[Federal Register Volume 77, Number 28 (Friday, February 10, 2012)]
[Rules and Regulations]
[Pages 6941-6945]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3173]

Rules and Regulations
                                                Federal Register

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Federal Register / Vol. 77, No. 28 / Friday, February 10, 2012 / 
Rules and Regulations

[[Page 6941]]


Commodity Credit Corporation

7 CFR Part 1491

[Docket No. NRCS-2009-0004]
RIN 0578-AA46

Farm and Ranch Lands Protection Program

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

ACTION: Final rule amendment; response to comments.


SUMMARY: The Natural Resources Conservation Service (NRCS) published in 
the Federal Register a final rule for the Farm and Ranch Lands 
Protection Program (FRPP) on January 24, 2011, to address comments 
received on the interim rule and to publish changes to the entity 
certification requirements. At that time, NRCS provided an opportunity 
for the public to submit comments for 30 days on the certification 
requirements only. This rulemaking action is necessary to address those 
comments received on the entity certification requirements.

DATES: Effective date: This amendment is effective February 10, 2012.

FOR FURTHER INFORMATION CONTACT: Steve Parkin, Team Leader, Easement 
Programs, Easement Programs Division, Department of Agriculture, 
Natural Resources Conservation Service, 1400 Independence Ave. SW., 
Room 6807 South Building, Washington, DC 20250; Telephone: (202) 720-
1864; Fax: (202) 720-9689; Email: [email protected].
    Persons with disabilities who require alternative means for 
communication (Braille, large print, audio tape, etc.) should contact 
the USDA TARGET Center at: (202) 720-2600 (Voice and TDD).


Regulatory Certifications

Executive Order 12866

    Pursuant to Executive Order 12866, the Office of Management and 
Budget (OMB) has determined that this final rule amendment is not 
significant and will not be reviewed by OMB. The FRPP final rule 
published on January 24, 2011, is a significant regulatory action, and 
NRCS conducted an economic analysis of the potential impacts associated 
with this program. NRCS reviewed the economic analysis prepared for the 
final rule and determined that the provisions of this amendment do not 
alter the assessment and the findings that were originally prepared. A 
copy of the economic analysis is available on the NRCS Web site at: 

Regulatory Flexibility Act

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

Environmental Analysis

    An environmental assessment (EA) was prepared in association with 
the FRPP interim and final rule. The provisions of this amendment do 
not alter the assessment and the findings that were originally 
prepared. The analysis determined that there would not be a significant 
impact to the human environment and as a result, an Environmental 
Impact Statement was not required to be prepared (40 CFR 1508.13). A 
copy of the EA and Finding of No Significant Impact may be obtained 
from the NRCS Web site at: http://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/farmbill/analysis.

Civil Rights Impact Analysis

    NRCS has determined through a Civil Rights Impact Analysis that the 
final rule discloses no disproportionately adverse impacts for 
minorities, women, or persons with disabilities. The provisions of this 
amendment to the final rule do not alter the assessment and the 
findings that were originally prepared. A copy of the analysis may be 
obtained from the NRCS Web site at: http://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/farmbill/analysis.

Paperwork Reduction Act

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

Executive Order 13132

    Executive Order 13132 requires agencies to conform to principles of 
Federalism in the development of its policies and regulations. NRCS has 
determined that this final rule amendment conforms with the Federalism 
principles set forth in the Executive Order; would not have impose any 
compliance costs on the States; and would not have substantial direct 
effects on the States, on the relationship between the Federal 
Government and the States, or on the distribution of power and 
responsibilities on the various levels of government. Therefore, NRCS 
concludes that this final rule amendment does not have Federalism 

Executive Order 13175

    This final rule amendment has been reviewed in accordance with the 
requirements of Executive Order 13175, Consultation and Coordination 
with Indian Tribal Governments. NRCS has assessed the impact of this 
final rule amendment on Indian Tribal Governments and concluded it will 
not negatively affect Indian Tribal Governments or their communities. 
This final rule amendment does not have a substantial direct effect on 
Tribes, as these regulatory provisions do not impose unreimbursed 
compliance costs nor preempts Tribal law.

Unfunded Mandates Reform Act of 1995

    This action does not compel the expenditure of $100 million or more 
in any one year (adjusted for inflation) by any State, local, or Tribal 
Governments, or anyone in the private sector.

[[Page 6942]]

Therefore, a statement under section 202 of the Unfunded Mandates 
Reform Act of 1995 is not required.

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

    The Federal Crop Insurance Reform and Department of Agriculture 
Reorganization Act of 1994, Title III, section 304, requires that for 
each proposed major regulation with a primary purpose to regulate 
issues of human health, human safety, or the environment, USDA is to 
publish an analysis of the risks addressed by the regulation and the 
costs and benefits of the regulation. This final rule is not a proposed 
major regulation, and therefore, a risk analysis was not conducted.

Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)

    This final rule amendment is neither major nor significant, and 
therefore, it is not subject to the SBREFA 60-day requirement. 
Accordingly, this final rule amendment is effective upon publication in 
the Federal Register.


    NRCS published in the Federal Register on January 16, 2009, an 
interim rule with request for comment amending the program regulations 
for FRPP. The interim rule implemented changes to FRPP made by the 2008 
Act and made administrative improvements to the program. NRCS published 
a correction to the interim rule on July 2, 2009, to clarify that the 
contingent right of enforcement is a condition placed upon the award of 
financial assistance and, therefore, does not constitute a realty 
acquisition. That action also reopened the public comment period for 
the interim rule.
    The FRPP final rule was issued on January 24, 2011, to address 
comments received on the interim rule and to publish changes to the 
entity certification requirements. At that time, NRCS provided the 
public an additional 30 days to comment only on the changes made by the 
final rule to the entity certification requirements. This rulemaking 
action is necessary to address comments received on the entity 
certification requirements during that public comment period.

Responses to Comments and Amendment to Final Rule

    NRCS received 27 comments from 7 commenters on FRPP entity 
certification requirements as set forth in the January 24, 2011, final 
rule. The commenters addressed both procedural and substantive topics 
associated with FRPP entity certification. This section of the preamble 
addresses these comments and NRCS responses. Comments that NRCS 
received on other topics were not considered in this rulemaking.

Administrative Flexibility

    Comment: One commenter expressed support for the administrative 
flexibility certified entities could receive regarding NRCS oversight 
of FRPP-funded easement transactions.
    NRCS Response: NRCS believes that the administrative flexibility 
provided by the certification process implements the statutory changes 
made to FRPP by the 2008 Act. NRCS is taking this opportunity to 
identify additional administrative flexibility afforded to certified 
entities. A certified entity may avail itself of post-closing 
administrative flexibility as well. In particular, Sec.  1491.22(k) of 
the FRPP final rule identifies that any changes to the easement deed 
after its recordation must be consistent with the purposes of the 
conservation easement and FRPP, and any substantive amendments will 
require NRCS approval. For certified entities, NRCS will deem 
amendments submitted by certified entities as approved and will only 
require the certified entity to provide the NRCS State office a copy of 
any recorded amendment within 60 days of recording the amendment. NRCS 
will consider a certified entity's implementation of this 
administrative flexibility as part of its 3-year certification review 
cycle and other quality assurance reviews. Any amendment that 
substantively adversely impacts the conservation values protected by 
the conservation easement deed may be considered a deficiency in terms 
of the certified entity's ability to enforce its conservation easement 
deeds effectively.
    Comment: One commenter recommended NRCS not mandate technical 
reviews of all appraisals, and instead should conduct quality assurance 
reviews on a sampling of appraisals in conjunction with the title and 
easement reports for certified entities.
    NRCS Response: NRCS has already adopted a practice consistent with 
this comment in the January 24, 2011, final rule. In particular, Sec.  
1491.4(e)(5) states that NRCS will conduct quality assurance reviews of 
a percentage of the conservation easement transactions submitted by the 
certified entity for payment. The review will include whether the deed, 
title review, or appraisals were conducted in accordance with the 
requirements set forth by NRCS in its certification of the eligible 
entity or in the cooperative agreement entered into with the certified 
    NRCS requires industry approved appraisals for every FRPP easement 
transaction. NRCS performs a technical review to establish that the 
industry approved appraisal standard and NRCS requirements have been 
met in the appraisal report. For certified entities, NRCS will not 
require technical reviews on every appraisal because certified entities 
have shown competency in administering the program. However, NRCS has a 
fiduciary responsibility to the Nation's taxpayers to ensure the 
program is carried out as authorized and that funds expended meet the 
program's purpose. In order to ensure that Federal dollars have been 
spent appropriately, NRCS will conduct a sampling of appraisals to 
ensure compliance with appraisal standards. No changes were made to the 
final rule as a result of this comment.

Certification Process

    Comment: NRCS received a recommendation that there should be an 
explicit step in the rule that states NRCS will make a certification 
determination and notify the eligible entity regarding that decision.
    NRCS Response: NRCS agrees that the certification determination and 
notification are necessary steps in the certification process and will 
notify an eligible entity of the NRCS certification determination with 
a letter from the Chief or the Chief's designee. Accordingly, NRCS has 
amended Sec.  1491.4(e) to clarify that NRCS will notify entities in 
writing whether they have met the certification requirements. If 
certification is denied, an entity may resubmit their certification 
application after addressing the application deficiencies.
    Comment: NRCS received two comments that several of the 
certification criteria in Sec.  1491.4(d) appeared redundant to the 
basic entity eligibility criteria in Sec.  1491.4(c), including 
criteria related to the timely acquisition of easements and adjustment 
of procedures to meet program purposes.
    NRCS Response: No changes were made to the final rule based on this 
comment. The criteria identified in Sec.  1491.4(d) are not duplicative 
of the eligibility criteria. Certification requirements are designed to 
build upon basic aspects of eligibility in order to provide streamlined 
acquisition of conservation easements by certified entities. Easement 
transactions conducted by certified entities occur with reduced 
oversight by NRCS. NRCS

[[Page 6943]]

believes that additional assurance at the time of certification is 
necessary to ensure certified entities will handle FRPP-funded 
transactions in an efficient manner that adheres to FRPP requirements.
    Comment: One commenter stated that Sec.  1491.4(d)(9) requires a 
plan for administering easements as ``determined by the Chief.'' This 
appears to give the Chief unlimited discretion to reject certification 
requests, suggests uncertainty for the program, and may conflict with 
State and local land preservation programs' approvals. The commenter 
argued that there needs to be a way for an entity to judge whether its 
plan will be found as adequate.
    NRCS Response: Given the range of partners in FRPP (over 400), NRCS 
does not want to circumscribe the content of an entity's plan in 
regulation. However, NRCS agrees with the commenter that further 
general guidance would be helpful. Accordingly, NRCS sets forth the 
following general categories that should be addressed by entities: 
Monitoring frequency and methodology, site visits, enforcement 
policies, policies related to when to notify NRCS about easement 
activities, amendment policies, and methods for periodic communication 
with landowners. NRCS believes that this flexibility works to the 
benefit of the applicant, allowing the applicant to demonstrate how its 
particular stewardship strategy will further FRPP purposes. No changes 
were made to the final rule as a result of this comment.
    Comment: One commenter cautioned that the terms ``certified'' and 
``eligible'' need to be used carefully. The word ``qualified'' can be 
confused with ``certified.'' Under this section, the respondent 
suggests that for any entity to become certified, it must be eligible. 
This same commenter recommended that NRCS not require that a request 
for certification be submitted in conjunction with a request for FRPP 
    NRCS Response: NRCS agrees that the terms should be clear and that 
a certification request does not also require a funding request. Any 
entity seeking certification must meet the basic eligibility 
requirements identified in Sec.  1491.4(c) which is currently required 
under Sec.  1491.4(d)(1). Therefore, NRCS has revised the introductory 
text to Sec.  1491.4(d) to read as follows: ``To be considered for 
certification, an entity must submit a written request for 
certification to NRCS, and must: * * *'' NRCS has removed the phrases 
``must be qualified to be an eligible entity and'' and ``at the time 
the entity is requesting FRPP cost-share assistance.''
    Comment: NRCS received three comments recommending that NRCS 
utilize the work of the Land Trust Alliance Accreditation Commission 
(LTAC) to determine whether an eligible entity has met some or all of 
the FRPP certification criteria, since the LTAC completes extensive 
reviews of land trusts to ensure that accredited land trusts have the 
ability to acquire, manage, and hold.
    NRCS Response: NRCS is familiar with the accreditation process used 
by LTAC and agrees with the commenters that in some instances, LTAC 
accreditation indicates a high level of competency in areas also 
required by NRCS. Where LTAC criteria meet or exceed FRPP certification 
requirements, NRCS will likely determine that an LTAC-accreditation 
will satisfy those FRPP requirements. However, NRCS also requires that 
an entity be proficient with the FRPP program and be knowledgeable 
about FRPP requirements in order to be certified. With respect to those 
FRPP-specific criteria, each entity will be evaluated by NRCS. No 
changes were made to the final rule as a result of this comment.
    Comments: NRCS received several comments expressing concern about 
the certification requirement that an entity hold, manage, and monitor 
a minimum of 25 agricultural land conservation easements and a minimum 
of 5 FRPP easements. Commenters stated that an entity may have stellar 
land preservation programs but not meet the agricultural land or 
numerical requirement because there are fewer farms to enroll. 
Accordingly, the commenters proposed that waivers should be provided 
for LTAC accredited land trusts or those entities who have demonstrated 
through their participation with other organizations or on other land 
types that they have sufficient conservation easement experience.
    Response: As explained in the preamble of the January 24, 2011, 
FRPP final rule, NRCS based the minimum 25 agricultural land 
conservation easement requirement upon data from the Land Trust 
Alliance 2005 National Land Trust Census Report. In particular, NRCS 
looked at acres owned and under easement by land trusts, the number of 
land trusts, and the average size FRPP easement. This figure represents 
the average number of easements held by land trusts, and therefore, 
serves as an indicator of entity capacity and stability. NRCS 
recognizes that this number can vary widely between States and regions. 
Entities with less than 25 easements may be demonstrating high 
standards in easement acquisition, management, and monitoring. 
Therefore, NRCS also incorporated a waiver provision in Sec.  
1491.4(d)(3) of the January 24, 2011, final rule, allowing entities to 
be certified even if they do not have the requisite minimum 25 
agricultural land conservation easements. However, there is no waiver 
provision for the requirement that entities hold five FRPP easements. 
NRCS believes a certified entity should be familiar with FRPP and its 
requirements before receiving the benefits of certification, and the 
requirement that the certified entity holds a minimum of five FRPP-
funded easements is a fair and reasonable threshold demonstrating such 

Closing Efficiency

    Comment: NRCS received several comments urging NRCS to utilize as 
its closing efficiency element whether an entity is able to 
consistently close on its easement within 18 months of the signing of 
the cooperative agreement. These commenters requested clarification on 
when NRCS begins measuring the 18 months and asked NRCS to only 
consider the time for aspects of the process that are within the 
entity's control. The commenters also identified that because parcel 
substitutions are allowed, adding or removing projects from a pending 
offer list should not affect the determination of closing efficiency so 
long as the majority of parcel transactions on the final list are 
completed within 18 months.
    NRCS Response: NRCS will base closing efficiency upon the time from 
the execution date of the cooperative agreement or amendment, and the 
closing date of the easement transaction funded under that cooperative 
agreement or amendment. The 18-month closing efficiency standard for 
certification is based upon the current closing efficiency requirement 
set forth in the FRPP cooperative agreements. NRCS calculates an 
average completion time for each funding year, and then averages the 
past 5 years together. The 5-year period of calculation provides an 
average that mitigates against concerns related to the timing of 
substitute parcels. NRCS will not remove substituted parcels from these 
closing efficiency calculations. NRCS has encountered situations where 
an eligible entity has allowed initial easement transactions to 
languish and then requested extensions to the cooperative agreement to 
conduct activities associated with substitute parcels. While allowance 
for substitute parcels is necessary, the abuse of this practice results 
in the inefficient use of Federal

[[Page 6944]]

funds or staff resources. To ensure fairness in situations where NRCS 
may have contributed unnecessarily to the delay, NRCS will allow an 
entity seeking certification to request a waiver of the 18-month 
closing efficiency requirement. The NRCS State Conservationist will 
make a recommendation to the Chief based on the information in the 
waiver request. No changes were made to the final rule to implement 
this administrative flexibility.

Cooperative Agreements

    Comment: NRCS received two comments recommending that the 
provisions for certified entities be applied retroactively to any 
cooperative agreements approved since adoption of the changes made by 
the 2008 Act.
    NRCS Response: NRCS is applying the certification provisions to 
cooperative agreements entered into by NRCS and the certified entity in 
fiscal year (FY) 2011 or later. The agency has chosen this date because 
in FY 2011, all partners were required to execute new agreements with 
the revised cooperative agreement template which incorporated 2008 Act 
requirements. Choosing this date ensures that all certified entities 
will be bound by the same requirements when using FRPP funds. NRCS 
views this decision to be administrative; therefore, no changes were 
made to the final rule.


    Comment: NRCS received one comment recommending that NRCS change an 
entity's review period to coincide with the renewal of the cooperative 
agreement. The commenter asserted that a 5-year review period will be 
more efficient and will provide NRCS with a more complete body of work.
    NRCS Response: Section 1238I(h)(3)(A) of the FRPP statute requires 
NRCS to conduct a review of certified entities every 3 years. This 
review would occur at least once during the life of the 5-year 
cooperative agreement. No changes were made to the final rule in 
response to this comment.
    Comment: NRCS received one comment about certified entities that 
may close on easements without prior review of appraisals, deeds, and 
title commitment. The commenter asserted that decertification of a 
certified entity should not be based on the NRCS reviewer's conclusions 
of deficiencies found in an appraisal report or other aspect of the 
easement transaction. Another commenter requested clarification 
regarding the appeal rights of a certified entity that has been de-
    NRCS Response: Decertification actions are not initiated based on 
NRCS identification of any particular deficiency that may be revealed 
in an appraisal or other review. Rather, decertification of a certified 
entity is based on the entity's failure to remedy one or more of the 
deficiencies regarding the criteria in Sec.  1491.4(d) within 180 days 
of receiving notice of such deficiency from NRCS. Additionally, NRCS 
will provide guidance to the certified entity regarding correcting 
identified deficiencies. The NRCS decertification decision is not a 
matter subject to a National Appeals Division appeal because it is not 
an adverse decision affecting the rights of a participant (see 7 CFR 
part 11). However, the FRPP decertification process at Sec.  
1491.4(f)(2) provides entities subject to decertification an 
opportunity to contest such action within 20 days of a Notice of 
Decertification. Eligible entities who are not certified may still 
participate in FRPP.

Dedicated Fund

    Comment: Four commenters requested clarification about the NRCS 
capitalization requirements for the dedicated fund for easement 
management, monitoring, and enforcement. Two of these commenters 
recommended that NRCS consider the capitalization guidelines provided 
by the Land Trust Alliance accreditation process.
    Response: NRCS does not want to dictate capitalization requirements 
for the land trust community. However, as a general guideline based 
upon standards in the farmland protection community, NRCS identified in 
the preamble of the final rule that the dedicated fund must have at 
least $50,000 for legal defense and $10,000 per easement for management 
and monitoring.
    Comment: NRCS received several comments asking for clarification 
about whether certified entities must have a dedicated fund for each 
easement transaction.
    Response: NRCS agrees that a dedicated fund is not needed for each 
transaction. A certified non-governmental entity may have funds reside 
in a pool dedicated for the management, monitoring, and enforcement of 
all easements. No changes were made to the final rule in response to 
these comments.

Quality Assurance

    Comment: NRCS received one comment requesting that NRCS conduct all 
quality assurance reviews prior to the certified entity closing on the 
transactions since a pre-closing quality assurance review will allow 
the certified entity to work through any issues.
    NRCS Response: NRCS agrees that a pre-closing quality assurance 
review has less risk than a post-closing review. However, the purpose 
of the expanded flexibility available to certified entities under the 
final rule is to improve the efficiency of easement acquisition 
activities for those responsible entities with a proven track-record. 
Through the certification process, NRCS determines the ability of an 
eligible entity to conduct acquisition activities in accordance with 
FRPP requirements without pre-closing review of each easement 
transaction. Additionally, a certified entity may consult with NRCS at 
any time during the easement acquisition process, but it will not be a 
requirement. No changes were made to the final rule in response to this 

List of Subjects in 7 CFR Part 1491

    Administrative practice and procedure, Agriculture, Soil 

    For the reasons stated above, the Commodity Credit Corporation 
amends part 1491 of Title 7 of the CFR as set forth below:


1. The authority citation for part 1491 continues to read as follows:

    Authority:  16 U.S.C. 3838h-3838i.

2. Amend Sec.  1491.4 by revising the introductory text of paragraph 
(d) and the introductory text of paragraph (e) to read as follows:

Sec.  1491.4  Program requirements.

* * * * *
    (d) To be considered for certification, an entity must submit a 
written request for certification to NRCS, and must:
* * * * *
    (e) NRCS will notify an entity in writing whether they have been 
certified and the rationale for the agency's decision. Once NRCS 
determines an entity qualifies as certified:
* * * * *

[[Page 6945]]

    Signed this 2nd day of February 2012, in Washington, DC.
Dave White,
Vice President, Commodity Credit Corporation and Chief, Natural 
Resources Conservation Service.
[FR Doc. 2012-3173 Filed 2-9-12; 8:45 am]