[Federal Register Volume 71, Number 43 (Monday, March 6, 2006)]
[Rules and Regulations]
[Pages 11139-11151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2091]



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  Federal Register / Vol. 71, No. 43 / Monday, March 6, 2006 / Rules 
and Regulations  

[[Page 11139]]



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).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The United States Department of Agriculture (USDA or the 
Department) is publishing a final rule implementing the Grassland 
Reserve Program (GRP). The GRP assists landowners and others in 
restoring and conserving eligible grassland and certain other lands 
through rental agreements and easements. This 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.

DATES: Effective date: March 6, 2006.

FOR FURTHER INFORMATION CONTACT: Floyd Wood, National Program Manager, 
Easement Programs Division, NRCS, P.O. Box 2890, Washington, DC 20013-
2890; telephone: (202) 720-0242; fax: (202) 720-9689; 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: USDA promulgated the GRP interim final rule 
in the Federal Register on May 21, 2004 (69 FR 29173). The GRP is 
authorized under the Food Security Act of 1985, as amended, 16 U.S.C. 
3838n-3838q. The Farm Security and Rural Investment Act of 2002 (2002 
Farm Bill) amended Subchapter C to Chapter 2, Subtitle D, of Title XII 
of the Food Security Act of 1985 to authorize GRP. GRP is a voluntary 
program to assist landowners and agriculture operators in restoring and 
conserving eligible private grassland and land that contains forbs and 
shrublands through rental agreements and easements.
    The interim final rulemaking provided a 60-day comment period that 
ended July 20, 2004. USDA received comments from thirty-nine entities. 
USDA addresses the comments received, including any changes to the 
final rule made as a result of the comments. Some of the comments 
received by the Department addressed the GRP template conservation 
easement deed even though the deed was not a part of the rule making. 
These comments may be of general interest, and the Department has 
decided to address those comments in the preamble as well. USDA notes, 
however, that it may make future changes to the easement deed without 
notice and comment rulemaking. Since the interim final rule was 
published, the statutory authority for GRP was amended by the 
Consolidated Appropriations Act of 2005, Pub. L. 108-447. The final 
rule addresses and implements this statutory change as well.

Background

    Historically, grassland and shrublands occupied approximately 1 
billion acres, about half the landmass of the 48 contiguous United 
States. 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. Grasslands provide 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 rural home sites, invasive species, woody 
vegetation, and suburban 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.
    As noted above, GRP is a voluntary program to assist landowners and 
agriculture operators in restoring and protecting eligible grassland 
and land that contains forbs and shrublands through rental agreements 
and easements. The 2002 Farm Bill provided that $254 million would be 
made available through FY 2007 to enroll no more than 2 million acres 
of restored or improved grassland, rangeland, shrubland and 
pastureland. USDA will consider all enrolled native and naturalized 
grasslands, both restored and existing, towards the 2 million acre cap. 
The statute 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.
    The Secretary of Agriculture delegated the authority to administer 
GRP on behalf of the CCC, to the Chief, Natural Resources Conservation 
Service (NRCS), who is CCC Vice President, and the Administrator, Farm 
Service Agency (FSA), who is the CCC Executive Vice President. NRCS has 
the lead responsibility on regulatory matters, technical issues, and 
easement administration, and FSA has the lead responsibility for rental 
agreement administration and financial activities. The agencies will 
consult on regulatory and policy matters pertaining to both rental 
agreements and easements. 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 lands. 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 given the general responsibilities of each agency.
    This final rule describes the various enrollment options through 
rental agreements and easements, the

[[Page 11140]]

compensation rates for each, the manner in which USDA establishes 
criteria to evaluate and rank applications at the State level, and the 
various protections and enhancements that rental agreements and 
easements would provide to grassland resources.

Summary of Comments

    Approximately, one-half of all comments received in response to the 
interim final rule were from livestock organizations, another one-third 
from State wildlife and agriculture agencies and non-governmental 
wildlife organizations, and the remainder from private landowners. The 
responses to the comments on the interim final rule are set forth 
below. USDA also received comments on the GRP template easement deed 
even though the deed was not the subject of notice and comment rule 
making. Those comments may be of general interest, and USDA has decided 
to address those comments in the preamble under a separate subsection 
entitled ``GRP Easement Deed.'' In addition to responding to the 
comments, USDA made nonsubstantive changes to the text of the final 
rule for purpose of clarity and improved organization. In the 
subsequent section, USDA provides a section-by-section description of 
the substantive changes.

State Allocations

    Under Sec.  1415.2 of the interim final rule, USDA used a national 
allocation formula to provide GRP funds to USDA State offices with the 
direction to emphasize support for biodiversity of plants and animals, 
protection of grasslands under the greatest threat of conversion, and 
support for grazing operations. The interim final rule at Sec.  1415.2 
also identified that the allocation formula would include a factor 
representing program ``demand'' which could be expressed in terms of 
applications received, acres offered, funding needs, or a combination 
of these elements.
    USDA received eight comments from entities which asserted that 
allocations to States should be based on grassland resource needs and 
not program demand. These commenters were concerned that the ``demand'' 
factor could result in less funding for States with the most critical 
grassland protection needs. USDA received an almost equal number of 
comments supporting the use of an allocation formula based partially on 
program demand.
    USDA did not intend for a demand factor to interfere with the 
ability to fund the most critical grassland resource needs. To avoid 
any misinterpretation, USDA has not included the language in the final 
rule concerning a program demand factor. The remaining provisions of 
the regulations provide for the allocation of funds consistent with 
meeting the most critical grassland resource needs and additional 
factors related to improving program implementation. For example, the 
regulations provide for allocations based on emphasis for ``support of 
biodiversity of plants and animals, grasslands under the greatest 
threat of conversion, and grazing operations.''

Conservation Plan

    The interim final rule required that participants in GRP implement 
a conservation plan approved by USDA to preserve, and if necessary 
restore and enhance, the viability of the grassland enrolled in the 
GRP. USDA received comments from entities both supporting and opposing 
requirements for landowners to establish a conservation plan. A 
conservation plan is designed to document the present and planned 
grassland characteristics and other conservation values, current and 
future land practices for the property, and the specific conservation 
requirements that would apply to the landowner's property based on the 
implementation of the provisions of the regulations. USDA believes a 
conservation plan is necessary to ensure that the landowner fully 
understands how the provisions of the final rule apply to their 
particular property enrolled in the GRP. In order to clarify USDA 
policy and terminology regarding GRP conservation plans, the Department 
has included in the final rule definitions for ``conservation values'' 
and ``enhancement,'' and has modified the definition of ``conservation 
plan,'' ``restoration `` and ``restored grassland.'' USDA made no 
changes in the final rule related to conservation plan requirements.

Right of Access

    The regulations at Sec.  1415.4(d) provide that the easement or 
rental agreement shall grant USDA or its representatives a right of 
access to the easement or rental agreement area. Commenters asserted 
that USDA should be allowed to enter such property only after prior 
notification to landowners. To address this comment, USDA will strive 
to provide prior notice, except when it believes that there has been a 
violation of the terms of the easement deed or rental agreement. USDA 
determined that an exception to the notification requirement is 
warranted in cases where the Department believes that there is an 
easement or rental agreement violation, in order to ensure protection 
of the resource.

Industrial Windmills

    16 U.S.C. 3838o provides that an easement or rental agreement shall 
prohibit activities, other than common grazing and cultural practices, 
including those necessary to restore or maintain grasslands, which 
would disturb the surface of the land covered by the easement or rental 
agreement. Based on this authority, in the interim final rule, USDA 
prohibited the installation of industrial windmills for commercial 
energy use on GRP enrolled lands. Eight entities opposed this action 
while six entities supported it. The entities in opposition questioned 
why GRP policy was different than CRP regarding the installation of 
windmills, while the entities in support asserted the prohibition was 
necessary to protect grassland-dependent bird populations.
    USDA adopted a different policy in GRP than CRP, because the CRP 
statute specifically authorized the installation of industrial-like 
windmills under particular circumstances while the GRP statute does not 
provide for such authority. Without explicit authority similar to CRP, 
and given the general prohibition against disturbing the soil surface, 
USDA has determined that the installation of industrial windmills on 
lands enrolled in GRP should be prohibited. Consequently, USDA made no 
changes in this rule to allow the installation of industrial windmills.

Hay, Mow, or Harvest for Seed

    The interim final regulations at Sec.  1415.4(h)(2) provided for 
the State Conservationist to establish certain restrictions on haying, 
mowing, or harvesting for seed production as necessary to protect 
nesting habitat for grassland-dependent bird populations that are in 
significant decline or are conserved in accordance with Federal or 
State law. Commenters asserted that the State Conservationist should 
consult with local work groups and appropriate State and Federal 
agencies when establishing such restrictions. We made no changes to the 
final rule based on these comments because this type of expertise is 
already being provided to the State Conservationist through 
consultation with the State technical committees.

New Livestock Facilities

    16 U.S.C. 3838o(b) provides that an easement or rental agreement 
shall permit common grazing practices, including necessary cultural 
practices, but prohibit activities, other than those necessary to 
restore or maintain

[[Page 11141]]

grasslands, that would disturb the surface of the land covered by the 
easement or rental agreement. Based on its original interpretation of 
this authority, USDA prohibited the installation of new livestock 
facilities on GRP enrolled land under the interim final rule at Sec.  
1415.4(i). Commenters asserted that the installation of new facilities 
may often be essential for conducting necessary livestock operations.
    In promulgating this final rule, USDA has reconsidered its 
interpretation of the statute and agrees with commenters that new 
livestock facilities, including corrals, watering troughs and tanks, 
barns or other minor infrastructure necessary to conduct common grazing 
practices and operations, may be authorized. Specifically, the common 
meaning given to the word ``cultural'' includes fostering animal 
growth, and production of forage and seed. In order to foster animal 
growth such as cattle and the related production of forage and seed, 
the infrastructure related to feeding, watering, shelter, and storage 
of hay, seed, and feed is necessary. As previously indicated, USDA 
believes that conditions must be placed on their installation to ensure 
that the facilities are ``consistent with maintaining the viability of 
grassland, forb, and shrub species common to that locality'' as 
required by 16 U.S.C. 3838o(b)(1), and to minimize adverse impacts to 
biodiversity and other conservation values associated with the 
conservation easement or rental agreement. Accordingly, USDA has 
modified Sec. Sec.  1415.4(h) and (i) of this final rule to incorporate 
this new, limited flexibility for the installation of corrals and other 
new livestock facilities. As a related matter, the Department has 
included in the final rule definitions of both common grazing practices 
and cultural practices in order to clarify the USDA's policy on 
permitted infrastructure.

Establishing Priority for Enrollment of Properties

    The interim final rule at Sec.  1415.8, provided that USDA at the 
State-level, with advice from the State technical committee, 
establishes criteria to evaluate and rank applications for easement and 
rental agreements based upon, among other things, threat of conversion 
to non-grassland uses. When developing ranking criteria for 
prioritizing applications, commenters asserted that State-level 
decision makers should also consider additional factors which emphasize 
enrollment of grasslands that:
     Are located outside urban areas,
     Contain (or will be restored to) native plant communities,
     Provide the greatest support for plant and animal 
biodiversity,
     Are most subject to conversion to cropland--especially 
lands classified as prime farmland,
     Are threatened by encroachment from invasive species,
     Will be protected for the longest duration,
     Are the ``most-likely to be converted'' from any source, 
and
     Are recognized as having high potential for conversion to 
industrial wind mills.

USDA at the State-level may include, but is not limited to, 
consideration of all these factors when developing State ranking 
criteria for GRP. Accordingly, USDA did not make any changes from the 
interim final rule to this section.

Native Versus Natural Grasses

    With respect to establishing ranking criteria to be used for 
funding priorities, 16 U.S.C. 3838o(c)(2) states that USDA ``shall 
emphasize support for (A) Grazing operations; (B) plant and animal 
biodiversity; and (C) grassland, land that contains forbs, and 
shrubland under the greatest threat of conversion.'' Consistent with 
this authority, the regulations at Sec.  1415.8 state that ranking 
criteria will emphasize support, among other things, for ``native and 
natural grassland'' and activities that will ``maintain and improve 
plant and animal diversity.''
    USDA received comments asserting that only native grasslands and 
lands to be restored to native species should be eligible for 
enrollment, or require that lands containing native species receive 
priority enrollment over lands with non-natives species, consistent 
with the Conservation Reserve Program. Commenters also asserted that 
USDA should require funds to be used first for protection of rare and 
declining native plant communities.
    The provisions of 16 U.S.C. 3838n(c)(1) allow for the enrollment of 
improved rangeland and pastureland. The State-level ranking criteria 
may prioritize enrollment of native grassland over non-native 
grassland. However, the recommendation for establishing funding 
priorities based solely for protection of rare and declining native 
plant communities would be inconsistent with the statutory direction 
for program emphasis.
    USDA made no changes to this rule based on these comments.

Calculation of Easement Values

    16 U.S.C. 3838p requires that an easement payment for a permanent 
easement will be an amount equal to the fair market value of the land, 
less the grazing value of the land encumbered by the easement. USDA 
implemented this statutory formula in the interim final rule at Sec.  
1415.10 by using the term ``grassland value'' instead of ``grazing 
value.'' However, in the final rule, USDA has changed the term 
``grassland value'' to ``grazing value'' to more accurately state the 
statutory formula. As used in the context of determining easement 
value, ``grazing value'' is ascertained through the appraisal process. 
This is different from the usage of the term ``grazing value'' in the 
rental context as discussed below.
    USDA received comments from entities who responded to the provision 
regarding easement compensation rates. These commenters expressed 
concern that the current appraisal procedures for calculating grazing 
values result in not adequately compensating landowners for 
restrictions placed upon their exercise of ranching and recreational 
activities. These commenters asserted that, unless compensation was 
provided for the restrictions placed on these activities, landowners in 
rural areas where the fair market value is typically comprised largely 
of grazing and recreational values, would be discouraged from 
participating in the easement option.
    First, the USDA notes that those non-developed recreational 
activities that are consistent with maintaining the conservation values 
are still permitted on GRP enrolled lands and that the statutory method 
of computing compensation essentially results in the purchasing of 
development rights. To the extent a property is not under development 
pressure, the rights purchased will not result in nearly as high a 
compensation amount as those rights purchased on property that is in an 
area that is impacted by sprawl or that is urbanizing. Even so, USDA 
reviews its GRP appraisal instructions to ensure that the Department 
provides adequate compensation when it purchases conservation 
easements, consistent with the GRP statutory formula.
    The interim final rule at Sec.  1415.10(e) stated that ``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.'' 
Paragraph (e) further stated that ``The programmatic appraisals would 
remove the need to conduct appraisals on each parcel selected for 
funding.'' Commenters asserted that programmatic appraisals should not 
be utilized

[[Page 11142]]

because they might result in lower compensation rates. USDA made no 
changes based on these comments. USDA will only use the programmatic 
appraisals in those instances where the grazing value would not vary 
significantly from one parcel to the next, and therefore, would result 
in an accurate appraisal of each parcel. In any event, the Department 
believes that use of this alternative appraisal methodology will be 
limited.

Rental Agreement Rates

    16 U.S.C. 3838p(b)(2) requires that annual payments under a rental 
agreement be not more than 75 percent of the grazing value of the land 
covered by the rental agreement. This is also reflected in the 
regulations at Sec.  1415.10. For the purpose of determining rental 
agreement rates only, USDA determines grazing values administratively 
based on compensation rates for the Conservation Reserve Program 
(authorized at 7 CFR part 1410) for each county. In fiscal years 2003, 
2004, and 2005, USDA utilized a 75 percent grazing value for rental 
agreements of all durations.
    USDA received comments regarding the utilization of grazing values 
for rental agreements. These commenters recommended that rental 
agreements with longer duration should receive higher payment rates 
than those with shorter-term duration. For example, a 30-year rental 
agreement would receive 75 percent of the grazing value in an annual 
payment while perhaps a 10-year rental agreement would receive only 50 
percent of the grazing value in an annual payment.
    USDA agrees with the commenters and believes that it should have 
flexibility to adjust rental agreement rates, not to exceed the 
statutory limits, to provide an incentive for longer-term protection of 
grassland resources. Grasslands protected for longer durations of time 
typically provide for significantly greater gains in biodiversity. 
Therefore, USDA has modified Sec.  1415.10(b) to allow USDA to adjust 
rental agreement rates based on duration of agreement.
    Commenters also recommended that USDA increase the rental rates for 
irrigated lands compared to non-irrigated lands and increase the rental 
rates as appropriate because of restrictions on haying and grazing 
land. USDA will endeavor to make the rental agreement rates reflect 
local prevailing rates based on consideration of all relevant factors 
that could affect the rate.

Title to GRP Easements

    16 U.S.C. 3838q provides that the Secretary may allow a private 
conservation or land trust organization to ``hold and enforce an 
easement'' entered into under GRP. Commenters argued that USDA 
incorrectly interpreted this statutory provision in Sec.  1415.17 of 
the interim final rule, because the Department interpreted the statute 
as only permitting third parties to manage and enforce, but not hold 
title to, GRP easements. The commenters interpreted the statute to 
provide that third parties could actually take title to GRP easements 
and that landowners would be more receptive to participation if land 
trusts could assume legal ownership.
    Since the interim final rule was published, section 797 of the 
Consolidated Appropriations Act of 2005, Pub. L. 108-447, was passed 
which amended section 3838q (a) and (d) of the GRP statute to clearly 
provide for the Secretary to ``transfer title of ownership'' of 
easements to third parties. In addition, the new statutory language 
provided that if entities holding such easements dissolve or fail to 
enforce the terms of the easement, the easement shall revert to the 
Secretary. Accordingly, USDA has modified Sec.  1415.17 in this final 
rule to provide for qualified third parties to own title of easements 
and to remove the provisions providing for easement management that was 
set forth in the interim final rule. This change effectively addresses 
the commenters' concerns.
    Commenters also asserted that third parties should be compensated 
for holding easements based on the conclusion that third parties would 
have no incentive to hold and administer easements without 
compensation. USDA has determined that there is no authority for paying 
compensation to third parties for voluntarily administering such 
easements. USDA has also determined that there is no authority for 
compensation where USDA transfers title of easement ownership to third 
parties. Therefore, USDA made no changes in response to these comments.

Statutory Matters

    Commenters asserted that information provided by applicants and 
program participants should be held confidential. USDA made no changes 
based on these comments because information submitted to USDA 
concerning the GRP program is already subject to the confidentiality 
provisions of 16 U.S.C. 3844.
    Commenters stated that State-owned land should be eligible for GRP. 
USDA made no changes based on these comments. The provisions of 16 
U.S.C. 3838n(c) clearly limit GRP to private lands.
    Commenters asserted that improved pastureland should not be 
eligible for GRP. We made no changes based on these comments. The 
provisions of 16 U.S.C. 3838n(c) specifically state that improved 
pastureland is eligible for GRP.
    Commenters asserted that 99-year easements should be treated as 
permanent easements and compensated similarly. USDA made no changes 
based on these comments because the clear meaning of the statutory 
provisions in 16 U.S.C. 3838p makes a distinction between permanent 
easements and term easements.
    Commenters asserted that the 40-acre minimum for GRP should be 
changed to a 10-acre minimum. USDA made no changes based on these 
comments because the statute at 16 U.S.C. 3838n already addresses this 
matter by providing that 40 contiguous acres is the minimum enrollment 
size unless the Secretary grants a waiver.
    Commenters also asserted that the regulations should delete or 
limit the ability of USDA to waive the 40-acre minimum for eligibility 
in GRP. Because this waiver process is provided by statute at 16 U.S.C. 
Sec.  3838n., USDA does not have the authority to waive or delete such 
a provision.

Conservation Easement Deed

Water Rights

    Comments were received on the deed arguing that the prohibitions in 
the deed regarding the transfer of water rights might usurp State water 
law. Although a conservation easement might encumber the ability of a 
landowner to sell the water rights associated with the property, the 
provisions of the easement deed are not contrary to State water laws. 
However, USDA recognizes that retention of all water rights associated 
with a particular property may not be necessary to protect the 
conservation purposes for which it acquired the easement. Therefore, 
USDA changed the easement deed to provide greater flexibility for 
landowners relating to water rights where appropriate.

Hay, Mow, or Harvest for Seed

    The easement deed provided that the landowner shall not hay, mow, 
or harvest for seed during certain nesting seasons for birds whose 
populations that USDA determines are in significant decline. Commenters 
asserted that these

[[Page 11143]]

provisions were too onerous. USDA made no changes to the conservation 
easement deed based on these comments. The provisions in the deed 
merely reflect statutory requirements at 16 U.S.C. Sec.  3838o.

Routine Activities

    Commenters asserted that certain prohibitions in the conservation 
easement deed placed onerous restrictions on a landowner's rights to 
conduct routine activities, such as the installation of new underground 
utilities and other activities that result in minimal disturbances to 
the surface of the land. Based upon these comments, USDA has 
reconsidered its interpretation of the provision in the statute 
prohibiting disturbing of the soil surface, and has determined that 
this provision was not meant to impede the practical administration of 
enrolled lands where no significant harm would result to the grassland 
values. Accordingly, USDA has modified the deed and final rule (see 
Sec.  1415.4(i)(3)) to allow for certain activities that disturb the 
surface of the land when such disturbances are only temporary in 
nature, and USDA determines that the manner, number, intensity, 
location, operation, and other features associated with the activity 
will not adversely affect the grassland resources protected under an 
easement or rental agreement. By ``temporary in nature,'' the 
Department means a limited extent of time, typically not to exceed a 
short-term period, ordinarily necessary to complete a specific 
activity, as determined by USDA. In addition, the nature of the 
disturbance must be such that the area affected is limited in scope and 
impact and is capable of being (and is) completely restored to its 
requisite grassland functions and values, as determined by NRCS.

Section by Section Description of Changes

    Changes to the sections from the interim final rule are as follows:
Section 1415.1 Purpose
    This section sets forth the purpose and objectives of the program. 
In the interim final rule, USDA used the term ``natural'' grasslands to 
include grasslands that are dominated by introduced, desirable forage 
species that are ecologically adapted to the site and can sustain 
itself in the vegetative community without frequent cultural treatment. 
Without changing the meaning, USDA has changed this term to 
``naturalized'' to avoid confusion with the term ``native.''
Section 1415.2 Administration
    This section includes language on general program administration 
and policy that relates to 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. USDA amended this section from the interim final rule 
to remove the demand factor, as described earlier in the preamble. USDA 
also amended this section to clarify that USDA is responsible for 
approving the conservation practices that are eligible for cost-share. 
USDA also added the term ``unfunded'' to paragraph (i) of this section 
to clarify the applications that would remain on file until funding 
became available.
Section 1415.3 Definitions
    This section defines terms used throughout the rule. Without 
changing the substance of this regulation, USDA replaced the term 
``natural'' with ``naturalized.'' USDA also substituted the term 
``naturalized'' for the term ``natural'' wherever it appeared in the 
interim final rule.
Section 1415.4 Program Requirements
    In this section, USDA identifies the requirements for participation 
in GRP. USDA modified paragraphs (h) and (i) of this section to 
clarify, among other things, that facilities and land use activities 
that are common grazing practices, including maintenance and necessary 
cultural practices, are permissible.
Section 1415.5 Land Eligibility
    The language in this section identifies eligible land as defined in 
the GRP statute. USDA made editorial changes to clarify the language in 
paragraph (b).
Section 1415.6 Participant Eligibility
    This section sets forth the eligibility for participation in GRP. 
USDA made no changes to this provision from the interim final rule.
Section 1415.7 Application Procedures
    This section provides general information about the application 
process. USDA made no changes to this provision from the interim final 
rule.
Section 1415.8 Establishing Priority for Enrollment of Properties
    This section sets forth policy for developing the ranking and 
evaluation criteria. USDA made no changes to this provision from the 
interim final rule.
Section 1415.9 Enrollment of Easements and Rental Agreements
    This section describes the process for enrollment in GRP and makes 
reference to a number of documents. USDA clarified the language in 
paragraphs (d), (e), and (f) to ensure that the reader would not 
confuse one of these documents for another.
Section 1415.10 Compensation for Easements and Rental Agreements
    This section sets forth the methodology for determining 
compensation for both easements and rental agreements. As discussed 
above under the heading ``compensation for easements,'' USDA changed 
the term ``grassland value'' to ``grazing value'' in paragraph (a) to 
more accurately state the statutory formula for determining easement 
values. As discussed above under the heading ``Rental Agreement 
Rates,'' USDA changed paragraph (c) to allow the adjustment of the 
rental agreement rates based on the duration of the agreements.
Section 1415.11 Restoration Agreements
    This section sets forth the terms and conditions under which USDA 
will enter into a restoration agreement. USDA modified paragraphs (b), 
(c), and (d) to clarify that only those practices and measures that it 
has determined eligible and approved for cost share will be eligible to 
receive reimbursement under GRP.
Section 1415.12 Modifications
    This section describes when easements and rental agreements may be 
modified. USDA did not make any changes to this section from the 
interim final rule.
Section 1415.13 Transfer of Land
    This section discusses the impact of transferring ownership or 
control of land enrolled in GRP. USDA modified paragraph (f) by adding 
the adjective ``GRP conservation'' to the term easement to clarify 
which easement would be binding upon a landowner and any person 
claiming under the landowner.
Sections 1415.14 Through 1415.20
    These sections contain standard administrative policy associated 
with contract violations and remedies, payments not subject to claims, 
assignment of payments, and appeals. Section 1415.17 contained the 
provision regarding transferring easement title to third parties. USDA 
made changes to Sec.  1415.17 to comport with the amendments to the GRP 
authorizing

[[Page 11144]]

statute, which provide authority for USDA to transfer title to GRP 
easements to qualified third parties. USDA did not make any substantive 
changes to these sections from the interim final rule, except for those 
required by statute.

Executive Order 12866

    The Office of Management and Budget (OMB) determined that this 
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 
final rule. Copies of the analysis may be obtained from Skip Hyberg, 
Agricultural Economist, Economic Analysis Staff, Farm Service Agency, 
Room 2745, Mail Stop 0519, 1400 Independence Ave., SW., Washington, DC 
20250-0519; telephone: (202) 720-9222; fax: (202) 720-4265; e-mail: 
[email protected], Attention: Grassland Reserve Program. The 
analysis is also available at the following Internet address: 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 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.

Environmental Analysis

    An Environmental Assessment (EA) has been prepared to assist in 
determining whether this 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 is issuing a Finding of No Significant Impact (FONSI). 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 are also available at the following Internet 
address: http://www.nrcs.usda.gov/programs/GRP.

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 final rule.

Government Paperwork Elimination Act

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

Civil Rights Impact Analysis

    USDA has determined through a Civil Rights Impact Analysis that the 
issuance of this rule will not result in adverse impacts for 
minorities, women, or persons with disabilities. Copies of the Civil 
Rights Impact Analysis may be obtained from Floyd Wood, National 
Program Manager, Easement Programs 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 final rule has been reviewed in accordance with Executive 
Order 12988, Civil Justice Reform. The rule is not retroactive. To the 
extent State and local laws are inconsistent with this rule, this rule 
preempts such provisions. 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 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.

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 revising part 1415 to read as follows:

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 Easement transfer 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 naturalized grasslands and 
shrublands;
    (2) Protect grasslands and shrublands from the threat of 
conversion;
    (3) Support grazing operations; and
    (4) Maintain and improve plant and animal biodiversity.

[[Page 11145]]

Sec.  1415.2  Administration.

    (a) The regulations in this part set forth policies, procedures, 
and requirements for program implementation of GRP, as administered by 
the Natural Resources Conservation Service (NRCS) and the Farm Service 
Agency (FSA). The regulations in this part are administered under the 
general supervision and direction of the NRCS Chief and the FSA 
Administrator. These two agency leaders:
    (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 offices that emphasizes support for biodiversity of plants and 
animals, grasslands under the greatest threat of conversion, and 
grazing operations. The national allocation formula may also include 
additional factors related to improving program implementation, as 
determined by the NRCS Chief and the FSA Administrator. The allocation 
formula may be modified periodically to change the emphasis of any 
factor(s) in order to address a particular natural resource concern, 
such as the precipitous decline of a population(s) of a grassland-
dependent bird(s) or animal(s).
    (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.
    (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 for:
    (1) Identifying State priorities for project selection, based on 
input from the State technical committee;
    (2) Identifying USDA employees at the field level responsible for 
implementing the program by 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) Developing program outreach materials at the State and local 
level to help ensure landowners, operators, and tenants of eligible 
land are aware and informed that they may be eligible for the program.
    (4) Approving conservation practices eligible for cost-share and 
cost-share rates.
    (5) Developing conservation plans and restoration agreements.
    (6) Administering and enforcing the terms of easements and rental 
agreements unless this responsibility is transferred to a third party 
as provided in Sec.  1415.17.
    (7) With advice from the State technical committee, developing 
criteria for ranking eligible land, consistent with national criteria 
and program objectives and State priorities. 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 
conservation purposes and sound administration of GRP. This authority 
cannot be further delegated. No provision of this part which is 
required by 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 USDA Forest Service may hold GRP 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, unfunded, 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.
    Common grazing practices means those grazing practices, including 
those related to forage and seed production common to the area of the 
subject ranching or farming operation, and the application of routine 
management activities necessary to maintain the viability of forage 
resources, that are common to the locale of the subject ranching or 
farming operation.
    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 GRP participants' decisions 
and supporting information for protection and treatment of a land unit 
or water as a result of the planning process, that meets NRCS Field 
Office Technical Guide criteria for each natural resource concern 
(soil, water, air, plants, and animals) and takes into account economic 
and social considerations. The plan describes the conservation values 
of the grassland and schedule of operations and activities required to 
solve identified natural resource problems and take advantage of 
opportunities at a conservation management system level. The needs of 
the participant, the resources, Federal,

[[Page 11146]]

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.
    Conservation values means those natural resource attributes 
identified by USDA as having significant importance to maintaining the 
natural functions and values of the grassland area, including but not 
limited to, habitat for declining species of grassland-dependent birds 
and animals.
    Cultural practice means those practices such as the installation of 
fences, watering, feeding, and sheltering facilities necessary for the 
raising of livestock, including related forage and seed production.
    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. 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 GRP.
    Enhancement means to increase or improve the viability of grassland 
resources, including habitat for declining species of grassland-
dependent birds and animals.
    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 who 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 rule includes shrubland, land 
that contains forbs, pastureland, and rangeland.
    Grazing value is a term used in the calculation of compensation for 
both rental agreements and easements. For easements, this value is 
determined through an appraisal process. For rental agreements, USDA 
determines the grazing value based upon an administrative process.
    Improved grassland, pasture, or rangeland means grazing land 
permanently producing naturalized 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.
    Naturalized means an introduced, desirable forage species that is 
ecologically adapted to the site and can perpetuate itself in the 
community without cultural treatment. For the purposes of this 
regulation, the term ``naturalized'' 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 agreements to purchase easements. 
Landowners of land subject to a GRP easement are also considered 
participants regardless of whether such landowner conveyed the easement 
to the Federal Government.
    Pastureland means a land cover/use category of land managed 
primarily for the production of desirable, introduced, perennial 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, 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, grass-
like 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 restores functions and 
values of grassland and shrubland (native and naturalized 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 reestablished through 
vegetative, management, or structural practices, to grassland and 
shrubland, according to criteria in the NRCS Field Office Technical 
Guide.
    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. Sec.  3861.
    USDA means the Chief, NRCS, and the Administrator, FSA.


Sec.  1415.4  Program requirements.

    (a) Only landowners may submit applications for easements. For 
rental agreements, the prospective participant must provide evidence of 
control of the property for the duration of the rental agreement.
    (b) The easement and rental agreement will require that the area be

[[Page 11147]]

maintained in accordance with GRP goals and objectives for the duration 
of the term of the easement or rental agreement, including the 
conservation, protection, enhancement, and, if necessary, restoration 
of the grassland functions and values.
    (c) All participants in GRP are required to implement a 
conservation plan approved by USDA to conserve, protect, enhance, and, 
if necessary, restore the viability of the grassland enrolled into the 
program. The conservation plan documents the conservation values, 
characteristics, current and future use of the land, and practices that 
need to be applied along with a schedule for application.
    (d) The easement and rental agreement must grant USDA or its 
representatives a right of ingress and egress to the easement and 
rental agreement area. For easements, this access is legally described 
by the conservation easement deed. Access to rental agreement areas is 
identified in the GRP conservation plan.
    (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 must 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 
conservation easement deed developed by USDA. The easement grants 
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 the conservation plan and any associated restoration agreement.
    (h) Easements and rental agreements allow the following activities:
    (1) Common grazing practices, including maintenance and cultural 
practices on the land in a manner that is consistent with maintaining 
the viability of native and naturalized grass and shrub species;
    (2) Haying, mowing, or harvesting for seed production, except that 
such uses shall have certain restrictions as determined by the NRCS 
State Conservationist, in consultation with the State technical 
committee, in order 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, 
corrals, watering facilities, seedbed preparation and seeding, and any 
other related facilitating practices, as determined by USDA, needed 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:
    (1) Common grazing management practices which are 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,
    (2) Maintenance and necessary cultural practices associated with 
common grazing practices, and
    (3) Other activities that result in only a temporary disturbance to 
the surface of the land where USDA determines that the manner, number, 
intensity, location, operation, and other features associated with the 
activity will not adversely affect the grassland resources protected 
under an easement or rental agreement. Such a temporary disturbance, 
being of a short duration and, not to exceed the extent of time 
ordinarily necessary for completing an activity, as determined by USDA.
    (j) Rental agreement contracts may be terminated by USDA without 
penalty or refund if the original participant dies, becomes 
incompetent, or is otherwise unavailable during the contract period.
    (k) Participants, with the agreement of USDA, may convert rental 
agreements to an easement, provided that 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 is eligible for funding consideration if the NRCS State 
Conservationist determines that the land is:
    (1) Grassland, land that contains forbs, or shrubs (including 
native and naturalized rangeland and pastureland); or
    (2) The land is located in an area that has been historically 
dominated by grassland, forbs, or shrubs, and the State 
Conservationist, with advice from the State technical committee, 
determines that it has potential to provide habitat for animal or plant 
populations of significant ecological value, if the land is--
    (i) Retained in the current use of the land; or
    (ii) Restored to a native or naturalized grassland conditions.
    (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 eligible for 
enrollment in GRP. 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 other 
than the statutory baseline level of 40 acres 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 already protected under an existing contract or easement. 
This land becomes eligible for enrollment in GRP 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 
prospective GRP participant 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

[[Page 11148]]

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 of this part 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. Generally, 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 for which they seek to enroll their 
land. 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, establishes 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 naturalized grassland;
    (2) Protection of grassland from the threat of conversion;
    (3) Support for grazing operations; and
    (4) Maintenance and improvement of 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.
    (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 
15 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 and 
evidences a good faith intent on the part of the applicant to 
participate in the program.
    (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 and signed 
by the participant.
    (d) USDA provides the applicant with a description of 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 land is enrolled, USDA will proceed 
with the development of the conservation plan and obtain an appraisal. 
If the landowner accepts the appraisal offer from USDA, the landowner 
signs an option agreement to purchase for the appraisal amount. USDA 
will then proceed with other easement acquisition activities, which 
include 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 rental 
agreement or easement, USDA may withdraw its offer anytime due to lack 
of available funds, title concerns for easements, or other reasons. For 
easements, the appraisal offer to the participant shall be void if the 
easement is not executed by the participant within the time specified 
in the option agreement to purchase.


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 grazing value 
encumbered by the easement as determined by an appraisal 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, as determined by 
USDA. USDA may adjust rental agreement rates, not to exceed the 
statutory limits, based on duration of agreement, inflation, and other 
economic considerations associated with grazing lands.
    (c) In order to provide for better uniformity among States, the FSA 
Administrator and the NRCS Chief may review and adjust, as appropriate, 
State or other geographically based payment rates for rental 
agreements.
    (d) For easements, to minimize expenditures on individual 
appraisals and to expedite program implementation, USDA may complete a 
programmatic appraisal to establish regional average market values and 
grazing values if acceptable under federally recognized real property 
valuation standards.
    (e) 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 USDA 
programs.


Sec.  1415.11  Restoration agreements.

    (a) Restoration agreements are only authorized to be used in 
conjunction

[[Page 11149]]

with easements and rental agreements. NRCS, in consultation with the 
program participant, determines 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 is also 
subject to the availability of funding. USDA 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 is not required. However, if a 
restoration agreement is required, NRCS will set the terms of the 
restoration agreement. The restoration agreement identifies 
conservation practices and measures necessary to restore or 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 when funds are available.
    (b) Restoration practices are those land management, vegetative, 
and structural conservation practices and measures that will restore or 
improve the grassland ecological functions and values on native and 
naturalized plant communities. The NRCS State Conservationist, with 
advice from the State technical committee and in consultation with FSA, 
determines the conservation practices, measures, payment rates, and 
cost-share percentages, not to exceed statutory limits, available under 
GRP. A list of restoration practices approved for cost-share assistance 
under GRP restoration plans is available to the public through the 
local USDA Service Center. NRCS, working through the local conservation 
district with the program participant, determines the terms of the 
restoration agreement. The conservation district may assist NRCS with 
determining eligible restoration practices and approving restoration 
agreements. Restoration agreements do not extend past the date of a GRP 
rental agreement or easement.
    (c) Only NRCS approved restoration practices and measures are 
eligible for cost sharing. Payments under GRP restoration agreements 
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 plans are entered into for restoring either native 
or naturalized plant communities. When seeding is determined necessary 
for restoration, USDA gives 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 must be maintained by the participant for 
the life of the practice, as identified in the restoration agreement. 
The life of the practice must be consistent with other USDA cost shared 
or easement programs. Failure to maintain the practice is dealt with 
under the terms of the restoration agreement and may involve repayment 
of the Federal cost share plus interest.
    (f) All conservation practices must be implemented in accordance 
with the NRCS Field Office Technical Guide.
    (g) Technical assistance is provided by NRCS, or an approved third 
party.
    (h) If the participant is receiving cost share for the same 
practice from State or local government, NRCS will adjust the GRP cost 
share rate so that the combined cost share received by the participant 
does not exceed 100 percent of the total actual cost of the 
restoration. In addition, the participant cannot receive cost-share 
from more than one USDA 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 restoration practice has been established in compliance with 
appropriate standards and specifications.
    (j) Restoration practices identified in the restoration plan may be 
implemented by the participant or other designee. Cost-share 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 by the Chief, NRCS, and 
the landowner.
    (b) Easement modifications may only be made by the Chief, NRCS, 
after consulting with the Office of the General Counsel. Minor 
modifications may be made by the NRCS State Conservationist in 
consultation with Office of the 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 USDA at the State level, 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 is responsible for 
complying with the terms of the recorded easement or rental agreement 
and for assuring

[[Page 11150]]

completion of all measures and practices required by the associated 
restoration agreement. Eligible cost share payments will 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 bears 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 or assigns. All obligations of the landowner 
under the GRP conservation easement deed also binds 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 successor 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, plus interest, 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 declines to assume responsibility under 
the agreement.


Sec.  1415.14  Misrepresentation and violations.

    (a) Contract violations:
    (1) Contract violations, determinations, and appeals are 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 is not entitled to contract payments and must refund to CCC all 
payments, plus interest in accordance with 7 CFR part 1403.
    (3) In the event of a violation of a rental agreement, the 
participant will 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. Failure to correct the violation may 
result in termination of the rental agreement.
    (b) Easement violations: Easement violations are handled under the 
terms of the easement. Upon notification of the participant, USDA has 
the right to enter upon the easement area at any time to monitor 
compliance with the terms of the GRP conservation easement or remedy 
deficiencies or violations. When USDA believes there may be a violation 
of the terms of the GRP conservation easement, USDA may enter the 
property without prior notice. 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.
    (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, USDA may withhold 
any easement payment, rental payment, or 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 a GRP conservation 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, such a participant 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  Easement transfer to third parties.

    (a) USDA may transfer title of ownership to an easement to an 
approved private conservation or land trust organization or State 
agency with the consent or written request of the landowner and upon a 
determination by the Secretary, or his or her designee, that granting 
permission will promote protection of grassland. Such entities must be 
a qualified organization under 16 U.S.C. Sec.  3838q that the Secretary 
determines has the appropriate authority, expertise, and resources 
necessary to assume title ownership of the easement. Rental agreements 
will not be transferred.
    (b) USDA has the right to conduct periodic inspections and enforce 
the easement and associated restoration agreement for any easements 
transferred pursuant to this section.
    (c) The private organization, State, or other Federal agency must 
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 or State agency that seeks to hold title 
to a GRP easement must apply to the NRCS State Conservationist for 
approval. The State Conservationist shall consult with FSA State 
Executive Director prior to rendering its determination.
    (e) For a private organization to be qualified to be an easement 
holder, the private organization must be organized as required by 28 
U.S.C. Sec.  501(c)(3) of the Internal Revenue Code of 1986 or be 
controlled by an organization described in section 28 U.S.C. Sec.  
509(a)(2). 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.

[[Page 11151]]

    (f) In the event that the easement holder fails to enforce the 
terms of the easement, as determined in the discretion of the 
Secretary, the Secretary, his or her successors and assigns, shall have 
the right to enforce the terms of this easement through any and all 
authorities available under Federal or State law or, at the option of 
the Secretary, to have all right, title, or interest in this easement 
revert to the United States of America. Further, in the event the 
easement holder dissolves or attempts to terminate the easement, then 
all right, title, and interest shall revert to the United States of 
America.
    (g) Should this easement be transferred pursuant to this section, 
all warranties and indemnifications provided for in this Deed shall 
continue to apply to the United States. Subsequent to the transfer of 
this easement, the easement holder shall be responsible for 
conservation planning and implementation and will adhere to the NRCS 
Field Office Technical Guide for maintaining the viability of grassland 
and other conservation values.
    (h) Due to the Federal interest in the GRP easement, the easement 
interest cannot be condemned.


Sec.  1415.18  Appeals.

    (a) Applicants or participants may appeal decisions regarding this 
program in accordance with part 7 CFR part 614, 11, and 780 of this 
Title.
    (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.

    The release of appraisal information shall be disclosed at the 
discretion of USDA in accordance with applicable law.

    Signed in Washington, DC on February 21, 2006.
Bruce I. Knight,
Vice President, Commodity Credit Corporation, and Chief, Natural 
Resources Conservation Service.
Teresa C. Lasseter,
Executive Vice President, Commodity Credit Corporation, and 
Administrator, Farm Service Agency.
[FR Doc. 06-2091 Filed 3-3-06; 8:45 am]
BILLING CODE 3410-16-P