Healthy Forests Reserve Program, 1954-1971 [E9-506]

Agencies

• DEPARTMENT OF AGRICULTURE
• Natural Resources Conservation Service

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


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DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service

7 CFR Part 625

RIN 0578-AA52


Healthy Forests Reserve Program

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

ACTION: Proposed rule; request for comment.

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

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

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

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link from the menu; select the Proposed Rule link from beneath the 
Rules Index title. Persons with disabilities who require alternative 
means for communication (Braille, large print, audiotape, etc.) should 
contact the USDA Target Center at (202) 720-2600 (voice and TDD).

FOR FURTHER INFORMATION CONTACT: Robin Heard, Director, Easement 
Programs Division, NRCS, P.O. Box 2890, Washington, DC 20013-2890; 
Phone: (202) 720-1854; Fax: (202) 720-4265; or e-mail: 
HFRP@wdc.usda.gov.

SUPPLEMENTARY INFORMATION: 

Regulatory Certifications

Executive Order 12866

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

Federal Crop Insurance Reform and Department of Agriculture 
Reorganization Act of 1994

    Pursuant to section 304 of the Federal Crop Insurance Reform Act of 
1994 (Pub. L. 103-354), USDA classified this rule as non-major. 
Therefore, a risk analysis was not conducted.

Regulatory Flexibility Act

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

Small Business Regulatory Enforcement Fairness Act of 1996

    This proposed rule is not a major rule as defined by section 804 of 
the Small Business Regulatory Enforcement Fairness Act of 1996. This 
proposed rule will not result in an annual effect on the economy of 
$100 million or more, a major increase in costs or prices, or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or the ability of U.S.-based companies to 
compete in domestic and export markets.
    The 30-day comment period associated with this rulemaking will 
provide the public the opportunity to comment on the changes to this 
regulation. To ensure that NRCS has the regulatory framework in place 
to implement the Food, Conservation, and Energy Act of 2008 (the 2008 
Act), Public Law 110-246, for a fiscal year 2009 sign-up, NRCS has 
determined that a 30 day comment period is necessary.

Environmental Analysis

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

Paperwork Reduction Act

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

Government Paperwork Elimination Act

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

Civil Rights Impact Analysis

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

Civil Justice Reform

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

Executive Order 13132, Federalism

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

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

Unfunded Mandates Reform Act of 1995

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 
U.S.C. 1531-1538), NRCS assessed the effects of this proposed rule on 
State, local, and Tribal governments, and the public. This proposed 
rule does not compel the expenditure of $100 million or more by any 
State, local, Tribal governments, or anyone in the private sector; 
therefore, a statement under section 202 of the Unfunded Mandates 
Reform Act is not required.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

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

Discussion of Program

    America's forests provide a wide range of environmental, economic, 
and social benefits including timber, wilderness, minerals, recreation 
opportunities, and fish and wildlife habitat. In addition, a healthy 
forest ecosystem provides habitat for endangered and threatened 
species, sustains biodiversity, protects watersheds, sequesters carbon, 
and helps purify the air. However, some forest ecosystems have had 
their ecological functions diminished by a number of factors, including 
fragmentation, reduction in periodic fires, lack of proper management, 
or invasive species. Habitat loss has been severe enough in some 
circumstances to cause dramatic population declines such as in the case 
of the ivory-billed woodpecker. As a result of the pressures on forest 
ecosystems, many forests need active management and protection from 
development in order to sustain biodiversity and restore habitat for 
species that have suffered significant population declines. Active 
management and protection of forest ecosystems can also increase carbon 
sequestration and improve air quality.
    Many forest ecosystems are located on private lands and provide 
habitat for species that have been listed as endangered or threatened 
under Section 4 of the Endangered Species Act (ESA), 16 U.S.C. 1533, 
(listed species). Congress enacted the Healthy Forests Reserve Program 
(HFRP), Title V of the Healthy Forest Restoration Act of 2003 (Pub. L. 
108-148, 16 U.S.C. 6571-6578, to provide financial assistance to 
private landowners to undertake projects that restore and enhance 
forest ecosystems to help promote the recovery of threatened and 
endangered species, improve biodiversity, and enhance carbon 
sequestration.
    The Secretary of Agriculture has delegated authority to implement 
HFRP to the NRCS Chief (Chief). In addition, technical support 
associated with forest management practices may also be provided by the 
U.S. Forest Service. Section 501 of Title V of the Healthy Forests 
Restoration Act of 2003 (Pub. L. 108-148) provides that the program 
will be carried out in coordination with the Secretary of the Interior 
and the Secretary of Commerce. NRCS works closely with the FWS and the 
NMFS to further the species recovery objectives of the HFRP and to help 
make available to HFRP participants safe harbor or similar assurances 
and protection under ESA section 7(b)(4) or Section 10(a)(1), 16 U.S.C. 
1536(b)(4), 1539(a)(1).

Proposed Changes to the Regulations Based on the Prior Comment Period

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

Purpose and Eligibility

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

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

Priority for Enrollment

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

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

Term of Enrollment

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

Restoration Plans

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

Cost-Share Payments

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

Easements

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

Cooperation and Technical Assistance

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

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

Landowner Protections and Safe Harbor Agreements

    The 2006 interim final rule (71 FR 28557), included a definition of 
Landowner Protections as part of Sec.  625.2 and the preamble described 
those protections and how program participants obtain them (71 FR 
28548-28550). Landowner Protections were defined in the interim final 
rule as ``protections and assurances made available to HFRP 
participants whose voluntary conservation activities result in a net 
conservation benefit for listed, candidate, or other species. Landowner 
Protections made available by the Secretary of Agriculture to HFRP 
participants may be provided under section 7(b)(4) or section 10(a)(1) 
of the Endangered Species Act of 1973 (ESA; 16 U.S.C. 1536(b)(4), 
1539(a)(1)). These Landowner Protections may be provided by NRCS in 
conjunction with meeting its responsibilities under section 7 of the 
ESA, or by FWS or NFMS through section 10 of the ESA. These Landowner 
Protections include a permit providing coverage for incidental take of 
species listed under the ESA. Landowner Protections also include 
assurances related to potential modifications of HFRP restoration plans 
and assurances related to the potential (unlikely) termination of 
Landowner Protections and any 10-year cost share agreement.''
    Commenters asserted that NRCS should establish specific provisions 
in agreements or in the regulations regarding how NRCS will cooperate 
with FWS and NMFS concerning the preparation of restoration plans and 
other activities under the HFRP. NRCS should include how it will 
cooperate with FWS and NMFS to make Landowner Protections available to 
participating landowners.
    Under the statutory provisions at 16 U.S.C. 6573, NRCS is 
responsible for preparing restoration plans. NRCS develops the 
restoration plans jointly with the program participant in coordination 
with the FWS or NMFS, as appropriate. Further, NRCS will work with FWS 
and NMFS to establish memorandums of understanding to enhance the 
coordination process. In response to the commenters' request for more 
procedural details, NRCS clarified the definition of Landowner 
Protections in Sec.  625.2 and added a new section in the regulations 
at Sec.  625.13(d) to indicate how NRCS will help program participants 
obtain Landowner Protections.
    NRCS has also added a definition for Candidate Conservation 
Agreement with Assurances (CCAA) and clarified the definitions of 
Landowner Protections and Safe Harbor Agreement (SHA) in Sec.  625.2 of 
this rule to more fully describe the two types of Landowner 
Protections. These Landowner Protections are conditioned on to the HFRP 
restoration plan and associated cost-share agreement or easement being 
properly implemented. There is no requirement that HFRP participants 
obtain any Landowner Protections. Generally, the three elements of 
Landowner Protections are: (1) Authorization for the take of endangered 
or threatened species when conducting management activities under a 
HFRP restoration plan and when returning to the baseline conditions at 
the end of the cost-share agreement or easement period (whichever is 
longer), (2) assurance that the landowner will not be required to 
undertake additional or different management activities without the 
consent of the landowner, and (3) limitations on the possibility of 
termination of a HFRP restoration plan that is being properly 
implemented by the landowner.
    The definition of Landowner Protections in the interim final rule 
(and text in the preamble), included a description of two approaches 
that the Secretary of Agriculture may use to make Landowner Protections 
available to HFRP participants. Based on the suggestions from 
commenters and to help ensure clarity, NRCS clarified the description 
in the definition in section Sec.  625.2 and added Sec.  625.13(d) to 
specify the two ways that NRCS can make Landowner Protections available 
to HFRP participants upon request. The first approach involves NRCS and 
the HFRP participant, and does not require direct involvement by FWS or 
NMFS with the participant. Under this approach, NRCS will extend to 
participants the incidental take authorization received by NRCS from 
FWS or NMFS through biological opinions issued as part of the 
interagency consultation process under section 7(a)(2) of the ESA.
    Under the second approach for Landowner Protections, NRCS will 
provide technical assistance to help participants design and use their 
HFRP restoration plan for the dual purposes of qualifying for HFRP 
financial assistance and as a basis for entering into a SHA or CCAA 
with FWS or NMFS under section 10(a)(1)A of the ESA. SHAs are voluntary 
arrangements between either the FWS or NMFS and cooperating 
participants who agree to adopt practices and measures, or refrain from 
certain activities, in order to achieve net conservation benefits, 
i.e., a contribution to the recovery of listed species. A CCAA is a 
voluntary agreement between FWS or NMFS and cooperating landowners, who 
voluntarily agree to manage their lands or waters to remove threats to 
species at risk of becoming threatened or endangered, receive 
assurances that their conservation efforts will not result in future 
regulatory obligations in excess of those they agree to at the time 
they enter into the Agreement. CCAAs are intended to help conserve 
proposed and candidate species, and species likely to become 
candidates, by giving private, non-Federal landowners incentives to 
implement conservation measures for declining species. The primary 
incentive for a CCAA is an assurance that no further additional land, 
water, or resource use restrictions would be imposed should the species 
later become listed under the ESA. There is no requirement that HFRP 
participants enter into a SHA or a CCAA. All SHAs are subject to the 
SHA policy jointly adopted by FWS and NMFS (Announcement of Final 
Policy, 64 FR 32717, June 17, 1999), and SHAs with the FWS also are 
subject to regulations at 50 CFR Part 17, and specifically 50 CFR 
17.22(c) for endangered species or 17.32(c) for threatened species. All 
CCAAs are subject to the CCAA policy jointly adopted by FWS and NMFS 
(Announcement of Final Policy, 64 FR 32726, June 17, 1999), and CCAAs 
with the FWS are also subject to regulations at 50 CFR Part 17, and 
specifically 50 CFR 17.22(d) for endangered species or 17.32(d) for 
threatened species.
    The provisions of 16 U.S.C. 6575 require that the Secretary of 
Agriculture offer landowners with technical assistance to assist the 
landowners ``in complying'' with the terms of restoration plans (as 
included in agreements or easements) under the

[[Page 1960]]

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

Electric Transmission Facilities

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

Termination of Landowner Protection

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

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

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

[[Page 1961]]

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

Other Proposed Minor Changes for Clarification or Improved Program 
Administration

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

Section 625.1 Purpose and Scope

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

Section 625.2 Definitions

    In addition to the definition of ``Acreage owned by Indian 
Tribes,'' which NRCS proposes to add as a result of statutory changes 
described in the previous section, NRCS proposes to add definitions for 
``Candidate Conservation Agreement with Assurances,'' ``Conservation 
practice'' and ``Forest ecosystem''.
    NRCS proposes to add a definition for the term ``Candidate 
Conservation Agreement with Assurances'' to ensure the public has clear 
understanding of the Landowner Protections provided through HFRP. NRCS 
proposes the definition to read as follows: ``Candidate Conservation 
Agreement with Assurances (CCAA) means a voluntary arrangement between 
FWS or NMFS, and cooperating non-Federal landowners under the authority 
of Section 10(a)(1) of the Endangered Species Act of 1973 (the Act), 16 
U.S.C. 1539(a)(1). Under the CCAA and an associated enhancement of 
survival permit, the non-Federal landowner implements actions that are 
consistent with the conditions of the permit. Candidate Conservation 
Agreements with Assurances with FWS are also subject to regulations at 
50 CFR 17.22(d) for endangered species or 50 CFR 17.32(d) for 
threatened species, or applicable subsequent regulations.''
    NRCS proposes to add the term ``Conservation practice'' to replace 
the definition of ``practice.'' The definition of ``conservation 
practice'' describes a broader array of activities than the definition 
of the term ``practice.'' NRCS proposes to incorporate the following 
language as the definition of ``conservation practice.'' ``Conservation 
practice means one or more conservation improvements and activities, 
including structural practices, land management practices, vegetative 
practices, forest management, and other improvements that benefit the 
eligible land and optimize environmental benefits, planned and applied 
according to NRCS standards and specifications.''
    The purpose of HFRP is to restore and enhance forest ecosystems. 
NRCS proposes to add the term ``forest ecosystem'' to clarify the 
program's purpose.
    NRCS proposes amendments to other definitions as follows:
    The definition of ``Activity'' is removed because statutory 
authority is only provided for ``Practices'' and ``Measures.''
    The definition of ``Biodiversity'' is changed to clarify that 
``biodiversity'' is the shortened term for biological diversity.
    The definition of ``Contract'' is changed to be consistent with 
other programs administered by NRCS. NRCS proposes amending the 
definition to read as follows:
    ``Contract/agreement means the legal document that specifies the 
obligations and rights of any applicant who has been accepted to 
participate in the program. A contract/agreement is a binding agreement 
for the transfer of assistance from USDA to the participant for 
conducting the prescribed program implementation actions.''
    The term ``30-year contract'' is added to incorporate the 30-year 
contract option.
    The Agency is removing the definition of ``Indian Trust Lands,'' 
``Practice,'' and ``Consultation or consult.'' The definition of 
``Indian Trust Lands'' is removed and replaced by the definition of 
``Acreage owned by Indian Tribes'' to be consistent with the statutory 
language. The definition of ``Practice'' is removed and replaced with 
the more specific term ``Conservation practice.'' The definition of 
``Consultation or consult'' is removed and revised to change the term 
to confer for the reasons described in the public comment section 
above.
    The definition of ``landowner'' is revised to remove the term 
``remaindermen'' as a category of ownership. NRCS proposes removing 
this term because it unnecessarily complicates the definition.
    The definition of ``Landowner Protections'' is changed as a result 
of the public comments received. The explanation for this proposal is 
provided under ``Proposed changes based on public comment.''
    The definition of ``Liquidated damages'' is amended to read: 
``Liquidated damages'' is defined as ``a sum of money stipulated in the 
HFRP restoration agreement that the participant agrees to pay NRCS if 
the participant fails to adequately complete the terms of the 
restoration agreement. The sum represents an estimate of the expenses 
incurred by NRCS to service the restoration agreement, and reflects the 
difficulties of proof of loss and the inconvenience or non-feasibility 
of otherwise obtaining an adequate remedy.'' This is consistent with 
how the term is defined in other programs administered by NRCS.
    The definition of ``Participant'' is amended to incorporate non-
substantive changes to make the definition consistent with the 
definition of ``Participant'' in other conservation programs and to 
address the addition of the 30-year contract option provided in the 
2008 Act for Tribal lands. Specifically, a ``Participant'' is an 
applicant who is party to a 10-year cost share agreement, 30-year 
contract, or an option agreement to purchase an easement. The Agency is 
also taking the opportunity to note in this regulation, consistent with 
the appeal regulations at

[[Page 1962]]

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

Section 625.4 Program Requirements

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

Section 625.5 Application Procedures

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

Section 625.6 Establishing Priority for Enrollment in HFRP

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

Section 625.7 Enrollment of Easements, Contracts, and Agreements

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

Section 625.8 Compensation for Easements and 30-Year Contracts

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

[[Page 1963]]

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

Section 625.9 10-Year Restoration Cost-Share Agreements

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

Section 625.10 Cost-Share Payments

    NRCS proposes to amend Sec.  625.10(b) to clarify the addition of 
the term ``candidate species,'' as well as listed species, through a 
Candidate