[Federal Register Volume 62, Number 179 (Tuesday, September 16, 1997)]
[Rules and Regulations]
[Pages 48471-48475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24486]


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DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service

7 CFR Part 633


Water Bank Program

AGENCY: Natural Resources Conservation Service, USDA.

ACTION: Final Rule.

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SUMMARY: The Department of Agriculture Reorganization Act of 1994 
authorized the establishment of the Natural Resources Conservation 
Service (NRCS) and transferred responsibility for the Water Bank 
Program (WBP) from the Agricultural Stabilization (ASCS) and 
Conservation Service to the NRCS, formerly the Soil Conservation 
Service (SCS). This final rule provides the process by which the WBP 
will be administered within the NRCS.

DATES: Effective date: September 16, 1997.

FOR FURTHER INFORMATION CONTACT: Robert Misso (Program Manager), (202) 
720-3534.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
final rule is not significant.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this rule because the NRCS is not required by 5 U.S.C. 
553 or any other provision of law to publish a notice of proposed 
rulemaking with respect to the subject matter of this rule. Further, 
because this rule merely reflects a statutory change in administrative 
responsibility, publication for public comment is unnecessary.

Environmental Evaluation

    This regulatory action, which merely recognizes a transfer in 
administrative responsibilities, is categorically excluded by 7 
CFR1b.3(a)(1). Therefore, neither an environmental assessment nor an 
environmental impact statement is needed.

[[Page 48472]]

Executive Order 12372

    This program/activity is not subject to the provisions of Executive 
Order 12372 because it involves direct payments to individuals and not 
to State and local officials. See notice related to 7 CFR part 3015, 
subpart V, published at 48 FR 29115 (June 24, 1983).

Federal Domestic Assistance Program

    The title and number of the Federal Domestic Assistance Program, as 
found in the Catalog of Federal Domestic Assistance, to which this rule 
applies are: Water Bank Program 10.062.

Paperwork Reduction Act

    No substantive changes have been made in this final rule which 
affect the recordkeeping requirements and estimated burdens previously 
reviewed and approved under OMB control number 0578-0013.

Executive Order 12778

    This final rule has been reviewed in accordance with Executive 
Order 12778. The provisions of this rule are not retroactive. 
Furthermore, the provisions of this final rule preempt State and local 
laws to the extent such laws are inconsistent with this final rule. 
Before an action may be brought in a Federal court of competent 
jurisdiction, the administrative appeal rights afforded persons at 7 
CFR part 614 must be exhausted.

Unfunded Mandates Reform Act of 1995

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995, 
Public Law 104-4, NRCS assessed the affects of this rulemaking action 
on State, local, and tribal governments. This action does not compel 
the expenditure of $100 million or more by any State, local or tribal 
governments, or anyone in the private sector, and therefore a statement 
under section 202 of the Unfunded Mandates Reform Act of 1995 is not 
required.

Discussion of Program

    The Agricultural Stabilization and Conservation Service (ASCS) 
issued the current regulations for implementation of WBP, and the 
regulations are codified at 7 CFR part 752. Pursuant to the Department 
of Agriculture Reorganization Act of 1994, Pub. L. 103-354, the Natural 
Resources Conservation Service (NRCS) assumed responsibility for 
administering the WBP and this final rule establishes a new part (7 CFR 
part 633) for implementation of the WBP under NRCS. Under this rule, 
NRCS will administer agreements entered into by persons with ASCS and, 
as funds are made available, new agreements entered into by persons 
with NRCS. This final rule adopts most of the policies as found in 7 
CFR part 752, except that the administration, enforcement, monitoring, 
and management of the program is now under the jurisdiction of the 
Chief, NRCS, or designee. NRCS believes that issuance of a final rule 
without a public comment period is appropriate because of the pending 
removal of 7 CFR part 752 and the need to maintain a regulatory 
framework for the program. More importantly, the changes made by this 
rule merely transfer administrative responsibilities. This final rule 
does not relieve any person of any obligation or liability incurred 
under 7 CFR part 752, nor otherwise deprive any person of any rights 
received or accrued under the provisions of 7 CFR part 752. Therefore, 
no person's rights shall be adversely impacted as a result of this 
action.
    WBP was developed in accordance with the Water Bank Act, enacted in 
1970. The purpose of the program is to conserve water, preserve and 
improve the condition of migratory waterfowl habitat and other wildlife 
resources, and secure other wildlife benefits through 10-year land use 
agreements with landowners and operators in important migratory 
waterfowl nesting and breeding areas.
    The program operates primarily in the northern part of the Central 
flyway and the northern and southern parts of the Mississippi flyway, 
which are the major migratory water routes used by waterfowl. WBP also 
operates along other flyways in States where the program is authorized. 
NRCS currently administers WBP agreements in Arkansas, California, 
Kentucky, Louisiana, Minnesota, Mississippi, Montana, Nebraska, North 
Dakota, Ohio, South Dakota, and Wisconsin.
    Unlike other Federal wetland laws, the Water Bank Act defines 
wetlands in accordance with Circular 39, Wetlands of the United States, 
published by the Department of the Interior. WBP agreements encompass 
inland fresh areas (types 1 through 7) as described in Circular 39, and 
artificially developed inland fresh water areas that meet the 
description of inland fresh water areas (types 1 through 7).

List of Subjects in 7 CFR Part 633

    Administrative practices and procedures, Contracts, Natural 
Resources, Technical assistance.
    Accordingly 7 CFR Chapter VI is amended as follows:
    A new part 633 is added to read as follows:

PART 633--WATER BANK PROGRAM

Sec.
633.1  Purpose and scope.
633.2  Definitions.
633.3  Administration.
633.4  Program requirements.
633.5  Application procedures.
633.6  Program participation requirements.
633.7  Annual payments.
633.8  Cost-share payments.
633.9  Conservation plan.
633.10  Modifications.
633.11  Transfer of an interest in an agreement.
633.12  Termination of agreements.
633.13  Violations and remedies.
633.14  Debt collection.
633.15  Payments not subject to claims.
633.16  Assignments.
633.17  Appeals.
633.18  Scheme and device.

    Authority: 16 U.S.C. 1301-1311.


Sec. 633.1  Purpose and scope.

    The regulations in this part set forth the policies, procedures, 
and requirements for the Water Bank Program (WBP) as administered by 
the Natural Resources Conservation Service (NRCS) for program 
implementation.


Sec. 633.2  Definitions.

    The following definitions shall be applicable to this part:
    Adjacent land means land on a farm which adjoins designated types 1 
through 7 wetlands and is considered essential for the protection of 
the wetland or for the nesting, breeding, or feeding of migratory 
waterfowl. Adjacent land need not be contiguous to the land designated 
as wetland, but cannot be located more than one quarter of a mile away.
    Agreement means the document that specifies the obligations and 
rights of any person who has been accepted for participation in the 
WBP.
    Annual payment means the consideration paid to a participant each 
year for entering an agreement with the NRCS under the WBP.
    Chief means the Chief of the Natural Resources Conservation Service 
or the person delegated authority to act for the Chief.
    Conservation District is a subdivision of a State government 
organized pursuant to applicable State law to promote and undertake 
actions for the conservation of soil, water, and other natural 
resources.
    Conservation plan means a written record of the land user's 
decision on the use and management of the wetland and adjacent areas 
covered by the agreement.
    Cost-share payment means the payment made by the NRCS to achieve 
the protection of the wetland functions

[[Page 48473]]

and values of the agreement area in accordance with the conservation 
plan.
    Landowner means a person or persons having legal ownership of 
farmland, including those who may be buying farmland under a purchase 
agreement. Landowner may include all forms of collective ownership 
including joint tenants, tenants in common, and life tenants and 
remaindermen in a farm property.
    Natural Resources Conservation Service (NRCS) is an agency of the 
United States Department of Agriculture, formerly called the Soil 
Conservation Service.
    Operator means the person who is in general control of the farming 
operations on the farm during the crop year.
    Person means one or more individuals, partnerships, associations, 
corporations, estates or trusts, or other business enterprises or other 
legal entities and, whenever applicable, a State, a political 
subdivision of a State, or any agency thereof.
    Practice means a measure necessary or desirable to accomplish the 
desired program objectives.
    State Technical Committee means a committee established by the 
Secretary of the United States Department of Agriculture in a State 
pursuant to 16 U.S.C. 3861. The State Conservationist will be the 
chairperson of the State Technical Committee.
    U.S. Fish and Wildlife Service is an agency of the United States 
Department of the Interior.
    Wetlands mean the inland fresh areas defined under 16 U.S.C. 1302 
and described as types 1 through 7 in Circular 39, Wetlands of the 
United States, as published by the United States Department of the 
Interior.
    Wetlands functions and values mean the hydrological and biological 
characteristics of wetlands and the social worth placed upon these 
characteristics, including:
    (1) Habitat for migratory birds and other wildlife, in particular 
at risk species;
    (2) Protection and improvement of water quality;
    (3) Attenuation of water flows due to flooding;
    (4) The recharge of ground water;
    (5) Protection and enhancement of open space and aesthetic quality;
    (6) Protection of flora and fauna which contributes to the Nation's 
natural heritage; and
    (7) Contribution to educational and scientific scholarship.
    WBP means the Water Bank Program.


Sec. 633.3  Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the Chief.
    (b) As determined by the Chief and the Administrator of the Farm 
Service Agency, the NRCS will seek the agreement of the Farm Service 
Agency in establishing policies, priorities, and guidelines related to 
the implementation of this part.
    (c) The State Conservationist will consultation with the State 
Technical Committee, on program administration and related policy 
matters. No determination by the State Technical Committee shall compel 
the NRCS to take any action which the NRCS determines will not serve 
the purposes of the program established by this part.
    (d) The NRCS may enter into cooperative agreements with Federal or 
State agencies and with private conservation organizations to assist 
the NRCS with educational efforts, agreement management and monitoring, 
program implementation assistance, and to assure a solid technical 
foundation for the program.
    (e) The NRCS shall consult with the U.S. Fish and Wildlife Service 
in the implementation of the program and in establishing program 
policies.
    (f) The Chief may allocate funds for such purposes related to 
special pilot programs for wetland management and monitoring, 
emergencies, cooperative agreements with other Federal or State 
agencies for program implementation, coordination of enrollment across 
State boundaries, or for other goals of the WBP found in this part.


Sec. 633.4  Program requirements.

    (a) General. Under the WBP, the NRCS will enter 10-year agreements 
with eligible persons who voluntarily cooperate in the protection of 
wetlands and associated lands. To participate in WBP, a person will 
agree to the implementation of a conservation plan, the effect of which 
is to protect, enhance, maintain, and manage the hydrologic conditions 
of inundation or saturation of the soil, native vegetation, and natural 
topography of eligible lands. The NRCS may provide cost-share 
assistance for the activities that promote the protection of wetland 
functions and values. Specific protection actions may be undertaken by 
the participant or other NRCS designee.
    (b) Participant eligibility. To be eligible to participate in the 
WBP, a person must:
    (1) Be the landowner of eligible land for which enrollment is 
sought; or
    (2) Have possession of the land by written lease over all 
designated acreage in the agreement for at least two years preceding 
the date of the agreement and will have possession over the all 
designated acreage for the agreement period.
    (c) Eligible land. (1) The NRCS shall determine whether land is 
eligible for enrollment and whether, once found eligible, the lands may 
be included in the program based on the likelihood of successful 
protection of wetland functions and values when considering the cost of 
entering the agreement and protection costs. Land placed under an 
agreement shall be specifically identified and designated for the 
period of the agreement.
    (2) The following land is eligible for enrollment in the WBP:
    (i) Privately owned inland fresh wetland areas of types 1 through 
7.
    (ii) Privately owned inland fresh wetland areas of types 1 through 
7 which are under a drainage easement with the U.S. Department of the 
Interior or with a State government which permits agricultural use; or
    (iii) Other privately owned land which is adjacent to or within one 
quarter mile of designated types 1 through 7 wetlands and which is 
determined by the State Conservationist to be essential for the 
nesting, breeding, or feeding of migratory waterfowl, or for the 
protection of wetland.
    (d) Ineligible land. The following land is not eligible for 
enrollment in the WBP:
    (1) Converted wetlands if the conversion was in violation of 16 
U.S.C. 3821 et seq.;
    (2) Lands owned by an agency of the United States;
    (3) Land which is set aside or diverted under any other program 
administered by the Department of Agriculture;
    (4) Land which is harvested in the first year of the agreement 
period prior to being designated, except for land on which timber is 
harvested in accordance with a Forest Management Plan which is included 
in the conservation plan and is approved by the State forester or 
equivalent State official;
    (5) Lands where implementation of agreement practices would be 
futile due to on-site or off-site conditions; and
    (6) Land on which the ownership has changed during the 2-year 
period preceding the first year of the agreement period unless:
    (i) The new ownership was acquired by will or succession as a 
result of the death of the previous owner,
    (ii) The land was acquired by the owner or operator to replace 
eligible land from which he was displaced because of its acquisition by 
any

[[Page 48474]]

Federal, State, or other agency having the right of eminent domain, or
    (iii) The new owner operated the land to be designated for as long 
as 2 years preceding the first year of the agreement and has control of 
such land for the agreement period.


Sec. 633.5  Application procedures.

    (a) Application for participation. To apply for enrollment, a 
person must submit an application for participation in the WBP.
    (b) Preliminary agency actions. The NRCS must certify that the 
designated acreage that would be placed under an agreement constitutes 
a viable wetland unit, contains sufficient adjacent land to protect the 
wetland, and provides essential habitat for the nesting, breeding or 
feeding of migratory waterfowl.
    (c) Where funds allocated to the State do not permit accepting all 
requests which are filed, the State Conservationist, in consultation 
with the State Technical Committee, may establish ranking criteria and 
limit the approval of requests for agreements in accordance with the 
ranking scheme. Any ranking scheme shall consider estimated costs of 
the agreement, costs of protection, availability of matching funds, 
significance of wetland functions and values, and estimated success of 
protection measures.
    (d) The NRCS may place higher priority on certain geographic 
regions of the State where the protection of wetlands may better 
achieve NRCS State and regional goals and objectives.
    (e) Notwithstanding any limitation of this part, the State 
Conservationist may enroll eligible lands at any time in order to 
encompass total wetland areas subject to multiple ownership or 
otherwise to achieve program objectives. Similarly, the State 
Conservationist may, at any time, exclude otherwise eligible lands if 
the participation of the adjacent landowners is essential to the 
successful protection of the wetlands and those adjacent landowners are 
unwilling to participate.


Sec. 633.6  Program participation requirements.

    (a) WBP Agreement. An agreement shall be executed for each 
participating farm. The agreement shall be signed by the owner of the 
designated acreage and any other person who, as landlord, tenant, or 
share cropper, will share in the payment or has an interest in the 
designated acreage. There may be more than one agreement for a farm.
    (b) Agreement period. The agreement period shall:
    (1) Be for a term of 10 years;
    (2) Become effective on January 1 of the year in which the 
agreement is approved except that the agreement shall become effective 
on January 1 of the next succeeding year in cases where, at the time 
the agreement is approved, the NRCS determines that the agreement 
signers will be unable to comply with the provisions of paragraph (c) 
of this section in the year in which such agreement is approved.
    (c) Agreement terms and conditions. The acreage designated under an 
agreement shall:
    (1) Be maintained for the agreement period in a manner which will 
preserve, restore, or improve the wetland character of the land;
    (2) Not be drained, burned, filled, or otherwise used in a manner 
which would destroy the wetland character of the acreage, except that 
the provisions of this paragraph shall not prohibit the carrying out of 
management practices which are specified in a conservation plan for the 
farm;
    (3) Not be used as a dumping area for draining other wetlands, 
except where the State Conservationist determines that such use is 
consistent with the sound management of wetlands and is specified in 
the conservation plan;
    (4) Not be used as a source of irrigation water;
    (5) Not be used for the harvesting of a crop;
    (6) Not be hayed except for during periods of severe drought and 
only under conditions prescribed by the State Conservationist in 
consultation with the Secretary of the Interior or his designee; and
    (7) Not be grazed, except as may be specified in the conservation 
plan.


Sec. 633.7  Annual payments.

    (a) Person on the farm having an interest in the designated 
acreage, including tenants and sharecroppers, shall be eligible for an 
annual payment in the manner agreed upon by them as representing their 
respective contributions to compliance with the agreement. The State 
Conservationist shall not approve an agreement if it is determined that 
the proposed division of payment is not fair and equitable.
    (b) The annual per acre payment rates for wetlands and for adjacent 
land shall be determined for each county by the State Conservationist, 
based on recommendations of the State Technical Committee.
    (c) Maximum payments. In order to ensure that limited program funds 
are expended to maximize program benefits, the State Conservationist, 
in consultation with the State Technical Committee, may establish 
uniform maximum annual payment limits for agreements within a State or 
for geographic areas within a State.
    (d) Preliminary estimates of annual payments. Upon request prior to 
filing an application for enrollment, a person may be apprised of the 
maximum annual payment rates.
    (e) Adjustment of annual rates.
    (1) The State Conservationist, in consultation with the State 
Technical Committee, shall reexamine the payment rates with respect to 
each agreement at the beginning of the fifth year of any ten-year 
initial or renewal period and before the renewal expires.
    (2) An adjustment in the payment rates shall be made for any 
initial or renewal period taking into consideration the current land 
rental rates and crop values in the area. No adjustment shall be made 
in a payment rate which will result in a reduction of an annual payment 
rate from the rate which is specified in the initial or renewal 
agreement.
    (3) The rate or rates of annual payments may be increased if the 
program participant permits access by the general public to the 
designated acreage for hunting, trapping, fishing, and hiking, subject 
to applicable State and Federal regulations.


Sec. 633.8  Cost-share payments.

    (a) In addition to annual payments, the NRCS may share the cost 
with program participants of protecting the wetland functions and 
values of the enrolled land as provided in the conservation plan. The 
NRCS may pay up to 75 percent of such costs.
    (b) Cost-share payments may be made only upon a determination by 
the NRCS that an eligible practice or an identifiable unit of the 
practice has been established in compliance with appropriate standards 
and specifications. Identified practices may be implemented by the 
program participant or other designee.
    (c) A program participant may seek additional cost-share assistance 
from other public or private organizations as long as the activities 
funded are in compliance with this part. In no event shall the program 
participant receive an amount which exceeds 100 percent of the total 
actual cost of the practices.


Sec. 633.9  Conservation plan.

    (a) The program participant, with assistance from NRCS and in 
consultation with the Conservation District, shall prepare a 
conservation plan for the acreage designated under an agreement.
    (b) The conservation plan is the basis for the agreement and is 
incorporated

[[Page 48475]]

therein. It includes a schedule of conservation treatment and 
management required to protect and to maintain the wetland and adjacent 
land as a functional wetland unit for the life of the agreement.
    (c) Conservation treatment and management of the vegetation for 
wetland protection, wildlife habitat, or other authorized objectives 
are consistent with the program objectives and priorities.


Sec. 633.10  Modifications.

    The NRCS may approve modifications to the agreement or associated 
conservation plan after consultation with the Conservation District. 
Any modification must meet WBP program objectives, and must be in 
compliance with this part.


Sec. 633.11  Transfer of interest in an agreement.

    (a) If the ownership or operation of a farm changes in such a 
manner that the agreement no longer contains the signatures of the 
persons required by Sec. 633.6(a) to sign the agreement, the agreement 
shall be modified to reflect the new interested persons and new 
divisions of payments.
    (b) If such persons are not willing to become parties to the 
modified agreement or for any other reason a modified agreement is not 
executed, the agreement shall be terminated and all unearned payments 
shall be forfeited or refunded.
    (c) The annual payment for the year in which the change of 
ownership or operation occurs shall not be considered to have been 
earned unless the designated acreage is continued in the program and 
there is compliance with the agreement for the full agreement year.
    (d) The signatories to the agreement prior to the change of 
ownership or operation shall be jointly and severally responsible for 
refunding the unearned payments previously made.


Sec. 633.12  Termination of agreements.

    (a) The State Conservationist may, by mutual agreement with the 
parties to the agreement, consent to the termination of the agreement 
where:
    (1) The parties to the agreement are unable to comply with the 
terms of the agreement as the result of conditions beyond their 
control;
    (2) Compliance with the terms of the agreement would work a severe 
hardship on the parties to the agreement; or
    (3) Termination of the agreement would be in the public interest.
    (b) If an agreement is terminated in accordance with the provisions 
of this section, the annual payment for the year in which the agreement 
is terminated shall not be considered to have been earned unless there 
is compliance with the terms and conditions of the agreement for the 
entire calendar year.


Sec. 633.13  Violations and remedies.

    (a) In the event of a violation of an agreement or any associated 
conservation plan, the parties to the agreement shall be given 
reasonable notice and an opportunity to voluntarily correct the 
violation within 30 days of the date of the notice, or such additional 
time as the State Conservationist may allow.
    (b) In addition to any and all legal and equitable remedies as may 
be available to the NRCS under applicable law, the NRCS may withhold 
any annual or cost-share payments owing to the parties of the agreement 
at any time there is a material breach of the agreement or any 
conservation plan. Such withheld funds may be used to offset costs 
incurred by the NRCS in any remedial actions or retained as damages 
pursuant to court order or settlement agreement.
    (c) The NRCS shall be entitled to recover any and all 
administrative and legal costs, including attorney's fees or expenses, 
associated with any enforcement or remedial action.


Sec. 633.14  Debt collection.

    Any debts arising under this program are governed with respect to 
their collection by the Federal Claims Collection Act of 1966 (31 
U.S.C. 3701) and the regulations found in 4 CFR chapter II.


Sec. 633.15  Payments not subject to claims.

    (a) Any payments due any person shall be determined and allowed 
without regard to State land and without regard to any claim or lien 
against any crop, or proceeds thereof, which may be asserted by any 
creditor, except as provided in paragraph (b) of this section.
    (b) The regulations governing setoffs and withholdings, in part 13 
of this title, as amended, shall be applicable to this program.


Sec. 633.16  Assignments.

    Any person entitled to any cash payment under this program may 
assign the right to receive such cash payments, in whole or in part.


Sec. 633.17  Appeals.

    (a) Any person may obtain reconsideration and review of 
determinations affecting participation in this program in accordance 
with part 614 of this chapter.
    (b) Before a person may seek judicial review of any action taken 
under this part, the person must exhaust all administrative appeal 
procedures set forth in paragraph (a) of this section, and for purposes 
of judicial review, no decision shall be a final agency action except a 
decision of the Chief of NRCS under these procedures.


Sec. 633.18  Scheme and device.

    (a) If it is determined by the NRCS that a person has employed a 
scheme or device to defeat the purposes of this part, any part of any 
program payment otherwise due or paid such person during the applicable 
period may be withheld or be required to be refunded with interest 
thereon, as determined appropriate by the NRCS.
    (b) A scheme or device includes, but is not limited to, coercion, 
fraud, misrepresentation, depriving any other person of an annual 
payment or payments for cost-share practices for the purpose of 
obtaining a payment to which a person would otherwise not be entitled.
    (c) A program participant who succeeds to the responsibilities 
under this part shall report in writing to the NRCS any interest of any 
kind in enrolled land that is held by a predecessor or any lender. A 
failure of full disclosure will be considered a scheme or device under 
this section.

    Signed at Washington, D.C. on September 4, 1997.
Gary R. Nordstrom,
Acting Chief, Natural Resources Conservation Service.
[FR Doc. 97-24486 Filed 9-15-97; 8:45 am]
BILLING CODE 3410-16-P