Farm and Ranch Lands Protection Program, 4027-4046 [2011-1212]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation

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



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

[[Page 4027]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1491

RIN 0578-AA46


Farm and Ranch Lands Protection Program

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

ACTION: Final rule with request for public comments.

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

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

ADDRESSES: Address all comments regarding Sec.  1491.4(d) through (f) 
using any of the following methods:
    Mail: Mark Rose, Farm and Ranch Lands Protection Program Manager, 
Easement Programs Division, Department of Agriculture, Natural 
Resources Conservation Service, Post Office Box 2890, Washington, DC 
20013; Fax: (202) 720-9689; e-mail: mark.rose@wdc.usda.gov.
    Hand delivery: Department of Agriculture, Natural Resources 
Conservation Service, 1400 Independence Avenue, SW., Room 6819 South 
Building, Washington, DC 20250 between 9 a.m. and 4 p.m., Monday 
through Friday, except Federal holidays. Please ask the guard at the 
entrance to the South Building to call (202) 720-1854 in order to be 
escorted into the building.

FOR FURTHER INFORMATION CONTACT: Mark Rose, Program Manager, Farm and 
Ranch Lands Protection Program, Easement Programs Division, Department 
of Agriculture, Natural Resources Conservation Service, 1400 
Independence Avenue, SW., Room 6819 South Building, Washington, DC 
20250; Telephone: (202) 720-9476; Fax: (202) 720-9689; or E-mail: 
mark.rose@wdc.usda.gov.
    Persons with disabilities who require alternative means for 
communicating (Braille, large print, audiotape, etc.) should contact 
the USDA Target Center at (202) 720-2600 (voice and TDD).

SUPPLEMENTARY INFORMATION:

Regulatory Certifications

Executive Order 12866

    Pursuant to Executive Order 12866, this final rule with request for 
comment has been determined to be a significant regulatory action. The 
administrative record is available for public inspection at the 
Department of Agriculture, Natural Resources Conservation Service, 1400 
Independence Avenue, SW., Room 6819 South Building, Washington, DC. In 
accordance with Executive Order 12866, NRCS conducted an economic 
analysis of the potential impacts associated with this program. A 
summary of the economic analysis can be found at the end of the 
regulatory certifications of the preamble, and a copy of the analysis 
is available upon request from Mark Rose, Program Manager, Farm and 
Ranch Lands Protection Program, Easement Programs Division, Department 
of Agriculture, Natural Resources Conservation Service, 1400 
Independence Avenue, SW., Room 6819 South Building, Washington, DC 
20250.

Regulatory Flexibility Act

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

Environmental Analysis

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

Civil Rights Impact Analysis

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

[[Page 4028]]

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

Paperwork Reduction Act

    Section 2904 of the Food, Conservation, and Energy Act of 2008 
(2008 Act) requires that the implementation of programs authorized 
under Title II of the Act be made without regard to the Paperwork 
Reduction Act of 1995 (Title 44 U.S.C. 3501 et seq.). Therefore, NRCS 
is not reporting recordkeeping or estimated paperwork burden associated 
with this final rule.

Government Paperwork Elimination Act

    NRCS is committed to compliance with the Government Paperwork 
Elimination Act and the Freedom to E-File Act, which requires 
government agencies, in general, to provide the public the option of 
submitting information or transacting business electronically to the 
maximum extent possible. To better accommodate public access, NRCS has 
developed an online application and information system for public use.

Executive Order 12988

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

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

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

Unfunded Mandates Reform Act of 1995

    NRCS assessed the effects of this final rule on State, local, and 
Tribal governments, and the public. This action does not compel the 
expenditure of $100 million or more in any one year (adjusted by 
inflation) by any State, local, or Tribal governments, or anyone in the 
private sector; therefore, a statement under section 202 of the 
Unfunded Mandates Reform Act of 1995 is not required.

Executive Order 13132

    This final rule has been reviewed in accordance with the 
requirements of Executive Order 13132, Federalism. USDA has determined 
that this final rule conforms with the Federalism principles set forth 
in the Executive Order; would not impose any compliance costs on the 
States; and would not have substantial direct effects on the States, on 
the relationship between the Federal Government and the States, or on 
the distribution of power and responsibilities on the various levels of 
government. Therefore, USDA concludes that this final rule does not 
have Federalism implications.

Executive Order 13175

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

Small Business Regulatory Enforcement Fairness Act of 1996

    Section 2904(c) of the 2008 Act requires that the Secretary use the 
authority in section 808(2) of Title 5, U.S.C., which allows an agency 
to forgo the Small Business Regulatory Enforcement Fairness Act of 1996 
usual 60-day congressional review delay of the effective date of a 
regulation if the agency finds that there is a good cause to do so. 
NRCS hereby determines that it has good cause to do so in order to meet 
the congressional intent to have the conservation programs authorized 
or amended by Title II of the 2008 Act in effect as soon as possible. 
Accordingly, this rule is effective January 24, 2011.

Section 2708 of the 2008 Act

    Section 2708, Compliance and Performance, added a paragraph to 
section 1244(g) of the Food Security Act of 1985 (1985 Act) entitled, 
Administrative Requirements for Conservation Programs, which states the 
following:
    ``(g) Compliance and performance.--For each conservation program 
under Subtitle D, the Secretary will develop procedures--
    (1) To monitor compliance with program requirements;
    (2) To measure program performance;
    (3) To demonstrate whether long-term conservation benefits of the 
program are being achieved;
    (4) To track participation by crop and livestock type; and
    (5) To coordinate activities described in this subsection with the 
national conservation program authorized under section 5 of the Soil 
and Water Resources Conservation Act of 1977 (16 U.S.C. 2004).''
    This new provision presents in one place the accountability 
requirements placed on the agency as it implements conservation 
programs and reports on program results. The requirements apply to all 
programs under Subtitle D, including the Wetlands Reserve Program, the 
Conservation Security Program, the Conservation Stewardship Program, 
the FRPP, the Grassland Reserve Program, the Environmental Quality 
Incentives Program (EQIP) (including the Agricultural Water Enhancement 
Program), the Wildlife Habitat Incentive Program, and the Chesapeake 
Bay Watershed initiative. These requirements are not directly 
incorporated into these regulations, which set out requirements for 
program participants. However, certain provisions within these 
regulations relate to elements of section 1244(g) of the 1985 Act and 
the agency's accountability responsibilities regarding program 
performance. The existing procedures described below relate to meeting 
the requirements of section 1244(g) of the 1985 Act and agency 
expectations for improving its ability to report on each program's 
performance and achievement of long-term conservation benefits. Also 
included is reference to the sections of these regulations that apply 
to program

[[Page 4029]]

participants and that relate to the agency accountability requirements 
as outlined in section 1244(g) of the 1985 Act.
    Monitor compliance with program requirements. NRCS has established 
application procedures to ensure that participants meet eligibility 
requirements and follow-up procedures to ensure that participants are 
complying with the terms and conditions of their contractual 
arrangement with the government, and that the installed conservation 
measures are operating as intended. These and related program 
compliance evaluation policies are set forth in agency guidance 
(Conservation Programs Manual--440--Part 512 and Conservation Programs 
Manual --440--Part 508) (https://directives.sc.egov.usda.gov/). The 
program requirements applicable to FRPP participants that relate to 
compliance are set forth in these regulations in Sec.  1491.4 Program 
requirements, Sec.  1491.20 Cooperative agreements, and Sec.  1491.22 
Conservation easement deeds. These sections make clear the general 
program eligibility requirements, obligations related to easements, and 
requirements for operating and maintaining FRPP-funded activities.
    Measure program performance. Pursuant to the requirements of the 
Government Performance and Results Act of 1993 (Pub. L. 103-62, Sec. 
1116) and guidance provided by the Office of Management and Budget 
(OMB) Circular A-11, NRCS has established performance measures for its 
conservation programs. Program-funded conservation activity is captured 
through automated field-level business tools and the information is 
made publicly available at https://ias.sc.egov.usda.gov/PRSHOME/. 
Program performance also is reported annually to Congress and the 
public through the annual performance budget, annual accomplishments 
report, and the USDA Performance Accountability Report. Related 
performance measurement and reporting policies are set forth in agency 
guidance (GM--340--401 and GM--340--403) (https://directives.sc.egov.usda.gov/)).
    The conservation actions undertaken by participating entities are 
the basis for measuring program performance--specific actions are 
tracked and reported annually, while the effects of those actions 
relate to whether the long-term benefits of the program are being 
achieved. The program requirements applicable to participants that 
relate to undertaking conservation actions are set forth in these 
regulations in Sec.  1491.20 Cooperative agreements and Sec.  1470.22 
Conservation easement deeds. These sections make clear participating 
entity obligations for acquiring easements and conservation stewardship 
activities, which in aggregate result in the program performance that 
is reflected in agency performance reports.
    Demonstrating the long-term natural resource benefits achieved 
through conservation programs is subject to the availability of needed 
data, the capacity and capability of modeling approaches, and the 
external influences that affect actual natural resource conditions. 
While NRCS captures many measures of output data, such as acres of 
conservation practices, it is still in the process of developing 
methods to quantify the contribution of those outputs to environmental 
outcomes.
    NRCS currently uses a mix of approaches to evaluate whether long-
term conservation benefits are being achieved through its programs. 
Since 1982, NRCS has reported on certain natural resource status and 
trends through the National Resources Inventory (NRI), which provides 
statistically reliable, nationally consistent land cover/use and 
related natural resource data. However, lacking has been a connection 
between these data and specific conservation programs.\1\ In the 
future, the interagency Conservation Effects Assessment Project (CEAP), 
which has been underway since 2003, will provide nationally consistent 
estimates of environmental effects resulting from conservation 
practices and systems applied. CEAP results will be used in conjunction 
with performance data gathered through agency field-level business 
tools to help produce estimates of environmental effects accomplished 
through agency programs, such as the Conservation Stewardship Program. 
In 2006, a Blue Ribbon panel evaluation of CEAP \2\ strongly endorsed 
the project's purpose, but concluded ``CEAP must change direction'' to 
achieve its purposes. In response, CEAP has focused on priorities 
identified by the panel and clarified that its purpose is to quantify 
the effects of conservation practices applied on the landscape. 
Information regarding CEAP, including reviews and current status is 
available at (https://www.nrcs.usda.gov/technical/NRI/ceap/ NRI/ceap/. Since 2004 
and the initial establishment of long-term performance measures by 
program, NRCS has been estimating and reporting progress toward long-
term program goals. Natural resource inventory and assessment and 
performance measurement and reporting policies are set forth in agency 
guidance (GM--290--400; GM--340--401; and GM--340--403) (https://directives.sc.egov.usda.gov/).
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    \1\ The exception to this is the Conservation Reserve Program 
(CRP); since 1987 the NRI has reported acreage enrolled in CRP.
    \2\ Soil and Water Conservation Society. 2006. Final report from 
the Blue Ribbon Panel Conducting an External Review of the U.S. 
Department of Agriculture Conservation Effects Assessment Project. 
Ankeny, IA: Soil and Water Conservation Society. This review is 
available at https://www.nrcs.usda.gov/technical/NRI/ceap/.
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    Demonstrating the long-term conservation benefits of conservation 
programs is an agency responsibility. Through CEAP, NRCS is in the 
process of evaluating how these long-term benefits can be achieved 
through the conservation easements acquired through FRPP and 
conservation practices and systems applied by participants under each 
of its programs. The FRPP program requirements applicable to 
participants that relate to producing long-term conservation benefits 
are located in Sec.  1491.20 Cooperative agreements and Sec.  1491.22 
Conservation easement deed. These requirements and related program 
management procedures supporting program implementation are set forth 
in agency guidance (Conservation Programs Manual 440--Part 512 and 
Conservation Programs Manual --440--Part 508).

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

    The 2008 Act reauthorized and expanded on a number of elements of 
the Soil and Water Resources Conservation Act (RCA) related to 
evaluating program performance and conservation benefits. Specifically, 
the 2008 Act added a provision stating:
    ``Appraisal and inventory of resources, assessment and inventory of 
conservation needs, evaluation of the effects of conservation 
practices, and analyses of alternative approaches to existing 
conservation programs are basic to effective soil, water, and related 
natural resources conservation.''
    The program, performance, and natural resource and effects data 
described previously will serve as a foundation for the next RCA, which 
will also identify and fill, to the extent possible, data and 
information gaps. Policy and procedures related to the RCA are set 
forth in agency guidance (GM--290--400 and GM--130--402) (https://directives.sc.egov.usda.gov/).
    The coordination of the previously described components with the 
RCA is an agency responsibility and is not reflected in these 
regulations. However, it is likely that results from the RCA process 
will result in modifications to

[[Page 4030]]

the program and performance data collected, to the systems used to 
acquire data and information, and potentially to the program itself. As 
the Secretary proceeds to implement RCA in accordance with the statute, 
the approaches and processes developed will improve existing program 
performance measurement and outcome reporting capability and provide 
the foundation for improved implementation of the program performance 
requirements of section 1244(g) of the 1985 Act.

Economic Analysis--Executive Summary

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

Summary of Interim Final Rule Changes

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

[[Page 4031]]

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

Summary of Amendment to the Interim Final Rule

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

[[Page 4032]]

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

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

Responses to Comments and Changes to Regulation

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

[[Page 4033]]

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

[[Page 4034]]

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

[[Page 4035]]

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