Agricultural Conservation Easement Program

 
CONTENT
Federal Register, Volume 85 Issue 3 (Monday, January 6, 2020)
[Federal Register Volume 85, Number 3 (Monday, January 6, 2020)]
[Rules and Regulations]
[Pages 558-590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27883]
[[Page 557]]
Vol. 85
Monday,
No. 3
January 6, 2020
Part II
Department of Agriculture
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Commodity Credit Corporation
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7 CFR Part 1468
Agricultural Conservation Easement Program; Interim Rule
Federal Register / Vol. 85 , No. 3 / Monday, January 6, 2020 / Rules
and Regulations
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1468
[Docket ID NRCS-2019-0006]
RIN 0578-AA66
Agricultural Conservation Easement Program
AGENCY: Natural Resources Conservation Service (NRCS) and the Commodity
Credit Corporation (CCC), U.S. Department of Agriculture (USDA).
ACTION: Interim rule.
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SUMMARY: The Agriculture Improvement Act of 2018 (the 2018 Farm Bill)
made changes to ACEP. This interim rule makes conforming changes to the
ACEP policies and procedures in the regulations.
DATES:
    Effective: December 30, 2019.
    Comment date: Submit comments on or before March 6, 2020.
    Comment date for Environmental Review: Submit comments on the draft
Environmental Analysis (EA) and Finding of No Significant Impact
(FONSI) on or before February 5, 2020.
ADDRESSES: We invite you to submit comments on this document. In your
comments, include the date, volume, and page number of this issue of
the Federal Register, and the title of this document. You may submit
comments by the following method:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and search for Docket ID NRCS-2019-0009. Follow the
online instructions for submitting comments.
    All written comments received will be publicly available on
www.regulations.gov.
    A copy of the draft Environmental Assessment (EA) and Finding of No
Significant Impact (FONSI) may be obtained from either of the following
websites: www.regulations.gov or https://www.nrcs.usda.gov/wps/portal/nrcs/detail/national/programs/farmbill/?cid=nrcseprd1504015. A hard
copy may also be requested in one of the following ways:
     Via mail: [email protected] with ``Request for EA'' in
the subject line; or
     A written request: Karen Fullen, Environmental Compliance
Specialist, Natural Resources Conservation Service, 9173 W Barnes Dr.,
Suite C, Boise, ID 83709.
FOR FURTHER INFORMATION CONTACT: Jeffrey White, 202-720-1882; email:
[email protected]. Persons with disabilities who require
alternative means for communication should contact the USDA Target
Center at (202) 720-2600 (voice).
SUPPLEMENTARY INFORMATION:
Background
    The Agricultural Conservation Easement Program (ACEP) is a
voluntary program to help farmers and ranchers preserve their
agricultural land and restore, protect, and enhance wetlands on
eligible lands. The program has two easement enrollment components:
     Agricultural land easements (ACEP-ALE); and
     Wetland reserve easements (ACEP-WRE).
    Under ACEP-ALE, NRCS provides matching funds to State, Tribal, and
local governments, and nongovernmental organizations with farm and
ranch land protection programs to purchase agricultural land easements.
Agricultural land easements are permanent or for the maximum duration
authorized by State law. Under ACEP-WRE, NRCS protects wetlands on
eligible lands by purchasing an easement directly from eligible
landowners or entering into 30-year contracts on acreage owned by
Indian Tribes, in each case providing for the restoration, enhancement,
and protection of wetlands and associated lands. Wetland reserve
easements may be permanent, 30-years, or the maximum duration
authorized by State law.
    ACEP was originally authorized by the Agricultural Act of 2014 (the
2014 Farm Bill) and NRCS administers ACEP pursuant to regulations at 7
CFR part 1468 issued as a final rule on October 18, 2016.
The 2018 Farm Bill
    The 2018 Farm Bill made changes to the ACEP authorizing legislation
in the Food Security Act of 1985, including:
     Identifying and protecting agricultural land by limiting
nonagricultural uses that negatively affect the land's agricultural
uses and conservation values as an ACEP purpose.
     Removing the requirement that NRCS seek input from the
Secretary of the Interior at the local level in the determination of
eligible land.
     Defining the term ``monitoring report.''
     Removing the requirement that an agricultural land
easement be subject to an agricultural land easement plan but retaining
the requirement that there be a conservation plan on any portion of the
easement area that is highly erodible cropland.
     Identifying for agricultural land easements that the U.S.
right of enforcement does not extend to a right of inspection except
under certain circumstances.
     Introducing new considerations for certification of
eligible entities, including whether the entity is an accredited land
trust or is a State department of agriculture.
     Adding improving water quality to the priority
considerations for acquiring wetland reserve easements.
     Adding additional criteria and parameters for the
authorization of compatible economic uses on wetland reserve easements.
     Adding further specificity to considerations made in
developing a wetlands reserve easement plan.
     Authorizing the Secretary to enter into a legal
arrangement with an eligible entity that is interested in a ``buy-
protect-sell'' transaction for the acquisition of an agricultural land
easement.
     Removing the requirement that 50 percent of the non-
Federal share for an agricultural land easement be provided by cash
resources of the eligible entity and identifying the extent to which
the non-Federal share can be comprised by other sources, such as a
qualified charitable donation by the landowner.
     Specifying the existing policy of the Secretary to adjust
agricultural land easement ranking and evaluation criteria for
geographic differences and to give priority to applications that
maintain agricultural viability.
     Introducing additional terms and conditions that may be
included in the agricultural land easement deed.
     Specifying the existing policy of the Secretary to ensure
that the grazing uses on a wetland reserve easement with a reservation
of grazing rights comply with a grazing management plan, that is
reviewed and modified as needed at least every 5 years.
     Identifying the criteria under which NRCS may authorize
the restoration of the wetland reserve easement area to hydrologically
appropriate native vegetative communities or alternative naturalized
vegetative communities, subject to certain requirements.
     Incorporating changes to NRCS's subordination,
modification, exchange, or termination of ACEP easements.
USDA 2018 Farm Bill Listening Session
    On February 14, 2019, the Farm Service Agency (FSA), NRCS, and the
Risk Management Agency (RMA) published a notice in the Federal Register
(84 FR 4041-4044) announcing
[[Page 559]]
a listening session for initial public input on the changes to existing
programs implemented by the agencies. The listening session was held on
February 26, 2019. The Commodity, Credit, and Crop Insurance titles,
and parts of the Conservation, Energy, and Miscellaneous titles were
covered during the listening session. The agencies also announced an
opportunity for the public to make written statements through March 1,
2019. Each agency will take into account stakeholder input when making
discretionary decisions on program implementation.
    FSA, NRCS, and RMA received 183 written comments from individuals,
trade groups, other organizations, and State entities. All written
comments are available to the public for review at: https://www.regulations.gov/document?D=USDA-2019-0001-0001. In addition to
program-specific comments, there were recurring overarching comments
about placing a priority on information sharing between agencies for
data collection regarding soil health and conservation practices.
    NRCS received a number of comments regarding the Agricultural
Conservation Easement Program (ACEP), with the majority of those
comments pertaining to the ACEP-ALE and a smaller number pertaining to
ACEP-WRE. Among the comments submitted, NRCS received 11 comments
recommending a more streamlined and efficient easement application and
enrollment process across ACEP.
    NRCS received 12 comments regarding the elimination of the
requirement for an agricultural land easement plan on ACEP agricultural
land easements. Most of these 12 comments called for the immediate
implementation of this new Farm Bill provision in FY 2019, while others
pushed for the prioritization of easements that have strong
conservation planning.
    NRCS received 10 comments seeking for additional guidance on the
buy-protect-sell provisions of the Farm Bill. Most of the comments
asked the Agency to ``clearly outline the scenario where one eligible
entity owns the land and another eligible entity acquires the
conservation easement.'' Other comments urged flexibility in the
consideration of extensions to the timing requirements for land
transfer under buy-protect-sell transactions, to help beginning and
young farmers acquire lands.
    NRCS received 10 comments regarding allocation and expenditure of
funding across ACEP, of which 5 comments recommended an annual
allocation of $30 million for the partnership arrangements under the
wetland reserve enhancement partnership (WREP) option in FY 2019. Other
comments recommended that funding allocations for ACEP follow
historical program demand, providing at least two-thirds of the funding
for wetland reserve easements and the rest for agricultural land
easements.
    On the Farm Bill provisions related to ACEP-ALE cost-share
requirements, NRCS received 10 comments recommending that the
elimination of minimum cash contribution amount from the eligible
entity as a component of the non-federal share of an agricultural land
easement not be subject to geographic limits. Other comments
highlighted that cash contributions provided by the eligible entity
should be prioritized and that closing costs be included under the
permissible forms of non-federal share.
    NRCS received eight comments that advocate for establishing an
efficient process for granting waivers of the Adjusted Gross Income
(AGI) limitation as it relates to the funding of conservation easements
that will result in the protection of environmentally sensitive land of
special significance, with a focus on easements that will help protect
migratory birds, conserve wetlands, secure habitat connectivity,
improve water quality, or contribute to conservation objectives
identified in wildlife, landscape, or watershed plans and initiatives.
    NRCS received seven comments recommending increased flexibility in
ACEP-ALE deed term requirements and streamlined process for accredited
land trusts to become certified entities. There were also seven
comments seeking clarification whether agricultural land easements can
be up to 100 percent forest land, given the provision on
``nonindustrial private forest land'' under the eligible land
definition.
    NRCS received six comments recommending that the Agency work with
regional, state and local wildlife agencies on ACEP-WRE enrollment and
implementation, and on the determination of ``alternative plant
communities.'' Other comments underlined the importance of science-
based forest and vegetation management in the restoration of new and
the maintenance of existing wetland reserve easements.
    NRCS received four comments urging the stringent application of the
statutory requirements in the approval of subsurface mineral
development projects on agricultural land easements and for the use of
diverse native plants in remediation and restoration plans.
    NRCS received three comments recommending that ``grasslands of
special environmental significance'' include native grasslands at risk
of conversion and those that provide habitat for threatened and
endangered species. Including a recommendation for the prioritization
of those on which the benefits of the grassland will be maximized
through robust conservation management activities.
    NRCS received three comments that recommended setting an annual
date for FSA to provide NRCS the 25 percent cropland compliance report
and releasing state and county-level data regarding closed ACEP
easements to the public. NRCS received three comments recommending
increased tracking and reporting of conservation and environmental
outcomes related to land protected by conservation easements under
ACEP.
    NRCS also received requests for additional guidance on the
following issues and provisions:
     Co-eligible entity process used in ACEP-ALE;
     Clear program rules on easement modification and
termination;
     Clarification on what constitutes ``non-agricultural
uses'' on eligible land under ACEP-ALE;
     Clear guidance on the ``reasonable person'' approach to
valuation in land appraisals for easements;
     Support for inclusion of water quality improvement in
program priorities and in the national ranking criteria; and
     Funding for technical assistance to implement ACEP-ALE.
    NRCS evaluated the changes made by the 2018 Farm Bill and the
comments received during the listening session and is incorporating
changes into the ACEP regulation as discussed below.
Discussion of Key Changes Incorporated Into the ACEP Regulation
    Several of the changes require different provisions of the ACEP
regulation to be revised. NRCS discusses the key changes first
generally depending upon whether the change is ACEP-wide, ACEP-ALE, and
ACEP-WRE, and then summarizing any changes to each of the sections has
changed.
ACEP-Wide Key Changes
AGI Waiver
    Section 1001D of the Food Security Act of 1985 specifies that a
person or legal entity is not eligible to receive a payment or benefit
under Title XII of the Food Security Act of 1985 if the average annual
AGI of the person or legal entity
[[Page 560]]
exceeds $900,000. Section 1704 of the 2018 Farm Bill amended section
1001D to reauthorize a waiver to the application of the AGI limitation
to certain conservation program payments, on a case-by-case basis, if
environmentally sensitive land of special significance would be
protected as a result of such waiver. An AGI waiver provision was
authorized under the Food, Conservation, and Energy Act of 2008 (2008
Farm Bill) but was removed under the Agricultural Act of 2014 (2014
Farm Bill). This rule incorporates the AGI waiver in Sec.  1468.2.
Easement Administration Actions: Easement Subordination, Modification,
Exchange, and Termination
    The 2014 Farm Bill provided NRCS with flexibility in the long-term
administration of easements by authorizing NRCS to approve an easement
subordination, modification, exchange, or termination under specified
criteria identified in statute. These actions are referred to
collectively as easement administration actions. In particular, as
originally authorized, NRCS could approve an easement administration
action if NRCS determined that the action:
    (1) Was in the Federal Government's interest,
    (2) addressed a compelling public need for which there is no
practicable alternative or such action furthered the practical
administration of the program,
    (3) resulted in comparable conservation value and equivalent or
greater economic value to the United States, and
    (4) other requirements specific to the action type.
    NRCS defined each of the easement administration actions in the
ACEP regulation to provide a clear distinction between each type of
easement administration action and identified the criteria under which
these actions are evaluated.
    The 2018 Farm Bill modified slightly the criteria under which NRCS
may subordinate, modify, exchange, or terminate part or all of an
easement. In particular, the 2018 Farm Bill distinguished each of these
easement administration actions by providing interrelated but somewhat
different criteria for subordination actions, for modification and
exchange actions, and for termination actions. The Managers recognized
the substantial investment taxpayers make in easements but identified
that on limited occasions, there may be justifications for changes to
easements. In particular, the Managers identified that terminating an
easement should only be done in very rare cases and that the amendments
made by the 2018 Farm Bill did not weaken the current requirements for
termination actions.
    Because the statute now separates the actions and provides slightly
different criteria for each, NRCS has modified the regulation to
reflect the changes as follows:
     Defined the term easement administration action to ease
readability of the regulation where all four terms are referenced;
     Modified slightly the existing definition of easement
subordination to reflect the changes made in the statute;
     Maintained the existing definitions for easement
modification, easement exchange, easement termination as these conform
to the new statutory language;
     Modified the regulation slightly to clarify which criteria
are applicable to each of the types of easement administration actions;
and
     Reflected the new statutory provisions that certain
easement administration actions may not increase any payment to an
eligible entity and that for easement terminations, the United States
will be fully compensated for the fair market value of the land and any
costs or damages related to the easement termination as determined
appropriate by NRCS.
ACEP-ALE Key Changes
ACEP-ALE Non-Federal Contribution Requirements
    The contributions provided by the eligible entity for the purchase
of the agricultural land easement from the landowner are comprised of a
Federal share and non-Federal share based on the fair market value of
the agricultural land easement. The Federal share is limited to 50
percent of the fair market value of the easement and the non-Federal
share must be at least equivalent to the Federal share (except for
grasslands of special environmental significance (GSS) where the
Federal share may be up to 75 percent). This did not change.
    Under the 2014 Farm Bill, the non-Federal share provided by the
eligible entity could include a charitable donation or qualified
conservation contribution from the agricultural landowner, but the
eligible entity was required to contribute its own cash resources in an
amount of at least 50 percent of the Federal share provided by NRCS.
    The 2018 Farm Bill amended the ACEP-ALE non-Federal share
provisions by removing the requirement that the eligible entity
contribute its own cash resources in an amount that is at least 50
percent of the Federal share. Additionally, the 2018 Farm Bill
specified the permissible sources that could be considered part of the
non-Federal share, including cash resources provided by the eligible
entity, a charitable donation or qualified conservation contribution
from the landowner, costs associated with securing an ACEP-ALE deed,
and other costs as determined by NRCS.
    The removal of a specified cash contribution amount to be provided
by the eligible entity creates the potential for the only actual
payment provided to an agricultural landowner for the sale of the
easement to be the funds provided by NRCS subject to the limits of the
Federal share. To address the potential for reduced contributions from
the eligible entity and the resultant reduction in compensation paid to
the agricultural landowner for the sale of an easement, NRCS considered
whether it should establish by regulation a different or tiered cash
contribution requirement for eligible entities seeking ACEP funding. In
particular, NRCS considered whether the regulation should maintain some
level of required eligible entity cash contribution (for example, 10 to
25 percent) with the flexibility to waive the requirement in areas of
historically low ACEP-ALE enrollment, if the landowner was not a
historically underserved producer, or for projects of special
significance.
    However, given the intent of the Managers to broaden the ability of
eligible entities to participate in ACEP-ALE across a more diverse
geography, NRCS did not incorporate or specify an eligible entity cash
contribution level in this interim rule. Instead, NRCS will consider a
cash contribution provided by an eligible entity as a National ranking
matter.
    Additionally, NRCS determined that certain procured costs, such as
appraisals, boundary surveys, and closing costs, incurred by the
eligible entity to secure the easement deed may be considered as
meeting the non-Federal share. NRCS has limited the consideration of
``other nonprocured costs,'' such as stewardship expenses, to
circumstances when the other sources of the non-Federal share,
including entity cash contribution toward the easement payment and
entity costs for procured items, are not sufficient to meet the non-
Federal share requirement. NRCS anticipates that in general, the
contribution of an eligible entity's cash resources toward the purchase
of the easement itself in combination with any qualified landowner
donation will satisfy the extent of the non-Federal contribution
requirement. NRCS
[[Page 561]]
anticipates that consideration of other costs associated with securing
the deed or stewarding the easement will not be needed frequently for
the eligible entity to meet the non-Federal contribution requirement.
Therefore, to minimize the administrative burden to all parties to the
ACEP-ALE enrollment, NRCS will identify the documentation the eligible
entity must provide based on the level of reliance on those other costs
in the calculation of the non-Federal share.
    Also, the cost benefit analysis for this rule assessed whether the
lack of a specified eligible entity cash contribution requirement would
result in increased cost to ACEP and a commensurate reduction in
acreage enrollment in ACEP. This analysis determined that this change
will likely result in reduced leveraging of Federal funds by the
eligible entity, but may provide better access to ACEP-ALE in areas
where non-Federal farm and ranch land preservation funding is not
readily available.
ACEP-ALE Plan
    As originally authorized under the 2014 Farm Bill, all ACEP-ALE
enrollments required that the agricultural land easement be subject to
an ACEP-ALE plan. The plan incorporated any required component plans
needed to address particular land types or resource issues on the
enrolled parcel, such as a grasslands management plan on grassland, a
forest management plan for certain forest land, or a conservation plan
for highly erodible cropland.
    The 2018 Farm Bill removed the requirement that the agricultural
land easement be subject to an ACEP-ALE plan but continues to require a
conservation plan for any highly erodible cropland. Given that the 2018
Farm Bill identified that NRCS could give priority to an application
for the purchase of an agricultural land easement that maintains
agricultural viability, and to encourage eligible entities and NRCS to
work with landowners to undertake conservation planning on their land
in order to maximize the environmental value of the protected land,
NRCS considered how best to encourage continued resource management
planning on ACEP-ALE lands.
    In particular, NRCS considered whether to:
    (1) Continue to require a grassland management plan for GSS given
the greater Federal investment (that is, 75 percent of fair market
value) and the ability of the plan to help ensure the landowner has the
best available information to manage these sensitive grasslands;
    (2) Authorize NRCS at the State level to consider certain planning
activities as an eligibility consideration; or
    (3) Not require any planning, other than a conservation plan on
highly erodible land, but authorize the inclusion of a ranking factor
that recognizes agreement by the eligible entity to develop an
agricultural land easement plan.
    This rule changes various sections of the regulation to remove the
requirement that the easement to be subject to an ACEP-ALE plan, except
for the compliance requirements associated with a conservation plan on
highly erodible cropland. This rule removes the requirement for the
development of an ACEP-ALE plan. However, to encourage continued
planning on ACEP-ALE lands where a conservation plan is not required,
the regulation specifies that the development and maintenance by the
eligible entity of an ACEP-ALE plan, including a grassland or forest
management plan, can be a ranking consideration at the State level to
prioritize applications from eligible entities committed to ensuring
conservation planning activity occurs on lands to be enrolled in ACEP-
ALE. The decision to adopt a planning requirement is made by the NRCS
State Conservationist, in consultation with the State Technical
Committee. If such ranking is adopted at the State level and a parcel
enrolled accordingly based on that ranking, the regulation specifies
that the easement deed terms must require that the plan be updated to
reflect any change in the agricultural operations on the easement area.
Buy-Protect-Sell Transactions
    The 2018 Farm Bill defines a new transaction type and authorizes
the Secretary to enter into a legal arrangement for buy-protect-sell
transactions. Buy-protect-sell transactions are arrangements between
NRCS and an eligible entity where the entity owns or will own the land
prior to the acquisition of the agricultural land easement on the
property, and the eligible entity either:
    (1) Sells fee title to the land to a farmer or rancher prior to or
at easement closing; or
    (2) Holds fee title at the time the agricultural land easement is
conveyed on that land, and transfers ownership of the land subject to
the easement to a farmer or rancher not later than 3 years after the
date of acquisition of the agricultural land easement.
    Buy-protect-sell transactions are limited to private and Tribal
agricultural lands. State or local governments are not eligible for
buy-protect-sell transactions on land they own.
    Buy-protect-sell transactions differ from standard transactions
that occur under ACEP-ALE. The standard ACEP-ALE transactions involve
land that is currently owned by a farmer or rancher and subject to a
pending offer by an eligible entity to purchase an agricultural land
easement, but the eligible entity does not and would not ever own the
property itself.
    In contrast, all buy-protect-sell transactions require the eligible
entity hold fee title to the land and to transfer such title subject to
the agricultural land easement to a farmer or rancher at not more than
agricultural value plus reasonable holding and transaction costs within
the timeframes specified for the buy-protect-sell transaction type.
Failure to meet these conditions, as determined by NRCS, requires the
eligible entity to reimburse NRCS for the entirety of the Federal share
provided. NRCS evaluated alternatives for determining compliance with
buy-protect-sell conditions, including:
    (1) Verification that the purchaser was a farmer or rancher through
filing of an Internal Revenue Service (IRS) Schedule F (Form 1040),
``Profit or Loss From Farming,'' or alternatively an independent
certification by the eligible entity;
    (2) verification that the sale of the land occurred at not more
than agricultural value based on an independent appraisal provided by
the eligible entity, or alternatively other documentation and
certification of agricultural value provided by the eligible entity;
    (3) ensuring that the purchaser was charged only reasonable holding
and transaction costs by identifying the items that could be considered
and establishing an upper limit as a percentage of the agricultural
value, or alternatively defining reasonable holding and transaction
costs but not setting a fixed upper limit.
    NRCS also evaluated alternatives to minimize risk of transaction
failure and cost recovery, including:
    (1) For land that the eligible entity does not own but is in the
process of purchasing at the time the buy-protect-sell agreement is
entered into, there is an additional risk to these transactions should
the entity fail to complete the initial purchase of the land,
therefore, NRCS considered limiting the time frame for this initial
purchase to within 12 months of the execution of the buy-protect-sell
agreement, or alternatively
[[Page 562]]
requiring the initial purchase to be completed any time prior to
closing on the agricultural land easement;
    (2) to minimize the risk of cost recovery for the first type of
buy-protect-sell transactions described above by issuing the ACEP-ALE
cost-share payment only on a reimbursable basis after the agricultural
land easement has closed, or alternatively issuing the ACEP-ALE cost-
share as either an advance payment 30-days prior to easement closing or
as a reimbursable payment.
    To make the process as objective and streamlined as possible, NRCS
has identified that evidence that the purchaser is a farmer or rancher
should be based on the filing of an IRS Schedule F, that the
agricultural value of the land must be determined by an appraisal, and
that the holding and transaction costs that may be charged to the
landowner are limited to 10 percent of the agricultural value of the
easement. NRCS will take into consideration in its determination that
beginning farmers and ranchers in their first year of farming and
limited resource farmers and ranchers may not file an IRS Schedule F,
and may require the eligible entity to provide alternative
documentation in those situations.
    To minimize the risk that ACEP-ALE funds will be obligated to an
unviable transaction for the full length of a buy-protect-sell
agreement at the expense of viable ACEP projects, the interim rule
requires that the eligible entity's initial purchase of the land be
completed within 12 months of the execution of the buy-protect-sell
agreement as identified by NRCS in the terms of the ALE-agreement. To
minimize the risk that the eligible entity will have to repay NRCS for
the Federal share, the interim rule identifies that an ACEP-ALE cost-
share payment will only be provided on a reimbursable basis for the
first type of buy-protect-sell transactions.
    Under the 2014 Farm Bill, NRCS had conducted ACEP-ALE transactions
similar to the first type of buy-protect-sell transactions where the
eligible entity owns fee title to a parcel of land and transfers that
fee title to a farmer or rancher prior to or at the time of the
creation of the agricultural land easement. However, there are
potential legal impediments to the second type of buy-protect-sell
transactions where the eligible entity holds fee title at the time the
agricultural land easement is created but does not transfer ownership
of the land subject to the easement for up 3 years after the creation
of the agricultural land easement. Typically there are provisions in
easement law that restrict a person or legal entity from granting
themselves an easement on land they own. Further, under easement law,
conservation easements are created either by reservation at the time of
transfer of the land or through a grant of an easement to a third
party.
    As part of the regulation development, NRCS worked with the USDA
Office of the General Counsel to identify how arrangements might be
structured to implement the second type of buy-protect-sell
transaction. NRCS considered five potential scenarios, including
several options under which the eligible entity worked with a third-
party to address the basic principle that an eligible entity that owns
fee title to land typically cannot create an easement against itself
(referred to in these examples as the ``easement principle''). The five
scenarios considered were:
    1. A third-party (Straw Landowner) holds the fee title until fee
title of the land subject to the easement is sold to a qualified farmer
or rancher at agricultural value, and the eligible entity holds the
agricultural land easement at time of easement closing. This scenario
addresses the easement principle as well as the requirement that the
transaction to the Straw Landowner does not violate the mandate that
the initial sale of the land subject to the agricultural land easement
is to a farmer or rancher.
    2. Two eligible entities apply for ACEP, jointly holding the fee
title to the parcel. Only one eligible entity becomes the holder of the
agricultural land easement. Both eligible entities then sell the fee
title of the land subject to the easement to a qualified farmer or
rancher at agricultural value. This scenario was determined not likely
to be legally viable due to the complexities under various State laws
regarding unity of title and disparate treatment about how such title
issues are addressed.
    3. A third-party (Straw Easement Holder) holds the agricultural
land easement from the time of easement closing, and the eligible
entity holds the fee title until a qualified farmer or rancher is found
to purchase, at agricultural value, the fee title of the land subject
to the easement, at which time the agricultural land easement is
transferred to the eligible entity. While this scenario addresses the
easement principle, NRCS would only be able to make payment after the
agricultural land easement is transferred to the eligible entity.
    4. As recommended by a comment submitted to the USDA Listening
Session held February 26, 2019, the parties to the ALE-agreement would
develop strong anti-merger and cost-recovery language to allow the
eligible entity to grant the agricultural land easement to itself while
still holding fee title to the property and then reaffirm the
agricultural land easement at the time the fee title to the land
subject to the easement is sold to a qualified farmer or rancher at
agricultural value. This scenario does not address the easement
principle as it still purports that the eligible entity can hold both
an easement and fee title simultaneously, therefore NRCS determined
that this scenario was likely not legally viable.
    5. NRCS determines the viability of the transaction submitted by an
eligible entity. An eligible entity submits to NRCS, as part of its
application, the proposed structure of the individual buy-protect-sell
arrangement for the sale of the fee title of the land subject to the
agricultural land easement to a qualified farmer or rancher at
agricultural value in a manner that would address the basic easement
principle and applicable program requirements. For approved
applications, the individual buy-protect-sell transaction agreement
includes such terms and conditions as necessary to satisfy the legal
and statutory requirements identified by NRCS.
    NRCS has incorporated scenario 5 into the regulation as more fully
discussed below in the section-by-section description of changes.
Certification of Eligible Entities
    When ACEP-ALE was first authorized, NRCS established a process
under which eligible entities that meet established criteria could be
certified and entered into longer-term agreements for ACEP-ALE cost-
share assistance. Certified eligible entities are able to avail
themselves of administrative flexibilities under ACEP-ALE based upon
their status as a certified eligible entity as compared to a non-
certified eligible entity. For example, NRCS relies on the certified
entity to independently complete the easement acquisition in accordance
with the terms and conditions of the ACEP-ALE agreement and consistent
with the requirements of this part. Additionally, NRCS conducts annual
quality assurance reviews on a subset of the transactions after closing
and payment rather than prior to closing.
    To be certified, an eligible entity must demonstrate to NRCS that
the eligible entity could maintain, at a minimum, for the duration of
the agreement, a plan for administering easements that is consistent
with the purposes of ACEP-ALE; the capacity and resources to monitor
and enforce the agricultural land easements; and policies and
procedures to ensure the long-term
[[Page 563]]
integrity of the easements. NRCS established in regulation a set of
objective, measurable criteria that were used to evaluate the eligible
entity's ability to meet the statutory certification criteria,
including that the eligible entity provide proof that they held and had
stewardship responsibility for a minimum of 25 agricultural land
conservation easements, unless that number was reduced by NRCS through
a waiver, and proof that at least 5 of the these easements were ACEP-
ALEs or predecessor program \1\ easements.
---------------------------------------------------------------------------
    \1\ The Farmland Protection Program (FPP), as authorized by the
Federal Agricultural Improvement and Reform Act of 1996 (the 1996
Farm Bill) and the Farm and Ranch Lands Protection Program (FRPP) as
authorized by the Farm Security and Rural Investment Act of 2002
(the 2002 Farm Bill) and the 2008 Farm Bill are the predecessor
programs to ACEP-ALE.
---------------------------------------------------------------------------
    The 2018 Farm Bill added two new methods by which an eligible
entity may become certified. NRCS can grant certification status to an
eligible entity that is either:
    (1) An eligible entity that is accredited by the Land Trust
Accreditation Commission or by an equivalent accrediting body as
determined by NRCS; or
    (2) A State department of agriculture or other State agency with
authority for farm and ranchland protection, and the associated
requirements for such entities.
    Under these two new methods of certification, the eligible entity
must demonstrate that it acquired not fewer than 10 agricultural land
easements under ACEP-ALE, FRPP, or FPP and has successfully met the
responsibilities of the eligible entity under the applicable agreements
with NRCS relating to agricultural land easements.
    NRCS revised the regulation to add these two new methods for an
eligible entity to be considered for certification. Additionally, to
ensure that an eligible entity that is certified under the original
criteria meets the same ACEP-ALE experience requirements as is required
under the two new methods, NRCS has increased from 5 to 10 the number
of ACEP-ALE agricultural land easements or predecessor program
easements that an eligible entity must have successfully closed to
qualify for certification. The minimum requirement has not changed; the
eligible entity must hold and have stewardship responsibility for at
least 25 agricultural land conservation easements.
Optional Permitted Uses
    Section 2603 of the 2018 Farm Bill amended section 1265B of the
Food Security Act of 1985 (16 U.S.C. 3865b) to identify optional
permitted uses that an eligible entity may include in the terms and
conditions for an easement deed funded under ACEP-ALE. Among the
optional uses, ACEP now includes criteria by which subsurface mineral
development on land subject to the agricultural land easement may be
authorized. These criteria mirror many of the criteria which NRCS
identified in policy and used when evaluating an eligible entity's
proposed terms and conditions concerning subsurface mineral
development. The 2018 Farm Bill amendments make some of the criteria
and requirements more specific, and in some instances more restrictive,
than the criteria and language used in previous ACEP-ALE funded
easements deeds. For example, the 2018 Farm Bill specifies that the
subsurface mineral development plan must include a plan for the
remediation of impacts to the agricultural use or conservation values
and must be approved by NRCS prior to the initiation of the mineral
development activity. This rule revises the regulation and NRCS has
revised its associated policy.
ACEP-WRE Key Changes
ACEP-WRE Compatible Use Authorizations
    Under ACEP-WRE, a landowner conveys a wetland reserve easement to
the United States through a reserved interest deed. Among the rights
conveyed, the United States acquires the rights to permit, in its sole
discretion and under specified conditions, compatible uses of the
easement area, including hunting and fishing, managed timber harvest,
or periodic haying or grazing. The 2018 Farm Bill requires several
considerations that have been part of the NRCS compatible use
authorization process.
    In particular, the 2018 Farm Bill added ``water management'' to the
list of activities that may be considered a compatible economic use on
a wetland reserve easement. The 2018 Farm Bill specified that NRCS will
request and consider the advice of the applicable State technical
committee about the types of compatible uses that may be authorized and
the conditions under which they may be conducted on land subject to a
wetland reserve easement. The 2018 Farm Bill provided that in
evaluating and authorizing compatible economic uses that NRCS will
consider the ability of the compatible use to facilitate the practical
administration and management of the WRE and ensure that the authorized
use furthers the functions and values for which the easement was
established.
    NRCS added water management to the list of specific examples of
compatible uses identified in the ACEP regulation, incorporated into
the responsibilities of the applicable State technical committees input
as it relates to compatible use types and conditions, and incorporated
the compatible use evaluation and authorization considerations
identified in the 2018 Farm Bill.
ACEP-WRE Reservation of Grazing Rights
    Under ACEP-WRE, a landowner may reserve grazing rights under a
wetland reserve easement or 30-year contract if the reservation and use
of the grazing rights is:
     Compatible with the land subject to the easement,
     Consistent with the historical natural uses of the land
and long-term wetland protection and enhancement goals for which the
easement or 30-year contract was established, and
     In compliance with the WRE plan developed for the
easement.
    The 2018 Farm Bill adds language to the ACEP-WRE reservation of
grazing rights enrollment option. There is now a statutory requirement
that the reservation and use of grazing rights comply with a grazing
management plan that is consistent with the wetland reserve easement
plan and that such grazing management plan has been reviewed, and
modified as necessary, at least every 5 years.
    NRCS recognizes that grazing can be an appropriate vegetation
management and disturbance activity tool to restore and maintain the
functions and values of certain wetland ecosystems. On any ACEP-WRE
enrollment, NRCS may authorize grazing on the easement area through a
temporary compatible use authorization to facilitate specific wetland
restoration or management objectives on the easement area.
    Under the ACEP-WRE reservation of grazing rights enrollment option,
NRCS identifies, as part of the wetland reserve easement deed, the
specific wetland ecosystem and the associated level of grazing that is
appropriate to ensure the wetland functions and values are achieved.
This level of grazing comprises the extent of the grazing rights
reserved to the landowner. As a result, the easement compensation for
ACEP-WRE reservation of grazing rights enrollments is less than a
standard ACEP-WRE enrollment because the landowner is retaining a right
that normally would be conveyed under a standard ACEP-WRE easement
deed.
[[Page 564]]
ACEP-WRE Wetland Restoration
    In the rulemaking for ACEP-WRE under the 2014 Farm Bill, NRCS
adopted in the ACEP regulation substantially the same definition of
wetland restoration that had long existed in the WRP regulation;
namely, the term wetland restoration under the ACEP regulation has been
defined as follows:
    Wetland restoration means the rehabilitation of degraded or lost
habitat in a manner such that:
    (1) The original vegetation community and hydrology are, to the
extent practical, re-established; or
    (2) A community different from what likely existed prior to
degradation of the site is established. The hydrology and native self-
sustaining vegetation being established will substantially replace
original habitat functions and values and does not involve more than 30
percent of the easement area.
    This definition of wetland restoration is unique to ACEP-WRE and is
used as a broad and inclusive term intended to guide decision-making
related to the treatment of the entire easement area, including wetland
and any associated habitats, and for the duration of the enrollment,
from initial land eligibility and ranking determinations, through
preliminary and final restoration planning, design, and implementation,
and on through the long-term management of the easement area. The 2018
Farm Bill adds new language under which NRCS, in coordination with
State technical committees and following State-specific criteria and
guidelines, may authorize the establishment or restoration of a
hydrologically appropriate native community or alternative naturalized
vegetative community as part of a wetland reserve easement plan on land
subject to a wetland reserve easement under certain conditions. This
rule revises the definition of wetland restoration for consistency with
the new requirements in the 2018 Farm Bill. The definition of wetland
restoration has been revised to include the requirement for wetland
restoration to be conducted following published State-specific criteria
and guidelines developed in consultation with the State technical
committee. Additionally, NRCS has eliminated the existing regulatory
limitation that an alternative community different from what existed
historically on the site be no more that 30 percent of the easement
area and has added the conditions under which such a community may be
restored on the easement area consistent with the provisions identified
in the 2018 Farm Bill.
ACEP Regulation Organization
    The ACEP regulation in 7 CFR part 1468 is organized into three
subparts. Subpart A contains provisions applicable across ACEP, subpart
B contains provisions specific to the implementation of ACEP-ALE, and
subpart C contains provisions specific to the implementation of ACEP-
WRE. The following section summarizes each section of the regulation
and describe the changes made to conform to the 2018 Farm Bill. Other
editorial adjustments to improve readability. Although some provisions
remain unchanged, this rule revises the ACEP regulation in its
entirety.
Summary of Changes in Subpart A, General Provisions
Sec.  1468.1 Applicability
    This section sets forth the requirements, policies, and procedures
for ACEP; identifies that ACEP is available in all 50 States, District
of Columbia, and certain territories; describes how the remainder of
the regulation is organized; and addresses stewardship responsibilities
associated with existing easements. NRCS incorporated the revision to
the program purposes to limit nonagricultural uses that negatively
affect the agricultural uses and conservation values.
Sec.  1468.2 Administration
    This section identifies that ACEP is administered under the general
supervision and direction of the NRCS Chief. The Commodity Credit
Corporation (CCC) made changes to its Board of Directors and the Chief
is no longer a Vice President of the CCC. A new paragraph (d) was moved
to this section, relocating a provision originally in Sec.  1468.21
that is applicable across ACEP. Paragraph (d) specifies that
applications may be submitted on a continuous basis or in response to
specific ACEP solicitations.
    The 2018 Farm Bill requires easement monitoring, therefore
paragraph (h) has been added to specify generally monitoring
responsibilities for ACEP-ALE and ACEP-WRE. Paragraph (f) has been
revised to add monitoring of wetland reserve easements to the
responsibilities that NRCS may delegate to an appropriately qualified
conservation organization.
    Additionally, the 2018 Farm Bill amended the Regional Conservation
Partnership Program (RCPP) so that RCPP funds are administered through
RCPP contracts and not contracts and agreements of the covered
programs, including ACEP. Therefore, the references to RCPP and related
text have been removed from the ACEP regulation.
    Other existing paragraphs in this section were reorganized slightly
for readability purposes.
Sec.  1468.3 Definitions
    The following definitions have been added in Sec.  1468.3 to be
consistent with the 2018 Farm Bill as follows:
    The definition of ``buy-protect-sell transaction'' is included to
establish this new transaction type under ACEP-ALE. An eligible entity
and NRCS may enter into a legal arrangement to secure an agricultural
land easement on land that will be transferred to a qualified farmer or
rancher under specified conditions.
    The definition of ``Easement administration action'' is included to
ease readability of the regulation where all four terms, easement
subordination, easement modification, easement exchange, and easement
termination are referenced.
    The definition of ``Grazing management plan'' is included to
identify the document used to describe an NRCS-approved grazing
management system on an ACEP-WRE.
    The definition of ``Monitoring report'' is included to describe the
obligation of the easement holder to document and convey the findings
of the annual review of ACEP easements.
    The definition of ``Nonindustrial private forest land'' is included
to reflect terminology used to describe the vegetative cover and
ownership requirements of such land. With the inclusion of the
definition of ``Nonindustrial private forest land,'' the definition of
``Forest land'' was removed to avoid confusion or redundancy.
    Changes to the definition of ``Wetland restoration'' are discussed
above in the section on that topic.
    Minor editorial changes were made to other definitions to improve
their readability. This rule also removed the definitions for ``Active
agricultural production,'' ``Forest land of statewide importance,'' and
``Projects of special significance'' since such terms were only
necessary to identify whether a transaction qualified for a waiver as a
project of special significance, and the 2018 Farm Bill removed the
need for such a waiver.
Sec.  1468.4 Appeals
    Section 1468.4 specifies the nature of the appeal rights for
persons, legal entities, or eligible entities that apply for, receive
payment under, or receive determinations for ACEP. The 2018
[[Page 565]]
Farm Bill did not make any changes that affects this section. Minor
edits have been made to include notice to easement holders.
Sec.  1468.5 Scheme or Device
    Section 1468.5 is similar to other conservation program provisions
and describes the authority that NRCS exercises to protect the Federal
investment in conservation easements from fraudulent activities. No
changes were made to this section.
Sec.  1468.6 Subordination, Exchange, Modification, and Termination
    Section 1468.6 specifies the easement administration actions that
may be authorized by section 1265D(c) of the Food Security Act of 1985.
    The 2018 Farm Bill made several changes that modified the framework
under which requests for easement administration actions may be
reviewed and approved. In particular, the 2018 Farm Bill, while
maintaining consistent standards for review, provides flexibility for
the review of requests for subordination, and added conditions to limit
the approval of terminations.
    The changes to this section included reorganizing the provisions to
specify the criteria that apply to each of the particular types of
easement administrative actions. Where particular criteria apply to
several types of easement administrative action, the rule identifies
the easement administrative actions types that must meet that criteria
in order to be considered for approval. Proposed easement
administration actions must meet all applicable criteria for the action
to be considered for approval. The section is organized in a step-wise
fashion so if the proposal fails to meet one of the criterion, it is
not necessary for NRCS to consider the remaining criteria.
Sec.  1468.7 Transfer of Land
    Section 1468.7 specifies how NRCS will address enrollment of land
where the landowner transfers the rights in land after an agreement has
been executed, but prior to the purchase of the easement. No changes
were made to this section.
Sec.  1468.8 Payments Not Subject to Claims
    Section 1468.8 specifies that NRCS will make payment to ACEP
participants without regard to any claims that non-Federal creditors
may have on the financial assets of the program participant as
authorized by 7 CFR part 1403. The 2018 Farm Bill did not make any
changes to ACEP that affect this section. A minor edit was made to
remove the word ``government.''
Sec.  1468.9 Assignments
    Section 1468.9 specifies that a program participant can assign
their right to payment to another person or legal entity. No changes
were made to this section.
Sec.  1468.10 Environmental Markets
    Section 1468.10 provides that a landowner subject to an ACEP
easement may also enter into an environmental credit agreement with
third parties provided that the terms of the environment credit
agreement do not interfere with the rights acquired by the United
States or the eligible entity and do not cause the landowner to violate
the terms of the agricultural land easement or wetland reserve
easement. Revisions to Sec.  1468.10 clarify that the purposes of the
environmental services market must include the facilitation of
additional conservation benefits consistent with the conservation
purposes for which the easement was acquired.
Summary of Changes in Subpart B, Agricultural Land Easements
Sec.  1468.20 Program Requirements
    Section 1468.20 includes the program requirements for eligible
entities who wish to receive cost-share assistance from NRCS for the
purchase of an agricultural land easement. The 2018 Farm Bill made
several changes that affect this section.
    Paragraph (a) provides that NRCS will facilitate and provide
funding for the purchase of easements or other interests in eligible
private or Tribal agricultural land for protecting the agricultural use
and related conservation values of the land by limiting nonagricultural
uses of the land. Also, it maintains the existing requirement that such
land be subject to a written pending offer from an eligible entity for
standard ALE transactions and adds the option for such lands to be
owned by the eligible entity as part of an approved buy-protect-sell
transaction.
    Paragraph (b) specifies the requirements for establishing the
eligibility of an entity applying for ACEP-ALE cost-share assistance.
This rule removes the requirement that an eligible entity provide
evidence at the time of application that they have funds available to
meet the minimum cash contribution requirement. Instead, for
transactions where the eligible entity's cash contribution will be less
than 10 percent of the easement's fair market value, NRCS requires the
eligible entity to provide the estimated costs and anticipated sources
of funding for each parcel and evidence of funds available for
stewardship of the easement.
    Paragraph (c) requires that a landowner who is selling an
agricultural land easement to an eligible entity meets the conservation
compliance requirements in 7 CFR part 12 and the AGI limitation
provisions at 7 CFR part 1400. Under a buy-protect-sell transaction,
the eligible entity is the landowner. For transactions where the
eligible entity sells the fee title to a qualified farmer or rancher
prior to or at the time of the easement closing, then the farmer or
rancher purchaser must meet these landowner payment eligibility
requirements. If, however, the fee title to the land will not be
transferred to a farmer or rancher until after the agricultural land
easement is closed, then the eligible entity is responsible for meeting
the landowner payment eligibility requirements prior to easement
closing. The regulation continues to clarify that it is the eligible
entity and landowner's responsibility to ensure that the necessary
records have been established in the USDA customer records system.
    Paragraph (d) specifies the criteria by which land can be
determined eligible and specifies that the land must be cropland,
rangeland, grassland, or land that contains forbs or shrubland for
which grazing is the predominant use, located in an area historically
dominated by grassland, forbs, or shrubs, and could provide habitat for
animal or plant populations of significant ecological value,
pastureland, or nonindustrial private forest land that meet specific
criteria. Consistent with the prior easement regulation and policy that
sought to minimize overlap and conflict with other USDA forest easement
programs, paragraph (d) requires that land enrolled in ACEP-ALE cannot
include forest land greater than two-thirds of the ACEP-ALE easement
area but eliminates the requirement that land with a certain amount of
forest land have a forest management plan. Lands with greater than two-
thirds non industrial private forests may be protected under a larger
conservation easement of which the ACEP-ALE easement area may be a
subcomponent, provided the forest land within the ACEP-ALE easement
area does not exceed two-thirds of the described ACEP-ALE easement
area.
    Paragraph (e) specifies which lands are ineligible for enrollment,
including lands that are owned by a governmental entity, unless in
trust for an Indian Tribe. Also, it identifies that land
[[Page 566]]
owned by nongovernmental organizations whose purpose is to protect
agricultural use and related conservation values are ineligible since
such lands are already protected from conversion to agricultural use.
To address buy-protect-sell transactions, paragraph (e)(3) has been
revised to specify that eligible lands owned by the eligible entity on
a transitional basis to secure an ALE on the land and to transfer fee
title ownership to a farmer or rancher may be eligible for enrollment
provided all other eligibility requirements are met.
    The 2018 Farm Bill replaced the term ``proposed'' with
``permitted'' in the language about the types of rights-of-way,
infrastructure development, or other adjacent land uses whose impacts
may cause land to be considered ineligible. NRCS made a conforming
change.
    This rule adds paragraph (f) to specify additional eligibility
requirements related to buy-protect-sell transactions. In addition to
meeting the other eligibility requirements, to be eligible for
enrollment under the complex and lengthy real estate transactions, the
land must be subject to conditions that necessitate the transitional
ownership by an eligible entity from fee title owner to only easement
holder. The conditions may include an imminent threat of development as
a result of which the existing landowner is unwilling to accept an
offer for the purchase of an agricultural land easement from the
eligible entity but is willing to sell the land to the eligible entity
and the eligible entity intends to place an agricultural land easement
on the property and ensure it is sold to a qualified farmer or rancher
subject to the conditions of a buy-protect-sell transaction. When
applying, the eligible entity must provide evidence of active purchase
of the parcel, such as a valid purchase agreement, on land not owned by
the eligible entity at the time of application.
Sec.  1468.21 Application Procedures
    Section 1468.21 specifies the application procedures that an entity
must follow to have their application be considered for funding under
ACEP-ALE. NRCS determines whether an applicant is eligible to
participate in ACEP-ALE based on the criteria in Sec.  1468.20.
Paragraph (a) was revised to identify that additional application
information may be required for buy-protect-sell transactions. Also, it
was revised to simplify the regulation and remove matters of policy and
administration.
Sec.  1468.22 Establishing Priorities, Ranking Considerations, and
Application Selection
    Section 1468.22 specifies how parcels will be ranked for funding.
The NRCS ranking system in each State incorporates national and State-
specific criteria to rank, score, and prioritize each eligible parcel
within the State. The 2018 Farm Bill allows NRCS to adjust the ALE
ranking criteria to account for geographic differences if the
adjustments meet ACEP purposes and continue to maximize the benefit of
the Federal ACEP investment. The section provides flexibility to ensure
that such adjustments to address geographic differences are available.
In particular, the ranking system, incorporating both national and
State criteria, enables NRCS to prioritize parcels that merit ACEP-ALE
enrollment. The 2018 Farm Bill also changed certain requirements
related to the eligible entity's contribution of cash to the non-
Federal share for the purchase of the easement and the requirements for
an ACEP-ALE plan. This rule revises the extent of the eligible entity's
cash contribution is a National ranking criterion. Additionally, as
revised, the regulation specifies that measures that will be used to
maintain or increase agricultural viability, such as ACEP-ALE plans,
may be a State ranking criterion. The benefits of these actions are now
specified as attributes that may be considered as a matter of ranking
in the prioritization of projects for selection for funding. Paragraph
(g) was modified to simplify the regulation and remove matters of
policy and administration.
Sec.  1468.23 ALE Agreements
    Section 1468.23 addresses the principal ACEP documents under which
NRCS and an eligible entity identify how they will coordinate the
activities needed for the eligible entity to purchase an agricultural
land easement with ACEP cost-share assistance, including the respective
rights, requirements, and responsibilities related to ACEP
implementation under subpart B of the regulation. NRCS, on behalf of
the CCC, enters into ALE-agreements with eligible entities with parcels
selected for funding. The section was revised for consistency with
provisions of the 2018 Farm Bill for ALE-agreements.
Sec.  1468.24 Compensation and Funding for Agricultural Land Easements
    Section 1468.24 addresses the extent to which NRCS will provide
financial assistance to an eligible entity for the purchase of an
agricultural land easement by the eligible entity. NRCS may provide a
Federal share up to 50 percent of the approved fair market value of the
agricultural land easement, and the eligible entity must provide a non-
Federal share that is at least equivalent to that provided by NRCS.
    While ACEP formerly required that an eligible entity contribute its
own cash resources in an amount that was at least 50 percent of the
amount contributed by NRCS, the 2018 Farm Bill removed the specific 50
percent eligible entity cash contribution requirement, and instead
identifies permissible sources of the non-Federal share provided by the
eligible entity. These sources include the eligible entity's own cash
resources, a landowner charitable donation or qualified conservation
contribution, certain easement acquisition costs incurred by the
eligible entity, and other costs as determined by NRCS.
    Paragraph (b) has been revised to remove the requirement for the
eligible entity to contribute its own cash resources in an amount equal
to 50 percent of the amount of the Federal share. Paragraph (b) also
specifies the costs incurred by the eligible entity associated with
securing a deed to the easement that may be included in the calculation
of the non-Federal share and the source and limit of other costs that
may be included in the calculation of the non-Federal share.
    The 2018 Farm Bill removed the reference to the availability of
waivers for grassland of special environmental significance since the
specific eligible entity cash contribution requirement was removed.
NRCS may now provide up to 75 percent of the fair market value of the
agricultural land easement, and the eligible entity must provide the
remainder as the non-Federal share through any of the specified
sources. The ACEP regulation has been modified accordingly, to update
the provisions related to grasslands of special environmental
significance and to delete paragraph (b)(4) regarding projects of
special significance.
    NRCS may only provide ACEP-ALE cost-share funds in the form of
financial assistance toward the cost of the agricultural land easement
itself. The 2018 Farm Bill limited the technical assistance that may be
provided by NRCS through ACEP-ALE funding related to planning on the
agricultural land easement to the development of a conservation plan on
highly erodible cropland. The section of the ACEP regulation has been
revised accordingly.
[[Page 567]]
Sec.  1468.25 Agricultural Land Easement Deeds
    Section 1468.25 addresses the minimum deed requirements for an
easement transaction to receive ACEP-ALE assistance. In particular, the
section specifies that in order for NRCS to provide cost-share
assistance to an eligible entity, NRCS will ensure that the eligible
entity will include in its easement deeds the terms and conditions
necessary to ensure ACEP purposes and requirements are met. The 2018
Farm Bill changes the required and new permitted terms and conditions
of agricultural land easement deeds used to specify the regulatory deed
requirements.
    Paragraph (d)(1) has been revised to incorporate the added
specificity to the right of enforcement conveyed to NRCS under the
terms of an agricultural land easement.
    The requirement that the agricultural land easement be subject to
an ACEP-ALE plan was removed.
    Paragraph (d)(7) was added to specify the terms and conditions
required by statute that must be addressed if the eligible entity
chooses to allow subsurface mineral development on the land subject to
the agricultural land easement. In particular, the 2018 Farm Bill
specified criteria to ensure prohibitions on subsurface mineral
development did not eliminate otherwise high value conservation lands
from program eligibility. As identified in the Managers Report, the
terms and conditions do not negate or supersede any other applicable
laws, including State laws, which may otherwise apply to any mineral
development activities but ensure the activity should be consistent
with the conservation and agricultural purposes of the land and all
provisions of the program,
    The requirement for a conservation plan on highly erodible cropland
was revised and moved to new paragraph (d)(9).
    Paragraph (d)(10) was added to specify that appropriate terms and
conditions must be included in the easement deed to address items
agreed to by the eligible entity as a matter of ranking and basis for
selection for funding, such as an eligible entity agreement to develop
and maintain an ACEP-ALE plan or provide a cash contribution toward the
purchase of the easement.
    Paragraph (d)(11) was added to provide that an eligible entity may
include terms and conditions in the ALE deed that are intended to keep
the land subject to the easement under farmer or rancher ownership.
Sec.  1468.26 Agricultural Land Easement Plans
    As discussed above, agricultural land easements enrolled under the
2018 Farm Bill are not required to be subject an ACEP-ALE plan. The
stand-alone section regarding ACEP-ALE plans has been deleted.
Applicable provisions related to the development of required
conservation plans or the development of ACEP-ALE plans as agreed-to by
the eligible entity are captured in other sections of the regulation.
Sec.  1468.26 Eligible Entity Certification
    Under ACEP, NRCS is required to establish a process under which
eligible entities that meet established criteria may be certified and
entered into long-term agreements for ACEP-ALE cost-share assistance.
This interim rule redesignates Sec.  1468.27 as Sec.  1468.26, and is
revised as discussed in this section. As redesignated, Sec.  1468.26,
Eligible Entity Certification, provides that, at an eligible entity's
request, the Chief will determine whether an eligible entity meets
certifications requirements and if so, certify the entity. The 2018
Farm Bill expanded the way an eligible entity could demonstrate that
they meet certification criteria. In particular, the 2018 Farm Bill
provided that NRCS may certify an eligible entity that is either
accredited by the Land Trust Accreditation Commission (or equivalent
accrediting body) or is a State department of agriculture or other
State agency with statutory authority for farm and ranch land
protection, and that either of these types of entities has acquired at
least 10 agricultural land easements under ACEP-ALE, or predecessor
NRCS easement programs, and has successfully met, as determined by
NRCS, its responsibilities under ALE-agreements. NRCS has incorporated
the additional certification criteria and revised the criteria to
require a minimum of 10 agricultural land easements under ACEP-ALE, or
predecessor NRCS easement programs (FPP and FRPP), to be held by any
eligible entity requesting certification, not just those that meet the
new criteria introduced in the 2018 Farm Bill. Other paragraphs in the
section were revised to simplify the existing regulation and remove
matters of policy and administration.
Sec.  1468.27 Buy-Protect-Sell Transactions
    As discussed above, the 2018 Farm Bill added a new transaction type
under ACEP-ALE for buy-protect-sell transactions. Section 1468.27 has
been added to describe the form that buy-protect-sell transactions may
take and to specify the requirements based on the specific buy-protect-
sell transaction type. Buy-protect-sell transactions introduce an
option under which NRCS may provide ACEP-ALE cost-share assistance for
the purchase of an agricultural land easement on private or Tribal
agricultural land owned on a transitional basis by an eligible entity
when the ownership of that land will be timely transferred to a
qualified farmer or rancher. Section 1468.27 specifies that there are
two types of buy-protect-sell transactions, pre-closing and post-
closing transfers, which are differentiated based on the timing of the
sale of the fee title interest in the land to a qualified farmer or
rancher relative to the timing of securing the agricultural land
easement. The regulation specifies the requirements and ALE-agreement
terms that are applicable to both buy-protect-sell transaction types,
and those that are applicable to the individual transaction types. For
post-closing buy-protect-sell transactions, additional information will
be required at the time of application and NRCS must determine whether
the structure of the transaction as proposed by the eligible entity
conforms with legal requirements prior to entering into an ALE-
agreement for such transactions on a parcel determined to meet the
requirements of part 1468.
Sec.  1468.28 Violations and Remedies
    Section 1468.28 specifies the eligible entity's responsibilities to
enforce the agricultural land easement's terms and conditions.
Additionally, Sec.  1468.28 specifies the circumstances under which
NRCS may exercise its right of enforcement under ACEP-ALE, including
its right of inspection.
    The 2018 Farm Bill identified more specific conditions upon when
NRCS could exercise the right of inspection on ACEP-ALE easements,
requiring that the right of inspection could only be exercised if the
holder of the easement fails to provide monitoring reports in a timely
manner or NRCS has a reasonable and articulable belief that the terms
and conditions of the easement have been violated. Prior to the
inspection, NRCS will notify the eligible entity and the landowner of
the inspection and provide a reasonable opportunity for the eligible
entity and the landowner to participate in the inspection. These
requirements have been incorporated into this section of the ACEP
regulations and in the terms and conditions of the ALE-agreements. NRCS
will continue to work with the eligible entity, including any easement
holders subsequent to the eligible entity,
[[Page 568]]
to assist it in its responsibility to enforce the easement terms.
Summary of Changes in Subpart C, Wetland Reserve Easements
Sec.  1468.30 Program Requirements
    Section 1468.30 specifies the basic requirements for participation
in ACEP through a wetland reserve easement, including landowner and
land eligibility requirements. The 2018 Farm Bill increased the acres
of total cropland in a county that may be subject to an ACEP-WRE
easement to 15 percent. Paragraph (b)(1) has been revised accordingly.
The 2018 Farm Bill removed the requirement for NRCS to seek input from
the Secretary of the Interior at the local level in the determination
of eligible land. Paragraph (e)(3) has been revised accordingly. The
2018 Farm Bill also made a slight adjustment to NRCS's consideration of
the effects of onsite or offsite conditions that may interfere with the
ability of the wetland functions and values to be successfully and
cost-effectively restored by changing the status of certain rights-of-
way, infrastructure development, or other adjacent land uses whose
impacts must be considered from ``proposed'' to ``permitted''.
Paragraph (g)(6) has been revised accordingly.
Sec.  1468.31 Application Procedures
    Section 1468.31 specifies the application procedures for a
landowner who wants to participate in ACEP-WRE. The 2018 Farm Bill did
not make any changes to program implementation that affects this
portion of the ACEP regulation.
Sec.  1468.32 Establishing Priorities, Ranking Consideration and
Project Selection
    Section 1468.32 specifies the criteria NRCS will use to prioritize,
rank, and select properties for enrollment in ACEP-WRE. Among the
prioritization and ranking criteria, NRCS may consider the conservation
benefits of obtaining an easement, the cost-effectiveness of each
easement, whether Federal funds are being leveraged, and the extent to
which ACEP-WRE purposes would be achieved on the land.
    The 2018 Farm Bill included water quality as an additional priority
along with the priority placed on acquiring easements based on the
value of the easement for protecting and enhancing habitat for
migratory birds and other wildlife. While the ACEP regulation included
benefits to water quality as a component of various existing ranking
criteria, the capacity of the wetland to improve water quality has been
added in the regulation.
Sec.  1468.33 Enrollment Process
    Section 1468.33 specifies the process that NRCS uses for handling
applications once they have been selected for enrollment. Minor edits
to improve accuracy and readability have been made in the section.
Sec.  1468.34 Compensation and Funding for Wetland Reserve Easements
and 30-Year Contracts
    Section 1468.34 specifies how NRCS will determine the level of
compensation that a landowner will receive in return for conveying a
wetland reserve easement. ACEP-WRE easement compensation is based upon
the lowest of the fair market value of the land, a geographic area rate
cap, or landowner offer. No substantive changes have been made to this
section and only minor edits have been made to improve its accuracy and
readability.
Sec.  1468.35 Wetland Reserve Enhancement Partnerships (WREP)
    Section 1468.35 specifies how NRCS will implement a wetland reserve
enhancement option with partners under ACEP-WRE. No changes were made
in the section.
Sec.  1468.36 WRPO Payments
    Section 1468.36 specifies that NRCS will provide funds towards the
wetland reserve plan of operations (WRPO) on land enrolled through a
wetland reserve easement or 30-year contract. Minor edits to improve
accuracy and readability have been made in the section.
Sec.  1468.37 Easement and 30-Year Contract Participation Requirements
    Section 1468.37 specifies requirements for ACEP-WRE participation.
The 2018 Farm Bill addresses restoration and management within the
easement and contract requirements. The section has been revised to
conform with the 2018 Farm Bill provisions. The section also specifies
that a landowner may be able to reserve grazing rights under a wetland
reserve easement or 30-year contract if the reservation and use of the
grazing rights is consistent with the historical natural uses of the
land and long-term wetland protection and enhancement goals for which
the easement or 30-year contract was established. The grazing rights
are reserved to the landowner and are subject to a recorded exhibit to
the deed that outlines the purposes and limitations of the grazing.
Additionally, the grazing must comply with a WRPO. As a matter of
existing ACEP policy, the WRPO may include a grazing management plan,
which is updated as necessary. The 2018 Farm Bill added a specific
reference to the grazing management plan and identified that the plan
may be reviewed and modified as necessary, at least every 5 years. This
section has been revised to incorporate this change.
Sec.  1468.38 Development and Revision of the WRPO and Associated
Compatible Use Authorizations
    The section specifies that WRPO is developed and updated by NRCS,
in consultation with the State technical committee, with consideration
of available site-specific technical input from the U.S. Fish and
Wildlife Service (FWS) at the local level and others as appropriate.
NRCS specifies in WRPO the manner in which land enrolled through a
wetland reserve easement or 30-year contract will be restored,
protected, enhanced, maintained, managed, and monitored to accomplish
ACEP-WRE goals.
    Paragraph (c) has been added to the section to more specifically
identify the activities identified in the 2018 Farm Bill that should be
addressed in the WRPO.
    The 2018 Farm Bill included new provisions related to the
evaluation and authorization of compatible uses on the easement area.
The new provisions have been added to the section. Specifically,
paragraph (d) provides that in evaluating and considering compatible
uses NRCS will consider whether the use will facilitate the practical
administration and management of the easement or contract area and
ensure that the use furthers the functions and values for which the
land was enrolled.
    The section also specifies that the authorization of a compatible
use is a determination made by NRCS, in its sole discretion, and that
all compatible use authorizations are time-limited and may be modified
or rescinded at any time. Compatible use authorizations issued by NRCS
do not vest any right of any kind to the landowner.
Sec.  1468.39 Violations and Remedies
    Section 1468.39 specifies how NRCS will address violations of a
wetland reserve easement or 30-year contract.
Effective Date, Notice and Comment, and Paperwork Reduction Act
    In general, the Administrative Procedure Act (APA) (5 U.S.C. 553)
requires that a notice of proposed rulemaking be published in the
Federal
[[Page 569]]
Register and interested persons be given an opportunity to participate
in the rulemaking through submission of written data, views, or
arguments with or without opportunity for oral presentation, except
when the rule involves a matter relating to public property, loans,
grants, benefits, or contracts. This rule involves matters relating to
benefits and therefore is exempt from the APA requirements. Further,
the regulations to implement the programs of chapter 58 of title 16 of
the U.S. Code, as specified in 16 U.S.C. 3846, and the administration
of those programs, are:
     To be made as an interim rule effective on publication,
with an opportunity for notice and comment,
     Exempt from the Paperwork Reduction Act (44 U.S.C. ch.
35), and
     To use the authority under 5 U.S.C. 808 related to
Congressional review and any potential delay in the effective date.
    For major rules, the Congressional Review Act requires a delay in
the effect date of 60-days after publication to allow for Congressional
Review. This rule is major under the Congressional Review Act, as
defined by 5 U.S.C. 804(2). The authority in 5 U.S.C. 808 provides that
when an agency finds for good cause that notice and public procedure
are impracticable, unnecessary, or contrary to the public interest,
that the rule may take effect at such time as the agency determines.
Due to the nature of the rule, the mandatory requirements of the 2018
Farm Bill, and the need to implement the ACEP regulations expeditiously
to provide assistance to producers, NRCS and CCC find that notice and
public procedure are contrary to the public interest. Therefore, even
though this rule is a major rule for purposes of the Congressional
Review Act of 1996, NRCS and CCC are not required to delay the
effective date for 60 days from the date of publication to allow for
Congressional review. Therefore, this rule is effective on the date of
publication in the Federal Register.
    NRCS invites interested persons to participate in this rulemaking
by submitting written comments or views about the changes made by this
interim rule. The most helpful comments reference a specific portion of
the regulation, explain the reason for any recommended changes, and
include supporting data and references to relevant section of either
the 2018 Farm Bill or the 1985 Farm Bill. NRCS specifically seeks
public comment on recommendations to streamline access to the program
and input on new or existing ranking criteria that would assist NRCS in
selecting projects that best further ACEP purposes. All comments
received on or before the closing date for comments will be considered.
NRCS will review and respond to the public comments in the ACEP final
rule.
Executive Orders 12866, 13563, 13771, and 13777
    Executive Order 12866, ``Regulatory Planning and Review,'' and
Executive Order 13563, ``Improving Regulation and Regulatory Review,''
direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). Executive Order 13563 emphasized the importance
of quantifying both costs and benefits, of reducing costs, of
harmonizing rules, and of promoting flexibility. Executive Order 13777,
``Enforcing the Regulatory Reform Agenda,'' established a federal
policy to alleviate unnecessary regulatory burdens on the American
people.
    The Office of Management and Budget (OMB) designated this interim
rule, with request for comment, a significant under Executive Order
12866, and therefore, OMB has reviewed this rule. The costs and
benefits of this rule are summarized at the end of this preamble. The
full cost benefit analysis is available on www.regulations.gov.
    Executive Order 13771, ``Reducing Regulation and Controlling
Regulatory Costs,'' requires that, in order to manage the private costs
required to comply with federal regulations that for every new
significant or economically significant regulation issued, the new
costs must be offset by the elimination of at least two prior
regulations. The OMB guidance in M-17-21, dated April 5, 2017,
specifies that ``transfer rules'' are not covered by Executive Order
13771. If any of the increases in flexibilities for program
participants results in cost-savings, they will be considered
deregulatory and will be accounted for under Executive Order 13771 when
the rule is finalized.
Clarity of the Regulation
    Executive Order 12866, as supplemented by Executive Order 13563,
requires each agency to write all rules in plain language. In addition
to your substantive comments on this rule, we invite your comments on
how to make the rule easier to understand. For example:
     Are the requirements in the rule clearly stated? Are the
scope and intent of the rule clear?
     Does the rule contain technical language or jargon that is
not clear?
     Is the material logically organized?
     Would changing the grouping or order of sections or adding
headings make the rule easier to understand?
     Could we improve clarity by adding tables, lists, or
diagrams?
     Would more, but shorter, sections be better? Are there
specific sections that are too long or confusing?
     What else could we do to make the rule easier to
understand?
Regulatory Flexibility Act
    The Regulatory Flexibility Act generally requires an agency to
prepare a regulatory analysis of any rule whenever an agency is
required by the Administrative Procedure Act or any other law to
publish a proposed rule, unless the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities. This rule is not subject to the Regulatory Flexibility Act
because CCC is not required by the Administrative Procedure Act or any
law to publish a proposed rule for this rulemaking. Despite the
Regulatory Flexibility Act not applying to this rule, the action only
affects those entities who voluntarily participate in ACEP and in doing
so receive its benefits. Compliance with the provisions of ACEP
regulations is only required for those entities who choose to
participate in this voluntary program.
Environmental Review
    The environmental impacts of this rule have been considered in a
manner consistent with the provisions of the National Environmental
Policy Act (NEPA), the regulations of the Council on Environmental
Quality (40 CFR parts 1500-1508), and the NRCS regulations for
compliance with NEPA (7 CFR part 650). A draft programmatic EA has been
prepared in association with this rulemaking. The analysis has
determined there will not be a significant impact to the human
environment and as a result, an Environmental Impact Statement (EIS) is
not required to be prepared (40 CFR part 1508.13). The draft EA and
FONSI are available for review and comment for 30 days from the date of
publication of this interim rule in the Federal Register. NRCS will
consider this input and determine whether there is any new information
provided that is relevant to environmental concerns and bearing on the
proposed action or its impacts that warrant supplementing or revising
the
[[Page 570]]
current available draft of the ACEP EA and FONSI.
Executive Order 12372
    Executive Order 12372, ``Intergovernmental Review of Federal
Programs,'' requires consultation with State and local officials that
would be directly affected by proposed federal financial assistance.
The objectives of the Executive order are to foster an
intergovernmental partnership and a strengthened Federalism, by relying
on State and local processes for State and local government
coordination and review of proposed Federal financial assistance and
direct Federal development. For reasons specified in the final rule
related notice regarding 7 CFR part 3015, subpart V (48 FR 29115, June
24, 1983), the programs and activities in this rule are excluded from
the scope of Executive Order 12372.
Executive Order 12988
    This rule has been reviewed under Executive Order 12988, ``Civil
Justice Reform.'' This rule will not preempt State or local laws,
regulations, or policies unless they represent an irreconcilable
conflict with this rule. This rule will not have retroactive effect.
Before any judicial actions may be brought regarding the provisions of
this rule, the administrative appeal provisions of 7 CFR part 11 are to
be exhausted.
Executive Order 13132
    This rule has been reviewed under Executive Order 13132,
``Federalism.'' The policies contained in this rule do not have any
substantial direct effect on States, on the relationship between the
Federal Government and the States, or on the distribution of power and
responsibilities among the various levels of government, except as
required by law. Nor does this rule impose substantial direct
compliance costs on State and local governments. Therefore,
consultation with the States is not required.
Executive Order 13175
    This rule has been reviewed in accordance with the requirements of
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments.'' Executive Order 13175 requires federal agencies
to consult and coordinate with Tribes on a government-to-government
basis on policies that have Tribal implications, including regulations,
legislative comments or proposed legislation, and other policy
statements or actions that have substantial direct effects on one or
more Indian Tribes, on the relationship between the Federal Government
and Indian Tribes or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes.
    The USDA's Office of Tribal Relations (OTR) has assessed the impact
of this rule on Indian Tribes and determined that this rule has
significant Tribal implication that require ongoing adherence to
Executive Order 13175. Tribal consultation for this rule was included
in the 2018 Farm Bill Tribal consultation held on May 1, 2019, at the
National Museum of the American Indian, in Washington, DC. The portion
of the Tribal consultation relative to this rule was conducted by Bill
Northey, USDA Under Secretary for the Farm Production and Conservation
mission area, as part of the Title II session. There were no specific
comments from Tribes on the rule during the Tribal consultation. If a
Tribe requests additional consultation, NRCS will work with OTR to
ensure meaningful consultation is provided where changes, additions,
and modifications identified in this rule are not expressly mandated by
law.
    Separate from Tribal consultation, communication, and outreach
efforts are in place to assure that all producers, including Tribes (or
their members), are provided information about the regulation changes.
Specifically, NRCS obtains input through Tribal Conservation Advisory
Councils. A Tribal Conservation Advisory Council may be an existing
Tribal committee or department and may also constitute an association
of member Tribes organized to provide direct consultation to NRCS at
the State, regional, and national levels to provide input on NRCS
rules, policies, programs, and impacts on Tribes. Tribal Conservation
Advisory Councils provide a venue for agency leaders to gather input on
Tribal interests. Additionally, NRCS will be holding several sessions
with Indian Tribes and Tribal entities across the country in fiscal
year 2019 to describe the 2018 Farm Bill changes to NRCS conservation
programs, obtain input about how to improve Tribal and Tribal member
access to NRCS conservation assistance, and make any appropriate
adjustments to the regulations that will foster such improved access.
The Unfunded Mandates Reform Act of 1995
    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA),
requires Federal agencies to assess the effects of their regulatory
actions on State, local, and Tribal Governments or the private sector.
Agencies generally must prepare a written statement, including a cost
benefits analysis, for proposed and final rules with Federal mandates
that may result in expenditures of $100 million or more in any 1 year
for State, local or Tribal governments, in the aggregate, or to the
private sector. UMRA generally requires agencies to consider
alternatives and adopt the more cost effective or least burdensome
alternative that achieves the objectives of the rule. This rule
contains no federal mandates, as defined under Title II of UMRA, for
State, local, and Tribal Governments or the private sector. Therefore,
this rule is not subject to the requirements of UMRA.
Federal Assistance Programs
    The title and number of the Federal Domestic Assistance Programs in
the Catalog of Federal Domestic Assistance to which this rule applies
is 10.931--Agricultural Conservation Easement Program.
E-Government Act Compliance
    NRCS and CCC are committed to complying with the E-Government Act,
to promote the use of the internet and other information technologies
to provide increased opportunities for citizen access to Government
information and services, and for other purposes.
Cost Benefit Analysis Summary
    For ACEP, NRCS provides technical and financial assistance to help
customers (farmers, ranchers, landowners, and other land users) address
natural resource concerns. As discussed above, ACEP has two distinct
components:
     The ALE component protects the agricultural use, future
viability, and conservation values of eligible land by limiting non-
agricultural uses of that land or protects grazing uses and related
conservation values by restoring or conserving eligible land; and
     The WRE component restores, protects, and enhances
wetlands.
    The 2018 Farm Bill included mandatory changes to ACEP that NRCS
must implement and changes over which NRCS has some discretion.
Additionally, NRCS continues to have discretion over other program
aspects that were unchanged by the 2018 Farm Bill, such as the
allocation of funds. Together, these various changes and discretionary
provisions may affect ACEP costs and the resulting impacts on natural
resource concerns, but those changes are expected to be small. Because
ACEP is voluntary, it does not impose any burden upon agricultural
landowners who choose not to participate.
[[Page 571]]
    One of the most significant ACEP changes in the 2018 Farm Bill is
to the existing contribution requirements for the non-Federal share
under ACEP-ALE. This change adds flexibility for eligible entities to
meet the non-Federal share requirement by no longer specifying a
minimum cash contribution amount to be provided by the eligible entity
and allowing the total of the non-Federal share to be comprised of a
charitable donation or qualified conservation contribution from the
private landowner. It also includes provisions for costs related to
securing the easement to be included in the calculation of the non-
Federal share.
    There are 6 states and 1 territory (Alabama, Arkansas, Hawaii,
Louisiana, Missouri, North Dakota, and Puerto Rico) that currently have
no enrollment in ACEP-ALE. This may have been due to a lack of
available financial resources for an eligible entity to meet the
minimum cash contribution requirement or may be due to a lack of
entities that meet the eligibility requirements to participate in ACEP-
ALE. The changes to the non-Federal share requirements may result in
increased ACEP-ALE enrollments in areas where enrollment has been
limited due to a lack of financial resources available for entities
that meet the ACEP-ALE eligibility requirements. To address these
changes, this rule has eliminated a specified minimum cash contribution
amount and incorporated provisions for considering costs related to
securing the easement. These changes are applicable to all eligible
entities in all States and as a result, it is anticipated that the
amount of the Federal contribution toward ACEP-ALE easements will
increase by 8 to10 percent.
    Another change under the 2018 Farm Bill provides the Secretary with
authority to enter into legal arrangements with eligible entities to
conduct buy-protect-sell transactions under ACEP-ALE. In specific
instances, NRCS may provide ACEP-ALE cost-share assistance to an
eligible entity for the purchase of an agricultural land easement on
private or Tribal agricultural land owned on a transitional basis by an
eligible entity when the ownership of that land will be timely
transferred to a qualified farmer or rancher. Buy-protect-sell
transactions are intended to help farmers and ranchers acquire
agricultural land they could not otherwise afford and to protect
agricultural land that may have otherwise been developed or removed
from agricultural production.
    NRCS continues to have the discretion to rank and prioritize
projects and to select individual applications based on their ability
to achieve ACEP purposes and to assess and determine the appropriate
allocation of funds for the acquisition of agricultural land and
wetland easements. The 2018 Farm Bill does not identify enrollment
level requirements between ACEP-WRE and ACEP-ALE. The relative emphasis
NRCS places on these two program components depends on State and
national priorities, environmental impacts, and local demand. It is
anticipated that enrollment in ACEP will be consistent with historic
enrollment trends.
List of Subjects in 7 CFR Part 1468
    Agricultural, Flood Plains, Grazing lands, Natural resources, Soil
conservation, and Wildlife.
0
For the reasons explained above, CCC revises 7 CFR part 1468 to read as
follows:
PART 1468--AGRICULTURAL CONSERVATION EASEMENT PROGRAM
Subpart A--General Provisions
Sec.
1468.1 Applicability.
1468.2 Administration.
1468.3 Definitions.
1468.4 Appeals.
1468.5 Scheme or device.
1468.6 Subordination, exchange, modification, and termination.
1468.7 Transfer of land.
1468.8 Payments not subject to claims.
1468.9 Assignments.
1468.10 Environmental markets.
Subpart B--Agricultural Land Easements
1468.20 Program requirements.
1468.21 Application procedures.
1468.22 Establishing priorities, ranking considerations, and project
selection.
1468.23 ALE-agreements.
1468.24 Compensation and funding for agricultural land easements.
1468.25 Agricultural land easement deeds.
1468.26 Eligible entity certification.
1468.27 Buy-Protect-Sell transactions.
1468.28 Violations and remedies.
Subpart C--Wetland Reserve Easements
1468.30 Program requirements.
1468.31 Application procedures.
1468.32 Establishing priorities, ranking consideration, and project
selection.
1468.33 Enrollment process.
1468.34 Compensation for easements and 30-year contracts.
1468.35 Wetland Reserve Enhancement Partnerships.
1468.36 WRPO payments.
1468.37 Easement and 30-year contract participation requirements.
1468.38 Development and revision of the WRPO and associated
compatible use authorizations.
1468.39 Violations and remedies.
    Authority: 15 U.S.C. 714b and 714c; 16 U.S.C. 3865-3865d.
Subpart A--General Provisions
Sec.  1468.1   Applicability.
    (a) The regulations in this part set forth requirements, policies,
and procedures for implementation of the Agricultural Conservation
Easement Program (ACEP) administered by the Natural Resources
Conservation Service (NRCS). ACEP purposes include:
    (1) Combining the purposes and coordinating the functions of the
Wetlands Reserve Program established under section 1237, the Grassland
Reserve Program established under section 1238N, and the Farmland
Protection Program established under section 1238I, as such sections
were in effect on the day before the date of enactment of the
Agricultural Act of 2014;
    (2) Restoring, protecting, and enhancing wetlands on eligible land;
    (3) Protecting the agricultural use and future viability, and
related conservation values, of eligible land by limiting
nonagricultural uses of that land that negatively affect the
agricultural uses and conservation values; and
    (4) Protecting grazing uses and related conservation values by
restoring or conserving eligible land.
    (b) The NRCS Chief may implement ACEP 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.
    (c) Subpart B of this part sets forth additional requirements,
policies, and procedures for implementation of the Agricultural Land
Easements (ALE) component of ACEP.
    (d) Subpart C of this part sets forth additional requirements,
policies, and procedures for the Wetland Reserve Easement (WRE)
component of ACEP.
    (e) Easement lands previously enrolled under the predecessor
programs Farm and Ranch Lands Protection Program (7 CFR part 1491), the
Grassland Reserve Program (7 CFR part 1415), and the Wetlands Reserve
Program (7 CFR part 1467) are considered enrolled in ACEP. Existing
easements and agreements remain valid and enforceable, and subject to
the legal framework in place at the time of enrollment, except that the
long-term stewardship and management of these easements, and any ACEP
funding made available for implementation, will be in accordance with
this part.
[[Page 572]]
Sec.  1468.2   Administration.
    (a) The regulations in this part will be administered under the
general supervision and direction of the NRCS Chief.
    (b) NRCS may seek advice from the State technical committee on
considerations relating to implementation and technical aspects of the
program, such as identification of lands of statewide importance or
special significance, review of State-level geographic area rate caps,
development of ranking criteria, wetland restoration objectives,
management considerations, including compatible use criteria, or
related technical matters.
    (c) NRCS may obtain input from Federal or State agencies,
conservation districts, or other organizations in program
administration. No determination by these agencies or organizations
will compel NRCS to take any action which NRCS determines does not
serve the purposes of the program established by this part.
    (d) Applications may be submitted on a continuous basis or in
response to specific program solicitations. NRCS may announce one or
more application cut-off dates for funding consideration within a given
fiscal year.
    (e) The Chief may allocate funds for purposes related to:
Encouraging enrollment by beginning farmers or ranchers, socially
disadvantaged farmers or ranchers, limited resource farmers or
ranchers, Indian Tribes, and veteran farmers or ranchers as authorized
by 16 U.S.C. 3844; implementing landscape and related initiatives,
special pilot programs for easement management and monitoring;
agreements with other agencies and organizations to assist with program
implementation; coordination of easement enrollment across State
boundaries; coordination of the development of easement plans for ACEP-
WRE or conservation plans for ACEP-ALE; or for other goals of the ACEP
found in this part.
    (f) NRCS may delegate at any time its ACEP-WRE monitoring or
management responsibilities to conservation organizations that have
appropriate authority, expertise and technical and financial resources,
as determined by NRCS, to carry out such delegated responsibilities.
    (g) NRCS may delegate at any time its ACEP-WRE monitoring,
management, or enforcement responsibilities to other Federal or State
agencies that have the appropriate authority, expertise, and technical
and financial resources, as determined by NRCS, to carry out such
delegated responsibilities.
    (h) For ACEP-ALEs, the easement holder is responsible to ensure the
easement is monitored on an annual basis and to provide annually to
NRCS a monitoring report. For ACEP-WREs, NRCS or its delegate, is
responsible to monitor the easement on an annual basis and comply with
applicable reporting requirements.
    (i) No delegation in the administration of this part to lower
organizational levels will preclude the Chief from making any
determinations under this part, redelegating to other organizational
levels, or from reversing or modifying any determination made under
this part.
    (j) The Chief may modify or waive nonstatutory, discretionary
provisions of this part if the Chief determines the waiver of such
discretionary provision is necessary to further the purposes of ACEP as
part of an ACEP-ALE buy-protect-sell transaction or under the ACEP-WRE
wetland reserve enhancement partnership option. The waiver must further
ACEP purposes and be consistent with the specific ACEP-WRE or ACEP-ALE
conservation purposes and objectives. No waiver will result in reducing
the quality of wetland functions and values restored under ACEP-WRE, or
the protection of agricultural viability under ACEP-ALE.
    (k) To assist in ACEP implementation the Chief may also waive the
applicability of the adjusted gross income limitation as authorized by
section 1001D(b)(3) of the Food Security Act of 1985 for participating
landowners if the Chief determines that environmentally sensitive land
of special significance would be protected as a result of such waiver.
Sec.  1468.3   Definitions.
    The definitions in this section apply to this part, and all
documents issued in accordance with this part, unless specified
otherwise:
    30-year Contract means an ACEP-WRE contract that is for a duration
of 30 years and is limited to acreage owned by Indian Tribes.
    Access means legal and physical ingress and egress to the entire
easement area over adjacent or contiguous lands for the exercise of any
of the rights or interests under the easement for the duration of its
term for the purposes of the program. Access for easement enrollments
must be described in the easement deed.
    Acreage owned by Indian Tribes means lands held in private
ownership by an Indian Tribe or individual Tribal member and lands held
in trust by a native corporation, Tribe, or the Bureau of Indian
Affairs. This land may be also be referred to as ``Tribal land.''
    Agreement means the document that specifies the rights,
requirements, and responsibilities of NRCS and any persons, legal
entities, or eligible entities participating in the program or any
document that authorizes the transfer of assistance between NRCS and a
third party for provision of authorized goods and services associated
with program implementation. Agreements may include but are not limited
to an agreement to purchase, an ALE-agreement, a buy-protect-sell
arrangement, a wetland reserve easement restoration agreement, a
cooperative agreement, a grant agreement, a partnership agreement, or
an interagency agreement.
    Agreement to purchase means the legal document that is the
equivalent of a real estate purchase and sale contract. The landowner
signs the agreement to purchase, which is the authorization for NRCS to
proceed with the ACEP-WRE acquisition process.
    Agricultural commodity means any agricultural commodity planted and
produced in a State by annual tilling of the soil, including tilling by
one-trip planters or sugarcane planted and produced in a State.
    Agricultural land easement means an easement or other interest in
eligible land that is conveyed for the purposes of protecting natural
resources and the agricultural nature of the land, and of promoting
agricultural viability for future generations, and permits the
landowner the right to continue agricultural production and related
uses.
    Agricultural land easement plan means a document developed by the
eligible entity that describes the activities which promote the long-
term viability of the land to meet the purposes for which the easement
was acquired. An agricultural land easement plan includes a description
of the farm or ranch management system and the natural resource
concerns on the land, describes the conservation measures and practices
that may be implemented to address applicable resource concerns for
which the easement was enrolled, and incorporates by reference any
component plans such as a grasslands management plan, forest management
plan, or conservation plan as defined in this part.
    Agricultural uses means those activities defined by a State's farm
or ranch land protection program or where no program exists, by the
State agricultural use tax assessment program. However, if NRCS
determines that a State definition of agricultural use is so broad that
an included use would constitute a violation of Federal law, limit
future agricultural viability, degrade soils or the agricultural nature
[[Page 573]]
of the land or the related natural resources, NRCS reserves the right
to impose greater deed restrictions on the property to be subject to an
agricultural land easement. These deed restrictions would narrow the
State definition of agricultural use in order to meet Federal law, or
to protect soils, the agricultural nature of the land, or related
natural resources.
    ALE-agreement means the document that outlines the rights,
requirements, roles, and responsibilities of NRCS and eligible entities
participating in the program under subpart B, including cost-share
payment provisions.
    At-risk species means any plant or animal species listed as
threatened or endangered; proposed or candidate for listing under the
Endangered Species Act; a species listed as threatened or endangered
under State law or Tribal law on Tribal land; State or Tribal land
species of conservation concern; or other plant or animal species or
community, as determined by the State conservationist, with advice from
the State technical committee or Tribal Conservation Advisory Council,
that has undergone, or is likely to undergo, population decline and may
become imperiled without direct intervention.
    Beginning farmer or rancher means a person, Indian Tribe, Tribal
corporation, or legal entity who:
    (1) Has not operated a farm or ranch, or non-industrialized private
forest land (NIPF), or who has operated a farm or ranch or NIPF for not
more than 10 consecutive years. This requirement applies to all members
of an entity who will materially and substantially participate in the
operation of the farm or ranch or NIPF.
    (2) In the case of an individual, individually, or with the
immediate family, material and substantial participation requires that
the individual provide substantial day-to-day labor and management of
the farm or ranch consistent with the practices in the county or State
where the farm is located.
    (3) In the case of a legal entity or joint operation, all members
must materially and substantially participate in the operation of the
farm or ranch. Material and substantial participation requires that
each of the members provide some amount of the management or labor and
management necessary for day-to-day activities, such that if each of
the members did not provide these inputs, operation of the farm or
ranch would be seriously impaired.
    Buy-Protect-Sell transaction means a legal arrangement between an
eligible entity and NRCS relating to land owned or being purchased by
an eligible entity on a transitional basis during which an agricultural
land easement will be secured on eligible private or Tribal land, and
ownership of the land transferred to a qualified farmer or rancher
following conditions specified in this part.
    Certified entity means an eligible entity that NRCS has determined
to meet the certification requirements in Sec.  1468.26 for the
purposes of ACEP-ALE.
    Chief means the Chief of the Natural Resources Conservation Service
or the person delegated the authority to act for the Chief.
    Commenced conversion wetland means a wetland or converted wetland
for which the Farm Service Agency (FSA) has determined that the wetland
manipulation was contracted for, started, or for which financial
obligation was incurred before December 23, 1985.
    Commodity Credit Corporation (CCC) is a wholly-owned government
corporation within the Department of Agriculture.
    Compatible use means a use or activity conducted on a wetland
reserve easement that NRCS determines, in its sole discretion, is
consistent with the long-term protection and enhancement of the wetland
and other natural values of the easement area when performed according
to amount, method, location, timing, frequency, intensity, and duration
limitations prescribed by NRCS.
    Conservation plan is for ACEP-ALE 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 and where appropriate, may include
conversion of highly erodible cropland to less intensive uses; and
    (3) Is developed in accordance with 7 CFR part 12.
    Conservation practice means a specified treatment, such as a
vegetative, structural, or land management practice, that is planned
and applied according to NRCS standards and specifications.
    Conservation Reserve Program (CRP) means the program administered
by the CCC as required by 16 U.S.C. 3831-3836.
    Converted wetland means a wetland that has been drained, dredged,
filled, leveled, or otherwise manipulated (including the removal of
woody vegetation or any activity that results in impairing or reducing
the flow, circulation, or reach of water) for the purpose of, or to
have the effect of, making possible the production of an agricultural
commodity if such production would not have been possible but for such
action, and before such action such land was wetland, farmed wetland,
or farmed-wetland pasture and was neither highly erodible land nor
highly erodible cropland.
    Cost-share payment means the payment made by NRCS to an eligible
entity for the purchase of an ACEP-ALE easement as set forth in subpart
B of this part.
    Dedicated fund means an account held by a certified nongovernmental
organization which is sufficiently capitalized for the purpose of
covering expenses associated with the management, monitoring, and
enforcement of agricultural land easements and where such account
cannot be used for other purposes.
    Easement administration action means an easement subordination,
easement modification, easement exchange, or easement termination.
    Easement area means the portion of a parcel that is encumbered by
an ACEP easement.
    Easement exchange means a real estate transaction where NRCS, on
behalf of the United States and in its sole discretion, relinquishes
all or a portion of its rights or interests in an easement which are
replaced by similar rights or interests in an easement that have
equivalent or greater conservation value, acreage, and economic value
to the United States on land that is not adjacent to the original
easement area. NRCS is not required to exchange any of its rights or
interests in an easement, and easement exchanges are discretionary,
voluntary, real estate transactions between the United States,
landowner, and other parties with an interest in the easement.
    Easement modification means a real estate transaction where NRCS,
on behalf of the United States and in its sole discretion, agrees to
adjust the boundaries or terms of an easement that will result in
equivalent or greater conservation value, acreage, and economic value
to the United States, and the modification only involves lands within
or physically adjacent to the original easement area. NRCS is not
required to modify any of its rights or interests in an easement, and
easement modifications are discretionary, voluntary, real estate
transactions between the United States, landowner, and other parties
with an interest in the easement that are subject to the requirements
of this part.
[[Page 574]]
    Easement payment means the consideration paid to a participant or
their assignee for an easement conveyed to the United States under the
ACEP-WRE, or the consideration paid to an Indian Tribe or Tribal
members for entering into 30-year contracts under ACEP-WRE.
    Easement restoration agreement means the agreement or contract NRCS
enters into with the landowner or a third party to implement the WRPO
on a wetland reserve easement or 30-year contract.
    Easement subordination means a real estate transaction where NRCS,
on behalf of the United States and in its sole discretion, agrees to
subordinate all or a portion of its rights or interests in an easement.
NRCS is not required to subordinate any of its rights or interests in
an easement, and easement subordinations are discretionary, voluntary,
real estate transactions between the United States, landowner, and
other parties with an interest in the easement that are subject to the
requirements of this part. As determined by NRCS, the subordination
must be in the public interest or further the practical administration
of the program, minimally affect the easement acreage, and increase or
have limited negative effects on the conservation values of the
easement area.
    Easement termination means a real estate transaction where NRCS, on
behalf of the United States and in its sole discretion, agrees to
terminate all or a portion of its rights or interests in an easement.
The termination must address a compelling public need for which there
is no practicable alternative even with avoidance and minimization of
adverse impacts and must facilitate the practical administration of the
program. The United States must be provided full compensation for such
termination and any costs and damages related to the termination. NRCS
is not required to terminate any of its rights or interests in an
easement, and easement terminations are discretionary, voluntary, real
estate transactions between the United States, landowner, and other
parties that are subject to the requirements of this part. Unless and
until the parties enter into a binding termination agreement, any party
may withdraw its approval of a termination proposal at any time during
the termination process.
    Eligible activity means an action other than a conservation
practice that has the effect of alleviating problems or improving the
condition of the resources, such as ensuring proper management or
maintenance of the wetland functions and values restored, protected, or
enhanced through an ACEP-WRE easement or 30-year contract as identified
in the WRPO.
    Eligible entity means an Indian Tribe, State government, local
government, or a nongovernmental organization that has a farmland or
grassland protection program that purchases agricultural land easements
for the purposes of protecting:
    (1) The agricultural use and future viability, and related
conservation values, of eligible land by limiting nonagricultural uses
of that land that negatively affect the agricultural uses and
conservation values; or
    (2) Grazing uses and related conservation values by restoring or
conserving eligible land.
    Eligible land means private or acreage owned by Indian Tribes that
NRCS has determined to meet the requirements of Sec.  1468.20 or Sec.
1468.30 of this part.
    Fair market value means the value of an agricultural land easement
as determined using the Uniform Standards of Professional Appraisal
Practice, an areawide market analysis or survey, or another industry-
approved method approved by the Chief, as established in subpart B or,
for a wetland reserve easement, the value of the land as determined
using the Uniform Standards of Professional Appraisal Practices or
areawide market analysis or survey, as established in subpart C.
    Farm and ranch land of local importance means farm or ranch land
used to produce food, feed, fiber, forage, biofuels, and oilseed crops
that are locally important but not identified as having national or
statewide importance. Criteria for defining and delineating this land
are to be determined by the appropriate local agency or agencies.
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, biofuels, and oilseed 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 agricultural business on the enrolled
land. The farm or ranch succession plan may include specific intra-
family succession agreements or business asset transfer strategies to
create opportunities for new or beginning farmers or ranchers, veteran
farmers or ranchers, or other historically underserved landowners.
    Farm Service Agency (FSA) is an agency of the United States
Department of Agriculture.
    Field Office Technical Guide (FOTG) means the official local NRCS
source of resource information and interpretations of guidelines,
criteria, and requirements for planning and applying conservation
practices and conservation management systems. The FOTG contains
detailed information on the conservation of soil, water, air, plant,
animal, and energy resources applicable to the local area for which it
is prepared.
    Fish and Wildlife Service (FWS) is an agency of the United States
Department of the Interior.
    Forest management plan means a site-specific plan that describes
management practices that conserve, protect, or enhance the viability
of the forest land. 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) or other plan approved by the
State forester.
    Future viability means the legal, physical, and financial
conditions under which the land itself will remain capable and
available for continued sustained productive agricultural or grassland
uses while protecting related conservation values such as management of
the agricultural land easement area consistent with an agricultural
land easement plan.
    Grassland means land on which the vegetation is dominated by
grasses, grass-like plants, shrubs, or forbs, including shrubland, land
that contains forbs, pastureland, and rangeland, and improved
pastureland and rangeland.
    Grassland of special environmental significance means grasslands
that contain little or no noxious or invasive species, as designated or
defined by State or Federal law; are subject to the threat of
conversion to non-grassland uses or fragmentation; and the land:
    (1)(i) Is rangeland, pastureland, shrubland, or wet meadows on
which the vegetation is dominated by native grasses, grass-like plants,
shrubs, or forbs, or
[[Page 575]]
    (ii) Is improved, naturalized pastureland, rangeland, or wet
meadows;
    (2)(i) Provides, or could provide, habitat for threatened or
endangered species or at-risk species,
    (ii) Protects sensitive or declining native prairie or grassland
types or grasslands buffering wetlands, or
    (iii) Provides protection of highly sensitive natural resources as
identified by NRCS, in consultation with the State technical committee.
    Grasslands management plan means a site-specific plan that
describes the grassland resources, the management system and practices
that conserve, protect, or enhance the viability of the grassland, and
as applicable, the habitat, species, or sensitive natural resources.
    Grazing management plan means for ACEP-WRE, a site-specific plan
developed as a component of the WRPO that provides for grazing of the
grass and grass-like cover while accomplishing the wetland functions
and values of the easement area as identified by NRCS.
    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), 54 U.S.C. 300101,
et seq.);
    (2) Formally determined eligible for listing in the National
Register of Historic Places (by the State Historic Preservation Office
(SHPO) or Tribal Historic Preservation Office (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.
    Historically underserved landowner means a beginning, limited
resource, socially disadvantaged farmer or rancher, or veteran farmer
or rancher.
    Imminent harm means easement violations or threatened violations
that, as determined by NRCS, would likely cause immediate and
significant degradation to the conservation values for which the
easement was acquired.
    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, pueblo, or other
organized group or community, including any Alaska Native village or
regional or village corporation as defined in or established as
required by 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 NRCS and used, when applicable, 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 eligible 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 and tenants-in-
common, and includes heirs, successors, assigns, and anyone claiming
under them. State and local governments are not eligible as landowners.
For ACEP-ALE, nongovernmental organizations and Indian tribes that
qualify as eligible entities are not eligible as landowners unless
otherwise determined by the Chief following an approved buy-protect-
sell transaction.
    Lands substantially altered by flooding means agricultural lands
where flooding has created wetland hydrologic conditions which, with a
high degree of certainty, will develop and retain wetland soil,
hydrology, and vegetation characteristics over time.
    Limited resource farmer or rancher means either:
    (1)(i) A person with direct or indirect gross farm sales not more
than the current indexed value in each of the previous two fiscal years
(adjusted for inflation using Prices Paid by Farmer Index as compiled
by National Agricultural Statistical Service), and
    (ii) Has a total household income at or below the national poverty
level for a family of four, or less than 50 percent of county median
household income in each of the previous two years (to be determined
annually using Commerce Department Data); or
    (2) A legal entity or joint operation if all individual members
independently qualify under paragraph (1) of this definition.
    Maintenance means work performed to keep the wetland reserve
easement lands functioning for program purposes for the duration of the
enrollment period. Maintenance includes actions and work to manage,
prevent deterioration, repair damage, or replace conservation practices
or eligible activities on a wetland reserve easement, as approved or
conducted by NRCS.
    Monitoring report means a report, the contents of which are
formulated and prepared by the easement holder, or their delegate, that
accurately documents on an annual basis whether the land subject to
easement is in compliance with the terms and conditions of the
easement.
    Natural Resources Conservation Service (NRCS) means an agency of
the U.S. Department of Agriculture (USDA), including when NRCS carries
out program implementation using the funds, facilities, or authorities
of the CCC.
    Nongovernmental organization means any organization that for
purposes of qualifying as an eligible entity under subpart B:
    (1) Is organized for, and at all times since the formation of the
organization, has been operated principally for, one or more of the
conservation purposes specified in clause (i), (ii), (iii), or (iv) of
section 170(h)(4)(A) of the Internal Revenue Code of 1986;
    (2) Is an organization described in section 501(c)(3) of that Code
that is exempt from taxation under 501(a) of that Code; and
    (3) Is described in--
    (i) Section 509(a)(1) and (2) of that Code, or
    (ii) Section 509(a)(3) of that Code and is controlled by an
organization described in section 509(a)(2) of that Code.
    Nonindustrial private forest land (NIPF) means rural land, as
determined by the NRCS, that has existing tree cover or is suitable for
growing trees; and is owned by any nonindustrial private individual,
group, association, corporation, Indian Tribe, or other private legal
entity that has definitive decision-making authority over the land.
    Other interests in land include any right in real property other
than easements that are recognized by State law that the Chief
determines can be purchased by an eligible entity to further the
agricultural use of the land and other ACEP-ALE purposes.
    Other productive soils means farm and ranch land soils, in addition
to prime farmland soils, that include unique farmland or farm and ranch
land of statewide and local importance.
    Parcel means the defined area of land and may be a portion or all
of the area of land that is owned by the landowner.
    Participant means a person, legal entity, Indian Tribe, native
corporation,
[[Page 576]]
or eligible entity who has been accepted into the program and who is
receiving payment or who is responsible for implementing the terms and
conditions of an agreement to purchase, an agreement to enter a 30-year
contract, or an ALE-agreement.
    Pending offer means a written bid, contract, or option between a
landowner and an eligible entity for the acquisition of an agricultural
conservation easement in perpetuity, or for the maximum duration
allowed by State law, before the legal title to these rights has been
conveyed for the purposes of protecting:
    (1) The agricultural use and future viability, and related
conservation values, of eligible land by limiting nonagricultural uses
of that land; or
    (2) Grazing uses and related conservation values by restoring or
conserving eligible land.
    Permanent easement means an easement that lasts in perpetuity.
    Person means a natural person.
    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 NRCS.
    Private land means land that is not owned by a governmental entity
and includes acreage owned by Indian Tribes, as defined in this part.
    Right of enforcement means the right of the United States to
enforce the easement entered into under this part in those instances in
which the grantee of the easement does not fully protect the interests
provided to the grantee under the easement.
    Riparian areas means areas of land that occur along streams,
channels, rivers, and other water bodies. These areas are normally
distinctly different from the surrounding lands because of unique soil
and vegetation characteristics, may be identified by distinctive
vegetative communities that are reflective of soil conditions normally
wetter than adjacent soils, and generally provide a corridor for the
movement of wildlife.
    Socially disadvantaged farmer or rancher means a producer who is a
member of a group whose members have been subjected to racial or ethnic
prejudices without regard to its members' individual qualities. For a
legal entity, at least 50-percent ownership in the legal entity must be
held by socially disadvantaged individuals.
    State conservationist means the NRCS employee authorized to direct
and supervise NRCS activities in a State and includes the directors of
the Caribbean Area (Puerto Rico and the 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 under 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 NRCS. 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.
    Veteran farmer or rancher means a producer who meets the definition
in section 2501(a) of the Food, Agriculture, Conservation, and Trade
Act of 1990, as amended (7 U.S.C. 2279(a)).
    Wetland means land that:
    (1) Has a predominance of hydric soils;
    (2) Is inundated or saturated by surface or groundwater at a
frequency and duration sufficient to support a prevalence of
hydrophytic vegetation typically adapted for life in saturated soil
conditions; and
    (3) Supports a prevalence of such vegetation under normal
circumstances.
    Wetland functions and values means the hydrological and biological
characteristics of wetlands and the socioeconomic value placed upon
these characteristics, including--
    (1) Habitat for migratory birds and other wildlife, in particular
at-risk species.
    (2) Protection and improvement of water quality.
    (3) Attenuation of water flows due to flood.
    (4) The recharge of ground water.
    (5) Protection and enhancement of open space and aesthetic quality.
    (6) Protection of flora and fauna which contributes to the Nation's
natural heritage.
    (7) Carbon sequestration.
    (8) Contribution to educational and scientific scholarship.
    Wetland reserve easement means a reserved interest easement which
is an interest in land defined and delineated in a deed whereby the
landowner conveys all rights, title, and interests in a property to the
United States, but the landowner retains those rights, title, and
interests in the property which are specifically reserved to the
landowner in the easement deed.
    Wetland reserve plan of operations (WRPO) means the document that
is developed or approved by NRCS that identifies how the wetland
functions and values and associated habitats on the easement will be
restored, improved, protected, managed, maintained, and monitored to
achieve the purposes of the wetland reserve easement enrollment.
    Wetland restoration means the rehabilitation of degraded or lost
wetland and associated habitats pursuant to published State-specific
criteria and guidelines developed in coordination with the State
technical committee in a manner such that:
    (1) The original, native vegetative community and hydrology are, to
the extent practical, reestablished; or
    (2) A hydrologic regime and native vegetative community different
from what likely existed prior to degradation of the site is
established that will:
    (i) Substantially replace the original habitat functions and values
while providing significant support or benefit for migratory waterfowl
or other wetland-dependent wildlife; or
    (ii) Address local resource concerns or needs for the restoration
of wetland functions and values for wetland-dependent wildlife as
identified in an approved State wildlife action plan or NRCS national
initiative.
Sec.  1468.4   Appeals.
    (a) ACEP-ALE eligibility of entities. An entity which has submitted
an ACEP-ALE application to be considered an eligible entity may obtain
a review of any administrative determination concerning their
eligibility for participation utilizing the administrative appeal
regulations provided in 7 CFR parts 11 and 614.
    (b) ACEP-WRE applicants and participants. An applicant or
participant in the ACEP-WRE may obtain a review of any administrative
determination concerning eligibility for participation or receipt of
payment utilizing the administrative appeal regulations provided in 7
CFR parts 11 and 614.
    (c) Easement administration and management determinations under
ACEP after easement closing. NRCS determinations that are made pursuant
to its rights or interests in an ACEP-funded easement after closing may
only be appealed to the State conservationist as specified in the
notice provided to the landowner or easement holder when NRCS exercises
its rights under the easement. Such determinations are not
[[Page 577]]
subject to appeal under 7 CFR parts 11 or 614.
Sec.  1468.5   Scheme or device.
    (a) In addition to other penalties, sanctions, or remedies that may
apply, if it is determined by NRCS that anyone has employed a scheme or
device to defeat the purposes of this part, any part of any program
payment otherwise due or paid during the applicable period may be
withheld or be required to be refunded with interest, thereon, as
determined appropriate by NRCS.
    (b) A scheme or device includes, but is not limited to, coercion,
fraud, misrepresentation, depriving anyone of a program benefit, or for
the purpose of obtaining a payment to which they would otherwise not be
entitled.
Sec.  1468.6   Subordination, exchange, modification, and termination.
    (a) After an easement has been recorded, no subordination,
modification, exchange, or termination will be made in any interest in
land, or portion of such interest, except as approved by the NRCS. NRCS
may approve such easement administration actions if NRCS determines, in
accordance with the sequencing considerations under the National
Environmental Policy Act, that--
    (1)(i) The subordination, modification, or exchange action results
in no net loss of easement acres, and is in the public interest or will
further the practical administration and management of the easement
area or the program, as determined by the NRCS, or
    (ii) The termination action will address a compelling public need
for which there is no practicable alternative even with avoidance and
minimization, and will further the practical administration and
management of the easement area or the program, as determined by the
NRCS.
    (2) For modification or exchange actions--
    (i) There is no reasonable alternative that would avoid the
easement area, or if the easement area cannot be avoided entirely, then
the preferred alternative must minimize impacts to the original
easement area and its conservation functions and values to the greatest
extent practicable and any remaining adverse impacts must be mitigated,
as determined by NRCS, at no cost to the government,
    (ii) The action is consistent with the original intent of the
easement and is consistent with the purposes of the program, and
    (iii) The action results in equal or greater conservation functions
and value and equal or greater economic value to the United States. A
determination of equal or greater economic value to the United States
will be made in accordance with an approved easement valuation
methodology for agricultural land easements under subpart B or for
wetland reserve easements under subpart C. In addition to the value of
the easement itself, NRCS may consider other financial investments it
has made in the acquisition, restoration, and management of the
original easement to ensure that the easement administration action
results in equal or greater economic value to the United States.
    (3) For subordination actions, the action--
    (i) Increases conservation functions and values or has a limited
negative effect on conservation functions and values;
    (ii) Is at no cost to the Government; and
    (iii) Notwithstanding paragraph (a)(4) of this section, will only
minimally affect the acreage subject to the interest in land.
    (4) For termination actions, the action--
    (i) Is in the interest of the Federal Government; and
    (ii) The United States will be fully compensated for the fair
market value of the interest in land including any costs and damages
related to the termination.
    (5) The easement administration action will not affect more than 10
percent of the original easement area unless NRCS determines that it is
impracticable to achieve program purposes on the original easements
area, in which case NRCS may authorize a greater percentage of the
original easement area to be affected.
    (6) The landowner and, if applicable, the agricultural land
easement holder agrees to such easement administration action prior to
NRCS considering that such easement administration action may be
approved.
    (b) Easement subordinations or modifications are preferred to
easement exchanges that may involve lands that are not physically
adjacent to the original easement area. Easement exchanges are limited
to circumstances where there are no available lands adjacent to the
original easement area that will result in equal or greater
conservation and economic values to the United States.
    (c) Replacement of easement acres as part of an easement exchange
must occur within the same State and within the same eight-digit
watershed as determined by the hydrologic unit codes developed by the
U.S. Geological Survey.
    (d) Where NRCS determines that recordation of an amended or new
easement deed is necessary to affect an easement administration action
under this section, NRCS may use the most recent version of the ACEP
deed document or deed terms approved by NRCS. The amended or new
easement deed must be duly prepared and recorded in conformity with
standard real estate practices, including requirements for title
approval, subordination of liens, and recordation of documents.
    (e) Modification or exchange of all or a portion of an interest in
land enrolled in ACEP-ALE may not increase any payment to an easement
holder.
    (f)(1) A termination action must meet criteria identified in this
part and are limited to those circumstances where NRCS determines it is
in the Federal Government's interest to terminate all or a portion of
the interest in the land enrolled in the program, that the purposes of
the program can no longer be achieved on the original easement area, or
the terms of the easement are no longer enforceable and there are no
acceptable replacement acres available.
    (2) NRCS will enter into a compensatory agreement with the
proponent of the termination that identifies the costs for which the
United States must be reimbursed, including but not limited to the
value of the easement itself based upon current valuation
methodologies, repayment of legal boundary survey costs, legal title
work costs, associated easement purchase and restoration costs, legal
filing fees, costs relating to the termination, and any damages
determined appropriate by NRCS.
    (3) At least 90 days prior to taking any termination action,
written notice of such termination action will be provided to the
Committee on Agriculture of the House of Representatives and the
Committee on Agriculture, Nutrition, and Forestry of the Senate.
    (g) Insofar as is consistent with the easement and applicable law,
NRCS may approve modifications to an easement plan that do not affect
provisions of the easement. Easement plans include any conservation
plan, WRPO, wetland reserve easement restoration agreements, grazing
management plan, habitat management plans, or other plans required as a
condition of enrollment. Any easement plan modification must meet this
part and must result in equal or greater conservation benefits on the
enrolled land.
[[Page 578]]
Sec.  1468.7   Transfer of land.
    (a) Offers voided. Any transfer of the property prior to recording
the easement in the applicable land records or executing the 30-year
contract may void the availability of ACEP funding for that
transaction, unless the new landowner is determined eligible, the
transfer is approved by NRCS, and the new landowner is willing to
comply with ACEP requirements.
    (b) Payments to participants. For wetland reserve easements with
annual installment payments, any remaining easement payments will be
made to the original participants unless NRCS receives an assignment of
proceeds.
    (c) Claims to payments. With respect to any and all payments owed
to participants, NRCS will bear no responsibility for any full payments
or partial distributions of funds between the original participant and
the participant's successor. In the event of a dispute or claim on the
distribution of payments, NRCS may withhold payments without the
accrual of interest pending an agreement or adjudication on the rights
to the funds.
Sec.  1468.8   Payments not subject to claims.
    Any cost-share, contract, agreement, or easement payment or
portion, thereof, due any person, legal entity, Indian Tribe, eligible
entity, or other party under this part will be allowed without regard
to any claim or lien in favor of any creditor, except agencies of the
United States.
Sec.  1468.9   Assignments.
    Any person, legal entity, Indian Tribe, eligible entity, or other
party entitled to any cash payment under this program may assign the
right to receive such cash payments, in whole or in part.
Sec.  1468.10   Environmental markets.
    (a) Ecosystem services credits for conservation improvements under
a wetland reserve easement. Landowners may obtain environmental credits
under other programs if one of the purposes of such program is the
facilitation of additional conservation benefits that are consistent
with the conservation purposes for which the easement was acquired, and
such action does not adversely affect the rights or interests granted
under the easement to the United States.
    (b) Ecosystem services credits related to an agricultural land
easement. Landowners may obtain environmental credits under other
programs if one of the purposes of such program is the facilitation of
additional conservation benefits that are consistent with the
conservation purposes for which the easement was acquired, and such
action does not adversely affect the interests granted under the
easement to the grantee or to the United States right of enforcement.
    (c) Voluntary action. ACEP funds may not be used to acquire
easements to establish protections or to implement conservation
practices that the landowner is required to establish as a result of a
court order or to satisfy any mitigation requirement for which the ACEP
landowner is otherwise responsible.
Subpart B--Agricultural Land Easements
Sec.  1468.20   Program requirements.
    (a) General. (1) Under ACEP-ALE, NRCS will facilitate and provide
cost-share assistance for the purchase by eligible entities of
agricultural land easements or other interests in eligible private or
Tribal land that is--
    (i) Subject to a written pending offer; or
    (ii) Owned or in the process of being purchased by the eligible
entity as part of an approved buy-protect-sell transaction.
    (2) To participate in ACEP-ALE, eligible entities as identified in
(b) below must submit applications to NRCS State offices to partner
with NRCS to acquire conservation easements on eligible land. Eligible
entities must enter into an ALE-agreement with NRCS and address the
ACEP-ALE deed requirements specified therein, the effect of which is to
protect natural resources and the agricultural nature of the land and
permit the landowner the right to continue agricultural production and
related uses.
    (3) Under the ALE-agreement, unless otherwise specified in this
part, the Federal share of the cost of an agricultural land easement or
other interest in eligible land will not exceed 50 percent of the fair
market value of the agricultural land easement and the eligible entity
will provide a share that is at least equivalent to the Federal share.
    (4) The duration of each agricultural land easement or other
interest in land will be in perpetuity or the maximum duration allowed
by State law.
    (b) Entity eligibility. (1) To be eligible to receive ACEP-ALE
funding, an Indian Tribe, State, unit of local government, or a
nongovernmental organization must meet the definition of eligible
entity as listed in Sec.  1468.3. In addition, eligible entities
interested in receiving ACEP-ALE funds must provide NRCS sufficient
evidence of--
    (i) A commitment to long-term conservation of agricultural lands,
    (ii) A capability to acquire, manage, and enforce easements,
    (iii) Sufficient number of staff dedicated to monitoring and
easement stewardship,
    (iv) The estimated easement and related costs and the anticipated
sources of funding sufficient to meet the non-Federal share
requirements for each parcel as described in Sec.  1468.24, and
    (v) For individual parcels on which the eligible entity's own cash
resources will comprise less than 10 percent of the fair market value
of the agricultural land easement for payment of easement compensation
to the landowner, the eligible entity must provide NRCS specific
evidence of funding available to manage, monitor, and enforce the
easement.
    (2) All eligible entities identified on an application or ALE-
agreement must--
    (i) Ensure that their records and the records of all landowners of
parcels identified on an application have been established in the USDA
customer records system and that USDA has all the documentation needed
to establish these records, and
    (ii) Eligible entities must also 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, and maintain such registration for
the duration of the ALE-agreement.
    (c) Landowner eligibility. Under ACEP-ALE, all parcel landowners,
including an eligible entity owner of private or Tribal land in an
approved buy-protect-sell transaction, must--
    (1) Be in compliance with the highly erodible land and wetland
conservation provisions in 7 CFR part 12,
    (2) Persons or legal entities must be in compliance with the
Adjusted Gross Income Limitation provisions of 7 CFR part 1400;
    (3) Agree to provide access to the property and such information to
NRCS as the agency deems necessary or desirable to assist in its
determination of eligibility for program implementation purposes; and
    (4) Have their records established in the USDA customer records
system.
    (d) Land eligibility. (1) Land will only be considered eligible for
enrollment in ACEP-ALE based on NRCS determination that such private or
Tribal agricultural land, including land on a farm or ranch that--
    (i) Is subject to a written pending offer by an eligible entity or
part of an approved buy-protect-sell transaction;
[[Page 579]]
    (ii)(A) Contains at least 50 percent prime or unique farmland, or
designated farm and ranch land of State or local importance unless
otherwise determined by NRCS,
    (B) Contains historical or archaeological resources,
    (C) The enrollment of which would protect grazing uses and related
conservation values by restoring or conserving land, or
    (D) Furthers a State or local policy consistent with the purposes
of the ACEP-ALE;
    (iii) Is--
    (A) Cropland;
    (B) Rangeland;
    (C) Grassland or land that contains forbs or shrubland for which
grazing is the predominant use;
    (D) Located in an area that has been historically dominated by
grassland, forbs, or shrubs and could provide habitat for animal or
plant populations of significant ecological value;
    (E) Pastureland; or
    (F) Nonindustrial private forest land that contributes to the
economic viability of a parcel offered for enrollment or serves as a
buffer to protect such land from development; and
    (iv) Possesses suitable onsite and offsite conditions which will
allow the easement to be effective in achieving the purposes of the
program.
    (2) If land offered for enrollment is determined eligible under
paragraph (d)(1) of this section, then NRCS may also enroll land that
is incidental to the eligible land if the incidental land is determined
by NRCS to be necessary for the efficient administration of an
agricultural land easement.
    (3) Eligible land, including eligible incidental land, may not
include nonindustrial private forest land of greater than two-thirds of
the easement area unless waived by NRCS with respect to lands
identified by NRCS as sugar bush that contributes to the economic
viability of the parcel.
    (e) Ineligible land. The land specified in paragraphs (e)(1)
through (7) of this section is not eligible for enrollment in ACEP-ALE:
    (1) Lands owned by an agency of the United States, other than land
held in trust for Indian Tribes;
    (2) Lands owned in fee title by a State, including an agency or a
subdivision of a State, or unit of local government;
    (3) Land owned by a nongovernmental organization whose purpose is
to protect agricultural use and related conservation values including
those listed in the statute under eligible land unless the eligible
land is owned on a transitional basis as part of an approved buy-
protect-sell transaction;
    (4) Land subject to an easement or deed restriction which, as
determined by NRCS, provides similar restoration and protection as
would be provided by enrollment in the program;
    (5) Land where the purposes of the program would be undermined due
to onsite or offsite conditions, such as risk of hazardous materials,
permitted or existing rights-of-way, infrastructure development, or
adjacent land uses;
    (6) Land which NRCS determines to have unacceptable exceptions to
clear title or insufficient legal access; or
    (7) Land on which gas, oil, earth, or mineral rights exploration
has been leased or is owned by someone other than the landowner is
ineligible under ACEP-ALE unless it is determined by NRCS that the
third-party rights will not harm or interfere with the conservation
values or agricultural uses of the easement, that any methods of
exploration and extraction will have only a limited and localized
impact on the easement, and the limitations are specified in the ALE
deed.
    (f) Buy-Protect-Sell transaction land eligibility. (1) NRCS may
enter into a buy-protect sell transaction with an eligible entity on a
parcel that--
    (i) Otherwise meets the eligibility criteria described in this
section,
    (ii) Is subject to conditions, as determined by NRCS, that
necessitate the ownership of the parcel by the eligible entity on a
transitional basis prior to the creation of an agricultural land
easement, such as imminent threat of development, including, but not
limited to, planned or approved conversion of grasslands to more
intensive agricultural uses, and
    (iii) Is owned by or is in the process of being purchased by the
eligible entity.
    (2) At the time of application, the eligible entity must provide
NRCS evidence of ownership or active purchase of the parcel, such as a
valid purchase agreement.
    (3) The eligible entity must meet all program requirements and any
specific provisions related to buy-protect-sell transactions as
specified in this part.
Sec.  1468.21   Application procedures.
    (a) To apply for enrollment an eligible entity must submit an
entity application for an ALE-agreement and any associated individual
parcel applications to NRCS. For buy-protect-sell transactions,
additional information may be required at the time of application as
identified by NRCS.
    (b) NRCS may conduct initial eligibility determinations for the
fiscal year an application is submitted. As determined by NRCS, the
entity eligibility requirements must be met for the fiscal year in
which the ALE-agreement is executed, and the land and landowner must be
eligible for the fiscal year the parcel is approved for funding through
an ALE-agreement. NRCS eligibility determinations are based on the
application materials provided by the eligible entity, onsite
assessments, and the criteria in Sec.  1468.20.
Sec.  1468.22   Establishing priorities, ranking considerations, and
project selection.
    (a) NRCS will use national and State criteria to rank and select
eligible parcels for funding. The national ranking criteria will
comprise at least half of the ranking score. The State criteria will be
developed by NRCS on a State-by-State basis, with input from the State
technical committee. The weighting of ranking criteria, including
adjustments to account for geographic differences, will be developed to
maximize the benefit of the Federal investment under the program.
Parcels are ranked and selected for funding at the State level.
    (b) The national ranking criteria are--
    (1) Percent of prime, unique, and other important farmland soils in
the parcel to be protected;
    (2) Percent of cropland, rangeland, grassland, historic grassland,
pastureland, or nonindustrial private forest land 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) Existence of a farm or ranch succession plan or similar plan
established to address agricultural viability for future generations;
    (8) 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 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
[[Page 580]]
nonagricultural use or protects grazing uses and related conservation
values;
    (9) Proximity of the parcel to other agricultural operations and
agricultural infrastructure;
    (10) Maximizing the protection of contiguous or proximal acres
devoted to agricultural use;
    (11) Whether the land is currently enrolled in CRP in a contract
that is set to expire within 1 year and is grassland that would benefit
from protection under a long-term easement;
    (12) Decrease in the percentage of acreage of permanent grassland,
pasture, and rangeland, other than cropland and woodland pasture, in
the county in which the parcel is located between the last two USDA
Censuses of Agriculture;
    (13) Percent of the fair market value of the agricultural land
easement that is the eligible entity's own cash resources for payment
of easement compensation to the landowner and comes from sources other
than the landowner; and
    (14) Other criteria as determined by NRCS.
    (c) State or local criteria as determined by NRCS, with advice of
the State technical committee, may only include--
    (1) The location of a parcel in an area zoned for agricultural use;
    (2) The eligible entity's performance in managing and enforcing
easements. Performance must be measured by the efficiency by which
easement transactions are completed or percentage of parcels that have
been monitored and the percentage of monitoring results that have been
reported;
    (3) Multifunctional benefits of farm and ranch land protection
including--
    (i) Social, economic, historic, and archaeological benefits;
    (ii) Enhancing carbon sequestration;
    (iii) Improving climate change resiliency;
    (iv) At-risk species protection;
    (v) Reducing nutrient runoff and improving water quality;
    (vi) Other related conservation benefits.
    (4) Geographic regions where the enrollment of particular lands may
help achieve national, State, and regional agricultural or conservation
goals and objectives, or enhance existing government or private
conservation projects;
    (5) Diversity of natural resources to be protected or improved;
    (6) Score in the land evaluation and site assessment system as
identified in 7 CFR part 658 or equivalent measure for grassland
enrollments, to serve as a measure of agricultural viability (access to
markets and infrastructure);
    (7) Measures that will be used to maintain or increase agricultural
viability, such as succession plans, agricultural land easement plans,
or entity deed terms that specifically address long-term agricultural
viability; and
    (8) Other criteria determined by NRCS that will account for
geographic differences provided such criteria allow for the selection
of parcels that will achieve ACEP-ALE purposes and continue to maximize
the benefit of the Federal investment under the program.
    (d) If NRCS determines that the purchase of two or more
agricultural land easements are comparable in achieving program goals,
NRCS will not assign a higher priority to any one of these agricultural
land easements solely on the basis of lesser cost to the program.
    (e) NRCS will rank all eligible parcels that have been submitted
prior to an application cut-off date in accordance with the national
and State ranking criteria before selecting parcels for funding.
    (f) Eligible parcels selected for funding by NRCS will be
identified in an agreement executed by NRCS and an eligible entity,
either as part of the ALE-agreement or through a supplemental
arrangement as agreed to by the parties.
    (g) Pursuant to the terms of the ALE-agreement, eligible parcels
may be selected for funding in a fiscal year subsequent to the fiscal
year in which the parties entered into an ALE-agreement.
Sec.  1468.23   ALE-agreements.
    (a) NRCS will enter into an ALE-agreement with a selected eligible
entity that stipulates the terms and conditions under which the
eligible entity is permitted to use ACEP-ALE funding and will
incorporate all ACEP-ALE requirements. NRCS will make available to
eligible entities the ALE-agreement terms and conditions, including any
applicable templates, based on enrollment type. The ALE-agreement will
address--
    (1) The interests in land to be acquired, including the United
States' right of enforcement, the deed requirements specified in this
part, as well as the other terms and conditions of the easement deed;
    (2) The management and enforcement of the rights on lands acquired
with ACEP-ALE funds;
    (3) The responsibilities of NRCS;
    (4) The responsibilities of the eligible entity on easements
acquired with ACEP-ALE funds;
    (5) The requirement for any conservation plan for highly erodible
cropland or agricultural land easement plans to be developed as
required or agreed-to prior to execution of the easement deed and
payment of easement compensation to the landowner;
    (6) As applicable, the allowance of eligible parcel substitution
upon mutual agreement of the parties;
    (7) The certification by the landowner at the time of easement
execution and payment of easement compensation of the extent of any
charitable contribution or other donation the landowner has provided to
the eligible entity;
    (8) The submission of documentation of procured costs for each
parcel, including appraisal, boundary survey, phase-I environmental
site assessment, title commitment or report, title insurance, and
closing cost if such procured costs are to be considered as part of the
eligible entity's non-Federal share; and
    (9) Other requirements deemed necessary by NRCS to meet the
purposes of this part or protect the interests of the United States.
    (10) For buy-protect-sell transactions, the ALE-agreement will also
include the requirements identified in Sec.  1468.27.
    (b) The term of standard ALE-agreements, except as described in
Sec.  1468.27 for ALE-agreements for approved buy-protect-sell
transactions, will be:
    (1) Up to 5 fiscal years following the fiscal year the agreement is
signed for certified entities; and
    (2) Up to 3 fiscal years and not to exceed 5 fiscal years following
the fiscal year the agreement is signed for other eligible entities.
    (c) Eligible parcels selected for funding by NRCS will be
identified on an attachment to the ALE-agreement. The attachment will
include landowners' names, acreage of the easement area, the estimated
fair market value, the estimated Federal contribution, and other
relevant information.
    (d) The ALE-agreement will require 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.
    (e) With NRCS approval, the eligible entity may substitute acres
within a pending easement offer. Substituted acres must not reduce the
easements capability in meeting program purposes.
    (f) With NRCS approval, an eligible entity may substitute pending
easement offers within a standard ALE-agreement. The substituted
landowner and easement offer must meet eligibility
[[Page 581]]
criteria as described in Sec.  1468.20. NRCS may require re-ranking of
substituted acres within an easement offer and substituted easement
offers within an ALE-agreement. Substitutions are not authorized under
ALE-agreements for buy-protect-sell transactions.
Sec.  1468.24   Compensation and funding for agricultural land
easements.
    (a) Determining the fair market value of the agricultural land
easement. (1) The Federal share will not exceed 50 percent of the fair
market value of the agricultural land easement, as determined using--
    (i) An appraisal using the Uniform Standards of Professional
Appraisal Practices or the Uniform Appraisal Standards for Federal Land
Acquisitions,
    (ii) An areawide market analysis or survey, or
    (iii) Another industry-approved method approved by NRCS.
    (2) Prior to receiving funds for an agricultural land easement, the
eligible entity must provide NRCS with an acceptable determination of
the fair market value of the agricultural land easements that conforms
to applicable industry standards and NRCS specifications and meets the
requirements of this part.
    (3) If the value of the easement is determined using an appraisal,
the appraisal 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.
    (4) If the fair market value of the easement is determined using an
areawide market analysis or survey, the areawide market analysis or
survey must be completed and signed by a person determined by NRCS to
have professional expertise and knowledge of agricultural land values
in the area subject to the areawide market analysis or survey. The use
of areawide market analysis or survey must be approved by NRCS prior to
entering into an ALE-agreement.
    (5) Requests to use another industry-approved method must be
submitted to NRCS and approved by NRCS prior to entering into the ALE-
agreement. NRCS will identify the applicable industry standards and any
associated NRCS specifications based on the methodology approved.
    (6) NRCS will review for quality assurance purposes, appraisals,
areawide market analysis or surveys, valuation reports, or other
information resulting from another industry-approved method approved
for use by NRCS.
    (7) Eligible entities must provide a copy of the applicable report
or other information used to establish the fair market value of the
agricultural land easement to NRCS at least 90 days prior to the
planned easement closing date.
    (8) Prior to the eligible entity's purchase of the easement,
including payment of easement compensation to the landowner, NRCS must
approve the determination of the fair market value of the agricultural
land easement upon which the Federal share will be based.
    (b) Determining the Federal share of the agricultural land
easement. (1) Subject to the statutory limits, NRCS may provide up to
50 percent of the fair market value of the agricultural land easement.
An eligible entity will provide a non-Federal share that is at least
equivalent to the Federal share.
    (2) The non-Federal share provided by an eligible entity may be
comprised of--
    (i) The eligible entity's own cash resources for payment of
easement compensation to the landowner;
    (ii) A charitable donation or qualified conservation contribution
(as defined by section 170(h) of the Internal Revenue Code of 1986)
from the landowner;
    (iii) The procured costs paid by the eligible entity to a third-
party for an appraisal, boundary survey, phase-I environmental site
assessment, title commitment or report, title insurance, or closing
cost; and
    (iv) Up to 2 percent of the fair market value of the agricultural
land easement for easement stewardship and monitoring costs where the
costs as identified in paragraphs (b)(2)(i) through (iii) of this
section are not sufficient to meet the non-Federal share;
    (3) NRCS may authorize a waiver to increase the Federal share of
the cost of an agricultural land easement to an amount not to exceed 75
percent of the fair market value of the agricultural land easement if--
    (i) NRCS determines the lands to be enrolled are grasslands of
special environmental significance as defined in this part,
    (ii) An eligible entity provides a non-Federal share that is at
least equivalent to the Federal share or comprises the remainder of the
fair market value of the agricultural land easement, whichever is less,
and
    (iii) The eligible entity agrees to incorporate and enforce the
additional necessary deed restrictions to manage and enforce the
easement to ensure the grassland of special environmental significance
attributes are protected.
    (c) Uses of NRCS ACEP-ALE funds. (1) ACEP-ALE funds may not be
provided or used for eligible entity expenditures for expenses, such
as: Appraisals, areawide market analysis, legal surveys, access, title
clearance or title insurance, legal fees, phase I environmental site
assessments, closing services, development of agricultural land
easement plans or component plans by the eligible entity, costs of
easement monitoring, and other related administrative and transaction
costs incurred by the eligible entity.
    (2) NRCS will conduct its own technical and administrative review
of appraisals, areawide market analysis, or other easement valuation
reports and hazardous materials reviews.
    (3) NRCS may provide technical assistance for the development of a
conservation plan on those portions of a parcel that contain highly
erodible cropland, or if requested, to assist in compliance with the
terms and conditions of easements.
Sec.  1468.25   Agricultural land easement deeds.
    (a) Under ACEP-ALE, a landowner grants an easement to an eligible
entity with which NRCS has entered into an ALE-agreement. The easement
deed will require that the easement area be maintained in accordance
with ACEP-ALE goals and objectives for the term of the easement.
    (b) The term of an agricultural land easement must be 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 duration allowed under State
law.
    (c) The eligible entity may use its own terms and conditions in the
agricultural land easement deed, but the agricultural land easement
deed must address the deed requirements as specified by this part and
by NRCS in the ALE-agreement.
    (d) All deeds, as further specified in the ALE-agreement, must
address the following regulatory deed requirements:
    (1) Include a right of enforcement clause for NRCS. NRCS will
specify the terms for the right of enforcement clause, including that
such interest in the agricultural land easement:
    (i) May be used only if the terms and conditions of the easement
are not enforced by the eligible entity;
    (ii) Extends to a right of inspection only if the holder of the
easement fails to provide monitoring reports in a timely manner or NRCS
has a reasonable and articulable belief that the
[[Page 582]]
terms and conditions of the easement have been violated;
    (iii) Remains in effect for the duration of the easement and any
changes that affect NRCS's interest in the agricultural land easement
must be reviewed and approved by NRCS under Sec.  1468.6 of this part.
    (2) Specify that impervious surfaces will not exceed 2 percent of
the ACEP-ALE easement area, excluding NRCS-approved conservation
practices unless NRCS grants a waiver as follows:
    (i) The eligible entity may request a waiver of the 2-percent
impervious surface limitation at the time an individual parcel is
approved for funding,
    (ii) NRCS may waive the 2-percent impervious surface limitation on
an individual easement basis, provided that no more than 10 percent of
the easement area is covered by impervious surfaces,
    (iii) Before waiving the 2 percent limitation, NRCS will consider,
at a minimum, population density; the ratio of open, prime, and other
important farmland versus impervious surfaces on the easement area; the
impact to water quality concerns in the area; the type of agricultural
operation; parcel size; and the purposes for which the easement is
being acquired,
    (iv) Eligible entities may submit an impervious surface limitation
waiver process to NRCS for review and consideration. The eligible
entities must apply any approved impervious surface limitation waiver
processes on an individual easement basis, and
    (v) NRCS will not approve blanket waivers or entity blanket waiver
processes of the impervious surface limitation. All ACEP-ALE easements
must include language limiting the extent of impervious surfaces within
the easement area.
    (3) 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 ACEP-ALE.
    (4) Include an amendment clause requiring that any changes to the
easement deed after its recordation must be consistent with the
purposes of the agricultural land easement and this part. Any
substantive amendment, including any subordination of the terms of the
easement or modifications, exchanges, or terminations of the easement
area, must be approved by NRCS and the easement holder in accordance
with Sec.  1468.6 prior to recordation or else the action is null and
void.
    (5) Prohibit commercial and industrial activities except those
activities that NRCS has determined are consistent with the
agricultural use of the land.
    (6) Limit the subdivision of the property subject to the
agricultural land easement, except where State or local regulations
explicitly require subdivision to construct residences for employees
working on the property or where otherwise authorized by NRCS.
    (7) Prohibit subsurface mineral development unless the terms of the
deed, as determined by NRCS, specify that any subsurface mineral
development allowed by the eligible entity on the easement area must--
    (i) Be conducted in accordance with applicable State law;
    (ii) Have a limited and localized impact;
    (iii) Not harm the agricultural use and conservation values of the
land subject to the easement;
    (iv) Not materially alter or affect the existing topography;
    (v) Comply with a subsurface mineral development plan that includes
a plan for the remediation of impacts to the agricultural use or
conservation values of the land subject to the easement and is approved
by NRCS prior to the initiation of mineral development activity;
    (vi) Not be accomplished by any surface mining method;
    (vii) Be within the impervious surface limits of the easement under
paragraph (d)(2) of this section;
    (viii) Use practices and technologies that minimize the duration
and intensity of impacts to the agricultural use and conservation
values of the land subject to the easement; and
    (ix) Ensure that each area impacted by the subsurface mineral
development are reclaimed and restored by the holder of the mineral
rights at cessation of operation.
    (8) Include specific protections related to the purposes for which
the agricultural land easement is being acquired, including provisions
to protect historical or archaeological resources or grasslands of
special environmental significance.
    (9) For parcels with highly erodible cropland, include terms that
ensure compliance with the conservation plan that will be developed and
managed in accordance with the Food Security Act of 1985, as amended,
and its associated regulations.
    (10) Include any additional provisions needed to address the
attributes for which a parcel was ranked and selected for funding by
NRCS, such as the purchase of the agricultural land easement, the
development and maintenance of an agricultural land easement plan, or
use of the minimum deed terms as described in paragraph (f) of this
section.
    (11) Include terms, if required by the eligible entity, that
identify an intent to keep the land subject to the agricultural land
easement under ownership of a farmer or rancher.
    (12) Include other minimum deed terms specified by NRCS to ensure
that ACEP-ALE purposes are met.
    (e) NRCS reserves the right to require additional specific language
or require removal of language in the agricultural land easement deed
to ensure the enforceability of the easement deed, protect the
interests of the United States, or to otherwise ensure ALE purposes
will be met.
    (f) For eligible entities that have not been certified, the deed
document must be reviewed and approved by NRCS in advance of use as
provided herein:
    (1) NRCS will make available for an eligible entity's use a
standard set of minimum deed terms that satisfactorily address the deed
requirements in paragraph (d) of this section and may be wholly
incorporated along with the eligible entity's own deed terms into the
agricultural land easement deed, or as an addendum that is attached and
incorporated by reference into the deed. The standard minimum deed
terms addendum will specify the terms that will prevail in the event of
a conflict.
    (2) If an eligible entity agrees to use the standard set of minimum
deed terms as published by NRCS, NRCS and the eligible entity will
identify in the ALE-agreement the use of the standard minimum deed
terms as a requirement and National Office review of individual deeds
may not be required. NRCS may place priority on applications where an
eligible entity agrees to use the standard set of minimum deed terms as
published.
    (3) The eligible entity must submit all individual agricultural
land easement deeds to NRCS at least 90 days before the planned
easement closing date and be approved by NRCS in advance of use.
    (4) Eligible entities with multiple eligible parcels may submit an
agricultural land easement deed template for review and approval. The
deed templates must be reviewed and approved by NRCS in advance of use.
    (5) NRCS may conduct an additional review of the agricultural land
easement deeds for individual parcels prior to the execution of the
easement deed by the landowner and the eligible entity to ensure that
they contain the same language as approved by the National Office and
that the appropriate site-specific information has been included.
    (g) The eligible entity will acquire, hold, manage, monitor, and
enforce the
[[Page 583]]
easement. The eligible entity may have the option to enter into an
agreement with appropriately qualified governmental or private
organizations that have no property rights or interests in the easement
area to carry out easement monitoring, management, and enforcement
responsibilities.
    (h) All agricultural land easement deeds acquired with ACEP-ALE
funds must be recorded. The eligible entity will provide proof of
recordation to NRCS within the timeframe specified in the ALE-
agreement.
Sec.  1468.26   Eligible entity certification.
    (a) To be considered for certification, an entity must submit a
written request for certification to NRCS, which specifically addresses
the items in paragraphs (a)(1) through (7) of this section:
    (1) An explanation of how the entity meets the requirements
identified in Sec.  1468.20(b) of this section;
    (2) An agreement to use for ACEP-ALE funded acquisitions easement
valuation methodologies identified in section Sec.  1468.24 of this
part;
    (3) A showing of a demonstrated record of completing acquisition of
easements in a timely fashion;
    (4) A showing that it has the capacity to monitor and enforce the
provisions of easement deeds and history of such monitoring and
enforcement;
    (5) A plan for administering easements enrolled under this part, as
determined by NRCS;
    (6) Proof that the eligible entity--
    (i) Has been accredited by the Land Trust Accreditation Commission
and has acquired not fewer than 10 agricultural land easements under
ACEP-ALE, the Farm and Ranch Lands Protection Program, or the Farmland
Protection Program;
    (ii) Is a State department of agriculture or other State agency
with statutory authority for farm and ranchland protection and has
acquired not fewer than 10 agricultural land easements under ACEP-ALE
or its predecessor programs; or
    (iii) Holds, manages, and monitors a minimum of 25 agricultural
land conservation easements, of which a minimum of 10 of these
easements are agricultural land easements under ACEP-ALE or its
predecessor programs, and if the eligible entity is a nongovernmental
organization, provides evidence that the eligible entity possesses a
dedicated fund for the purposes of managing, monitoring, and enforcing
each easement held by the eligible entity; and
    (7) Successfully met the responsibilities of the eligible entity
under the applicable agreements with NRCS, as determined by NRCS,
relating to agricultural land easements that the eligible entity has
acquired under the program or any predecessor program;
    (b) NRCS will notify an eligible entity in writing whether they
have been certified and the rationale for the agency's decision. When
NRCS determines an eligible entity qualifies as certified--
    (1) NRCS may enter into an ALE-agreement with the certified entity
that is for a period of up to 5 fiscal years following the fiscal year
the agreement is executed. NRCS will review and select parcel
applications submitted for funding by certified entities as specified
in Sec.  1468.22. Funding for selected parcels is identified on an
attachment to the ALE-agreement.
    (2) The terms of the ALE-agreement will include the regulatory deed
requirements specified in Sec.  1468.25 of this part that must be
addressed in the deed to ensure that ACEP-ALE purposes will be met
without requiring NRCS to pre-approve each easement transaction prior
to closing.
    (i) Certified entities may purchase easements without NRCS
approving the agricultural land easement deeds, baseline reports,
titles, or appraisals before the purchase of the easement;
    (ii) Certified entities will prepare the agricultural land easement
deeds, baseline reports, titles, and appraisals in accordance with NRCS
requirements as identified in the ALE-agreement;
    (3) NRCS will conduct quality assurance reviews of a percentage of
the closed agricultural land easement transactions and annual
monitoring reports submitted by the certified entity; and
    (4) NRCS will provide the certified entity an opportunity to
correct errors or remedy deficiencies identified in the NRCS quality
assurance review. If the certified entity fails to remedy the
identified items to NRCS's satisfaction, NRCS will consider whether to
allow the certified entity to continue to purchase ALE-funded easements
without prior NRCS approval, to decertify the entity in accordance with
paragraph (c) of this section, or, require the certified entity to take
administrative steps necessary to remedy the deficiencies.
    (c)(1) NRCS will conduct a quality assurance review of the
certified entity a minimum of once every 3 fiscal years to ensure that
the certified entities are meeting the certification criteria
established in this section.
    (2) If NRCS determines that the certified entity no longer meets
these criteria, the Chief will--
    (i) Provide 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 NRCS determines the certified entity does not meet the
criteria established in this part after the 180 days, NRCS will send
written notice of decertification. This notice will specify the actions
that have not been completed to retain certification status, the
actions the entity must take to regain certification status, the status
of funds in the ALE-agreement; and the eligibility of the entity to
apply for future ACEP-ALE funds. The entity may contest the notice of
decertification in writing to NRCS within 20 calendar days of receipt
of the notice of decertification. The entity's letter must provide
specific reasons why the decision to decertify is in error.
    (3) The period of decertification may be up to 3 years, based upon
the circumstances associated with the action.
    (4) The entity may submit a new request for certification to NRCS
only after the decertification period has expired.
Sec.  1468.27   Buy-Protect-Sell transactions.
    (a) NRCS may enter into an ALE-agreement with an eligible entity
for a buy-protect-sell transaction to provide cost-share assistance for
the purchase of an agricultural land easement on eligible private or
Tribal agricultural land that an eligible entity owns or is in the
process of purchasing for the purposes of securing the long-term
protection of natural resources and the agricultural nature of the land
and ensuring timely transfer to a qualified farmer or rancher.
    (b) At the time the individual parcel application is submitted, the
eligible entity must identify the specific buy-protect-sell transaction
type as either--
    (1) Pre-closing transfer, wherein the eligible entity will transfer
fee title ownership to a farmer or rancher at or prior to closing on
the agricultural land easement and the eligible entity will hold the
agricultural land easement prior to receiving the Federal share, or
    (2) Post-closing transfer, wherein the eligible entity will
transfer fee title ownership to a farmer or rancher not later than 3
years after closing on the agricultural land easement, unless an
extension of such time has been authorized by NRCS based on
documentation of extenuating circumstances provided by the eligible
entity.
    (c) The ALE-agreement must contain the information described in
Sec.  1468.23
[[Page 584]]
and must specify the details of the legal arrangement for the
individual buy-protect-sell transaction, including that for all buy-
protect-sell transactions the eligible entity must--
    (1) Own the land or within 12 months of execution of the ALE-
agreement for the buy-protect-sell transaction by both NRCS and the
eligible entity, and the eligible entity has completed or has
demonstrated to the satisfaction of NRCS that completion of the
purchase of the land is imminent.
    (2) Make an initial sale of the land to a farmer or rancher that is
or will be subject to the agricultural land easement pursuant to the
terms of the ALE-agreement.
    (3) Sell the land to the farmer or rancher for a purchase price
that does not exceed the lesser of--
    (i) The original purchase price of the land paid by the eligible
entity; or
    (ii) The agricultural value as determined by an appraisal.
    (4) Ensure that amounts included in the sale of the land to the
farmer or rancher for reasonable holding and transaction costs incurred
by the eligible entity in total do not exceed more than 10 percent of
the agricultural value.
    (5) Submit documentation satisfactory to NRCS that confirms the
sale of the land that is or will be subject to the agricultural land
easement meets the buy-protect-sell transaction requirements. Pursuant
to the terms and conditions of the ALE-agreement for the buy-protect-
sell transaction, the eligible entity must provide--
    (i) Evidence that the purchaser of the land is a qualified farmer
or rancher,
    (ii) Documentation of the purchase price for the land paid by the
eligible entity,
    (iii) The appraisal used to determine the agricultural value of the
land,
    (iv) An itemized list of the allowable holding or transaction costs
included in the sales price,
    (v) A copy of the settlement statements identifying the sale price
and all holding and transactions costs charged to the farmer or rancher
purchaser, and
    (vi) Other documents as specified by NRCS in the ALE-agreement.
    (6) Reimburse NRCS for the entirety of the Federal share provided
if, as determined by NRCS, the eligible entity failed to transfer
ownership per the terms and conditions of the ALE-agreement for the
buy-protect-sell transaction.
    (d) In addition to the requirements identified in paragraph (c) of
this section, for buy-protect-sell transactions that involve a pre-
closing transfer as required by paragraph (b)(1) of this section:
    (1) The maximum duration of the ALE-agreement may be the same as
described in Sec.  1468.23(b).
    (2) The Federal share for the agricultural land easement will be
provided on a reimbursable basis only, after the agricultural land
easement has closed and the required documents have been provided to
and reviewed by NRCS.
    (e) For buy-protect-sell transactions that involve a post-closing
transfer as required by paragraph (b)(2) of this section:
    (1) At the time of application, in addition to the information
identified Sec.  1468.21, the eligible entity must provide NRCS
specific information on the proposed structure of the buy-protect-sell
transaction, including the parties to be involved in the transaction,
the roles and responsibilities of each party related to the
acquisition, holding, monitoring, and enforcement of the easement and
the fee title ownership of the land, relevant State law that authorizes
such transactions, proposed timeline, and other information identified
by NRCS.
    (2) NRCS will determine the legal conformance of the proposed
arrangement for the buy-protect-sell transaction.
    (3) Based on the NRCS determination of legal conformance of the
proposed buy-protect-sell transaction, for eligible applications
selected for funding based on ranking and availability of funds, NRCS
will identify the specific terms of the ALE-agreement for the buy-
protect-sell transaction.
    (4) The buy-protect-sell transaction must meet the timing
requirements in paragraphs (e)(4)(i) through (iv) of this section--
    (i) The term of the ALE-agreement for a buy-protect-sell
transaction will be for a period no longer than 5 fiscal years
following the fiscal year of execution of the ALE-agreement by NRCS and
the eligible entity.
    (ii) The agricultural land easement must be closed within 2 fiscal
years following the fiscal year of ALE-agreement execution, and the
sale of the land subject to the agricultural land easement to a
qualified farmer or rancher must occur within 3 years of closing on the
agricultural land easement.
    (iii) Prior to the expiration of the 3-year timeframe, the eligible
entity may submit to NRCS a request for an extension that includes
documentation of extenuating circumstances and the anticipated
timeline, not to exceed 12 months, in which the sale of the land
subject to the easement will occur.
    (iv) NRCS may, in its discretion, authorize such additional time
for the sale of the land subject to the agricultural land easement to a
qualified farmer or rancher through a modification to the ALE-
agreement.
Sec.  1468.28   Violations and remedies.
    (a) In the event of a violation of the agricultural land easement
terms, the agricultural land easement holder will notify the landowner
and the violator, if different than the landowner, and NRCS. The
landowner may be given reasonable notice and, where appropriate, an
opportunity to voluntarily correct the violation in accordance with the
terms of the agricultural land easement.
    (b) In the event that the agricultural land easement holder, or its
successors or assigns, fails to enforce any of the terms of the
agricultural land easement as determined by NRCS, NRCS may exercise the
United States' rights to enforce the terms of the agricultural land
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 and the agricultural land easement
holder, reserves the right to enter upon the easement area if the
annual monitoring report provided by the agricultural land easement
holder documenting compliance with the agricultural land easement is
insufficient or is not provided annually, the United States has a
reasonable and articulable belief that the terms and conditions of the
easement have been violated, or to remedy deficiencies or easement
violations as it relates to the conservation plan in accordance with 7
CFR part 12.
    (d) In the event of an emergency, the entry onto the easement area
may be made at the discretion of NRCS when the actions are deemed
necessary to prevent, terminate, or mitigate a potential or unaddressed
violation with notification to the landowner and the agricultural land
easement holder provided at the earliest practicable time. The
landowner will be liable for any costs incurred by NRCS as a result of
the landowner's failure to comply with the easement requirements as it
relates to agricultural land easement violations.
    (e) The United States will be entitled to recover any and all costs
from the eligible entity, or its successors or assigns, including
attorney's fees or expenses, associated with any enforcement or
remedial action as it
[[Page 585]]
relates to the enforcement of the agricultural land easement.
    (f) In instances where an easement is terminated, the proponent of
the termination action must pay to CCC an amount determined by NRCS.
    (g) If NRCS exercises its rights identified under an agricultural
land easement NRCS will provide written notice to the agricultural land
easement holder at their last-known address. The notice will set forth
the nature of the noncompliance by the agricultural land easement
holder, or its successors or assigns, and provide a 180-day period to
cure. If the agricultural land easement holder fails to cure within the
180-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 that it seeks to protect.
Subpart C--Wetland Reserve Easements
Sec.  1468.30   Program requirements.
    (a) General. (1) Under the ACEP-WRE, NRCS may purchase wetland
reserve easements from eligible landowners who voluntarily cooperate to
restore, protect, and enhance wetlands on eligible private or Tribal
lands. A 30-year contract enrollment option is also available for
acreage owned by Indian Tribes.
    (2) To participate in ACEP-WRE, a landowner must agree to the
implementation of a WRPO, the effect of which is to restore, protect,
enhance, maintain, manage, and monitor the hydrologic conditions of
inundation or saturation of the soil, native vegetation, and natural
topography of eligible lands.
    (3) NRCS may provide financial assistance through an easement
restoration agreement for the conservation practices and eligible
activities that promote the restoration, protection, enhancement,
maintenance, and management of wetland functions and values and
associated habitats.
    (4) For ACEP-WRE enrollments, NRCS may implement such conservation
practices and eligible activities through an agreement with the
landowner, a contract with a vendor, an interagency agreement, or a
cooperative agreement. The specific restoration, protection,
enhancement, maintenance, and management actions authorized by NRCS,
may be undertaken by the landowner, NRCS, or its designee.
    (5) The duration of a wetland reserve easement may be either
perpetual, 30-years, or the maximum duration allowed by State law. The
duration of a 30-year contract on acreage owned by Indian Tribes is 30
years.
    (b) Acreage limitations. (1) No more than 25 percent of the total
cropland in any county, as determined by the FSA, may be enrolled in
CRP and ACEP-WRE, and no more than 15 percent of the total cropland in
the county may be subject to an easement under ACEP-WRE.
    (2) The limitations in paragraph (b)(1) of this section do not
apply to areas devoted to windbreaks or shelterbelts after November 28,
1990, or to cropland designated by NRCS with ``subclass w'' in the land
capability classes IV through VIII because of severe use limitations
due to factors related to excess water such as poor soil drainage,
wetness, high water table, soil saturation, or inundation.
    (3) NRCS and the FSA will concur before a waiver of the 25-percent
limit of paragraph (b)(1) of this section can be approved for an
easement proposed for enrollment in ACEP-WRE. Such a waiver will only
be approved if the waiver will not adversely affect the local economy,
and operators in the county are having difficulties complying with the
conservation plans implemented under 16 U.S.C. 3812.
    (c) Landowner eligibility. To be eligible to enroll in the ACEP-
WRE, all landowners must be in compliance with the highly erodible land
and wetland conservation provisions in 7 CFR part 12. Persons or legal
entities must be in compliance with the Adjusted Gross Income
Limitation provisions at 7 CFR part 1400 and:
    (1) Be the landowner of eligible land for which enrollment is
sought;
    (2) Provide any documentation required by NRCS as necessary to
determine eligibility; and
    (3) For easement applications, have been the landowner of such land
for the 24-month period prior to the time of application unless it is
determined by NRCS that:
    (i) The land was acquired by will or succession as a result of the
death of the previous landowner or pursuant to the terms of an existing
trust,
    (ii) The ownership change occurred due to foreclosure on the land
and the owner of the land immediately before the foreclosure exercises
a right of redemption from the mortgage holder in accordance with State
law, or
    (iii) The land was acquired under circumstances that give adequate
assurances, as determined by NRCS, that such land was not acquired for
the purposes of placing it in the program. Adequate assurances will
include documentation that the change of ownership resulted from
circumstances such as:
    (A) The prior landowner owned the land for 2 years or more and
transferred ownership amongst members of the immediate family (father,
mother, spouse, children, grandparents, or grandchildren),
    (B) A completion of a contract for deed entered into 24 months or
more prior to the application date,
    (C) The new landowner had leased the land for agricultural purposes
for 24 months or more prior to the application date, or
    (D) The easement area is a portion of a larger property where the
majority portion was acquired for agriculture purposes.
    (4) Agree to provide such information to NRCS as the agency deems
necessary to assist in its determination of eligibility for program
benefits and for other program implementation purposes.
    (d) New landowner. When a parcel of land that has been accepted for
enrollment into the ACEP-WRE is sold or transferred prior to NRCS
purchase of the easement, NRCS will cancel the application or agreement
to purchase and remove the acres from enrollment unless the new
landowner meets the requirements of paragraph (c) of this section and
accepts the terms and conditions of enrollment. The new landowner must
submit required documentation for NRCS review and execute any required
agreements or contracts. The decision to approve and execute an
enrollment transferred prior to closing is at NRCS's discretion.
    (e) Land eligibility. (1) Only private land or acreage owned by an
Indian Tribe may be considered for enrollment into ACEP-WRE.
    (2) NRCS will determine whether land is eligible for enrollment and
whether, once found eligible, the lands may be included in the program
based on the likelihood of successful restoration of such land and
resultant wetland functions and values merit inclusion of such land in
the program when considering the cost of acquiring the easement and the
cost of the restoration, protection, enhancement, maintenance,
management, and monitoring.
    (3) Land will only be considered eligible for enrollment in the
ACEP-WRE if NRCS determines that the enrollment of such land maximizes
wildlife benefits and wetland function and values.
    (4) To be determined eligible, NRCS must also determine that such
land is--
    (i) Farmed wetland or converted wetland, together with adjacent
lands that are functionally dependent on the
[[Page 586]]
wetlands, if such land is identified by NRCS as:
    (A) Wetlands farmed under natural conditions, farmed wetlands,
prior converted cropland, commenced conversion wetlands, farmed wetland
pastures, and agricultural lands substantially altered by flooding so
as to develop and retain wetland functions and values; or
    (B) Former or degraded wetlands that occur on lands that have been
used or are currently being used for the production of food and fiber,
including rangeland and forest production lands, where the hydrology
has been significantly degraded or modified and will be substantially
restored; or
    (C) Farmed wetland and adjoining land enrolled in CRP that has the
highest wetland functions and values and is likely to return to
production after the land leaves CRP; or
    (D) A riparian area along a stream or other waterway that links, or
after restoring the riparian area, will link wetlands protected by the
ACEP-WRE easement, another easement, or other device or circumstance
that achieves the same objectives as an ACEP-WRE easement.
    (ii) Cropland or grassland that was used for agricultural
production prior to flooding from the natural overflow of--
    (A) A closed basin lake, together with adjacent land that is
functionally dependent upon it, if the State or other entity is willing
to provide a 50-percent share of the cost of the easement; or
    (B) A pothole and adjacent land that is functionally dependent on
it; and
    (C) The size of the parcel offered for enrollment is a minimum of
20 contiguous acres. Such land meets the requirement of likelihood of
successful restoration only if the soils are hydric and the depth of
water is 6.5 feet or less.
    (5) If land offered for enrollment is determined eligible under
this section, then NRCS may also enroll land adjacent or contiguous to
such eligible land together with the eligible land, if such land
maximizes wildlife benefits and contributes significantly to wetland
functions and values. Such adjacent or contiguous land may include
buffer areas, created wetlands, noncropped natural wetlands, riparian
areas that do not meet the requirements of paragraph (e)(4)(i)(D) of
this section, and restored wetlands, but not more than NRCS, in
consultation with the State technical committee, determines is
necessary to maximize wildlife benefits and contribute significantly to
wetland functions and values. NRCS will not enroll as eligible adjacent
or contiguous land any constructed wetlands that treat wastewater or
contaminated runoff.
    (6) To be enrolled in the program, eligible land must have
sufficient access and be configured in a size and with boundaries that
allow for the efficient management and monitoring of the area for
program purposes and otherwise promote and enhance program objectives
as determined by NRCS.
    (f) Enrollment of CRP lands. Land subject to an existing CRP
contract may be enrolled in ACEP-WRE only if the land and landowner
meet the requirements of this part and the enrollment is requested by
the landowner and agreed to by NRCS. To enroll in ACEP-WRE, the CRP
contract for the property must be terminated or otherwise modified
subject to such terms and conditions as are mutually agreed upon by FSA
and the landowner.
    (g) Ineligible land. The land specified in paragraphs (g)(1)
through (7) of this section is not eligible for enrollment in the ACEP-
WRE:
    (1) Converted wetlands if the conversion was commenced after
December 23, 1985;
    (2) Land established to trees under the CRP, except in cases where
the land meets all other WRE eligibility criteria, the established
cover conforms to WRE restoration requirements and NRCS specifications,
an active CRP contract will be terminated or otherwise modified upon
purchase of the WRE easement, and any additional criteria NRCS uses to
determine if enrollment of such lands would further the purposes of the
program;
    (3) Lands owned by the United States other than held in trust for
Indian Tribes;
    (4) Lands owned in fee title by a State, including an agency or a
subdivision of a State or a unit of local government;
    (5) Land subject to an easement or deed restriction which, as
determined by NRCS, provides similar restoration and protection of
wetland functions and values as would be provided by enrollment in
ACEP-WRE;
    (6) Lands where the purposes of the program or implementation of
restoration practices would be undermined due to onsite or offsite
conditions, including, but not limited to--
    (i) Risk of hazardous materials or petroleum products either onsite
or offsite;
    (ii) Permitted or existing rights of way, either onsite or offsite,
for infrastructure development;
    (iii) Adjacent land uses, such as airports, that would either
impede complete restoration or prevent wetland functions and values
from being fully restored; or
    (7) Land which NRCS determines to have unacceptable exceptions to
clear title or legal access that is encumbered, nontransferable,
restricted, or otherwise insufficient.
Sec.  1468.31   Application procedures.
    (a) Application for participation. To apply for enrollment, a
landowner must submit an application to NRCS.
    (b) Preliminary agency action. By filing an application, the
landowner consents to an NRCS representative entering upon the land for
purposes of assessing the wetland functions and values and for other
activities, such as the ranking and development of the preliminary
WRPO, that are necessary or desirable for NRCS to evaluate
applications. The landowner is entitled to accompany an NRCS
representative on any site visits.
    (c) Voluntary reduction in costs. In order to enhance the
probability of enrollment in ACEP-WRE, the landowner or someone other
than the landowner may offer to contribute financially to the cost of
the acquisition or restoration of the wetland reserve easement to
leverage Federal funds. This offer must be made in writing to NRCS.
Sec.  1468.32   Establishing priorities, ranking consideration, and
project selection.
    (a) When evaluating easements or 30-year contract applications from
landowners, NRCS, with advice from the State technical committee, may
consider:
    (1) The conservation benefits of obtaining an easement or other
interest in the land, including but not limited to--
    (i) Habitat that will be restored for the benefit of migratory
birds and wetland-dependent wildlife, including diversity of wildlife
that will be benefitted or life-cycle needs that will be addressed;
    (ii) Extent and use of habitat that will be restored for
threatened, endangered, or other at-risk species or number of different
at-risk species benefitted;
    (iii) Protection or restoration of native vegetative communities;
    (iv) Habitat diversity and complexity to be restored;
    (v) Proximity and connectivity to other protected habitats;
    (vi) Extent of beneficial adjacent land uses;
    (vii) Proximity to impaired water bodies;
    (viii) Extent of wetland losses within a geographic area, including
wetlands generally or specific wetland types;
    (ix) Capacity of the wetland to improve water quality;
[[Page 587]]
    (x) Hydrology restoration potential, which must comprise at least
50 percent of the points for conservation benefits.
    (2) The cost effectiveness of each easement;
    (3) Whether the landowner or another person or entity is offering
to contribute financially to the cost of the easement or other interest
in the land to leverage Federal funds;
    (4) The extent to which the purposes of this part would be achieved
on the land;
    (5) The productivity of the land;
    (6) The on-farm and off-farm environmental threats if the land is
used for the production of agricultural commodities;
    (7) Such other factors as NRCS determines are necessary to carry
out the purposes of the program.
    (b) To the extent practicable, taking into consideration costs and
future agricultural and food needs, NRCS will give priority to--
    (1) Obtaining permanent easements over shorter term easements; and
    (2) Acquiring easements based on the value of the easement for
protecting and enhancing habitat for migratory birds and other wetland-
dependent wildlife or improving water quality, in coordination with FWS
at the local level, as may be appropriate.
    (c) NRCS, in consultation with the State technical committee, may
place higher priority on--
    (1) Certain land types or geographic regions of the State where
restoration of wetlands may better achieve State and regional goals and
objectives; and
    (2) Land that is currently enrolled in CRP in a contract that is
set to expire within 1 year from the date of application and is farmed
wetland and adjoining land that has the highest wetland functions and
values and is likely to return to production after the land leaves CRP.
    (d) Notwithstanding any limitation of this part regarding priority
ranking, NRCS may enroll eligible lands at any time to encompass total
wetland areas subject to multiple ownership or otherwise to achieve
program objectives. NRCS may, at any time, exclude enrollment of
otherwise eligible lands if the participation of the adjacent
landowners is essential to the successful restoration of the wetlands
and those adjacent landowners are unwilling or ineligible to
participate.
Sec.  1468.33   Enrollment process.
    (a) Tentative selection. Based on the priority ranking, NRCS will
notify an affected landowner of tentative acceptance into the program.
    (b) Effect of notice of tentative selection. The notice of
tentative acceptance into the program does not bind NRCS or the United
States to enroll the proposed project in ACEP-WRE, nor does it bind the
landowner to continue with enrollment in the program. The notice
informs the landowner of NRCS's intent to continue the enrollment
process on their land.
    (c) Acceptance and effect of offer of enrollment--(1) Wetland
reserve easement. For applications requesting enrollment through a
wetland reserve easement, NRCS will present an agreement to purchase to
the landowner which will describe the easement area, the easement
compensation amount, the easement terms and conditions, and other terms
and conditions for participation that may be required by NRCS as
appropriate. The easement compensation amount will be based upon the
lowest of the fair market value of the land, the geographic area rate
cap, or the landowner offer, as provided in Sec.  1468.34 of this part.
The landowner accepts enrollment in the ACEP-WRE by signing the
agreement to purchase. NRCS will continue with easement acquisition
activities after the property has been enrolled.
    (2) 30-year contract. For applications requesting enrollment of
acreage owned by an Indian Tribe through the 30-year contract option,
NRCS will present an agreement to enter 30-year contract to the Tribal
landowner which will describe the contract area, the contract
compensation amount, the contract terms and conditions, and other terms
and conditions for participation that may be required by NRCS as
appropriate. The Tribal landowner accepts enrollment in the ACEP-WRE by
signing the agreement to enter 30-year contract. NRCS will proceed with
implementation of the WRPO after the 30-year contract has been
executed.
    (d) Restoration responsibility and the scope of enrollment. (1) The
agreement to purchase or agreement to enter 30-year contract is the
enrollment document that establishes the terms of enrollment consistent
with the terms and conditions of this part and identifies the--
    (i) Scope of the agreement between NRCS and the landowner,
    (ii) Basis for NRCS to obligate funds,
    (iii) Nature and method through which NRCS will provide ACEP-WRE
technical and financial assistance to the landowner, and
    (iv) Withholding of the landowner's share of the restoration cost
from the easement payment for applicable 30-year or nonpermanent
easement or 30-year contract enrollments.
    (2) The agreement to purchase between NRCS and the landowner under
the easement option also constitutes the agreement for--
    (i) Granting an easement on the enrolled land and sufficient access
to the enrolled land as set forth under Sec.  1468.37,
    (ii) Implementing a WRPO which provides for the restoration,
protection, and management of the wetland functions and values,
    (iii) Recording the easement in accordance with applicable State
law, and
    (iv) Ensuring the title to the easement is superior to the rights
of all others, except for exceptions to the title that are deemed
acceptable by NRCS and in accordance with Department of Justice Title
Standards.
    (3) The terms of the easement identified in paragraph (d)(2)(i) of
this section includes the landowner's agreement to the implementation
of a WRPO identified in paragraph (d)(2)(ii) of this section. In
particular, the easement deed identifies that NRCS has the right to
enter the easement area to undertake on its own or through an agreement
with the landowner or other third party, any activities to restore,
protect, enhance, manage, maintain, and monitor the wetland and other
natural values of the easement area.
    (4) At the time NRCS enters into an agreement to purchase, NRCS
agrees, subject to paragraph (e) of this section, to acquire and
provide for restoration of the land enrolled into the program.
    (e) Withdrawal of offer of enrollment. Prior to execution of the
easement deed or 30-year contract by the United States and the
landowner, NRCS may withdraw the land from enrollment at any time due
to lack of availability of funds, inability to clear title,
insufficient access, sale of the land, risk of contamination from
hazardous materials or petroleum products, or other reasons.
    (f) Landowner failure to accept enrollment offer in timely manner.
The offer of enrollment to the landowner will be void if not executed
by the landowner within the time specified.
Sec.  1468.34   Compensation for easements and 30-year contracts.
    (a) Determination of easement compensation values. (1) Compensation
for an easement or 30-year contract under this part will be made in
cash in such amount as is agreed to and specified in the agreement to
purchase or agreement to enter 30-year contract and finalized in the
warranty easement deed or 30-year contract.
    (2) Payments for 30-year easements, nonpermanent easements as
limited by State law, or 30-year contracts will be not more than 75
percent of that which
[[Page 588]]
would have been paid for a permanent easement as determined by the
methods listed in paragraph (a)(3) of this section.
    (3) NRCS will pay as compensation the lowest of the values from
paragraphs (a)(3)(i) through (iii) of this section:
    (i) The fair market value of the land using the Uniform Standards
for Professional Appraisal Practices or based on an area-wide market
analysis or survey,
    (ii) The geographic area rate cap determined under paragraph (a)(4)
of this section, or
    (iii) A written offer made by the landowner.
    (4) Each fiscal year NRCS, in consultation with the State technical
committee, will establish one or more geographic area rate caps within
a State. NRCS will determine the geographic area rate cap using the
best information which is readily available in that State. Such
information may include soil types, types of crops capable of being
grown, production history, location, real estate market values, and tax
rates and assessments.
    (b) Acceptance of offered easement compensation. (1) NRCS will not
acquire any easement unless the landowner accepts the amount of the
easement payment offered by NRCS. The easement payment may be less than
the fair market value of the interests and rights to be conveyed by the
landowner under the easement.
    (2)(i) For easements or 30-year contracts valued at $500,000 or
less, NRCS will provide compensation in up to 10 annual payments, as
requested by the participant, as specified in the agreement to purchase
or 30-year contract between NRCS and the participant.
    (ii) For easements or 30-year contracts valued at more than
$500,000, NRCS may provide compensation in at least 5, but not more
than 10 annual payments. NRCS may provide compensation in a single
payment for such easements or 30-year contracts when, as determined by
the NRCS Chief, it would further the purposes of the program. The
applicable payment schedule will be specified in the agreement to
purchase or 30-year contract, entered into between NRCS and the
landowner.
    (c) Reimbursement of a landowner's expenses. For completed easement
conveyances, NRCS will reimburse the landowner for fair and reasonable
expenses, if any, incurred for legal boundary surveys and other related
costs, as authorized and determined by NRCS.
    (d) Per-acre-basis-calculations. If easement or 30-year contract
compensation values are calculated on a per-acre basis, NRCS will
identify an estimated amount in its agreement to purchase and the final
easement or 30-year contract payment will be made based on final
determination of value and acreage and specified in the warranty
easement deed or 30-year contract.
Sec.  1468.35  Wetland Reserve Enhancement Partnerships.
    (a) The purpose of the Wetland Reserve Enhancement Partnership
(WREP) option is to target and leverage resources to address high
priority wetland protection, restoration, and enhancement objectives
through agreements with States (including a political subdivision or
agency of a State), nongovernmental organizations, or Indian Tribes.
    (b) NRCS will establish priorities for funding, required level of
partner contribution of resources, ranking criteria, and other
criteria. NRCS will prioritize proposals that address wetland
restoration needs of national or regional importance, including special
project or area-wide proposals.
    (c) NRCS will make the information regarding WREP available to the
public and potential partners.
    (d) NRCS will evaluate proposals and make final funding selections
based upon the priorities identified in the public notice of funding
availability.
    (e) NRCS will enter into WREP agreements with partners who have
projects selected for funding.
Sec.  1468.36   WRPO payments.
    (a) NRCS may provide financial assistance for implementing the WRPO
on the enrolled land subject to an easement or 30-year contract. The
amount and terms and conditions of the financial assistance will be
subject to the restrictions in paragraphs (a)(1) and (2) of this
section on the costs of establishing or installing conservation
practices or eligible activities specified in the WRPO:
    (1) On enrolled land subject to a permanent easement, NRCS will
offer to pay at least 75 percent but not more than 100 percent of such
costs; and
    (2) On enrolled land subject to a 30-year or nonpermanent easement
or 30-year contract, NRCS will offer to pay at least 50 percent but not
more than 75 percent of such costs. The landowner's share of the WRPO
implementation costs may be withheld from the easement or 30-year
contract payment.
    (b) Payments may be made only upon a determination by NRCS that an
eligible conservation practice or component of the conservation
practice has been implemented in compliance with appropriate NRCS
standards and specifications; or an eligible activity has been
implemented in compliance with the appropriate requirements detailed in
the WRPO.
    (c) Payments may be made for repair or replacement of an eligible
conservation practice or activity, if NRCS determines that the
conservation practice or eligible activity is still needed and that the
disrepair or failure of the original conservation practice or eligible
activity was due to reasons beyond the control of the participant.
    (d) A participant may seek additional assistance from other public
or private organizations as long as the conservation practices or
eligible activities funded are approved by NRCS and implemented in
compliance with this part.
Sec.  1468.37   Easement and 30-year contract participation
requirements.
    (a) Easement requirements. (1) To enroll eligible land in ACEP-WRE
through the permanent or 30-year easement option, a landowner will
grant an easement to the United States. The easement will require that
the easement area be maintained in accordance with ACEP-WRE goals and
objectives for the duration of the term of the easement, including the
restoration, protection, enhancement, maintenance, management, and
monitoring of wetland and other land functions and values.
    (2) For the duration of its term, the easement will require, at a
minimum, that the landowner and the landowner's heirs, successors, and
assigns will cooperate in the restoration, protection, enhancement,
maintenance, management, and monitoring of the land in accordance with
the warranty easement deed and with the terms of the WRPO. In addition,
the easement will grant to the United States:
    (i) A sufficient right of legal access to the easement area,
    (ii) The right to authorize compatible uses of the easement area,
including but not limited to such activities as hunting and fishing,
managed timber harvest, water management, or periodic haying or
grazing, if such use is consistent with the long-term protection and
enhancement of the wetland resources for which the easement was
established,
    (iii) All rights, title, and interest in the easement area except
those rights specifically reserved in the deed, and
    (iv) The right to restore, protect, enhance, maintain, manage, and
monitor activities on the easement area.
    (3) The landowner will convey title to the easement in a manner
that is acceptable to NRCS. The landowner will warrant that the
easement granted to the
[[Page 589]]
United States is superior to the rights of all others, except for title
exceptions deemed acceptable by NRCS.
    (4) The participant will--
    (i) Comply with the terms of the easement,
    (ii) Comply with all terms and conditions of any related contract
or agreement,
    (iii) Agree to the permanent retirement of any existing cropland
base and allotment history for the easement area, as determined by FSA,
    (iv) Agree to the long-term restoration, protection, enhancement,
maintenance, management, and monitoring of the easement in accordance
with the terms of the easement and related agreements, and
    (v) Agree that each person or legal entity that is subject to the
easement will be jointly and severally responsible for compliance with
the easement and the provisions of this part and for any refunds or
payment adjustment which may be required for violation of any terms or
conditions of the easement or the provisions of this part.
    (b) 30-year contract requirements. (1) To enroll eligible land in
ACEP-WRE through the 30-year contract option, a landowner will enter
into a contract with NRCS. The contract will require that the enrolled
area be maintained in accordance with ACEP-WRE goals and objectives for
the duration of the contract, including the restoration, protection,
enhancement, maintenance, management, and monitoring of wetland and
other land functions and values.
    (2) For the duration of the 30-year contract, the contract will
require, at a minimum, that the landowner and the landowner's heirs,
successors, and assigns will, consistent with the terms of this part,
cooperate in the restoration, protection, enhancement, maintenance,
management, and monitoring of the land in accordance with the contract
and with the terms of the WRPO. In addition, the 30-year contract will
grant to NRCS:
    (i) A sufficient right of legal access to the entire contract area
for the duration of the contract,
    (ii) The right to authorize compatible uses of the contract area,
including such activities as a traditional Tribal use of the land,
hunting and fishing, managed timber harvest, water management, or
periodic haying or grazing if such use is consistent with the long-term
protection and enhancement of the wetland resources for which the
contract was established, and
    (iii) The right to restore, protect, enhance, maintain, manage, and
monitor activities on the enrolled area.
    (3) The landowner will--
    (i) Comply with the terms of the contract,
    (ii) Comply with all terms and conditions of any associated
agreement,
    (iii) Agree to the long-term restoration, protection, enhancement,
maintenance, management, and monitoring of the enrolled area in
accordance with the terms of the contract and related agreements, and
    (iv) Agree that each person or legal entity that is subject to the
contract will be jointly and severally responsible for compliance with
the contract and the provisions of this part and for any refunds or
payment adjustment which may be required for violation of any terms or
conditions of the contract or the provisions of this part.
    (c) Reservation of grazing rights. (1) NRCS may include in the
terms and conditions of an easement a provision under which the
landowner reserves grazing rights if NRCS determines that the
reservation and use of the grazing rights:
    (i) Is compatible with the land subject to the wetland reserve
easement or 30-year contract,
    (ii) Is consistent with the historical natural uses of the land and
long-term wetland restoration, protection, and enhancement goals for
which the wetland reserve easement or 30-year contract was established,
    (iii) Is subject to a recorded exhibit to the deed outlining
grazing purposes and limitations, and
    (iv) Complies with a WRPO developed by NRCS, which may include a
grazing management plan component that is consistent with the WRPO and
is reviewed and modified as necessary, at least every 5 years.
    (2) Compensation for easements or 30-year contracts where the
grazing rights are reserved under this section will be based on the
method described in Sec.  1468.34, except such compensation will be
reduced by an amount equal to the value of the reserved grazing rights,
as determined by NRCS.
Sec.  1468.38   Development and revision of the WRPO and associated
compatible use authorizations.
    (a) The WRPO will be developed and updated as determined by NRCS in
consultation with the State technical committee and consideration of
available site-specific technical input from FWS at the local level and
others as appropriate.
    (b) The WRPO will specify the manner in which the enrolled land
will be restored, protected, enhanced, maintained, managed, and
monitored to accomplish the goals of the program. The WRPO, and any
revisions thereto, will be developed to ensure that cost-effective
restoration and maximization of wildlife benefits and wetland functions
and values will result. Specifically, the WRPO will consider and
address, to the extent practicable, the onsite alterations and the
offsite watershed conditions that adversely impact the hydrology and
associated wildlife, water quality, and wetland functions and values.
    (c) The WRPO will identify the conservation practices and eligible
activities needed to restore the functions and values on the enrolled
land. NRCS may review, revise, and supplement the WRPO as needed
throughout the duration of the enrollment to ensure that program goals
are fully and effectively achieved. Revisions to the WRPO may result in
the addition of conservation practices or eligible activities needed to
enhance, maintain, manage, repair, replace or otherwise to protect the
functions and values of the easement or 30-year contract area.
    (d) As required by the terms of the easement deed as described in
Sec.  1468.37(a)(2)(ii) or 30-year contract as described in Sec.
1468.37(b)(2)(ii), NRCS may, in its sole discretion, authorize the
landowner to conduct compatible uses as defined in this part on the
easement or contract area. Compatible use authorizations are time-
limited and may be modified or rescinded at any time by NRCS. In
evaluating and authorizing compatible uses of the easement or contract
area, NRCS will--
    (1) Consider whether the authorized use will facilitate the
practical administration and management of the land subject to the
easement or contract; and
    (2) Ensure that the authorized use furthers the functions and
values for which the easement or 30-year contract was enrolled.
Sec.  1468.39   Violations and remedies.
    (a) Easement violations. (1) In the event of a violation of the
easement involving the landowner, the landowner will be given
reasonable notice and an opportunity to voluntarily correct the
violation within 30 days of the date of the notice, or such additional
time as NRCS determines is necessary to correct the violation at the
landowner's expense.
    (2) Notwithstanding paragraph (a)(1) of this section, NRCS reserves
the right to enter upon the easement or 30-year area at any time to
remedy deficiencies or easement violations. Such entry may be made at
the discretion of NRCS when such actions are deemed necessary to
protect important wetland functions and values or other rights of the
United
[[Page 590]]
States under the easement. The landowner will be liable for any costs
incurred by the United States as a result of the landowner's failure to
comply with easement obligations.
    (3) If there is failure to comply with easement obligations, the
easement will remain in effect, and NRCS may, in addition to any other
remedy available to the United States, retain any payment otherwise
required to be paid under this part and require the refund of any
payment previously made under this part.
    (b) 30-year contract or wetland reserve easement restoration
agreements violations. (1) If NRCS determines that a landowner is in
violation of the terms of a 30-year contract or wetland reserve
easement restoration agreement, or documents incorporated by reference
into the 30-year contract or wetland reserve easement restoration
agreement, the landowner will be given reasonable notice and an
opportunity to voluntarily correct the violation within 30 days of the
date of the notice, or such additional time as NRCS determines is
necessary to correct the violation. If the violation continues, NRCS
may terminate the 30-year contract or wetland reserve easement
restoration agreement.
    (2) Notwithstanding the provisions of paragraph (b)(1) of this
section, a 30-year contract or wetland reserve easement restoration
agreement termination is effective immediately upon a determination by
the NRCS that the landowner has--
    (i) Submitted false information,
    (ii) Filed a false claim, or
    (iii) Engaged in any act for which a finding of ineligibility for
payments is permitted under this part.
    (3) If NRCS terminates a 30-year contract or wetland reserve
easement restoration agreement, the landowner will forfeit all rights
for future payments under the 30-year contract or wetland reserve
easement restoration agreement, and must refund all or part, as
determined by NRCS, of the payments received, plus interest.
Matthew Lohr,
Chief, Natural Resources Conservation Service.
Robert Stephenson,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 2019-27883 Filed 12-30-19; 4:15 pm]
BILLING CODE 3410-16-P