[Federal Register Volume 71, Number 95 (Wednesday, May 17, 2006)]
[Rules and Regulations]
[Pages 28547-28562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-4587]


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DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service

7 CFR Part 625


Healthy Forests Reserve Program

AGENCY: Natural Resources Conservation Service (NRCS), United States 
Department of Agriculture (USDA).

ACTION: Interim final rule with request for comments.

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SUMMARY: Title V of the Healthy Forests Restoration Act of 2003 (Act) 
(Pub. L. 108-148) authorizes the establishment of the Healthy Forests 
Reserve Program (HFRP). The purpose of this program is to assist 
landowners in restoring and enhancing forest ecosystems to: Promote the 
recovery of threatened and endangered species; improve biodiversity; 
and enhance carbon sequestration. This interim final rule sets forth 
how NRCS will implement HFRP to meet the statutory objectives of the 
program.

DATES: This rule is effective May 17, 2006. Comments must be received 
by August 15, 2006.

ADDRESSES: Send comments by mail to Robin Heard, Acting Director, 
Easement

[[Page 28548]]

Program Division, Natural Resources Conservation Service, P.O. Box 
2890, Washington, DC 20013-2890; or by e-mail: [email protected]; attn: 
Healthy Forests Reserve Program. This rule may also be accessed via 
Internet through the NRCS homepage at http://www.nrcs.usda.gov/programs/HFRP. The rule may also be reviewed and comments may be 
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: Robin Heard, Director, Easement 
Programs Division, NRCS, P.O. Box 2890, Washington, DC 20013-2890; 
telephone: (202) 720-1854; fax: (202) 720-4265; e-mail: 
[email protected], Attention: Healthy Forests 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:

Background

    America's forests provide multiple benefits and resources for our 
society including, timber, wilderness, minerals, recreation and 
wildlife. In addition, a healthy forest ecosystem provides critical 
habitat for wildlife, sustains biodiversity, protects watersheds, 
sequesters carbon, and helps purify the air. However, some forest 
ecosystems have had their ecological functions reduced from a number of 
factors such as fragmentation, loss of periodic fires, or invasive 
species. This habitat loss has been severe enough in some circumstances 
to cause dramatic population decline such as in the case of the ivory-
billed woodpecker. Many forests need active management to restore 
health and function to sustain biodiversity and habitat for species 
that have suffered significant population decline. Active management of 
forest ecosystems can also increase carbon sequestration and improve 
air quality.
    There are many forest ecosystems on private lands provide that 
habitats for species that have been listed as endangered or threatened 
under Section 4 of the Endangered Species Act (ESA), 16 U.S.C. 1533, 
(listed species). Congress enacted the HFRP to provide financial 
support to landowners to undertake projects that restore and enhance 
forest ecosystems to help promote the recovery of listed species, 
improve biodiversity, and to enhance carbon sequestration.
    The Secretary of Agriculture has delegated authority to implement 
HFRP to the Chief of NRCS (Chief). In addition, technical support 
associated with forest management practices may also be provided by the 
Forest Service. Section 501 of the Act provides that the program will 
be carried out in coordination with the Secretary of the Interior and 
the Secretary of Commerce. NRCS will work closely with the Fish and 
Wildlife Service (FWS) and the National Marine Fisheries Service (NMFS) 
to further the species recovery objectives of the HFRP and to help make 
available to HFRP program participants safe harbor or similar 
assurances and protection under ESA section 7(b)(4) or Section 
10(a)(1), 16 U.S.C. 1536(b)(4), 1539(a)(1).

Discussion of the Program

    HFRP is a voluntary program to assist landowners in restoring, 
enhancing, and protecting forestland. The Chief provides national 
leadership for the implementation of the program. At the state level, 
the NRCS State Conservationist determines how best to deliver the 
program and implement national policies in an efficient manner based on 
the national priorities identified in each sign-up announcement.
    NRCS evaluated whether the HFRP 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 Act does not provide authority to do so. Thus, the United States 
Department of Agriculture will hold title to HFRP easements.
    Enrollment Options: There are three enrollment options for program 
participants and projects will be enrolled in the approximate 
proportion of landowner interest expressed in a particular enrollment 
method. NRCS may enroll land in HFRP through 10-year restoration cost-
share agreements; 30-year easements; or 99-year easements. NRCS may 
offer an easement with duration longer than 30 years and less than 99 
years if a different duration is the maximum allowed under state law. 
The program has a statutory enrollment cap of two million acres. See, 
16 U.S.C. 6572.
    NRCS will only accept applications for enrollment during announced 
sign-up periods. The sign-up announcement will identify the national 
requirements for the particular sign-up, including the geographic 
extent. NRCS will select applications for enrollment based on ranking 
and selection criteria developed for the particular forest ecosystem, 
following the national guidelines outlined in the sign-up notice. With 
both HFRP easements and 10-year cost-share agreements, participants 
will have the opportunity to utilize common management practices and 
activities to restore, enhance, and protect forest ecosystems.
    As required by Section 503 of the Act, 16 U.S.C. 6573 all 
participants will enter into a restoration plan for the enrolled area 
(HFRP restoration plan) for the length of their agreement or easement. 
The HFRP restoration plan includes conservation treatments, such as the 
conservation practices and measures necessary to the restoration and 
management of the enrolled area. Where NRCS will provide financial 
assistance for this conservation treatment, NRCS will enter into a 
restoration agreement and the HFRP restoration plan will serve as the 
basis for the agreement. Therefore, participants may receive financial 
assistance for restoration management practices identified in the 
restoration plan through enrollment under the 10-year cost-share 
agreement option or in conjunction with enrollment through either the 
30-year or 99-year easement option. If desired by the participant, the 
HFRP restoration plan can also serve as the basis for obtaining safe 
harbor or similar assurances, which shall be made available to the 
landowner through NRCS in coordination with FWS and NMFS.
    Landowner Protections (safe harbor or similar assurances): Because 
many listed species occur primarily or exclusively on privately owned 
property, NRCS believes it is critical to involve the private sector in 
the conservation and recovery of these species. Many property owners, 
however, are concerned about land use restrictions, particularly in 
relation to the prohibition on take of listed species under section 9 
of the ESA, which may occur if listed species colonize their property 
or increase in numbers as a result of their land management. Thus, 
these landowners may avoid or limit land and water management practices 
and activities that could enhance and maintain a specific habitat. 
Additionally, habitat adjustments may cause an improvement in habitat 
for one species and a decline in habitat for another.
    Section 506 of the Act, 16 U.S.C. 6576, requires that the Secretary 
of Agriculture to make available ``safe harbor or similar assurances 
and protection'' (``Landowner Protections'')

[[Page 28549]]

to program participants with land enrolled in the HFRP and whose 
conservation activities result in a net conservation benefit for listed 
species, candidate species, or other species of concern. Landowners 
Protections are explained further below.
    Section 503 of the Act requires that land enrolled in the program 
be subject to a restoration plan and that the restoration plan require 
such practices as are necessary to restore and enhance habitat for 
listed species. Consistent with the section 502 eligibility provisions, 
the restoration plan actions for lands enrolled in the HFRP will be 
designed to restore, enhance, or otherwise increase the likelihood of 
recovery of listed species or candidates for listing, State-listed 
species, or special concern species. Because program participants must 
have an HFRP restoration plan, program participants' activities that 
comply with the terms of the 10-year cost-share agreement, easement 
and/or HFRP restoration plan are assumed to result in a net 
conservation benefit that contributes to the recovery of listed 
species, candidate or other species. In addition, if the means to 
obtaining Landowner Protections requires the program participant to 
take additional conservation or protection measures besides those 
contained in his or her 10-year cost-share agreement or easement, such 
measures shall be considered part of an HFRP restoration plan for these 
purposes. In exchange, program participants will be able to obtain safe 
harbor or similar assurances (Landowner Protections) under ESA section 
7(b)(4) or section 10(a)(1), 16 U.S.C. 1536(b)(4), 1539(a)(1).
    There are two ways that NRCS plans to help its program participants 
obtain Landowner Protections, and these protections are very similar 
under either approach:
    (1) NRCS may extend to a HFRP program participant incidental take 
authorization received by NRCS through biological opinions issued by 
FWS or NMFS pursuant to section 7(b)(4) of the ESA. Such an incidental 
take authorization will be obtained by NRCS through consultation with 
FWS or NMFS under section 7(a)(2) of the ESA. Under this approach, the 
program participant will be covered by the authorization to NRCS to 
``take'' (as defined in the ESA) listed species in the course of 
conducting management activities and other compliance with the terms of 
a 10-year cost-share agreement, or a 30-year or 99-year easement, and 
associated restoration plan. This may, if the landowner so desires, 
include authorization for incidental take associated with returning to 
baseline resource conditions at the end of the applicable period. Thus, 
the landowner would not be in violation of ESA section 9 take 
prohibitions.
    (A) With regard to modifications of a restoration plan than 
contains provisions for a net conservation benefit, NRCS will work with 
program participants who request modifications to a restoration plan, 
provided the requested modifications do not adversely affect the forest 
ecosystem for which the easement or agreement was established or the 
basis on which the section 7 incidental take authorization was issued, 
and a net conservation benefit is still likely to be achieved.
    (B) In the event where a landowner enrolled in HFRP through a 10-
year cost share agreement does not carry out the terms and conditions 
of the restoration agreement, NRCS has the discretion to terminate the 
10-year cost share agreement and associated HFRP restoration plan. Such 
termination may also require the Services to terminate Landowner 
Protections. NRCS does not have authority to terminate HFRP easements. 
In easement circumstances, where a change of conditions requires the 
Services to terminate a Landowner Protection, NRCS will work to address 
the changed conditions in the HFRP restoration plan in coordination 
with the landowner.
    (2) NRCS will provide technical assistance to the HFRP program 
participant to enter into a Safe Harbor Agreement (SHA) with FWS or 
NMFS under section 10 of the ESA, 16 U.S.C. 1539. ESA Section 10 Safe 
Harbor Agreements are voluntary arrangements between either FWS or NMFS 
and cooperating landowners where landowners agree to adopt practices 
and measures, or refrain from certain activities, that are reasonably 
likely to result in a net conservation benefit that contributes to the 
recovery of listed species. In many cases the FWS or NMFS enter into a 
programmatic SHA with a non-Federal entity (e.g., a State Fish and 
Wildlife Agency or a local government), who holds the permit and 
assurances and extends them to landowners who chose to participate in 
the SHA. SHA requirements are described in the Safe Harbor Policy 
adopted by FWS and NMFS (64 FR 32717) and, in the case of FWS, 
regulations at 50 CFR 17.22(c) and 17.32(c). In exchange for their 
commitment to undertake conservation measures, the landowner receives 
an enhancement of survival permit under section 10 of the ESA 
authorizing incidental take that may occur, both as a result of 
management activities and as a result of the return to baseline 
conditions, of the listed species covered by the SHA. Thus the 
landowner would not be in violation of ESA section 9 prohibitions on 
take. In addition to the authorization for incidental take provided 
through the enhancement of survival permit, under an SHA the landowner 
also receives assurances that:
    (A) Provided the SHA is being properly implemented, FWS or NMFS may 
not require additional or different management activities be undertaken 
by the permittee without the consent of the permittee; and
    (B) The FWS must, with the consent of the permittee, pursue all 
appropriate options to avoid revoking an enhancement of survival 
permit.
    Whether or not a program participant seeks the assistance of NRCS 
to obtain the Landowner Protections through either of the approaches 
described above, NRCS has its own ESA Section 7(a)(1) and Section 
7(a)(2) responsibilities. Under ESA Section 7(a)(1), NRCS utilizes its 
authorities to further the purposes of ESA by carrying out programs for 
the conservation of endangered and threatened species; this program is 
an example of NRCS utilizing its authorities to further the purposes of 
ESA. Consistent with ESA Section 7(a)(2), NRCS will consult with the 
appropriate Service to ensure that its activities are not likely to 
jeopardize the continued existence of any listed species or result in 
the destruction or adverse modification of designated critical habitat 
of such species. Pursuant to consultation under ESA Section 7(a)(2), 
the Service issues a biological opinion and an incidental take 
statement to the NRCS as the action agency. The incidental take 
statement identifies those terms and conditions to which the NRCS, as 
the action agency, must adhere in order to avoid incurring liability 
that would be associated with unauthorized take of listed species under 
section 9 of the ESA. Typically, the action consulted upon includes 
measures that designed to avoid or minimize incidental take, and the 
terms and conditions simply specify that these agreed upon measures 
must be implemented.
    In its administration of HFRP, NRCS is proposing to enter into 
programmatic consultation with FWS or NMFS on a forest ecosystem basis, 
or other appropriate geographic scale, to encompass NRCS activities 
under HFRP within that area. Pursuant to the consultation, if the 
appropriate Service issues NRCS a biological opinion and an Incidental 
Take Statement authorizing NRCS activities under HFRP to occur under 
certain terms and conditions,

[[Page 28550]]

HFRP program participants automatically would be covered by this 
authorization for incidental take by virtue of their commitment to 
implement the restoration plan associated with their HFRP easement or 
10-year cost share agreement. Courts have held that a party which is 
neither a federal agency nor an applicant for a permit or license can 
take members of a listed species without violating the ESA if the 
action in question was contemplated by an incidental take statement 
issued to a federal agency under Section 7(a)(2) of the ESA. See, 
Ramsey v. Kantor, 96 F.3d 434 (9th Cir. 1996) Thus, HFRP program 
participants can obtain protection from ESA liability by adhering to 
the terms and conditions of the Incidental Take Statement issued by the 
appropriate Service to NRCS for that particular forest ecosystem. HFRP 
program participants also have the option of entering into a Safe 
Harbor Agreement with FWS or NMFS to receive similar protections.
    The HFRP and associated Landowner Protections will benefit listed 
species while giving private landowners protection from potential 
restrictions of section 9 of the ESA by authorizing the take of listed 
species that may occur during restoration actions, ongoing operations, 
or returning to baseline conditions at the end of the 10-year cost-
share agreement or a 30-or 99-year easement. These Landowner 
Protections operate with lands enrolled in the HFRP and are valid for 
as long as the participant is complying with the terms under which the 
Landowner Protections were given.
    Land Eligibility: Consistent with section 502(b) of the Act, 16 
U.S.C. 6572(b), NRCS identifies in 625.4 that it will consider land 
eligible if it is privately owned land, including Indian trust land, 
the enrollment of which will restore, enhance, or otherwise measurably 
increase the likelihood of recovery of listed species, candidates for 
such listing, State-listed species, or species identified by the Chief 
for special funding consideration. Privately-owned land does not 
include land owned by the federal, state, or local government. NRCS 
will work with FWS and/or NMFS in identifying particular forest 
ecosystems that meet these eligibility criteria.
    In enrolling such land, NRCS will give additional consideration to 
enrolling land that improves biological diversity and increases carbon 
sequestration. NRCS will only enroll land offered voluntarily by the 
landowner.
    Lands in addition to the above described eligible lands may also be 
enrolled if NRCS determines enrollment of such land is necessary for 
the efficient administration of an easement or restoration cost-share 
agreement.
    Enrollment Priority: As provided in Section 502(g) of the Act, 16 
U.S.C. 6572(g), NRCS will give priority to the enrollment of land 
capable of supporting the forest ecosystem conditions that will provide 
the greatest conservation benefit primarily to species listed under the 
ESA and secondarily to other species that are candidates for such 
listing, State-listed species, or species identified by the Chief for 
special funding consideration. NRCS will not enroll otherwise eligible 
lands if it determines that the current land use has modified site 
conditions to such an extent that the re-establishment of the desired 
forest ecosystem conditions is impracticable or infeasible. NRCS will 
also emphasize program implementation to restore the Nation's forest 
land for the improvement of biological diversity and the sequestration 
of carbon.
    NRCS will consider the cost-effectiveness of each 10-year cost-
share agreement or easement, and associated HFRP restoration plan, so 
as to maximize the Federal investment. However, NRCS will not utilize a 
strict environmental benefits index, but will evaluate the enrollment 
of particular land parcels based upon their site conditions, the 
feasibility to restore the desired forest cover, proximity to other 
parcels with the desired forest cover, contribution of resources by 
partnering organizations, and other resource and cost factors. NRCS 
seeks public input regarding how best to maximize the federal 
investment as required by statute.
    NRCS may place enrollment priority upon certain regional forest 
ecosystems, such as the longleaf pine forest ecosystem of the 
Southeast, riparian forest ecosystems of California and the Southwest, 
mesic hardwood forest ecosystems of the Appalachian region, coastal 
coniferous forests of New England, and temperate rainforests of the 
Pacific Northwest. Each of these forest ecosystems have listed 
endangered and threatened species that could benefit from more active 
forest management practices and measures. NRCS will identify through a 
sign-up notice process the geographic scope and ranking priorities for 
that particular sign-up.
    NRCS considered several methods of ranking the applications, 
including a state-by-state ranking, a national ranking, or a 
combination of the two methods. Under the combination method, NRCS, 
with the input of the applicable State Conservationists, will develop a 
ranking process for applications received within that forest ecosystem. 
States would initially screen applications based on criteria contained 
in the sign-up announcement and the more locally-derived specific 
criteria. NRCS seeks public input about the manner in which NRCS should 
select particular projects for funding. In carrying out the HFRP, NRCS 
may consult with non-industrial private forest landowners, other 
Federal agencies, State fish and wildlife agencies, State forestry 
agencies, State environmental quality agencies, and non-profit 
conservation agencies.

Provisions That Apply to Both Easements and 10-Year Restoration Cost-
Share Agreements

    As required by section 503 of the Act, 16 U.S.C. 6573, lands 
enrolled in HFRP shall be subject to a restoration plan for the period 
of time the land is covered by either a 10-year cost share agreement or 
easement that requires such restoration practices as necessary to 
restore and enhance habitat for listed species under ESA and animal and 
plant species before the species reach such endangered or threatened 
status, such as candidate, State-listed species, and special concern 
species as identified by the Chief. NRCS will work closely with FWS and 
NMFS to identify those practices and measures that will be included as 
the conservation treatment within the HFRP restoration plan. NRCS 
believes that the close collaboration with FWS and NMFS will aid in the 
coordination of the implementation of the program and in establishing 
program policies. However, no determination by FWS, NMFS, the Forest 
Service, federal or state agency, conservation district, or other 
organization will compel the NRCS to take any action which the NRCS 
determines will not serve the purposes of the program established by 
this part.
    Both HFRP easements and 10-year cost-share agreements will require 
that the land is managed to maintain the vitality of the forest 
ecosystem as described in the HFRP restoration plan. The HFRP 
restoration plan will take into account management practices and 
measures necessary for further species recovery objectives of the HFRP 
and may serve as the basis for program participants to obtain Landowner 
Protections as described above.
    Section 503 of the Act, 16 U.S.C. 6573, requires that NRCS and the 
landowner will jointly develop the HFRP restoration plan, in 
coordination with the Secretary of the Interior. Similar to the 
Grassland Reserve

[[Page 28551]]

Program and the Wetland Reserve Program (which are other conservation 
programs administered by NRCS), the ``restoration agreement'' will be 
the legal instrument used to incorporate the HFRP restoration plans 
into both the 10-year cost-share agreements and easements and will 
provide cost-share assistance for implementing measures that will 
restore and enhance habitat for listed species or candidate, state-
listed or species of special concern. NRCS has determined that program 
implementation is greatly enhanced in this way if it has the 
flexibility to utilize the same type of legal instrument, in this case 
the restoration agreement, for providing financial assistance for 
restoration implementation activities to program participants.
    Section 506(b) directs that if Landowner Protections require the 
taking of measures that are in addition to the measures covered by the 
applicable HFRP restoration plan, the cost of the additional measures, 
including the cost of any permit, are considered part of the HFRP 
restoration plan for purposes of financial assistance. As such, any 
additional measures that might be required so that the HFRP participant 
can qualify for Landowner Protections would be eligible for cost-share 
assistance under section 504 of the Act, 16 U.S.C. 6579.
    NRCS will work with the program participant and the Services to 
ensure that these measures are designed to restore and enhance habitat 
so as to provide a net conservation benefit for listed species, 
candidate species, State-listed species, and special concern species. 
These measures would be site-specific and would be addressed as 
management activities in the HFRP restoration plan. Failure by the 
program participant to perform the activities required by the HFRP 
restoration plan and/or any measures required can result in violation 
of the easement or 10-year cost-share agreement, and in the loss of 
Landowner Protections.
    A major program participation requirement contained in Sec.  625.11 
and Sec.  625.12 of the interim final rule is the inclusion of a right 
under an easement or 10-year cost-share agreement for NRCS to determine 
if a landowner's specific use of the enrolled area may be permitted as 
compatible with the purposes for which the land was enrolled into HFRP. 
Under the terms of an easement, the landowner would retain fee title to 
the land and such uses that are compatible with maintaining the 
conservation benefits for priority species. Such uses may include 
hunting, fishing, hiking, camping, bird watching, and other undeveloped 
recreational activities. Under the terms of a 10-year cost-share 
agreement, NRCS will include provisions within the agreement document 
that identify those activities determined compatible with the short-
term duration of enrollment. For a use to be considered compatible, the 
Chief or designee would determine that the use is consistent with the 
purposes of HFRP: (1) Promoting the recovery of listed species, (2) 
improving biodiversity, and (3) enhancing carbon sequestration. NRCS 
seeks comment about the compatible use process for HFRP.
    To be determined compatible, the type, method, timing, duration, 
and extent of a use must be an integral and positive part of the 
overall HFRP restoration plan for the easement or 10-year cost-share 
agreement. For example, in an easement area that is a restored forest 
ecosystem, a salvage cut to remove diseased or damaged trees may be 
appropriate. A selective harvest of over-story trees which opens up the 
canopy to provide for under-story vegetative diversity may also be 
compatible in specific cases. A clear cutting approach to timber 
harvest, however, for the purpose of achieving economic gain at the 
expense of the forest ecosystem or essential wildlife habitat would not 
be compatible.
    Once an easement or 10-year cost-share agreement has been signed, a 
program participant can request modifications to the HFRP restoration 
plan that do not adversely affect the forest ecosystem for which the 
easement or 10-year cost-share agreement was established or the basis 
on which Landowner Protections were issued. However, as determined by 
NRCS, in coordination with FWS or NMFS, the modification must result in 
equal or greater species conservation.
    Section 504 of the Act, 16 U.S.C. 6574, provides for cost-share 
assistance for the adoption of approved practices on land enrolled 
through both the easement and 10-year cost-share agreement options. 
However, the Act limits the rate of cost-share assistance depending 
upon the duration of the enrollment. For 99-year easements, NRCS will 
reimburse a program participant an amount not less than 75 percent nor 
more than 100 percent of the cost of approved practices. For 30-year 
easements, NRCS will reimburse a program participant an amount not more 
than 75 percent of the cost of approved practices. For 10-year cost-
share agreements, NRCS will reimburse a program participant an amount 
not more than 50 percent of approved practices.
    Easements: Section 625.4 of the interim final rule 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. Additionally, there must be 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.
    NRCS intends to acquire easements under HFRP utilizing a standard 
conservation easement deed similar to the deed used by the Grasslands 
Reserve Program (GRP). The standard conservation easement, termed a 
negative restrictive easement, is an interest in land where the holder 
of the easement has the right to require the owner of the burdened land 
(i.e., the easement area) to do or not to do specified things with 
respect to that land. Under a negative restrictive easement, the 
drafter of the easement deed anticipates the possible uses of the 
property that might interfere with forest resources and specifically 
prohibits them in the easement document. Negative restrictive easements 
tend to work well in programs where the landowner will continue to 
conduct various activities on the property and only a few activities 
need to be prohibited to meet program purposes. NRCS also considered 
utilizing a reserved interest easement deed similar to the deed used 
for the Wetlands Reserve Program (WRP). Under a reserved interest deed, 
the purchaser acquires all rights in the property not reserved to the 
landowner. Thus, reserve interest deeds identify to the landowner the 
rights s/he is keeping in the property and thus knows which activities 
are permitted and which are prohibited. Activities that do not 
interfere with protecting forest resources purposes would be identified 
in the deed as reserved to the landowner. Reserved interest easements 
tend to work very well in programs where habitat protection is a 
primary purpose and the landowner is not expected to perform many 
activities on the property. NRCS seeks public comment regarding which 
deed form should be used in the administration of HFRP.
    Easement payments are based on appraisals that derive value from 
the method commonly referred to as the before-and-after appraisal 
method. Under this appraisal method, the amount paid for the easement 
is the fair market value of the easement which is determined by a 
before-and-after

[[Page 28552]]

appraisal method done by a certified land appraiser. A certified land 
appraiser appraises the fair market value of the land before an HFRP 
easement is acquired and subtracts from this amount what the fair 
market value of the land would be after an HFRP easement is acquired. 
This difference in value represents the value of the HFRP easement and 
will form the basis of compensation paid to an HFRP program 
participant. For easements longer than 30 years and not more than 99 
years, NRCS will offer to pay the landowner not less than 75 percent, 
nor more than 100 percent, of the value of the easement for the time 
period the land is subject to the easement, as determined by a before-
and-after appraisal. In the case of a 30-year easement, NRCS will offer 
to pay the landowner an amount equal to not more than 75 percent of the 
value of the easement for the time period the land is subject to the 
easement, as determined by a before-and-after appraisal.
    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 NRCS and the landowner.
    In addition to compensation for the conveyance of an easement, a 
landowner may receive cost-share assistance towards the establishment 
or maintenance of practices and measures that restore and enhance 
habitat for listed species, candidate species, State-listed species, 
and other species of special concern. These practices and measures must 
be approved by the Chief or his designee, to be eligible for cost-share 
assistance under HFRP.
    NRCS will provide cost-share assistance to program participants for 
practices and measures, including those necessary to obtain Landowner 
Protections, which are incorporated into an HFRP restoration plan. The 
extent of cost-share assistance will be up to the maximum allowed by 
law, based on the NRCS State average cost list, and subject to the 
availability of funds. The Act provides an option for NRCS to base 
cost-share assistance upon either actual costs or an average cost list 
developed by NRCS. See 16 U.S.C. 6574. NRCS determined to use the 
average cost list consistent with its cost-share programs. NRCS 
believes the average cost approach is more cost-efficient when 
considering the administrative costs associated with utilizing the 
actual cost approach in terms of the additional documentation that 
needs to be submitted by the program participant and processed by NRCS. 
NRCS welcomes public comment regarding the use of average or actual 
costs when it provides cost-share assistance under HFRP.
    Lastly, section 504(d) of the Act, 16 U.S.C. 6574(d), provides that 
NRCS may accept and use contributions of non-federal funds to make 
payments.
    10-Year Restoration Cost-Share Agreements: Instead of applying for 
entry into HFRP through one of the easement options, section 502(f) of 
the Act, 16 U.S.C. 6572(f), allows landowners, including other people 
who have general control of property for the agreement period, to apply 
for enrollment into HFRP through 10-year cost-share agreements. HFRP 
10-year cost-share agreements do not involve a transfer of real 
property rights like under the easement enrollment options. Applicants 
who do not have fee title ownership of the enrolled area need to 
provide evidence of control of the property for the length of the 
agreement. If cost-share payments are to be divided between the 
landowner and other participants or multiple landowners, the 10-year 
cost-share agreement will need to be signed by all parties, indicating 
their respective share of the payments. As required by section 504(c) 
of the Act, 16 U.S.C. 6574(c), cost-share payment amounts under the 10-
year cost-share agreement option will not exceed 50 percent of the 
average cost of approved practices and measures. Payments will be paid 
upon completion of a practice, a measure, or identifiable component of 
a practice.
    Cost-shared practices and measures shall be maintained by the 
participant for the life of the practice or measure. The life of the 
practice or measure is determined by the NRCS State Conservationist, 
and shall be consistent with other NRCS conservation programs. All 
practices and measures will be implemented in accordance with the NRCS 
requirements.
    Persons who enroll land initially through a 10-year cost-share 
agreement may subsequently enroll the land through an easement, 
providing 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. This policy allows NRCS to 
obtain longer term protection on lands considered valuable for 
enrollment.

Summary of Provisions and Request for Comment

    NRCS welcomes comments on all aspects of this interim final rule. 
The following describes the specific requirements in each section of 
the regulation. Activities conducted by NRCS would be performed by 
representatives of NRCS or third party providers hired by NRCS as 
identified in 7 CFR part 652. Section 505(b) of the Act, 16 U.S.C. 
6575(b), authorizes NRCS to request the services of, and enter into 
cooperative agreements with, individuals or entities identified as 
technical service providers pursuant to section 1242 of the Food 
Security Act of 1985, as amended, 16 U.S.C. 3842.

Section 625.1 Purpose and Scope

    This section describes the general purpose and scope of HFRP. The 
purpose of HFRP is to assist landowners, on a voluntary basis, in 
restoring, enhancing, and protecting forest ecosystems on private lands 
through 10-year cost-share agreements and easements. The objectives of 
HFRP are to promote the recovery of listed species, maintain and 
improve plant and animal biodiversity, and enhance carbon 
sequestration.
    The Chief may implement HFRP 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, the Commonwealth of the Northern 
Mariana Islands, and the Trust Territories of the Pacific Islands. The 
Chief may determine to offer the program nationwide, in particular 
regional forest ecosystems, or in particular States, depending upon the 
extent of funding available, the identification of eligible forest 
ecosystems, and other considerations.

Section 625.2 Definitions

    This section sets forth the definition of terms that are utilized 
throughout the regulation. Many of these definitions are not unique to 
HFRP. However, several terms included in this section have not been 
previously defined or they have meanings different than how these terms 
are understood under other conservation programs.
    For example, NRCS is including a definition for ``conservation 
treatment'' that specifies that the practices, measures, and activities 
encompassed by a conservation treatment must meet HFRP purposes. NRCS 
expects that the actions needed to restore or enhance habitat for 
listed species may require the implementation of work more than the 
adoption of conservation practices

[[Page 28553]]

currently identified in NRCS Field Office Technical Guides. In 
particular, the enrolled land will require a comprehensive system of 
restoration and management actions to meet HFRP purposes. For example, 
the terms and conditions of an Incidental Take Statement may require 
certain actions that are not NRCS conservation practices. Since there 
may be measures and activities that are known to improve habitat 
conditions and/or provide the basis for Landowner Protections, NRCS 
believes that the term conservation treatment describes the contents of 
an HFRP restoration plan more completely. Therefore, such practices, 
measures, and activities that improve habitat conditions for listed 
species or other species of concern are identified collectively as 
eligible for financial assistance as necessary conservation treatment.
    In addition, the term ``consultation'' or ``consult with'' under 
these regulations would mean to talk things over for the purpose of 
providing information, to offer an opinion for consideration, or to 
meet for discussion or to confer. The Act calls for the Secretary of 
Agriculture to ``consult with'' a wide range of groups, individuals, 
and agencies. Groups the Secretary may consult with include non-
industrial private forest landowners, other Federal agencies, State 
fish and wildlife agencies, State forestry agencies, other State 
conservation agencies, and non-profit conservation organizations. See 
16 U.S.C. 6567. The term under HFRP does not have the same meaning as 
that same or similar term is understood to have under the ESA.
    Section 502 of the Act, 16 U.S.C. 6572, also specifies that the 
implementation of HFRP will be in ``coordination'' with FWS and NMFS. 
NRCS proposes in this regulation to distinguish ``coordination'' from 
ESA ``consultation.'' While NRCS will enter into ESA consultation with 
the Services where appropriate under section 7(a) of the ESA, the term 
``coordination'' means something different for HFRP purposes. NRCS has 
defined ``coordination'' as NRCS taking the lead in making all 
decisions associated with implementing the program, involving FWS and 
NMFS, and utilizing information provided by these agencies in HFRP 
implementation.
    NRCS is the leading agency in conservation planning in the Federal 
Government, and HFRP will utilize this technical capability of the 
Agency. As part of any easement or 10-year cost-share agreement, NRCS 
will develop a conservation plan that includes the schedule for 
implementation for conservation practices and measures and other 
conservation treatment that will be implemented to restore, enhance, 
and protect forest ecosystems enrolled in HFRP. NRCS has named the 
required conservation plan the ``HFRP restoration plan.''
    NRCS has included the term ``Landowner Protections'' in the HFRP 
interim final rule. Such protections may include those associated with: 
(1) Incidental take authorization issued to NRCS pursuant to an 
Incidental Take Statement under section 7(b)(4) of the ESA, which 
automatically conveys to HFRP participants, and (2) similar protections 
associated with Safe Harbor Agreements under section 10(a)(1) of the 
ESA, as described in the SHA regulations issued by the FWS at 50 CFR 
17.22 and 17.32, and the Safe Harbor policy issued by FWS and NMFS. 
Under either approach, Landowner Protections will most likely allow 
HFRP participants to provide beneficial habitat that may attract listed 
species to their property, or increase the number of individuals of 
listed species already present, while not violating the ESA if the 
program participant chooses to return the enrolled area to baseline 
conditions upon expiration of the term of the HFRP easement or 
restoration cost-share agreement.

Section 625.3 Administration

    This section describes how the HFRP will be administered under the 
general supervision and direction of the Chief. The Chief delegates 
certain responsibilities to the NRCS State Conservationists.
    NRCS will coordinate with FWS and NMFS in the implementation of the 
program and in establishing program policies. The NRCS may also consult 
with the nonindustrial private forest landowners, the Forest Service 
and other Federal agencies, State fish and wildlife agencies, State 
forestry agencies, State environmental quality agencies, other State 
conservation agencies; and nonprofit conservation organizations. 
However, this rule specifies that no determination by any of these 
entities will compel the NRCS to take any action which the NRCS 
determines will not serve the purposes of HFRP.

Section 625.4 Program Requirements

    This section sets forth the requirements that program participants 
must meet to enroll lands into the HFRP. NRCS sets forth the basic 
requirements in paragraph (a) of this section. In general, NRCS will 
purchase conservation easements or enter into 10-year cost-share 
agreements with eligible landowners who voluntarily enroll in the 
program. To participate in HFRP, a landowner will agree to the 
implementation of a HFRP restoration plan.
    If a program participant must take management measures that are in 
addition to the measures covered by the applicable HFRP restoration 
plan in order to obtain Landowner Protections, the cost of additional 
measures, as well as the cost of any permit, if incorporated into the 
HFRP restoration plan, are considered eligible for financial assistance 
as part of the HFRP restoration plan.
    Paragraph (b) specifies the eligibility requirements of program 
participants. In particular, this interim final rule requires that a 
program participant be a landowner. However, a landowner includes those 
persons who have control of the land for the term of the program 
enrollment period.
    To grant an easement, a landowner must possess clear title to the 
land or be able to provide subordination agreements from third parties 
with interest in the land. The landowner must also provide NRCS access 
to the easement area from a public road.
    Paragraph (c) of this section defines the type of land that will be 
eligible for enrollment. Land is eligible if it is private land, 
including tribal land. The land must, subsequent to enrollment, 
restore, enhance, or otherwise measurably increase the likelihood of 
recovery of a listed species or other species of concern such as state-
listed species or candidates for federal listing. Among the land types 
eligible for enrollment, NRCS may enroll other lands adjacent that 
would contribute significantly to the conservation benefit of the 
ecosystem or improve the practical administration of the program.
    Paragraph (d) of this section describes lands that NRCS will not 
enroll into HFRP. These ineligible lands include lands owned by a 
governmental entity, lands already subject to an easement or deed 
restriction that provides for the protection of wildlife habitat, or 
lands where implementation of forest restoration practices would be 
futile due to on-site or off-site conditions. These on-site or off-site 
conditions could result from the presence of hazardous waste, 
incompatible land use patterns, or other factors that prove either 
impracticable or costly to address.

Section 625.5 Application Procedures

    This section provides the sign-up notice and application procedures 
for a person to express their wish to enroll land into HFRP. Interested 
applicants can file an application pursuant to a

[[Page 28554]]

sign-up notice with their local USDA Service Center.
    Paragraph (c) provides that the applicant, by filing an 
application, will allow an NRCS representative to come onto their 
property to determine whether the land is eligible and a priority for 
enrollment. NRCS will notify the applicant when the agency intends to 
visit the property, and the applicant, of course, is entitled to 
accompany the NRCS representative on any such visits.
    Paragraph (d) provides the flexibility for an applicant to improve 
their ranking score by voluntarily accepting a lesser payment amount 
than that being offered by NRCS.

Section 625.6 Establishing Priority for Enrollment of Properties in 
HFRP

    The State Conservationist will develop a ranking process. As 
required by section 502(g) of the Act, 16 U.S.C. 6572(g), NRCS will 
give priority to the enrollment of land that provides the greatest 
conservation benefit primarily to listed species under the ESA and 
secondarily to other species that are candidates for such listing, 
State-listed species, or species identified by the Chief for special 
funding considerations. NRCS will consider the cost-effectiveness of 
each 10-year cost-share agreement and easement so as to maximize the 
federal investment.

Section 625.7 Enrollment of Easements

    This section of the interim final rule describes the process for 
enrolling easements into the program. NRCS will consider land enrolled 
into HFRP if an applicant responds to an NRCS offer of tentative 
acceptance with a notice of intent to continue. The applicant's notice 
of intent to continue will authorize NRCS to proceed with easement 
acquisition activities, including appraisal, survey, title clearance, 
and other matters. Prior to NRCS and the landowner executing the 
easement on the land, NRCS may withdraw its offer of enrollment because 
of title clearance issues, hazardous waste issues, lack of availability 
of funds, or other matters related to whether the enrollment of the 
particular parcel of land will meet program requirements.

Section 625.8 Compensation for Easements

    This section of the interim final rule describes the level of 
compensation that will be provided to HFRP program participants for the 
enrollment of up to a 99-year easement, a 30-year easement, and a 
restoration cost-share agreement. As described earlier in this 
preamble, the compensation rates for easements will be based upon 
before-and-after appraisals and the duration of the easement.

Section 625.9 10-Year Cost-Share Agreements

    This section of the interim final rule describes the terms and 
conditions of the 10-year cost-share agreement. In particular, a 10-
year cost-share agreement will incorporate the provisions of the HFRP 
restoration plan, be for a period of 10 years, specify the requirements 
for operation and maintenance of applied practices and measures, and 
specify the extent to which NRCS will provide cost-share assistance for 
the adoption or implementation of the approved conservation treatment. 
This section also describes the limited circumstances under which a 10-
year cost-share agreement can be terminated.

Section 625.10 Restoration Cost-Share Payments

    This section of the interim final rule describes the availability 
of cost-share assistance for practices and measures identified in the 
HFRP restoration plan, including cost-share assistance for the 
implementation of practices and measures related to obtaining Safe 
Harbor Assurances and related permits. HFRP program participants can 
receive cost-share assistance for the implementation of approved 
practices and measures at varying rates, depending upon the duration of 
the easement or if enrollment is through a restoration cost-share 
agreement: (1) Up to 100% cost-share assistance for activities 
implemented on up to a 99-year easement; (2) up to 75% cost-share 
assistance for activities implemented on a 30-year easement; and (3) up 
to 50% cost-share assistance for activities implemented on land 
enrolled through a 10-year cost-share agreement.
    Practices or measures eligible for cost-share assistance under HFRP 
shall be approved by NRCS, in coordination with FWS and NMFS. These 
practices will include those necessary to restore, enhance, or maintain 
habitat conditions or otherwise increase the likelihood of recovery of 
listed species, candidate, and other species identified by the Chief 
for special funding consideration.

Section 625.11 Easement Participation Requirements

    This section of the interim final rule describes the 
responsibilities the program participant has by enrolling an easement 
into HFRP. An easement is an interest in land and is binding, for the 
duration of its term, upon the landowner and anyone claiming title, 
rights, or interests under the landowner. In particular, a program 
participant must grant an easement to the United States and agree to 
the restoration of the property in accordance with the goals and 
objectives of HFRP.
    Additionally, the program participant must provide NRCS a right of 
access to the easement area sufficient for the NRCS to exercise the 
rights it acquires under the easement. By enrolling an easement into 
HFRP, a program participant agrees to the use of the easement area for 
the restoration, protection, enhancement, maintenance, and management 
of forest ecosystems and recovery of a listed species or other species 
of concern. NRCS may authorize a landowner subject to an HFRP easement 
to engage in certain activities if such activities are compatible with 
the purposes for which the easement was acquired.

Section 625.12 The HFRP Restoration Plan Development

    This section of the interim final rule sets forth the terms and 
conditions under which NRCS will enter into a HFRP restoration plan. 
Eligible activities include land management, vegetative, and structural 
practices and measures in forestland ecosystems that will restore, 
enhance, or maintain habitat conditions or otherwise increase the 
likelihood of recovery of listed species, or candidate, state-listed or 
species of special concern as identified by the Chief. Specific 
activities eligible for payment will be determined by the NRCS at the 
State level in coordination with FWS and NMFS.
    The HFRP restoration plan will specify the manner in which the 
enrolled land shall be restored, protected, enhanced, maintained, and 
managed for forest ecosystems and recovery of listed species and other 
species selected by the Chief for special funding consideration.

Section 625.13 Modification of the HFRP Restoration Plan

    This section of the interim final rule provides how the HFRP 
restoration plan may be modified.

Section 625.14 Transfer of Land

    This section of the interim final rule provides how applications 
will be handled if the original applicant transfers the land that is 
encompassed by the application before the closing of the easement. In 
general, any transfer of the property prior to the landowner acceptance 
into the program will void the offer of enrollment. However, at the 
option of the State Conservationist, an

[[Page 28555]]

offer can be extended to the new landowner if the new landowner agrees 
to the same or more restrictive easement or cost-share agreement terms 
and conditions.
    NRCS will hold the new landowner responsible for assuring 
completion of all measures and practices required by the restoration 
plan. NRCS will make cost-share payments to the new landowner upon 
presentation of an assignment of rights or other evidence that title 
had passed. However, NRCS does not bear any responsibility for any full 
payments or partial distributions of funds between the original 
landowner and the landowner's successor.

Sections 625.15 Through 625.19

    These sections of the interim final rule are common provisions in 
NRCS easement and cost-share programs. They include how NRCS will 
handle violations and recovery of costs, including the ability to 
recover under a liquidated damages provision in 10-year cost-share 
agreements.
    Any cost-share or easement payment or portion thereof due any 
person under HFRP will be allowed without regard to any claim or lien 
in favor of any creditor, except agencies of the United States 
Government.
    A person participating in the HFRP may obtain a review of any 
administrative determination concerning eligibility for participation 
utilizing the administrative appeal procedures under 7 CFR part 614 for 
non-Title XII programs. 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 part 614. Additionally, 
any appraisals, market analysis, or supporting documentation that may 
be used by the NRCS in determining property value are considered 
confidential information, and NRCS will only disclose such information 
as determined at the sole discretion of the NRCS in accordance with 
applicable law.
    If NRCS determines that a person has employed a scheme or device to 
defeat the purposes of HFRP, any part of any program payment otherwise 
due or paid such person during the applicable period may be withheld or 
be required to be refunded with interest thereon, as determined 
appropriate by NRCS.

Regulatory Certifications

Executive Order 12866

    The Office of Management and Budget (OMB) determined that this 
interim final rule is not significant and it was not reviewed by the 
Office of Management and Budget under Executive Order 12866.

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 Natural Resources Conservation Service (NRCS) 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.
    Section 553(b)(B) of Title 5 of the United States Code exempts 
rules from notice and comment procedures if such rules would be 
``impracticable, unnecessary, or contrary to the public interest.'' 
NRCS hereby finds that there is ``good cause'' to proceed with interim 
final rule making because this rulemaking is to implement a pilot 
program effort of $2.5 million that Congress has authorized for FY 
2006. The $2.5 million will be able to purchase only approximately 15 
easements encompassing an estimated 3000 acres, and thus the scope of 
the rule is quite small compared to other NRCS program efforts where 
NRCS purchases over 1000 conservation easement encompassing over 
150,000 acres annually. Additionally, many of the interim rule's 
provisions relate to acquisition of conservation easements and are 
based upon standard acquisition provisions utilized under other NRCS 
conservation easement programs. NRCS will base the final rule upon the 
experience gained from the pilot program effort and the public comments 
it receives pursuant to this rulemaking. Therefore, the 90-day comment 
period associated with this rulemaking will provide the public the 
opportunity to comment prior to NRCS implementing HFRP on a more 
regional or national scale. To ensure that NRCS has the regulatory 
framework in place for a pilot program effort for an FY 2006 sign-up, 
NRCS has determined that it is in the public interest for this interim 
rule to be in effect upon its publication in the Federal Register.

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, NRCS has issued a Finding of No Significant Impact 
(FONSI). Copies of the EA and FONSI may be obtained from Diane Gelburd, 
Director, Ecological Sciences Division, Natural Resources Conservation 
Service, P.O. Box 2890, Washington, DC 20013-2890. The HFRP EA and 
FONSI will also be available at the following Internet address: http://www.nrcs.usda.gov/programs/Env_Assess/HFRP/HFRP.html. Written comments 
on the EA and FONSI should be sent to Diane Gelburd, Director, 
Ecological Sciences Division, Natural Resources Conservation Service, 
P.O. Box 2890, Washington, DC 20013-2890, or submit them via the 
Internet to [email protected].

Paperwork Reduction Act

    The forms that will be utilized to implement this regulation have 
previously been approved for use and OMB assigned the control number 
0578-0013. NRCS estimates that HFRP results in the following changes to 
the current package:
     Increase of 26,020 respondents
     Increase of 23,926.3 responses
     Increase Burden Hours by 27,768.12 hours
     Increase in the average time to execute a form in the 
collection: 0.229 hours/14.03 minutes

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.

Executive Order 12988, Civil Justice Reform

    This interim final rule has been reviewed in accordance with 
Executive

[[Page 28556]]

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 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. NRCS 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, NRCS 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 Unfunded Mandates 
Reform Act is not required.

List of Subjects in 7 CFR Part 625

    Administrative practice and procedure, Agriculture, Soil 
conservation.

0
For the reason stated in the preamble, NRCS is adding a new part 625 in 
Chapter VI of 7 CFR to read as follows:

PART 625--HEALTHY FORESTS RESERVE PROGRAM

Sec.
625.1 Purpose and scope.
625.2 Definitions.
625.3 Administration.
625.4 Program requirements.
625.5 Application procedures.
625.6 Establishing priority for enrollment in HFRP.
625.7 Enrollment of easements.
625.8 Compensation for easements.
625.9 10-year restoration cost-share agreements.
625.10 Cost-share payments.
625.11 Easement participation requirements.
625.12 The HFRP restoration plan development.
625.13 Modification of the HFRP restoration plan.
625.14 Transfer of land.
625.15 Violations and remedies.
625.16 Payments not subject to claims.
625.17 Assignments.
625.18 Appeals.
625.19 Scheme and device.

    Authority: 16 U.S.C. 6571-6578.


Sec.  625.1  Purpose and scope.

    (a) The purpose of the Health Forests Reserve Program (HFRP) is to 
assist landowners, on a voluntary basis, in restoring, enhancing, and 
protecting forestland resources on private lands through easements and 
10-year cost-share agreements.
    (b) The objectives of HFRP are to:
    (1) Promote the recovery of endangered and threatened species under 
the ESA;
    (2) Improve plant and animal biodiversity; and
    (3) Enhance carbon sequestration.
    (c) The regulations in this part set forth the policies, 
procedures, and requirements for the HFRP as administered by the 
Natural Resources Conservation Service (NRCS) for program 
implementation and processing applications for enrollment.
    (d) The Chief of NRCS may implement HFRP 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 Marianna Islands.


Sec.  625.2  Definitions.

    The following definitions shall be applicable to this part:
    Activity means an action other than a conservation practice that is 
included as a part of a restoration agreement; such as a measure, 
incremental movement on a conservation index or scale, or a pilot or 
assessment.
    Biological diversity (biodiversity) means the variety and 
variability among living organisms and the ecological complexes in 
which they live.
    Carbon sequestration means the long term storage of carbon in soil 
(as soil organic matter) or in plant material (such as in trees).
    Chief means the Chief of the Natural Resources Conservation Service 
or the person delegated authority to act on behalf of the Chief.
    Conservation treatment means any and all conservation practices, 
measures, activities, and works of improvement that have the purpose of 
alleviating resource concerns, solving or reducing the severity of 
natural resource use problems, or taking advantage of resource 
opportunities, including the restoration, enhancement, maintenance, or 
management of habitat conditions for HFRP purposes.
    Consultation or ``consult with'' means to talk things over for the 
purpose of providing information; to offer an opinion for 
consideration; and/or to meet for discussion or to confer, while 
reserving final decision-making authority with NRCS.
    Contract means the document that specifies the obligations and 
rights of any individual or entity who has been accepted for 
participation in the program.
    Coordination means to obtain input and involvement from others 
while reserving final decision-making authority with NRCS.
    Cost-share payment means the payment made by NRCS to a program 
participant or vendor to achieve the restoration, enhancement, and 
protection goals of enrolled land in accordance with the HFRP 
restoration plan.
    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 forestland and the conservation 
values of the property.
    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 HFRP.
    Fish and Wildlife Service (FWS) is an agency of the United States 
Department of the Interior.
    Forest Service is an agency of the United States Department of 
Agriculture.
    HFRP means the Healthy Forests Reserve Program authorized by Title 
V of the Healthy Forests Restoration Act of 2003.
    HFRP restoration plan means the Health Forests Reserve Program 
restoration plan that identifies the conservation treatments that are 
scheduled for application to land enrolled in HFRP in accordance with 
NRCS standards and specifications.
    Indian trust lands means real property in which:
    (1) The United States holds title as trustee for an Indian or 
Tribal beneficiary; or
    (2) An Indian or Tribal beneficiary holds title and the United 
States maintains a trust relationship.
    Landowner means an individual or entity having legal ownership of 
land, including those who may be buying land under a purchase agreement 
or who have legal control of the land for the term of the HFRP 
enrollment period for which enrollment is sought.

[[Page 28557]]

Landowner may include all forms of collective ownership including joint 
tenants, tenants in common, and life tenants and remaindermen in a 
property.
    Landowner Protections means protections and assurances made 
available to HFRP participants whose voluntary conservation activities 
result in a net conservation benefit for listed, candidate, or other 
species. Landowner Protections made available by the Secretary of 
Agriculture to HFRP participants may be provided under section 7(b)(4) 
or section 10(a)(1) of the Endangered Species Act of 1973 (ESA; 16 
U.S.C. 1536(b)(4), 1539(a)(1)). These Landowner Protections may be 
provided by NRCS in conjunction with meeting its responsibilities under 
section 7 of the ESA, and/or by FWS or NFMS through section 10 of the 
ESA. These Landowner Protections include a permit providing coverage 
for incidental take of species listed under the ESA. Landowner 
Protections also include assurances related to potential modifications 
of HFRP restoration plans and assurances related to the potential 
(unlikely) termination of Landowner Protections and any 10-year cost 
share agreement.
    Liquidated damages means a sum of money stipulated in a restoration 
agreement which the participant agrees to pay NRCS if the participant 
fails to adequately complete the restoration agreement. The sum 
represents an estimate of the anticipated or actual harm caused by the 
failure, and reflects the difficulties of proof of loss and the 
inconvenience or non-feasibility of otherwise obtaining an adequate 
remedy.
    Maintenance means work performed to keep the applied conservation 
practice functioning for the intended purpose during its life span. 
Maintenance includes work to prevent deterioration of the practice, 
repairing damage, or replacement of the practice to its original 
condition if one or more components fail.
    Measure means one or more specific actions that is not a 
conservation practice, but has the effect of alleviating problems or 
improving the treatment of the resources.
    National Marine Fisheries Service (NMFS) is an agency of the United 
States Department of Commerce.
    Natural Resources Conservation Service (NRCS) is an agency of the 
United States Department of Agriculture.
    Participant means an applicant who is a party to a 10-year cost 
share agreement or an option agreement to purchase.
    Practice means a specified treatment, such as a structural or land 
management practice, that is planned and applied according to NRCS 
standards and specifications.
    Private land means land that is not owned by a governmental entity, 
and includes land that is considered Indian trust lands.
    Restoration means implementing any conservation practice 
(vegetative, management, or structural) or measure that improves the 
values and functions of forestland (native and natural plant 
communities).
    Restoration agreement means a cost-share agreement between the 
program participant and NRCS to restore, enhance, and protect the 
functions and values of forestland for the purposes of HFRP under 
either an easement or a 10-year cost-share agreement enrollment option.
    Safe Harbor Agreement means a voluntary arrangement between FWS or 
NMFS, and cooperating non-federal landowners under the authority of 
Section 10(a)(1) of the Endangered Species Act of 1973, 16 U.S.C. 
1536(b)(4), 1539(a)(1). Under the Safe Harbor Agreement and an 
associated enhancement of survival permit, the non-federal property 
owner implements actions that will result in a net conservation benefit 
for species listed under the Act without the risk of further 
restrictions pursuant to section 9 of the Act, which prohibits take of 
listed species. The property owner also receives assurances related to 
modifications of the SHA or termination of the permit. (See ``Landowner 
Protections,'' above.)
    Sign-up notice means the public notification document that NRCS 
provides to describe the particular requirements for a specific HFRP 
sign-up.
    State Conservationist means the NRCS employee authorized to direct 
and supervise NRCS activities within a specified State, the Pacific 
Basin, or the Caribbean Area.
    Technical service provider means an individual, private-sector 
entity, or public agency certified or approved by NRCS to provide 
technical services through NRCS or directly to program participants, as 
defined in 7 CFR part 652.


Sec.  625.3  Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the Chief.
    (b) The Chief may modify or waive a provision of this part if the 
Chief determines that the application of such provision to a particular 
limited situation is inappropriate and inconsistent with the goals of 
the program.
    (c) No delegation in this part to lower organizational levels shall 
preclude the Chief from determining any issue arising under this part 
or from reversing or modifying any determination arising from this 
part.
    (d) The State Conservationist will develop the rates of 
compensation for an easement, a priority ranking process, and any 
related technical matters.
    (e) The NRCS shall coordinate with FWS and NMFS in the 
implementation of the program and in establishing program policies. In 
carrying out this program, NRCS may consult with nonindustrial private 
forest landowners, the Forest Service and other Federal agencies, State 
fish and wildlife agencies, State forestry agencies, State 
environmental quality agencies, other State conservation agencies; and 
nonprofit conservation organizations. No determination by FWS, NMFS, 
the Forest Service, any Federal or State agency, conservation district, 
or other organization shall compel the NRCS to take any action which 
the NRCS determines will not serve the purposes of the program 
established by this part.


Sec.  625.4  Program requirements.

    (a) General. Under the HFRP, NRCS will purchase conservation 
easements from, or enter into 10-year cost-share agreements with, 
eligible landowners who voluntarily cooperate in the restoration and 
protection of forestlands and associated lands. To participate in HFRP, 
a landowner will agree to the implementation of a HFRP restoration 
plan, the effect of which is to restore, protect, enhance, maintain, 
and manage the habitat conditions necessary to increase the likelihood 
of recovery of listed species under the Endangered Species Act (ESA), 
or measurably improve the well-being of species that are not listed as 
endangered or threatened under the ESA but are candidates for such 
listing, State-listed species, or species identified by the Chief for 
special consideration for funding. NRCS may provide cost-share 
assistance for the activities that promote the restoration, protection, 
enhancement, maintenance, and management of forestland functions and 
values. Specific restoration, protection, enhancement, maintenance, and 
management activities may be undertaken by the landowner or other NRCS 
designee.
    (b) Landowner eligibility. To be eligible to enroll an easement in 
the HFRP, a person must:

[[Page 28558]]

    (1) Be the landowner of eligible land for which enrollment is 
sought; and
    (2) Agree to provide such information to NRCS as the agency deems 
necessary or desirable to assist in its determination of eligibility 
for program benefits and for other program implementation purposes.
    (c) Eligible land. (1) The NRCS, in coordination with FWS or NMFS, 
shall determine whether land is eligible for enrollment and whether, 
once found eligible, the lands may be included in the program based on 
the likelihood of successful restoration, enhancement, and protection 
of forest ecosystem functions and values when considering the cost of 
acquiring the easement and the restoration, protection, enhancement, 
maintenance, and management costs.
    (2) Land shall be considered eligible for enrollment in the HFRP 
only if the NRCS determines that:
    (i) Such private land is capable of supporting habitat for a 
selected species listed under Section 4 of the ESA; and
    (ii) Such private land is capable of supporting habitat for a 
selected species not listed under Section 4 of the ESA but is candidate 
for such listing, or the selected species is State-listed species, or 
is a species identified by the Chief for special consideration for 
funding.
    (3) NRCS may also enroll land adjacent to the restored forestland 
if the enrollment of such adjacent land would contribute significantly 
to the practical administration of the easement area, but not more than 
it determines is necessary for such contribution.
    (4) To be enrolled in the program, eligible land must be configured 
in a size and with boundaries that allow for the efficient management 
of the area for easement purposes and otherwise promote and enhance 
program objectives.
    (d) Ineligible land. The following land is not eligible for 
enrollment in the HFRP:
    (1) Lands owned by a governmental entity;
    (2) Land subject to an easement or deed restriction that already 
provides for the protection of wildlife habitat or which would 
interfere with HFRP purposes, as determined by NRCS; and
    (3) Lands where implementation of restoration practices would be 
futile due to on-site or off-site conditions.


Sec.  625.5  Application procedures.

    (a) Sign-up process. NRCS will publish an HFRP sign-up notice with 
sufficient time for individuals and entities to consider the benefits 
of participation prior to the opening of the sign-up period. In the 
public sign-up notice, the Chief will announce and explain the 
rationale for decisions for the following information:
    (1) The geographic scope of the sign-up;
    (2) Any additional program eligibility criteria that are not 
specifically listed in this part;
    (3) Any additional requirements that participants must include in 
their HFRP applications and program agreements that are not 
specifically identified in this part;
    (4) Information on the priority order of enrollment for funding;
    (5) An estimate of the total funds NRCS expects to obligate under 
new program agreements during a given sign-up; and
    (6) The schedule for the sign-up process, including the deadline(s) 
for applying.
    (b) Application for participation. To apply for enrollment through 
an easement or 10-year cost-share agreement, a landowner must submit an 
application for participation in the HFRP during an announced period 
for such sign-up.
    (c) Preliminary agency actions. By filing an application for 
participation, the applicant consents to an NRCS representative 
entering upon the land for purposes of determining land eligibility, 
and for other activities that are necessary or desirable for the NRCS 
to make offers of enrollment. The applicant is entitled to accompany an 
NRCS representative on any site visits.
    (d) Voluntary reduction in compensation. In order to enhance the 
probability of enrollment in HFRP, an applicant may voluntarily offer 
to accept a lesser payment than is being offered by NRCS.


Sec.  625.6  Establishing priority for enrollment in HFRP.

    (a) Ranking considerations. Based on the specific criteria set 
forth in a sign-up announcement and the applications for participation, 
NRCS, in coordination FWS and NMFS, may consider the following factors 
to rank properties:
    (1) Estimated conservation benefit to habitat required by 
threatened or endangered species listed under Section 4 of the ESA;
    (2) Estimated conservation benefit to habitat required by species 
not listed as endangered or threatened under Section 4 of the ESA but 
that are candidates for such listing, State-listed species, or species 
identified by the Chief for special consideration for funding;
    (3) Estimated improvement of biological diversity, if enrolled;
    (4) Potential for increased capability of carbon sequestration, if 
enrolled;
    (5) Availability of contribution of non-federal funds;
    (6) Significance of forest ecosystem functions and values;
    (7) Estimated cost-effectiveness of the particular restoration 
cost-share agreement or easement, and associated HFRP restoration plan; 
and
    (8) Other factors identified in an HFRP sign-up notice.
    (b) The NRCS may place higher priority on certain forest ecosystems 
based regions of the State or multi-State area where restoration of 
forestland may better achieve NRCS programmatic and sign-up goals and 
objectives.
    (c) Notwithstanding any limitation of this part, NRCS may enroll 
eligible lands at any time in order to encompass project areas subject 
to multiple land ownership or otherwise to achieve program objectives. 
Similarly, NRCS may, at any time, exclude otherwise eligible lands if 
the participation of the adjacent landowners is essential to the 
successful restoration of the forest ecosystem and those adjacent 
landowners are unwilling to participate.
    (d) 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.  625.7  Enrollment of easements.

    (a) Offers of enrollment. Based on the priority ranking, NRCS will 
notify an affected landowner of tentative acceptance into the program 
for which the landowner has 15 calendar days to sign a letter of intent 
to continue.
    (b) Effect of letter of intent to continue (enrollment). An offer 
of tentative acceptance into the program does not bind NRCS or the 
United States to acquire an easement, nor does it bind the landowner to 
convey an easement or agree to HFRP restoration plan activities. 
However, receipt of an executed letter of intent to continue will 
authorize NRCS to proceed with easement acquisition activities and the 
land will be considered enrolled into HFRP.
    (c) Acceptance of offer of enrollment. An option agreement to 
purchase will be presented by NRCS to the landowner, which will 
describe the easement area; the easement terms and conditions; and 
other terms and conditions for

[[Page 28559]]

participation that may be required by NRCS.
    (d) Effect of the acceptance of the offer. After the option 
agreement to purchase is executed by NRCS and the landowner, NRCS will 
proceed with the remaining activities necessary for NRCS to purchase an 
easement, which may include conducting a survey of the easement area, 
securing necessary subordination agreements, procuring title insurance, 
and conducting other activities necessary to record the easement or 
implement the HFRP restoration plan. If the landowner breaches an 
option agreement to purchase, NRCS is entitled to recover any costs, 
including administrative or technical costs, expended in reliance of 
the option agreement to purchase.
    (e) Withdrawal of offers. Prior to execution and recordation by the 
United States and the landowner of the easement, NRCS may withdraw its 
offer anytime due to availability of funds, inability to clear title, 
or other reasons. The offer to the landowner shall be void if not 
executed by the landowner within the time specified.


Sec.  625.8  Compensation for easements.

    (a) Establishment of rates. (1) The State Conservationist may 
determine the maximum easement payment rates to be applied to specific 
geographic areas within the State or to individual easement areas.
    (2) In order to provide for better uniformity among States, the 
Regional Assistant Chief and Chief may review and adjust, as 
appropriate, State or other geographically based easement payment 
rates.
    (b) Determination of easement payment rates. (1) NRCS shall offer 
to pay not less than 75 percent nor more than 100 percent of the fair 
market value of the enrolled land during the period the land is subject 
to the easement less the fair market value of the land encumbered by 
the easement for easement payments for easements of not more than 99 
years.
    (2) NRCS shall offer to pay not more than 75 percent of the fair 
market value of the enrolled land less the fair market value of the 
land encumbered by the easement for 30-year easements.
    (c) NRCS may accept and use contributions of non-federal funds to 
make payments under this section.
    (d) Acceptance of offered easement compensation. (1) NRCS will not 
acquire any easement unless the landowner accepts the amount of the 
easement payment which is offered by NRCS. The easement payment may or 
may not equal the fair market value of the interests and rights to be 
conveyed by the landowner under the easement. By voluntarily 
participating in the program, a landowner waives any claim to 
additional compensation based on fair market value.
    (2) Annual easement payments may be made in no more than 10 annual 
payments of equal or unequal size, as agreed to between NRCS and the 
landowner.
    (e) Reimbursement of a landowner's expenses. For completed easement 
conveyances, NRCS will reimburse landowners for their fair and 
reasonable expenses, if any, incurred for surveying and related costs, 
as determined by NRCS. The State Conservationist may establish maximum 
payments to reimburse landowners for reasonable expenses.
    (f) Tax implications of easement conveyances. Subject to applicable 
regulations of the Internal Revenue Service, a landowner may be 
eligible for a bargain sale tax deduction which is the difference 
between the fair market value of the easement conveyed to the United 
States and the easement payment made to the landowner. NRCS disclaims 
any representations concerning the tax implications of any easement or 
cost-share transaction.
    (g) Per acre payments. If easement payments are calculated on a per 
acre basis, adjustment to stated easement payment will be made based on 
final determination of acreage.


Sec.  625.9  10-year restoration cost-share agreements.

    (a) The restoration plan developed under Sec.  625.12 forms the 
basis for the 10-year cost-share agreement and is incorporated therein.
    (b) A 10-year cost-share agreement will:
    (1) Incorporate all portions of a restoration plan;
    (2) Be for a period of 10 years;
    (3) Include all provisions as required by law or statute;
    (4) Specify the requirements for operation and maintenance of 
applied practices;
    (5) Include any participant reporting and recordkeeping 
requirements to determine compliance with the agreement and HFRP;
    (6) Be signed by the participant. When the participant is not the 
fee title owner, concurrence from the fee title owner is required;
    (7) Identify the amount and extent of cost-share assistance that 
NRCS will provide for the adoption or implementation of the approved 
conservation treatment identified in the restoration plan; and
    (8) Include any other provision determined necessary or appropriate 
by the NRCS representative.
    (c) Once the participant and NRCS have signed a 10-year cost-share 
agreement, the land shall be considered enrolled in HFRP.
    (d) The State Conservationist may, by mutual agreement with the 
parties to the 10-year cost-share agreement, consent to the termination 
of the restoration agreement where:
    (1) The parties to the 10-year cost-share agreement are unable to 
comply with the terms of the restoration agreement as the result of 
conditions beyond their control;
    (2) Compliance with the terms of the 10-year cost-share agreement 
would work a severe hardship on the parties to the agreement;
    (3) Termination of the 10-year cost-share agreement would, as 
determined by the State Conservationist, be in the public interest.
    (e) If a 10-year cost-share agreement is terminated in accordance 
with the provisions of this section, the State Conservationist may 
allow the participants to retain any cost-share payments received under 
the 10-year cost-share agreement in a proportion appropriate to the 
effort the participant has made to comply with the restoration 
agreement, or, in cases of hardship, where forces beyond the 
participant's control prevented compliance with the agreement.


Sec.  625.10  Cost-share payments.

    (a) NRCS may share the cost with landowners of restoring land 
enrolled in HFRP as provided in the HFRP restoration plan. The HFRP 
restoration plan may include periodic manipulation to maximize wildlife 
habitat and preserve forest ecosystem functions and values over time 
and measures that are needed to provide the Landowner Protections under 
section 7(b)(4) or section 10(a)(1) of the ESA, including the cost of 
any permit.
    (b) Landowner Protections may be made available to landowners 
enrolled in the HFRP who agree, for a specified period, to restore, 
protect, enhance, maintain, and manage the habitat conditions on their 
land in a manner that is reasonably expected to result in a net 
conservation benefit that contributes to the recovery of listed species 
under the Endangered Species Act (ESA). These protections operate with 
lands enrolled in the HFRP and are valid for as long as the landowner 
is in compliance with the terms and conditions of such assurances, any 
associated permit, the easement, and the restoration agreement.

[[Page 28560]]

    (c) If the Landowner Protections, or any associated permit, require 
the adoption of a practice or measure in addition to the practices and 
measures identified in the applicable HFRP restoration plan, NRCS and 
the landowner will incorporate the practice or measure into the HFRP 
restoration plan as an item eligible for cost-share assistance.
    (d) Failure to perform planned management activities can result in 
violation of the easement, 10-year cost-share agreement, or the 
agreement under which Landowner Protections have been provided. NRCS 
will work with landowners to plan appropriate management activities.
    (e) The amount and terms and conditions of the cost-share 
assistance shall be subject to the following restrictions on the costs 
of establishing or installing practices or implementing measures 
specified in the HFRP restoration plan:
    (1) On enrolled land subject to an easement of not more than 99 
years, NRCS shall offer to pay not less than 75 percent nor more than 
100 percent of the average cost;
    (2) On enrolled land subject to a 30-year easement, NRCS shall 
offer to pay not more than 75 percent of the average cost; and
    (f) On enrolled land subject to a 10-year cost-share agreement 
without an associated easement, NRCS shall offer to pay not more than 
50 percent of the average costs.
    (g) Cost-share payments may be made only upon a determination by 
the NRCS that an eligible practice or measure, or an identifiable 
component of the practice has been established in compliance with 
appropriate standards and specifications. Identified practices and 
measures may be implemented by the landowner or other designee.
    (h) Cost-share payments may be made for the establishment and 
installation of additional eligible practices and measures, or the 
maintenance or replacement of an eligible practice or measure, but only 
if NRCS determines the practice or measure is needed to meet the 
objectives of HFRP, and the failure of the original practices or 
measures was due to reasons beyond the control of the landowner.
    (i) A landowner may seek additional cost-share assistance from 
other public or private organizations as long as the activities funded 
are in compliance with this part. In no event shall the landowner 
receive an amount which exceeds 100 percent of the total actual cost of 
the restoration.


Sec.  625.11  Easement participation requirements.

    (a) To enroll land in HFRP through the 99-year or 30-year 
enrollment option, a landowner shall grant an easement to the United 
States. The easement shall require that the easement area be maintained 
in accordance with HFRP goals and objectives for the duration of the 
term of the easement, including the restoration, protection, 
enhancement, maintenance, and management of habitat for listed species 
within a forest ecosystem's functions and values.
    (b) For the duration of its term, the easement shall require, at a 
minimum, that the landowner, and the landowner's heirs, successors and 
assigns, shall cooperate in the restoration, protection, enhancement, 
maintenance, and management of the land in accordance with the easement 
and with the terms of the HFRP restoration plan. In addition, the 
easement shall grant to the United States, through the NRCS:
    (1) A right of access to the easement area;
    (2) The right to permit compatible uses of the easement area, which 
may include such activities as hunting and fishing, managed timber 
harvest, or periodic haying or grazing, if such use is consistent with 
the long-term protection and enhancement of the purposes for which the 
easement was established;
    (3) The right to determine compatible uses on the easement area and 
specify the amount, method, timing, intensity and duration of the 
compatible use;
    (4) The rights, title and interest to the easement area as 
specified in the conservation easement deed; and
    (5) The right to perform restoration, protection, enhancement, 
maintenance, and management activities on the easement area.
    (c) The landowner shall convey title to the easement which is 
acceptable to the NRCS. The landowner shall warrant that the easement 
granted to the United States is superior to the rights of all others, 
except for exceptions to the title which are deemed acceptable by the 
NRCS.
    (d) The landowner shall:
    (1) Comply with the terms of the easement;
    (2) Comply with all terms and conditions of any associated 
agreement or contract;
    (3) Agree to the long-term restoration, protection, enhancement, 
maintenance, and management of the easement in accordance with the 
terms of the easement and related agreements;
    (4) Have the option to enter into an agreement with governmental or 
private organizations to assist in carrying out any landowner 
responsibilities on the easement area; and
    (5) Agree that each person who is subject to the easement shall be 
jointly and severally responsible for compliance with the easement and 
the provisions of this part and for any refunds or payment adjustment 
which may be required for violation of any terms or conditions of the 
easement or the provisions of this part.


Sec.  625.12  The HFRP restoration plan development.

    (a) The development of the HFRP restoration plan shall be made 
through an NRCS representative, in consultation with the program 
participant and with coordination of input from the FWS and NMFS, where 
applicable.
    (b) The HFRP restoration plan shall specify the manner in which the 
enrolled land under easement or 10-year cost-share agreement shall be 
restored, protected, enhanced, maintained, and managed to accomplish 
the goals of the program.
    (c) Eligible restoration practices and measures may include land 
management, vegetative, and structural practices and measures that will 
restore and enhance habitat conditions for listed species, candidate, 
State-listed, and other species identified by the Chief for special 
funding consideration. To the extent practicable, eligible practices 
and measures will improve biodiversity and increase the sequestration 
of carbon. NRCS, in coordination with FWS, will determine the 
conservation practices and measures. NRCS will determine payment rates 
and cost-share percentages within statutory limits that will be 
available for restoration. A list of eligible practices will be 
available to the public.


Sec.  625.13  Modification of the HFRP restoration plan.

    Consistent with the easement and applicable law, the State 
Conservationist may approve modifications to the HFRP restoration plan 
that do not modify or void provisions of the easement, restoration 
agreement, or Landowner Protections. NRCS may obtain and receive input 
from the landowner and coordination from FWS and NMFS to determine 
whether a modification is justified. Any HFRP restoration plan 
modification must meet HFRP program objectives, and must result in 
equal or greater wildlife benefits and ecological and economic values 
to the United States. Modifications to the HFRP restoration plan which 
are substantial and affect provisions of the easement, restoration

[[Page 28561]]

cost-share agreement, or Landowner Protections will require agreement 
from the landowner, FWS or NMFS, as appropriate, and may require 
execution of an amended easement and restoration cost-share agreement 
and modification to the protections afforded by the safe harbor 
assurances.


Sec.  625.14  Transfer of land.

    (a) Offers voided. Any transfer of the property prior to the 
applicant's acceptance into the program shall void the offer of 
enrollment. At the option of the State Conservationist, an offer can be 
extended to the new landowner if the new landowner agrees to the same 
or more restrictive easement and contract terms and conditions.
    (b) Payments to landowners. (1) For easements with multiple annual 
payments, any remaining easement payments will be made to the original 
landowner unless NRCS receives an assignment of proceeds.
    (2) The new landowner shall be held responsible for assuring 
completion of all measures and practices required by the contract. 
Eligible cost-share payments shall be made to the new landowner upon 
presentation of an assignment of rights or other evidence that title 
had passed.
    (c) Claims to payments. With respect to any and all payments owed 
to a person, 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, NRCS may withhold 
payments without the accrual of interest pending an agreement or 
adjudication on the rights to the funds.


Sec.  625.15  Violations and remedies.

    (a) Easement Violations. (1) In the event of a violation of the 
easement or any associated agreement involving a landowner, the 
landowner shall be given reasonable notice and an opportunity to 
voluntarily correct the violation within 30 days of the date of the 
notice, or such additional time as the State Conservationist may allow.
    (2) Notwithstanding paragraph (a)(1) of this section, the NRCS 
reserves the right to enter upon the easement area at any time to 
remedy deficiencies or easement violations. Such entry may be made at 
the discretion of the NRCS when such actions are deemed necessary to 
protect important listed species and forest ecosystem functions and 
values or other rights of the United States under the easement. The 
landowner shall be liable for any costs incurred by the United States 
as a result of the landowner's negligence or failure to comply with 
easement or contractual obligations.
    (3) In addition to any and all legal and equitable remedies as may 
be available to the United States under applicable law, NRCS may 
withhold any easement and cost-share payments owing to landowners at 
any time there is a material breach of the easement covenants, 
associated restoration agreement, or any associated 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.
    (4) 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.
    (b) 10-year Cost-Share Agreement Violations. (1) If the NRCS 
determines that a participant is in violation of the terms of a 10-year 
cost-share agreement, or documents incorporated by reference into the 
10-year cost-share agreement, NRCS will give the participant a 
reasonable time, as determined by the State Conservationist, to correct 
the violation and comply with the terms of the cost-share agreement and 
attachments thereto. If the violation continues, the State 
Conservationist may terminate the 10-year cost-share agreement.
    (2) Notwithstanding the provisions of paragraph (b)(1) of this 
section, an agreement termination is effective immediately upon a 
determination by the State Conservationist that the participant has: 
Submitted false information; filed a false claim; engaged in any act 
for which a finding of ineligibility for payments is permitted under 
this part; or taken actions NRCS deems to be sufficiently purposeful or 
negligent to warrant a termination without delay.
    (3) If NRCS terminates a cost-share agreement due to breach of 
contract, the participant will forfeit all rights for future payments 
under the cost-share agreement, and must refund all or part of the 
payments received, plus interest, and liquidated damages. The State 
Conservationist may require only partial refund of the payments 
received if a previously installed practice or measure can function 
independently, is not affected by the violation or other practices or 
measures that would have been installed under the cost-share agreement, 
and the participant agrees to operate and maintain the installed 
practice or measure for the life span of the practice or measure.
    (4) If NRCS terminates a 10-year cost-share agreement due to breach 
of contract, or the participant voluntarily terminates the 10-year 
cost-share agreement before any cost-share payments have been made, the 
participant will forfeit all rights for further payments under the 10-
year cost-share agreement, and must pay such liquidated damages as are 
prescribed in the restoration agreement. The State Conservationist has 
the option to waive the liquidated damages, depending upon the 
circumstances of the case.
    (5) When making any 10-year cost-share agreement termination 
decisions, the State Conservationist may reduce the amount of money 
owed by the participant by a proportion which reflects the good faith 
effort of the participant to comply with the cost-share agreement, or 
the hardships beyond the participant's control that have prevented 
compliance with the contract including natural disasters or events.
    (6) The participant may voluntarily terminate a 10-year cost-share 
agreement, without penalty or repayment, if the State Conservationist 
determines that the cost-share agreement terms and conditions have been 
fully complied with before termination of the cost-share agreement.


Sec.  625.16  Payments not subject to claims.

    Any cost-share 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.  625.17  Assignments.

    Any person entitled to any cash payment under this program may 
assign the right to receive such cash payments, in whole or in part.


Sec.  625.18  Appeals.

    (a) A person participating in the HFRP may obtain a review of any 
administrative determination concerning eligibility for participation 
utilizing the administrative appeal regulations provided in 7 CFR part 
614.
    (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, and for purposes 
of judicial review, no decision shall be a final agency action except a 
decision of the Chief under these procedures.
    (c) Any appraisals, market analysis, or supporting documentation 
that may be used by NRCS in determining property

[[Page 28562]]

value are considered confidential information, and shall only be 
disclosed as determined at the sole discretion of NRCS in accordance 
with applicable law.


Sec.  625.19  Scheme and device.

    (a) If it is determined by NRCS that a person has employed a scheme 
or device to defeat the purposes of this part, any part of any program 
payment otherwise due or paid such person during the applicable period 
may be withheld or be required to be refunded with interest thereon, as 
determined appropriate by NRCS.
    (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 person who succeeds to the responsibilities under this part 
shall report in writing to NRCS 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.

    Signed in Washington, DC, on May 8, 2006.
Bruce I. Knight,
Chief, Natural Resources Conservation Service.
[FR Doc. 06-4587 Filed 5-16-06; 8:45 am]
BILLING CODE 3410-16-P