Wetlands Reserve Program, 2317-2337 [E9-735]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation

[Federal Register Volume 74, Number 10 (Thursday, January 15, 2009)]
[Rules and Regulations]
[Pages 2317-2337]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-735]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1467

RIN 0578-AA47


Wetlands Reserve Program

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

ACTION: Interim final rule with request for comment.

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SUMMARY: The Wetlands Reserve Program (WRP) assists owners of eligible 
land in restoring and protecting wetlands. This interim final rule sets 
forth how the Natural Resources Conservation Service (NRCS), an agency 
of the U.S. Department of Agriculture (USDA), using the funds, 
facilities, and authorities of the Commodity Credit Corporation (CCC), 
will implement WRP in response to changes made to the program by the 
Food, Conservation, and Energy Act of 2008. In addition, this interim 
final rule incorporates other changes to the regulation for 
clarification or program administration improvement.

DATES: Effective Date: The rule is effective January 15, 2009.
    Comment Date: Submit comments on or before March 16, 2009.

ADDRESSES: You may send comments (identified by Docket Number NRCS-IFR-
08013) 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.
     Mail: Easements Programs Division, Natural Resources 
Conservation Service, Wetlands Reserve Program Comments, P.O. 2890, 
Room 6819-S, Washington, DC 20013.
     Fax: 1-202-720-9689.
     Hand Delivery: Room 6819-S of the USDA South Office 
Building, 1400 Independence Avenue, SW., Washington, DC 20250, between 
9 a.m. and 4 p.m., Monday through Friday, except Federal Holidays. 
Please ask the guard at the entrance to the South Office Building to 
call 202-720-4527 in order to be escorted into the building.
     This interim final rule may be accessed via Internet. 
Users can access the NRCS homepage at https://www.nrcs.usda.gov/; select 
the Farm Bill link from the menu; select the Interim final link from 
beneath the Final and Interim Final Rules Index title. Persons with 
disabilities who require

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alternative means for communication (Braille, large print, audio tape, 
etc.) should contact the USDA TARGET Center at: (202) 720-2600 (voice 
and TDD).

FOR FURTHER INFORMATION CONTACT: Robin Heard, Director, Easement 
Programs Division, U.S. Department of Agriculture, Natural Resources 
Conservation Service, Room 6819, P.O. Box 2890, Washington, DC 20013-
2890; Phone: (202) 720-1854; Fax: (202) 720-9689; or e-mail: 
WRP2008@wdc.usda.gov.

SUPPLEMENTARY INFORMATION:

Regulatory Certifications

Executive Order 12866

    The Office of Management and Budget (OMB) reviewed this interim 
final rule and determined that this interim final rule is an 
economically significant regulatory action since it results in an 
annual effect on the economy of $100 million or more. Pursuant to 
Executive Order 12866, NRCS conducted a cost-benefit analysis of the 
Wetlands Reserve Program. The administrative record is available for 
public inspection in Room 5831 South Building, USDA, 14th and 
Independence Avenue, SW., Washington, DC. A summary of the economic 
analysis can be found at the end of this preamble and a copy of the 
analysis is available upon request from the Director, Easement Programs 
Division, Natural Resources Conservation Service, Room 6819, 
Washington, DC 20250-2890 or electronically at: https://
www.nrcs.usda.gov/programs/wrp/ under the Program Information title.

Regulatory Flexibility Act

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

Environmental Analysis

    A programmatic environmental assessment has been prepared in 
association with this rulemaking. The analysis has determined that 
there will not be a significant impact to the human environment and as 
a result an Environmental Impact Statement is not required to be 
prepared (40 CFR part 1508.13). The Environmental (EA) Analysis and 
Finding of No Significant Impact (FONSI) are available for review and 
comment for 60 days from the date of publication of this interim final 
rule in the Federal Register. A copy of the EA and FONSI may be 
obtained from the following Web site: https://www.nrcs.usda.gov/
programs/Env_Assess/. A hard copy may also be requested from the 
following address and contact: National Environmental Coordinator, 
Natural Resources Conservation Service, Ecological Sciences Division, 
1400 Independence Ave., SW., Washington DC 20250. Comments from the 
public should be specific and reference that comments provided are on 
the EA and FONSI. Public comment may be submitted by any of the 
following means: (1) e-mail comments to NEPA2008@wdc.usda.gov, (2) e-
mail to e-gov Web site www.regulations.gov, or (3) written comments to: 
National Environmental Coordinator, Natural Resources Conservation 
Service, Ecological Sciences Division, 1400 Independence Ave., SW., 
Washington DC 20250.

Civil Rights Impact Analysis

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

Paperwork Reduction Act

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

Government Paperwork Elimination Act

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

Executive Order 12988

    This interim final rule has been reviewed in accordance with 
Executive Order 12988, Civil Justice Reform. The provisions of this 
interim final rule are not retroactive and preempt State and local laws 
to the extent that such laws are inconsistent with this interim final 
rule. Before an action may be brought in a Federal court of competent 
jurisdiction, the administrative appeal rights afforded persons at 7 
CFR parts 11, 614, and 780 must be exhausted.

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

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

Unfunded Mandates Reform Act of 1995

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

Small Business Regulatory Enforcement Fairness Act of 1996

    This interim final rule is a major rule as defined by Section 804 
of the Small Business Regulatory Enforcement Fairness Act of 1996. This 
interim final 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. However, Section 2904(b) and 
(c) of the Food, Conservation, and Energy Act of 2008 requires that the 
Secretary use the authority in section 808(2) of title 5, United States 
Code, which allows an agency to forego SBREFA's usual 60-day 
Congressional Review delay of the effective date of a major regulation 
if the agency finds that there is a good cause to do so. NRCS hereby 
determines that it has good cause to implement this regulation as an 
interim final rule and have the rule effective immediately in order to 
meet the Congressional intent to have the conservation programs 
authorized or amended by Title II in effect as soon as possible. 
Accordingly, this rule is effective upon filing for public inspection 
by the Office of the Federal Register.

Executive Order 13132

    E.O. 13132 requires NRCS to develop an accountable process to 
ensure ``meaningful and timely input by State

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and local officials in the development of regulatory policies that have 
federalism implications.'' E.O. 13132 defines the term ``Policies that 
have federalism implications'' to include regulations that have 
``substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government.'' Under 
E.O. 13132, NRCS may not issue a regulation that has federalism 
implication, that imposes substantial direct compliance costs, and that 
is not required by statute, unless the Federal government provides the 
funds necessary to pay the direct compliance costs incurred by State 
and local governments, or NRCS consults with State and local officials 
early in the process of developing the proposed regulation. NRCS shows 
sensitivity to Federalism concerns by requiring the State 
Conservationist to meet with and provide opportunities for involvement 
of State and local governments through the State Technical Committee. 
This interim final rule will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government as specified in E.O. 13132. Thus, the 
Executive Order does not apply to this rule.

Executive Order 13175

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

Section 2904 of the Food, Conservation, and Energy Act of 2008

    This interim final rule with request for comment amends the 
existing Wetlands Reserve Program (WRP) regulations. The Commodity 
Credit Corporation and the Natural Resources Conservation Service 
(NRCS), an agency of the United States Department of Agriculture 
(USDA), publishes this interim final rule with request for comment to 
incorporate programmatic changes as authorized by amendments in the 
Food, Conservation, and Energy Act of 2008 (2008 Act). The Commodity 
Credit Corporation (CCC) and the Natural Resources Conservation Service 
(NRCS) are not required by 5 U.S.C. 553 or by any other provision of 
law, to publish a notice of proposed rulemaking with respect to the 
subject matter of this rule. Section 2904 of the 2008 Act requires 
regulations to be published within 90 days after the date of enactment 
and authorizes CCC and NRCS to promulgate an interim final rule 
effective upon publication with an opportunity for notice and comment. 
CCC and NRCS have determined that an interim final rule is necessary to 
expedite the effective date of rulemaking in order to meet the intent 
of Section 2904 of the 2008 Act.

Economic Analysis--Executive Summary

    Pursuant to Executive Order 12866, Regulatory Planning and Review, 
the Natural Resources Conservation Service (NRCS) has conducted a 
benefit-cost analysis of the Wetlands Reserve Program (WRP) as 
formulated for the Interim Final Rule. This requirement provides 
decision makers with the opportunity to develop and implement a program 
that is beneficial, cost effective, and that minimizes negative impacts 
to health, human safety, and the environment. Congress passed 
amendments to the program that requires the Secretary of Agriculture, 
within 90 days after the enactment of the WRP amendments, to promulgate 
regulations necessary to carry out the program.
    In considering alternatives for implementing WRP, the United States 
Department of Agriculture (USDA) followed the legislative intent to 
optimize environmental benefits, address natural resource concerns and 
problems, establish an open participatory process, and provide flexible 
assistance to producers who apply appropriate conservation measures 
that enable the satisfaction of Federal and State environmental 
requirements. Because WRP is a voluntary program, the program will not 
impose any obligation or burden upon agricultural producers who choose 
not to participate. The program has been authorized by the Congress 
with an acreage target for program participation. Funding for WRP comes 
from the Commodity Credit Corporation.
    The WRP provides technical and financial assistance to eligible 
landowners to address wetland, wildlife habitat, soil, water, and 
related natural resource concerns on private lands in an 
environmentally beneficial and cost-effective manner. As will be 
discussed later, WRP program costs are the main costs to consider in 
this analysis. The WRP is an important tool in restoring and protecting 
wetlands along with the efforts of other governmental agencies, non-
profit organizations, and landowners. Land enrolled in WRP can produce 
substantial improvements in on-site resource conditions and at the same 
time substantial off-site environmental benefits for the public-at-
large can also accrue. These on site and off-site benefits could 
include: Creation of high value wetlands, control of sheet and rill 
erosion as lands are converted form cropland to wetlands, creation and 
protection of habitat for fish and wildlife, including threatened and 
endangered species and migrating birds; improving water quality by 
filtering sediments and chemicals; reducing flooding; recharging 
groundwater; protecting biological diversity; controlling invasive 
species with planting of natural vegetation; as well as providing 
opportunities for educational, scientific, and recreational activities. 
To some extent, air quality could be improved by reduced wind erosion 
and by an increase in carbon stored in the soil and reestablished 
vegetation, leading to reduced atmospheric amounts of carbon. Many of 
these benefits are difficult to quantify, although several studies have 
attempted to do so. One such study, published in 2008, found that the 
``public willingness to pay to enroll an additional acre of typical 
fresh water marsh in the WRP is about $425 annually.'' Capitalizing 
this benefit flow at a seven percent rate produced a per acre value of 
over $5,800 for permanent easement agreements; a value of over $5,200 
for 30-year easement agreements; and a value of almost $3,000 on 10-
year restoration agreements. Using a three percent discount rate, these 
values become $10,935, $8,330, and $3,625, for the three types of 
agreements discussed above, respectively. These values take into 
consideration private benefits that may be derived, such as income from 
any fishing, hunting fees, and other recreational activities that may 
be realized by WRP landowners.
    The main program costs include the purchase of easements and 
wetland restoration expenses with the program. Although agricultural 
production ceases from lands enrolled in WRP, this output effect is 
expected to be small given that WRP parcels are usually marginal 
agricultural lands poorly suited for efficient agricultural production. 
Agricultural production from lands better suited to agricultural use 
can easily compensate for reduced production from newly enrolled WRP 
land. Approximately 89.8 percent of the WRP funding has been used for

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permanent easement projects; about 7.9 percent for 30-year easement 
projects and about 2.4 percent for restoration cost-share agreement 
projects. The associated FY 2007 average per acre program costs for 
these projects were estimated at $3,000 for permanent easements, almost 
$1,100 for 30-year easements, and nearly $670 for restoration cost-
share agreements.
    A comparison of total economic benefits and costs related to 
restoring and protecting wetlands on a ``typical acre'' suggests that 
WRP can produce substantial economic net benefits.

Method of Analysis and Key Results

    The method of analysis for this study relied heavily on program 
managers' experience and assumptions. For example, the analysis team 
relied on program managers to identify important variables to consider 
when developing plausible scenarios. The analysis team took this 
information and constructed a small spreadsheet model. The current 
policy scenario for this analysis is program performance similar to 
those in FY 2007 persisting throughout FY 2009-FY 2012. A key variable 
in this scenario was the FY 2007 easement acquisition valuation 
methodology: Primarily by an appraisal of the fair market value of a 
parcel before the easement was in place minus the fair market value of 
the parcel after the easement was in place--an approach adopted by NRCS 
on recommendations from the USDA Inspector General's Office. Program 
managers felt that the post-FY 2007 valuation methodology was the main 
driver that caused the appraised value of parcels in many states to 
fall below the state's geographic cap and in turn causing a shift in 
program acres across states as compared to past years. These changes 
shifted WRP acreage from states with relatively low acquisition costs 
to those with relatively high acquisition costs which increased average 
national per acre WRP costs significantly. The switch in methodology 
did not result in NRCS paying more for the same easement than it would 
have paid under the old methodology, but rather significantly reduced 
the amount the agency could offer to landowners for an easement in some 
states, causing landowners to lose interest in the program. The current 
policy scenario assumes that the FY 2007 valuation method will be 
employed and drives model results that suggest total national WRP 
acreage would only increase by 294,200 acres over the FY 2009-FY 2012 
period.
    The changes in the 2008 Act return the valuation methodology to the 
valuation practices used before FY 2007. As a result, program mangers 
expect the distribution of acres enrolled in the program to revert back 
to its previous pattern. This geographic re-positioning is expected to 
be associated with lower average easement costs (assumed to be the fair 
market value of land using the Uniform Standards of Professional 
Appraisal Practices or an area-wide market analysis) and for geographic 
caps to be the primary means used to determine compensation rates. With 
the lower geographic per acre project costs becoming more relevant 
(assumed to be 25 percent lower than FY 2007 levels and those assumed 
in the baseline scenario), WRP acreage is expected to increase by 
600,000 acres over the FY 2009-FY 2012 period--a substantial increase 
over the continuation of the existing valuation method.
    Because per acre benefits exceed costs regardless of policy 
scenario assumed, all model results suggest that net benefits from WRP 
are positive.

Conclusions

    This WRP benefit-cost analysis assumes that the major driver in 
program costs over the FY 2009-FY 2012 period will be the method of 
easement evaluation. The single discretionary policy item available to 
NRCS does not alter this result. This item pertains to the creation of 
the Wetland Reserve Enhancement Program (WREP) that would allow States, 
non-governmental organizations, or Indian tribes to partner with USDA 
in the selection and funding of contracts, as long as selected 
contracts meet the purposes of WRP.
    Data on past WRP enrollment suggests that the 2008 Act changes 
related to easement compensation could lead to lower national average 
per-acre offer prices paid for easements when compared to pre-fiscal 
year (FY) 2007. This prediction is dependent upon where acreage is 
predominantly enrolled. NRCS anticipates that the new compensation 
methodology will encourage re-establishment of historic enrollment 
patterns. The assumptions in this analysis suggest the per-acre acre 
average costs on WRP could be reduced by about 25 percent. Although 
costs are expected to be reduced, there are no environmental studies to 
suggest that environmental benefits from such a change will be altered. 
Additional technical information from such sources as the Conservation 
Effects Assessment Project, plus empirical data on the nature of the 
types of environmental benefits being generated on WRP land across the 
United States would be necessary.
    Although benefits of wetlands have been estimated on specific sites 
in a generalized fashion, researchers of many of these past studies 
caution in transferring benefits to other areas or to be interpreted as 
``average'' values of a typical wetland type. That caveat 
notwithstanding, the conclusions of this analysis suggests that the 
monetary and non-monetary benefits from WRP in restoring and placing 
easements on wetlands can exceed total program costs.

Discussion of Program

Background

    Wetlands have long been recognized as critical to the environment 
and ecosystem health. They provide a protective buffer for our towns 
and cities against floods and storm surges; they are the habitat for 
hundreds of species; and they connect aquatic and terrestrial 
ecosystems. The Nation's wetlands provide an array of benefits to 
society and affect the Nation's economic, ecological, and cultural 
heritage.
    The WRP is a voluntary program providing technical and financial 
assistance to eligible landowners to restore and protect wetlands. 
Protecting wetlands provides wildlife habitat, as well as enhancement 
of soil, water, plants, and related natural resource concerns. 
Floodplain forests, prairie potholes, and coastal marshes are among the 
wetlands restored through WRP. More than 2 million acres have been 
enrolled in WRP since the program's inception.
    Title XIV of the Food Agriculture, Conservation, and Trade Act of 
1990 (the 1990 Farm Bill), amended the Food Security Act of 1985 to 
provide for the establishment of the Wetlands Reserve Program. The 
Secretary of Agriculture delegated responsibility for the WRP to the 
Agricultural Stabilization and Conservation Service (ASCS), and ASCS 
published a proposed rule followed by a final rule in 1992. Thereafter, 
ASCS implemented a pilot program effort in 9 States.
    In 1994, ASCS expanded the pilot program implementation of WRP to 
20 States and published an interim final rule for the program. Also in 
1994, the Department of Agriculture Reorganization Act of 1994 (the 
Reorganization Act) authorized the establishment of NRCS as the 
successor agency to the Soil Conservation Service. The Reorganization 
Act also transferred responsibility for the WRP to NRCS, and NRCS 
published an interim final rule in June 1995.

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    Under the NRCS interim final rule, NRCS expanded the program to all 
50 States, and made other program adjustments to align WRP with real 
property acquisition policies. These changes included providing 
participants with a single payment at easement closing, and the holding 
of the easement deed by the United States of America in accordance with 
the Department of Justice Title Standards.
    The Federal Agriculture Improvement and Reform Act of 1996 (the 
1996 Farm Bill), Public Law 104-387, modified several aspects of WRP, 
including offering enrollment through a non-easement option, placing 
equal enrollment priority among the three enrollment methods, and 
requiring that eligible lands maximize wildlife benefits.
    In the August 1996 final rule, NRCS incorporated the changes 
mandated by the 1996 Farm Bill and responded to comments received to 
the 1995 interim final rule. The Farm Security and Rural Investment Act 
of 2002 (the 2002 Farm Bill), Public Law 107-171, expanded the ability 
of the Secretary to grant a waiver for ownership changes due to 
foreclosure on the land when the owner of the land exercises a right of 
redemption from the mortgage holder, in accordance with State law, 
immediately before the foreclosure. NRCS incorporated this non-
discretionary change in a direct final rule published in the Federal 
Register in June 2002.
    The 2008 Act made a number of changes to WRP, including raising the 
enrollment cap to 3,041,200 acres through 2012; limiting program 
eligibility to private lands and acreage owned by Indian Tribes; 
determining the rate of compensation for easements or 30-year contracts 
enrolled in the program; requiring ownership of the land for 7 years 
under the easement enrollment option; expanding the ranking criteria; 
and adding a 30-year contract enrollment option on acreage owned by 
Indian Tribes. In addition, the 2008 Act revises the authority for the 
Wetlands Reserve Enhancement Program and a grazing rights pilot within 
that revised program, and makes agricultural lands flooded from the 
natural overflow of a closed basin lake or pothole within the Prairie 
Pothole Region eligible for enrollment without requiring that the land 
be a farmed wetland or converted wetland.
    The 2008 Act incorporated two specific changes limiting the 
participation of public agencies in the implementation of WRP after 
September 30, 2008. First, the 2008 Act limited enrollment of eligible 
land to private land and acreage owned by Indian Tribes. In this 
manner, lands owned by a State Department of Natural Resources could 
not be enrolled in the program, even if the operator of those lands was 
a private individual. Previously, such lands were eligible for 
enrollment.
    Second, Section 1603(f)(6) of the 1985 Act, as amended by Title I 
of the 2008 Act, provides that a State or local government is not 
eligible to receive any payment, benefit, or loan under Title XII of 
the 1985 Act. This prohibition includes WRP easement and restoration 
payments. Therefore, NRCS identifies how it will address these 
limitations upon public agency participation dependent upon which stage 
of the process a project was as of October 1, 2008.
    For land that was enrolled in WRP and was owned by a public entity 
prior to October 1, 2008, NRCS will complete the acquisition and 
restoration of the project and make appropriate payment to the public 
entity. The rationale for completing the acquisition and restoration is 
that a recent change in the NRCS business process, which separates the 
dates of obligation of acquisition and restoration and thereby results 
in the obligation for restoration to occur several months later than 
the obligation for acquisition, has delayed obligation of restoration 
funds beyond the control of state and local governments. Although 
restoration funds for the project will not be obligated to such 
projects until after October 1, 2008, NRCS has determined that 
restoration payments are appropriate because government entities were 
eligible to receive restoration payments when the land was enrolled or 
purchased because the restrictions on public lands eligibility in the 
WRP statute and on payments to government entities in Section 
1603(f)(6) of the 1985 Act, as amended by the 2008 Act, did not go into 
effect until October 1, 2008. The WRP statute authorizes NRCS to cost-
share to the extent the Agency determines that cost-share is 
appropriate and in the public interest.
    For land that was enrolled in WRP and was owned by a private person 
or legal entity or Indian Tribe prior to October 1, 2008, but on or 
after October 1, 2008, the private landowner or Tribe transfers 
ownership of the land to a public entity, NRCS will cancel the 
enrollment if the easement acquisition has not been completed.
    For land that was enrolled in WRP and was owned by a private person 
or legal entity or Indian Tribe prior to October 1, 2008, but on or 
after October 1, 2008, the private landowner or Tribe transfers 
ownership of the land to a public entity, and NRCS has completed the 
easement acquisition and made payment to the private landowner, NRCS 
will not cancel the enrollment. The easement will remain in place; and 
no refund will be sought from the private landowner. However, NRCS will 
not obligate funds to restore the land encumbered by the easement 
because NRCS has determined that it is not authorized to make payment 
to the public entity owner because of the restrictions in Section 
1603(f)(6) of the 1985 Act, as amended by the 2008 Act. NRCS will work 
with the new public entity landowner to encourage the public entity to 
implement the provisions of the NRCS-approved WRPO at its own expense.
    If the private land or acreage owned by an Indian tribe is enrolled 
after September 30, 2008, and prior to completion of the restoration 
activities the land is acquired by a public entity, NRCS will not 
obligate funds for restoring the land encumbered by the easement 
because NRCS has determined that it is not authorized to make payment 
to the public entity owner because of the restrictions in Section 
1603(f)(6) of the 1985 Act, as amended by the 2008 Act. Further, NRCS 
will consider failure to complete restoration of the wetlands a 
violation of the terms of enrollment. As a violation, under the WRP 
statute, NRCS has the right to have the easement remain in force and to 
seek a refund of payments made in furtherance of the enrollment. A 
violation may be avoided if the new public entity landowner implements 
all provisions of the NRCS-approved WRPO at its own expense.

Summary of 2008 Act Changes

    The 2008 Act amended the Wetlands Reserve Program to:
     Add a new enrollment method for Tribal lands through 30-
year contracts;
     Expand land eligibility under WRP to cropland or grassland 
that was used for agricultural production prior to flooding from the 
natural overflow of a closed basin lake or pothole, as determined by 
the Secretary, together (where practicable) with the adjacent land that 
is functionally dependent on the cropland or grassland;
     Require that an easement cannot be created on land that 
changed ownership within the previous 7-year period. Previously, the 
ownership requirement was for 12 months;
     Limit eligible land to private or tribal land;
     Add restoration, protection and enhancement of wetlands as 
WRP purposes;

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     Revise the authority for the Wetlands Reserve Enhancement 
Program;
     Require NRCS to conduct a survey of the prairie pothole 
regions to inform the allocation process of WRP funds to that region;
     Base easement compensation on the lowest of three values: 
The fair market value of the land determined through either an 
appraisal or market analysis; a geographic cap; or the landowner offer;
     Establish an easement compensation payment schedule 
depending upon the value of the easement;
     Require a yearly payment limitation for restoration cost-
share agreements of $50,000 per year and to clarify that the $50,000 
yearly restoration cost-share payment limitation applies to any person 
or legal entity;
     Extend the existing waiver of the $50,000 yearly payment 
limitation to 30-year contracts;
     Identify that maintenance is an activity eligible for 
cost-share assistance;
     Add ranking criteria regarding maximizing environmental 
benefits; and
     Allow the spraying or mowing of land enrolled in the 
program if necessary to meet habitat needs of specific wildlife 
species.

Section by Section Analysis

Section 1467.1 Applicability

    The term ``Department'' is changed to ``NRCS'' where it occurs in 
Sec.  1467.1 and throughout the regulation to clarify that NRCS 
implements the program and disburses payments to participants. Prior to 
2002, the Farm Service Agency (FSA) disbursed WRP payments on behalf of 
CCC. In 2002, NRCS assumed responsibility for disbursing WRP payments.
    The reference to processing outstanding and new applications for 
enrollment during calendar year 1995 has been removed as moot. There 
are no longer any outstanding applications from prior to 1995. The 
reference to the Trust Territories of the Pacific Islands has been 
removed to reflect more accurately the geographic scope of the program.

Section 1467.2 Administration

    Section 1467.2(c) that required concurrence between NRCS and FSA 
related to WRP policies, priorities and guidelines is removed, 
reflecting that the program has been delegated to NRCS. NRCS and FSA 
concurrence remains a program requirement under Section 246 of the 
Department of Agriculture Reorganization Act (Pub. L. 103-354; 7 U.S.C. 
6962(c)). NRCS and FSA will continue its working relationship regarding 
coordination of WRP policies with FSA activities, especially in the 
case where CRP and WRP enrollment are impacted by the county acreage 
cap limitations.
    Section 1467.2(d) is re-designated as Sec.  1467.2(c) and revised 
to clarify that the role of the State Technical Committee is to advise 
rather than consult with NRCS in program implementation. Given the 
regulatory connotation associated with consultation requirements under 
the Endangered Species Act, NRCS determined that the term ``advice'' 
better reflects the relationship between NRCS and the State Technical 
Committees. Additionally, this paragraph is revised to clarify that the 
advice of the State Technical Committee will be sought in the 
development of the geographic area rate caps of compensation which is 
addressed more fully in Sec.  1467.8.
    Section 1467.2(e) is re-designated as Sec.  1467.2(d) and revised 
to clarify that other Federal and State agencies to which NRCS may 
delegate easement management responsibilities must have the needed 
authority, expertise, and resources to carry out the responsibilities. 
This clarification will ensure that this authority is implemented as 
intended by statute. Throughout WRP program implementation, NRCS has 
worked in close partnership with other Federal and State agencies 
regarding management of adjacent and contiguous conservation areas, and 
will continue to do so.
    Section 1467.2(f) is re-designated as Sec.  1467.2(e) and 
incorporates the term ``technical assistance'' in the language 
regarding the use of cooperative agreements to obtain services from 
other agencies and organizations. ``Technical assistance'' is defined 
in section 2001 of the 2008 Act, and is used in this regulation to 
cover the various forms of assistance that other parties may provide 
rather than listing specific types of assistance.
    Section 1467.2(g) is re-designated as Sec.  1467.2(f) and clarifies 
that the role of the U.S. Department of the Interior's Fish and 
Wildlife Service (FWS) is in consultation regarding land eligibility. 
The additional references to FWS and the Forest Service are removed, 
because the authority to consult with other Federal or State agencies 
on issues related to WRP implementation is covered in other parts of 
the regulation and is redundant here. References to the U.S. Department 
of the Interior's Fish and Wildlife Service have been changed to 
``FWS'' where it occurs throughout the regulation to streamline 
terminology.
    Section 1467.2 (h) is re-designated as Sec.  1467.2(g) and expands 
authority for the Chief of NRCS to allocate funding pools to encourage 
program participation among historically underserved producers as 
authorized by Section 1244 of the Food Security Act of 1985, as amended 
(16 U.S.C. 3844).

Section 1467.3 Definitions

    Definitions of the terms used in this regulation are set forth in 
Sec.  1467.3 to provide consistent interpretations for the public and 
for NRCS personnel. These definitions are consistent with statutory 
changes and with the revisions to 7 CFR part 1467 contained herein.
    The term ``Acreage owned by Indian Tribes'' is added to define the 
term as used by the amendment made by the 2008 Act. The term is defined 
broadly to include lands held in trust for Indian Tribes, and to 
increase program accessibility and to allow for the greatest 
opportunity for Indian Tribal participation in the program through the 
use of 30-year contracts, which may be more conducive to requirements 
on trust lands, which are owned by the Tribe, but held in trust by 
another agency or entity.
    The term ``Activity'' is added to define the meaning of the term 
used in the regulation and refer to maintenance and management 
activities that are essential parts of a restoration agreement. The 
statute specifies that cost-share payments may be provided for 
management and maintenance activities, which does not always involve a 
full conservation practice.
    The term ``Agreement'' is added to specify that it is a legal 
document that describes the rights and obligations of NRCS and program 
participants.
    The term ``Agricultural commodity'' is revised to reflect the 
definition provided in Sec.  1201(a)(1) of the Food Security Act of 
1985, as amended, providing consistency with other Title XII programs.
    The term ``Beginning farmer or rancher'' is added to clarify who is 
eligible to be enrolled under provisions specific to historically 
underserved producers, which is referenced under Sec.  1467.2(g).
    The term ``Conservation district'' is revised to reflect the 
definition provided in Sec.  1201(a)(5) of the Food Security Act of 
1985, providing consistency with other Title XII programs.
    The term ``Conservation practice'' replaces the term ``practice,'' 
and clarifies that conservation practices implemented in WRP meet NRCS

[[Page 2323]]

standards and specifications, and provides a consistent definition 
across all easement programs.
    The term ``Contract'' is revised to clarify that it is a legal 
document that specifies the rights and obligations of NRCS and program 
participants.
    The term ``30-year Contract'' is added to reflect the statutory 
addition of the 30-year contract enrollment option for acreage owned by 
Indian Tribes.
    The term ``Converted wetland'' is revised to reflect the definition 
in Sec.  1201(a)(7) of the Food Security Act of 1985, as amended, 
providing consistency with other Title XII programs.
    The term ``Cost-share payment'' is revised to clarify that payments 
are made to carry out conservation practices and activities on enrolled 
lands.
    The term ``Department'' is removed. References to ``Department'' 
throughout 7 CFR part 1467 are replaced with ``NRCS,'' the Natural 
Resources Conservation Service, an agency of the U.S. Department of 
Agriculture responsible for carrying out the program.
    The term ``Easement payment'' is revised to include the 
consideration paid to an Indian Tribe or to tribal members 
participating through the 30-year contract option, because the managers 
expressed that the 30-year contract option would provide the same 
payment as a 30-year easement, but would not be a real property 
transaction.
    The term ``Easement Restoration Agreement'' is added to specify 
that an easement restoration agreement will be the agreement used to 
implement the Wetland Restoration Plan of Operations (WRPO) for 
easements and 30-year contracts and mechanism for providing cost-share 
assistance to participants to carry out restoration and maintenance as 
planned in the WRPO under such enrollments.
    The term ``Forest Service'' is removed as it is duplicative to all-
inclusive references to ``other Federal and State agencies'' throughout 
the regulation.
    The term ``Fish and Wildlife Service (FWS)'' replaces the term 
``U.S. Fish and Wildlife Service'' and such term refers to the same 
agency within the United States Department of the Interior.
    The term ``Historically underserved producer'' is added to refer to 
the specific groups of producers to which the Chief may direct funding 
through funding pools specifically to encourage participation, and to 
provide consistency with related conservation programs administered by 
NRCS.
    The term ``Indian Tribe'' is added and adopts the definition in 
Sec.  4(e) of the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450b(e)).
    The term ``Landowner'' is revised to reflect that such term 
includes legal entities and refines the applicability of the term from 
the overly broad term ``farmland'' to eligible land since the 2008 Act 
amended the WRP statute to limit eligibility to private and Tribal 
lands, including lands held in trust for Indian tribes. ``Remaindermen 
in a farm property'' is removed because remaindermen in a property do 
not have a current legal ownership of the land.
    The term ``Legal entity'' is added to respond to statutory changes, 
which limit eligible land to private and Tribal land and place a 
payment limitation to a person or a legal entity. The term ``limited 
resource farmer or rancher'' is added to clarify who is eligible to be 
enrolled under provisions specific to historically underserved 
producers at Sec.  1467.2(g).
    The term ``Maintenance'' is added to reflect statutory changes that 
incorporate maintenance as a cost-sharable activity.
    The term ``Natural Resources Conservation Service'' is revised to 
clarify that NRCS carries out program implementation using the funds, 
facilities, or authorities of the Commodity Credit Corporation (CCC). 
In the definition ``Department'' is replaced with ``NRCS'' and 
reference to the Soil Conservation Service is removed.
    The term ``Option agreement to purchase'' is added to describe the 
legal document used to authorize NRCS to proceed with the easement 
acquisition process and which binds the landowner to sell a 
conservation easement upon exercise of the option by NRCS.
    The term ``Participant'' is added to simplify reference throughout 
the regulations to persons or legal entities who have been accepted to 
participate in the program.
    The term ``Person'' is revised in response to statutory changes 
that eliminated governmental entity eligibility under the program. The 
term ``person'' now refers only to a natural person, a legal entity, or 
an Indian Tribe, but does not include governments or their political 
subdivisions.
    The term ``Prairie Pothole Region'' is added to reflect statutory 
changes requiring an assessment of program demand in the ``Prairie 
Pothole Region'' and consideration of those needs in allocation 
formulas. The definition establishes the geographic scope of the 
prairie pothole region, as it existed on June 18, 2008.
    The term ``Private land'' is added to reflect statutory changes 
that excluded land owned by State and local governments from being 
eligible to enroll in the program.
    The term ``Restoration Cost-Share Agreement'' is added to clarify 
that the restoration agreement is the contract used to describe the 
rights and obligations of participants who have been accepted to 
participate in the WRP restoration cost-share enrollment option. This 
agreement is used to carry out the WRPO and to identify the cost-share 
assistance NRCS will provide to the participant for implementing the 
conservation practices and activities in the Wetland Restoration Plan 
of Operations.
    The term ``Riparian areas'' is revised to correct the spelling of 
the word ``vegetative.''
    The term ``Socially disadvantaged farmer or rancher'' is added to 
clarify who is eligible to be enrolled under provisions specific to 
historically underserved producers at Sec.  1467.2(g).
    The term ``State technical committee'' is revised to remove 
unnecessary reference to the State Conservationist as the chair of the 
committee; this role is established through regulations found at 7 CFR 
610.22(a).
    The term ``United States Department of Agriculture (USDA)'' 
replaces the use of the term ``U.S. Department of Agriculture.''
    The term ``Wetland'' is amended to remove adjacent lands from the 
definition of wetland for consistency with the statute. Adjacent 
uplands, while they may be eligible for the program, are technically 
not wetlands.
    The term ``WRP'' has been removed as unnecessary since the term is 
adequately described in Sec.  1467.1.
    The term ``Wetlands Reserve Plan of Operations (WRPO)'' is revised 
to add the definition of the WRPO and describe the purpose of this 
conservation plan. In particular, the WRPO is the conservation plan 
that identifies how the wetland functions and values will be restored, 
improved, and protected and which is approved by NRCS.

Section 1467.4 Program Requirements

    Section 1467.4(a) is revised to incorporate the statutory addition 
of the 30-year contract enrollment option available only on acreage 
owned by Indian Tribes. Additionally, Sec.  1467.4(a) is revised to 
clarify that cost-share assistance under the easement or 30-year 
enrollment option will be provided through the easement restoration 
agreement and that cost-share assistance under the restoration cost-
share enrollment option will be provided

[[Page 2324]]

through the restoration cost-share agreement.
    Section 1467.4(b) is revised to remove reference to CRP easements 
with respect to a county cap limitation since this enrollment option is 
not provided through the existing CRP. Additionally, the 2008 Act 
removed the ability to waive the 10% limitation of cropland that can be 
enrolled through an easement option under WRP. Therefore, this 
paragraph has been revised to reflect the 2008 Act amendments.
    Section 1467.4(c) is revised to clarify that eligible program 
participants are persons or legal entities or Indian Tribes and are 
subject to the adjusted gross income (AGI) limitation and highly 
erodible land and wetland compliance provisions of the Food Security 
Act of 1985, as amended. Indian Tribes are exempted from the AGI and 
payment limitations by 7 CFR Part 1400.600(g).
    Section 1467.4(c)(2) is revised to reflect the statutory change in 
required ownership period from 12 months to 7 years. NRCS will 
determine the 7-year ownership requirement at the time NRCS determines 
the eligibility of the land offered for enrollment. Previously, NRCS 
measured ownership duration at the time of application. However, NRCS 
determined that as an eligibility criterion, ownership duration should 
be determined as part of the eligibility review of a project.
    A new Sec.  1467.4(d)) is added to specify that land that is 
accepted for enrollment in an easement, but is sold or transferred 
prior to the easement being perfected will be removed from enrollment. 
The new landowner may file a new application so that all landowner 
eligibility criteria may be examined and documented appropriately. 
However, the land eligibility, ranking, and other administrative 
determinations that relate to the land will remain valid for the 
remainder of the funding cycle.
    Section 1467.4(d) is redesignated as Sec.  1467.4(e) and is revised 
to reflect the requirement made by the 2008 Act amendments that land 
must be private land or acreage owned by Indian Tribes to be eligible 
for WRP.
    Section 1467.4(e)(3), formerly Sec.  1467.4(d)(2), is revised to 
provide the new eligible land category for flooded lands within a 
closed basin lake or pothole as established by the amendments in the 
2008 Act. This change authorizes the enrollment of lands that are 
currently inundated.
    Section 1467.4(e)(4) is revised to add clarity related to lands 
that may be considered farmed wetland or converted wetland, and conform 
to revisions made in Sec.  1467.4(e)(3). The lands identified were 
previously identified in regulation but the revision ties their 
identification more clearly to statutory criteria.
    Section 1467.4(e)(5) Prairie Pothole Region adds new language to 
provide eligibility criteria for land being enrolled under the new 
eligibility category of flooded lands in a closed basin located in the 
Prairie Pothole Region as defined in Sec.  1467.3. The Prairie Pothole 
Region is defined as the counties designated as part of the Prairie 
Pothole National Priority Area for CRP as of June 18, 2008. This 
designation is chosen because it is clearly delineated and is already 
an established and well-known designation. The 2008 Act amendments 
require that lands under this section maximize wildlife benefits and 
wetland values and functions and be restorable. In order for a wetland 
to be restorable, the soils must be hydric, and the depth of the water 
cannot exceed 6.5 feet because water over this level is considered open 
water, not a wetland. The minimum size requirement of 20 contiguous 
acres is included to focus enrollment on lands that are not eligible 
under the Conservation Reserve Program Flooded Farmland program, which 
allows enrollment of parcels under 20 contiguous acres in size.
    Section 1467.4(e)(6) restructures language previously under Sec.  
1467.4(d)(3)(iii) through (vi) regarding eligibility of lands adjacent 
to land eligible under Sec.  1467.4(e)(3). The change results in 
increased cohesiveness in the description of eligible lands and more 
clearly comports with statutory intent by rewording the existing 
language. Land identified in this paragraph may include types of land 
that could be considered eligible under Sec.  1467.4(e)(3). For 
example, paragraph (e)(6) identifies restored wetlands as eligible 
adjacent lands. However, some restored wetlands that are not adjacent 
to eligible land may be identified as farmed wetlands and thus eligible 
under Sec.  1467.4(e)(3), while other restored wetlands may not have an 
agricultural history, and thus would only be eligible as adjacent 
eligible land under paragraph (e)(6). The identification of restored 
wetlands under paragraph (e)(6) is not intended to preclude the 
enrollment of restored agricultural wetlands under Sec.  1467.4(e)(3), 
but to facilitate the enrollment of restored adjacent non-agricultural 
wetlands if their enrollment furthers the functions and values of 
eligible agricultural wetlands.
    Section 1467.4(e)(7) is revised to clarify that eligible land must 
be configured with boundaries that allow for efficient management for 
the program purposes, as determined by NRCS, by changing the term 
``easement'' to ``program.''
    Section 1467.4(g)(3) is revised by clarifying that land held in 
trust for Indian Tribes, though owned by an agency of the United 
States, is not ineligible. Section 1467.4(g)(4) adds language 
incorporating the statutory change that lands owned by State and local 
units of government are not eligible for WRP. Section 1467.4(g)(5) also 
revises the language describing when an existing deed restriction 
causes land to be ineligible for participation to provide more 
administrative flexibility to determine whether wetland functions and 
values are adequately protected by such restrictions. When existing 
restrictions provide adequate wetland protection benefits, WRP 
enrollment is superfluous and unnecessary. In Section 1467.4(g)(6) NRCS 
provides examples of the types of lands where implementation of 
restoration practices would be undermined due to on-site or off-site 
conditions.

Section 1467.5 Application Procedures

    The requirement that applications must be submitted during an 
announced period for such submissions is removed from Sec.  1467.5(a), 
because NRCS provides for continuous enrollment in WRP.
    In Sec.  1467.5(b) the term ``Department'' is replaced with 
``NRCS.''
    NRCS has removed paragraph (c) since the criteria about reduced 
easement cost as a ranking factor is addressed in revisions made to 
Sec.  1467.6.

Section 1467.6 Establishing Priority for Enrollment of Properties in 
WRP

    Section 1467.6(a) is removed to eliminate duplicative language 
related to enrollment priorities from this regulation. Section 
1467.6(b) is re-designated as Sec.  1467.6(a) and clarifies that the 
same ranking considerations apply to all enrollment options. Language 
is added to reflect additional ranking considerations added to the WRP 
statute by the 2008 Act. Section 1467.6 now reflects the priorities 
identified in the WRP statute, including: The conservation benefits of 
obtaining an easement, or other interest in the land; the cost 
effectiveness of each easement or other interest in eligible land, so 
as to maximize the environmental benefits per dollar expended; whether 
the landowner or another person is offering to contribute financially 
to the cost of the easement or other interest in the land to leverage 
Federal funds; the extent to which the purposes of the easement program 
would be achieved on the land; the productivity of the land; and the 
on-

[[Page 2325]]

farm and off-farm environmental threats if the land is used for the 
production of agricultural commodities.
    Section 1467.6(b) is added to reflect existing statutory language 
that, in consideration of the costs and future agricultural food needs, 
gives priority to permanent easements over shorter-term easements, and 
acquiring easements based on habitat value for migratory birds and 
other wildlife, to the extent practicable. The language was added 
because it had not been previously clearly addressed in the regulation.
    Section 1467.6(c) is revised to include consultation with the State 
Technical Committee when placing higher priority on specific geographic 
areas. This change is intended to incorporate State, local, and non-
governmental organization input when designating a priority area.
    Section 1467.6(d) is revised to remove reference to enrolling 
eligible lands at any time to achieve the program objectives. WRP 
operates on a continuous enrollment basis so this language is 
unnecessary. This paragraph is also revised to clarify that eligible 
land may be excluded from enrollment if the adjacent land is needed for 
successful restoration of the property and the adjacent landowner, 
though willing to participate, is ineligible to participate.
    Section 1467.6(e) is added to provide guidelines for the Prairie 
Pothole Region Assessment and Reallocation as required by the statute. 
These guidelines and the rationale for the changes are included in the 
description of the changes to Sec.  1467.4(e)(5).

Section 1467.7 Enrollment Process

    Section 1467.7 is revised to include changes to the NRCS business 
process as a result of experience gained in operating the WRP. These 
revisions require steps related to land valuation, preliminary title 
work, and all appropriate inquiries and record searches to be completed 
prior to the offer to the landowner. These steps had previously been 
performed after the obligation of NRCS funds and resulted in de-
obligation of funds when issues related to these steps could not be 
resolved. These revisions streamline program implementation and are 
intended to help reduce the number of applicants having to exit the 
enrollment process due to irresolvable issues, such as title issues and 
hazardous substance problems.
    In addition, Sec.  1467.7 is revised to confirm that land is 
enrolled in the program when the landowner and NRCS enter into an 
option agreement to purchase an easement, a 30-year contract, or a 
restoration cost-share agreement. Previously, when acreage enrollment 
goals were by calendar year and funding availability by fiscal year, 
land was enrolled in WRP when the landowner executed a notice of intent 
to continue in response to the NRCS offer of tentative acceptance into 
the program. The 2008 Act modified the acreage enrollment goals to be 
by fiscal year, and thus NRCS determined that it improved 
administrative consistency to have the time of enrollment to coincide 
when funds were obligated to a project through the execution of a 
program agreement.
    Section 1467.7(c) is revised to clarify that the option agreement 
to purchase, which becomes the contract for sale when signed by NRCS, 
stipulates the NRCS and landowner obligations and responsibilities, 
particularly regarding restoration and future sales. This is necessary, 
in part, to describe NRCS and landowner responsibilities if the land is 
sold to a party who is unwilling to assume restoration or is ineligible 
for NRCS cost-share assistance for restoration. The option agreement to 
purchase may also include payment schedules for easements valued at 
more than $500,000, consistent with the payment schedule for such 
easements authorized by the 2008 Act.
    Additionally, this section is expanded to incorporate additional 
material regarding enrollment through a 30-year contract or a 
restoration cost-share agreement. In particular, a participant accepts 
enrollment in the program by signing the 30-year contract or the 
restoration cost-share agreement.
    The existing Sec.  467.7(d) is revised and incorporated into the 
new Sec.  1467.7(c) described above.
    The existing Sec.  1467.7(e) is re-designated as Sec.  1467.7(d) 
and is revised to clarify under what conditions NRCS may withdraw an 
offer of enrollment. Sale of the land enrolled prior to easement 
closing or risk of hazardous substances are added as examples of such 
conditions.

Section 1467.8 Compensation for Easements and 30-Year Contracts

    The caption for Sec.  1467.8 is changed from ``Compensation for 
easements'' to ``Compensation for easements and 30-year contracts'' to 
reflect the addition by the 2008 Act of the 30-year contract enrollment 
option for acreage owned by Indian Tribes. The statute requires that 
compensation for 30-year contracts and 30-year easements be equivalent.
    Section 1467.8 is also revised to reflect the statutory easement 
compensation language in the 2008 Act, which became effective 
immediately upon enactment. In particular, the 2008 Act provided that 
NRCS shall pay as compensation the lowest of the following: (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) the landowner offer. The 
revisions to Sec.  1467.8 implement the new compensation methods, 
including the equivalence of 30-year contracts and 30-year easements, 
as required by statute. This section is also revised to clarify the 
process for setting and approving the geographic area rate cap. The 
actual method and data sources for determining a geographic rate cap 
have not changed from the existing regulation. The changes were made to 
require that the State Technical Committee provide advice on 
establishment of the caps, and that the caps for each state must be 
approved by the Chief. In this manner, NRCS may ensure nationwide 
consistency and equitable treatment of participants across State 
boundaries. Advice on establishment of the geographic rate cap is 
limited to the State Technical Committee to ensure consistency among 
states in developing fair compensation rates which will encourage 
participation while ensuring prudent investment of the public dollar. 
Payment schedule and payment limitations are revised to reflect the 
2008 Act. This section is also revised to address when a waiver to 
installment payments is allowed for easements that cost in excess of 
$500,000. NRCS will make a single payment when such payment will result 
in the restoration, protection, or enhancement of wetlands on eligible 
land, unless installment payments are requested by the landowner. 
Single payments facilitate the administrative efficiency of the 
program, especially in situations where the landowner must negotiate 
subordination of mortgages or other liens in order to provide clear 
title to the easement area.
    Section 1467.8(b) contains language related to the acceptance of 
easement compensation that previously existed at Sec.  1467.8(e). 
Additionally, this section is revised to incorporate the payment timing 
and method prescribed by statute.
    Section 1467.8(c), previously Sec.  1467.8(f), includes minor 
changes to provide clarity that reimbursement for surveys are for legal 
boundary surveys.
    Language in the existing regulation at Sec.  1467.8(h) regarding 
payment limitations is deleted and incorporated in new Sec.  
1467.10(a)(3).

[[Page 2326]]

    Remaining sections have been re-designated to accommodate the above 
section re-designations.

Section 1467.9 Wetlands Reserve Enhancement Program

    Section 1467.9, Cost-share Payments, is re-designated as Sec.  
1467.10. A new Sec.  1467.9 is added to incorporate provisions for 
implementing the new Wetlands Reserve Enhancement Program (WREP) 
created by the statute. WREP provides the authority to enter into 
agreements with States (or subdivisions), nongovernmental 
organizations, and Indian Tribes to advance the purposes of WRP. WREP 
will operate through an announcement of funding in the Federal 
Register. Proposals will be submitted to the appropriate State 
Conservationist for initial review, and recommended proposals will be 
provided to the Chief by the State Conservationists for nationwide 
ranking and final selection. NRCS believes that WREP will facilitate 
the identification of unique enrollment opportunities that are of 
regional or National significance, and thus beyond the normal purview 
of State-level selection processes. However, selected proposals and 
associated funding will be provided through the applicable State 
Conservationists in order to enter into the WREP agreement with the 
eligible partner.
    Section 1467.9(b) includes language for implementing a reserved 
rights pilot authorized by the statute. Participants in the reserved 
rights pilot are subject to the general eligibility and program 
administration requirements established for this part. Under the 
reserved rights pilot, landowners who wish to reserve grazing rights in 
the grazing rights pilot deed or 30-year contract must comply with a 
WRPO which includes the location, timing, intensity, frequency, and 
duration of grazing. The Managers Report language states that 
activities occurring under a reserved rights easement or 30-year 
contract shall be covered by a conservation plan that is developed and 
approved by NRCS. NRCS intends to compile, evaluate, and make available 
information acquired through its monitoring of projects enrolled 
through WREP in general, and the reserved rights pilot specifically, to 
ascertain the benefits gained through these programmatic options.
    The Managers Report also states that NRCS should explore different 
types of warranty easement deeds consistent with the purposes of the 
program, which will allow landowners to retain the right to use the 
land for grazing purposes. The reserved rights pilot will use template 
deeds and 30-year contracts, which will be made public concurrent with 
the announcement of availability of the pilot.
    Section 1467.9(b)(4) on compensation describes that the value of 
retained grazing rights will be considered in establishing 
compensation. The value of the retained grazing rights, set by either a 
Uniform Standards for Professional Appraisal Practices (USPAP) 
appraisal or a market survey, is subtracted from the fair market value 
of the land; in setting geographic area rate caps, a value for grazing 
rights must be subtracted from the established geographic rate cap for 
the area.

Section 1467.10 Cost-Share Payments

    As mentioned above, Sec.  1467.9 ``Cost-share payments'' is re-
designated as Sec.  1467.10 and