[Federal Register Volume 74, Number 9 (Wednesday, January 14, 2009)]
[Proposed Rules]
[Pages 1954-1971]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-506]


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DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service

7 CFR Part 625

RIN 0578-AA52


Healthy Forests Reserve Program

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

ACTION: Proposed rule; request for comment.

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SUMMARY: On May 17, 2006, NRCS published an interim final rule for the 
Healthy Forests Reserve Program (HFRP) and received 11 comment letters. 
NRCS proposes to amend this rule to incorporate changes associated with 
enactment of the Food, Conservation, and Energy Act of 2008 (the 2008 
Act). The 2008 Act authorizes $9,750,000 for each of the fiscal years 
2009 through 2012 to carry out the program. As a result of the 2008 
Act, NRCS will allow land enrollment through permanent easements, or 
easements for a maximum duration allowed under state law and continue 
to allow enrollment through 10-year cost-share agreements; and allow 
enrollment of land owned by tribes or members of tribes in 30-year 
contracts or 10-year cost-share agreements, or any combination of both. 
Forty percent of program expenditures in any fiscal year will be used 
for restoration cost-share agreement enrollment and 60 percent of 
program expenditures in any fiscal year will be for easement 
enrollment.
    In addition to changes associated with the 2008 Act, NRCS is 
addressing comments received on the interim final rule and proposing 
additional changes that improve program implementation based on the 
experience gained from the HRFP implementation under the interim final 
rule.

DATES: Comments must be received on or before February 13, 2009. 
Comments will be made available to the public or posted publicly in 
their entirety.

ADDRESSES: You may send comments using any of the following methods:
    Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending comments 
electronically.
    NRCS Web site: Go to http://www.nrcs.usda.gov and follow the 
instructions for sending comments electronically.
    Mail: Easements Programs Division, Natural Resources Conservation 
Service, Healthy Forests Reserve Program Comments, P.O. 2890, Room 
6819-S, Washington, DC 20013.
    Fax: 1-202-720-4265
    Hand Delivery: Room 6819-S of the USDA South Office Building, 1400 
Independence Avenue, SW., Washington, DC 20250, between 9 a.m. and 4 
p.m., Monday through Friday, except Federal Holidays. Please ask the 
guard at the entrance to the South Office Building to call 202-720-4527 
in order to be escorted into the building.
    This proposed rule may be accessed via Internet. Users can access 
the NRCS homepage at http://www.nrcs.usda.gov/; select Farm Bill

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link from the menu; select the Proposed Rule link from beneath the 
Rules Index title. 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).

FOR FURTHER INFORMATION CONTACT: Robin Heard, Director, Easement 
Programs Division, NRCS, P.O. Box 2890, Washington, DC 20013-2890; 
Phone: (202) 720-1854; Fax: (202) 720-4265; or e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Regulatory Certifications

Executive Order 12866

    The Office of Management and Budget (OMB) determined that this 
proposed rule is not a significant regulatory action, and a benefit 
cost assessment has not been undertaken.

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

    Pursuant to 5 U.S.C. 605(c) of the Regulatory Flexibility Act, this 
proposed rule will not have a significant economic impact on a 
substantial number of small entities as defined by that Act. Therefore, 
a regulatory flexibility analysis is not required for this proposed 
rule. This proposed rule would amend the HFRP, which involves the 
voluntary acquisition of interests in property by NRCS.

Small Business Regulatory Enforcement Fairness Act of 1996

    This proposed rule is not a major rule as defined by section 804 of 
the Small Business Regulatory Enforcement Fairness Act of 1996. This 
proposed rule will not result in an 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.
    The 30-day comment period associated with this rulemaking will 
provide the public the opportunity to comment on the changes to this 
regulation. To ensure that NRCS has the regulatory framework in place 
to implement the Food, Conservation, and Energy Act of 2008 (the 2008 
Act), Public Law 110-246, for a fiscal year 2009 sign-up, NRCS has 
determined that a 30 day comment period is necessary.

Environmental Analysis

    The proposed rule for the Healthy Forests Reserve Program amends 
the current regulation to include congressionally required statutory 
changes to the program as a result of the Food, Conservation, and 
Energy Act of 2008 (the 2008 Act), Public Law 110-246. The 2008 Act 
changes the enrollment options for acreage owned by Indian tribes. In 
addition to using 10-year cost-share agreements, Indian Tribes may now 
enroll lands under a 30-year contracts option. The 2008 Act also allows 
the Natural Resources Conservation Service (NRCS) to acquire permanent 
easements, and establish limitations on the use of funds for cost-share 
agreements and easements. The proposed rule also amends the regulation 
in response to comments received by the Agency as a result of a public 
comment period in 2006; these changes would include language to clarify 
the Landowner Protections and Safe Harbor Agreements provisions. In 
addition, the proposed rule makes a number of minor changes to clarify 
the regulations for the public; such changes include clarifying the 
enrollment process, providing clear guidance on methods of 
determination of compensation, providing guidance on the Agency's 
treatment of ecosystem service credits, and clarifying language on 
Agency appeals.
    After review of the previous Environmental Assessment (EA) prepared 
in April 2006, it has been determined that the proposed changes are 
minor and do not present significant new circumstances or new 
information relative to environmental issues from those analyzed in the 
2006 EA. Accordingly, NRCS has determined and reaffirms that the 
previous EA and Finding of No Significant Impact (FONSI) have 
sufficiently analyzed the program's potential environmental impacts and 
are inclusive of the proposed rule. Copies of the EA and FONSI impact 
may be obtained from the National Environmental Coordinator, Natural 
Resources Conservation Service, Ecological Sciences Division, 1400 
Independence Ave., SW., Washington, DC 20250; the Healthy Forests 
Reserve Program Manager, Easements Programs Division, NRCS, P.O. Box 
2890, Room 6813-S, Washington, DC 20013; or electronically on the 
Internet through the NRCS homepage, at http://www.nrcs.usda.gov/programs/HFRP/ProgInfo/Index.html

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:
    Type of Request: New Information Collection Package/form/etc.
     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 or 14.03 minutes.

Government Paperwork Elimination Act

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

Civil Rights Impact Analysis

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

Civil Justice Reform

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

Executive Order 13132, Federalism

    This proposed rule has been reviewed in accordance with the 
requirements of Executive Order 13132, Federalism. NRCS has determined 
that this proposed rule conforms with the Federalism principles set 
forth in the Executive Order; would not impose any compliance costs on 
the States; and would not have substantial direct effects on the 
States, on the relationship between the Federal Government and

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the States, or on the distribution of power and responsibilities on the 
various levels of government. Therefore, NRCS concludes that this 
proposed rule does not have Federalism implications. Moreover, Sec.  
625.5 of this proposed rule shows sensitivity to Federalism concerns by 
providing an option for the responsible official (State 
Conservationist) to obtain input from other agencies in proposal 
development.

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 proposed rule on 
State, local, and Tribal governments, and the public. This proposed 
rule does not compel the expenditure of $100 million or more by any 
State, local, Tribal governments, or anyone in the private sector; 
therefore, a statement under section 202 of the Unfunded Mandates 
Reform Act is not required.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    NRCS has assessed the impact of this proposed rule on Indian tribes 
and concluded that this proposed rule will not have a substantial 
direct effect on one or more Indian tribes. Given the legal complexity 
of acquiring easements on acreage owned by Indian Tribes, the 2008 Act 
added an enrollment option, in addition to the 10-year cost-share 
agreement option, of offering 30-year contracts. This change encourages 
Indian Tribal participation in the program. The proposed rule at Sec.  
625.12, will outline the procedures for enrolling land in the program 
through the 30-year contract option. The rule will neither impose 
compliance costs on Tribal governments, nor preempt Tribal law.

Discussion of Program

    America's forests provide a wide range of environmental, economic, 
and social benefits including timber, wilderness, minerals, recreation 
opportunities, and fish and wildlife habitat. In addition, a healthy 
forest ecosystem provides habitat for endangered and threatened 
species, sustains biodiversity, protects watersheds, sequesters carbon, 
and helps purify the air. However, some forest ecosystems have had 
their ecological functions diminished by a number of factors, including 
fragmentation, reduction in periodic fires, lack of proper management, 
or invasive species. Habitat loss has been severe enough in some 
circumstances to cause dramatic population declines such as in the case 
of the ivory-billed woodpecker. As a result of the pressures on forest 
ecosystems, many forests need active management and protection from 
development in order to sustain biodiversity and restore habitat for 
species that have suffered significant population declines. Active 
management and protection of forest ecosystems can also increase carbon 
sequestration and improve air quality.
    Many forest ecosystems are located on private lands and provide 
habitat 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 Healthy Forests Reserve Program 
(HFRP), Title V of the Healthy Forest Restoration Act of 2003 (Pub. L. 
108-148, 16 U.S.C. 6571-6578, to provide financial assistance to 
private landowners to undertake projects that restore and enhance 
forest ecosystems to help promote the recovery of threatened and 
endangered species, improve biodiversity, and enhance carbon 
sequestration.
    The Secretary of Agriculture has delegated authority to implement 
HFRP to the NRCS Chief (Chief). In addition, technical support 
associated with forest management practices may also be provided by the 
U.S. Forest Service. Section 501 of Title V of the Healthy Forests 
Restoration Act of 2003 (Pub. L. 108-148) provides that the program 
will be carried out in coordination with the Secretary of the Interior 
and the Secretary of Commerce. NRCS works closely with the FWS and the 
NMFS to further the species recovery objectives of the HFRP and to help 
make available to HFRP 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).

Proposed Changes to the Regulations Based on the Prior Comment Period

    NRCS published an interim final rule that established the 
regulations captioned ``Healthy Forests Reserve Program'' in the 
Federal Register on May 17, 2006 (71 FR 28547). The Agency provided a 
90-day comment period that ended on August 15, 2006. NRCS received 
comments from 11 commenters who raised a number of issues. This section 
discusses all of the relevant comments except for those that expressed 
agreement with provisions of the interim final rule. Based on the 
reasons set forth in the interim final rule and this document, NRCS 
proposes the changes discussed below.

Purpose and Eligibility

    The statutory provisions at 16 U.S.C. 6571 state that the purpose 
of HFRP is to restore and enhance forest ecosystems in order to: (1) 
Promote the recovery of threatened and endangered species, (2) improve 
biodiversity, and (3) enhance carbon sequestration. Under 16 U.S.C. 
6572(b), to be eligible for enrollment, land must be:
    (1) Private land the enrollment of which will restore, enhance, or 
otherwise measurably increase the likelihood of recovery of a species 
listed as endangered or threatened under 16 U.S.C. 1533 and
    (2) private land the enrollment of which will restore, enhance, or 
otherwise measurably improve the well-being of species that--
    (a) are not listed as endangered or threatened under 16 U.S.C. 
1533; but
    (b) are candidates for such listing, State-listed species, or 
special concern species.
    The authorizing statute further provides at 16 U.S.C. 6572(c) that 
the Secretary of Agriculture shall give additional consideration to 
enrollment of eligible land that will improve biological diversity and 
increase carbon sequestration.
    One Federal agency commenter questioned whether land had to meet 
both criteria in order to be eligible. While the language of 16 U.S.C. 
6572(b) uses ``and'' between both criteria, it has been determined that 
both categories of land are individually eligible. The interpretation 
that eligible land must meet both criteria is overly restrictive and is 
likely to occur rarely. The NRCS interpretation is intended to avoid 
negatively impacting its ability to achieve the program purposes. This 
is clarified in 7 CFR 625.4.
    One commenter asserted that eligibility for the HFRP should be 
limited to non-industrial private forest lands. No changes were made to 
the regulations based on this comment because the Agency does not see 
any basis in the statute for limiting enrollment to non-industrial 
private forest lands. As noted above, 16 U.S.C. 6572 provides that any 
private land (including industrial private forest land) that meets the 
specified conditions is eligible.
    Commenters asserted that HFRP places too much emphasis on 
protecting endangered species and too little emphasis on protecting the 
forest ecosystem. To help change the emphasis, commenters asserted that 
professional foresters should be heavily involved in ranking proposed 
sites for the HFRP. No changes were made to the regulations based on 
this comment. The emphasis on endangered species reflects the purpose 
of the program detailed in the statute: to promote the recovery of

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threatened and endangered species, to improve biodiversity, and to 
enhance carbon sequestration. See 16 U.S.C. 6571 and 6572.
    Two commenters questioned why clear-cutting was singled out as 
incompatible with HFRP and asserted that HFRP should allow for clear-
cutting when it would enhance the long-term forest and wildlife health. 
No changes were made to the regulations based on these comments. It 
appears that the commenters referred to an example concerning clear-
cutting in the preamble of the interim final rule, which indicated that 
clear-cutting may not be a compatible use for enrollment under the HFRP 
if the purpose was to achieve economic gain at the expense of the 
forest ecosystem or essential fish and wildlife habitat (71 FR 28551). 
The discussion was just an example and was not intended to cover all 
circumstances. Clear-cutting may be allowed under HFRP if such activity 
were designed to help accomplish the purposes of the program.
    A number of commenters made reference to non-forest lands as part 
of a forest ecosystem. No changes were made to the regulations because 
non-forest land is eligible to be included if it is part of an eligible 
forest ecosystem.
    Two commenters asserted that ``forest ecosystems'' eligible for 
HFRP should not be limited to lands with trees on them, but should 
include rangelands and other lands that are integral parts of a forest 
ecosystem and vital to the habitat of species or the enhancement of 
biodiversity and carbon sequestration. No changes were made to the 
regulations based on these comments. ``Rangelands and other lands'' 
described by the commenter are not prohibited from inclusion in HFRP. 
The statutory provisions at 16 U.S.C. 6572, state that to be eligible 
for enrollment, land must be:
    (1) Private land the enrollment of which will restore, enhance, or 
otherwise measurably increase the likelihood of recovery of a species 
listed as endangered or threatened under 16 U.S.C. 1533 and
    (2) private land the enrollment of which will restore, enhance, or 
otherwise measurably improve the well-being of species that--
    (a) Are not listed as endangered or threatened under 16 U.S.C. 
1533; but
    (b) are candidates for such listing, State-listed species, or 
special concern species.
    With respect to the statutory eligibility for enrollment of private 
land which would restore, enhance, or otherwise measurably improve the 
well-being of State-listed species, one commenter asserted that for 
States that do not have State lists, enrollment eligibility should 
include lands that provide habitat for G1-G2 species recognized by 
NatureServe and requests made by applicants. No changes were made to 
the regulations based on this comment. As noted above, the statutory 
provisions allow for eligibility for enrollment of private land the 
enrollment of which would restore, enhance, or otherwise measurably 
improve the well-being of ``special concern species.'' This provides a 
basis for enrolling lands in those States that do not have State lists.
    One commenter asserted that the interim final rule should be 
changed by adding a definition of ``forestland.'' This comment appears 
to have been made to help clarify land eligibility. No changes were 
made to the regulations based on this comment. As noted above, private 
land that meets the eligibility criteria specified above is eligible 
for HFRP; the statute does not include a term ``forestland''.
    One commenter asserted that rangelands and other lands that are 
integral parts of a forest ecosystem and vital to the habitat of 
species or the enhancement of biodiversity and carbon sequestration, 
should be eligible for inclusion in the HFRP to the extent that areas 
covered by trees might be eligible. One commenter asserted that 
riparian corridors that would protect aquatic species, such as salmon, 
should be eligible land for HFRP. NRCS did not make any changes to the 
regulations based on these comments. HFRP does not limit eligible lands 
to a particular type of private lands. Except as described in Sec.  
625.4(d), any type of private land may be eligible for inclusion in 
HFRP.
    One commenter asserted that NRCS should remove the requirement that 
eligible property must have access from a public road. No changes were 
made to the regulations based on this comment. Although the 2006 
interim final rule preamble indicated that there must be access to the 
property from a public road (71 FR 28551 and 28553), the interim final 
rule text at Sec.  625.11(b)(1) provides merely that the easement shall 
grant the United States a right of access to the easement area. The 
Agency affirms the regulatory language that direct access from a public 
road is not required, if access to the easement area is conveyed to the 
United States through an acceptable right-of-way easement.

Priority for Enrollment

    The statutory provisions at 16 U.S.C. 6572 set forth priority 
criteria for enrollment in HFRP. Subsection (f) provides the following 
regarding enrollment priority:
    (1) Species--The Secretary of Agriculture shall give priority to 
the enrollment of land that provides the greatest conservation benefit 
to--
    (a) Primarily, species listed as endangered or threatened under 16 
U.S.C. 1533; and
    (b) Secondarily, species that--
    (i) Are not listed as endangered or threatened under 16 U.S.C. 
1533; but
    (ii) Are candidates for such listing, State-listed species, or 
special concern species.
    (2) Cost-effectiveness--The Secretary of Agriculture shall also 
consider the cost-effectiveness of each agreement or easement, and 
associated restoration plans, so as to maximize the environmental 
benefits per dollar expended.
    One commenter asserted that the HFRP should place emphasis on 
pollinator-related enhancements. Another commenter suggested that the 
HFRP should change the emphasis for enrollment under the HFRP from 
``promoting'' the recovery of listed species, ``improving'' 
biodiversity, and ``enhancing'' carbon sequestration to ``does not 
detract from'' the recovery of listed species, ``does not detract from 
biodiversity,'' and ``does not detract from'' carbon sequestration. No 
changes were made to the regulations based on these comments. The 
Agency does not have statutory authority to change the emphasis of the 
HFRP as requested by commenters. However, issues regarding the forest 
ecosystem and pollinator-related enhancements would be considered for 
purposes of eligibility as set forth above.
    One commenter recommended inclusion of the hardwoods of the 
Mississippi River and its tributaries and the mesic hardwoods forests 
of the Appalachian region (including the Cumberland plateau) as a 
regional forest ecosystem to be included as HFRP focus areas. No 
changes were made to the regulations based on this comment. Under the 
provisions of 16 U.S.C. 6572(f), any eligible lands, including those 
described by the commenter, may be considered if they meet the 
requirements for enrollment priority.
    One commenter asserted that eligible non-profit conservation 
organizations should receive higher priority in application selection. 
No changes were made to the regulations based on this comment. As noted 
above, 16 U.S.C. 6572(f) sets forth the criteria for enrollment 
priority, and no statutory authority exists to give priority to non-
profit conservation organizations eligible for participation in HFRP.

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    One commenter suggested that affected State Conservationists 
develop a uniform set of ranking criteria for a particular regional 
enrollment. No changes were made to the regulations based on this 
comment because the statute does not give NRCS the discretion to use 
priorities other than those set forth in 16 U.S.C. 6572. The required 
ranking considerations are found in the interim final rule at Sec.  
625.6. As a matter of policy, the NRCS State Conservationists will 
ensure that local conditions are considered in applying the ranking 
criteria.

Term of Enrollment

    Statutory provisions at 16 U.S.C. 6572(e)(1) provide that land may 
be enrolled in the HFRP in accordance with:
     A 10-year cost-share agreement,
     A 30-year easement, or
     A permanent easement; or an easement for the maximum 
duration allowed under State law.
    Under the provisions of 16 U.S.C. 6572(e)(3), the statute allows 
acreage owned by Indian Tribes to be enrolled into the program through 
the use of 30-year contracts or 10-year cost-share agreements or a 
combination of the two.
    Two commenters asserted that NRCS should not adopt informal quotas 
for the three enrollment types. The original HFRP statutory language 
required that ``the extent to which each enrollment method is used 
shall be based on the approximate proportion of owner interest 
expressed in that method in comparison to the other methods.'' No 
changes were made to the regulations based on these comments. However, 
the 2008 Act included language specifying that 40 percent of program 
expenditures in any FY be for restoration cost-share agreement 
enrollment and 60 percent of program expenditures in any FY be for 
easement enrollment. The 2008 Act allows re-allocation if funds are not 
obligated by April 1st of the FY in which the funds were made 
available.
    One commenter asserted that HFRP should allow a continuous 
enrollment process. Although NRCS recognizes that continuous enrollment 
may be more convenient for some landowners, no changes were made to the 
regulation based on this comment. Given the limited funding for HFRP, 
continuous enrollment would increase the administrative costs of 
implementing the program without providing additional beneficial 
effects.

Restoration Plans

    The interim final rule provided that as a condition of HFRP 
participation, a landowner must agree to the implementation of a HFRP 
restoration plan. The purpose of the restoration plan is to restore, 
protect, enhance, maintain, and manage the habitat conditions necessary 
to increase the likelihood of recovery of listed species under the ESA, 
or measurably improve the well-being of species that are not listed but 
are candidates for such listing, State-listed species, or species 
identified by the Chief for special consideration for funding.
    One commenter asserted that the HFRP should allow existing plans 
prepared for other forestry and conservation programs to be used to 
satisfy the requirement for a HFRP restoration plan. No changes were 
made to the regulations based on this comment because no other plans 
prepared for other forestry and conservation programs meet the criteria 
for participation in the HFRP. Further, 16 U.S.C. 6573 requires that 
the HFRP restoration plan be developed ``jointly, by the landowner and 
the Secretary of Agriculture, in coordination with the Secretary of the 
Interior.''
    One commenter asserted that the HFRP should compensate applicants 
for the use of consulting services for preparing applications. No 
changes were made to the regulations based on this comment. Under the 
provisions of 16 U.S.C. 6575, NRCS is responsible for providing, 
including obtaining from third parties, any needed assistance in 
preparing the HFRP restoration plan.
    With respect to reviewing and approving restoration plans, three 
commenters suggested that NRCS use the word ``confer'' instead of 
``consult with'' based on the assertion that ``consult with'' could be 
misinterpreted to have a more formal meaning than intended. The interim 
final rule defined ``consultation'' or ``consult with'' to mean ``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.'' 
Accordingly, ``consultation'' or ``consult with'' does not refer to a 
formal process. To avoid confusion, the Agency has eliminated the terms 
``consultation'' and ``consult with'' and, instead, without a change in 
meaning, is using the term ``confer'' as suggested by the commenters.

Cost-Share Payments

    Two commenters asserted that NRCS should use actual costs, 
including maximum caps, rather than average costs for determining cost-
share assistance reimbursement rates as allowed under 16 U.S.C. 6574. 
They assert that the average may be far lower than the actual costs and 
thereby make full program implementation less likely in those places if 
landowners are not repaid for their full expenses. No changes were made 
to the regulation based on these comments. Calculating actual costs 
would require extensive reviews of each applicant's situation, 
including review of every relevant receipt. This would significantly 
increase the administrative workload and reduce the financial 
assistance available to HFRP participants. Average costs as determined 
on a regional basis will be used to ensure that the average costs are 
close to actual costs in that area.

Easements

    One commenter asserted that the HFRP should provide for permanent 
easements. NRCS did not make any changes to the regulations based on 
this comment. The statute sets forth the methods through which land can 
be enrolled into the program. The 2008 Act amended the statutory 
language to allow for the enrollment of permanent easements. This 
change is discussed along with other statutory changes in a separate 
section which follows.
    The Agency proposed to use a standard conservation easement deed, 
termed a negative restricted deed. The Agency specifically requested 
comments on whether the standard conservation easement deed or the 
reserved interest deed should be used in HFRP (71 FR 28551). The 
standard conservation easement deed, termed a negative restricted 
easement deed, represents an interest in land where the holder of the 
easement has the right to require the owner of the encumbered land 
(i.e., the easement area) to take, or not take, specific actions with 
respect to that land. On the other hand, the reserved interest deed 
acquires all rights in the property not specifically reserved to the 
landowner. In response, NRCS received two comments, asserting that the 
HFRP should use the standard conservation easement deed for HFRP. No 
changes were made to the regulations based on these comments because 
the Agency has been using the standard conservation easement deed in 
HFRP and will continue to do so. Standard conservation easement deeds 
work best on working lands in programs such as HFRP where the landowner 
will continue to conduct various activities on the easement area and 
few activities need to be prohibited in order to meet program purposes.

Cooperation and Technical Assistance

    Under the provisions of 16 U.S.C. 6572, NRCS is to carry out the 
HFRP in

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coordination with the FWS and the NMFS. The provisions of Sec.  
625.13(c), which concern the HFRP restoration plan development, state 
that NRCS, in coordination with FWS, will determine the conservation 
practices and measures for the restoration plan.
    One commenter asserted that the reference to coordination with FWS 
should also include cooperation with NMFS. The language of 16 U.S.C. 
6573 says that NRCS, the landowner, and FWS will develop the HFRP 
restoration plan. However, given that 16 U.S.C. 6572 states that NRCS 
is to carry out HFRP in coordination with FWS and NMFS, NRCS is 
changing the regulation text to refer to coordination with both FWS and 
NMFS as appropriate, in light of the species or habitat involved, in 
developing the HFRP conservation plan.

Landowner Protections and Safe Harbor Agreements

    The 2006 interim final rule (71 FR 28557), included a definition of 
Landowner Protections as part of Sec.  625.2 and the preamble described 
those protections and how program participants obtain them (71 FR 
28548-28550). Landowner Protections were defined in the interim final 
rule as ``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, 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.''
    Commenters asserted that NRCS should establish specific provisions 
in agreements or in the regulations regarding how NRCS will cooperate 
with FWS and NMFS concerning the preparation of restoration plans and 
other activities under the HFRP. NRCS should include how it will 
cooperate with FWS and NMFS to make Landowner Protections available to 
participating landowners.
    Under the statutory provisions at 16 U.S.C. 6573, NRCS is 
responsible for preparing restoration plans. NRCS develops the 
restoration plans jointly with the program participant in coordination 
with the FWS or NMFS, as appropriate. Further, NRCS will work with FWS 
and NMFS to establish memorandums of understanding to enhance the 
coordination process. In response to the commenters' request for more 
procedural details, NRCS clarified the definition of Landowner 
Protections in Sec.  625.2 and added a new section in the regulations 
at Sec.  625.13(d) to indicate how NRCS will help program participants 
obtain Landowner Protections.
    NRCS has also added a definition for Candidate Conservation 
Agreement with Assurances (CCAA) and clarified the definitions of 
Landowner Protections and Safe Harbor Agreement (SHA) in Sec.  625.2 of 
this rule to more fully describe the two types of Landowner 
Protections. These Landowner Protections are conditioned on to the HFRP 
restoration plan and associated cost-share agreement or easement being 
properly implemented. There is no requirement that HFRP participants 
obtain any Landowner Protections. Generally, the three elements of 
Landowner Protections are: (1) Authorization for the take of endangered 
or threatened species when conducting management activities under a 
HFRP restoration plan and when returning to the baseline conditions at 
the end of the cost-share agreement or easement period (whichever is 
longer), (2) assurance that the landowner will not be required to 
undertake additional or different management activities without the 
consent of the landowner, and (3) limitations on the possibility of 
termination of a HFRP restoration plan that is being properly 
implemented by the landowner.
    The definition of Landowner Protections in the interim final rule 
(and text in the preamble), included a description of two approaches 
that the Secretary of Agriculture may use to make Landowner Protections 
available to HFRP participants. Based on the suggestions from 
commenters and to help ensure clarity, NRCS clarified the description 
in the definition in section Sec.  625.2 and added Sec.  625.13(d) to 
specify the two ways that NRCS can make Landowner Protections available 
to HFRP participants upon request. The first approach involves NRCS and 
the HFRP participant, and does not require direct involvement by FWS or 
NMFS with the participant. Under this approach, NRCS will extend to 
participants the incidental take authorization received by NRCS from 
FWS or NMFS through biological opinions issued as part of the 
interagency consultation process under section 7(a)(2) of the ESA.
    Under the second approach for Landowner Protections, NRCS will 
provide technical assistance to help participants design and use their 
HFRP restoration plan for the dual purposes of qualifying for HFRP 
financial assistance and as a basis for entering into a SHA or CCAA 
with FWS or NMFS under section 10(a)(1)A of the ESA. SHAs are voluntary 
arrangements between either the FWS or NMFS and cooperating 
participants who agree to adopt practices and measures, or refrain from 
certain activities, in order to achieve net conservation benefits, 
i.e., a contribution to the recovery of listed species. A CCAA is a 
voluntary agreement between FWS or NMFS and cooperating landowners, who 
voluntarily agree to manage their lands or waters to remove threats to 
species at risk of becoming threatened or endangered, receive 
assurances that their conservation efforts will not result in future 
regulatory obligations in excess of those they agree to at the time 
they enter into the Agreement. CCAAs are intended to help conserve 
proposed and candidate species, and species likely to become 
candidates, by giving private, non-Federal landowners incentives to 
implement conservation measures for declining species. The primary 
incentive for a CCAA is an assurance that no further additional land, 
water, or resource use restrictions would be imposed should the species 
later become listed under the ESA. There is no requirement that HFRP 
participants enter into a SHA or a CCAA. All SHAs are subject to the 
SHA policy jointly adopted by FWS and NMFS (Announcement of Final 
Policy, 64 FR 32717, June 17, 1999), and SHAs with the FWS also are 
subject to regulations at 50 CFR Part 17, and specifically 50 CFR 
17.22(c) for endangered species or 17.32(c) for threatened species. All 
CCAAs are subject to the CCAA policy jointly adopted by FWS and NMFS 
(Announcement of Final Policy, 64 FR 32726, June 17, 1999), and CCAAs 
with the FWS are also subject to regulations at 50 CFR Part 17, and 
specifically 50 CFR 17.22(d) for endangered species or 17.32(d) for 
threatened species.
    The provisions of 16 U.S.C. 6575 require that the Secretary of 
Agriculture offer landowners with technical assistance to assist the 
landowners ``in complying'' with the terms of restoration plans (as 
included in agreements or easements) under the

[[Page 1960]]

HFRP. One commenter requested that NRCS indicate how this will be 
carried out. No changes were made to the regulation based on this 
comment because NRCS works with the landowner when developing the 
restoration plan. As part of the planning process, NRCS ensures that 
the landowner understands the plan requirements. The existing 
regulations at Sec.  625.16 provide guidance as to how NRCS would work 
with those found to have deficiencies or committed violations.

Electric Transmission Facilities

    One commenter asserted that the HFRP should not be implemented in a 
way that would be contrary to the use of electric transmission 
facilities. The commenter stated:
     NRCS should consider electronic transmission facilities to 
be compatible with HFRP and allow such facilities to be located on 
lands covered by NRCS easements without the need to modify each 
individual easement.
     NRCS should provide public notice of and the opportunity 
for comments on all pending NRCS projects, including easements in the 
HFRP.
     NRCS should have an up-to-date system at the regional 
level for obtaining information about existing and planned easements 
rather than an annual system so that utilities could easily identify 
where the easements may be located.
     After a utility has filed a formal application for 
construction of facilities, NRCS should stay any further action on 
proposed easements within the identified utility routes until final 
action is taken on the application by State and Federal agencies.
    No changes were made to the regulations based on these comments. 
The Agency understands the importance of electric transmission 
facilities that provide electricity to homes and businesses across 
America. However, NRCS is purchasing conservation easements for the 
protection of certain conservation values: promoting the recovery of 
threatened and endangered species, improving biodiversity, and 
enhancing carbon sequestration. The protection of those conservation 
values will dictate the terms of any conservation easement deed. Most 
conservation easement deeds limit the development of structures and 
utilities. Whether an electric transmission facility would be allowed 
on an easement property is determined on a case-by-case basis and 
depends on whether the electronic transmission facilities would be 
compatible with the purposes of HFRP and the easement at issue. 
Regarding the comment about public notice and comment, NRCS is not 
required by law to provide public notice and an opportunity to comment 
on easements under HFRP. The last two comments are related to potential 
conflicts between the placement of an easement and the placement of 
utilities. NRCS policy requires that State Conservationists take into 
account utilities that are being planned for installation when making 
project funding decisions and seek to avoid conflicts with 
infrastructure projects when feasible.

Termination of Landowner Protection

    The preamble of the 2006 interim final rule states that ``In 
easement circumstances, where a change of conditions requires the FWS 
and the NMFS to terminate a Landowner Protection, NRCS will work to 
address the changed conditions in the HFRP restoration plan in 
coordination with the landowner'' (71 FR 28549). One commenter 
questioned whether this referred to landowner non-compliance or changed 
environmental or ecological conditions. NRCS will work to address the 
changed conditions in coordination with the landowner regardless of the 
cause of the change. As provided for in this proposed rule in the 
clarified definition of Landowner Protections in Sec.  625.2 and the 
associated provision at Sec.  625.13(d), provided that the contract 
holder has acted in good faith and without the intent to violate the 
terms of the HFRP restoration plan, all appropriate options will be 
pursued with the participant to avoid termination in the case of 
landowner non-compliance or changed conditions. If the participant has 
entered into a SHA or CCAA with FWS or NMFS (the Services) based on a 
HFRP restoration plan, NRCS will work with the participant and the 
Services to seek appropriate means of avoiding revocation of a permit 
issued under section 10(a)(1) of the ESA by FWS or NMFS to implement 
the SHA or CCAA. However, in the event of a termination, any requested 
assurances from NRCS will be voided and the landowner will be 
responsible to FWS or NMFS for any violations of the ESA, as clarified 
in this proposed rule at Sec.  625.13(d). The SHA policy regarding 
revocation of a permit issued in association with a SHA is: ``The 
Services are prepared as a last resort to revoke a permit implementing 
a Safe Harbor Agreement where continuation of the permitted activity 
would be likely to result in jeopardy to a species covered by the 
permit. Prior to taking such a step, however, the Services would first 
have to exercise all possible means to remedy such a situation.'' (Fish 
and Wildlife Service and National Fisheries Marine Service, Safe Harbor 
Agreements and Candidate Conservation Agreements with Assurances, Final 
Rule and Notices, 64 FR 32724). Regulations pertaining to SHA permits 
issued by FWS have a similar provision (50 CFR 17.22(c)(7) and 
17.32(c)(7)) for endangered and threatened wildlife.

Proposed Changes Resulting From Passage of the Food, Conservation, and 
Energy Act of 2008

    NRCS proposes to amend the current regulation to include statutory 
changes included in Section 8205 of the 2008 Act (Pub. L. 110-246) as 
follows:
     Section 8205 amended the methods of enrollment by 
replacing the 99-year enrollment method with enrollment of permanent 
easements or the maximum duration allowed by state law. NRCS proposes 
to amend Sec.  625.8(b), Sec.  625.10(e)(1) and Sec.  625.11(a) by 
removing reference to 99 year easements and inserting in its place the 
words ``permanent easement''.
     Section 8205 also expanded the enrollment methods to 
include the use of 30-year contracts or 10-year cost share agreements, 
or any combination of both, for acreage owned by Indian tribes. The 
statement of managers (Conference Report H.R. 110-627 for HR 2419, 
pages 202 and 203, May 13, 2008) provided additional clarification of 
Congressional intent by stating that ``the Managers intend that Tribal 
land enrolled in the program should be land held in private ownership 
by a tribe or an individual Tribal member. Tribal lands held in trust 
or reserved by the U.S. government or restricted fee lands should not 
be enrolled in the program regardless of ownership.'' NRCS proposes to 
add the definition of ``acreage owned by Indian Tribes'' in Sec.  625.3 
to read as follows: ``acreage owned by Indian Tribes means private 
lands to which the title is held by individual Indians and Indian 
tribes, including Alaska Native Corporations. This term does not 
include land held in trust by the United States or lands the title to 
which is held subject to Federal restrictions against alienation.''
    NRCS also proposes to amend the following sections to incorporate 
reference to 30-year contracts: Sec.  625.1(a); Sec.  625.2; Sec.  
625.3 in the definition of ``restoration agreement;'' Sec.  625.4(a); 
Sec.  625.5(b); Sec.  625.8(b)(2); Sec.  625.8(d); Sec.  625.15(b)(5); 
Sec.  625.16(b); and Sec.  625.20(b); NRCS proposes to add the term 
``contract'' in reference to 30-year contracts in Sec.  625.6(a)(7); 
Sec.  625.7(a) and (b); Sec.  625.14; Sec.  625.17; and Sec.  
625.16(a)(3); and NRCS proposes to

[[Page 1961]]

add a new Sec.  625.12, 30-year contracts, to include the provisions 
related to this new enrollment method. Consistent with the statutory 
requirement, NRCS must treat 30-year contracts like easements to the 
extent possible. In particular, statutory language in 16 U.S.C. 6572 
requires that the value of a 30-year contract for Tribal lands shall be 
equivalent to the value of a 30-year easement. Although there are 
limitations to handling 30-year contacts like 30-year easements because 
of the fundamental differences between contract law and real property 
law related to easements, NRCS has structured 30-year contract 
requirements in Sec.  625.12 to be as comparable as possible to the 
easements requirements in Sec.  625.11.
    Section 8205 of the 2008 Act establishes requirements regarding the 
use of funds for cost-share agreements and easements. Specifically, 
this section directs that of the total amount of funds expended under 
the program for a fiscal year to acquire easements and enter into cost-
share agreements, not more than 40 percent shall be used for 10-year 
cost-share agreements and not more than 60 percent shall be used for 
easements. Funds not obligated by April 1st of the fiscal year may be 
used to carryout either enrollment method. Cost-share agreements and 
easements under the Tribal lands option do not count toward the 60/40 
calculation. NRCS proposes to incorporate this statutory requirement in 
Sec.  625.4(a).

Other Proposed Minor Changes for Clarification or Improved Program 
Administration

    NRCS proposes to make other changes to clarify the regulations for 
the public; such changes include clarifying the enrollment process, 
providing clear language about determining easement, contract, and 
agreement compensation, providing guidance on the Agency's treatment of 
ecosystem service credits, and clarifying language on Agency appeals. 
The proposed changes include:

Section 625.1 Purpose and Scope

    Section 625.1(b)(1) identifies one objective of the program as 
being to ``Promote the recovery of endangered and threatened species 
under the ESA.'' NRCS proposes to amend Sec.  625.1(b)(1) to clarify 
that ESA is an abbreviation for the Endangered Species Act.

Section 625.2 Definitions

    In addition to the definition of ``Acreage owned by Indian 
Tribes,'' which NRCS proposes to add as a result of statutory changes 
described in the previous section, NRCS proposes to add definitions for 
``Candidate Conservation Agreement with Assurances,'' ``Conservation 
practice'' and ``Forest ecosystem''.
    NRCS proposes to add a definition for the term ``Candidate 
Conservation Agreement with Assurances'' to ensure the public has clear 
understanding of the Landowner Protections provided through HFRP. NRCS 
proposes the definition to read as follows: ``Candidate Conservation 
Agreement with Assurances (CCAA) 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 (the Act), 16 
U.S.C. 1539(a)(1). Under the CCAA and an associated enhancement of 
survival permit, the non-Federal landowner implements actions that are 
consistent with the conditions of the permit. Candidate Conservation 
Agreements with Assurances with FWS are also subject to regulations at 
50 CFR 17.22(d) for endangered species or 50 CFR 17.32(d) for 
threatened species, or applicable subsequent regulations.''
    NRCS proposes to add the term ``Conservation practice'' to replace 
the definition of ``practice.'' The definition of ``conservation 
practice'' describes a broader array of activities than the definition 
of the term ``practice.'' NRCS proposes to incorporate the following 
language as the definition of ``conservation practice.'' ``Conservation 
practice means one or more conservation improvements and activities, 
including structural practices, land management practices, vegetative 
practices, forest management, and other improvements that benefit the 
eligible land and optimize environmental benefits, planned and applied 
according to NRCS standards and specifications.''
    The purpose of HFRP is to restore and enhance forest ecosystems. 
NRCS proposes to add the term ``forest ecosystem'' to clarify the 
program's purpose.
    NRCS proposes amendments to other definitions as follows:
    The definition of ``Activity'' is removed because statutory 
authority is only provided for ``Practices'' and ``Measures.''
    The definition of ``Biodiversity'' is changed to clarify that 
``biodiversity'' is the shortened term for biological diversity.
    The definition of ``Contract'' is changed to be consistent with 
other programs administered by NRCS. NRCS proposes amending the 
definition to read as follows:
    ``Contract/agreement means the legal document that specifies the 
obligations and rights of any applicant who has been accepted to 
participate in the program. A contract/agreement is a binding agreement 
for the transfer of assistance from USDA to the participant for 
conducting the prescribed program implementation actions.''
    The term ``30-year contract'' is added to incorporate the 30-year 
contract option.
    The Agency is removing the definition of ``Indian Trust Lands,'' 
``Practice,'' and ``Consultation or consult.'' The definition of 
``Indian Trust Lands'' is removed and replaced by the definition of 
``Acreage owned by Indian Tribes'' to be consistent with the statutory 
language. The definition of ``Practice'' is removed and replaced with 
the more specific term ``Conservation practice.'' The definition of 
``Consultation or consult'' is removed and revised to change the term 
to confer for the reasons described in the public comment section 
above.
    The definition of ``landowner'' is revised to remove the term 
``remaindermen'' as a category of ownership. NRCS proposes removing 
this term because it unnecessarily complicates the definition.
    The definition of ``Landowner Protections'' is changed as a result 
of the public comments received. The explanation for this proposal is 
provided under ``Proposed changes based on public comment.''
    The definition of ``Liquidated damages'' is amended to read: 
``Liquidated damages'' is defined as ``a sum of money stipulated in the 
HFRP restoration agreement that the participant agrees to pay NRCS if 
the participant fails to adequately complete the terms of the 
restoration agreement. The sum represents an estimate of the expenses 
incurred by NRCS to service the restoration agreement, and reflects the 
difficulties of proof of loss and the inconvenience or non-feasibility 
of otherwise obtaining an adequate remedy.'' This is consistent with 
how the term is defined in other programs administered by NRCS.
    The definition of ``Participant'' is amended to incorporate non-
substantive changes to make the definition consistent with the 
definition of ``Participant'' in other conservation programs and to 
address the addition of the 30-year contract option provided in the 
2008 Act for Tribal lands. Specifically, a ``Participant'' is an 
applicant who is party to a 10-year cost share agreement, 30-year 
contract, or an option agreement to purchase an easement. The Agency is 
also taking the opportunity to note in this regulation, consistent with 
the appeal regulations at

[[Page 1962]]

7 CFR Part 614 and Federal real property law, that once a conservation 
easement is conveyed, the landowner is no longer a ``Participant'' for 
easement enforcement and management matters and, therefore, may not 
file an administrative appeal on those matters.
    The definition of ``Private land'' is changed to read: ``Private 
land means land that is not owned by a governmental entity, and 
includes land meeting the definition of ``acreage owned by Indian 
Tribes.'' This proposed change ensures the public recognizes that the 
term ``Private land,'' as used in this regulation, includes acreage 
owned by Indian Tribes. The previous definition included the term 
``Indian Trust Lands.''
    The definition of ``Safe harbor agreement'' is changed as described 
in the public comment section above.
    The definition of ``State Conservationist'' is changed to clarify 
that the former State Conservationist of Hawaii position has become the 
director of the Pacific Islands.

Section 625.4 Program Requirements

    NRCS proposes to revise Sec.  625.4(a) to incorporate the statutory 
limitation on the use of funds for cost-share agreements and easements. 
As described in the statutory change section above, Section 8205 of the 
2008 Act requires an allocation of no more than 40 percent of program 
expenditures toward enrollment of restoration cost-share agreements and 
no more than 60 percent of program expenditures toward enrollment of 
easements. Any contracts on acreage owned by Indian Tribes are not 
included in this calculation. The 2008 Act allows the Secretary to use 
any funds that are not obligated by April 1st of the fiscal year to be 
used for either agreements or easements during that fiscal year. Any 
funds not obligated by April 1 or later will be re-distributed to 
projects with agreements or easements ready to obligate funding. NRCS 
proposes to manage this process at the national level to ensure that 
the allocation of funds meets the statutory requirements.
    NRCS proposes to amend Sec.  625.4(b) to clarify that an individual 
or entity can enroll in HFRP by replacing the term ``person'' with the 
words ``individual or entity.'' The current language refers to a 
``person.'' This term is inaccurate due to participation of entities 
and Indian tribes.
    NRCS proposes, for clarity purposes, to change Sec.  625.4(d) to 
clarify that any land not eligible under the categories listed in Sec.  
625.4(c) is ineligible land. Section 625.4(c) identifies eligible land.

Section 625.5 Application Procedures

    NRCS proposes revising Sec.  625.5(a) to clarify the sign-up 
process. Specifically, the State Conservationists will develop 
proposals for the State to receive funds and may seek input from other 
agencies in doing so. The State Conservationists will submit proposals 
to the Chief for funding consideration. The Chief will evaluate and 
select proposals for funding and provide the State Conservationist with 
a funding allocation. Upon a State's selection for funding, the State 
Conservationists will issue a public sign-up notice to obtain 
applications from eligible landowners. The State Conservationists may 
consult with organizations or units of government with appropriate 
technical expertise in developing ranking criteria to be used in 
selecting applications best suited to achieving the project purpose. 
The applications will be ranked based on these criteria. The highest 
ranking applications are funded by the State Conservationists. Due to 
the limited funding provided for this program, continuous enrollment 
would likely increase the administrative burden of implementing the 
program. This sign-up process will ensure that the limited HFRP funding 
will be used for the best projects nationally, and help maximize the 
expected benefits related to habitat restoration and protection that 
address the recovery of endangered species, improvement in 
biodiversity, and enhanced carbon sequestration. In short, national 
competition will result in the optimal use of funds.
    NRCS proposes to amend Sec.  625.5(d) to clarify that any voluntary 
reduction in compensation must not be below the lowest rate allowed by 
the statute.

Section 625.6 Establishing Priority for Enrollment in HFRP

    NRCS proposes to amend Sec.  625.6(a) to reflect the change in the 
definition of biological diversity discussed above at Sec.  625.2

Section 625.7 Enrollment of Easements, Contracts, and Agreements

    NRCS proposes to amend Sec.  625.7 to reflect a change in the NRCS 
business process that is designed to reduce the potential for de-
obligating funds. NRCS has experienced difficulty in other easement 
programs where funds are obligated to projects whose enrollment is 
subsequently terminated due to irresolvable title issues and hazardous 
materials concerns. NRCS will no longer use commitment accounting, but 
will use the option agreement to purchase as the point of obligation. 
Also, additional evaluation that was formerly performed after the 
signing of the option agreement to purchase will now be performed prior 
to the obligation.
    Section 625.7(a) is changed to clarify that the obligation of HFRP 
funds occurs when the landowner signs the option agreement to purchase, 
cost-share agreement, or 30-year contract. This policy helps ensures 
that HFRP funds are used to the greatest extent possible by reducing 
the potential for de-obligation.
    Section 625.7(c) is changed to clarify the point at which land is 
considered enrolled into the program to be consistent with other 
easement programs administered by NRCS.
    Section 625.7(d) is amended to clarify the conditions and 
procedures for withdrawing an offer after the land is considered 
enrolled in the program.

Section 625.8 Compensation for Easements and 30-Year Contracts

    NRCS proposes to amend Sec.  625.8(c) to clarify the Agency's 
existing authority to accept and use non-Federal contributions.
    NRCS proposes to amend Sec.  625.8(d) to identify that payments for 
30-year contracts will be treated the same as 30-year easement 
payments. The statutory language in 16 U.S.C. 6572 instructs that the 
value of a 30-year contract shall be equivalent to the value of a 30-
year easement.
    Additionally, the following information about the appraisal 
methodology will be used for the valuation of HFRP offers: For 
permanent easements (or easements for the maximum duration allowed 
under State law), the HFRP statute states that the Secretary of 
Agriculture shall pay the landowner not less than 75 percent, nor more 
than 100 percent of (as determined by the Secretary) the fair market 
value of the land enrolled unencumbered by the easement, less the fair 
market value of such land encumbered by the easement. The term 
``encumbered'' refers to the period of time when the easement becomes 
effective. The appraisal process established by NRCS is aimed at 
determining the difference between the value of the enrolled land prior 
to and after easement encumbrance.
    When acquiring real property, Federal agencies generally follow the 
Uniform Relocation Assistance and Real Property Acquisition Policies 
for Federal and federally Assisted Programs (``the Uniform Relocation 
Act'') found in regulations at Part 24 of Title 49 of the Code of 
Federal Regulations. Section 24.103 of that title establishes that 
``appraisals are to be prepared according to these requirements, which 
are

[[Page 1963]]

intended to be consistent with the Uniform Standards of Professional 
Appraisal Practice (USPAP). The Agency may have appraisal requirements 
that supplement these requirements, including, to the extent 
appropriate, the Uniform Appraisal Standards for Federal Land 
Acquisition (UASFLA).'' [Yellow Book] The Yellow Book requires that 
compensation be based upon the impact that the easement encumbrance 
will have on the value of the ``larger parcel,'' which is all land 
owned by the landowner that may be impacted by the easement, as 
determined by the appraiser.
    The HFRP language for permanent and maximum duration easements 
requires that compensation be based on the impact to value of only the 
land enrolled and encumbered by the easement. Thus, the Yellow Book 
requirement of appraising the larger parcel conflicts with the HFRP 
statutory requirement related to determining easement value for 
permanent easements, or those of the maximum duration required by state 
law. Therefore, the Agency proposes to use Uniform Standards for 
Professional Appraisal Practice (USPAP) for those easements, which is 
consistent with 49CFR24. Even though the HFRP statute states the 
approach for valuing permanent and 30-year easements in slightly 
different language, there is no actual distinction since both result in 
basing value on the enrolled land encumbered by the easement. 
Correspondingly, the Agency is maintaining consistency in the approach 
to determining easement compensation values for 30-year and permanent 
easements.
    NRCS proposes to add language in Sec.  625.8(h) that clarifies USDA 
policy regarding environmental credits such as carbon, water quality, 
biodiversity, or wetlands preservation, on land enrolled in HFRP. USDA 
considers these credits the property of the farmer, the landowner, or 
the person who applied the conservation practices on the land, 
regardless of the Federal funds invested.

Section 625.9 10-Year Restoration Cost-Share Agreements

    NRCS proposes to amend Sec.  625.9 (a) to reflect a change in 
section numbering caused by the addition of the 30-year contract 
section. Amendments to this section reflect the change from the term 
``practice'' to ``conservation practice.''
    NRCS proposes to amend Sec.  625.9 (d) to clarify the meaning of 
the sentence and to clarify that termination of the restoration cost-
share agreement can occur when the terms of Sec.  625.9(d) 1, 2, or 3 
are met.

Section 625.10 Cost-Share Payments

    NRCS proposes to amend Sec.  625.10(b) to clarify the addition of 
the term ``candidate species,'' as well as listed species, through a 
Candidate Conservation Agreement with Assurances.
    Section 625.10(c) and Sec.  625.10(g) and (h) are amended to 
reflect the change in the definition from ``practice'' to the more 
specific term ``conservation practice'' as discussed above at Sec.  
625.2. Section 625.10(e) is also amended for the same reason and to 
clarify that the conservation practice would need to meet NRCS 
standards and specifications.

Section 625.11 Easement Participation Requirements

    NRCS proposes to amend Sec.  625.11(a) to clarify the sentence to 
include not only listed species but to allow for other types of 
management that support forest ecosystem functions and values, such as 
activities to protect candidate species.

Section 625.12 30-Year Contracts

    A new section is added to incorporate the statutory provision for 
30-year contracts for acreage owned by Indian Tribes. The section 
describes enrollment and minimum requirements of the contract. Terms of 
the 30-year contract are kept as consistent as possible with terms of a 
30-year easement, considering the differences in the legal instruments.

Section 625.13 The HFRP Restoration Plan Development and Landowner 
Protections

    NRCS proposes to amend Sec.  625.13(a), Sec.  625.13(c) and Sec.  
625.13(d) to reflect the changes discussed above as a result of public 
comments. Section 625.13(a), was amended to replace the term 
``consult'' with ``confer.'' In Sec.  625.13(c) ``The National Marine 
Fisheries Service'' was added as an agency that would assist in 
determining eligible practices. Section 625.13(d) was amended to 
clarify Landowner Protections.

Section 625.14 Modification of the HFRP Restoration Plan

    NRCS proposes to amend Sec.  625.14 to make non-substantive changes 
to the sentence structure.

Section 625.15 Transfer of Land

    NRCS proposes the following changes: Amend Sec.  625.15(a) to 
clarify that this section refers to offers voided prior to enrollment 
in the program. This section would also be amended to clarify that this 
section applies to easements, agreements, and contracts.
    In addition, amend Sec.  625.15(b) to clarify that this section 
refers to actions following transfer of land. These changes clarify 
that cost-share payments can be transferred to the new owner upon 
presentation of an assignment of rights. Landowner Protections can be 
transferred to the new landowner, and if a SHA or CCAA is involved, the 
landowners need to coordinate with FWS or NMFS to transfer the 
agreement and assurances to the new landowner.

Section 625.16 Violations and Remedies

    NRCS proposes to make the following amendments to this section: 
Amend Sec.  625.16 (a) to clarify that extensions to correct violations 
beyond 30 days, under this section, should be made based on the State 
Conservationists determination of how much time is necessary to correct 
the violation.
    Section 625.16(b) is amended to clarify that extensions to correct 
violations beyond 30 days should be based on the State Conservationists 
determination of how much time is necessary to correct the violation. 
NRCS is also removing the last sentence of paragraph (b)(3), all of 
paragraph (b)(4), and paragraph (b)(6). The last sentence of (b)(3) is 
removed because it is administratively burdensome to continue to 
monitor and enforce the operation and maintenance of practices for 
which the Agency no longer has a contract. Due to limited resources and 
funding, the Agency has determined that to administer the program more 
effectively after an agreement is terminated, that the Agency will 
recover the appropriate amount and will not continue to monitor the 
installed practices or measures. Paragraph (b)(4) is removed because it 
has been incorporated into (b)(3). Paragraph (b)(6) is removed because 
the Agency has determined that it is not in the interests of the 
program to allow participants to unilaterally terminate a contract 
without penalty or repayment, even when participants are in compliance 
with all conditions. The Agency is interested in ensuring practices are 
continued for the original duration of the contract and maintaining a 
high level of environmental benefits.

Section 625.18 Assignments

    The text of Section Sec.  625.18 is not amended. The only change to 
this section is the section heading which has been changed to reflect 
the insertion of the 30-year contract section above at Sec.  625.12.

[[Page 1964]]

Section 625.19 Appeals

    NRCS proposes to amend Sec.  625.19(b) to clarify that appeals 
procedures apply to administrative actions and not for other purposes 
such as enforcement actions.
    Section 625.19(d) is added to further clarify that enforcement 
actions taken by NRCS are not subject to review under administrative 
appeal regulations. This language is consistent with the appeal 
regulations at 7 CFR Part 614 and Federal real property law.

Specific Request for Public Comment

    The Agency is particularly interested in receiving public input 
regarding the following topics: (1) The definition of acreage owned by 
Indian Tribes and the accompanying requirements for 30-year contracts 
at Sec.  625.12; (2) the language regarding ownership of ecosystem 
services credits; and (3) the language regarding the establishment of 
easement compensation rates.

List of Subjects in 7 CFR Part 625

    Administrative practice and procedure, Agriculture, Soil 
conservation, Forestry.

Text of Rule Amendments

    For the reasons stated in the preamble, the Natural Resources 
Conservation Service proposes to revise 7 CFR part 625 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, contracts, and agreements.
625.8 Compensation for easements and 30-year contracts.
625.9 10-year restoration cost-share agreements.
625.10 Cost-share payments.
625.11 Easement participation requirements.
625.12 30-year contracts.
625.13 The HFRP restoration plan development and landowner 
protections.
625.14 Modification of the HFRP restoration plan.
625.15 Transfer of land.
625.16 Violations and remedies.
625.17 Payments not subject to claims.
625.18 Assignments.
625.19 Appeals.
625.20 Scheme and device.

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


Sec.  625.1  Purpose and scope.

    (a) The purpose of the Healthy Forests Reserve Program (HFRP) is to 
assist landowners, on a voluntary basis, in restoring and enhancing 
forest ecosystems on private lands through easements, 30-year 
contracts, and 10-year cost-share agreements.
    (b) The objectives of HFRP are to:
    (1) Promote the recovery of endangered and threatened species under 
the Endangered Species Act (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 additions shall be applicable to this part:
    30-year Contract means a contract that is limited to acreage held 
in private ownership by Indian Tribes or individual tribal members. The 
30-year contract is not eligible for use on tribal lands held in trust 
or subject to Federal restrictions against alienation.
    Acreage Owned by Indian Tribes means private lands to which the 
title is held by individual Indians and Indian tribes, including Alaska 
Native Corporations. This term does not include land held in trust by 
the United States or lands where the fee title contains restraints 
against alienation.
    Biodiversity (Biological Diversity) means the variety and 
variability among living organisms and the ecological complexes in 
which they live.
    Candidate Conservation Agreement with Assurances (CCAA) means a 
voluntary arrangement between U.S. 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. 1539(a)(1). Under the CCAA 
and an associated enhancement of survival permit, the non-Federal 
landowner implements actions that are consistent with the conditions of 
the permit. Candidate Conservation Agreements with Assurances with FWS 
are also subject to regulations at 50 CFR 17.22(d) for endangered 
species or 50 CFR 17.32(d) for threatened species, or applicable 
subsequent regulations.
    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 NRCS, United States Department of 
Agriculture (USDA), or designee.
    Confer means to discuss for the purpose of providing information; 
to offer an opinion for consideration; or to meet for discussion, while 
reserving final decision-making authority with NRCS.
    Conservation practice means one or more conservation improvements 
and activities, including structural practices, land management 
practices, vegetative practices, forest management, and other 
improvements that benefit the eligible land and optimize environmental 
benefits, planned and applied according to NRCS standards and 
specifications.''
    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.
    Contract or agreement means the legal document that specifies the 
obligations and rights of any applicant who has been accepted to 
participate in the program. A contract or agreement is a binding 
agreement for the transfer of assistance, including financial or 
technical assistance, from USDA to the participant for conducting the 
prescribed program implementation actions.
    Coordination means to obtain input and involvement from others 
while reserving final decision-making authority with NRCS.
    Cost-share agreement means a legal document that specifies the 
rights and obligations of any participant accepted into the program. A 
HFRP cost-share agreement is a binding agreement for the transfer of 
assistance from USDA to the participant to share in the costs of 
applying conservation. A cost-share agreement under HFRP has a duration 
of 10-years.
    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.

[[Page 1965]]

    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 forest ecosystem 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 ecosystem means a dynamic set of living organisms, including 
plants, animals and microorganisms interacting among themselves and 
with the environment in which they live. A forest ecosystem is 
characterized by a predominance of trees, and by the fauna, flora, and 
ecological cycles (energy, water, carbon, and nutrients)
    Forest Service is an agency of the USDA.
    HFRP restoration plan means the document that identifies the 
conservation treatments that are scheduled for application to land 
enrolled in HFRP in accordance with NRCS standards and specifications.
    Indian Tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act (85 Stat. 688, 43 U.S.C. 
1601 et seq.), which is recognized as eligible for the special programs 
and services provided by the United States to Indians because of their 
status as Indians.
    Landowner means an individual or entity having legal ownership of 
land, including those who may be buying land under a purchase 
agreement. The term ``landowner'' may also include all forms of 
collective ownership including joint tenants, tenants in common, and 
life tenants.
    Landowner Protections means protections and assurances made 
available by NRCS to HFRP participants when requested and whose 
voluntary conservation activities result in a net conservation benefit 
for listed, candidate, or other species, and meet other requirements of 
the program. These Landowner Protections are subject to an HFRP 
restoration plan and associated cost-share agreement, 30-year contract, 
or easement being properly implemented. Landowner Protections made 
available by the Secretary of Agriculture to HFRP participants may 
include an incidental take authorization received by NRCS from FWS or 
NMFS or may be provided by a Safe Harbor Agreement or Candidate 
Conservation Agreement with Assurances directly between the HFRP 
participant and FWS or NMFS as appropriate.
    Liquidated Damages means a sum of money stipulated in the HFRP 
restoration agreement that the participant agrees to pay NRCS if the 
participant fails to adequately complete the terms of the restoration 
agreement. The sum represents an estimate of the expenses incurred by 
NRCS to service the restoration agreement, 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 
USDA, which has the responsibility for administering HFRP.
    Participant means a person or entity who is a party to a 10-year 
cost share agreement, 30-year contract, or an option agreement to 
purchase an easement.
    Private land means land that is not owned by a governmental entity, 
and includes land that meets the definition of ``acreage owned by 
Indian Tribes.''
    Restoration means implementing any conservation practice 
(vegetative, management, or structural) or measure that improves forest 
ecosystem values and functions (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 a forest ecosystem for the purposes of HFRP 
under either an easement, 30-year contract, 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 (the Act), 16 
U.S.C. 1539(a)(1). Under the Safe Harbor Agreement and an associated 
enhancement of survival permit, the private property owner implements 
actions that are consistent with the conditions of the permit. Safe 
Harbor Agreements with FWS are also subject to regulations at 50 CFR 
17.22(c) for endangered species or 50 CFR 17.32 (c) for threatened 
species, or applicable subsequent regulations.
    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 
implement HFRP and direct and supervise NRCS activities in a State, the 
Caribbean Area, or the Pacific Island Area.
    Technical service provider means an individual, private-sector 
entity, or public agency certified by NRCS to provide technical 
services to program participants in lieu of or on behalf of NRCS.


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. This authority cannot be further delegated. The Chief may 
not modify or waive any provision of this part which is required by 
applicable law.
    (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 and 30-year contract, 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 confer with private forest 
landowners, including Indian tribes, 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

[[Page 1966]]

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 30-year contracts or 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 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 forest ecosystem functions 
and values. Specific restoration, protection, enhancement, maintenance, 
and management activities may be undertaken by the landowner or other 
NRCS designee.
    (1) Of the total amount of funds expended under the program for a 
fiscal year to acquire easements and enter into 10-year cost-share 
agreements, not more than 40 percent shall be used for cost-share 
agreements and not more than 60 percent shall be used for easements.
    (2) The Chief may use any funds that are not obligated by April 1st 
of the fiscal year for which the funds are made available to carry out 
a different method of enrollment during that fiscal year.
    (b) Landowner eligibility. To be eligible to enroll an easement in 
the HFRP, an individual or entity must:
    (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, 30-year contract, or 10-year cost share 
agreement, 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; or
    (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 eligible land 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.
    (5) In the case of acreage owned by an Indian Tribe, the NRCS may 
enroll acreage into the HFRP which is privately owned by either the 
Tribe or an individual.
    (d) Ineligible land. The following land is not eligible for 
enrollment in the HFRP:
    (1) Lands owned by the United States, States, or units of local 
government;
    (2) Land subject to an easement or deed restriction that already 
provides for the protection of fish and wildlife habitat or which would 
interfere with HFRP purposes, as determined by NRCS; and
    (3) Lands that would not be eligible for HFRP under paragraphs (c) 
(1) through (c) (5).


Sec.  625.5  Application procedures.

    (a) Sign-up process. As funds are available, the Chief will solicit 
project proposals from the State Conservationist. The State 
Conservationist may consult with other agencies at the State, Federal, 
and local levels to develop proposals. The State Conservationist will 
submit the proposal(s) to the Chief for funding selection. Upon 
selection for funding, the State Conservationist will issue a public 
sign-up notice which will announce and explain the rationale for 
decisions based on 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 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 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, 30-year contract, 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 amount than is being offered by NRCS. Such 
offer and subsequent payments may not be less than those rates set 
forth in 625.8 and 625.10 of this part.


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 biodiversity, if enrolled;
    (4) Potential for increased capability of carbon sequestration, if 
enrolled;

[[Page 1967]]

    (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, contract, 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, NRCS may select a lower 
ranked application that can be fully funded. In cases where HFRP funds 
are not sufficient to cover the costs of an application selected for 
funding, the applicant may lower the cost of the application by 
changing the duration of the easement or agreement or reducing the 
acreage offered, unless these changes result in a reduction of the 
application ranking score below that of the score of the next available 
application on the ranking list.


Sec.  625.7  Enrollment of easements, contracts, and agreements.

    (a) Offers of enrollment. Based on the priority ranking, NRCS will 
notify an affected landowner of tentative acceptance into the program. 
This notice of tentative acceptance into the program does not bind NRCS 
or the United States to enroll the proposed project in HFRP, nor does 
it bind the landowner to convey an easement, or to contract, or agree 
to HFRP activities. The letter notifies the landowner that NRCS intends 
to continue the enrollment process on their land unless otherwise 
notified by the landowner.
    (b) Acceptance of offer of enrollment. An option agreement to 
purchase or a restoration cost-share agreement or contract will be 
presented by NRCS to the landowner, which will describe the easement, 
agreement, or contract area; the easement, agreement, or contract terms 
and conditions; and other terms and conditions for participation that 
may be required by NRCS.
    (c) Effect of the acceptance of the offer (enrollment). After the 
option agreement to purchase or restoration cost-share agreement or 
contract is executed by NRCS and the landowner, the land will be 
considered enrolled in the HFRP. For easements, NRCS will proceed with 
various easement acquisition activities, 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, as appropriate 
for the enrollment option being considered. For restoration cost-share 
agreements and contracts the landowner will proceed to implement the 
restoration plan with technical assistance and cost-share from NRCS.
    (d) Withdrawal of offers. Prior to execution of an option agreement 
to purchase, a restoration cost-share agreement, and/or contract 
between the United States and the landowner, NRCS may withdraw the land 
from enrollment at any time due to lack of availability of funds, 
inability to clear title, or other reasons. An option to purchase shall 
be void, and the offer withdrawn, if not executed by the landowner 
within the time specified.


Sec.  625.8  Compensation for easements and 30-year contracts.

    (a) 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 permanent easements or 
easements for the maximum duration allowed under State law.
    (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 or 30-year 
contracts.
    (b) Acceptance and use of contributions. NRCS may accept and use 
contributions of non-federal funds to make payments under this section.
    (c) Acceptance of offered easement or 30-year contract 
compensation.
    (1) NRCS will not acquire any easement or 30-year contract unless 
the landowner accepts the amount of the payment that is offered by 
NRCS. The payment may or may not equal the fair market value of the 
interests and rights to be conveyed by the landowner under the easement 
or 30-year contract. By voluntarily participating in the program, a 
landowner waives any claim to additional compensation based on fair 
market value.
    (2) Payments may be made in a single payment or no more than 10 
annual payments of equal or unequal size, as agreed to between NRCS and 
the landowner.
    (d) If a landowner believes they may be eligible for a bargain sale 
tax deduction that is the difference between the fair market value of 
the easement conveyed to the United States and the easement payment 
made to the landowner, it is the landowner's responsibility to discuss 
those matters with the Internal Revenue Service. NRCS disclaims any 
representations concerning the tax implications of any easement or 
cost-share transaction.
    (e) 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.
    (f) Environmental Services Credits for Conservation Improvements. 
USDA recognizes that environmental benefits will be achieved by 
implementing conservation practices, measures, and activities funded 
through HFRP, and that environmental credits may be gained as a result 
of implementing activities compatible with the purposes of an HFRP 
easement, contract, or restoration agreement. NRCS asserts no direct or 
indirect interest on these credits. However, NRCS retains the authority 
to ensure the requirements of an HFRP easement, contract, cost-share 
agreement, or restoration plan are met consistent with Sec. Sec.  625.9 
through 625.13 of this part. Where activities required under an 
environmental credit agreement may affect land covered under an HFRP 
easement, restoration cost-share agreement, or contract, an amendment 
to the restoration agreement or contract, or a compatible use approval 
under an easement, may be required and participants are highly 
encouraged to request a compatibility assessment from NRCS prior to 
entering into such environmental credit agreements.


Sec.  625.9  10-year restoration cost-share agreements

    (a) The restoration plan developed under Sec.  625.13 forms the 
basis for the 10-year cost-share agreement and its terms are 
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;

[[Page 1968]]

    (3) Include all provisions as required by law or statute;
    (4) Specify the requirements for operation and maintenance of 
applied conservation practices;
    (5) Include any participant reporting and recordkeeping 
requirements to determine compliance with the agreement and HFRP;
    (6) Be signed by the participant;
    (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 cause a severe hardship on the parties to the agreement; or
    (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 fish and 
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 ESA, candidate, or other species covered by this regulation. 
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, 
contract, or the restoration agreement.
    (c) If the Landowner Protections, or any associated permit, require 
the adoption of a conservation practice or measure in addition to the 
conservation practices and measures identified in the applicable HFRP 
restoration plan, NRCS and the landowner will incorporate the 
conservation 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 NRCS approved conservation practices or 
implementing measures specified in the HFRP restoration plan:
    (1) On enrolled land subject to a permanent easement or an easement 
for the maximum duration allowed under State law, NRCS shall offer to 
pay not less than 75 percent nor more than 100 percent of the average 
cost; and
    (2) On enrolled land subject to a 30-year easement or 30 year 
contract, NRCS shall offer to pay not more than 75 percent of the 
average cost.
    (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 
NRCS that an eligible conservation practice or measure, or an 
identifiable component of the conservation practice has been 
established in compliance with appropriate standards and 
specifications. Identified conservation 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 conservation practices and 
measures, or the maintenance or replacement of an eligible conservation 
practice or measure, but only if NRCS determines the conservation 
practice or measure is needed to meet the objectives of HFRP, and the 
failure of the original conservation practices or measures was due to 
reasons beyond the control of the landowner.


Sec.  625.11  Easement participation requirements.

    (a) To enroll land in HFRP through a permanent easement, an 
easement for the maximum duration allowed under State law, or 30-year 
enrollment option, a landowner shall grant an easement to the United 
States. The easement deed 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 and 
forest ecosystem 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 
assignees, 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 by the landowner 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

[[Page 1969]]

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 
that may be required for violation of any terms or conditions of the 
easement or the provisions of this part.


Sec.  625.12  30-year contracts.

    (a) To enroll land in HFRP through the 30-year contract option, a 
landowner shall sign a 30-year contract with NRCS. The contract shall 
require that the contract area be maintained in accordance with HFRP 
goals and objectives for the duration of the term of the contract, 
including the restoration, protection, enhancement, maintenance, and 
management of habitat and forest ecosystem functions and values.
    (b) For the duration of its term, the 30-year contract shall 
require, at a minimum, that the landowner, and the landowner's 
assignees, shall cooperate in the restoration, protection, enhancement, 
maintenance, and management of the land in accordance with the contract 
and with the terms of the HFRP restoration plan. In addition, the 
contract shall grant to the United States, through the NRCS:
    (1) A right of access to the contract area;
    (2) The right to allow such activities by the landowner 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 contract was established;
    (3) The right to specify the amount, method, timing, intensity, and 
duration of the activities listed in paragraph (b)(2) of this section, 
as incorporated into the terms of the contract; and
    (4) The right to perform restoration, protection, enhancement, 
maintenance, and management activities on the contract area.
    (c) The landowner shall:
    (1) Comply with the terms of the contract;
    (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 contract area in accordance with the 
terms of the contract and related agreements.
    (d) A 30-year contract will:
    (1) Be signed by the participant;
    (2) 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
    (3) Include any other provision determined necessary or appropriate 
by the NRCS representative.
    (e) Once the landowner and NRCS have signed a 30-year contract, the 
land shall be considered enrolled in HFRP.


Sec.  625.13  The HFRP restoration plan development and landowner 
protections.

    (a) The development of the HFRP restoration plan shall be made 
through an NRCS representative, who shall confer with the program 
participant and with the FWS and NMFS, as appropriate.
    (b) The HFRP restoration plan shall specify the manner in which the 
enrolled land under easement, 30-year contract, 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 NRCS 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 and NMFS, 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.
    (d) Landowner Protections. An HFRP participant who enrolls land in 
HFRP and whose conservation treatment results in a net conservation 
benefit for listed, candidate, or other species. A participant may 
request such Landowner Protections as follows:
    (1) Incidental Take Authorization.
    (i) NRCS will extend to participants the incidental take 
authorization received by NRCS from FWS or NMFS through biological 
opinions issued as part of the interagency cooperation process under 
section 7(a)(2) of the ESA;
    (ii) NRCS will provide assurances, as a provision of the 
restoration plan, that when a participant is provided authorization for 
incidental take of a listed species, NRCS will not require management 
activities related to that species to be undertaken in addition to or 
different from those specified in the restoration plan without the 
participant's consent;
    (iii) Provided the landowner has acted in good faith and without 
intent to violate the terms of the HFRP restoration plan, NRCS will 
pursue all appropriate options with the participant to avoid 
termination in the event of the need to terminate an HFRP restoration 
plan that is being properly implemented; and
    (iv) If the 30-year contract or 10-year restoration cost-share 
agreement is terminated, any requested assurances, including an 
incidental take authorization under this section, provided by NRCS will 
be voided. As such, the landowner will be responsible to FWS or NMFS 
for any violations of the ESA.
    (2) SHA or CCAA.
    (i) NRCS will provide technical assistance to help participants 
design and use their HFRP restoration plan for the dual purposes of 
qualifying for HFRP financial assistance and as a basis for entering 
into a SHA or CCAA with FWS or NMFS and receiving an associated permit 
under section 10(a)(1)(a) of the ESA.
    (ii) All SHAs and associated permits issued by FWS or NMFS are 
subject to the Safe Harbor Policy jointly adopted by FWS and NMFS 
according to the regulations at 64 FR 32717 or applicable subsequently 
adopted policy, and SHAs with FWS also are subject to regulations at 50 
CFR 17.22(c) for endangered species or 50 CFR 17.32(c) for threatened 
species, or applicable subsequent regulations.
    (iii) All CCAAs and associated permits issued by FWS or NMFS are 
subject to the CCAAs policy jointly adopted by FWS and NMFS according 
to the regulations at 64 FR 32706 or applicable subsequently adopted 
policy, and Candidate Conservation Agreements with Assurances with FWS 
also are subject to regulations at 50 CFR 17.22(d) for endangered 
species or 50 CFR 17.32(d) for threatened species, or applicable 
subsequent regulations.

[[Page 1970]]

    (iv) If the 30-year contract or 10-year restoration cost-share 
agreement is terminated, the landowner will be responsible to notify 
and coordinate with FWS and NMFS, as appropriate, for any modifications 
related to the SHA or CCAA.


Sec.  625.14  Modification of the HFRP restoration plan.

    The State Conservationist may approve modifications to the HFRP 
restoration plan that do not modify or void provisions of the easement, 
contract, restoration agreement, or Landowner Protections, and are 
consistent with applicable law. NRCS may obtain and receive input from 
the landowner and coordinate with 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, contract, 
restoration 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, contract, and 10-year 
restoration cost-share agreement and modification to the protections 
afforded by the safe harbor assurances.


Sec.  625.15  Transfer of land.

    (a) Offers voided prior to enrollment. 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, agreement, and contract terms 
and conditions.
    (b) Actions following transfer of land.
    (1) For easements or 30-year contracts with multiple annual 
payments, any remaining payments will be made to the original landowner 
unless NRCS receives an assignment of proceeds.
    (2) Eligible cost-share payments shall be made to the new landowner 
upon presentation of an assignment of rights or other evidence that 
title has passed.
    (3) Landowner protections shall be available to the new landowner 
and the new landowner shall be held responsible for assuring completion 
of all measures and conservation practices required by the contract, 
deed, and incidental take permit.
    (4) If a SHA or CCAA, is involved, the previous and new landowners 
may coordinate with FWS or NMFS, as appropriate, to transfer the 
agreement and associated permits and assurances.
    (5) The landowner and NRCS may agree to transfer a 30-year 
contract. The transferee must be determined by NRCS to be eligible to 
participate in HFRP and must assume full responsibility under the 
contract, including operation and maintenance of all conservation 
practices and measures required by the contract.
    (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.  625.16  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 determines is necessary to correct 
the violation.
    (2) Notwithstanding paragraph (a)(1) of this section, 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 NRCS when such actions are deemed necessary to protect 
important listed species, candidate 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 owed 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) 30-year Contract and 10-year Cost-Share Agreement Violations.
    (1) If the NRCS determines that a participant is in violation of 
the terms of a 30-year contract, or 10-year cost-share agreement, or 
documents incorporated by reference into the 30-year contract or 10-
year cost-share agreement, 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 determines is necessary to correct the violation. If 
the violation continues, the State Conservationist may terminate the 
30-year contract or 10-year cost-share agreement.
    (2) Notwithstanding the provisions of paragraph (b)(1) of this 
section, a 10-year cost-share agreement or 30-year contract 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 10-year cost-share agreement or 30-year 
contract, the participant will forfeit all rights for future payments 
under the 10-year cost-share agreement or 30-year contract, and must 
refund all or part of the payments received, plus interest, and 
liquidated damages.
    (4) When making any 30-year contract or 10-year cost-share 
agreement termination decisions, the State Conservationist may provide 
equitable relief in accordance with 7 CFR part 635.


Sec.  625.17  Payments not subject to claims.

    Any cost-share, contract, 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.  625.18  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.  625.19  Appeals.

    (a) A person participating in the HFRP may obtain a review of any 
administrative determination concerning eligibility for participation 
utilizing the administrative appeal

[[Page 1971]]

regulations provided in 7 CFR parts 11 and 614.
    (b) Before a person may seek judicial review of any administrative 
action concerning eligibility for program participation 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 value are considered 
confidential information, and shall only be disclosed as determined at 
the sole discretion of NRCS in accordance with applicable law.
    (d) Enforcement actions undertaken by NRCS in furtherance of its 
federally held property rights are under the jurisdiction of the 
Federal District Court and are not subject to review under 
administrative appeal regulations.


Sec.  625.20  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 
10-year cost share agreements, contracts, 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.

Arlen L. Lancaster,
Vice President, Commodity Credit Corporation and Chief, Natural 
Resources Conservation Service.
[FR Doc. E9-506 Filed 1-13-09; 8:45 am]
BILLING CODE 3410-16-P