Agricultural Conservation Easement Program, 8113-8131 [2021-02268]

Download as PDF 8113 Rules and Regulations Federal Register Vol. 86, No. 22 Thursday, February 4, 2021 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. DEPARTMENT OF AGRICULTURE Commodity Credit Corporation 7 CFR Part 1468 [Docket ID NRCS–2019–0006] RIN 0578–AA66 Agricultural Conservation Easement Program Natural Resources Conservation Service (NRCS) and the Commodity Credit Corporation (CCC), United States Department of Agriculture. ACTION: Final rule. AGENCY: This final rule adopts, with minor changes, an interim rule published in the Federal Register on January 6, 2020. The interim rule implemented changes to ACEP that were necessitated by enactment of the Agriculture Improvement Act of 2018 (the 2018 Farm Bill) and changes for administrative streamlining improvements and clarifications. This final rule makes permanent many of the changes made in the interim rule, responds to comments received, and makes further adjustments in response to some of the comments received. DATES: Effective: February 4, 2021. FOR FURTHER INFORMATION CONTACT: Carrie Lindig, (202) 720–1882, or carrie.lindig@usda.gov. Persons with disabilities who require alternative means for communication should contact the USDA Target Center at (202) 720–2600 (voice). SUPPLEMENTARY INFORMATION: SUMMARY: jbell on DSKJLSW7X2PROD with RULES Background The 2018 Farm Bill reauthorized and amended ACEP. The 2018 Farm Bill authorized the use of the existing regulations that had been implemented under the Agricultural Act of 2014 for the remainder of FY 2019 to the extent that those regulations were consistent with the 2018 Farm Bill changes. VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 On January 6, 2020, CCC published an interim rule with request for comments in the Federal Register (85 FR 558–590) that implemented mandatory changes made by the 2018 Farm Bill or that were required to implement administrative improvements and clarifications. This final rule adopts, with minor changes, the interim rule. Discussion of ACEP (7 CFR part 1466) ACEP helps farmers and ranchers preserve their agricultural land and restore, protect, and enhance wetlands on eligible lands. The program has two components: (1) Agricultural land easements (ACEP–ALE); and (2) Wetland reserve easements (ACEP–WRE). The Secretary of Agriculture delegated authority to the Chief, NRCS, to administer ACEP. Through ACEP–ALE, NRCS provides matching funds to eligible entities that are 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. Through ACEP–WRE, NRCS protects wetlands on eligible lands by purchasing an easement directly from eligible landowners or entering into 30year 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 for acreage owned by Indian Tribes, or the maximum duration authorized by State law. Participation in either ACEP–ALE or ACEP–WRE is voluntary. The interim rule: • Incorporated changes to the ACEP purposes to limit nonagricultural uses that negatively affect agricultural uses and conservation values; • Added language to specify general monitoring responsibilities under ACEP–ALE and ACEP–WRE; • Removed references to the Regional Conservation Partnership Program (RCPP) as the 2018 Farm Bill revised RCPP as a stand-alone program, which is now in 7 CFR part 1464; • Added definitions to reflect 2018 Farm Bill changes: Buy-protect-sell (BPS) transaction, monitoring report, PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 wetland restoration, easement administration action, grazing management plan, and nonindustrial private forest land; • Removed definitions for: Active agricultural production, forest land, forest land of statewide importance, and projects of special significance; • Made changes to easement administration actions, including specifying the criteria that apply to each type of easement administrative actions; • Made revisions to the environmental markets section in response to the 2018 Farm Bill; • Removed 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; • Eliminated the requirement that land with a certain amount of forest land have a forest management plan; • Replaced the term ‘‘proposed’’ with ‘‘permitted’’ in text about the types of rights-of-way, infrastructure development, or other adjacent land uses whose impacts may cause land to be considered ineligible; • Specified that under a BPS transaction, the eligible entity for meeting payment eligibility requirements (highly erodible land and wetland conservation, and Adjusted Gross Income (AGI)) is the landowner unless the eligible entity sells the fee title to a qualified farmer or rancher prior to, or at the time of, the easement closing, in which case the farmer or rancher purchaser must meet payment eligibility requirements; • To address BPS transactions, specified that eligible lands owned by the eligible entity may be eligible for enrollment if the land is owned, on a transitional basis, to protect the land through securing an agricultural land easement on the land and to transfer fee title ownership to a farmer or rancher; • Specified eligibility requirements related to BPS transactions; • Specified that NRCS will consider eligible entity cash contribution toward the easement purchase price and measures to increase agricultural viability as ranking criteria; • Specified 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; E:\FR\FM\04FER1.SGM 04FER1 jbell on DSKJLSW7X2PROD with RULES 8114 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations • Removed 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; • Specified the incurred costs by the eligible entity associated with securing a deed to the easement that may be included in the calculation of the nonFederal share, and that the source and limit of other costs that may be included in the calculation of the non-Federal share; • Removed reference to the availability of waivers for grasslands of special environmental significance since the specific eligible entity cash contribution requirement was removed; • Added specificity to the right of enforcement conveyed to NRCS under the terms of an agricultural land easement; • Removed the requirement that the agricultural land easement be subject to an ACEP–ALE plan; • Specified 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; • Revised the requirement for a conservation plan on highly erodible cropland; • Provided that an eligible entity may include terms and conditions in the ACEP–ALE deed that are intended to keep the land subject to the easement under farmer or rancher ownership; • Removed the stand-alone section regarding ACEP–ALE plans and captured in other sections the provisions related to development of required conservation plans or development of ACEP–ALE plans as agreed-to by the eligible entity; • Incorporated two new categories under which an eligible entity may demonstrate that they meet the ACEP– ALE certification requirements and revised the criteria to require a minimum of 10 agricultural land easements under ACEP–ALE, or predecessor NRCS easement programs, for all eligible entities seeking certification; • Specified the circumstances under which NRCS may exercise its right of enforcement under ACEP–ALE, including its right of inspection; • Increased the percent of acres of total cropland in a county that may be subject to an ACEP–WRE easement to 15 percent; • Removed the requirement for NRCS to seek input from the Secretary of the Interior at the local level in the determination of eligible land; VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 • Included water quality as an additional priority along with the priority placed on acquiring wetland reserve easements based on the value of the easement for protecting and enhancing habitat for migratory birds and other wildlife; • Specified that grazing under reserve grazing rights wetland reserve easement or 30-year contract must comply with a wetlands reserve plan of operations (WRPO) developed by NRCS, which may include a grazing management plan component, and identified that the plan may be reviewed and modified as necessary, at least every 5 years; and • Included new provisions related to the evaluation and authorization of compatible uses on wetland reserve easements, including 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. Summary of ACEP Comments The interim rule 60-day comment period ended March 6, 2020, and was extended to March 20, 2020, to provide the public an opportunity to consider the January 24, 2020, correction. Seventy commenters, including individuals, organizations, and agencies, submitted comments to regulations.gov. NRCS reviewed the input from these 70 commenters in response to the rule and identified 576 comments contained within these 70 entries. NRCS reviewed these 576 comments and categorized and summarized them according to the topics identified below. The topics that generated the greatest response were on ALE ranking, ALE BPS transactions, and definitions. Overall, the comments expressed general support for the changes made in the interim rule. Six comments were not relevant to the ACEP interim rule. Ten comments expressed general support for the regulation and three comments criticized the regulation in general. These comments did not include any recommendations for change. NRCS appreciates all comments submitted and thanks each person and organization who expressed an opinion related to ACEP or the interim rule. NRCS will continue the endeavor to improve its customer service and the equitable dispensation of benefits under ACEP. In this rule, the comments have been organized alphabetically by topic. The topics include: • ALE Buy-Protect-Sell Transactions; PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 • ALE Contribution Requirements; • ALE Deed Requirements and Terms; • ALE Entity Certification; • ALE Land Eligibility Issues; • ALE Planning; • ALE Program Requirements; • ALE Ranking; • Definitions; • Easement Administration Actions; • Environmental Markets; • Fund Allocations; • Landowner Eligibility—AGI Limitation Waiver; • Program Administration; and • WRE Issues. This final rule responds to the comments received by the public comment deadline and makes minor clarifying and related changes. ALE Buy-Protect-Sell Transactions BPS transactions are arrangements under ALE, first authorized under the 2018 Farm Bill, 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. NRCS received comments related to BPS transactions, several of which expressed support for allowing BPS transactions. Remaining comments were as follows: Comment: NRCS received comment related to the requirement to sell at agricultural value except that eligible entities could charge qualified farmers or ranchers certain holding and transactions costs. These comments requested a change to the amount an eligible entity may charge the qualified farmer or rancher as part of the sale of the property, recommending either that the 10-percent limitation be removed or increased to 10 percent of the total fair market value (FMV) of the property rather than 10 percent of the agricultural value. Other comments recommended that the sale be based on appraised agricultural value (rather than lesser of appraised agricultural value or original purchase price) to avoid a potential windfall to the purchaser that might raise private benefit or other issues under federal tax law if the eligible entity is a nongovernmental organization. Response: The 10-percent limit was identified because NRCS may have to E:\FR\FM\04FER1.SGM 04FER1 jbell on DSKJLSW7X2PROD with RULES Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations recover costs if the conveyance includes more than ‘‘reasonable holding and transaction costs.’’ It is consistent with industry standards and the use of a published upper limit removes the potential for arbitrary decision making and expensive challenges in cost recovery cases. Additionally, this transaction type aims to help farmers and ranchers gain access to affordable farmland, and a limit on the holding and transaction costs that may be charged to the farmer or rancher ensures that there is no circumvention of that intent. A discussion of the federal income tax regulatory requirement that an organization described in section 501(c)(3) of the Internal Revenue Code (IRC) operate for the benefit of public rather than private interests is outside the scope of both the jurisdiction of the United States Department of Agriculture and this rule. For more information about the requirements applicable to tax-exempt organizations, including those described in section 501(c)(3) of IRC, visit the IRS’s Charities and Nonprofits page at www.irs.gov/ charities-and-nonprofits. The ACEP statute requires the sale to be at ‘‘agricultural value’’ plus any reasonable holding costs. A sale at FMV assumes that the impact of the placement of the easement on the land will result in the highest and best use of the land being agriculture, and thus agricultural value. The alternative value, the purchase price at which the entity purchased the land, would have been at most, theoretically, FMV of the land without being encumbered by the easement. If the original purchase price of the property was less than FMV of the land encumbered with the easement, then ACEP assistance through a BPS arrangement is not necessary for the entity to have a viable transaction that would result in the same outcome and could occur without an investment of taxpayer funds. This requirement ensures that eligible entities do not profit from the BPS transaction at the cost of the qualified farmer or rancher. The provision requiring the eligible entity to sell the property at the original purchase price, if lower than the appraised agricultural value, was similarly included to help farmers and ranchers gain access to affordable farmland. NRCS has clarified in the regulation that appraised agricultural value means agricultural value of the land. An eligible entity should seek tax or legal advice if a particular transaction, due to the entity’s unique circumstances, could jeopardize its tax-exempt status. In those instances, the entity can move VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 forward independently without ACEP assistance, especially if the entity would make a profit from the subsequent land transfer, which would negate the need for Federal funds. No change is made to the regulation in response to this issue. Comment: NRCS received comment requesting that the pre-closing transfer of BPS easements should allow for advance payments in addition to reimbursements. Response: NRCS selected the reimbursement-only approach for preclosing BPS transactions as it reduces the risk for cost-recovery by allowing NRCS and the entity to ensure the transaction meets all requirements prior to NRCS providing cost-share assistance. To ensure this risk is minimized across all BPS transactions, NRCS has clarified that payment of the Federal share will occur on a reimbursable basis for all BPS transaction types. Even under standard (non-BPS) ALE transactions, an advance payment may only be issued 30 days prior to closing. Therefore, the amount of time the eligible entity could be in receipt of easement funds in advance of the easement closing under the requested approach is minimal, whereas the reimbursement-only approach for BPS transactions significantly reduces risk and increases administrative savings for both the eligible entity and the Government. The regulation has been updated to make the Federal share payment provision more consistent across the BPS transaction types. Comment: NRCS received comment related to adjusted gross income (AGI) waivers; two comments suggested adding AGI waivers for entities involved in BPS transactions who play an intermediary role as landowner. Another comment suggested automatically waiving AGI for BPS transactions because entities only act as pass-through organizations for the purpose of the contract. Response: The requesting and granting of AGI waivers for landowners that the Farm Service Agency (FSA) has determined do not meet the AGI limitations must ultimately be addressed prior to providing ACEP funds. Determinations to waive AGI for landowners that do not meet the AGI limitations, as set forth in 7 CFR part 1400, must be based on a case-by-case basis. NRCS policy addresses when NRCS makes its eligibility determinations, including AGI, based on the BPS transaction type and provides maximum flexibility with respect to the timing of conducting AGI determinations. No change is made to the regulation in response to this issue. PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 8115 Comment: NRCS received comment regarding the length of ACEP–ALE agreements for BPS transactions, including request for an extension beyond the 3-year ACEP–ALE agreement length (and 12-month extension) for post-closing transfers to a qualified buyer or an extension to a 5year agreement length. Response: NRCS provides a period of 3 years, plus a potential additional 12 months, to find a qualified buyer, in addition to the initial 2-year period provided to close on the easement, for a total of 6 years for an individual transaction. NRCS selected the 12month extension for several reasons, largely based on the administrative burden associated with extending transactions further. Additionally, NRCS recognizes that post-closing BPS transactions compete for the same ACEP funds that otherwise would be available to protect land that is already owned by a private or Tribal landowner or qualified farmer or rancher. Under a post-closing BPS transaction, until transfer to a qualified farmer or rancher takes place, the intended purposes of ACEP for which the Federal funds have been invested, are not fully realized. If the property is not ultimately transferred, then those Federal funds have been rendered unavailable for 5 to 6 years during which time they could have been used to protect another property that may have met ACEP purposes from the outset. Twelve months was chosen to ensure appropriate stewardship of Federal funds. No change is made to the regulation in response to this issue. Comment: NRCS received comment requesting addition of an option to purchase at agricultural value (OPAV) for BPS agreements to maintain maximum flexibility. Response: Encumbered land under a BPS transaction must be sold at agricultural value to a qualified farmer or rancher. The ACEP statute at 16 U.S.C. 3865b(b)(4)(D)(i) specifically allows the inclusion of additional deed terms to keep the land subject to the ALE under the ownership of a farmer or rancher, which includes easement deeds that are part of a BPS transaction. However, NRCS must provide oversight to ensure that the use of an OPAV term in BPS transactions does not create an incentive for strawman sales to a qualified farmer or rancher just to meet statutory BPS requirements and then have the qualified farmer or rancher sell the land immediately back to the entity at agricultural value under the OPAV term. No change is made to the regulation in response to this issue. E:\FR\FM\04FER1.SGM 04FER1 jbell on DSKJLSW7X2PROD with RULES 8116 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations Comment: NRCS received comment recommending modification of the penalty for failure to complete BPS transactions to a sliding scale of restitution rather than full repayment. Response: The ACEP statute requires that the ‘‘Secretary shall be reimbursed for the entirety of the Federal share of the cost of the agricultural land easement by the eligible entity if the eligible entity fails to transfer ownership.’’ NRCS does not have any flexibility with respect to the level of restitution and therefore no change is made to the regulation in response to this issue. Comment: NRCS received comment requesting that eligibility for BPS transactions be expanded to include land owned by State and local governments. Response: The statute identifies ‘‘eligible land’’ as ‘‘private or tribal land,’’ which land owned by a State or local government is not. However, this limitation does not preclude the involvement of a State or local government in a BPS transaction. A state or local government can serve as the interim easement holder while a non-governmental-eligible entity serves as the landowner until the land can be transferred to a qualified farmer or rancher. No change is made to the regulation in response to this issue. Comment: NRCS received comment requesting that, in the development of its policy for BPS transactions, the entity not be required to identify the landowner or sale price during the application and agreement phase. Response: NRCS does not require the identification of the landowner or sale price during the application phase. The timing of the identification of the landowner and the sale price is specified in the ALE-agreement terms and based on the specific BPS transaction type as either a pre-closing or post-closing transfer. No change is made to the regulation in response to this issue. Comment: NRCS received comment requesting that land eligibility provisions be changed for BPS transactions, including removal of the ‘‘imminent threat’’ test example or addition of ‘‘advancing program goals’’ as a basis for eligibility. Response: To align with the ‘‘Conference Report to Accompany H.R. 2—Agriculture Improvement Act of 2018’’ (Managers’ Report), the ACEP– ALE ‘‘eligible land’’ definition for BPS transactions was modified to ‘‘allow for agricultural land to be owned by an eligible entity on a transitional basis to qualify for program participation, provided that the land subject to the VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 agricultural land easement be transitioned to farmer or rancher ownership within 3 years.’’ Due to the transitional nature of this ownership, there are risks that the Federal investment in ACEP–ALE benefits will not be fully realized, risks that do not exist with standard ALE transactions. However, in some circumstances, such as an imminent threat of development, this risk is outweighed by the benefit of placing an easement on land not owned by an otherwise eligible private or Tribal landowner at the time the Federal funds are invested in the easement. NRCS therefore states in the ACEP regulation that, to be eligible for a BPS transaction, the land must be subject to conditions that necessitate the ownership of the parcel by the eligible entity on a transitional basis prior to the creation of an agricultural land easement, and that these conditions may include land subject to an ‘‘imminent threat of development, including, but not limited to, planned or approved conversion of grasslands to more intensive agricultural uses.’’ Other conditions may also satisfy that requirement. NRCS made a slight editorial clarification in the regulation with respect to the requirement that the eligible entity must, within 12-months of the BPS agreement, have completed the initial purchase of the land or have demonstrated that completion of the purchase of the land is imminent. No other change is made to the regulation in response to this issue. Comment: NRCS received comment on the issue of merger of title in BPS transactions, including comment recommending deed term stating merger does not apply. Another comment encouraged NRCS and Office of the General Counsel to rely on an opinion of counsel eligible to practice in the State in which the ALE project is located to the effect that no merger would result through the transaction if the eligible entity: (1) Developed strong anti-merger language to allow it to grant an agricultural land easement to itself while still holding the fee title to the property, and then (2) reaffirmed the agricultural land easement at the time the eased parcel is sold to a farmer or rancher. Response: ACEP–ALE is a nationwide program and State law varies on the effectiveness of an anti-merger clause; however, in general, entities may include a no merger clause in ALE deeds. However, NRCS does not believe that the combination of an anti-merger clause with the suggested attorney’s opinion sufficiently allows an eligible entity to temporarily hold the easement and the underlying fee at the same time. PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 NRCS contemplated this proposed BPS transaction structure in response to previous public comments. The comment received does not introduce new information resulting in a different determination with respect to the legal issues of easement creation, as an easement, by definition, are the rights held by someone in the land owned by another and is created at the time of the transfer to the other person. The article supplied by the respondent reaffirmed this concept by identifying cases where courts determined that the doctrine of merger was not applicable due to the transfer of an easement to a third party. Merger of title addresses the extinguishment of an easement right due to a subsequent acquisition of fee title, while the BPS transactions present issues of easement creation. In addition to these issues, the conflict of interest inherent in this type of ownership scenario, which would impact enforcement, monitoring, and management of the easement and property, would not be mitigated by including an anti-merger provision. No change is made to the regulation in response to this issue. Comment: NRCS received comment that parcel substitutions for BPS transactions should be allowed. Response: Due to the unique and complex nature of BPS transactions, the ALE agreement includes terms that are specific to the individual transaction and ultimately constitute the ‘legal arrangement’ being entered into ‘relating to land owned . . . by an eligible entity’ for the purchase of an agricultural land easement on that particular piece of land. In contrast, the terms of the standard ALE agreement and contract appendix are applied universally to every parcel funded. No change is made to the regulation in response to this issue. Comment: NRCS received comment recommending that changes to transaction type (pre-closing versus post-closing transfer) be allowed after entering into agreement. Response: NRCS identified two types of BPS transactions in the interim rule: 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 apply to both types. NRCS will address in the terms of the ALE agreement how an eligible entity may request a modification to an ALEagreement to change between these two types of BPS transactions. No change is E:\FR\FM\04FER1.SGM 04FER1 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations jbell on DSKJLSW7X2PROD with RULES made to the regulation in response to this issue. Comment: NRCS received comment requesting clarification in the preamble as to whether a qualified farmer or rancher includes those who do not file a Schedule F, such as a farmer in an S corporation. Response: IRS Form 1040 or 1040–SR, Schedule F, ‘‘Profit or Loss from Farming,’’ is the preferred documentation and is consistent with other NRCS and USDA programs. However, NRCS will also consider circumstances in which other forms of IRS documentation identifying the landowners’ engagement in an agricultural operation may be appropriate. ALE Contribution Requirements Under both the 2014 and 2018 Farm Bills, NRCS may provide a Federal share that does not exceed 50 percent of the FMV of the agricultural land easement and requires the eligible entity to provide a share at least equivalent to that provided by NRCS, except in the case of grasslands of special environmental significance. For grasslands of special environmental significance, NRCS may provide a Federal share that does not exceed 75 percent of the easement FMV and the non-Federal share requirement is adjusted accordingly. The 2018 Farm Bill removed the 50-percent cash contribution requirement on the part of the eligible entity and identified permissible sources of the non-Federal share. NRCS received the following comments. Comment: NRCS received comment in support of removing the requirement for the eligible entity to provide a minimum cash contribution toward the purchase of the agricultural land easement and allowing donations of land by the landowner and eligible entity expenses for procured items to satisfy the nonFederal share requirements. Other comments did not support eligible entities no longer being required to provide a minimum cash contribution. Response: The regulatory changes follow requirements of the 2018 Farm Bill. No change is made to the regulation in response to this issue. Comment: NRCS received comment suggesting changes to how NRCS structured the non-Federal share in the regulation. They asked that the ‘‘and’’ at the end of the list be replaced with an ‘‘or.’’ Response: NRCS is clarifying that the sources comprising the non-Federal share are listed in order, and proceeding through the list, once the minimum non-Federal share amount is met, VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 additional sources and amounts do not need to be identified. Additionally, given that an eligible entity’s contribution may be related to cash resources expended for the purchase of the land prior to the easement transaction, NRCS has clarified in the regulation that for BPS transactions, part of the non-Federal share provided by an eligible entity may include that portion of the fair market value of the agricultural land easement that is not provided as the Federal share. Comment: NRCS received comment requesting clarification about the timing and the type of documentation that would be required for procured costs incurred by the eligible entity if relied upon to meet the non-Federal share requirement. Response: The regulation states that documentation requirements for procured costs are included in the ALE agreement. NRCS recognizes that, at the time of agreement, costs for procured items are estimated amounts and have not yet been incurred. Such estimates are needed in order to calculate the amount of the Federal share that may be obligated. No change is made to the regulation in response to this issue. Comment: NRCS received comment requesting that baseline reports and mineral assessments be added to the list of procured costs that may be included in the non-Federal share. Response: NRCS added baseline reports and mineral assessments to the list of items that may be included in the non-Federal share if these items are procured by the eligible entity from third parties. Comment: NRCS received comment asking that a Federal share of up to 75 percent of easement costs be provided in communities that do not have eligible entities present. Response: The statute limits NRCS’s authority to provide a Federal share of up to 75 percent of the easement value to grasslands of special environmental significance only. No other types of transactions are authorized to receive up to 75 percent of the easement value, including transactions that occur in communities that do not have an eligible entity present. No change is made to the regulation in response to this issue. Comment: NRCS received comment requesting a change to clarify that the non-Federal share provided by the eligible entity for ACEP–ALE grasslands of special environmental significance must comprise the difference between the Federal share and the remainder of the FMV. The comment requested removal of the provision that, in the PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 8117 event the non-Federal share provided by the eligible entity is less than such amount, NRCS will provide a Federal share equivalent to the non-Federal share being provided. Response: The interim rule mirrors the statute. Additionally, the language allows for the possibility that, in the event that the non-Federal share provided by the eligible entity does not comprise the difference between the Federal share and the remainder of the FMV of the easement, NRCS could still provide a lesser amount that is equivalent to the non-Federal share. Although this is unlikely, removing the language from the regulation would eliminate this possibility. No change is made to the regulation in response to this issue. ALE Deed Requirements and Terms NRCS received comment related to the topic of ALE deed requirements and deed terms as follows: Comment: NRCS received comment related to the ALE deed template review, recommending that the deed template review be limited to ensuring that the minimum deed terms are incorporated and that other terms are not contrary to the purpose of ACEP. Response: The NRCS review of ALE deed templates focuses on ensuring that minimum deed terms (MDT) are incorporated and ensuring other terms are not contrary to the purpose of the program. Review of other items may be necessary to ensure that the document will work effectively as a template for the acquisition of agricultural land easements on multiple parcels. No change is made to the regulation in response to this issue. Comment: NRCS received comment about deed provisions related to agricultural use, including a request to strike the phrase ‘‘consistent with agricultural use’’ and replace it with the phrase ‘‘does not negatively affect agricultural use’’ as to commercial uses. Another comment recommended that NRCS limit its ability to impose greater deed restrictions in instances where the State definition of agricultural uses may result in the degradation of the soils, agricultural nature of the land, or related natural resources. Response: This phrase ‘consistent with agricultural use’ is unchanged from the previous ACEP regulation and is expansive enough to apply to farmland and grassland enrollments and is sufficient to prevent commercial uses that may negatively affect agricultural uses. NRCS may impose deed restrictions needed to ensure ACEP– ALE purposes will be met in exchange for the Federal investment. No change is E:\FR\FM\04FER1.SGM 04FER1 jbell on DSKJLSW7X2PROD with RULES 8118 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations made to the regulation in response to this issue. Comment: NRCS received comment expressing general support for various elements of the deed requirements set forth in the interim rule, including commending NRCS for the revised mineral development language; language regarding an entity’s use of their own deed terms and conditions; and supporting the U.S. right of enforcement and right of inspection language in the interim rule. Response: NRCS thanks respondents for their input. No change is made to the regulation in response to these issues. Comment: NRCS received comment related to amendment clauses that must be included in each agricultural land easement deed, recommending splitting the amendment provision in the regulation to avoid confusion between ‘‘amendments’’ and the various types of easement administration actions (subordination, modification, exchange, and termination actions). Response: NRCS appreciates the request for clarification regarding the requirement that each agriculture land easement deed include clauses that address amendments or changes that may occur after recordation of the easement. To clarify, NRCS uses the term ‘‘amendment’’ in the regulatory deed requirement in § 1468.25(d)(4) broadly to include each type of easement administration action: Subordination, modification, exchange, and termination. In practice, NRCS provides two separate clauses in the minimum deed terms to address this regulatory deed requirement and fully encompass the various types of easement administration actions. NRCS revised the text in the final rule to clarify and remove ambiguity regarding the various types of changes to the easement deed or easement area that must be approved in advance by NRCS. Comment: NRCS received comment regarding the interim rule’s impervious surface limitations that must be specified in ACEP–ALE easement deeds, including comments recommending that NRCS authorize a blanket impervious surface waiver to ACEP–ALE easement deed language and cap the waiver authority at 5 percent of the easement area. Response: The impervious surface limitation and the current cap are wellestablished. NRCS explained in prior rulemakings the basis for its use of a 2-percent limitation and the flexibility of having a waiver that allows up to 10 percent based upon site-specific factors. In particular, this limitation provides a reasoned balance between ensuring the future capacity of agricultural land use VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 with flexibility to allow for changes to the agricultural operation. NRCS requires a parcel-by-parcel determination because impervious surface limitations are site-specific. NRCS will not approve a blanket waiver or grant eligible entities a right to create blanket waivers for a greater impervious surface limit. However, there is an existing waiver option available that may have been underutilized. Specifically, when an eligible entity has a waiver process consistent with NRCS limitations and it is based on parcel-by-parcel determinations made by the entity, the entity may request authority from NRCS to use its own process. In this case, separate individual parcel waivers from NRCS would not be necessary. No change is made to the regulation in response to this issue. Comment: NRCS received comment regarding the subsurface mineral deed provisions. The comments requested: • A requirement that native plants be used to remediate subsurface mining impacts; • A requirement that involves State technical committees when determining impact of mineral development; • That NRCS seek guidance on timing and responsibility for the development of the subsurface development plan; and • That NRCS provide flexibility in the identification of de minimis gravel extraction sites. Response: NRCS recognizes the preference for the use of native plants for remediating sites in general, but the determination of the appropriate vegetation for any particular easement must be based upon site-specific factors. While the State technical committee can provide input on the impact of mineral development to particular land uses or locations in the State, such input would be inappropriate on an individual easement basis. The eligible entity is responsible for providing the subsurface mineral development plan to NRCS, which must be approved by NRCS prior to initiation of the mineral development activity, as set forth in § 1468.25(d)(7)(v). The de minimis gravel extraction matter is not a regulatory issue but the comment responds to text that exists in the current minimum deed terms. NRCS would like to clarify that de minimis gravel extraction is through surface methods and therefore not encompassed by the subsurface mineral deed. Additionally, the current minimum deed terms authorize such de minimis gravel extraction for on-farm purposes. No change is made to the regulation in response to these issues. PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 Comment: NRCS received comment recommending that certified entities need not be required to seek NRCS approval for subdivision and other activities that currently require NRCS approval under regulatory deed requirements and allow only notice to NRCS of these actions as sufficient. Response: The interim rule language did not change from prior rules. Certified entities have broad discretion already but still must meet regulatory deed requirements. NRCS, as a fiduciary, must approve those actions that can so fundamentally affect program purposes. Comment: NRCS received comment with respect to the requirement of the United States right of enforcement in the agricultural land easement deed, including request that a reference to § 1468.28 be added to the right of enforcement definition, recommendation that the word ‘‘contingent’’ should be inserted before the term ‘‘United States right of enforcement’’, and a statement that the right of enforcement does not include the ability of the NRCS enforce the terms of an ALE plan if such a plan exists. Response: NRCS removed the term ‘‘contingent’’ many years ago to remove confusion that such right is a currently vested right. The term ‘‘contingent’’ indicates that NRCS’s exercise of its right of enforcement is conditioned on particular events. It does not mean that the right itself is contingent, such that it would only be vested upon some future event. NRCS has not included any cross references to the various sections which relate to the United States right of enforcement in the definition itself since such cross-referencing is unnecessary. Agricultural land easements acquired under the 2018 Farm Bill are not required to have or be subject to an ALE plan. NRCS enforces highly erodible land conservation plans on highly erodible cropland as required by the ACEP–ALE statute; however, NRCS does not otherwise identify in the regulation the enforcement of an ALE plan. No change is made to the regulation in response to this issue. Comment: NRCS received comment stating that the statutory requirement of providing notice and right to participate when exercising the right of inspection should be added to the rule and deed terms. Response: The circumstances under which NRCS may enter upon and inspect an easement pursuant to the United States right of enforcement is E:\FR\FM\04FER1.SGM 04FER1 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations jbell on DSKJLSW7X2PROD with RULES included in the full right of enforcement clause provided to all eligible entities and must be used in all ACEP-funded agricultural land easement deeds. The ACEP regulation clarifies that NRCS will provide the agricultural land easement holder and the landowner a reasonable opportunity to participate if NRCS exercises its right of inspection. Comment: NRCS received comment recommending that deed terms should allow site potential tree height (SPTH) forested riparian buffers as a permissible provision in western Washington. Response: The ACEP regulation includes a ‘‘catch-all’’ provision that allows States to have additional minimum deed terms. NRCS recommends that the commenters and any stakeholders with similar concerns should work with their applicable State Conservationist. No change is made to the regulation in response to this issue. Comment: NRCS received comment related to how the ALE-agreement references the deed requirements. Response: The ALE agreement must specify the deed requirements as set forth in the regulation so that they are enforceable. ALE Entity Certification NRCS received comment related to ALE entity certification as follows: Comment: NRCS received comment on the term of agreements with certified eligible entities recommending that NRCS allow for a minimum 5-year term. Response: NRCS is changing the regulatory language in response to this comment to specify that agreements with certified entities will be for a minimum of 5 fiscal years following the fiscal year the agreement is originally executed, but may not exceed 7 fiscal years following the fiscal year the agreement is originally executed. NRCS has found that an upper limit is necessary to limit the administrative burden associated with implementing agreements that cross different farm bills. Comment: NRCS received comment urging NRCS to expand eligibility for certification for State agencies, recommending a broadening of language for which types of prior conservation easements would be counted, and requesting that NRCS drop the number of required prior conservation easement transactions from 10 to 5. Response: The terms for certification of State agencies are set forth in statute, including the type of easements that can be counted and the number of prior transactions required, and NRCS does not have discretion to waive or amend those provisions. No change is made to the regulation in response to this issue. VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 Comment: NRCS received comment requesting additional guidance on the entity certification process, including evaluation criteria, how NRCS will address partnerships between certified and non-certified eligible entities, what technical assistance NRCS may provide to certified entities (with regards to things like title review and appraisal), the benefits of certification, and the definition of a plan for administering easements. The comment detailed recommendations about the kind of transparency NRCS should have for its process and the timeline. Another comment requested a streamlined process for certifying eligible entities, including State agencies and land trusts. Response: The internal certification review process is found at 440 Conservation Programs Manual (CPM) Part 528 and may be accessed at https:// directives.sc.egov.usda.gov/. NRCS will continue its ongoing efforts to streamline processes through new business tools to be as efficient and effective in program delivery as possible while operating within legal authorities. NRCS will continue to make publicly available any new policy or guidance. No change is made to the regulation in response to this issue. Comment: NRCS received comment expressing support for changes made in the interim rule to the entity certification process. Response: NRCS appreciates this support. ALE Land Eligibility Issues NRCS received comment related to ALE land eligibility as follows: Comment: NRCS received comment about forest land eligibility issues. Many supported maintaining the two-thirds limitation on non-industrial private forest land (NIPF) eligibility under ACEP–ALE and offered that programs like the Regional Conservation Partnership Program (RCPP), Healthy Forests Reserve Program (HFRP), and Forest Legacy Program can all be used currently to protect forest lands. Another comment requested the twothird limitation on NIPF in ACEP–ALE be struck. Response: To minimize duplication, overlap, and conflict with other USDA forest easement programs, the interim rule and this regulation maintain the existing eligibility provision that land enrolled in ACEP–ALE cannot include NIPF greater than two-thirds of the ACEP–ALE easement area unless waived by NRCS with respect to forest lands dedicated to sugar bush that contribute to the economic viability of the parcel. PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 8119 NRCS specifically requested public comment in the interim rule on whether RCPP or HFRP could protect lands on which NIPF is the predominant use at levels beyond the scope of ACEP–ALE. Regarding the two-third limitation, NRCS cannot authorize parcels that are 100 percent NIPF because statutory eligibility criteria is phrased as NIPF contributing to the economic viability of an offered parcel or serving as a buffer to protect land from development. Thus, the eligibility of NIPF is in relationship to other eligible land. This has long been NRCS’s interpretation of this eligibility criterion under ACEP–ALE and its predecessor Farm and Ranch Lands Protection Program. Congress specifically rejected language that would have expanded eligibility in the 2018 Farm Bill. NRCS concurs that the availability of other USDA easement programs that specifically protect forested lands warrants the continued focus of ACEP–ALE more broadly on other agricultural lands. No change is made to the regulation in response to this issue. Comment: NRCS received comment about the definition of grasslands of special environmental significance (GSES) under ACEP–ALE, including support for the definition of GSES and the prioritization and management of native vegetation and habitats in relationship to GSES. A comment also encouraged the return of land to heritage marshes and vernal pools wherever possible on GSES enrollments. Another comment supported allowing only native vegetation to be categorized as GSES. Response: NRCS believes that the current GSES definition supports the recommendation about prioritization of native vegetation and habitat. In particular, the GSES definition identifies sensitive or declining native prairie or grassland types or grasslands buffering wetlands. However, there are grasslands that, while not native vegetation, provide critical habitat for at-risk species that warrant the increased Federal investment to protect. Thus, NRCS will not limit GSES to native vegetation only. No change is made to the regulation in response to this issue. Comment: NRCS received comment related to ALE land eligibility, including: • A request that confined animal feeding operations (CAFOs) not be eligible for an ALE-funded easement; • A comment addressing the ineligibility criteria related to on-site and off-site conditions; • A comment commending NRCS for including criteria related to permitted E:\FR\FM\04FER1.SGM 04FER1 jbell on DSKJLSW7X2PROD with RULES 8120 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations rights-of-way and requesting that NRCS clarify how off-site conditions are deemed suitable for the purpose of making ALE land eligibility determinations; • A comment requesting that NRCS broaden the definition of access and the eligibility requirements so that air access can qualify; and • A comment requesting additional clarification as to whether a farmer or rancher can participate in both ALE and Conservation Reserve Program (CRP). Response: For any proposed easement containing a CAFO, the confined area is a heavy use area that must be evaluated by NRCS to determine if the on-site or off-site conditions render the site ineligible and make a determination as to whether the land meets the required land eligibility criteria. This is a casespecific determination and broad categorization of land eligibility simply based on type of operation is not appropriate. NRCS has set forth in national policy, which is publicly available, the procedures and forms NRCS uses to make land eligibility determinations for ACEP–ALE, including assessing the potential of onsite and offsite conditions to undermine the purposes of ACEP. Ultimately, land eligibility determinations are site-specific and rely upon programmatic and technical assessments based on criteria set forth broadly in national policy and more specifically at the State level. For more information, see: 440 CPM part 528 at https://directives.sc.egov.usda.gov/. Legal access to agricultural land easements is critical to the ability of the eligible entity, and NRCS, under its right of enforcement, to monitor and enforce the terms of the easement and ensure that program purposes are achieved. Effective monitoring and enforcement ultimately require ground inspection and verification. Access to an easement that can only be achieved by aircraft would require both the eligible entity and NRCS to maintain, in perpetuity, aircraft that can provide personnel access to monitor and land on the easement property and would require the landowner to maintain, in perpetuity, a landing strip or helipad on the property. NRCS does not maintain its own aircraft for easement monitoring purposes and cannot evaluate the safety and suitability of aircraft owned by the eligible entity or the landowner’s landing strip or helipad. All lands that do not have sufficient legal, physical access are ineligible to receive Federal funds under ACEP, including those that are only accessible by air. The 2018 Farm Bill specifies that a farmer or rancher who owns eligible VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 land subject to an agricultural land easement may enter into a CRP contract. Determinations of land eligibility for enrollment in CRP are under the purview of FSA and we have therefore shared the comment with FSA. No change is made to the regulation in response to these issues. ALE Planning NRCS received comment related to ALE planning and ALE plans as follows: Comment: NRCS received comment related to ALE planning generally and some of them urging NRCS to require a grassland management plan for grasslands of special environmental significance given the higher environmental value of these easements. Another comment recommended that NRCS continue to encourage planning on ALE easements, while a comment did not support how NRCS encouraged planning. Response: The 2018 Farm Bill removed language requiring that ACEP– ALE easements enrolled under the 2018 Farm Bill be subject to an ALE plan, including grasslands of special environmental significance. However, in the Managers’ Report, the Managers ‘‘encourage USDA and eligible entities to work with landowners entering into an ALE easement to undertake conservation planning activities on their land in order to maximize the environmental value of the protected land.’’ Therefore, NRCS will continue to encourage planning on ACEP–ALE enrollment, including grasslands of special environmental significance. No change is made to the regulation in response to this issue. Comment: NRCS received comment strongly supporting the recognition ALE plan as a measure that maintains or increases the agricultural viability of the land in the ranking criteria, and identified that the ranking criterion should strongly weight ALE plans for grasslands of special environmental significance and that a plan should be required for any application that is prioritized based on carbon sequestration or climate change resiliency goals. Another comment expressed that an ALE plan should not be recognized in the ranking criteria because it is no longer required by statute. Response: As described in the preamble of the interim rule, NRCS identified that the development and maintenance by the eligible entity of an ACEP–ALE plan could be a ranking consideration at the State level to prioritize applications from eligible entities. NRCS believes that conservation planning is the base upon PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 which sound conservation stewardship originates. To eliminate support for planning would undermine the quality of stewardship that would be encouraged on lands in which the public provides a sizable financial investment. Additionally, as a ranking criterion this consideration does not prohibit eligible entities from being able to access program funding but instead acknowledges that eligible entities committed to long-term conservation planning are helping to ensure an agricultural land easement yields the greatest benefits for the landowner, conservation, and the public funds invested in that easement. No change is made to the regulation in response to this issue. Comment: NRCS received comment related to the definition of the ALE plan, with some advocating for the removal of the ALE plan definition entirely because plans are no longer mandated by statute. Another comment supported the definition of ALE plans and commended NRCS for clearly defining that the plan is developed by the eligible entity and not as a component of the deed. Comment also expressed support for limiting conservation plans to only highly erodible croplands. Response: NRCS supports conservation planning as the cornerstone of land stewardship efforts. NRCS retained the definition of the ALE plan in the ACEP regulation. No change is made to the regulation in response to this issue. ALE Program Requirements NRCS received comment related to ALE program requirements as follows: Comment: NRCS received comment requesting clarification as to how NRCS will determine if a landowner entity is compliant with AGI. Response: NRCS uses the AGI eligibility determinations made by the FSA. NRCS accesses such determinations through the agencies’ shared database services. No change is made to the regulation in response to this issue. Comment: NRCS received comment related to the requirement that eligible entities must provide evidence of their financial capacity for transactions in which the non-Federal share does not include at least a 10-percent cash contribution from the eligible entity for payment of easement compensation to the landowner. Other comment requested removal of the requirement that the entity provide specific evidence of funds available for stewardship of the easement and suggested that entity eligibility requirements that apply to all ACEP–ALE transactions regardless of E:\FR\FM\04FER1.SGM 04FER1 jbell on DSKJLSW7X2PROD with RULES Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations entity cash contribution amounts are sufficient. Other comment commended NRCS on including the requirement but requested clarification as to what would constitute specific evidence of funds available for stewardship. Response: All entities must demonstrate capability and capacity as an eligibility requirement. Under the 2014 Farm Bill, NRCS could use an entity’s ability to provide at least the required cash contribution amount for all ACEP–ALE transactions as an indication that the entity is able to meet capability and capacity requirements. Where an entity is unable to provide at least a minimum cash contribution, questions arise as to the entity’s financial capacity to assume responsibility for the easement acquisition. NRCS has, therefore, specified in the regulation the conditions under which additional capability and capacity evidence will always be required. However, it is always the entity’s responsibility to establish that it meets basic ACEP–ALE eligibility requirements and as identified in the rule, the entity must provide to NRCS sufficient information to establish that the applicable entity eligibility criteria have been met. Comment: NRCS received comment recommending that the definition of a farm or ranch succession plan be expanded to include transfers of land and deeds to non-relatives and other long-term protections for agricultural productivity. Also, comment recommended specifying that successions plans may include options to purchase at agricultural value or preemptive purchase rights. Response: The key part of a succession plan is that the landowner makes arrangements for the future management of the land as a farm or ranch once the landowner retires or dies. NRCS does not limit those types of arrangements. The definition of the succession plan in the regulation used intra-family succession agreements or business asset transfer strategies as examples. NRCS has added language to clarify that the examples included in the definition are not all-inclusive. Comment: NRCS received comment related to the easement valuation methods available under ACEP–ALE, encouraging NRCS to provide guidance on information required for easement valuation methods used other than the Uniform Standards of Professional Appraisal Practice (USPAP) appraisals, including areawide market analysis or other industry-approved methods. Comment also expressed support for the current availability of ACEP–ALE VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 valuation options beyond USPAP appraisals. Response: NRCS provides guidance in policy with respect to what is required if an eligible entity elects to use an alternative easement valuation methodology, including a ‘‘Specification and Scope of Work for Areawide Market Analysis for ACEP–ALE.’’ These items are published and publicly available in NRCS directive Title 440, Conservation Programs Manual (440–CPM), Part 528, Section 528.53, and in 440–CPM, Part 527, Subpart E, which can be accessed on the NRCS Electronic Directives system at https:// directives.sc.egov.usda.gov/. No change is made to the regulation in response to this issue. Comment: NRCS received comment recommending that NRCS be required to consult with the State technical committee on ACEP–ALE prioritization for ranking, special eligibility, and all other State-decided criteria. Response: Statutory authority states that State technical committees assist in implementation and technical aspects of conservation programs under Title XII of the Food Security Act, such as ACEP. Sections 1468.2 and 1468.22 of the ACEP interim rule incorporate this role, including that State technical committees provide input on the development of ranking criteria and other matters. No change is made to the regulation in response to this issue. Comment: NRCS received comment related to the ACEP–ALE application process and the new option for ALEprogram agreements, requesting that NRCS make the application form and new option for ALE-program agreements form more usable and that the process be streamlined. Other comments wished to have greater guidance about how producers could participate and supported the new ALE program agreement option and requested additional clarification regarding its availability. Response: NRCS appreciates the complexity of easement transactions, including the extent of information that must be collected from applicants and participants on various program forms. NRCS has made several efforts to streamline the ACEP–ALE enrollment process. In FY 2020, NRCS released various new or updated forms used to administer ACEP–ALE. Additionally, NRCS piloted in fiscal year 2019 and is implementing more widely in fiscal year 2020 the use of ALE program agreements, making available several automated eligibility and payment processes previously only available to NRCS financial assistance programs. Also, the use of a program agreement PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 8121 framework under ACEP–ALE allows NRCS and eligible entities to more easily address enrollment changes, such as parcel substitution or acreage modifications. Since NRCS does not receive landowner applications directly for ACEP–ALE enrollment, NRCS will provide outreach to States to help landowners interested in ACEP–ALE identify eligible entities in their geographic area. No change is made to the regulation in response to this issue. Comment: NRCS received comment recommending that NRCS allow water supply entities to participate in ACEP– ALE as eligible entities. Response: An eligible entity must meet the definition of an eligible entity established by statute and incorporated into the ACEP regulation. NRCS does not have authority to expand the basic eligible entity definition. No change is made to the regulation in response to this issue. ALE Ranking NRCS received comment related to ALE ranking as follows: Comment: NRCS received comment related to removing the factor associated with national ranking criterion that takes into consideration whether the cash contribution is being provided by the eligible entity toward the payment of easement compensation to the landowner. Other comments: • Recommended consideration of State and local tax incentives be added to this factor; • Recommended NRCS prioritization of landowner donation in the ranking; and • Agreed with including the eligible entity’s cash contribution in the ranking. Response: The Managers report introduced flexibilities to provide better access to ACEP in States where conservation easement funding is limited. The Managers stated that they did not intend for NRCS to reject cash matches entirely but broadened the options available to eligible entities. NRCS recognizes that any time the eligible entity’s cash contribution is reduced, the landowner receives less compensation for the sale of an easement on their land, which may result in ACEP funds being the only funds paid to the landowner for the easement. Additionally, the increased donation by the landowner will frequently satisfy the minimum nonFederal share requirement under ACEP– ALE. By considering the cash contribution as a positive attribute in ranking, NRCS is encouraging enrollment while ensuring that ACEP is implemented equitably. Each State has E:\FR\FM\04FER1.SGM 04FER1 jbell on DSKJLSW7X2PROD with RULES 8122 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations the ability to calibrate the relative importance of cash contributions in the prioritization of applications for enrollment in that State. No change is made to the regulation in response to these issues. Comment: NRCS received comment related to ranking priority for actions related to the future, agricultural, and long-term viability of enrolled land. Comment supported adding information to the succession plan portion of the ranking, such as specifically identifying OPAV, Purchase of Development Rights (PDR), and other succession planning options that maintain agricultural viability or awarding points for innovative succession requirements. Comment also: • Recommended expanding the ranking criteria to prioritize applications that increase opportunities for historically underserved farmers; • Supported the maintenance of agricultural viability as a ranking criterion; including supporting its inclusion as both a national and State ranking factor; • Suggested that such inclusion is duplicative; • Recommended that agricultural viability be included in the national ranking criteria; and • Recommended that succession planning be removed from the ranking criteria. Response: Based on national and State ranking criteria in the ACEP regulation, NRCS at the State level develops ranking factors and associated weights. Broadly identifying State ranking criteria in the regulation provides the needed flexibility for States to develop the specific ranking criteria that best address State and local priorities. Regarding long-term maintenance of agricultural viability, the national ranking criteria ensures, consistent with the statute, that this criterion is considered in every ACEP–ALE application by assessing whether a succession plan exists. The existence of State ranking criteria enables States to develop nuanced approaches to address long-term agricultural viability, which may include more specific identification or prioritization of certain types of succession plans or succession planning strategies. NRCS does not wish to limit agricultural landowners’ choices or restrict who could be involved in succession planning. Such specificity is not necessary in the regulation itself. NRCS includes in the regulatory definition of a farm or ranch succession plan strategies that create opportunities for historically underserved landowners. NRCS also includes a State VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 ranking criterion related to the multifunctional benefits of farm and ranch land protection, of which social and economic considerations may be included. No change is made to the regulation in response to these issues. Comment: NRCS received comment about eliminating the potential for prioritization of applications for which eligible entities agree to use the ACEP– ALE minimum deed terms. Response: In the interim rule, NRCS indicated that it may prioritize transactions where an eligible entity uses NRCS’s standard set of minimum deed terms. This potential prioritization also existed for enrollment during the 2014 Farm Bill and its inclusion as a factor in the State’s ranking criteria is at the State’s discretion. An eligible entity’s use of the standard set of minimum deed terms streamlines the easement approval process and eliminates the need for NRCS review of the conservation easement deed for individual transactions. The efficiency by which easement transactions are completed, including the use of available administrative streamlining options, is an appropriate consideration in ranking, and no change was made in this final rule. No change is made to the regulation in response to this issue. Comment: NRCS received comment related to the State ranking criteria for multifunctional benefits for the protection of a particular farm or ranch, recommending that NRCS at the State level have the option to specify ‘other related conservation benefits’ under this multifunctional benefits criterion. Comment also recommended adding ‘species of economic significance’ to the consideration for at-risk species protection under this ranking criterion. Another comment recommended the criteria be ‘other related benefits,’ striking ‘conservation’ from the consideration, and other comments recommended that NRCS add ranking criteria about related conservation values. Response: NRCS agrees that evaluating the multifunctional benefits that may result from parcel protection is an important prioritization criterion. NRCS has enumerated in the regulation some potential benefits that may be considered and has included ‘other related conservation benefits’ to provide States with the flexibility to identify such conservation benefits and establish the associated ranking factors and priorities. NRCS believes the State ranking criterion is sufficiently expansive for NRCS to tailor ranking factors at the State and local level. No PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 change is made to the regulation in response to this issue. Comment: NRCS received comment and appreciation related to various State ranking criteria, including requesting that NRCS provide specific references to geographic differences for States to use in ranking. Other comment stated that prioritizing land in areas zoned for agricultural use may inadvertently exclude agricultural lands. Comment also recommended that protection of native prairie and other native habitats, including protection or improvement of habitat for pollinators, be added to the State ranking criteria related to the diversity of natural resources to be protected or improved, and requested that riparian buffers be ranked as the highest ACEP–ALE priority. Response: NRCS believes that the regulation provides a sufficient framework under which the various items brought forth in these comments can all be addressed at the State level with input from the State technical committee. No change is made to the regulation in response to these issues. Comment: NRCS received comment related to various national ranking criteria. One comment indicated that it is contradictory to limit forest land enrollment to two-thirds of an easement area while also having the extent of forestland as part of a ranking criterion. Another comment encouraged NRCS to clarify in the regulation that it will use the ‘median’ county average farm size and requested higher priority be given to parcels adjacent to existing easements or protected areas. Response: Comment related to forest lands refers to the national ranking criteria for the percent of cropland, rangeland, grassland, historic grassland, pastureland, or nonindustrial private forest land permitted in a protected parcel. Each State is able to tailor the specific ranking factor to prioritize enrollment of land that contains the amounts and types of land and agricultural uses that are most at risk in their State. For example, a western State may establish the ranking factor to prioritize parcels with a larger percentage of historic grassland since those lands may be at the greatest risk of conversion. In contrast, a midwestern State may prioritize the percentage of cropland in a parcel since those lands may be at the greatest risk of conversion. Comment regarding median county average farm size refers to the national ranking criteria that considers the ratio of the size of the parcel compared to the average farm size in the county. As identified in the regulation, the USDA Census of Agriculture is the data source for this national ranking criterion; the E:\FR\FM\04FER1.SGM 04FER1 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations jbell on DSKJLSW7X2PROD with RULES term ‘average size of farm’ is contained in the Census. Based on ALE application and enrollment data, use of this nationally available data item continues to be appropriate. NRCS affirms that proximity to other protected lands continues to be one of the national ranking criteria set forth in the regulation. No change is made to the regulation in response to these issues. Comment: NRCS received comment recommending that NRCS allow ACEP– ALE eligible entities to participate in State technical committee recommendations for ACEP–ALE ranking determinations. Response: Eligible entities may participate in the State technical committee; however, they may not participate in developing ranking factors for programs in which they participate. If potential participants had input into ranking factors, NRCS selection decisions would be suspect. NRCS will provide training to State offices describing the roles of eligible entities. No change is made to the regulation in response to this issue. Comment: NRCS received comment supporting various aspects of the ACEP– ALE ranking provisions, including: Commending NRCS for not using cost as a ranking criterion; commending NRCS’s consideration of proximity to other protected land as a ranking criteria; and commending the straightforward implementation of ranking that allows States to prioritize parcels through ranking criteria. Response: NRCS appreciates the comments. Comment: NRCS received comment recommending landowners who have protected their land through ACEP–ALE receive priority for funding under NRCS’ financial assistance programs, such as the Environmental Quality Incentives Program (EQIP). Response: NRCS receives input on program priorities, including priorities for enrollment in its financial assistance programs, from the State technical committees. There is no need to identify priorities for other programs’ enrollment in the ACEP regulation. No change is made to the regulation in response to this issue. Definitions NRCS received comment related to the definitions in the ACEP interim rule as follows: Comment: NRCS received comment related to the terms ‘‘future,’’ ‘‘agricultural,’’ and ‘‘long-term’’ with respect to the term ‘‘viability.’’ Comment recommended that greater consistency be applied throughout the VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 final rule for the three terms with respect to the term ‘‘viability;’’ the definition of ‘‘agricultural viability,’’ as referenced in the Managers’ Report language, be clarified; and various items be added to, or deleted from, the definition of ‘‘future viability.’’ Response: Since the creation of ACEP in the 2014 Farm Bill, the statute uses the phrase ‘‘agricultural use and future viability’’ in the program purposes statement. In response to comments on the February 2015 ACEP interim rule, NRCS included a definition of ‘‘future viability’’ to identify that ACEP–ALE purposes include the legal, physical, and financial conditions under which the land itself will remain capable and available for continued sustained productive agricultural or grassland uses. The 2018 Farm Bill maintained the reference to ‘‘agricultural uses and future viability’’ in the context of the program purposes and introduced the term ‘‘agricultural viability’’ in the context of potential application prioritization. NRCS believes that the existing definition of ‘‘future viability,’’ which is sufficiently expansive without being overly prescriptive, includes such concepts as accessibility to beginning farmers or ranchers and continued affordability. To address the request for clarity, NRCS has included a reference to the adoption of a farm or ranch succession plan as another example of a condition that supports the future viability of the protected land. Comment: NRCS received comment related to the definition of historically underserved landowner, recommending that socially disadvantaged farmers be specifically identified, be included in the definition of historically underserved landowners, and be added to the definition of ‘‘socially disadvantaged farmer or rancher.’’ This comment refers to the provision in the interim rule associated with farm or ranch succession planning that identifies new or beginning farmers or ranchers, veteran farmers or ranchers, or ‘‘other historically underserved landowners.’’ Response: The definition of historically underserved landowner includes beginning, limited resource, socially disadvantaged, and veteran farmer or ranchers. As a result, the definition of farm or ranch succession plan has been modified in this final rule to refer simply to ‘‘historically underserved landowner’’ since this term is all-encompassing. The definition of socially disadvantaged farmer or rancher has been in the definitions section since the ACEP regulation was first promulgated in 2015. PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 8123 Comment: NRCS received comment that suggested replacing the concept of watersheds with ‘‘watershares.’’ Response: NRCS has long been involved in watershed and watershed planning, and the term ‘‘watershares’’ is not a universal term. No change is made to the regulation in response to this issue. Comment: NRCS received comment requesting that the definition of ‘‘riparian areas’’ be modified to eliminate the ‘‘movement for wildlife’’ as an element. Response: The definition of riparian areas has long included reference to the movement of wildlife as it is one of the critical functions of riparian areas. No change is made to the regulation in response to this issue. Comment: NRCS received comment requesting removal of reference to species that are ‘‘likely to undergo’’ population decline from the definition of ‘‘at-risk species.’’ The commenter objected to an unnamed agency imposing restrictions through an unknown process. Response: The interim rule identified the determination of ‘‘likely to undergo population decline’’ is made by the NRCS State Conservationist, with advice from the State technical committee or Tribal Conservation Advisory Council. The definition is shared across NRCS conservation programs, all of which are voluntary. No change is made to the regulation in response to this issue. Comment: NRCS received comment requesting a change to the definition of ‘‘agricultural commodity’’ so that the intent to harvest annually rather than tillage is used as the determining mechanism. Response: The definition of agricultural commodity is contained in statute. No change is made to the regulation in response to this issue. Easement Administration Actions NRCS received comment related to easement administration actions as follows: Comment: NRCS received comment related to the identification of the sequencing procedures under the National Environmental Policy Act (NEPA) with respect to easement administration actions, recommending that easement administration actions related to sequencing considerations be classified as categorical exclusions for NEPA analysis. Other comment suggested that the provision be amended to eliminate NEPA sequencing review if the easement administrative actions either enhance purposes of the ACEP–ALE program or do not materially threaten the ALE’s protection E:\FR\FM\04FER1.SGM 04FER1 jbell on DSKJLSW7X2PROD with RULES 8124 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations of agricultural viability or other conservation values, and requested removal of reference to NEPA entirely. Comment also requested clarification about how NEPA sequencing considerations may affect NRCS approval of easement administration actions. Response: The decision to modify or terminate a Federal interest has long been subject to NEPA review, and NRCS must comply with NEPA statutory, regulatory, and policy requirements during its review of a requested easement administration action. These requirements include reviewing whether adverse impacts associated with an easement administration action can be avoided, minimized, or mitigated. Since the impacts and outcomes of an easement administration action cannot be categorized generally, a specific review is necessary. As NRCS evaluates the NEPA analyses developed for the individual easement administrative actions, it is gathering evidence that may be used to propose categorical exclusions for certain easement administrative actions in the future. NRCS may identify new categorical exclusions, through issuing new NEPA procedures (including by amending NRC’s current regulations implementing NEPA at 7 CFR part 650), consistent with the Council on Environmental Quality’s regulations for implementing the procedural provisions of NEPA, published at 40 CFR parts 1500 through 1508. No change is made to the regulation in response to this issue. Comment: NRCS received comment related to adding references or additional requirements to the easement administration action criteria, including a reference to the easement administration criteria indicating that any easement modification or termination conform to State law requirements, and including a reference that easement administration actions must conform to section 170(h) of IRC and associated U.S. Department of the Treasury (Treasury) regulations. Comment also requested that easement administration actions align more closely with Land Trust Alliance (LTA) industry standards. Response: Easement administration actions are documented in land records in accordance with State law. NRCS’s authority to approve easement administration actions is not subject to requirements in section 170(h) of the Treasury or associated regulations related to charitable donations. However, entities are not prevented from incorporating language that addresses their own compliance with VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 section 170(h) in their part of the conservation easement deed terms. NRCS must implement easement administration actions in accordance with Federal law and responsibilities; private land trusts are not subject to these requirements when conducting actions without Federal involvement. It would not be appropriate for NRCS to adopt ‘‘industry standards’’ that do not account for these Federal standards. No change is made to the regulation in response to this issue. Comment: NRCS received comment related to the various easement administration action requirements, including: • Recommending that NRCS remove the 10-percent limitation on easement administration actions so that an easement modification or exchange action would just need to meet one of the two thresholds: (1) The action provide equal or greater conservation functions and values and (2) equal or greater economic values; • Recommending removal of the standard of no net loss of easement acres required for easement subordination, modification, or exchange actions; and • Recommending a change to the definition of easement termination to acknowledge compensation that may be owed to other interest holders in a conservation easement. Response: NRCS uses the 10-percent limitation requirement to minimize the effects of administration actions. NRCS selected the 10-percent level based upon review of the scope of prior requests for easement administration actions and for consistency with other NRCS conservation programs. It is a statutory requirement that an easement modification or exchange action must meet both thresholds (equal or greater conservation value and equal or greater economic value). As to the threshold for an easement subordination, modification, or exchange to result in no net loss of easement acres, NRCS believes, based on long-standing experience, that the existing standard ensures that the public investment in conservation easements endures for the life of the easement and that NRCS is able to make credible determinations of equal or greater conservation and economic value as required by statute. The definition of easement termination addresses only the United States’ rights or interests in an easement, including that the United States must be fully compensated for the termination of such rights and interests that are held by the United States. The easement termination language does not PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 address or affect compensation that may be owed to other interest holders. No change is made to the regulation in response to these issues. Comment: NRCS received comment that requested NRCS modify language regarding easement termination to clarify that it also applies to the partial termination of an easement. Response: NRCS has clarified that partial termination of an easement is subject to the easement termination requirements to the same extent as the full termination of an easement. All easement termination actions are subject to review at both the NRCS State office and National Headquarters levels. Comment: NRCS received comment that supported allowing the use of updated deed provisions when making easement amendments, cautioned that flexibility be granted to do simple amendments, and advised NRCS not to require updates to new language that may be contained in updated deed provisions of those provisions are unnecessary or unacceptable to the landowner. Response: NRCS appreciates the support received for deed amendment process requirements. Deed amendments to ACEP–ALE easement deeds must be approved by NRCS, as discussed above. No change is made to the regulation in response to this issue. Environmental Markets Comment: NRCS received comment expressing support for updates to the section on environmental markets. Response: NRCS appreciates the comments. Fund Allocations NRCS received comment related to ACEP fund allocations as follows: Comment: NRCS received comment supporting the historic division of fund allocations across ACEP, that is based on demand for funding. Approximately 70 percent of ACEP funding is dedicated to wetland conservation through ACEP– WRE and 30 percent is for agricultural land preservation through ACEP–ALE. Another comment urged greater flexibility with respect to fund allocations. Response: NRCS has not specified in the regulation an allocation of program funds between the two components of the program. NRCS maintains program flexibility year-to-year to respond to program demand. No change is made to the regulation in response to this issue. Comment: NRCS received comment recommending continued use of ACEP– WRE authorities to enter into agreements and contracts with nongovernmental organizations, State E:\FR\FM\04FER1.SGM 04FER1 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations agencies, and other partners to continue to leverage resources and expertise. Response: NRCS relies on its partners to assist NRCS in its delivery of ACEP– WRE and will continue to utilize its authorities to coordinate with these valuable partners. No change is made to the regulation in response to this issue. Comment: NRCS received comment supporting the continued allocation of a portion of ACEP funds for monitoring and management of existing easements and recommending that State Conservationists have discretion to determine the appropriate portion of the individual State allocation to be used for monitoring and management of existing easements. Response: NRCS National Headquarters provides on-going coordination, guidance, and support to State Conservationists to ensure that sufficient funds are dedicated and used to appropriately monitor, manage, and enforce stewardship lands. No change is made to the regulation in response to this issue. jbell on DSKJLSW7X2PROD with RULES Landowner Eligibility—Adjusted Gross Income (AGI) Limitation Waiver NRCS received comment related to the AGI limitation waiver as it affects landowner eligibility to enroll in ACEP as follows: Comment: NRCS received comment related to the definition and criteria for environmentally sensitive lands of special significance, including encouraging NRCS in its AGI waiver determinations to give the most consideration to lands with the highest conservation value, particularly lands of special significance that can demonstrate significant linkages with the conservation objectives of migratory bird, wetlands conservation, and water quality programs, plans, or initiatives. Comment also requested that environmentally sensitive land of special significance be explicitly defined. Response: NRCS will consider the factors noted in the comment in granting AGI waivers. Terms associated with the AGI waiver are set forth in the regulations governing payment limitation and payment eligibility requirements, including AGI provisions, at 7 CFR part 1400. No change is made to the regulation in response to this issue. Comment: NRCS received comment suggesting that NRCS expand eligibility for AGI waivers, including allowing the waiver for all ACEP–ALE enrollment, automatically waiving AGI for BPS transactions, and interpreting AGI waiver factors broadly. VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 Response: NRCS may only grant waivers on a case-by-case basis where the waiver criteria are met. Broadening the waiver authority to eliminating AGI applicability to all ALE enrollment types is outside statutory authority. No change is made to the regulation in response to this issue. Comment: NRCS received comment seeking increased streamlining and guidance regarding AGI waivers. Response: NRCS will continue its ongoing efforts to streamline processes through the use of new tools. NRCS will continue to develop and release specific guidance as needed. No change is made to the regulation in response to this issue. Comment: NRCS received comments expressing support for the use of AGI waiver authority in ACEP. Response: NRCS appreciates support for its AGI waiver process. Program Administration NRCS received comment on the topic of program administration as follows: Comment: NRCS received one detailed comment emphasizing the importance of protecting endangered and at-risk species through ACEP. This comment specifically referred to salmonid species. Response: NRCS appreciates the importance of protecting threatened and endangered species and its responsibility to comply with the Endangered Species Act (ESA), including ESA section 7(a)(1). As part of its conservation planning framework and site-specific NEPA process, NRCS also considers impacts to at-risk species as required by its NEPA implementing regulations (7 CFR part 650). No change is made to the regulation in response to this issue. Comment: NRCS received comment related to outreach activities, including recommending that: NRCS retain its outreach focus on historically underserved farmers and ranchers; funds expended for historically underserved purposes be identified and made public; and NRCS ensure that the process is streamlined to ensure access to disadvantaged and underserved populations. Comment also reminded NRCS regarding sovereign-to-sovereign consultation for Farm Bill easement programs having Tribal implications. Response: NRCS will continue to evaluate options to enhance opportunities for historically underserved producers and focus resources on ensuring parity in program enrollment. NRCS conducted several Tribal meetings in FY 2019 and FY 2020 and State Conservationists obtained input on program implementation from PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 8125 the Tribal Conservation Advisory Committees. No change is made to the regulation in response to this issue. Comment: NRCS received comment expressing specific support for various aspects of program administration, including supporting NRCS discretion to waive certain program administration provisions and commending NRCS for continuing to obtain input from State technical committees, other Federal and State agencies, conservation districts, and other organizations. Response: NRCS appreciates the support it has received for ACEP administration. Comment: NRCS received comment urging continued or increased consultation with partners and stakeholders, including State technical committees, non-governmental organizations, and the U.S. Fish and Wildlife Service. Response: NRCS will continue to seek stakeholder input on how to improve program administration, especially input that NRCS receive on State and local resource issues. No change is made to the regulation in response to this issue. Comment: NRCS received comment asking that technical assistance provided by NRCS regarding compliance with easement terms be clarified and recommending creation of ACEP-specific forms. Comment also recommended guidance on conflicts of interest and information on the implementation of Voluntary Public Access and Habitat Incentives Program (VPA–HIP). Response: NRCS will continue its ongoing efforts to streamline processes, including modifying its required forms, through the use of new tools. Additionally, NRCS will continue to develop and release guidance on specific topics as needed. NRCS regulation and policy regarding VPA– HIP is provided separately and can be found in 7 CFR part 1455, and associated agency policy is available on the NRCS website. No change is made to the regulation in response to this issue. Comment: NRCS received comment recommending that NRCS include text regarding ACEP ranking that prioritizes lands enrolled in the Transition Incentives Program under the Conservation Reserve Program (CRP– TIP). Section 1235(f)(1)(E) of the CRP statute requires that priority enrollment be given to land subject to a CRP–TIP contract into EQIP, Conservation Stewardship Program (CSP), and ACEP. Response: Section 1468.22(b)(11) of the ACEP interim rule identifies as a national priority for ALE enrollment E:\FR\FM\04FER1.SGM 04FER1 jbell on DSKJLSW7X2PROD with RULES 8126 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations grasslands currently enrolled in CRP in a contract that is set to expire within 1 year. Section 1468.32(c) of the ACEP interim rule identifies as a potential State priority for WRE enrollment whether land is farmed wetland and adjacent land that is currently enrolled in CRP in a contract that is set to expire within 1 year. However, neither ALE nor WRE identify a specific priority ranking for CRP–TIP land. Therefore, NRCS is adding a specific priority in the ACEP regulation for CRP–TIP. Comment: NRCS received comment related to the practices and activities administered through ACEP, including: • Encouraging NRCS to adopt the ‘‘Active River Area Concept’’ to its management scheme; • Proposing that all easements go through a plant and plant community survey by a botanist prior to enrollment; • Seeking confirmation that NRCS would not enter into agreements with entities who would preclude forested riparian buffers; • Recommending that NRCS recognize specifically intensive rotational grazing as one of the best management tools; and • Recommending that diverse native plant mixes be prioritized in ACEP wetland and grassland restoration and management plans. Response: NRCS addresses how best to administer its practices and activities through technical and program policy implemented at the State level through the discretion given NRCS State Conservationists. In general, NRCS supports the development and implementation of plans and restoration activities that consider the value of management and restoration activities that provide for a diverse assemblage of native plants, including pollinatorfriendly species. However, NRCS believes that specific resource management issues are best addressed at the State level. No change is made to the regulation in response to this issue. Comment: NRCS received comment related to program administration that did not fit neatly into any single subtopic: • Require landowners to assume responsibility for operation and maintenance of easements; • Provide sufficient staffing to meet customer service needs; • Concern over the authorization of permanent easements; • Make publicly available information related to easement enrollments such as acres enrolled, soil classification of land, and before and after land use; • Condition ACEP so that all funded efforts achieve consistency with State VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 water quality standards and salmon recovery plan habitat objectives; and • Review easement deed terms at least every 100 years to ensure consistency with existing conditions. Response: The operation and maintenance that may occur on ACEP easements and who may perform such activities is addressed in the terms of the easement deeds. NRCS staffing is not a part of this rulemaking, but the agency will continue providing the highest quality customer service and program implementation with its resources. Permanent easements are authorized and prioritized by statute. As NRCS collects data, the agency generates multiple reports on a variety of impacts, which are typically made available to the public upon request. NRCS will consider the recommendation regarding consistency with water quality standards and recovery plan habitat objectives as it continues to evaluate and refine ranking and eligibility criteria. Review of easement deed terms at least every 100 years is beyond the scope of current regulation and policy. No change is made to the regulation in response to these issues. Comment: NRCS received comment related to source water protection issues including: • Recommending that NRCS acknowledge source water protection as a goal of ACEP; • Adding discussion about how source water protection priorities will be included in the implementation of ACEP and other NRCS conservation programs; • Addressing how ACEP will be included in accounting for overall source water expenditures by publishing a plan for comment; • Adding source water protection in the ACEP ranking criteria; • Ensuring adequate attention given to source water protection at State technical committees; and • Recommending that NRCS address how spatial data related to source water areas will intersect with ACEP. Response: Source water protection is a statutory priority and NRCS Headquarters provides guidance to ensure that all its programs are contributing to the protection of source water protection areas. The ACEP regulation includes water quality as a consideration in the list of ranking criteria for both ALE and WRE and the State Conservationist, in consultation with the State technical committee, may develop and include specific considerations for source water protection as part of their State’s PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 ranking factors. NRCS uses geographic information system tools to help identify source water protection areas and easement enrollment. No change is made to the regulation in response to this issue. WRE Issues NRCS received comment related to ACEP–WRE topics as follows: Comment: NRCS received comment supporting revisions to the definition of wetland restoration in the interim rule regarding ACEP–WRE. Comment highlighted that the expanded flexibility would benefit wetland functions and habitat values. Comment also encouraged NRCS to engage robustly with State technical committees when devising the State-specific NRCS criteria and guidelines for wetland restoration. Response: NRCS appreciates support for the revised definition of wetland restoration. Comment: NRCS received comment related to compatible use authorizations under ACEP–WRE, expressing support for the inclusion of water management and supporting the use of such management activities to maintain, enhance, and diversify wetland habitats on ACEP–WRE easements. Comment also recommended removing ‘‘hunting and fishing’’ from the list of activities that can be authorized as a compatible use in § 1468.37(a)(2)(ii) because undeveloped recreational uses, including hunting and fishing, are listed as one of the five rights reserved by the landowner in the ACEP–WRE warranty easement deed. Comment also identified that NRCS should seek input from the State technical committee on technical matters related to compatible use designations and guidelines. Response: NRCS appreciates support for the inclusion of water management and recognizes the potential utility of this activity to wetland functions and values when properly prescribed and implemented on ACEP–WRE easements through the compatible use authorization process. Hunting and fishing are specifically identified in the ACEP statute as a ‘compatible use’ that is subject to NRCS determination of compatibility. NRCS has implemented this provision by identifying in all ACEP–WRE easement deeds that undeveloped hunting and fishing, subject to the terms of the easements, is a reserved right. However, any hunting and fishing activities that extend beyond that reserved right are prohibited unless determined compatible by NRCS through the compatible use authorization process. In the ACEP interim rule, NRCS included compatible use criteria and related E:\FR\FM\04FER1.SGM 04FER1 jbell on DSKJLSW7X2PROD with RULES Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations matters in the expanded list of examples provided in § 1468.2(b) regarding subjects on which the State technical committee may provide advice to the State Conservationist. Comment: NRCS received comment regarding wetland restoration and management activities, encouraging that the technical requirements for grazing management plans and exhibits for ACEP–WRE grazing reserved rights enrollments be developed in consultation with State technical committees and that the individual grazing management plans be dynamic to accommodate wildlife and habitat conservation along with producer needs. Comment also recommended that NRCS prioritize activities supporting migratory waterfowl and other wetlanddependent wildlife through sciencebased management and recommended levee setbacks and forested riparian buffers be allowed on all easements in Washington State. Response: NRCS appreciates comment related to grazing management plans and ACEP–WRE reservation of grazing rights enrollments. The ACEP interim rule provided clarifying changes consistent with these recommendations, including addition of a grazing management plan definition that is specific to ACEP–WRE and provisions related to the review and modification of such plans for reserved grazing rights enrollments. NRCS conducts and supports monitoring and research on its wetland easements to obtain data and information that informs technical decisions related to prioritization and selection of new easements and restoration and management of existing easements. NRCS will continue to collaborate with partners and institutions to obtain the information needed to make science-based decisions to maximize wildlife benefits and wetland functions and values on every ACEP–WRE easement. The concern related to restoration activities in the State of Washington do not rise to a nationwide level and are not addressed in the regulation. The ACEP regulation and other NRCS planning procedures provide the States the needed flexibilities to make technical decisions related to enrollment, restoration, and management of ACEP–WRE lands. NRCS recommends that stakeholders with concerns should work with their applicable State Conservationist. Comment: NRCS received comment related to WRE land eligibility: Recommending that NRCS allow cropping on the WRE easement area; supporting the increase in the percentage of easements that can be enrolled on cropland in a county from VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 10 percent to 15 percent; and requesting flexibility with respect to the 2-year ownership requirement for land that the farmer has managed for numerous years prior to purchase. Response: NRCS prohibits cropping on ACEP–WRE enrolled lands because the purpose of the program is to restore the wetland functions and values and crop production is inconsistent with such purposes. NRCS appreciates the comments related to the county cropland limitation. The 2-year ownership provision in the ACEP regulation is a specific statutory requirement, but flexibility exists through the waiver process. When deciding whether to waive the 2-year ownership requirement, NRCS considers whether the land has been managed by the landowner as part of their operation prior to acquiring ownership of the land. No change is made to the regulation in response to these issues. Comment: NRCS received comment relating to factors used to prioritize enrollments in ACEP–WRE, including support for prioritizing permanent easements over non-permanent easements and including water quality as a conservation benefit. Response: NRCS appreciates support for the ACEP–WRE prioritization factors. Comment: NRCS received comment recommending NRCS consider funds from other Federal sources as contributions for ranking purposes. Response: Section 1265C(b)(3) of the ACEP statute authorizes as a ranking factor whether the landowner or other person offers to contribute to the cost of the easement and thereby leverage Federal funds. The statutory priority is that Federal funds, not just ACEP–WRE funds, be leveraged by other sources, and NRCS has incorporated this factor into the regulation. NRCS State Conservationists, with input from State technical committees, may consider other priorities that further program goals, including other sources of contribution. However, other Federal sources of contribution may have restrictions on the use of their funds and NRCS must ensure that there is no augmentation in contravention of appropriations law. No change is made to the regulation in response to this issue. Comment: NRCS received comment supporting and encouraging NRCS to continue to seek advice and input on implementation of ACEP–WRE from the U.S. Fish and Wildlife Service, State fish and wildlife agencies, and State technical committees. PO 00000 Frm 00015 Fmt 4700 Sfmt 4700 8127 Response: Both ACEP regulation and policy require the NRCS to seek continued engagement from these partners. No change is made to the regulation in response to this issue. Comment: NRCS received comment related to the Wetland Restoration Enhancement Partnership (WREP), recommending that NRCS restore the 5 percent match requirement for the WREP partner contributions and maintain historic levels of partner contributions at 25 percent. Another comment recommended that NRCS provide an annual allocation for WREP of between $35–50 million per year. Response: NRCS appreciates the support for WREP. NRCS has not established any regulatory level of match that is required for WREP and bases such determination upon the focus of each year’s WREP effort. No change is made to the regulation in response to this issue. Notice and Comment, Paperwork Reduction Act, and Effective Date In general, the Administrative Procedure Act (APA) (5 U.S.C. 553) requires that a notice of proposed rulemaking be published in the Federal 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. Consistent with the use of the authority under 5 U.S.C. 808 related to Congressional review for the immediate effect date of the interim rule, this rule is also effective on the date of publication in the Federal Register. Executive Orders 12866 and 13563 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 E:\FR\FM\04FER1.SGM 04FER1 8128 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Management and Budget (OMB) designated this rule as significant under Executive Order 12866 and therefore, OMB has reviewed this rule. The costs and benefits of this rule are summarized below. The full regulatory impact analysis is available on https://www.regulations.gov/. jbell on DSKJLSW7X2PROD with RULES 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 the substantive comments NRCS received on the interim rule, NRCS invited public comments on how to make the rule easier to understand. NRCS has incorporated these recommendations for improvement where appropriate. NRCS responses to public comment are described in more detail above. Cost-Benefit Analysis 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. Previously, there were only two sources of non-Federal contribution— the entity’s cash resources towards the purchase and the donation by the entity—with cash resources towards the purchase required for half of the nonFederal contribution. The 2018 Farm Bill eliminated the requirement for cash resources towards the purchase and allows the entity to consider other costs, previously not included, toward the non-Federal match. 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. While removing a potential hurdle to entity participation, the additional flexibility is not intended to supersede the conservation benefits possible under ACEP. There are six states and one territory (Alabama, Arkansas, Hawaii, Louisiana, VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 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 statutory changes, in this final, we 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 to 10 percentage points. Another change under the 2018 Farm Bill provides NRCS with authority to enter into legal arrangements with eligible entities to conduct BPS transactions under ACEP–ALE. Under a BPS transaction, 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. BPS 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 program 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 limit NRCS’s discretion to determine the allocation of funds 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. Land enrolled in ACEP–WRE easements produces onsite and offsite environmental benefits. Those include: PO 00000 Frm 00016 Fmt 4700 Sfmt 4700 Restoring and protecting high value wetlands; controlling sheet and rill erosion as lands are restored from cropland to wetlands and associated habitats; restoring, enhancing, and protecting habitat for fish and wildlife, including threatened and endangered species and migratory birds; improving water quality by filtering sediment and chemicals; reducing flooding and floodrelated damage; recharging groundwater; protecting biological diversity; controlling invasive species with planting of native vegetation; and providing opportunities for educational, scientific, and recreational activities. Soil health and air quality are improved by reduced wind erosion, reduced soil disturbance, increased organic matter accumulation, and an increase in carbon sequestration. For land enrolled in ACEP–ALE, the suite of conservation effects on protected grasslands are different than those on protected farmland; the impacts are not valued here as one being more beneficial than another. For example, ACEP–ALE easements on grasslands limit agricultural activities to predominantly haying and grazing, whereas easements on farmland allow crop cultivation and pasture-based agriculture. As such, farmland protection effects are derived from onsite and ecological services, as well as preserving highly productive agricultural areas from development or fragmentation. Impacts on grasslands are derived from onsite and ecological impacts as well as preventing conversion to nongrassland uses. The net conservation effects through time from farmland protection include direct access benefits (pick-your-own, agritourism, and nature based activities like hunting), indirect access benefits (open spaces and scenic views), and nonuse benefits (wildlife habitat and existence values). Grassland protection conservation effects include direct, indirect, and nonuse benefits, and also on-farm production gains and carbon sequestration. The authorized level of funding for ACEP for the period of FY 2019 through 2023 is $2.25 billion (assuming future funding is set at authorized amounts). This represents an increase in ACEP average annual funding over the 2014 Farm Bill of 11 percent—from $405 million per year to $450 million per year in nominal dollars. The regulatory impacts of ACEP funding consist of payments for the purchase of easements or real property interests; the costs incurred related to the acquisition, such as title companies, appraisers, licensed land surveyors; and the costs of restoring wetlands. E:\FR\FM\04FER1.SGM 04FER1 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations Although these transfers create incentives that likely cause changes in the way society uses its resources, NRCS lacks data with which to identify where these resources would otherwise be used. NRCS also recognizes that applicants and participants incur costs in terms of time used to gain access to ACEP. We estimate the imputed value of applicant and participant time spent in accessing the program from FY 2019 through 2023 at $1.1 million for the 5 years. Our estimates of costs, benefits and transfers of ACEP on an annual basis are reported in Table 1. Given a 3 percent discount rate, the projected annualized real cost to producers of accessing the program is $229,000 and the projected annualized real transfers are $433 million. Conservation benefits from the easement are difficult to quantify at a national scale but have been described by studies at an individual project or watershed or local scale. the NRCS regulations for compliance with NEPA (7 CFR part 650). NRCS conducted an analysis of the ACEP interim rule and NRCS’s analysis determined there would 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 1501.5 and 1501.6). The Environmental Assessment (EA) and Finding of No Significant Impact (FONSI) were available for review for 30 days from the date of publication of the interim rule in the Federal Register. NRCS considered comments received during the 30-day period and determined minor changes to the ACEP EA and FONSI were sufficient, and that no information warranting preparation of an EIS was received. The final ACEP EA and FONSI have been posted to the NRCS homepage at https:// www.nrcs.usda.gov/wps/portal/nrcs/ detail/national/programs/farmbill/ ?cid=stelprdb1263599. TABLE 1—ANNUALIZED REAL ESTIExecutive Order 12372 MATED COSTS, BENEFITS, AND Executive Order 12372, TRANSFERS a Category Cost b ......................... Benefits ..................... Transfers ................... Annual estimate $229,000 Qualitative $433,000,000 a All estimates are discounted at 3 percent to 2019. Note that this table focuses on the costs, benefits, and transfers of the entire program, not the marginal change in a comparison of the 2014 and 2018 Farm Bills. b Imputed cost of applicant time to gain access to the program. jbell on DSKJLSW7X2PROD with RULES Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601–612), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), generally requires an agency to prepare a regulatory analysis of any rule whenever an agency is required by APA 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 this rule is exempt from notice and comment rulemaking requirements of the APA and no other law requires that a proposed rule be published for this rulemaking initiative. Environmental Review The environmental impacts of this rule have been considered in a manner consistent with the provisions of NEPA (42 U.S.C. 4321–4347), the regulations of the Council on Environmental Quality (40 CFR parts 1500–1508), and VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 ‘‘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. 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, consistent with 7 U.S.C. 6912(e). 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 PO 00000 Frm 00017 Fmt 4700 Sfmt 4700 8129 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 does not have significant Tribal implications that require Tribal consultations at this time for ACEP, which is a beneficial voluntary program. Notwithstanding this conclusion, OTR believes that continued focused outreach to Tribes could increase engagement in ACEP and provide assistance with water quality issues for Tribes. OTR states that NRCS has adhered to the spirit and intent of Executive Order 13175. If a Tribe requests consultation, NRCS and CCC will work with OTR to ensure meaningful consultation is provided where changes, additions, and modifications identified in this rule are not expressly mandated by the 2018 Farm Bill. 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 I session. There were no specific comments from Tribes on ACEP during this Tribal consultation. Additionally, NRCS held sessions with Indian Tribes and Tribal entities across the country in the spring of FY 2019 to describe the 2018 Farm Bill changes to NRCS conservation programs, obtain input about how to improve Tribal and Tribal member E:\FR\FM\04FER1.SGM 04FER1 8130 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations jbell on DSKJLSW7X2PROD with RULES access to NRCS conservation assistance, and make any appropriate adjustments to the regulations that will foster such improved access. NRCS invited State leaders for FSA and Rural Development (RD), as well as Regional Directors for the Risk Management Agency (RMA) to discuss their programs also. As a result, approximately 50 percent of the comments received as a result of these sessions were directed to FSA, RMA, RD, and other USDA agencies, with many comments specific to hemp production and the surrounding regulations. Over 40 percent of the feedback pertained to NRCS programs. Comments listed challenges specific to Tribes that impact eligibility and inhibit access to USDA programs. None of the feedback received necessitated a change to the regulation. NRCS will continue to work with our Tribal stakeholders to address the issues raised in order to facilitate greater technical assistance and program delivery to Indian country. Separate from Tribal consultation and the sessions discussed above, 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. Unfunded Mandates Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104–4), 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 costbenefits 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 costeffective 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 VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 State, local, and Tribal Governments or the private sector. Therefore, this rule is not subject to the requirements of UMRA. ■ Federal Assistance Programs § 1468.6 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. List of Subjects in 7 CFR Part 1466 Agricultural, Flood Plains, Grazing lands, Natural resources, Soil conservation, and Wildlife. Accordingly, the interim rule published January 6, 2020, at 85 FR 558, is adopted as final with the following changes: PART 1468—AGRICULTURAL CONSERVATION EASEMENT PROGRAM 1. The authority citation for part 1468 continues to read as follows: ■ Authority: 15 U.S.C. 714b and 714c; 16 U.S.C. 3865–3865d. Subpart A—General Provisions § 1468.3 [Amended] 2. Amend § 1468.3 as follows: a. In the definition of ‘‘Beginning farmer or rancher’’: ■ i. In paragraph (1), remove the words ‘‘farm or ranch or’’ and add in their place the words ‘‘farm, ranch, or’’ each time they appear; ■ ii. In paragraphs (2) and (3), remove the words ‘‘farm or ranch’’ and add the words ‘‘farm, ranch, or NIPF’’ in their place each time they appear; ■ b. In the definition of ‘‘Eligible land’’, add the word ‘‘land’’ immediately after the word ‘‘private’’; ■ c. In the definition of ‘‘Farm or ranch succession plan’’, remove the words ‘‘include specific’’ and add the words ‘‘include, but is not limited to, specific’’ in their place and remove the words ‘‘new or beginning farmers or ranchers, veteran farmers, or other’’; ■ d. In the definition of ‘‘Future viability’’, add the words ‘‘or adoption of a farm or ranch succession plan’’ immediately after the word ‘‘plan’’; and ■ ■ PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 e. In the second sentence in the definition of ‘‘Maintenance’’, add the word ‘‘performed’’ immediately after the word ‘‘work’’. [Amended] 3. Amend § 1468.6 in paragraph (a)(3)(iii) by removing the cross reference ‘‘paragraph (a)(4)’’ and add in its place add the cross reference ‘‘paragraph (a)(5)’’. Subpart B—Agricultural Land Easements § 1468.20 [Amended] 4. Amend § 1468.20 in paragraph (b)(1)(ii) by adding the word ‘‘demonstrated’’ immediately before the word ‘‘capability’’. ■ 5. Amend § 1468.22 as follows. ■ a. Revise paragraph (b)(11); and ■ b. In paragraph (c)(2), add the word ‘‘annually’’ immediately after the words ‘‘monitored’’ and ‘‘reported’’. The revision reads as follows: ■ § 1468.22 Establishing priorities, ranking considerations, and project selection. * * * * * (b) * * * (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 or is land under a CRP contract that is in transition to a covered farmer or rancher pursuant to 16 U.S.C. 3835(f); * * * * * § 1468.23 [Amended] 6. Amend § 1468.23 as follows: a. In paragraph (b)(1), remove the words ‘‘Up to’’ and add ‘‘A minimum of’’ in their place and add the words ‘‘and not to exceed 7 fiscal years’’ immediately after the words ‘‘5 fiscal years’’; and ■ b. In paragraph (b)(2), remove the words ‘‘Up to’’ and add ‘‘At least’’ in their place. ■ 7. In § 1468.24 revise paragraphs (b)(2)(i), (iii), and (iv) to read as follows: ■ ■ § 1468.24 Compensation and funding for agricultural land easements. * * * * * (b) * * * (2) * * * (i) The eligible entity’s own cash resources for payment of easement compensation to the landowner or for a buy-protect-sell transaction, the amount of the fair market value of the agricultural land easement, less the amount of the Federal share, that is provided through the conveyance of the E:\FR\FM\04FER1.SGM 04FER1 Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations agricultural land easement by the eligible entity; * * * * * (iii) Where the amounts as identified in paragraphs (b)(2)(i) and (ii) of this section are not sufficient to meet the non-Federal share amount, the eligible entity may also include 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, baseline reports, mineral assessments, or closing cost; and (iv) Where the amounts as identified in paragraphs (b)(2)(i) through (iii) of this section are not sufficient to meet the non-Federal share amount, the eligible entity may also include up to 2 percent of the fair market value of the agricultural land easement for easement stewardship and monitoring costs provided by the eligible entity. * * * * * ■ 8. In § 1468.25 revise paragraphs (c) and (d)(4) to read as follows: § 1468.25 deeds. Agricultural land easement * * * * * (c) The eligible entity may use its own terms and conditions in the agricultural land easement deed, but the agricultural land easement deed must provide for the effective administration, management, and enforcement of the agricultural land easement by the eligible entity or its successors and assigns and must address the deed requirements as specified by this part and by NRCS in the ALE-agreement. (d) * * * (4) Include clauses requiring that any changes to the easement deed or easement area made after easement recordation, including any amendment to the easement deed, any subordination of the terms of the easement, or any modifications, exchanges, or terminations of some or all of the easement area, must be consistent with the purposes of the agricultural land easement and this part and must be approved by NRCS and the easement holder in accordance with § 1468.6 prior to recordation or else the action is null and void. * * * * * § 1468.26 [Amended] 9. Amend § 1468.26 in paragraph (b)(1) by removing the words ‘‘up to’’ and adding ‘‘a minimum of’’ in their place and adding ‘‘and not to exceed 7 fiscal years’’ after the words ‘‘5 fiscal years’’. a. In paragraph (c)(1), add the words ‘‘the purchase of the land’’ after the word ‘‘completed’’; ■ b. In paragraphs (c)(3)(ii) and (c)(4), add the words ‘‘of the land’’ after the word ‘‘value’’; ■ b. Redesignate paragraphs (e)(4)(iii) and (iv) as paragraphs (e)(4)(iv) and (v); ■ c. Add a new paragraph (e)(4)(iii). The addition reads as follows: ■ § 1468.27 * * * * (e) * * * (4) * * * (iii) 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. * * * * * 11. Amend § 1468.28 as follows: ■ a. Revise paragraph (c); and ■ b. In paragraph (f), add the words ‘‘in whole or in in part,’’ immediately after the word ‘‘terminated’’. The revision reads as follows: ■ Violations and remedies. * * * * * (c) Notwithstanding paragraph (a) of this section, NRCS reserves the right to enter upon and inspect 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. Prior to its inspection, NRCS will notify the agricultural land easement holder and the landowner and provide a reasonable opportunity for the agricultural land easement holder and the landowner to participate in the inspection. * * * * * Subpart C—Wetland Reserve Easements jbell on DSKJLSW7X2PROD with RULES ■ 10. Amend § 1468.27 as follows: VerDate Sep<11>2014 15:54 Feb 03, 2021 Jkt 253001 [Amended] 12. Amend § 1468.32 in paragraph (c)(2) by adding the words ‘‘or land under a CRP contract that is in transition to a covered farmer or rancher pursuant to 16 U.S.C. 3835(f), and such ■ PO 00000 Terry Cosby, Acting Chief, Natural Resources Conservation Service. Robert Stephenson, Executive Vice President, Commodity Credit Corporation. [FR Doc. 2021–02268 Filed 2–3–21; 8:45 am] BILLING CODE 3410–16–P Frm 00019 Fmt 4700 Sfmt 4700 DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Parts 250 and 385 [Docket No. RM21–8–000; Order No. 875] Civil Monetary Penalty Inflation Adjustments Federal Energy Regulatory Commission, Department of Energy (DOE). ACTION: Final rule. AGENCY: The Federal Energy Regulatory Commission (Commission) is issuing a final rule to amend its regulations governing the maximum civil monetary penalties assessable for violations of statutes, rules, and orders within the Commission’s jurisdiction. The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended most recently by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, requires the Commission to issue this final rule. DATES: This final rule is effective February 4, 2021. FOR FURTHER INFORMATION CONTACT: Todd Hettenbach, Attorney, Office of Enforcement, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426. Phone: (202) 502–8794; email: Todd.Hettenbach@ ferc.gov. SUMMARY: SUPPLEMENTARY INFORMATION: 1. In this final rule, the Federal Energy Regulatory Commission (Commission) is complying with its statutory obligation to amend the civil monetary penalties provided by law for matters within the agency’s jurisdiction. I. Background ■ § 1468.32 land’’ immediately after the word ‘‘application’’. Buy-Protect-Sell transactions. * § 1468.28 8131 2. The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Adjustment Act),1 which further amended the Federal Civil Penalties Inflation Adjustment Act 1 Public E:\FR\FM\04FER1.SGM Law 114–74, Sec. 701, 129 Stat. 584, 599. 04FER1

Agencies

[Federal Register Volume 86, Number 22 (Thursday, February 4, 2021)]
[Rules and Regulations]
[Pages 8113-8131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02268]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

========================================================================


Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / 
Rules and Regulations

[[Page 8113]]



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), United States Department of Agriculture.

ACTION: Final rule.

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

SUMMARY: This final rule adopts, with minor changes, an interim rule 
published in the Federal Register on January 6, 2020. The interim rule 
implemented changes to ACEP that were necessitated by enactment of the 
Agriculture Improvement Act of 2018 (the 2018 Farm Bill) and changes 
for administrative streamlining improvements and clarifications. This 
final rule makes permanent many of the changes made in the interim 
rule, responds to comments received, and makes further adjustments in 
response to some of the comments received.

DATES: Effective: February 4, 2021.

FOR FURTHER INFORMATION CONTACT: Carrie Lindig, (202) 720-1882, or 
[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 2018 Farm Bill reauthorized and amended ACEP. The 2018 Farm 
Bill authorized the use of the existing regulations that had been 
implemented under the Agricultural Act of 2014 for the remainder of FY 
2019 to the extent that those regulations were consistent with the 2018 
Farm Bill changes.
    On January 6, 2020, CCC published an interim rule with request for 
comments in the Federal Register (85 FR 558-590) that implemented 
mandatory changes made by the 2018 Farm Bill or that were required to 
implement administrative improvements and clarifications. This final 
rule adopts, with minor changes, the interim rule.

Discussion of ACEP (7 CFR part 1466)

    ACEP helps farmers and ranchers preserve their agricultural land 
and restore, protect, and enhance wetlands on eligible lands. The 
program has two components:
    (1) Agricultural land easements (ACEP-ALE); and
    (2) Wetland reserve easements (ACEP-WRE).
    The Secretary of Agriculture delegated authority to the Chief, 
NRCS, to administer ACEP.
    Through ACEP-ALE, NRCS provides matching funds to eligible entities 
that are 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.
    Through 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 for acreage owned by Indian Tribes, or the maximum duration 
authorized by State law.
    Participation in either ACEP-ALE or ACEP-WRE is voluntary.
    The interim rule:
     Incorporated changes to the ACEP purposes to limit 
nonagricultural uses that negatively affect agricultural uses and 
conservation values;
     Added language to specify general monitoring 
responsibilities under ACEP-ALE and ACEP-WRE;
     Removed references to the Regional Conservation 
Partnership Program (RCPP) as the 2018 Farm Bill revised RCPP as a 
stand-alone program, which is now in 7 CFR part 1464;
     Added definitions to reflect 2018 Farm Bill changes: Buy-
protect-sell (BPS) transaction, monitoring report, wetland restoration, 
easement administration action, grazing management plan, and 
nonindustrial private forest land;
     Removed definitions for: Active agricultural production, 
forest land, forest land of statewide importance, and projects of 
special significance;
     Made changes to easement administration actions, including 
specifying the criteria that apply to each type of easement 
administrative actions;
     Made revisions to the environmental markets section in 
response to the 2018 Farm Bill;
     Removed 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;
     Eliminated the requirement that land with a certain amount 
of forest land have a forest management plan;
     Replaced the term ``proposed'' with ``permitted'' in text 
about the types of rights-of-way, infrastructure development, or other 
adjacent land uses whose impacts may cause land to be considered 
ineligible;
     Specified that under a BPS transaction, the eligible 
entity for meeting payment eligibility requirements (highly erodible 
land and wetland conservation, and Adjusted Gross Income (AGI)) is the 
landowner unless the eligible entity sells the fee title to a qualified 
farmer or rancher prior to, or at the time of, the easement closing, in 
which case the farmer or rancher purchaser must meet payment 
eligibility requirements;
     To address BPS transactions, specified that eligible lands 
owned by the eligible entity may be eligible for enrollment if the land 
is owned, on a transitional basis, to protect the land through securing 
an agricultural land easement on the land and to transfer fee title 
ownership to a farmer or rancher;
     Specified eligibility requirements related to BPS 
transactions;
     Specified that NRCS will consider eligible entity cash 
contribution toward the easement purchase price and measures to 
increase agricultural viability as ranking criteria;
     Specified 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;

[[Page 8114]]

     Removed 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;
     Specified the incurred costs 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 that the source and limit 
of other costs that may be included in the calculation of the non-
Federal share;
     Removed reference to the availability of waivers for 
grasslands of special environmental significance since the specific 
eligible entity cash contribution requirement was removed;
     Added specificity to the right of enforcement conveyed to 
NRCS under the terms of an agricultural land easement;
     Removed the requirement that the agricultural land 
easement be subject to an ACEP-ALE plan;
     Specified 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;
     Revised the requirement for a conservation plan on highly 
erodible cropland;
     Provided that an eligible entity may include terms and 
conditions in the ACEP-ALE deed that are intended to keep the land 
subject to the easement under farmer or rancher ownership;
     Removed the stand-alone section regarding ACEP-ALE plans 
and captured in other sections the provisions related to development of 
required conservation plans or development of ACEP-ALE plans as agreed-
to by the eligible entity;
     Incorporated two new categories under which an eligible 
entity may demonstrate that they meet the ACEP-ALE certification 
requirements and revised the criteria to require a minimum of 10 
agricultural land easements under ACEP-ALE, or predecessor NRCS 
easement programs, for all eligible entities seeking certification;
     Specified the circumstances under which NRCS may exercise 
its right of enforcement under ACEP-ALE, including its right of 
inspection;
     Increased the percent of acres of total cropland in a 
county that may be subject to an ACEP-WRE easement to 15 percent;
     Removed the requirement for NRCS to seek input from the 
Secretary of the Interior at the local level in the determination of 
eligible land;
     Included water quality as an additional priority along 
with the priority placed on acquiring wetland reserve easements based 
on the value of the easement for protecting and enhancing habitat for 
migratory birds and other wildlife;
     Specified that grazing under reserve grazing rights 
wetland reserve easement or 30-year contract must comply with a 
wetlands reserve plan of operations (WRPO) developed by NRCS, which may 
include a grazing management plan component, and identified that the 
plan may be reviewed and modified as necessary, at least every 5 years; 
and
     Included new provisions related to the evaluation and 
authorization of compatible uses on wetland reserve easements, 
including 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.

Summary of ACEP Comments

    The interim rule 60-day comment period ended March 6, 2020, and was 
extended to March 20, 2020, to provide the public an opportunity to 
consider the January 24, 2020, correction. Seventy commenters, 
including individuals, organizations, and agencies, submitted comments 
to regulations.gov. NRCS reviewed the input from these 70 commenters in 
response to the rule and identified 576 comments contained within these 
70 entries. NRCS reviewed these 576 comments and categorized and 
summarized them according to the topics identified below. The topics 
that generated the greatest response were on ALE ranking, ALE BPS 
transactions, and definitions.
    Overall, the comments expressed general support for the changes 
made in the interim rule. Six comments were not relevant to the ACEP 
interim rule. Ten comments expressed general support for the regulation 
and three comments criticized the regulation in general. These comments 
did not include any recommendations for change.
    NRCS appreciates all comments submitted and thanks each person and 
organization who expressed an opinion related to ACEP or the interim 
rule. NRCS will continue the endeavor to improve its customer service 
and the equitable dispensation of benefits under ACEP.
    In this rule, the comments have been organized alphabetically by 
topic. The topics include:
     ALE Buy-Protect-Sell Transactions;
     ALE Contribution Requirements;
     ALE Deed Requirements and Terms;
     ALE Entity Certification;
     ALE Land Eligibility Issues;
     ALE Planning;
     ALE Program Requirements;
     ALE Ranking;
     Definitions;
     Easement Administration Actions;
     Environmental Markets;
     Fund Allocations;
     Landowner Eligibility--AGI Limitation Waiver;
     Program Administration; and
     WRE Issues.
    This final rule responds to the comments received by the public 
comment deadline and makes minor clarifying and related changes.

ALE Buy-Protect-Sell Transactions

    BPS transactions are arrangements under ALE, first authorized under 
the 2018 Farm Bill, 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.
    NRCS received comments related to BPS transactions, several of 
which expressed support for allowing BPS transactions. Remaining 
comments were as follows:
    Comment: NRCS received comment related to the requirement to sell 
at agricultural value except that eligible entities could charge 
qualified farmers or ranchers certain holding and transactions costs. 
These comments requested a change to the amount an eligible entity may 
charge the qualified farmer or rancher as part of the sale of the 
property, recommending either that the 10-percent limitation be removed 
or increased to 10 percent of the total fair market value (FMV) of the 
property rather than 10 percent of the agricultural value. Other 
comments recommended that the sale be based on appraised agricultural 
value (rather than lesser of appraised agricultural value or original 
purchase price) to avoid a potential windfall to the purchaser that 
might raise private benefit or other issues under federal tax law if 
the eligible entity is a nongovernmental organization.
    Response: The 10-percent limit was identified because NRCS may have 
to

[[Page 8115]]

recover costs if the conveyance includes more than ``reasonable holding 
and transaction costs.'' It is consistent with industry standards and 
the use of a published upper limit removes the potential for arbitrary 
decision making and expensive challenges in cost recovery cases. 
Additionally, this transaction type aims to help farmers and ranchers 
gain access to affordable farmland, and a limit on the holding and 
transaction costs that may be charged to the farmer or rancher ensures 
that there is no circumvention of that intent.
    A discussion of the federal income tax regulatory requirement that 
an organization described in section 501(c)(3) of the Internal Revenue 
Code (IRC) operate for the benefit of public rather than private 
interests is outside the scope of both the jurisdiction of the United 
States Department of Agriculture and this rule. For more information 
about the requirements applicable to tax-exempt organizations, 
including those described in section 501(c)(3) of IRC, visit the IRS's 
Charities and Nonprofits page at www.irs.gov/charities-and-nonprofits.
    The ACEP statute requires the sale to be at ``agricultural value'' 
plus any reasonable holding costs. A sale at FMV assumes that the 
impact of the placement of the easement on the land will result in the 
highest and best use of the land being agriculture, and thus 
agricultural value. The alternative value, the purchase price at which 
the entity purchased the land, would have been at most, theoretically, 
FMV of the land without being encumbered by the easement. If the 
original purchase price of the property was less than FMV of the land 
encumbered with the easement, then ACEP assistance through a BPS 
arrangement is not necessary for the entity to have a viable 
transaction that would result in the same outcome and could occur 
without an investment of taxpayer funds.
    This requirement ensures that eligible entities do not profit from 
the BPS transaction at the cost of the qualified farmer or rancher. The 
provision requiring the eligible entity to sell the property at the 
original purchase price, if lower than the appraised agricultural 
value, was similarly included to help farmers and ranchers gain access 
to affordable farmland. NRCS has clarified in the regulation that 
appraised agricultural value means agricultural value of the land. An 
eligible entity should seek tax or legal advice if a particular 
transaction, due to the entity's unique circumstances, could jeopardize 
its tax-exempt status. In those instances, the entity can move forward 
independently without ACEP assistance, especially if the entity would 
make a profit from the subsequent land transfer, which would negate the 
need for Federal funds.
    No change is made to the regulation in response to this issue.
    Comment: NRCS received comment requesting that the pre-closing 
transfer of BPS easements should allow for advance payments in addition 
to reimbursements.
    Response: NRCS selected the reimbursement-only approach for pre-
closing BPS transactions as it reduces the risk for cost-recovery by 
allowing NRCS and the entity to ensure the transaction meets all 
requirements prior to NRCS providing cost-share assistance. To ensure 
this risk is minimized across all BPS transactions, NRCS has clarified 
that payment of the Federal share will occur on a reimbursable basis 
for all BPS transaction types. Even under standard (non-BPS) ALE 
transactions, an advance payment may only be issued 30 days prior to 
closing. Therefore, the amount of time the eligible entity could be in 
receipt of easement funds in advance of the easement closing under the 
requested approach is minimal, whereas the reimbursement-only approach 
for BPS transactions significantly reduces risk and increases 
administrative savings for both the eligible entity and the Government. 
The regulation has been updated to make the Federal share payment 
provision more consistent across the BPS transaction types.
    Comment: NRCS received comment related to adjusted gross income 
(AGI) waivers; two comments suggested adding AGI waivers for entities 
involved in BPS transactions who play an intermediary role as 
landowner. Another comment suggested automatically waiving AGI for BPS 
transactions because entities only act as pass-through organizations 
for the purpose of the contract.
    Response: The requesting and granting of AGI waivers for landowners 
that the Farm Service Agency (FSA) has determined do not meet the AGI 
limitations must ultimately be addressed prior to providing ACEP funds. 
Determinations to waive AGI for landowners that do not meet the AGI 
limitations, as set forth in 7 CFR part 1400, must be based on a case-
by-case basis. NRCS policy addresses when NRCS makes its eligibility 
determinations, including AGI, based on the BPS transaction type and 
provides maximum flexibility with respect to the timing of conducting 
AGI determinations. No change is made to the regulation in response to 
this issue.
    Comment: NRCS received comment regarding the length of ACEP-ALE 
agreements for BPS transactions, including request for an extension 
beyond the 3-year ACEP-ALE agreement length (and 12-month extension) 
for post-closing transfers to a qualified buyer or an extension to a 5-
year agreement length.
    Response: NRCS provides a period of 3 years, plus a potential 
additional 12 months, to find a qualified buyer, in addition to the 
initial 2-year period provided to close on the easement, for a total of 
6 years for an individual transaction. NRCS selected the 12-month 
extension for several reasons, largely based on the administrative 
burden associated with extending transactions further.
    Additionally, NRCS recognizes that post-closing BPS transactions 
compete for the same ACEP funds that otherwise would be available to 
protect land that is already owned by a private or Tribal landowner or 
qualified farmer or rancher. Under a post-closing BPS transaction, 
until transfer to a qualified farmer or rancher takes place, the 
intended purposes of ACEP for which the Federal funds have been 
invested, are not fully realized. If the property is not ultimately 
transferred, then those Federal funds have been rendered unavailable 
for 5 to 6 years during which time they could have been used to protect 
another property that may have met ACEP purposes from the outset. 
Twelve months was chosen to ensure appropriate stewardship of Federal 
funds. No change is made to the regulation in response to this issue.
    Comment: NRCS received comment requesting addition of an option to 
purchase at agricultural value (OPAV) for BPS agreements to maintain 
maximum flexibility.
    Response: Encumbered land under a BPS transaction must be sold at 
agricultural value to a qualified farmer or rancher. The ACEP statute 
at 16 U.S.C. 3865b(b)(4)(D)(i) specifically allows the inclusion of 
additional deed terms to keep the land subject to the ALE under the 
ownership of a farmer or rancher, which includes easement deeds that 
are part of a BPS transaction. However, NRCS must provide oversight to 
ensure that the use of an OPAV term in BPS transactions does not create 
an incentive for strawman sales to a qualified farmer or rancher just 
to meet statutory BPS requirements and then have the qualified farmer 
or rancher sell the land immediately back to the entity at agricultural 
value under the OPAV term. No change is made to the regulation in 
response to this issue.

[[Page 8116]]

    Comment: NRCS received comment recommending modification of the 
penalty for failure to complete BPS transactions to a sliding scale of 
restitution rather than full repayment.
    Response: The ACEP statute requires that the ``Secretary shall be 
reimbursed for the entirety of the Federal share of the cost of the 
agricultural land easement by the eligible entity if the eligible 
entity fails to transfer ownership.'' NRCS does not have any 
flexibility with respect to the level of restitution and therefore no 
change is made to the regulation in response to this issue.
    Comment: NRCS received comment requesting that eligibility for BPS 
transactions be expanded to include land owned by State and local 
governments.
    Response: The statute identifies ``eligible land'' as ``private or 
tribal land,'' which land owned by a State or local government is not. 
However, this limitation does not preclude the involvement of a State 
or local government in a BPS transaction. A state or local government 
can serve as the interim easement holder while a non-governmental-
eligible entity serves as the landowner until the land can be 
transferred to a qualified farmer or rancher. No change is made to the 
regulation in response to this issue.
    Comment: NRCS received comment requesting that, in the development 
of its policy for BPS transactions, the entity not be required to 
identify the landowner or sale price during the application and 
agreement phase.
    Response: NRCS does not require the identification of the landowner 
or sale price during the application phase. The timing of the 
identification of the landowner and the sale price is specified in the 
ALE-agreement terms and based on the specific BPS transaction type as 
either a pre-closing or post-closing transfer. No change is made to the 
regulation in response to this issue.
    Comment: NRCS received comment requesting that land eligibility 
provisions be changed for BPS transactions, including removal of the 
``imminent threat'' test example or addition of ``advancing program 
goals'' as a basis for eligibility.
    Response: To align with the ``Conference Report to Accompany H.R. 
2--Agriculture Improvement Act of 2018'' (Managers' Report), the ACEP-
ALE ``eligible land'' definition for BPS transactions was modified to 
``allow for agricultural land to be owned by an eligible entity on a 
transitional basis to qualify for program participation, provided that 
the land subject to the agricultural land easement be transitioned to 
farmer or rancher ownership within 3 years.'' Due to the transitional 
nature of this ownership, there are risks that the Federal investment 
in ACEP-ALE benefits will not be fully realized, risks that do not 
exist with standard ALE transactions. However, in some circumstances, 
such as an imminent threat of development, this risk is outweighed by 
the benefit of placing an easement on land not owned by an otherwise 
eligible private or Tribal landowner at the time the Federal funds are 
invested in the easement.
    NRCS therefore states in the ACEP regulation that, to be eligible 
for a BPS transaction, the land must be subject to conditions that 
necessitate the ownership of the parcel by the eligible entity on a 
transitional basis prior to the creation of an agricultural land 
easement, and that these conditions may include land subject to an 
``imminent threat of development, including, but not limited to, 
planned or approved conversion of grasslands to more intensive 
agricultural uses.'' Other conditions may also satisfy that 
requirement. NRCS made a slight editorial clarification in the 
regulation with respect to the requirement that the eligible entity 
must, within 12-months of the BPS agreement, have completed the initial 
purchase of the land or have demonstrated that completion of the 
purchase of the land is imminent.
    No other change is made to the regulation in response to this 
issue.
    Comment: NRCS received comment on the issue of merger of title in 
BPS transactions, including comment recommending deed term stating 
merger does not apply. Another comment encouraged NRCS and Office of 
the General Counsel to rely on an opinion of counsel eligible to 
practice in the State in which the ALE project is located to the effect 
that no merger would result through the transaction if the eligible 
entity: (1) Developed strong anti-merger language to allow it to grant 
an agricultural land easement to itself while still holding the fee 
title to the property, and then (2) reaffirmed the agricultural land 
easement at the time the eased parcel is sold to a farmer or rancher.
    Response: ACEP-ALE is a nationwide program and State law varies on 
the effectiveness of an anti-merger clause; however, in general, 
entities may include a no merger clause in ALE deeds. However, NRCS 
does not believe that the combination of an anti-merger clause with the 
suggested attorney's opinion sufficiently allows an eligible entity to 
temporarily hold the easement and the underlying fee at the same time. 
NRCS contemplated this proposed BPS transaction structure in response 
to previous public comments. The comment received does not introduce 
new information resulting in a different determination with respect to 
the legal issues of easement creation, as an easement, by definition, 
are the rights held by someone in the land owned by another and is 
created at the time of the transfer to the other person.
    The article supplied by the respondent reaffirmed this concept by 
identifying cases where courts determined that the doctrine of merger 
was not applicable due to the transfer of an easement to a third party. 
Merger of title addresses the extinguishment of an easement right due 
to a subsequent acquisition of fee title, while the BPS transactions 
present issues of easement creation. In addition to these issues, the 
conflict of interest inherent in this type of ownership scenario, which 
would impact enforcement, monitoring, and management of the easement 
and property, would not be mitigated by including an anti-merger 
provision. No change is made to the regulation in response to this 
issue.
    Comment: NRCS received comment that parcel substitutions for BPS 
transactions should be allowed.
    Response: Due to the unique and complex nature of BPS transactions, 
the ALE agreement includes terms that are specific to the individual 
transaction and ultimately constitute the `legal arrangement' being 
entered into `relating to land owned . . . by an eligible entity' for 
the purchase of an agricultural land easement on that particular piece 
of land. In contrast, the terms of the standard ALE agreement and 
contract appendix are applied universally to every parcel funded. No 
change is made to the regulation in response to this issue.
    Comment: NRCS received comment recommending that changes to 
transaction type (pre-closing versus post-closing transfer) be allowed 
after entering into agreement.
    Response: NRCS identified two types of BPS transactions in the 
interim rule: 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 apply to both 
types. NRCS will address in the terms of the ALE agreement how an 
eligible entity may request a modification to an ALE-agreement to 
change between these two types of BPS transactions. No change is

[[Page 8117]]

made to the regulation in response to this issue.
    Comment: NRCS received comment requesting clarification in the 
preamble as to whether a qualified farmer or rancher includes those who 
do not file a Schedule F, such as a farmer in an S corporation.
    Response: IRS Form 1040 or 1040-SR, Schedule F, ``Profit or Loss 
from Farming,'' is the preferred documentation and is consistent with 
other NRCS and USDA programs. However, NRCS will also consider 
circumstances in which other forms of IRS documentation identifying the 
landowners' engagement in an agricultural operation may be appropriate.

ALE Contribution Requirements

    Under both the 2014 and 2018 Farm Bills, NRCS may provide a Federal 
share that does not exceed 50 percent of the FMV of the agricultural 
land easement and requires the eligible entity to provide a share at 
least equivalent to that provided by NRCS, except in the case of 
grasslands of special environmental significance. For grasslands of 
special environmental significance, NRCS may provide a Federal share 
that does not exceed 75 percent of the easement FMV and the non-Federal 
share requirement is adjusted accordingly. The 2018 Farm Bill removed 
the 50-percent cash contribution requirement on the part of the 
eligible entity and identified permissible sources of the non-Federal 
share. NRCS received the following comments.
    Comment: NRCS received comment in support of removing the 
requirement for the eligible entity to provide a minimum cash 
contribution toward the purchase of the agricultural land easement and 
allowing donations of land by the landowner and eligible entity 
expenses for procured items to satisfy the non-Federal share 
requirements. Other comments did not support eligible entities no 
longer being required to provide a minimum cash contribution.
    Response: The regulatory changes follow requirements of the 2018 
Farm Bill. No change is made to the regulation in response to this 
issue.
    Comment: NRCS received comment suggesting changes to how NRCS 
structured the non-Federal share in the regulation. They asked that the 
``and'' at the end of the list be replaced with an ``or.''
    Response: NRCS is clarifying that the sources comprising the non-
Federal share are listed in order, and proceeding through the list, 
once the minimum non-Federal share amount is met, additional sources 
and amounts do not need to be identified.
    Additionally, given that an eligible entity's contribution may be 
related to cash resources expended for the purchase of the land prior 
to the easement transaction, NRCS has clarified in the regulation that 
for BPS transactions, part of the non-Federal share provided by an 
eligible entity may include that portion of the fair market value of 
the agricultural land easement that is not provided as the Federal 
share.
    Comment: NRCS received comment requesting clarification about the 
timing and the type of documentation that would be required for 
procured costs incurred by the eligible entity if relied upon to meet 
the non-Federal share requirement.
    Response: The regulation states that documentation requirements for 
procured costs are included in the ALE agreement. NRCS recognizes that, 
at the time of agreement, costs for procured items are estimated 
amounts and have not yet been incurred. Such estimates are needed in 
order to calculate the amount of the Federal share that may be 
obligated. No change is made to the regulation in response to this 
issue.
    Comment: NRCS received comment requesting that baseline reports and 
mineral assessments be added to the list of procured costs that may be 
included in the non-Federal share.
    Response: NRCS added baseline reports and mineral assessments to 
the list of items that may be included in the non-Federal share if 
these items are procured by the eligible entity from third parties.
    Comment: NRCS received comment asking that a Federal share of up to 
75 percent of easement costs be provided in communities that do not 
have eligible entities present.
    Response: The statute limits NRCS's authority to provide a Federal 
share of up to 75 percent of the easement value to grasslands of 
special environmental significance only. No other types of transactions 
are authorized to receive up to 75 percent of the easement value, 
including transactions that occur in communities that do not have an 
eligible entity present. No change is made to the regulation in 
response to this issue.
    Comment: NRCS received comment requesting a change to clarify that 
the non-Federal share provided by the eligible entity for ACEP-ALE 
grasslands of special environmental significance must comprise the 
difference between the Federal share and the remainder of the FMV. The 
comment requested removal of the provision that, in the event the non-
Federal share provided by the eligible entity is less than such amount, 
NRCS will provide a Federal share equivalent to the non-Federal share 
being provided.
    Response: The interim rule mirrors the statute. Additionally, the 
language allows for the possibility that, in the event that the non-
Federal share provided by the eligible entity does not comprise the 
difference between the Federal share and the remainder of the FMV of 
the easement, NRCS could still provide a lesser amount that is 
equivalent to the non-Federal share. Although this is unlikely, 
removing the language from the regulation would eliminate this 
possibility. No change is made to the regulation in response to this 
issue.

ALE Deed Requirements and Terms

    NRCS received comment related to the topic of ALE deed requirements 
and deed terms as follows:
    Comment: NRCS received comment related to the ALE deed template 
review, recommending that the deed template review be limited to 
ensuring that the minimum deed terms are incorporated and that other 
terms are not contrary to the purpose of ACEP.
    Response: The NRCS review of ALE deed templates focuses on ensuring 
that minimum deed terms (MDT) are incorporated and ensuring other terms 
are not contrary to the purpose of the program. Review of other items 
may be necessary to ensure that the document will work effectively as a 
template for the acquisition of agricultural land easements on multiple 
parcels. No change is made to the regulation in response to this issue.
    Comment: NRCS received comment about deed provisions related to 
agricultural use, including a request to strike the phrase ``consistent 
with agricultural use'' and replace it with the phrase ``does not 
negatively affect agricultural use'' as to commercial uses. Another 
comment recommended that NRCS limit its ability to impose greater deed 
restrictions in instances where the State definition of agricultural 
uses may result in the degradation of the soils, agricultural nature of 
the land, or related natural resources.
    Response: This phrase `consistent with agricultural use' is 
unchanged from the previous ACEP regulation and is expansive enough to 
apply to farmland and grassland enrollments and is sufficient to 
prevent commercial uses that may negatively affect agricultural uses. 
NRCS may impose deed restrictions needed to ensure ACEP-ALE purposes 
will be met in exchange for the Federal investment. No change is

[[Page 8118]]

made to the regulation in response to this issue.
    Comment: NRCS received comment expressing general support for 
various elements of the deed requirements set forth in the interim 
rule, including commending NRCS for the revised mineral development 
language; language regarding an entity's use of their own deed terms 
and conditions; and supporting the U.S. right of enforcement and right 
of inspection language in the interim rule.
    Response: NRCS thanks respondents for their input. No change is 
made to the regulation in response to these issues.
    Comment: NRCS received comment related to amendment clauses that 
must be included in each agricultural land easement deed, recommending 
splitting the amendment provision in the regulation to avoid confusion 
between ``amendments'' and the various types of easement administration 
actions (subordination, modification, exchange, and termination 
actions).
    Response: NRCS appreciates the request for clarification regarding 
the requirement that each agriculture land easement deed include 
clauses that address amendments or changes that may occur after 
recordation of the easement. To clarify, NRCS uses the term 
``amendment'' in the regulatory deed requirement in Sec.  1468.25(d)(4) 
broadly to include each type of easement administration action: 
Subordination, modification, exchange, and termination. In practice, 
NRCS provides two separate clauses in the minimum deed terms to address 
this regulatory deed requirement and fully encompass the various types 
of easement administration actions. NRCS revised the text in the final 
rule to clarify and remove ambiguity regarding the various types of 
changes to the easement deed or easement area that must be approved in 
advance by NRCS.
    Comment: NRCS received comment regarding the interim rule's 
impervious surface limitations that must be specified in ACEP-ALE 
easement deeds, including comments recommending that NRCS authorize a 
blanket impervious surface waiver to ACEP-ALE easement deed language 
and cap the waiver authority at 5 percent of the easement area.
    Response: The impervious surface limitation and the current cap are 
well-established. NRCS explained in prior rulemakings the basis for its 
use of a 2-percent limitation and the flexibility of having a waiver 
that allows up to 10 percent based upon site-specific factors. In 
particular, this limitation provides a reasoned balance between 
ensuring the future capacity of agricultural land use with flexibility 
to allow for changes to the agricultural operation.
    NRCS requires a parcel-by-parcel determination because impervious 
surface limitations are site-specific. NRCS will not approve a blanket 
waiver or grant eligible entities a right to create blanket waivers for 
a greater impervious surface limit.
    However, there is an existing waiver option available that may have 
been underutilized. Specifically, when an eligible entity has a waiver 
process consistent with NRCS limitations and it is based on parcel-by-
parcel determinations made by the entity, the entity may request 
authority from NRCS to use its own process. In this case, separate 
individual parcel waivers from NRCS would not be necessary.
    No change is made to the regulation in response to this issue.
    Comment: NRCS received comment regarding the subsurface mineral 
deed provisions. The comments requested:
     A requirement that native plants be used to remediate 
subsurface mining impacts;
     A requirement that involves State technical committees 
when determining impact of mineral development;
     That NRCS seek guidance on timing and responsibility for 
the development of the subsurface development plan; and
     That NRCS provide flexibility in the identification of de 
minimis gravel extraction sites.
    Response: NRCS recognizes the preference for the use of native 
plants for remediating sites in general, but the determination of the 
appropriate vegetation for any particular easement must be based upon 
site-specific factors.
    While the State technical committee can provide input on the impact 
of mineral development to particular land uses or locations in the 
State, such input would be inappropriate on an individual easement 
basis.
    The eligible entity is responsible for providing the subsurface 
mineral development plan to NRCS, which must be approved by NRCS prior 
to initiation of the mineral development activity, as set forth in 
Sec.  1468.25(d)(7)(v).
    The de minimis gravel extraction matter is not a regulatory issue 
but the comment responds to text that exists in the current minimum 
deed terms.
    NRCS would like to clarify that de minimis gravel extraction is 
through surface methods and therefore not encompassed by the subsurface 
mineral deed. Additionally, the current minimum deed terms authorize 
such de minimis gravel extraction for on-farm purposes. No change is 
made to the regulation in response to these issues.
    Comment: NRCS received comment recommending that certified entities 
need not be required to seek NRCS approval for subdivision and other 
activities that currently require NRCS approval under regulatory deed 
requirements and allow only notice to NRCS of these actions as 
sufficient.
    Response: The interim rule language did not change from prior 
rules. Certified entities have broad discretion already but still must 
meet regulatory deed requirements. NRCS, as a fiduciary, must approve 
those actions that can so fundamentally affect program purposes.
    Comment: NRCS received comment with respect to the requirement of 
the United States right of enforcement in the agricultural land 
easement deed, including request that a reference to Sec.  1468.28 be 
added to the right of enforcement definition, recommendation that the 
word ``contingent'' should be inserted before the term ``United States 
right of enforcement'', and a statement that the right of enforcement 
does not include the ability of the NRCS enforce the terms of an ALE 
plan if such a plan exists.
    Response: NRCS removed the term ``contingent'' many years ago to 
remove confusion that such right is a currently vested right. The term 
``contingent'' indicates that NRCS's exercise of its right of 
enforcement is conditioned on particular events. It does not mean that 
the right itself is contingent, such that it would only be vested upon 
some future event.
    NRCS has not included any cross references to the various sections 
which relate to the United States right of enforcement in the 
definition itself since such cross-referencing is unnecessary.
    Agricultural land easements acquired under the 2018 Farm Bill are 
not required to have or be subject to an ALE plan. NRCS enforces highly 
erodible land conservation plans on highly erodible cropland as 
required by the ACEP-ALE statute; however, NRCS does not otherwise 
identify in the regulation the enforcement of an ALE plan.
    No change is made to the regulation in response to this issue.
    Comment: NRCS received comment stating that the statutory 
requirement of providing notice and right to participate when 
exercising the right of inspection should be added to the rule and deed 
terms.
    Response: The circumstances under which NRCS may enter upon and 
inspect an easement pursuant to the United States right of enforcement 
is

[[Page 8119]]

included in the full right of enforcement clause provided to all 
eligible entities and must be used in all ACEP-funded agricultural land 
easement deeds. The ACEP regulation clarifies that NRCS will provide 
the agricultural land easement holder and the landowner a reasonable 
opportunity to participate if NRCS exercises its right of inspection.
    Comment: NRCS received comment recommending that deed terms should 
allow site potential tree height (SPTH) forested riparian buffers as a 
permissible provision in western Washington.
    Response: The ACEP regulation includes a ``catch-all'' provision 
that allows States to have additional minimum deed terms. NRCS 
recommends that the commenters and any stakeholders with similar 
concerns should work with their applicable State Conservationist. No 
change is made to the regulation in response to this issue.
    Comment: NRCS received comment related to how the ALE-agreement 
references the deed requirements.
    Response: The ALE agreement must specify the deed requirements as 
set forth in the regulation so that they are enforceable.

ALE Entity Certification

    NRCS received comment related to ALE entity certification as 
follows:
    Comment: NRCS received comment on the term of agreements with 
certified eligible entities recommending that NRCS allow for a minimum 
5-year term.
    Response: NRCS is changing the regulatory language in response to 
this comment to specify that agreements with certified entities will be 
for a minimum of 5 fiscal years following the fiscal year the agreement 
is originally executed, but may not exceed 7 fiscal years following the 
fiscal year the agreement is originally executed. NRCS has found that 
an upper limit is necessary to limit the administrative burden 
associated with implementing agreements that cross different farm 
bills.
    Comment: NRCS received comment urging NRCS to expand eligibility 
for certification for State agencies, recommending a broadening of 
language for which types of prior conservation easements would be 
counted, and requesting that NRCS drop the number of required prior 
conservation easement transactions from 10 to 5.
    Response: The terms for certification of State agencies are set 
forth in statute, including the type of easements that can be counted 
and the number of prior transactions required, and NRCS does not have 
discretion to waive or amend those provisions. No change is made to the 
regulation in response to this issue.
    Comment: NRCS received comment requesting additional guidance on 
the entity certification process, including evaluation criteria, how 
NRCS will address partnerships between certified and non-certified 
eligible entities, what technical assistance NRCS may provide to 
certified entities (with regards to things like title review and 
appraisal), the benefits of certification, and the definition of a plan 
for administering easements. The comment detailed recommendations about 
the kind of transparency NRCS should have for its process and the 
timeline. Another comment requested a streamlined process for 
certifying eligible entities, including State agencies and land trusts.
    Response: The internal certification review process is found at 440 
Conservation Programs Manual (CPM) Part 528 and may be accessed at 
https://directives.sc.egov.usda.gov/. NRCS will continue its ongoing 
efforts to streamline processes through new business tools to be as 
efficient and effective in program delivery as possible while operating 
within legal authorities. NRCS will continue to make publicly available 
any new policy or guidance. No change is made to the regulation in 
response to this issue.
    Comment: NRCS received comment expressing support for changes made 
in the interim rule to the entity certification process.
    Response: NRCS appreciates this support.

ALE Land Eligibility Issues

    NRCS received comment related to ALE land eligibility as follows:
    Comment: NRCS received comment about forest land eligibility 
issues. Many supported maintaining the two-thirds limitation on non-
industrial private forest land (NIPF) eligibility under ACEP-ALE and 
offered that programs like the Regional Conservation Partnership 
Program (RCPP), Healthy Forests Reserve Program (HFRP), and Forest 
Legacy Program can all be used currently to protect forest lands. 
Another comment requested the two-third limitation on NIPF in ACEP-ALE 
be struck.
    Response: To minimize duplication, overlap, and conflict with other 
USDA forest easement programs, the interim rule and this regulation 
maintain the existing eligibility provision that land enrolled in ACEP-
ALE cannot include NIPF greater than two-thirds of the ACEP-ALE 
easement area unless waived by NRCS with respect to forest lands 
dedicated to sugar bush that contribute to the economic viability of 
the parcel.
    NRCS specifically requested public comment in the interim rule on 
whether RCPP or HFRP could protect lands on which NIPF is the 
predominant use at levels beyond the scope of ACEP-ALE. Regarding the 
two-third limitation, NRCS cannot authorize parcels that are 100 
percent NIPF because statutory eligibility criteria is phrased as NIPF 
contributing to the economic viability of an offered parcel or serving 
as a buffer to protect land from development. Thus, the eligibility of 
NIPF is in relationship to other eligible land. This has long been 
NRCS's interpretation of this eligibility criterion under ACEP-ALE and 
its predecessor Farm and Ranch Lands Protection Program. Congress 
specifically rejected language that would have expanded eligibility in 
the 2018 Farm Bill. NRCS concurs that the availability of other USDA 
easement programs that specifically protect forested lands warrants the 
continued focus of ACEP-ALE more broadly on other agricultural lands. 
No change is made to the regulation in response to this issue.
    Comment: NRCS received comment about the definition of grasslands 
of special environmental significance (GSES) under ACEP-ALE, including 
support for the definition of GSES and the prioritization and 
management of native vegetation and habitats in relationship to GSES. A 
comment also encouraged the return of land to heritage marshes and 
vernal pools wherever possible on GSES enrollments. Another comment 
supported allowing only native vegetation to be categorized as GSES.
    Response: NRCS believes that the current GSES definition supports 
the recommendation about prioritization of native vegetation and 
habitat. In particular, the GSES definition identifies sensitive or 
declining native prairie or grassland types or grasslands buffering 
wetlands. However, there are grasslands that, while not native 
vegetation, provide critical habitat for at-risk species that warrant 
the increased Federal investment to protect. Thus, NRCS will not limit 
GSES to native vegetation only. No change is made to the regulation in 
response to this issue.
    Comment: NRCS received comment related to ALE land eligibility, 
including:
     A request that confined animal feeding operations (CAFOs) 
not be eligible for an ALE-funded easement;
     A comment addressing the ineligibility criteria related to 
on-site and off-site conditions;
     A comment commending NRCS for including criteria related 
to permitted

[[Page 8120]]

rights-of-way and requesting that NRCS clarify how off-site conditions 
are deemed suitable for the purpose of making ALE land eligibility 
determinations;
     A comment requesting that NRCS broaden the definition of 
access and the eligibility requirements so that air access can qualify; 
and
     A comment requesting additional clarification as to 
whether a farmer or rancher can participate in both ALE and 
Conservation Reserve Program (CRP).
    Response: For any proposed easement containing a CAFO, the confined 
area is a heavy use area that must be evaluated by NRCS to determine if 
the on-site or off-site conditions render the site ineligible and make 
a determination as to whether the land meets the required land 
eligibility criteria. This is a case-specific determination and broad 
categorization of land eligibility simply based on type of operation is 
not appropriate. NRCS has set forth in national policy, which is 
publicly available, the procedures and forms NRCS uses to make land 
eligibility determinations for ACEP-ALE, including assessing the 
potential of onsite and offsite conditions to undermine the purposes of 
ACEP. Ultimately, land eligibility determinations are site-specific and 
rely upon programmatic and technical assessments based on criteria set 
forth broadly in national policy and more specifically at the State 
level. For more information, see: 440 CPM part 528 at https://directives.sc.egov.usda.gov/.
    Legal access to agricultural land easements is critical to the 
ability of the eligible entity, and NRCS, under its right of 
enforcement, to monitor and enforce the terms of the easement and 
ensure that program purposes are achieved. Effective monitoring and 
enforcement ultimately require ground inspection and verification. 
Access to an easement that can only be achieved by aircraft would 
require both the eligible entity and NRCS to maintain, in perpetuity, 
aircraft that can provide personnel access to monitor and land on the 
easement property and would require the landowner to maintain, in 
perpetuity, a landing strip or helipad on the property. NRCS does not 
maintain its own aircraft for easement monitoring purposes and cannot 
evaluate the safety and suitability of aircraft owned by the eligible 
entity or the landowner's landing strip or helipad. All lands that do 
not have sufficient legal, physical access are ineligible to receive 
Federal funds under ACEP, including those that are only accessible by 
air.
    The 2018 Farm Bill specifies that a farmer or rancher who owns 
eligible land subject to an agricultural land easement may enter into a 
CRP contract. Determinations of land eligibility for enrollment in CRP 
are under the purview of FSA and we have therefore shared the comment 
with FSA. No change is made to the regulation in response to these 
issues.

ALE Planning

    NRCS received comment related to ALE planning and ALE plans as 
follows:
    Comment: NRCS received comment related to ALE planning generally 
and some of them urging NRCS to require a grassland management plan for 
grasslands of special environmental significance given the higher 
environmental value of these easements. Another comment recommended 
that NRCS continue to encourage planning on ALE easements, while a 
comment did not support how NRCS encouraged planning.
    Response: The 2018 Farm Bill removed language requiring that ACEP-
ALE easements enrolled under the 2018 Farm Bill be subject to an ALE 
plan, including grasslands of special environmental significance. 
However, in the Managers' Report, the Managers ``encourage USDA and 
eligible entities to work with landowners entering into an ALE easement 
to undertake conservation planning activities on their land in order to 
maximize the environmental value of the protected land.'' Therefore, 
NRCS will continue to encourage planning on ACEP-ALE enrollment, 
including grasslands of special environmental significance. No change 
is made to the regulation in response to this issue.
    Comment: NRCS received comment strongly supporting the recognition 
ALE plan as a measure that maintains or increases the agricultural 
viability of the land in the ranking criteria, and identified that the 
ranking criterion should strongly weight ALE plans for grasslands of 
special environmental significance and that a plan should be required 
for any application that is prioritized based on carbon sequestration 
or climate change resiliency goals. Another comment expressed that an 
ALE plan should not be recognized in the ranking criteria because it is 
no longer required by statute.
    Response: As described in the preamble of the interim rule, NRCS 
identified that the development and maintenance by the eligible entity 
of an ACEP-ALE plan could be a ranking consideration at the State level 
to prioritize applications from eligible entities. NRCS believes that 
conservation planning is the base upon which sound conservation 
stewardship originates. To eliminate support for planning would 
undermine the quality of stewardship that would be encouraged on lands 
in which the public provides a sizable financial investment. 
Additionally, as a ranking criterion this consideration does not 
prohibit eligible entities from being able to access program funding 
but instead acknowledges that eligible entities committed to long-term 
conservation planning are helping to ensure an agricultural land 
easement yields the greatest benefits for the landowner, conservation, 
and the public funds invested in that easement. No change is made to 
the regulation in response to this issue.
    Comment: NRCS received comment related to the definition of the ALE 
plan, with some advocating for the removal of the ALE plan definition 
entirely because plans are no longer mandated by statute. Another 
comment supported the definition of ALE plans and commended NRCS for 
clearly defining that the plan is developed by the eligible entity and 
not as a component of the deed. Comment also expressed support for 
limiting conservation plans to only highly erodible croplands.
    Response: NRCS supports conservation planning as the cornerstone of 
land stewardship efforts. NRCS retained the definition of the ALE plan 
in the ACEP regulation. No change is made to the regulation in response 
to this issue.

ALE Program Requirements

    NRCS received comment related to ALE program requirements as 
follows:
    Comment: NRCS received comment requesting clarification as to how 
NRCS will determine if a landowner entity is compliant with AGI.
    Response: NRCS uses the AGI eligibility determinations made by the 
FSA. NRCS accesses such determinations through the agencies' shared 
database services. No change is made to the regulation in response to 
this issue.
    Comment: NRCS received comment related to the requirement that 
eligible entities must provide evidence of their financial capacity for 
transactions in which the non-Federal share does not include at least a 
10-percent cash contribution from the eligible entity for payment of 
easement compensation to the landowner. Other comment requested removal 
of the requirement that the entity provide specific evidence of funds 
available for stewardship of the easement and suggested that entity 
eligibility requirements that apply to all ACEP-ALE transactions 
regardless of

[[Page 8121]]

entity cash contribution amounts are sufficient. Other comment 
commended NRCS on including the requirement but requested clarification 
as to what would constitute specific evidence of funds available for 
stewardship.
    Response: All entities must demonstrate capability and capacity as 
an eligibility requirement. Under the 2014 Farm Bill, NRCS could use an 
entity's ability to provide at least the required cash contribution 
amount for all ACEP-ALE transactions as an indication that the entity 
is able to meet capability and capacity requirements. Where an entity 
is unable to provide at least a minimum cash contribution, questions 
arise as to the entity's financial capacity to assume responsibility 
for the easement acquisition. NRCS has, therefore, specified in the 
regulation the conditions under which additional capability and 
capacity evidence will always be required. However, it is always the 
entity's responsibility to establish that it meets basic ACEP-ALE 
eligibility requirements and as identified in the rule, the entity must 
provide to NRCS sufficient information to establish that the applicable 
entity eligibility criteria have been met.
    Comment: NRCS received comment recommending that the definition of 
a farm or ranch succession plan be expanded to include transfers of 
land and deeds to non-relatives and other long-term protections for 
agricultural productivity. Also, comment recommended specifying that 
successions plans may include options to purchase at agricultural value 
or preemptive purchase rights.
    Response: The key part of a succession plan is that the landowner 
makes arrangements for the future management of the land as a farm or 
ranch once the landowner retires or dies. NRCS does not limit those 
types of arrangements. The definition of the succession plan in the 
regulation used intra-family succession agreements or business asset 
transfer strategies as examples. NRCS has added language to clarify 
that the examples included in the definition are not all-inclusive.
    Comment: NRCS received comment related to the easement valuation 
methods available under ACEP-ALE, encouraging NRCS to provide guidance 
on information required for easement valuation methods used other than 
the Uniform Standards of Professional Appraisal Practice (USPAP) 
appraisals, including areawide market analysis or other industry-
approved methods. Comment also expressed support for the current 
availability of ACEP-ALE valuation options beyond USPAP appraisals.
    Response: NRCS provides guidance in policy with respect to what is 
required if an eligible entity elects to use an alternative easement 
valuation methodology, including a ``Specification and Scope of Work 
for Areawide Market Analysis for ACEP-ALE.'' These items are published 
and publicly available in NRCS directive Title 440, Conservation 
Programs Manual (440-CPM), Part 528, Section 528.53, and in 440-CPM, 
Part 527, Subpart E, which can be accessed on the NRCS Electronic 
Directives system at https://directives.sc.egov.usda.gov/. No change is 
made to the regulation in response to this issue.
    Comment: NRCS received comment recommending that NRCS be required 
to consult with the State technical committee on ACEP-ALE 
prioritization for ranking, special eligibility, and all other State-
decided criteria.
    Response: Statutory authority states that State technical 
committees assist in implementation and technical aspects of 
conservation programs under Title XII of the Food Security Act, such as 
ACEP. Sections 1468.2 and 1468.22 of the ACEP interim rule incorporate 
this role, including that State technical committees provide input on 
the development of ranking criteria and other matters. No change is 
made to the regulation in response to this issue.
    Comment: NRCS received comment related to the ACEP-ALE application 
process and the new option for ALE-program agreements, requesting that 
NRCS make the application form and new option for ALE-program 
agreements form more usable and that the process be streamlined. Other 
comments wished to have greater guidance about how producers could 
participate and supported the new ALE program agreement option and 
requested additional clarification regarding its availability.
    Response: NRCS appreciates the complexity of easement transactions, 
including the extent of information that must be collected from 
applicants and participants on various program forms. NRCS has made 
several efforts to streamline the ACEP-ALE enrollment process. In FY 
2020, NRCS released various new or updated forms used to administer 
ACEP-ALE. Additionally, NRCS piloted in fiscal year 2019 and is 
implementing more widely in fiscal year 2020 the use of ALE program 
agreements, making available several automated eligibility and payment 
processes previously only available to NRCS financial assistance 
programs. Also, the use of a program agreement framework under ACEP-ALE 
allows NRCS and eligible entities to more easily address enrollment 
changes, such as parcel substitution or acreage modifications. Since 
NRCS does not receive landowner applications directly for ACEP-ALE 
enrollment, NRCS will provide outreach to States to help landowners 
interested in ACEP-ALE identify eligible entities in their geographic 
area. No change is made to the regulation in response to this issue.
    Comment: NRCS received comment recommending that NRCS allow water 
supply entities to participate in ACEP-ALE as eligible entities.
    Response: An eligible entity must meet the definition of an 
eligible entity established by statute and incorporated into the ACEP 
regulation. NRCS does not have authority to expand the basic eligible 
entity definition. No change is made to the regulation in response to 
this issue.

ALE Ranking

    NRCS received comment related to ALE ranking as follows:
    Comment: NRCS received comment related to removing the factor 
associated with national ranking criterion that takes into 
consideration whether the cash contribution is being provided by the 
eligible entity toward the payment of easement compensation to the 
landowner. Other comments:
     Recommended consideration of State and local tax 
incentives be added to this factor;
     Recommended NRCS prioritization of landowner donation in 
the ranking; and
     Agreed with including the eligible entity's cash 
contribution in the ranking.
    Response: The Managers report introduced flexibilities to provide 
better access to ACEP in States where conservation easement funding is 
limited. The Managers stated that they did not intend for NRCS to 
reject cash matches entirely but broadened the options available to 
eligible entities. NRCS recognizes that any time the eligible entity's 
cash contribution is reduced, the landowner receives less compensation 
for the sale of an easement on their land, which may result in ACEP 
funds being the only funds paid to the landowner for the easement. 
Additionally, the increased donation by the landowner will frequently 
satisfy the minimum non-Federal share requirement under ACEP-ALE. By 
considering the cash contribution as a positive attribute in ranking, 
NRCS is encouraging enrollment while ensuring that ACEP is implemented 
equitably. Each State has

[[Page 8122]]

the ability to calibrate the relative importance of cash contributions 
in the prioritization of applications for enrollment in that State. No 
change is made to the regulation in response to these issues.
    Comment: NRCS received comment related to ranking priority for 
actions related to the future, agricultural, and long-term viability of 
enrolled land. Comment supported adding information to the succession 
plan portion of the ranking, such as specifically identifying OPAV, 
Purchase of Development Rights (PDR), and other succession planning 
options that maintain agricultural viability or awarding points for 
innovative succession requirements. Comment also:
     Recommended expanding the ranking criteria to prioritize 
applications that increase opportunities for historically underserved 
farmers;
     Supported the maintenance of agricultural viability as a 
ranking criterion; including supporting its inclusion as both a 
national and State ranking factor;
     Suggested that such inclusion is duplicative;
     Recommended that agricultural viability be included in the 
national ranking criteria; and
     Recommended that succession planning be removed from the 
ranking criteria.
    Response: Based on national and State ranking criteria in the ACEP 
regulation, NRCS at the State level develops ranking factors and 
associated weights. Broadly identifying State ranking criteria in the 
regulation provides the needed flexibility for States to develop the 
specific ranking criteria that best address State and local priorities. 
Regarding long-term maintenance of agricultural viability, the national 
ranking criteria ensures, consistent with the statute, that this 
criterion is considered in every ACEP-ALE application by assessing 
whether a succession plan exists.
    The existence of State ranking criteria enables States to develop 
nuanced approaches to address long-term agricultural viability, which 
may include more specific identification or prioritization of certain 
types of succession plans or succession planning strategies. NRCS does 
not wish to limit agricultural landowners' choices or restrict who 
could be involved in succession planning. Such specificity is not 
necessary in the regulation itself.
    NRCS includes in the regulatory definition of a farm or ranch 
succession plan strategies that create opportunities for historically 
underserved landowners. NRCS also includes a State ranking criterion 
related to the multifunctional benefits of farm and ranch land 
protection, of which social and economic considerations may be 
included.
    No change is made to the regulation in response to these issues.
    Comment: NRCS received comment about eliminating the potential for 
prioritization of applications for which eligible entities agree to use 
the ACEP-ALE minimum deed terms.
    Response: In the interim rule, NRCS indicated that it may 
prioritize transactions where an eligible entity uses NRCS's standard 
set of minimum deed terms. This potential prioritization also existed 
for enrollment during the 2014 Farm Bill and its inclusion as a factor 
in the State's ranking criteria is at the State's discretion. An 
eligible entity's use of the standard set of minimum deed terms 
streamlines the easement approval process and eliminates the need for 
NRCS review of the conservation easement deed for individual 
transactions. The efficiency by which easement transactions are 
completed, including the use of available administrative streamlining 
options, is an appropriate consideration in ranking, and no change was 
made in this final rule. No change is made to the regulation in 
response to this issue.
    Comment: NRCS received comment related to the State ranking 
criteria for multifunctional benefits for the protection of a 
particular farm or ranch, recommending that NRCS at the State level 
have the option to specify `other related conservation benefits' under 
this multifunctional benefits criterion. Comment also recommended 
adding `species of economic significance' to the consideration for at-
risk species protection under this ranking criterion. Another comment 
recommended the criteria be `other related benefits,' striking 
`conservation' from the consideration, and other comments recommended 
that NRCS add ranking criteria about related conservation values.
    Response: NRCS agrees that evaluating the multifunctional benefits 
that may result from parcel protection is an important prioritization 
criterion. NRCS has enumerated in the regulation some potential 
benefits that may be considered and has included `other related 
conservation benefits' to provide States with the flexibility to 
identify such conservation benefits and establish the associated 
ranking factors and priorities. NRCS believes the State ranking 
criterion is sufficiently expansive for NRCS to tailor ranking factors 
at the State and local level. No change is made to the regulation in 
response to this issue.
    Comment: NRCS received comment and appreciation related to various 
State ranking criteria, including requesting that NRCS provide specific 
references to geographic differences for States to use in ranking. 
Other comment stated that prioritizing land in areas zoned for 
agricultural use may inadvertently exclude agricultural lands. Comment 
also recommended that protection of native prairie and other native 
habitats, including protection or improvement of habitat for 
pollinators, be added to the State ranking criteria related to the 
diversity of natural resources to be protected or improved, and 
requested that riparian buffers be ranked as the highest ACEP-ALE 
priority.
    Response: NRCS believes that the regulation provides a sufficient 
framework under which the various items brought forth in these comments 
can all be addressed at the State level with input from the State 
technical committee. No change is made to the regulation in response to 
these issues.
    Comment: NRCS received comment related to various national ranking 
criteria. One comment indicated that it is contradictory to limit 
forest land enrollment to two-thirds of an easement area while also 
having the extent of forestland as part of a ranking criterion. Another 
comment encouraged NRCS to clarify in the regulation that it will use 
the `median' county average farm size and requested higher priority be 
given to parcels adjacent to existing easements or protected areas.
    Response: Comment related to forest lands refers to the national 
ranking criteria for the percent of cropland, rangeland, grassland, 
historic grassland, pastureland, or nonindustrial private forest land 
permitted in a protected parcel. Each State is able to tailor the 
specific ranking factor to prioritize enrollment of land that contains 
the amounts and types of land and agricultural uses that are most at 
risk in their State. For example, a western State may establish the 
ranking factor to prioritize parcels with a larger percentage of 
historic grassland since those lands may be at the greatest risk of 
conversion. In contrast, a midwestern State may prioritize the 
percentage of cropland in a parcel since those lands may be at the 
greatest risk of conversion.
    Comment regarding median county average farm size refers to the 
national ranking criteria that considers the ratio of the size of the 
parcel compared to the average farm size in the county. As identified 
in the regulation, the USDA Census of Agriculture is the data source 
for this national ranking criterion; the

[[Page 8123]]

term `average size of farm' is contained in the Census. Based on ALE 
application and enrollment data, use of this nationally available data 
item continues to be appropriate. NRCS affirms that proximity to other 
protected lands continues to be one of the national ranking criteria 
set forth in the regulation.
    No change is made to the regulation in response to these issues.
    Comment: NRCS received comment recommending that NRCS allow ACEP-
ALE eligible entities to participate in State technical committee 
recommendations for ACEP-ALE ranking determinations.
    Response: Eligible entities may participate in the State technical 
committee; however, they may not participate in developing ranking 
factors for programs in which they participate. If potential 
participants had input into ranking factors, NRCS selection decisions 
would be suspect. NRCS will provide training to State offices 
describing the roles of eligible entities. No change is made to the 
regulation in response to this issue.
    Comment: NRCS received comment supporting various aspects of the 
ACEP-ALE ranking provisions, including: Commending NRCS for not using 
cost as a ranking criterion; commending NRCS's consideration of 
proximity to other protected land as a ranking criteria; and commending 
the straightforward implementation of ranking that allows States to 
prioritize parcels through ranking criteria.
    Response: NRCS appreciates the comments.
    Comment: NRCS received comment recommending landowners who have 
protected their land through ACEP-ALE receive priority for funding 
under NRCS' financial assistance programs, such as the Environmental 
Quality Incentives Program (EQIP).
    Response: NRCS receives input on program priorities, including 
priorities for enrollment in its financial assistance programs, from 
the State technical committees. There is no need to identify priorities 
for other programs' enrollment in the ACEP regulation. No change is 
made to the regulation in response to this issue.

Definitions

    NRCS received comment related to the definitions in the ACEP 
interim rule as follows:
    Comment: NRCS received comment related to the terms ``future,'' 
``agricultural,'' and ``long-term'' with respect to the term 
``viability.'' Comment recommended that greater consistency be applied 
throughout the final rule for the three terms with respect to the term 
``viability;'' the definition of ``agricultural viability,'' as 
referenced in the Managers' Report language, be clarified; and various 
items be added to, or deleted from, the definition of ``future 
viability.''
    Response: Since the creation of ACEP in the 2014 Farm Bill, the 
statute uses the phrase ``agricultural use and future viability'' in 
the program purposes statement. In response to comments on the February 
2015 ACEP interim rule, NRCS included a definition of ``future 
viability'' to identify that ACEP-ALE purposes include the legal, 
physical, and financial conditions under which the land itself will 
remain capable and available for continued sustained productive 
agricultural or grassland uses. The 2018 Farm Bill maintained the 
reference to ``agricultural uses and future viability'' in the context 
of the program purposes and introduced the term ``agricultural 
viability'' in the context of potential application prioritization. 
NRCS believes that the existing definition of ``future viability,'' 
which is sufficiently expansive without being overly prescriptive, 
includes such concepts as accessibility to beginning farmers or 
ranchers and continued affordability. To address the request for 
clarity, NRCS has included a reference to the adoption of a farm or 
ranch succession plan as another example of a condition that supports 
the future viability of the protected land.
    Comment: NRCS received comment related to the definition of 
historically underserved landowner, recommending that socially 
disadvantaged farmers be specifically identified, be included in the 
definition of historically underserved landowners, and be added to the 
definition of ``socially disadvantaged farmer or rancher.'' This 
comment refers to the provision in the interim rule associated with 
farm or ranch succession planning that identifies new or beginning 
farmers or ranchers, veteran farmers or ranchers, or ``other 
historically underserved landowners.''
    Response: The definition of historically underserved landowner 
includes beginning, limited resource, socially disadvantaged, and 
veteran farmer or ranchers. As a result, the definition of farm or 
ranch succession plan has been modified in this final rule to refer 
simply to ``historically underserved landowner'' since this term is 
all-encompassing. The definition of socially disadvantaged farmer or 
rancher has been in the definitions section since the ACEP regulation 
was first promulgated in 2015.
    Comment: NRCS received comment that suggested replacing the concept 
of watersheds with ``watershares.''
    Response: NRCS has long been involved in watershed and watershed 
planning, and the term ``watershares'' is not a universal term. No 
change is made to the regulation in response to this issue.
    Comment: NRCS received comment requesting that the definition of 
``riparian areas'' be modified to eliminate the ``movement for 
wildlife'' as an element.
    Response: The definition of riparian areas has long included 
reference to the movement of wildlife as it is one of the critical 
functions of riparian areas. No change is made to the regulation in 
response to this issue.
    Comment: NRCS received comment requesting removal of reference to 
species that are ``likely to undergo'' population decline from the 
definition of ``at-risk species.'' The commenter objected to an unnamed 
agency imposing restrictions through an unknown process.
    Response: The interim rule identified the determination of ``likely 
to undergo population decline'' is made by the NRCS State 
Conservationist, with advice from the State technical committee or 
Tribal Conservation Advisory Council. The definition is shared across 
NRCS conservation programs, all of which are voluntary. No change is 
made to the regulation in response to this issue.
    Comment: NRCS received comment requesting a change to the 
definition of ``agricultural commodity'' so that the intent to harvest 
annually rather than tillage is used as the determining mechanism.
    Response: The definition of agricultural commodity is contained in 
statute. No change is made to the regulation in response to this issue.

Easement Administration Actions

    NRCS received comment related to easement administration actions as 
follows:
    Comment: NRCS received comment related to the identification of the 
sequencing procedures under the National Environmental Policy Act 
(NEPA) with respect to easement administration actions, recommending 
that easement administration actions related to sequencing 
considerations be classified as categorical exclusions for NEPA 
analysis. Other comment suggested that the provision be amended to 
eliminate NEPA sequencing review if the easement administrative actions 
either enhance purposes of the ACEP-ALE program or do not materially 
threaten the ALE's protection

[[Page 8124]]

of agricultural viability or other conservation values, and requested 
removal of reference to NEPA entirely. Comment also requested 
clarification about how NEPA sequencing considerations may affect NRCS 
approval of easement administration actions.
    Response: The decision to modify or terminate a Federal interest 
has long been subject to NEPA review, and NRCS must comply with NEPA 
statutory, regulatory, and policy requirements during its review of a 
requested easement administration action. These requirements include 
reviewing whether adverse impacts associated with an easement 
administration action can be avoided, minimized, or mitigated. Since 
the impacts and outcomes of an easement administration action cannot be 
categorized generally, a specific review is necessary. As NRCS 
evaluates the NEPA analyses developed for the individual easement 
administrative actions, it is gathering evidence that may be used to 
propose categorical exclusions for certain easement administrative 
actions in the future. NRCS may identify new categorical exclusions, 
through issuing new NEPA procedures (including by amending NRC's 
current regulations implementing NEPA at 7 CFR part 650), consistent 
with the Council on Environmental Quality's regulations for 
implementing the procedural provisions of NEPA, published at 40 CFR 
parts 1500 through 1508. No change is made to the regulation in 
response to this issue.
    Comment: NRCS received comment related to adding references or 
additional requirements to the easement administration action criteria, 
including a reference to the easement administration criteria 
indicating that any easement modification or termination conform to 
State law requirements, and including a reference that easement 
administration actions must conform to section 170(h) of IRC and 
associated U.S. Department of the Treasury (Treasury) regulations. 
Comment also requested that easement administration actions align more 
closely with Land Trust Alliance (LTA) industry standards.
    Response: Easement administration actions are documented in land 
records in accordance with State law. NRCS's authority to approve 
easement administration actions is not subject to requirements in 
section 170(h) of the Treasury or associated regulations related to 
charitable donations. However, entities are not prevented from 
incorporating language that addresses their own compliance with section 
170(h) in their part of the conservation easement deed terms. NRCS must 
implement easement administration actions in accordance with Federal 
law and responsibilities; private land trusts are not subject to these 
requirements when conducting actions without Federal involvement. It 
would not be appropriate for NRCS to adopt ``industry standards'' that 
do not account for these Federal standards. No change is made to the 
regulation in response to this issue.
    Comment: NRCS received comment related to the various easement 
administration action requirements, including:
     Recommending that NRCS remove the 10-percent limitation on 
easement administration actions so that an easement modification or 
exchange action would just need to meet one of the two thresholds: (1) 
The action provide equal or greater conservation functions and values 
and (2) equal or greater economic values;
     Recommending removal of the standard of no net loss of 
easement acres required for easement subordination, modification, or 
exchange actions; and
     Recommending a change to the definition of easement 
termination to acknowledge compensation that may be owed to other 
interest holders in a conservation easement.
    Response: NRCS uses the 10-percent limitation requirement to 
minimize the effects of administration actions. NRCS selected the 10-
percent level based upon review of the scope of prior requests for 
easement administration actions and for consistency with other NRCS 
conservation programs.
    It is a statutory requirement that an easement modification or 
exchange action must meet both thresholds (equal or greater 
conservation value and equal or greater economic value).
    As to the threshold for an easement subordination, modification, or 
exchange to result in no net loss of easement acres, NRCS believes, 
based on long-standing experience, that the existing standard ensures 
that the public investment in conservation easements endures for the 
life of the easement and that NRCS is able to make credible 
determinations of equal or greater conservation and economic value as 
required by statute. The definition of easement termination addresses 
only the United States' rights or interests in an easement, including 
that the United States must be fully compensated for the termination of 
such rights and interests that are held by the United States. The 
easement termination language does not address or affect compensation 
that may be owed to other interest holders.
    No change is made to the regulation in response to these issues.
    Comment: NRCS received comment that requested NRCS modify language 
regarding easement termination to clarify that it also applies to the 
partial termination of an easement.
    Response: NRCS has clarified that partial termination of an 
easement is subject to the easement termination requirements to the 
same extent as the full termination of an easement. All easement 
termination actions are subject to review at both the NRCS State office 
and National Headquarters levels.
    Comment: NRCS received comment that supported allowing the use of 
updated deed provisions when making easement amendments, cautioned that 
flexibility be granted to do simple amendments, and advised NRCS not to 
require updates to new language that may be contained in updated deed 
provisions of those provisions are unnecessary or unacceptable to the 
landowner.
    Response: NRCS appreciates the support received for deed amendment 
process requirements. Deed amendments to ACEP-ALE easement deeds must 
be approved by NRCS, as discussed above. No change is made to the 
regulation in response to this issue.

Environmental Markets

    Comment: NRCS received comment expressing support for updates to 
the section on environmental markets.
    Response: NRCS appreciates the comments.

Fund Allocations

    NRCS received comment related to ACEP fund allocations as follows:
    Comment: NRCS received comment supporting the historic division of 
fund allocations across ACEP, that is based on demand for funding. 
Approximately 70 percent of ACEP funding is dedicated to wetland 
conservation through ACEP-WRE and 30 percent is for agricultural land 
preservation through ACEP-ALE. Another comment urged greater 
flexibility with respect to fund allocations.
    Response: NRCS has not specified in the regulation an allocation of 
program funds between the two components of the program. NRCS maintains 
program flexibility year-to-year to respond to program demand. No 
change is made to the regulation in response to this issue.
    Comment: NRCS received comment recommending continued use of ACEP-
WRE authorities to enter into agreements and contracts with non-
governmental organizations, State

[[Page 8125]]

agencies, and other partners to continue to leverage resources and 
expertise.
    Response: NRCS relies on its partners to assist NRCS in its 
delivery of ACEP-WRE and will continue to utilize its authorities to 
coordinate with these valuable partners. No change is made to the 
regulation in response to this issue.
    Comment: NRCS received comment supporting the continued allocation 
of a portion of ACEP funds for monitoring and management of existing 
easements and recommending that State Conservationists have discretion 
to determine the appropriate portion of the individual State allocation 
to be used for monitoring and management of existing easements.
    Response: NRCS National Headquarters provides on-going 
coordination, guidance, and support to State Conservationists to ensure 
that sufficient funds are dedicated and used to appropriately monitor, 
manage, and enforce stewardship lands. No change is made to the 
regulation in response to this issue.

Landowner Eligibility--Adjusted Gross Income (AGI) Limitation Waiver

    NRCS received comment related to the AGI limitation waiver as it 
affects landowner eligibility to enroll in ACEP as follows:
    Comment: NRCS received comment related to the definition and 
criteria for environmentally sensitive lands of special significance, 
including encouraging NRCS in its AGI waiver determinations to give the 
most consideration to lands with the highest conservation value, 
particularly lands of special significance that can demonstrate 
significant linkages with the conservation objectives of migratory 
bird, wetlands conservation, and water quality programs, plans, or 
initiatives. Comment also requested that environmentally sensitive land 
of special significance be explicitly defined.
    Response: NRCS will consider the factors noted in the comment in 
granting AGI waivers. Terms associated with the AGI waiver are set 
forth in the regulations governing payment limitation and payment 
eligibility requirements, including AGI provisions, at 7 CFR part 1400. 
No change is made to the regulation in response to this issue.
    Comment: NRCS received comment suggesting that NRCS expand 
eligibility for AGI waivers, including allowing the waiver for all 
ACEP-ALE enrollment, automatically waiving AGI for BPS transactions, 
and interpreting AGI waiver factors broadly.
    Response: NRCS may only grant waivers on a case-by-case basis where 
the waiver criteria are met. Broadening the waiver authority to 
eliminating AGI applicability to all ALE enrollment types is outside 
statutory authority. No change is made to the regulation in response to 
this issue.
    Comment: NRCS received comment seeking increased streamlining and 
guidance regarding AGI waivers.
    Response: NRCS will continue its ongoing efforts to streamline 
processes through the use of new tools. NRCS will continue to develop 
and release specific guidance as needed. No change is made to the 
regulation in response to this issue.
    Comment: NRCS received comments expressing support for the use of 
AGI waiver authority in ACEP.
    Response: NRCS appreciates support for its AGI waiver process.

Program Administration

    NRCS received comment on the topic of program administration as 
follows:
    Comment: NRCS received one detailed comment emphasizing the 
importance of protecting endangered and at-risk species through ACEP. 
This comment specifically referred to salmonid species.
    Response: NRCS appreciates the importance of protecting threatened 
and endangered species and its responsibility to comply with the 
Endangered Species Act (ESA), including ESA section 7(a)(1). As part of 
its conservation planning framework and site-specific NEPA process, 
NRCS also considers impacts to at-risk species as required by its NEPA 
implementing regulations (7 CFR part 650). No change is made to the 
regulation in response to this issue.
    Comment: NRCS received comment related to outreach activities, 
including recommending that: NRCS retain its outreach focus on 
historically underserved farmers and ranchers; funds expended for 
historically underserved purposes be identified and made public; and 
NRCS ensure that the process is streamlined to ensure access to 
disadvantaged and underserved populations. Comment also reminded NRCS 
regarding sovereign-to-sovereign consultation for Farm Bill easement 
programs having Tribal implications.
    Response: NRCS will continue to evaluate options to enhance 
opportunities for historically underserved producers and focus 
resources on ensuring parity in program enrollment. NRCS conducted 
several Tribal meetings in FY 2019 and FY 2020 and State 
Conservationists obtained input on program implementation from the 
Tribal Conservation Advisory Committees. No change is made to the 
regulation in response to this issue.
    Comment: NRCS received comment expressing specific support for 
various aspects of program administration, including supporting NRCS 
discretion to waive certain program administration provisions and 
commending NRCS for continuing to obtain input from State technical 
committees, other Federal and State agencies, conservation districts, 
and other organizations.
    Response: NRCS appreciates the support it has received for ACEP 
administration.
    Comment: NRCS received comment urging continued or increased 
consultation with partners and stakeholders, including State technical 
committees, non-governmental organizations, and the U.S. Fish and 
Wildlife Service.
    Response: NRCS will continue to seek stakeholder input on how to 
improve program administration, especially input that NRCS receive on 
State and local resource issues. No change is made to the regulation in 
response to this issue.
    Comment: NRCS received comment asking that technical assistance 
provided by NRCS regarding compliance with easement terms be clarified 
and recommending creation of ACEP-specific forms. Comment also 
recommended guidance on conflicts of interest and information on the 
implementation of Voluntary Public Access and Habitat Incentives 
Program (VPA-HIP).
    Response: NRCS will continue its ongoing efforts to streamline 
processes, including modifying its required forms, through the use of 
new tools. Additionally, NRCS will continue to develop and release 
guidance on specific topics as needed. NRCS regulation and policy 
regarding VPA-HIP is provided separately and can be found in 7 CFR part 
1455, and associated agency policy is available on the NRCS website. No 
change is made to the regulation in response to this issue.
    Comment: NRCS received comment recommending that NRCS include text 
regarding ACEP ranking that prioritizes lands enrolled in the 
Transition Incentives Program under the Conservation Reserve Program 
(CRP-TIP). Section 1235(f)(1)(E) of the CRP statute requires that 
priority enrollment be given to land subject to a CRP-TIP contract into 
EQIP, Conservation Stewardship Program (CSP), and ACEP.
    Response: Section 1468.22(b)(11) of the ACEP interim rule 
identifies as a national priority for ALE enrollment

[[Page 8126]]

grasslands currently enrolled in CRP in a contract that is set to 
expire within 1 year. Section 1468.32(c) of the ACEP interim rule 
identifies as a potential State priority for WRE enrollment whether 
land is farmed wetland and adjacent land that is currently enrolled in 
CRP in a contract that is set to expire within 1 year. However, neither 
ALE nor WRE identify a specific priority ranking for CRP-TIP land. 
Therefore, NRCS is adding a specific priority in the ACEP regulation 
for CRP-TIP.
    Comment: NRCS received comment related to the practices and 
activities administered through ACEP, including:
     Encouraging NRCS to adopt the ``Active River Area 
Concept'' to its management scheme;
     Proposing that all easements go through a plant and plant 
community survey by a botanist prior to enrollment;
     Seeking confirmation that NRCS would not enter into 
agreements with entities who would preclude forested riparian buffers;
     Recommending that NRCS recognize specifically intensive 
rotational grazing as one of the best management tools; and
     Recommending that diverse native plant mixes be 
prioritized in ACEP wetland and grassland restoration and management 
plans.
    Response: NRCS addresses how best to administer its practices and 
activities through technical and program policy implemented at the 
State level through the discretion given NRCS State Conservationists. 
In general, NRCS supports the development and implementation of plans 
and restoration activities that consider the value of management and 
restoration activities that provide for a diverse assemblage of native 
plants, including pollinator-friendly species. However, NRCS believes 
that specific resource management issues are best addressed at the 
State level. No change is made to the regulation in response to this 
issue.
    Comment: NRCS received comment related to program administration 
that did not fit neatly into any single subtopic:
     Require landowners to assume responsibility for operation 
and maintenance of easements;
     Provide sufficient staffing to meet customer service 
needs;
     Concern over the authorization of permanent easements;
     Make publicly available information related to easement 
enrollments such as acres enrolled, soil classification of land, and 
before and after land use;
     Condition ACEP so that all funded efforts achieve 
consistency with State water quality standards and salmon recovery plan 
habitat objectives; and
     Review easement deed terms at least every 100 years to 
ensure consistency with existing conditions.
    Response: The operation and maintenance that may occur on ACEP 
easements and who may perform such activities is addressed in the terms 
of the easement deeds.
    NRCS staffing is not a part of this rulemaking, but the agency will 
continue providing the highest quality customer service and program 
implementation with its resources.
    Permanent easements are authorized and prioritized by statute.
    As NRCS collects data, the agency generates multiple reports on a 
variety of impacts, which are typically made available to the public 
upon request.
    NRCS will consider the recommendation regarding consistency with 
water quality standards and recovery plan habitat objectives as it 
continues to evaluate and refine ranking and eligibility criteria.
    Review of easement deed terms at least every 100 years is beyond 
the scope of current regulation and policy.
    No change is made to the regulation in response to these issues.
    Comment: NRCS received comment related to source water protection 
issues including:
     Recommending that NRCS acknowledge source water protection 
as a goal of ACEP;
     Adding discussion about how source water protection 
priorities will be included in the implementation of ACEP and other 
NRCS conservation programs;
     Addressing how ACEP will be included in accounting for 
overall source water expenditures by publishing a plan for comment;
     Adding source water protection in the ACEP ranking 
criteria;
     Ensuring adequate attention given to source water 
protection at State technical committees; and
     Recommending that NRCS address how spatial data related to 
source water areas will intersect with ACEP.
    Response: Source water protection is a statutory priority and NRCS 
Headquarters provides guidance to ensure that all its programs are 
contributing to the protection of source water protection areas. The 
ACEP regulation includes water quality as a consideration in the list 
of ranking criteria for both ALE and WRE and the State Conservationist, 
in consultation with the State technical committee, may develop and 
include specific considerations for source water protection as part of 
their State's ranking factors. NRCS uses geographic information system 
tools to help identify source water protection areas and easement 
enrollment. No change is made to the regulation in response to this 
issue.

WRE Issues

    NRCS received comment related to ACEP-WRE topics as follows:
    Comment: NRCS received comment supporting revisions to the 
definition of wetland restoration in the interim rule regarding ACEP-
WRE. Comment highlighted that the expanded flexibility would benefit 
wetland functions and habitat values. Comment also encouraged NRCS to 
engage robustly with State technical committees when devising the 
State-specific NRCS criteria and guidelines for wetland restoration.
    Response: NRCS appreciates support for the revised definition of 
wetland restoration.
    Comment: NRCS received comment related to compatible use 
authorizations under ACEP-WRE, expressing support for the inclusion of 
water management and supporting the use of such management activities 
to maintain, enhance, and diversify wetland habitats on ACEP-WRE 
easements. Comment also recommended removing ``hunting and fishing'' 
from the list of activities that can be authorized as a compatible use 
in Sec.  1468.37(a)(2)(ii) because undeveloped recreational uses, 
including hunting and fishing, are listed as one of the five rights 
reserved by the landowner in the ACEP-WRE warranty easement deed. 
Comment also identified that NRCS should seek input from the State 
technical committee on technical matters related to compatible use 
designations and guidelines.
    Response: NRCS appreciates support for the inclusion of water 
management and recognizes the potential utility of this activity to 
wetland functions and values when properly prescribed and implemented 
on ACEP-WRE easements through the compatible use authorization process. 
Hunting and fishing are specifically identified in the ACEP statute as 
a `compatible use' that is subject to NRCS determination of 
compatibility. NRCS has implemented this provision by identifying in 
all ACEP-WRE easement deeds that undeveloped hunting and fishing, 
subject to the terms of the easements, is a reserved right. However, 
any hunting and fishing activities that extend beyond that reserved 
right are prohibited unless determined compatible by NRCS through the 
compatible use authorization process. In the ACEP interim rule, NRCS 
included compatible use criteria and related

[[Page 8127]]

matters in the expanded list of examples provided in Sec.  1468.2(b) 
regarding subjects on which the State technical committee may provide 
advice to the State Conservationist.
    Comment: NRCS received comment regarding wetland restoration and 
management activities, encouraging that the technical requirements for 
grazing management plans and exhibits for ACEP-WRE grazing reserved 
rights enrollments be developed in consultation with State technical 
committees and that the individual grazing management plans be dynamic 
to accommodate wildlife and habitat conservation along with producer 
needs. Comment also recommended that NRCS prioritize activities 
supporting migratory waterfowl and other wetland-dependent wildlife 
through science-based management and recommended levee setbacks and 
forested riparian buffers be allowed on all easements in Washington 
State.
    Response: NRCS appreciates comment related to grazing management 
plans and ACEP-WRE reservation of grazing rights enrollments. The ACEP 
interim rule provided clarifying changes consistent with these 
recommendations, including addition of a grazing management plan 
definition that is specific to ACEP-WRE and provisions related to the 
review and modification of such plans for reserved grazing rights 
enrollments. NRCS conducts and supports monitoring and research on its 
wetland easements to obtain data and information that informs technical 
decisions related to prioritization and selection of new easements and 
restoration and management of existing easements. NRCS will continue to 
collaborate with partners and institutions to obtain the information 
needed to make science-based decisions to maximize wildlife benefits 
and wetland functions and values on every ACEP-WRE easement. The 
concern related to restoration activities in the State of Washington do 
not rise to a nationwide level and are not addressed in the regulation. 
The ACEP regulation and other NRCS planning procedures provide the 
States the needed flexibilities to make technical decisions related to 
enrollment, restoration, and management of ACEP-WRE lands. NRCS 
recommends that stakeholders with concerns should work with their 
applicable State Conservationist.
    Comment: NRCS received comment related to WRE land eligibility: 
Recommending that NRCS allow cropping on the WRE easement area; 
supporting the increase in the percentage of easements that can be 
enrolled on cropland in a county from 10 percent to 15 percent; and 
requesting flexibility with respect to the 2-year ownership requirement 
for land that the farmer has managed for numerous years prior to 
purchase.
    Response: NRCS prohibits cropping on ACEP-WRE enrolled lands 
because the purpose of the program is to restore the wetland functions 
and values and crop production is inconsistent with such purposes. NRCS 
appreciates the comments related to the county cropland limitation. The 
2-year ownership provision in the ACEP regulation is a specific 
statutory requirement, but flexibility exists through the waiver 
process. When deciding whether to waive the 2-year ownership 
requirement, NRCS considers whether the land has been managed by the 
landowner as part of their operation prior to acquiring ownership of 
the land. No change is made to the regulation in response to these 
issues.
    Comment: NRCS received comment relating to factors used to 
prioritize enrollments in ACEP-WRE, including support for prioritizing 
permanent easements over non-permanent easements and including water 
quality as a conservation benefit.
    Response: NRCS appreciates support for the ACEP-WRE prioritization 
factors.
    Comment: NRCS received comment recommending NRCS consider funds 
from other Federal sources as contributions for ranking purposes.
    Response: Section 1265C(b)(3) of the ACEP statute authorizes as a 
ranking factor whether the landowner or other person offers to 
contribute to the cost of the easement and thereby leverage Federal 
funds. The statutory priority is that Federal funds, not just ACEP-WRE 
funds, be leveraged by other sources, and NRCS has incorporated this 
factor into the regulation. NRCS State Conservationists, with input 
from State technical committees, may consider other priorities that 
further program goals, including other sources of contribution. 
However, other Federal sources of contribution may have restrictions on 
the use of their funds and NRCS must ensure that there is no 
augmentation in contravention of appropriations law. No change is made 
to the regulation in response to this issue.
    Comment: NRCS received comment supporting and encouraging NRCS to 
continue to seek advice and input on implementation of ACEP-WRE from 
the U.S. Fish and Wildlife Service, State fish and wildlife agencies, 
and State technical committees.
    Response: Both ACEP regulation and policy require the NRCS to seek 
continued engagement from these partners. No change is made to the 
regulation in response to this issue.
    Comment: NRCS received comment related to the Wetland Restoration 
Enhancement Partnership (WREP), recommending that NRCS restore the 5 
percent match requirement for the WREP partner contributions and 
maintain historic levels of partner contributions at 25 percent. 
Another comment recommended that NRCS provide an annual allocation for 
WREP of between $35-50 million per year.
    Response: NRCS appreciates the support for WREP. NRCS has not 
established any regulatory level of match that is required for WREP and 
bases such determination upon the focus of each year's WREP effort. No 
change is made to the regulation in response to this issue.

Notice and Comment, Paperwork Reduction Act, and Effective Date

    In general, the Administrative Procedure Act (APA) (5 U.S.C. 553) 
requires that a notice of proposed rulemaking be published in the 
Federal 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.
    Consistent with the use of the authority under 5 U.S.C. 808 related 
to Congressional review for the immediate effect date of the interim 
rule, this rule is also effective on the date of publication in the 
Federal Register.

Executive Orders 12866 and 13563

    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

[[Page 8128]]

regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasizes the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility.
    The Office of Management and Budget (OMB) designated this rule as 
significant under Executive Order 12866 and therefore, OMB has reviewed 
this rule. The costs and benefits of this rule are summarized below. 
The full regulatory impact analysis is available on https://www.regulations.gov/.

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 the substantive comments NRCS received on the interim rule, NRCS 
invited public comments on how to make the rule easier to understand. 
NRCS has incorporated these recommendations for improvement where 
appropriate. NRCS responses to public comment are described in more 
detail above.

Cost-Benefit Analysis

    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. Previously, there were only two sources of non-Federal 
contribution--the entity's cash resources towards the purchase and the 
donation by the entity--with cash resources towards the purchase 
required for half of the non-Federal contribution. The 2018 Farm Bill 
eliminated the requirement for cash resources towards the purchase and 
allows the entity to consider other costs, previously not included, 
toward the non-Federal match. 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. While removing a potential hurdle 
to entity participation, the additional flexibility is not intended to 
supersede the conservation benefits possible under ACEP.
    There are six states and one 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 
statutory changes, in this final, we 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 to 10 percentage points.
    Another change under the 2018 Farm Bill provides NRCS with 
authority to enter into legal arrangements with eligible entities to 
conduct BPS transactions under ACEP-ALE. Under a BPS transaction, 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. BPS 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 program 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 limit NRCS's discretion 
to determine the allocation of funds 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.
    Land enrolled in ACEP-WRE easements produces onsite and offsite 
environmental benefits. Those include: Restoring and protecting high 
value wetlands; controlling sheet and rill erosion as lands are 
restored from cropland to wetlands and associated habitats; restoring, 
enhancing, and protecting habitat for fish and wildlife, including 
threatened and endangered species and migratory birds; improving water 
quality by filtering sediment and chemicals; reducing flooding and 
flood-related damage; recharging groundwater; protecting biological 
diversity; controlling invasive species with planting of native 
vegetation; and providing opportunities for educational, scientific, 
and recreational activities. Soil health and air quality are improved 
by reduced wind erosion, reduced soil disturbance, increased organic 
matter accumulation, and an increase in carbon sequestration.
    For land enrolled in ACEP-ALE, the suite of conservation effects on 
protected grasslands are different than those on protected farmland; 
the impacts are not valued here as one being more beneficial than 
another. For example, ACEP-ALE easements on grasslands limit 
agricultural activities to predominantly haying and grazing, whereas 
easements on farmland allow crop cultivation and pasture-based 
agriculture. As such, farmland protection effects are derived from 
onsite and ecological services, as well as preserving highly productive 
agricultural areas from development or fragmentation. Impacts on 
grasslands are derived from onsite and ecological impacts as well as 
preventing conversion to nongrassland uses. The net conservation 
effects through time from farmland protection include direct access 
benefits (pick-your-own, agri-tourism, and nature based activities like 
hunting), indirect access benefits (open spaces and scenic views), and 
nonuse benefits (wildlife habitat and existence values). Grassland 
protection conservation effects include direct, indirect, and nonuse 
benefits, and also on-farm production gains and carbon sequestration.
    The authorized level of funding for ACEP for the period of FY 2019 
through 2023 is $2.25 billion (assuming future funding is set at 
authorized amounts). This represents an increase in ACEP average annual 
funding over the 2014 Farm Bill of 11 percent--from $405 million per 
year to $450 million per year in nominal dollars.
    The regulatory impacts of ACEP funding consist of payments for the 
purchase of easements or real property interests; the costs incurred 
related to the acquisition, such as title companies, appraisers, 
licensed land surveyors; and the costs of restoring wetlands.

[[Page 8129]]

Although these transfers create incentives that likely cause changes in 
the way society uses its resources, NRCS lacks data with which to 
identify where these resources would otherwise be used.
    NRCS also recognizes that applicants and participants incur costs 
in terms of time used to gain access to ACEP. We estimate the imputed 
value of applicant and participant time spent in accessing the program 
from FY 2019 through 2023 at $1.1 million for the 5 years.
    Our estimates of costs, benefits and transfers of ACEP on an annual 
basis are reported in Table 1. Given a 3 percent discount rate, the 
projected annualized real cost to producers of accessing the program is 
$229,000 and the projected annualized real transfers are $433 million. 
Conservation benefits from the easement are difficult to quantify at a 
national scale but have been described by studies at an individual 
project or watershed or local scale.

  Table 1--Annualized Real Estimated Costs, Benefits, and Transfers \a\
------------------------------------------------------------------------
                 Category                          Annual estimate
------------------------------------------------------------------------
Cost \b\..................................  $229,000
Benefits..................................  Qualitative
Transfers.................................  $433,000,000
------------------------------------------------------------------------
\a\ All estimates are discounted at 3 percent to 2019. Note that this
  table focuses on the costs, benefits, and transfers of the entire
  program, not the marginal change in a comparison of the 2014 and 2018
  Farm Bills.
\b\ Imputed cost of applicant time to gain access to the program.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA), generally requires an agency to prepare a regulatory analysis 
of any rule whenever an agency is required by APA 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 this rule is exempt from notice and comment rulemaking 
requirements of the APA and no other law requires that a proposed rule 
be published for this rulemaking initiative.

Environmental Review

    The environmental impacts of this rule have been considered in a 
manner consistent with the provisions of NEPA (42 U.S.C. 4321-4347), 
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). NRCS conducted an analysis of the ACEP interim rule and 
NRCS's analysis determined there would 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 1501.5 and 
1501.6). The Environmental Assessment (EA) and Finding of No 
Significant Impact (FONSI) were available for review for 30 days from 
the date of publication of the interim rule in the Federal Register. 
NRCS considered comments received during the 30-day period and 
determined minor changes to the ACEP EA and FONSI were sufficient, and 
that no information warranting preparation of an EIS was received. The 
final ACEP EA and FONSI have been posted to the NRCS homepage at 
https://www.nrcs.usda.gov/wps/portal/nrcs/detail/national/programs/farmbill/?cid=stelprdb1263599.

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. 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, consistent with 7 
U.S.C. 6912(e).

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 does not 
have significant Tribal implications that require Tribal consultations 
at this time for ACEP, which is a beneficial voluntary program. 
Notwithstanding this conclusion, OTR believes that continued focused 
outreach to Tribes could increase engagement in ACEP and provide 
assistance with water quality issues for Tribes. OTR states that NRCS 
has adhered to the spirit and intent of Executive Order 13175. If a 
Tribe requests consultation, NRCS and CCC will work with OTR to ensure 
meaningful consultation is provided where changes, additions, and 
modifications identified in this rule are not expressly mandated by the 
2018 Farm Bill. 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 I session. There were no specific 
comments from Tribes on ACEP during this Tribal consultation.
    Additionally, NRCS held sessions with Indian Tribes and Tribal 
entities across the country in the spring of FY 2019 to describe the 
2018 Farm Bill changes to NRCS conservation programs, obtain input 
about how to improve Tribal and Tribal member

[[Page 8130]]

access to NRCS conservation assistance, and make any appropriate 
adjustments to the regulations that will foster such improved access. 
NRCS invited State leaders for FSA and Rural Development (RD), as well 
as Regional Directors for the Risk Management Agency (RMA) to discuss 
their programs also.
    As a result, approximately 50 percent of the comments received as a 
result of these sessions were directed to FSA, RMA, RD, and other USDA 
agencies, with many comments specific to hemp production and the 
surrounding regulations. Over 40 percent of the feedback pertained to 
NRCS programs. Comments listed challenges specific to Tribes that 
impact eligibility and inhibit access to USDA programs. None of the 
feedback received necessitated a change to the regulation.
    NRCS will continue to work with our Tribal stakeholders to address 
the issues raised in order to facilitate greater technical assistance 
and program delivery to Indian country.
    Separate from Tribal consultation and the sessions discussed above, 
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.

Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. 
L. 104-4), 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 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.

List of Subjects in 7 CFR Part 1466

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

    Accordingly, the interim rule published January 6, 2020, at 85 FR 
558, is adopted as final with the following changes:

PART 1468--AGRICULTURAL CONSERVATION EASEMENT PROGRAM

0
1. The authority citation for part 1468 continues to read as follows:

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

Subpart A--General Provisions


Sec.  1468.3  [Amended]

0
2. Amend Sec.  1468.3 as follows:
0
a. In the definition of ``Beginning farmer or rancher'':
0
i. In paragraph (1), remove the words ``farm or ranch or'' and add in 
their place the words ``farm, ranch, or'' each time they appear;
0
ii. In paragraphs (2) and (3), remove the words ``farm or ranch'' and 
add the words ``farm, ranch, or NIPF'' in their place each time they 
appear;
0
b. In the definition of ``Eligible land'', add the word ``land'' 
immediately after the word ``private'';
0
c. In the definition of ``Farm or ranch succession plan'', remove the 
words ``include specific'' and add the words ``include, but is not 
limited to, specific'' in their place and remove the words ``new or 
beginning farmers or ranchers, veteran farmers, or other'';
0
d. In the definition of ``Future viability'', add the words ``or 
adoption of a farm or ranch succession plan'' immediately after the 
word ``plan''; and
0
e. In the second sentence in the definition of ``Maintenance'', add the 
word ``performed'' immediately after the word ``work''.


Sec.  1468.6  [Amended]

0
3. Amend Sec.  1468.6 in paragraph (a)(3)(iii) by removing the cross 
reference ``paragraph (a)(4)'' and add in its place add the cross 
reference ``paragraph (a)(5)''.

Subpart B--Agricultural Land Easements


Sec.  1468.20  [Amended]

0
4. Amend Sec.  1468.20 in paragraph (b)(1)(ii) by adding the word 
``demonstrated'' immediately before the word ``capability''.

0
5. Amend Sec.  1468.22 as follows.
0
a. Revise paragraph (b)(11); and
0
b. In paragraph (c)(2), add the word ``annually'' immediately after the 
words ``monitored'' and ``reported''.
    The revision reads as follows:


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

* * * * *
    (b) * * *
    (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 or is land under a CRP 
contract that is in transition to a covered farmer or rancher pursuant 
to 16 U.S.C. 3835(f);
* * * * *


Sec.  1468.23  [Amended]

0
6. Amend Sec.  1468.23 as follows:
0
a. In paragraph (b)(1), remove the words ``Up to'' and add ``A minimum 
of'' in their place and add the words ``and not to exceed 7 fiscal 
years'' immediately after the words ``5 fiscal years''; and
0
b. In paragraph (b)(2), remove the words ``Up to'' and add ``At least'' 
in their place.

0
7. In Sec.  1468.24 revise paragraphs (b)(2)(i), (iii), and (iv) to 
read as follows:


Sec.  1468.24  Compensation and funding for agricultural land 
easements.

* * * * *
    (b) * * *
    (2) * * *
    (i) The eligible entity's own cash resources for payment of 
easement compensation to the landowner or for a buy-protect-sell 
transaction, the amount of the fair market value of the agricultural 
land easement, less the amount of the Federal share, that is provided 
through the conveyance of the

[[Page 8131]]

agricultural land easement by the eligible entity;
* * * * *
    (iii) Where the amounts as identified in paragraphs (b)(2)(i) and 
(ii) of this section are not sufficient to meet the non-Federal share 
amount, the eligible entity may also include 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, baseline reports, mineral assessments, or closing 
cost; and
    (iv) Where the amounts as identified in paragraphs (b)(2)(i) 
through (iii) of this section are not sufficient to meet the non-
Federal share amount, the eligible entity may also include up to 2 
percent of the fair market value of the agricultural land easement for 
easement stewardship and monitoring costs provided by the eligible 
entity.
* * * * *

0
8. In Sec.  1468.25 revise paragraphs (c) and (d)(4) to read as 
follows:


Sec.  1468.25  Agricultural land easement deeds.

* * * * *
    (c) The eligible entity may use its own terms and conditions in the 
agricultural land easement deed, but the agricultural land easement 
deed must provide for the effective administration, management, and 
enforcement of the agricultural land easement by the eligible entity or 
its successors and assigns and must address the deed requirements as 
specified by this part and by NRCS in the ALE-agreement.
    (d) * * *
    (4) Include clauses requiring that any changes to the easement deed 
or easement area made after easement recordation, including any 
amendment to the easement deed, any subordination of the terms of the 
easement, or any modifications, exchanges, or terminations of some or 
all of the easement area, must be consistent with the purposes of the 
agricultural land easement and this part and 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.
* * * * *


Sec.  1468.26  [Amended]

0
9. Amend Sec.  1468.26 in paragraph (b)(1) by removing the words ``up 
to'' and adding ``a minimum of'' in their place and adding ``and not to 
exceed 7 fiscal years'' after the words ``5 fiscal years''.


0
10. Amend Sec.  1468.27 as follows:
0
a. In paragraph (c)(1), add the words ``the purchase of the land'' 
after the word ``completed'';
0
b. In paragraphs (c)(3)(ii) and (c)(4), add the words ``of the land'' 
after the word ``value'';
0
b. Redesignate paragraphs (e)(4)(iii) and (iv) as paragraphs (e)(4)(iv) 
and (v);
0
c. Add a new paragraph (e)(4)(iii).
    The addition reads as follows:


Sec.  1468.27  Buy-Protect-Sell transactions.

* * * * *
    (e) * * *
    (4) * * *
    (iii) 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.
* * * * *

0
11. Amend Sec.  1468.28 as follows:
0
a. Revise paragraph (c); and
0
b. In paragraph (f), add the words ``in whole or in in part,'' 
immediately after the word ``terminated''.
    The revision reads as follows:


Sec.  1468.28  Violations and remedies.

* * * * *
    (c) Notwithstanding paragraph (a) of this section, NRCS reserves 
the right to enter upon and inspect 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. Prior to its inspection, NRCS will notify the agricultural 
land easement holder and the landowner and provide a reasonable 
opportunity for the agricultural land easement holder and the landowner 
to participate in the inspection.
* * * * *

Subpart C--Wetland Reserve Easements


Sec.  1468.32  [Amended]

0
12. Amend Sec.  1468.32 in paragraph (c)(2) by adding the words ``or 
land under a CRP contract that is in transition to a covered farmer or 
rancher pursuant to 16 U.S.C. 3835(f), and such land'' immediately 
after the word ``application''.

Terry Cosby,
Acting Chief, Natural Resources Conservation Service.
Robert Stephenson,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 2021-02268 Filed 2-3-21; 8:45 am]
BILLING CODE 3410-16-P