Agricultural Conservation Easement Program, 11031-11065 [2015-03781]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation

[Federal Register Volume 80, Number 39 (Friday, February 27, 2015)]
[Rules and Regulations]
[Pages 11031-11065]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-03781]



[[Page 11031]]

Vol. 80

Friday,

No. 39

February 27, 2015

Part VI





Department of Agriculture





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





Commodity Credit Corporation





7 CFR Part 1468





Agricultural Conservation Easement Program; Interim Rule

Federal Register / Vol. 80 , No. 39 / Friday, February 27, 2015 / 
Rules and Regulations

[[Page 11032]]


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

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1468

RIN 0578-AA61
[Docket No. NRCS-2014-0011]


Agricultural Conservation Easement Program

AGENCY: Natural Resources Conservation Service (NRCS) and the Commodity 
Credit Corporation (CCC), United States Department of Agriculture 
(USDA).

ACTION: Interim rule with request for comments.

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

SUMMARY: The Agricultural Act of 2014 (the 2014 Act) consolidates the 
purposes of the Farm and Ranch Lands Protection Program (FRPP), 
Grassland Reserve Program (GRP), and Wetlands Reserve Program (WRP) 
into one easement program called the Agricultural Conservation Easement 
Program (ACEP). ACEP restores, protects, and enhances wetland on 
eligible land; protects the agricultural use, viability, and related 
conservation values of eligible land by limiting non-agricultural uses 
of that land; and protects grazing uses and related conservation values 
by restoring and conserving eligible land. This interim rule with 
request for comments sets forth the policies and procedures related to 
implementation of ACEP as authorized by the 2014 Act. Since the 
Conservation Farm Option (CFO) is a repealed program that was never 
implemented, NRCS is replacing the CFO regulations at 7 CFR part 1468 
with the regulations necessary to implement ACEP.

DATES: Effective date: The rule is effective February 27, 2015.
    Comment date: Submit comments on or before April 28, 2015. Comments 
will be made available to the public or posted publicly in their 
entirety.

ADDRESSES: You may submit comments by one of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments for Docket No. NRCS-
2014-0011.
     U.S. mail or hand delivery: Public Comments Processing, 
Attn: Docket No. NRCS-2014-0011, Regulatory and Agency Policy Team, 
Strategic Planning and Accountability, U.S. Department of Agriculture, 
Natural Resources Conservation Service, 5601 Sunnyside Avenue, Building 
1-1112D, Beltsville, MD 20705.
    NRCS will post all comments on https://www.regulations.gov. Personal 
information provided with comments will be posted. If your comment 
includes your address, phone number, email address, or other personal 
identifying information, please be aware that your entire comment, 
including this personal information, will be made publicly available. 
Do not include personal information with your comment submission if you 
do not wish for it to be made public. This interim 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 rules Index title 
under the heading ``2014 NRCS Farm Bill Conservation Program Rules.'' 
Select Agricultural Conservation Easement Program.

FOR FURTHER INFORMATION CONTACT: Kim Berns, 202-720-1882.
    Persons with disabilities who require alternative means for 
communication (Braille, large print, audio tape, etc.) should contact 
the USDA TARGET Center at: 202-720-2600 (voice and TDD).

SUPPLEMENTARY INFORMATION:

Regulatory Certifications

Executive Order 12866 and 13563

    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
directs agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasizes the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility. Upon implementation of 
this rule the Natural Resources Conservation Service intends to conduct 
a retrospective review of this rule with the purpose of improving 
program performance, and better understanding the longevity of 
conservation implementation.
    The Office of Management and Budget (OMB) designated this interim 
rule, with request for comment, 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 5831 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 this 
preamble, and a copy of the analysis is available upon request from Kim 
Berns, Director, Easement Programs Division, U.S. Department of 
Agriculture, Natural Resources Conservation Service, Post Office Box 
2890, Washington, DC 20013-2890; or at: https://www.nrcs.usda.gov/programs/acep/ under ACEP Rules and Notices with Supporting Documents.
    Executive Order 12866, as supplemented by Executive Order 13563, 
requires each agency to write all rules in plain language. In addition 
to your comments on this interim rule, we invite your comments on how 
to make the provisions easier to understand. For example:
     Are the requirements in the rule clearly stated? Are the 
scope and intent of the rule clear?
     Does the rule contain technical language or jargon that is 
not clear?
     Is the material logically organized?
     Would changing the grouping or order of sections or adding 
headings make the rule easier to understand?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     Would more, but shorter, sections be better? Are there 
specific sections that are too long or confusing?
     What else could we do to make the rule easier to 
understand?

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA) generally 
requires an agency to prepare a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements under the 
Administrative Procedure Act or any other statute. NRCS did not prepare 
a regulatory flexibility analysis for this rule because NRCS is not 
required by 5 U.S.C. 553, or any other provision of law, to publish a 
notice of proposed rulemaking with respect to the subject matter of 
this rule. Even so, NRCS has determined that this action, while mostly 
affecting small entities, will not have a significant economic impact 
on a substantial number of these small entities. NRCS made this 
determination based on the fact that this regulation only impacts those 
who choose to participate in the program. Small entity applicants will 
not be affected to a greater extent than large entity applicants.

[[Page 11033]]

Congressional Review Act

    Section 1246(c) of the Food Security Act of 1985 (the 1985 Act), as 
amended by Section 2608 of the Agricultural Act of 2014, requires that 
the Secretary of Agriculture use the authority in section 808(2) of 
title 5, United States Code, which allows an agency to forego 
Congressional Review Act 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 
do so in order to meet the Congressional intent to have the 
conservation programs, authorized or amended under Title XII of the 
1985 Act, in effect as soon as possible. NRCS also determined it has 
good cause to forgo delaying the effective date given the critical need 
to let agricultural producers know what programmatic changes are being 
made so that they can make financial plans accordingly prior to 
planting season. For these reasons, this rule is effective upon 
publication in the Federal Register.

Environmental Analysis

    A programmatic Environmental Assessment (EA) has been prepared in 
association with this rulemaking. The analysis has determined there 
will not be a significant impact to the human environment and as a 
result, an Environmental Impact Statement (EIS) is not required to be 
prepared (40 CFR 1508.13). The EA and Finding of No Significant Impact 
(FONSI) are available for review and comment for 30 days from the date 
of publication of this interim rule in the Federal Register. NRCS will 
consider this input and determine whether there is any new information 
provided that is relevant to environmental concerns and bearing on the 
proposed action or its impacts that warrant supplementing or revising 
the current available draft of the ACEP EA and FONSI.
    A copy of the EA and Finding of No Significant Impact (FONSI) may 
be obtained from the following Web site: https://www.nrcs.usda.gov/ea. A 
hard copy may also be requested in one of the following ways: (1) 
Email: andree.duvarney@wdc.usda.gov with ``Request for EA'' in the 
subject line; or (2) written request: National Environmental 
Coordinator, Natural Resources Conservation Service, Ecological 
Sciences Division, Post Office Box 2890, Washington, DC 20013-2890. 
Comments should be specific and indicate that comments provided are on 
the EA and FONSI. Public comment on the environmental analysis only may 
be submitted by any of the following means: (1) Email comments to 
andree.duvarney@wdc.usda.gov, (2) go to https://www.regulations.gov and 
follow the instructions for submitting comments for Docket No. NRCS-
2014-0011, or (3) mail written comments to: National Environmental 
Coordinator, Natural Resources Conservation Service, Ecological 
Sciences Division, Room 6159-S, P.O. Box 2890, Washington, DC 20013-
2890.

Civil Rights Impact Analysis

    USDA has determined through a Civil Rights Impact Analysis that 
this interim rule discloses no disproportionately adverse impacts for 
minorities, women, or persons with disabilities. The data presented in 
the Civil Rights Impact Analysis indicate producers who are members of 
the protected groups have participated in NRCS conservation programs at 
parity with other producers. Extrapolating from historical 
participation data, it is reasonable to conclude that ACEP will be 
administered in a nondiscriminatory manner as the predecessor programs 
have been. Outreach and communication strategies are in place to ensure 
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 U.S. Department of Agriculture 
(USDA) programs. NRCS conservation programs apply to all persons 
equally regardless of their race, color, national origin, gender, sex, 
or disability status. Therefore, this interim rule portends no adverse 
civil rights implications for women, minorities, and persons with 
disabilities. Copies of the Civil Rights Impact Analysis are available, 
and may be obtained from Kim Berns, Director, Easement Programs 
Division, U.S. Department of Agriculture, Natural Resources 
Conservation Service, Post Office Box 2890, Washington, DC 20013-2890, 
or electronically at: https://www.nrcs.usda.gov/programs/ACEP.

Paperwork Reduction Act

    Section 1246 of the Food Security Act of 1985 (the 1985 Act) as 
amended by the Agricultural Act of 2014 (the 2014 Act) requires that 
the implementation of this provision be carried out without regard to 
the Paperwork Reduction Act, chapter 35 of Title 44, U.S.C. Therefore, 
NRCS is not reporting recordkeeping or estimated paperwork burden 
associated with this interim 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, to provide the public the option of submitting 
information or transacting business electronically to the maximum 
extent possible.

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

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995, 
Public Law 104-4, USDA assessed the effects of this interim 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 of 1995 
is not required.

Executive Order 13132

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

Executive Order 13175

    This interim rule has been reviewed in accordance with the 
requirements of Executive Order 13175, Consultation and Coordination 
with Indian Tribal Governments. Executive Order 13175 required Federal 
agencies to consult and coordinate with Tribes on a government-to-
government basis on policies that have Tribal implications, including 
regulations, legislative comments or proposed legislation, and other 
policy statements or actions that have been substantial direct effects 
on (1) one or more Indian Tribes, (2) the

[[Page 11034]]

Relationship between the Federal Government and Indian Tribes, or (3) 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. NRCS has assessed the impact of this 
interim rule on Indian Tribes and determined that this rule does not 
have Tribal implication that requires Tribal consultation under EO 
13175. The rule neither imposes substantial direct compliance costs on 
Tribal governments nor preempts Tribal law. The agency has developed an 
outreach/collaboration plan that it will implement as it develops its 
Farm Bill policy. If a Tribe requests consultation, NRCS will work with 
the Office of Tribal Relations to ensure meaningful consultation is 
provided where changes, additions, and modifications identified herein 
are not expressly mandated by Congress.

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

    OMB published two regulations, codified at 2 CFR part 25 and 2 CFR 
part 170, to assist agencies and recipients of Federal financial 
assistance in complying with the Federal Funding Accountability and 
Transparency Act of 2006 (FFATA) (Pub. L. 109-282, as amended). Both 
regulations have implementation requirements effective as of 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 System Award Management (SAM). The regulations at 2 CFR 
part 170 establish new requirements for Federal financial assistance 
applicants, recipients, and subrecipients. 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 subawards and executive compensation under those 
awards.
    NRCS has determined that 2 CFR part 25 and 2 CFR part 170 applies 
to ACEP financial assistance provided to entities. Therefore, NRCS has 
incorporated, by reference, these registration and reporting 
requirements into the ACEP regulations and will continue to include the 
requisite provisions as part of assistance agreements.

Background

    The Agricultural Conservation Easement Program (ACEP) is a 
voluntary program to help farmers and ranchers preserve their 
agricultural land and restore, protect, and enhance wetlands on 
eligible lands. The program has two easement enrollment components: (1) 
Agricultural land easements; and (2) wetland reserve easements. Under 
the agricultural land easement component, NRCS provides matching funds 
to State, Tribal, and local governments, and nongovernmental 
organizations with farm and ranch land protection programs to purchase 
permanent agricultural land easements. Under the wetland reserve 
easement component, NRCS protects wetlands by purchasing directly from 
owners a reserved interest in eligible land or entering into 30-year 
contracts on acreage owned by Indian Tribes, in each case providing for 
the restoration, enhancement, and protection of wetlands and associated 
lands. Wetland reserve easements may be permanent, 30-years, or the 
maximum duration authorized by State law.
    The 2014 Act kept much of the substance of the statutory provisions 
that originally existed for the Wetlands Reserve Program (WRP) and Farm 
and Ranch Lands Protection Program (FRPP), with land eligibility 
elements from the Grassland Reserve Program (GRP) incorporated. In 
particular, ACEP as authorized by the 2014 Act:
     Consolidates FRPP, GRP, and WRP easement options into one 
program, and repeals these three programs; and
     Incorporates elements of FRPP and GRP into the 
agricultural land easement component of ACEP, and elements of WRP into 
the wetland reserve easement component of ACEP.
    ACEP provisions are organized by those provisions that affect the 
entire program, provisions that affect only the Agricultural Land 
Easement component, and provisions that affect only the Wetlands 
Reserve Easement component. Provisions that affect the entire program 
include:
     Identification of the following lands as ineligible--
    [cir] Federal lands except lands held in trust for Indian Tribes.
    [cir] State-owned lands, including lands owned by agencies or 
subdivisions of the State or unit of local government.
    [cir] Land subject to an existing easement or deed restriction that 
provides similar protection that would be achieved by enrollment.
    [cir] Lands that have onsite or offsite conditions which would 
undermine meeting the purposes of the program.
     Authorization for easement subordination, modification, 
exchange, termination of easements under specific criteria.
     Identification that lands enrolled in FRPP, GRP, and WRP 
are considered enrolled in ACEP.
     Transition of contracts, agreements, and easements entered 
into prior to October 1, 2013, creating a pool of funds from each of 
the original programs to address existing enrollments, to remain 
available until expended.
    Provisions that affect only the Agricultural Land Easement 
Component include:
     Limiting the Federal share of the easement cost for 
projects that are not grasslands of special environmental significance 
to not exceed 50 percent of the fair market value of the agricultural 
land easement, while requiring the non-Federal share to be at least 
equivalent to the Federal share, with an eligible entity contributing 
at least 50 percent of the Federal share with its own cash resources. 
Eligible entities may include Indian Tribes, State governments, local 
governments, or nongovernmental organizations which have farmland or 
grassland protection programs that purchase agricultural land 
easements.
     Protecting grasslands of special environmental 
significance by authorizing NRCS to pay up to 75 percent of the fair 
market value of the agricultural land easement for the enrollment of 
such grasslands.
     Providing flexibility for projects of special significance 
by authorizing NRCS to waive the eligible entity cash contribution 
requirement with no increase in Federal share where the landowner 
voluntarily increases the landowner contribution commensurate to the 
amount of the waiver and the property is in active agricultural 
production.
     Maintaining a certification process for eligible entities.
     Prohibiting the assigning of a higher priority to an 
application solely on the basis of lesser cost to the program.
     Requiring all easements to be subject to an agricultural 
land easement plan.
    Provisions that affect only the Wetland Reserve Easement Component 
include:
     Maintaining most elements of WRP eligibility and 
administrative framework.
     Authorizing a waiver process to allow enrollment of 
Conservation Reserve Program (CRP) lands established to trees.
     Allowing ranking criteria to consider the extent to which 
a landowner or other person or entity leverages the Federal investment.
     Reducing length of ownership requirement prior to 
enrollment from 7 years to 24 months.

[[Page 11035]]

     Keeping WRP easement compensation framework for wetland 
reserve easements.
    The enrollment options under ACEP differ slightly from the source 
programs because ACEP does not incorporate GRP rental agreements or the 
authority for the Secretary of Agriculture to directly purchase and 
hold grassland easements; requires a State or other entity to provide 
50 percent of the WRE-easement cost for lands meeting the closed basin 
lake WRE eligibility criteria; and eliminates the stand-alone wetland 
Restoration Cost-Share Agreements without an associated easement.
    With these slight differences acknowledged, NRCS is incorporating 
the substance of many of the regulatory provisions of FRPP and WRP 
originally promulgated at 7 CFR part 1491 and 7 CFR part 1467, 
respectively in this regulation. However, ACEP is a consolidated 
program, and therefore, NRCS has organized these provisions into three 
subparts. Subpart A contains provisions that apply to both agricultural 
land easements and to wetland reserve easements and 30-year contracts; 
subpart B contains provisions specific to the implementation of 
agricultural land easements; and subpart C contains provisions specific 
to the implementation of wetland reserve easements and 30-year 
contracts. These subparts, and their constituent provisions, are 
described more fully below, including a discussion about how NRCS will 
exercise provisions that are new or different from the predecessor 
programs.

Subpart A--General Provisions

Sec.  1468.1 Applicability

    This section sets forth the requirements, policies, and procedures 
for ACEP; identifies that ACEP is available in all 50 States, District 
of Columbia, and certain territories; describes how the remainder of 
the regulation is organized; and addresses stewardship responsibilities 
associated with existing easements.

Sec.  1468.2 Administration

    This section identifies that ACEP is administered under the general 
supervision and direction of the NRCS Chief, who is a Vice President of 
the Commodity Credit Corporation (CCC), and sets forth the roles and 
responsibilities of NRCS staff and other agencies that assist with ACEP 
implementation.

Sec.  1468.3 Definitions

    The purpose of the definitions section set forth at Sec.  1468.3 is 
to ensure consistent interpretation of the terms used throughout the 
regulation. These definitions are the same definitions that were used 
to implement FRPP or WRP with adjustments made, where needed, to 
further the purposes of ACEP as authorized by the 2014 Act.
    The definitions of ``30-year contract'' and ``Acreage Owned by 
Indian Tribes'' are the same definitions that were used in WRP and are 
included to implement the 30-year contract enrollment option under 
subpart C.
    The definition of ``Access'' is included to clarify what 
constitutes sufficient legal access to ensure that the purposes of the 
program can be achieved and federal investment in the easement can be 
enforced for the duration of the easement. This definition allows NRCS 
to provide additional flexibility under ALE than is available for the 
Federally-held easements under WRE. NRCS welcomes public comment on 
whether NRCS should adopt this greater flexibility for eligible 
entities on what constitutes sufficient access for ALE easements and 
what specific conditions should be considered sufficient access under 
ALE to ensure the federal investment is protected?
    The definition of ``Active agricultural production'' is included to 
establish the parameters of the requirement that the land be in active 
agricultural production to qualify as a project of special significance 
under subpart B of this part.
    The definition of ``Agreement'' is included to identify any 
document that specifies the rights of NRCS and a person or legal entity 
participating in ACEP. This term formerly was only defined in WRP.
    The definition of ``Agreement to purchase'' is included to identify 
the document that NRCS uses to obligate funding for the acquisition of 
a wetland reserve easement and proceed with easement acquisition 
activities.
    The definition of ``Agricultural commodity'' is included since it 
is part of the statutory and regulatory definition of ``legal entity.''
    The definition of ``Agriculture uses'' uses a more universal term 
of ``farm or ranch land protection program'' than was used under FRPP 
to ensure that programs that have the principal purpose of protecting 
grasslands or grazing uses are included. NRCS will refer to the State 
definition of agricultural use found in either its farm and ranch land 
protection program or tax assessment authority, but reserves the right 
to impose deed restrictions to comply with Federal law or to protect 
soil or related natural resources. For example, some States have 
identified that sod farming or turf operations are an agricultural use 
despite such activities representing an unsustainable mining of 
valuable topsoil resources, and therefore, NRCS reserves its right to 
require that such activities be prohibited in the terms of an 
Agriculture Land Easement (ALE) funded with ACEP funds.
    The definition of ``Agricultural Land Easement'' is included to 
identify the type of conservation easement that is funded pursuant to 
the policies and procedures under subpart B.
    The definition of ``Agricultural Land Easement Plan'' is included 
to identify the document that NRCS will use to meet the requirements of 
section 1265B(b)(4)(C)(iv) of the 1985 Act, which requires land 
enrolled under subpart B to be subject to an agricultural land easement 
plan. All ACEP-Agricultural Land Easement (ALE) enrollments must have 
an agricultural land easement plan and may also incorporate by 
reference any required component plans needed to address particular 
land types or resource issues on the enrolled parcel, such as a 
grasslands management plan on grassland, a forest management plan for 
certain forest land, or a conservation plan for highly erodible 
cropland. The agricultural land easement plan and any associated 
component plans are collectively referred to as the agricultural land 
easement plan. The agricultural land easement plan must promote the 
long-term viability of the land to meet the purposes for which the 
easement was acquired. The eligible entity is responsible for the 
development of an agricultural land easement plan, though NRCS may 
provide technical assistance in the development of the agricultural 
land easement plan or any of the component plans. The eligible entity 
is responsible to annually monitor compliance and provide NRCS an 
annual monitoring report that documents that the landowner and eligible 
entity are in compliance with the terms of easement deeds, including 
the agricultural land easement plan.
    The definition of ``Beginning farmer or rancher'' is included to 
meet program outreach purposes and is consistent with how the term is 
identified in USDA programs.
    The term ``Certified entities'' is added to meet the statutory 
requirement providing for an eligible entity certification process. 
Certification of ``eligible entities'' is discussed in the description 
of Sec.  1468.27.
    The term ``Chief'' existed in both FRPP and WRP, and is the 
official who

[[Page 11036]]

has been delegated administrative responsibility for ACEP by the 
Secretary of Agriculture.
    The terms for ``Commenced conversion wetland,'' ``Converted 
wetland,'' ``Lands substantially altered by flooding,'' ``Riparian 
areas,'' ``Wetlands,'' and ``Wetland functions and values'' were 
defined terms under WRP and are incorporated in this rulemaking as 
applicable to the land eligibility requirements for enrollment of 
wetland reserve easements and 30-year contracts under subpart C.
    The definition of ``Commodity Credit Corporation'' is included 
since ACEP is funded through CCC and since the Chief serves as a Vice-
President of the CCC.
    The definition of ``Compatible use'' is included to describe the 
mechanism through which NRCS may authorize the implementation of 
activities that NRCS determines are consistent with the long-term 
purposes of a wetland reserve easement.
    The definition of ``Conservation plan'' is included since section 
1265B(b)(4)(C)(iv)(III) requires that highly erodible cropland enrolled 
in an agricultural land easement must be subject to a conservation plan 
developed pursuant to the requirements under 7 CFR part 12.
    The definition of ``Conservation practice'' is included since NRCS 
may provide technical assistance for the development of agricultural 
land easement plans for lands enrolled in ACEP-ALE and will provide 
technical and financial assistance for the planning and implementation 
of conservation practices on lands enrolled in ACEP-Wetland Reserve 
Easement (WRE).
    The definition of ``Conservation Reserve Program'' is included 
since lands enrolled in CRP are eligible for enrollment in ACEP, with 
priority provided for enrollment in ACEP-ALE of grasslands leaving CRP 
and for enrollment in the ACEP-WRE of high value wetlands that are 
likely to return to production upon leaving CRP.
    The term ``Cooperative agreement'' is included to define the 
document that specifies the obligations and rights of NRCS and the 
eligible entities related to the purchase of an agricultural land 
easement under subpart B.
    The term ``Cost-share payment'' is added to refer to a payment for 
program implementation that NRCS provides to an eligible entity related 
to the purchase of an agricultural land easement under subpart B.
    The term ``Dedicated fund'' is added and describes an account that 
can only be used for the purposes of management, monitoring, and 
enforcement of agricultural land easements. This requirement applies to 
nongovernmental organizations who seek to become ``certified entities'' 
under subpart B and serves as evidence of their capacity to ensure the 
long-term protection of easements.
    Definitions for ``Easement exchange,'' ``Easement modification,'' 
``Easement subordination,'' and ``Easement termination'' have been 
added to address the various ways that NRCS may address the long-term 
management and administration of the easements rights it has in lands 
enrolled in ACEP.
    The definition of ``Easement payment'' is included to identify the 
payment that is made by NRCS to a landowner under ACEP-WRE.
    The definition of ``Easement restoration agreement'' is included to 
encompass any of the legal arrangements NRCS may enter into to effect 
the restoration of any area enrolled in ACEP-WRE under subpart C. 
Section 1265C(d) identifies that NRCS may ``enter into one or more 
contracts with private entities or agreements with a State, 
nongovernmental organization, or Indian Tribe to carry out necessary 
restoration, enhancement or maintenance of a wetland reserve easement 
if the Secretary of Agriculture determines that the contract or 
agreement will advance the purposes of the program.''
    The definition of ``Eligible activity'' is included to address 
actions that may be included in a Wetland Reserve Plan of Operation 
(WRPO) to further the wetland functions and values of lands enrolled 
under subpart C. The former WRP rule referred to this plan as the 
Wetlands Restoration Plan of Operations.
    The definition of ``Eligible entity'' is included to identify the 
entities who are eligible to receive assistance under ACEP-ALE as 
described in subpart B.
    The definition of ``Eligible land'' is included to identify lands 
that are eligible for assistance under ACEP as specified in subparts B 
and C.
    The definition of ``Fair market value'' is included to refer to the 
basis upon which NRCS will base its cost-share payment to an eligible 
entity under ACEP-ALE and its easement payment under ACEP-WRE.
    The definition of ``Farm and ranch land of statewide importance'' 
is included to provide greater specificity to the existing umbrella 
term ``other productive soils.'' This definition is the technical 
definition of this land type which is subsumed in the general term 
``other productive soils.''
    The definition of ``Farm and ranch land of local importance'' is 
added for the same reason discussed above under ``Farm and ranch land 
of statewide importance.''
    The definition of ``Farm or ranch succession plan'' is included to 
assist with identification of parcels that may receive priority 
consideration since the landowners had taken action to ensure the long-
term viability of the agricultural use of the parcel.
    The definition of ``Farm Service Agency (FSA)'' is included since 
NRCS coordinates with FSA on many program matters, including land and 
landowner eligibility criteria.
    The definition of ``Field Office Technical Guide (FOTG)'' is 
included to provide consistency with the way the term is defined in 
other NRCS program regulations.
    The definition of ``Fish and Wildlife Service (FWS)'' is included 
since NRCS coordinates with Department of the Interior's Fish and 
Wildlife Service at the local level on several matters related to 
wetland reserve easements and contracts with Indian Tribes.
    The definition of ``Forest land'' is included since it is 
identified as land category eligible for enrollment in ACEP-ALE.
    The term ``Forest management plan'' is included to identify the 
documentation required to demonstrate forest land eligibility for 
agricultural land easements, when the ``forest land'' is being enrolled 
under the ``contributes to the economic viability of the agricultural 
operation'' land eligibility category. NRCS is using the ``forest 
management plan'' as documentation for eligibility, rather than 
requiring submission of receipts or tax returns which may be viewed as 
intrusive. The definition is consistent with the way the term is 
defined in other NRCS program regulations. Additionally, a forest 
management plan is a component of an agricultural land easement plan as 
described above.
    The term ``Grassland of special environmental significance'' is 
included since section 1265B of the 1985 Act authorizes NRCS to provide 
additional cost-share assistance for the purchase of an agricultural 
land easement by an eligible entity on land that is grassland of 
special environmental significance. NRCS has defined grassland of 
special environmental significance in this interim rule as ``grasslands 
that contain little or no noxious or invasive species; are subject to 
threat of conversion to nongrassland uses or are subject to 
fragmentation; and the land is rangeland, pastureland, or shrubland on 
which the vegetation is dominated by native grasses, grass-like plants, 
shrubs, or forbs, or is improved, naturalized

[[Page 11037]]

pastureland and rangeland. In addition, these must be lands that 
provide, or could provide, habitat for threatened, endangered species 
or at-risk species; protect sensitive or declining native prairie or 
grassland types; or provide protection of highly sensitive natural 
resources.''
    The definition of ``Grasslands management plan'' is similar to the 
definition that existed in the GRP regulation, and such a plan is 
required by section 1265B(b)(4)(C)(iv)(II) of the 1985 Act for 
grasslands subject to an agricultural land easement.
    The definition of ``Historical and archaeological resources'' 
includes resources related to parcels listed in the National Register 
of Historic Places, but can include lands listed in the State Historic 
Preservation Office or Tribal Historic Preservation Office inventory 
with written justification as to why the resource meets the National 
Register of Historic Places criteria. This definition recognizes 
preservation efforts of State, Tribal, and local preservation offices.
    The definition of ``Historically underserved landowner'' is 
included to further the outreach purposes of ACEP.
    The definition of ``Imminent harm'' is included to help identify 
situations where NRCS may exercise its right of enforcement on 
agricultural land easements.
    The definition of ``Impervious surface'' is included since the 
terms of an agricultural land easement under subpart B must specify an 
impervious surface limitation appropriate for the agricultural 
operation.
    The definition of ``Indian Tribe'' is consistent with how the term 
has been defined in the previous FRPP and WRP regulations. However, the 
term ``pueblo'' has been added consistent with other conservation 
programs. ``Pueblo'' is a type of collective ownership already 
encompassed by the statutory definition of Indian Tribe, but 
clarification was sought by commenters in prior rulemaking efforts.
    The definition of the ``Land Evaluation and Site Assessment 
System'' is included since it is the land evaluation system used to 
rank land for farm and ranch land protection purposes.
    The definition of ``Landowner'' is included since conservation 
easements, whether through an agricultural land easement or a wetland 
reserve easement, is a real property transaction which requires the 
participation by the fee title landowner. The definition of 
``landowner'' is adopted from the WRP regulation and is included to 
clarify that a landowner may be a ``person, legal entity, or Indian 
Tribe.'' An Indian Tribe does not meet the definition of person or 
legal entity as defined by section 1201 of the 1985 Act, and thus, 
needs to be included in order to ensure full participation in ACEP.
    The definition of ``Legal entity'' is included since ACEP payment 
eligibility requirements apply to persons and legal entities.
    The definition of ``Limited Resource Farmer or Rancher'' is 
included as an embedded term in the definition of ``Historically 
Underserved Landowner.''
    The definition of ``Maintenance'' is included to identify actions 
necessary to be conducted on lands enrolled in the program to meet 
program purposes.
    The term ``Natural Resources Conservation Service'' existed in both 
the FRPP and WRP regulations. However, the WRP definition more fully 
describes NRCS relationship to CCC, and therefore, has been adopted for 
use in ACEP. ACEP is funded through the CCC.
    The definition of ``Nongovernmental organization'' is included in 
accordance with the 2014 Act that identifies the types of agencies and 
organizations that may qualify as an eligible entity under subpart B.
    The definition of ``Other interests in land'' is included to 
clarify interests in land other than easements NRCS may provide cost-
share assistance to an eligible entity to purchase under subpart B. 
However, NRCS requires that an eligible entity obtain prior approval 
from the Chief before rights or interests in land other than an 
agricultural land easement are funded under subpart B.
    The definition of ``Other productive soils'' is included to 
identify that the term is restricted to farm and ranch land soils that 
are considered ``unique farmland'' and ``farm and ranch land of 
statewide and local importance.'' The terms ``unique farmland,'' ``farm 
and ranch land of statewide importance,'' and ``farm and ranch land of 
local importance'' are defined separately rather than within the 
definition of ``other productive soils.'' The change was made to 
provide specific definitions for these types of land.
    The definition of ``Parcel'' is included to simplify the language 
used to identify an area of land that is either subject to an 
application or enrollment under ACEP.
    The definition of ``Participant'' is included as it identifies who 
may be accepted for participation in ACEP.
    The definition of ``Pending offer'' is included since a parcel must 
be subject to a written pending offer by an eligible entity in order to 
be eligible for cost-share assistance under subpart B.
    The definition of ``Permanent easement'' is included to clarify 
that the duration for easements enrolled as ``permanent easements'' 
under ACEP is perpetual. Wetland reserve easements that are for a 
duration that is the maximum authorized by State law, but are not 
perpetual, will be subject to the same payment rates as 30-year wetland 
reserve easements.
    The definition of ``Prime farmland'' is the technical definition 
that is used by NRCS under the Farmland Protection Policy Act and is 
included given the purposes for acquiring an agricultural land 
easement.
    The definition of ``Private land'' is included since land is only 
eligible for enrollment if it is private or Tribal land. Tribal land is 
land identified as ``acreage owned by an Indian tribe'' as defined 
above.
    The term ``Right of enforcement'' is an interest in the land 
enrolled in the ACEP-ALE which the United States may exercise under 
specific circumstances to enforce the terms of the agricultural land 
easement. The definition is included to identify that the right of 
enforcement may only be used under circumstances where the eligible 
entity or other holder of the easement has not enforced the terms of an 
agricultural land easement.
    The definition of ``Socially disadvantaged farmer or rancher'' is 
included as an embedded term in the definition of ``Historically 
underserved landowner.''
    The definition of ``State Conservationist'' is inclusive of 
Directors of the ``Caribbean and Pacific Island Areas.''
    The definition of ``State Technical Committee'' existed in both 
FRPP and WRP, and the FRPP definition, since it cites to both statutory 
and regulatory authority for the State Technical Committees, is adopted 
for use in ACEP.
    The term ``Unique farmland'' is added to improve clarity and 
provide a more technically accurate definition of this type of land 
that is encompassed by the clause ``prime and unique farmland.''
    The definition of ``Wetland Reserve Easement'' is included to 
identify the type of reserve interest conservation easement that NRCS 
will purchase directly from a landowner of eligible land pursuant to 
the policies and procedures under subpart C.
    The definition of ``Wetland Reserve Plan of Operations'' is 
included to identify the easement plan that is applicable to lands 
enrolled under subpart C.
    The definition of ``Wetland restoration'' existed in WRP and is 
included to identify the actions

[[Page 11038]]

necessary to further the purposes of ACEP-WRE.

Sec.  1468.4 Appeals

    This section identifies the different programmatic relationships 
that NRCS has with persons, legal entities, or eligible entities that 
receive payment under ACEP in return for participation in the program 
and the nature of the appeal rights that flow from these relationships. 
Additionally, NRCS clarifies the scope of program participation so that 
it is clear that prior to the transfer of property rights and the 
payment of compensation, NRCS decisions that affect the participant 
adversely are appealable under NRCS appeal procedures, including a 
direct appeal to the National Appeals Division (NAD) as provided in 7 
CFR part 11. NRCS determinations that are after easement closing would 
not be subject to the appeal process in 7 CFR part 11. In the latter 
situation, a WRE landowner, or ALE eligible entity as applicable, with 
easement lands that are not in compliance with the easement terms would 
be provided advance notice of the NRCS determination and the landowner 
or eligible entity would be provided the opportunity to file an appeal 
with the appropriate State Conservationist.
    NRCS enters into agreements with and makes payments to eligible 
entities under ACEP-ALE, and thus, the eligible entities are the 
program participants under subpart B. NRCS enters into agreements with 
and makes payment directly to landowners of eligible land under ACEP-
WRE, and thus, the private landowners are the program participants 
under subpart C. Given the different program agreement relationships, 
the appeal rights differ.

Sec.  1468.5 Scheme or Device

    This section is similar to other conservation program provisions 
and is included to describe the authority which NRCS exercises to 
protect the Federal investment in conservation easements from 
fraudulent activities.

Sec.  1468.6 Subordination, Exchange, Modification, and Termination

    This section implements the new easement administration provisions 
authorized by section 1265D(c) of the 1985 Act as added by the 2014 
Act. This section provides the necessary flexibility to ensure that the 
long-term viability of agricultural land and wetland protection efforts 
through conservation easements will be achieved in a manner that can 
accommodate subsequent compelling public needs, or will facilitate the 
practical administration of the program when no reasonable alternatives 
are available. This section clarifies the preferred alternative is 
always avoidance of impacts to the easement area, followed by 
minimization of impacts to the easement area. Furthermore, NRCS will 
give preference to addressing impacts of an action to the easement 
onsite or immediately adjacent to original easement area over 
addressing such impacts offsite. This consideration of alternative and 
sequencing is consistent with NRCS responsibilities under the National 
Environmental Policy Act (NEPA).
    Given its stewardship responsibilities, NRCS has limited the scope 
of the easement that may be affected by an easement action to 10 
percent of the easement area. Under very limited circumstances, NRCS 
may consider easement actions that exceed this 10 percent limitation if 
NRCS determines that the original easement area has experienced offsite 
landscape changes such as catastrophic changes to hydrology, complete 
loss of all agricultural infrastructure and markets, or contamination 
from hazardous materials from adjacent properties, and NRCS determines 
that such changes make achieving easement purposes impracticable.
    NRCS will make the determination of equal or greater economic value 
to the United States based upon an approved easement valuation 
methodology in place at the time of the easement action request. 
Currently, the easement valuation methodology for ALE easements is 
outlined under subpart B and outlined for WRE easements under subpart 
C. In addition to the value of the easement itself, NRCS may consider 
other financial investments it has made in the acquisition, 
restoration, and management of the original easement to ensure that the 
easement administration action results in equal or greater economic 
value to the United States.
    To further ensure that the easement action will result in equal or 
greater conservation value to the United States, NRCS places a 
limitation concerning the geographic area from which exchange acres can 
be obtained. The type of conservation and economic values of exchange 
properties are more likely to be similar if situated in close proximity 
to the original easement area, and thus NRCS identifies that 
replacement of easement acres as part of an easement exchange must 
occur in the same 8-digit watershed and within the same State.

Sec.  1468.7 Transfer of Land

    This section sets forth how NRCS will address enrollment of land 
where the landowner transfers the rights in land to a third party prior 
to the purchase of the easement.

Sec.  1468.8 Payments Not Subject to Claims

    This section sets forth that NRCS will make payment to its program 
participants without regard to any claims that non-Federal creditors 
may have on the financial assets of the program participant as 
authorized by 7 CFR part 1403.

Sec.  1468.9 Assignments

    This section identifies that a program participant has the ability 
to assign their right to payment to another person or legal entity in 
accordance with 7 CFR part 1404.

Sec.  1468.10 Environmental Markets

    This section provides that a landowner subject to an ACEP easement 
may also enter into an environmental credit agreement with third 
parties provided that the terms of the environment credit agreement do 
not interfere with the rights acquired by the United States and do not 
cause the landowner to violate the terms of the agricultural land 
easement or wetland reserve easement.

Subpart B--Agricultural Land Easements

Sec.  1468.20 Program Requirements

    This section includes the program requirements for eligible 
entities who wish to receive cost-share assistance from NRCS for the 
purchase of an agricultural land easement.
    Paragraph (a) identifies that NRCS will facilitate and provide 
funding for the purchase of easements or other interests in eligible 
land that is subject to a written pending offer from an eligible entity 
for the purpose of protecting the agricultural use and related 
conservation values of the land by limiting nonagricultural uses of the 
land. Paragraph (a) also identifies the basic parameters of the 
program, including that eligible entities must submit applications to 
NRCS State offices, that funding would be provided through a 
cooperative agreement that specifies NRCS minimum deed terms, and that 
all easements or other interests in land will be in perpetuity unless 
provided otherwise by State law.
    Paragraph (b) provides that to be eligible to receive ACEP-ALE 
funding, an Indian Tribe, State, unit of local government, or 
nongovernmental organization must demonstrate a commitment to long-term 
conservation of agricultural lands; a capability to acquire, manage, 
and enforce easements;

[[Page 11039]]

sufficient number of staff dedicated to monitoring and easement 
stewardship; and the availability of funds.
    Paragraph (c) provides that a landowner who is selling an eligible 
entity an agricultural land easement is responsible for meeting 
conservation compliance requirements at 7 CFR part 12, as required by 
section 1265D(e) of the 1985 Act and the Adjusted Gross Income 
Limitation provisions at 7 CFR part 1400. Under paragraphs (b) and (c), 
the regulation clarifies that it is the eligible entity and landowner's 
responsibility to ensure that the necessary records have been 
established in the USDA customer records system.
    Paragraph (d) sets forth the criteria by which land can be 
determined eligible. In particular, eligible land includes private or 
Tribal agricultural land on a farm or ranch subject to a pending 
written offer by the eligible entity and contains at least 50 percent 
prime or unique farmland or designated farm and ranch land of State or 
local importance, unless a lesser percentage is determined appropriate 
by NRCS based on local conditions; contains historical or 
archaeological resources; protects grazing uses and related 
conservation values by restoring and conserving land; or furthers a 
State or local government policy consistent with the purposes of the 
program.
    Paragraph (d) specifies that the land must be cropland, rangeland, 
grassland, or land that contains forbs or shrubland for which grazing 
is the predominant use, located in an area historically dominated by 
grassland, forbs, or shrubs, and could provide habitat for animal or 
plant populations of significant ecological value, pastureland, or 
nonindustrial private forest land that meet specific criteria. 
Consistent with the prior FRPP regulation and policy that sought to 
minimize overlap and conflict with other forest easement programs, 
paragraph (d) clarifies that land cannot include forest land greater 
than two-thirds of the easement area. NRCS will reduce its cost-share 
in proportion to the extent that an easement protects forest land that 
exceeds two-thirds of the easement area. For example, if a 100 acre 
easement contains 30 acres of cropland and 70 acres of forest land, 
NRCS would provide cost-share on the 30 acres of cropland and 66.6 
acres of forest land, but would not provide any cost-share for the 
purchase of the remaining 3.4 acres of forest land. However, this 
paragraph also identifies that NRCS may waive the forest land 
restriction for sugar bush acreage that contributes significantly to 
the economic viability of the parcel being offered for enrollment. A 
sugar bush refers to a forest stand which is utilized by agricultural 
landowners for the production of maple syrup. The tree canopy is 
dominated by sugar maple, black maple, or similar tree species, and 
other tree species, if present, form only a small fraction of the total 
tree cover. NRCS believes that landowners manage their sugar bush as an 
integral part of their overall agricultural operations.
    Paragraph (e) specifies lands that are ineligible for enrollment. 
Lands that are owned by a governmental entity, unless in trust for an 
Indian Tribe, are ineligible. Additionally, certain land owned by 
nongovernmental organizations whose purpose is to protect agricultural 
use and related conservation values are ineligible since such lands are 
already protected from conversion to agricultural use. NRCS will also 
consider land ineligible if it is subject to (1) onsite or offsite 
conditions that would interfere with the agricultural viability of the 
property, including the risk of the presence of hazardous substances or 
incompatible land uses, or (2) subject to a deed restriction that 
provides similar protection to that provided by the program.

Sec.  1468.21 Application Procedures

    This section identifies the application procedures that an entity 
must follow in order to have their application be considered for 
funding under ACEP-ALE.
    Paragraph (a) requires an entity to submit an application to NRCS 
in the State where parcels are located.
    Paragraph (b) identifies that applications may be submitted on a 
continuous basis or in response to specific program solicitations. 
However, NRCS may announce application cut-off periods to evaluate 
applications received by a date certain.
    Paragraph (c) provides that NRCS will determine whether an 
applicant is eligible to participate in ACEP-ALE based on the criteria 
set forth in Sec.  1468.20(b).
    Paragraph (d) provides that at the end of each fiscal year, NRCS 
will cancel the lists of pending, unfunded eligible parcels unless the 
eligible entity requests that certain parcels be considered for funding 
in the following fiscal year.

Sec.  1468.22 Establishing Priorities, Ranking Considerations, and 
Application Selection

    This section sets forth how parcels will be ranked for funding. 
NRCS will determine the eligibility of the landowner and land prior to 
ranking. The NRCS ranking system in each State incorporates national 
and State-specific criteria to rank, score and prioritize each eligible 
parcel within the State. All eligible parcels that compete for funding 
during a given application period are ranked using the same NRCS 
ranking criteria. The national criteria must comprise at least 50 
percent of the total numerical ranking score with the state criteria 
comprising the remaining 50 percent.
    The national ranking criteria include quantitative factors such as 
the percent of prime, unique, and important soil or grazing uses and 
related conservation values in the parcel to be protected; the percent 
of cropland, pastureland, grassland, and rangeland in the parcel to be 
protected; the ratio of the total acres of land in the parcel to be 
protected to average farm or ranch size in the county according to the 
most recent USDA Census of Agriculture; the percent population growth 
in the county as documented by the United States Census; the threat of 
conversion to incompatible land uses; the existence of a farm or ranch 
succession plan; proximity to other protected land; grassland that is 
currently enrolled in the conservation reserve program in a contract 
that is set to expire within 1 year that would benefit from protection 
under a long-term easement; and other similar criteria.
    This section also identifies the factors that may be identified by 
NRCS at the State level. State criteria are determined by the State 
Conservationist, with advice from the State Technical Committee. This 
section of the regulation identifies that the State criteria may 
consider the location of a parcel in an area zoned for agricultural 
use, the eligible entity's performance in managing and enforcing 
easements, multifunctional benefits of agricultural land protection, 
geographic regions where enrollment of particular lands may help 
achieve program objectives, diversity of natural resources to be 
protected, score using the land evaluation and site assessment system 
or equivalent measure for grassland enrollments, or other criteria 
determined by NRCS that will allow for the selection of parcels that 
will achieve ACEP-ALE purposes. When developing the State ranking 
factors, the State Conservationist must use factors that will assess 
the parcels potential to meet the purpose and goals of ACEP-ALE.
    The ranking system incorporating both national and state criteria 
enables NRCS to prioritize parcels that merit ACEP-ALE enrollment. The 
ranking process must be followed and parcels funded in order of 
priority unless

[[Page 11040]]

inadequate funds are available to fund the next highest ranked parcel. 
If adequate funds are not available, NRCS may select the next highest-
ranked parcel for which funding is available.
    The ranking system may assign negative points or place at the 
bottom of the ranking list any parcels submitted by an eligible entity 
which is delinquent on submitting annual monitoring reports on prior-
year conservation easements or has open ACEP-ALE cooperative agreements 
more than 2 years old. State Conservationists may also establish 
ranking thresholds below which parcels will not be funded.
    In summary, NRCS will rank all eligible parcels submitted by 
eligible entities prior to an announced application cut-off date. NRCS 
will rank all parcels in accordance with the national and State 
criteria identified in this section. As required by section 
1265B(b)(3)(C) of the 1985 Act, NRCS will not assign a higher priority 
to any parcel solely based on the lesser cost to the program.
    NRCS will list the selected eligible parcels in the cooperative 
agreement to be entered into between NRCS and the eligible entity.

Sec.  1468.23 Cooperative Agreements

    This section addresses the principal program document under which 
NRCS and an eligible entity identify how they will coordinate the 
activities needed for the eligible entity to purchase a conservation 
easement with ACEP assistance, including their respective rights and 
responsibilities related to program enrollment under this subpart. In 
particular, NRCS, on behalf of the CCC, enters into a cooperative 
agreement with entities selected for funding. Once NRCS selects an 
application, the eligible entity works with NRCS to finalize and sign a 
standard program cooperative agreement, incorporating all necessary 
ACEP-ALE requirements including the requirement that each easement must 
have an agricultural land easement plan.

Sec.  1468.24 Compensation and Funding for Agricultural Land Easements

    This section addresses the extent to which NRCS will provide 
financial assistance to an eligible entity for the purchase of an 
agricultural land easement by the eligible entity. NRCS may provide up 
to 50 percent of the approved fair market value of the agricultural 
land easement. NRCS will approve the use of the Uniform Standards for 
Professional Appraisal Practice (USPAP), the Uniform Appraisal 
Standards for Federal Land Acquisition (UASFLA), or Areawide Market 
Analysis procedures by the eligible entity for determining ``fair 
market value of the agricultural land easement.'' An eligible entity is 
responsible to obtain a fair market value determination of the easement 
using one of the approved methods in accordance with NRCS 
specifications and applicable industry standards. The eligible entities 
provide the easement valuation determination documentation to NRCS. The 
Uniform Standards of Professional Appraisal Practices may serve as an 
industry standard for areawide market analysis. NRCS welcomes comments 
on what other types of ``industry methods'' should be considered when 
determining ``fair market value of the agricultural land easement'' for 
Federal match requirements for agricultural land easements.
    A landowner may make donations toward the acquisition of the 
agricultural land easement. However, the 2014 Act requires that the 
eligible entity provide a share that is at least equivalent to that 
provided by NRCS. While the eligible entity may include as part of its 
share a landowner's qualified donation, the statute identifies that the 
eligible entity must contribute its own cash resources in an amount 
that is at least 50 percent of the amount contributed by NRCS. To 
ensure that the Federal share meets these parameters, NRCS requires 
that prior to execution of the easement deed and payment of 
compensation to the landowner, the eligible entity provide the 
necessary acceptable valuation documentation and NRCS approve the 
determination of fair market value.
    This section also outlines circumstances where NRCS may waive 
certain cost-share limitations for grassland of special environmental 
significance or other projects of special significance. For grasslands 
of special environmental significance, NRCS may provide up to 75 
percent of the fair market value of the agricultural land easement and 
the eligible entity is required to provide the remainder as the entity 
share, of which the eligible entity is still required to provide its 
own cash resources as at least half of the entity share unless an 
additional entity cash contribution waiver is requested and granted.
    For projects of special significance, NRCS may waive the eligible 
entity cash contribution requirement in accordance with the criteria 
and circumstances outlined in this section. However, for these projects 
of special significance, the landowner donation must increase 
commensurate to the amount of the waiver, the landowner donation must 
be voluntary, and the property must be in active agricultural 
production. This section identifies the criteria by which a project may 
be determined to be one of special significance, including that the 
land is subject to threat of conversion or fragmentation and is in 
proximity to other protected areas supporting agricultural, grassland, 
or other compatible uses.
    Additional factors considered are whether the project is listed on 
the National Register of Historic Places, if the location is within a 
micropolitan statistical area and 50 percent of the adjacent land is 
agricultural land, if the location is within a metropolitan statistical 
area, if the project will increase participation in agriculture by 
underserved communities, veterans, or beginning or disabled farmers and 
ranchers, and whether the farm or ranch is used as an education or 
demonstration farm focused on agricultural production and natural 
resource conservation, and other similar factors. NRCS welcomes input 
on the criteria that have been developed and any additional criteria 
that may be used to determine projects of special significance.
    NRCS will provide ACEP-ALE cost-share funds toward the cost of the 
agricultural land easement itself. Since section 1265B of the 1985 Act 
does not authorize any cost-share beyond contribution towards the 
purchase of an ACEP-ALE easement based on the approved fair market 
value of the agricultural land easement, NRCS does not provide funds 
for related administrative costs such as appraisals, surveys, title 
insurance, legal fees, costs of easement monitoring, and other related 
administrative and transaction costs incurred by the eligible entity.

Sec.  1468.25 Agricultural Land Easement Deeds

    Section 1265B(b)(4)(C) of the 1985 Act anticipates that an eligible 
entity is able to use its own deed terms provided that NRCS is able to 
determine that such terms ``are consistent with the purposes of the 
program [and] permit effective enforcement of the conservation purposes 
of such easements.'' Therefore, in order for NRCS to provide cost-share 
assistance to an eligible entity, NRCS must ensure that the eligible 
entity will include in its agricultural land easement deeds the terms 
and conditions necessary to ensure ACEP statutory purposes and 
requirements are met.
    NRCS may determine that an agricultural land easement deed meets 
program purposes by either the eligible entity drafting all of the deed 
terms and conditions for an individual easement

[[Page 11041]]

and submitting the entire deed to NRCS for review, or through NRCS 
developing a standard set of minimum deed terms that the eligible 
entity agrees to incorporate as a whole into the deed along with the 
entity's own deed terms. In either scenario the eligible entity may use 
their own terms and conditions, the difference is the review process by 
which NRCS ensures the purposes and requirements of the program are 
met.
    Under FRPP, NRCS reviewed each individual deed review due to the 
variability of easement deed terms. The result of this highly 
individualized approach provided maximum flexibility for the eligible 
entity but also resulted in extended acquisition timelines, 
inconsistent deed terms, variability in deed enforceability, and risk 
of inequitable treatment of eligible entity applicants.
    Under ACEP, NRCS will provide a standard set of minimum deed terms 
that could be wholly incorporated along with the eligible entity's own 
deed terms into the agricultural land easement deed. NRCS and the 
eligible entity would agree to the standard minimum deed terms through 
the cooperative agreement, and the eligible entity would include these 
standard minimum deed terms into the agricultural land easement deed 
directly or as deed addendum attached and incorporated by reference 
into the deed.
    If the eligible entity agrees to and incorporates these minimum 
standard deed terms, NRCS may choose not to review individual deeds 
prior to closing. NRCS goals with this approach are to streamline 
program delivery, increase the transparency of program requirements, 
ensure the equitable treatment of all participants, and reduce 
inconsistency in the long-term management and enforcement of the 
easements. This approach still allows the eligible entity to introduce 
its own deed terms, including those that are more restrictive. Through 
the publication of this interim rule, NRCS is seeking and welcomes 
specific public comment on the content of these standard minimum deed 
terms. The current minimum deed terms can be found at [enter URL for 
such terms].
    Due to high program demand, limited funds, and anticipated cost-
savings from streamlining program delivery, in fiscal year 2015, NRCS 
will prioritize those applications with entities who agree to use the 
standard minimum deed terms found at https://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/easements/acep/.
    Among the minimum requirements that must be in each ALE funded 
easement, whether or not an eligibility entity elects to use the 
minimum standard set of deed terms, is a right of enforcement for the 
Secretary of Agriculture required by Section 1265B(b)(4)(C)(iii) of the 
1985 Act. The United States right of enforcement may only be used if 
the terms of the Agricultural Land Easement are not enforced by the 
holder of the easement. The right of enforcement includes the right of 
inspection so that NRCS can ensure that the eligible entity is meeting 
its enforcement, monitoring and stewardship responsibilities. As 
described above, the eligible entity must annually monitor compliance 
and provide NRCS an annual monitoring report that documents that the 
eligible entity and landowner have complied with the Agricultural Land 
Easement and Agricultural Land Easement Plan. Therefore, pursuant to 
its right of enforcement, if the annual monitoring report is 
insufficient or is not provided annually, or if NRCS has evidence of an 
unaddressed violation, as determined by NRCS, NRCS may exercise this 
right of inspection and enter the easement area with advance notice to 
the eligible entity and the landowner or landowner's representative. In 
the event of an emergency, NRCS may enter the easement area to prevent, 
terminate, or mitigate a potential or unaddressed violation of the 
easement's restrictions and will provide notice to both the eligible 
entity and the landowner at the earliest practicable time.
    Consistent with former FRPP requirements and standard conservation 
easement practice, each ALE funded easement must also include an 
indemnification clause requiring the landowner to indemnify and hold 
harmless the United States from liability arising from or related to 
the property enrolled in ACEP-ALE. Each eligible entity is also 
responsible for the development of baseline documentation that is 
attached to the easement deed, or if allowed by State law cross 
reference in the deed. Baseline documentation is submitted to NRCS with 
the other easement deed documents.
    Consistent with policy that had been developed under FRPP, NRCS has 
established that impervious surfaces will not exceed 2 percent of the 
ACEP-ALE easement area, excluding NRCS-approved conservation practices. 
However, NRCS may waive the 2 percent impervious surface limitation on 
a parcel-by-parcel basis, provided that no more than 10 percent of the 
easement area is covered by impervious surface.
    The inclusion of these minimum provisions in ALE-funded easements 
is a requirement for participation in the ACEP-ALE and cannot be 
waived. All agricultural land easement deeds acquired with ACEP-ALE 
funds must be recorded in the appropriate land records for the county 
or parish.

Sec.  1468.26 Agricultural Land Easement Plans

    This section sets forth the requirement of section 
1265B(b)(4)(C)(iv) of the 1985 Act that all agricultural land easements 
must be subject to an agricultural land easement plan approved by NRCS 
and the landowner. This section identifies the minimum requirements for 
an agricultural land easement plan and describes the relationship 
between the agricultural land easement plan and the individual 
component plans that are required for certain land-use types and 
incorporated by reference into the overarching agricultural land 
easement plan. The eligible entity is responsible to ensure an 
agricultural land easement plan that has been approved by NRCS and 
signed by the landowner is in place prior to the execution of the 
easement deed and the payment of compensation to the landowner.
    As identified in Section 1265B(d), NRCS may provide technical 
assistance, if requested, to assist in the development of an 
agricultural land easement plan. Therefore, the cooperative agreement 
can address the availability of NRCS technical assistance to develop 
these plans. No separate approval of the plan by NRCS is needed if 
NRCS, a certified technical service provider, or other NRCS certified 
conservation planner develops the agricultural land easement plan. The 
development of a robust and comprehensive agricultural land easement 
plan, such as a plan at the NRCS Resource Management System planning 
level, is encouraged and as such, may include both required and 
recommended practices. NRCS recommends that NRCS' planning procedures, 
conservation practices, and standards and specifications be used to 
develop the agricultural land easement plans. Certain component plans, 
such as the forest land management plan may use other industry-approved 
planning methods and standards such as forest stewardship plans.
    The eligible entity is responsible for enforcement of the easement, 
including ensuring the landowner is implementing or adhering to the 
required elements of the agricultural land easement plan. The NRCS 
right of enforcement includes a right of inspection that authorizes 
NRCS to ensure the landowner and easement holder are in compliance with 
the

[[Page 11042]]

agricultural land easement plan as required by section 
1265B(b)(4)(C)(iv).

Sec.  1468.27 Eligible Entity Certification

    Section 1265B of the Food Security Act of 1985, as amended, 
requires NRCS to establish a process under which eligible entities that 
meet established criteria may be certified and enter into long-term 
agreements for ACEP-ALE cost-share assistance. In summary, Section 
1468.27 implements this statutory provisions and provides that, at an 
entity's request, the Chief will determine whether an eligible entity 
meets certifications requirements and if so, certify the entity.
    The ACEP-ALE statutory provisions specify that an eligible entity, 
to be certified, must demonstrate to NRCS that the eligible entity will 
maintain, at a minimum, for the duration of the agreement:
    (i) A plan for administering easements that is consistent with the 
purposes of ACEP-ALE;
    (ii) The capacity and resources to monitor and enforce the 
agricultural land easements; and
    (iii) Policies and procedures to ensure--
    a. the long-term integrity of the easements,
    b. timely completion of acquisition of such easements, and
    c. timely and complete evaluation and reporting to NRCS on the use 
of ACEP-ALE cost-share assistance provided.

Additionally, NRCS must, based upon when an entity is certified, 
conduct a review of a certified eligible entity at least every three 
years to ensure it continues to meet the certification criteria. If 
NRCS finds that the certified entity no longer meets the criteria, NRCS 
may allow the entity a specified period of time to take corrective 
actions, and may revoke certification if the entity does not meet the 
requirements.
    These same certification provisions existed under the ACEP-ALE 
predecessor program, the Farm and Ranch Lands Protection Program 
(FRPP). However NRCS is introducing a few key changes in the ACEP-ALE 
regulation and policy to streamline and improve the certification 
process that was initially developed under FRPP and expand the 
availability of certification to eligible entities.
    NRCS has developed a set of objective, measurable criteria that can 
be used to evaluate the eligible entity's ability to meet the statutory 
certification criteria. The certification criteria outlined in this 
interim rule are similar to the criteria under FRPP with a key change 
to the criteria that proved most problematic under FRPP. The statutory 
requirement that the entity have a plan to administer easements that is 
consistent with the purposes of ACEP-ALE will be demonstrated by the 
eligible entity agreeing in their request for certification to use the 
template ACEP-ALE Agreement for Certified Entities if they are 
certified.
    This change is in effort to address the issues that arose related 
to entities being unable or unwilling to adjust their policy and 
procedures to meet the programmatic FRPP requirements under the FRPP 
certification process. This change will also expedite the review of 
entity certification requests and ensure the equitable treatment of all 
certified entities by establishing a simple, transparent, objective 
criteria for determining whether the entity is addressing the statutory 
requirement.
    Another change is that an eligible entity may submit a request for 
certification with associated documentation to the NRCS State 
Conservationist at any time rather than during specific sign-up 
periods. The State Conservationist will review the materials and make a 
recommendation to the National Office for final determination. NRCS 
will notify an entity in writing whether they have been certified and 
the rationale for the agency's decision.
    This section also identifies the type of administrative flexibility 
available to a certified entity based upon their certification. For 
example, NRCS will rely on the certified entity to independently 
complete the easement acquisition in accordance with the terms and 
conditions of the cooperative agreement and consistent with the 
requirements of this part. NRCS will conduct annual quality assurance 
reviews on a subset of the transactions after closing and payment 
rather than prior to closing. Since NRCS review of these transactions 
is minimized prior to closing, a certified entity is better able to 
schedule easement closings and meet timelines associated with other 
funding sources. These benefits associated with certification will 
allow a certified entity greater autonomy in its acquisition of ALE-
funded easements and potentially expedite the time it takes for a 
certified entity to complete its easement acquisitions.

Sec.  1468.28 Violations and Remedies

    This section sets forth the eligible entity's responsibilities to 
enforce the easement terms and conditions. Additionally, this section 
sets forth the circumstances under which NRCS may exercise its right of 
enforcement.
    NRCS will work with the eligible entity to assist it in its 
responsibility to enforce the easement terms. If, however, the eligible 
entity is unable or unwilling to enforce the easement terms and NRCS 
determines the eligible entity has not met its enforcement 
responsibilities, NRCS may exercise the United States' rights 
identified under an agricultural land easement or other interest in 
land to protect the agricultural values. If such action becomes 
necessary, NRCS will provide written notice by certified mail, return 
receipt requested, to the eligible entity at the eligible entity's last 
known address. Unless emergency circumstances require more immediate 
NRCS action to prevent imminent harm, the notice will provide the 
eligible entity an opportunity to cure its failure to enforce the terms 
of the deed within a reasonable timeframe. If NRCS is required to 
exercise its right of enforcement, NRCS may recover any and all 
administrative and legal costs from the eligible entity, the current 
holder of the easement if applicable, and the landowner or other party 
responsible for the easement violation.

Subpart C--Wetland Reserve Easements

Sec.  1468.30 Program Requirements

    This section sets forth the basic requirements for participation in 
ACEP through a wetland reserve easement, including landowner and land 
eligibility requirements.
    Paragraph (a) identifies that under the ACEP-WRE, NRCS may purchase 
wetland reserve easements from eligible landowners who voluntarily 
agree to the restoration, protection, and enhancement of wetlands on 
eligible private and Tribal lands. Additionally, the 30-year contract 
enrollment option is available to enroll acreage owned by Indian Tribes 
and these 30-year contracts are implemented similarly to 30-year 
easements. In order to participate through any of the WRE enrollment 
options, the landowner must agree to the implementation of a WRPO, the 
effect of which is to restore, protect, enhance, maintain, and manage 
the hydrologic conditions of inundation or saturation of the soil, 
native vegetation, and natural topography of eligible lands.
    Paragraph (b) sets forth the county cropland enrollment limitations 
that are established by section 1244 of the 1985 Act as amended by the 
2014 Act. In particular, no more than 25 percent of the total cropland 
in any county may be enrolled in CRP and ACEP-WRE, and no more than 10 
percent of the total cropland in the county, as determined by FSA, may 
be subject to an easement under ACEP-WRE. The cropland limits do not 
apply to shelterbelts,

[[Page 11043]]

windbreaks, and certain designated wet and saturated soils.
    Paragraph (c) identifies that an applicant must be the landowner of 
eligible land for which enrollment is sought, and must have owned that 
land for at least 24 months prior to the time the land is determined 
eligible for enrollment unless certain exemptions apply, including that 
it is determined by the Chief, upon application by the landowner, that 
such land was acquired under circumstances that give adequate 
assurances that the land was not acquired for the purposes of placing 
it in the program. NRCS has also included the requirement that the 
landowner must provide all necessary documents that are required by the 
Farm Service Agency to establish customer records in the USDA customer 
records system. Recipients of USDA benefits, including NRCS customers, 
work with the Farm Service Agency to establish the requisite 
eligibility records in the USDA customer service data base. NRCS checks 
these records to ensure that the landowner meets conservation 
compliance and adjusted gross income limitation requirements.
    Paragraph (d) sets forth how NRCS will handle enrollment situations 
where, prior to easement purchase, the landowner transfers the land 
offered for enrollment.
    Paragraph (e) sets forth the land eligibility criteria that were 
specified by sections 1265(3) of the 1985 Act as added by the 2014 Act. 
Among the categories of eligible land are: Farmed wetland or converted 
wetland, together with adjacent lands that are functionally dependent 
on the wetlands; cropland or grassland that was used for agricultural 
production prior to flooding from the natural overflow of a closed 
basin lake or pothole, together with the adjacent land, where 
practicable, that is functionally dependent on the cropland or 
grassland; farmed wetland and adjoining lands enrolled in CRP, with the 
highest wetland functions and values, and is likely to return to 
production after it leaves CRP; or a riparian area along a stream or 
other waterway that links or, after restoring the riparian area, will 
link wetlands protected by the ACEP-WRE easement, another easement, or 
other device or circumstance that achieves the same objectives as an 
easement. Determination of land eligibility is made at the time of 
application evaluation.
    NRCS may also enroll adjacent or contiguous land if such land 
maximizes wildlife benefits and contributes significantly to wetland 
functions and values. Such adjacent or contiguous land may include 
buffer areas, created wetlands, noncropped natural wetlands, riparian 
areas that do not otherwise meet riparian eligibility requirements, and 
restored wetlands.
    Land enrolled in the program must have sufficient legal access, be 
configured in a size and with boundaries that allow for the efficient 
management of the area for program purposes, and otherwise promote and 
enhance program objectives, as determined by NRCS.
    Paragraph (f) addresses the enrollment of CRP lands.
    Paragraph (g) identifies land that is not eligible for enrollment, 
including converted wetlands if the conversion was commenced after 
December 23, 1985; land established to trees under CRP except in cases 
where NRCS determines it would further the purposes of the program; 
lands owned by a Federal or non-Federal governmental agency; land that 
does not have sufficient legal access, clear title, or meet Department 
of Justice Title Standards; land subject to an easement or deed 
restriction which, as determined by NRCS, provides similar restoration 
and protection of wetland functions and values as would be provided by 
enrollment in ACEP-WRE; and lands where purposes of program or 
implementation of restoration practices would be undermined due to 
onsite or offsite conditions. Such conditions may include risk of 
contamination from hazardous substances either onsite or offsite, 
proposed or existing rights of way, either onsite or offsite, for 
infrastructure development, or adjacent land uses that would either 
impede complete restoration or prevent wetland functions and values 
from being fully restored.
    With respect to the ineligibility of land established to trees 
under CRP, the 2014 Act authorized a waiver where NRCS determines the 
enrollment of such land will further the purposes of the program. Such 
circumstances may exist where established cover conforms to ACEP-WRE 
requirements if the CRP trees are on incidental land adjacent to 
eligible wetland; enrollment would improve the practical administration 
of the easement boundary; the land contains habitat for at-risk species 
or migratory birds; conversion to higher intensity of production is 
likely; or other criteria as determined appropriate by the Chief.

Sec.  1468.31 Application Procedures

    This section sets forth the application procedures for a landowner 
that wants to participate in the ACEP-WRE. Specifically, a landowner 
may obtain and submit to NRCS an application to participate in the 
program at any time to the local USDA Service Center. By filing an 
application, the landowner consents to an NRCS representative entering 
upon the land for purposes needed to evaluate the application. The 
landowner is entitled to accompany an NRCS representative on any site 
visits.

Sec.  1468.32 Establishing Priorities, Ranking Consideration and 
Project Selection

    This section sets forth the factors NRCS will use to select 
properties for enrollment in an ACEP-WRE. Among the priority factors, 
NRCS may consider the conservation benefits of obtaining an easement, 
the cost-effectiveness of each easement, whether Federal funds are 
being leveraged, and the extent to which ACEP-WRE purposes would be 
achieved on the land.
    Given the statutory priority placed on acquiring easements based on 
the value of the easement for protecting and enhancing habitat for 
migratory birds and other wildlife and maximizing the benefit of the 
Federal investment, NRCS will also give priority consideration to 
obtaining permanent easements over shorter term easements. NRCS may 
work with both the FWS and the State Technical Committee on priority 
factors to ensure that ACEP and related Federal consultation 
requirements are met.
    As provided by section 1265D(b) of the 1985 Act, NRCS may provide 
priority enrollment to land that is currently enrolled in CRP in a 
contract that is set to expire within one year from date of application 
to ACEP-WRE and is a wetland or related area with high wetland 
functions and values; is likely to return to production after the land 
leaves CRP; and has not been established to trees under CRP unless that 
limitation has been waived by NRCS.
    This section sets forth how applications will be ranked for 
funding. The NRCS ranking system in each State incorporates criteria to 
rank, score and prioritize each eligible parcel within the State. NRCS 
determines priority for ACEP-WRE enrollment through an onsite field 
reviews conducted by NRCS and an appropriate interdisciplinary team of 
partner specialists, which may include FWS. The landowner is invited to 
participate in these field reviews.
    The ranking criteria include quantitative factors that assess the 
sites physical capacity to be restored and the extent and diversity of 
anticipated benefits of such restoration. Hydrology restoration 
potential comprises at least 50 percent of the potential points awarded 
for environmental benefit considerations. NRCS obtains specific

[[Page 11044]]

information about a site's physical capacity to be restored using 
metrics such as the soil and landscape form characteristics including 
soil type, permeability, flooding frequency, depth to water table, 
slope, extent the original hydrology has been manipulated or removed, 
the extent to which the original hydrology can be restored, and other 
wetland restoration factors. To receive hydrology restoration ranking 
points, hydrology restoration or enhancement practices must provide 
hydrologic conditions suitable for the needs of the native wetland-
dependent wildlife species that occurred in the area and appropriate 
for the wetland functions and values that existed prior to 
manipulation.

Sec.  1468.33 Enrollment Process

    This section sets forth the process that NRCS will use for handling 
applications once they have been selected for enrollment. NRCS notifies 
a landowner of their tentative acceptance into the program. This notice 
does not bind NRCS or the landowner, but allows the parties to continue 
the enrollment process.
    Once NRCS has completed its preliminary enrollment activities, the 
landowner will be presented with an agreement to purchase. The 
agreement to purchase describes the easement area, the easement 
compensation amount, the easement terms and conditions, and other terms 
and conditions for participation that NRCS may require. Easement 
compensation is based upon the criteria identified in Sec.  1468.34, 
including the determination of fair market value of the land. This same 
methodology was used under the predecessor program, the Wetlands 
Reserve Program. USPAP establishes the criteria for appraisals and 
areawide market analysis which are each supplemented by NRCS 
Specifications and Statement of Work requirements for each methodology. 
NRCS has also developed policy parameters for area wide market analyses 
and geographic area rate caps to ensure that compensation amounts are 
appropriately constrained. Individual appraisals cannot be used on land 
that has been valued through an areawide market analysis.
    Fair market value is determined, therefore, through either the use 
of a USPAP appraisal or an areawide market analysis or survey. For any 
particular easement offer, NRCS will only use one method for 
determining fair market value, and a landowner does not have input into 
which method NRCS will use. Once fair market value is determined, the 
value is compared to the geographic area rate cap and the landowner 
offer made prior to enrollment, if any. The least of these values is 
the value used to determine the easement compensation amount.
    The landowner accepts enrollment in the ACEP-WRE by signing the 
agreement to purchase. A similar process is followed for enrolling land 
held by Indian Tribes through a 30-year contract.
    The agreement to purchase establishes the scope of the agreement 
between the parties, including the landowners' agreement to grant to 
the United States a wetland reserve easement and to the implementation 
of a WRPO.

Sec.  1468.34 Compensation and Funding for Wetland Reserve Easements 
and 30-Year Contracts

    This section sets forth how NRCS will determine the level of 
compensation that a landowner will receive in return for granting a 
wetland reserve easement. Easement compensation methodologies are 
determine by statute at section 1265C(b)(6) of the 1985 Act. In 
particular, the landowner will receive the least of: (1) The fair 
market value of the land; (2) a geographic rate cap; or (3) the 
landowner offer. This section also describes how each of these values 
are determined. This valuation determination uses the same methods of 
valuation determination that had previously been used in the WRP.

Sec.  1468.35 Wetland Reserve Enhancement Partnerships (WREP)

    This section sets forth how NRCS will implement a wetland reserve 
enhancement option with partners under ACEP-WRE. In particular, the 
purpose of WREP is to target and leverage resources to address high 
priority wetlands protection, restoration, and enhancement objectives 
through agreements with States (including political subdivision or 
agency of a State, nongovernmental organizations, and Indian tribes. 
The Chief will establish priorities for funding, required level of 
partner contribution of resources, ranking criteria, and other 
criteria. NRCS will make public notifications of the availability of 
funding and instruct interested partners about the manner in which they 
should submit their proposal. Partners with a selected proposal will 
enter into WREP agreements with NRCS to carry out the project. Under 
WREP, individual easements are purchased directly from the landowner 
and held by the United States.

Sec.  1468.36 WRPO Payments

    This section identifies that NRCS will provide funds towards 
implementing the WRPO on land enrolled through a wetland reserve 
easement or 30-year contract. NRCS will offer to pay at least 75 
percent but not more than 100 percent of the cost of implementing the 
WRPO on land subject to a permanent easement. NRCS will offer to pay at 
least 50 percent but not more than 75 percent of such costs on enrolled 
land subject to a 30-year easement or maximum duration allowed by state 
law or 30-year contract.

Sec.  1468.37 Easement and 30-Year Contract Participation Requirements

    This section identifies that to enroll land in ACEP-WRE through the 
permanent or 30-year easement option, a landowner must grant an 
easement to the United States. Consistent with ACEP-WRE requirements 
and as previously required under WRP, the landowner grants the wetland 
reserve easement to the United States through a reserved interest deed, 
including the right of access to the easement area, the right to permit 
compatible uses of the easement area, and the right to restore, 
protect, enhance, maintain, and manage activities on the easement area. 
Similar provisions are contained in a 30-year contract that is entered 
into with an Indian Tribe.
    This section also identifies that a landowner may be able to 
reserve grazing rights under a wetland reserve easement or 30-year 
contract if the reservation and use of the grazing rights is consistent 
with the historical natural uses of the land and long-term wetland 
protection and enhancement goals for which the easement or 30-year 
contract was established. Compensation for easements or 30-year 
contracts where the grazing rights are reserved will be reduced by an 
amount equal to the value of the reserved grazing rights, as determined 
by the Chief.

Sec.  1468.38 The WRPO Development

    This section identifies that the development of the WRPO is through 
the local NRCS representative, in consultation with the State Technical 
Committee, with consideration of available site-specific technical 
input from the FWS and others as appropriate. NRCS specifies in the 
WRPO the manner in which land enrolled through a wetland reserve 
easement or 30-year contract will be restored, protected, enhanced, 
maintained, and managed to accomplish ACEP-WRE goals. NRCS will review, 
revise, and supplement the WRPO, as needed, throughout the

[[Page 11045]]

duration of the easement or 30-year contract term to ensure that 
program goals are fully and effectively achieved.

Sec.  1468.39 Violations and Remedies

    This section identifies how NRCS will address violations of a 
wetland reserve easement or 30-year contract. In the event of a 
violation of a wetland reserve easement or 30-year contract involving 
the landowner, NRCS will give the landowner reasonable written notice 
and an opportunity to voluntarily correct the violation within 30 days 
of the date of the notice. However, NRCS reserves the right to enter 
upon the easement area at any time to remedy deficiencies or easement 
violations. Such entry may be made at the discretion of NRCS when such 
actions are deemed necessary to protect wetland functions and values or 
other rights of the United States under the easement. The landowner 
will be liable for any costs incurred by the United States as a result 
of the landowner's negligence or failure to comply with easement or 
contractual obligations.

Executive Summary of the Regulatory Impact Analysis

    Section XII of the Food Security Act of 1985, as amended by the 
Agricultural Act of 2014 (2014 Act), requires the Natural Resources 
Conservation Service (NRCS) to establish the Agricultural Conservation 
Easement Program (ACEP) in a new Subtitle H. This Subtitle repeals the 
previously authorized programs, Wetlands Reserve Program (WRP), Farm 
and Ranchlands Protection Program (FRPP) and Grassland Reserve Program 
(GRP), but maintains the purposes of these programs in ACEP. Pursuant 
to Executive Order 12866, Regulatory Planning and Review, NRCS has 
conducted a Regulatory Impact Analysis and Initial Regulatory 
Flexibility Analysis (RIA) of ACEP using historical data and 
information, including information from WRP, FRPP, and GRP. This RIA 
describes both the potential impact of the regulation on benefits and 
costs and the regulatory flexibility in the rule implementation. 
Implementation of this rule is required to complete the Congressional 
Action.
    In considering alternatives for implementing ACEP, the agency 
followed the legislative intent to establish an open participatory 
process, optimize environmental/conservation benefits, and address 
natural resource concerns. Because ACEP is a voluntary program, the 
program will not impose any obligation or burden upon agricultural 
landowners who choose not to participate.
    The 2014 Act requires establishment of ACEP to retain the 
provisions in the current easement programs by establishing two types 
of easements: Wetlands reserve easements (WRE) that protect and restore 
wetlands as previously available under WRP, and agricultural land 
easements (ALE) that limit nonagricultural uses on productive farm or 
grassland as previously available under FRPP and the easement component 
of GRP. The WRE component will provide technical and financial 
assistance to landowners to restore and protect wetlands and associated 
habitats through conservation easements. ACEP-WRE will address 
wetlands, wildlife habitat, soil, water, and related natural resource 
concerns on private lands. The ALE component will protect the natural 
resources and agricultural value of agricultural cropland, pasture and 
other working land, promote agricultural viability for future 
generations, preserve open space, provide scenic amenities, and protect 
grazing uses and related conservation values by restoring and 
conserving eligible land and limiting nonagricultural uses.
    The 2014 Act also identified ACEP as a covered program for 
implementation of the Regional Conservation Partnership Program (RCPP), 
authorized by Subtitle I of Title XII of the Food Security Act of 1985, 
as amended (16 U.S.C. 3871 et seq.) RCPP is funded, in part, by a 
reservation of 7 percent of funds that have been allocated to implement 
covered programs, including 7 percent of funds allocated for ACEP 
implementation.

Impacts of ACEP

    Most of this rule's impacts consist of transfer payments from the 
Federal Government to farmers, landowners, and producers. Although 
these transfers create incentives that very likely cause changes in the 
way society uses its resources, we lack data with which to quantify the 
resulting social costs or benefits. Under the 2014 Act, ALE and WRE 
enrollments are limited by funding. As set forth in the 2014 Act, total 
proposed ACEP funding and associated transfer payments by fiscal year 
is presented in Table ES-1.

  Table ES-1--Proposed Conservation Transfer Payments Facilitated by ACEP Funding, Including the Potential RCPP
                                            Allocation, FY 2014-2018
----------------------------------------------------------------------------------------------------------------
                              Nominal-dollar farm-   Real-dollar \1\      Real-dollar \1\      Real-dollar \1\
                              bill  authorization  authorization  2.1%     authorization        authorization
             FY              ---------------------     GDP deflator       discounted at 3%     discounted at 7%
                                                  --------------------------------------------------------------
                                   million $            million $            million $            million $
----------------------------------------------------------------------------------------------------------------
FY 2014.....................               $400.0               $400.0               $400.0               $400.0
FY 2015.....................                425.0                416.3                404.1                389.0
FY 2016.....................                450.0                431.7                406.9                377.0
FY 2017.....................                500.0                469.8                429.9                383.5
FY 2018.....................                250.0                230.1                204.4                175.5
                             -----------------------------------------------------------------------------------
    Total \2\...............              2,025.0              1,947.8              1,845.4              1,725.1
----------------------------------------------------------------------------------------------------------------
\1\ 2013 dollars.
\2\ Net present value of discounted funding levels.

Conservation Impacts of the Program

    Land enrolled in ACEP-WRE easements will produce onsite and offsite 
environmental impacts. Those include: Restoration and protection of 
high value wetlands; control of sheet and rill erosion as lands are 
restored from cropland to wetlands and associated habitats; 
restoration, enhancement, and protection of habitat for fish and 
wildlife, including threatened and endangered species and migratory 
birds; improving water quality by filtering sediments and chemicals; 
reducing flooding and flood-related damage; recharging groundwater; 
protecting biological diversity; controlling invasive species with 
planting of native vegetation; as well as providing opportunities for

[[Page 11046]]

educational, scientific, and recreational activities. Soil health and 
air quality are improved by reduced wind erosion, reduced soil 
disturbance, increased organic matter accumulation, and an increase in 
carbon sequestration. Many of those conservation impacts are difficult 
to quantify at a national scale, but have been described by studies at 
an individual project, watershed, or flyway scale.
    For land enrolled in ACEP-ALE, the suite of conservation effects on 
protected grasslands are different than those on protected farmland. 
ACEP-ALE easements on grasslands limit agricultural activities to 
predominately grazing and haying, whereas easements on farmland allow 
crop cultivation and pasture-based agriculture. As such, farmland 
protection effects are derived from onsite and ecological services, as 
well as preserving highly productive agricultural areas from 
development or fragmentation. Impacts on grasslands are derived from 
onsite and ecological impacts as well as preventing conversion to 
nongrassland uses. The net conservation effects through time from 
farmland protection include direct access benefits (pick-your-own, 
agri-tourism, and nature based activities like hunting) indirect access 
benefits (open spaces and scenic views) and nonuse benefits (wildlife 
habitat and existence values). Grassland protection conservation 
effects include the direct, indirect, and nonuse benefits, but also 
include on-farm production gains and carbon sequestration.

Expected Costs of the Program

    The main program costs are the purchase of easements and associated 
restoration expenses under the ACEP-WRE component. Agricultural 
production ceases on lands enrolled in ACEP-WRE. At the same time, 
disaster payments, crop loss payments, and other commodity payments are 
eliminated.
    Through ACEP-ALE, landowners voluntarily restrict the land to 
agricultural uses by the sale of conservation easements to eligible 
entities. Local cooperating entities are key drivers in farmland \1\ 
conservation because they benefit from the indirect services (offsite 
and nonuse benefits) provided by agricultural land, and in the case of 
ACEP-ALE and its predecessors, also share in the costs of purchasing 
conservation easements. The local nature of the supply of and demand 
for conservation easements, and the site-specific nature of the 
potential benefits complicate the description of conservation effects 
conducted in this analysis.
---------------------------------------------------------------------------

    \1\ Farmland refers to agricultural land used in crop production 
and livestock production, i.e., cropland and pasture. For the 
purposes of this document, farmland does not include grasslands.
---------------------------------------------------------------------------

    The public and private costs of ACEP-ALE are: (1) The actual cost 
of purchasing the easement; (2) a reduced tax base which includes the 
opportunity cost of lower local economic activity, which for this 
analysis we assume is offset by a reduction in needed public 
infrastructure and associated taxes to support that infrastructure; and 
(3) the forgone economic activity fostered by new development. These 
costs are not social costs and we do not estimate them in this 
analysis.
Allocation Process and Comparison to Legacy Programs
    NRCS allocates ACEP funding based upon State-generated assessments 
of priority natural resource needs and associated work necessary to 
address identified resource concerns. These State-developed 
assessments, following national guidance to assure accuracy and 
consistency, are submitted to agency leadership for review. At the 
national level NRCS analyzes in a systematic manner these state-
reported resource needs and requests along with factors including NRCS 
landscape initiatives or other nationally established conservation 
priorities; regional factors such as development pressure, migratory 
bird flyways, multi-state watersheds with water quality resource 
concerns; existing State capacity, workload, and performance; and other 
factors. This approach provides flexibility to address nationally and 
locally important natural resource concerns. Once funds are allocated 
to the States, individual project selection occurs at the State level 
based on the prioritization of the eligible applications using the NRCS 
ranking criteria.
    Over the course of the 2008 Farm Bill, the three easement programs 
(WRP, GRP, and FRPP) received an average of $691 million annually, 
which was comprised of $513 million WRP, $138 million in FRPP, and $39 
million in GRP. All three easement programs were combined under ACEP 
and the purposes of FRPP and GRP were combined under the ACEP-ALE 
component. The average annual funding available under the new ACEP 
program will be approximately $368 million annually, about 53 percent 
of the amount previously available under the repealed programs.

Conclusions

    Executive Summary Table ES-2 provides an overview of the potential 
benefits from both sub-program areas of ACEP. For the private 
landowner, the end products of the ACEP-WRE include assurances of the 
restoration of the property and associated recreational use, the 
potential to engage in compatible uses on the property, and the 
elimination of negative impacts to agricultural operations on the 
property. Outcomes from the private landowner view of the ACEP-ALE 
include the long-term protection of the agricultural nature of the land 
and potential increases in productivity (from implementing the ALE 
plan) and sustainability of the local agricultural market (from local 
production). In addition, the private landowner, along with the general 
public, will reap the benefits of recreational waterfowl harvest, 
upland species harvest, and agri-tourism. Also in many cases easement 
that protect farmsteads under ACEP-ALE will provide the general public 
with an opportunity to engage with and obtain food products from a 
local farm producer.
    Both ACEP-WRE and ACEP-ALE may provide benefits that are achieved 
for society as a whole, within the limitations of a voluntary program. 
These include: Improved water quality and water quantity; carbon 
sequestration; restoration of habitat for endangered or threatened 
wildlife species; flood prevention and protection; and improvements to 
scenic quality and rural characteristics. We note that agricultural 
lands and wetlands sequester carbon at higher rates than lands 
converted to development.
    Participation in ACEP is voluntary and landowners participate in 
the program for many reasons, such as estate planning, income 
diversity, expanded recreational opportunity, improving agricultural 
efficiency, and their personal natural resource ethic. Landowners may 
also participate in part to meet requirements they face in managing 
their operation. For example, a landowner may decide to enroll acres in 
ACEP in order to protect highly productive grasslands from conversion 
to crop production and thus limit soil and chemical runoff into a 
nearby stream. Such actions may help demonstrate compliance with other 
State or Federal requirements, such as State plans to meet Federal TMDL 
requirements. ACEP may help landowners meet any compliance 
responsibilities that they may have under the Endangered Species Act. 
Also, ACEP-WRE implementation provides new habitat through the 
restoration of degraded wetlands that benefits wildlife. Even in the 
absence of a FWS critical habitat listing, as is

[[Page 11047]]

generally the case, land enrolled in ACEP could benefit at-risk 
species.
    NRCS has a long-term responsibility to ensure ACEP program 
objectives are achieved and statutory requirements are met on these 
lands. Monitoring policy for these lands is in place to guide NRCS in 
meeting these responsibilities and to maintain working relationships 
with landowners. In addition, the Statement of Federal Financial 
Accounting Standards 29 (SFFAS 29) considers easements held by the 
United States as Stewardship Lands which must be accounted for as part 
of the agency's annual financial accountability reporting. The SFFAS 29 
requires that the ``Condition'' of all Stewardship Lands be reported 
regularly. Therefore, NRCS incorporates this additional financial 
accounting responsibility to report on the condition of Stewardship 
Lands into its monitoring requirements by assessing compliance with the 
terms of the easement and whether the easement is meeting program 
objectives. NRCS added functionality to its easement database to aid 
its State Offices in tracking monitoring events and observations.
    NRCS requires an annual monitoring review of all ACEP easements to 
ensure compliance with easement terms and that program purposes are 
being met. For ACEP-ALE easements, NRCS requires the eligible entity to 
submit annual monitoring reports to NRCS for all ALE easements it 
holds, while NRCS conducts the annual monitoring of all ACEP-WRE 
easements.
    Data, however, currently do not exist that would allow for parsing, 
or attributing, different potential benefits to the suite of 
motivations that might result in a producer participating in this 
program. What can be said, is that those actions benefit the public as 
a whole and the ACEP easement payment compensates the landowner for the 
rights they are encumbering as a result of participating in ACEP. In 
addition, those transfer payments from the Federal Government to 
farmers, landowners, and producers may also create incentives that 
cause changes in the way society uses its resources. As mentioned, we 
lack data with which to estimate and attribute the overall social costs 
or benefits.
    NRCS is committed to the continual improvement of its collection 
and analysis of administrative and programmatic data to ensure that 
program benefits are being achieved through adoptions and 
implementation of targeted resource-based policies and procedures. 
Given the existing limitation and lack of data, NRCS will investigate 
ways to quantify the incremental benefits obtained from this program.

 Table ES-2--Potential Benefits From the Agricultural Conservation Easements Program Described in the 2014 Farm
                                                Bill by Recipient
----------------------------------------------------------------------------------------------------------------
                                                                                    Wetlands
              Ecosystem function                      Ecosystem service             reserve        Agricultural
                                                                                   easements     lands easements
----------------------------------------------------------------------------------------------------------------
                                 Benefits likely to accrue to private landowner
----------------------------------------------------------------------------------------------------------------
Tree growth medium...........................  Commercial timber harvest......         [radic]   ...............
Fish habitat.................................  Commercial fish harvest........         [radic]   ...............
Grassland preservation.......................  Forage production..............         [radic]          [radic]
----------------------------------------------------------------------------------------------------------------
                      Benefits that potentially accrue to both private landowner and public
----------------------------------------------------------------------------------------------------------------
Wildlife habitat.............................  Recreational waterfowl harvest.         [radic]   ...............
Wildlife habitat.............................  Recreational upland species             [radic]          [radic]
                                                harvest.
Land for Food Production.....................  Local Food Production..........  ...............         [radic]
Recreation Opportunities.....................  Agri-tourism...................         [radic]          [radic]
----------------------------------------------------------------------------------------------------------------
                                            Potential Social Benefits
----------------------------------------------------------------------------------------------------------------
Flood retention..............................  Reduced flood flows/peaks......         [radic]          [radic]
Water filtration.............................  Water Quality..................         [radic]          [radic]
Endangered and Threatened wildlife habitat...  Biodiversity...................         [radic]          [radic]
Open Space...................................  Scenic quality and rural                [radic]          [radic]
                                                characteristics.
Carbon Sequestration.........................  Carbon Storage.................         [radic]          [radic]
Groundwater Recharge.........................  Water Quantity.................         [radic]          [radic]
----------------------------------------------------------------------------------------------------------------

Summary of Request for Comments

    NRCS seeks general comments related to how to make the provisions 
easier to understand. In addition, NRCS seeks public comment related to 
the ACEP regulation adopted by this interim rule, including seeking 
comment on the following topics:
     Access--Under ALE, NRCS has modified the requirements for 
what constitutes sufficient access to the easement to be less stringent 
than what is required by the Department of Justice title standards for 
WRE easements. Should NRCS adopt this greater flexibility for eligible 
entities on what constitutes sufficient access for ALE easements and 
what specific conditions should be considered sufficient access under 
ALE to ensure the federal investment is protected?
     New terms--NRCS defined several new terms to implement new 
statutory authorities. What improvements to the definitions and 
implementation of the associated provisions should NRCS incorporate? 
The new terms include active agricultural production, agricultural land 
easement plan, the easement administration definitions (easement 
modification, easement exchange, easement subordination, and easement 
termination), and grassland of special environmental significance.
     Project Selection Criteria and Weightings--What additional 
criteria should NRCS adopt in its allocation of funds and selection of 
ACEP projects, what weighting should NRCS provide to existing or new 
criteria, should this weighting of particular ranking factors occur at 
the National or State level, and what other changes would assist NRCS 
in selecting projects that best further ACEP purposes.
     ALE Valuation methods--What other types of ``industry 
methods'' should NRCS allow for determining

[[Page 11048]]

agricultural land easement ``fair market value'' for Federal match 
requirements?
     Projects of Special Significance--Did NRCS select 
appropriate criteria for determining projects of special significance 
and what other criteria should NRCS consider?
     Standard Minimum Easement Deed Terms--NRCS has developed a 
standard set of minimum deed terms that implement the minimum 
requirements that must be addressed by provisions in every ALE deed. 
What improvements can NRCS make to these standard deed terms?

List of Subjects in 7 CFR Part 1468

    Agricultural operations, conservation practices, conservation 
payments, conservation easements, farmland protection, grasslands, 
natural resources, soil conservation, wetlands, wildlife.

    For the reasons stated in the preamble, the Natural Resources 
Conservation Service revises part 1468 of Title 7 of the CFR to read as 
follows:

PART 1468--AGRICULTURAL CONSERVATION EASEMENT PROGRAM

Subpart A--General Provisions
Sec.
1468.1 Applicability
1468.2 Administration.
1468.3 Definitions.
1468.4 Appeals.
1468.5 Scheme or device.
1468.6 Subordination, exchange, modification, and termination.
1468.7 Transfer of land.
1468.8 Payments not subject to claims.
1468.9 Assignments.
1468.10 Environmental markets.
Subpart B--Agricultural Land Easements
1468.20 Program requirements.
1468.21 Application procedures.
1468.22 Establishing priorities, ranking considerations and 
application selection.
1468.23 Cooperative agreements.
1468.24 Compensation and funding for agricultural land easements.
1468.25 Agricultural land easement deeds.
1468.26 Agricultural land easement plan.
1468.27 Eligible entity certification.
1468.28 Violations and remedies.
Subpart C--Wetland Reserve Easements
1468.30 Program requirements.
1468.31 Application procedures.
1468.32 Establishing priorities, ranking consideration and project 
selection.
1468.33 Enrollment process.
1468.34 Compensation and funding for wetland reserve easements and 
30-year contracts.
1468.35 Wetland Reserve Enhancement Partnerships.
1468.36 WRPO payments.
1468.37 Easement and 30-year contract participation requirements.
1468.38 The WRPO development.
1468.39 Violations and remedies.

    Authority: 15 U.S.C. 714b and 714c; 16 U.S.C. 3865-3865d.

Subpart A--General Provisions


Sec.  1468.1  Applicability.

    (a) The regulations in this part set forth requirements, policies, 
and procedures for implementation of the Agricultural Conservation 
Easement Program (ACEP) administered by the Natural Resources 
Conservation Service (NRCS).
    (b) The NRCS Chief may implement ACEP in any of the 50 States, the 
District of Columbia, Commonwealth of Puerto Rico, Guam, the Virgin 
Islands of the United States, American Samoa, and the Commonwealth of 
the Northern Mariana Islands.
    (c) Subpart B of this part sets forth additional requirements, 
policies, and procedures for implementation of the Agricultural Land 
Easements (ALE) component of ACEP.
    (d) Subpart C of this part sets forth additional requirements, 
policies, and procedures for the Wetland Reserve Easement (WRE) 
component of ACEP.
    (e) Easement lands previously enrolled under the Farm and Ranch 
Lands Protection Program (7 CFR part 1491), the Grassland Reserve 
Program (7 CFR part 1415), and the Wetlands Reserve Program (7 CFR part 
1467) are considered enrolled in ACEP. Existing easements and 
agreements remain valid and enforceable, and subject to the legal 
framework in place at the time of enrollment, except that the long-term 
stewardship and management of these easements, and any ACEP funding 
made available for implementation, will be in accordance with this 
part.


Sec.  1468.2  Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the NRCS Chief.
    (b) NRCS may seek advice from the State Technical Committee on the 
identification of lands of statewide importance, development of a 
priority ranking process, and related technical matters.
    (c) NRCS may delegate at any time its wetlands reserve easement 
management responsibilities to other Federal or State agencies or 
conservation organizations that have appropriate authority, expertise 
and technical and financial resources, as determined by NRCS, to carry 
out such delegated responsibilities.
    (d) NRCS may delegate at any time its wetlands reserve easement 
monitoring and enforcement responsibilities to other Federal or State 
agencies that have the appropriate authority, expertise, and technical 
and financial resources, as determined by NRCS, to carry out such 
delegated responsibilities.
    (e) NRCS may consult Federal or State agencies, conservation 
districts, or other organizations in program administration. No 
determination by these agencies or organizations will compel NRCS to 
take any action which NRCS determines does not serve the purposes of 
the program established by this part.
    (f) The Chief may allocate funds for purposes related to: 
encouraging enrollment by beginning farmers or ranchers, socially 
disadvantaged farmers or ranchers, limited resource farmers or 
ranchers, Indian tribes, and veteran farmers or ranchers as authorized 
by 16 U.S.C. 3844; special pilot programs for easement management and 
monitoring; cooperative agreements with other agencies and 
organizations to assist with program implementation; coordination of 
easement enrollment across State boundaries; coordination of the 
development of easement plans; or for other goals of the ACEP found in 
this part.
    (g) No delegation in the administration of this part to lower 
organizational levels will preclude the Chief from making any 
determinations under this part, re-delegating to other organizational 
levels, or from reversing or modifying any determination made under 
this part.
    (h) The Chief may modify or waive nonstatutory, discretionary 
provisions of this part if the Chief determines the waiver of such 
discretionary provision is necessary to further the purposes of ACEP 
under the Regional Conservation Partnership Program (RCPP) authorized 
by Subtitle I of Title XII of the Food Security Act of 1985. The waiver 
must further ACEP purposes while also addressing whether the purpose 
and conservation objectives of the RCPP project(s) are consistent with 
the specific Wetland Reserve Easement (WRE) or Agricultural Land 
Easement (ALE) conservation purpose and objectives. No waiver will 
result in reducing the quality of wetland wildlife habitat that is 
restored under WRE, or the protection for agricultural viability under 
ALE.
    (i) To assist in RCPP implementation the Chief may also waive the 
applicability of the limitation in section 1001D(b)(2) of the Food 
Security Act of 1985 for participating landowners if the Chief 
determines that the waiver is necessary to fulfill RCPP objectives.

[[Page 11049]]

Sec.  1468.3  Definitions.

    The following definitions will apply to this part, and all 
documents issued in accordance with this part, unless specified 
otherwise:
    30-year Contract means an ACEP-WRE contract that is for a duration 
of 30 years and is limited to acreage owned by Indian Tribes.
    Access means legal and physical ingress and egress to the entire 
easement area over adjacent or contiguous lands for the exercise of any 
of the rights or interests under the easement for the duration of its 
term for the purposes of the program. Access for easement enrollments 
must be described in the easement deed.
    Acreage owned by Indian Tribes means lands held in private 
ownership by an Indian Tribe or individual Tribal member and lands held 
in trust by a native corporation, Tribe or the Bureau of Indian 
Affairs.
    Active agricultural production means that on lands that meet the 
definition of being in agricultural use, agricultural or forest-related 
products or livestock are being produced or have been produced within 
one year of the date of application by an eligible entity for funding 
under subpart B of this part. Land may also be considered in active 
agricultural production if it is current or former CRP land that is 
planted, considered planted, or in conserving use as determined by 
NRCS.
    Agreement means the document that specifies the obligations and 
rights of NRCS and any person, legal entity, or eligible entity who is 
participating in the program or any document that authorizes the 
transfer of assistance between NRCS and a third party for provision of 
authorized goods and services associated with program implementation. 
Agreements may include but are not limited to an agreement to purchase, 
a wetland reserve easement restoration agreement, a cooperative 
agreement, a partnership agreement, or an interagency agreement.
    Agreement to purchase means the legal document that is the 
equivalent of a real estate purchase and sale contract. The landowner 
signs the agreement to purchase, which is the authorization for NRCS to 
proceed with the wetland reserve easement acquisition process and to 
incur costs for surveys, title clearance, due diligence activities, and 
closing procedures on the easement.
    Agricultural commodity means any agricultural commodity planted and 
produced in a State by annual tilling of the soil, including tilling by 
one-trip planters or sugarcane planted and produced in a State.
    Agricultural uses means those activities defined by a State's farm 
or ranch land protection program, or where no program exists, by the 
State agricultural use tax assessment program. However, if NRCS 
determines that a State definition of agricultural use is so broad that 
an included use would constitute a violation of Federal law, degrade 
soils, the agricultural nature of the land or the related natural 
resources, NRCS reserves the right to impose greater deed restrictions 
on the property to be subject to an agricultural land easement. These 
deed restrictions would narrow the State definition of agricultural use 
in order to meet Federal law, or to protect soils, the agricultural 
nature of the land, or related natural resources.
    Agricultural land easement means an easement or other interest in 
eligible land that is conveyed for the purposes of protecting natural 
resources and the agricultural nature of the land, and of promoting 
agricultural viability for future generations, and permits the 
landowner the right to continue agricultural production and related 
uses subject to an agricultural land easement plan.
    Agricultural land easement plan means the document developed by 
NRCS or provided by the eligible entity and approved by NRCS, in 
consultation with the eligible entity and landowner, that describes the 
activities which promote the long-term viability of the land to meet 
the purposes for which the easement was acquired. The agricultural land 
easement plan includes a description of the farm or ranch management 
system, conservation practices that address the resource concerns for 
which the easement was enrolled, and any required component plans such 
as a grasslands management plan, forest management plan, or 
conservation plan as defined in this part. Where appropriate, the 
agricultural land easement plan will include conversion of highly 
erodible cropland to less intensive uses.
    Beginning farmer or rancher means an individual or legal entity 
who:
    (1) Has not operated a farm or ranch, or who has operated a farm or 
ranch for not more than 10 consecutive years and who will materially 
and substantially participate in the operation of the farm or ranch. 
This requirement applies to all members of a legal entity.
    (2) In the case of an individual, individually, or with the 
immediate family, material and substantial participation requires that 
the individual provide substantial day-to-day labor and management of 
the farm or ranch consistent with the practices in the county or State 
where the farm is located.
    (3) In the case of a legal entity or joint operation, all members 
must materially and substantially participate in the operation of the 
farm or ranch. Material and substantial participation requires that 
each of the members provide some amount of the management or labor and 
management necessary for day-to-day activities, such that if each of 
the members did not provide these inputs, operation of the farm or 
ranch would be seriously impaired.
    Certified entity means an eligible entity that NRCS has determined 
to meet the certification requirements in 1468.27 for the purposes of 
ACEP-ALE.
    Chief means the Chief of the Natural Resources Conservation Service 
or the person delegated the authority to act for the Chief.
    Commenced conversion wetland means a wetland or converted wetland 
for which the Farm Service Agency (FSA) has determined that the wetland 
manipulation was contracted for, started, or for which financial 
obligation was incurred before December 23, 1985.
    Commodity Credit Corporation (CCC) is a wholly-owned government 
corporation within the Department of Agriculture.
    Compatible use means a use or activity conducted on a wetland 
reserve easement that NRCS determines, in its sole discretion, is 
consistent with the long-term protection and enhancement of the wetland 
and other natural values of the easement area when performed according 
to amount, method, timing, frequency, intensity, and duration 
limitations prescribed by NRCS.
    Conservation plan is the document that--
    (1) Applies to highly erodible cropland;
    (2) Describes the conservation system applicable to the highly 
erodible cropland and describes the decisions of the person with 
respect to location, land use, tillage systems, and conservation 
treatment measures and schedules and where appropriate, will include 
conversion of highly erodible cropland to less intensive uses; and
    (3) Is developed in accordance with 7 CFR part 12.
    Conservation practice means a specified treatment, such as a 
vegetative, structural, or land management practice, that is planned 
and applied according to NRCS standards and specifications.
    Conservation Reserve Program (CRP) means the program administered 
by the CCC pursuant to 16 U.S.C. 3831-3836.
    Converted wetland means a wetland that has been drained, dredged, 
filled,

[[Page 11050]]

leveled, or otherwise manipulated (including the removal of woody 
vegetation or any activity that results in impairing or reducing the 
flow, circulation, or reach of water) for the purpose of, or to have 
the effect of, making possible the production of an agricultural 
commodity if such production would not have been possible but for such 
action, and before such action such land was wetland, farmed wetland, 
or farmed-wetland pasture and was neither highly erodible land nor 
highly erodible cropland.
    Cooperative agreement means the document that specifies the 
obligations and rights of NRCS and eligible entities participating in 
the program under subpart B or the document that authorizes the 
transfer of assistance between NRCS and a non-Federal entity associated 
with implementation of the program under subpart C.
    Cost-share payment means the payment made by NRCS to an eligible 
entity for the purchase of an ALE easement as set forth in subpart B of 
this part.
    Dedicated fund means an account held by a nongovernmental 
organization which is sufficiently capitalized for the purpose of 
covering expenses associated with the management, monitoring, and 
enforcement of agricultural land easements and where such account 
cannot be used for other purposes.
    Easement area means the portion of a parcel that is encumbered by 
an ACEP easement.
    Easement exchange means a real estate transaction where NRCS, on 
behalf of the United States and in its sole discretion, relinquishes 
all or a portion of its real property rights or interests in an 
easement which are replaced by real property rights or interests 
granted through an easement that has equivalent or greater conservation 
value, acreage, and economic value to the United States on land that is 
not adjacent to the original easement area. NRCS is not required to 
exchange any of its rights in an easement, and easement exchanges are 
discretionary, voluntary, real estate transactions between the United 
States, landowner, and other parties with an interest in the easement.
    Easement modification means a real estate transaction where NRCS, 
on behalf of the United States and in its sole discretion, agrees to 
adjust the boundaries or terms of an easement that will result in 
equivalent or greater conservation value, acreage, and economic value 
to the United States, and the modification only involves lands within 
or physically adjacent to the original easement area. NRCS is not 
required to modify any of its rights in an easement, and easement 
modifications are discretionary, voluntary, real estate transactions 
between the United States, landowner, and other parties with an 
interest in the easement that are subject to the requirements of this 
part.
    Easement payment means the consideration paid to a participant or 
their assignee for an easement conveyed to the United States under the 
ACEP-WRE, or the consideration paid to an Indian Tribe or Tribal 
members for entering into 30-year contracts.
    Easement restoration agreement means the agreement or contract NRCS 
enters into with the landowner or a third party to implement the WRPO 
on a wetland reserve easement or 30-year contract enrollment.
    Easement subordination means a real estate transaction where NRCS, 
on behalf of the United States and in its sole discretion, agrees to 
subordinate its real property rights on all or a portion of an easement 
as part of an easement exchange or easement modification. The 
subordinated rights will be replaced by rights that are of equivalent 
or greater conservation value, acreage, and economic value to the 
United States. NRCS is not required to subordinate any of its rights in 
an easement, and easement subordinations are discretionary, voluntary, 
real estate transactions between the United States, landowner, and 
other parties with an interest in the easement that are subject to the 
requirements of this part.
    Easement termination means a real estate transaction where NRCS, on 
behalf of the United States and in its sole discretion, agrees to 
terminate its rights in an easement or portion thereof to facilitate a 
project that addresses a compelling public need for which there is no 
practicable alternative and such termination action will result in 
equivalent or greater conservation value and economic value to the 
United States, and the United States is provided compensation for such 
termination. NRCS is not required to terminate any of its rights in an 
easement, and easement terminations are discretionary, voluntary, real 
estate transactions between the United States, landowner, and other 
parties that are subject to the requirements of this part. Unless and 
until the parties enter into a binding termination agreement, any party 
may withdraw its approval of a termination proposal at any time during 
the termination process.
    Eligible activity means an action other than a conservation 
practice that is included in the Wetland Reserve Plan of Operations 
(WRPO), as applicable, and that has the effect of alleviating problems 
or improving the condition of the resources, including ensuring proper 
management or maintenance of the wetland functions and values restored, 
protected, or enhanced through an easement or 30-year contract.
    Eligible entity means an Indian Tribe, State government, local 
government, or a nongovernmental organization which has a farmland or 
grassland protection program that purchases agricultural land easements 
for the purpose of protecting agriculture use and related conservation 
values, including grazing uses and related conservation values, by 
limiting conversion to nonagricultural uses of the land.
    Eligible land means private or Tribal land that NRCS has determined 
to meet the requirements of Sec.  1468.20 or Sec.  1468.30 of this 
part.
    Fair market value means the value of an agricultural land easement 
as determined using the Uniform Standards of Professional Appraisal 
Practice, an areawide market analysis or survey, or another industry-
approved method approved by the Chief, as established in subpart B or, 
for a wetland reserve easement, the value of the land as determined 
using the Uniform Standards of Professional Appraisal Practices or 
areawide market analysis or survey, as established in subpart C.
    Farm and ranch land of local importance means farm or ranch land 
used to produce food, feed, fiber, forage, bio-fuels, and oilseed crops 
that are locally important but not identified as having national or 
statewide importance. Criteria for defining and delineating this land 
are to be determined by the appropriate local agency or agencies. 
Farmlands of local importance may include tracts of land that have been 
designated for agriculture by local ordinance.
    Farm and ranch land of statewide importance means, in addition to 
prime and unique farmland, land that is of statewide importance for the 
production of food, feed, fiber, forage, bio-fuels, and oil seed crops. 
Criteria for defining and delineating this land are to be determined by 
the appropriate State agency or agencies. Generally, additional 
farmlands of statewide importance include those that are nearly prime 
farmland and that economically produce high yields of crops when 
treated and managed according to acceptable farming methods. Some may 
produce as high a yield as prime farmlands if conditions are favorable. 
In some States, additional farmlands of statewide importance may 
include tracts of land that have been designated for

[[Page 11051]]

agriculture by State law in accordance with 7 CFR part 657.
    Farm or ranch succession plan means a general plan to address the 
continuation of some type of agricultural business on the enrolled 
land. The farm or ranch succession plan may include specific intra-
family succession agreements or business asset transfer strategies to 
create opportunities for veteran farmers or ranchers or other 
historically underserved landowners.
    Farm Service Agency (FSA) is an agency of the United States 
Department of Agriculture.
    Field Office Technical Guide (FOTG) means the official local NRCS 
source of resource information and interpretations of guidelines, 
criteria, and requirements for planning and applying conservation 
practices and conservation management systems. The FOTG contains 
detailed information on the conservation of soil, water, air, plant, 
animal, and energy resources applicable to the local area for which it 
is prepared.
    Fish and Wildlife Service (FWS) is an agency of the United States 
Department of the Interior.
    Forest land means a land cover or use category that is at least 10 
percent stocked by single-stemmed woody species of any size that will 
be at least 13 feet tall at maturity. Also included is land bearing 
evidence of natural regeneration of tree cover (cutover forest or 
abandoned farmland) that is not currently developed for nonforest use. 
Ten percent stocked, when viewed from a vertical direction, equates to 
an aerial canopy cover of leaves and branches of 25 percent or greater.
    Forest land of statewide importance means forest land that NRCS, in 
consultation with the State Technical Committee, identifies as having 
ecological or economic significance within the State and may include 
forested areas or regions of the State that have been identified 
through statewide assessments and strategies conducted pursuant to 
State or Federal law.
    Forest management plan means a site-specific plan developed or 
approved by NRCS, in consultation with the eligible entity and the 
landowner, that describes management practices to conserve, protect, 
and enhance the viability of the forest land. Forest management plans 
may include a forest stewardship plan, as specified in section 5 of the 
Cooperative Forestry Assistance Act of 1978 (16 U.S.C. 2103a), another 
practice plan approved by the State Forester, or another plan 
determined appropriate by NRCS. The plan complies with applicable 
Federal, State, Tribal, and local laws, regulations, and permit 
requirements.
    Grassland of special environmental significance means grasslands 
that contain little or no noxious or invasive species, as designated or 
defined by State or Federal law; are subject to the threat of 
conversion to nongrassland uses or fragmentation; and the land is:
    (1)(i) Rangeland, pastureland, or shrubland on which the vegetation 
is dominated by native grasses, grass-like plants, shrubs, or forbs, or
    (ii) Improved, naturalized pastureland and rangeland; and
    (2)(i) Provides, or could provide, habitat for threated or 
endangered species or at-risk species,
    (ii) Protects sensitive or declining native prairie or grassland 
types, or
    (iii) Provides protection of highly sensitive natural resources.
    Grasslands management plan means the site-specific plan developed 
or approved by NRCS that describes the management system and practices 
to conserve, protect, and enhance the viability of the grassland. The 
grasslands management plan will include a description of the grassland 
management system consistent with NRCS practices contained in the FOTG, 
including the prescribed grazing standard for easements that will be 
managed using grazing; the management of the grassland for grassland-
dependent birds, animals, or other resource concerns for which the 
easement was enrolled; the permissible and prohibited activities; and 
any associated restoration plan or conservation plan. The grasslands 
management plan is a component of either an agricultural land easement 
plan or wetland reserve plan of operations.
    Historical and archaeological resources mean resources that are:
    (1) Listed in the National Register of Historic Places (established 
under the National Historic Preservation Act (NHPA), 16 U.S.C. 470, et 
seq.);
    (2) Formally determined eligible for listing in the National 
Register of Historic Places (by the State Historic Preservation Office 
(SHPO) or Tribal Historic Preservation Office (THPO) and the Keeper of 
the National Register in accordance with section 106 of the NHPA);
    (3) Formally listed in the State or Tribal Register of Historic 
Places of the SHPO (designated under section 101(b)(1)(B) of the NHPA) 
or the THPO (designated under section 101(d)(1)(C) of the NHPA); or
    (4) Included in the SHPO or THPO inventory with written 
justification as to why it meets National Register of Historic Places 
criteria.
    Historically underserved landowner means a beginning, limited 
resource, or socially disadvantaged farmer or rancher.
    Imminent harm means easement violations or threatened violations 
that, as determined by NRCS, would likely cause immediate and 
significant degradation to the conservation values for which the 
easement was acquired.
    Impervious surface means surfaces that are covered by asphalt, 
concrete, roofs, or any other surface that does not allow water to 
percolate into the soil.
    Indian Tribe means any Indian Tribe, band, nation, pueblo, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.), 
that is eligible for the special programs and services provided by the 
United States to Indians because of their status as Indians, including, 
for the purposes of this part, pueblos.
    Land evaluation and site assessment system means the land 
evaluation system approved by NRCS and used, when applicable, to rank 
land for farm and ranch land protection purposes based on soil 
potential for agriculture, as well as social and economic factors such 
as location, access to markets, and adjacent land use. For additional 
information see the Farmland Protection Policy Act regulation at 7 CFR 
part 658.
    Landowner means a person, legal entity, or Indian Tribe having 
legal ownership of land and those who may be buying eligible land under 
a purchase agreement. The term landowner may include all forms of 
collective ownership including joint tenants and tenants-in-common, and 
includes heirs, successors, assigns, and anyone claiming under them. 
State governments, local governments, and nongovernmental organizations 
that qualify as eligible entities are not eligible as landowners, 
unless otherwise determined by the Chief.
    Lands substantially altered by flooding means areas where flooding 
has created wetland hydrologic conditions which, with a high degree of 
certainty, will develop and retain wetland soil, hydrology, and 
vegetation characteristics over time.
    Limited resource farmer or rancher means either:
    (1)(i) A person with direct or indirect gross farm sales not more 
than the current indexed value in each of the previous two fiscal years 
(adjusted for inflation using Prices Paid by Farmer Index as compiled 
by National Agricultural Statistical Service), and

[[Page 11052]]

    (ii) Has a total household income at or below the national poverty 
level for a family of four, or less than 50 percent of county median 
household income in each of the previous two years (to be determined 
annually using Commerce Department Data); or
    (2) A legal entity or joint operation if all individual members 
independently qualify under paragraph (1) of this definition.
    Maintenance means work performed to keep the wetland reserve 
easement functioning for program purposes for the duration of the 
enrollment period. Maintenance includes actions and work to manage, 
prevent deterioration, repair damage, or replace conservation practices 
or activities on a wetland reserve easement, as approved by NRCS.
    Natural Resources Conservation Service (NRCS) means an agency of 
the U.S. Department of Agriculture (USDA), including when NRCS carries 
out program implementation using the funds, facilities, or authorities 
of the CCC.
    Nongovernmental organization means any organization that for 
purposes of qualifying as an eligible entity under subpart B:
    (1) Is organized for, and at all times since, the formation of the 
organization and has been operated principally for one or more of the 
conservation purposes specified in clause (i), (ii), (iii), or (iv) of 
section 170(h)(4)(A) of the Internal Revenue Code of 1986;
    (2) Is an organization described in section 501(c)(3) of that Code 
that is exempt from taxation under 501(a) of that Code; and
    (3) Is described--
    (i) In section 509(a)(1) and (2) of that Code, or
    (ii) Is described in section 509(a)(3) of that Code and is 
controlled by an organization described in section 509(a)(2) of that 
Code.
    Other interests in land include any right in real property other 
than easements that are recognized by State law that the Chief 
determines can be purchased by an eligible entity to further the 
agricultural use of the land and other ACEP-ALE purposes.
    Other productive soils means farm and ranch land soils, in addition 
to prime farmland soils, that include unique farmland and farm and 
ranch land of statewide and local importance.
    Parcel means the defined area of land and may be a portion or all 
of the area of land that is owned by the landowner.
    Participant means a person, legal entity, Indian Tribe, native 
corporation, or eligible entity who has been accepted into the program 
and who is receiving payment or who is responsible for implementing the 
terms and conditions of an agreement to purchase or 30-year contract, 
or the cooperative agreement for agricultural land easements.
    Pending offer means a written bid, contract, or option extended to 
a landowner by an eligible entity to acquire an agricultural 
conservation easement before the legal title to these rights has been 
conveyed for the purposes of protecting the agricultural use and future 
viability, including the protection of grazing uses and related 
conservation values, by limiting nonagricultural uses of the land or by 
restoring and conserving eligible land.
    Permanent easement means an easement that lasts in perpetuity.
    Person means a natural person.
    Prime farmland means land that has the best combination of physical 
and chemical characteristics for producing food, feed, fiber, forage, 
oilseed, and other agricultural crops with minimum inputs of fuel, 
fertilizer, pesticides, and labor without intolerable soil erosion, as 
determined by NRCS.
    Private land means land that is not owned by a governmental entity 
and includes acreage owned by Indian Tribes, as defined in this part.
    Projects of special significance means projects identified by the 
Chief using the criteria identified in Sec.  1468.24 of this part.
    Right of enforcement means the right of the United States to 
inspect the easement area and to enforce the easement entered into 
under this part in those instances in which the grantee of the easement 
does not fully protect the interests provided to the grantee under the 
easement.
    Riparian areas means areas of land that occur along streams, 
channels, rivers, and other water bodies. These areas are normally 
distinctly different from the surrounding lands because of unique soil 
and vegetation characteristics, may be identified by distinctive 
vegetative communities that are reflective of soil conditions normally 
wetter than adjacent soils, and generally provide a corridor for the 
movement of wildlife.
    Socially disadvantaged farmer or rancher means a producer who is a 
member of a group whose members have been subjected to racial or ethnic 
prejudices without regard to its members' individual qualities. For an 
entity, at least 50 percent ownership in the business entity must be 
held by socially disadvantaged individuals.
    State Conservationist means the NRCS employee authorized to direct 
and supervise NRCS activities in a State, and includes the Directors of 
the Caribbean Area (Puerto Rico and the Virgin Islands), or the Pacific 
Islands Area (Guam, American Samoa, and the Commonwealth of the 
Northern Mariana Islands).
    State Technical Committee means a committee established pursuant to 
16 U.S.C. 3861 and 7 CFR part 610, subpart C.
    Unique farmland means land other than prime farmland that is used 
for the production of specific high-value food and fiber crops as 
determined by NRCS. It has the special combination of soil quality, 
location, growing season, and moisture supply needed to economically 
produce sustained high quality or high yields of specific crops when 
treated and managed according to acceptable farming methods. Examples 
of such crops include citrus, tree nuts, olives, cranberries, fruits, 
and vegetables. Additional information on the definition of prime, 
unique, or other productive soil can be found in 7 CFR part 657 and 7 
CFR part 658.
    Veteran farmer or rancher means a producer who meets the definition 
in section 2501(e) of the Food, Agriculture, Conservation, and Trade 
Act of 1990, as amended (7 U.S.C. 2279(e)).
    Wetland means land that:
    (1) Has a predominance of hydric soils;
    (2) Is inundated or saturated by surface or groundwater at a 
frequency and duration sufficient to support a prevalence of 
hydrophytic vegetation typically adapted for life in saturated soil 
conditions; and
    (3) Supports a prevalence of such vegetation under normal 
circumstances.
    Wetland reserve easement means a reserved interest easement which 
is an interest in land defined and delineated in a deed whereby the 
landowner conveys all rights, title, and interests in a property to the 
United States, but the landowner retains those rights, title, and 
interests in the property which are specifically reserved to the 
landowner in the easement deed.
    Wetland reserve plan of operations (WRPO) means the document that 
is developed or approved by NRCS that identifies how the wetland 
functions and values and associated habitats on the easement will be 
restored, improved, and protected to achieve the purposes of the 
wetland reserve easement enrollment.
    Wetland functions and values means the hydrological and biological 
characteristics of wetlands and the socioeconomic value placed upon 
these characteristics, including:
    (1) Habitat for migratory birds and other wildlife, in particular 
at-risk species;

[[Page 11053]]

    (2) Protection and improvement of water quality;
    (3) Attenuation of water flows due to flood;
    (4) The recharge of ground water;
    (5) Protection and enhancement of open space and aesthetic quality;
    (6) Protection of flora and fauna which contributes to the Nation's 
natural heritage;
    (7) Carbon sequestration; and
    (8) Contribution to educational and scientific scholarship.
    Wetland restoration means the rehabilitation of degraded or lost 
habitat in a manner such that:
    (1) The original vegetation community and hydrology are, to the 
extent practical, re-established; or
    (2) A community different from what likely existed prior to 
degradation of the site is established. The hydrology and native self-
sustaining vegetation being established will substantially replace 
original habitat functions and values and does not involve more than 30 
percent of the easement area.


Sec.  1468.4  Appeals.

    (a) ACEP-ALE eligibility of entities. An entity which has submitted 
an ACEP-ALE application to be considered an eligible entity may obtain 
a review of any administrative determination concerning their 
eligibility for participation utilizing the administrative appeal 
regulations provided in 7 CFR parts 11 and 614.
    (b) ACEP-WRE applicants and participants. An applicant or 
participant in the ACEP-WRE may obtain a review of any administrative 
determination concerning eligibility for participation or receipt of 
payment utilizing the administrative appeal regulations provided in 7 
CFR parts 11 and 614.
    (c) Easement administration determinations under ACEP after 
easement closing. NRCS determinations that are made pursuant to its 
rights in an ACEP-funded easement after closing may be appealed to the 
State Conservationist as specified in the notice provided to the 
landowner when NRCS exercises its rights under the easement. Such 
determinations are not subject to appeal under 7 CFR part 11.


Sec.  1468.5  Scheme or device.

    (a) If it is determined by NRCS that anyone has employed a scheme 
or device to defeat the purposes of this part, any part of any program 
payment otherwise due or paid during the applicable period may be 
withheld or be required to be refunded with interest, thereon, as 
determined appropriate by NRCS.
    (b) A scheme or device includes, but is not limited to, coercion, 
fraud, misrepresentation, depriving anyone of a program benefit, or for 
the purpose of obtaining a payment to which they would otherwise not be 
entitled.


Sec.  1468.6  Subordination, exchange, modification, and termination.

    (a) After an easement has been recorded, no subordination, 
exchange, modification, or termination will be made in any interest in 
land, or portion of such interest, except as approved by the NRCS.
    (b) NRCS may approve subordinations, exchanges, modifications, or 
terminations if NRCS determines that:
    (1) It is in the Federal Government's interest to subordinate, 
exchange, modify, or terminate the interest in the land enrolled in the 
program;
    (2) The subordination, exchange, modification, or termination 
action will address a compelling public need or will facilitate the 
practical administration and management of the easement area or the 
program, as determined by the NRCS;
    (3) There is no practicable alternative that would address the 
compelling public need and avoid the easement area;
    (4)(i) The change will not adversely affect the conservation 
functions and values for which the easement was acquired or
    (ii) If there are no practicable alternative that exists other than 
impact to the conservation value of the easement area, such adverse 
impacts have been minimized to the greatest extent practicable, and any 
remaining adverse impacts mitigated by enrollment of other lands that 
provide equal or greater conservation functions and values, as 
determined by NRCS, at no cost to the government;
    (5) The easement subordination, modification, exchange, or 
termination under this section will not affect more than 10 percent of 
the original easement area. NRCS may authorize a greater percentage of 
the original easement area to be affected if NRCS determines that it is 
impracticable to achieve program purposes on the original easement 
area; and
    (6) The subordination, exchange, modification, or termination 
action will result in comparable conservation functions and value and 
equivalent or greater economic value to the United States as determined 
pursuant to paragraph (d) of this section.
    (c) NRCS must determine that the landowner and, if applicable, the 
eligible entity agree to such easement subordination, modification, 
exchange, or termination prior to considering that such easement 
administration action should be approved.
    (d) A determination of equal or greater economic value to the 
United States under paragraph (b) of this section will be made in 
accordance with an approved easement valuation methodology for ALE 
easements under subpart B or for WRE easements under subpart C. In 
addition to the value of the easement itself, NRCS may consider other 
financial investments it has made in the acquisition, restoration, and 
management of the original easement to ensure that the easement 
administration action results in equal or greater economic value to the 
United States.
    (e) Subordinations, exchanges, modifications, or terminations must 
result in equal or greater conservation and economic values to the 
United States. Subordinations, exchanges, or modifications of ACEP 
easements must result in no net loss of easement acres.
    (f) When reviewing a proposed action under this section, the 
preferred alternative is to avoid the easement area. If the easement 
area cannot be avoided entirely, then the preferred alternative should 
minimize impacts to the original easement area and its conservation 
functions and values.
    (g) Easement modifications, including subordinations, are preferred 
to easement exchanges which involve lands that are not physically 
adjacent to the original easement area. Easement exchanges are limited 
to circumstances where there are no available lands adjacent to the 
original easement area that will result in equal or greater 
conservation and economic values to the United States.
    (h) Replacement of easement acres as part of an easement exchange 
must occur within the same State and within the same eight-digit 
watershed as determined by the hydrologic unit codes developed by the 
U.S. Geological Survey.
    (i) Where NRCS determines that recordation of a new deed is 
necessary to effect an easement administration action under this 
section, NRCS will use the most recent version of the ACEP deed 
document or deed terms approved by NRCS.
    (j) If a modification, subordination or exchange involves an 
amended or new easement deed, the amended or new easement deed will be 
duly prepared and recorded in conformity with standard real estate 
practices, including requirements for title approval, subordination of 
liens, and recordation of documents.
    (k) At least 90 days prior to taking any termination action, 
written notice of such termination action will be

[[Page 11054]]

provided to the Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, Nutrition, and 
Forestry of the Senate.
    (l) A termination must meet criteria identified in this part and 
are limited to those circumstances where NRCS determines that the 
purposes of the program can no longer be achieved on the original 
easement area or the terms of the easement are no longer enforceable 
and there are no acceptable replacement acres available. NRCS will 
enter into a compensatory agreement with the proponent of the 
termination that identifies the costs for which the United States must 
be reimbursed, including but not limited to the value of the easement 
itself based upon current valuation methodologies, repayment of legal 
boundary survey costs, legal title work costs, associated easement 
purchase and restoration costs, and legal filing fees.
    (m) Easement plan. Insofar as is consistent with the easement and 
applicable law, NRCS may approve modifications to an easement plan that 
do not affect provisions of the easement. Easement plans include any 
agricultural land easement plans and component plans, wetland reserve 
plans of operations, or wetland reserve easement restoration 
agreements. Any easement plan modification must meet ACEP regulations 
and program objectives and must result in equal or greater conservation 
benefits on the enrolled land.


Sec.  1468.7  Transfer of land.

    (a) Offers voided. Any transfer of the property prior to recording 
the easement in the applicable land records or executing the 30-year 
contract may void the availability of ACEP funding for that easement 
transaction, unless the new landowner is determined eligible, the 
transfer is approved by NRCS, and the new landowner is willing to 
comply with ACEP requirements.
    (b) Payments to participants. For wetland reserve easements with 
annual installment payments, any remaining easement payments will be 
made to the original participants unless NRCS receives an assignment of 
proceeds.
    (c) Claims to payments. With respect to any and all payments owed 
to participants, NRCS will bear no responsibility for any full payments 
or partial distributions of funds between the original participant and 
the participant's successor. In the event of a dispute or claim on the 
distribution of payments, NRCS may withhold payments without the 
accrual of interest pending an agreement or adjudication on the rights 
to the funds.


Sec.  1468.8  Payments not subject to claims.

    Any cost-share, contract, agreement, or easement payment or 
portion, thereof, due any person, legal entity, Indian Tribe, eligible 
entity, or other party under this part will be allowed without regard 
to any claim or lien in favor of any creditor, except agencies of the 
United States Government.


Sec.  1468.9  Assignments.

    Any person, legal entity, Indian Tribe, eligible entity, or other 
party entitled to any cash payment under this program may assign the 
right to receive such cash payments, in whole or in part.


Sec.  1468.10  Environmental markets.

    (a) Ecosystem services credits for conservation improvements under 
a wetland reserve easement. Landowners may obtain environmental credits 
under other programs but such action must not adversely affect the 
interests granted under the easement to the United States or be 
inconsistent with or defeat the conservation purpose for which the 
easement is acquired.
    (b) Ecosystem Services Credits Related to an Agricultural Land 
Easement: Landowners may obtain environmental credits under other 
programs but such action must not adversely affect the interests 
granted under the easement to the grantee or to the United States right 
of enforcement or be inconsistent with or defeat the conservation 
purpose for which the easement is acquired.

Subpart B--Agricultural Land Easements


Sec.  1468.20  Program requirements.

    (a) General. (1) Under ACEP-ALE, NRCS will facilitate and provide 
cost-share assistance for the purchase by eligible entities of 
agricultural land easements or other interests in eligible private or 
Tribal land that is subject to a written pending offer from an eligible 
entity for the purpose of protecting the agricultural use, including 
grazing, and related conservation values of the land by limiting 
nonagricultural uses of the land.
    (2) To participate in ACEP-ALE, eligible entities as identified in 
paragraph (b) of this section must submit applications to NRCS State 
offices to partner with NRCS to acquire conservation easements on 
eligible land. Eligible entities with applications selected for funding 
must enter into a cooperative agreement with NRCS and use the NRCS 
required minimum deed terms specified therein, the effect of which is 
to protect natural resources and the agricultural nature of the land 
and permit the landowner the right to continue agricultural production 
and related uses subject to an agricultural land easement plan as 
approved by NRCS.
    (3) Under the agreement, the Federal share of the cost of an 
agricultural land easement or other interest in eligible land will not 
exceed 50 percent of the fair market value of the agricultural land 
easement and the eligible entity will provide a share that is at least 
equivalent to the Federal share, and at least 50 percent of the 
eligible entity share is from the eligible entity's own cash resources 
unless otherwise specified in this part.
    (4) The duration of each agricultural land easement or other 
interest in land will be in perpetuity or the maximum duration 
permitted by State law.
    (b) Entity eligibility. (1) To be eligible to receive ACEP-ALE 
funding, an Indian Tribe, State, unit of local government, or a 
nongovernmental organization must meet the definition of eligible 
entity as listed in Sec.  1468.3. In addition, eligible entities 
interested in receiving ACEP-ALE funds must provide NRCS sufficient 
evidence of:
    (i) A commitment to long-term conservation of agricultural lands,
    (ii) A capability to acquire, manage, and enforce easements,
    (iii) Sufficient number of staff dedicated to monitoring and 
easement stewardship, and
    (iv) The availability of funds at the time of application 
sufficient to meet the eligible entity's contribution requirements for 
each parcel proposed for funding.
    (2) All entities identified on the application or agreement must:
    (i) Ensure that their records and the records of all landowners 
with parcels selected for funding have been established in the USDA 
customer records system and are responsible for ensuring that USDA has 
all the documentation needed to establish these records, and
    (ii) Comply with applicable registration and reporting requirements 
of the Federal Funding Accountability and Transparency Act of 2006 
(Pub. L. 109-282, as amended), and 2 CFR parts 25 and 170, and maintain 
such registration for the duration of the cooperative agreement.
    (c) Landowner eligibility. Under ACEP-ALE, the parcel landowners 
must:
    (1) Be in compliance with the highly erodible land and wetland 
conservation provisions in 7 CFR part 12. Persons or legal entities 
must be in compliance with the Adjusted Gross Income

[[Page 11055]]

Limitation provisions of 7 CFR part 1400;
    (2) Agree to provide access to the property and such information to 
NRCS as the agency deems necessary or desirable to assist in its 
determination of eligibility for program implementation purposes; and
    (3) Have their records established in the USDA customer records 
system.
    (d) Land eligibility. (1) Land will only be considered eligible for 
enrollment in ACEP-ALE based on NRCS determination that such land:
    (i) Is private or Tribal land on a farm or ranch subject to a 
written pending offer by an eligible entity,
    (ii) Contains at least 50 percent prime or unique farmland, or 
designated farm and ranch land of State or local importance unless 
otherwise determined by NRCS, contains historical or archaeological 
resources, the enrollment of which would protect grazing uses and 
related conservation values by restoring and conserving land, or 
furthers a State or local policy consistent with the purposes of the 
ACEP-ALE,
    (iii) Is cropland; rangeland; grassland or land that contains forbs 
or shrubland for which grazing is the predominant use; located in an 
area that has been historically dominated by grassland, forbs, or 
shrubs and could provide habitat for animal or plant populations of 
significant ecological value; pastureland; or nonindustrial private 
forest land that contributes to the economic viability of a parcel 
offered for enrollment or serves as a buffer to protect such land from 
development, and
    (iv) Possesses suitable onsite and offsite conditions which will 
allow the easement to be effective in achieving the purposes of the 
program.
    (2) If land offered for enrollment is determined eligible under 
paragraph (d)(1) of this section, then NRCS may also enroll land that 
is incidental to the eligible land if the incidental land is determined 
by NRCS to be necessary for the efficient administration of an 
agricultural land easement.
    (3) Eligible land, including eligible incidental land, may not 
include forest land of greater than two-thirds of the easement area 
unless waived by NRCS with respect to lands identified by NRCS as sugar 
bush that contributes to the economic viability of the parcel. Land 
with contiguous forest that exceeds the greater of 40 acres or 20 
percent of the easement area will have a forest management plan before 
the easement is purchased and compensation paid to the landowner unless 
NRCS has approved an alternative means by which the forest land's 
contribution to the economic viability of the land has been 
demonstrated.
    (e) Ineligible land. The following land is not eligible for 
enrollment in ACEP-ALE:
    (1) Lands owned by an agency of the United States, other than land 
held in trust for Indian Tribes;
    (2) Lands owned in fee title by a State, including an agency or a 
subdivision of a State, or unit of local government;
    (3) Land owned by a nongovernmental organization whose purpose is 
to protect agricultural use and related conservation values including 
those listed in the statute under eligible land;
    (4) Land subject to an easement or deed restriction which, as 
determined by NRCS, provides similar restoration and protection as 
would be provided by enrollment in the program;
    (5) Land where the purposes of the program would be undermined due 
to onsite or offsite conditions, such as risk of hazardous substances, 
proposed or existing rights of way, infrastructure development, or 
adjacent land uses;
    (6) Land which NRCS determines to have unacceptable exceptions to 
clear title or insufficient legal access; or
    (7) Land on which gas, oil, earth, or mineral rights exploration 
has been leased or is owned by someone other than the landowner is 
ineligible under ACEP-ALE unless it is determined by NRCS that the 
third party rights will not harm or interfere with the conservation 
values or agricultural uses of the easement, that any methods of 
exploration and extraction will have only a limited and localized 
impact on the easement, and the limitations are specified in the ALE 
deed.


Sec.  1468.21  Application procedures.

    (a) To apply for enrollment under a new agreement or if applicable, 
under an existing agreement in a subsequent fiscal year, an eligible 
entity must submit an entity application for an ACEP-ALE agreement and 
any associated individual parcel applications to NRCS in the State 
where parcels are located.
    (b) Applications may be submitted on a continuous basis or in 
response to specific program solicitations. NRCS may announce one or 
more application cut-off dates for funding consideration within a given 
fiscal year.
    (c) NRCS will determine the entity, land, and landowner eligibility 
based on the application materials provided by the eligible entity, 
onsite assessments, and the criteria set forth in Sec.  1468.20.
    (d) At the end of each fiscal year, the lists of pending, unfunded 
eligible parcels will be cancelled unless the eligible entity requests 
that specific parcels be considered for funding in the next fiscal year 
and provides updated application information to NRCS.


Sec.  1468.22   Establishing priorities, ranking considerations and 
project selection.

    (a) After NRCS determines the eligibility of the landowner and the 
land, it can score and rank the parcels for funding. NRCS will use 
national and State criteria to score and rank eligible parcels. The 
national ranking criteria will comprise at least half of the ranking 
score. The State criteria will be developed by NRCS on a State-by-State 
basis, with advice from the State Technical Committee. Eligible parcels 
are ranked at the State level.
    (b) The national ranking criteria are:
    (1) Percent of prime, unique, and other important farmland in the 
parcel to be protected;
    (2) Percent of cropland, rangeland, grassland, historic grassland, 
pastureland, or nonindustrial private forest land in the parcel to be 
protected;
    (3) Ratio of the total acres of land in the parcel to be protected 
to average farm size in the county according to the most recent USDA 
Census of Agriculture;
    (4) Decrease in the percentage of acreage of farm and ranch land in 
the county in which the parcel is located between the last two USDA 
Censuses of Agriculture;
    (5) Percent population growth in the county as documented by the 
United States Census;
    (6) Population density (population per square mile) as documented 
by the most recent United States Census;
    (7) Existence of a farm or ranch succession plan or similar plan 
established to address farm viability for future generations;
    (8) Proximity of the parcel to other protected land, such as 
military installations; land owned in fee title by the United States or 
an Indian Tribe, State or local government, or by a nongovernmental 
organization whose purpose is to protect agricultural use and related 
conservation values; or land that is already subject to an easement or 
deed restriction that limits the conversion of the land to 
nonagricultural use;
    (9) Proximity of the parcel to other agricultural operations and 
agricultural infrastructure;
    (10) Maximizing the protection of contiguous acres devoted to 
agricultural use;
    (11) Whether the land is currently enrolled in CRP in a contract 
that is set

[[Page 11056]]

to expire within one year and is grassland that would benefit from 
protection under a long-term easement; and
    (12) Other additional criteria as determined by NRCS.
    (c) State or local criteria as determined by NRCS, with advice of 
the State Technical Committee, may only include:
    (1) The location of a parcel in an area zoned for agricultural use;
    (2) The eligible entity's performance in managing and enforcing 
easements. Performance must be measured by the efficiency by which 
easement transactions are completed or percentage of parcels that have 
been monitored and the percentage of monitoring results that have been 
reported;
    (3) Multifunctional benefits of farm and ranch land protection 
including social, economic, historical and archaeological, 
environmental benefits, species protection, or climate change 
resiliency;
    (4) Geographic regions where the enrollment of particular lands may 
help achieve national, State, and regional conservation goals and 
objectives, or enhance existing government or private conservation 
projects;
    (5) Diversity of natural resources to be protected;
    (6) Score in the land evaluation and site assessment system or 
equivalent measure for grassland enrollments. This score serves as a 
measure of agricultural viability (access to markets and 
infrastructure); and
    (7) Other criteria determined by NRCS that will allow for the 
selection of parcels that will achieve ACEP-ALE purposes.
    (d) If NRCS determines that the purchase of two or more 
agricultural land easements are comparable in achieving program goals, 
NRCS will not assign a higher priority to any one of these agricultural 
land easements solely on the basis of lesser cost to the program.
    (e) NRCS will rank all eligible parcels that have been submitted 
prior to an application cut-off date in accordance with the national 
and State ranking criteria before selecting parcels for inclusion in a 
cooperative agreement.
    (f) NRCS will list the selected eligible parcels in the cooperative 
agreements with the eligible entities that submitted the parcels, and 
the cooperative agreements will be signed by NRCS and eligible 
entities.
    (g) If the terms of the cooperative agreement allow for amendments 
in a subsequent fiscal year, the subsequent fiscal year's selected 
eligible parcels will be identified on an amendment to the cooperative 
agreement for that fiscal year. Funds for each subsequent fiscal year's 
parcels will be obligated with new NRCS and eligible entity signatures 
on each fiscal year's amendment. Parcels funded on each fiscal year's 
amendment will have a separate deadline for easement purchase, 
requesting reimbursement, and funding expiration.


Sec.  1468.23  Cooperative agreements.

    (a) NRCS will enter into a cooperative agreement with selected 
eligible entities that stipulates the terms and conditions under which 
the eligible entity is permitted to use ACEP-ALE funding, and will 
incorporate all ACEP-ALE requirements. NRCS will make a cooperative 
agreement template available to the eligible entities. The cooperative 
agreement will address:
    (1) The interests in land to be acquired, including the United 
States' right of enforcement, the minimum deed requirements, as well as 
the form and other terms and conditions of the easement deed;
    (2) The management and enforcement of the rights on lands acquired 
with ACEP-ALE funds;
    (3) The responsibilities of NRCS;
    (4) The responsibilities of the eligible entity on lands acquired 
with ACEP-ALE funds;
    (5) The requirement for each easement to have an agricultural land 
easement plan that is approved by NRCS and signed by the landowner and 
the eligible entity prior to execution of the easement deed and payment 
of easement compensation to the landowner;
    (6) The allowance of eligible parcel substitution upon mutual 
agreement of the parties;
    (7) The certification by the landowner at the time of easement 
execution and payment of easement compensation of the extent of any 
charitable contribution the landowner has provided to eligible entity; 
and
    (8) Other requirements deemed necessary by NRCS to meet the 
purposes of this part or protect the interests of the United States.
    (b) The term of cooperative agreements will be up to 5 fiscal years 
following the fiscal year the agreement is signed for certified 
entities and up to 3 fiscal years following the fiscal year the 
agreement is signed for other eligible entities.
    (c) The cooperative agreement will include an attachment listing 
the eligible parcels accepted by the NRCS. This list will include 
landowners' names and addresses, acreage, the estimated fair market 
value, the estimated Federal contribution, and other relevant 
information.
    (d) The cooperative agreement will require the eligible entity to 
comply with applicable registration and reporting requirements of the 
Federal Funding Accountability and Transparency Act of 2006 (Pub. L. 
109-282, as amended) and 2 CFR parts 25 and 170.
    (e) With NRCS approval, the eligible entity may substitute acres 
within a pending easement offer. Substituted acres must not decrease 
the monetary value of the offered easement or reduce the easements 
capability in meeting program purposes. With NRCS approval, an eligible 
entity may substitute pending easement offers within their cooperative 
agreement. The substituted landowner and easement offer must meet 
eligibility criteria as described in Sec.  1468.20. NRCS may require 
re-ranking of substituted acres within an easement offer and 
substituted easement offers within a cooperative agreement.


Sec.  1468.24  Compensation and funding for agricultural land 
easements.

    (a) Determining the fair market value of the agricultural land 
easement. (1) The Federal share will not exceed 50 percent of the fair 
market value of the agricultural land easement, as determined using:
    (i) An appraisal using the Uniform Standards of Professional 
Appraisal Practices or the Uniform Appraisal Standards for Federal Land 
Acquisitions,
    (ii) An areawide market analysis or survey, or
    (iii) Another industry-approved method approved by NRCS.
    (2) Prior to receiving funds for an agricultural land easement, the 
eligible entity must provide NRCS with an acceptable determination of 
the fair market value of the agricultural land easements that conforms 
to applicable industry standards and NRCS specifications and meets the 
requirements of this part.
    (3) If the value of the easement is determined using an appraisal, 
the appraisal must be completed and signed by a State-certified general 
appraiser and must contain a disclosure statement by the appraiser. The 
appraisal must conform to the Uniform Standards of Professional 
Appraisal Practices or the Uniform Appraisal Standards for Federal Land 
Acquisitions as selected by the eligible entity.
    (4) If the fair market value of the easement is determined using an 
areawide market analysis or survey, the

[[Page 11057]]

areawide market analysis or survey must be completed and signed by a 
person determined by NRCS to have professional expertise and knowledge 
of agricultural land values in the area subject to the areawide market 
analysis or survey. The use of areawide market analysis or survey must 
be approved by NRCS prior to entering a cooperative agreement.
    (5) Requests to use another industry-approved method must be 
submitted to NRCS and approved by NRCS prior to entering into the 
cooperative agreement. NRCS will identify the applicable industry 
standards and any associated NRCS specifications based on the 
methodology approved.
    (6) NRCS will review for quality assurance purposes, appraisals, 
areawide market analysis or surveys, valuation reports, or other 
information resulting from another industry-approved method approved 
for use by NRCS. Eligible entities must provide a copy of the 
applicable report or other information used to establish the fair 
market value of the agricultural land easement to NRCS at least 90 days 
prior to the planned date of easement execution and payment of easement 
compensation to the landowner.
    (7) Prior to the eligible entity's purchase of the easement, 
including payment of easement compensation to the landowner, NRCS must 
approve the determination of the fair market value of the agricultural 
land easement upon which the Federal share will be determined.
    (8) The landowner may make a charitable donation for a qualified 
conservation contribution (as defined by Section 170(h) of the Internal 
Revenue Code of 1986) to the eligible entity as provided in paragraph 
(b) of this section.
    (b) Determining the Federal share of the agricultural land 
easement. (1) Subject to the statutory limits, NRCS may provide up to 
50 percent of the fair market value of the agricultural land easement. 
An eligible entity will share in the cost of purchasing an agricultural 
land easement in an amount that is at least equivalent to the Federal 
share.
    (2) An eligible entity may include as part of its share a 
charitable donation or qualified conservation contribution (as defined 
by section 170(h) of the Internal Revenue Code of 1986) from the 
landowner if the eligible entity contributes its own cash resources in 
an amount that is at least 50 percent of the amount of the Federal 
share.
    (3) NRCS may authorize a waiver to increase the Federal share of 
the cost an agricultural land easement to an amount not to exceed 75 
percent of the fair market value of the agricultural land easement if:
    (i) NRCS determines the lands to be enrolled are grasslands of 
special environmental significance as defined in this part,
    (ii) An eligible entity will share in the cost of purchasing an 
agricultural land easement in an amount that is no less than 33.33 
percent of the Federal share. The eligible entity share may include a 
qualified landowner contribution if the eligible entity contributes its 
own cash resources in an amount that is at least 16.67 percent of the 
Federal share, and
    (iii) The eligible entity agrees to incorporate and enforce the 
additional necessary deed restrictions to manage and enforce the 
easement to ensure the grasslands of special environmental significance 
attributes are protected.
    (4) NRCS may waive a portion of the applicable eligible entity cash 
contribution requirement for enrollments that NRCS determines are of 
projects of special significance, including ALE enrollments that have 
received a waiver as grasslands of special environmental significance 
waiver. The waiver of the entity cash contribution does not result in 
an increase in the applicable Federal share and may only be authorized 
if NRCS determines the parcel is a project of special significance and 
NRCS determines that--
    (i) The transaction is subject to an increase in the private 
landowner donation that is equal to the amount of the waiver,
    (ii) The increase in the landowner donation is voluntary,
    (iii) The property is in active agricultural production,
    (iv) The agricultural land easement plan will address the 
protection of the attributes resulting in the parcel being a project of 
special significance, and
    (v) The eligible entity contributes its own cash resources in an 
amount that is:
    (A) For projects of special significance that are not grasslands of 
special environmental significance, at least 25 percent of the amount 
of the Federal share, or at least 10 percent of the Federal share in 
States that offer a State tax credit for a qualified conservation 
contribution on agricultural land; and
    (B) For enrollment on lands that has received a grasslands of 
special environmental significance waiver, at least 8.33 percent of the 
amount of the Federal share, or at least 3.33 percent of the Federal 
share in States that offer a State tax credit for a qualified 
conservation contribution on agricultural land.
    (vi) The parcel must meet definition of project of special 
significance and meet one or more of the following national criteria. 
The parcel is:
    (A) Listed on the National Register of Historic Places or is a 
traditional cultural property;
    (B) Located within a micropolitan statistical area and 50 percent 
of the adjacent land is agricultural land;
    (C) Located within a metropolitan statistical area;
    (D) An education or demonstration farm or ranch focused on 
agricultural production and natural resource conservation;
    (E) A farm or ranch operated for the purpose of increasing 
participation in agriculture and natural resource conservation by 
underserved communities, veterans, beginning farmers or ranchers, or 
disabled farmers or ranchers;
    (F) Officially designated as having been in the same family 
ownership for over 100 years; or
    (G) Meets the definition of grasslands of special environmental 
significance.
    (c) Uses of NRCS ACEP-ALE funds. (1) ACEP-ALE funds may not be used 
for eligible entity expenditures for appraisals, areawide market 
analysis, legal surveys, access, title clearance or title insurance, 
legal fees, development of agricultural land easement plans or 
component plans by the eligible entity, costs of easement monitoring, 
and other related administrative and transaction costs incurred by the 
eligible entity.
    (2) NRCS will conduct its own technical and administrative review 
of appraisals, areawide market analysis, or other easement valuation 
reports and its hazardous materials reviews.
    (3) NRCS may provide technical assistance to develop an 
agricultural land easement plan or component plans or may provide ACEP-
ALE funds to technical service providers (TSP) under 7 CFR part 652 to 
develop the agricultural land easement plan or component easement 
plans.


Sec.  1468.25  Agricultural land easement deeds.

    (a) Under ACEP-ALE, a landowner grants an easement to an eligible 
entity with which NRCS has entered into an ACEP-ALE cooperative 
agreement. The easement deed will require that the easement area be 
maintained in accordance with ACEP-ALE goals and objectives for the 
term of the easement.
    (b) Written pending offers by an eligible entity must be for 
acquiring an easement in perpetuity, except where State law prohibits a 
permanent easement. In such cases where State law limits the term of a 
conservation

[[Page 11058]]

easement, the easement term will be for the maximum duration allowed 
under State law.
    (c) The eligible entity may use its own terms and conditions in the 
agricultural land easement deed, but the agricultural land easement 
deed must contain the minimum deed requirements as specified by NRCS in 
the cooperative agreement, either in the deed or through an addendum 
that is incorporated therein.
    (d) For eligible entities that have not been certified, the deed 
document must be reviewed and approved by NRCS in advance of use as 
provided herein:
    (1) The eligible entity must submit individual agricultural land 
easement deeds to NRCS at least 90 days before the planned easement 
purchase date and be approved by NRCS in advance of use.
    (2) Eligible entities with multiple eligible parcels in a 
cooperative agreement may submit an agricultural land easement deed 
template for review and approval. The deed templates must be reviewed 
and approved by NRCS in advance of use.
    (3) NRCS may conduct an additional review of the agricultural land 
easement deeds for individual parcels prior to the execution of the 
easement deed by the landowner and the eligible entity to ensure that 
they contain the same language as approved by National Headquarters and 
that the appropriate site-specific information has been included.
    (e) NRCS reserves the right to require additional specific language 
or require removal of language in the agricultural land easement deed 
to ensure the enforceability of the easement deed, protect the 
interests of the United States, or to otherwise ensure ALE purposes 
will be met.
    (f) Among the minimum deed requirements specified in the 
cooperative agreement, the deed must:
    (1) Include a right of enforcement clause for NRCS. NRCS will 
specify the terms for the right of enforcement clause, including that 
such interest in the agricultural land easement remains in effect for 
the duration of the easement and any changes that affect NRCS's 
interest in the agricultural land easement must be reviewed and 
approved by NRCS under Sec.  1468.6 of this part.
    (2) Ensure compliance with an agricultural land easement plan that 
is provided by the eligible entity in consultation with the landowner, 
approved by NRCS, and implemented according to NRCS requirements. NRCS 
may provide technical assistance for the development or implementation 
of the agricultural land easement plan. If the parcel contains highly 
erodible land, the conservation plan component of the agricultural land 
easement plan will be developed and managed in accordance with the Food 
Security Act of 1985 and its associated regulations. The access must be 
sufficient to provide the United States ingress and egress to the 
easement area to ensure compliance pursuant to its right of 
enforcement.
    (3) Specify that impervious surfaces will not exceed 2 percent of 
the ACEP-ALE easement area, excluding NRCS-approved conservation 
practices unless NRCS grants a waiver as follows:
    (i) The eligible entity may request a waiver of the 2 percent 
impervious surface limitation at the time that a parcel is approved for 
funding,
    (ii) NRCS may waive the 2 percent impervious surface limitation on 
an individual easement basis, provided that no more than 10 percent of 
the easement area is covered by impervious surfaces,
    (iii) Before waiving the 2 percent limitation, NRCS will consider, 
at a minimum, population density; the ratio of open, prime, and other 
important farmland versus impervious surfaces on the easement area; the 
impact to water quality concerns in the area; the type of agricultural 
operation; parcel size; and the purposes for which the easement was 
acquired,
    (iv) Eligible entities may submit an impervious surface limitation 
waiver process to NRCS for review and consideration. The eligible 
entities must apply any approved impervious surface limitation waiver 
processes on an individual easement basis, and
    (v) NRCS will not approve blanket waivers or entity blanket waiver 
processes of the impervious surface limitation. All ACEP-ALE easements 
must include language limiting the amount of impervious surfaces within 
the easement area.
    (4) Include an indemnification clause requiring the landowner to 
indemnify and hold harmless the United States from any liability 
arising from or related to the property enrolled in ACEP-ALE. This 
provision cannot be waived.
    (5) Include an amendment clause requiring that any changes to the 
easement deed after its recordation must be consistent with the 
purposes of the agricultural land easement and this part. Any 
substantive amendment, including any subordination of the terms of the 
easement or modifications, exchanges, or terminations of the easement 
area, must be approved by NRCS prior to recordation or else the action 
is null and void.
    (6) Prohibit commercial and industrial activities except those 
activities that NRCS has determined are consistent with the 
agricultural use of the land.
    (7) Prohibit the subdivision of the property subject to the 
agricultural land easement, except where state or local regulations 
explicitly require subdivision to construct residences for employees 
working on the property or where otherwise authorized by NRCS.
    (8) Include specific protections related to the purposes for which 
the agricultural land easement is being purchased, including provisions 
to protect historic or archaeological resources or grasslands of 
special environmental significance.
    (9) Other minimum deed terms specified by NRCS to ensure that ACEP-
ALE purposes are met.
    (g) NRCS will make available for an eligible entity's use a 
standard set of minimum deed terms that could be wholly incorporated 
along with the eligible entity's own deed terms into the agricultural 
land easement deed, or as an addendum that is attached and incorporated 
by reference into the deed. If an eligible entity agrees to use the 
standard set of minimum deed terms, NRCS and the eligible entity will 
identify in the cooperative agreement those minimum standard deed terms 
as a requirement and the review of individual deeds may not be 
required. The minimum standard deed terms will specify that if such 
terms conflict with other terms of the deed, the NRCS terms superseded 
and prevail. NRCS may place priority on applications where an eligible 
entity agrees to use the standard set of minimum deed terms.
    (h) The eligible entity will acquire, hold, manage, monitor, and 
enforce the easement. The eligible entity may have the option to enter 
into an agreement with a governmental or private organizations that 
have no property rights or interests in the easement area to carry out 
easement monitoring, management and enforcement responsibilities.
    (i) All agricultural land easement deeds acquired with ACEP-ALE 
funds must be recorded. The eligible entity will provide proof of 
recordation to NRCS within the timeframe specified in the cooperative 
agreement.


Sec.  1468.26  Agricultural land easement plan.

    (a) The terms of the agricultural land easement deed will permit 
the landowner the right to continue agricultural production and related 
uses subject to an agricultural land easement plan, approved by NRCS 
and the landowner. An agricultural land

[[Page 11059]]

easement plan is required on all ACEP-ALE easements and at a minimum 
must:
    (1) Describe the activities which promote the long-term viability 
of the land to meet the purposes for which the easement was acquired;
    (2) Identify required and recommended conservation practices that 
address the purposes and resource concerns for which the parcel was 
selected;
    (3) Identify additional or specific criteria associated with 
permissible and prohibited activities consistent with the terms of the 
deed; and
    (4) If the agricultural land easement contains certain land use 
types, a component plan must be incorporated by reference into the 
agricultural land easement plan for each land use type present on the 
easement as follows:
    (i) Grasslands must have a grasslands management plan as defined in 
this part which includes a description of the grazing management system 
consistent with NRCS prescribed grazing standards,
    (ii) Forest land as described in Sec.  1468.20(d)(3) must have a 
forest management plan, and
    (iii) Highly erodible land must have a conservation plan wherein 
NRCS may require the conversion to less intensive uses. The terms of 
the conservation plan must be developed and managed in compliance with 
the Food Security Act of 1985 and its associated regulations.
    (5) The eligible entity is responsible to obtain and provide the 
agricultural land easement plan to NRCS. The agricultural land easement 
plan may be developed by NRCS, a qualified TSP, or an NRCS-certified 
conservation planner with current certifications.
    (6) Prior to the execution of the easement by the eligible entity 
and the landowner and payment of easement compensation to the 
landowner, the agricultural land easement plan must be approved by NRCS 
and be signed by the landowner and the eligible entity. The eligible 
entity is primarily responsible to ensure compliance with any required 
provisions of the agricultural land easement plan.
    (b) [Reserved].


Sec.  1468.27  Eligible entity certification.

    (a) To be considered for certification, an entity must submit a 
written request for certification to NRCS, which specifically addresses 
the following items:
    (1) An explanation of how the entity meets the requirements 
identified in Sec.  1468.20(d) of this section;
    (2) An agreement to use for ACEP-ALE funded acquisitions easement 
valuation methodologies identified in section Sec.  1468.24 of this 
part;
    (3) Proof that the entity holds, manages, and monitors a minimum of 
25 agricultural land conservation easements, unless the entity requests 
and receives a waiver of this requirement from NRCS;
    (4) Proof that the entity holds, manages, and monitors a minimum of 
five ACEP-ALE, FRPP, or Farmland Protection Program conservation 
easements;
    (5) A showing of a demonstrated ability to complete acquisition of 
easements in a timely fashion;
    (6) A showing that it has the capacity to enforce the provisions of 
easement deeds and history of such enforcement;
    (7) For nongovernmental organizations, information that the entity 
possesses a dedicated fund for the purposes of easement management, 
monitoring, and enforcement where such fund is sufficiently 
capitalized. The fund must be dedicated to the purposes of managing, 
monitoring, and enforcing each easement held by the eligible entity; 
and
    (8) A plan for administering easements enrolled under this part, as 
determined by NRCS.
    (b) NRCS will notify an entity in writing whether they have been 
certified and the rationale for the agency's decision. When NRCS 
determines an entity qualifies as certified:
    (1) NRCS may enter into a cooperative agreement with the certified 
entity through which NRCS may obligate funding for up to 5 fiscal 
years. New parcels or prior-year unfunded parcels submitted for funding 
by certified entities must compete for funding each year. Selected 
parcels and funding will be added to the existing cooperative agreement 
using an amendment to the cooperative agreement. Amendments added in 
the last year of the agreement cannot be extended;
    (2) NRCS will accept applications from certified entities 
continuously throughout the fiscal year;
    (3) The terms of the cooperative agreement will include the minimum 
deed terms and conditions to ensure that ACEP-ALE purposes will be met 
by the certified entity without requiring NRCS to pre-approve each 
easement transaction prior to closing.
    (i) Certified entities may purchase easements without NRCS 
approving the agricultural land easement deeds, agricultural land 
easement plans, titles, or appraisals before the purchase of the 
easement;
    (ii) Certified entities will prepare the agricultural land easement 
deeds, agricultural land easement plans, titles, and appraisals in 
accordance with NRCS requirements as identified in the cooperative 
agreement;
    (4) NRCS may provide technical assistance to develop the 
agricultural land easement plan.
    (5) NRCS will conduct quality assurance reviews of a percentage of 
the agricultural land easement transactions submitted by the certified 
entity for payment and annual monitoring reports submitted by the 
certified entity. The review will include whether the deed, title 
review, agricultural land easement plan, easement valuation 
determinations, and subsequent monitoring were conducted in accordance 
with the requirements set forth by NRCS in its certification of the 
eligible entity or in the cooperative agreement entered into with the 
certified entity; and
    (6) If an agricultural land easement deed, agricultural land 
easement plan, title, appraisal, or other easement valuation 
determination, or monitoring report fails the NRCS quality assurance 
review, NRCS will provide the certified entity an opportunity to 
correct the errors. If the certified entity fails to correct the errors 
to NRCS' satisfaction, NRCS will consider whether to allow the 
certified entity to continue to purchase ALE-funded easements without 
prior NRCS approval, to decertify the entity in accordance with 
paragraph (c) of this section, or require the certified entity to take 
administrative steps necessary to remedy the deficiencies.
    (c) Review and decertification of the certified entity. (1) NRCS 
will conduct a review of the certified entity a minimum of once every 3 
years to ensure that the certified entities are meeting the 
certification criteria established in this section.
    (2) If NRCS determines that the certified entity no longer meets 
these criteria, the Chief will:
    (i) Provide the certified entity a specified period of time, at a 
minimum 180 days, in which to take such actions as may be necessary to 
correct the identified deficiencies, and
    (ii) If NRCS determines the certified entity does not meet the 
criteria established in this part after the 180 days, NRCS will send 
written notice of decertification of the entity's certification status 
or eligibility for future ACEP-ALE funding. This notice will specify 
the actions that have not been completed to retain certification 
status, the actions entity must take to request certification status, 
the status of funds in the cooperative agreement; and the eligibility 
of the entity to apply for future ACEP-ALE funds. The entity may 
contest the Notice of Decertification in

[[Page 11060]]

writing to NRCS within 20 calendar days of receipt of the notice of 
decertification. The entity's letter must provide specific reasons why 
the decision to decertify is in error.
    (3) The period of decertification may not exceed 3 years in 
duration, with duration of decertification based upon the seriousness 
of the facts; and
    (4) The entity may be recertified upon application to NRCS, after 
the decertification period has expired, and when the entity has met the 
requirements as outlined under Sec.  1468.20(d).


Sec.  1468.28  Violations and remedies.

    (a) In the event of a violation of the agricultural land easement 
terms, the eligible entity will notify the landowner and the violator, 
if different than the landowner, and NRCS. The landowner may be given 
reasonable notice and, where appropriate, an opportunity to voluntarily 
correct the violation in accordance with the terms of the agricultural 
land easement.
    (b) In the event that the eligible entity fails to enforce any of 
the terms of the agricultural land easement as determined by NRCS, NRCS 
may exercise the United States' rights to enforce the terms of the 
agricultural land easement through any and all authorities available 
under Federal or State law.
    (c) Notwithstanding paragraph (a) of this section, NRCS, upon 
notification to the landowner and the eligible entity, reserves the 
right to enter upon the easement area if the annual monitoring report 
provided by the eligible entity documenting compliance with the 
agricultural land easement and the agricultural land easement plan is 
insufficient or is not provided annually, the United States has 
evidence of an unaddressed violation, or to remedy deficiencies or 
easement violations as it relates to the agricultural land easement 
plan. In the event of an emergency, the entry may be made at the 
discretion of NRCS when the actions are deemed necessary to prevent, 
terminate or mitigate a potential or unaddressed violation with 
notification to the landowner and eligible entity provided at the 
earliest practicable time. The landowner will be liable for any costs 
incurred by NRCS as a result of the landowner's failure to comply with 
the easement requirements as it relates to agricultural land easement 
violations.
    (d) The United States will be entitled to recover any and all costs 
from the eligible entity, including attorney's fees or expenses, 
associated with any enforcement or remedial action as it relates to the 
enforcement of the ACEP-ALE easement.
    (e) In instances where an easement is terminated, the proponent of 
the termination action shall pay to CCC an amount determined by NRCS.
    (f) If NRCS exercises its rights identified under an agricultural 
land easement NRCS will provide written notice to the eligible entity 
at the eligible entity's last known address. The notice will set forth 
the nature of the noncompliance by the eligible entity and a 60-day 
period to cure. If the eligible entity fails to cure within the 60-day 
period, NRCS will take the action specified under the notice. NRCS 
reserves the right to decline to provide a period to cure if NRCS 
determines that imminent harm may result to the conservation values or 
other interest in land it seeks to protect.

Subpart C--Wetland Reserve Easements


Sec.  1468.30  Program requirements.

    (a) General. (1) Under the ACEP-WRE, NRCS may purchase wetland 
reserve easements from with eligible landowners who voluntarily 
cooperate to restore, protect, and enhance wetlands on eligible private 
or Tribal lands. A 30-year contract enrollment option is also available 
for acreage owned by Indian Tribes.
    (2) To participate in ACEP-WRE, a landowner must agree to the 
implementation of a WRPO, the effect of which is to restore, protect, 
enhance, maintain, and manage the hydrologic conditions of inundation 
or saturation of the soil, native vegetation, and natural topography of 
eligible lands.
    (3) NRCS may provide financial assistance through an easement 
restoration agreement for the conservation practices and activities 
that promote the restoration, protection, enhancement, maintenance, and 
management of wetland functions and values and associated habitats.
    (4) For ACEP-WRE enrollments, NRCS may implement such conservation 
practices and activities through an agreement with the landowner, a 
contract with a vendor, an interagency agreement, or a cooperative 
agreement with a cooperating entity. Specific restoration, protection, 
enhancement, maintenance, and management actions may be undertaken by 
the landowner, NRCS or its designee.
    (5) The duration of a wetland reserve easement may be either 
perpetual, 30-years, or the maximum duration permitted by State law. 
The duration of a 30-year contract on acreage owned by Indian Tribes is 
30 years.
    (b) Acreage limitations. (1) No more than 25 percent of the total 
cropland in any county, as determined by the Farm Service Agency, may 
be enrolled in CRP and ACEP-WRE, and no more than 10 percent of the 
total cropland in the county may be subject to an easement under ACEP-
WRE.
    (2) The limitations in paragraph (1) of this subsection do not 
apply to areas devoted to windbreaks or shelterbelts after November 28, 
1990, or to cropland designated by NRCS with ``subclass w'' in the land 
capability classes IV through VIII because of severe use limitations 
due to factors related to excess water such as poor soil drainage, 
wetness, high water table, soil saturation, or inundation.
    (3) NRCS and the Farm Service Agency will concur before a waiver of 
the 25 percent limit of paragraph (b)(1) of this section can be 
approved for an easement proposed for enrollment in ACEP-WRE. Such a 
waiver will only be approved if the waiver will not adversely affect 
the local economy, and operators in the county are having difficulties 
complying with the conservation plans implemented under 16 U.S.C. 3812.
    (c) Landowner eligibility. To be eligible to enroll in the ACEP-
WRE, all landowners must be in compliance with the highly erodible land 
and wetland conservation provisions in 7 CFR part 12. Persons or legal 
entities must be in compliance with the Adjusted Gross Income 
Limitation provisions at 7 CFR part 1400 and:
    (1) Be the landowner of eligible land for which enrollment is 
sought;
    (2) Provide any documentation required by NRCS as necessary to 
determine eligibility;
    (3) Comply with applicable registration and reporting requirements 
of the Federal Funding Accountability and Transparency Act of 2006 
(Pub. L. 109-282, as amended), and 2 CFR parts 25 and 170; and
    (4) For easement applications, have been the landowner of such land 
for the 24-month period prior to the time of application unless it is 
determined by NRCS that:
    (i) The land was acquired by will or succession as a result of the 
death of the previous landowner or pursuant to the terms of an existing 
trust,
    (ii) The ownership change occurred due to foreclosure on the land 
and the owner of the land immediately before the foreclosure exercises 
a right of redemption from the mortgage holder in accordance with State 
law, or
    (iii) The land was acquired under circumstances that give adequate 
assurances, as determined by NRCS,

[[Page 11061]]

that such land was not acquired for the purposes of placing it in the 
program. Adequate assurances will include documentation that the change 
of ownership resulted from circumstances such as:
    (A) The prior landowner owned the land for 2 years or more and 
transferred ownership amongst members of the immediate family (father, 
mother, spouse, children, grandparents, or grandchildren),
    (B) A completion of a contract for deed entered into 24 months or 
more prior to the application date,
    (C) The new landowner had leased the land for agricultural purposes 
for 24 months or more prior to the application date, or
    (D) The easement area is a portion of a larger property where the 
majority portion was acquired for agriculture purposes.
    (4) Agree to provide such information to NRCS as the agency deems 
necessary to assist in its determination of eligibility for program 
benefits and for other program implementation purposes.
    (d) Transfer of parcel before purchase of easement. When a parcel 
of land that has been accepted for enrollment into the ACEP-WRE is sold 
or transferred prior to NRCS purchase of the easement, NRCS will cancel 
the application or agreement to purchase and remove the acres from 
enrollment unless the new landowner meets the requirements of paragraph 
(c) of this section and accepts the terms and conditions of enrollment. 
The new landowner must submit required documentation for NRCS review 
and execute any required agreements or contracts. The decision to 
approve and execute an enrollment transferred prior to closing is at 
NRCS' discretion.
    (e) Land eligibility. (1) Only private land or acreage owned by an 
Indian Tribe may be considered for enrollment into ACEP-WRE.
    (2) NRCS will determine whether land is eligible for enrollment and 
whether, once found eligible, the lands may be included in the program 
based on the likelihood of successful restoration of such land and 
resultant wetland functions and values merit inclusion of such land in 
the program when considering the cost of acquiring the easement and the 
cost of the restoration, protection, enhancement, maintenance, and 
management.
    (3) Land will only be considered eligible for enrollment in the 
ACEP-WRE if NRCS determines, in consultation with the FWS, that the 
enrollment of such land maximizes wildlife benefits and wetland 
function and values.
    (4) To be determined eligible, NRCS must also determine that such 
land is--
    (i) Farmed wetland or converted wetland, together with adjacent 
lands that are functionally dependent on the wetlands, if such land is 
identified by NRCS as:
    (A) Wetlands farmed under natural conditions, farmed wetlands, 
prior converted cropland, commenced conversion wetlands, farmed wetland 
pastures, and lands substantially altered by flooding so as to develop 
and retain wetland functions and values; or
    (B) Former or degraded wetlands that occur on lands that have been 
used or are currently being used for the production of food and fiber, 
including rangeland and forest production lands, where the hydrology 
has been significantly degraded or modified and will be substantially 
restored; or
    (C) Farmed wetland and adjoining land enrolled in CRP that has the 
highest wetland functions and values and is likely to return to 
production after the land leaves CRP; or
    (D) A riparian area along a stream or other waterway that links, or 
after restoring the riparian area, will link wetlands protected by the 
ACEP-WRE easement, another easement, or other device or circumstance 
that achieves the same objectives as an ACEP-WRE easement; or
    (ii) Cropland or grassland that was used for agricultural 
production prior to flooding from the natural overflow of:
    (A) A closed basin lake, together with adjacent land that is 
functionally dependent upon it, if the State or other entity is willing 
to provide 50 percent share of the cost of the an easement; or
    (B) A pothole and adjacent land that is functionally dependent on 
it; and
    (C) The size of the parcel offered for enrollment is a minimum of 
20 contiguous acres. Such land meets the requirement of likelihood of 
successful restoration only if the soils are hydric and the depth of 
water is 6.5 feet or less.
    (5) If land offered for enrollment is determined eligible under 
this subsection, then NRCS may also enroll land adjacent or contiguous 
to such eligible land together with the eligible land, if such land 
maximizes wildlife benefits and contributes significantly to wetland 
functions and values. Such adjacent or contiguous land may include 
buffer areas, created wetlands, noncropped natural wetlands, riparian 
areas that do not meet the requirements of paragraph (e)(4)(i)(D) of 
this section, and restored wetlands, but not more than NRCS, in 
consultation with the State Technical Committee, determines is 
necessary to maximize wildlife benefits and contribute significantly to 
wetland functions and values. NRCS will not enroll as adjacent or 
contiguous land any constructed wetlands that treat wastewater or 
contaminated runoff.
    (6) To be enrolled in the program, eligible land must have 
sufficient access and be configured in a size and with boundaries that 
allow for the efficient management of the area for program purposes and 
otherwise promote and enhance program objectives as determined by NRCS.
    (f) Enrollment of CRP lands. Land subject to an existing CRP 
contract may be enrolled in ACEP-WRE only if the land and landowner 
meet the requirements of this part and the enrollment is requested by 
the landowner and agreed to by NRCS. To enroll in ACEP-WRE, the CRP 
contract for the property must be terminated or otherwise modified 
subject to such terms and conditions as are mutually agreed upon by FSA 
and the landowner.
    (g) Ineligible land. The following land is not eligible for 
enrollment in the ACEP-WRE:
    (1) Converted wetlands if the conversion was commenced after 
December 23, 1985;
    (2) Land established to trees under the CRP, except in cases where 
the land meets all other WRE eligibility criteria, the established 
cover conforms to WRE restoration requirements and NRCS specifications, 
an active CRP contract will be terminated or otherwise modified upon 
purchase of the WRE easement, and any additional criteria NRCS uses to 
determine if enrollment of such lands would further the purposes of the 
program;
    (3) Lands owned the United States other than held in trust for 
Indian Tribes;
    (4) Lands owned in fee title by a State, including an agency or a 
subdivision of a State or a unit of local government;
    (5) Land subject to an easement or deed restriction which, as 
determined by NRCS, provides similar restoration and protection of 
wetland functions and values as would be provided by enrollment in 
ACEP-WRE;
    (6) Lands where the purposes of the program or implementation of 
restoration practices would be undermined due to onsite or offsite 
conditions, including, but not limited to--
    (i) Risk of hazardous substances either onsite or offsite,
    (ii) Proposed or existing rights of way, either onsite or offsite, 
for infrastructure development, or
    (iii) Adjacent land uses, such as airports, that would either 
impede

[[Page 11062]]

complete restoration or prevent wetland functions and values from being 
fully restored; or
    (7) Land which NRCS determines to have unacceptable exceptions to 
clear title or legal access that is encumbered, nontransferable, 
restricted, or otherwise insufficient.


Sec.  1468.31  Application procedures.

    (a) Application for participation. To apply for enrollment, a 
landowner must submit an application to NRCS.
    (b) Preliminary agency action. By filing an application, the 
landowner consents to an NRCS representative entering upon the land for 
purposes of assessing the wetland functions and values and for other 
activities, such as the ranking and development of the preliminary 
WRPO, that are necessary or desirable for NRCS to evaluate 
applications. The landowner is entitled to accompany an NRCS 
representative on any site visits.
    (c) Voluntary reduction in costs. In order to enhance the 
probability of enrollment in ACEP-WRE, the landowner or someone other 
than the landowner may offer to contribute financially to the cost of 
the acquisition or restoration of the wetland reserve easement to 
leverage Federal funds. This offer must be made in writing to NRCS.


Sec.  1468.32  Establishing priorities, ranking consideration and 
project selection.

    (a) When evaluating easement or 30-year contract applications from 
landowners, NRCS, with advice from the State Technical Committee, may 
consider:
    (1) The conservation benefits of obtaining an easement or other 
interest in the land, including but not limited to:
    (i) Habitat that will be restored for the benefit of for migratory 
birds and wetland-dependent wildlife, including diversity of wildlife 
that will be benefitted or life-cycle needs that will be addressed;
    (ii) Extent and use of habitat that will be restored for 
threatened, endangered, or other at-risk species or number of different 
at-risk species benefitted;
    (iii) Protection or restoration of native vegetative communities;
    (iv) Habitat diversity and complexity to be restored;
    (v) Proximity and connectivity to other protected habitats;
    (vi) Extent of beneficial adjacent land uses;
    (vii) Proximity to impaired water bodies;
    (viii) Extent of wetland losses within a geographic area, including 
wetlands generally or specific wetland types;
    (ix) Hydrology restoration potential, which must comprise at least 
50 percent of the points for conservation benefits.
    (2) The cost effectiveness of each easement;
    (3) Whether the landowner or another person is offering to 
contribute financially to the cost of the easement or other interest in 
the land to leverage Federal funds;
    (4) The extent to which the purposes of this part would be achieved 
on the land;
    (5) The productivity of the land;
    (6) The on-farm and off-farm environmental threats if the land is 
used for the production of agricultural commodities.
    (7) Such other factors as NRCS determines are necessary to carry 
out the purposes of the program.
    (b) To the extent practicable, taking into consideration costs and 
future agricultural and food needs, NRCS will give priority to:
    (1) Obtaining permanent easements over shorter term easements; and
    (2) Acquiring easements based on the value of the easement for 
protecting and enhancing habitat for migratory birds and other 
wildlife, in consultation with FWS, as may be appropriate.
    (c) NRCS, in consultation with the State Technical Committee, may 
place higher priority on:
    (1) Certain land types or geographic regions of the State where 
restoration of wetlands may better achieve State and regional goals and 
objectives; and
    (2) Land that is currently enrolled in CRP in a contract that is 
set to expire within one year from the date of application and is 
farmed wetland and adjoining land that has the highest wetland 
functions and values and is likely to return to production after the 
land leaves CRP.
    (d) Notwithstanding any limitation of this part regarding priority 
ranking, NRCS may enroll eligible lands at any time in order to 
encompass total wetland areas subject to multiple ownership or 
otherwise to achieve program objectives. NRCS may, at any time, exclude 
enrollment of otherwise eligible lands if the participation of the 
adjacent landowners is essential to the successful restoration of the 
wetlands and those adjacent landowners are unwilling or ineligible to 
participate. NRCS may coordinate with other Federal, State, and 
nonprofit organizations to encourage the restoration of wetlands on 
adjacent ineligible lands, especially in priority geographic areas.


Sec.  1468.33  Enrollment process.

    (a) Tentative selection. Based on the priority ranking, NRCS will 
notify an affected landowner of tentative acceptance into the program.
    (b) Effect of notice of tentative selection. The notice of 
tentative acceptance into the program does not bind NRCS or the United 
States to enroll the proposed project in ACEP-WRE, nor does it bind the 
landowner to continue with enrollment in the program. The notice 
informs the landowner of NRCS' intent to continue the enrollment 
process on their land.
    (c) Acceptance and effect of offer of enrollment--(1) Wetland 
reserve easement. For applications requesting enrollment through a 
wetland reserve easement, NRCS will present an agreement to purchase to 
the landowner which will describe the easement area, the easement 
compensation amount, the easement terms and conditions, and other terms 
and conditions for participation that may be required by NRCS as 
appropriate. The easement compensation amount will be based upon the 
lowest of the fair market value of the land, the geographic area rate 
cap, or the landowner offer, as provided in Sec.  1468.34 of this part. 
The landowner accepts enrollment in the ACEP-WRE by signing the 
agreement to purchase. NRCS will continue with easement acquisition 
activities after the property has been enrolled.
    (2) 30-year contract. For applications requesting enrollment of 
acreage owned by an Indian tribe through the 30-year contract option, 
NRCS will present an agreement to enter 30-year contract to the Tribal 
landowner which will describe the contract area, the contract terms and 
conditions, and other terms and conditions for participation that may 
be required by NRCS as appropriate. The Tribal landowner accepts 
enrollment in the ACEP-WRE by signing the agreement to enter 30-year 
contract. NRCS will proceed with implementation of the WRPO after the 
30-year contract has been executed.
    (d) Restoration responsibility and the scope of enrollment. (1) The 
enrollment document establishes the terms of enrollment consistent with 
the terms and conditions of this part and identifies the:
    (i) Scope of the agreement between NRCS and the landowner,
    (ii) Basis for NRCS to obligate funds, and
    (iii) Nature and method through which NRCS will provide ACEP-WRE 
technical and financial assistance to the landowner.
    (2) The agreement to purchase between NRCS and the landowner under 
the easement option constitutes the agreement for:

[[Page 11063]]

    (i) Granting an easement on the enrolled land and sufficient access 
to the enrolled land as set forth under Sec.  1468.37,
    (ii) Implementing a WRPO which provides for the restoration and 
protection of the wetland functions and values,
    (iii) Recording the easement in accordance with applicable State 
law,
    (iv) Ensuring the title to the easement is superior to the rights 
of all others, except for exceptions to the title that are deemed 
acceptable by NRCS and in accordance with Department of Justice Title 
Standards, and
    (v) Withholding the landowner's share of the restoration cost from 
the easement payment for 30-year or non-permanent easement or 30-year 
contract enrollments.
    (3) The terms of the easement identified in paragraph (d)(2)(i) of 
this section includes the landowner's agreement to the implementation 
of a WRPO identified in paragraph (d)(2)(ii) of this section. In 
particular, the easement deed identifies that NRCS has the right to 
enter the easement area to undertake on its own or through an agreement 
with the landowner or other entity, any activities to restore, protect, 
manage, maintain, enhance, and monitor the wetland and other natural 
values of the easement area.
    (4) At the time NRCS enters into an agreement to purchase, NRCS 
agrees, subject to paragraph (e) of this section, to acquire and 
provide for restoration of the land enrolled into the program.
    (e) Withdrawal of offer of enrollment. Prior to execution of the 
easement deed by the United States and the landowner, NRCS may withdraw 
the land from enrollment at any time due to lack of availability of 
funds, inability to clear title, insufficient access, sale of the land, 
risk of hazardous substance contamination, or other reasons.
    (f) Landowner failure to accept enrollment offer in timely manner. 
The offer of enrollment to the landowner will be void if not executed 
by the landowner within the time specified.


Sec.  1468.34  Compensation for easements and 30-year contracts.

    (a) Determination of easement payment rates. (1) Compensation for 
an easement or 30-year contract under this part will be made in cash in 
such amount as is agreed to and specified in the agreement to purchase 
or agreement to enter 30-year contract and finalized in the warranty 
easement deed or 30-year contract.
    (2) Payments for 30-year easements, nonpermanent easements as 
limited by State law, or 30-year contracts will be not more than 75 
percent of that which would have been paid for a permanent easement as 
determined by the methods listed in paragraph (a)(3) of this section.
    (3) NRCS will pay as compensation the lowest of the following:
    (i) The fair market value of the land using the Uniform Standards 
for Professional Appraisal Practices or based on an areawide market 
analysis or survey,
    (ii) The geographic area rate cap determined under paragraph (a)(4) 
of this section, or
    (iii) A written offer made by the landowner.
    (4) Each fiscal year NRCS, in consultation with the State Technical 
Committee, will establish one or more geographic area rate caps within 
a State. NRCS will determine the geographic area rate cap using the 
best information which is readily available in that State. Such 
information may include: soil types, types of crops capable of being 
grown, production history, location, real estate market values, and tax 
rates and assessments.
    (b) Acceptance of offered easement compensation. (1) NRCS will not 
acquire any easement unless the landowner accepts the amount of the 
easement payment offered by NRCS. The easement payment may or may not 
equal the fair market value of the interests and rights to be conveyed 
by the landowner under the easement.
    (2)(i) For easements or 30-year contracts valued at $500,000 or 
less, NRCS will provide compensation in up to 10 annual payments, as 
requested by the participant, as specified in the agreement to purchase 
or agreement to enter 30-year contract between NRCS and the 
participant.
    (ii) For easements or 30-year contracts valued at more than 
$500,000, NRCS may provide compensation in at least 5, but not more 
than 10 annual payments. NRCS may provide compensation in a single 
payment for such easements or 30-year contracts when, as determined by 
the NRCS Chief, it would further the purposes of the program. The 
applicable payment schedule will be specified in the agreement to 
purchase a conservation easement (APCE) or agreement to enter contract 
for 30-year land use, entered into between NRCS and the landowner.
    (c) Reimbursement of a landowner's expenses. For completed easement 
conveyances, NRCS will reimburse the landowner for fair and reasonable 
expenses, if any, incurred for legal boundary surveys and other related 
costs, as authorized and determined by NRCS.
    (d) Per acre basis calculations. If easement or 30-year contract 
payments are calculated on a per acre basis, NRCS will identify an 
estimated amount in its agreement to purchase and the final easement or 
30-year contract payment will be made based on final determination of 
acreage and specified in the warranty easement deed or 30-year 
contract.


Sec.  1468.35  Wetland Reserve Enhancement Partnerships.

    (a) The purpose of the Wetland Reserve Enhancement Partnership 
(WREP) option is to target and leverage resources to address high 
priority wetland protection, restoration, and enhancement objectives 
through agreements with States (including a political subdivision or 
agency of a State), nongovernmental organizations, or Indian Tribes.
    (b) NRCS will establish priorities for funding, required level of 
partner contribution of resources, ranking criteria, and other 
criteria. Among other selection criteria, NRCS will prioritize 
proposals that address wetland restoration needs of national or 
regional importance, including special project or area-wide proposals.
    (c) NRCS will make the information regarding WREP available to the 
public and potential partners.
    (d) NRCS will evaluate proposals and make final funding selections 
based upon the priorities identified in the public notice of funding 
availability.
    (e) NRCS will enter into WREP agreements with partners who have 
projects selected for funding.


Sec.  1468.36  WRPO payments.

    (a) NRCS may provide financial assistance for implementing the WRPO 
on the enrolled land. The amount and terms and conditions of the 
financial assistance will be subject to the following restrictions on 
the costs of establishing or installing conservation practices or 
activities specified in the WRPO:
    (1) On enrolled land subject to a permanent easement, NRCS will 
offer to pay at least 75 percent but not more than 100 percent of such 
costs; and
    (2) On enrolled land subject to a 30-year or nonpermanent easement 
or 30-year contract, NRCS will offer to pay at least 50 percent but not 
more than 75 percent of such costs. The landowner's share of the WRPO 
implementation costs may be withheld from the easement or 30-year 
contract payment.
    (b) Payments may be made only upon a determination by NRCS that an 
eligible conservation practice or component of the conservation 
practice

[[Page 11064]]

has been implemented in compliance with appropriate NRCS standards and 
specifications; or an eligible activity has been implemented in 
compliance with the appropriate requirements detailed in the WRPO.
    (c) Payments may be made for replacement of an eligible 
conservation practice, if NRCS determines that the practice is still 
needed and that the failure of the original conservation practice was 
due to reasons beyond the control of the participant.
    (d) A participant may seek additional assistance from other public 
or private organizations as long as the conservation practices or 
activities funded are approved by NRCS and implemented in compliance 
with this part.


Sec.  1468.37  Easement and 30-year contract participation 
requirements.

    (a) Easement requirements. (1) To enroll eligible land in ACEP-WRE 
through the permanent or 30-year easement option, a landowner will 
grant an easement to the United States. The easement will require that 
the easement area be maintained in accordance with ACEP-WRE goals and 
objectives for the duration of the term of the easement, including the 
restoration, protection, enhancement, maintenance, and management of 
wetland and other land functions and values.
    (2) For the duration of its term, the easement will require, at a 
minimum, that the landowner and the landowner's heirs, successors, and 
assigns will cooperate in the restoration, protection, enhancement, 
maintenance, and management of the land in accordance with the warranty 
easement deed and with the terms of the WRPO. In addition, the easement 
will grant to the United States:
    (i) A sufficient right of legal access to the easement area,
    (ii) The right to authorize compatible uses of the easement area, 
including such activities as hunting and fishing, managed timber 
harvest, or periodic haying or grazing, if such use is consistent with 
the long-term protection and enhancement of the wetland resources for 
which the easement was established,
    (iii) All rights, title, and interest in the easement area except 
those rights specifically reserved in the deed, and
    (iv) The right to restore, protect, enhance, maintain, and manage 
activities on the easement area.
    (3) The landowner will convey title to the easement in a manner 
that is acceptable to NRCS. The landowner will warrant that the 
easement granted to the United States is superior to the rights of all 
others, except for title exceptions deemed acceptable by NRCS.
    (4) The participant will:
    (i) Comply with the terms of the easement,
    (ii) Comply with all terms and conditions of any related contract 
or agreement,
    (iii) Agree to the permanent retirement of any existing cropland 
base and allotment history for the easement area, as determined by FSA,
    (iv) Agree to the long-term restoration, protection, enhancement, 
maintenance, and management of the easement in accordance with the 
terms of the easement and related agreements, and
    (v) Agree that each person or legal entity that is subject to the 
easement will be jointly and severally responsible for compliance with 
the easement and the provisions of this part and for any refunds or 
payment adjustment which may be required for violation of any terms or 
conditions of the easement or the provisions of this part.
    (b) 30-year contract requirements. (1) To enroll eligible land in 
ACEP-WRE through the 30-year contract option, a landowner will enter 
into a contract with NRCS. The contract will require that the enrolled 
area be maintained in accordance with ACEP-WRE goals and objectives for 
the duration of the contract, including the restoration, protection, 
enhancement, maintenance, and management of wetland and other land 
functions and values.
    (2) For the duration of the 30-year contract, the contract will 
require, at a minimum, that the landowner and the landowner's heirs, 
successors, and assigns will, consistent with the terms of this part, 
cooperate in the restoration, protection, enhancement, maintenance, and 
management of the land in accordance with the contract and with the 
terms of the WRPO. In addition, the 30-year contract will grant to 
NRCS:
    (i) A sufficient right of legal access to the entire contract area 
for the duration of the contract,
    (ii) The right to authorize compatible uses of the contract area, 
including such activities as a traditional Tribal use of the land, 
hunting and fishing, managed timber harvest, or periodic haying or 
grazing if such use is consistent with the long-term protection and 
enhancement of the wetland resources for which the contract was 
established, and
    (iii) The right to restore, protect, enhance, maintain, and manage 
activities on the enrolled area.
    (3) The landowner will:
    (i) Comply with the terms of the contract,
    (ii) Comply with all terms and conditions of any associated 
agreement,
    (iii) Agree to the long-term restoration, protection, enhancement, 
maintenance, and management of the enrolled area in accordance with the 
terms of the contract and related agreements, and
    (iv) Agree that each person or legal entity that is subject to the 
contract will be jointly and severally responsible for compliance with 
the contract and the provisions of this part and for any refunds or 
payment adjustment which may be required for violation of any terms or 
conditions of the contract or the provisions of this part.
    (c) Reservation of grazing rights. (1) NRCS may include in the 
terms and conditions of an easement a provision under which the 
landowner reserves grazing rights if NRCS determines that the 
reservation and use of the grazing rights:
    (i) Is compatible with the land subject to the wetland reserve 
easement or 30-year contract,
    (ii) Is consistent with the historical natural uses of the land and 
long-term wetland protection and enhancement goals for which the 
wetland reserve easement or 30-year contract was established,
    (iii) Is subject to a recorded Exhibit to the deed outlining 
grazing purposes and limitations, and
    (iv) Complies with a WRPO developed by NRCS.
    (2) Compensation for easements or 30-year contracts where the 
grazing rights are reserved under this subsection will be based on the 
method described in Sec.  1468.34, except such compensation will be 
reduced by an amount equal to the value of the reserved grazing rights, 
as determined by NRCS.


Sec.  1468.38  The WRPO development.

    (a) The WRPO will be developed as determined by NRCS in 
consultation with the State Technical Committee and consideration of 
available site-specific technical input from FWS and others as 
appropriate.
    (b) The WRPO will specify the manner in which the enrolled land 
will be restored, protected, enhanced, maintained, and managed to 
accomplish the goals of the program. The WRPO will be developed to 
ensure that cost effective restoration and maximization of wildlife 
benefits and wetland functions and values will result. Specifically, 
the WRPO will consider and address, to the extent practicable, the 
onsite alternations and the offsite watershed conditions that adversely 
impact the hydrology and associated wildlife and wetland functions and 
values.

[[Page 11065]]

Sec.  1468.39  Violations and remedies.

    (a) Easement violations. (1) In the event of a violation of the 
easement or 30-year contract involving the landowner, the landowner 
will be given reasonable notice and an opportunity to voluntarily 
correct the violation within 30 days of the date of the notice, or such 
additional time as NRCS determines is necessary to correct the 
violation at the landowner's expense.
    (2) Notwithstanding paragraph (a)(1) of this section, NRCS reserves 
the right to enter upon the easement area at any time to remedy 
deficiencies or easement violations. Such entry may be made at the 
discretion of NRCS when such actions are deemed necessary to protect 
important wetland functions and values or other rights of the United 
States under the easement. The landowner will be liable for any costs 
incurred by the United States as a result of the landowner's failure to 
comply with easement obligations.
    (3) If there is failure to comply with easement obligations, the 
easement will remain in effect, and NRCS may, in addition to any other 
remedy available to the United States, retain any payment otherwise 
required to be paid under this part and require the refund of any 
payment previously made under this part.
    (b) 30-year contract or wetland reserve easement restoration 
agreements violations. (1) If NRCS determines that a landowner is in 
violation of the terms of a 30-year contract or wetland reserve 
easement restoration agreement, or documents incorporated by reference 
into the 30-year contract or wetland reserve easement restoration 
agreement, the landowner will be given reasonable notice and an 
opportunity to voluntarily correct the violation within 30 days of the 
date of the notice, or such additional time as NRCS determines is 
necessary to correct the violation. If the violation continues, NRCS 
may terminate the 30-year contract or wetland reserve easement 
restoration agreement.
    (2) Notwithstanding the provisions of paragraph (b)(1) of this 
section, a 30-year contract or wetland reserve easement restoration 
agreement termination is effective immediately upon a determination by 
the NRCS that the landowner has:
    (i) Submitted false information,
    (ii) Filed a false claim, or
    (iii) Engaged in any act for which a finding of ineligibility for 
payments is permitted under this part.
    (3) If NRCS terminates a 30-year contract or wetland reserve 
easement restoration agreement, the landowner will forfeit all rights 
for future payments under the 30-year contract or wetland reserve 
easement restoration agreement, and must refund all or part, as 
determined by NRCS, of the payments received, plus interest.

    Signed this 13th day of February, 2015, in Washington, DC.
Jason A. Weller,
Vice-President, Commodity Credit Corporation and Chief, Natural 
Resources Conservation Service.
[FR Doc. 2015-03781 Filed 2-26-15; 8:45 am]
BILLING CODE 3410-16-P