[Federal Register Volume 74, Number 11 (Friday, January 16, 2009)]
[Rules and Regulations]
[Pages 2809-2823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-829]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1491

RIN 0578-AA46


Farm and Ranch Lands Protection Program

AGENCY: Natural Resources Conservation Service (NRCS) and the Commodity 
Credit Corporation (CCC),

[[Page 2810]]

United States Department of Agriculture (USDA).

ACTION: Interim final rule with request for comments.

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SUMMARY: The Food, Conservation, and Energy Act of 2008 (the 2008 Act) 
amended the Farmland Protection Program (FPP), established by the 
Federal Agriculture Improvement and Reform Act of 1996, and 
reauthorized by the Farm Security and Rural Investment Act of 2002. In 
the implementing rulemaking, the program was named the Farm and Ranch 
Lands Protection Program (FRPP) to describe best the types of land the 
program seeks to protect. Under the FRPP, the Secretary of Agriculture, 
acting through the Natural Resources Conservation Service (NRCS), an 
agency of the U.S. Department of Agriculture (USDA), is authorized, on 
behalf of the Commodity Credit Corporation (CCC) and under its 
authorities, to facilitate and provide funding for the purchase of 
conservation easements or other interests in land for the purpose of 
protecting the agricultural use and related conservation values by 
limiting nonagricultural uses of the land. This rulemaking implements 
changes to FRPP made by the 2008 Act and makes administrative 
improvement to the program.

DATES: Effective Date: The rule is effective January 16, 2009.
    Comment Date: Submit comments on or before March 17, 2009. Comments 
will be made available to the public or posted publicly in their 
entirety.

ADDRESSES: You may send comments (identified by Docket Number NRCS-IFR-
08006) 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.
     Mail: Easements Programs Division, Natural Resources 
Conservation Service, Farm and Ranch Lands Program Comments, P.O. 2890, 
Room 6819-S, Washington, DC 20013.
     E-mail: [email protected].
     Fax: 1-202-720-9689
     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 interim final rule may be accessed via Internet. 
Users can access the NRCS homepage at http://www.nrcs.usda.gov/; select 
the Farm Bill link from the menu; select the Interim final link from 
beneath the Final and Interim Final Rules Index title under the heading 
``2008 NRCS Farm Bill Conservation Program Rules''. Select Farm and 
Ranch Lands Protection Program. Persons with disabilities who require 
alternative means for communication (Braille, large print, audio tape, 
etc.) should contact the USDA TARGET Center at: (202) 720-2600 (voice 
and TDD).

FOR FURTHER INFORMATION CONTACT: Director, Easement Programs Division, 
U.S. Department of Agriculture, Natural Resources Conservation Service, 
Room 6819, P.O. Box 2890, Washington, DC 20013-2890; fax (202) 720-
9689; or e-mail: [email protected]. Persons with disabilities who 
require alternative means for communication (Braille, large print, 
audiotape, etc.) should contact the USDA Target Center at (202) 720-
2600 (voice and TDD).

SUPPLEMENTARY INFORMATION:

Regulatory Certifications

Executive Order 12866

    Pursuant to Executive Order 12866, this interim final rule with 
request for comment has been determined to be a significant regulatory 
action. The administrative record is available for public inspection in 
Room 5831 South Building, USDA, 14th and Independence Avenue, SW., 
Washington, DC. In accordance with Executive Order 12866, NRCS 
conducted an economic analysis of the potential impacts associated with 
this program. A summary of the economic analysis can be found at the 
end of this preamble and a copy of the analysis is available upon 
request from the Director, Easement Programs Division, Natural 
Resources Conservation Service, Room 6819, Washington, DC 20250-2890.

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this interim 
final rule because the CCC is not required by 5 U.S.C. 553, or by any 
other provision of law, to publish a notice of proposed rulemaking with 
respect to the subject matter of this rule.

Availability of the Environmental Assessment and Finding of No 
Significant Impact

    A programmatic Environmental Assessment (EA) has been prepared in 
association with this rulemaking. The analysis has determined there 
will not be a significant impact to the human environment and as a 
result an Environmental Impact Statement (EIS) is not required to be 
prepared (40 CFR part 1508.13) The EA and FONSI are available for 
review and comment for 60 days from the date of publication of this 
interim final rule in the Federal Register. Copies of the EA and FONSI 
may be obtained from the National Environmental Coordinator, Natural 
Resources Conservation Service, Ecological Sciences Division, 1400 
Independence Ave., SW., Washington, DC 20250. The FRPP EA and FONSI 
will also be available at the following Internet address: http://www.nrcs.usda.gov/programs/Env_Assess. Written comments on the EA and 
FONSI should be specific and reference that comments are regarding the 
EA or FONSI. Public comment may be submitted by any of the following 
means: (1) E-mail comments to [email protected], (2) e-mail to e-
gov Web site http://www.regulations.gov, or (3) mail written comments 
to National Environmental Coordinator, Natural Resources Conservation 
Service, Ecological Sciences Division, 1400 Independence Ave., SW., 
Washington, DC 20205.

Civil Rights Impact Analysis

    USDA has determined through a Civil Rights Impact Analysis that the 
issuance of this rule discloses no disproportionately adverse impacts 
for minorities, women, or persons with disabilities. Copies of the 
Civil Rights Impact Analysis 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/FRPP.

Paperwork Reduction Act

    Section 2904 of the Food, Conservation and Energy Act of 2008 
requires that the implementation of this provision be carried out 
without regard to the Paperwork Reduction Act, Chapter 35 of title 44, 
United States Code. Therefore, USDA is not reporting recordkeeping or 
estimated paperwork burden associated with this interim final rule.

Government Paperwork Elimination Act

    NRCS is committed to compliance with the Government Paperwork 
Elimination Act 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.

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Executive Order 12988

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

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.

Unfunded Mandates Reform Act of 1995

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995, 
Public Law 104-4, USDA assessed the effects of this interim final rule 
on State, local, and Tribal governments, and the public. This rule does 
not compel the expenditure of $100 million or more by any State, local, 
or 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 13132

    This interim final rule has been reviewed in accordance with the 
requirements of Executive Order 13132, Federalism. USDA has determined 
that this interim final 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 the 
States, or on the distribution of power and responsibilities on the 
various levels of government. Therefore, USDA concludes that this 
interim final rule does not have Federalism implications.

Executive Order 13175

    This interim final rule has been reviewed in accordance with the 
requirements of Executive Order 13175, Consultation and Coordination 
with Indian Tribal Governments. USDA has assessed the impact of this 
interim final rule on Indian Tribal Governments and has concluded that 
this proposed rule will not negatively affect communities of Indian 
Tribal governments. The rule will neither impose substantial direct 
compliance costs on tribal governments, nor preempt tribal law.

Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)

    Section 2904(c) of the Food, Conservation, and Energy Act of 2008 
requires that the Secretary use the authority in section 808(2) of 
title 5, United States Code, which allows an agency to forgo SBREFA's 
usual Congressional Review delay of the effective date of a regulation 
if the agency finds that there is a good cause to do so. NRCS hereby 
determines that it has good cause to do so in order to meet the 
Congressional intent to have the conservation programs authorized or 
amended by Title II in effect as soon as possible. Accordingly, this 
rule is effective upon filing for public inspection by the Office of 
the Federal Register.

Background

    FRPP is a voluntary program to help farmers and ranchers preserve 
their agricultural land. The program provides matching funds to State, 
Tribal, and local governments, and nongovernmental organizations with 
farmland protection programs to purchase conservation easements. The 
Federal Agriculture Improvement and Reform Act of 1996 (1996 Farm 
Bill), Public Law 104-387, established the Farmland Protection Program 
(FPP). The Farm Security and Rural Investment Act of 2002 (2002 Farm 
Bill), Public Law 107-171, repealed the FPP and created a new farmland 
protection program. USDA promulgated a proposed rule on October 29, 
2002 (67 FR 65907), and a final rule on May 16, 2003 (68 FR 26474) 
implementing the FPP statutory authority and naming the program the 
Farm and Ranch Lands Protection Program (FRPP). On July 27, 2006, NRCS 
amended the final rule by promulgating an interim final rule. The 
interim final rule was prepared to clarify the following policies and 
legal requirements: Fair market value definition; the eligibility of 
forest lands; the nature of the United States' real property rights and 
how the United States will exercise those rights; compliance with 
Department of Justice (DOJ) Title Standards; the implementation of 
Federal appraisal requirements required by the Uniform Relocation 
Assistance and Real Property Acquisitions Policies Act of 1970; 
impervious surface limitations on the easement area; and 
indemnification requirements. NRCS viewed these issues to be matters of 
public interest and thus sought public comment on associated agency 
policy. Section 2401 of the Food, Conservation, and Energy Act of 2008 
(2008 Act), Public Law 110-246, reauthorized FRPP and made several 
amendments.
    The Farm and Ranch Lands Protection Program has enrolled 533,068 
acres on 2,764 farms and ranches since 1996. That area has included 
386,444 acres of prime, unique, and important farmland soil or about 72 
percent of the total acreage enrolled. The program has also enrolled 
50,007 acres of upland forest, 13,287 acres of forested wetlands, and 
29,174 acres of non-forested wetlands. The Federal contribution to 
those enrolled parcels was $536 million, the eligible entity 
contribution was $857 million, the landowner donation was $215 million, 
and the total estimated value of those easements was $1.6 billion. The 
average Federal contribution was 33 percent of the total estimated 
value, the eligible entity contribution was 53 percent, and the 
landowner donation was 13 percent.

Summary of 2008 Act Changes

    The 2008 Act revised the Farm and Ranch Lands Protection Program 
to:
     Expand the program purpose to protecting agricultural 
lands by limiting nonagricultural uses.
     Shift the program focus from purchasing conservation 
easements to facilitating the purchase of conservation easements by 
eligible entities.
     Require the Secretary to enter into agreements with 
eligible entities to stipulate the terms and conditions under which the 
entity is authorized to use FRPP funds to acquire easements.
     Authorize an eligible entity to use its own conservation 
easement deed terms and conditions, as approved by the Secretary, so 
long as such terms and conditions are consistent with the purposes of 
the program, permit effective enforcement of the conservation easement 
deed or other interest and include, among other terms, a limit on the 
impervious surfaces to be allowed that is consistent with the 
agricultural activities to be conducted.
     Require the establishment of a certification process by 
which the Secretary will directly qualify certain eligible entities as 
certified entities.
     Require that to be certified, an eligible entity must have 
a plan for administering easements consistent with FRPP purposes, the 
capacity and resources to monitor and enforce conservation easements, 
policies and procedures to ensure long-term integrity of conservation 
easements, timely completion of acquisitions, and timely reporting of 
use of funds.
     Require that the fair market value of the conservation 
easement or other

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interest in eligible land is determined on the basis of an appraisal 
using an industry-approved method, selected by the eligible entity and 
approved by the Secretary.
     Require that entities provide a share of the cost of 
purchasing a conservation easement or other interest in eligible land 
in an amount that is not less than 25 percent of the acquisition 
purchase price.
     Require that the Secretary hold a right of enforcement in 
FRPP funded conservation easements.
     Amend the definition of eligible land to allow for the 
inclusion of forest land as an eligible land use.
     Allow for the inclusion of forest land that contributes to 
the economic viability of an agricultural operation or serves as a 
buffer to protect an agricultural operation.

Description of Changes to the Regulation

Subpart A--General Provisions

Section 1491.1 Applicability

    Section 1491.1(a) is revised to update the effective date by 
removing the reference to ``May 16, 2003'' and inserting that 
cooperative agreements shall be administered under the regulations in 
effect at the time the cooperative agreement is signed. This change is 
necessary for administrative clarity because NRCS is administering 
active cooperative agreements that were entered into before passage of 
the 2008 Act. In addition, the word ``easements'' is removed from 
paragraph (a). The term ``easements'' is removed for administrative 
clarity because the terms and conditions in effect when the cooperative 
agreements were signed will determine the terms and conditions for a 
given easement.
    Further, Sec.  1491.1(a) is revised to change ``will'' to 
``shall''. The change from ``will'' to ``shall'' is made throughout 
this regulation for consistency and to strengthen the understanding of 
the requirement, this change will not be referenced again in this 
preamble.

Section 1491.2 Administration

    Section 1491.2, in paragraph (b)(4) is revised to clarify that a 
landowner's eligibility must be determined as well as the land 
eligibility and the eligibility of the entity that receives cost-share 
through FRPP to purchase the easement. Other non-substantive changes 
are included to improve readability

Section 1491.3 Definitions

    The purpose of the definition section set forth at Sec.  1491.3 is 
to ensure consistent interpretation by the public and NRCS personnel of 
the terms used throughout the regulation. Through this rulemaking, NRCS 
is amending portions of the definition section to implement 2008 Act 
changes as well as to provide consistency with other conservation 
programs when practicable.
    The definition of ``Agriculture uses'' is amended to use more 
current and correct terminology, and to broaden the definition to 
reflect the new statutory program purposes. The definition in the 2003 
rule linked to the state's purchase of development rights (PDR) 
program. The revised definition uses a more universal term, ``farm or 
ranch land protection program or equivalent.'' The definition is also 
revised to change the program purpose from protecting topsoil, the 
purpose of the 2002 Act, to ``protect agricultural use and related 
conservation uses'' as provided for in the 2008 Act. Additional non-
substantive changes were made to improve readability.
    The term ``Certified entities'' is added to conform to the new 
statutory requirement providing for an eligible entity certification 
process. Certification of ``eligible entities'' is discussed in the 
description of changes to Sec.  1491.4.
    The definition for ``contingent right'' is removed because the 
regulation no longer refers to the term.
    The term ``Cooperative agreement'' is added to define the document 
that specifies the obligations and rights of NRCS and the eligible 
entities.
    The term ``Dedicated fund'' is added and describes an account that 
can only be used for the purposes of management, monitoring, and 
enforcement of conservation easements. This requirement applies to non-
governmental organizations wishing to become ``certified entities'' and 
serves as evidence of their capacity to ensure the long term protection 
of easements.
    The definition of ``Eligible entities'' is revised to reflect the 
statutory change in the program's purpose and to remove language that 
is irrelevant to the new definition. The 2008 Act amended the 
definition of an eligible entity to add organizations that are 
described in paragraph (1) of section 509(a) of the Internal Revenue 
Code of 1986.
    The definition of ``Eligible land'' is removed because the term is 
fully explained in Sec.  1491.4(f).
    The definition of ``Fair market value'' is amended to reflect the 
change in the statute regarding easement valuation methodology. NRCS 
will approve the use of either the Uniform Standards for Professional 
Appraisal Practice (USPAP) or the Uniform Appraisal Standards for 
Federal Land Acquisition (UASFLA) procedures by the eligible entity for 
determining ``fair market value.'' This decision is discussed further 
in this preamble where the agency addresses changes to Sec.  1491.4(g).
    The definition of ``Farm and ranchland of statewide importance'' is 
added to provide greater specificity to the existing umbrella term 
``other productive soils.'' This new definition is more descriptive and 
technically correct than the current definition of this land type, 
which is subsumed in general term ``other productive soils.''
    The definition of ``Farm and ranchland of local importance'' is 
added for the same reason discussed above under ``Farm and ranchland of 
statewide importance.''
    The definition of ``Farm or ranch succession plan'' is changed to 
correct typographical errors in capitalization and lower case. The 
phrase ``Farm or Ranch Succession Plan is * * *'' is changed to ``Farm 
or Ranch Succession Plan means * * *'' for consistency purposes.
    The definition of ``Field Office Technical Guide (FOTG)'' is 
revised to provide consistency with the way the term is defined in 
other NRCS program regulations.
    The definition of ``Forest land'' is amended to delete the minimum 
acreage requirement for forest land. The 2008 Act provides that forest 
land is eligible providing it contributes to the economic viability of 
an agricultural operation or serves as a buffer to protect an 
agricultural operation from development. No minimum acreage enrollment 
levels were established in statute.
    The term ``Forest management plan'' is added to define a newly 
established documentation requirement needed to demonstrate forest land 
eligibility, when the ``forest land'' is being enrolled under the 
``contributes to the economic viability of the agricultural operation'' 
land eligibility category. NRCS is using the ``forest management plan'' 
as documentation of eligibility rather than requiring submission of 
receipts or tax returns, which may be viewed as intrusive. The 
definition is consistent with the way the term is defined in other NRCS 
program regulations.
    The definition of Historical and archaeological resources is 
amended to include resources listed in the State Historic Preservation 
Officer or Tribal Historic Preservation Officer inventory with written 
justification as to why the resource meets National Register of 
Historic Places criteria. This change is made to more fully recognize 
preservation efforts of State, Tribal, and local preservation offices.

[[Page 2813]]

    The definition of ``Imminent harm'' is amended to incorporate the 
change in statutory purpose of the program from protection of topsoil 
to protection of agricultural use and related conservation values. 
Other non-substantive changes are made to improve sentence structure 
and clarity.
    The definition of ``Indian Tribe'' is updated to give the term the 
meaning provided in section 4(e) of the Indian Self-Determination and 
Education Assistance Act (25 U.S.C. 450(b)(e)). This definition is 
consistent with the way the term is defined for other NRCS easement 
programs.
    The definition of ``landowner'' is amended to clarify that a 
landowner may be a ``person, legal entity, or Indian Tribe.'' The 
definition clarifies that State and local governments, and non-
governmental organizations are not considered eligible landowners. This 
clarification was previously included in policy, but it was not 
included in the regulation.
    The term ``Natural Resources Conservation Service'' is amended to 
more appropriately refer to the ``United States'' rather than ``U. S.'' 
and to denote ``NRCS'' as the defined acronym.
    The definition of ``Non-governmental organization'' is amended in 
accordance with the 2008 Act to incorporate reference to organizations 
that are described in section 509(a)(1) of the Internal Revenue Code.
    The definition of ``Other interests in land'' is amended to clarify 
that other interests are interests other than easements.
    The definition of ``Other productive soils'' is amended to identify 
that the term is restricted to farm and ranch land soils that are 
considered ``unique farmland,'' and ``farm and ranch land of statewide 
and local importance.'' The terms ``unique farmland'', ``farm and ranch 
land of statewide importance'' and ``farm and ranch land of local 
importance'' are now defined separately rather than within the 
definition of ``other productive soils.'' The change was made to 
provide specific definitions for these types of land.
    The definition of ``Prime and unique farmland'' is deleted and 
replaced with separate definitions for ``Prime farmland'' and ``Unique 
farmland.'' The change is made to improve the clarity and technical 
correctness of the definitions for these types of land.
    The definition of ``Purchase price'' is added to provide for 
consistent use of the term in the regulation. ``Purchase price'' is the 
appraised fair market value of the easement minus the landowner 
donation. The definition of ``purchase price'' is essential to 
determining the entity's minimum contribution as provided for in the 
2008 Act.
    The term ``Right of enforcement'' is added to clarify that a right 
of enforcement is an interest in the land which the United States may 
exercise under specific circumstances to enforce the terms of the 
conservation easement. The exercise of this right is provided in the 
description of changes to Sec.  1491.22.
    The definition of ``Secretary'' is amended to more appropriately 
refer to the ``United States'' rather than the ``U. S.''.
    The definition of ``State Technical Committee'' is changed to 
remove ``of the U.S. Department of Agriculture'' following the term 
``Secretary'' to simplify the definition. The definition for the term 
``Secretary'' already includes these words.
    The definition of ``State Conservationist'' is updated to use the 
current terminology for the ``Pacific Island Area'' rather than 
``Pacific Basin Area.''
    As noted above, the term ``Unique farmland'' is added to improve 
clarity and provide a more technically accurate definition of this type 
of land than is described in the existing regulation under ``Prime and 
unique farmland.''
    The term ``United States' rights'' is removed because the 2008 Act 
limited the Secretary's interest in FRPP funded easements to a right of 
enforcement which runs with the land. The term ``right of enforcement'' 
is defined in this section.

Section 1491.4 Program Requirements

    Section 1491.4(a) is amended to incorporate the statutory 
requirement that NRCS provide funding for conservation easements or 
other interests in land versus acquiring a Federal interest in land; 
change the reference from the ``Secretary'' to ``Chief''; and to add 
the ``right of enforcement''. The ``right of enforcement'' is discussed 
further under the description of changes to Sec.  1491.22. The 2008 Act 
changed the role of the Secretary to ``facilitate and provide funding 
for the purchase of conservation easements or other interests in 
eligible land'' rather than to directly purchase easements. Related 
changes are made to remove the requirement that the United States is 
named as a grantee on the deed and instead require that the United 
States' right of enforcement is noted in the opening paragraph of the 
deed that acknowledges the parties. The purpose for requiring this 
acknowledgement is to put the public on notice of the Federal right and 
to guard against condemnation of FRPP-funded deeds. Minor non-
substantive changes are also made to improve readability.
    Section 1491.4(b) is amended to add that in states that limit the 
term of the easement, the term of the easement must be the maximum 
allowed by State law.
    Section 1491.4(c) is amended to make non-substantive changes to 
improve readability.
    A new Sec.  1491.4(d) is added, and subsequent paragraphs are re-
designated, to address the requirements that an entity must meet to 
become a ``certified entity.'' The certification process was added by 
the 2008 Act as an option for entities. To meet the certification 
requirements established under the 2008 Act, NRCS is requiring that an 
entity demonstrate long-term and substantial experience directly with 
the FRPP program. This section also includes a requirement for the 
existence of a dedicated fund for non-governmental organizations, as 
described in the changes to Sec.  1491.3. Section 1491.4(d)(1) includes 
the requirement that an entity have a demonstrated ability to complete 
timely acquisition of easements through compliance with the terms under 
previously executed FRPP cooperative agreements.
    A new Sec.  1491.4(e) is added to describe the provisions for 
review and revocation of certification included in the 2008 Act.
    Section 1491.4(f), previously Sec.  1491.4(d), is restructured to 
increase clarity and readability. Section 1491.4(f) is amended in 
paragraph (1) to combine the provisions of the former Sec.  
1491.4(d)(2) and certain provisions found in the ``eligible land'' 
definition in Sec.  1491.3. Section 1491.4(f)(1) is also amended to add 
the new statutory eligibility land category identified as ``to further 
a State or local policy consistent with the purposes of the program.'' 
Section 1491.4(f)(2) is added to describe the type of agriculture land 
categories that are eligible for enrollment. This language was 
previously found in the definition of ``eligible land'' in Sec.  
1491.3, except that, the text in paragraph (f)(2) contains restrictions 
on forest land provided in the 2008 Act. Section Sec.  1491.4(f)(3) is 
added to include language on incidental lands formerly found in the 
definition of ``eligible land''. Section 1491.4(f)(4), previously Sec.  
1491.4(d)(1), is revised to clarify that whole or part of a farm or 
ranch may be offered for enrollment. In Sec.  1491.4(f)(5), NRCS is 
establishing a threshold for requiring the development of forest 
management plans. The threshold will be the greater of 10 acres of 
forest or 10 percent of the easement area in forest. Based on 
historical program

[[Page 2814]]

participation, NRCS estimates that this policy would have resulted in 
forest management plans on about 40 percent of the parcels enrolled in 
the program currently. Farms that are less than 100 acres in size with 
less than 10 acres of forest are not required to have a plan to be 
eligible. A forest management plan will help ensure that the Federal 
investment in an easement encompassing significant forest acreage will 
have long-term viability for food, fiber, and environmental benefits. 
The requirement also helps to ensure that these forest lands contribute 
to the viability of the agricultural operation as required by the 2008 
Act.
    Section 1491.4(f)(6), previously Sec.  1491.4(d)(5), is revised to 
clarify that lands currently under ownership by an entity whose purpose 
is to protect agricultural uses and related conservation values are not 
eligible for the program. Lands owned by these entities are already 
protected. Exclusion of these lands will allow program investments to 
protect additional acreage. This provision is already included in the 
FRPP policy, and is now being incorporated into the regulation by this 
rulemaking.
    Section 1491.4(f)(7), previously Sec.  1491.4(d)(6), is amended to 
add the current regulatory Adjusted Gross Income (AGI) eligibility 
reference, non-substantive changes are made to improve clarity, and 
paragraphs are re-numbered as appropriate.
    Section 1491.4(f)(8) is added to describe the on-site and off-site 
conditions that are not compatible with the program's purposes.
    Section 1491.4(f)(9) is added to clarify that a landowner may 
submit an application on land on which the mineral estate is owned by 
someone other than the landowner (also referred to as a split estate), 
but that USDA reserves the right to determine the impacts of third 
party rights upon a potential easement and to deny funding where the 
purposes of the program cannot be achieved.
    Section 1491.4(g), previously Sec.  1491.4(e), is amended to define 
the industry-approved appraisal methods specified in the 2008 Act as 
the Uniform Standards of Professional Appraisal Practices (USPAP) or 
the Uniform Appraisal Standards for Federal Land Acquisition (UASFLA). 
USPAP and UASFLA are the guidelines that professional appraisers use 
for appraising properties. The entity may choose which of these methods 
they prefer to use. The 2008 Act specified that an appraisal would be 
used; therefore, administrative valuation processes which are used by 
some farm and ranchland protection programs will not be acceptable 
because they are not appraisal methodologies.
    Section 1491.4(h), previously Sec.  1491.4(f), is amended to 
clarify that a standard deed form may be required and is updated to 
reflect the passage of the 2008 Act by indicating that any standard 
form must meet the purposes of this part.
    Section 1491(4)(i), previously Sec.  1491.4(g), was not otherwise 
amended. Section 1491.4(i) contains the requirement that a landowner 
must meet the payment eligibility requirements of 7 CFR part 12.

Section 1491.5 Application Procedures

    The text of the existing section is deleted in its entirety and 
replaced with a new application process. Section 1491.5(a) establishes 
that an entity must submit an application to the State Conservationist 
in the State where the parcels are located. Section 1491.5(b) provides 
that the Chief will determine whether an eligible entity qualifies as a 
certified entity based on the criteria in Sec.  1491.4(d) and in the 
NRCS national FRPP database.
    Section 1491.5(c) indicates that the State Conservationist will 
notify the entity about whether or not the entity has been determined 
to be eligible or certified.
    Section 1491.5 (d) clarifies that an entity with an established 
cooperative agreement will not need to submit an annual application in 
response to an RFP, but that the entity may re-apply when their 
cooperative agreement expires. NRCS determined, based on experience 
administering other easement programs, that FRPP can be implemented 
using a continuous signup process. This process provides better service 
to agency clients because applications can be submitted in accordance 
with their own schedule. Clients do not have to wait for a Federal 
Register publication. It also reduces administrative burden for the 
agency.
    Section 1491.5(e) identifies that the new application process will 
allow continuous sign-up, which is consistent with other conservation 
programs. The State Conservationist will announce periodic ranking 
dates no less than 60 days before the date of the ranking. The process 
will allow certified and non-certified eligible entities to compete 
under the same application and ranking process. NRCS has decided to 
have certified and non-certified entities participate similarly in the 
program to simplify the application process and allow parcels to 
compete on equal resource-based terms, regardless of the status of the 
entity.
    To eliminate confusion and miscommunication on the status of non-
selected parcels at the end of each fiscal year, Sec.  1491.5(f) 
provides that NRCS will purge the unfunded parcels from the application 
list on September 30 of each year unless the entity requests that the 
parcels be considered for funding in the next fiscal year. If an entity 
fails to request that their parcels be retained on the list, a new list 
of parcels must be submitted for consideration each year. This process 
will allow NRCS State Offices to purge their lists of parcels that may 
have dropped their applications or were funded with other sources, and 
eliminate confusion for entities regarding the status of their existing 
applications.

Section 1491.6 Ranking Considerations and Proposal Selection

    The existing section is deleted and replaced by a new ranking 
process. Section 1491.6(a) establishes that prior to scoring and 
ranking parcels for funding, NRCS must evaluate the eligibility of both 
the landowner and the land. Section 1491.6(b) of this section 
establishes that such parcels will be ranked according to both National 
and State criteria. Within the State ranking criteria, the National 
criteria must comprise at least half of the available ranking points. 
Section 1491.6(c) identifies that State Conservationists will establish 
and announce a date for ranking the applications that were accepted and 
scored in the continuous signup. Section 1491.6(d) states that 
applications from certified entities and non-certified entities will be 
ranked together and not separately so that the parcels submitted 
compete equally.
    Section 1491.6(e) provides that parcels selected for funding will 
be included in the cooperative agreements signed by both NRCS and the 
entity; that funds for each fiscal year will be obligated through an 
amendment signed by both parties to the existing cooperative agreement; 
and that the amendment will identify the closing and payment 
reimbursement deadline applicable to each funding year's parcels.
    Paragraph (f) sets forth the national ranking criteria. The 
national ranking criteria are changed to reflect site (parcel)-specific 
criteria rather than entity performance criteria and language has been 
added to clarify that the national requirements are mandatory for 
inclusion in the state ranking. The national criteria set forth in the 
2003 Rule included information in the State FRPP plans, and criteria on 
eligible entities regarding their histories of protecting farms and 
ranches. These

[[Page 2815]]

criteria did not include parcel specific criteria; however, it is the 
individual parcels that are being rated and ranked. Therefore, these 
changes are made because the use of the new factors provides a more 
quantifiable resource-based ranking of individual parcels.
    In addition, in order to clarify and streamline their use, funding 
priorities set forth in the existing Sec.  1491.7 are being 
incorporated into the new national and the state funding criteria 
established by this rulemaking in Sec.  1491.6(f) and (g). In the 
``other protected land'' criteria set forth at Sec.  1491.6(f)(7), this 
rulemaking adds a reference to military installations to emphasize the 
USDA partnership with the Department of Defense under its buffer 
program.
    Section 1491.6(g) identifies the type of criteria that a State 
Conservationist, with advice of the State Technical Committee, may 
include. The State ranking criteria may address the viability of the 
parcel for agriculture into the future, the landowner's willingness to 
grant public access for recreational purposes, and the performance of 
the entity. Because the leveraging factors may skew the ranking of 
individual parcels and the other factors set forth in the existing 
regulation are not relevant to individual parcels, the State ranking 
criteria is being changed by this rulemaking to eliminate criteria 
related to the type of farm, the maximum amount of Federal funding 
required per acre, the percent leveraging, and an entity's history of 
assisting beginning farmers and ranchers. Funding priorities from the 
former Sec.  1491.7, however, were incorporated as possible State 
factors.
    Section 1491.6(h), previously Sec.  1491.6(b), provides that the 
State ranking criteria will be developed on a State-by-State basis. 
However, it removes the language in Sec.  1491.6(b) that recommends 
interested entities request ranking criteria from the State 
Conservationist. This language is replaced with a provision that 
requires NRCS State Conservationists to make available the full listing 
of National and State ranking criteria. Section 1491.6(i) is removed 
because the purpose of (i) is addressed with the changes in Sec.  
1491.4 (g).

Section 1491.7 Funding Priorities

    Section 1491.7 is deleted and its elements incorporated in Sec.  
1491.6 as noted above to improve the structure of the regulation.

Subpart B--Cooperative Agreements and Conservation Easement Deeds

Section 1491.20 Cooperative Agreements

    Section 1491.20(a) is amended to reflect changes to the contents of 
cooperative agreements that are necessitated by the 2008 Act, including 
the change that FRPP funds are used to assist eligible entities with 
the purchase of rights in land rather than to purchase these rights 
directly by the United States. To implement 2008 Act statutory changes, 
the following additions have been made to this section: requirements of 
the easement deed, management and enforcement requirements, the 
responsibilities of NRCS, the responsibilities of the eligible entity, 
the ability to substitute parcels by mutual agreement, and other 
requirements deemed necessary by NRCS. These issues have been addressed 
in the cooperative agreements since 1996, but their presence in the 
cooperative agreements has never been required by regulation. These 
issues are included in this regulation to inform the eligible entities 
what their responsibilities are in the agreement and list the 
responsibilities of NRCS. Other non-substantive changes were made to 
paragraph (a) to improve its readability.
    A new Sec.  1491.20(b) is added which sets forth the new statutory 
requirement that the terms of agreements be a minimum of five years for 
certified entities and three years for other eligible entities.
    The existing Sec.  1491.20(b) is being redesignated as Sec.  
1491.20(c) and is amended to require that the list of parcels funded 
under a cooperative agreement include the acreage, the estimated fair 
market value of the parcel, and the FRPP contribution amount. The 
requirement for a location map is being removed from the existing 
regulation, but such information may be still required as a matter of 
policy under the category of ``other relevant information''.

Section 1491.21 Funding

    Section 1491.21(a) is amended to reflect that NRCS may share the 
cost of an interest in land, and not just the cost of a conservation 
easement. Section 1491.21(b) incorporates the 2008 Act change that the 
minimum entity cost-share to be an amount that is not less than 25 
percent of the acquisition purchase price. As discussed above in the 
changes to the definitions section, ``purchase price'' is defined as 
the fair market value of the easement less the landowner's 
contribution. Section 1491.21(c) authorizes landowner donations without 
restrictions. The previous rule limited landowner donations to 25 
percent. Section 1491.21(d) includes the requirement that the entity 
must provide a minimum of 25 percent of the purchase price of the 
conservation easement. Section 1491.21(e) remains unchanged. Section 
1491.21(f) emphasizes that a State Conservationist shall not assign a 
higher priority to any easement solely based on its lesser cost to 
FRPP.
    Section 1491.21(g) is added to affirm that NRCS asserts no direct 
or indirect interests to environmental credits associated with an 
easement purchased in part with FRPP funds.

Section 1491.22 Conservation Easement Deeds

    Section 1491.22(b) is amended to clarify that easements in States 
where State law prohibits permanent easements shall be of the maximum 
duration allowed by state law. The 2008 Act requires that entities may 
use their own terms and conditions of conservation easement deeds, 
provided that such terms and conditions meet the minimum requirements 
set forth in the statute and are approved by the Secretary. 
Consequently, this rulemaking amends Sec.  1491.22(c) to provide that 
eligible entities may use their own easement deeds when the deed form 
to be used for its land transactions under the cooperative agreement 
has been submitted to and approved by NRCS in advance.
    In accordance with the 2008 Act change made to the property 
interest acquired by the United States in FRPP funded easements, this 
rulemaking deletes the language of the existing Sec.  1491.22(d), which 
requires the United States to be named a grantee on FRPP funded 
easements.
    New language is set forth in Sec.  1491.22(d) incorporating the 
2008 Act requirement that the Secretary shall require the inclusion of 
a ``contingent right of enforcement'' for the Secretary in the terms of 
the conservation easement deed. Because this right is new in the 2008 
Act and is not a standard real property term, NRCS has carefully 
considered its meaning while promulgating this rule. Specifically, NRCS 
interpreted the plain meaning of the statutory language, considered the 
legislative history, and consulted with the Office of the General 
Counsel for the Department.
    The purpose of the right is to ensure that the easement is enforced 
and that the Federal investment is protected. The FRPP statute requires 
that the easement deed include a contingent right of enforcement. Given 
the requirement for

[[Page 2816]]

inclusion of a contingent right of enforcement in the terms of the 
deed, the Agency has determined that it is Congress' intent that such a 
right run with the land for the duration of the easement.
    The only legislative history discussing the nature of the 
contingent right of enforcement is found in the Manager's Report for 
FRPP. Here the Managers indicated that Congress did not want the 
contingent right of enforcement considered an acquisition of real 
property. The House version of FRPP included specific statutory 
language stating that the contingent right of enforcement was not a 
real property acquisition. However, Congress adopted the Senate version 
(with amendment), which did not include this language.
    NRCS has concluded that it cannot accomplish the intent of the 
Managers as reflected in the legislative history regarding the effect 
of ``contingent right of enforcement'' and give meaning to the plain 
statutory language of FRPP. This is because when an interest is to run 
with the land, it constitutes a real property right. The agency has 
considered other theories, including contractual and constitutional 
authority under the Spending Clause, but none provide a sufficient 
legal justification for the Secretary to enforce the terms of the 
easement for its duration against subsequent landowners. Consequently, 
the Agency has concluded that the contingent right of enforcement as 
used in FRPP means a vested real property right, which provides the 
Secretary, on behalf of the United States, the right to enforce the 
terms of the easement for the duration of the easement. In addition, 
because the United States has a vested real property right in FRPP 
easements, i.e., its right of enforcement, the easement cannot be 
condemned by state or local government, thereby providing further 
protection of the easement and the federal investment.
    Finally, the Agency is interpreting the term ``contingent'' in 
``contingent right of enforcement'' to mean that the Secretary 
exercises that right under certain circumstances, not that the right 
itself is contingent. Consequently, to prevent confusion over the scope 
of right, the Agency is referring to its enforcement right as a ``right 
of enforcement.'' The definition clarifies that this right is only 
exercised under certain circumstances. Section 1491.22(d) is changed to 
provide information about the United State's right of enforcement. 
Specifically, the paragraph provides that the conveyance document must 
include the right of enforcement as set forth in the FRPP cooperative 
agreement, it identifies when the United States may exercise this right 
and it explains that the right is a vested interest in real property 
and cannot be condemned by State or local governments. Section 
1491.22(e) is amended to remove the requirement for conservation 
districts to approve the conservation plan, as this is not always 
consistent with local practice. The change still gives NRCS the ability 
to work through local conservation districts in the development of 
conservation plans. The requirement that NRCS sign the deed accepting 
its terms is incorporated at Sec.  1491.22(g) for administrative 
clarity.
    Section 1491.22(i) retains the impervious surface limit of 2%, but 
is amended to increase the impervious surface waiver to up to 10% from 
the existing policy of 6%. This change is possible because the statute 
was amended to eliminate the protection of topsoil as the primary 
purpose of the program. This impervious surface limit should be 
adequate to allow for various types of agricultural needs in different 
regions, while providing an adequate protection against destruction of 
agricultural soil resources and other conservation values associated 
with agricultural land such as open space.
    The indemnification language previously located in Sec.  1491.30(d) 
is moved to Sec.  1491.22(j) because this language describes a deed 
requirement and is appropriately placed in this section.
    Section 1491.22(k) is added to require that any conservation 
easement deed include a clause which addresses amendments to its terms. 
In particular, Sec.  1491.22(k) requires that any amendment be 
consistent with the purposes of the conservation easement and with 
FRPP. This paragraph replaces the provisions previously found in Sec.  
1491.23.
    Section 1491.23 is removed since the United States is no longer a 
grantee under the terms of the conservation easements acquired with 
FRPP funds. Therefore, modifications to the terms of the conservation 
easement will be handled through an amendment clause required under 
Sec.  1491.22(k).

Subpart C--General Administration

Section 1491.30 Violations and Remedies

    Section 1491.30(b) and (f) are revised to incorporate the changes 
to the nature of the Federal right. The former section 1491.30(e) is 
moved to Sec.  1491.22 as described above. Subsequent sections are re-
numbered. Section 1491.30(d) clarifies that any cost recoveries levied 
by NRCS will be directed to the cooperating entity, not the specific 
landowner.

Section 1491.31 Appeals

    Section 1491.31(a) is changed by replacing the term ``cooperating 
entity'' with the term ``eligible entity'' to refer to potential FRPP 
participants. The term ``cooperating entity'' is no longer used. 
Section 1491.31(b) is changed to add the term ``of eligible entity'' 
after the term ``person'' to ensure the public understands that all 
participants have the same rights. Paragraph (b) is further changed to 
refer to ``administrative action'' rather than ``any action taken under 
this part''. Only administrative actions are appealable. Last, 
paragraph (b) is changed to provide that no decision shall be a final 
Agency action except a decision of the Chief of NRCS. The words ``Chief 
of NRCS'' replace the words ``U.S. Department of Agriculture''. 
Paragraph (c) is added to further clarify that once an easement is 
recorded, 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, 7 CFR part 11, and 
Federal real property law.

Section 1491.32 Scheme and Device

    The text of Section 1491.32 is revised by replacing ``Secretary'' 
with ``NRCS''.
    Section 2708, ``Compliance and Performance'', of the 2008 Act added 
a paragraph to section 1244(g) of the 1985 Act entitled, 
``Administrative Requirements for Conservation Programs,'' which states 
the following:
    ``(g) Compliance and performance.--For each conservation program 
under Subtitle D, the Secretary shall develop procedures--
    (1) To monitor compliance with program requirements;
    (2) To measure program performance;
    (3) To demonstrate whether long-term conservation benefits of the 
program are being achieved;
    (4) To track participation by crop and livestock type; and
    (5) To coordinate activities described in this subsection with the 
national conservation program authorized under section 5 of the Soil 
and Water Resources Conservation Act of 1977 (16 U.S.C. 2004).''
    This new provision presents in one place the accountability 
requirements placed on the Agency as it implements conservation 
programs and reports on program results. The requirements apply to all 
programs under Subtitle D, including the Wetlands Reserve program, the 
Conservation Security Program, the Conservation Stewardship Program, 
the Farm and Ranch Lands

[[Page 2817]]

Protection Program, the Grassland Reserve Program, the Environmental 
Quality Incentives Program (including the Agricultural Water 
Enhancement Program), the Wildlife Habitat Incentive Program, and the 
Chesapeake Bay Watershed initiative. These requirements are not 
directly incorporated into these regulations, which set out 
requirements for program participants. However, certain provisions 
within these regulations relate to elements of section 1244(g) of the 
1985 Act and the Agency's accountability responsibilities regarding 
program performance. NRCS is taking this opportunity to describe 
existing procedures that relate to meeting the requirements of section 
1244(g) of the 1985 Act, and Agency expectations for improving its 
ability to report on each program's performance and achievement of 
long-term conservation benefits. Also included is reference to the 
sections of these regulations that apply to program participants and 
that relate to the Agency accountability requirements as outlined in 
section 1244(g) of the 1985 Act.
    Monitor compliance with program requirements. NRCS has established 
application procedures to ensure that participants meet eligibility 
requirements, and follow-up procedures to ensure that participants are 
complying with the terms and conditions of their contractual 
arrangement with the government and that the installed conservation 
measures are operating as intended. These and related program 
compliance evaluation policies are set forth in Agency guidance (440 
CPM--519) (http://directives.sc.egov.usda.gov/).
    The program requirements applicable to participants that relate to 
compliance are set forth in these regulations in Sec.  1491.4, 
``Program Requirements'', Sec.  1491.22, ``Conservation Easement 
Deeds'', and Sec.  1491.30, ``Violations and remedies''. These sections 
make clear the general program participant and entity obligations, the 
terms and conditions of the conservation easement, and the 
ramifications of noncompliance. Pursuant to the requirements of the 
Government Performance and Results Act of 1993 (Pub. L. 103-62, Sec. 
1116) and guidance provided by OMB Circular A-11, NRCS has established 
performance measures for its conservation programs. Program-funded 
conservation activity is captured through automated field-level 
business tools and the information is made publicly available at: 
http://ias.sc.egov.usda.gov/PRSHOME/. Program performance also is 
reported annually to Congress and the public through the annual 
performance budget, annual accomplishments report and the USDA 
Performance Accountability Report. Related performance measurement and 
reporting policies are set forth in Agency guidance (GM--340--401 and 
GM--340--403) (http://directives.sc.egov.usda.gov/).
    The actions undertaken by eligible entities and participants are 
the basis for measuring program performance--specific actions are 
tracked and reported annually, while the effects of those actions 
relate to whether the long-term benefits of the program are being 
achieved. The program requirements applicable to participants and 
eligible entities that relate to undertaking conservation actions are 
set forth in these regulations in Sec.  1491.4, ``Program 
Requirements,'' Sec.  1491.20, ``Cooperative Agreements,'' and Sec.  
1491.22 ``Conservation Easement Deeds''.
    Demonstrate whether long-term conservation benefits of the program 
are being achieved. Demonstrating the long-term natural resource 
benefits achieved through conservation programs is subject to the 
availability of needed data, the capacity and capability of modeling 
approaches, and the external influences that affect actual natural 
resource condition. While NRCS captures many measures of ``output'' 
data, such as acres of conservation practices, it is still in the 
process of developing methods to quantify the contribution of those 
outputs to environmental outcomes NRCS currently uses a mix of 
approaches to evaluate whether long-term conservation benefits are 
being achieved through its programs. Since 1982, NRCS has reported on 
certain natural resource status and trends through the National 
Resources Inventory (NRI), which provides statistically reliable, 
nationally consistent land cover/use and related natural resource data. 
However, lacking has been a connection between these data and specific 
conservation programs. In the future, the interagency Conservation 
Effects Assessment Project (CEAP), which has been underway since 2003, 
will provide nationally consistent estimates of environmental effects 
resulting from conservation practices and systems applied. CEAP results 
will be used in conjunction with performance data gathered through 
Agency field-level business tools to help produce estimates of 
environmental effects accomplished through Agency programs, such as 
WRP. In 2006 a Blue Ribbon panel evaluation of CEAP strongly endorsed 
the project's purpose, but concluded ``CEAP must change direction'' to 
achieve its purposes. In response, CEAP has focused on priorities 
identified by the Panel and clarified that its purpose is to quantify 
the effects of conservation practices applied on the landscape. 
Information regarding CEAP, including reviews and current status is 
available at (http://www.nrcs.usda.gov/technical/NRI/ ceap/. Since 2004 
and the initial establishment of long-term performance measures by 
program, NRCS has been estimating and reporting progress toward long-
term program goals. Natural resource inventory and assessment, and 
performance measurement and reporting policies set forth in Agency 
guidance (GM--290--400; GM--340--401; GM--340--403) (http://directives.sc.egov.usda.gov/).
    Demonstrating the long-term conservation benefits of conservation 
programs is an Agency responsibility. Through CEAP, NRCS is in the 
process of evaluating how these long-term benefits can be achieved 
through the conservation practices and systems applied by participants 
under the program. The program requirements applicable to participants 
that relate to producing long-term conservation benefits are described 
previously under ``measuring program performance.''
    Track participation by crop and livestock type. NRCS' automated 
field-level business tools capture participant, land, and operation 
information. This information is aggregated in the National 
Conservation Planning database and is used in a variety of program 
reports. Additional reports will be developed to provide more detailed 
information on program participation to meet congressional needs. These 
and related program management procedures supporting program 
implementation are set forth in Agency guidance (440 CPM 519).
    The program requirements applicable to participants that relate to 
tracking participation by crop and livestock type are put forth in 
these regulations in Sec.  1491.4, ``Program Requirements,'' which 
makes clear program eligibility requirements, including the requirement 
to provide NRCS the information necessary to implement WRP.
    Coordinate these actions with the national conservation program 
authorized under the Soil and Water Resources Conservation Act (RCA). 
The 2008 Act reauthorized and expanded on a number of elements of the 
RCA related to evaluating program performance and conservation 
benefits. Specifically, the 2008 Farm Bill added a provision stating, 
``Appraisal and inventory of resources, assessment and inventory of 
conservation needs, evaluation of the effects of conservation 
practices, and analyses of alternative approaches to

[[Page 2818]]

existing conservation programs are basic to effective soil, water, and 
related natural resources conservation.''
    The program, performance, and natural resource and effects data 
described previously will serve as a foundation for the next RCA, which 
will also identify and fill, to the extent possible, data and 
information gaps. Policy and procedures related to the RCA are set 
forth in Agency guidance (GM--290--400; M--440--525; GM--130--
402)(http://directives.sc.egov.usda.gov/).
    The coordination of the previously described components with the 
RCA is an Agency responsibility and is not reflected in these 
regulations. However, it is likely that results from the RCA process 
will result in modifications to the program and performance data 
collected, to the systems used to acquire data and information, and 
potentially to the program itself. Thus, as the Secretary proceeds to 
implement the RCA in accordance with the statute, the approaches and 
processes developed will improve existing program performance 
measurement and outcome reporting capability and provide the foundation 
for improved implementation of the program performance requirements of 
section 1244(g) of the 1985 Act.

List of Subjects in 7 CFR 1491

    Administrative practice and procedure, Agriculture, Soil 
conservation.

0
For the reasons stated in the preamble, the Commodity Credit 
Corporation revises 7 CFR part 1491 to read as follows:

PART 1491--FARM AND RANCH LANDS PROTECTION PROGRAM

Subpart A--General Provisions
Sec.
1491.1 Applicability.
1491.2 Administration.
1491.3 Definitions.
1491.4 Program requirements.
1491.5 Application procedures.
1491.6 Ranking considerations and proposal selection.
Subpart B--Cooperative Agreements and Conservation Easement Deeds
1491.20 Cooperative agreements.
1491.21 Funding.
1491.22 Conservation easement deeds.
Subpart C--General Administration
1491.30 Violations and remedies.
1491.31 Appeals.
1491.32 Scheme or device.

    Authority: 16 U.S.C. 3838h-3838i.

Subpart A--General Provisions


Sec.  1491.1  Applicability.

    (a) The regulations in this part set forth requirements, policies, 
and procedures, for implementation of the Farm and Ranch Lands 
Protection Program (FRPP) as administered by the Natural Resources 
Conservation Service (NRCS). FRPP cooperative agreements shall be 
administered under the regulations in effect at the time the 
cooperative agreement is signed.
    (b) The NRCS Chief may implement FRPP in any of the 50 States, the 
District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin 
Islands of the United States, American Samoa, and the Commonwealth of 
the Northern Mariana Islands.


Sec.  1491.2  Administration.

    (a) The regulations in this part shall be administered under the 
general supervision and direction of the NRCS Chief.
    (b) NRCS shall--
    (1) Provide overall program management and implementation 
leadership for FRPP;
    (2) Develop, maintain, and ensure that policies, guidelines, and 
procedures are carried out to meet program goals and objectives;
    (3) Ensure that the FRPP share of the cost of an easement or other 
deed restrictions in eligible land shall not exceed 50 percent of the 
appraised fair market value of the conservation easement;
    (4) Determine eligibility of the land, the landowner, and the 
entity;
    (5) Ensure a conservation plan is developed in accordance with 7 
CFR part 12;
    (6) Make funding decisions and determine allocations of program 
funds;
    (7) Coordinate with the Office of the General Counsel (OGC) to 
ensure the legal sufficiency of the cooperative agreement and the 
easement deed or other legal instrument;
    (8) Sign and monitor cooperative agreements for the CCC with the 
selected entity;
    (9) Monitor and ensure conservation plan compliance with highly 
erodible land and wetland provisions in accordance with 7 CFR part 12; 
and
    (10) Provide leadership for establishing, implementing, and 
overseeing administrative processes for easements, easement payments, 
and administrative and financial performance reporting.
    (c) NRCS shall enter into cooperative agreements with eligible 
entities to assist NRCS with implementation of this part.


Sec.  1491.3  Definitions.

    The following definitions will apply to this part and all documents 
issued in accordance with this part, unless specified otherwise:
    Agricultural uses are defined by the State's farm or ranch land 
protection program or equivalent, or where no program exists, 
agricultural uses should be defined by the State agricultural use tax 
assessment program. (If NRCS finds that a State definition of 
agriculture is so broad that an included use could lead to the 
degradation of soils and agriculture productivity, NRCS reserves the 
right to impose greater deed restrictions on the property than 
allowable under that State definition of agriculture in order to 
protect agricultural use and related conservation values.)
    Certified entity means an eligible entity that NRCS has determined 
to meet the requirements of Sec.  1491.4(d) of this part.
    Chief means the Chief of NRCS, USDA.
    Commodity Credit Corporation (CCC) is a Government-owned and 
operated entity that was created to stabilize, support, and protect 
farm income and prices. CCC is managed by a Board of Directors, subject 
to the general supervision and direction of the Secretary of 
Agriculture, who is an ex-officio director and chairperson of the 
Board. CCC provides the funding for FRPP, and NRCS administers FRPP on 
its behalf.
    Conservation Easement means a voluntary, legally recorded 
restriction, in the form of a deed, on the use of property, in order to 
protect resources such as agricultural lands, historic structures, open 
space, and wildlife habitat.
    Conservation Plan is the document that--
    (1) Applies to highly erodible cropland;
    (2) Describes the conservation system applicable to the highly 
erodible cropland and describes the decisions of the person with 
respect to location, land use, tillage systems, and conservation 
treatment measures and schedules;
    (3) Is approved by the local soil conservation district in 
consultation with the local committees established under Section 
8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 
5909h(b)(5)) and the Secretary, or by the Secretary.
    Cooperative agreement means the document that specifies the 
obligations and rights of NRCS and eligible entities participating in 
the program.
    Dedicated fund means an account held by an eligible entity 
sufficiently

[[Page 2819]]

capitalized for the purpose of covering expenses associated with the 
management, monitoring, and enforcement of conservation easements and 
where such account cannot be used for other purposes.
    Eligible entity means federally recognized Indian Tribes, State, 
unit of local government, or a non-governmental organization, which has 
a farmland protection program that purchases agricultural conservation 
easements for the purpose of protecting agriculture use and related 
conservation values by limiting conversion to non-agricultural uses of 
the land.
    Fair market value means the value of a conservation easement as 
ascertained through standard real property appraisal methods, as 
established in Sec.  1491.4(g).
    Farm and ranch land of statewide importance means, in addition to 
prime and unique farmland, land that is of statewide importance for the 
production of food, feed, fiber, forage, bio-fuels, and oil seed crops. 
Criteria for defining and delineating this land are to be determined by 
the appropriate State agency or agencies. Generally, additional 
farmlands of statewide importance include those that are nearly prime 
farmland and that economically produce high yields of crops when 
treated and managed according to acceptable farming methods. Some may 
produce as high a yield as prime farmlands if conditions are favorable. 
In some States, additional farmlands of statewide importance may 
include tracts of land that have been designated for agriculture by 
State law in accordance with 7 CFR part 657.
    Farm and ranch land of local importance means farm or ranch land 
used to produce food, feed, fiber, forage, bio-fuels, and oilseed 
crops, that are not identified as having national or statewide 
importance. Where appropriate, these lands are to be identified by the 
local agency or agencies concerned. Farmlands of local importance may 
include tracts of land that have been designated for agriculture by 
local ordinance.
    Farm or Ranch Succession Plan means a general plan to address the 
continuation of some type of agricultural business on the conserved 
land; the farm or ranch succession plan may include specific intra-
family succession agreements or strategies to address business asset 
transfer planning to create opportunities for beginning farmers and 
ranchers.
    Field Office Technical Guide (FOTG) means the official local NRCS 
source of resource information and interpretations of guidelines, 
criteria, and requirements for planning and applying conservation 
practices and conservation management systems. The FOTG contains 
detailed information on the conservation of soil, water, air, plant, 
and animal resources applicable to the local area for which it is 
prepared.
    Forest land means a land cover or use category that is at least 10 
percent stocked by single-stemmed woody species of any size that will 
be at least 13 feet tall at maturity. Also included is land bearing 
evidence of natural regeneration of tree cover (cutover forest or 
abandoned farmland) that is not currently developed for non-forest use. 
Ten percent stocked, when viewed from a vertical direction, equates to 
an aerial canopy cover of leaves and branches of 25 percent or greater.
    Forest management plan means a site-specific plan that is prepared 
by a professional resource manager, in consultation with the 
participant, and is approved by the State Conservationist. Forest 
management plans may include a forest stewardship plan, as specified in 
section 5 of the Cooperative Forestry Assistance Act of 1978 (16 U.S.C. 
2103a); another practice plan approved by the State Forester; or 
another plan determined appropriate by the State Conservationist. The 
plan complies with applicable Federal, State, Tribal, and local laws, 
regulations and permit requirements.
    Historical and archaeological resources mean resources that are:
    (1) Listed in the National Register of Historic Places (established 
under the National Historic Preservation Act (NHPA), 16 U.S.C. 470, et 
seq.),
    (2) Formally determined eligible for listing in the National 
Register of Historic Places (by the State Historic Preservation Officer 
(SHPO) or Tribal Historic Preservation Officer (THPO) and the Keeper of 
the National Register in accordance with section 106 of the NHPA),
    (3) Formally listed in the State or Tribal Register of Historic 
Places of the SHPO (designated under section 101(b)(1)(B) of the NHPA) 
or the THPO (designated under section 101(d)(1)(C) of the NHPA), or
    (4) Included in the SHPO or THPO inventory with written 
justification as to why it meets National Register of Historic Places 
criteria.
    Imminent harm means easement violations or threatened violations 
that, as determined by the Chief, would likely cause immediate and 
significant degradation to the conservation values; for example, those 
violations that would adversely impact agriculture use, productivity, 
and related conservation values or result in the erosion of topsoil 
beyond acceptable levels as established by NRCS.
    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, 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 (25 U.S.C. 450(b)(e)).
    Land Evaluation and Site Assessment System (LESA) means the land 
evaluation system approved by the NRCS State Conservationist used to 
rank land for farm and ranch land protection purposes, based on soil 
potential for agriculture, as well as social and economic factors, such 
as location, access to markets, and adjacent land use. (For additional 
information see the Farmland Protection Policy Act rule at 7 CFR part 
658.)
    Landowner means a person, legal entity, or Indian Tribe having 
legal ownership of land, and those who may be buying eligible land 
under a purchase agreement. The term ``landowner'' may include all 
forms of collective ownership including joint tenants, tenants-in-
common, and life tenants. State governments, local governments, and 
non-governmental organizations that qualify as eligible entities are 
not eligible as landowners.
    Natural Resources Conservation Service (NRCS) means an agency of 
the United States Department of Agriculture.
    Non-governmental organization means any organization that:
    (1) Is organized for, and at all times since the formation of the 
organization, has been operated principally for one or more of the 
conservation purposes specified in clause (i), (ii), (iii), or (iv) of 
section 170(h)(4)(A) of the Internal Revenue Code of 1986;
    (2) Is an organization described in section 501(c)(3) of that Code 
that is exempt from taxation under 501(a) of that Code; and
    (3) Is described--
    (i) In section 509(a)(1) and (2) of that Code; or
    (ii) Is described in section 509(a)(3) of that Code and is 
controlled by an organization described in section 509(a)(2) of that 
Code.
    Other interests in land include any right in real property other 
than easements that are recognized by State law. FRPP funds shall only 
be used to purchase other interests in land with prior approval from 
the Chief.

[[Page 2820]]

    Other productive soils means farm and ranch land soils, in addition 
to prime farmland soils that include unique farmland and farm and ranch 
land of statewide and local importance.
    Pending offer means a written bid, contract, or option extended to 
a landowner by an eligible entity to acquire a conservation easement 
before the legal title to these rights has been conveyed for the 
purpose of limiting non-agricultural uses of the land.
    Prime farmland means land that has the best combination of physical 
and chemical characteristics for producing food, feed, fiber, forage, 
oilseed, and other agricultural crops with minimum inputs of fuel, 
fertilizer, pesticides, and labor, without intolerable soil erosion, as 
determined by the Secretary.
    Purchase price means the appraised fair market value of the 
easement minus the landowner donation.
    Right of enforcement means an interest in real property set forth 
in the conservation easement deed, equal in scope to the right of 
inspection and enforcement granted to the grantee, that the United 
States Government may exercise under specific circumstances in order to 
enforce the terms of the conservation easement.
    Secretary means the Secretary of the United States Department of 
Agriculture.
    State Technical Committee means a committee established by the 
Secretary in a State pursuant to 16 U.S.C. 3861 and 7 CFR part 610, 
subpart C.
    State Conservationist means the NRCS employee authorized to direct 
and supervise NRCS activities in a State, the Caribbean Area (Puerto 
Rico and the Virgin Islands), or the Pacific Island Area (Guam, 
American Samoa, and the Commonwealth of the Northern Mariana Islands).
    Unique farmland means land other than prime farmland that is used 
for the production of specific high-value food and fiber crops, as 
determined by the Secretary. It has the special combination of soil 
quality, location, growing season, and moisture supply needed to 
economically produce sustained high quality or high yields of specific 
crops when treated and managed according to acceptable farming methods. 
Examples of such crops include citrus, tree nuts, olives, cranberries, 
fruits, and vegetables. Additional information on the definition of 
prime, unique, or other productive soil can be found in 7 CFR part 657 
and 7 CFR part 658.


Sec.  1491.4  Program requirements.

    (a) Under FRPP, the Chief, on behalf of CCC, shall provide funding 
for the purchase of conservation easements or other interests in 
eligible land that is subject to a pending offer from an eligible 
entity for the purpose of protecting the agricultural use and related 
conservation values of the land by limiting nonagricultural uses of the 
land. Eligible entities submit applications to NRCS State Offices to 
partner with NRCS to acquire conservation easements on farm and ranch 
land. NRCS enters into cooperative agreements with selected entities 
and provides funds for up to 50 percent of the fair market value of the 
easement. In return, the entity agrees to acquire, hold, manage, and 
enforce the easement. A Federal right of enforcement must also be 
included in each FRPP funded easement deed for the protection of the 
Federal investment.
    (b) The term of all easements shall be in perpetuity unless 
prohibited by State law. In states that limit the term of the easement, 
the term of the easement must be the maximum allowed by State law.
    (c) To be eligible to receive FRPP funding, an entity must meet the 
definition of ``eligible entity'' as listed in Sec.  1491.3. In 
addition, eligible entities interested in receiving FRPP funds must 
demonstrate:
    (1) A commitment to long-term conservation of agricultural lands;
    (2) A capability to acquire, manage, and enforce easements;
    (3) Sufficient number of staff dedicated to monitoring and easement 
stewardship; and
    (4) The availability of funds.
    (d) To be eligible as a ``certified entity,'' an entity must be 
qualified to be an ``eligible entity'' and have demonstrated, as 
determined by the Chief:
    (1) The ability to complete acquisition of easements in a timely 
fashion;
    (2) The ability to monitor easements on a regular basis;
    (3) The ability to enforce the provisions of easement deeds;
    (4) Experience enrolling parcels in the Farm and Ranch Lands 
Protection Program (FRPP) or the Farmland Protection Program (FPP);
    (5) For non-governmental organizations, the existence of a 
dedicated fund for the purposes of easement management, monitoring, and 
enforcement where such fund is sufficiently capitalized in accordance 
with NRCS standards. The dedicated fund must be dedicated to the 
purposes of managing, monitoring, and enforcing each easement held by 
the eligible entity; and
    (6) Other certification criteria, including having a plan for 
administering easements enrolled under this part, as determined by the 
Chief.
    (e) Review and Revocation of Certification.
    (1) The Chief shall conduct a review of certified entities every 
three years to ensure that the certified entities are meeting the 
certification criteria established in Sec.  1491.4(d).
    (2) If the Chief finds that the certified entity no longer meets 
the criteria in Sec.  1491.4(d), the Chief may:
    (i) Allow the certified entity a specified period of time, at a 
minimum 180 days, in which to take such actions as may be necessary to 
meet the criteria; and
    (ii) Revoke the certification of the entity, if after the specified 
period of time, the certified entity does not meet the criteria 
established in Sec.  1491.4(d).
    (f) Eligible land:
    (1) Must be privately owned land on a farm or ranch and contain at 
least 50 percent prime, unique, Statewide, or locally important 
farmland, unless otherwise determined by the State Conservationist; 
contain historical or archaeological resources; or furthers a State or 
local policy consistent with the purposes of the program; and is 
subject to a pending offer by an eligible entity;
    (2) Must be cropland, rangeland, grassland, pasture land, or forest 
land that contributes to the economic viability of an agricultural 
operation or serves as a buffer to protect an agricultural operation 
from development;
    (3) May include land that is incidental to the cropland, rangeland, 
grassland, pasture land, or forest land if the incidental land is 
determined by the Secretary to be necessary for the efficient 
administration of a conservation easement;
    (4) May include parts of or entire farms or ranches;
    (5) Must not include forest land of greater than two-thirds of the 
easement area. Forest land that exceeds the greater of 10 acres or 10 
percent of the easement area shall have a forest management plan before 
closing;
    (6) NRCS shall not enroll land in FRPP that is owned in fee title 
by an agency of the United States, a State or local government, or by 
an entity whose purpose is to protect agricultural use and related 
conservation values, including those listed in the statute under 
eligible land, or land that is already subject to an easement or deed 
restriction that limits the conversion of the land to nonagricultural 
use, unless otherwise determined by the Chief;
    (7) Must be owned by landowners who certify that they do not exceed 
the adjusted gross income limitation

[[Page 2821]]

eligibility requirements set forth in part 1400 of this title;
    (8) Must possess suitable on-site and off-site conditions which 
will allow the easement to be effective in achieving the purposes of 
the program. Suitability conditions may include, but are not limited 
to, hazardous substances on or in the vicinity of the parcel, land use 
surrounding the parcel that is not compatible with agriculture, and 
highway or utility corridors that are planned to pass through or 
immediately adjacent to the parcel; and
    (9) May be land on which gas, oil, earth, or other mineral rights 
exploration has been leased or is owned by someone other than the 
applicant may be offered for participation in the program. However, if 
an applicant submits an offer for an easement project, USDA will assess 
the potential impact that the third party rights may have upon 
achieving the program purposes. USDA reserves the right to deny funding 
for any application where there are exceptions to clear title on any 
property.
    (g) Prior to FRPP fund disbursement, the value of the conservation 
easement must be appraised. Appraisals must be completed and signed by 
a State-certified general appraiser and must contain a disclosure 
statement by the appraiser. The appraisal must conform to the Uniform 
Standards of Professional Appraisal Practices or the Uniform Appraisal 
Standards for Federal Land Acquisitions, as selected by the entity. 
State Conservationists will provide the guidelines through which NRCS 
will review appraisals for quality control purposes.
    (h) The landowner shall be responsible for complying with the 
Highly Erodible Land and Wetland Conservation provisions of the Food 
Security Act of 1985, as amended, and 7 CFR part 12.


Sec.  1491.5  Application procedures.

    (a) An entity shall submit an application to the State 
Conservationist in the State where parcels are located in order to 
determine if the entity is eligible to participate in FRPP.
    (b) The Chief shall determine whether an eligible entity is a 
certified entity based on the criteria set forth in Sec.  1491.4(d); 
information provided by the entity's application; and data in the 
national FRPP database.
    (c) The State Conservationist shall notify each entity if it has 
been determined eligible, certified, or ineligible.
    (d) Entities with cooperative agreements entered into after the 
effective date of this part will not have to resubmit an annual 
application for the duration of the cooperative agreement. Entities may 
reapply for eligibility when their cooperative agreements expire.
    (e) Throughout the fiscal year, eligible entities may submit to the 
appropriate NRCS State Conservationist applications for parcels, in 
that State, with supporting information to be scored, ranked, and 
considered for funding.
    (f) At the end of each fiscal year, the lists of pending, unfunded 
parcels shall be cancelled unless the entity requests that specific 
parcels be considered for funding in the next fiscal year. Entities 
must submit a new list of parcels each fiscal year in order to be 
considered for funding unless they request that parcels from the 
previous fiscal year be considered.


Sec.  1491.6  Ranking considerations and proposal selection.

    (a) Before the State Conservationist can score and rank the parcels 
for funding, the eligibility of the landowner and the land must be 
assessed.
    (b) The State Conservationist shall use National and State criteria 
to score and rank parcels. The national ranking criteria will be 
established by the Chief and the State criteria will be determined by 
the State Conservationist, with advice from the State Technical 
Committee. The national criteria shall comprise at least half of the 
ranking system score.
    (c) When funds are available, the State Conservationist shall 
announce the date on which ranking of parcels shall occur. A State 
Conservationist may announce more than one date of ranking in a fiscal 
year.
    (d) All parcels submitted throughout the fiscal year shall be 
scored. All parcels will be ranked together in accordance with the 
national and state ranking criteria before parcels are selected for 
funding.
    (e) The parcels selected for funding shall be listed on the 
agreements of the entities that submitted the parcels and the 
agreements shall be signed by the State Conservationist and the 
eligible entity. Funds for each fiscal year's parcels shall be 
obligated with a new signature each year on an amendment to the 
agreement. Parcels funded on each fiscal year's amendment shall have a 
separate deadline for closing and requesting reimbursement.
    (f) The national ranking criteria are:
    (1) Percent of prime, unique, and important farmland in the parcel 
to be protected;
    (2) Percent of cropland, pastureland, grassland, and rangeland in 
the parcel to be protected;
    (3) Ratio of the total acres of land in the parcel to be protected 
to average farm size in the county according to the most recent USDA 
Census of Agriculture;
    (4) Decrease in the percentage of acreage of farm and ranch land in 
the county in which the parcel is located between the last two USDA 
Censuses of Agriculture;
    (5) Percent population growth in the county as documented by the 
United States Census;
    (6) Population density (population per square mile) as documented 
by the most recent United States Census;
    (7) Proximity of the parcel to other protected land, such as 
military installations land owned in fee title by the United States or 
a State or local government, or by an entity whose purpose is to 
protect agricultural use and related conservation values, or land that 
is already subject to an easement or deed restriction that limits the 
conversion of the land to nonagricultural use;
    (8) Proximity of the parcel to other agricultural operations and 
infrastructure; and
    (9) Other additional criteria as determined by the Chief.
    (g) State or local criteria, as determined by the State 
Conservationist, with advice of the State Technical Committee, may 
include:
    (1) The location of a parcel in an area zoned for agricultural use;
    (2) The performance of an entity experience in managing and 
enforcing easements. Performance must be measured by the closing 
efficiency or percentage of monitoring that is reported. Years of an 
entity's existence shall not be used as a ranking factor;
    (3) Multifunctional benefits of farm and ranch land protection 
including social, economic, historical and archaeological, and 
environmental benefits;
    (4) Geographic regions where the enrollment of particular lands may 
help achieve National, State, and regional conservation goals and 
objectives, or enhance existing government or private conservation 
projects;
    (5) Diversity of natural resources to be protected;
    (6) Score in the Land Evaluation and Site Assessment (LESA) system. 
This score serves as a measure of agricultural viability (access to 
markets and infrastructure);
    (7) Existence of a farm or ranch succession plan or similar plan 
established to encourage farm viability for future generations; and
    (8) Landowner willingness to allow public access for recreational 
purposes.

[[Page 2822]]

    (h) State ranking criteria will be developed on a State-by-State 
basis. The State Conservationist will make available a full listing of 
applicable National and State ranking criteria.

Subpart B--Cooperative Agreements and Conservation Easement Deeds


Sec.  1491.20  Cooperative agreements.

    (a) NRCS, on behalf of CCC, shall enter into a cooperative 
agreement with those entities selected for funding. Once a proposal is 
selected by the State Conservationist, the entity must work with the 
State Conservationist to finalize and sign the cooperative agreement, 
incorporating all necessary FRPP requirements. The cooperative 
agreement must address:
    (1) The interests in land to be acquired, including the United 
States' right of enforcement as well as the form and other terms and 
conditions of the easement deed;
    (2) The management and enforcement of the rights on lands acquired 
with FRPP funds;
    (3) The responsibilities of NRCS;
    (4) The responsibilities of the eligible entity on lands acquired 
with FRPP funds;
    (5) The allowance of parcel substitution upon mutual agreement of 
the parties; and
    (6) Other requirements deemed necessary by NRCS to meet the 
purposes of this part or protect the interests of the United States.
    (b) The term of cooperative agreements shall be a minimum of five 
years for certified entities and three years for other eligible 
entities.
    (c) The cooperative agreement shall also include an attachment 
listing the parcels accepted by the State Conservationist. This list 
shall include landowners' names and addresses, acreage, the estimated 
fair market value, the estimated Federal contribution, and other 
relevant information. An example of a cooperative agreement shall be 
made available by the State Conservationist.


Sec.  1491.21  Funding.

    (a) Subject to the statutory limits, the State Conservationist, in 
coordination with the cooperating entity, shall determine the NRCS 
share of the cost of purchasing a conservation easement or other 
interest in the land.
    (b) NRCS may provide up to 50 percent of the appraised fair market 
value of the conservation easement, as determined in Sec.  1491.4(g). 
An entity shall share in the cost of purchasing a conservation easement 
in accordance with the limitations of this part.
    (c) A landowner may make donations toward the acquisition of the 
conservation easement.
    (d) The entity must provide a minimum of 25 percent of the purchase 
price of the conservation easement.
    (e) FRPP funds may not be used for expenditures such as appraisals, 
surveys, title insurance, legal fees, costs of easement monitoring, and 
other related administrative and transaction costs incurred by the 
entity.
    (f) If the State Conservationist determines that the purchase of 
two or more conservation easements are comparable in achieving FRPP 
goals, the State Conservationist shall not assign a higher priority to 
any one of these conservation easements solely on the basis of lesser 
cost to FRPP.
    (g) Environmental Services Credits.
    (1) NRCS asserts no direct or indirect interest in environmental 
credits that may result from or be associated with an FRPP easement.
    (2) NRCS retains the authority to ensure that the requirements for 
FRPP-funded easements are met and maintained consistent with this part.
    (3) If activities required under an environmental credit agreement 
may affect land covered under a FRPP easement, landowners are 
encouraged to request a compatibility assessment from the eligible 
entity prior to entering into such agreements.


Sec.  1491.22  Conservation easement deeds.

    (a) Under FRPP, a landowner grants an easement to an eligible 
entity with which NRCS has entered into an FRPP cooperative agreement. 
The easement shall require that the easement area be maintained in 
accordance with FRPP goals and objectives for the term of the easement.
    (b) Pending offers by an eligible entity must be for acquiring an 
easement in perpetuity, except where State law prohibits a permanent 
easement. In such cases where State law limits the term of a 
conservation easement, the easement term shall be for the maximum 
allowed under state law.
    (c) The entity may use its own terms and conditions in the 
conservation easement deed, but a conservation easement deed template 
used by the eligible entity shall be submitted to the NRCS National 
Headquarters within 30 days of the signing of the cooperative 
agreement. The conservation easement deed templates must be reviewed 
and approved by the NRCS National Headquarters in advance of use. NRCS 
reserves the right to require additional specific language or to remove 
language in the conservation easement deed to protect the interests of 
the United States.
    (d) The conveyance document must include a ``right of enforcement'' 
clause for the United States. NRCS shall specify the terms for the 
``right of enforcement'' clause to read as set forth in the FRPP 
cooperative agreement. The right of enforcement provides that the NRCS 
has the right to inspect and enforce the easement, if the eligible 
entity fails to uphold the easement, as determined by NRCS. This right 
is a vested interest in real property and cannot be condemned by State 
or local government.
    (e) As a condition for participation, a conservation plan shall be 
developed by NRCS in consultation with the landowner and implemented 
according to the NRCS Field Office Technical Guide. NRCS may work 
through the local conservation district in the development of the 
conservation plan. The conservation plan will be developed and managed 
in accordance with the Food Security Act of 1985, as amended, 7 CFR 
part 12 or subsequent regulations, and other requirements as determined 
by the State Conservationist. To ensure compliance with this 
conservation plan, the easement shall grant to the United States, 
through NRCS, its successors or assigns, a right of access to the 
easement area.
    (f) The cooperating entity shall acquire, hold, manage and enforce 
the easement. The cooperating entity may have the option to enter into 
an agreement with governmental or private organizations to carry out 
easement stewardship responsibilities.
    (g) Prior to easement closing, NRCS must sign an acceptance of the 
conservation easement, concurring with the terms of the conservation 
easement and accepting its interest in the conservation easement deed.
    (h) All conservation easement deeds acquired with FRPP funds must 
be recorded. Proof of recordation shall be provided to NRCS by the 
cooperating entity.
    (i) Impervious surfaces shall not exceed two percent of the FRPP 
easement area, excluding NRCS-approved conservation practices. The NRCS 
State Conservationist may waive the two percent impervious surface 
limitation on a parcel by parcel basis, provided that no more than ten 
percent of the easement area is covered by impervious surfaces. Before 
waiving the two percent limitation, the State Conservationist must 
consider, at a minimum: population density; the ratio of open prime 
other important farmland versus impervious surfaces on the easement 
area; the impact to water

[[Page 2823]]

quality concerns in the area; the type of agricultural operation; and 
parcel size. All FRPP easements must include language limiting the 
amount of impervious surfaces within the easement area.
    (j) The conservation easement deed must include an indemnification 
clause requiring the landowner (grantor) to indemnify and hold harmless 
the United States from any liability arising from or related to the 
property enrolled in FRPP.
    (k) The conservation easement deed must include an amendment clause 
requiring that any changes to the easement deed after its recordation 
must be consistent with the purposes of the conservation easement and 
this part.

Subpart C--General Administration


Sec.  1491.30  Violations and remedies.

    (a) In the event of a violation of the terms of the easement, the 
eligible entity shall notify the landowner. The landowner may be given 
reasonable notice and, where appropriate, an opportunity to voluntarily 
correct the violation in accordance with the terms of the conservation 
easement.
    (b) In the event that the entity fails to enforce any of the terms 
of the conservation easement, as determined in the sole discretion of 
the Chief, the Chief and his or her successors or assigns may exercise 
the United States' rights to enforce the terms of the conservation 
easement through any and all authorities available under Federal or 
State law.
    (c) Notwithstanding paragraph (a) of this section, NRCS, upon 
notification to the landowner, reserves the right to enter upon the 
easement area at any time to monitor conservation plan implementation 
or remedy deficiencies or easement violations, as it relates to the 
conservation plan. The entry may be made at the discretion of NRCS when 
the actions are deemed necessary to protect highly erodible soils and 
wetland resources. The landowner will be liable for any costs incurred 
by the NRCS as a result of the landowner's negligence or failure to 
comply with the easement requirements as it relates to conservation 
plan violations.
    (d) The United States shall be entitled to recover any and all 
administrative and legal costs from the participating entity, including 
attorney's fees or expenses, associated with any enforcement or 
remedial action as it relates to the enforcement of the FRPP easement.
    (e) In instances where an easement is terminated or extinguished, 
NRCS shall collect CCC's share of the conservation easement based on 
the appraised fair market value of the conservation easement at the 
time the easement is extinguished or terminated. CCC's share shall be 
in proportion to its percentage of original investment.
    (f) In the event NRCS determines it must exercise the United 
States' right to enforce the terms of, or taking a property interest 
in, the conservation easement, NRCS shall provide written notice by 
certified mail to the grantee at the grantee's last known address. The 
notice will set forth the nature of the noncompliance by the grantee 
and a 60-day period to cure. If the grantee fails to cure within the 
60-day period, the United States shall take the action specified under 
the notice. The United States reserves the right to decline to provide 
a period to cure if NRCS determines that imminent harm may result to 
the conservation easement deed or the conservation values it seeks to 
protect.


Sec.  1491.31  Appeals.

    (a) A person or eligible entity which has submitted an FRPP 
proposal and is therefore participating in FRPP may obtain a review of 
any administrative determination concerning eligibility for 
participation utilizing the administrative appeal regulations provided 
in 7 CFR part 614.
    (b) Before a person or eligible entity may seek judicial review of 
any administrative action taken under this part, the person or eligible 
entity must exhaust all administrative appeal procedures set forth in 
paragraph (a) of this section, and for the purposes of judicial review, 
no decision shall be a final Agency action except a decision of the 
Chief of the NRCS under these provisions.
    (c) Enforcement action undertaken by the NRCS in furtherance of its 
vested property rights are under the jurisdiction of the Federal 
District Court and not subject to review under administrative appeal 
regulations.


Sec.  1491.32  Scheme or device.

    (a) If it is determined by the NRCS that a cooperating entity has 
employed a scheme or device to defeat the purposes of this part, any 
part of any program payment otherwise due or paid such a cooperating 
entity during the applicable period may be withheld or be required to 
be refunded with interest thereon, as determined appropriate by NRCS on 
behalf of CCC.
    (b) A scheme or device includes, but is not limited to, coercion, 
fraud, misrepresentation, depriving any other person or entity of 
payments for easements for the purpose of obtaining a payment to which 
a person would otherwise not be entitled.

    Signed this 9th day of 2009 in Washington, DC.
Arlen L. Lancaster,
Vice President, Commodity Credit Corporation and Chief, Natural 
Resources Conservation Service.
[FR Doc. E9-829 Filed 1-15-09; 8:45 am]
BILLING CODE 3410-16-P