Agricultural Conservation Easement Program, 558-590 [2019-27883]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation

[Federal Register Volume 85, Number 3 (Monday, January 6, 2020)]
[Rules and Regulations]
[Pages 558-590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27883]



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Vol. 85

Monday,

No. 3

January 6, 2020

Part II





Department of Agriculture





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Commodity Credit Corporation





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7 CFR Part 1468





Agricultural Conservation Easement Program; Interim Rule

Federal Register / Vol. 85 , No. 3 / Monday, January 6, 2020 / Rules 
and Regulations

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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1468

[Docket ID NRCS-2019-0006]
RIN 0578-AA66


Agricultural Conservation Easement Program

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

ACTION: Interim rule.

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SUMMARY: The Agriculture Improvement Act of 2018 (the 2018 Farm Bill) 
made changes to ACEP. This interim rule makes conforming changes to the 
ACEP policies and procedures in the regulations.

DATES: 
    Effective: December 30, 2019.
    Comment date: Submit comments on or before March 6, 2020.
    Comment date for Environmental Review: Submit comments on the draft 
Environmental Analysis (EA) and Finding of No Significant Impact 
(FONSI) on or before February 5, 2020.

ADDRESSES: We invite you to submit comments on this document. In your 
comments, include the date, volume, and page number of this issue of 
the Federal Register, and the title of this document. You may submit 
comments by the following method:
     Federal eRulemaking Portal: Go to https://www.regulations.gov and search for Docket ID NRCS-2019-0009. Follow the 
online instructions for submitting comments.
    All written comments received will be publicly available on 
www.regulations.gov.
    A copy of the draft Environmental Assessment (EA) and Finding of No 
Significant Impact (FONSI) may be obtained from either of the following 
websites: www.regulations.gov or https://www.nrcs.usda.gov/wps/portal/nrcs/detail/national/programs/farmbill/?cid=nrcseprd1504015. A hard 
copy may also be requested in one of the following ways:
     Via mail: [email protected] with ``Request for EA'' in 
the subject line; or
     A written request: Karen Fullen, Environmental Compliance 
Specialist, Natural Resources Conservation Service, 9173 W Barnes Dr., 
Suite C, Boise, ID 83709.

FOR FURTHER INFORMATION CONTACT: Jeffrey White, 202-720-1882; email: 
[email protected]. Persons with disabilities who require 
alternative means for communication should contact the USDA Target 
Center at (202) 720-2600 (voice).

SUPPLEMENTARY INFORMATION:

Background

    The Agricultural Conservation Easement Program (ACEP) is a 
voluntary program to help farmers and ranchers preserve their 
agricultural land and restore, protect, and enhance wetlands on 
eligible lands. The program has two easement enrollment components:
     Agricultural land easements (ACEP-ALE); and
     Wetland reserve easements (ACEP-WRE).
    Under ACEP-ALE, NRCS provides matching funds to State, Tribal, and 
local governments, and nongovernmental organizations with farm and 
ranch land protection programs to purchase agricultural land easements. 
Agricultural land easements are permanent or for the maximum duration 
authorized by State law. Under ACEP-WRE, NRCS protects wetlands on 
eligible lands by purchasing an easement directly from eligible 
landowners or entering into 30-year contracts on acreage owned by 
Indian Tribes, in each case providing for the restoration, enhancement, 
and protection of wetlands and associated lands. Wetland reserve 
easements may be permanent, 30-years, or the maximum duration 
authorized by State law.
    ACEP was originally authorized by the Agricultural Act of 2014 (the 
2014 Farm Bill) and NRCS administers ACEP pursuant to regulations at 7 
CFR part 1468 issued as a final rule on October 18, 2016.

The 2018 Farm Bill

    The 2018 Farm Bill made changes to the ACEP authorizing legislation 
in the Food Security Act of 1985, including:
     Identifying and protecting agricultural land by limiting 
nonagricultural uses that negatively affect the land's agricultural 
uses and conservation values as an ACEP purpose.
     Removing the requirement that NRCS seek input from the 
Secretary of the Interior at the local level in the determination of 
eligible land.
     Defining the term ``monitoring report.''
     Removing the requirement that an agricultural land 
easement be subject to an agricultural land easement plan but retaining 
the requirement that there be a conservation plan on any portion of the 
easement area that is highly erodible cropland.
     Identifying for agricultural land easements that the U.S. 
right of enforcement does not extend to a right of inspection except 
under certain circumstances.
     Introducing new considerations for certification of 
eligible entities, including whether the entity is an accredited land 
trust or is a State department of agriculture.
     Adding improving water quality to the priority 
considerations for acquiring wetland reserve easements.
     Adding additional criteria and parameters for the 
authorization of compatible economic uses on wetland reserve easements.
     Adding further specificity to considerations made in 
developing a wetlands reserve easement plan.
     Authorizing the Secretary to enter into a legal 
arrangement with an eligible entity that is interested in a ``buy-
protect-sell'' transaction for the acquisition of an agricultural land 
easement.
     Removing the requirement that 50 percent of the non-
Federal share for an agricultural land easement be provided by cash 
resources of the eligible entity and identifying the extent to which 
the non-Federal share can be comprised by other sources, such as a 
qualified charitable donation by the landowner.
     Specifying the existing policy of the Secretary to adjust 
agricultural land easement ranking and evaluation criteria for 
geographic differences and to give priority to applications that 
maintain agricultural viability.
     Introducing additional terms and conditions that may be 
included in the agricultural land easement deed.
     Specifying the existing policy of the Secretary to ensure 
that the grazing uses on a wetland reserve easement with a reservation 
of grazing rights comply with a grazing management plan, that is 
reviewed and modified as needed at least every 5 years.
     Identifying the criteria under which NRCS may authorize 
the restoration of the wetland reserve easement area to hydrologically 
appropriate native vegetative communities or alternative naturalized 
vegetative communities, subject to certain requirements.
     Incorporating changes to NRCS's subordination, 
modification, exchange, or termination of ACEP easements.

USDA 2018 Farm Bill Listening Session

    On February 14, 2019, the Farm Service Agency (FSA), NRCS, and the 
Risk Management Agency (RMA) published a notice in the Federal Register 
(84 FR 4041-4044) announcing

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a listening session for initial public input on the changes to existing 
programs implemented by the agencies. The listening session was held on 
February 26, 2019. The Commodity, Credit, and Crop Insurance titles, 
and parts of the Conservation, Energy, and Miscellaneous titles were 
covered during the listening session. The agencies also announced an 
opportunity for the public to make written statements through March 1, 
2019. Each agency will take into account stakeholder input when making 
discretionary decisions on program implementation.
    FSA, NRCS, and RMA received 183 written comments from individuals, 
trade groups, other organizations, and State entities. All written 
comments are available to the public for review at: https://www.regulations.gov/document?D=USDA-2019-0001-0001. In addition to 
program-specific comments, there were recurring overarching comments 
about placing a priority on information sharing between agencies for 
data collection regarding soil health and conservation practices.
    NRCS received a number of comments regarding the Agricultural 
Conservation Easement Program (ACEP), with the majority of those 
comments pertaining to the ACEP-ALE and a smaller number pertaining to 
ACEP-WRE. Among the comments submitted, NRCS received 11 comments 
recommending a more streamlined and efficient easement application and 
enrollment process across ACEP.
    NRCS received 12 comments regarding the elimination of the 
requirement for an agricultural land easement plan on ACEP agricultural 
land easements. Most of these 12 comments called for the immediate 
implementation of this new Farm Bill provision in FY 2019, while others 
pushed for the prioritization of easements that have strong 
conservation planning.
    NRCS received 10 comments seeking for additional guidance on the 
buy-protect-sell provisions of the Farm Bill. Most of the comments 
asked the Agency to ``clearly outline the scenario where one eligible 
entity owns the land and another eligible entity acquires the 
conservation easement.'' Other comments urged flexibility in the 
consideration of extensions to the timing requirements for land 
transfer under buy-protect-sell transactions, to help beginning and 
young farmers acquire lands.
    NRCS received 10 comments regarding allocation and expenditure of 
funding across ACEP, of which 5 comments recommended an annual 
allocation of $30 million for the partnership arrangements under the 
wetland reserve enhancement partnership (WREP) option in FY 2019. Other 
comments recommended that funding allocations for ACEP follow 
historical program demand, providing at least two-thirds of the funding 
for wetland reserve easements and the rest for agricultural land 
easements.
    On the Farm Bill provisions related to ACEP-ALE cost-share 
requirements, NRCS received 10 comments recommending that the 
elimination of minimum cash contribution amount from the eligible 
entity as a component of the non-federal share of an agricultural land 
easement not be subject to geographic limits. Other comments 
highlighted that cash contributions provided by the eligible entity 
should be prioritized and that closing costs be included under the 
permissible forms of non-federal share.
    NRCS received eight comments that advocate for establishing an 
efficient process for granting waivers of the Adjusted Gross Income 
(AGI) limitation as it relates to the funding of conservation easements 
that will result in the protection of environmentally sensitive land of 
special significance, with a focus on easements that will help protect 
migratory birds, conserve wetlands, secure habitat connectivity, 
improve water quality, or contribute to conservation objectives 
identified in wildlife, landscape, or watershed plans and initiatives.
    NRCS received seven comments recommending increased flexibility in 
ACEP-ALE deed term requirements and streamlined process for accredited 
land trusts to become certified entities. There were also seven 
comments seeking clarification whether agricultural land easements can 
be up to 100 percent forest land, given the provision on 
``nonindustrial private forest land'' under the eligible land 
definition.
    NRCS received six comments recommending that the Agency work with 
regional, state and local wildlife agencies on ACEP-WRE enrollment and 
implementation, and on the determination of ``alternative plant 
communities.'' Other comments underlined the importance of science-
based forest and vegetation management in the restoration of new and 
the maintenance of existing wetland reserve easements.
    NRCS received four comments urging the stringent application of the 
statutory requirements in the approval of subsurface mineral 
development projects on agricultural land easements and for the use of 
diverse native plants in remediation and restoration plans.
    NRCS received three comments recommending that ``grasslands of 
special environmental significance'' include native grasslands at risk 
of conversion and those that provide habitat for threatened and 
endangered species. Including a recommendation for the prioritization 
of those on which the benefits of the grassland will be maximized 
through robust conservation management activities.
    NRCS received three comments that recommended setting an annual 
date for FSA to provide NRCS the 25 percent cropland compliance report 
and releasing state and county-level data regarding closed ACEP 
easements to the public. NRCS received three comments recommending 
increased tracking and reporting of conservation and environmental 
outcomes related to land protected by conservation easements under 
ACEP.
    NRCS also received requests for additional guidance on the 
following issues and provisions:
     Co-eligible entity process used in ACEP-ALE;
     Clear program rules on easement modification and 
termination;
     Clarification on what constitutes ``non-agricultural 
uses'' on eligible land under ACEP-ALE;
     Clear guidance on the ``reasonable person'' approach to 
valuation in land appraisals for easements;
     Support for inclusion of water quality improvement in 
program priorities and in the national ranking criteria; and
     Funding for technical assistance to implement ACEP-ALE.
    NRCS evaluated the changes made by the 2018 Farm Bill and the 
comments received during the listening session and is incorporating 
changes into the ACEP regulation as discussed below.

Discussion of Key Changes Incorporated Into the ACEP Regulation

    Several of the changes require different provisions of the ACEP 
regulation to be revised. NRCS discusses the key changes first 
generally depending upon whether the change is ACEP-wide, ACEP-ALE, and 
ACEP-WRE, and then summarizing any changes to each of the sections has 
changed.

ACEP-Wide Key Changes

AGI Waiver

    Section 1001D of the Food Security Act of 1985 specifies that a 
person or legal entity is not eligible to receive a payment or benefit 
under Title XII of the Food Security Act of 1985 if the average annual 
AGI of the person or legal entity

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exceeds $900,000. Section 1704 of the 2018 Farm Bill amended section 
1001D to reauthorize a waiver to the application of the AGI limitation 
to certain conservation program payments, on a case-by-case basis, if 
environmentally sensitive land of special significance would be 
protected as a result of such waiver. An AGI waiver provision was 
authorized under the Food, Conservation, and Energy Act of 2008 (2008 
Farm Bill) but was removed under the Agricultural Act of 2014 (2014 
Farm Bill). This rule incorporates the AGI waiver in Sec.  1468.2.

Easement Administration Actions: Easement Subordination, Modification, 
Exchange, and Termination

    The 2014 Farm Bill provided NRCS with flexibility in the long-term 
administration of easements by authorizing NRCS to approve an easement 
subordination, modification, exchange, or termination under specified 
criteria identified in statute. These actions are referred to 
collectively as easement administration actions. In particular, as 
originally authorized, NRCS could approve an easement administration 
action if NRCS determined that the action:
    (1) Was in the Federal Government's interest,
    (2) addressed a compelling public need for which there is no 
practicable alternative or such action furthered the practical 
administration of the program,
    (3) resulted in comparable conservation value and equivalent or 
greater economic value to the United States, and
    (4) other requirements specific to the action type.
    NRCS defined each of the easement administration actions in the 
ACEP regulation to provide a clear distinction between each type of 
easement administration action and identified the criteria under which 
these actions are evaluated.
    The 2018 Farm Bill modified slightly the criteria under which NRCS 
may subordinate, modify, exchange, or terminate part or all of an 
easement. In particular, the 2018 Farm Bill distinguished each of these 
easement administration actions by providing interrelated but somewhat 
different criteria for subordination actions, for modification and 
exchange actions, and for termination actions. The Managers recognized 
the substantial investment taxpayers make in easements but identified 
that on limited occasions, there may be justifications for changes to 
easements. In particular, the Managers identified that terminating an 
easement should only be done in very rare cases and that the amendments 
made by the 2018 Farm Bill did not weaken the current requirements for 
termination actions.
    Because the statute now separates the actions and provides slightly 
different criteria for each, NRCS has modified the regulation to 
reflect the changes as follows:
     Defined the term easement administration action to ease 
readability of the regulation where all four terms are referenced;
     Modified slightly the existing definition of easement 
subordination to reflect the changes made in the statute;
     Maintained the existing definitions for easement 
modification, easement exchange, easement termination as these conform 
to the new statutory language;
     Modified the regulation slightly to clarify which criteria 
are applicable to each of the types of easement administration actions; 
and
     Reflected the new statutory provisions that certain 
easement administration actions may not increase any payment to an 
eligible entity and that for easement terminations, the United States 
will be fully compensated for the fair market value of the land and any 
costs or damages related to the easement termination as determined 
appropriate by NRCS.

ACEP-ALE Key Changes

ACEP-ALE Non-Federal Contribution Requirements

    The contributions provided by the eligible entity for the purchase 
of the agricultural land easement from the landowner are comprised of a 
Federal share and non-Federal share based on the fair market value of 
the agricultural land easement. The Federal share is limited to 50 
percent of the fair market value of the easement and the non-Federal 
share must be at least equivalent to the Federal share (except for 
grasslands of special environmental significance (GSS) where the 
Federal share may be up to 75 percent). This did not change.
    Under the 2014 Farm Bill, the non-Federal share provided by the 
eligible entity could include a charitable donation or qualified 
conservation contribution from the agricultural landowner, but the 
eligible entity was required to contribute its own cash resources in an 
amount of at least 50 percent of the Federal share provided by NRCS.
    The 2018 Farm Bill amended the ACEP-ALE non-Federal share 
provisions by removing the requirement that the eligible entity 
contribute its own cash resources in an amount that is at least 50 
percent of the Federal share. Additionally, the 2018 Farm Bill 
specified the permissible sources that could be considered part of the 
non-Federal share, including cash resources provided by the eligible 
entity, a charitable donation or qualified conservation contribution 
from the landowner, costs associated with securing an ACEP-ALE deed, 
and other costs as determined by NRCS.
    The removal of a specified cash contribution amount to be provided 
by the eligible entity creates the potential for the only actual 
payment provided to an agricultural landowner for the sale of the 
easement to be the funds provided by NRCS subject to the limits of the 
Federal share. To address the potential for reduced contributions from 
the eligible entity and the resultant reduction in compensation paid to 
the agricultural landowner for the sale of an easement, NRCS considered 
whether it should establish by regulation a different or tiered cash 
contribution requirement for eligible entities seeking ACEP funding. In 
particular, NRCS considered whether the regulation should maintain some 
level of required eligible entity cash contribution (for example, 10 to 
25 percent) with the flexibility to waive the requirement in areas of 
historically low ACEP-ALE enrollment, if the landowner was not a 
historically underserved producer, or for projects of special 
significance.
    However, given the intent of the Managers to broaden the ability of 
eligible entities to participate in ACEP-ALE across a more diverse 
geography, NRCS did not incorporate or specify an eligible entity cash 
contribution level in this interim rule. Instead, NRCS will consider a 
cash contribution provided by an eligible entity as a National ranking 
matter.
    Additionally, NRCS determined that certain procured costs, such as 
appraisals, boundary surveys, and closing costs, incurred by the 
eligible entity to secure the easement deed may be considered as 
meeting the non-Federal share. NRCS has limited the consideration of 
``other nonprocured costs,'' such as stewardship expenses, to 
circumstances when the other sources of the non-Federal share, 
including entity cash contribution toward the easement payment and 
entity costs for procured items, are not sufficient to meet the non-
Federal share requirement. NRCS anticipates that in general, the 
contribution of an eligible entity's cash resources toward the purchase 
of the easement itself in combination with any qualified landowner 
donation will satisfy the extent of the non-Federal contribution 
requirement. NRCS

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anticipates that consideration of other costs associated with securing 
the deed or stewarding the easement will not be needed frequently for 
the eligible entity to meet the non-Federal contribution requirement. 
Therefore, to minimize the administrative burden to all parties to the 
ACEP-ALE enrollment, NRCS will identify the documentation the eligible 
entity must provide based on the level of reliance on those other costs 
in the calculation of the non-Federal share.
    Also, the cost benefit analysis for this rule assessed whether the 
lack of a specified eligible entity cash contribution requirement would 
result in increased cost to ACEP and a commensurate reduction in 
acreage enrollment in ACEP. This analysis determined that this change 
will likely result in reduced leveraging of Federal funds by the 
eligible entity, but may provide better access to ACEP-ALE in areas 
where non-Federal farm and ranch land preservation funding is not 
readily available.

ACEP-ALE Plan

    As originally authorized under the 2014 Farm Bill, all ACEP-ALE 
enrollments required that the agricultural land easement be subject to 
an ACEP-ALE plan. The plan incorporated any required component plans 
needed to address particular land types or resource issues on the 
enrolled parcel, such as a grasslands management plan on grassland, a 
forest management plan for certain forest land, or a conservation plan 
for highly erodible cropland.
    The 2018 Farm Bill removed the requirement that the agricultural 
land easement be subject to an ACEP-ALE plan but continues to require a 
conservation plan for any highly erodible cropland. Given that the 2018 
Farm Bill identified that NRCS could give priority to an application 
for the purchase of an agricultural land easement that maintains 
agricultural viability, and to encourage eligible entities and NRCS to 
work with landowners to undertake conservation planning on their land 
in order to maximize the environmental value of the protected land, 
NRCS considered how best to encourage continued resource management 
planning on ACEP-ALE lands.
    In particular, NRCS considered whether to:
    (1) Continue to require a grassland management plan for GSS given 
the greater Federal investment (that is, 75 percent of fair market 
value) and the ability of the plan to help ensure the landowner has the 
best available information to manage these sensitive grasslands;
    (2) Authorize NRCS at the State level to consider certain planning 
activities as an eligibility consideration; or
    (3) Not require any planning, other than a conservation plan on 
highly erodible land, but authorize the inclusion of a ranking factor 
that recognizes agreement by the eligible entity to develop an 
agricultural land easement plan.
    This rule changes various sections of the regulation to remove the 
requirement that the easement to be subject to an ACEP-ALE plan, except 
for the compliance requirements associated with a conservation plan on 
highly erodible cropland. This rule removes the requirement for the 
development of an ACEP-ALE plan. However, to encourage continued 
planning on ACEP-ALE lands where a conservation plan is not required, 
the regulation specifies that the development and maintenance by the 
eligible entity of an ACEP-ALE plan, including a grassland or forest 
management plan, can be a ranking consideration at the State level to 
prioritize applications from eligible entities committed to ensuring 
conservation planning activity occurs on lands to be enrolled in ACEP-
ALE. The decision to adopt a planning requirement is made by the NRCS 
State Conservationist, in consultation with the State Technical 
Committee. If such ranking is adopted at the State level and a parcel 
enrolled accordingly based on that ranking, the regulation specifies 
that the easement deed terms must require that the plan be updated to 
reflect any change in the agricultural operations on the easement area.

Buy-Protect-Sell Transactions

    The 2018 Farm Bill defines a new transaction type and authorizes 
the Secretary to enter into a legal arrangement for buy-protect-sell 
transactions. Buy-protect-sell transactions are arrangements between 
NRCS and an eligible entity where the entity owns or will own the land 
prior to the acquisition of the agricultural land easement on the 
property, and the eligible entity either:
    (1) Sells fee title to the land to a farmer or rancher prior to or 
at easement closing; or
    (2) Holds fee title at the time the agricultural land easement is 
conveyed on that land, and transfers ownership of the land subject to 
the easement to a farmer or rancher not later than 3 years after the 
date of acquisition of the agricultural land easement.
    Buy-protect-sell transactions are limited to private and Tribal 
agricultural lands. State or local governments are not eligible for 
buy-protect-sell transactions on land they own.
    Buy-protect-sell transactions differ from standard transactions 
that occur under ACEP-ALE. The standard ACEP-ALE transactions involve 
land that is currently owned by a farmer or rancher and subject to a 
pending offer by an eligible entity to purchase an agricultural land 
easement, but the eligible entity does not and would not ever own the 
property itself.
    In contrast, all buy-protect-sell transactions require the eligible 
entity hold fee title to the land and to transfer such title subject to 
the agricultural land easement to a farmer or rancher at not more than 
agricultural value plus reasonable holding and transaction costs within 
the timeframes specified for the buy-protect-sell transaction type. 
Failure to meet these conditions, as determined by NRCS, requires the 
eligible entity to reimburse NRCS for the entirety of the Federal share 
provided. NRCS evaluated alternatives for determining compliance with 
buy-protect-sell conditions, including:
    (1) Verification that the purchaser was a farmer or rancher through 
filing of an Internal Revenue Service (IRS) Schedule F (Form 1040), 
``Profit or Loss From Farming,'' or alternatively an independent 
certification by the eligible entity;
    (2) verification that the sale of the land occurred at not more 
than agricultural value based on an independent appraisal provided by 
the eligible entity, or alternatively other documentation and 
certification of agricultural value provided by the eligible entity;
    (3) ensuring that the purchaser was charged only reasonable holding 
and transaction costs by identifying the items that could be considered 
and establishing an upper limit as a percentage of the agricultural 
value, or alternatively defining reasonable holding and transaction 
costs but not setting a fixed upper limit.
    NRCS also evaluated alternatives to minimize risk of transaction 
failure and cost recovery, including:
    (1) For land that the eligible entity does not own but is in the 
process of purchasing at the time the buy-protect-sell agreement is 
entered into, there is an additional risk to these transactions should 
the entity fail to complete the initial purchase of the land, 
therefore, NRCS considered limiting the time frame for this initial 
purchase to within 12 months of the execution of the buy-protect-sell 
agreement, or alternatively

[[Page 562]]

requiring the initial purchase to be completed any time prior to 
closing on the agricultural land easement;
    (2) to minimize the risk of cost recovery for the first type of 
buy-protect-sell transactions described above by issuing the ACEP-ALE 
cost-share payment only on a reimbursable basis after the agricultural 
land easement has closed, or alternatively issuing the ACEP-ALE cost-
share as either an advance payment 30-days prior to easement closing or 
as a reimbursable payment.
    To make the process as objective and streamlined as possible, NRCS 
has identified that evidence that the purchaser is a farmer or rancher 
should be based on the filing of an IRS Schedule F, that the 
agricultural value of the land must be determined by an appraisal, and 
that the holding and transaction costs that may be charged to the 
landowner are limited to 10 percent of the agricultural value of the 
easement. NRCS will take into consideration in its determination that 
beginning farmers and ranchers in their first year of farming and 
limited resource farmers and ranchers may not file an IRS Schedule F, 
and may require the eligible entity to provide alternative 
documentation in those situations.
    To minimize the risk that ACEP-ALE funds will be obligated to an 
unviable transaction for the full length of a buy-protect-sell 
agreement at the expense of viable ACEP projects, the interim rule 
requires that the eligible entity's initial purchase of the land be 
completed within 12 months of the execution of the buy-protect-sell 
agreement as identified by NRCS in the terms of the ALE-agreement. To 
minimize the risk that the eligible entity will have to repay NRCS for 
the Federal share, the interim rule identifies that an ACEP-ALE cost-
share payment will only be provided on a reimbursable basis for the 
first type of buy-protect-sell transactions.
    Under the 2014 Farm Bill, NRCS had conducted ACEP-ALE transactions 
similar to the first type of buy-protect-sell transactions where the 
eligible entity owns fee title to a parcel of land and transfers that 
fee title to a farmer or rancher prior to or at the time of the 
creation of the agricultural land easement. However, there are 
potential legal impediments to the second type of buy-protect-sell 
transactions where the eligible entity holds fee title at the time the 
agricultural land easement is created but does not transfer ownership 
of the land subject to the easement for up 3 years after the creation 
of the agricultural land easement. Typically there are provisions in 
easement law that restrict a person or legal entity from granting 
themselves an easement on land they own. Further, under easement law, 
conservation easements are created either by reservation at the time of 
transfer of the land or through a grant of an easement to a third 
party.
    As part of the regulation development, NRCS worked with the USDA 
Office of the General Counsel to identify how arrangements might be 
structured to implement the second type of buy-protect-sell 
transaction. NRCS considered five potential scenarios, including 
several options under which the eligible entity worked with a third-
party to address the basic principle that an eligible entity that owns 
fee title to land typically cannot create an easement against itself 
(referred to in these examples as the ``easement principle''). The five 
scenarios considered were:
    1. A third-party (Straw Landowner) holds the fee title until fee 
title of the land subject to the easement is sold to a qualified farmer 
or rancher at agricultural value, and the eligible entity holds the 
agricultural land easement at time of easement closing. This scenario 
addresses the easement principle as well as the requirement that the 
transaction to the Straw Landowner does not violate the mandate that 
the initial sale of the land subject to the agricultural land easement 
is to a farmer or rancher.
    2. Two eligible entities apply for ACEP, jointly holding the fee 
title to the parcel. Only one eligible entity becomes the holder of the 
agricultural land easement. Both eligible entities then sell the fee 
title of the land subject to the easement to a qualified farmer or 
rancher at agricultural value. This scenario was determined not likely 
to be legally viable due to the complexities under various State laws 
regarding unity of title and disparate treatment about how such title 
issues are addressed.
    3. A third-party (Straw Easement Holder) holds the agricultural 
land easement from the time of easement closing, and the eligible 
entity holds the fee title until a qualified farmer or rancher is found 
to purchase, at agricultural value, the fee title of the land subject 
to the easement, at which time the agricultural land easement is 
transferred to the eligible entity. While this scenario addresses the 
easement principle, NRCS would only be able to make payment after the 
agricultural land easement is transferred to the eligible entity.
    4. As recommended by a comment submitted to the USDA Listening 
Session held February 26, 2019, the parties to the ALE-agreement would 
develop strong anti-merger and cost-recovery language to allow the 
eligible entity to grant the agricultural land easement to itself while 
still holding fee title to the property and then reaffirm the 
agricultural land easement at the time the fee title to the land 
subject to the easement is sold to a qualified farmer or rancher at 
agricultural value. This scenario does not address the easement 
principle as it still purports that the eligible entity can hold both 
an easement and fee title simultaneously, therefore NRCS determined 
that this scenario was likely not legally viable.
    5. NRCS determines the viability of the transaction submitted by an 
eligible entity. An eligible entity submits to NRCS, as part of its 
application, the proposed structure of the individual buy-protect-sell 
arrangement for the sale of the fee title of the land subject to the 
agricultural land easement to a qualified farmer or rancher at 
agricultural value in a manner that would address the basic easement 
principle and applicable program requirements. For approved 
applications, the individual buy-protect-sell transaction agreement 
includes such terms and conditions as necessary to satisfy the legal 
and statutory requirements identified by NRCS.
    NRCS has incorporated scenario 5 into the regulation as more fully 
discussed below in the section-by-section description of changes.

Certification of Eligible Entities

    When ACEP-ALE was first authorized, NRCS established a process 
under which eligible entities that meet established criteria could be 
certified and entered into longer-term agreements for ACEP-ALE cost-
share assistance. Certified eligible entities are able to avail 
themselves of administrative flexibilities under ACEP-ALE based upon 
their status as a certified eligible entity as compared to a non-
certified eligible entity. For example, NRCS relies on the certified 
entity to independently complete the easement acquisition in accordance 
with the terms and conditions of the ACEP-ALE agreement and consistent 
with the requirements of this part. Additionally, NRCS conducts annual 
quality assurance reviews on a subset of the transactions after closing 
and payment rather than prior to closing.
    To be certified, an eligible entity must demonstrate to NRCS that 
the eligible entity could maintain, at a minimum, for the duration of 
the agreement, a plan for administering easements that is consistent 
with the purposes of ACEP-ALE; the capacity and resources to monitor 
and enforce the agricultural land easements; and policies and 
procedures to ensure the long-term

[[Page 563]]

integrity of the easements. NRCS established in regulation a set of 
objective, measurable criteria that were used to evaluate the eligible 
entity's ability to meet the statutory certification criteria, 
including that the eligible entity provide proof that they held and had 
stewardship responsibility for a minimum of 25 agricultural land 
conservation easements, unless that number was reduced by NRCS through 
a waiver, and proof that at least 5 of the these easements were ACEP-
ALEs or predecessor program \1\ easements.
---------------------------------------------------------------------------

    \1\ The Farmland Protection Program (FPP), as authorized by the 
Federal Agricultural Improvement and Reform Act of 1996 (the 1996 
Farm Bill) and the Farm and Ranch Lands Protection Program (FRPP) as 
authorized by the Farm Security and Rural Investment Act of 2002 
(the 2002 Farm Bill) and the 2008 Farm Bill are the predecessor 
programs to ACEP-ALE.
---------------------------------------------------------------------------

    The 2018 Farm Bill added two new methods by which an eligible 
entity may become certified. NRCS can grant certification status to an 
eligible entity that is either:
    (1) An eligible entity that is accredited by the Land Trust 
Accreditation Commission or by an equivalent accrediting body as 
determined by NRCS; or
    (2) A State department of agriculture or other State agency with 
authority for farm and ranchland protection, and the associated 
requirements for such entities.
    Under these two new methods of certification, the eligible entity 
must demonstrate that it acquired not fewer than 10 agricultural land 
easements under ACEP-ALE, FRPP, or FPP and has successfully met the 
responsibilities of the eligible entity under the applicable agreements 
with NRCS relating to agricultural land easements.
    NRCS revised the regulation to add these two new methods for an 
eligible entity to be considered for certification. Additionally, to 
ensure that an eligible entity that is certified under the original 
criteria meets the same ACEP-ALE experience requirements as is required 
under the two new methods, NRCS has increased from 5 to 10 the number 
of ACEP-ALE agricultural land easements or predecessor program 
easements that an eligible entity must have successfully closed to 
qualify for certification. The minimum requirement has not changed; the 
eligible entity must hold and have stewardship responsibility for at 
least 25 agricultural land conservation easements.

Optional Permitted Uses

    Section 2603 of the 2018 Farm Bill amended section 1265B of the 
Food Security Act of 1985 (16 U.S.C. 3865b) to identify optional 
permitted uses that an eligible entity may include in the terms and 
conditions for an easement deed funded under ACEP-ALE. Among the 
optional uses, ACEP now includes criteria by which subsurface mineral 
development on land subject to the agricultural land easement may be 
authorized. These criteria mirror many of the criteria which NRCS 
identified in policy and used when evaluating an eligible entity's 
proposed terms and conditions concerning subsurface mineral 
development. The 2018 Farm Bill amendments make some of the criteria 
and requirements more specific, and in some instances more restrictive, 
than the criteria and language used in previous ACEP-ALE funded 
easements deeds. For example, the 2018 Farm Bill specifies that the 
subsurface mineral development plan must include a plan for the 
remediation of impacts to the agricultural use or conservation values 
and must be approved by NRCS prior to the initiation of the mineral 
development activity. This rule revises the regulation and NRCS has 
revised its associated policy.

ACEP-WRE Key Changes

ACEP-WRE Compatible Use Authorizations

    Under ACEP-WRE, a landowner conveys a wetland reserve easement to 
the United States through a reserved interest deed. Among the rights 
conveyed, the United States acquires the rights to permit, in its sole 
discretion and under specified conditions, compatible uses of the 
easement area, including hunting and fishing, managed timber harvest, 
or periodic haying or grazing. The 2018 Farm Bill requires several 
considerations that have been part of the NRCS compatible use 
authorization process.
    In particular, the 2018 Farm Bill added ``water management'' to the 
list of activities that may be considered a compatible economic use on 
a wetland reserve easement. The 2018 Farm Bill specified that NRCS will 
request and consider the advice of the applicable State technical 
committee about the types of compatible uses that may be authorized and 
the conditions under which they may be conducted on land subject to a 
wetland reserve easement. The 2018 Farm Bill provided that in 
evaluating and authorizing compatible economic uses that NRCS will 
consider the ability of the compatible use to facilitate the practical 
administration and management of the WRE and ensure that the authorized 
use furthers the functions and values for which the easement was 
established.
    NRCS added water management to the list of specific examples of 
compatible uses identified in the ACEP regulation, incorporated into 
the responsibilities of the applicable State technical committees input 
as it relates to compatible use types and conditions, and incorporated 
the compatible use evaluation and authorization considerations 
identified in the 2018 Farm Bill.

ACEP-WRE Reservation of Grazing Rights

    Under ACEP-WRE, a landowner may reserve grazing rights under a 
wetland reserve easement or 30-year contract if the reservation and use 
of the grazing rights is:
     Compatible with the land subject to the easement,
     Consistent with the historical natural uses of the land 
and long-term wetland protection and enhancement goals for which the 
easement or 30-year contract was established, and
     In compliance with the WRE plan developed for the 
easement.
    The 2018 Farm Bill adds language to the ACEP-WRE reservation of 
grazing rights enrollment option. There is now a statutory requirement 
that the reservation and use of grazing rights comply with a grazing 
management plan that is consistent with the wetland reserve easement 
plan and that such grazing management plan has been reviewed, and 
modified as necessary, at least every 5 years.
    NRCS recognizes that grazing can be an appropriate vegetation 
management and disturbance activity tool to restore and maintain the 
functions and values of certain wetland ecosystems. On any ACEP-WRE 
enrollment, NRCS may authorize grazing on the easement area through a 
temporary compatible use authorization to facilitate specific wetland 
restoration or management objectives on the easement area.
    Under the ACEP-WRE reservation of grazing rights enrollment option, 
NRCS identifies, as part of the wetland reserve easement deed, the 
specific wetland ecosystem and the associated level of grazing that is 
appropriate to ensure the wetland functions and values are achieved. 
This level of grazing comprises the extent of the grazing rights 
reserved to the landowner. As a result, the easement compensation for 
ACEP-WRE reservation of grazing rights enrollments is less than a 
standard ACEP-WRE enrollment because the landowner is retaining a right 
that normally would be conveyed under a standard ACEP-WRE easement 
deed.

[[Page 564]]

ACEP-WRE Wetland Restoration

    In the rulemaking for ACEP-WRE under the 2014 Farm Bill, NRCS 
adopted in the ACEP regulation substantially the same definition of 
wetland restoration that had long existed in the WRP regulation; 
namely, the term wetland restoration under the ACEP regulation has been 
defined as follows:
    Wetland restoration means the rehabilitation of degraded or lost 
habitat in a manner such that:
    (1) The original vegetation community and hydrology are, to the 
extent practical, re-established; or
    (2) A community different from what likely existed prior to 
degradation of the site is established. The hydrology and native self-
sustaining vegetation being established will substantially replace 
original habitat functions and values and does not involve more than 30 
percent of the easement area.
    This definition of wetland restoration is unique to ACEP-WRE and is 
used as a broad and inclusive term intended to guide decision-making 
related to the treatment of the entire easement area, including wetland 
and any associated habitats, and for the duration of the enrollment, 
from initial land eligibility and ranking determinations, through 
preliminary and final restoration planning, design, and implementation, 
and on through the long-term management of the easement area. The 2018 
Farm Bill adds new language under which NRCS, in coordination with 
State technical committees and following State-specific criteria and 
guidelines, may authorize the establishment or restoration of a 
hydrologically appropriate native community or alternative naturalized 
vegetative community as part of a wetland reserve easement plan on land 
subject to a wetland reserve easement under certain conditions. This 
rule revises the definition of wetland restoration for consistency with 
the new requirements in the 2018 Farm Bill. The definition of wetland 
restoration has been revised to include the requirement for wetland 
restoration to be conducted following published State-specific criteria 
and guidelines developed in consultation with the State technical 
committee. Additionally, NRCS has eliminated the existing regulatory 
limitation that an alternative community different from what existed 
historically on the site be no more that 30 percent of the easement 
area and has added the conditions under which such a community may be 
restored on the easement area consistent with the provisions identified 
in the 2018 Farm Bill.

ACEP Regulation Organization

    The ACEP regulation in 7 CFR part 1468 is organized into three 
subparts. Subpart A contains provisions applicable across ACEP, subpart 
B contains provisions specific to the implementation of ACEP-ALE, and 
subpart C contains provisions specific to the implementation of ACEP-
WRE. The following section summarizes each section of the regulation 
and describe the changes made to conform to the 2018 Farm Bill. Other 
editorial adjustments to improve readability. Although some provisions 
remain unchanged, this rule revises the ACEP regulation in its 
entirety.

Summary of Changes in Subpart A, General Provisions

Sec.  1468.1 Applicability

    This section sets forth the requirements, policies, and procedures 
for ACEP; identifies that ACEP is available in all 50 States, District 
of Columbia, and certain territories; describes how the remainder of 
the regulation is organized; and addresses stewardship responsibilities 
associated with existing easements. NRCS incorporated the revision to 
the program purposes to limit nonagricultural uses that negatively 
affect the agricultural uses and conservation values.

Sec.  1468.2 Administration

    This section identifies that ACEP is administered under the general 
supervision and direction of the NRCS Chief. The Commodity Credit 
Corporation (CCC) made changes to its Board of Directors and the Chief 
is no longer a Vice President of the CCC. A new paragraph (d) was moved 
to this section, relocating a provision originally in Sec.  1468.21 
that is applicable across ACEP. Paragraph (d) specifies that 
applications may be submitted on a continuous basis or in response to 
specific ACEP solicitations.
    The 2018 Farm Bill requires easement monitoring, therefore 
paragraph (h) has been added to specify generally monitoring 
responsibilities for ACEP-ALE and ACEP-WRE. Paragraph (f) has been 
revised to add monitoring of wetland reserve easements to the 
responsibilities that NRCS may delegate to an appropriately qualified 
conservation organization.
    Additionally, the 2018 Farm Bill amended the Regional Conservation 
Partnership Program (RCPP) so that RCPP funds are administered through 
RCPP contracts and not contracts and agreements of the covered 
programs, including ACEP. Therefore, the references to RCPP and related 
text have been removed from the ACEP regulation.
    Other existing paragraphs in this section were reorganized slightly 
for readability purposes.

Sec.  1468.3 Definitions

    The following definitions have been added in Sec.  1468.3 to be 
consistent with the 2018 Farm Bill as follows:
    The definition of ``buy-protect-sell transaction'' is included to 
establish this new transaction type under ACEP-ALE. An eligible entity 
and NRCS may enter into a legal arrangement to secure an agricultural 
land easement on land that will be transferred to a qualified farmer or 
rancher under specified conditions.
    The definition of ``Easement administration action'' is included to 
ease readability of the regulation where all four terms, easement 
subordination, easement modification, easement exchange, and easement 
termination are referenced.
    The definition of ``Grazing management plan'' is included to 
identify the document used to describe an NRCS-approved grazing 
management system on an ACEP-WRE.
    The definition of ``Monitoring report'' is included to describe the 
obligation of the easement holder to document and convey the findings 
of the annual review of ACEP easements.
    The definition of ``Nonindustrial private forest land'' is included 
to reflect terminology used to describe the vegetative cover and 
ownership requirements of such land. With the inclusion of the 
definition of ``Nonindustrial private forest land,'' the definition of 
``Forest land'' was removed to avoid confusion or redundancy.
    Changes to the definition of ``Wetland restoration'' are discussed 
above in the section on that topic.
    Minor editorial changes were made to other definitions to improve 
their readability. This rule also removed the definitions for ``Active 
agricultural production,'' ``Forest land of statewide importance,'' and 
``Projects of special significance'' since such terms were only 
necessary to identify whether a transaction qualified for a waiver as a 
project of special significance, and the 2018 Farm Bill removed the 
need for such a waiver.

Sec.  1468.4 Appeals

    Section 1468.4 specifies the nature of the appeal rights for 
persons, legal entities, or eligible entities that apply for, receive 
payment under, or receive determinations for ACEP. The 2018

[[Page 565]]

Farm Bill did not make any changes that affects this section. Minor 
edits have been made to include notice to easement holders.

Sec.  1468.5 Scheme or Device

    Section 1468.5 is similar to other conservation program provisions 
and describes the authority that NRCS exercises to protect the Federal 
investment in conservation easements from fraudulent activities. No 
changes were made to this section.

Sec.  1468.6 Subordination, Exchange, Modification, and Termination

    Section 1468.6 specifies the easement administration actions that 
may be authorized by section 1265D(c) of the Food Security Act of 1985.
    The 2018 Farm Bill made several changes that modified the framework 
under which requests for easement administration actions may be 
reviewed and approved. In particular, the 2018 Farm Bill, while 
maintaining consistent standards for review, provides flexibility for 
the review of requests for subordination, and added conditions to limit 
the approval of terminations.
    The changes to this section included reorganizing the provisions to 
specify the criteria that apply to each of the particular types of 
easement administrative actions. Where particular criteria apply to 
several types of easement administrative action, the rule identifies 
the easement administrative actions types that must meet that criteria 
in order to be considered for approval. Proposed easement 
administration actions must meet all applicable criteria for the action 
to be considered for approval. The section is organized in a step-wise 
fashion so if the proposal fails to meet one of the criterion, it is 
not necessary for NRCS to consider the remaining criteria.

Sec.  1468.7 Transfer of Land

    Section 1468.7 specifies how NRCS will address enrollment of land 
where the landowner transfers the rights in land after an agreement has 
been executed, but prior to the purchase of the easement. No changes 
were made to this section.

Sec.  1468.8 Payments Not Subject to Claims

    Section 1468.8 specifies that NRCS will make payment to ACEP 
participants without regard to any claims that non-Federal creditors 
may have on the financial assets of the program participant as 
authorized by 7 CFR part 1403. The 2018 Farm Bill did not make any 
changes to ACEP that affect this section. A minor edit was made to 
remove the word ``government.''

Sec.  1468.9 Assignments

    Section 1468.9 specifies that a program participant can assign 
their right to payment to another person or legal entity. No changes 
were made to this section.

Sec.  1468.10 Environmental Markets

    Section 1468.10 provides that a landowner subject to an ACEP 
easement may also enter into an environmental credit agreement with 
third parties provided that the terms of the environment credit 
agreement do not interfere with the rights acquired by the United 
States or the eligible entity and do not cause the landowner to violate 
the terms of the agricultural land easement or wetland reserve 
easement. Revisions to Sec.  1468.10 clarify that the purposes of the 
environmental services market must include the facilitation of 
additional conservation benefits consistent with the conservation 
purposes for which the easement was acquired.

Summary of Changes in Subpart B, Agricultural Land Easements

Sec.  1468.20 Program Requirements

    Section 1468.20 includes the program requirements for eligible 
entities who wish to receive cost-share assistance from NRCS for the 
purchase of an agricultural land easement. The 2018 Farm Bill made 
several changes that affect this section.
    Paragraph (a) provides that NRCS will facilitate and provide 
funding for the purchase of easements or other interests in eligible 
private or Tribal agricultural land for protecting the agricultural use 
and related conservation values of the land by limiting nonagricultural 
uses of the land. Also, it maintains the existing requirement that such 
land be subject to a written pending offer from an eligible entity for 
standard ALE transactions and adds the option for such lands to be 
owned by the eligible entity as part of an approved buy-protect-sell 
transaction.
    Paragraph (b) specifies the requirements for establishing the 
eligibility of an entity applying for ACEP-ALE cost-share assistance. 
This rule removes the requirement that an eligible entity provide 
evidence at the time of application that they have funds available to 
meet the minimum cash contribution requirement. Instead, for 
transactions where the eligible entity's cash contribution will be less 
than 10 percent of the easement's fair market value, NRCS requires the 
eligible entity to provide the estimated costs and anticipated sources 
of funding for each parcel and evidence of funds available for 
stewardship of the easement.
    Paragraph (c) requires that a landowner who is selling an 
agricultural land easement to an eligible entity meets the conservation 
compliance requirements in 7 CFR part 12 and the AGI limitation 
provisions at 7 CFR part 1400. Under a buy-protect-sell transaction, 
the eligible entity is the landowner. For transactions where the 
eligible entity sells the fee title to a qualified farmer or rancher 
prior to or at the time of the easement closing, then the farmer or 
rancher purchaser must meet these landowner payment eligibility 
requirements. If, however, the fee title to the land will not be 
transferred to a farmer or rancher until after the agricultural land 
easement is closed, then the eligible entity is responsible for meeting 
the landowner payment eligibility requirements prior to easement 
closing. The regulation continues to clarify that it is the eligible 
entity and landowner's responsibility to ensure that the necessary 
records have been established in the USDA customer records system.
    Paragraph (d) specifies the criteria by which land can be 
determined eligible and specifies that the land must be cropland, 
rangeland, grassland, or land that contains forbs or shrubland for 
which grazing is the predominant use, located in an area historically 
dominated by grassland, forbs, or shrubs, and could provide habitat for 
animal or plant populations of significant ecological value, 
pastureland, or nonindustrial private forest land that meet specific 
criteria. Consistent with the prior easement regulation and policy that 
sought to minimize overlap and conflict with other USDA forest easement 
programs, paragraph (d) requires that land enrolled in ACEP-ALE cannot 
include forest land greater than two-thirds of the ACEP-ALE easement 
area but eliminates the requirement that land with a certain amount of 
forest land have a forest management plan. Lands with greater than two-
thirds non industrial private forests may be protected under a larger 
conservation easement of which the ACEP-ALE easement area may be a 
subcomponent, provided the forest land within the ACEP-ALE easement 
area does not exceed two-thirds of the described ACEP-ALE easement 
area.
    Paragraph (e) specifies which lands are ineligible for enrollment, 
including lands that are owned by a governmental entity, unless in 
trust for an Indian Tribe. Also, it identifies that land

[[Page 566]]

owned by nongovernmental organizations whose purpose is to protect 
agricultural use and related conservation values are ineligible since 
such lands are already protected from conversion to agricultural use. 
To address buy-protect-sell transactions, paragraph (e)(3) has been 
revised to specify that eligible lands owned by the eligible entity on 
a transitional basis to secure an ALE on the land and to transfer fee 
title ownership to a farmer or rancher may be eligible for enrollment 
provided all other eligibility requirements are met.
    The 2018 Farm Bill replaced the term ``proposed'' with 
``permitted'' in the language about the types of rights-of-way, 
infrastructure development, or other adjacent land uses whose impacts 
may cause land to be considered ineligible. NRCS made a conforming 
change.
    This rule adds paragraph (f) to specify additional eligibility 
requirements related to buy-protect-sell transactions. In addition to 
meeting the other eligibility requirements, to be eligible for 
enrollment under the complex and lengthy real estate transactions, the 
land must be subject to conditions that necessitate the transitional 
ownership by an eligible entity from fee title owner to only easement 
holder. The conditions may include an imminent threat of development as 
a result of which the existing landowner is unwilling to accept an 
offer for the purchase of an agricultural land easement from the 
eligible entity but is willing to sell the land to the eligible entity 
and the eligible entity intends to place an agricultural land easement 
on the property and ensure it is sold to a qualified farmer or rancher 
subject to the conditions of a buy-protect-sell transaction. When 
applying, the eligible entity must provide evidence of active purchase 
of the parcel, such as a valid purchase agreement, on land not owned by 
the eligible entity at the time of application.

Sec.  1468.21 Application Procedures

    Section 1468.21 specifies the application procedures that an entity 
must follow to have their application be considered for funding under 
ACEP-ALE. NRCS determines whether an applicant is eligible to 
participate in ACEP-ALE based on the criteria in Sec.  1468.20. 
Paragraph (a) was revised to identify that additional application 
information may be required for buy-protect-sell transactions. Also, it 
was revised to simplify the regulation and remove matters of policy and 
administration.

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

    Section 1468.22 specifies how parcels will be ranked for funding. 
The NRCS ranking system in each State incorporates national and State-
specific criteria to rank, score, and prioritize each eligible parcel 
within the State. The 2018 Farm Bill allows NRCS to adjust the ALE 
ranking criteria to account for geographic differences if the 
adjustments meet ACEP purposes and continue to maximize the benefit of 
the Federal ACEP investment. The section provides flexibility to ensure 
that such adjustments to address geographic differences are available. 
In particular, the ranking system, incorporating both national and 
State criteria, enables NRCS to prioritize parcels that merit ACEP-ALE 
enrollment. The 2018 Farm Bill also changed certain requirements 
related to the eligible entity's contribution of cash to the non-
Federal share for the purchase of the easement and the requirements for 
an ACEP-ALE plan. This rule revises the extent of the eligible entity's 
cash contribution is a National ranking criterion. Additionally, as 
revised, the regulation specifies that measures that will be used to 
maintain or increase agricultural viability, such as ACEP-ALE plans, 
may be a State ranking criterion. The benefits of these actions are now 
specified as attributes that may be considered as a matter of ranking 
in the prioritization of projects for selection for funding. Paragraph 
(g) was modified to simplify the regulation and remove matters of 
policy and administration.

Sec.  1468.23 ALE Agreements

    Section 1468.23 addresses the principal ACEP documents under which 
NRCS and an eligible entity identify how they will coordinate the 
activities needed for the eligible entity to purchase an agricultural 
land easement with ACEP cost-share assistance, including the respective 
rights, requirements, and responsibilities related to ACEP 
implementation under subpart B of the regulation. NRCS, on behalf of 
the CCC, enters into ALE-agreements with eligible entities with parcels 
selected for funding. The section was revised for consistency with 
provisions of the 2018 Farm Bill for ALE-agreements.

Sec.  1468.24 Compensation and Funding for Agricultural Land Easements

    Section 1468.24 addresses the extent to which NRCS will provide 
financial assistance to an eligible entity for the purchase of an 
agricultural land easement by the eligible entity. NRCS may provide a 
Federal share up to 50 percent of the approved fair market value of the 
agricultural land easement, and the eligible entity must provide a non-
Federal share that is at least equivalent to that provided by NRCS.
    While ACEP formerly required that an eligible entity contribute its 
own cash resources in an amount that was at least 50 percent of the 
amount contributed by NRCS, the 2018 Farm Bill removed the specific 50 
percent eligible entity cash contribution requirement, and instead 
identifies permissible sources of the non-Federal share provided by the 
eligible entity. These sources include the eligible entity's own cash 
resources, a landowner charitable donation or qualified conservation 
contribution, certain easement acquisition costs incurred by the 
eligible entity, and other costs as determined by NRCS.
    Paragraph (b) has been revised to remove the requirement for the 
eligible entity to contribute its own cash resources in an amount equal 
to 50 percent of the amount of the Federal share. Paragraph (b) also 
specifies the costs incurred by the eligible entity associated with 
securing a deed to the easement that may be included in the calculation 
of the non-Federal share and the source and limit of other costs that 
may be included in the calculation of the non-Federal share.
    The 2018 Farm Bill removed the reference to the availability of 
waivers for grassland of special environmental significance since the 
specific eligible entity cash contribution requirement was removed. 
NRCS may now provide up to 75 percent of the fair market value of the 
agricultural land easement, and the eligible entity must provide the 
remainder as the non-Federal share through any of the specified 
sources. The ACEP regulation has been modified accordingly, to update 
the provisions related to grasslands of special environmental 
significance and to delete paragraph (b)(4) regarding projects of 
special significance.
    NRCS may only provide ACEP-ALE cost-share funds in the form of 
financial assistance toward the cost of the agricultural land easement 
itself. The 2018 Farm Bill limited the technical assistance that may be 
provided by NRCS through ACEP-ALE funding related to planning on the 
agricultural land easement to the development of a conservation plan on 
highly erodible cropland. The section of the ACEP regulation has been 
revised accordingly.

[[Page 567]]

Sec.  1468.25 Agricultural Land Easement Deeds

    Section 1468.25 addresses the minimum deed requirements for an 
easement transaction to receive ACEP-ALE assistance. In particular, the 
section specifies that in order for NRCS to provide cost-share 
assistance to an eligible entity, NRCS will ensure that the eligible 
entity will include in its easement deeds the terms and conditions 
necessary to ensure ACEP purposes and requirements are met. The 2018 
Farm Bill changes the required and new permitted terms and conditions 
of agricultural land easement deeds used to specify the regulatory deed 
requirements.
    Paragraph (d)(1) has been revised to incorporate the added 
specificity to the right of enforcement conveyed to NRCS under the 
terms of an agricultural land easement.
    The requirement that the agricultural land easement be subject to 
an ACEP-ALE plan was removed.
    Paragraph (d)(7) was added to specify the terms and conditions 
required by statute that must be addressed if the eligible entity 
chooses to allow subsurface mineral development on the land subject to 
the agricultural land easement. In particular, the 2018 Farm Bill 
specified criteria to ensure prohibitions on subsurface mineral 
development did not eliminate otherwise high value conservation lands 
from program eligibility. As identified in the Managers Report, the 
terms and conditions do not negate or supersede any other applicable 
laws, including State laws, which may otherwise apply to any mineral 
development activities but ensure the activity should be consistent 
with the conservation and agricultural purposes of the land and all 
provisions of the program,
    The requirement for a conservation plan on highly erodible cropland 
was revised and moved to new paragraph (d)(9).
    Paragraph (d)(10) was added to specify that appropriate terms and 
conditions must be included in the easement deed to address items 
agreed to by the eligible entity as a matter of ranking and basis for 
selection for funding, such as an eligible entity agreement to develop 
and maintain an ACEP-ALE plan or provide a cash contribution toward the 
purchase of the easement.
    Paragraph (d)(11) was added to provide that an eligible entity may 
include terms and conditions in the ALE deed that are intended to keep 
the land subject to the easement under farmer or rancher ownership.

Sec.  1468.26 Agricultural Land Easement Plans

    As discussed above, agricultural land easements enrolled under the 
2018 Farm Bill are not required to be subject an ACEP-ALE plan. The 
stand-alone section regarding ACEP-ALE plans has been deleted. 
Applicable provisions related to the development of required 
conservation plans or the development of ACEP-ALE plans as agreed-to by 
the eligible entity are captured in other sections of the regulation.

Sec.  1468.26 Eligible Entity Certification

    Under ACEP, NRCS is required to establish a process under which 
eligible entities that meet established criteria may be certified and 
entered into long-term agreements for ACEP-ALE cost-share assistance. 
This interim rule redesignates Sec.  1468.27 as Sec.  1468.26, and is 
revised as discussed in this section. As redesignated, Sec.  1468.26, 
Eligible Entity Certification, provides that, at an eligible entity's 
request, the Chief will determine whether an eligible entity meets 
certifications requirements and if so, certify the entity. The 2018 
Farm Bill expanded the way an eligible entity could demonstrate that 
they meet certification criteria. In particular, the 2018 Farm Bill 
provided that NRCS may certify an eligible entity that is either 
accredited by the Land Trust Accreditation Commission (or equivalent 
accrediting body) or is a State department of agriculture or other 
State agency with statutory authority for farm and ranch land 
protection, and that either of these types of entities has acquired at 
least 10 agricultural land easements under ACEP-ALE, or predecessor 
NRCS easement programs, and has successfully met, as determined by 
NRCS, its responsibilities under ALE-agreements. NRCS has incorporated 
the additional certification criteria and revised the criteria to 
require a minimum of 10 agricultural land easements under ACEP-ALE, or 
predecessor NRCS easement programs (FPP and FRPP), to be held by any 
eligible entity requesting certification, not just those that meet the 
new criteria introduced in the 2018 Farm Bill. Other paragraphs in the 
section were revised to simplify the existing regulation and remove 
matters of policy and administration.

Sec.  1468.27 Buy-Protect-Sell Transactions

    As discussed above, the 2018 Farm Bill added a new transaction type 
under ACEP-ALE for buy-protect-sell transactions. Section 1468.27 has 
been added to describe the form that buy-protect-sell transactions may 
take and to specify the requirements based on the specific buy-protect-
sell transaction type. Buy-protect-sell transactions introduce an 
option under which NRCS may provide ACEP-ALE cost-share assistance for 
the purchase of an agricultural land easement on private or Tribal 
agricultural land owned on a transitional basis by an eligible entity 
when the ownership of that land will be timely transferred to a 
qualified farmer or rancher. Section 1468.27 specifies that there are 
two types of buy-protect-sell transactions, pre-closing and post-
closing transfers, which are differentiated based on the timing of the 
sale of the fee title interest in the land to a qualified farmer or 
rancher relative to the timing of securing the agricultural land 
easement. The regulation specifies the requirements and ALE-agreement 
terms that are applicable to both buy-protect-sell transaction types, 
and those that are applicable to the individual transaction types. For 
post-closing buy-protect-sell transactions, additional information will 
be required at the time of application and NRCS must determine whether 
the structure of the transaction as proposed by the eligible entity 
conforms with legal requirements prior to entering into an ALE-
agreement for such transactions on a parcel determined to meet the 
requirements of part 1468.

Sec.  1468.28 Violations and Remedies

    Section 1468.28 specifies the eligible entity's responsibilities to 
enforce the agricultural land easement's terms and conditions. 
Additionally, Sec.  1468.28 specifies the circumstances under which 
NRCS may exercise its right of enforcement under ACEP-ALE, including 
its right of inspection.
    The 2018 Farm Bill identified more specific conditions upon when 
NRCS could exercise the right of inspection on ACEP-ALE easements, 
requiring that the right of inspection could only be exercised if the 
holder of the easement fails to provide monitoring reports in a timely 
manner or NRCS has a reasonable and articulable belief that the terms 
and conditions of the easement have been violated. Prior to the 
inspection, NRCS will notify the eligible entity and the landowner of 
the inspection and provide a reasonable opportunity for the eligible 
entity and the landowner to participate in the inspection. These 
requirements have been incorporated into this section of the ACEP 
regulations and in the terms and conditions of the ALE-agreements. NRCS 
will continue to work with the eligible entity, including any easement 
holders subsequent to the eligible entity,

[[Page 568]]

to assist it in its responsibility to enforce the easement terms.

Summary of Changes in Subpart C, Wetland Reserve Easements

Sec.  1468.30 Program Requirements

    Section 1468.30 specifies the basic requirements for participation 
in ACEP through a wetland reserve easement, including landowner and 
land eligibility requirements. The 2018 Farm Bill increased the acres 
of total cropland in a county that may be subject to an ACEP-WRE 
easement to 15 percent. Paragraph (b)(1) has been revised accordingly. 
The 2018 Farm Bill removed the requirement for NRCS to seek input from 
the Secretary of the Interior at the local level in the determination 
of eligible land. Paragraph (e)(3) has been revised accordingly. The 
2018 Farm Bill also made a slight adjustment to NRCS's consideration of 
the effects of onsite or offsite conditions that may interfere with the 
ability of the wetland functions and values to be successfully and 
cost-effectively restored by changing the status of certain rights-of-
way, infrastructure development, or other adjacent land uses whose 
impacts must be considered from ``proposed'' to ``permitted''. 
Paragraph (g)(6) has been revised accordingly.

Sec.  1468.31 Application Procedures

    Section 1468.31 specifies the application procedures for a 
landowner who wants to participate in ACEP-WRE. The 2018 Farm Bill did 
not make any changes to program implementation that affects this 
portion of the ACEP regulation.

Sec.  1468.32 Establishing Priorities, Ranking Consideration and 
Project Selection

    Section 1468.32 specifies the criteria NRCS will use to prioritize, 
rank, and select properties for enrollment in ACEP-WRE. Among the 
prioritization and ranking criteria, NRCS may consider the conservation 
benefits of obtaining an easement, the cost-effectiveness of each 
easement, whether Federal funds are being leveraged, and the extent to 
which ACEP-WRE purposes would be achieved on the land.
    The 2018 Farm Bill included water quality as an additional priority 
along with the priority placed on acquiring easements based on the 
value of the easement for protecting and enhancing habitat for 
migratory birds and other wildlife. While the ACEP regulation included 
benefits to water quality as a component of various existing ranking 
criteria, the capacity of the wetland to improve water quality has been 
added in the regulation.

Sec.  1468.33 Enrollment Process

    Section 1468.33 specifies the process that NRCS uses for handling 
applications once they have been selected for enrollment. Minor edits 
to improve accuracy and readability have been made in the section.

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

    Section 1468.34 specifies how NRCS will determine the level of 
compensation that a landowner will receive in return for conveying a 
wetland reserve easement. ACEP-WRE easement compensation is based upon 
the lowest of the fair market value of the land, a geographic area rate 
cap, or landowner offer. No substantive changes have been made to this 
section and only minor edits have been made to improve its accuracy and 
readability.

Sec.  1468.35 Wetland Reserve Enhancement Partnerships (WREP)

    Section 1468.35 specifies how NRCS will implement a wetland reserve 
enhancement option with partners under ACEP-WRE. No changes were made 
in the section.

Sec.  1468.36 WRPO Payments

    Section 1468.36 specifies that NRCS will provide funds towards the 
wetland reserve plan of operations (WRPO) on land enrolled through a 
wetland reserve easement or 30-year contract. Minor edits to improve 
accuracy and readability have been made in the section.

Sec.  1468.37 Easement and 30-Year Contract Participation Requirements

    Section 1468.37 specifies requirements for ACEP-WRE participation. 
The 2018 Farm Bill addresses restoration and management within the 
easement and contract requirements. The section has been revised to 
conform with the 2018 Farm Bill provisions. The section also specifies 
that a landowner may be able to reserve grazing rights under a wetland 
reserve easement or 30-year contract if the reservation and use of the 
grazing rights is consistent with the historical natural uses of the 
land and long-term wetland protection and enhancement goals for which 
the easement or 30-year contract was established. The grazing rights 
are reserved to the landowner and are subject to a recorded exhibit to 
the deed that outlines the purposes and limitations of the grazing. 
Additionally, the grazing must comply with a WRPO. As a matter of 
existing ACEP policy, the WRPO may include a grazing management plan, 
which is updated as necessary. The 2018 Farm Bill added a specific 
reference to the grazing management plan and identified that the plan 
may be reviewed and modified as necessary, at least every 5 years. This 
section has been revised to incorporate this change.

Sec.  1468.38 Development and Revision of the WRPO and Associated 
Compatible Use Authorizations

    The section specifies that WRPO is developed and updated by NRCS, 
in consultation with the State technical committee, with consideration 
of available site-specific technical input from the U.S. Fish and 
Wildlife Service (FWS) at the local level and others as appropriate. 
NRCS specifies in WRPO the manner in which land enrolled through a 
wetland reserve easement or 30-year contract will be restored, 
protected, enhanced, maintained, managed, and monitored to accomplish 
ACEP-WRE goals.
    Paragraph (c) has been added to the section to more specifically 
identify the activities identified in the 2018 Farm Bill that should be 
addressed in the WRPO.
    The 2018 Farm Bill included new provisions related to the 
evaluation and authorization of compatible uses on the easement area. 
The new provisions have been added to the section. Specifically, 
paragraph (d) provides that in evaluating and considering compatible 
uses NRCS will consider whether the use will facilitate the practical 
administration and management of the easement or contract area and 
ensure that the use furthers the functions and values for which the 
land was enrolled.
    The section also specifies that the authorization of a compatible 
use is a determination made by NRCS, in its sole discretion, and that 
all compatible use authorizations are time-limited and may be modified 
or rescinded at any time. Compatible use authorizations issued by NRCS 
do not vest any right of any kind to the landowner.

Sec.  1468.39 Violations and Remedies

    Section 1468.39 specifies how NRCS will address violations of a 
wetland reserve easement or 30-year contract.

Effective Date, Notice and Comment, and Paperwork Reduction Act

    In general, the Administrative Procedure Act (APA) (5 U.S.C. 553) 
requires that a notice of proposed rulemaking be published in the 
Federal

[[Page 569]]

Register and interested persons be given an opportunity to participate 
in the rulemaking through submission of written data, views, or 
arguments with or without opportunity for oral presentation, except 
when the rule involves a matter relating to public property, loans, 
grants, benefits, or contracts. This rule involves matters relating to 
benefits and therefore is exempt from the APA requirements. Further, 
the regulations to implement the programs of chapter 58 of title 16 of 
the U.S. Code, as specified in 16 U.S.C. 3846, and the administration 
of those programs, are:
     To be made as an interim rule effective on publication, 
with an opportunity for notice and comment,
     Exempt from the Paperwork Reduction Act (44 U.S.C. ch. 
35), and
     To use the authority under 5 U.S.C. 808 related to 
Congressional review and any potential delay in the effective date.
    For major rules, the Congressional Review Act requires a delay in 
the effect date of 60-days after publication to allow for Congressional 
Review. This rule is major under the Congressional Review Act, as 
defined by 5 U.S.C. 804(2). The authority in 5 U.S.C. 808 provides that 
when an agency finds for good cause that notice and public procedure 
are impracticable, unnecessary, or contrary to the public interest, 
that the rule may take effect at such time as the agency determines. 
Due to the nature of the rule, the mandatory requirements of the 2018 
Farm Bill, and the need to implement the ACEP regulations expeditiously 
to provide assistance to producers, NRCS and CCC find that notice and 
public procedure are contrary to the public interest. Therefore, even 
though this rule is a major rule for purposes of the Congressional 
Review Act of 1996, NRCS and CCC are not required to delay the 
effective date for 60 days from the date of publication to allow for 
Congressional review. Therefore, this rule is effective on the date of 
publication in the Federal Register.
    NRCS invites interested persons to participate in this rulemaking 
by submitting written comments or views about the changes made by this 
interim rule. The most helpful comments reference a specific portion of 
the regulation, explain the reason for any recommended changes, and 
include supporting data and references to relevant section of either 
the 2018 Farm Bill or the 1985 Farm Bill. NRCS specifically seeks 
public comment on recommendations to streamline access to the program 
and input on new or existing ranking criteria that would assist NRCS in 
selecting projects that best further ACEP purposes. All comments 
received on or before the closing date for comments will be considered. 
NRCS will review and respond to the public comments in the ACEP final 
rule.

Executive Orders 12866, 13563, 13771, and 13777

    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasized the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility. Executive Order 13777, 
``Enforcing the Regulatory Reform Agenda,'' established a federal 
policy to alleviate unnecessary regulatory burdens on the American 
people.
    The Office of Management and Budget (OMB) designated this interim 
rule, with request for comment, a significant under Executive Order 
12866, and therefore, OMB has reviewed this rule. The costs and 
benefits of this rule are summarized at the end of this preamble. The 
full cost benefit analysis is available on www.regulations.gov.
    Executive Order 13771, ``Reducing Regulation and Controlling 
Regulatory Costs,'' requires that, in order to manage the private costs 
required to comply with federal regulations that for every new 
significant or economically significant regulation issued, the new 
costs must be offset by the elimination of at least two prior 
regulations. The OMB guidance in M-17-21, dated April 5, 2017, 
specifies that ``transfer rules'' are not covered by Executive Order 
13771. If any of the increases in flexibilities for program 
participants results in cost-savings, they will be considered 
deregulatory and will be accounted for under Executive Order 13771 when 
the rule is finalized.

Clarity of the Regulation

    Executive Order 12866, as supplemented by Executive Order 13563, 
requires each agency to write all rules in plain language. In addition 
to your substantive comments on this rule, we invite your comments on 
how to make the rule easier to understand. For example:
     Are the requirements in the rule clearly stated? Are the 
scope and intent of the rule clear?
     Does the rule contain technical language or jargon that is 
not clear?
     Is the material logically organized?
     Would changing the grouping or order of sections or adding 
headings make the rule easier to understand?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     Would more, but shorter, sections be better? Are there 
specific sections that are too long or confusing?
     What else could we do to make the rule easier to 
understand?

Regulatory Flexibility Act

    The Regulatory Flexibility Act generally requires an agency to 
prepare a regulatory analysis of any rule whenever an agency is 
required by the Administrative Procedure Act or any other law to 
publish a proposed rule, unless the agency certifies that the rule will 
not have a significant economic impact on a substantial number of small 
entities. This rule is not subject to the Regulatory Flexibility Act 
because CCC is not required by the Administrative Procedure Act or any 
law to publish a proposed rule for this rulemaking. Despite the 
Regulatory Flexibility Act not applying to this rule, the action only 
affects those entities who voluntarily participate in ACEP and in doing 
so receive its benefits. Compliance with the provisions of ACEP 
regulations is only required for those entities who choose to 
participate in this voluntary program.

Environmental Review

    The environmental impacts of this rule have been considered in a 
manner consistent with the provisions of the National Environmental 
Policy Act (NEPA), the regulations of the Council on Environmental 
Quality (40 CFR parts 1500-1508), and the NRCS regulations for 
compliance with NEPA (7 CFR part 650). A draft programmatic EA has been 
prepared in association with this rulemaking. The analysis has 
determined there will not be a significant impact to the human 
environment and as a result, an Environmental Impact Statement (EIS) is 
not required to be prepared (40 CFR part 1508.13). The draft EA and 
FONSI are available for review and comment for 30 days from the date of 
publication of this interim rule in the Federal Register. NRCS will 
consider this input and determine whether there is any new information 
provided that is relevant to environmental concerns and bearing on the 
proposed action or its impacts that warrant supplementing or revising 
the

[[Page 570]]

current available draft of the ACEP EA and FONSI.

Executive Order 12372

    Executive Order 12372, ``Intergovernmental Review of Federal 
Programs,'' requires consultation with State and local officials that 
would be directly affected by proposed federal financial assistance. 
The objectives of the Executive order are to foster an 
intergovernmental partnership and a strengthened Federalism, by relying 
on State and local processes for State and local government 
coordination and review of proposed Federal financial assistance and 
direct Federal development. For reasons specified in the final rule 
related notice regarding 7 CFR part 3015, subpart V (48 FR 29115, June 
24, 1983), the programs and activities in this rule are excluded from 
the scope of Executive Order 12372.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, ``Civil 
Justice Reform.'' This rule will not preempt State or local laws, 
regulations, or policies unless they represent an irreconcilable 
conflict with this rule. This rule will not have retroactive effect. 
Before any judicial actions may be brought regarding the provisions of 
this rule, the administrative appeal provisions of 7 CFR part 11 are to 
be exhausted.

Executive Order 13132

    This rule has been reviewed under Executive Order 13132, 
``Federalism.'' The policies contained in this rule do not have any 
substantial direct effect on States, on the relationship between the 
Federal Government and the States, or on the distribution of power and 
responsibilities among the various levels of government, except as 
required by law. Nor does this rule impose substantial direct 
compliance costs on State and local governments. Therefore, 
consultation with the States is not required.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires federal agencies 
to consult and coordinate with Tribes on a government-to-government 
basis on policies that have Tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian Tribes, on the relationship between the Federal Government 
and Indian Tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian Tribes.
    The USDA's Office of Tribal Relations (OTR) has assessed the impact 
of this rule on Indian Tribes and determined that this rule has 
significant Tribal implication that require ongoing adherence to 
Executive Order 13175. Tribal consultation for this rule was included 
in the 2018 Farm Bill Tribal consultation held on May 1, 2019, at the 
National Museum of the American Indian, in Washington, DC. The portion 
of the Tribal consultation relative to this rule was conducted by Bill 
Northey, USDA Under Secretary for the Farm Production and Conservation 
mission area, as part of the Title II session. There were no specific 
comments from Tribes on the rule during the Tribal consultation. If a 
Tribe requests additional consultation, NRCS will work with OTR to 
ensure meaningful consultation is provided where changes, additions, 
and modifications identified in this rule are not expressly mandated by 
law.
    Separate from Tribal consultation, communication, and outreach 
efforts are in place to assure that all producers, including Tribes (or 
their members), are provided information about the regulation changes. 
Specifically, NRCS obtains input through Tribal Conservation Advisory 
Councils. A Tribal Conservation Advisory Council may be an existing 
Tribal committee or department and may also constitute an association 
of member Tribes organized to provide direct consultation to NRCS at 
the State, regional, and national levels to provide input on NRCS 
rules, policies, programs, and impacts on Tribes. Tribal Conservation 
Advisory Councils provide a venue for agency leaders to gather input on 
Tribal interests. Additionally, NRCS will be holding several sessions 
with Indian Tribes and Tribal entities across the country in fiscal 
year 2019 to describe the 2018 Farm Bill changes to NRCS conservation 
programs, obtain input about how to improve Tribal and Tribal member 
access to NRCS conservation assistance, and make any appropriate 
adjustments to the regulations that will foster such improved access.

The Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 
requires Federal agencies to assess the effects of their regulatory 
actions on State, local, and Tribal Governments or the private sector. 
Agencies generally must prepare a written statement, including a cost 
benefits analysis, for proposed and final rules with Federal mandates 
that may result in expenditures of $100 million or more in any 1 year 
for State, local or Tribal governments, in the aggregate, or to the 
private sector. UMRA generally requires agencies to consider 
alternatives and adopt the more cost effective or least burdensome 
alternative that achieves the objectives of the rule. This rule 
contains no federal mandates, as defined under Title II of UMRA, for 
State, local, and Tribal Governments or the private sector. Therefore, 
this rule is not subject to the requirements of UMRA.

Federal Assistance Programs

    The title and number of the Federal Domestic Assistance Programs in 
the Catalog of Federal Domestic Assistance to which this rule applies 
is 10.931--Agricultural Conservation Easement Program.

E-Government Act Compliance

    NRCS and CCC are committed to complying with the E-Government Act, 
to promote the use of the internet and other information technologies 
to provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

Cost Benefit Analysis Summary

    For ACEP, NRCS provides technical and financial assistance to help 
customers (farmers, ranchers, landowners, and other land users) address 
natural resource concerns. As discussed above, ACEP has two distinct 
components:
     The ALE component protects the agricultural use, future 
viability, and conservation values of eligible land by limiting non-
agricultural uses of that land or protects grazing uses and related 
conservation values by restoring or conserving eligible land; and
     The WRE component restores, protects, and enhances 
wetlands.
    The 2018 Farm Bill included mandatory changes to ACEP that NRCS 
must implement and changes over which NRCS has some discretion. 
Additionally, NRCS continues to have discretion over other program 
aspects that were unchanged by the 2018 Farm Bill, such as the 
allocation of funds. Together, these various changes and discretionary 
provisions may affect ACEP costs and the resulting impacts on natural 
resource concerns, but those changes are expected to be small. Because 
ACEP is voluntary, it does not impose any burden upon agricultural 
landowners who choose not to participate.

[[Page 571]]

    One of the most significant ACEP changes in the 2018 Farm Bill is 
to the existing contribution requirements for the non-Federal share 
under ACEP-ALE. This change adds flexibility for eligible entities to 
meet the non-Federal share requirement by no longer specifying a 
minimum cash contribution amount to be provided by the eligible entity 
and allowing the total of the non-Federal share to be comprised of a 
charitable donation or qualified conservation contribution from the 
private landowner. It also includes provisions for costs related to 
securing the easement to be included in the calculation of the non-
Federal share.
    There are 6 states and 1 territory (Alabama, Arkansas, Hawaii, 
Louisiana, Missouri, North Dakota, and Puerto Rico) that currently have 
no enrollment in ACEP-ALE. This may have been due to a lack of 
available financial resources for an eligible entity to meet the 
minimum cash contribution requirement or may be due to a lack of 
entities that meet the eligibility requirements to participate in ACEP-
ALE. The changes to the non-Federal share requirements may result in 
increased ACEP-ALE enrollments in areas where enrollment has been 
limited due to a lack of financial resources available for entities 
that meet the ACEP-ALE eligibility requirements. To address these 
changes, this rule has eliminated a specified minimum cash contribution 
amount and incorporated provisions for considering costs related to 
securing the easement. These changes are applicable to all eligible 
entities in all States and as a result, it is anticipated that the 
amount of the Federal contribution toward ACEP-ALE easements will 
increase by 8 to10 percent.
    Another change under the 2018 Farm Bill provides the Secretary with 
authority to enter into legal arrangements with eligible entities to 
conduct buy-protect-sell transactions under ACEP-ALE. In specific 
instances, NRCS may provide ACEP-ALE cost-share assistance to an 
eligible entity for the purchase of an agricultural land easement on 
private or Tribal agricultural land owned on a transitional basis by an 
eligible entity when the ownership of that land will be timely 
transferred to a qualified farmer or rancher. Buy-protect-sell 
transactions are intended to help farmers and ranchers acquire 
agricultural land they could not otherwise afford and to protect 
agricultural land that may have otherwise been developed or removed 
from agricultural production.
    NRCS continues to have the discretion to rank and prioritize 
projects and to select individual applications based on their ability 
to achieve ACEP purposes and to assess and determine the appropriate 
allocation of funds for the acquisition of agricultural land and 
wetland easements. The 2018 Farm Bill does not identify enrollment 
level requirements between ACEP-WRE and ACEP-ALE. The relative emphasis 
NRCS places on these two program components depends on State and 
national priorities, environmental impacts, and local demand. It is 
anticipated that enrollment in ACEP will be consistent with historic 
enrollment trends.

List of Subjects in 7 CFR Part 1468

    Agricultural, Flood Plains, Grazing lands, Natural resources, Soil 
conservation, and Wildlife.


0
For the reasons explained above, CCC revises 7 CFR part 1468 to read as 
follows:

PART 1468--AGRICULTURAL CONSERVATION EASEMENT PROGRAM

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

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

Subpart A--General Provisions


Sec.  1468.1   Applicability.

    (a) The regulations in this part set forth requirements, policies, 
and procedures for implementation of the Agricultural Conservation 
Easement Program (ACEP) administered by the Natural Resources 
Conservation Service (NRCS). ACEP purposes include:
    (1) Combining the purposes and coordinating the functions of the 
Wetlands Reserve Program established under section 1237, the Grassland 
Reserve Program established under section 1238N, and the Farmland 
Protection Program established under section 1238I, as such sections 
were in effect on the day before the date of enactment of the 
Agricultural Act of 2014;
    (2) Restoring, protecting, and enhancing wetlands on eligible land;
    (3) Protecting the agricultural use and future viability, and 
related conservation values, of eligible land by limiting 
nonagricultural uses of that land that negatively affect the 
agricultural uses and conservation values; and
    (4) Protecting grazing uses and related conservation values by 
restoring or conserving eligible land.
    (b) The NRCS Chief may implement ACEP in any of the 50 States, the 
District of Columbia, Commonwealth of Puerto Rico, Guam, the Virgin 
Islands of the United States, American Samoa, and the Commonwealth of 
the Northern Mariana Islands.
    (c) Subpart B of this part sets forth additional requirements, 
policies, and procedures for implementation of the Agricultural Land 
Easements (ALE) component of ACEP.
    (d) Subpart C of this part sets forth additional requirements, 
policies, and procedures for the Wetland Reserve Easement (WRE) 
component of ACEP.
    (e) Easement lands previously enrolled under the predecessor 
programs Farm and Ranch Lands Protection Program (7 CFR part 1491), the 
Grassland Reserve Program (7 CFR part 1415), and the Wetlands Reserve 
Program (7 CFR part 1467) are considered enrolled in ACEP. Existing 
easements and agreements remain valid and enforceable, and subject to 
the legal framework in place at the time of enrollment, except that the 
long-term stewardship and management of these easements, and any ACEP 
funding made available for implementation, will be in accordance with 
this part.

[[Page 572]]

Sec.  1468.2   Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the NRCS Chief.
    (b) NRCS may seek advice from the State technical committee on 
considerations relating to implementation and technical aspects of the 
program, such as identification of lands of statewide importance or 
special significance, review of State-level geographic area rate caps, 
development of ranking criteria, wetland restoration objectives, 
management considerations, including compatible use criteria, or 
related technical matters.
    (c) NRCS may obtain input from Federal or State agencies, 
conservation districts, or other organizations in program 
administration. No determination by these agencies or organizations 
will compel NRCS to take any action which NRCS determines does not 
serve the purposes of the program established by this part.
    (d) Applications may be submitted on a continuous basis or in 
response to specific program solicitations. NRCS may announce one or 
more application cut-off dates for funding consideration within a given 
fiscal year.
    (e) The Chief may allocate funds for purposes related to: 
Encouraging enrollment by beginning farmers or ranchers, socially 
disadvantaged farmers or ranchers, limited resource farmers or 
ranchers, Indian Tribes, and veteran farmers or ranchers as authorized 
by 16 U.S.C. 3844; implementing landscape and related initiatives, 
special pilot programs for easement management and monitoring; 
agreements with other agencies and organizations to assist with program 
implementation; coordination of easement enrollment across State 
boundaries; coordination of the development of easement plans for ACEP-
WRE or conservation plans for ACEP-ALE; or for other goals of the ACEP 
found in this part.
    (f) NRCS may delegate at any time its ACEP-WRE monitoring or 
management responsibilities to conservation organizations that have 
appropriate authority, expertise and technical and financial resources, 
as determined by NRCS, to carry out such delegated responsibilities.
    (g) NRCS may delegate at any time its ACEP-WRE monitoring, 
management, or enforcement responsibilities to other Federal or State 
agencies that have the appropriate authority, expertise, and technical 
and financial resources, as determined by NRCS, to carry out such 
delegated responsibilities.
    (h) For ACEP-ALEs, the easement holder is responsible to ensure the 
easement is monitored on an annual basis and to provide annually to 
NRCS a monitoring report. For ACEP-WREs, NRCS or its delegate, is 
responsible to monitor the easement on an annual basis and comply with 
applicable reporting requirements.
    (i) No delegation in the administration of this part to lower 
organizational levels will preclude the Chief from making any 
determinations under this part, redelegating to other organizational 
levels, or from reversing or modifying any determination made under 
this part.
    (j) The Chief may modify or waive nonstatutory, discretionary 
provisions of this part if the Chief determines the waiver of such 
discretionary provision is necessary to further the purposes of ACEP as 
part of an ACEP-ALE buy-protect-sell transaction or under the ACEP-WRE 
wetland reserve enhancement partnership option. The waiver must further 
ACEP purposes and be consistent with the specific ACEP-WRE or ACEP-ALE 
conservation purposes and objectives. No waiver will result in reducing 
the quality of wetland functions and values restored under ACEP-WRE, or 
the protection of agricultural viability under ACEP-ALE.
    (k) To assist in ACEP implementation the Chief may also waive the 
applicability of the adjusted gross income limitation as authorized by 
section 1001D(b)(3) of the Food Security Act of 1985 for participating 
landowners if the Chief determines that environmentally sensitive land 
of special significance would be protected as a result of such waiver.


Sec.  1468.3   Definitions.

    The definitions in this section apply to this part, and all 
documents issued in accordance with this part, unless specified 
otherwise:
    30-year Contract means an ACEP-WRE contract that is for a duration 
of 30 years and is limited to acreage owned by Indian Tribes.
    Access means legal and physical ingress and egress to the entire 
easement area over adjacent or contiguous lands for the exercise of any 
of the rights or interests under the easement for the duration of its 
term for the purposes of the program. Access for easement enrollments 
must be described in the easement deed.
    Acreage owned by Indian Tribes means lands held in private 
ownership by an Indian Tribe or individual Tribal member and lands held 
in trust by a native corporation, Tribe, or the Bureau of Indian 
Affairs. This land may be also be referred to as ``Tribal land.''
    Agreement means the document that specifies the rights, 
requirements, and responsibilities of NRCS and any persons, legal 
entities, or eligible entities participating in the program or any 
document that authorizes the transfer of assistance between NRCS and a 
third party for provision of authorized goods and services associated 
with program implementation. Agreements may include but are not limited 
to an agreement to purchase, an ALE-agreement, a buy-protect-sell 
arrangement, a wetland reserve easement restoration agreement, a 
cooperative agreement, a grant agreement, a partnership agreement, or 
an interagency agreement.
    Agreement to purchase means the legal document that is the 
equivalent of a real estate purchase and sale contract. The landowner 
signs the agreement to purchase, which is the authorization for NRCS to 
proceed with the ACEP-WRE acquisition process.
    Agricultural commodity means any agricultural commodity planted and 
produced in a State by annual tilling of the soil, including tilling by 
one-trip planters or sugarcane planted and produced in a State.
    Agricultural land easement means an easement or other interest in 
eligible land that is conveyed for the purposes of protecting natural 
resources and the agricultural nature of the land, and of promoting 
agricultural viability for future generations, and permits the 
landowner the right to continue agricultural production and related 
uses.
    Agricultural land easement plan means a document developed by the 
eligible entity that describes the activities which promote the long-
term viability of the land to meet the purposes for which the easement 
was acquired. An agricultural land easement plan includes a description 
of the farm or ranch management system and the natural resource 
concerns on the land, describes the conservation measures and practices 
that may be implemented to address applicable resource concerns for 
which the easement was enrolled, and incorporates by reference any 
component plans such as a grasslands management plan, forest management 
plan, or conservation plan as defined in this part.
    Agricultural uses means those activities defined by a State's farm 
or ranch land protection program or where no program exists, by the 
State agricultural use tax assessment program. However, if NRCS 
determines that a State definition of agricultural use is so broad that 
an included use would constitute a violation of Federal law, limit 
future agricultural viability, degrade soils or the agricultural nature

[[Page 573]]

of the land or the related natural resources, NRCS reserves the right 
to impose greater deed restrictions on the property to be subject to an 
agricultural land easement. These deed restrictions would narrow the 
State definition of agricultural use in order to meet Federal law, or 
to protect soils, the agricultural nature of the land, or related 
natural resources.
    ALE-agreement means the document that outlines the rights, 
requirements, roles, and responsibilities of NRCS and eligible entities 
participating in the program under subpart B, including cost-share 
payment provisions.
    At-risk species means any plant or animal species listed as 
threatened or endangered; proposed or candidate for listing under the 
Endangered Species Act; a species listed as threatened or endangered 
under State law or Tribal law on Tribal land; State or Tribal land 
species of conservation concern; or other plant or animal species or 
community, as determined by the State conservationist, with advice from 
the State technical committee or Tribal Conservation Advisory Council, 
that has undergone, or is likely to undergo, population decline and may 
become imperiled without direct intervention.
    Beginning farmer or rancher means a person, Indian Tribe, Tribal 
corporation, or legal entity who:
    (1) Has not operated a farm or ranch, or non-industrialized private 
forest land (NIPF), or who has operated a farm or ranch or NIPF for not 
more than 10 consecutive years. This requirement applies to all members 
of an entity who will materially and substantially participate in the 
operation of the farm or ranch or NIPF.
    (2) In the case of an individual, individually, or with the 
immediate family, material and substantial participation requires that 
the individual provide substantial day-to-day labor and management of 
the farm or ranch consistent with the practices in the county or State 
where the farm is located.
    (3) In the case of a legal entity or joint operation, all members 
must materially and substantially participate in the operation of the 
farm or ranch. Material and substantial participation requires that 
each of the members provide some amount of the management or labor and 
management necessary for day-to-day activities, such that if each of 
the members did not provide these inputs, operation of the farm or 
ranch would be seriously impaired.
    Buy-Protect-Sell transaction means a legal arrangement between an 
eligible entity and NRCS relating to land owned or being purchased by 
an eligible entity on a transitional basis during which an agricultural 
land easement will be secured on eligible private or Tribal land, and 
ownership of the land transferred to a qualified farmer or rancher 
following conditions specified in this part.
    Certified entity means an eligible entity that NRCS has determined 
to meet the certification requirements in Sec.  1468.26 for the 
purposes of ACEP-ALE.
    Chief means the Chief of the Natural Resources Conservation Service 
or the person delegated the authority to act for the Chief.
    Commenced conversion wetland means a wetland or converted wetland 
for which the Farm Service Agency (FSA) has determined that the wetland 
manipulation was contracted for, started, or for which financial 
obligation was incurred before December 23, 1985.
    Commodity Credit Corporation (CCC) is a wholly-owned government 
corporation within the Department of Agriculture.
    Compatible use means a use or activity conducted on a wetland 
reserve easement that NRCS determines, in its sole discretion, is 
consistent with the long-term protection and enhancement of the wetland 
and other natural values of the easement area when performed according 
to amount, method, location, timing, frequency, intensity, and duration 
limitations prescribed by NRCS.
    Conservation plan is for ACEP-ALE the document that--
    (1) Applies to highly erodible cropland;
    (2) Describes the conservation-system applicable to the highly 
erodible cropland and describes the decisions of the person with 
respect to location, land use, tillage systems, and conservation 
treatment measures and schedules and where appropriate, may include 
conversion of highly erodible cropland to less intensive uses; and
    (3) Is developed in accordance with 7 CFR part 12.
    Conservation practice means a specified treatment, such as a 
vegetative, structural, or land management practice, that is planned 
and applied according to NRCS standards and specifications.
    Conservation Reserve Program (CRP) means the program administered 
by the CCC as required by 16 U.S.C. 3831-3836.
    Converted wetland means a wetland that has been drained, dredged, 
filled, leveled, or otherwise manipulated (including the removal of 
woody vegetation or any activity that results in impairing or reducing 
the flow, circulation, or reach of water) for the purpose of, or to 
have the effect of, making possible the production of an agricultural 
commodity if such production would not have been possible but for such 
action, and before such action such land was wetland, farmed wetland, 
or farmed-wetland pasture and was neither highly erodible land nor 
highly erodible cropland.
    Cost-share payment means the payment made by NRCS to an eligible 
entity for the purchase of an ACEP-ALE easement as set forth in subpart 
B of this part.
    Dedicated fund means an account held by a certified nongovernmental 
organization which is sufficiently capitalized for the purpose of 
covering expenses associated with the management, monitoring, and 
enforcement of agricultural land easements and where such account 
cannot be used for other purposes.
    Easement administration action means an easement subordination, 
easement modification, easement exchange, or easement termination.
    Easement area means the portion of a parcel that is encumbered by 
an ACEP easement.
    Easement exchange means a real estate transaction where NRCS, on 
behalf of the United States and in its sole discretion, relinquishes 
all or a portion of its rights or interests in an easement which are 
replaced by similar rights or interests in an easement that have 
equivalent or greater conservation value, acreage, and economic value 
to the United States on land that is not adjacent to the original 
easement area. NRCS is not required to exchange any of its rights or 
interests in an easement, and easement exchanges are discretionary, 
voluntary, real estate transactions between the United States, 
landowner, and other parties with an interest in the easement.
    Easement modification means a real estate transaction where NRCS, 
on behalf of the United States and in its sole discretion, agrees to 
adjust the boundaries or terms of an easement that will result in 
equivalent or greater conservation value, acreage, and economic value 
to the United States, and the modification only involves lands within 
or physically adjacent to the original easement area. NRCS is not 
required to modify any of its rights or interests in an easement, and 
easement modifications are discretionary, voluntary, real estate 
transactions between the United States, landowner, and other parties 
with an interest in the easement that are subject to the requirements 
of this part.

[[Page 574]]

    Easement payment means the consideration paid to a participant or 
their assignee for an easement conveyed to the United States under the 
ACEP-WRE, or the consideration paid to an Indian Tribe or Tribal 
members for entering into 30-year contracts under ACEP-WRE.
    Easement restoration agreement means the agreement or contract NRCS 
enters into with the landowner or a third party to implement the WRPO 
on a wetland reserve easement or 30-year contract.
    Easement subordination means a real estate transaction where NRCS, 
on behalf of the United States and in its sole discretion, agrees to 
subordinate all or a portion of its rights or interests in an easement. 
NRCS is not required to subordinate any of its rights or interests in 
an easement, and easement subordinations are discretionary, voluntary, 
real estate transactions between the United States, landowner, and 
other parties with an interest in the easement that are subject to the 
requirements of this part. As determined by NRCS, the subordination 
must be in the public interest or further the practical administration 
of the program, minimally affect the easement acreage, and increase or 
have limited negative effects on the conservation values of the 
easement area.
    Easement termination means a real estate transaction where NRCS, on 
behalf of the United States and in its sole discretion, agrees to 
terminate all or a portion of its rights or interests in an easement. 
The termination must address a compelling public need for which there 
is no practicable alternative even with avoidance and minimization of 
adverse impacts and must facilitate the practical administration of the 
program. The United States must be provided full compensation for such 
termination and any costs and damages related to the termination. NRCS 
is not required to terminate any of its rights or interests in an 
easement, and easement terminations are discretionary, voluntary, real 
estate transactions between the United States, landowner, and other 
parties that are subject to the requirements of this part. Unless and 
until the parties enter into a binding termination agreement, any party 
may withdraw its approval of a termination proposal at any time during 
the termination process.
    Eligible activity means an action other than a conservation 
practice that has the effect of alleviating problems or improving the 
condition of the resources, such as ensuring proper management or 
maintenance of the wetland functions and values restored, protected, or 
enhanced through an ACEP-WRE easement or 30-year contract as identified 
in the WRPO.
    Eligible entity means an Indian Tribe, State government, local 
government, or a nongovernmental organization that has a farmland or 
grassland protection program that purchases agricultural land easements 
for the purposes of protecting:
    (1) The agricultural use and future viability, and related 
conservation values, of eligible land by limiting nonagricultural uses 
of that land that negatively affect the agricultural uses and 
conservation values; or
    (2) Grazing uses and related conservation values by restoring or 
conserving eligible land.
    Eligible land means private or acreage owned by Indian Tribes that 
NRCS has determined to meet the requirements of Sec.  1468.20 or Sec.  
1468.30 of this part.
    Fair market value means the value of an agricultural land easement 
as determined using the Uniform Standards of Professional Appraisal 
Practice, an areawide market analysis or survey, or another industry-
approved method approved by the Chief, as established in subpart B or, 
for a wetland reserve easement, the value of the land as determined 
using the Uniform Standards of Professional Appraisal Practices or 
areawide market analysis or survey, as established in subpart C.
    Farm and ranch land of local importance means farm or ranch land 
used to produce food, feed, fiber, forage, biofuels, and oilseed crops 
that are locally important but not identified as having national or 
statewide importance. Criteria for defining and delineating this land 
are to be determined by the appropriate local agency or agencies. 
Farmlands of local importance may include tracts of land that have been 
designated for agriculture by local ordinance.
    Farm and ranch land of statewide importance means, in addition to 
prime and unique farmland, land that is of statewide importance for the 
production of food, feed, fiber, forage, biofuels, and oilseed crops. 
Criteria for defining and delineating this land are to be determined by 
the appropriate State agency or agencies. Generally, additional 
farmlands of statewide importance include those that are nearly prime 
farmland and that economically produce high yields of crops when 
treated and managed according to acceptable farming methods. Some may 
produce as high a yield as prime farmlands if conditions are favorable. 
In some States, additional farmlands of statewide importance may 
include tracts of land that have been designated for agriculture by 
State law in accordance with 7 CFR part 657.
    Farm or ranch succession plan means a general plan to address the 
continuation of some type of agricultural business on the enrolled 
land. The farm or ranch succession plan may include specific intra-
family succession agreements or business asset transfer strategies to 
create opportunities for new or beginning farmers or ranchers, veteran 
farmers or ranchers, or other historically underserved landowners.
    Farm Service Agency (FSA) is an agency of the United States 
Department of Agriculture.
    Field Office Technical Guide (FOTG) means the official local NRCS 
source of resource information and interpretations of guidelines, 
criteria, and requirements for planning and applying conservation 
practices and conservation management systems. The FOTG contains 
detailed information on the conservation of soil, water, air, plant, 
animal, and energy resources applicable to the local area for which it 
is prepared.
    Fish and Wildlife Service (FWS) is an agency of the United States 
Department of the Interior.
    Forest management plan means a site-specific plan that describes 
management practices that conserve, protect, or enhance the viability 
of the forest land. Forest management plans may include a forest 
stewardship plan, as specified in section 5 of the Cooperative Forestry 
Assistance Act of 1978 (16 U.S.C. 2103a) or other plan approved by the 
State forester.
    Future viability means the legal, physical, and financial 
conditions under which the land itself will remain capable and 
available for continued sustained productive agricultural or grassland 
uses while protecting related conservation values such as management of 
the agricultural land easement area consistent with an agricultural 
land easement plan.
    Grassland means land on which the vegetation is dominated by 
grasses, grass-like plants, shrubs, or forbs, including shrubland, land 
that contains forbs, pastureland, and rangeland, and improved 
pastureland and rangeland.
    Grassland of special environmental significance means grasslands 
that contain little or no noxious or invasive species, as designated or 
defined by State or Federal law; are subject to the threat of 
conversion to non-grassland uses or fragmentation; and the land:
    (1)(i) Is rangeland, pastureland, shrubland, or wet meadows on 
which the vegetation is dominated by native grasses, grass-like plants, 
shrubs, or forbs, or

[[Page 575]]

    (ii) Is improved, naturalized pastureland, rangeland, or wet 
meadows;
    (2)(i) Provides, or could provide, habitat for threatened or 
endangered species or at-risk species,
    (ii) Protects sensitive or declining native prairie or grassland 
types or grasslands buffering wetlands, or
    (iii) Provides protection of highly sensitive natural resources as 
identified by NRCS, in consultation with the State technical committee.
    Grasslands management plan means a site-specific plan that 
describes the grassland resources, the management system and practices 
that conserve, protect, or enhance the viability of the grassland, and 
as applicable, the habitat, species, or sensitive natural resources.
    Grazing management plan means for ACEP-WRE, a site-specific plan 
developed as a component of the WRPO that provides for grazing of the 
grass and grass-like cover while accomplishing the wetland functions 
and values of the easement area as identified by NRCS.
    Historical and archaeological resources mean resources that are:
    (1) Listed in the National Register of Historic Places (established 
under the National Historic Preservation Act (NHPA), 54 U.S.C. 300101, 
et seq.);
    (2) Formally determined eligible for listing in the National 
Register of Historic Places (by the State Historic Preservation Office 
(SHPO) or Tribal Historic Preservation Office (THPO) and the Keeper of 
the National Register in accordance with section 106 of the NHPA);
    (3) Formally listed in the State or Tribal Register of Historic 
Places of the SHPO (designated under section 101(b)(1)(B) of the NHPA) 
or the THPO (designated under section 101(d)(1)(C) of the NHPA); or
    (4) Included in the SHPO or THPO inventory with written 
justification as to why it meets National Register of Historic Places 
criteria.
    Historically underserved landowner means a beginning, limited 
resource, socially disadvantaged farmer or rancher, or veteran farmer 
or rancher.
    Imminent harm means easement violations or threatened violations 
that, as determined by NRCS, would likely cause immediate and 
significant degradation to the conservation values for which the 
easement was acquired.
    Impervious surface means surfaces that are covered by asphalt, 
concrete, roofs, or any other surface that does not allow water to 
percolate into the soil.
    Indian Tribe means any Indian Tribe, band, nation, pueblo, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established as 
required by the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 
seq.), that is eligible for the special programs and services provided 
by the United States to Indians because of their status as Indians.
    Land evaluation and site assessment system means the land 
evaluation system approved by NRCS and used, when applicable, to rank 
land for farm and ranch land protection purposes based on soil 
potential for agriculture, as well as social and economic factors such 
as location, access to markets, and adjacent land use. For additional 
information see the Farmland Protection Policy Act regulation at 7 CFR 
part 658.
    Landowner means a person, legal entity, or Indian Tribe having 
legal ownership of eligible land and those who may be buying eligible 
land under a purchase agreement. The term landowner may include all 
forms of collective ownership including joint tenants and tenants-in-
common, and includes heirs, successors, assigns, and anyone claiming 
under them. State and local governments are not eligible as landowners. 
For ACEP-ALE, nongovernmental organizations and Indian tribes that 
qualify as eligible entities are not eligible as landowners unless 
otherwise determined by the Chief following an approved buy-protect-
sell transaction.
    Lands substantially altered by flooding means agricultural lands 
where flooding has created wetland hydrologic conditions which, with a 
high degree of certainty, will develop and retain wetland soil, 
hydrology, and vegetation characteristics over time.
    Limited resource farmer or rancher means either:
    (1)(i) A person with direct or indirect gross farm sales not more 
than the current indexed value in each of the previous two fiscal years 
(adjusted for inflation using Prices Paid by Farmer Index as compiled 
by National Agricultural Statistical Service), and
    (ii) Has a total household income at or below the national poverty 
level for a family of four, or less than 50 percent of county median 
household income in each of the previous two years (to be determined 
annually using Commerce Department Data); or
    (2) A legal entity or joint operation if all individual members 
independently qualify under paragraph (1) of this definition.
    Maintenance means work performed to keep the wetland reserve 
easement lands functioning for program purposes for the duration of the 
enrollment period. Maintenance includes actions and work to manage, 
prevent deterioration, repair damage, or replace conservation practices 
or eligible activities on a wetland reserve easement, as approved or 
conducted by NRCS.
    Monitoring report means a report, the contents of which are 
formulated and prepared by the easement holder, or their delegate, that 
accurately documents on an annual basis whether the land subject to 
easement is in compliance with the terms and conditions of the 
easement.
    Natural Resources Conservation Service (NRCS) means an agency of 
the U.S. Department of Agriculture (USDA), including when NRCS carries 
out program implementation using the funds, facilities, or authorities 
of the CCC.
    Nongovernmental organization means any organization that for 
purposes of qualifying as an eligible entity under subpart B:
    (1) Is organized for, and at all times since the formation of the 
organization, has been operated principally for, one or more of the 
conservation purposes specified in clause (i), (ii), (iii), or (iv) of 
section 170(h)(4)(A) of the Internal Revenue Code of 1986;
    (2) Is an organization described in section 501(c)(3) of that Code 
that is exempt from taxation under 501(a) of that Code; and
    (3) Is described in--
    (i) Section 509(a)(1) and (2) of that Code, or
    (ii) Section 509(a)(3) of that Code and is controlled by an 
organization described in section 509(a)(2) of that Code.
    Nonindustrial private forest land (NIPF) means rural land, as 
determined by the NRCS, that has existing tree cover or is suitable for 
growing trees; and is owned by any nonindustrial private individual, 
group, association, corporation, Indian Tribe, or other private legal 
entity that has definitive decision-making authority over the land.
    Other interests in land include any right in real property other 
than easements that are recognized by State law that the Chief 
determines can be purchased by an eligible entity to further the 
agricultural use of the land and other ACEP-ALE purposes.
    Other productive soils means farm and ranch land soils, in addition 
to prime farmland soils, that include unique farmland or farm and ranch 
land of statewide and local importance.
    Parcel means the defined area of land and may be a portion or all 
of the area of land that is owned by the landowner.
    Participant means a person, legal entity, Indian Tribe, native 
corporation,

[[Page 576]]

or eligible entity who has been accepted into the program and who is 
receiving payment or who is responsible for implementing the terms and 
conditions of an agreement to purchase, an agreement to enter a 30-year 
contract, or an ALE-agreement.
    Pending offer means a written bid, contract, or option between a 
landowner and an eligible entity for the acquisition of an agricultural 
conservation easement in perpetuity, or for the maximum duration 
allowed by State law, before the legal title to these rights has been 
conveyed for the purposes of protecting:
    (1) The agricultural use and future viability, and related 
conservation values, of eligible land by limiting nonagricultural uses 
of that land; or
    (2) Grazing uses and related conservation values by restoring or 
conserving eligible land.
    Permanent easement means an easement that lasts in perpetuity.
    Person means a natural person.
    Prime farmland means land that has the best combination of physical 
and chemical characteristics for producing food, feed, fiber, forage, 
oilseed, and other agricultural crops with minimum inputs of fuel, 
fertilizer, pesticides, and labor without intolerable soil erosion, as 
determined by NRCS.
    Private land means land that is not owned by a governmental entity 
and includes acreage owned by Indian Tribes, as defined in this part.
    Right of enforcement means the right of the United States to 
enforce the easement entered into under this part in those instances in 
which the grantee of the easement does not fully protect the interests 
provided to the grantee under the easement.
    Riparian areas means areas of land that occur along streams, 
channels, rivers, and other water bodies. These areas are normally 
distinctly different from the surrounding lands because of unique soil 
and vegetation characteristics, may be identified by distinctive 
vegetative communities that are reflective of soil conditions normally 
wetter than adjacent soils, and generally provide a corridor for the 
movement of wildlife.
    Socially disadvantaged farmer or rancher means a producer who is a 
member of a group whose members have been subjected to racial or ethnic 
prejudices without regard to its members' individual qualities. For a 
legal entity, at least 50-percent ownership in the legal entity must be 
held by socially disadvantaged individuals.
    State conservationist means the NRCS employee authorized to direct 
and supervise NRCS activities in a State and includes the directors of 
the Caribbean Area (Puerto Rico and the Virgin Islands), or the Pacific 
Islands Area (Guam, American Samoa, and the Commonwealth of the 
Northern Mariana Islands).
    State technical committee means a committee established under 16 
U.S.C. 3861 and 7 CFR part 610, subpart C.
    Unique farmland means land other than prime farmland that is used 
for the production of specific high-value food and fiber crops as 
determined by NRCS. It has the special combination of soil quality, 
location, growing season, and moisture supply needed to economically 
produce sustained high quality or high yields of specific crops when 
treated and managed according to acceptable farming methods. Examples 
of such crops include citrus, tree nuts, olives, cranberries, fruits, 
and vegetables. Additional information on the definition of prime, 
unique, or other productive soil can be found in 7 CFR part 657 and 7 
CFR part 658.
    Veteran farmer or rancher means a producer who meets the definition 
in section 2501(a) of the Food, Agriculture, Conservation, and Trade 
Act of 1990, as amended (7 U.S.C. 2279(a)).
    Wetland means land that:
    (1) Has a predominance of hydric soils;
    (2) Is inundated or saturated by surface or groundwater at a 
frequency and duration sufficient to support a prevalence of 
hydrophytic vegetation typically adapted for life in saturated soil 
conditions; and
    (3) Supports a prevalence of such vegetation under normal 
circumstances.
    Wetland functions and values means the hydrological and biological 
characteristics of wetlands and the socioeconomic value placed upon 
these characteristics, including--
    (1) Habitat for migratory birds and other wildlife, in particular 
at-risk species.
    (2) Protection and improvement of water quality.
    (3) Attenuation of water flows due to flood.
    (4) The recharge of ground water.
    (5) Protection and enhancement of open space and aesthetic quality.
    (6) Protection of flora and fauna which contributes to the Nation's 
natural heritage.
    (7) Carbon sequestration.
    (8) Contribution to educational and scientific scholarship.
    Wetland reserve easement means a reserved interest easement which 
is an interest in land defined and delineated in a deed whereby the 
landowner conveys all rights, title, and interests in a property to the 
United States, but the landowner retains those rights, title, and 
interests in the property which are specifically reserved to the 
landowner in the easement deed.
    Wetland reserve plan of operations (WRPO) means the document that 
is developed or approved by NRCS that identifies how the wetland 
functions and values and associated habitats on the easement will be 
restored, improved, protected, managed, maintained, and monitored to 
achieve the purposes of the wetland reserve easement enrollment.
    Wetland restoration means the rehabilitation of degraded or lost 
wetland and associated habitats pursuant to published State-specific 
criteria and guidelines developed in coordination with the State 
technical committee in a manner such that:
    (1) The original, native vegetative community and hydrology are, to 
the extent practical, reestablished; or
    (2) A hydrologic regime and native vegetative community different 
from what likely existed prior to degradation of the site is 
established that will:
    (i) Substantially replace the original habitat functions and values 
while providing significant support or benefit for migratory waterfowl 
or other wetland-dependent wildlife; or
    (ii) Address local resource concerns or needs for the restoration 
of wetland functions and values for wetland-dependent wildlife as 
identified in an approved State wildlife action plan or NRCS national 
initiative.


Sec.  1468.4   Appeals.

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

[[Page 577]]

subject to appeal under 7 CFR parts 11 or 614.


Sec.  1468.5   Scheme or device.

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


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

    (a) After an easement has been recorded, no subordination, 
modification, exchange, or termination will be made in any interest in 
land, or portion of such interest, except as approved by the NRCS. NRCS 
may approve such easement administration actions if NRCS determines, in 
accordance with the sequencing considerations under the National 
Environmental Policy Act, that--
    (1)(i) The subordination, modification, or exchange action results 
in no net loss of easement acres, and is in the public interest or will 
further the practical administration and management of the easement 
area or the program, as determined by the NRCS, or
    (ii) The termination action will address a compelling public need 
for which there is no practicable alternative even with avoidance and 
minimization, and will further the practical administration and 
management of the easement area or the program, as determined by the 
NRCS.
    (2) For modification or exchange actions--
    (i) There is no reasonable alternative that would avoid the 
easement area, or if the easement area cannot be avoided entirely, then 
the preferred alternative must minimize impacts to the original 
easement area and its conservation functions and values to the greatest 
extent practicable and any remaining adverse impacts must be mitigated, 
as determined by NRCS, at no cost to the government,
    (ii) The action is consistent with the original intent of the 
easement and is consistent with the purposes of the program, and
    (iii) The action results in equal or greater conservation functions 
and value and equal or greater economic value to the United States. A 
determination of equal or greater economic value to the United States 
will be made in accordance with an approved easement valuation 
methodology for agricultural land easements under subpart B or for 
wetland reserve easements under subpart C. In addition to the value of 
the easement itself, NRCS may consider other financial investments it 
has made in the acquisition, restoration, and management of the 
original easement to ensure that the easement administration action 
results in equal or greater economic value to the United States.
    (3) For subordination actions, the action--
    (i) Increases conservation functions and values or has a limited 
negative effect on conservation functions and values;
    (ii) Is at no cost to the Government; and
    (iii) Notwithstanding paragraph (a)(4) of this section, will only 
minimally affect the acreage subject to the interest in land.
    (4) For termination actions, the action--
    (i) Is in the interest of the Federal Government; and
    (ii) The United States will be fully compensated for the fair 
market value of the interest in land including any costs and damages 
related to the termination.
    (5) The easement administration action will not affect more than 10 
percent of the original easement area unless NRCS determines that it is 
impracticable to achieve program purposes on the original easements 
area, in which case NRCS may authorize a greater percentage of the 
original easement area to be affected.
    (6) The landowner and, if applicable, the agricultural land 
easement holder agrees to such easement administration action prior to 
NRCS considering that such easement administration action may be 
approved.
    (b) Easement subordinations or modifications are preferred to 
easement exchanges that may involve lands that are not physically 
adjacent to the original easement area. Easement exchanges are limited 
to circumstances where there are no available lands adjacent to the 
original easement area that will result in equal or greater 
conservation and economic values to the United States.
    (c) Replacement of easement acres as part of an easement exchange 
must occur within the same State and within the same eight-digit 
watershed as determined by the hydrologic unit codes developed by the 
U.S. Geological Survey.
    (d) Where NRCS determines that recordation of an amended or new 
easement deed is necessary to affect an easement administration action 
under this section, NRCS may use the most recent version of the ACEP 
deed document or deed terms approved by NRCS. The amended or new 
easement deed must be duly prepared and recorded in conformity with 
standard real estate practices, including requirements for title 
approval, subordination of liens, and recordation of documents.
    (e) Modification or exchange of all or a portion of an interest in 
land enrolled in ACEP-ALE may not increase any payment to an easement 
holder.
    (f)(1) A termination action must meet criteria identified in this 
part and are limited to those circumstances where NRCS determines it is 
in the Federal Government's interest to terminate all or a portion of 
the interest in the land enrolled in the program, that the purposes of 
the program can no longer be achieved on the original easement area, or 
the terms of the easement are no longer enforceable and there are no 
acceptable replacement acres available.
    (2) NRCS will enter into a compensatory agreement with the 
proponent of the termination that identifies the costs for which the 
United States must be reimbursed, including but not limited to the 
value of the easement itself based upon current valuation 
methodologies, repayment of legal boundary survey costs, legal title 
work costs, associated easement purchase and restoration costs, legal 
filing fees, costs relating to the termination, and any damages 
determined appropriate by NRCS.
    (3) At least 90 days prior to taking any termination action, 
written notice of such termination action will be provided to the 
Committee on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate.
    (g) Insofar as is consistent with the easement and applicable law, 
NRCS may approve modifications to an easement plan that do not affect 
provisions of the easement. Easement plans include any conservation 
plan, WRPO, wetland reserve easement restoration agreements, grazing 
management plan, habitat management plans, or other plans required as a 
condition of enrollment. Any easement plan modification must meet this 
part and must result in equal or greater conservation benefits on the 
enrolled land.

[[Page 578]]

Sec.  1468.7   Transfer of land.

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


Sec.  1468.8   Payments not subject to claims.

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


Sec.  1468.9   Assignments.

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


Sec.  1468.10   Environmental markets.

    (a) Ecosystem services credits for conservation improvements under 
a wetland reserve easement. Landowners may obtain environmental credits 
under other programs if one of the purposes of such program is the 
facilitation of additional conservation benefits that are consistent 
with the conservation purposes for which the easement was acquired, and 
such action does not adversely affect the rights or interests granted 
under the easement to the United States.
    (b) Ecosystem services credits related to an agricultural land 
easement. Landowners may obtain environmental credits under other 
programs if one of the purposes of such program is the facilitation of 
additional conservation benefits that are consistent with the 
conservation purposes for which the easement was acquired, and such 
action does not adversely affect the interests granted under the 
easement to the grantee or to the United States right of enforcement.
    (c) Voluntary action. ACEP funds may not be used to acquire 
easements to establish protections or to implement conservation 
practices that the landowner is required to establish as a result of a 
court order or to satisfy any mitigation requirement for which the ACEP 
landowner is otherwise responsible.

Subpart B--Agricultural Land Easements


Sec.  1468.20   Program requirements.

    (a) General. (1) Under ACEP-ALE, NRCS will facilitate and provide 
cost-share assistance for the purchase by eligible entities of 
agricultural land easements or other interests in eligible private or 
Tribal land that is--
    (i) Subject to a written pending offer; or
    (ii) Owned or in the process of being purchased by the eligible 
entity as part of an approved buy-protect-sell transaction.
    (2) To participate in ACEP-ALE, eligible entities as identified in 
(b) below must submit applications to NRCS State offices to partner 
with NRCS to acquire conservation easements on eligible land. Eligible 
entities must enter into an ALE-agreement with NRCS and address the 
ACEP-ALE deed requirements specified therein, the effect of which is to 
protect natural resources and the agricultural nature of the land and 
permit the landowner the right to continue agricultural production and 
related uses.
    (3) Under the ALE-agreement, unless otherwise specified in this 
part, the Federal share of the cost of an agricultural land easement or 
other interest in eligible land will not exceed 50 percent of the fair 
market value of the agricultural land easement and the eligible entity 
will provide a share that is at least equivalent to the Federal share.
    (4) The duration of each agricultural land easement or other 
interest in land will be in perpetuity or the maximum duration allowed 
by State law.
    (b) Entity eligibility. (1) To be eligible to receive ACEP-ALE 
funding, an Indian Tribe, State, unit of local government, or a 
nongovernmental organization must meet the definition of eligible 
entity as listed in Sec.  1468.3. In addition, eligible entities 
interested in receiving ACEP-ALE funds must provide NRCS sufficient 
evidence of--
    (i) A commitment to long-term conservation of agricultural lands,
    (ii) A capability to acquire, manage, and enforce easements,
    (iii) Sufficient number of staff dedicated to monitoring and 
easement stewardship,
    (iv) The estimated easement and related costs and the anticipated 
sources of funding sufficient to meet the non-Federal share 
requirements for each parcel as described in Sec.  1468.24, and
    (v) For individual parcels on which the eligible entity's own cash 
resources will comprise less than 10 percent of the fair market value 
of the agricultural land easement for payment of easement compensation 
to the landowner, the eligible entity must provide NRCS specific 
evidence of funding available to manage, monitor, and enforce the 
easement.
    (2) All eligible entities identified on an application or ALE-
agreement must--
    (i) Ensure that their records and the records of all landowners of 
parcels identified on an application have been established in the USDA 
customer records system and that USDA has all the documentation needed 
to establish these records, and
    (ii) Eligible entities must also comply with applicable 
registration and reporting requirements of the Federal Funding 
Accountability and Transparency Act of 2006 (Pub. L. 109-282, as 
amended) and 2 CFR parts 25 and 170, and maintain such registration for 
the duration of the ALE-agreement.
    (c) Landowner eligibility. Under ACEP-ALE, all parcel landowners, 
including an eligible entity owner of private or Tribal land in an 
approved buy-protect-sell transaction, must--
    (1) Be in compliance with the highly erodible land and wetland 
conservation provisions in 7 CFR part 12,
    (2) Persons or legal entities must be in compliance with the 
Adjusted Gross Income Limitation provisions of 7 CFR part 1400;
    (3) Agree to provide access to the property and such information to 
NRCS as the agency deems necessary or desirable to assist in its 
determination of eligibility for program implementation purposes; and
    (4) Have their records established in the USDA customer records 
system.
    (d) Land eligibility. (1) Land will only be considered eligible for 
enrollment in ACEP-ALE based on NRCS determination that such private or 
Tribal agricultural land, including land on a farm or ranch that--
    (i) Is subject to a written pending offer by an eligible entity or 
part of an approved buy-protect-sell transaction;

[[Page 579]]

    (ii)(A) Contains at least 50 percent prime or unique farmland, or 
designated farm and ranch land of State or local importance unless 
otherwise determined by NRCS,
    (B) Contains historical or archaeological resources,
    (C) The enrollment of which would protect grazing uses and related 
conservation values by restoring or conserving land, or
    (D) Furthers a State or local policy consistent with the purposes 
of the ACEP-ALE;
    (iii) Is--
    (A) Cropland;
    (B) Rangeland;
    (C) Grassland or land that contains forbs or shrubland for which 
grazing is the predominant use;
    (D) Located in an area that has been historically dominated by 
grassland, forbs, or shrubs and could provide habitat for animal or 
plant populations of significant ecological value;
    (E) Pastureland; or
    (F) Nonindustrial private forest land that contributes to the 
economic viability of a parcel offered for enrollment or serves as a 
buffer to protect such land from development; and
    (iv) Possesses suitable onsite and offsite conditions which will 
allow the easement to be effective in achieving the purposes of the 
program.
    (2) If land offered for enrollment is determined eligible under 
paragraph (d)(1) of this section, then NRCS may also enroll land that 
is incidental to the eligible land if the incidental land is determined 
by NRCS to be necessary for the efficient administration of an 
agricultural land easement.
    (3) Eligible land, including eligible incidental land, may not 
include nonindustrial private forest land of greater than two-thirds of 
the easement area unless waived by NRCS with respect to lands 
identified by NRCS as sugar bush that contributes to the economic 
viability of the parcel.
    (e) Ineligible land. The land specified in paragraphs (e)(1) 
through (7) of this section is not eligible for enrollment in ACEP-ALE:
    (1) Lands owned by an agency of the United States, other than land 
held in trust for Indian Tribes;
    (2) Lands owned in fee title by a State, including an agency or a 
subdivision of a State, or unit of local government;
    (3) Land owned by a nongovernmental organization whose purpose is 
to protect agricultural use and related conservation values including 
those listed in the statute under eligible land unless the eligible 
land is owned on a transitional basis as part of an approved buy-
protect-sell transaction;
    (4) Land subject to an easement or deed restriction which, as 
determined by NRCS, provides similar restoration and protection as 
would be provided by enrollment in the program;
    (5) Land where the purposes of the program would be undermined due 
to onsite or offsite conditions, such as risk of hazardous materials, 
permitted or existing rights-of-way, infrastructure development, or 
adjacent land uses;
    (6) Land which NRCS determines to have unacceptable exceptions to 
clear title or insufficient legal access; or
    (7) Land on which gas, oil, earth, or mineral rights exploration 
has been leased or is owned by someone other than the landowner is 
ineligible under ACEP-ALE unless it is determined by NRCS that the 
third-party rights will not harm or interfere with the conservation 
values or agricultural uses of the easement, that any methods of 
exploration and extraction will have only a limited and localized 
impact on the easement, and the limitations are specified in the ALE 
deed.
    (f) Buy-Protect-Sell transaction land eligibility. (1) NRCS may 
enter into a buy-protect sell transaction with an eligible entity on a 
parcel that--
    (i) Otherwise meets the eligibility criteria described in this 
section,
    (ii) Is subject to conditions, as determined by NRCS, that 
necessitate the ownership of the parcel by the eligible entity on a 
transitional basis prior to the creation of an agricultural land 
easement, such as imminent threat of development, including, but not 
limited to, planned or approved conversion of grasslands to more 
intensive agricultural uses, and
    (iii) Is owned by or is in the process of being purchased by the 
eligible entity.
    (2) At the time of application, the eligible entity must provide 
NRCS evidence of ownership or active purchase of the parcel, such as a 
valid purchase agreement.
    (3) The eligible entity must meet all program requirements and any 
specific provisions related to buy-protect-sell transactions as 
specified in this part.


Sec.  1468.21   Application procedures.

    (a) To apply for enrollment an eligible entity must submit an 
entity application for an ALE-agreement and any associated individual 
parcel applications to NRCS. For buy-protect-sell transactions, 
additional information may be required at the time of application as 
identified by NRCS.
    (b) NRCS may conduct initial eligibility determinations for the 
fiscal year an application is submitted. As determined by NRCS, the 
entity eligibility requirements must be met for the fiscal year in 
which the ALE-agreement is executed, and the land and landowner must be 
eligible for the fiscal year the parcel is approved for funding through 
an ALE-agreement. NRCS eligibility determinations are based on the 
application materials provided by the eligible entity, onsite 
assessments, and the criteria in Sec.  1468.20.


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

    (a) NRCS will use national and State criteria to rank and select 
eligible parcels for funding. The national ranking criteria will 
comprise at least half of the ranking score. The State criteria will be 
developed by NRCS on a State-by-State basis, with input from the State 
technical committee. The weighting of ranking criteria, including 
adjustments to account for geographic differences, will be developed to 
maximize the benefit of the Federal investment under the program. 
Parcels are ranked and selected for funding at the State level.
    (b) The national ranking criteria are--
    (1) Percent of prime, unique, and other important farmland soils in 
the parcel to be protected;
    (2) Percent of cropland, rangeland, grassland, historic grassland, 
pastureland, or nonindustrial private forest land in the parcel to be 
protected;
    (3) Ratio of the total acres of land in the parcel to be protected 
to average farm size in the county according to the most recent USDA 
Census of Agriculture;
    (4) Decrease in the percentage of acreage of farm and ranch land in 
the county in which the parcel is located between the last two USDA 
Censuses of Agriculture;
    (5) Percent population growth in the county as documented by the 
United States Census;
    (6) Population density (population per square mile) as documented 
by the most recent United States Census;
    (7) Existence of a farm or ranch succession plan or similar plan 
established to address agricultural viability for future generations;
    (8) Proximity of the parcel to other protected land, such as 
military installations; land owned in fee title by the United States or 
an Indian Tribe, State or local government, or by a nongovernmental 
organization whose purpose is to protect agricultural use and related 
conservation values; or land that is already subject to an easement or 
deed restriction that limits the conversion of the land to

[[Page 580]]

nonagricultural use or protects grazing uses and related conservation 
values;
    (9) Proximity of the parcel to other agricultural operations and 
agricultural infrastructure;
    (10) Maximizing the protection of contiguous or proximal acres 
devoted to agricultural use;
    (11) Whether the land is currently enrolled in CRP in a contract 
that is set to expire within 1 year and is grassland that would benefit 
from protection under a long-term easement;
    (12) Decrease in the percentage of acreage of permanent grassland, 
pasture, and rangeland, other than cropland and woodland pasture, in 
the county in which the parcel is located between the last two USDA 
Censuses of Agriculture;
    (13) Percent of the fair market value of the agricultural land 
easement that is the eligible entity's own cash resources for payment 
of easement compensation to the landowner and comes from sources other 
than the landowner; and
    (14) Other criteria as determined by NRCS.
    (c) State or local criteria as determined by NRCS, with advice of 
the State technical committee, may only include--
    (1) The location of a parcel in an area zoned for agricultural use;
    (2) The eligible entity's performance in managing and enforcing 
easements. Performance must be measured by the efficiency by which 
easement transactions are completed or percentage of parcels that have 
been monitored and the percentage of monitoring results that have been 
reported;
    (3) Multifunctional benefits of farm and ranch land protection 
including--
    (i) Social, economic, historic, and archaeological benefits;
    (ii) Enhancing carbon sequestration;
    (iii) Improving climate change resiliency;
    (iv) At-risk species protection;
    (v) Reducing nutrient runoff and improving water quality;
    (vi) Other related conservation benefits.
    (4) Geographic regions where the enrollment of particular lands may 
help achieve national, State, and regional agricultural or conservation 
goals and objectives, or enhance existing government or private 
conservation projects;
    (5) Diversity of natural resources to be protected or improved;
    (6) Score in the land evaluation and site assessment system as 
identified in 7 CFR part 658 or equivalent measure for grassland 
enrollments, to serve as a measure of agricultural viability (access to 
markets and infrastructure);
    (7) Measures that will be used to maintain or increase agricultural 
viability, such as succession plans, agricultural land easement plans, 
or entity deed terms that specifically address long-term agricultural 
viability; and
    (8) Other criteria determined by NRCS that will account for 
geographic differences provided such criteria allow for the selection 
of parcels that will achieve ACEP-ALE purposes and continue to maximize 
the benefit of the Federal investment under the program.
    (d) If NRCS determines that the purchase of two or more 
agricultural land easements are comparable in achieving program goals, 
NRCS will not assign a higher priority to any one of these agricultural 
land easements solely on the basis of lesser cost to the program.
    (e) NRCS will rank all eligible parcels that have been submitted 
prior to an application cut-off date in accordance with the national 
and State ranking criteria before selecting parcels for funding.
    (f) Eligible parcels selected for funding by NRCS will be 
identified in an agreement executed by NRCS and an eligible entity, 
either as part of the ALE-agreement or through a supplemental 
arrangement as agreed to by the parties.
    (g) Pursuant to the terms of the ALE-agreement, eligible parcels 
may be selected for funding in a fiscal year subsequent to the fiscal 
year in which the parties entered into an ALE-agreement.


Sec.  1468.23   ALE-agreements.

    (a) NRCS will enter into an ALE-agreement with a selected eligible 
entity that stipulates the terms and conditions under which the 
eligible entity is permitted to use ACEP-ALE funding and will 
incorporate all ACEP-ALE requirements. NRCS will make available to 
eligible entities the ALE-agreement terms and conditions, including any 
applicable templates, based on enrollment type. The ALE-agreement will 
address--
    (1) The interests in land to be acquired, including the United 
States' right of enforcement, the deed requirements specified in this 
part, as well as the other terms and conditions of the easement deed;
    (2) The management and enforcement of the rights on lands acquired 
with ACEP-ALE funds;
    (3) The responsibilities of NRCS;
    (4) The responsibilities of the eligible entity on easements 
acquired with ACEP-ALE funds;
    (5) The requirement for any conservation plan for highly erodible 
cropland or agricultural land easement plans to be developed as 
required or agreed-to prior to execution of the easement deed and 
payment of easement compensation to the landowner;
    (6) As applicable, the allowance of eligible parcel substitution 
upon mutual agreement of the parties;
    (7) The certification by the landowner at the time of easement 
execution and payment of easement compensation of the extent of any 
charitable contribution or other donation the landowner has provided to 
the eligible entity;
    (8) The submission of documentation of procured costs for each 
parcel, including appraisal, boundary survey, phase-I environmental 
site assessment, title commitment or report, title insurance, and 
closing cost if such procured costs are to be considered as part of the 
eligible entity's non-Federal share; and
    (9) Other requirements deemed necessary by NRCS to meet the 
purposes of this part or protect the interests of the United States.
    (10) For buy-protect-sell transactions, the ALE-agreement will also 
include the requirements identified in Sec.  1468.27.
    (b) The term of standard ALE-agreements, except as described in 
Sec.  1468.27 for ALE-agreements for approved buy-protect-sell 
transactions, will be:
    (1) Up to 5 fiscal years following the fiscal year the agreement is 
signed for certified entities; and
    (2) Up to 3 fiscal years and not to exceed 5 fiscal years following 
the fiscal year the agreement is signed for other eligible entities.
    (c) Eligible parcels selected for funding by NRCS will be 
identified on an attachment to the ALE-agreement. The attachment will 
include landowners' names, acreage of the easement area, the estimated 
fair market value, the estimated Federal contribution, and other 
relevant information.
    (d) The ALE-agreement will require the eligible entity to comply 
with applicable registration and reporting requirements of the Federal 
Funding Accountability and Transparency Act of 2006 (Pub. L. 109-282, 
as amended) and 2 CFR parts 25 and 170.
    (e) With NRCS approval, the eligible entity may substitute acres 
within a pending easement offer. Substituted acres must not reduce the 
easements capability in meeting program purposes.
    (f) With NRCS approval, an eligible entity may substitute pending 
easement offers within a standard ALE-agreement. The substituted 
landowner and easement offer must meet eligibility

[[Page 581]]

criteria as described in Sec.  1468.20. NRCS may require re-ranking of 
substituted acres within an easement offer and substituted easement 
offers within an ALE-agreement. Substitutions are not authorized under 
ALE-agreements for buy-protect-sell transactions.


Sec.  1468.24   Compensation and funding for agricultural land 
easements.

    (a) Determining the fair market value of the agricultural land 
easement. (1) The Federal share will not exceed 50 percent of the fair 
market value of the agricultural land easement, as determined using--
    (i) An appraisal using the Uniform Standards of Professional 
Appraisal Practices or the Uniform Appraisal Standards for Federal Land 
Acquisitions,
    (ii) An areawide market analysis or survey, or
    (iii) Another industry-approved method approved by NRCS.
    (2) Prior to receiving funds for an agricultural land easement, the 
eligible entity must provide NRCS with an acceptable determination of 
the fair market value of the agricultural land easements that conforms 
to applicable industry standards and NRCS specifications and meets the 
requirements of this part.
    (3) If the value of the easement is determined using an appraisal, 
the appraisal must be completed and signed by a State-certified general 
appraiser and must contain a disclosure statement by the appraiser. The 
appraisal must conform to the Uniform Standards of Professional 
Appraisal Practices or the Uniform Appraisal Standards for Federal Land 
Acquisitions as selected by the eligible entity.
    (4) If the fair market value of the easement is determined using an 
areawide market analysis or survey, the areawide market analysis or 
survey must be completed and signed by a person determined by NRCS to 
have professional expertise and knowledge of agricultural land values 
in the area subject to the areawide market analysis or survey. The use 
of areawide market analysis or survey must be approved by NRCS prior to 
entering into an ALE-agreement.
    (5) Requests to use another industry-approved method must be 
submitted to NRCS and approved by NRCS prior to entering into the ALE-
agreement. NRCS will identify the applicable industry standards and any 
associated NRCS specifications based on the methodology approved.
    (6) NRCS will review for quality assurance purposes, appraisals, 
areawide market analysis or surveys, valuation reports, or other 
information resulting from another industry-approved method approved 
for use by NRCS.
    (7) Eligible entities must provide a copy of the applicable report 
or other information used to establish the fair market value of the 
agricultural land easement to NRCS at least 90 days prior to the 
planned easement closing date.
    (8) Prior to the eligible entity's purchase of the easement, 
including payment of easement compensation to the landowner, NRCS must 
approve the determination of the fair market value of the agricultural 
land easement upon which the Federal share will be based.
    (b) Determining the Federal share of the agricultural land 
easement. (1) Subject to the statutory limits, NRCS may provide up to 
50 percent of the fair market value of the agricultural land easement. 
An eligible entity will provide a non-Federal share that is at least 
equivalent to the Federal share.
    (2) The non-Federal share provided by an eligible entity may be 
comprised of--
    (i) The eligible entity's own cash resources for payment of 
easement compensation to the landowner;
    (ii) A charitable donation or qualified conservation contribution 
(as defined by section 170(h) of the Internal Revenue Code of 1986) 
from the landowner;
    (iii) The procured costs paid by the eligible entity to a third-
party for an appraisal, boundary survey, phase-I environmental site 
assessment, title commitment or report, title insurance, or closing 
cost; and
    (iv) Up to 2 percent of the fair market value of the agricultural 
land easement for easement stewardship and monitoring costs where the 
costs as identified in paragraphs (b)(2)(i) through (iii) of this 
section are not sufficient to meet the non-Federal share;
    (3) NRCS may authorize a waiver to increase the Federal share of 
the cost of an agricultural land easement to an amount not to exceed 75 
percent of the fair market value of the agricultural land easement if--
    (i) NRCS determines the lands to be enrolled are grasslands of 
special environmental significance as defined in this part,
    (ii) An eligible entity provides a non-Federal share that is at 
least equivalent to the Federal share or comprises the remainder of the 
fair market value of the agricultural land easement, whichever is less, 
and
    (iii) The eligible entity agrees to incorporate and enforce the 
additional necessary deed restrictions to manage and enforce the 
easement to ensure the grassland of special environmental significance 
attributes are protected.
    (c) Uses of NRCS ACEP-ALE funds. (1) ACEP-ALE funds may not be 
provided or used for eligible entity expenditures for expenses, such 
as: Appraisals, areawide market analysis, legal surveys, access, title 
clearance or title insurance, legal fees, phase I environmental site 
assessments, closing services, development of agricultural land 
easement plans or component plans by the eligible entity, costs of 
easement monitoring, and other related administrative and transaction 
costs incurred by the eligible entity.
    (2) NRCS will conduct its own technical and administrative review 
of appraisals, areawide market analysis, or other easement valuation 
reports and hazardous materials reviews.
    (3) NRCS may provide technical assistance for the development of a 
conservation plan on those portions of a parcel that contain highly 
erodible cropland, or if requested, to assist in compliance with the 
terms and conditions of easements.


Sec.  1468.25   Agricultural land easement deeds.

    (a) Under ACEP-ALE, a landowner grants an easement to an eligible 
entity with which NRCS has entered into an ALE-agreement. The easement 
deed will require that the easement area be maintained in accordance 
with ACEP-ALE goals and objectives for the term of the easement.
    (b) The term of an agricultural land easement must be in 
perpetuity, except where State law prohibits a permanent easement. In 
such cases where State law limits the term of a conservation easement, 
the easement term will be for the maximum duration allowed under State 
law.
    (c) The eligible entity may use its own terms and conditions in the 
agricultural land easement deed, but the agricultural land easement 
deed must address the deed requirements as specified by this part and 
by NRCS in the ALE-agreement.
    (d) All deeds, as further specified in the ALE-agreement, must 
address the following regulatory deed requirements:
    (1) Include a right of enforcement clause for NRCS. NRCS will 
specify the terms for the right of enforcement clause, including that 
such interest in the agricultural land easement:
    (i) May be used only if the terms and conditions of the easement 
are not enforced by the eligible entity;
    (ii) Extends to a right of inspection only if the holder of the 
easement fails to provide monitoring reports in a timely manner or NRCS 
has a reasonable and articulable belief that the

[[Page 582]]

terms and conditions of the easement have been violated;
    (iii) Remains in effect for the duration of the easement and any 
changes that affect NRCS's interest in the agricultural land easement 
must be reviewed and approved by NRCS under Sec.  1468.6 of this part.
    (2) Specify that impervious surfaces will not exceed 2 percent of 
the ACEP-ALE easement area, excluding NRCS-approved conservation 
practices unless NRCS grants a waiver as follows:
    (i) The eligible entity may request a waiver of the 2-percent 
impervious surface limitation at the time an individual parcel is 
approved for funding,
    (ii) NRCS may waive the 2-percent impervious surface limitation on 
an individual easement basis, provided that no more than 10 percent of 
the easement area is covered by impervious surfaces,
    (iii) Before waiving the 2 percent limitation, NRCS will consider, 
at a minimum, population density; the ratio of open, prime, and other 
important farmland versus impervious surfaces on the easement area; the 
impact to water quality concerns in the area; the type of agricultural 
operation; parcel size; and the purposes for which the easement is 
being acquired,
    (iv) Eligible entities may submit an impervious surface limitation 
waiver process to NRCS for review and consideration. The eligible 
entities must apply any approved impervious surface limitation waiver 
processes on an individual easement basis, and
    (v) NRCS will not approve blanket waivers or entity blanket waiver 
processes of the impervious surface limitation. All ACEP-ALE easements 
must include language limiting the extent of impervious surfaces within 
the easement area.
    (3) Include an indemnification clause requiring the landowner to 
indemnify and hold harmless the United States from any liability 
arising from or related to the property enrolled in ACEP-ALE.
    (4) Include an amendment clause requiring that any changes to the 
easement deed after its recordation must be consistent with the 
purposes of the agricultural land easement and this part. Any 
substantive amendment, including any subordination of the terms of the 
easement or modifications, exchanges, or terminations of the easement 
area, must be approved by NRCS and the easement holder in accordance 
with Sec.  1468.6 prior to recordation or else the action is null and 
void.
    (5) Prohibit commercial and industrial activities except those 
activities that NRCS has determined are consistent with the 
agricultural use of the land.
    (6) Limit the subdivision of the property subject to the 
agricultural land easement, except where State or local regulations 
explicitly require subdivision to construct residences for employees 
working on the property or where otherwise authorized by NRCS.
    (7) Prohibit subsurface mineral development unless the terms of the 
deed, as determined by NRCS, specify that any subsurface mineral 
development allowed by the eligible entity on the easement area must--
    (i) Be conducted in accordance with applicable State law;
    (ii) Have a limited and localized impact;
    (iii) Not harm the agricultural use and conservation values of the 
land subject to the easement;
    (iv) Not materially alter or affect the existing topography;
    (v) Comply with a subsurface mineral development plan that includes 
a plan for the remediation of impacts to the agricultural use or 
conservation values of the land subject to the easement and is approved 
by NRCS prior to the initiation of mineral development activity;
    (vi) Not be accomplished by any surface mining method;
    (vii) Be within the impervious surface limits of the easement under 
paragraph (d)(2) of this section;
    (viii) Use practices and technologies that minimize the duration 
and intensity of impacts to the agricultural use and conservation 
values of the land subject to the easement; and
    (ix) Ensure that each area impacted by the subsurface mineral 
development are reclaimed and restored by the holder of the mineral 
rights at cessation of operation.
    (8) Include specific protections related to the purposes for which 
the agricultural land easement is being acquired, including provisions 
to protect historical or archaeological resources or grasslands of 
special environmental significance.
    (9) For parcels with highly erodible cropland, include terms that 
ensure compliance with the conservation plan that will be developed and 
managed in accordance with the Food Security Act of 1985, as amended, 
and its associated regulations.
    (10) Include any additional provisions needed to address the 
attributes for which a parcel was ranked and selected for funding by 
NRCS, such as the purchase of the agricultural land easement, the 
development and maintenance of an agricultural land easement plan, or 
use of the minimum deed terms as described in paragraph (f) of this 
section.
    (11) Include terms, if required by the eligible entity, that 
identify an intent to keep the land subject to the agricultural land 
easement under ownership of a farmer or rancher.
    (12) Include other minimum deed terms specified by NRCS to ensure 
that ACEP-ALE purposes are met.
    (e) NRCS reserves the right to require additional specific language 
or require removal of language in the agricultural land easement deed 
to ensure the enforceability of the easement deed, protect the 
interests of the United States, or to otherwise ensure ALE purposes 
will be met.
    (f) For eligible entities that have not been certified, the deed 
document must be reviewed and approved by NRCS in advance of use as 
provided herein:
    (1) NRCS will make available for an eligible entity's use a 
standard set of minimum deed terms that satisfactorily address the deed 
requirements in paragraph (d) of this section and may be wholly 
incorporated along with the eligible entity's own deed terms into the 
agricultural land easement deed, or as an addendum that is attached and 
incorporated by reference into the deed. The standard minimum deed 
terms addendum will specify the terms that will prevail in the event of 
a conflict.
    (2) If an eligible entity agrees to use the standard set of minimum 
deed terms as published by NRCS, NRCS and the eligible entity will 
identify in the ALE-agreement the use of the standard minimum deed 
terms as a requirement and National Office review of individual deeds 
may not be required. NRCS may place priority on applications where an 
eligible entity agrees to use the standard set of minimum deed terms as 
published.
    (3) The eligible entity must submit all individual agricultural 
land easement deeds to NRCS at least 90 days before the planned 
easement closing date and be approved by NRCS in advance of use.
    (4) Eligible entities with multiple eligible parcels may submit an 
agricultural land easement deed template for review and approval. The 
deed templates must be reviewed and approved by NRCS in advance of use.
    (5) NRCS may conduct an additional review of the agricultural land 
easement deeds for individual parcels prior to the execution of the 
easement deed by the landowner and the eligible entity to ensure that 
they contain the same language as approved by the National Office and 
that the appropriate site-specific information has been included.
    (g) The eligible entity will acquire, hold, manage, monitor, and 
enforce the

[[Page 583]]

easement. The eligible entity may have the option to enter into an 
agreement with appropriately qualified governmental or private 
organizations that have no property rights or interests in the easement 
area to carry out easement monitoring, management, and enforcement 
responsibilities.
    (h) All agricultural land easement deeds acquired with ACEP-ALE 
funds must be recorded. The eligible entity will provide proof of 
recordation to NRCS within the timeframe specified in the ALE-
agreement.


Sec.  1468.26   Eligible entity certification.

    (a) To be considered for certification, an entity must submit a 
written request for certification to NRCS, which specifically addresses 
the items in paragraphs (a)(1) through (7) of this section:
    (1) An explanation of how the entity meets the requirements 
identified in Sec.  1468.20(b) of this section;
    (2) An agreement to use for ACEP-ALE funded acquisitions easement 
valuation methodologies identified in section Sec.  1468.24 of this 
part;
    (3) A showing of a demonstrated record of completing acquisition of 
easements in a timely fashion;
    (4) A showing that it has the capacity to monitor and enforce the 
provisions of easement deeds and history of such monitoring and 
enforcement;
    (5) A plan for administering easements enrolled under this part, as 
determined by NRCS;
    (6) Proof that the eligible entity--
    (i) Has been accredited by the Land Trust Accreditation Commission 
and has acquired not fewer than 10 agricultural land easements under 
ACEP-ALE, the Farm and Ranch Lands Protection Program, or the Farmland 
Protection Program;
    (ii) Is a State department of agriculture or other State agency 
with statutory authority for farm and ranchland protection and has 
acquired not fewer than 10 agricultural land easements under ACEP-ALE 
or its predecessor programs; or
    (iii) Holds, manages, and monitors a minimum of 25 agricultural 
land conservation easements, of which a minimum of 10 of these 
easements are agricultural land easements under ACEP-ALE or its 
predecessor programs, and if the eligible entity is a nongovernmental 
organization, provides evidence that the eligible entity possesses a 
dedicated fund for the purposes of managing, monitoring, and enforcing 
each easement held by the eligible entity; and
    (7) Successfully met the responsibilities of the eligible entity 
under the applicable agreements with NRCS, as determined by NRCS, 
relating to agricultural land easements that the eligible entity has 
acquired under the program or any predecessor program;
    (b) NRCS will notify an eligible entity in writing whether they 
have been certified and the rationale for the agency's decision. When 
NRCS determines an eligible entity qualifies as certified--
    (1) NRCS may enter into an ALE-agreement with the certified entity 
that is for a period of up to 5 fiscal years following the fiscal year 
the agreement is executed. NRCS will review and select parcel 
applications submitted for funding by certified entities as specified 
in Sec.  1468.22. Funding for selected parcels is identified on an 
attachment to the ALE-agreement.
    (2) The terms of the ALE-agreement will include the regulatory deed 
requirements specified in Sec.  1468.25 of this part that must be 
addressed in the deed to ensure that ACEP-ALE purposes will be met 
without requiring NRCS to pre-approve each easement transaction prior 
to closing.
    (i) Certified entities may purchase easements without NRCS 
approving the agricultural land easement deeds, baseline reports, 
titles, or appraisals before the purchase of the easement;
    (ii) Certified entities will prepare the agricultural land easement 
deeds, baseline reports, titles, and appraisals in accordance with NRCS 
requirements as identified in the ALE-agreement;
    (3) NRCS will conduct quality assurance reviews of a percentage of 
the closed agricultural land easement transactions and annual 
monitoring reports submitted by the certified entity; and
    (4) NRCS will provide the certified entity an opportunity to 
correct errors or remedy deficiencies identified in the NRCS quality 
assurance review. If the certified entity fails to remedy the 
identified items to NRCS's satisfaction, NRCS will consider whether to 
allow the certified entity to continue to purchase ALE-funded easements 
without prior NRCS approval, to decertify the entity in accordance with 
paragraph (c) of this section, or, require the certified entity to take 
administrative steps necessary to remedy the deficiencies.
    (c)(1) NRCS will conduct a quality assurance review of the 
certified entity a minimum of once every 3 fiscal years to ensure that 
the certified entities are meeting the certification criteria 
established in this section.
    (2) If NRCS determines that the certified entity no longer meets 
these criteria, the Chief will--
    (i) Provide the certified entity a specified period of time, at a 
minimum 180 days, in which to take such actions as may be necessary to 
correct the identified deficiencies, and
    (ii) If NRCS determines the certified entity does not meet the 
criteria established in this part after the 180 days, NRCS will send 
written notice of decertification. This notice will specify the actions 
that have not been completed to retain certification status, the 
actions the entity must take to regain certification status, the status 
of funds in the ALE-agreement; and the eligibility of the entity to 
apply for future ACEP-ALE funds. The entity may contest the notice of 
decertification in writing to NRCS within 20 calendar days of receipt 
of the notice of decertification. The entity's letter must provide 
specific reasons why the decision to decertify is in error.
    (3) The period of decertification may be up to 3 years, based upon 
the circumstances associated with the action.
    (4) The entity may submit a new request for certification to NRCS 
only after the decertification period has expired.


Sec.  1468.27   Buy-Protect-Sell transactions.

    (a) NRCS may enter into an ALE-agreement with an eligible entity 
for a buy-protect-sell transaction to provide cost-share assistance for 
the purchase of an agricultural land easement on eligible private or 
Tribal agricultural land that an eligible entity owns or is in the 
process of purchasing for the purposes of securing the long-term 
protection of natural resources and the agricultural nature of the land 
and ensuring timely transfer to a qualified farmer or rancher.
    (b) At the time the individual parcel application is submitted, the 
eligible entity must identify the specific buy-protect-sell transaction 
type as either--
    (1) Pre-closing transfer, wherein the eligible entity will transfer 
fee title ownership to a farmer or rancher at or prior to closing on 
the agricultural land easement and the eligible entity will hold the 
agricultural land easement prior to receiving the Federal share, or
    (2) Post-closing transfer, wherein the eligible entity will 
transfer fee title ownership to a farmer or rancher not later than 3 
years after closing on the agricultural land easement, unless an 
extension of such time has been authorized by NRCS based on 
documentation of extenuating circumstances provided by the eligible 
entity.
    (c) The ALE-agreement must contain the information described in 
Sec.  1468.23

[[Page 584]]

and must specify the details of the legal arrangement for the 
individual buy-protect-sell transaction, including that for all buy-
protect-sell transactions the eligible entity must--
    (1) Own the land or within 12 months of execution of the ALE-
agreement for the buy-protect-sell transaction by both NRCS and the 
eligible entity, and the eligible entity has completed or has 
demonstrated to the satisfaction of NRCS that completion of the 
purchase of the land is imminent.
    (2) Make an initial sale of the land to a farmer or rancher that is 
or will be subject to the agricultural land easement pursuant to the 
terms of the ALE-agreement.
    (3) Sell the land to the farmer or rancher for a purchase price 
that does not exceed the lesser of--
    (i) The original purchase price of the land paid by the eligible 
entity; or
    (ii) The agricultural value as determined by an appraisal.
    (4) Ensure that amounts included in the sale of the land to the 
farmer or rancher for reasonable holding and transaction costs incurred 
by the eligible entity in total do not exceed more than 10 percent of 
the agricultural value.
    (5) Submit documentation satisfactory to NRCS that confirms the 
sale of the land that is or will be subject to the agricultural land 
easement meets the buy-protect-sell transaction requirements. Pursuant 
to the terms and conditions of the ALE-agreement for the buy-protect-
sell transaction, the eligible entity must provide--
    (i) Evidence that the purchaser of the land is a qualified farmer 
or rancher,
    (ii) Documentation of the purchase price for the land paid by the 
eligible entity,
    (iii) The appraisal used to determine the agricultural value of the 
land,
    (iv) An itemized list of the allowable holding or transaction costs 
included in the sales price,
    (v) A copy of the settlement statements identifying the sale price 
and all holding and transactions costs charged to the farmer or rancher 
purchaser, and
    (vi) Other documents as specified by NRCS in the ALE-agreement.
    (6) Reimburse NRCS for the entirety of the Federal share provided 
if, as determined by NRCS, the eligible entity failed to transfer 
ownership per the terms and conditions of the ALE-agreement for the 
buy-protect-sell transaction.
    (d) In addition to the requirements identified in paragraph (c) of 
this section, for buy-protect-sell transactions that involve a pre-
closing transfer as required by paragraph (b)(1) of this section:
    (1) The maximum duration of the ALE-agreement may be the same as 
described in Sec.  1468.23(b).
    (2) The Federal share for the agricultural land easement will be 
provided on a reimbursable basis only, after the agricultural land 
easement has closed and the required documents have been provided to 
and reviewed by NRCS.
    (e) For buy-protect-sell transactions that involve a post-closing 
transfer as required by paragraph (b)(2) of this section:
    (1) At the time of application, in addition to the information 
identified Sec.  1468.21, the eligible entity must provide NRCS 
specific information on the proposed structure of the buy-protect-sell 
transaction, including the parties to be involved in the transaction, 
the roles and responsibilities of each party related to the 
acquisition, holding, monitoring, and enforcement of the easement and 
the fee title ownership of the land, relevant State law that authorizes 
such transactions, proposed timeline, and other information identified 
by NRCS.
    (2) NRCS will determine the legal conformance of the proposed 
arrangement for the buy-protect-sell transaction.
    (3) Based on the NRCS determination of legal conformance of the 
proposed buy-protect-sell transaction, for eligible applications 
selected for funding based on ranking and availability of funds, NRCS 
will identify the specific terms of the ALE-agreement for the buy-
protect-sell transaction.
    (4) The buy-protect-sell transaction must meet the timing 
requirements in paragraphs (e)(4)(i) through (iv) of this section--
    (i) The term of the ALE-agreement for a buy-protect-sell 
transaction will be for a period no longer than 5 fiscal years 
following the fiscal year of execution of the ALE-agreement by NRCS and 
the eligible entity.
    (ii) The agricultural land easement must be closed within 2 fiscal 
years following the fiscal year of ALE-agreement execution, and the 
sale of the land subject to the agricultural land easement to a 
qualified farmer or rancher must occur within 3 years of closing on the 
agricultural land easement.
    (iii) Prior to the expiration of the 3-year timeframe, the eligible 
entity may submit to NRCS a request for an extension that includes 
documentation of extenuating circumstances and the anticipated 
timeline, not to exceed 12 months, in which the sale of the land 
subject to the easement will occur.
    (iv) NRCS may, in its discretion, authorize such additional time 
for the sale of the land subject to the agricultural land easement to a 
qualified farmer or rancher through a modification to the ALE-
agreement.


Sec.  1468.28   Violations and remedies.

    (a) In the event of a violation of the agricultural land easement 
terms, the agricultural land easement holder will notify the landowner 
and the violator, if different than the landowner, and NRCS. The 
landowner may be given reasonable notice and, where appropriate, an 
opportunity to voluntarily correct the violation in accordance with the 
terms of the agricultural land easement.
    (b) In the event that the agricultural land easement holder, or its 
successors or assigns, fails to enforce any of the terms of the 
agricultural land easement as determined by NRCS, NRCS may exercise the 
United States' rights to enforce the terms of the agricultural land 
easement through any and all authorities available under Federal or 
State law.
    (c) Notwithstanding paragraph (a) of this section, NRCS, upon 
notification to the landowner and the agricultural land easement 
holder, reserves the right to enter upon the easement area if the 
annual monitoring report provided by the agricultural land easement 
holder documenting compliance with the agricultural land easement is 
insufficient or is not provided annually, the United States has a 
reasonable and articulable belief that the terms and conditions of the 
easement have been violated, or to remedy deficiencies or easement 
violations as it relates to the conservation plan in accordance with 7 
CFR part 12.
    (d) In the event of an emergency, the entry onto the easement area 
may be made at the discretion of NRCS when the actions are deemed 
necessary to prevent, terminate, or mitigate a potential or unaddressed 
violation with notification to the landowner and the agricultural land 
easement holder provided at the earliest practicable time. The 
landowner will be liable for any costs incurred by NRCS as a result of 
the landowner's failure to comply with the easement requirements as it 
relates to agricultural land easement violations.
    (e) The United States will be entitled to recover any and all costs 
from the eligible entity, or its successors or assigns, including 
attorney's fees or expenses, associated with any enforcement or 
remedial action as it

[[Page 585]]

relates to the enforcement of the agricultural land easement.
    (f) In instances where an easement is terminated, the proponent of 
the termination action must pay to CCC an amount determined by NRCS.
    (g) If NRCS exercises its rights identified under an agricultural 
land easement NRCS will provide written notice to the agricultural land 
easement holder at their last-known address. The notice will set forth 
the nature of the noncompliance by the agricultural land easement 
holder, or its successors or assigns, and provide a 180-day period to 
cure. If the agricultural land easement holder fails to cure within the 
180-day period, NRCS will take the action specified under the notice. 
NRCS reserves the right to decline to provide a period to cure if NRCS 
determines that imminent harm may result to the conservation values or 
other interest in land that it seeks to protect.

Subpart C--Wetland Reserve Easements


Sec.  1468.30   Program requirements.

    (a) General. (1) Under the ACEP-WRE, NRCS may purchase wetland 
reserve easements from eligible landowners who voluntarily cooperate to 
restore, protect, and enhance wetlands on eligible private or Tribal 
lands. A 30-year contract enrollment option is also available for 
acreage owned by Indian Tribes.
    (2) To participate in ACEP-WRE, a landowner must agree to the 
implementation of a WRPO, the effect of which is to restore, protect, 
enhance, maintain, manage, and monitor the hydrologic conditions of 
inundation or saturation of the soil, native vegetation, and natural 
topography of eligible lands.
    (3) NRCS may provide financial assistance through an easement 
restoration agreement for the conservation practices and eligible 
activities that promote the restoration, protection, enhancement, 
maintenance, and management of wetland functions and values and 
associated habitats.
    (4) For ACEP-WRE enrollments, NRCS may implement such conservation 
practices and eligible activities through an agreement with the 
landowner, a contract with a vendor, an interagency agreement, or a 
cooperative agreement. The specific restoration, protection, 
enhancement, maintenance, and management actions authorized by NRCS, 
may be undertaken by the landowner, NRCS, or its designee.
    (5) The duration of a wetland reserve easement may be either 
perpetual, 30-years, or the maximum duration allowed by State law. The 
duration of a 30-year contract on acreage owned by Indian Tribes is 30 
years.
    (b) Acreage limitations. (1) No more than 25 percent of the total 
cropland in any county, as determined by the FSA, may be enrolled in 
CRP and ACEP-WRE, and no more than 15 percent of the total cropland in 
the county may be subject to an easement under ACEP-WRE.
    (2) The limitations in paragraph (b)(1) of this section do not 
apply to areas devoted to windbreaks or shelterbelts after November 28, 
1990, or to cropland designated by NRCS with ``subclass w'' in the land 
capability classes IV through VIII because of severe use limitations 
due to factors related to excess water such as poor soil drainage, 
wetness, high water table, soil saturation, or inundation.
    (3) NRCS and the FSA will concur before a waiver of the 25-percent 
limit of paragraph (b)(1) of this section can be approved for an 
easement proposed for enrollment in ACEP-WRE. Such a waiver will only 
be approved if the waiver will not adversely affect the local economy, 
and operators in the county are having difficulties complying with the 
conservation plans implemented under 16 U.S.C. 3812.
    (c) Landowner eligibility. To be eligible to enroll in the ACEP-
WRE, all landowners must be in compliance with the highly erodible land 
and wetland conservation provisions in 7 CFR part 12. Persons or legal 
entities must be in compliance with the Adjusted Gross Income 
Limitation provisions at 7 CFR part 1400 and:
    (1) Be the landowner of eligible land for which enrollment is 
sought;
    (2) Provide any documentation required by NRCS as necessary to 
determine eligibility; and
    (3) For easement applications, have been the landowner of such land 
for the 24-month period prior to the time of application unless it is 
determined by NRCS that:
    (i) The land was acquired by will or succession as a result of the 
death of the previous landowner or pursuant to the terms of an existing 
trust,
    (ii) The ownership change occurred due to foreclosure on the land 
and the owner of the land immediately before the foreclosure exercises 
a right of redemption from the mortgage holder in accordance with State 
law, or
    (iii) The land was acquired under circumstances that give adequate 
assurances, as determined by NRCS, that such land was not acquired for 
the purposes of placing it in the program. Adequate assurances will 
include documentation that the change of ownership resulted from 
circumstances such as:
    (A) The prior landowner owned the land for 2 years or more and 
transferred ownership amongst members of the immediate family (father, 
mother, spouse, children, grandparents, or grandchildren),
    (B) A completion of a contract for deed entered into 24 months or 
more prior to the application date,
    (C) The new landowner had leased the land for agricultural purposes 
for 24 months or more prior to the application date, or
    (D) The easement area is a portion of a larger property where the 
majority portion was acquired for agriculture purposes.
    (4) Agree to provide such information to NRCS as the agency deems 
necessary to assist in its determination of eligibility for program 
benefits and for other program implementation purposes.
    (d) New landowner. When a parcel of land that has been accepted for 
enrollment into the ACEP-WRE is sold or transferred prior to NRCS 
purchase of the easement, NRCS will cancel the application or agreement 
to purchase and remove the acres from enrollment unless the new 
landowner meets the requirements of paragraph (c) of this section and 
accepts the terms and conditions of enrollment. The new landowner must 
submit required documentation for NRCS review and execute any required 
agreements or contracts. The decision to approve and execute an 
enrollment transferred prior to closing is at NRCS's discretion.
    (e) Land eligibility. (1) Only private land or acreage owned by an 
Indian Tribe may be considered for enrollment into ACEP-WRE.
    (2) NRCS will determine whether land is eligible for enrollment and 
whether, once found eligible, the lands may be included in the program 
based on the likelihood of successful restoration of such land and 
resultant wetland functions and values merit inclusion of such land in 
the program when considering the cost of acquiring the easement and the 
cost of the restoration, protection, enhancement, maintenance, 
management, and monitoring.
    (3) Land will only be considered eligible for enrollment in the 
ACEP-WRE if NRCS determines that the enrollment of such land maximizes 
wildlife benefits and wetland function and values.
    (4) To be determined eligible, NRCS must also determine that such 
land is--
    (i) Farmed wetland or converted wetland, together with adjacent 
lands that are functionally dependent on the

[[Page 586]]

wetlands, if such land is identified by NRCS as:
    (A) Wetlands farmed under natural conditions, farmed wetlands, 
prior converted cropland, commenced conversion wetlands, farmed wetland 
pastures, and agricultural lands substantially altered by flooding so 
as to develop and retain wetland functions and values; or
    (B) Former or degraded wetlands that occur on lands that have been 
used or are currently being used for the production of food and fiber, 
including rangeland and forest production lands, where the hydrology 
has been significantly degraded or modified and will be substantially 
restored; or
    (C) Farmed wetland and adjoining land enrolled in CRP that has the 
highest wetland functions and values and is likely to return to 
production after the land leaves CRP; or
    (D) A riparian area along a stream or other waterway that links, or 
after restoring the riparian area, will link wetlands protected by the 
ACEP-WRE easement, another easement, or other device or circumstance 
that achieves the same objectives as an ACEP-WRE easement.
    (ii) Cropland or grassland that was used for agricultural 
production prior to flooding from the natural overflow of--
    (A) A closed basin lake, together with adjacent land that is 
functionally dependent upon it, if the State or other entity is willing 
to provide a 50-percent share of the cost of the easement; or
    (B) A pothole and adjacent land that is functionally dependent on 
it; and
    (C) The size of the parcel offered for enrollment is a minimum of 
20 contiguous acres. Such land meets the requirement of likelihood of 
successful restoration only if the soils are hydric and the depth of 
water is 6.5 feet or less.
    (5) If land offered for enrollment is determined eligible under 
this section, then NRCS may also enroll land adjacent or contiguous to 
such eligible land together with the eligible land, if such land 
maximizes wildlife benefits and contributes significantly to wetland 
functions and values. Such adjacent or contiguous land may include 
buffer areas, created wetlands, noncropped natural wetlands, riparian 
areas that do not meet the requirements of paragraph (e)(4)(i)(D) of 
this section, and restored wetlands, but not more than NRCS, in 
consultation with the State technical committee, determines is 
necessary to maximize wildlife benefits and contribute significantly to 
wetland functions and values. NRCS will not enroll as eligible adjacent 
or contiguous land any constructed wetlands that treat wastewater or 
contaminated runoff.
    (6) To be enrolled in the program, eligible land must have 
sufficient access and be configured in a size and with boundaries that 
allow for the efficient management and monitoring of the area for 
program purposes and otherwise promote and enhance program objectives 
as determined by NRCS.
    (f) Enrollment of CRP lands. Land subject to an existing CRP 
contract may be enrolled in ACEP-WRE only if the land and landowner 
meet the requirements of this part and the enrollment is requested by 
the landowner and agreed to by NRCS. To enroll in ACEP-WRE, the CRP 
contract for the property must be terminated or otherwise modified 
subject to such terms and conditions as are mutually agreed upon by FSA 
and the landowner.
    (g) Ineligible land. The land specified in paragraphs (g)(1) 
through (7) of this section is not eligible for enrollment in the ACEP-
WRE:
    (1) Converted wetlands if the conversion was commenced after 
December 23, 1985;
    (2) Land established to trees under the CRP, except in cases where 
the land meets all other WRE eligibility criteria, the established 
cover conforms to WRE restoration requirements and NRCS specifications, 
an active CRP contract will be terminated or otherwise modified upon 
purchase of the WRE easement, and any additional criteria NRCS uses to 
determine if enrollment of such lands would further the purposes of the 
program;
    (3) Lands owned by the United States other than held in trust for 
Indian Tribes;
    (4) Lands owned in fee title by a State, including an agency or a 
subdivision of a State or a unit of local government;
    (5) Land subject to an easement or deed restriction which, as 
determined by NRCS, provides similar restoration and protection of 
wetland functions and values as would be provided by enrollment in 
ACEP-WRE;
    (6) Lands where the purposes of the program or implementation of 
restoration practices would be undermined due to onsite or offsite 
conditions, including, but not limited to--
    (i) Risk of hazardous materials or petroleum products either onsite 
or offsite;
    (ii) Permitted or existing rights of way, either onsite or offsite, 
for infrastructure development;
    (iii) Adjacent land uses, such as airports, that would either 
impede complete restoration or prevent wetland functions and values 
from being fully restored; or
    (7) Land which NRCS determines to have unacceptable exceptions to 
clear title or legal access that is encumbered, nontransferable, 
restricted, or otherwise insufficient.


Sec.  1468.31   Application procedures.

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


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

    (a) When evaluating easements or 30-year contract applications from 
landowners, NRCS, with advice from the State technical committee, may 
consider:
    (1) The conservation benefits of obtaining an easement or other 
interest in the land, including but not limited to--
    (i) Habitat that will be restored for the benefit of migratory 
birds and wetland-dependent wildlife, including diversity of wildlife 
that will be benefitted or life-cycle needs that will be addressed;
    (ii) Extent and use of habitat that will be restored for 
threatened, endangered, or other at-risk species or number of different 
at-risk species benefitted;
    (iii) Protection or restoration of native vegetative communities;
    (iv) Habitat diversity and complexity to be restored;
    (v) Proximity and connectivity to other protected habitats;
    (vi) Extent of beneficial adjacent land uses;
    (vii) Proximity to impaired water bodies;
    (viii) Extent of wetland losses within a geographic area, including 
wetlands generally or specific wetland types;
    (ix) Capacity of the wetland to improve water quality;

[[Page 587]]

    (x) Hydrology restoration potential, which must comprise at least 
50 percent of the points for conservation benefits.
    (2) The cost effectiveness of each easement;
    (3) Whether the landowner or another person or entity is offering 
to contribute financially to the cost of the easement or other interest 
in the land to leverage Federal funds;
    (4) The extent to which the purposes of this part would be achieved 
on the land;
    (5) The productivity of the land;
    (6) The on-farm and off-farm environmental threats if the land is 
used for the production of agricultural commodities;
    (7) Such other factors as NRCS determines are necessary to carry 
out the purposes of the program.
    (b) To the extent practicable, taking into consideration costs and 
future agricultural and food needs, NRCS will give priority to--
    (1) Obtaining permanent easements over shorter term easements; and
    (2) Acquiring easements based on the value of the easement for 
protecting and enhancing habitat for migratory birds and other wetland-
dependent wildlife or improving water quality, in coordination with FWS 
at the local level, as may be appropriate.
    (c) NRCS, in consultation with the State technical committee, may 
place higher priority on--
    (1) Certain land types or geographic regions of the State where 
restoration of wetlands may better achieve State and regional goals and 
objectives; and
    (2) Land that is currently enrolled in CRP in a contract that is 
set to expire within 1 year from the date of application and is farmed 
wetland and adjoining land that has the highest wetland functions and 
values and is likely to return to production after the land leaves CRP.
    (d) Notwithstanding any limitation of this part regarding priority 
ranking, NRCS may enroll eligible lands at any time to encompass total 
wetland areas subject to multiple ownership or otherwise to achieve 
program objectives. NRCS may, at any time, exclude enrollment of 
otherwise eligible lands if the participation of the adjacent 
landowners is essential to the successful restoration of the wetlands 
and those adjacent landowners are unwilling or ineligible to 
participate.


Sec.  1468.33   Enrollment process.

    (a) Tentative selection. Based on the priority ranking, NRCS will 
notify an affected landowner of tentative acceptance into the program.
    (b) Effect of notice of tentative selection. The notice of 
tentative acceptance into the program does not bind NRCS or the United 
States to enroll the proposed project in ACEP-WRE, nor does it bind the 
landowner to continue with enrollment in the program. The notice 
informs the landowner of NRCS's intent to continue the enrollment 
process on their land.
    (c) Acceptance and effect of offer of enrollment--(1) Wetland 
reserve easement. For applications requesting enrollment through a 
wetland reserve easement, NRCS will present an agreement to purchase to 
the landowner which will describe the easement area, the easement 
compensation amount, the easement terms and conditions, and other terms 
and conditions for participation that may be required by NRCS as 
appropriate. The easement compensation amount will be based upon the 
lowest of the fair market value of the land, the geographic area rate 
cap, or the landowner offer, as provided in Sec.  1468.34 of this part. 
The landowner accepts enrollment in the ACEP-WRE by signing the 
agreement to purchase. NRCS will continue with easement acquisition 
activities after the property has been enrolled.
    (2) 30-year contract. For applications requesting enrollment of 
acreage owned by an Indian Tribe through the 30-year contract option, 
NRCS will present an agreement to enter 30-year contract to the Tribal 
landowner which will describe the contract area, the contract 
compensation amount, the contract terms and conditions, and other terms 
and conditions for participation that may be required by NRCS as 
appropriate. The Tribal landowner accepts enrollment in the ACEP-WRE by 
signing the agreement to enter 30-year contract. NRCS will proceed with 
implementation of the WRPO after the 30-year contract has been 
executed.
    (d) Restoration responsibility and the scope of enrollment. (1) The 
agreement to purchase or agreement to enter 30-year contract is the 
enrollment document that establishes the terms of enrollment consistent 
with the terms and conditions of this part and identifies the--
    (i) Scope of the agreement between NRCS and the landowner,
    (ii) Basis for NRCS to obligate funds,
    (iii) Nature and method through which NRCS will provide ACEP-WRE 
technical and financial assistance to the landowner, and
    (iv) Withholding of the landowner's share of the restoration cost 
from the easement payment for applicable 30-year or nonpermanent 
easement or 30-year contract enrollments.
    (2) The agreement to purchase between NRCS and the landowner under 
the easement option also constitutes the agreement for--
    (i) Granting an easement on the enrolled land and sufficient access 
to the enrolled land as set forth under Sec.  1468.37,
    (ii) Implementing a WRPO which provides for the restoration, 
protection, and management of the wetland functions and values,
    (iii) Recording the easement in accordance with applicable State 
law, and
    (iv) Ensuring the title to the easement is superior to the rights 
of all others, except for exceptions to the title that are deemed 
acceptable by NRCS and in accordance with Department of Justice Title 
Standards.
    (3) The terms of the easement identified in paragraph (d)(2)(i) of 
this section includes the landowner's agreement to the implementation 
of a WRPO identified in paragraph (d)(2)(ii) of this section. In 
particular, the easement deed identifies that NRCS has the right to 
enter the easement area to undertake on its own or through an agreement 
with the landowner or other third party, any activities to restore, 
protect, enhance, manage, maintain, and monitor the wetland and other 
natural values of the easement area.
    (4) At the time NRCS enters into an agreement to purchase, NRCS 
agrees, subject to paragraph (e) of this section, to acquire and 
provide for restoration of the land enrolled into the program.
    (e) Withdrawal of offer of enrollment. Prior to execution of the 
easement deed or 30-year contract by the United States and the 
landowner, NRCS may withdraw the land from enrollment at any time due 
to lack of availability of funds, inability to clear title, 
insufficient access, sale of the land, risk of contamination from 
hazardous materials or petroleum products, or other reasons.
    (f) Landowner failure to accept enrollment offer in timely manner. 
The offer of enrollment to the landowner will be void if not executed 
by the landowner within the time specified.


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

    (a) Determination of easement compensation values. (1) Compensation 
for an easement or 30-year contract under this part will be made in 
cash in such amount as is agreed to and specified in the agreement to 
purchase or agreement to enter 30-year contract and finalized in the 
warranty easement deed or 30-year contract.
    (2) Payments for 30-year easements, nonpermanent easements as 
limited by State law, or 30-year contracts will be not more than 75 
percent of that which

[[Page 588]]

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


Sec.  1468.35  Wetland Reserve Enhancement Partnerships.

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


Sec.  1468.36   WRPO payments.

    (a) NRCS may provide financial assistance for implementing the WRPO 
on the enrolled land subject to an easement or 30-year contract. The 
amount and terms and conditions of the financial assistance will be 
subject to the restrictions in paragraphs (a)(1) and (2) of this 
section on the costs of establishing or installing conservation 
practices or eligible activities specified in the WRPO:
    (1) On enrolled land subject to a permanent easement, NRCS will 
offer to pay at least 75 percent but not more than 100 percent of such 
costs; and
    (2) On enrolled land subject to a 30-year or nonpermanent easement 
or 30-year contract, NRCS will offer to pay at least 50 percent but not 
more than 75 percent of such costs. The landowner's share of the WRPO 
implementation costs may be withheld from the easement or 30-year 
contract payment.
    (b) Payments may be made only upon a determination by NRCS that an 
eligible conservation practice or component of the conservation 
practice has been implemented in compliance with appropriate NRCS 
standards and specifications; or an eligible activity has been 
implemented in compliance with the appropriate requirements detailed in 
the WRPO.
    (c) Payments may be made for repair or replacement of an eligible 
conservation practice or activity, if NRCS determines that the 
conservation practice or eligible activity is still needed and that the 
disrepair or failure of the original conservation practice or eligible 
activity was due to reasons beyond the control of the participant.
    (d) A participant may seek additional assistance from other public 
or private organizations as long as the conservation practices or 
eligible activities funded are approved by NRCS and implemented in 
compliance with this part.


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

    (a) Easement requirements. (1) To enroll eligible land in ACEP-WRE 
through the permanent or 30-year easement option, a landowner will 
grant an easement to the United States. The easement will require that 
the easement area be maintained in accordance with ACEP-WRE goals and 
objectives for the duration of the term of the easement, including the 
restoration, protection, enhancement, maintenance, management, and 
monitoring of wetland and other land functions and values.
    (2) For the duration of its term, the easement will require, at a 
minimum, that the landowner and the landowner's heirs, successors, and 
assigns will cooperate in the restoration, protection, enhancement, 
maintenance, management, and monitoring of the land in accordance with 
the warranty easement deed and with the terms of the WRPO. In addition, 
the easement will grant to the United States:
    (i) A sufficient right of legal access to the easement area,
    (ii) The right to authorize compatible uses of the easement area, 
including but not limited to such activities as hunting and fishing, 
managed timber harvest, water management, or periodic haying or 
grazing, if such use is consistent with the long-term protection and 
enhancement of the wetland resources for which the easement was 
established,
    (iii) All rights, title, and interest in the easement area except 
those rights specifically reserved in the deed, and
    (iv) The right to restore, protect, enhance, maintain, manage, and 
monitor activities on the easement area.
    (3) The landowner will convey title to the easement in a manner 
that is acceptable to NRCS. The landowner will warrant that the 
easement granted to the

[[Page 589]]

United States is superior to the rights of all others, except for title 
exceptions deemed acceptable by NRCS.
    (4) The participant will--
    (i) Comply with the terms of the easement,
    (ii) Comply with all terms and conditions of any related contract 
or agreement,
    (iii) Agree to the permanent retirement of any existing cropland 
base and allotment history for the easement area, as determined by FSA,
    (iv) Agree to the long-term restoration, protection, enhancement, 
maintenance, management, and monitoring of the easement in accordance 
with the terms of the easement and related agreements, and
    (v) Agree that each person or legal entity that is subject to the 
easement will be jointly and severally responsible for compliance with 
the easement and the provisions of this part and for any refunds or 
payment adjustment which may be required for violation of any terms or 
conditions of the easement or the provisions of this part.
    (b) 30-year contract requirements. (1) To enroll eligible land in 
ACEP-WRE through the 30-year contract option, a landowner will enter 
into a contract with NRCS. The contract will require that the enrolled 
area be maintained in accordance with ACEP-WRE goals and objectives for 
the duration of the contract, including the restoration, protection, 
enhancement, maintenance, management, and monitoring of wetland and 
other land functions and values.
    (2) For the duration of the 30-year contract, the contract will 
require, at a minimum, that the landowner and the landowner's heirs, 
successors, and assigns will, consistent with the terms of this part, 
cooperate in the restoration, protection, enhancement, maintenance, 
management, and monitoring of the land in accordance with the contract 
and with the terms of the WRPO. In addition, the 30-year contract will 
grant to NRCS:
    (i) A sufficient right of legal access to the entire contract area 
for the duration of the contract,
    (ii) The right to authorize compatible uses of the contract area, 
including such activities as a traditional Tribal use of the land, 
hunting and fishing, managed timber harvest, water management, or 
periodic haying or grazing if such use is consistent with the long-term 
protection and enhancement of the wetland resources for which the 
contract was established, and
    (iii) The right to restore, protect, enhance, maintain, manage, and 
monitor activities on the enrolled area.
    (3) The landowner will--
    (i) Comply with the terms of the contract,
    (ii) Comply with all terms and conditions of any associated 
agreement,
    (iii) Agree to the long-term restoration, protection, enhancement, 
maintenance, management, and monitoring of the enrolled area in 
accordance with the terms of the contract and related agreements, and
    (iv) Agree that each person or legal entity that is subject to the 
contract will be jointly and severally responsible for compliance with 
the contract and the provisions of this part and for any refunds or 
payment adjustment which may be required for violation of any terms or 
conditions of the contract or the provisions of this part.
    (c) Reservation of grazing rights. (1) NRCS may include in the 
terms and conditions of an easement a provision under which the 
landowner reserves grazing rights if NRCS determines that the 
reservation and use of the grazing rights:
    (i) Is compatible with the land subject to the wetland reserve 
easement or 30-year contract,
    (ii) Is consistent with the historical natural uses of the land and 
long-term wetland restoration, protection, and enhancement goals for 
which the wetland reserve easement or 30-year contract was established,
    (iii) Is subject to a recorded exhibit to the deed outlining 
grazing purposes and limitations, and
    (iv) Complies with a WRPO developed by NRCS, which may include a 
grazing management plan component that is consistent with the WRPO and 
is reviewed and modified as necessary, at least every 5 years.
    (2) Compensation for easements or 30-year contracts where the 
grazing rights are reserved under this section will be based on the 
method described in Sec.  1468.34, except such compensation will be 
reduced by an amount equal to the value of the reserved grazing rights, 
as determined by NRCS.


Sec.  1468.38   Development and revision of the WRPO and associated 
compatible use authorizations.

    (a) The WRPO will be developed and updated as determined by NRCS in 
consultation with the State technical committee and consideration of 
available site-specific technical input from FWS at the local level and 
others as appropriate.
    (b) The WRPO will specify the manner in which the enrolled land 
will be restored, protected, enhanced, maintained, managed, and 
monitored to accomplish the goals of the program. The WRPO, and any 
revisions thereto, will be developed to ensure that cost-effective 
restoration and maximization of wildlife benefits and wetland functions 
and values will result. Specifically, the WRPO will consider and 
address, to the extent practicable, the onsite alterations and the 
offsite watershed conditions that adversely impact the hydrology and 
associated wildlife, water quality, and wetland functions and values.
    (c) The WRPO will identify the conservation practices and eligible 
activities needed to restore the functions and values on the enrolled 
land. NRCS may review, revise, and supplement the WRPO as needed 
throughout the duration of the enrollment to ensure that program goals 
are fully and effectively achieved. Revisions to the WRPO may result in 
the addition of conservation practices or eligible activities needed to 
enhance, maintain, manage, repair, replace or otherwise to protect the 
functions and values of the easement or 30-year contract area.
    (d) As required by the terms of the easement deed as described in 
Sec.  1468.37(a)(2)(ii) or 30-year contract as described in Sec.  
1468.37(b)(2)(ii), NRCS may, in its sole discretion, authorize the 
landowner to conduct compatible uses as defined in this part on the 
easement or contract area. Compatible use authorizations are time-
limited and may be modified or rescinded at any time by NRCS. In 
evaluating and authorizing compatible uses of the easement or contract 
area, NRCS will--
    (1) Consider whether the authorized use will facilitate the 
practical administration and management of the land subject to the 
easement or contract; and
    (2) Ensure that the authorized use furthers the functions and 
values for which the easement or 30-year contract was enrolled.


Sec.  1468.39   Violations and remedies.

    (a) Easement violations. (1) In the event of a violation of the 
easement involving the landowner, the landowner will be given 
reasonable notice and an opportunity to voluntarily correct the 
violation within 30 days of the date of the notice, or such additional 
time as NRCS determines is necessary to correct the violation at the 
landowner's expense.
    (2) Notwithstanding paragraph (a)(1) of this section, NRCS reserves 
the right to enter upon the easement or 30-year area at any time to 
remedy deficiencies or easement violations. Such entry may be made at 
the discretion of NRCS when such actions are deemed necessary to 
protect important wetland functions and values or other rights of the 
United

[[Page 590]]

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

Matthew Lohr,
Chief, Natural Resources Conservation Service.
Robert Stephenson,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 2019-27883 Filed 12-30-19; 4:15 pm]
BILLING CODE 3410-16-P