[Federal Register Volume 69, Number 99 (Friday, May 21, 2004)]
[Rules and Regulations]
[Pages 29173-29187]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11473]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1415

RIN 0578-AA38


Grassland Reserve Program

AGENCY: Commodity Credit Corporation (CCC), United States Department of 
Agriculture (USDA).

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ACTION: Interim final rule with request for comments.

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SUMMARY: The Farm Security and Rural Investment Act of 2002 (2002 Farm 
Bill) amended the Food Security Act of 1985, to add the Grassland 
Reserve Program (GRP). The purpose of this program is to assist 
landowners and others in restoring and protecting eligible grassland 
and certain other lands through rental agreements and easements. This 
interim final rule sets forth how the Secretary of Agriculture (the 
Secretary), using the funds, facilities, and authorities of the 
Commodity Credit Corporation (CCC), will implement GRP to meet the 
statutory objectives of the program.
    USDA made a determination to issue an Interim Final Rule with 
request for comments rather than a proposed rule in order to implement 
the program in fiscal year 2004 pursuant to this rule. USDA believes it 
is critical to put into place a rule that will guide the Department in 
implementing the program while at the same time provide the public with 
notice regarding how the program will be implemented. USDA also gave 
consideration to the fact that GRP implementation will be modeled after 
other established conservation programs. USDA is using its experiences 
from implementing other similar programs to develop operating 
procedures. USDA will consider all comments received when promulgating 
a final GRP rule.

DATES: The rule is effective May 21, 2004. Comments must be received by 
July 20, 2004.

ADDRESSES: Send comments by mail to Easement Division, Natural 
Resources Conservation Service, P.O. Box 2890, Washington, DC 20013-
2890; or by e-mail: [email protected]; attn: Grassland Reserve 
Program. This rule may also be accessed via Internet through the NRCS 
homepage at http://www.nrcs.usda.gov/programs/GRP by selecting ``Farm 
Bill'' from the menu, then ``Rules published in the Federal Register,'' 
and then selecting ``Grassland Reserve Program.'' The rule may also be 
reviewed and comments submitted via the Federal Government's 
centralized rulemaking Web site at http://www.regulations.gov. All 
comments, including the name and address of each commenter, will become 
a matter of public record, and may be viewed during normal business 
hours by contacting NRCS at the address above.

FOR FURTHER INFORMATION CONTACT: Richard Swenson, Director, Easement 
Division, NRCS, P.O. Box 2890, Washington, DC 20013-2890; telephone: 
(202) 720-1845; fax: (202) 720-4265; e-mail: [email protected], 
Attention: Grassland Reserve Program. Persons with disabilities who 
require alternative means for communication (Braille, large print, 
audiotape, etc.) should contact the USDA Target Center at (202) 720-
2600 (voice and TDD).

SUPPLEMENTARY INFORMATION:

Regulatory Certifications

Executive Order 12866

    The Office of Management and Budget (OMB) determined that this 
interim final rule is significant and must be reviewed by the Office of 
Management and Budget under Executive Order 12866. USDA conducted a 
cost-benefit analysis of the potential impacts associated with this 
Interim Final Rule.
    Five options for determining State funding levels and their impacts 
on enrollment are examined. The first two examine alternatives for 
balancing GRP objectives. These options include: The Selected Option, 
which balances the amount of grassland, number of livestock operations, 
biodiversity, and landowner demand, and a continuation of FY2003 
procedures, which is like the Selected Option, except for not giving 
consideration to landowner demand. The three additional options examine 
the consequences of concentrating on only a single objective, e.g., 
native grasslands.
    The Selected Option allocates State funding as a function of State 
number of grazing operations, acres of grassland under the threat of 
conversion, bio-diversity considerations, and State demand for funds, 
as measured by the number of offers for the GRP. This process is the 
same used in FY2003, except it includes consideration of interest 
within a State for demand for funds. This last component addresses high 
FY2003 participation demand.
    Although the Selected Option enrolls fewer grasslands than some 
other options, the Selected Option distributes funds to States based on 
the number of grazing operations, the threat of grassland conversion to 
other uses, and a bio-diversity index, recognizing the implicit 
equality given the three program objectives by the statute. The demand 
component was used to capture producer willingness to participate and 
the quality of offers. Because this option balances the three statutory 
objectives, no single objective is maximized.
    Copies of the analysis may be obtained from Richard Swenson, 
Director, Easement Division, NRCS, P.O. Box 2890, Washington, DC 20013-
2890; telephone: (202) 720-1845; fax (202) 720-4265; e-mail: 
[email protected], Attention: Grassland Reserve Program and 
electronically at http://www.nrcs.usda.gov/programs/GRP/.

Federal Crop Insurance Reform and Department of Agriculture 
Reorganization Act of 1994

    Pursuant to section 304 of the Federal Crop Insurance Reform Act of 
1994 (Pub. L. 103-354), USDA classified this rule as non-major. 
Therefore, a risk analysis was not conducted.

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this Interim 
Final Rule because the Commodity Credit Corporation (CCC) is not 
required by 5 U.S.C. 553, or by any other provision of law, to publish 
a notice of proposed rulemaking with respect to the subject matter of 
this rule.

Small Business Regulatory Enforcement Fairness Act of 1996

    This Interim Final Rule is not a major rule as defined by section 
804 of the Small Business Regulatory Enforcement Fairness Act of 1996. 
This Interim Final Rule will not result in annual effect on the economy 
of $100 million or more, a major increase in costs or prices, or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or the ability of U.S.-based companies to 
compete in domestic and export markets.

Environmental Analysis

    An Environmental Assessment (EA) has been prepared to assist in 
determining whether this Interim Final Rule would have a significant 
impact on the quality of the human environment such that an 
Environmental Impact Statement (EIS) should be prepared. Based on the 
results of the EA, USDA proposes issuing a Finding of No Significant 
Impact (FONSI) before a final rule is published. Copies of the EA and 
FONSI may be obtained from Andree DuVarney, National Environmental 
Specialist, Ecological Sciences Division, Natural Resources 
Conservation Service, P.O. Box 2890, Washington, DC 20013-2890. The GRP 
EA and FONSI will also be available at the following Internet address: 
http://www.nrcs.usda.gov/programs/GRP. Written comments on the EA and 
FONSI should be sent to Andree DuVarney, National Environmental 
Specialist, Ecological Sciences Division, Natural Resources 
Conservation Service, P.O. Box 2890, Washington, DC 20013-2890, or 
submit them via the Internet to [email protected].

[[Page 29175]]

Paperwork Reduction Act

    Section 2702 of the Farm Security and Rural Investment Act of 2002 
requires that the implementation of this provision be carried out 
without regard to the Paperwork Reduction Act, Chapter 35 of title 44, 
United States Code. Therefore, USDA is not reporting recordkeeping or 
estimated paperwork burden associated with this Interim Final Rule.

Government Paperwork Elimination Act

    NRCS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA) and the Freedom to E-File Act, which require 
government agencies in general, and NRCS in particular, to provide the 
public the option of submitting information or transacting business 
electronically to the maximum extent possible.

Civil Rights Impact Analysis

    USDA has determined through a Civil Rights Impact Analysis that the 
issuance of this rule discloses no disproportionately adverse impacts 
for minorities, women, or persons with disabilities. Copies of the 
Civil Rights Impact Analysis is available, and may be obtained from 
Richard Swenson, Director, Easement Division, Natural Resources 
Conservation Service, P.O. Box 2890, Washington, DC 20013-2890, and 
electronically at http://www.nrcs.usda.gov/programs/GRP.

Executive Order 12988, Civil Justice Reform

    This Interim Final Rule has been reviewed in accordance with 
Executive Order 12988, Civil Justice Reform. The rule is not 
retroactive and preempts State and local laws to the extent that such 
laws are inconsistent with this rule. Before an action may be brought 
in a Federal court of competent jurisdiction, the administrative appeal 
rights afforded persons at 7 CFR parts 614, 780, and 11 must be 
exhausted.

Executive Order 13132, Federalism

    This Interim Final Rule has been reviewed in accordance with the 
requirements of Executive Order 13132, Federalism. USDA has determined 
that the rule conforms to the federalism principles set forth in the 
Executive Order; would not impose any compliance cost on the States; 
and would not have substantial direct effects on the States, on the 
relationship between the Federal Government and the States, or on the 
distribution of power and responsibilities on the various levels of 
government.

Unfunded Mandates Reform Act of 1995

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995, 2 
U.S.C. 1531-1538, USDA assessed the effects of this rulemaking action 
of State, local, and tribal governments, and the public. This action 
does not compel the expenditure of $100 million or more by any State, 
local, or tribal government, or anyone in the private sector; 
therefore, a statement under section 202 of the Act is not required.

Background

    Historically, grassland and shrublands occupied approximately one 
billion acres, about half the landmass of the 48 contiguous United 
States (Richard Conner, Texas A&M, June 2001). Roughly 50 percent of 
these lands have been converted to cropland, urban land, and other land 
uses. Privately owned grasslands (pastureland and rangeland) cover 
approximately 526 million acres in this country (1997 National Resource 
Inventory (NRI)). Grasslands provide both ecological and economic 
benefits to local residents and society in general. Grassland 
importance lies not only in the immense area covered, but also in the 
diversity of benefits they produce. These lands provide water for urban 
and rural uses, livestock products, flood protection, wildlife habitat, 
and carbon sequestration. These lands also provide aesthetic value in 
the form of open space and are vital links in the enhancement of rural 
social stability and economic vigor, as well as being part of the 
Nation's history.
    Grassland loss through conversion to other land uses such as 
cropland, parcels for home sites, invasion of woody or non-native 
species, and urban development threatens grassland resources. About 24 
million acres of grasslands and shrublands were converted to cropland 
or non-agriculture uses between 1992 through 1997 (1997 National 
Resource Inventory).
    In Fiscal Year (FY) 2003, GRP was implemented through a notice of 
funds availability published in the Federal Register on June 13, 2003 
(See Federal Register Vol. 68, No. 114). The document explained that in 
FY 2003, CCC intended to use GRP to protect grazing lands from 
conversion, and support efforts to maintain or enhance biodiversity.
    The Secretary has delegated authority to implement GRP jointly to 
the Administrator, Farm Service Agency (FSA), and the Chief, Natural 
Resources Conservation Service (NRCS). In addition, limited 
responsibilities associated with easement management and general 
program development have been delegated to the Forest Service (FS). 
Activities identified in this interim rule as being conducted by the 
USDA or the CCC will be performed by representatives of these three 
agencies, as appropriate.
    The GRP rental agreements and easements are designed for working 
agricultural lands. Therefore, the program provides incentives to 
protect grassland resources while enabling agricultural producers to 
use the forage in their agricultural operation. There are multiple 
enrollment duration options for both the rental agreements and 
easements.
    In the 2002 Farm Bill Managers' Report, Congress recommended that 
the GRP enrollment process be modeled after the Conservation Reserve 
Program (CRP), 16 U.S.C.3835a and the Wetlands Reserve Program (WRP), 
16 U.S.C.3837 et seq. Like the CRP Continuous Sign-up and the WRP, 
applications for program enrollment in GRP can be filed at any time 
throughout the year. Application selection is based on ranking and 
selection criteria developed at the State level, following broad 
National guidelines. Although the GRP rental agreements are for working 
lands, the rental agreements are modeled after the CRP long-term rental 
contracts. Likewise, the easement acquisition process is similar to 
that used in the WRP. With both GRP easements and rental agreements, 
participants will have the opportunity to utilize common management 
practices to maintain the viability of the grassland acreage.
    The Secretary evaluated whether the GRP could be administered by 
partnering with third parties to acquire easements, similar to the Farm 
and Ranch Lands Protection Program, 16 U.S.C. 3838h and 3838i, and 
concluded that the GRP statute does not provide authority to do so.
    The GRP statute provides broad land eligibility criteria regarding 
the type of grasslands that can be enrolled in the program. USDA 
proposes in this regulation to emphasize program implementation to 
preserve the Nation's most critical grassland resources, both native 
and natural grasslands, and shrublands.

Discussion of the Program

    The Grassland Reserve Program (GRP) is a voluntary program to 
assist landowners and agriculture operators in restoring and protecting 
grassland and land that contains forbs and shrublands. The Secretary of 
Agriculture delegated the authority to administer GRP on behalf of the 
Commodity Credit Corporation, to the Chief, Natural

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Resources Conservation Service (NRCS) and the Administrator, Farm 
Service Agency (FSA). These agency leaders are Vice Presidents of the 
CCC. NRCS has the lead responsibility on technical issues and easement 
administration, and FSA has the lead responsibility for rental 
agreement administration and financial activities. The Secretary also 
delegated authority to the Forest Service to hold easements at the 
option of the landowner, on properties adjacent to USDA Forest Service 
properties. At the State level, the NRCS State Conservationist and the 
FSA State Executive Director will determine how best to utilize the 
human resources of both agencies to deliver the program and implement 
National policies in an efficient manner.
    The program has a statutory enrollment cap of two million acres of 
restored or improved grasslands. USDA may enroll an excess of two 
million acres in the program, providing the additional acreage does not 
require restoration, and the program has sufficient funding. The 
statute also requires that 40 percent of the program funds be used for 
10-year, 15-year, and 20-year rental agreements, and 60 percent of the 
funds be used for 30-year rental agreements and easements.
    As defined in this rule, the term ``restoration'' not only includes 
restoring grassland from cropland and other uses, but it also refers to 
improving lands with existing stands of grasses, forbs, and shrubs. 
USDA has defined ``restoration'' as the implementation of any 
conservation practice (vegetative, management, or structural) that 
improves the values and functions of grasslands (native and natural 
plant communities). The term ``improves'' in this context means taking 
an existing grassland and moving it toward a higher functioning 
grassland condition. The definition of restoration is found in section 
1415.3 of this rule. This regulation does not define the required 
restored condition in order to allow for flexibility in making such 
determinations at the local level in accordance with local conditions 
and desired outcomes. USDA recognizes that restoration includes the 
process of establishing practices and managing the land to reach a 
desired grassland condition. Enrolled lands will require periodic 
manipulation to maximize wildlife habitat and preserve grassland 
functions and values over time. The ``restored'' grassland condition 
will be determined by the NRCS State Conservationist, with input from 
the State Technical Committee.
    GRP enrollment options include easements with various durations, 
including 30 years, permanent, or for the maximum duration allowed 
under State law; or rental agreements with a duration of 10-, 15-, 20-, 
or 30-years. Participants can enter into a restoration agreement in 
conjunction with either an easement or rental agreement, at the 
discretion of the USDA and if desired by the participant, to restore 
the ecological functions and values of these lands. The GRP statute 
does not authorize USDA to use restoration agreements as a stand-alone 
enrollment option.
    As set forth in section 1415.5, land is eligible if it is privately 
owned land, including tribal land, and it is: (1) Grassland, land that 
contains forbs, or shrubs (including rangeland and pastureland); or (2) 
located in an area that has been historically dominated by grassland, 
forbs, and shrubs and has potential to provide habitat for animal or 
plant populations of significant ecological value if the land is 
retained in the current use of the land or restored to a natural 
condition. Lands incidental to the above described eligible lands may 
also be enrolled if the Secretary determines enrollment of such land is 
necessary for the efficient administration of a rental agreement or 
easement. Privately owned land does not include land owned by the 
Federal, State, or local government.
    USDA, at the State level, based on national guidance, shall 
establish criteria to evaluate and rank applications for easements and 
rental agreements as outlined in this regulation at section 1415.8. As 
required by statute, emphasis will be placed on supporting grazing 
operations, plant and animal biodiversity, and grassland and land 
containing shrubs or forbs under the greatest threat of conversion.
    USDA evaluated the following two approaches for allocating funds to 
projects. One approach is to allocate funds to States using a formula 
that incorporates factors associated with the program's areas of 
emphasis. Under this approach, each NRCS State Conservationist and the 
FSA State Executive Director would be given the responsibility to 
develop, within broad national guidelines and with input from State 
Technical Committees, ranking criteria against which to evaluate and 
select applications for funding.
    Another approach is to develop national criteria and have all 
applications evaluated and selected nationally. Allocations would not 
be provided to States. USDA has used both approaches when implementing 
other conservation programs. Based on its experience with implementing 
GRP in fiscal year 2003, USDA is adopting the approach of allocating 
funds to States for selection of projects at the State level. This 
approach allows USDA to enhance its ability to address State grassland 
concerns, as well as enable States to use all conservation programs in 
a coordinated effort to address grassland concerns, giving 
consideration to the entire ecosystem. USDA recognizes that this 
approach results in some differences between State ranking criteria, 
and that it may be more challenging to address specific national 
priorities. USDA welcomes comments on this decision. State ranking 
criteria will be available to the public through local USDA service 
centers or on the NRCS Grassland Reserve Program web site. See http://www.nrcs.usda.gov. Select ``Programs'' from the menu, then ``Grassland 
Reserve Program.'' Anyone having comments on the 2003 State ranking 
criteria should refer the comments to the respective NRCS State 
Conservationist or FSA State Executive Director located in the USDA 
State Office. Addresses for the State offices are available at http://www.fsa.usda.gov/pas/default.asp. Select ``Your State Office'' from the 
menu bar.
    USDA seeks public comment on the criteria and weighting factors 
that should be used to allocate funds to States, and the national 
guidance from which States develop their individual ranking criteria. 
In particular, USDA asks that respondents provide information on 
credible data that is national in scope related to grassland plant and 
animal biodiversity. The current allocation formula, developed by USDA 
at the national level, includes data from the NRI regarding pasture and 
rangeland conversion, prime farmland used as range or pasture, and 
total range and pastureland acreage. From agriculture statistics USDA 
uses data regarding agriculture operations. USDA also includes 
information from the U.S. Fish and Wildlife Service about threatened 
and endangered plant and animal species. The data was categorized as 
either being a biodiversity, conversion, or grazing operation factor. 
In addition, now that USDA has collected program demand data from the 
2003 signup, there will be a demand factor included in the State 
allocation formula. Program demand data is expressed in terms of total 
applications received, total acres offered for enrollment, and total 
estimated cost of applications received. For fiscal year 2004 and 
beyond, demand may be reflected in terms of applications received, 
acreage associated with such applications, funding needs associated 
with unfunded applications, or a

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combination of all three. USDA intends to provide equal weight to each 
area of emphasis (grazing operations, threat of conversion, and 
biodiversity of plants and animals) and the demand category in the 
allocation formula.
    Once USDA State offices receive their allocation, FSA and NRCS, at 
the State level, will determine the distribution of funds within the 
State, with input from the State Technical Committee. FSA and NRCS may 
allocate funds to regions based on natural resource priority, 
distribute funds for easements and rental agreements based on landowner 
interest in the various enrollment options, or establish funding pools. 
If a State office lacks funds to enroll an entire project, the 
applicant will be provided the opportunity to reduce the amount of land 
offered, or change the duration of the enrollment option, providing the 
ranking score is not lowered below the score of the next application on 
the ranking list. If the applicant declines adjusting the offered 
acreage level, the USDA at the State level can accept the next eligible 
application on the list of unfunded applicants.

Easements

    Section 1415.4 provides that for participation in an easement 
option, the applicant must be the owner of the eligible land. To grant 
an easement to the United States, the landowner must possess clear 
title to the land or be able to provide subordination agreements from 
third parties with interest in the land, and provide access to the 
property from a public road. The landowner must comply with the terms 
of the easement and associated restoration agreement, if one is 
required.
    Easement payments are based on the current market value of the land 
less the grazing value of the land encumbered by the easement. Under 
the terms of the easement, in addition to the use of the forage, the 
landowner retains the right to grassland uses so long as such use is 
compatible with maintaining the viability of the grassland resources. 
In addition to grazing, haying, mowing, and seed production, other uses 
may include hunting, fishing, hiking, camping, bird watching, and other 
non-motorized recreational activities. Since landowners retain certain 
rights to grassland resources, for appraisal purposes, grazing value 
has been defined as grassland value. Land values will be determined 
through a site-specific appraisal. For 30-year easements, or an 
easement for the maximum duration allowed under State or tribal law, a 
landowner receives 30 percent of the appraised value for a permanent 
easement. Easement payments may be provided in one lump sum payment at 
the time of closing or participants may elect to receive installment 
payments. Participants who elect to receive installment payments can 
receive no more than 10 annual payments of equal or unequal amount, as 
agreed to by the USDA and the landowner.
    USDA has developed a standard conservation deed that the United 
States will use for all easements purchased under GRP. A copy of the 
deed may be viewed at http://www.nrcs.usda.gov.

Subsurface Resource Concerns

    In promulgating this rule, USDA considered whether the exploration 
and development of subsurface resources was compatible with the purpose 
of GRP. The GRP statute provides that the conduct of any activity that 
would disturb the surface of the land covered by the GRP easement or 
rental agreement is prohibited, except for restoration, fire 
rehabilitation, and construction of fire breaks. Therefore, the 
extraction of subsurface resources is prohibited on all lands 
participating in GRP. However, subsurface resource exploration and 
extraction is permissible when it is accomplished remotely, that is 
from adjacent land not covered by a GRP easement, and when it does not 
result in subsidence or any other adverse effects to the surface 
estate. USDA finds the extraction of certain materials, such as gravel, 
to be inconsistent with the purposes of the program. USDA contemplated 
appraising land based on surface rights alone, but determined that this 
appraisal method prohibits USDA from restricting the disturbance of the 
surface when such rights are owned by the GRP participation landowner. 
Therefore, the easement appraisal will consider full market value 
rather than surface value, in those instances where the applicant owns 
the rights to the surface and subsurface estate.
    For rental agreements, USDA is adopting subsurface resource policy 
similar to that of the Conservation Reserve Program. If the subsurface 
resources are severed and the owner of such rights decides to extract 
the resources, the affected land will be terminated from the rental 
agreement with no penalty to the participant. If the rights are not 
severed and the landowner participant exercises such rights, the 
participant will have to refund to the USDA payments received on the 
affected acres.

Rental Agreements

    Section 1415.4 provides that landowners and other people who have 
general control of property may apply for enrollment in rental 
agreements through GRP. Applicants who are not landowners need to 
provide evidence of control of the property for the length of the 
agreement. If rental agreement payments are to be divided between the 
landowner and other participants or multiple landowners, the rental 
agreement will need to be signed by all parties, indicating their 
respective share of the payments.
    As required by statute, rental payment amounts will not exceed 75 
percent of the grazing value for the length of the agreement. Rental 
payments will be paid annually after the anniversary date of the 
agreement. Local grazing values are determined based on a methodology 
developed for the CRP using estimated forage production by soil type 
and knowledge of local rental rates. USDA will make administrative 
adjustments to local rates in areas where there is a dramatic 
difference between county rates. County rental rates will be posted in 
USDA Service Centers after being evaluated locally by USDA 
representatives to determine whether the rates generally reflect local 
prevailing rental rates. There may be some significant differences 
within a State due to elevation changes and precipitation variability.
    Persons who participate in a rental agreement may offer the land 
for an easement, providing the duration of the easement exceeds the 
duration of the rental agreement, the application ranks high enough to 
be funded, all other eligibility criteria are met, and funds are 
available to acquire an easement. The easement application will be 
considered a new offer that will be evaluated with all other new 
offers. The rental agreement will be terminated upon easement closing. 
This policy allows USDA to obtain longer term protection on lands 
considered valuable for enrollment. This policy will apply to those 
individuals who signed up for a rental agreement in FY2003 and 
subsequent years.

Provisions That Apply to Both Easements and Rental Agreements

    Program participants are subject to the Adjusted Gross Income 
Limitation set forth at 7 CFR part 1400. In summary, this limitation 
provides that individuals or entities that have an average adjusted 
gross income exceeding $2.5 million for the three tax years immediately 
preceding the year the contract is approved are not eligible to receive

[[Page 29178]]

program benefits or payments, unless 75 percent of the adjusted gross 
income is derived from farming, ranching, or forestry operations. 
Easement or rental agreement payments received by a participant shall 
be in addition to any payments that the participant is otherwise 
eligible to receive under other Federal laws.
    As required by statute, easements and rental agreements will:
    (1) Permit grazing on the land in a manner that is consistent with 
maintaining the viability of the grassland, shrubs, forbs, and habitat 
for wildlife species adapted to the locality.
    (2) Permit haying, mowing, or harvesting for seed production, 
except during the nesting season for birds in the local area that are 
in significant decline. When bird species are identified by USDA as 
needing protection during the nesting season, mowing, haying, and 
harvesting of grass seed will be permitted as determined by the NRCS 
State Conservationist in accordance with Federal and State law. In 
making this determination, NRCS will consult with the State Technical 
Committee, which includes representation from appropriate State and 
Federal agencies.
    (3) Allow for fire rehabilitation and construction of firebreaks, 
fences, watering facilities, and practices that protect and restore the 
grasslands functions and values.
    (4) Prohibit the production of row crops, fruit trees, vineyards, 
or any other agricultural commodities or activity that requires 
disturbance of the soil surface, except for those activities permitted 
above. Grassland and wildlife management practices and restoration 
activities that require disturbing the soil surface, such as light 
discing, will be permitted at the discretion of USDA.
    Both GRP easements and rental agreements will require that the land 
is managed to maintain the vitality of the plant community as described 
in the conservation plan. The plan will take into account management 
practices necessary for the control of invasive species. At the 
discretion of USDA and subject to funding availability, landowners may 
include a restoration agreement with both enrollment options that will 
provide for: maintaining the viability of the grassland; sufficient 
ground cover to protect the soil from wind and water erosion; forage 
production for grazing animals, and wildlife habitat. The grassland 
restoration plan will be implemented according to the schedule 
developed by USDA. Restoration agreements will provide cost-share 
assistance for installing practices that will restore or protect the 
functions and values of the grassland and shrubland. In addition to 
reestablishing desirable grass cover, restoration practices may include 
practices associated with grazing management, or other management 
activities designed to preserve grassland acreage, such as controlled 
burns. The GRP statute provides that payments may be made to the 
participant of not more than 90 percent for the cost of carrying out 
restoration measures and practices on grassland and shrubland that has 
never been cultivated, and not more than 75 percent on restored 
grassland and shrubland that at one time was cultivated. Cost-shared 
practices shall be maintained by the participant for the life of the 
practice. The life of the practice is determined by the NRCS State 
Conservationist, and shall be consistent with other USDA conservation 
programs. All conservation practices will be implemented in accordance 
with the NRCS Field Office Technical Guide.

Summary of Provisions and Request for Comment

    USDA welcomes comments on all aspects of this Interim Final Rule. 
The following describes the specific requirements in each section of 
the regulation. Activities identified in this regulation as being 
conducted by USDA or the CCC, will be performed by representatives of 
either the Farm Service Agency, the Natural Resources Conservation 
Service, or the U.S. Forest Service. Additionally, USDA fully intends 
to use the services of third party providers identified in 7 CFR part 
652.

Section 1415.1 Purpose

    This section sets forth the purpose and objectives of the program. 
In carrying out this program, the Secretary will focus GRP resources on 
the following:
    1. Preserving native and natural grasslands and shrublands;
    2. Protecting grassland and shrubland from the threat of 
conversion; conversion refers to all threats, including conversion to 
non agriculture uses, conversion to cropland, and vegetation changes to 
non-grassland covers;
    3. Supporting grazing operations; and
    4. Maintaining and improving plant and animal biodiversity.
    The Secretary has determined that it makes sense to focus the 
program on those grasslands and shrublands that are at greatest risk of 
being lost. Therefore, the overall program emphasis will be on 
preserving native and natural species.
    After completing the FY 2003 sign-up, USDA received feedback from 
conservation organizations and Congressional representatives that GRP 
should focus on restoring and protecting native and natural grasses, 
shrubs, and forbs. The statute identifies eligible land as grassland, 
land that contains forbs, or shrubland. It does not identify whether 
the program should emphasize native species, nor does it exclude 
certain types of grassland or shrublands from being enrolled in the 
program. However, USDA recognizes that grassland and shrublands that 
are native support an abundant diversity of plant and animal species 
along with other attributes. Once native grassland or shrubland is 
converted, it is often impractical, and sometimes impossible, to 
restore the land with its many attributes back to its original state. 
In many areas of the country where it is impractical to restore native 
plant species, other nonnative species have been used to serve similar 
purposes. Consequently, USDA proposes to emphasize protecting those 
eligible lands that consist of native and natural species.
    Conservation organizations and Congressional representatives also 
expressed that USDA should use the Farm and Ranch Lands Protection 
Program (FRPP) to protect land subject to urban conversion pressures, 
and that GRP should focus on lower cost land subject to other 
conversion pressures outside of developing urban areas. These concerns 
primarily result from the high cost of easements in urban areas. The 
Secretary has the authority through FRPP, not GRP, to leverage Federal 
funds with non-Federal funds. The GRP statute does not provide the 
Secretary the flexibility to offer easement applicants amounts lower 
than the fair market value less the grazing value, nor does the USDA 
have the authority to share with other third parties the cost of 
acquiring easements. Therefore, the Secretary has been contemplating 
how the implementation of these two easement programs should fit 
together. When considering the scope of eligible lands, the amount of 
interest expressed by people to participate in GRP (approximately 
13,000 applications offering 8.9 million acres received in FY 2003), 
and the limited GRP funding, the Secretary determined that USDA can 
preserve far greater grassland resources if GRP focuses on non-urban 
lands. The Secretary recognizes that in some States the primary threat 
to grassland is urban development, and that GRP rental agreement 
payment rates will provide little incentive to keep the acreage in 
grass cover. Since easement costs in areas with intense urban pressures 
tends to be quite high on a per acre basis, and

[[Page 29179]]

FRPP is able to leverage a large percentage of funds with non-Federal 
sources while GRP cannot, the Secretary may utilize FRPP easements to 
the extent practical on lands under extreme threat of conversion to 
non-agricultural uses. However, the focus of FRPP will remain 
protecting lands for broad agricultural use, including cropland. The 
Secretary intends to take a common sense approach to implementing both 
programs, and where it is more appropriate or strategically 
advantageous to protect important grassland in urbanizing areas, the 
USDA may use GRP to purchase easements in those areas. USDA State 
offices will be provided the flexibility to minimize the enrollment of 
high cost projects by considering cost in the State ranking criteria.

Section 1415.2 Administration

    This section includes language on general program administration 
and policy that sets forth the role of the State Technical Committee in 
the development of criteria for ranking and selecting applications and 
addressing related technical and policy matters in the implementation 
of the program.

Section 1415.3 Definitions

    This section defines terms used throughout the proposed rule. Some 
of the terms in this section such as Administrator, Chief, Commodity 
Credit Corporation, Cost-share, Department, etc., are not unique to 
GRP, and the definitions are consistent with definitions in other 
program regulations. For other terms, such as grassland value, grazing 
value, restored grassland, restoration etc. this section defines how 
these terms will be utilized for GRP.

Section 1415.4 Program Requirements

    In this section, USDA identifies the requirements for participation 
in GRP. Earlier in the preamble Sec.  1415.4(a) was referenced 
regarding ownership requirements. Section 1415.4(c) requires that 
participants follow a conservation plan that maintains the viability of 
the grassland regardless of the grassland use. The Secretary has 
determined that such a requirement is needed to carryout the purposes 
of GRP (see 16 U.S.C. 3830o). The level of restoration or management 
required in a conservation plan is established by the NRCS State 
Conservationist in each State, with input from the State Technical 
Committee.
    USDA is seeking input regarding GRP project management. Under this 
rule, USDA is requiring participants to manage the GRP acreage to move 
toward a certain natural resource condition without requiring that 
certain species of grasses, shrubs, or forbs be planted. This policy 
makes sense considering the general purpose of the authorizing statute 
on land eligibility and the high cost of reestablishing native grasses 
in some settings. Management requirements may change over the life of 
the easement or rental agreement based on the natural resource response 
to such activities. Since the GRP statute is not specific about the 
types of land that should be enrolled in the program, once land has 
been accepted into the program USDA seeks input on whether a 
participant should be able to maintain the current cover even if it 
contains a monoculture of a less desirable species, or whether a 
participant should be required to manage the property to move toward a 
certain natural resource condition. USDA is reluctant to require 
participants to fully restore project acreage to native species because 
of the extreme cost, and in some localities, it is impractical to do 
so. However, in instances where a grassland cover does not exist, 
participants will be required to establish a grassland cover with 
either native or natural species to the extent it is practical, as 
determined by the NRCS State Conservationist.

Section 1415.5 Land Eligibility

    The language in this section identifies eligible land as defined in 
the GRP statute. The GRP statute does not restrict the amount of 
acreage a landowner can offer for the program or the maximum payment a 
person can receive over the life of the contract or otherwise. The 
statute does provide for a minimum acreage enrollment level.
    Section 1415.5(d) provides that 40 contiguous acres is the minimum 
acreage offer that will be accepted in the program, however, less than 
40 acres may be accepted if USDA grants a waiver. USDA recognizes that 
some grassland habitat is considered irreplaceable and thus has 
determined to provide States the discretion to determine when the 40 
acre minimum requirement will be waived. Decisions associated with this 
waiver should be granted based on input from the State Technical 
Committee and local natural resource concerns. USDA policy is to ensure 
that NRCS State Conservationists make this determination based on all 
the purposes of GRP as provided for in Sec.  1415.1. State 
Conservationists may consider establishing separate funding pools based 
on offer size.
    USDA considered providing States greater flexibility to set minimum 
acreage levels in States where there is a strong interest in preserving 
very large blocks of grassland and offers below a certain level have 
virtually no chance of being accepted into the program due to intense 
competition. However, the statute directs which lands are eligible for 
consideration under GRP. Accordingly, rather than establish policy that 
impacts eligibility, USDA determined to address this issue through the 
ranking criteria at the State level. Allowances shall be made to ensure 
the ranking criteria does not discriminate against small or limited 
resource producers. USDA will periodically review the types of projects 
being enrolled and compare those projects with the applications being 
submitted for participation to evaluate whether small or limited 
resource producers are being routinely prohibited from participating in 
the program.
    Section 1415.5(f) makes land ineligible if it is already protected 
by an easement or contract that requires the GRP applicant to maintain 
the grassland resources. If the existing easement or agreement is with 
USDA or with a program funded through USDA, USDA will look to the 
program rules of the existing contract or the terms of the easement to 
determine whether such agreement can be canceled in order to enroll the 
land in GRP. This policy was determined because it is not fiscally 
responsible to pay someone twice for the same natural resource 
protection. USDA welcomes comment on this policy, especially as it 
relates to the relationship between GRP and the Conservation Reserve 
Program, Environmental Quality Incentives Program and the Wildlife 
Habitat Incentives Program.
    Section 1415(g) of the Interim Final Rule addresses the issue of 
third party ownership of subsurface mineral rights on land proposed for 
enrollment under a rental agreement or an easement. Specifically, this 
rule provides that such lands may be enrolled in GRP. If the third 
party exercises such rights during the agreement period, the agreement 
will be terminated without penalty on the affected land. The land may 
be reoffered for the program at a later date if the grassland resources 
are restored, subject to eligibility rules and funding at that time. 
For easement enrollment, such lands may only be offered if the third 
party subordinates its rights to the resources or if USDA determines 
that the risk to the grassland resources is minimal if such rights are 
exercised (i.e., would not undermine the conservation purposes of the 
easement).

Section 1415.6 Participant Eligibility

    This section sets forth the eligibility for participation in GRP. 
Only landowners may participate in the

[[Page 29180]]

easement option, because only landowners have the ability to convey 
property rights. Both landowners and tenants can participate in the 
rental agreement enrollment options. However, if a tenant wishes to 
participate without a landowner, the tenant must provide evidence of 
control for the duration of the agreement period.
    Since the GRP is a Title XII program, all participants are subject 
to the conservation compliance requirements found in 7 CFR, part 12.

Section 1415.7 Application Procedures

    This section provides general information about the application 
process. Interested applicants can file an application at any time with 
their local USDA Service Center.

Section 1415.8 Establishing Priority for Enrollment of Properties

    This section sets forth policy for developing the ranking and 
evaluation criteria. The GRP statute directs the Secretary to emphasize 
support for grazing operations, plant and animal biodiversity, and the 
threat of conversion in project selection. It does not give guidance 
about whether any of these factors should be given greater 
consideration than the others.
    As discussed earlier in the preamble, USDA is placing a priority on 
protecting native or natural grassland and shrubland in the ranking 
process to the extent practical, and it is providing States the 
flexibility to develop ranking criteria that may encourage participants 
to restore their land back to a natural or native plant community. Land 
not currently in grass or shrubs that needs to be reseeded back to a 
grassland or shrubland may be eligible for the program if the applicant 
agrees to reseed the land back to its historically dominated grassland, 
shrubland, or forb plant community. However, if it can be demonstrated 
that reseeding to appropriate introduced plant species has potential to 
serve as habitat for animal or plant populations of significant 
ecological value, such land may be enrolled in the program and 
reseeding can take place through a GRP restoration agreement. Lower 
enrollment priority may be given to smaller parcels, especially in 
States where protecting larger grassland parcels is more desirable from 
an administrative and environmental standpoint. By prioritizing the 
types of eligible land for funding, USDA seeks to secure maximum 
conservation benefits for the Federal dollar expended. USDA is seeking 
specific comments on this decision.
    USDA does provide its offices at the State level, the flexibility 
to establish one or more ranking pools. Although each pool will use the 
State established ranking criteria, the projects within one pool will 
only compete with similar projects. USDA, at the State level, may 
determine the portion of its funds to direct to each established 
ranking pool. Ranking pools will be established prior to conducting a 
signup.

Section 1415.9 Enrollment of Easements and Rental Agreements

    This section describes the process for enrollment in GRP which is 
similar to that used for the Conservation Reserve Program for rental 
agreements and the Wetlands Reserve Program for easements. This 
approach was suggested by Congress in the Managers Report to the 
authorizing statute. For rental agreement projects, land is considered 
enrolled when the rental agreement is approved by USDA. For easement 
projects, land is considered enrolled when a landowner accepts a letter 
of tentative acceptance by signing documentation that indicates the 
landowner's intent to continue with the project.

Section 1415.10 Compensation for Easements and Rental Agreements

    This section sets forth the methodology for determining 
compensation for both easements and rental agreements. For rental 
agreements, the statute at 16 U.S.C. 3838p requires that USDA pay 
participants not more than 75 percent of the grazing values. For the FY 
2003, signup period grazing values for rental agreements were 
determined administratively based on compensation rates for the 
Conservation Reserve Program. Rates were established for each county, 
rather than on a site specific basis. This process enabled USDA to post 
compensation rates for public information and minimized the 
administrative burden at the field level for USDA employees.
    The statute provides at 16 U.S.C. 3838p that easement compensation 
rates be determined based on the fair market value of the land, less 
the grazing value of the land encumbered by the easement. USDA will use 
certified land appraisers to develop easement compensation rates on a 
site specific basis. USDA recognizes that in certain parts of the 
country, the cost of acquiring easements may be considerable. 
Therefore, the Secretary evaluated alternatives to minimize the per 
acre cost of enrolling projects in the program, such as establishing 
maximum payment rates or contract limits. However, the Secretary 
determined the statute, by requiring a fair market valuation, does not 
permit a non-appraisal approach to valuing conservation easements.

Section 1415.11 Restoration Agreements

    This section sets forth the terms and conditions under which USDA 
will enter into a restoration agreement. GRP does not have the 
authority to enroll land in restoration agreements as a separate, 
stand-alone enrollment option. Consequently, USDA will only enter into 
restoration agreements in conjunction with easements and rental 
agreements at the discretion of USDA, subject to available funding, and 
when it is supported by the participant.
    Eligible practices include land management, vegetative, and 
structural practices and measures that will improve the grassland and 
shrubland ecological functions. Specific practices eligible for payment 
will be determined by the USDA at the State level with advice from the 
State Technical Committee. Limitations on cost-share rates set forth in 
this rule are those provided for in the GRP statute at 16 U.S.C. 3838p.

Section 1415.12 Modifications

    This section describes when easements and rental agreements may be 
modified. For both easements and rental agreements, modifications may 
be made to the conservation plan by mutual agreement between the USDA 
and the participant as changes occur in the participant's operation and 
land management strategy. However, any modification must continue to 
ensure the viability of the grassland, and meet the other objectives of 
the GRP.

Section 1415.13 Transfer of Land

    This section discusses the impact of transferring ownership or 
control of land enrolled in GRP.

Section 1415.17 Easement Administrative Delegations to Third Parties

    The GRP statute at 16 U.S.C. 3838q provides that the Secretary may 
permit a private conservation or land trust organization, or a State 
agency to hold and enforce an easement, in lieu of the Secretary, 
subject to the right of the Secretary to conduct periodic inspections 
and enforce the easement. The Secretary has interpreted the word 
``hold'' in this context to mean ``administer.'' Prior to permitting an 
approved third party to hold and enforce an easement, USDA must 
determine that granting such permission

[[Page 29181]]

will result in the protection of grassland, land that contains forbs, 
and shrubland; the owner authorizes the third party to hold and enforce 
the easement; and the third party agrees to assume the costs incurred 
in administering and enforcing the easement, including the costs of 
restoration or rehabilitation of the land as required by the landowner 
and the third party. The intent is not to have the third party cover 
the costs of natural resource practices required through GRP. However, 
the third party must cover costs of practices that it requires above 
what is required by GRP. The third party must submit its intent to 
impose these additional requirements to USDA to determine whether they 
are consistent with the conservation purposes of the easement.
    In GRP, the Secretary administers the easement on behalf of the 
United States, and may delegate the easement administrative 
responsibilities to a private organization or State agency under 
certain conditions. However, the GRP statute does not provide authority 
for the Secretary to convey property rights acquired under the 
authority of the GRP statute.
    This section provides that certain private organizations, as set 
forth in the statute, and State agencies interested in managing and 
enforcing GRP easements, may apply for GRP administration. The criteria 
and approval process required for participation are set forth below. 
The application packages must include:
    (1) Certification that the conservation organization or land trust 
is an organization described in section 501(c)(3) of the Internal 
Revenue Code of 1986 that is exempt from taxation under section 501(a) 
of that Code; or is described in section 509(a)(3), and is controlled 
by an organization described in section 509(a)(2), of that Code.
    (2) Certification that the applicant has the human and financial 
resources necessary to administer and enforce the easements, and that 
the applicant has relevant experience with easement enforcement 
activities.
    (3) Certification that the applicant's charter expresses a 
commitment to conserving agriculture land, grassland, or rangeland. The 
application will require a summary of such commitment.
    (4) Estimates in terms of acreage, number of easements, and funding 
requirements that the third party is willing to assume on behalf of the 
Secretary.
    (5) Description of the human resources available to perform tasks 
associated with easement management and enforcement, including 
information about range and grassland management for livestock and 
wildlife, and realty management expertise.
    (6) Budgetary information that demonstrates the organization is 
prepared to assume the Secretary's duties.
    State agencies do not have to submit information related to items 
(1) or (3) above. All other requested information must be included with 
State agency applications. Application packages will be reviewed by 
both the Chief, NRCS, and the Administrator, Farm Service Agency, or 
their designees, for suitability of the party to administer the GRP 
easement. This authority may be delegated to NRCS State 
Conservationists and FSA State Executive Directors. Multiple third 
party applications may be approved for each State.
    Application approval means the private organization or State agency 
meets the Secretary's requirements for managing and enforcing 
easements. Since landowners must authorize a third party easement 
administrator, Secretarial approval does not guarantee that the 
approved applicant will receive GRP easements to administer. Those 
agencies and organizations selected to manage easements will be 
required to submit an annual report to the Secretary.

Sections 1415.14 Through 1415.16 and 1415.18 Through 1415.20

    These sections are consistent with other conservation programs and 
contain standard administrative policy associated with contract 
violations and remedies, payments not subject to claims, assignment of 
payments, appeals, etc. Nonetheless, USDA welcomes comments regarding 
this section on land enrolled in GRP.

Other

    There has been much discussion within USDA regarding the 
development of industrial windmills on grassland acreage. USDA is 
prohibiting industrial windmills on GRP acreage because the structure 
is unrelated to protecting the viability of the grassland acreage, it 
requires disturbing the soil surface in a manner that is not permitted 
in the GRP statute, and it would encourage people wanting to establish 
other types of towers on GRP acreage. The public is free to comment on 
this policy decision as well.

List of Subjects in 7 CFR Part 1415

    Administrative practice and procedure, Agriculture, Soil 
conservation, Grassland, Grassland protection, Grazing land protection.

0
For the reason stated in the preamble, chapter XIV of 7 CFR is amended 
by adding a new part 1415 as set forth below:

PART 1415--GRASSLAND RESERVE PROGRAM

Sec.
1415.1 Purpose.
1415.2 Administration.
1415.3 Definitions.
1415.4 Program requirements.
1415.5 Land eligibility.
1415.6 Participant eligibility.
1415.7 Application procedures.
1415.8 Establishing priority for enrollment of properties.
1415.9 Enrollment of easements and rental agreements.
1415.10 Compensation for easements and rental agreements.
1415.11 Restoration agreements.
1415.12 Modifications to easements and rental agreements.
1415.13 Transfer of land.
1415.14 Misrepresentations and violations.
1415.15 Payments not subject to claims.
1415.16 Assignments.
1415.17 Delegation to third parties.
1415.18 Appeals.
1415.19 Scheme or device.
1415.20 Confidentiality.

    Authority: 16.U.S.C. 3838n-3838q.


Sec.  1415.1  Purpose.

    (a) The purpose of the Grassland Reserve Program (GRP) is to assist 
landowners in protecting, conserving, and restoring grassland resources 
on private lands through short and long-term rental agreements and 
easements.
    (b) The objectives of GRP are to:
    (1) Emphasize preservation of native and natural grasslands and 
shrublands, first and foremost;
    (2) Protect grasslands and shrublands from the threat of 
conversion;
    (3) Support grazing operations; and
    (4) Maintain and improve plant and animal biodiversity.


Sec.  1415.2  Administration.

    (a) The regulations in this part set forth policies, procedures, 
and requirements for program implementation of the GRP as administered 
by the Natural Resources Conservation Service (NRCS) and the Farm 
Service Agency (FSA). The regulations in this part will be administered 
under the general supervision and direction of the NRCS Chief and the 
FSA Administrator. These two agency leaders will:
    (1) Concur in the establishment of program policy and direction; 
development of the State allocation formula, and development of broad 
national ranking criteria;
    (2) Use a national allocation formula to provide GRP funds to USDA 
State

[[Page 29182]]

offices that emphasizes support for biodiversity of plants and animals, 
grasslands under the greatest threat of conversion, and grazing 
operations. The allocation formula will also include a factor 
representing program demand. The demand factor could be expressed in 
terms of applications received, acres offered, funding needs for such 
applications, or a combination of these elements. The allocation 
formula may be modified periodically to change the emphasis of any 
factor to reflect information about natural resource concerns. The data 
in the allocation formula will be updated periodically as new 
information becomes available.
    (3) Ensure the National, State and local level information 
regarding program implementation is made available to the public;
    (4) Consult with USDA leaders at the State level and other Federal 
agencies with the appropriate expertise and information when evaluating 
program policies and direction; and
    (5) Authorize NRCS State Conservationists and FSA State Executive 
Directors to determine how funds will be used and how the program will 
be implemented at the State level.
    (b) At the State level, the NRCS State Conservationist and the FSA 
State Executive Director are jointly responsible to:
    (1) Identify State priorities for project selection, based on input 
from the State Technical Committee;
    (2) Identify, as appropriate, USDA employees at the field level 
responsible for implementing the program, and the implementation 
process considering the nature and extent of natural resource concerns 
throughout the State and the availability of human resources to assist 
with activities related to program enrollment;
    (3) Develop program outreach materials at the State and local level 
to ensure landowners, operators, and tenants of eligible land are aware 
and informed that they may be eligible for the program;
    (4) Develop conservation practice cost-share rates;
    (5) Administer and enforce the terms of easements and rental 
agreements unless this responsibility is delegated to a third party as 
provided in Sec. 1415.17; and
    (6) With advice from the State Technical Committee, develop 
criteria for ranking eligible land, consistent with national criteria 
and program objectives and address related policy matters regarding 
program direction for GRP in the applicable State. USDA, at the State 
level, has the authority to accept or reject the State Technical 
Committee recommendations; however, USDA will give consideration to the 
State Technical Committee's recommendations.
    (c) The funds, facilities, and authorities of the Commodity Credit 
Corporation are available to NRCS and FSA to implement GRP.
    (d) Subject to funding availability, the program may be implemented 
in any of the 50 States, the District of Columbia, the Commonwealth of 
Puerto Rico, Guam, the Virgin Islands of the United States, American 
Samoa, and the Commonwealth of the Northern Mariana Islands.
    (e) The Secretary may modify or waive a provision of this part if 
he or she deems the application of that provision to a particular 
limited situation to be inappropriate and inconsistent with the 
environmental and cost-efficiency goals of GRP. This authority cannot 
be further delegated. No provision of this part which is required by 
applicable law may be waived.
    (f) No delegation in this part to lower organizational levels shall 
preclude the Chief, NRCS, or the Administrator, FSA, from determining 
any issue arising under this part or from reversing or modifying any 
determination arising from this part.
    (g) The Chief, NRCS, may delegate at any time Federal easement 
administration and enforcement responsibilities to approved State 
Agencies, or approved private conservation or land trust organizations 
with the consent or at the request of the participating landowner. The 
USDA Forest Service may hold easements on properties adjacent to USDA 
Forest Service land, with the consent of the landowner.
    (h) Program participation is voluntary.
    (i) Applications for participation will be accepted on a continual 
basis at local USDA Service Centers. NRCS and FSA at the State level 
will establish cut-off periods to rank and select applications. These 
cut-off periods will be available in program outreach material provided 
by the local USDA Service Center. Once funding levels have been 
exhausted, eligible applications will remain on file until additional 
funding becomes available or the applicant chooses to be removed from 
consideration.
    (j) The services of other third parties as provided for in 7 CFR 
part 652 may be used to provide technical services to participants.


Sec.  1415.3  Definitions.

    Administrator means the Administrator of the Farm Service Agency 
(FSA) or the person delegated authority to act for the Administrator.
    Chief means the Chief of the Natural Resources Conservation Service 
(NRCS) or the person delegated authority to act for the Chief.
    Commodity Credit Corporation (CCC) is a Government-owned and 
operated entity that was created to stabilize, support, and protect 
farm income and prices. CCC is managed by a Board of Directors, subject 
to the general supervision and direction of the Secretary of 
Agriculture, who is an ex-officio director and chairperson of the 
Board. The Chief and Administrator are Vice Presidents of CCC. CCC 
provides the funding for GRP, and FSA and NRCS administer the GRP on 
its behalf.
    Conservation District means any district or unit of State, tribal, 
or local government formed under State, tribal, or territorial law for 
the express purpose of developing and carrying out a local soil and 
water conservation program. Such district or unit of government may be 
referred to as a ``conservation district,'' ``soil conservation 
district,'' ``resource conservation district,'' ``land conservation 
committee,'' or similar name.
    Conservation plan means a record of the client's decisions and 
supporting information, for treatment of a land unit or water as a 
result of the planning process, that meets NRCS Field Office Technical 
Guide quality criteria for each natural resource (soil, water, air, 
plants, and animals) and takes into account economic and social 
considerations. The plan describes the schedule of operations and 
activities needed to solve identified natural resource problems and 
take advantage of opportunities at a conservation management system 
level. The needs of the client, the resources, Federal, State, and 
local requirements will be met by carrying out the plan.
    Conservation practice means a specified treatment, such as a 
structural or land management practice, that is planned and applied 
according to NRCS standards and specifications.
    Cost-share agreement means the document that specifies the 
obligations and the rights of any person who has been accepted for 
participation in the program.
    Department means United States Department of Agriculture.
    Easement means a conservation easement, which is an interest in 
land defined and delineated in a deed whereby the landowner conveys 
certain rights, title, and interests in a property to the United States 
for the purpose of protecting the grassland and other conservation 
values of the property.

[[Page 29183]]

Under GRP, the property rights are conveyed in a ``conservation 
easement deed.''
    Easement area means the land encumbered by an easement.
    Easement payment means the consideration paid to a landowner for an 
easement conveyed to the United States under the Grassland Reserve 
Program.
    Field office technical guide means the official local NRCS source 
of resource information and interpretations of guidelines, criteria, 
and standards for planning and applying conservation treatments and 
conservation management systems. It contains detailed information for 
the conservation of soil, water, air, plant, and animal resources 
applicable to the local area for which it is prepared.
    Forb means any herbaceous plant other than those in the grass 
family.
    Grantor is the term used for the landowner that is transferring 
land rights to the United States through an easement.
    Grassland means land on which the vegetation is dominated by 
grasses, grass-like plants, shrubs, and forbs. The definition of 
grassland as used in the context of this part includes shrubland, land 
that contains forbs, pastureland, and rangeland.
    Grazing value means the value assigned to the grassland cover by 
USDA.
    Improved pasture means grazing land permanently producing natural 
forage species that receives varying degrees of periodic cultural 
treatment to enhance forage quality and yields and is primarily 
harvested by grazing animals.
    Landowner means a person or persons holding fee title to the land.
    Native means a species that is a part of the original fauna or 
flora of the area.
    Natural means a native or an introduced species that is adapted to 
the ecological site and can perpetuate itself in the community without 
cultural treatment. For the purposes of this part the term ``natural'' 
does not include noxious weeds.
    Participant means a landowner, operator, or tenant who is a party 
to a GRP agreement. The term ``agreement'' in this context refers to 
GRP rental agreements and option to purchase agreements for easements. 
Landowners of land subject to a GRP easement are also considered 
participants regardless of whether such landowner initiated the sale of 
the easement to the Federal Government.
    Pastureland means a land cover/use category of land managed 
primarily for the production of introduced forage plants for grazing 
animals. Pastureland cover may consist of a single species in a pure 
stand, a grass mixture, or a grass-legume mixture. Management usually 
consists of cultural treatments: fertilization, weed control, reseeding 
or renovation, and control of grazing.
    Permanent easement means an easement that lasts in perpetuity.
    Private land means land that is not owned by a governmental entity.
    Rangeland means a land cover/use category on which the climax or 
potential plant cover is composed principally of native grasses, 
grasslike plants, forbs, or shrubs suitable for grazing and browsing, 
and introduced forage species that are managed like rangeland. 
Rangeland includes lands re-vegetated naturally or artificially when 
routine management of that vegetation is accomplished mainly through 
manipulation of grazing. This term would include areas where introduced 
hardy and persistent grasses, such as crested wheatgrass, are planted 
and such practices as deferred grazing, burning, chaining, and 
rotational grazing are used, with little or no chemicals or fertilizer 
being applied. Grasslands, savannas, many wetlands, some deserts, and 
tundra are considered to be rangeland. Certain communities of low forbs 
and shrubs, such as mesquite, chaparral, mountain shrub, and pinyon-
juniper, are also included as rangeland.
    Rental agreement means an agreement where the participant will be 
paid annual rental payments for the length of the agreement to maintain 
and/or restore grassland functions and values under the Grassland 
Reserve Program.
    Restoration means implementing any conservation practice 
(vegetative, management, or structural) that improves the values and 
functions of grassland (native and natural plant communities).
    Restoration agreement means an agreement between the program 
participant and the United States Department of Agriculture to restore 
or improve the functions and values of grassland and shrubland.
    Restored grassland means land that is to be converted back to 
grassland or shrubland.
    Secretary means the Secretary of Agriculture.
    Shrubland means land that the dominant plant species is shrubs, 
which are plants that are persistent, have woody stems, a relatively 
low growth habitat, and generally produces several basal shoots instead 
of a single bole.
    Significant decline means a decrease of a species population to 
such an extent that it merits direct intervention to halt further 
decline, as determined by the NRCS State Conservationist in 
consultation with the State Technical Committee.
    Similar function and value means plants that are alike in growth 
habitat, environmental requirements, and provide substantially the same 
ecological benefits.
    State Technical Committee means a committee established by the 
Secretary of the United States Department of Agriculture in a State 
pursuant to 16 U.S.C. 3861.
    USDA means the Chief, NRCS, in consultation with the Administrator, 
FSA or the NRCS State Conservationist in consultation with the FSA 
State Executive Director.


Sec.  1415.4  Program requirements.

    (a) Only landowners may submit applications for easements. For 
rental agreements, the applicant must provide evidence of control of 
the property for the duration of the rental agreement.
    (b) The easement and rental agreement shall require that the area 
be maintained in accordance with GRP goals and objectives for the 
duration of the term of the easement or rental agreement, including the 
conservation, protection, and restoration of the grassland functions 
and values.
    (c) All participants in GRP will be required to implement a 
conservation plan approved by USDA to preserve the viability of the 
grassland enrolled into the program. The conservation plan will 
document the conservation values, characteristics, current and future 
use of the land, practices that may need to be applied along with a 
schedule for application, and a management plan.
    (d) The easement and rental agreement shall grant USDA or its 
representatives a right of access to the easement and rental agreement 
area.
    (e) Easement participants are required to convey title that is 
acceptable to the United States and provide consent or subordination 
agreements from each holder of a security or other interest in the 
land. The landowner shall warrant that the easement granted the United 
States is superior to the rights of all others, except for exceptions 
to the title that are deemed acceptable by the USDA.
    (f) Easement participants are required to use a standard GRP 
easement developed by the Department. The easement shall grant all 
development rights, title, and interest in the easement area in order 
to protect grassland and other conservation values.
    (g) The program participant must comply with the terms of the 
easement or rental agreement and comply with all terms and conditions 
of any associated restoration agreement.

[[Page 29184]]

    (h) Easements and rental agreements will allow the following 
activities:
    (1) Common grazing practices on the land in a manner that are 
consistent with maintaining the viability of natural grass and shrub 
species;
    (2) Haying, mowing, or haying for seed production, except that such 
uses shall have certain restrictions determined appropriate by the NRCS 
State Conservationist to protect, during the nesting season, birds in 
the local area that are in significant decline or are conserved in 
accordance with Federal or State law; and
    (3) Fire rehabilitation and construction of firebreaks, fences 
(excluding corrals), watering facilities, seedbed preparation and 
seeding, and any other facilitating practices, as determined by the 
USDA to protect and restore the grassland functions and values.
    (i) Any activity that would disturb the surface of the land covered 
by the easement is prohibited except for common grazing management 
practices carried out in a manner consistent with maintaining the 
functions and values of grassland common to the local area, including 
fire rehabilitation and construction of firebreaks, construction of 
fences, and restoration practices.
    (j) Contracts may be canceled without penalty or refund if the 
original participant dies, becomes incompetent, or is otherwise 
unavailable during the contract period.
    (k) Participants may be able to convert rental agreements to an 
easement, providing the easement is for a longer duration than the 
rental agreement, funds are available, and the project meets conditions 
established by the USDA. Land cannot be enrolled in both a rental 
agreement option and an easement enrollment option at the same time. 
The rental agreement shall be deemed terminated the date the easement 
is recorded in the local land records office.


Sec.  1415.5  Land eligibility.

    (a) GRP is available on privately owned lands, which include 
private and tribal land. Publicly-owned land is not eligible.
    (b) Land shall be eligible for funding consideration if the NRCS 
State Conservationist determines that the land is:
    (1) Grassland, land that contains forbs, or shrubs (including 
rangeland and pastureland); or
    (2) The land is located in an area that has been historically 
dominated by grassland, forbs, or shrubs; and has potential to provide 
habitat for animal or plant populations of significant ecological 
value, as determined by the State Conservationist in consultation with 
the State Technical Committee and FSA, if the land is;
    (i) Retained in the current use of the land; or
    (ii) Restored to a natural condition.
    (c) Incidental lands, in conjunction with eligible land, may also 
be considered for enrollment to allow for the efficient administration 
of an easement or rental agreement.
    (d) Forty contiguous acres is the minimum acreage that will be 
accepted in the program. However, less than 40 acres may be accepted if 
the USDA, with advice from the State Technical Committee, determines 
that the enrollment of acreage meets the purposes of the program and 
grants a waiver. USDA, at the State level, may also establish a higher 
minimum acreage level. USDA will review any minimum acreage requirement 
to ensure, to the extent permitted by law, that this requirement does 
not unfairly discriminate against small farmers.
    (e) Land will not be enrolled if the functions and values of the 
grassland are protected under an existing contract or easement. The 
land would become eligible when the existing contract expires or is 
terminated, and the grassland values and functions are no longer 
protected.
    (f) Land on which gas, oil, earth, or other mineral rights 
exploration has been leased or is owned by someone other than the GRP 
applicant may be offered for participation in the program. However, if 
an applicant submits an offer for an easement project, USDA will assess 
the potential impact that the third party rights may have upon the 
grassland resources. USDA reserves the right to deny funding for any 
application where there are exceptions to clear title on any property.


Sec.  1415.6  Participant eligibility.

    To be eligible to participate in GRP an applicant:
    (a) Must be a landowner for easement participation or be a 
landowner or have general control of the eligible acreage being offered 
for rental agreement participation;
    (b) Agree to provide such information to USDA that the Department 
deems necessary or desirable to assist in its determination of 
eligibility for program benefits and for other program implementation 
purposes;
    (c) Meet the Adjusted Gross Income requirements in 7 CFR part 1400; 
and
    (d) Meet the conservation compliance requirements found in 7 CFR 
part 12.


Sec.  1415.7  Application procedures.

    (a) Any owner or operator or tenant of eligible land that meets the 
criteria set forth in Sec.  1415.6 may submit an application through a 
USDA Service Center for participation in the GRP. Applications are 
accepted throughout the year.
    (b) By filing an Application for Participation, the applicant 
consents to a USDA representative entering upon the land offered for 
enrollment for purposes of assessing the grassland functions and 
values, and for other activities that are necessary for the USDA to 
make an offer of enrollment. The applicant will be notified prior to a 
USDA representative entering upon their property.
    (c) Applicants submit applications that identify the duration of 
the easement or rental agreement. Rental agreements may be for 10-
years, 15-years, 20-years, or 30-years; easements may be for 30-years, 
permanent, or for the maximum duration authorized by State law.


Sec.  1415.8  Establishing priority for enrollment of properties.

    (a) USDA, at the National level, will provide to USDA offices at 
the State level, broad national guidelines for establishing State 
specific project selection criteria.
    (b) USDA, at the State level, with advice from the State Technical 
Committee, shall establish criteria to evaluate and rank applications 
for easement and rental agreement enrollment following the guidance 
established in paragraph (a) of this section.
    (c) Ranking criteria will emphasize support for:
    (1) Native and natural grassland;
    (2) Protection of grassland from the threat of conversion;
    (3) Support for grazing operations; and
    (4) Maintain and improve plant and animal biodiversity.
    (d) When funding is available, USDA at the State level will 
periodically select for funding the highest ranked applications based 
on applicant and land eligibility and the State-developed ranking 
criteria.
    (e) States may utilize one or more ranking pools, including a pool 
for special project consideration such as establishing a pool for 
projects that receive restoration funding from non-USDA sources.
    (f) The USDA, with advice from the State Technical Committee, may 
emphasize enrollment of unique grasslands or specific geographic areas 
of the State.

[[Page 29185]]

    (g) The FSA State Executive Director and NRCS State 
Conservationist, with advice from the State Technical Committee will 
select applications for funding.
    (h) If available funds are insufficient to accept the highest 
ranked application, and the applicant is not interested in reducing the 
acres offered to match available funding, USDA may select a lower 
ranked application that can be fully funded. Applicants may choose to 
change the duration of the easement or agreement or reduce acreage 
amount offered if the application ranking score is not reduced below 
that of the score of the next available application on the ranking 
list.


Sec.  1415.9  Enrollment of easements and rental agreements.

    (a) Based on the priority ranking, USDA will notify applicants in 
writing of their tentative acceptance into the program for either 
rental agreement or conservation easement options. The participant has 
fifteen calendar days from the date of notification to sign and submit 
a letter of intent to continue. A letter of intent to continue from the 
applicant authorizes USDA to proceed with the enrollment process.
    (b) An offer of tentative acceptance into the program does not bind 
the USDA to acquire an easement or enter into a rental agreement, nor 
does it bind the participant to convey an easement, enter into a rental 
agreement, or agree to restoration activities.
    (c) For easement projects, land is considered enrolled after the 
landowner signs the intent to continue. For rental agreements, land is 
considered enrolled after a GRP contract is approved by USDA.
    (d) USDA will present a contract to the participant, which will 
describe the easement or rental area; the easement terms, or rental 
terms and conditions; and other terms and conditions for participation 
that may be required by CCC.
    (e) For easements, after the contract is executed by USDA and 
participant, USDA will proceed with development of the conservation 
plan and various acquisition activities, which may include conducting a 
survey of the easement, securing necessary subordination agreements, 
procuring title insurance, developing a baseline data report, and 
conducting other activities necessary to record the easement.
    (f) Prior to execution by USDA and the participant of the contract, 
the USDA may withdraw its offer anytime due to lack of available funds, 
title concerns for easements, or other reasons. The offer to the 
participant shall be void if not executed by the participant within the 
time specified in an option to purchase agreement.


Sec.  1415.10  Compensation for easements and rental agreements.

    (a) Compensation for easements will be based upon:
    (1) The fair market value of the land less the grassland value of 
the land for permanent easements; and
    (2) Thirty percent of the value determined in paragraph (a)(1) of 
this section for 30-year easements or for an easement for the maximum 
duration permitted under State law.
    (b) For 10-, 15-, 20-, and 30-year rental agreements, the 
participant will receive not more than 75 percent of the grazing value 
in an annual payment for the length of the agreement.
    (c) In order to provide for better uniformity among States, the FSA 
Administrator and NRCS Chief may review and adjust, as appropriate, 
State or other geographically based payment rates for rental 
agreements. NRCS State Conservationists may establish easement payment 
amounts on a site specific or geographic area basis.
    (d) Easement or rental agreement payments received by participant 
shall be in addition to, and not affect, the total amount of payments 
that the participant is otherwise eligible to receive under other 
Federal laws.
    (e) For easements, to minimize expenditures on individual 
appraisals and expedite program delivery, USDA may complete a 
programmatic appraisal to establish regional average market values and 
grazing values. The programmatic appraisals would remove the need to 
conduct appraisals on each parcel selected for funding.


Sec.  1415.11  Restoration agreements.

    (a) Restoration agreements are only authorized to be used in 
conjunction with easements and rental agreements. NRCS, in consultation 
with the program participant, will determine if the grassland resources 
are adequate to meet the participant's objectives and the purposes of 
the program, or if a restoration agreement is needed. Such a 
determination will also be subject to the availability of funding. NRCS 
may condition participation in the program upon the execution of a 
restoration agreement depending on the condition of the grassland 
resources. When the functions and values of the grassland are 
determined adequate by NRCS, a restoration agreement will not be 
required. However, if a restoration agreement is required, NRCS will 
set the terms of the restoration agreement. The restoration agreement 
will identify conservation practices and measures necessary to improve 
the functions and values of the grassland. If the functions and values 
of the grassland decline while the land is subject to a GRP easement or 
rental agreement through no fault of the participant, the participant 
may enter into a restoration agreement at that time to improve the 
functions and values with USDA approval and fund availability.
    (b) Eligible restoration practices include land management, 
vegetative, and structural practices and measures that will improve the 
grassland ecological functions and values on native and natural, and 
introduced plant communities. The NRCS State Conservationist, with 
advice from the State Technical Committee and in consultation with FSA, 
will determine the conservation practices, measures, payment rates, and 
cost-share percentages, not to exceed statutory limits, that will be 
available for restoration. A list of eligible practices will be 
available to the public. NRCS working through the local conservation 
district with the program participant will determine the terms of the 
restoration agreement. The conservation district may assist with 
determining eligible practices and approving restoration agreements. 
Restoration agreements will not extend past the date of a rental 
agreement or easement.
    (c) All restoration practices and measures are eligible for cost 
sharing. Payments under GRP may be made to the participant of not more 
than 90 percent for the cost of carrying out conservation practices and 
measures on grassland and shrubland that has never been cultivated, and 
not more than 75 percent on restored grassland and shrubland on land 
that at one time was cultivated.
    (d) Restoration activities are applicable to native and natural 
plant communities. When seeding is determined necessary for 
restoration, USDA will give priority to using native seed. However, 
when native seed is not available, or returning the land to native 
conditions is determined impractical by USDA, plant propagation using 
species that provide similar functions and values may be utilized.
    (e) Cost-shared practices shall be maintained by the participant 
for the life of the practice. The life of the practice shall be 
consistent with other USDA cost shared or easement programs. Failure to 
maintain the practice will be dealt with under the terms of the 
restoration agreement and may involve repayment of the Federal cost-
share.

[[Page 29186]]

    (f) All conservation practices will be implemented in accordance 
with the NRCS Field Office Technical Guide.
    (g) Technical assistance will be provided by NRCS, or an approved 
third party, as needed by the participant.
    (h) Federal cost sharing shall be adjusted so that the combined 
cost share by Federal and State government or subdivision of a State 
government shall not exceed 100 percent of the total actual cost of the 
restoration. The participant cannot receive cost-share from more than 
one Federal cost-share program for the same conservation practice.
    (i) Cost-share payments may be made only upon a determination by a 
qualified individual approved by the NRCS State Conservationist that an 
eligible practice has been established in compliance with appropriate 
standards and specifications.
    (j) Identified practices may be implemented by the participant or 
other designee. Payments will not be made for practices applied prior 
to submitting an application to participate in the program.
    (k) Cost-share payments will not be made for practices implemented 
or initiated prior to the approval of a rental agreement or easement 
acquisition unless a written waiver is granted by USDA at the State 
level prior to installation of the practice.


Sec.  1415.12  Modifications to easements and rental agreements.

    (a) After an easement has been recorded, no modification will be 
made to the easement except by mutual agreement with Chief, NRCS, and 
the landowner.
    (b) Easement modifications may only be made by the Chief, NRCS, 
after consulting with the Office of General Counsel. Minor 
modifications may be made by the NRCS State Conservationist in 
consultation with Office of General Counsel. Minor modifications are 
those that do not affect the substance of the conservation easement 
deed. Such modifications include, typographical errors, minor changes 
in legal descriptions as a result of survey or mapping errors, and 
address changes.
    (c) Approved modifications will be made only in an amendment to an 
easement which is duly prepared and recorded in conformity with 
standard real estate practices, including requirements for title 
approval, subordination of liens, and recordation.
    (d) The Chief, NRCS, may approve modifications on easements to 
facilitate the practical administration and management of the enrolled 
area so long as the modification will not adversely affect the 
grassland functions and values for which the land was acquired or other 
terms of the easement.
    (e) NRCS State Conservationists may approve modifications for 
restoration agreements and conservation plans as long as the 
modifications do not affect the provisions of the easement or rental 
agreement and meets GRP program objectives.
    (f) USDA may approve modifications on rental agreements to 
facilitate the practical administration and management of the enrolled 
area so long as the modification will not adversely affect the 
grassland functions and values for which the land was enrolled.


Sec.  1415.13  Transfer of land.

    (a) Any transfer of the property prior to the participant's 
acceptance into the program shall void the offer of enrollment, unless 
at the option of the NRCS State Conservationist, in consultation with 
the FSA State Executive Director, an offer is extended to the new 
participant and the new participant agrees to the same easement or 
rental agreement terms and conditions.
    (b) After acreage is accepted in the program, for easements with 
multiple payments, any remaining easement payments will be made to the 
original landowner unless USDA receives an assignment of proceeds.
    (c) Future annual rental payments will be made to the successor 
participant.
    (d) The new landowner or contract successor shall be held 
responsible for complying with the terms of the recorded easement or 
rental agreement and for assuring completion of all measures and 
practices required by the associated restoration agreement. Eligible 
cost-share payments shall be made to the new participant upon 
presentation that the successor assumed the costs of establishing the 
practices.
    (e) With respect to any and all payments owed to landowners, the 
United States shall bear no responsibility for any full payments or 
partial distributions of funds between the original landowner and the 
landowner's successor. In the event of a dispute or claim on the 
distribution of cost-share payments, USDA may withhold payments without 
the accrual of interest pending an agreement or adjudication on the 
rights to the funds.
    (f) The rights granted to the United States in an easement shall 
apply to any of its agents, successors, or assigns. All obligations of 
the landowner under an easement deed shall also bind the landowner's 
heirs, successors, agents, assigns, lessees, and any other person 
claiming under them.
    (g) Rental agreements may be transferred to another landowner, 
operator or tenant that acquires an interest in the land enrolled in 
GRP. The transferee must be determined by USDA to be eligible to 
participate in GRP and must assume full responsibility under the 
agreement. USDA may require a participant to refund all or a portion of 
any financial assistance awarded under GRP if the participant sells or 
loses control of the land under a GRP rental agreement and the new 
owner or controller is not eligible to participate in the program or 
refuses to assume responsibility under the agreement.


Sec.  1415.14  Misrepresentation and violations.

    (a) Contract violations:
    (1) Contract violations, determinations, and appeals will be 
handled in accordance with the terms of the program contract or 
agreement and attachments thereto.
    (2) A participant who is determined to have erroneously represented 
any fact affecting a program determination made in accordance with this 
part shall not be entitled to contract payments and must refund to USDA 
all payments, plus interest in accordance with 7 CFR part 1403.
    (3) In the event of a violation of a rental agreement or any 
contract directly involving the participant, the participant shall be 
given notice and an opportunity to voluntarily correct the violation 
within 30-days of the date of the notice, or such additional time as 
CCC may allow.
    (b) Easement violations: Easement violations are handled under the 
terms of the easement. Upon notification of the participant, the USDA 
reserves the right to enter upon the easement area at any time to 
remedy deficiencies or violations. Such entry may be made when USDA 
deems such action necessary to protect important grassland and 
shrubland functions and values or other rights of the United States 
under the easement. The participant shall be liable for any costs 
incurred by the United States as a result of the participant's 
negligence or failure to comply with easement, rental agreement, or 
contractual obligations.
    (c) USDA may require the participant to refund all or part of any 
payments received by the participant or pay liquidated damages as may 
be required under the program contract or agreement.
    (d) In addition to any and all legal and equitable remedies 
available to the United States under applicable law,

[[Page 29187]]

USDA may withhold any easement payment, and cost-share payments owing 
to the participant at any time there is a material breach of the 
easement covenants, rental agreement, or any contract. Such withheld 
funds may be used to offset costs incurred by the United States in any 
remedial actions or retained as damages pursuant to court order or 
settlement agreement.
    (e) Under an easement, the United States shall be entitled to 
recover any and all administrative and legal costs, including 
attorney's fees or expenses, associated with any enforcement or 
remedial action.


Sec.  1415.15  Payments not subject to claims.

    Any cost-share, rental payment, or easement payment or portion 
thereof due any person under this part shall be allowed without regard 
to any claim or lien in favor of any creditor, except agencies of the 
United States Government.


Sec.  1415.16  Assignments.

    (a) Any person entitled to any cash payment under this program may 
assign the right to receive such cash payments, in whole or in part.
    (b) If a participant that is entitled to a payment dies, becomes 
incompetent, or is otherwise unable to receive the payment, or is 
succeeded by another person who renders or completes the required 
performance, others may be eligible to receive payment in such a manner 
as USDA determines is fair and reasonable in light of all the 
circumstances.


Sec.  1415.17  Delegation to third parties.

    (a) USDA may permit an approved private conservation or land trust 
organization, State or other Federal agency to administer an easement 
with the consent or written request of the landowner. Rental agreements 
will not be delegated to private organizations, State, or other Federal 
agencies.
    (b) USDA will have the right to conduct periodic inspections and 
enforce the easement and associated restoration agreement for any 
easements administered pursuant to this section.
    (c) The private organization, State, or other Federal agency shall 
assume the costs incurred in administering and enforcing the easement, 
including the costs of restoration or rehabilitation of the land to the 
extent that such restoration or rehabilitation is above and beyond that 
required by the GRP conservation plan and restoration agreement. Any 
additional restoration must be consistent with the purposes of the 
easement.
    (d) A private organization, State, or other Federal agency that 
seeks to administer and enforce an easement shall apply to the NRCS 
State Conservationist for approval. The State Conservationist shall 
consult with FSA State Executive Director prior to approval.
    (e) For a private organization to administer and enforce an 
easement, the private organization must be organized as required by 28 
U.S.C. 501(c)(3) of the Internal Revenue Code of 1986 or be controlled 
by an organization described in section 28 U.S.C. 509(a)(2) of that 
code. In addition, the private organization must provide evidence to 
USDA that it has:
    (1) Relevant experience necessary to administer grassland and 
shrubland easements;
    (2) A charter that describes the commitment of the private 
organization to conserving ranchland, agricultural land, or grassland 
for grazing and conservation purposes;
    (3) The human and financial resources necessary, as determined by 
the Chief, NRCS, to effectuate the purposes of the charter; and
    (4) Sufficient financial resources to carry out easement 
administrative and enforcement activities.
    (f) If a private organization is terminated, withdraws from the 
agreement to administer the easement, or the landowner submits a 
request in writing to terminate such agreement, the USDA will assume 
the responsibility upon receiving such formal notice from the 
organization or the landowner. Subsequent agreements for easement 
management with other approved private, nonprofit organizations could 
be entered into at the request of the landowner with approval from the 
NRCS State Conservationist. If the owner and the new organization fail 
to notify the NRCS State Conservationist of the reassignment within 30 
days of termination, the easement shall revert to the control of NRCS.


Sec.  1415.18  Appeals.

    (a) Applicants or participants may appeal decisions regarding this 
program in accordance with 7 CFR parts 11, 614, and 780.
    (b) Before a person may seek judicial review of any action taken 
under this part, the person must exhaust all administrative appeal 
procedures set forth in paragraph (a) of this section.


Sec.  1415.19  Scheme or device.

    (a) If it is determined by the Department that a participant has 
employed a scheme or device to defeat the purposes of this part, any 
part of any program payment otherwise due or paid such participant 
during the applicable period may be withheld or be required to be 
refunded with interest thereon, as determined appropriate by the 
Department.
    (b) A scheme or device includes, but is not limited to, coercion, 
fraud, misrepresentation, depriving any other person of payments for 
cost-share practices or easements for the purpose of obtaining a 
payment to which a person would otherwise not be entitled.
    (c) A participant who succeeds to the responsibilities under this 
part shall report in writing to the Department any interest of any kind 
in enrolled land that is held by a predecessor or any lender. A failure 
of full disclosure will be considered a scheme or device under this 
section.


Sec.  1415.20  Confidentiality.

    Appraisals are considered confidential information and are not 
distributed. The regulations in this part provide that any appraisals, 
market analysis, or supporting documentation that may be used by USDA 
in determining property value are considered confidential information, 
and shall only be disclosed as determined at the sole discretion of FSA 
and NRCS in accordance with applicable law.

    Signed at Washington, DC on May 13, 2004.
Bruce I. Knight,
Vice President, Commodity Credit Corporation and Chief, Natural 
Resources Conservation Service.
[FR Doc. 04-11473 Filed 5-20-04; 8:45 am]
BILLING CODE 3410-16-P