(Reorganization of National Forest) Article 1. The Minister of Agriculture and Forestry may sell undermentioned national forests (namely, the national forest provided for by Article 2 of the National Forest Law (Law No.246 of 1951);hereinafter the same) which are not needed to be placed under the Government management, to the local public entity or other person who is deemed able to manage the national forest concerned adequately, or may exchange such forests for such person's private forest (including the forest owned by local public entity;hereinafter the same): (1) Isolated small national forest or small group; (2) Small scale national forest now being under isolated management because of traffic facilities; (3) National forest giving hindrance to management because of complicated boundary with private forest; (4) National forest now being under special management because of the prevalent custom to supply wood to the inhabitants of the locality where the national forest locates for producing the firewood and charcoal for their use. 2 The order of priority of sale or exchange, in case the request for sale or exchange is made by two or more persons on the national forest stipulated in items (1), (2) and (4) of the preceding paragraph, shall be in the following sequence: (1) City, town or village where the national forest concerned locates; (2) To, Do, Fu or prefecture where the national forest concerned locates; (3) Persons other than those stated above. 3 In respect to exchange stipulated in paragraph 1, regardless of the provision of the proviso to Article 27 paragraph 1 (Limit of Exchange) of the National Property Law (Law No.73 or 1948), exchange can be made in case the margin of price shall not exceed one half of the higher price.

(Limits of Sale and Exchange) Article 2. National forest necessary for national land safeguard and forest roads, timber yards and other facilities necessary for management of national forest shall not be sold or exchanged in accordance with the provisions of paragraph 1 of the preceding Article.

(Special Agreement for Deferred Payment) Article 3. The Minister of Agriculture and Forestry, in case of sale of a national forest in accordance with the provision of Article 1 paragraph 1, when a city, town or village or a prefecture which purchases the national forest concerned is deemed difficult to do its payment in a lump sum, regardless of the provision of the proviso to Article 31 paragraph 1 (Special Agreement for Deferred Payment) of the National Property Law, may conclude a special agreement for deferred payment, not exceeding ten years, secured by reliable mortgage, and with interest. The provisions of paragraphs 2 and 3 of the same Article (Consultation on Agreement for Deferred Payment and Cancellation of the Agreement) shall apply mutatis mutandis to this case.

(Use of Income) Article 4. The income from sale or exchange under Article 1 paragraph 1 shall be used for following purposes: (1) Exchange margin under Article 1 paragraph 1 or expenses required for sale or exchange under the same paragraph; (2) Purchasing money or expenses required for purchasing, in case private forest which is adjacent to national forest and is deemed proper to manage with the national forest is purchased; (3) Purchasing money for a private forest which is important for national land safeguard and is appropriate to be managed together with national forest, and the expense needed for such purchasing; (4) Expenses needed for necessary facilities for management of national forest.

(Application of National Forest Law, etc.) Article 5. To the sale or exchange of national forest stipulated in Article 1 paragraph 1, other than those provided for by this Law, the provisions of the National Forest Law and the National Property Law shall be applicable.