[Federal Register Volume 76, Number 15 (Monday, January 24, 2011)]
[Rules and Regulations]
[Pages 4027-4046]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-1212]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 76, No. 15 / Monday, January 24, 2011 / Rules 
and Regulations  

[[Page 4027]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1491

RIN 0578-AA46


Farm and Ranch Lands Protection Program

AGENCY: Commodity Credit Corporation, Natural Resources Conservation 
Service, United States Department of Agriculture.

ACTION: Final rule with request for public comments.

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

SUMMARY: This final rule amends the Natural Resources Conservation 
Service (NRCS) regulations for implementation of the Farm and Ranch 
Lands Protection Program (FRPP). This action is necessary to address 
the comments received on the interim final rule as published and to 
publish changes to the entity certification requirements. This document 
provides a 30 day public comment period on the entity certification 
requirements.

DATES: Effective Date: The rule is effective January 24, 2011.
    Comment Date: Submit comments on Sec.  1491.4(d) through (f) on or 
before February 23, 2011.

ADDRESSES: Address all comments regarding Sec.  1491.4(d) through (f) 
using any of the following methods:
    Mail: Mark Rose, Farm and Ranch Lands Protection Program Manager, 
Easement Programs Division, Department of Agriculture, Natural 
Resources Conservation Service, Post Office Box 2890, Washington, DC 
20013; Fax: (202) 720-9689; e-mail: [email protected].
    Hand delivery: Department of Agriculture, Natural Resources 
Conservation Service, 1400 Independence Avenue, SW., Room 6819 South 
Building, 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 Building to call (202) 720-1854 in order to be 
escorted into the building.

FOR FURTHER INFORMATION CONTACT: Mark Rose, Program Manager, Farm and 
Ranch Lands Protection Program, Easement Programs Division, Department 
of Agriculture, Natural Resources Conservation Service, 1400 
Independence Avenue, SW., Room 6819 South Building, Washington, DC 
20250; Telephone: (202) 720-9476; Fax: (202) 720-9689; or E-mail: 
[email protected].
    Persons with disabilities who require alternative means for 
communicating (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 final rule with request for 
comment has been determined to be a significant regulatory action. The 
administrative record is available for public inspection at the 
Department of Agriculture, Natural Resources Conservation Service, 1400 
Independence Avenue, SW., Room 6819 South Building, 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 the 
regulatory certifications of the preamble, and a copy of the analysis 
is available upon request from Mark Rose, Program Manager, Farm and 
Ranch Lands Protection Program, Easement Programs Division, Department 
of Agriculture, Natural Resources Conservation Service, 1400 
Independence Avenue, SW., Room 6819 South Building, Washington, DC 
20250.

Regulatory Flexibility Act

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

Environmental Analysis

    In compliance with the National Environmental Policy Act, a 
Programmatic Environmental Assessment (EA) was prepared in association 
with the interim final rule. The analysis determined there will not be 
a significant impact to the human environment and as a result, an 
Environmental Impact Statement was not required to be prepared (40 CFR 
1508.13). For this final rule, the agency has determined that there are 
no new circumstances or significant new information that has a bearing 
on environmental effects which warrant supplementing the previous EA 
and Finding of No Significant Impact (FONSI). The proposed changes 
identified in this final rule are considered minor changes that should 
be implemented for the program. The majority of these changes are 
administrative or technical changes to the regulation.
    Copies of the EA and FONSI may be obtained from Matt Harrington, 
National Environmental Coordinator, Ecological Sciences Division, 
Department of Agriculture, Natural Resources Conservation Service, 1400 
Independence Avenue, SW., Room 6151 South Building, Washington, DC 
20250. The EA and FONSI are also available at http://www.nrcs.usda.gov/programs/Env_Assess/.

Civil Rights Impact Analysis

    NRCS has determined through a Civil Rights Impact Analysis that 
this final rule discloses no disproportionately adverse impacts for 
minorities, women, or persons with disabilities. The historical 
participation data presented in the analysis indicates that producers 
who are members of the protected groups have participated in NRCS 
conservation programs at parity with other producers. By extrapolating 
from historical participation data, NRCS has reasonably concluded that 
NRCS programs, including FRPP, will continue to be administered in a 
non-discriminatory manner. Outreach and communication strategies are in 
place to ensure that all producers will be provided the same 
information to allow them to make informed compliance decisions 
regarding the use of their lands that will affect their participation 
in the Department of Agriculture (USDA) programs. FRPP applies to all

[[Page 4028]]

persons equally regardless of their race, color, national origin, 
gender, sex, or disability status. Therefore, this final rule will not 
result in adverse civil rights implications for women, minorities, and 
persons with disabilities.
    Copies of the Civil Rights Impact Analysis are available from Mark 
Rose, Program Manager, Farm and Ranch Lands Protection Program, 
Easement Programs Division, Department of Agriculture, Natural 
Resources Conservation Service, 1400 Independence Avenue, SW., Room 
6819 South Building, Washington, DC 20250, or electronically at http://www.nrcs.usda.gov/programs/FRPP.

Paperwork Reduction Act

    Section 2904 of the Food, Conservation, and Energy Act of 2008 
(2008 Act) requires that the implementation of programs authorized 
under Title II of the Act be made without regard to the Paperwork 
Reduction Act of 1995 (Title 44 U.S.C. 3501 et seq.). Therefore, NRCS 
is not reporting recordkeeping or estimated paperwork burden associated 
with this 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 requires 
government agencies, in general, to provide the public the option of 
submitting information or transacting business electronically to the 
maximum extent possible. To better accommodate public access, NRCS has 
developed an online application and information system for public use.

Executive Order 12988

    This 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

    NRCS assessed the effects of this final rule on State, local, and 
Tribal governments, and the public. This action does not compel the 
expenditure of $100 million or more in any one year (adjusted by 
inflation) 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 of 1995 is not required.

Executive Order 13132

    This final rule has been reviewed in accordance with the 
requirements of Executive Order 13132, Federalism. USDA has determined 
that this 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 final rule does not 
have Federalism implications.

Executive Order 13175

    This final rule has been reviewed in accordance with the 
requirements of Executive Order 13175, Consultation and Coordination 
with Indian Tribal Governments. NRCS has assessed the impact of this 
final rule on Indian Tribal governments and concluded that this final 
rule will not negatively affect Indian Tribal governments or their 
communities. The rule neither imposes substantial direct compliance 
costs on Tribal governments nor preempts Tribal law. However, NRCS 
plans to undertake a series of at least six regional Tribal 
consultation sessions before January 15, 2011, on the impact of NRCS 
conservation programs and services on Tribal governments and their 
members to establish a baseline of consultation for future actions. 
Reports from these sessions will be made part of the USDA annual 
reporting on Tribal Consultation and Collaboration. NRCS will respond 
in a timely and meaningful manner to all Tribal governments' requests 
for consultation.

Small Business Regulatory Enforcement Fairness Act of 1996

    Section 2904(c) of the 2008 Act requires that the Secretary use the 
authority in section 808(2) of Title 5, U.S.C., which allows an agency 
to forgo the Small Business Regulatory Enforcement Fairness Act of 1996 
usual 60-day 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 of the 2008 Act in effect as soon as possible. 
Accordingly, this rule is effective January 24, 2011.

Section 2708 of the 2008 Act

    Section 2708, Compliance and Performance, added a paragraph to 
section 1244(g) of the Food Security Act of 1985 (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 will 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 FRPP, the Grassland Reserve Program, the Environmental Quality 
Incentives Program (EQIP) (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. The existing procedures described below 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

[[Page 4029]]

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 
(Conservation Programs Manual--440--Part 512 and Conservation Programs 
Manual --440--Part 508) (http://directives.sc.egov.usda.gov/). The 
program requirements applicable to FRPP participants that relate to 
compliance are set forth in these regulations in Sec.  1491.4 Program 
requirements, Sec.  1491.20 Cooperative agreements, and Sec.  1491.22 
Conservation easement deeds. These sections make clear the general 
program eligibility requirements, obligations related to easements, and 
requirements for operating and maintaining FRPP-funded activities.
    Measure program performance. Pursuant to the requirements of the 
Government Performance and Results Act of 1993 (Pub. L. 103-62, Sec. 
1116) and guidance provided by the Office of Management and Budget 
(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 conservation actions undertaken by participating entities 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 that 
relate to undertaking conservation actions are set forth in these 
regulations in Sec.  1491.20 Cooperative agreements and Sec.  1470.22 
Conservation easement deeds. These sections make clear participating 
entity obligations for acquiring easements and conservation stewardship 
activities, which in aggregate result in the program performance that 
is reflected in agency performance reports.
    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 conditions. 
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.\1\ 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 the Conservation Stewardship Program. 
In 2006, a Blue Ribbon panel evaluation of CEAP \2\ 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/ 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 are set forth in agency 
guidance (GM--290--400; GM--340--401; and GM--340--403) (http://directives.sc.egov.usda.gov/).
---------------------------------------------------------------------------

    \1\ The exception to this is the Conservation Reserve Program 
(CRP); since 1987 the NRI has reported acreage enrolled in CRP.
    \2\ Soil and Water Conservation Society. 2006. Final report from 
the Blue Ribbon Panel Conducting an External Review of the U.S. 
Department of Agriculture Conservation Effects Assessment Project. 
Ankeny, IA: Soil and Water Conservation Society. This review is 
available at http://www.nrcs.usda.gov/technical/NRI/ceap/.
---------------------------------------------------------------------------

    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 easements acquired through FRPP and 
conservation practices and systems applied by participants under each 
of its programs. The FRPP program requirements applicable to 
participants that relate to producing long-term conservation benefits 
are located in Sec.  1491.20 Cooperative agreements and Sec.  1491.22 
Conservation easement deed. These requirements and related program 
management procedures supporting program implementation are set forth 
in agency guidance (Conservation Programs Manual 440--Part 512 and 
Conservation Programs Manual --440--Part 508).

Coordination of Actions Authorized Under the Soil and Water Resources 
Conservation Act

    The 2008 Act reauthorized and expanded on a number of elements of 
the Soil and Water Resources Conservation Act (RCA) related to 
evaluating program performance and conservation benefits. Specifically, 
the 2008 Act 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 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 and 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

[[Page 4030]]

the program and performance data collected, to the systems used to 
acquire data and information, and potentially to the program itself. As 
the Secretary proceeds to implement 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.

Economic Analysis--Executive Summary

    The FRPP is an important tool available to farmers, ranchers, and 
their communities to preserve the agricultural landscape. The local 
community is a key driver in farmland \3\ protection efforts and is a 
major beneficiary, as well as incurring much of the cost. Because 
farmland retention efforts are driven by local decisionmakers and 
involve site-specific impacts that affect a host of intangible values 
(scenic views, environmental amenities, etc.), performing a traditional 
nationwide final benefit-cost analysis with a national scope is 
difficult. Despite limitations, a benefit-cost analysis offers a means 
to identify the main costs and describe the benefits, albeit in 
qualitative terms, and explore policy and program alternatives.
---------------------------------------------------------------------------

    \3\ Farmland refers to agricultural land used in crop and 
livestock production, i.e., cropland, ranch land, and pasture.
---------------------------------------------------------------------------

    The main expenditure is funding for the purchase of development 
rights (PDR). The economic costs of farmland protection programs 
include the foregone economic activities fostered by development that 
would have taken place in the absence of FRPP and any resulting 
secondary effects such as the reduced tax base. FRPP is only one source 
of funds to offset the initial acquisition costs of PDRs for these 
individuals and communities. The cumulative (1996-2010) contributions 
on 3,489 enrolled parcels consisting of 808,515 acres includes: FRPP 
share--$787,444,975; entity share--$1,088,313,653; landowner 
donations--$347,253,305; and combined value--$2,223,011,933. The 
foregone economic activities need to be compared with the incremental 
benefits of protecting farmland, which are largely intangible, such as 
environmental goods and services from the land and non-market valued 
amenities brought about by NRCS funding. Non-market valued amenities 
include the public's desire for open spaces and scenic views. Also, the 
distributional effects of retaining an active agricultural sector in 
the local communities must be acknowledged.
    The FRPP Final Benefit-Cost Analysis is posted at http://www.nrcs.usda.gov/programs/farmbill/2008/benefitcostanalysis.html. Only 
qualitative descriptions of the possible social benefits of farmland 
protection are presented in the main text of this analysis. These 
potential benefits are more fully described in Appendix A. Appendix B 
presents a method, that when refined, can potentially be used to 
quantitatively assess the effects of FRPP. A rigorous treatment of 
these benefits is not possible at this time due to a number of reasons, 
including the limitations in the willingness-to-pay methodology and 
uncertainties about extent, locations, and patterns of future 
development pressure.
    The 2008 Act reauthorized the FRPP through FY 2012 and increased 
program funding. Mandatory changes were made to the program purpose, 
role of the United States Government, enrollment process, eligible 
land, and cost-sharing requirements for entities. In addition, the 2008 
Act provided discretion for the agency in interpreting aspects of the 
mandatory provisions and other discretionary elements. The major policy 
scenarios analyzed in this benefit-cost analysis include:
    1. Increased Funding--Authorized funding increases from $97 million 
in FY 2008 to $200 million in FY 2012.
    2. Land Eligibility--Compensate landowners for more forest land 
acreage and ensure that enrolled forest land contributes to natural 
resource benefits.
    3. Certification Process--Establish a certification process and 
deliver increased flexibilities for certified entities.
    4. Simplifying Participation--Establish a simple process for 
entities to select an appraisal method and use their own terms and 
conditions in easement deeds, as approved by the Secretary.
    5. Impervious Surface Restrictions--Establish clear guidelines for 
entities to consult for impervious surface restrictions.
    6. Non-Federal Contributions--Establish a process to accept 
contributions of non-Federal funds.
    7. Program Performance--Establish procedures to monitor and report 
on program performance.
    Overall, FRPP assistance to local farmland protection programs is 
important from the distributional effects perspective. The FRPP 
attempts to assist these local decisionmakers in their efforts to 
protect farmland. The presence of active farmland retention programs 
could be interpreted as empirical evidence that local decisionmakers 
anticipate positive net benefits from protecting farmland, such as 
preventing undesirable changes to the landscape and adverse impacts on 
the natural environment that can result from development locally. From 
a national perspective, the assessment of benefits and costs is 
incomplete due to lack of information in existing literature. The 
assessment of benefits involves amenities that are indirectly traded in 
markets (e.g., scenic view). The assessment of costs involves 
forecasting the level of economic activities that would have taken 
place in the absence of FRPP. The potential effects on benefits and 
costs for most of the areas of policy discretion covered in this 
analysis consequently are addressed qualitatively.

Summary of Interim Final Rule Changes

    On January 16, 2009, NRCS published in the Federal Register an 
interim final rule at 74 FR 2809 with a 60-day public comment period 
that ended on March 17, 2009.
    Section 2401 of the 2008 Act amended sections 1238H and 1238I of 
the 1985 Act to reauthorize and make significant amendments to FRPP. To 
implement these amendments, the interim final rule made the following 
changes to the FRPP regulation at 7 CFR part 1491:
Subpart A--General Provisions
     Administration--Clarified that a landowner's eligibility 
must be determined, as well as the land eligibility and the eligibility 
of the entity that receives the cost-share assistance to purchase the 
easement.
     Definitions--Modified several definitions of the previous 
rule. For instance, the definition of agriculture uses was amended to 
use more current and correct terminology and to broaden the definition 
to reflect the new statutory program purposes.
     Program Requirements
    [cir] Incorporated the statutory requirement that NRCS provide 
funding for conservation easements or other interests in land versus 
acquiring a Federal interest in land, thereby shifting the program 
focus from purchasing conservation easements to facilitating the 
purchase of conservation easements by eligible entities.
    [cir] Added that in States that limit the term of the easement, the 
term of the easement must be the maximum allowed by State law.
    [cir] Set forth the requirements for a new certification process 
that an entity must meet in order to become a certified

[[Page 4031]]

entity, as well as the process for review and revocation of 
certification.
    [cir] Added a new statutory eligibility land category, ``to further 
a State or local policy consistent with the purposes of the program.''
    [cir] Established that farms with at least 10 acres in forest cover 
or 10 percent in forest cover required the development of a forest 
management plan. Farms that were less than 100 acres in size with less 
than 10 acres of forest were not required to have a forest management 
plan developed to be eligible.
    [cir] Clarified that lands currently under ownership by an entity 
whose purpose is to protect agricultural uses and related conservation 
values were not eligible for the program, as lands owned by these 
entities were already protected.
    [cir] Described the onsite and offsite conditions that were not 
compatible with the program's purposes.
    [cir] Clarified that a landowner may submit an application on land 
on which the mineral estate is owned by someone other than the 
landowner, but that USDA reserved the right to determine the impacts of 
third party rights upon a potential easement and to deny funding where 
the purposes of the program could not be achieved.
    [cir] Defined the industry-approved appraisal methods specified in 
the 2008 Act as the Uniform Standards of Professional Appraisal 
Practices or the Uniform Appraisal Standards for Federal Land 
Acquisition.
     Application Procedures--Established a new application 
process for the program. This new process established that the entity 
must submit an application to the State Conservationist in the State 
where the parcel(s) is located, and that the Chief determined whether 
an eligible entity qualified as a certified entity. Further, the 
interim final rule established that FRPP would be implemented using a 
continuous sign-up process, consistent with other NRCS conservation 
programs. The process allowed certified and non-certified eligible 
entities to compete under the same application and ranking process in 
order to simplify the application process and allowed parcels to obtain 
funding on equal resource-based terms, regardless of the status of the 
entity.
     Ranking Considerations and Proposal Selection--Established 
a new ranking process whereby NRCS evaluated the eligibility of both 
the landowner and the land prior to the scoring and ranking of the 
parcel for funding, because payment eligibility requirements for 
Adjusted Gross Income (AGI) 7 CFR part 1400 and land eligibility 
requirements for Highly Erodible Land and Wetland Conservation 
provisions at 7 CFR part 12 are a threshold requirement for program 
participation. In addition, parcels became ranked according to both 
national and State criteria. National ranking criteria were changed to 
reflect site (parcel) specific criteria rather than entity performance 
criteria, and language was added to clarify that the national 
requirements were mandatory for inclusion in the State ranking.
Subpart B--Cooperative Agreements and Conservation Easement Deeds
     Cooperative Agreements--Revised cooperative agreement 
requirements to reflect changes 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. The interim final rule also incorporated 
the new requirement that the terms of agreements be a minimum of 5 
years for certified entities and 3 years for other eligible entities.
     Substituting Parcels--Incorporated 2008 Act authorization 
to allow a cooperating entity to substitute pending offers within their 
cooperative agreement.
     Funding--Reflected the 2008 Act's change to the minimum 
entity cost-share, an amount not less than 25 percent of the 
acquisition purchase price.
     Conservation Easement Deeds
    [cir] Deed Form--Incorporated changes made by the 2008 Act that 
allow eligible entities to use their own easement deeds submitted to 
and approved by NRCS in advance.
    [cir] Contingent Right of Enforcement--Incorporated the 2008 Act 
requirement that the eligible entity include a contingent right of 
enforcement for the Secretary in the terms of the conservation easement 
deed. The purpose of this right is to ensure that the easement is 
enforced and that the Federal investment is protected. NRCS, in the 
interim final rule, interpreted the contingent right of enforcement to 
mean a vested real property right, providing the Secretary, on behalf 
of the United States, the right to enforce the terms of the easement 
for the duration of the easement.
    [cir] Approval of Conservation Plan--Eliminated the requirement 
that conservation districts approve the conservation plan, as this was 
not always consistent with local practice.
    [cir] Impervious Surfaces--Retained the impervious surface limit of 
2 percent, but increased the impervious surface waiver to up to 10 
percent from the prior policy of 6 percent.
Subpart C--General Administration
     Violations and Remedies--Clarified that any cost 
recoveries levied by NRCS would be directed to the cooperating entity, 
not the specific landowner.
     Appeals--Replaced the term cooperating entity with 
eligible entity to refer to FRPP participants. This change ensured that 
all FRPP participants had the same rights of appeal. The interim final 
rule also clarified that only administrative actions were appealable, 
and once the easement was recorded, enforcement actions taken by NRCS 
were not subject to review under administrative appeal regulations. 
This change was consistent with appeal regulations at 7 CFR part 614 
and 7 CFR part 11, as well as Federal real property law.

Summary of Amendment to the Interim Final Rule

    On July 2, 2009, NRCS published a correction to the interim final 
rule at 74 FR 31578 and opened the public comment period an additional 
30 days. The correction made the following adjustments:
     Contingent Right of Enforcement--Clarified that the 
contingent right of enforcement established by the 2008 Act, and 
defined by the interim final rule as a Federal acquisition of a real 
property right, was instead a condition placed upon the award of 
financial assistance, and though a real property right, did not 
constitute an acquisition subject to Federal acquisition requirements.
     Lands Owned by State or Local Government--Incorporated 
additional flexibility into the definition of landowner such that it 
did not preclude the ability of NRCS to help facilitate the placement 
of a conservation easement or other interest in land on properties in 
circumstances where an eligible entity purchased fee title to land 
temporarily and then re-conveyed those lands to a private landowner, 
such as purchasing farmland in foreclosure to prevent it from being 
sold at a sheriff's sale for non-agricultural development.
     Requests for Public Input--Sought public feedback as to 
whether FRPP could be utilized to further the Nation's efforts with 
regard to encouraging renewable energy production, promoting energy 
conservation, mitigating the effects of climate change, facilitating 
climate change adaptation, or reducing net carbon emissions.

[[Page 4032]]

Registration and Reporting Requirements of the Federal Funding and 
Transparency Act of 2006

    OMB recently published two regulations, 2 CFR part 25 and 2 CFR 
part 170, to assist agencies and recipients of Federal financial 
assistance comply with the Federal Funding Accountability and 
Transparency Act of 2006 (FFATA) (Pub. L. 109-282, as amended). Both 
regulations have implementation requirements beginning October 1, 2010.
    The regulations at 2 CFR part 25 require, with some exceptions, 
recipients of Federal financial assistance to apply for and receive a 
Dun and Bradstreet Universal Numbering Systems (DUNS) number and 
register in the Central Contractor Registry (CCR). The regulations at 2 
CFR part 170 establish new requirements for Federal financial 
assistance applicants, recipients, and sub recipients. The regulation 
provides standard wording that each agency must include in its awarding 
of financial assistance that requires recipients to report information 
about first-tier sub awards and executive compensation under those 
awards.
    NRCS has determined that 2 CFR part 25 and 2 CFR part 170 apply to 
certain awards of financial assistance provided under FRPP. Therefore, 
NRCS has incorporated, by reference, these registration and reporting 
requirements at Sec.  1491.20 and will include the requisite provisions 
as part of the FRPP contract.

Responses to Comments and Changes to Regulation

    NRCS received approximately 624 comments on the interim final rule 
and its amendment. This section of the preamble discusses all of the 
relevant comments, except for those that expressed agreement with 
provisions of the interim final rule. NRCS has organized the discussion 
alphabetically by topic.
Applicability
    Comments: NRCS received seven comments recommending NRCS eliminate 
application of Department of Justice title standards for projects that 
remain under 2007-2008 cooperative agreements. Projects funded in FY 
2009, and thereafter, are not subject to review under the Department of 
Justice title standards.
    Response: FRPP, as authorized by the Farm Security and Rural 
Investment Act of 2002 (2002 Act), Public Law 107-171, required the 
Secretary to acquire a conservation easement or other interest in land. 
Parcels funded under FY 2007-2008 cooperative agreements are subject to 
the 2002 Act requirements. Since NRCS acquires a co-grantee interest in 
the conservation easements funded in FY 2007-2008, the transactions are 
subject to Federal real property acquisition requirements, including 
the Department of Justice title standards. NRCS does not have the 
authority to waive these title standards. Parcels funded in FY 2009 and 
hereafter are authorized by the 2008 Act, and are financial assistance 
transactions not subject to Federal real property acquisition 
requirements; therefore, no changes were made to the final rule.
Certification
    Comments: NRCS received 64 comments regarding the references in 
Sec.  1491.4 to certified entities. These comments urged NRCS to 
develop a robust certification program for certified entities. NRCS 
received 27 comments recommending that NRCS rewrite the rule to develop 
a certification program that, for certified entities, would minimize 
title reviews in particular.
    Response: NRCS agrees that a more robust certification process will 
improve FRPP implementation. The criteria for certification outlined in 
the 2008 Act are nearly identical to the criteria for eligibility that 
existed in FRPP policy prior to 2008 Act enactment, with the exception 
of closing efficiency. Therefore, the interim final rule mirrored the 
2008 Act by identifying very few differences between the agreements 
with certified entities and agreements with other eligible entities.
    The 2008 Act transformed FRPP from a Federal real property 
acquisition program to a program where NRCS provides financial 
assistance for the purchase of a conservation easement by an eligible 
entity. Consistent with this shift in program purpose, NRCS has made 
further changes in this final rule to the certification criteria and 
process outlined in Sec.  1491.4 to minimize the need for NRCS 
oversight of individual easement transactions. NRCS still obtains 
certain safeguards in relation to an entity's easement acquisition, 
real property such as review of template deeds and the incorporation of 
a right of enforcement; however, the actual easement acquisition 
process is the responsibility of partners. The certification procedures 
set forth in the interim final rule did not address this shift fully.
    NRCS believes that the revisions to Sec.  1491.4 provide a more 
comprehensive certification program that will better implement the 2008 
Act's shift in program purpose and help NRCS focus on other aspects of 
program implementation to better protect the long-term viability of 
higher quality and more vulnerable agricultural lands. Upon review and 
consideration of the respondents' comments, NRCS has adopted criteria 
to improve identification of eligible entities that have the capability 
to manage FRPP lands. Additionally, a more comprehensive certification 
program gives NRCS greater administrative flexibility in implementing 
the FRPP program.
    In particular, NRCS reviews criteria during the certification 
process, including an entity's acquisition, management, and enforcement 
standards and processes to ascertain whether the entity exhibits 
sufficient capability and experience to manage FRPP financial 
assistance prudently. NRCS has determined that the certification 
criteria in the interim final rule unnecessarily limit the ability to 
identify eligible entities that have the resources and experience to 
assume the flexibility afforded by certification status. Therefore, a 
primary qualification for certification status is that an eligible 
entity must hold and manage a minimum of 25 easements. NRCS derived 
this number from the total acres owned and under easement by land 
trusts, the total number of land trusts, and the average size FRPP 
easement. Land trust figures are taken from the Land Trust Alliance 
2005 National Land Trust Census Report.
    Additionally, for an eligible entity to qualify for certification, 
it must hold and manage a minimum of five FRPP conservation easements 
and have acquired these easements using industry-approved appraisals, 
title clearance reviews, and deed reviews for each transaction. This 
minimum number of FRPP easements will demonstrate the entity has 
experience with FRPP cooperative agreements and FRPP easement 
acquisition process. Entities may request in writing a waiver of the 
25-easement requirement from the Chief. The certification of an entity 
does not extend to eligible entities funded through the certified 
entity if the eligible entity is not held to the same standards as the 
certified entity, and the certified entity is not identified as a co-
grantee in the conservation easement deed. If an eligible entity does 
not meet the certification criteria, NRCS will not certify the eligible 
entity and will review each transaction's procedures, including the 
appraisal, deed, and title to ensure that the Federal investment is 
protected.
    As to the greater administrative flexibility provided by 
certification, NRCS will not require NRCS' appraisal

[[Page 4033]]

review, title review, and conservation easement deed review in advance 
of easement acquisition since a certified entity demonstrates, during 
the certification process, that it has credible processes of its own 
that ensure its conservation easements will meet FRPP purposes. 
Therefore, a certified entity will be authorized to close on individual 
easement transactions without prior NRCS review and approval of the 
particular deed, title, or appraisal. If any of these certification 
criteria are not met, NRCS may still certify the entity, albeit with 
conditions, such as a requirement that the entity adjust those aspects 
of its program, e.g., particular deed provisions that are needed to 
ensure that the acquired conservation easements meet FRPP purposes and 
are enforceable over the long term.
    Regardless of the certification status of an entity, NRCS will 
conduct quality review checks upon a percentage of transactions, and if 
any aspect of a transaction fails, NRCS will provide the entity with 
time to rectify the errors, a minimum of 180 days. If a certified 
entity fails to do so, the State Conservationist will send, by 
certified mail, return receipt requested, written notice of proposed 
decertification of the certified entity's certification status or 
eligibility. The certified entity may contest the Notice of Proposed 
Decertification in writing to the State Conservationist within 20 
calendar days of receipt of the notice of proposed decertification. If 
the State Conservationist decides to decertify, the entity will be 
given written notice of the determination which will set forth the 
reasons for decertification, the period of decertification, and the 
scope of decertification. If the State Conservationist decides not to 
decertify the entity, the entity will be given written notice of that 
determination. The decertification determination will be based on the 
administrative record which will be comprised of the Notice of Proposed 
Decertification and supporting documents, any documents pertaining to 
the entity's lack of compliance with the certification criteria, and if 
submitted, the entity's written response and supporting documentation. 
The Easement Programs Division will maintain a national list of 
certified and de-certified entities that each NRCS State office will 
check prior to entering into a cooperative agreement. The period of 
decertification may not exceed 3 years, and the entity may reapply for 
certification after the period of decertification has expired. NRCS 
will recertify an entity that meets the requirements as outlined under 
Sec.  1491.4(d).
    NRCS added a new paragraph (e) to Sec.  1491.4 to provide 
additional clarification to the certification process and redesignated 
paragraphs (e), (f), (g), and (h) as (f), (g), (h), and (i). A new 
paragraph (j) is added to provide policy on substituting parcels.
    This new approach to certification was not identified in the 
interim final rule and instead, is based upon comments received from 
various respondents to the interim final rule. Since the public has not 
had the opportunity to comment upon this new approach, NRCS will 
receive public comment on the certification and decertification 
approach set forth in this rulemaking. NRCS is not soliciting comments 
on any other aspect of this FRPP final rulemaking since NRCS has 
already solicited and received public comments on these matters as 
identified herein.
    Comments: NRCS received four comments suggesting a change to Sec.  
1491.4(d)(5) of the interim final rule to clarify that a dedicated fund 
be a necessary requirement for certified entities that are 
nongovernmental organizations. The fund is in place for enforcement 
purposes, and the certified entities that are required to have a 
dedicated fund must have a sufficient annual budget designation for 
annual monitoring and administrative functions for conservation 
easement management purposes.
    Response: NRCS concurs with the recommendation made by the 
respondents. The definition of dedicated fund was modified to clarify 
that a dedicated fund is required for certified entities that are 
nongovernmental organizations. The purpose of the dedicated fund is to 
provide a long-term source of funds for management and monitoring of 
easements acquired and held by nongovernmental organizations. Dedicated 
funds are not necessary for certified entities which are State and 
local units of government, because such entities typically have taxing 
authority for the long-term operation and management of easement 
programs. In contrast, nongovernmental organizations typically rely on 
private funding to support their operations and management of 
easements, thus a dedicated fund ensures a long-term source of funds 
for such activities. The specific amounts required in the dedicated 
fund are clarified in policy. The current requirements for the 
capitalization of the endowment funds are $50,000 for legal defense and 
$10,000 per easement for management and monitoring. NRCS will adjust 
the amount required for the dedicated fund based on NRCS' experience, 
feedback from the nongovernmental organizations, and standards for such 
accounts within the farmland protection community.
    Comments: NRCS received 33 comments recommending that NRCS conduct 
only spot checks of appraisals rather than a review of every appraisal.
    Response: NRCS will conduct appraisal reviews differently depending 
upon whether an eligible entity has been certified or not. As described 
earlier in this preamble, NRCS will only spot check a percentage of a 
certified entity's transactions. Additionally, the spot checks of a 
certified entity's appraisals will be to ensure the certified entity 
followed its appraisal procedures properly, including any adjustments 
to those procedures required by NRCS as part of certification.
    However, for other eligible entities, NRCS will still require more 
extensive appraisal reviews, including technical and administrative 
reviews, to ensure that the appraisal meets the detailed NRCS standards 
and specifications required under the cooperative agreement. Appraisal 
reviews document the validity of the expenditure of funds. For 
appraisals submitted by eligible entities that are not certified, 
agency policy requires a technical review of the first appraisal report 
that is done by a particular appraiser each year. NRCS will conduct 
technical review on a minimum of 10 percent of appraisals submitted for 
approval in each State each year. NRCS standards require sufficient 
detail to allow for its review of an appraiser's work and to ensure 
that the less experienced eligible entities are appropriately following 
procedures.
Conservation Easement Deeds
    Comments: NRCS received 44 comments recommending that NRCS not 
require conservation easement deed templates used by eligible entities 
to be submitted to National Headquarters, nor require review and 
approval of each transaction's deed in advance of use. Five respondents 
recommended that NRCS continue to review conservation easement deeds.
    Response: Section 1238I(g)(4) of the 1985 Act authorizes an 
eligible entity to use its own terms and conditions in conservation 
easements and other interests in land as approved by the Secretary as 
long as the terms and conditions ``(A) are consistent with the purposes 
of the program; (B) permit effective enforcement of the conservation 
purposes of such

[[Page 4034]]

easements or other interests; and (C) include a limit on the impervious 
surfaces to be allowed that is consistent with the agricultural 
activities to be conducted.'' As described above, NRCS agrees that once 
a template easement deed form has been reviewed and approved, certified 
entities do not need to seek prior NRCS review and approval of the 
conservation deed for each transaction. However, for eligible entities 
that are not certified, NRCS will continue to require that the eligible 
entity submit to NRCS the deed, title, and appraisal for review prior 
to closing to ensure that such documents meet NRCS specifications. No 
changes were made to the final rule.
    Comments: NRCS received one comment requesting NRCS be aware that 
State statutes often specify the deed requirements for eligible 
entities.
    Response: NRCS recognizes that State statutes require particular 
provisions, and NRCS will work with eligible entities to address any 
conflicts between State statutes and FRPP program requirements. 
However, NRCS must ensure that deed terms are consistent with FRPP 
purposes as described above. No changes were made to the final rule.
    Comments: NRCS received one comment asserting that the Federal 
Government has no authority to enforce a prohibition on future State or 
local condemnation. The respondent maintains that the Federal 
Government's contingent right of enforcement is merely a mechanism to 
ensure terms and conditions of FRPP easements are honored. The 
respondent asserted that FRPP purposes can be guaranteed by other means 
such as requiring a proportionate share of condemnation proceeds be 
paid to the Federal Government. The respondent contends that the 
interim final rule's current condemnation prohibition is causing many 
States to forego participation in FRPP.
    Response: Under the 2008 Act, Congress required that a right of 
enforcement for the Secretary be included in FRPP funded deeds. This 
right of enforcement is held by the Secretary and runs with the land. 
As such, it is a vested interest in real property. Under well-
established constitutional principles, State and local governments do 
not have the authority to condemn a Federal interest in land.
    Comments: NRCS received one comment recommending that NRCS' 
conservation plans identify conservation values.
    Response: NRCS agrees with the respondent. NRCS' conservation plans 
already identify conservation values.
    Comments: NRCS received several comments related to NRCS' 
identification of various activities as agricultural uses or non-
agricultural uses. NRCS received three comments recommending that NRCS 
allow on-farm energy production in conservation easement deeds. NRCS 
also received three comments that argued that the restriction on 
subdividing a parcel under a FRPP conservation easement deed 
contradicts State regulations or statutes, and has no basis in the 2008 
Act. Two comments identified that the more restrictive conservation 
easement deed requirements spelled out in the interim final rule and 
the new cooperative agreement template, threaten Maine farmers in a 
number of ways including failure to address on-farm energy production 
and use. Seven respondents argued that limitations on signage and 
snowmobiles threaten Maine farmers. One respondent asserted that the 
requirement to forego future rights to residential development 
contradicts Maryland's regulations or statutes, and has no basis in the 
2008 Act. Three comments recommended allowing farms enrolled in FRPP to 
host non-farm rural enterprises.
    Response: NRCS identifies agricultural and non-agricultural uses 
pursuant to its responsibilities under FRPP. In particular, the purpose 
of FRPP as stated in the 2008 Act is to ``protect the agricultural use 
and related conservation values of eligible land by limiting non-
agricultural uses of that land.'' Additionally, the identification of 
agricultural and non-agricultural uses is relevant in regard to the 
terms and conditions of the cooperative agreement. Section 1238I(g)(1) 
of the 1985 Act requires NRCS to stipulate in the cooperative agreement 
the terms and conditions under which cost-share assistance is provided, 
and section 1238I(g)(4) of the 1985 Act authorizes NRCS to review the 
terms of an eligible entity's conservation easement to ensure the terms 
and conditions are consistent with FRPP. Activities that are related to 
agricultural production or directly support the agricultural operations 
are agricultural uses of the land. Other activities, though they 
commonly may occur on agricultural lands, are not agricultural uses, 
and thus, NRCS may require eligible entities to incorporate limitations 
into the terms of approved conservation easement deeds.
    For example, the on-farm production of energy presents a 
combination of agricultural and non-agricultural uses, and NRCS must 
find a balance between those uses. Where the energy produced on a farm 
is for on-farm usage, NRCS considers such activity an agricultural use. 
However, the same farmers who wish to protect their farms from 
development are often the same landowners who care about meeting the 
Nation's future energy needs. While the on-farm production of energy 
for off-farm use is not an agricultural use, NRCS believes that a 
complete prohibition of such uses is not required by statute. Thus, 
NRCS will work with eligible entities to develop appropriate 
limitations in the deed terms that focus on the impact that such 
activities have upon the particular easement area's agricultural 
viability, such as proposed siting and density restrictions, rather 
than strictly prohibiting such uses.
    The more complex activities to address in conservation easement 
deeds are those that, when exercised by a farmer's family and its 
guests, should be authorized, but when exercised on a commercial scale, 
may represent a conversion to non-agricultural use. However, if the 
activity does not interfere with the agriculture use, like 
snowmobiling, it may be considered a permitted activity. Other 
activities, such as the development of all terrain or off-road vehicle 
recreation, significantly impacts the resource and represents 
conversion of a farm to non-agricultural use, and thus, should be 
prohibited. NRCS recognizes that a balance must be struck between 
authorized, prohibited, and restricted activities within the terms of a 
conservation easement deed to ensure protection of the agricultural 
viability of the land while allowing flexibility for reasonable use of 
the land into the future. NRCS will continue to work with eligible 
entities to develop the appropriate balance.
    Comments: NRCS received 11 comments recommending that NRCS 
eliminate the NRCS reserved right.
    Response: Section 1238I(f)(2) of the 1985 Act requires that a 
``contingent right of enforcement'' be included in the terms of a 
conservation easement or other interest in eligible land that is 
purchased using cost-share assistance provided under the program. The 
contingent right of enforcement is required by statute, protects the 
Federal investment, and cannot be eliminated by NRCS.
    Comments: NRCS received three comments stating that NRCS should not 
allow cooperating entities to run FRPP.
    Response: While NRCS works closely with cooperating entities, NRCS 
will not abdicate its responsibility to maintain quality assurance 
oversight over the transactions funded through FRPP. NRCS requires 
cooperating entities to meet eligibility requirements, and requires 
that each transaction funded also meets NRCS eligibility and priority

[[Page 4035]]

requirements. For example, rather than simply adopting the ranking 
criteria of the cooperating entity, NRCS reviews and ranks the 
transactions it funds using NRCS national and State criteria. No 
changes were made to the final rule.
    Comments: NRCS received one comment recommending that NRCS not 
involve local conservation districts in approving the conservation 
plan.
    Response: Section 1491.22(e) of the interim final rule makes clear 
that local conservation districts are not involved in approving 
conservation plans. While district staff is often involved in the 
development of the conservation plan, the conservation plan is 
ultimately developed by NRCS, in consultation with the landowner, and 
implemented according to the NRCS Field Office Technical Guide (FOTG).
    Comments: NRCS received one comment recommending that under Sec.  
1491.22(g) of the interim final rule, the conservation easement review 
conducted by NRCS prior to easement closing should be limited to a 
determination that the conservation easement deed conforms to the 
conservation easement form contained in the executed cooperative 
agreement.
    Response: The acceptance referenced in Sec.  1491.22(g) of the 
interim final rule pertains to the land, not to the terms of the 
conservation easement deed. However, all of the terms contained in the 
conservation easement deed are not necessarily contained in the 
conservation easement form in the cooperative agreement. For example, 
the deed template does not identify the grantors and the capacity in 
which they are conveying the land. During its reviews, NRCS has 
identified many situations where the draft deed for a particular 
transaction did not correctly identify the grantors or the land area to 
be encumbered.
    Comments: NRCS received four comments that the general 
indemnification requirement of Sec.  1491.22(j) of the interim final 
rule contradicts State regulations or statutes and has no basis in the 
2008 Act. The respondents argue that NRCS should allow entities to 
modify the indemnification language of conservation easement deeds.
    Response: NRCS recognizes the limitations that public entities have 
in regards to entering into indemnification agreements. NRCS, working 
with the Office of the General Counsel, modifies its indemnification 
language for public entities to comply with State laws while ensuring 
adequate protection to the United States. Although the 2008 Act does 
not specifically mention addressing potential liability issues, it is 
common practice for conservation easement holders to include such 
clauses. Moreover, as part of the NRCS duty to protect the public 
interest, it is good administrative practice to include such clauses.
    Comments: NRCS received one comment recommending that language be 
added requiring NRCS to review and approve any amendments to easement 
deeds.
    Response: NRCS agrees with this recommendation. The language in 
Sec.  1491.22(k) of the interim final rule has been modified to require 
that NRCS must review and approve any material amendments to 
conservation easement deeds.
Conservation Easement Deeds-Impervious Surfaces
    Comments: NRCS received 63 comments concerning impervious surfaces 
in Sec.  1491.22(i). The comments assert that, despite congressional 
intent and statutory direction, NRCS continues to impose a standard of 
no more than 2 percent impervious surfaces on FRPP easement areas. The 
respondents asserted that NRCS should not set a numerical limit, but 
instead allow eligible entities to use their own terms and conditions 
that are consistent with the agricultural activities to be conducted. 
NRCS also received 20 comments supporting an impervious surface 
limitation, and several respondents recommended that the impervious 
surface limit be scaled to the size of the easement so that smaller 
easements would be authorized to have a larger percentage in impervious 
surface. These respondents also recommended that State Conservationists 
have flexibility to approve a local entity's waiver processes for 
impervious surfaces if the processes are applied on a parcel-by-parcel 
basis.
    Response: The purpose of the impervious surface standard is to 
limit the conversion of productive agriculture lands to non-
agricultural use within the easement area. An impervious surface 
represents an irretrievable commitment of resources to a particular 
use, and thus, has an impact upon the long-term viability and 
adaptability of the agricultural operation. NRCS does not intend to 
limit the expansion, for example, of a confined animal or permanent 
greenhouse operation. However, NRCS will not permit the impervious 
surface of these operations to exceed the maximum allowed under Sec.  
1491.22(i) in the FRPP rule. Existing NRCS policy permits State 
Conservationists to waive the 2 percent impervious surface limitation 
on a parcel-by-parcel basis up to a maximum of 10 percent. In addition, 
NRCS has revised policy to allow eligible entities to develop and 
submit their own impervious surface waiver process to the State 
Conservationist for review and consideration. The process must be 
approved by the State Conservationist and applied by the eligible 
entity on a parcel-by-parcel basis.
Cooperative Agreements
    Comments: NRCS received three comments on the topic of amendments 
to cooperative agreements. The respondents recommended that multi-year 
cooperative agreements be revised to reflect any changes between the 
final rule and the interim final rule.
    Response: Cooperative agreements may be modified subject to the 
mutual agreement of NRCS and the cooperating entity. The final rule 
does not require any substantive changes to the cooperative agreements 
made prior to the final rule.
    Comments: NRCS received one comment that recommended the agency 
provide for the ability to make property substitutions as part of FRPP.
    Response: Section 1491.20(a)(5) of the interim final rule already 
provides for the ability to make parcel substitutions upon mutual 
agreement of the parties. No changes were made to the final rule.
    Comments: NRCS received one comment regarding the manner in which 
the New Jersey farmland preservation program purchases easements and 
its interface with FRPP. The respondent expressed concern that FRPP 
policy requiring the disbursement of the entire payment during the life 
of the cooperative agreement could prevent New Jersey counties and 
townships from using FRPP funding. In particular, New Jersey farmland 
preservation programs often purchase conservation easements with 
proceeds from general obligation debt, paying in installments over an 
extended period of time. However, cooperative agreements are for a 
maximum of 5 years. Further, the respondent requested clarification as 
to whether NRCS would consider certain debt obligations incurred by the 
cooperating entity to the benefit of the landowner as constituting a 
cash contribution rather than an installment payment.
    Response: Section 1238I(c) of the 1985 Act describes the financial 
assistance provided from NRCS to eligible entities as cost-share 
assistance. Section 1238I(c) also requires that the Federal share for 
purchasing a conservation easement or other interest in eligible land 
will not exceed 50 percent of the appraised fair market

[[Page 4036]]

value. The requirement that an entity must provide at least 25 percent 
of the purchase price of the acquisition is also a statutory 
requirement. The situation suggested by the respondent would violate 
the statutory requirements for the program by requiring NRCS or the 
landowner to cover the statutorily required cost-share expenses for the 
entity. NRCS, by statute, may only provide funding for the costs of the 
easement purchase and not the associated administrative costs such as 
title insurance, surveys, appraisals, easement monitoring, and other 
related administrative fees and transaction costs incurred by the 
entity. Additionally, funds for FRPP appropriated to NRCS by Congress 
must be expended within 5 years from the fiscal year of obligation. 
Obligated funds not expended within the 5-year period will no longer be 
available for payment after the fifth year of obligation. In response 
to the respondent's comment regarding whether NRCS would allow the 
entity's obligation to count as a cash contribution from the landowner, 
this is not permitted for the same statutory reasons mentioned earlier. 
The statute requires the entity to provide at least 25 percent of the 
purchase price of the easement or other interest in property. The 
purchase price is defined as the appraised fair market value of the 
easement minus the landowner donation. The eligible entity must 
contribute its statutorily required share to purchase the easement, and 
debt obligations do not count towards satisfying an eligible entity's 
required share of the purchase price of an easement.
Definitions
    Comments: NRCS received two comments requesting that the FRPP final 
rule provide a definition for the phrase, land that furthers a State or 
local policy consistent with the purposes of the program and gives the 
State Conservationist, with input from the State Technical Committee 
and FRPP partner organizations, the ability to decide what lands might 
further a State or local policy consistent with the program.
    Response: Given the potential range and variety of State or local 
policies that may exist, NRCS does not believe that a definition ``that 
furthers a State or local policy consistent with the purposes of the 
program'' would provide much meaning. Additionally, FRPP purposes are 
identified by statute. The final rule has not been modified to include 
this definition. The 2008 Act included an additional category of 
eligible land which was ``land, the protection of which will further a 
State or local policy consistent with the purposes of the program.'' 
The purpose of FRPP is to protect the agricultural use and related 
conservation values of eligible land by limiting non-agricultural uses 
of that land. NRCS will allow State Conservationists to determine which 
State and local policies are consistent with the stated purposes of 
FRPP for this category of eligible land.
Agricultural Use
    Comments: NRCS received 11 comments recommending that NRCS accept 
any State's definition of agriculture as contained in State or local 
farmland protection legislature, regulation, and ordinance.
    Response: The definition of agricultural use in the interim final 
rule, in substantial part, is the same as the definition of 
agricultural use used in the 2003 FRPP final rule published at 68 FR 
26461, May 16, 2003. FRPP defers to State definitions, but cannot allow 
uses that decrease the agricultural productivity of the soil such as 
sod-farming or balled and burlap nursery stock production. Some States 
include in their definition of agriculture use activities that may 
decrease the agricultural productivity of the soil. No changes were 
made to the final rule.
Forest Land
    Comments: NRCS received three comments requesting that NRCS change 
the first sentence in the definition of forest land to ``Forest land 
means a land cover or use category that is at least 10 percent stocked 
by non-invasive woody species of any size.'' The respondents argue that 
NRCS should redefine the term forest land to be consistent with the 
definition cited by the USDA Forest Service Forestry Inventory and 
Analysis Program, and should be limited to nonindustrial private forest 
land (NIPF) to ensure a focus on family farmers who own forests.
    Response: With regard to the respondents' first comment, NRCS 
adopted the definition of forest land that is used throughout the NRI. 
NRCS will use this definition of forest land to ensure consistency with 
other NRCS programs and to ensure the quality and consistency of NRCS 
data. With regard to the respondents' last comment pertaining to 
ensuring a ``focus on family farmers who own forests,'' Farm Bill 
programs are available to all private landowners that meet the AGI 
limitation of $1 million per year. Several Farm Bill programs, such as 
EQIP and the Conservation Stewardship Program, limit forest land 
eligibility to NIPF. FRPP does not limit land eligibility to NIPF. 
Limiting eligibility to NIPF could limit the ability of the program to 
protect contiguous sections of agricultural lands where land conversion 
pressures are higher.
Forest Land of Statewide Importance
    Comments: NRCS received one comment requesting that the final rule 
add a definition for forest land of statewide importance that includes 
priority forested areas or regions of the State that have been 
identified by the State forester and informed through statewide 
assessments and strategies pursuant to sections 8001 and 8002 of the 
2008 Act.
    Response: NRCS agrees with the recommendation of the respondent and 
has added a definition to the final rule. Forest land of statewide 
importance means forest land that the State Conservationist, in 
consultation with the State Technical Committee, identifies as having 
ecological or economic significance within the State, and may include 
forested areas or regions of the State that have been identified 
through statewide assessments and strategies conducted pursuant to 
State or Federal law.
Forest Management Plan
    Comments: NRCS received three comments recommending that NRCS 
recognize and accept forest plans as specified in section five of the 
Cooperative Forestry Assistance Act of 1978, 16 U.S.C. 2103c, or other 
forest plans developed and approved solely by a State forester. The 
respondents also suggested redefining the term forest management plan 
to include forest stewardship plans as specified by the Cooperative 
Forestry Assistance Act, and forest management plans developed under a 
third-party audited forest certification system, such as the American 
Tree Farm System.
    Response: The definition of forest management plan, as currently 
written, permits the use of the various plans described by the 
respondents. No changes were made to the final rule.
Impervious Surface
    Comments: NRCS received two comments requesting a definition for 
impervious surface.
    Response: NRCS agrees with the respondents that a definition for 
impervious surface as used in the context of FRPP is necessary. The 
rule has been modified to provide such definition. NRCS would like to 
clarify that the following activities are not considered impervious 
surfaces for the purposes of FRPP: Roads and parking

[[Page 4037]]

lots with soil or gravel surfaces, conservation practices identified in 
the FOTG and in a conservation plan for the subject farm or ranch, and 
temporary greenhouses that cover the soil surface for less than 6 
months.
Landowner
    Comments: NRCS received 13 comments requesting that NRCS allow 
organizations that qualify as eligible entities under FRPP to also be 
eligible as landowners and permitted to apply for cost-share assistance 
under FRPP. NRCS also received one comment recommending that NRCS 
provide for an exemption from the definition of landowner such that a 
nongovernmental organization would have the ability to purchase an FRPP 
property in order to keep it from being developed while the funds to 
protect it were being secured.
    Response: Lands currently under ownership by an entity whose 
purpose is to protect agricultural uses and related conservation 
values, such as a nongovernmental organization, are already protected 
without funding from FRPP. Therefore, an eligible entity normally 
cannot qualify as a landowner. However, the July 2, 2009, correction to 
the interim final rule incorporated additional flexibility into the 
definition of landowner at Sec.  1491.3 to allow NRCS to facilitate the 
placement of a conservation easement or other interest in land on 
properties in limited circumstances where an eligible entity purchases 
fee title to land temporarily, and then re-conveys those lands to a 
private landowner. In order for this flexibility to apply, the parcel 
must be transferred back to private ownership before or at closing on 
the easement. No further changes were made to the final rule.
Parcel
    Comments: NRCS received one comment requesting the agency define 
the term parcel because the agency uses the term interchangeably when 
it refers to farms and ranches.
    Response: NRCS agrees with the respondent's comment. The final rule 
has been modified to define the term parcel. Parcel means a farm or 
ranch submitted for consideration for funding under this part.
Public Access
    Comments: NRCS received one comment requesting that NRCS define the 
phrase public access.
    Response: The State and local ranking criteria are determined by 
the State Conservationist, with advice from the State Technical 
Committee. The State Technical Committee provides information, 
analysis, and recommendations to the State Conservationist on 
implementation of conservation programs under Title XII of the 1985 
Act. The interim final rule identified that eligible entities may 
receive additional ranking points under the State ranking criteria if 
the landowner is willing to allow public access for recreational 
purposes. NRCS has removed this as a potential ranking criterion. NRCS 
is cognizant of the potential biohazards that public access presents to 
an active agricultural operation, and thus, will not use public access 
as a ranking factor for FRPP assistance.
Right of Enforcement (Original Interim Final Rule Definition)
    Comments: NRCS received 32 comments asserting that the agency's 
position that the contingent right of enforcement is a vested real 
property right is inconsistent with the intent of Congress.
    Response: NRCS addressed the respondents' comments in its July 2, 
2009, correction to the interim final rule published at 74 FR 31578. 
The correction to the interim final rule at Sec.  1491.3 defines the 
contingent right of enforcement as a vested right set forth in the 
conservation easement deed. However, as explained below, the contingent 
right of enforcement is a condition of providing assistance and is not 
an acquisition subject to the Department of Justice title standards.
Right of Enforcement (Correction to the Interim Final Rule Sec.  
1491.22(d))
    Comments: NRCS received two comments critical of NRCS' contingent 
right of enforcement. The respondents argued that USDA's insistence on 
maintaining the right to enforce the FRPP conservation easement in 
perpetuity regardless of State and local future needs is causing many 
States to forego participation in FRPP. NRCS also received eight 
comments that applauded the change in language made by the correction 
to the interim final rule regarding the contingent right of enforcement 
and the elimination of Department of Justice title standard 
requirements.
    Response: Section 1238I(f)(2) of the 1985 Act explicitly requires 
that a contingent right of enforcement be included in the terms of each 
FRPP conservation easement deed. As the correction to the interim final 
rule explained, as a term of the conservation easement, the contingent 
right of enforcement is a vested real property right which provides the 
Chief, on behalf of the United States, the ability to sue to ensure the 
protection of the conservation values identified in the conservation 
easement deed. Because the enforcement right is required by statute, 
NRCS has no authority to remove it. Moreover, the very purpose of the 
right is to protect the public investment in conservation and to 
prevent the possibility of future divestment that the first commenter 
discusses.
    Comments: NRCS received one comment that recommended NRCS allow 
cooperating entities to consider acquisition costs as part of the 
purchase price.
    Response: FRPP cost-share is limited to the cost of purchasing the 
easement and is defined in the statute in reference to the fair market 
value of the easement. There is no authority for NRCS to provide cost-
share assistance for the other costs associated with conservation 
easement acquisition.
    Comments: NRCS received one comment that requested NRCS inform 
cooperating entities of the acquisition costs for which they are 
responsible.
    Response: Acquisition costs have always been the responsibility of 
the cooperating entity and encompass the standard direct acquisition 
costs and due diligence responsibilities of purchasers of conservation 
easements. Additional information on typical standards and practices of 
easement acquisition and management may be found on the Land Trust 
Alliance Web site at http://www.landtrustalliance.org. No changes were 
made to the final rule.
Program Requirements
    Comments: NRCS received one comment requesting clarification about 
how program funds will be available to eligible entities to partner 
with NRCS to acquire forest land. The respondent requested 
clarification as to whether eligible entities must consult with the 
State Forester to determine what constitutes characteristics of 
viability, as mentioned in the 2008 Act, and the extent to which forest 
land may satisfy that determination, as well as to determine the extent 
and type of buffer necessary and the appropriate measures to maintain 
adequate buffer capacity.
    Response: The focus of the program is the protection of working 
farms and ranches. The inclusion of forest land as an allowable land 
use facilitates the enrollment of farms and ranches with a high 
percentage of forest land. NRCS is interested in assisting landowners 
in managing forest lands, and is relying on the forest management plan 
to guide landowners. While the State Forester is a valuable source of 
information and guidance, the FRPP rule does not

[[Page 4038]]

require an eligible entity to consult with the State Forester to 
determine the characteristics of viability. The buffers mentioned in 
the 2008 Act and the final rule are buffers to protect the farm from 
development, not necessarily to function as a water quality buffer.
    Comments: NRCS received three comments that FRPP should be 
redesigned to be a grant program similar to block grants where Federal 
agencies focus on the results and facilitate local management of the 
program.
    Response: The statute describes the program as a cost-share 
program. The original House legislation proposed a grant program; 
however, Congress did not adopt that provision of the legislation in 
the Conference Report. In the Conference Report, Congress designed FRPP 
as a program to provide financial assistance through a cooperative 
agreement to facilitate the purchase of conservation easements by 
eligible entities. As defined in the Federal Grants and Cooperative 
Agreement Act, 31 U.S.C. 6304 et seq., cooperative agreements are 
different from grants because, among other things, there is a higher 
level of Federal involvement. This is consistent with the FRPP 
statutory requirements which require significant involvement of the 
Secretary, including setting cooperative agreement requirements, 
certification, conservation planning, and enforcement.
    Comments: NRCS received two comments asserting that the requirement 
that eligible entities have pending offers to purchase conservation 
easements or other interests in eligible land before applying for FRPP 
funds is arbitrary and burdensome.
    Response: Section 1238H of the 1985 Act defines eligible land as 
``land on a farm or ranch that is subject to a pending offer for 
purchase from an eligible entity.'' Therefore, the pending offer is 
required to meet land eligibility criteria. Additionally, securing a 
pending offer ensures that the landowner is serious about selling an 
easement. No changes were made to the final rule.
    Comments: NRCS received one request that the term facilitate be 
added to the purpose of the program.
    Response: NRCS agrees with the respondent. However, the term 
facilitate was added to the language of Sec.  1491.4(a) of the interim 
final rule; therefore, no change is required to address this comment. 
NRCS believes that the language of Sec.  1491.4(a) affirms NRCS has 
shifted the focus of the program from purchasing conservation easements 
to facilitating the purchase of conservation easements by eligible 
entities. Also, adding the term facilitate identifies that NRCS will 
promote farm and ranch land protection, not that it will decrease the 
accountability required of cooperating entities.
    Comments: NRCS received 17 comments expressing concern about 
removal of the specific reference to topsoil protection as a primary 
program purpose.
    Response: Section 2401 of the 2008 Act revised the program purpose 
of FRPP so that the language no longer includes protection of topsoil. 
The purpose of the 2002 Act was ``protecting agricultural use and 
related conservation uses.'' NRCS is not authorized to change the 
purpose of the program. Even so, the protection of topsoil remains one 
of FRPP purposes as is made clear by the criteria for eligible land--
``prime, unique, or productive soil.''
    Comments: NRCS received one comment suggesting consideration of 
optional term easements consistent with State program requirements, 
where available.
    Response: Section 1491.4(b) of the interim final rule already 
provided for the maximum term allowed by State law. Optional term 
easements are often for less than the maximum term allowed by State 
law, and NRCS believes that the FRPP Federal investment is best served 
by permanent or the longest-term easement that is available. Therefore, 
NRCS did not adopt the recommendation of the respondent.
    Comments: NRCS received one comment recommending that NRCS allow 
entities to be qualified as eligible without being associated with a 
parcel.
    Response: Entities can be considered qualified to apply for FRPP 
financial assistance without having any parcels being considered for 
financial assistance. Because the entity's eligibility may vary over 
time as funding and staff wax and wane, an entity will have to be 
qualified at least annually unless they are an entity associated with a 
cooperative agreement with a term of 3 or 5 years.
    Comments: NRCS received 10 comments recommending that the final 
rule provide a more qualitative standard for eligible land that is 
consistent with existing State and local program requirements. The 
respondents argued that land eligibility tied to a percentage of the 
farm in certain soil types is inappropriate.
    Response: Congress established the criteria for eligible land in 
the 2008 Act. Section 1491.4(c) further clarifies program eligibility 
criteria. A criterion for land eligibility in the 2008 Act is prime, 
unique, and other productive soils. NRCS has national standards for 
prime, unique, and important farmland soil that have been developed in 
cooperation with Land Grant Universities in each State. The national 
target for prime, unique, and important farmland soil in FRPP, set by 
the White House Office of Management and Budget, is 65 percent of the 
total acres enrolled in FRPP. No changes were made to the final rule.
    Comments: NRCS received one comment asserting that there is no 
clear rationale as to why an easement cannot contain more than two-
thirds forest land. The respondent urges flexibility in this figure to 
allow for greater acreages if the forest meets the viability test as 
identified in the 2008 Act, and that there is no statutory restriction 
on amount of the forest land that can be enrolled.
    Response: The limitation of two-thirds forest land is to avoid 
conflicts with the Forest Legacy Program as requested by the USDA 
Forest Service. No changes were made to the final rule.
    Comments: NRCS received 75 comments asserting that the requirement 
for forest management plans is burdensome. The respondents requested 
that NRCS eliminate this requirement, or at least make the threshold 50 
acres. NRCS also received one comment stating that the forest 
management plan requirement was perfect.
    Response: The 2008 Act requires that forest land enrolled in FRPP 
contributes to the economic viability of the farm or serves as a buffer 
from development. A management plan is a minimal requirement to prove 
land eligibility and will be the primary means by which economic 
viability will be determined. In response to comments on the interim 
final rule, the final rule increased the amount of acreage enrolled in 
FRPP requiring a forest management plan to 40 contiguous acres, or 20 
percent of the easement area from 10 contiguous acres or 10 percent of 
the easement area. Forest land that contributes to the economic 
viability of the farm may include parcels of forest with viability for 
timber harvest, hunting, or other recreational uses for which a fee may 
be charged. Section 1491.4(g)(2) of the final rule has been modified by 
adding ``or serves as a buffer to protect an agricultural operation 
from development'' to allow the Chief to identify other means for which 
the contribution of FRPP to the economic viability can be demonstrated.
    Comments: NRCS received eight comments asserting that NRCS should 
not require hazardous materials records search and site reviews.

[[Page 4039]]

    Response: NRCS does not require the eligible entity to do hazardous 
materials records search. However, the hazardous materials records 
search, site review, and landowner interview are basic due diligence 
requirements that are recommended for any purchaser of real property. 
NRCS may conduct its own hazardous materials records search, site 
review, and landowner interview to ensure public funds are not being 
used to acquire an interest in contaminated sites.
    Comments: NRCS received one comment that the term suitability may 
need to be replaced with unsuitable for this sentence to make sense.
    Response: NRCS agrees with the respondent. Section 1491.4(f)(8) has 
been modified to reflect the commenter's suggestion.
    Comments: NRCS received one comment supporting the provision in 
Sec.  1491.4(f)(9) that eligible land ``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 and may be offered for 
participation in the program.''
    Response: NRCS appreciates the respondent's support for the 
provision. NRCS will assess the potential impact that the third party 
rights, such as severed or leased mineral rights, may have upon 
achieving the program purposes. NRCS reserves the right to deny funding 
for any application where existing encumbrances will have an adverse 
impact upon the ability to protect the agricultural viability of the 
land, and such encumbrances are not able to be resolved during the 
title clearance process.
    Comments: NRCS received one comment that requested NRCS not allow 
large entities to dictate the terms of the program.
    Response: NRCS uses a ranking process as described in Sec.  1491.6 
of the final rule to ensure all cooperating entities are treated 
equally. The process ranks the parcels to be selected for funding, not 
the entity. The entity must meet the eligibility criteria as described 
in Sec.  1491. NRCS will not abdicate its responsibility to ensure that 
FRPP is administered in a manner that protects Federal investment in 
farmland protection.
Ranking Considerations and Proposal Selection, Sec.  1491.6 of the 
Interim Final Rule
    Comments: NRCS received one comment recommending that NRCS delete 
the suggested State criteria involving succession plans.
    Response: The State criteria are suggestions only. They are not 
requirements. USDA encourages succession planning for farmers and 
ranchers; therefore, no changes were made to the final rule.
    Comments: NRCS received one comment recommending deletion of the 
suggested State criteria involving access for recreation.
    Response: As discussed above, NRCS removed the reference to 
priority for allowing public access to acknowledge the biohazard 
concerns of agricultural operations.
    Comments: NRCS received 80 comments asserting that delineating 
specific national criteria in the rule that are not called for by 
statute may conflict with established State and local criteria. The 
respondents argue that certified entities should be allowed to use 
their own ranking and proposal selection process, and that NRCS should 
identify broad categories, but not specific criteria, in order to 
facilitate comparison between applications from certified and non-
certified entities.
    Response: NRCS believes that it is the ranking aspect of FRPP that 
provides the greatest assurance that FRPP purposes are being met, and 
national criteria are vital to the ranking process. Certification alone 
does not ensure that the parcels selected will best meet FRPP purposes. 
The national ranking factors in the 2003 FRPP final rule only provided 
weight to the cooperating entities with the longest tenure and the 
largest budgets and staff. No weight was given to the quality of the 
parcels. The national ranking factors in the 2009 interim final rule 
removed the bias in favor of established cooperating entities with 
large budgets and staff, and placed greater emphasis on the quality of 
the parcels. Parcels submitted by all eligible entities are treated 
equally once the eligible entities have met the eligibility criteria. 
In every State except two, parcels are submitted by certified and non-
certified eligible entities. There must be a selection process that is 
common to both certified and non-certified entities. NRCS State offices 
may score and weigh the national ranking factors to reflect the State's 
needs and add ranking factors that reflect State or local priorities. 
NRCS accepts applications on a continuous basis. The announcement of 
the application ranking date is changed from 60 days to 30 days before 
ranking to allow State offices to select eligible parcels and obligate 
funds faster. The reduced time will also allow States to announce 
multiple ranking dates.
Violations and Remedies
    Comments: NRCS received one comment that asserted that if NRCS 
finds that a grantor has violated the easement, then NRCS should pursue 
cost recovery directly from the grantor without obligation from the 
grantee. The respondent believes that NRCS should only pursue legal 
action against the grantee if NRCS feels the grantee is violating its 
obligations.
    Response: Section 1491.30(c) of the interim final rule states that 
the landowner will be liable for any costs. NRCS has identified that it 
will only seek to enforce an easement if the grantee has failed to do 
so; therefore, no changes were made to the final rule.
Miscellaneous
    Comments: NRCS received one request that NRCS use eligible entity 
in place of cooperating entity.
    Response: NRCS agrees with the respondent. The change is required 
for clarity and has been made in the final rule.
    Comments: NRCS received one request that NRCS use eligible entity 
in place of grantee.
    Response: NRCS agrees with the respondent. The change is required 
for clarity and has been made in this final rule where applicable. 
However, there are certain situations where grantee is the appropriate 
term, and NRCS retained its use in those circumstances.
    Comments: NRCS received one request that the agency not use 
eligible entity to address an entity before it is determined to be 
eligible.
    Response: NRCS agrees with the respondent. The change is required 
for clarity and has been made in the final rule.

List of Subjects in 7 CFR Part 1491

    Administrative practice and procedure, Agriculture, Soil 
conservation.

    For the reasons stated above, the CCC revises part 1491 of Title 7 
of the CFR 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.

[[Page 4040]]

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 will 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, 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 will be administered under the 
general supervision and direction of the NRCS Chief.
    (b) NRCS will--
    (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 will not exceed 50 percent of the 
appraised fair market value of the conservation easement;
    (4) Determine eligibility of the land, landowner, State government, 
local government, Indian Tribe, or nongovernmental organization;
    (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 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 Commodity 
Credit Corporation (CCC) with the selected eligible 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 will 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 FRPP or equivalent, or 
where no program exists. Agricultural uses should be defined by the 
State agricultural use tax assessment program. However, 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 or designee.
    Commodity Credit Corporation is a government-owned and operated 
entity that was created to stabilize, support, and protect farm income 
and prices. The CCC is managed by a Board of Directors, subject to the 
general supervision and direction of the Secretary of Agriculture, who 
is an ex-officio director and chairperson of the Board. The 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 developed by NRCS in consultation with the landowner through 
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 a nongovernmental 
organization which is sufficiently 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 Indian Tribe, State government, local 
government, or a nongovernmental 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.
    Eligible land means privately owned land on a farm or ranch that 
NRCS has determined to meet the requirements of Sec.  1491.4(f) of this 
part.
    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 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 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 or ranch succession plan means a general plan to address the 
continuation of some type of

[[Page 4041]]

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 or ranchers.
    Field Office Technical Guide 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 Field Office Technical Guide 
(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 land of statewide importance means forest land that the 
State Conservationist, in consultation with the State Technical 
Committee, identifies as having ecological or economic significance 
within the State, and may include forested areas or regions of the 
State that have been identified through statewide assessments and 
strategies conducted pursuant to State or Federal law.
    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.
    Impervious surface means surfaces that are covered by asphalt, 
concrete, roofs, or any other surface that does not allow water to 
percolate into the soil.
    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.) 
that is eligible for the special programs and services provided by the 
United States to Indians because of their status as Indians.
    Land Evaluation and Site Assessment System means the land 
evaluation system approved by the 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 regulation 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 nongovernmental 
organizations that qualify as eligible entities are not eligible as 
landowners, unless otherwise determined by the Chief.
    Natural Resources Conservation Service means an agency of the 
Department of Agriculture.
    Nongovernmental organization means any organization that:
    (1) Is organized for, and at all times since, the formation of the 
organization, and 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 will only 
be used to purchase other interests in land with prior approval from 
the Chief.
    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.
    Parcel means a farm or ranch submitted for consideration for 
funding under this part.
    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 a vested right set forth in the 
conservation easement deed, equal in scope to the right of inspection 
and enforcement granted to the grantee, that the Chief, on behalf of 
the United States, may exercise under specific circumstances in order 
to enforce the terms of the conservation easement when not enforced by 
the holder of the easement.
    Secretary means the Secretary of the United States Department of 
Agriculture.
    State Conservationist means the NRCS employee authorized to direct 
and supervise NRCS activities in a State, the Caribbean Area (Puerto 
Rico and the

[[Page 4042]]

Virgin Islands), or the Pacific Islands Area (Guam, American Samoa, and 
the Commonwealth of the Northern Mariana Islands).
    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.
    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 the CCC, will facilitate 
and 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 non-agricultural 
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 eligible 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 or other interests in land will be in 
perpetuity unless prohibited by State law. In States that limit the 
term of the easement or other interest in land, the term of the 
easement or other interest in land must be the maximum allowed by State 
law.
    (c) To be eligible to receive FRPP funding, an Indian Tribe, State, 
unit of local government, or a nongovernmental organization 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 Indian Tribe, State, 
unit of local government, or a nongovernmental organization must be 
qualified to be an eligible entity and must submit a written request 
for certification to the Chief at the same time the entity is 
requesting FRPP cost-share assistance. In order to be certified, an 
eligible entity must:
    (1) Meet the requirements identified in paragraph (c) of this 
section;
    (2) Use or agree to use for FRPP funded acquisitions, the Uniform 
Standards for Professional Appraisal Practice or the Uniform Appraisal 
Standards for Federal Land Acquisitions in conducting appraisals;
    (3) Hold, manage, and monitor a minimum of 25 agricultural land 
conservation easements, unless the entity requests and receives a 
waiver of this requirement from the Chief;
    (4) Hold, manage, and monitor a minimum of five FRPP or Farmland 
Protection Program conservation easements;
    (5) Have the demonstrated ability to complete acquisition of 
easements in a timely fashion;
    (6) Have the capacity to enforce the provisions of easement deeds;
    (7) For nongovernmental organizations, possess 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;
    (8) Be willing to adjust procedures to ensure that the conservation 
easements acquired meet FRPP purposes and are enforceable; and
    (9) Have a plan for administering easements enrolled under this 
part, as determined by the Chief.
    (e) Once NRCS determines that an eligible entity qualifies as a 
certified entity:
    (1) NRCS will enter into a cooperative agreement with the certified 
entity through which NRCS may obligate funding for up to 5 years. New 
parcels or prior-year unfunded parcels submitted for funding by 
certified entities must compete for funding each year. Selected parcels 
and funding will be added to the existing cooperative agreement using 
an amendment to the cooperative agreement. Funding expiration dates for 
the added parcels will be in the amendment to the cooperative 
agreement;
    (2) NRCS will accept applications from certified entities 
continuously throughout the fiscal year;
    (3) Certified entities may elect to close easements without NRCS 
approving the conservation easement deeds, titles, or appraisals before 
closing;
    (4) Certified entities will prepare the conservation easement 
deeds, titles, and appraisals according to NRCS requirements as 
identified in the cooperative agreement;
    (5) NRCS will conduct quality assurance reviews of a percentage of 
the conservation easement transactions submitted by the certified 
entity for payment. The review will include whether the deed, title 
review, or appraisals were conducted in accordance with the 
requirements set forth by NRCS in its certification of the eligible 
entity or in the cooperative agreement entered into with the certified 
entity; and
    (6) If a certified entity closes on the easement without a pre-
closing NRCS review, and the conservation easement deed, title, or 
appraisal fails the NRCS quality assurance review, NRCS will provide 
the certified entity an opportunity to correct the errors. If the 
certified entity fails to correct the errors to NRCS satisfaction, NRCS 
may consider decertification of the entity in accordance with paragraph 
(f) of this section.
    (f) Review and decertification of the certified entity. (1) The 
Chief will conduct a review of the certified entity a minimum of once 
every 3 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 will:
    (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 
correct the identified deficiencies, and
    (ii) If the State Conservationist has determined the certified 
entity does not meet the criteria established in Sec.  1491.4(d) after 
the 180 days, the State Conservationist will send, by certified mail, 
return receipt requested, written notice of proposed decertification of 
the entity's certification status or eligibility for future FRPP 
funding. This notice will contain what actions have not been completed 
to retain certification status, what actions the entity must take to 
request certification status, the status of funds in the cooperative 
agreement, and the eligibility of the entity to apply for future FRPP 
funds. The entity may

[[Page 4043]]

contest the Notice of Decertification in writing to the State 
Conservationist within 20 calendar days of receipt of the notice of 
proposed decertification.
    (3) The period of decertification may not exceed 3 years in 
duration, with duration of decertification based upon the seriousness 
of the facts; and
    (4) The entity may be recertified upon application to NRCS, after 
the decertification period has expired, and when the entity has met the 
requirements as outlined under Sec.  1491.4(d).
    (g) 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; 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, pastureland, 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, pastureland, 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. Land with contiguous forest that exceeds the greater of 
40 acres or 20 percent of the easement area will have a forest 
management plan before closing, unless the Chief has reviewed and 
approved an alternative means by which the forest land's contribution 
to the economic viability of the land has been demonstrated;
    (6) NRCS will not provide FRPP funds for the purchase of an 
easement or other interest in land on land owned in fee title by an 
agency of the United States, a State or local government, or by a 
nongovernmental organization 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 
non-agricultural use;
    (7) Must be owned by landowners who certify that they do not exceed 
the adjusted gross income limitation eligibility requirements set forth 
in part 1400 of this title;
    (8) Must possess suitable onsite and offsite conditions which will 
allow the easement to be effective in achieving the purposes of the 
program. Unsuitable 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 and may be offered for participation in the program. However, 
if an applicant submits an offer for an easement project, the 
Department of Agriculture (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.
    (h) Prior to closing, 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 eligible entity. State 
Conservationists will provide the guidelines through which NRCS will 
review appraisals for quality assurance purposes. Entities must provide 
a copy of the appraisal to NRCS.
    (i) The landowner will be responsible for complying with the Highly 
Erodible Land and Wetland Conservation provisions of the Food Security 
Act of 1985 (1985 Act), as amended and 7 CFR part 12.
    (j) The entity may substitute acres within a pending offer. 
Substituted acres must not decrease the value of the offered easement 
or the value of the parcel in meeting program purposes. With the State 
Conservationist's approval, a cooperating entity may substitute pending 
offers within their cooperative agreement. The landowner and parcel 
must meet eligibility criteria as described in Sec.  1491.4(e). The 
State Conservationist may require re-ranking of substituted acres and 
substituted parcels.


Sec.  1491.5  Application procedures.

    (a) An Indian Tribe, State, unit of local government, or a 
nongovernmental organization will submit an application to the State 
Conservationist in the State where parcels are located.
    (b) The State Conservationist will determine whether the Indian 
Tribe, State, unit of local government, or a nongovernmental 
organization is eligible to participate in FRPP based on the criteria 
set forth in Sec.  1491.4(c).
    (c) The Chief will determine whether an eligible entity is a 
certified entity based on the criteria set forth in Sec.  1491.4(d), 
information provided by the application, and data in the national FRPP 
database.
    (d) The State Conservationist will notify each Indian Tribe, State, 
unit of local government, or a nongovernmental organization if it has 
been determined eligible, certified, or ineligible.
    (e) Eligible 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.
    (f) Throughout the fiscal year, eligible entities may submit to the 
appropriate State Conservationist applications for parcels, in that 
State, with supporting information to be scored, ranked, and considered 
for funding.
    (g) At the end of each fiscal year, the lists of pending, unfunded 
parcels will be cancelled unless the eligible 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 will 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 will comprise at least half of the 
ranking system score.
    (c) At least 30 days before the ranking of parcels, the State 
Conservationist will announce the date on which ranking of parcels will 
occur. A State Conservationist may announce more than one date of 
ranking in a fiscal year.
    (d) All parcels submitted throughout the fiscal year will be 
scored. All parcels

[[Page 4044]]

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 will be listed on the 
agreements of the entities that submitted the parcels, and the 
agreements will be signed by the State Conservationist and the eligible 
entity. Funds for each fiscal year's parcels will be obligated with a 
new signature each year on an amendment to the agreement. Parcels 
funded on each fiscal year's amendment will 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 
an Indian Tribe, State government or local government, or by a 
nongovernmental organization 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 non-agricultural 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 eligible entity's experience in managing 
and enforcing easements. Performance must be measured by the closing 
efficiency or percentage of parcels that have been monitored and the 
percentage of monitoring results that have been reported. The number of 
years of an eligible entity's existence, budget, or staffing level will 
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 system. This 
score serves as a measure of agricultural viability (access to markets 
and infrastructure); and
    (7) Existence of a farm or ranch succession plan or similar plan 
established to encourage farm viability for future generations.
    (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 the CCC, will enter into a cooperative 
agreement with entities selected for funding. Once a proposal is 
selected by the State Conservationist, the eligible 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 will be 5 years for 
certified entities and 3 years for other eligible entities.
    (c) The cooperative agreement will include an attachment listing 
the parcels accepted by the State Conservationist. This list will 
include landowners' names and addresses, acreage, the estimated fair 
market value, the estimated Federal contribution, and other relevant 
information. The cooperative agreement template will be made available 
by the State Conservationist.
    (d) The cooperative agreement will incorporate the provisions 
necessary for the eligible entity to comply with applicable 
registration and reporting requirements of the Federal Funding 
Accountability and Transparency Act of 2006 (Pub. L. 109-282, as 
amended) and 2 CFR parts 25 and 170.


Sec.  1491.21  Funding.

    (a) Subject to the statutory limits, the State Conservationist, in 
coordination with the eligible entity, will 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 consistent with Sec.  1491.4(g). An 
eligible entity will 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 eligible 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 
eligible entity.
    (f) NRCS will conduct its technical and administrative review of 
appraisals and its hazardous materials reviews with FRPP funds.
    (g) If the State Conservationist determines that the purchase of 
two or more conservation easements are comparable in achieving FRPP 
goals, the State Conservationist will not assign a higher priority to 
any one of these conservation easements solely on the basis of lesser 
cost to FRPP.
    (h) 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; 
and

[[Page 4045]]

    (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 will 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 will be for the maximum 
allowed under State law.
    (c) The eligible entity may use its own terms and conditions in the 
conservation easement deed, but the conservation easement deed must be 
reviewed and approved by National Headquarters in advance of use. 
Individual conservation easement deeds used by the eligible entity will 
be submitted to National Headquarters at least 90 days before the 
planned closing date. Eligible entities with multiple parcels in a 
cooperative agreement may submit a conservation easement deed template 
for review and approval. The deed templates must be reviewed and 
approved by National Headquarters in advance of use. For eligible 
entities that have not been certified, the NRCS State offices will 
review prior to closing the conservation easement deeds for individual 
parcels to ensure that they contain the same language as approved by 
the national office and that the appropriate site-specific information 
has been included. 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. The Chief may 
exercise the option to promulgate standard minimum conservation deed 
requirements as a condition for receiving FRPP funds.
    (d) The conveyance document must include a right of enforcement 
clause. NRCS will specify the terms for the right of enforcement clause 
to read as set forth in the FRPP cooperative agreement. This right is a 
vested property right and cannot be condemned by State or local 
government.
    (e) As a condition for participation, a conservation plan will be 
developed by NRCS in consultation with the landowner and implemented 
according to the FOTG. 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 1985 Act, 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 will grant to the United States, 
through NRCS, its successors or assigns, a right of access to the 
easement area.
    (f) The eligible entity will acquire, hold, manage, and enforce the 
easement. The eligible entity may have the option to enter into an 
agreement with governmental or private organizations to carry out 
easement stewardship responsibilities.
    (g) NRCS will 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 will be provided to NRCS by the 
eligible entity.
    (i) Impervious surfaces will not exceed 2 percent of the FRPP 
easement area, excluding NRCS-approved conservation practices. The 
State Conservationist may waive the 2 percent impervious surface 
limitation on a parcel-by-parcel basis, provided that no more than 10 
percent of the easement area is covered by impervious surfaces. Before 
waiving the 2 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 quality concerns in the area, the type of 
agricultural operation, and parcel size. Eligible entities may submit 
an impervious surface limitation waiver process to the State 
Conservationist for review and consideration. The eligible entities 
must apply approved impervious surface limitation waiver processes on a 
parcel-by-parcel basis. State Conservationists will not approve blanket 
waivers of the impervious surface limitation for all parcels 
administered by the eligible entity without regard for the 
characteristics of individual parcels. 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 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. The conservation easement deed must require that NRCS 
approve any substantive amendment.

Subpart C--General Administration


Sec.  1491.30  Violations and remedies.

    (a) In the event of a violation of the easement terms, the eligible 
entity will 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 eligible entity fails to enforce any of 
the terms of the conservation easement as determined by the Chief, the 
Chief or 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 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 will be entitled to recover any and all 
administrative and legal costs from the participating eligible 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 will 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. The CCC's share will be in 
proportion to its percentage of original investment.
    (f) In the event NRCS determines it must exercise its rights 
identified under a conservation easement or other

[[Page 4046]]

interest in land, NRCS will provide written notice by certified mail, 
return receipt requested, to the eligible entity at the eligible 
entity's last known address. The notice will set forth the nature of 
the noncompliance by the eligible entity and a 60-day period to cure. 
If the eligible entity fails to cure within the 60-day period, NRCS 
will take the action specified under the notice. NRCS reserves the 
right to decline to provide a period to cure if NRCS determines that 
imminent harm may result to the conservation values or other interest 
in land 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 will be a final agency action except a decision of the 
Chief under these provisions.
    (c) Enforcement action undertaken by 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 NRCS that a eligible entity has employed 
a scheme or device to defeat the purposes of this part, any part of any 
program payment otherwise due or paid to such an eligible entity during 
the applicable period may be withheld or be required to be refunded, 
with interest, as determined appropriate by NRCS on behalf of the CCC.
    (b) A scheme or device includes, but is not limited to, coercion, 
fraud, misrepresentation, and 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 11th day of January, 2011 in Washington, DC.
Dave White,
Vice-President, Commodity Credit Corporation and Chief, Natural 
Resources Conservation Service.
[FR Doc. 2011-1212 Filed 1-21-11; 8:45 am]
BILLING CODE 3410-16-P