[Federal Register Volume 74, Number 10 (Thursday, January 15, 2009)]
[Rules and Regulations]
[Pages 2317-2337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-735]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1467

RIN 0578-AA47


Wetlands Reserve Program

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

ACTION: Interim final rule with request for comment.

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SUMMARY: The Wetlands Reserve Program (WRP) assists owners of eligible 
land in restoring and protecting wetlands. This interim final rule sets 
forth how the Natural Resources Conservation Service (NRCS), an agency 
of the U.S. Department of Agriculture (USDA), using the funds, 
facilities, and authorities of the Commodity Credit Corporation (CCC), 
will implement WRP in response to changes made to the program by the 
Food, Conservation, and Energy Act of 2008. In addition, this interim 
final rule incorporates other changes to the regulation for 
clarification or program administration improvement.

DATES: Effective Date: The rule is effective January 15, 2009.
    Comment Date: Submit comments on or before March 16, 2009.

ADDRESSES: You may send comments (identified by Docket Number NRCS-IFR-
08013) using any of the following methods:
    <bullet> Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending comments 
electronically.
    <bullet> Mail: Easements Programs Division, Natural Resources 
Conservation Service, Wetlands Reserve Program Comments, P.O. 2890, 
Room 6819-S, Washington, DC 20013.
    <bullet> Fax: 1-202-720-9689.
    <bullet> Hand Delivery: Room 6819-S of the USDA South Office 
Building, 1400 Independence Avenue, SW., Washington, DC 20250, between 
9 a.m. and 4 p.m., Monday through Friday, except Federal Holidays. 
Please ask the guard at the entrance to the South Office Building to 
call 202-720-4527 in order to be escorted into the building.
    <bullet> This interim final rule may be accessed via Internet. 
Users can access the NRCS homepage at http://www.nrcs.usda.gov/; select 
the Farm Bill link from the menu; select the Interim final link from 
beneath the Final and Interim Final Rules Index title. Persons with 
disabilities who require

[[Page 2318]]

alternative means for communication (Braille, large print, audio tape, 
etc.) should contact the USDA TARGET Center at: (202) 720-2600 (voice 
and TDD).

FOR FURTHER INFORMATION CONTACT: Robin Heard, Director, Easement 
Programs Division, U.S. Department of Agriculture, Natural Resources 
Conservation Service, Room 6819, P.O. Box 2890, Washington, DC 20013-
2890; Phone: (202) 720-1854; Fax: (202) 720-9689; or e-mail: 
<a href="/cdn-cgi/l/email-protection#9ccbceccaeacaca4dcebf8ffb2e9eff8fdb2fbf3ea"><span class="__cf_email__" data-cfemail="fdaaafadcfcdcdc5bd8a999ed3888e999cd39a928b">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Regulatory Certifications

Executive Order 12866

    The Office of Management and Budget (OMB) reviewed this interim 
final rule and determined that this interim final rule is an 
economically significant regulatory action since it results in an 
annual effect on the economy of $100 million or more. Pursuant to 
Executive Order 12866, NRCS conducted a cost-benefit analysis of the 
Wetlands Reserve Program. The administrative record is available for 
public inspection in Room 5831 South Building, USDA, 14th and 
Independence Avenue, SW., Washington, DC. A summary of the economic 
analysis can be found at the end of this preamble and a copy of the 
analysis is available upon request from the Director, Easement Programs 
Division, Natural Resources Conservation Service, Room 6819, 
Washington, DC 20250-2890 or electronically at: http://www.nrcs.usda.gov/programs/wrp/ under the Program Information title.

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this interim 
final rule because the Commodity Credit Corporation (CCC) 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

    A programmatic environmental assessment has been prepared in 
association with this rulemaking. The analysis has determined that 
there will not be a significant impact to the human environment and as 
a result an Environmental Impact Statement is not required to be 
prepared (40 CFR part 1508.13). The Environmental (EA) Analysis and 
Finding of No Significant Impact (FONSI) are available for review and 
comment for 60 days from the date of publication of this interim final 
rule in the Federal Register. A copy of the EA and FONSI may be 
obtained from the following Web site: http://www.nrcs.usda.gov/programs/Env_Assess/. A hard copy may also be requested from the 
following address and contact: National Environmental Coordinator, 
Natural Resources Conservation Service, Ecological Sciences Division, 
1400 Independence Ave., SW., Washington DC 20250. Comments from the 
public should be specific and reference that comments provided are on 
the EA and FONSI. Public comment may be submitted by any of the 
following means: (1) e-mail comments to <a href="/cdn-cgi/l/email-protection#3d73786d7c0f0d0d057d4a595e13484e595c135a524b"><span class="__cf_email__" data-cfemail="713f34213043414149310615125f040215105f161e07">[email protected]</span></a>, (2) e-
mail to e-gov Web site www.regulations.gov, or (3) written comments to: 
National Environmental Coordinator, Natural Resources Conservation 
Service, Ecological Sciences Division, 1400 Independence Ave., SW., 
Washington DC 20250.

Civil Rights Impact Analysis

    NRCS has determined through a Civil Rights Impact Analysis that the 
issuance of this rule discloses no disproportionately adverse impacts 
for minorities, women, or persons with disabilities. Copies of the 
Civil Rights Impact Analysis are available, and may be obtained from 
the Director, Easement Programs Division, Natural Resources 
Conservation Service, P.O. Box 2890, Washington, DC 20013-2890, or 
electronically at http://www.nrcs.usda.gov/programs/WRP.

Paperwork Reduction Act

    Section 2904 of the Food, Conservation and Energy Act of 2008 
requires that the implementation of this provision be carried out 
without regard to the Paperwork Reduction Act, Chapter 35 of title 44, 
United States Code. Therefore, NRCS is not reporting recordkeeping or 
estimated paperwork burden associated with this interim final rule.

Government Paperwork Elimination Act

    NRCS is committed to compliance with the Government Paperwork 
Elimination Act and the Freedom to E-File Act, which require government 
agencies in general and NRCS in particular, to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible.

Executive Order 12988

    This interim final rule has been reviewed in accordance with 
Executive Order 12988, Civil Justice Reform. The provisions of this 
interim final rule are not retroactive and preempt State and local laws 
to the extent that such laws are inconsistent with this interim final 
rule. Before an action may be brought in a Federal court of competent 
jurisdiction, the administrative appeal rights afforded persons at 7 
CFR parts 11, 614, and 780 must be exhausted.

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

    Pursuant to section 304 of the Federal Crop Insurance Reform Act of 
1994 (Pub. L. 103-354), NRCS classified this rule as non-major. 
Therefore, a risk analysis was not conducted.

Unfunded Mandates Reform Act of 1995

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 
U.S.C. 1531-1538), USDA assessed the effects of this interim final rule 
on State, local, and Tribal governments, and the public. This rule does 
not compel the expenditure of $100 million or more by any State, local, 
or Tribal governments or anyone in the private sector; therefore, a 
statement under section 202 of the Unfunded Mandates Reform Act is not 
required.

Small Business Regulatory Enforcement Fairness Act of 1996

    This interim final rule is a major rule as defined by Section 804 
of the Small Business Regulatory Enforcement Fairness Act of 1996. This 
interim final rule will not result in an annual effect on the economy 
of $100 million or more, a major increase in costs or prices, or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or the ability of U.S.-based companies to 
compete in domestic and export markets. However, Section 2904(b) and 
(c) of the Food, Conservation, and Energy Act of 2008 requires that the 
Secretary use the authority in section 808(2) of title 5, United States 
Code, which allows an agency to forego SBREFA's usual 60-day 
Congressional Review delay of the effective date of a major regulation 
if the agency finds that there is a good cause to do so. NRCS hereby 
determines that it has good cause to implement this regulation as an 
interim final rule and have the rule effective immediately in order to 
meet the Congressional intent to have the conservation programs 
authorized or amended by Title II in effect as soon as possible. 
Accordingly, this rule is effective upon filing for public inspection 
by the Office of the Federal Register.

Executive Order 13132

    E.O. 13132 requires NRCS to develop an accountable process to 
ensure ``meaningful and timely input by State

[[Page 2319]]

and local officials in the development of regulatory policies that have 
federalism implications.'' E.O. 13132 defines the term ``Policies that 
have federalism implications'' to include regulations that have 
``substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government.'' Under 
E.O. 13132, NRCS may not issue a regulation that has federalism 
implication, that imposes substantial direct compliance costs, and that 
is not required by statute, unless the Federal government provides the 
funds necessary to pay the direct compliance costs incurred by State 
and local governments, or NRCS consults with State and local officials 
early in the process of developing the proposed regulation. NRCS shows 
sensitivity to Federalism concerns by requiring the State 
Conservationist to meet with and provide opportunities for involvement 
of State and local governments through the State Technical Committee. 
This interim final rule will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government as specified in E.O. 13132. Thus, the 
Executive Order does not apply to this rule.

Executive Order 13175

    This interim final rule has been reviewed in accordance with 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments. NRCS has assessed the impact of this interim final rule on 
Indian Tribal Governments and has concluded that this rule will not 
negatively affect communities of Indian Tribal governments. The rule 
will neither impose substantial direct compliance costs on Indian 
Tribal governments, nor preempt Tribal law.

Section 2904 of the Food, Conservation, and Energy Act of 2008

    This interim final rule with request for comment amends the 
existing Wetlands Reserve Program (WRP) regulations. The Commodity 
Credit Corporation and the Natural Resources Conservation Service 
(NRCS), an agency of the United States Department of Agriculture 
(USDA), publishes this interim final rule with request for comment to 
incorporate programmatic changes as authorized by amendments in the 
Food, Conservation, and Energy Act of 2008 (2008 Act). The Commodity 
Credit Corporation (CCC) and the Natural Resources Conservation Service 
(NRCS) are 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. Section 2904 of the 2008 Act requires 
regulations to be published within 90 days after the date of enactment 
and authorizes CCC and NRCS to promulgate an interim final rule 
effective upon publication with an opportunity for notice and comment. 
CCC and NRCS have determined that an interim final rule is necessary to 
expedite the effective date of rulemaking in order to meet the intent 
of Section 2904 of the 2008 Act.

Economic Analysis--Executive Summary

    Pursuant to Executive Order 12866, Regulatory Planning and Review, 
the Natural Resources Conservation Service (NRCS) has conducted a 
benefit-cost analysis of the Wetlands Reserve Program (WRP) as 
formulated for the Interim Final Rule. This requirement provides 
decision makers with the opportunity to develop and implement a program 
that is beneficial, cost effective, and that minimizes negative impacts 
to health, human safety, and the environment. Congress passed 
amendments to the program that requires the Secretary of Agriculture, 
within 90 days after the enactment of the WRP amendments, to promulgate 
regulations necessary to carry out the program.
    In considering alternatives for implementing WRP, the United States 
Department of Agriculture (USDA) followed the legislative intent to 
optimize environmental benefits, address natural resource concerns and 
problems, establish an open participatory process, and provide flexible 
assistance to producers who apply appropriate conservation measures 
that enable the satisfaction of Federal and State environmental 
requirements. Because WRP is a voluntary program, the program will not 
impose any obligation or burden upon agricultural producers who choose 
not to participate. The program has been authorized by the Congress 
with an acreage target for program participation. Funding for WRP comes 
from the Commodity Credit Corporation.
    The WRP provides technical and financial assistance to eligible 
landowners to address wetland, wildlife habitat, soil, water, and 
related natural resource concerns on private lands in an 
environmentally beneficial and cost-effective manner. As will be 
discussed later, WRP program costs are the main costs to consider in 
this analysis. The WRP is an important tool in restoring and protecting 
wetlands along with the efforts of other governmental agencies, non-
profit organizations, and landowners. Land enrolled in WRP can produce 
substantial improvements in on-site resource conditions and at the same 
time substantial off-site environmental benefits for the public-at-
large can also accrue. These on site and off-site benefits could 
include: Creation of high value wetlands, control of sheet and rill 
erosion as lands are converted form cropland to wetlands, creation and 
protection of habitat for fish and wildlife, including threatened and 
endangered species and migrating birds; improving water quality by 
filtering sediments and chemicals; reducing flooding; recharging 
groundwater; protecting biological diversity; controlling invasive 
species with planting of natural vegetation; as well as providing 
opportunities for educational, scientific, and recreational activities. 
To some extent, air quality could be improved by reduced wind erosion 
and by an increase in carbon stored in the soil and reestablished 
vegetation, leading to reduced atmospheric amounts of carbon. Many of 
these benefits are difficult to quantify, although several studies have 
attempted to do so. One such study, published in 2008, found that the 
``public willingness to pay to enroll an additional acre of typical 
fresh water marsh in the WRP is about $425 annually.'' Capitalizing 
this benefit flow at a seven percent rate produced a per acre value of 
over $5,800 for permanent easement agreements; a value of over $5,200 
for 30-year easement agreements; and a value of almost $3,000 on 10-
year restoration agreements. Using a three percent discount rate, these 
values become $10,935, $8,330, and $3,625, for the three types of 
agreements discussed above, respectively. These values take into 
consideration private benefits that may be derived, such as income from 
any fishing, hunting fees, and other recreational activities that may 
be realized by WRP landowners.
    The main program costs include the purchase of easements and 
wetland restoration expenses with the program. Although agricultural 
production ceases from lands enrolled in WRP, this output effect is 
expected to be small given that WRP parcels are usually marginal 
agricultural lands poorly suited for efficient agricultural production. 
Agricultural production from lands better suited to agricultural use 
can easily compensate for reduced production from newly enrolled WRP 
land. Approximately 89.8 percent of the WRP funding has been used for

[[Page 2320]]

permanent easement projects; about 7.9 percent for 30-year easement 
projects and about 2.4 percent for restoration cost-share agreement 
projects. The associated FY 2007 average per acre program costs for 
these projects were estimated at $3,000 for permanent easements, almost 
$1,100 for 30-year easements, and nearly $670 for restoration cost-
share agreements.
    A comparison of total economic benefits and costs related to 
restoring and protecting wetlands on a ``typical acre'' suggests that 
WRP can produce substantial economic net benefits.

Method of Analysis and Key Results

    The method of analysis for this study relied heavily on program 
managers' experience and assumptions. For example, the analysis team 
relied on program managers to identify important variables to consider 
when developing plausible scenarios. The analysis team took this 
information and constructed a small spreadsheet model. The current 
policy scenario for this analysis is program performance similar to 
those in FY 2007 persisting throughout FY 2009-FY 2012. A key variable 
in this scenario was the FY 2007 easement acquisition valuation 
methodology: Primarily by an appraisal of the fair market value of a 
parcel before the easement was in place minus the fair market value of 
the parcel after the easement was in place--an approach adopted by NRCS 
on recommendations from the USDA Inspector General's Office. Program 
managers felt that the post-FY 2007 valuation methodology was the main 
driver that caused the appraised value of parcels in many states to 
fall below the state's geographic cap and in turn causing a shift in 
program acres across states as compared to past years. These changes 
shifted WRP acreage from states with relatively low acquisition costs 
to those with relatively high acquisition costs which increased average 
national per acre WRP costs significantly. The switch in methodology 
did not result in NRCS paying more for the same easement than it would 
have paid under the old methodology, but rather significantly reduced 
the amount the agency could offer to landowners for an easement in some 
states, causing landowners to lose interest in the program. The current 
policy scenario assumes that the FY 2007 valuation method will be 
employed and drives model results that suggest total national WRP 
acreage would only increase by 294,200 acres over the FY 2009-FY 2012 
period.
    The changes in the 2008 Act return the valuation methodology to the 
valuation practices used before FY 2007. As a result, program mangers 
expect the distribution of acres enrolled in the program to revert back 
to its previous pattern. This geographic re-positioning is expected to 
be associated with lower average easement costs (assumed to be the fair 
market value of land using the Uniform Standards of Professional 
Appraisal Practices or an area-wide market analysis) and for geographic 
caps to be the primary means used to determine compensation rates. With 
the lower geographic per acre project costs becoming more relevant 
(assumed to be 25 percent lower than FY 2007 levels and those assumed 
in the baseline scenario), WRP acreage is expected to increase by 
600,000 acres over the FY 2009-FY 2012 period--a substantial increase 
over the continuation of the existing valuation method.
    Because per acre benefits exceed costs regardless of policy 
scenario assumed, all model results suggest that net benefits from WRP 
are positive.

Conclusions

    This WRP benefit-cost analysis assumes that the major driver in 
program costs over the FY 2009-FY 2012 period will be the method of 
easement evaluation. The single discretionary policy item available to 
NRCS does not alter this result. This item pertains to the creation of 
the Wetland Reserve Enhancement Program (WREP) that would allow States, 
non-governmental organizations, or Indian tribes to partner with USDA 
in the selection and funding of contracts, as long as selected 
contracts meet the purposes of WRP.
    Data on past WRP enrollment suggests that the 2008 Act changes 
related to easement compensation could lead to lower national average 
per-acre offer prices paid for easements when compared to pre-fiscal 
year (FY) 2007. This prediction is dependent upon where acreage is 
predominantly enrolled. NRCS anticipates that the new compensation 
methodology will encourage re-establishment of historic enrollment 
patterns. The assumptions in this analysis suggest the per-acre acre 
average costs on WRP could be reduced by about 25 percent. Although 
costs are expected to be reduced, there are no environmental studies to 
suggest that environmental benefits from such a change will be altered. 
Additional technical information from such sources as the Conservation 
Effects Assessment Project, plus empirical data on the nature of the 
types of environmental benefits being generated on WRP land across the 
United States would be necessary.
    Although benefits of wetlands have been estimated on specific sites 
in a generalized fashion, researchers of many of these past studies 
caution in transferring benefits to other areas or to be interpreted as 
``average'' values of a typical wetland type. That caveat 
notwithstanding, the conclusions of this analysis suggests that the 
monetary and non-monetary benefits from WRP in restoring and placing 
easements on wetlands can exceed total program costs.

Discussion of Program

Background

    Wetlands have long been recognized as critical to the environment 
and ecosystem health. They provide a protective buffer for our towns 
and cities against floods and storm surges; they are the habitat for 
hundreds of species; and they connect aquatic and terrestrial 
ecosystems. The Nation's wetlands provide an array of benefits to 
society and affect the Nation's economic, ecological, and cultural 
heritage.
    The WRP is a voluntary program providing technical and financial 
assistance to eligible landowners to restore and protect wetlands. 
Protecting wetlands provides wildlife habitat, as well as enhancement 
of soil, water, plants, and related natural resource concerns. 
Floodplain forests, prairie potholes, and coastal marshes are among the 
wetlands restored through WRP. More than 2 million acres have been 
enrolled in WRP since the program's inception.
    Title XIV of the Food Agriculture, Conservation, and Trade Act of 
1990 (the 1990 Farm Bill), amended the Food Security Act of 1985 to 
provide for the establishment of the Wetlands Reserve Program. The 
Secretary of Agriculture delegated responsibility for the WRP to the 
Agricultural Stabilization and Conservation Service (ASCS), and ASCS 
published a proposed rule followed by a final rule in 1992. Thereafter, 
ASCS implemented a pilot program effort in 9 States.
    In 1994, ASCS expanded the pilot program implementation of WRP to 
20 States and published an interim final rule for the program. Also in 
1994, the Department of Agriculture Reorganization Act of 1994 (the 
Reorganization Act) authorized the establishment of NRCS as the 
successor agency to the Soil Conservation Service. The Reorganization 
Act also transferred responsibility for the WRP to NRCS, and NRCS 
published an interim final rule in June 1995.

[[Page 2321]]

    Under the NRCS interim final rule, NRCS expanded the program to all 
50 States, and made other program adjustments to align WRP with real 
property acquisition policies. These changes included providing 
participants with a single payment at easement closing, and the holding 
of the easement deed by the United States of America in accordance with 
the Department of Justice Title Standards.
    The Federal Agriculture Improvement and Reform Act of 1996 (the 
1996 Farm Bill), Public Law 104-387, modified several aspects of WRP, 
including offering enrollment through a non-easement option, placing 
equal enrollment priority among the three enrollment methods, and 
requiring that eligible lands maximize wildlife benefits.
    In the August 1996 final rule, NRCS incorporated the changes 
mandated by the 1996 Farm Bill and responded to comments received to 
the 1995 interim final rule. The Farm Security and Rural Investment Act 
of 2002 (the 2002 Farm Bill), Public Law 107-171, expanded the ability 
of the Secretary to grant a waiver for ownership changes due to 
foreclosure on the land when the owner of the land exercises a right of 
redemption from the mortgage holder, in accordance with State law, 
immediately before the foreclosure. NRCS incorporated this non-
discretionary change in a direct final rule published in the Federal 
Register in June 2002.
    The 2008 Act made a number of changes to WRP, including raising the 
enrollment cap to 3,041,200 acres through 2012; limiting program 
eligibility to private lands and acreage owned by Indian Tribes; 
determining the rate of compensation for easements or 30-year contracts 
enrolled in the program; requiring ownership of the land for 7 years 
under the easement enrollment option; expanding the ranking criteria; 
and adding a 30-year contract enrollment option on acreage owned by 
Indian Tribes. In addition, the 2008 Act revises the authority for the 
Wetlands Reserve Enhancement Program and a grazing rights pilot within 
that revised program, and makes agricultural lands flooded from the 
natural overflow of a closed basin lake or pothole within the Prairie 
Pothole Region eligible for enrollment without requiring that the land 
be a farmed wetland or converted wetland.
    The 2008 Act incorporated two specific changes limiting the 
participation of public agencies in the implementation of WRP after 
September 30, 2008. First, the 2008 Act limited enrollment of eligible 
land to private land and acreage owned by Indian Tribes. In this 
manner, lands owned by a State Department of Natural Resources could 
not be enrolled in the program, even if the operator of those lands was 
a private individual. Previously, such lands were eligible for 
enrollment.
    Second, Section 1603(f)(6) of the 1985 Act, as amended by Title I 
of the 2008 Act, provides that a State or local government is not 
eligible to receive any payment, benefit, or loan under Title XII of 
the 1985 Act. This prohibition includes WRP easement and restoration 
payments. Therefore, NRCS identifies how it will address these 
limitations upon public agency participation dependent upon which stage 
of the process a project was as of October 1, 2008.
    For land that was enrolled in WRP and was owned by a public entity 
prior to October 1, 2008, NRCS will complete the acquisition and 
restoration of the project and make appropriate payment to the public 
entity. The rationale for completing the acquisition and restoration is 
that a recent change in the NRCS business process, which separates the 
dates of obligation of acquisition and restoration and thereby results 
in the obligation for restoration to occur several months later than 
the obligation for acquisition, has delayed obligation of restoration 
funds beyond the control of state and local governments. Although 
restoration funds for the project will not be obligated to such 
projects until after October 1, 2008, NRCS has determined that 
restoration payments are appropriate because government entities were 
eligible to receive restoration payments when the land was enrolled or 
purchased because the restrictions on public lands eligibility in the 
WRP statute and on payments to government entities in Section 
1603(f)(6) of the 1985 Act, as amended by the 2008 Act, did not go into 
effect until October 1, 2008. The WRP statute authorizes NRCS to cost-
share to the extent the Agency determines that cost-share is 
appropriate and in the public interest.
    For land that was enrolled in WRP and was owned by a private person 
or legal entity or Indian Tribe prior to October 1, 2008, but on or 
after October 1, 2008, the private landowner or Tribe transfers 
ownership of the land to a public entity, NRCS will cancel the 
enrollment if the easement acquisition has not been completed.
    For land that was enrolled in WRP and was owned by a private person 
or legal entity or Indian Tribe prior to October 1, 2008, but on or 
after October 1, 2008, the private landowner or Tribe transfers 
ownership of the land to a public entity, and NRCS has completed the 
easement acquisition and made payment to the private landowner, NRCS 
will not cancel the enrollment. The easement will remain in place; and 
no refund will be sought from the private landowner. However, NRCS will 
not obligate funds to restore the land encumbered by the easement 
because NRCS has determined that it is not authorized to make payment 
to the public entity owner because of the restrictions in Section 
1603(f)(6) of the 1985 Act, as amended by the 2008 Act. NRCS will work 
with the new public entity landowner to encourage the public entity to 
implement the provisions of the NRCS-approved WRPO at its own expense.
    If the private land or acreage owned by an Indian tribe is enrolled 
after September 30, 2008, and prior to completion of the restoration 
activities the land is acquired by a public entity, NRCS will not 
obligate funds for restoring the land encumbered by the easement 
because NRCS has determined that it is not authorized to make payment 
to the public entity owner because of the restrictions in Section 
1603(f)(6) of the 1985 Act, as amended by the 2008 Act. Further, NRCS 
will consider failure to complete restoration of the wetlands a 
violation of the terms of enrollment. As a violation, under the WRP 
statute, NRCS has the right to have the easement remain in force and to 
seek a refund of payments made in furtherance of the enrollment. A 
violation may be avoided if the new public entity landowner implements 
all provisions of the NRCS-approved WRPO at its own expense.

Summary of 2008 Act Changes

    The 2008 Act amended the Wetlands Reserve Program to:
    <bullet> Add a new enrollment method for Tribal lands through 30-
year contracts;
    <bullet> Expand land eligibility under WRP to cropland or grassland 
that was used for agricultural production prior to flooding from the 
natural overflow of a closed basin lake or pothole, as determined by 
the Secretary, together (where practicable) with the adjacent land that 
is functionally dependent on the cropland or grassland;
    <bullet> Require that an easement cannot be created on land that 
changed ownership within the previous 7-year period. Previously, the 
ownership requirement was for 12 months;
    <bullet> Limit eligible land to private or tribal land;
    <bullet> Add restoration, protection and enhancement of wetlands as 
WRP purposes;

[[Page 2322]]

    <bullet> Revise the authority for the Wetlands Reserve Enhancement 
Program;
    <bullet> Require NRCS to conduct a survey of the prairie pothole 
regions to inform the allocation process of WRP funds to that region;
    <bullet> Base easement compensation on the lowest of three values: 
The fair market value of the land determined through either an 
appraisal or market analysis; a geographic cap; or the landowner offer;
    <bullet> Establish an easement compensation payment schedule 
depending upon the value of the easement;
    <bullet> Require a yearly payment limitation for restoration cost-
share agreements of $50,000 per year and to clarify that the $50,000 
yearly restoration cost-share payment limitation applies to any person 
or legal entity;
    <bullet> Extend the existing waiver of the $50,000 yearly payment 
limitation to 30-year contracts;
    <bullet> Identify that maintenance is an activity eligible for 
cost-share assistance;
    <bullet> Add ranking criteria regarding maximizing environmental 
benefits; and
    <bullet> Allow the spraying or mowing of land enrolled in the 
program if necessary to meet habitat needs of specific wildlife 
species.

Section by Section Analysis

Section 1467.1 Applicability

    The term ``Department'' is changed to ``NRCS'' where it occurs in 
Sec.  1467.1 and throughout the regulation to clarify that NRCS 
implements the program and disburses payments to participants. Prior to 
2002, the Farm Service Agency (FSA) disbursed WRP payments on behalf of 
CCC. In 2002, NRCS assumed responsibility for disbursing WRP payments.
    The reference to processing outstanding and new applications for 
enrollment during calendar year 1995 has been removed as moot. There 
are no longer any outstanding applications from prior to 1995. The 
reference to the Trust Territories of the Pacific Islands has been 
removed to reflect more accurately the geographic scope of the program.

Section 1467.2 Administration

    Section 1467.2(c) that required concurrence between NRCS and FSA 
related to WRP policies, priorities and guidelines is removed, 
reflecting that the program has been delegated to NRCS. NRCS and FSA 
concurrence remains a program requirement under Section 246 of the 
Department of Agriculture Reorganization Act (Pub. L. 103-354; 7 U.S.C. 
6962(c)). NRCS and FSA will continue its working relationship regarding 
coordination of WRP policies with FSA activities, especially in the 
case where CRP and WRP enrollment are impacted by the county acreage 
cap limitations.
    Section 1467.2(d) is re-designated as Sec.  1467.2(c) and revised 
to clarify that the role of the State Technical Committee is to advise 
rather than consult with NRCS in program implementation. Given the 
regulatory connotation associated with consultation requirements under 
the Endangered Species Act, NRCS determined that the term ``advice'' 
better reflects the relationship between NRCS and the State Technical 
Committees. Additionally, this paragraph is revised to clarify that the 
advice of the State Technical Committee will be sought in the 
development of the geographic area rate caps of compensation which is 
addressed more fully in Sec.  1467.8.
    Section 1467.2(e) is re-designated as Sec.  1467.2(d) and revised 
to clarify that other Federal and State agencies to which NRCS may 
delegate easement management responsibilities must have the needed 
authority, expertise, and resources to carry out the responsibilities. 
This clarification will ensure that this authority is implemented as 
intended by statute. Throughout WRP program implementation, NRCS has 
worked in close partnership with other Federal and State agencies 
regarding management of adjacent and contiguous conservation areas, and 
will continue to do so.
    Section 1467.2(f) is re-designated as Sec.  1467.2(e) and 
incorporates the term ``technical assistance'' in the language 
regarding the use of cooperative agreements to obtain services from 
other agencies and organizations. ``Technical assistance'' is defined 
in section 2001 of the 2008 Act, and is used in this regulation to 
cover the various forms of assistance that other parties may provide 
rather than listing specific types of assistance.
    Section 1467.2(g) is re-designated as Sec.  1467.2(f) and clarifies 
that the role of the U.S. Department of the Interior's Fish and 
Wildlife Service (FWS) is in consultation regarding land eligibility. 
The additional references to FWS and the Forest Service are removed, 
because the authority to consult with other Federal or State agencies 
on issues related to WRP implementation is covered in other parts of 
the regulation and is redundant here. References to the U.S. Department 
of the Interior's Fish and Wildlife Service have been changed to 
``FWS'' where it occurs throughout the regulation to streamline 
terminology.
    Section 1467.2 (h) is re-designated as Sec.  1467.2(g) and expands 
authority for the Chief of NRCS to allocate funding pools to encourage 
program participation among historically underserved producers as 
authorized by Section 1244 of the Food Security Act of 1985, as amended 
(16 U.S.C. 3844).

Section 1467.3 Definitions

    Definitions of the terms used in this regulation are set forth in 
Sec.  1467.3 to provide consistent interpretations for the public and 
for NRCS personnel. These definitions are consistent with statutory 
changes and with the revisions to 7 CFR part 1467 contained herein.
    The term ``Acreage owned by Indian Tribes'' is added to define the 
term as used by the amendment made by the 2008 Act. The term is defined 
broadly to include lands held in trust for Indian Tribes, and to 
increase program accessibility and to allow for the greatest 
opportunity for Indian Tribal participation in the program through the 
use of 30-year contracts, which may be more conducive to requirements 
on trust lands, which are owned by the Tribe, but held in trust by 
another agency or entity.
    The term ``Activity'' is added to define the meaning of the term 
used in the regulation and refer to maintenance and management 
activities that are essential parts of a restoration agreement. The 
statute specifies that cost-share payments may be provided for 
management and maintenance activities, which does not always involve a 
full conservation practice.
    The term ``Agreement'' is added to specify that it is a legal 
document that describes the rights and obligations of NRCS and program 
participants.
    The term ``Agricultural commodity'' is revised to reflect the 
definition provided in Sec.  1201(a)(1) of the Food Security Act of 
1985, as amended, providing consistency with other Title XII programs.
    The term ``Beginning farmer or rancher'' is added to clarify who is 
eligible to be enrolled under provisions specific to historically 
underserved producers, which is referenced under Sec.  1467.2(g).
    The term ``Conservation district'' is revised to reflect the 
definition provided in Sec.  1201(a)(5) of the Food Security Act of 
1985, providing consistency with other Title XII programs.
    The term ``Conservation practice'' replaces the term ``practice,'' 
and clarifies that conservation practices implemented in WRP meet NRCS

[[Page 2323]]

standards and specifications, and provides a consistent definition 
across all easement programs.
    The term ``Contract'' is revised to clarify that it is a legal 
document that specifies the rights and obligations of NRCS and program 
participants.
    The term ``30-year Contract'' is added to reflect the statutory 
addition of the 30-year contract enrollment option for acreage owned by 
Indian Tribes.
    The term ``Converted wetland'' is revised to reflect the definition 
in Sec.  1201(a)(7) of the Food Security Act of 1985, as amended, 
providing consistency with other Title XII programs.
    The term ``Cost-share payment'' is revised to clarify that payments 
are made to carry out conservation practices and activities on enrolled 
lands.
    The term ``Department'' is removed. References to ``Department'' 
throughout 7 CFR part 1467 are replaced with ``NRCS,'' the Natural 
Resources Conservation Service, an agency of the U.S. Department of 
Agriculture responsible for carrying out the program.
    The term ``Easement payment'' is revised to include the 
consideration paid to an Indian Tribe or to tribal members 
participating through the 30-year contract option, because the managers 
expressed that the 30-year contract option would provide the same 
payment as a 30-year easement, but would not be a real property 
transaction.
    The term ``Easement Restoration Agreement'' is added to specify 
that an easement restoration agreement will be the agreement used to 
implement the Wetland Restoration Plan of Operations (WRPO) for 
easements and 30-year contracts and mechanism for providing cost-share 
assistance to participants to carry out restoration and maintenance as 
planned in the WRPO under such enrollments.
    The term ``Forest Service'' is removed as it is duplicative to all-
inclusive references to ``other Federal and State agencies'' throughout 
the regulation.
    The term ``Fish and Wildlife Service (FWS)'' replaces the term 
``U.S. Fish and Wildlife Service'' and such term refers to the same 
agency within the United States Department of the Interior.
    The term ``Historically underserved producer'' is added to refer to 
the specific groups of producers to which the Chief may direct funding 
through funding pools specifically to encourage participation, and to 
provide consistency with related conservation programs administered by 
NRCS.
    The term ``Indian Tribe'' is added and adopts the definition in 
Sec.  4(e) of the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450b(e)).
    The term ``Landowner'' is revised to reflect that such term 
includes legal entities and refines the applicability of the term from 
the overly broad term ``farmland'' to eligible land since the 2008 Act 
amended the WRP statute to limit eligibility to private and Tribal 
lands, including lands held in trust for Indian tribes. ``Remaindermen 
in a farm property'' is removed because remaindermen in a property do 
not have a current legal ownership of the land.
    The term ``Legal entity'' is added to respond to statutory changes, 
which limit eligible land to private and Tribal land and place a 
payment limitation to a person or a legal entity. The term ``limited 
resource farmer or rancher'' is added to clarify who is eligible to be 
enrolled under provisions specific to historically underserved 
producers at Sec.  1467.2(g).
    The term ``Maintenance'' is added to reflect statutory changes that 
incorporate maintenance as a cost-sharable activity.
    The term ``Natural Resources Conservation Service'' is revised to 
clarify that NRCS carries out program implementation using the funds, 
facilities, or authorities of the Commodity Credit Corporation (CCC). 
In the definition ``Department'' is replaced with ``NRCS'' and 
reference to the Soil Conservation Service is removed.
    The term ``Option agreement to purchase'' is added to describe the 
legal document used to authorize NRCS to proceed with the easement 
acquisition process and which binds the landowner to sell a 
conservation easement upon exercise of the option by NRCS.
    The term ``Participant'' is added to simplify reference throughout 
the regulations to persons or legal entities who have been accepted to 
participate in the program.
    The term ``Person'' is revised in response to statutory changes 
that eliminated governmental entity eligibility under the program. The 
term ``person'' now refers only to a natural person, a legal entity, or 
an Indian Tribe, but does not include governments or their political 
subdivisions.
    The term ``Prairie Pothole Region'' is added to reflect statutory 
changes requiring an assessment of program demand in the ``Prairie 
Pothole Region'' and consideration of those needs in allocation 
formulas. The definition establishes the geographic scope of the 
prairie pothole region, as it existed on June 18, 2008.
    The term ``Private land'' is added to reflect statutory changes 
that excluded land owned by State and local governments from being 
eligible to enroll in the program.
    The term ``Restoration Cost-Share Agreement'' is added to clarify 
that the restoration agreement is the contract used to describe the 
rights and obligations of participants who have been accepted to 
participate in the WRP restoration cost-share enrollment option. This 
agreement is used to carry out the WRPO and to identify the cost-share 
assistance NRCS will provide to the participant for implementing the 
conservation practices and activities in the Wetland Restoration Plan 
of Operations.
    The term ``Riparian areas'' is revised to correct the spelling of 
the word ``vegetative.''
    The term ``Socially disadvantaged farmer or rancher'' is added to 
clarify who is eligible to be enrolled under provisions specific to 
historically underserved producers at Sec.  1467.2(g).
    The term ``State technical committee'' is revised to remove 
unnecessary reference to the State Conservationist as the chair of the 
committee; this role is established through regulations found at 7 CFR 
610.22(a).
    The term ``United States Department of Agriculture (USDA)'' 
replaces the use of the term ``U.S. Department of Agriculture.''
    The term ``Wetland'' is amended to remove adjacent lands from the 
definition of wetland for consistency with the statute. Adjacent 
uplands, while they may be eligible for the program, are technically 
not wetlands.
    The term ``WRP'' has been removed as unnecessary since the term is 
adequately described in Sec.  1467.1.
    The term ``Wetlands Reserve Plan of Operations (WRPO)'' is revised 
to add the definition of the WRPO and describe the purpose of this 
conservation plan. In particular, the WRPO is the conservation plan 
that identifies how the wetland functions and values will be restored, 
improved, and protected and which is approved by NRCS.

Section 1467.4 Program Requirements

    Section 1467.4(a) is revised to incorporate the statutory addition 
of the 30-year contract enrollment option available only on acreage 
owned by Indian Tribes. Additionally, Sec.  1467.4(a) is revised to 
clarify that cost-share assistance under the easement or 30-year 
enrollment option will be provided through the easement restoration 
agreement and that cost-share assistance under the restoration cost-
share enrollment option will be provided

[[Page 2324]]

through the restoration cost-share agreement.
    Section 1467.4(b) is revised to remove reference to CRP easements 
with respect to a county cap limitation since this enrollment option is 
not provided through the existing CRP. Additionally, the 2008 Act 
removed the ability to waive the 10% limitation of cropland that can be 
enrolled through an easement option under WRP. Therefore, this 
paragraph has been revised to reflect the 2008 Act amendments.
    Section 1467.4(c) is revised to clarify that eligible program 
participants are persons or legal entities or Indian Tribes and are 
subject to the adjusted gross income (AGI) limitation and highly 
erodible land and wetland compliance provisions of the Food Security 
Act of 1985, as amended. Indian Tribes are exempted from the AGI and 
payment limitations by 7 CFR Part 1400.600(g).
    Section 1467.4(c)(2) is revised to reflect the statutory change in 
required ownership period from 12 months to 7 years. NRCS will 
determine the 7-year ownership requirement at the time NRCS determines 
the eligibility of the land offered for enrollment. Previously, NRCS 
measured ownership duration at the time of application. However, NRCS 
determined that as an eligibility criterion, ownership duration should 
be determined as part of the eligibility review of a project.
    A new Sec.  1467.4(d)) is added to specify that land that is 
accepted for enrollment in an easement, but is sold or transferred 
prior to the easement being perfected will be removed from enrollment. 
The new landowner may file a new application so that all landowner 
eligibility criteria may be examined and documented appropriately. 
However, the land eligibility, ranking, and other administrative 
determinations that relate to the land will remain valid for the 
remainder of the funding cycle.
    Section 1467.4(d) is redesignated as Sec.  1467.4(e) and is revised 
to reflect the requirement made by the 2008 Act amendments that land 
must be private land or acreage owned by Indian Tribes to be eligible 
for WRP.
    Section 1467.4(e)(3), formerly Sec.  1467.4(d)(2), is revised to 
provide the new eligible land category for flooded lands within a 
closed basin lake or pothole as established by the amendments in the 
2008 Act. This change authorizes the enrollment of lands that are 
currently inundated.
    Section 1467.4(e)(4) is revised to add clarity related to lands 
that may be considered farmed wetland or converted wetland, and conform 
to revisions made in Sec.  1467.4(e)(3). The lands identified were 
previously identified in regulation but the revision ties their 
identification more clearly to statutory criteria.
    Section 1467.4(e)(5) Prairie Pothole Region adds new language to 
provide eligibility criteria for land being enrolled under the new 
eligibility category of flooded lands in a closed basin located in the 
Prairie Pothole Region as defined in Sec.  1467.3. The Prairie Pothole 
Region is defined as the counties designated as part of the Prairie 
Pothole National Priority Area for CRP as of June 18, 2008. This 
designation is chosen because it is clearly delineated and is already 
an established and well-known designation. The 2008 Act amendments 
require that lands under this section maximize wildlife benefits and 
wetland values and functions and be restorable. In order for a wetland 
to be restorable, the soils must be hydric, and the depth of the water 
cannot exceed 6.5 feet because water over this level is considered open 
water, not a wetland. The minimum size requirement of 20 contiguous 
acres is included to focus enrollment on lands that are not eligible 
under the Conservation Reserve Program Flooded Farmland program, which 
allows enrollment of parcels under 20 contiguous acres in size.
    Section 1467.4(e)(6) restructures language previously under Sec.  
1467.4(d)(3)(iii) through (vi) regarding eligibility of lands adjacent 
to land eligible under Sec.  1467.4(e)(3). The change results in 
increased cohesiveness in the description of eligible lands and more 
clearly comports with statutory intent by rewording the existing 
language. Land identified in this paragraph may include types of land 
that could be considered eligible under Sec.  1467.4(e)(3). For 
example, paragraph (e)(6) identifies restored wetlands as eligible 
adjacent lands. However, some restored wetlands that are not adjacent 
to eligible land may be identified as farmed wetlands and thus eligible 
under Sec.  1467.4(e)(3), while other restored wetlands may not have an 
agricultural history, and thus would only be eligible as adjacent 
eligible land under paragraph (e)(6). The identification of restored 
wetlands under paragraph (e)(6) is not intended to preclude the 
enrollment of restored agricultural wetlands under Sec.  1467.4(e)(3), 
but to facilitate the enrollment of restored adjacent non-agricultural 
wetlands if their enrollment furthers the functions and values of 
eligible agricultural wetlands.
    Section 1467.4(e)(7) is revised to clarify that eligible land must 
be configured with boundaries that allow for efficient management for 
the program purposes, as determined by NRCS, by changing the term 
``easement'' to ``program.''
    Section 1467.4(g)(3) is revised by clarifying that land held in 
trust for Indian Tribes, though owned by an agency of the United 
States, is not ineligible. Section 1467.4(g)(4) adds language 
incorporating the statutory change that lands owned by State and local 
units of government are not eligible for WRP. Section 1467.4(g)(5) also 
revises the language describing when an existing deed restriction 
causes land to be ineligible for participation to provide more 
administrative flexibility to determine whether wetland functions and 
values are adequately protected by such restrictions. When existing 
restrictions provide adequate wetland protection benefits, WRP 
enrollment is superfluous and unnecessary. In Section 1467.4(g)(6) NRCS 
provides examples of the types of lands where implementation of 
restoration practices would be undermined due to on-site or off-site 
conditions.

Section 1467.5 Application Procedures

    The requirement that applications must be submitted during an 
announced period for such submissions is removed from Sec.  1467.5(a), 
because NRCS provides for continuous enrollment in WRP.
    In Sec.  1467.5(b) the term ``Department'' is replaced with 
``NRCS.''
    NRCS has removed paragraph (c) since the criteria about reduced 
easement cost as a ranking factor is addressed in revisions made to 
Sec.  1467.6.

Section 1467.6 Establishing Priority for Enrollment of Properties in 
WRP

    Section 1467.6(a) is removed to eliminate duplicative language 
related to enrollment priorities from this regulation. Section 
1467.6(b) is re-designated as Sec.  1467.6(a) and clarifies that the 
same ranking considerations apply to all enrollment options. Language 
is added to reflect additional ranking considerations added to the WRP 
statute by the 2008 Act. Section 1467.6 now reflects the priorities 
identified in the WRP statute, including: The conservation benefits of 
obtaining an easement, or other interest in the land; the cost 
effectiveness of each easement or other interest in eligible land, so 
as to maximize the environmental benefits per dollar expended; whether 
the landowner or another person is offering to contribute financially 
to the cost of the easement or other interest in the land to leverage 
Federal funds; the extent to which the purposes of the easement program 
would be achieved on the land; the productivity of the land; and the 
on-

[[Page 2325]]

farm and off-farm environmental threats if the land is used for the 
production of agricultural commodities.
    Section 1467.6(b) is added to reflect existing statutory language 
that, in consideration of the costs and future agricultural food needs, 
gives priority to permanent easements over shorter-term easements, and 
acquiring easements based on habitat value for migratory birds and 
other wildlife, to the extent practicable. The language was added 
because it had not been previously clearly addressed in the regulation.
    Section 1467.6(c) is revised to include consultation with the State 
Technical Committee when placing higher priority on specific geographic 
areas. This change is intended to incorporate State, local, and non-
governmental organization input when designating a priority area.
    Section 1467.6(d) is revised to remove reference to enrolling 
eligible lands at any time to achieve the program objectives. WRP 
operates on a continuous enrollment basis so this language is 
unnecessary. This paragraph is also revised to clarify that eligible 
land may be excluded from enrollment if the adjacent land is needed for 
successful restoration of the property and the adjacent landowner, 
though willing to participate, is ineligible to participate.
    Section 1467.6(e) is added to provide guidelines for the Prairie 
Pothole Region Assessment and Reallocation as required by the statute. 
These guidelines and the rationale for the changes are included in the 
description of the changes to Sec.  1467.4(e)(5).

Section 1467.7 Enrollment Process

    Section 1467.7 is revised to include changes to the NRCS business 
process as a result of experience gained in operating the WRP. These 
revisions require steps related to land valuation, preliminary title 
work, and all appropriate inquiries and record searches to be completed 
prior to the offer to the landowner. These steps had previously been 
performed after the obligation of NRCS funds and resulted in de-
obligation of funds when issues related to these steps could not be 
resolved. These revisions streamline program implementation and are 
intended to help reduce the number of applicants having to exit the 
enrollment process due to irresolvable issues, such as title issues and 
hazardous substance problems.
    In addition, Sec.  1467.7 is revised to confirm that land is 
enrolled in the program when the landowner and NRCS enter into an 
option agreement to purchase an easement, a 30-year contract, or a 
restoration cost-share agreement. Previously, when acreage enrollment 
goals were by calendar year and funding availability by fiscal year, 
land was enrolled in WRP when the landowner executed a notice of intent 
to continue in response to the NRCS offer of tentative acceptance into 
the program. The 2008 Act modified the acreage enrollment goals to be 
by fiscal year, and thus NRCS determined that it improved 
administrative consistency to have the time of enrollment to coincide 
when funds were obligated to a project through the execution of a 
program agreement.
    Section 1467.7(c) is revised to clarify that the option agreement 
to purchase, which becomes the contract for sale when signed by NRCS, 
stipulates the NRCS and landowner obligations and responsibilities, 
particularly regarding restoration and future sales. This is necessary, 
in part, to describe NRCS and landowner responsibilities if the land is 
sold to a party who is unwilling to assume restoration or is ineligible 
for NRCS cost-share assistance for restoration. The option agreement to 
purchase may also include payment schedules for easements valued at 
more than $500,000, consistent with the payment schedule for such 
easements authorized by the 2008 Act.
    Additionally, this section is expanded to incorporate additional 
material regarding enrollment through a 30-year contract or a 
restoration cost-share agreement. In particular, a participant accepts 
enrollment in the program by signing the 30-year contract or the 
restoration cost-share agreement.
    The existing Sec.  467.7(d) is revised and incorporated into the 
new Sec.  1467.7(c) described above.
    The existing Sec.  1467.7(e) is re-designated as Sec.  1467.7(d) 
and is revised to clarify under what conditions NRCS may withdraw an 
offer of enrollment. Sale of the land enrolled prior to easement 
closing or risk of hazardous substances are added as examples of such 
conditions.

Section 1467.8 Compensation for Easements and 30-Year Contracts

    The caption for Sec.  1467.8 is changed from ``Compensation for 
easements'' to ``Compensation for easements and 30-year contracts'' to 
reflect the addition by the 2008 Act of the 30-year contract enrollment 
option for acreage owned by Indian Tribes. The statute requires that 
compensation for 30-year contracts and 30-year easements be equivalent.
    Section 1467.8 is also revised to reflect the statutory easement 
compensation language in the 2008 Act, which became effective 
immediately upon enactment. In particular, the 2008 Act provided that 
NRCS shall pay as compensation the lowest of the following: (i) The 
fair market value of the land using the Uniform Standards for 
Professional Appraisal Practices, or based on an area-wide market 
analysis or survey; (ii) the geographic area rate cap determined under 
paragraph (a)(4) of this section; or (iii) the landowner offer. The 
revisions to Sec.  1467.8 implement the new compensation methods, 
including the equivalence of 30-year contracts and 30-year easements, 
as required by statute. This section is also revised to clarify the 
process for setting and approving the geographic area rate cap. The 
actual method and data sources for determining a geographic rate cap 
have not changed from the existing regulation. The changes were made to 
require that the State Technical Committee provide advice on 
establishment of the caps, and that the caps for each state must be 
approved by the Chief. In this manner, NRCS may ensure nationwide 
consistency and equitable treatment of participants across State 
boundaries. Advice on establishment of the geographic rate cap is 
limited to the State Technical Committee to ensure consistency among 
states in developing fair compensation rates which will encourage 
participation while ensuring prudent investment of the public dollar. 
Payment schedule and payment limitations are revised to reflect the 
2008 Act. This section is also revised to address when a waiver to 
installment payments is allowed for easements that cost in excess of 
$500,000. NRCS will make a single payment when such payment will result 
in the restoration, protection, or enhancement of wetlands on eligible 
land, unless installment payments are requested by the landowner. 
Single payments facilitate the administrative efficiency of the 
program, especially in situations where the landowner must negotiate 
subordination of mortgages or other liens in order to provide clear 
title to the easement area.
    Section 1467.8(b) contains language related to the acceptance of 
easement compensation that previously existed at Sec.  1467.8(e). 
Additionally, this section is revised to incorporate the payment timing 
and method prescribed by statute.
    Section 1467.8(c), previously Sec.  1467.8(f), includes minor 
changes to provide clarity that reimbursement for surveys are for legal 
boundary surveys.
    Language in the existing regulation at Sec.  1467.8(h) regarding 
payment limitations is deleted and incorporated in new Sec.  
1467.10(a)(3).

[[Page 2326]]

    Remaining sections have been re-designated to accommodate the above 
section re-designations.

Section 1467.9 Wetlands Reserve Enhancement Program

    Section 1467.9, Cost-share Payments, is re-designated as Sec.  
1467.10. A new Sec.  1467.9 is added to incorporate provisions for 
implementing the new Wetlands Reserve Enhancement Program (WREP) 
created by the statute. WREP provides the authority to enter into 
agreements with States (or subdivisions), nongovernmental 
organizations, and Indian Tribes to advance the purposes of WRP. WREP 
will operate through an announcement of funding in the Federal 
Register. Proposals will be submitted to the appropriate State 
Conservationist for initial review, and recommended proposals will be 
provided to the Chief by the State Conservationists for nationwide 
ranking and final selection. NRCS believes that WREP will facilitate 
the identification of unique enrollment opportunities that are of 
regional or National significance, and thus beyond the normal purview 
of State-level selection processes. However, selected proposals and 
associated funding will be provided through the applicable State 
Conservationists in order to enter into the WREP agreement with the 
eligible partner.
    Section 1467.9(b) includes language for implementing a reserved 
rights pilot authorized by the statute. Participants in the reserved 
rights pilot are subject to the general eligibility and program 
administration requirements established for this part. Under the 
reserved rights pilot, landowners who wish to reserve grazing rights in 
the grazing rights pilot deed or 30-year contract must comply with a 
WRPO which includes the location, timing, intensity, frequency, and 
duration of grazing. The Managers Report language states that 
activities occurring under a reserved rights easement or 30-year 
contract shall be covered by a conservation plan that is developed and 
approved by NRCS. NRCS intends to compile, evaluate, and make available 
information acquired through its monitoring of projects enrolled 
through WREP in general, and the reserved rights pilot specifically, to 
ascertain the benefits gained through these programmatic options.
    The Managers Report also states that NRCS should explore different 
types of warranty easement deeds consistent with the purposes of the 
program, which will allow landowners to retain the right to use the 
land for grazing purposes. The reserved rights pilot will use template 
deeds and 30-year contracts, which will be made public concurrent with 
the announcement of availability of the pilot.
    Section 1467.9(b)(4) on compensation describes that the value of 
retained grazing rights will be considered in establishing 
compensation. The value of the retained grazing rights, set by either a 
Uniform Standards for Professional Appraisal Practices (USPAP) 
appraisal or a market survey, is subtracted from the fair market value 
of the land; in setting geographic area rate caps, a value for grazing 
rights must be subtracted from the established geographic rate cap for 
the area.

Section 1467.10 Cost-Share Payments

    As mentioned above, Sec.  1467.9 ``Cost-share payments'' is re-
designated as Sec.  1467.10 and revised to incorporate 30-year 
contracts and to improve readability.
    Language is included throughout this section to accommodate the 
inclusion of maintenance as an activity that is eligible for cost-
share. Changes throughout this section clarify that conservation 
practices and activities, as defined in Sec.  1467.3, are eligible for 
cost-share. Maintenance is included in the definition of activity under 
Sec.  1467.3.
    Section 1467.10(a)(3) is added to provide language for implementing 
the $50,000 annual payment limitation for restoration cost-share 
agreements, consistent with the statutory requirements of the 2008 Act 
amendments.
    Sections 1467.10(b), (c), and (d) are revised to more fully 
describe the items for which cost-share is available within the WRPO. 
These items include measures, activities, and components of 
conservation practices which may be necessary for alleviating problems 
or improving a conservation treatment, including as a maintenance 
activity.
    Section 1467.10(e) is added to clarify that the participant with 
the contractual obligation with NRCS will be responsible for completing 
restoration if land enrolled in WRP is sold to a new landowner who is 
unwilling, ineligible, or unable to complete the restoration. Eligible 
new landowners who agree to the transfer of the responsibilities under 
the easement restoration agreement or restoration cost-share agreement, 
as applicable, may receive cost-share assistance for restoration if all 
requirements for payment are met. NRCS will seek refund of payments if 
the participant with the contractual obligation or the new landowner 
fail to implement the required restoration as specified in the WRPO.

Section 1467.11 Easement and 30-Year Contract Participation 
Requirements

    Section 1467.10, Easement participation requirements, is re-
designated as Sec.  1467.11. This section is revised by adding a new 
Sec.  1467.11(b) to make the requirements also applicable to 30-year 
contracts. The requirements for participation under the 30-year 
contract option mirror the easement participation requirements, except 
where necessary to reflect that the 30-year easement is not a real 
property right such as an easement but a contractual arrangement 
between NRCS and an Indian Tribe or tribal member. Additional minor 
revisions are made to Sec.  1467.11 for administrative clarity and 
streamlining. This section is also modified to clarify that the 
restoration of lands enrolled in WRP is the responsibility of the 
participant.
    Section 1467.11(e) is added to include the requirement that for all 
lands enrolled in WRP, NRCS shall develop a WRPO, which will be 
implemented by the participant. This WRPO will be signed by both NRCS 
and the participant. This language is added to further clarify the 
participant responsibilities when enrolled in the WRP.

Section 1467.12 The WRPO Development

    Section 1467.11 is re-designated as Sec.  1467.12. This section 
contains only minor changes to clarify that NRCS is the USDA agency 
with responsibility for developing the WRPO.

Section 1467.13 Modifications

    Section 1467.12 is re-designated as Sec.  1467.13, Modifications.
    Section 1467.13(a)(4) clarifies that the Chief will approve 
modifications and under what circumstances modifications may be 
approved; this language was previously included in the WRP Manual and 
is now being incorporated in the rule to provide clarification for the 
level of approval for modifications. The Chief reserves the authority 
to approve modifications to ensure the long-term integrity of NRCS 
easements.
    Section 1467.13(b) is revised to require agreement and signatures 
from the participant and NRCS for a modification to the WRPO. These 
changes will ensure protection of the Federal investment.

Section 1467.14 Transfer of Land

    Section 1467.13 is re-designated as Sec.  1467.14. Section 
1467.14(a) clarifies what constitutes a transfer of land and the impact 
of the transfer. In cases

[[Page 2327]]

where the transfer of land meets conditions described under Sec.  
1467.4(c)(2), the State Conservationist must cancel the application; 
however, the new landowner may re-apply so that a determination of 
landowner eligibility may be made and properly documented. The land 
eligibility, ranking, and other administrative determinations that 
relate to the land will remain valid for the remainder of the funding 
cycle. This revision is made to comply with the 7-year ownership 
language added by the 2008 Act amendments. Language previously included 
in the existing regulation under payments to landowners is revised and 
moved to Sec.  1467.10(e).

Section 1467.15 Violations and Remedies

    Section 1467.14 is re-designated as Sec.  1467.15 and is re-
structured to provide separate language for violations of easements, 
30-year contracts, and restoration cost-share agreements consistent 
with the statutory language. New language is also added to provide for 
cost recovery of payments, plus interest, when agreements or contracts 
are terminated.

Section 1467.16 Payments Not Subject to Claims

    Section 1467.15 is re-designated as Sec.  1467.16 and the term 
``contract'' is added to the list of payment types to reflect the 
statutory change to include a 30-year contract option for acreage owned 
by Indian Tribes.

Section 1467.17 Assignments

    Section 1467.16 is re-designated as Sec.  1467.17.

Section 1467.18 Appeals

    Section 1467.17 is re-designated as Sec.  1467.18. Section 
1467.18(b) is revised to clarify that appeals procedures apply to 
administrative actions such as determination of eligibility.
    Section 1467.18(d) is added to further clarify that enforcement 
actions taken by NRCS are not subject to review under administrative 
appeal regulations because a landowner's activities related to easement 
deed restrictions are subject to rights held by the United States, and 
thus a landowner cannot be adversely affected in an administrative 
sense by the enforcement of these Federal rights. This language is 
consistent with the appeal regulations at 7 CFR part 614 and federal 
real property law.

Section 1467.19 Scheme and Device

    Section 1467.18 is re-designated as Sec.  1467.19 and revised at 
Sec.  1467.19(b) to include 30-year contracts in the list of payment 
types to reflect the statutory addition of the 30-year contract option 
for acreage owned by Indian Tribes.

Section 1467.20 Market-Based Conservation Initiatives

    Section 1467.20 is a new section. Section 1467.20(a) is added to 
address the Secretary's new authority to accept and use contributions. 
Section 2702 of the 2008 Act authorizes the Secretary to accept and use 
contributions of non-Federal funds to support the purposes of the 
program. The statutory language provides that these funds are available 
to the Secretary without further appropriation and until expended, to 
carry out the program.
    Section 1467.20(b) is added to clarify that the NRCS does not 
assert any interest in the generation of environmental credits such as 
carbon, water quality, biodiversity, or wetlands preservation on land 
enrolled in the program other than to ensure that activities performed 
by the participant to obtain these credits are not contradictory to the 
purposes of the program.
    Section 2708, ``Compliance and Performance'', of the 2008 Act added 
a paragraph to Section 1244(g) of the 1985 Act entitled, 
``Administrative Requirements for Conservation Programs,'' which states 
the following:
    ``(g) Compliance and performance.--For each conservation program 
under Subtitle D, the Secretary shall develop procedures--
    (1) To monitor compliance with program requirements;
    (2) To measure program performance;
    (3) To demonstrate whether long-term conservation benefits of the 
program are being achieved;
    (4) To track participation by crop and livestock type; and
    (5) To coordinate activities described in this subsection with the 
national conservation program authorized under section 5 of the Soil 
and Water Resources Conservation Act of 1977 (16 U.S.C. 2004).''
    This new provision presents in one place the accountability 
requirements placed on the Agency as it implements conservation 
programs and reports on program results. The requirements apply to all 
programs under Subtitle D, including the Wetlands Reserve program, the 
Conservation Security Program, the Conservation Stewardship Program, 
the Farm and Ranch Lands Protection Program, the Grassland Reserve 
Program, the Environmental Quality Incentives Program (including the 
Agricultural Water Enhancement Program), the Wildlife Habitat Incentive 
Program, and the Chesapeake Bay Watershed initiative. These 
requirements are not directly incorporated into these regulations, 
which set out requirements for program participants. However, certain 
provisions within these regulations relate to elements of Section 
1244(g) of the 1985 Act and the Agency's accountability 
responsibilities regarding program performance. NRCS is taking this 
opportunity to describe existing procedures that relate to meeting the 
requirements of Section 1244(g) of the 1985 Act, and Agency 
expectations for improving its ability to report on each program's 
performance and achievement of long-term conservation benefits. Also 
included is reference to the sections of these regulations that apply 
to program participants and that relate to the Agency accountability 
requirements as outlined in Section 1244(g) of the 1985 Act.
    Monitor compliance with program requirements. NRCS has established 
application procedures to ensure that participants meet eligibility 
requirements, and follow-up procedures to ensure that participants are 
complying with the terms and conditions of their contractual 
arrangement with the government and that the installed conservation 
measures are operating as intended. These and related program 
compliance evaluation policies are set forth in Agency guidance (440 
CPM--519) (http://directives.sc.egov.usda.gov/).
    The program requirements applicable to participants that relate to 
compliance are set forth in these regulations in Sec.  1467.4, 
``Program Requirements,'' Sec.  1467.10, ``Cost-Share payments,'' and 
Sec.  1467.11 ``Easement and 30-year contract participation 
requirements.'' These sections make clear the general program 
eligibility requirements, participant obligations for implementing a 
WRPO, and participant program obligations.
    Measure program performance. Pursuant to the requirements of the 
Government Performance and Results Act of 1993 (Pub. L. 103-62, Sec. 
1116) and guidance provided by OMB Circular A-11, NRCS has established 
performance measures for its conservation programs. Program-funded 
conservation activity is captured through automated field-level 
business tools and the information is made publicly available at: 
http://ias.sc.egov.usda.gov/PRSHOME/. Program performance also is 
reported annually to Congress and the public through the annual 
performance budget, annual accomplishments report and the USDA 
Performance Accountability Report. Related performance

[[Page 2328]]

measurement and reporting policies are set forth in Agency guidance 
(GM--340--401 and GM--340--403) (http://directives.sc.egov.usda.gov/). 
The conservation actions undertaken by participants are the basis for 
measuring program performance-specific actions are tracked and reported 
annually, while the effects of those actions relate to whether the 
long-term benefits of the program are being achieved. The program 
requirements applicable to participants that relate to undertaking 
conservation actions are set forth in these regulations in Sec.  
1467.4, ``Program Requirements,'' Sec.  1467.10, ``Cost-Share 
payments,'' and Sec.  1467.11 ``Easement and 30-year contract 
participation requirements.'' These sections make clear participant 
obligations for implementing, operating, and maintaining WRP-funded 
conservation improvements, which in aggregate result in the program 
performance that is reflected in Agency performance reports.
    Demonstrate whether long-term conservation benefits of the program 
are being achieved. Demonstrating the long-term natural resource 
benefits achieved through conservation programs is subject to the 
availability of needed data, the capacity and capability of modeling 
approaches, and the external influences that affect actual natural 
resource condition. While NRCS captures many measures of ``output'' 
data, such as acres of conservation practices, it is still in the 
process of developing methods to quantify the contribution of those 
outputs to environmental outcomes.
    NRCS currently uses a mix of approaches to evaluate whether long-
term conservation benefits are being achieved through its programs. 
Since 1982, NRCS has reported on certain natural resource status and 
trends through the National Resources Inventory (NRI), which provides 
statistically reliable, nationally consistent land cover/use and 
related natural resource data. However, lacking has been a connection 
between these data and specific conservation programs. In the future, 
the interagency Conservation Effects Assessment Project (CEAP), which 
has been underway since 2003, will provide nationally consistent 
estimates of environmental effects resulting from conservation 
practices and systems applied. CEAP results will be used in conjunction 
with performance data gathered through Agency field-level business 
tools to help produce estimates of environmental effects accomplished 
through Agency programs, such as WRP. In 2006 a Blue Ribbon panel 
evaluation of CEAP strongly endorsed the project's purpose, but 
concluded ``CEAP must change direction'' to achieve its purposes. In 
response, CEAP has focused on priorities identified by the Panel and 
clarified that its purpose is to quantify the effects of conservation 
practices applied on the landscape. Information regarding CEAP, 
including reviews and current status is available at http://www.nrcs.usda.gov/technical/NRI/ceap/. Since 2004 and the initial 
establishment of long-term performance measures by program, NRCS has 
been estimating and reporting progress toward long-term program goals. 
Natural resource inventory and assessment, and performance measurement 
and reporting policies set forth in Agency guidance (GM--290--400; GM--
340--401; GM--340--403) (http://directives.sc.egov.usda.gov/).
    Demonstrating the long-term conservation benefits of conservation 
programs is an Agency responsibility. Through CEAP, NRCS is in the 
process of evaluating how these long-term benefits can be achieved 
through the conservation practices and systems applied by participants 
under the program. The program requirements applicable to participants 
that relate to producing long-term conservation benefits are described 
previously under ``measuring program performance,'' i.e., Sec.  1467.4, 
``Program Requirements,'' Sec.  1467.10, ``Cost-Share payments,'' and 
Sec.  1467.11 ``Easement and 30-year contract participation 
requirements.''
    Track participation by crop and livestock type. NRCS' automated 
field-level business tools capture participant, land, and operation 
information. This information is aggregated in the National 
Conservation Planning database and is used in a variety of program 
reports. Additional reports will be developed to provide more detailed 
information on program participation to meet congressional needs. These 
and related program management procedures supporting program 
implementation are set forth in Agency guidance (440 CPM 519).
    The program requirements applicable to participants that relate to 
tracking participation by crop and livestock type are put forth in 
these regulations in Sec.  1467.4, ``Program Requirements,'' which 
makes clear program eligibility requirements, including the requirement 
to provide NRCS the information necessary to implement WRP.
    Coordinate these actions with the national conservation program 
authorized under the Soil and Water Resources Conservation Act (RCA). 
The 2008 Act reauthorized and expanded on a number of elements of the 
RCA related to evaluating program performance and conservation 
benefits. Specifically, the 2008 Farm Bill added a provision stating,
    ``Appraisal and inventory of resources, assessment and inventory of 
conservation needs, evaluation of the effects of conservation 
practices, and analyses of alternative approaches to existing 
conservation programs are basic to effective soil, water, and related 
natural resources conservation.''
    The program, performance, and natural resource and effects data 
described previously will serve as a foundation for the next RCA, which 
will also identify and fill, to the extent possible, data and 
information gaps. Policy and procedures related to the RCA are set 
forth in Agency guidance (GM--290--400; M--440--525; GM--130--402) 
(http://directives.sc.egov.usda.gov/).
    The coordination of the previously described components with the 
RCA is an Agency responsibility and is not reflected in these 
regulations. However, it is likely that results from the RCA process 
will result in modifications to the program and performance data 
collected, to the systems used to acquire data and information, and 
potentially to the program itself. Thus, as the Secretary proceeds to 
implement the RCA in accordance with the statute, the approaches and 
processes developed will improve existing program performance 
measurement and outcome reporting capability and provide the foundation 
for improved implementation of the program performance requirements of 
Section 1244(g) of the 1985 Act.

List of Subjects in 7 CFR Part 1467

    Administrative practice and procedure, Agriculture, Soil 
conservation, Wetlands, Wetland protection.

0
For the reasons stated in the preamble, the Commodity Credit 
Corporation revises Part 1467 of Title 7 of the Code of Federal 
Regulations to read as follows:

PART 1467--WETLANDS RESERVE PROGRAM

Sec.
1467.1 Applicability.
1467.2 Administration.
1467.3 Definitions.
1467.4 Program requirements.
1467.5 Application procedures.
1467.6 Establishing priority for enrollment of properties in WRP.
1467.7 Enrollment process.
1467.8 Compensation for easements and 30-year contracts.
1467.9 Wetlands Reserve Enhancement Program.

[[Page 2329]]

1467.10 Cost-share payments.
1467.11 Easement participation requirements.
1467.12 The WRPO development.
1467.13 Modifications.
1467.14 Transfer of land.
1467.15 Violations and remedies.
1467.16 Payments not subject to claims.
1467.17 Assignments.
1467.18 Appeals.
1467.19 Scheme and device.
1467.20 Market-based conservation initiatives.

    Authority: 16 U.S.C. 3837 et seq.


Sec.  1467.1  Applicability.

    (a) The regulations in this part set forth the policies, 
procedures, and requirements for the Wetlands Reserve Program (WRP) as 
administered by the Natural Resources Conservation Service (NRCS) for 
program implementation.
    (b) The Chief, NRCS, may implement WRP in any of the 50 States, the 
District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin 
Islands of the United States, American Samoa, and the Commonwealth of 
the Northern Mariana Islands.


Sec.  1467.2  Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the Chief.
    (b) The Chief is authorized to modify or waive a provision of this 
part if the Chief deems the application of that provision to a 
particular limited situation to be inappropriate and inconsistent with 
the environmental and cost-efficiency goals of the WRP. This authority 
cannot be further delegated. The Chief may not modify or waive any 
provision of this part that is required by applicable law.
    (c) The State Conservationist will seek advice from the State 
Technical Committee on the development of the geographic area rate caps 
of compensation for an easement, a priority ranking process, and 
related policy matters.
    (d) NRCS may delegate at any time easement management, monitoring, 
and enforcement responsibilities to other Federal or State agencies 
that have the appropriate authority, expertise, and technical and 
financial resources, as determined by NRCS to carry out such delegated 
responsibilities.
    (e) NRCS may enter into cooperative agreements with Federal or 
State agencies, conservation districts, and private conservation 
organizations to assist NRCS with program implementation, including the 
provision of technical assistance.
    (f) NRCS shall consult with the U.S. Department of the Interior's 
Fish and Wildlife Service (FWS) at the local level in determinations of 
land eligibility and as appropriate throughout the program 
implementation process. NRCS may consult Federal or State agencies, 
conservation districts, or other organizations in program 
administration. No determination by these agencies or organizations 
shall compel NRCS to take any action which NRCS determines will not 
serve the purposes of the program established by this part.
    (g) The Chief may allocate funds for purposes related to: 
Encouraging enrollment by historically underserved producers as 
authorized by 16 U.S.C. 3844; special pilot programs for wetland 
management and monitoring; acquisition of wetland easements with 
emergency funding; cooperative agreements with other Federal or State 
agencies for program implementation; coordination of easement 
enrollment across State boundaries; coordination of the development of 
conservation plans; or, for other goals of the WRP found in this part. 
NRCS may designate areas as conservation priority areas where 
environmental concerns are especially pronounced and to assist 
landowners in meeting nonpoint source pollution requirements and other 
conservation needs.


Sec.  1467.3  Definitions.

    The following definitions are applicable to this part:
    30-year Contract means a contract that is for a duration of 30 
years and is limited to acreage owned by Indian Tribes.
    Acreage Owned by Indian Tribes means lands held in private 
ownership by an Indian Tribe or individual Tribal member and lands held 
in trust by a native corporation, Tribe or the Bureau of Indian Affairs 
(BIA).
    Activity means an action other than a conservation practice that is 
included in the WRPO or restoration cost-share agreement, as 
applicable, and that has the effect of alleviating problems or 
improving treatment of the resources, including ensuring proper 
management or maintenance of the wetland functions and values restored, 
protected, or enhanced through an easement, contract, or restoration 
cost-share agreement.
    Agreement means the document that specifies the obligations and 
rights of NRCS and any person or legal entity who is participating in 
the program.
    Agricultural commodity means any agricultural commodity planted and 
produced in a State by annual tilling of the soil, including tilling by 
one-trip planters; or sugarcane planted and produced in a State.
    Beginning Farmer or Rancher means an individual or legal entity who 
has not operated a farm or ranch, or who has operated a farm or ranch 
for not more than 10 consecutive years. This requirement applies to all 
members of a legal entity, and who will materially and substantially 
participate in the operation of the farm or ranch. In the case of an 
individual, individually or with the immediate family, material and 
substantial participation requires that the individual provide 
substantial day-to-day labor and management of the farm or ranch, 
consistent with the practices in the county or State where the farm is 
located. In the case of a legal entity or joint operation, material and 
substantial participation requires that each of the members provide 
some amount of the management, or labor and management necessary for 
day-to-day activities, such that if each of the members did not provide 
these inputs, operation of the farm or ranch would be seriously 
impaired.
    Chief means the Chief of the Natural Resources Conservation Service 
or the person delegated authority to act for the Chief.
    Commenced conversion wetland means a wetland or converted wetland 
for which the Farm Service Agency has determined that the wetland 
manipulation was contracted for, started, or for which financial 
obligation was incurred before December 23, 1985.
    Conservation district means any district or unit of State or local 
government formed under State or territorial law for the express 
purpose of developing and carrying out a local soil and water 
conservation program. Such district or unit of government may be 
referred to as a ``conservation district,'' ``soil conservation 
district,'' ``soil and water conservation district,'' ``resource 
conservation district,'' ``natural resource district,'' ``land 
conservation committee,'' or a similar name.
    Conservation practice means a specified treatment, such as a 
vegetative, structural, or land management practice, that is planned 
and applied according to NRCS standards and specifications.
    Conservation Reserve Program (CRP) means the program administered 
by the Commodity Credit Corporation pursuant to 16 U.S.C. 3831-3836.
    Contract means the legal document that specifies the obligations 
and rights of NRCS and any person or legal entity accepted to 
participate in the program. A WRP contract is an agreement for the 
transfer of assistance from NRCS to the participant for conducting the 
prescribed program implementation actions.

[[Page 2330]]

    Converted wetland means a wetland that has been drained, dredged, 
filled, leveled, or otherwise manipulated (including any activity that 
results in impairing or reducing the flow, circulation, or reach of 
water) for the purpose, or to have the effect of, making the production 
of an agricultural commodity possible if such production would not have 
been possible but for such action; and before such action such land was 
wetland; and such land was neither highly erodible land nor highly 
erodible cropland.
    Cost-share payment means the payment made by NRCS to a participant 
to carry out conservation practices and to achieve the protection of 
wetland functions and values, including necessary activities, as set 
forth in the Wetlands Reserve Plan of Operations (WRPO).
    Easement means a reserved interest easement, which is an interest 
in land defined and delineated in a deed whereby the landowner conveys 
all rights, title, and interests in a property to the grantee, but the 
landowner retains those rights, title, and interests in the property 
which are specifically reserved to the landowner in the easement deed.
    Easement area means the land encumbered by an easement.
    Easement payment means the consideration paid to a landowner for an 
easement conveyed to the United States under the WRP, or the 
consideration paid to an Indian Tribe or tribal members for entering 
into 30-year contracts.
    Easement Restoration Agreement means the agreement used to 
implement the Wetland Restoration Plan of Operations for projects 
enrolled through the permanent easement, 30-year easement, or 30-year 
contract enrollment options.
    Farm Service Agency (FSA) is an agency of the United States 
Department of Agriculture.
    Fish and Wildlife Service (FWS) is an agency of the United States 
Department of the Interior.
    Historically Underserved Producer means a beginning, limited 
resource, or socially disadvantaged farmer or rancher.
    Indian Tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act (85 Stat. 688, 43 U.S.C. 
1601 et seq.), which is recognized as eligible for the special programs 
and services provided by the United States to Indians because of their 
status as Indians.
    Landowner means a person or legal entity having legal ownership of 
eligible land. Landowner may include all forms of collective ownership 
including joint tenants, tenants in common, and life tenants. The term 
landowner includes trust holders of acreage owned by Indian Tribes.
    Lands substantially altered by flooding means areas where flooding 
has created wetland hydrologic conditions which, with a high degree of 
certainty, will develop wetland soil and vegetation characteristics 
over time.
    Legal entity means an entity that is created under Federal or State 
law and that owns land or an agricultural commodity; or produces an 
agricultural commodity.
    Limited Resource Farmer or Rancher means a person with direct or 
indirect gross farm sales not more than $100,000 in each of the 
previous two years (to be increased to adjust for inflation using 
Prices Paid by Farmer Index as compiled by National Agricultural 
Statistical Service (NASS)), and who has a total household income at or 
below the national poverty level for a family of four, or less than 50 
percent of county median household income in each of the previous two 
years (to be determined annually using U.S. Department of Commerce 
data).
    Maintenance means work performed to keep the enrolled area 
functioning for program purposes for the duration of the enrollment 
period. Maintenance includes actions and work to manage, prevent 
deterioration, repair damage, or replace conservation practices on 
enrolled lands, as approved by NRCS.
    Natural Resources Conservation Service (NRCS) is an agency of the 
United States Department of Agriculture, including when NRCS carries 
out program implementation using the funds, facilities, or authorities 
of the Commodity Credit Corporation (CCC).
    Option agreement to purchase means the legal document that is the 
equivalent of a real estate option contract for purchasing land. The 
landowner signs the option agreement to purchase, which is 
authorization for NRCS to proceed with the easement acquisition 
process, and to incur costs for surveys, where applicable, title 
clearance and closing procedures on the easement. The option becomes a 
contract for sale and obligates CCC funding after it is executed by 
NRCS and transmitted to the landowner.
    Participant means a person or legal entity who has been accepted 
into the program and who is receiving payment or who is responsible for 
implementing the terms and conditions of an option to purchase 
agreement, 30-year contract, or restoration cost-share agreement, and 
the associated WRPO.
    Permanent easement means an easement that lasts in perpetuity.
    Person means a natural person, a legal entity, or an Indian Tribe, 
but does not include governments or their political subdivisions.
    Prairie Pothole Region means the counties designated as part of the 
Prairie Pothole National Priority Area for the Conservation Reserve 
Program (CRP) as of June 18, 2008.
    Private land means land that is not owned by a governmental entity, 
and includes acreage owned by Indian Tribes, as defined in this Part.
    Restoration Cost-Share Agreement means the legal document that 
describes the rights and obligations of participants who have been 
accepted to participate in WRP restoration cost-share enrollment option 
that is used to implement conservation practices and activities to 
protect, restore, or enhance wetlands values and functions to achieve 
the purposes of the program. The restoration cost-share agreement is an 
agreement between NRCS and the participant to share in the costs of 
implementing the Wetland Restoration Plan of Operations.
    Riparian areas means areas of land that occur along streams, 
channels, rivers, and other water bodies. These areas are normally 
distinctly different from the surrounding lands because of unique soil 
and vegetation characteristics, may be identified by distinctive 
vegetative communities that are reflective of soil conditions normally 
wetter than adjacent soils, and generally provide a corridor for the 
movement of wildlife.
    Socially disadvantaged farmer or rancher means a farmer or rancher 
who has been subjected to racial or ethnic prejudices because of their 
identity as a member of a group without regard to their individual 
qualities.
    State Technical Committee means a committee established by the 
Secretary of the United States Department of Agriculture (USDA) in a 
State pursuant to 16 U.S.C. 3861.
    Wetland means land that:
    (1) Has a predominance of hydric soils;
    (2) Is inundated or saturated by surface or groundwater at a 
frequency and duration sufficient to support a prevalence of 
hydrophytic vegetation typically adapted for life in saturated soil 
conditions; and
    (3) Supports a prevalence of such vegetation under normal 
circumstances.
    Wetland functions and values means the hydrological and biological

[[Page 2331]]

characteristics of wetlands and the socioeconomic value placed upon 
these characteristics, including:
    (1) Habitat for migratory birds and other wildlife, in particular 
at risk species;
    (2) Protection and improvement of water quality;
    (3) Attenuation of water flows due to flood;
    (4) The recharge of ground water;
    (5) Protection and enhancement of open space and aesthetic quality;
    (6) Protection of flora and fauna which contributes to the Nation's 
natural heritage; and
    (7) Contribution to educational and scientific scholarship.
    Wetland restoration means the rehabilitation of degraded or lost 
habitat in a manner such that:
    (1) The original vegetation community and hydrology are, to the 
extent practical, re-established; or
    (2) A community different from what likely existed prior to 
degradation of the site is established. The hydrology and native self-
sustaining vegetation being established will substantially replace 
original habitat functions and values and does not involve more than 30 
percent of the wetland restoration area.
    Wetlands Reserve Plan of Operations (WRPO) means the conservation 
plan that identifies how the wetland functions and values will be 
restored, improved, and protected and which is approved by NRCS.


Sec.  1467.4  Program requirements.

    (a) General. (1) Under the WRP, NRCS may purchase conservation 
easements from, or enter into 30-year contracts or restoration cost-
share agreements with, eligible landowners who voluntarily cooperate to 
restore, protect, or enhance wetlands on eligible private and Tribal 
lands. The 30-year contract enrollment option is only available to 
acreage owned by Indian Tribes.
    (2) To participate in WRP, a landowner must agree to the 
implementation of a WRPO, the effect of which is to restore, protect, 
enhance, maintain, and manage the hydrologic conditions of inundation 
or saturation of the soil, native vegetation, and natural topography of 
eligible lands. NRCS may provide cost-share assistance through a 
restoration cost-share agreement or an easement restoration agreement 
for the conservation practices and activities that promote the 
restoration, protection, enhancement, maintenance, and management of 
wetland functions and values. Specific restoration, protection, 
enhancement, maintenance, and management actions may be undertaken by 
the landowner, NRCS, or other designee.
    (b) Acreage limitations. (1) Except for areas devoted to windbreaks 
or shelterbelts after November 28, 1990, no more than 25 percent of the 
total cropland in any county, as determined by the FSA, may be enrolled 
in the CRP and the WRP, and no more than 10 percent of the total 
cropland in the county may be subject to an easement acquired through 
the WRP.
    (2) NRCS and FSA shall concur before a waiver of the 25 percent 
limit of this paragraph can be approved for an easement proposed for 
enrollment in the WRP. Such a waiver will only be approved if the 
waiver will not adversely affect the local economy, and operators in 
the county are having difficulties complying with the conservation 
plans implemented under 16 U.S.C. 3812.
    (c) Landowner eligibility. To be eligible to enroll in the WRP, a 
person, legal entity, or Indian Tribe must be in compliance with the 
highly erodible land and wetland conservation provisions in 7 CFR part 
12. Persons or legal entities must be in compliance with the Adjusted 
Gross Income Limitation provisions at Subpart G of 7 CFR part 1400, 
and:
    (1) Be the landowner of eligible land for which enrollment is 
sought;
    (2) For easement applications, have been the landowner of such land 
for the 7-year period prior to the time the land is determined eligible 
for enrollment unless it is determined by the State Conservationist 
that:
    (i) The land was acquired by will or succession as a result of the 
death of the previous landowner;
    (ii) The ownership change occurred due to foreclosure on the land 
and the owner of the land immediately before the foreclosure exercises 
a right of redemption from the mortgage holder in accordance with State 
law; or
    (iii) The land was acquired under circumstances that give adequate 
assurances, as determined by NRCS, that such land was not acquired for 
the purposes of placing it in the program, such as demonstration of 
status as a beginning farmer or rancher.
    (3) Agree to provide such information to NRCS as the agency deems 
necessary or desirable to assist in its determination of eligibility 
for program benefits and for other program implementation purposes.
    (d) When a parcel of land that has been accepted for enrollment 
into the WRP is sold or transferred prior to the easement being 
perfected, the application or option agreement to purchase will be 
cancelled and acres will be removed from enrollment. If the new 
landowner wishes to continue enrollment, a new application must be 
filed so that all eligibility criteria may be examined and documented.
    (e) Land eligibility. (1) Only private land or land owned by Indian 
Tribes may be considered for enrollment into WRP.
    (2) 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 restoration of wetland 
functions and values when considering the cost of acquiring the 
easement and the cost of the restoration, protection, enhancement, 
maintenance, and management.
    (3) Land shall only be considered eligible for enrollment in the 
WRP if NRCS determines, in consultation with the FWS, that:
    (i) The enrollment of such land maximizes wildlife benefits and 
wetland values and functions;
    (ii) Such land is--
    (A) Farmed wetland or converted wetland, together with adjacent 
lands that are functionally dependent on the wetlands; or
    (B) Cropland or grassland that was used for agricultural production 
prior to flooding from the natural overflow of a closed basin lake or 
pothole, together with the adjacent land, where practicable, that is 
functionally dependent on the cropland or grassland; and
    (iii) The likelihood of the successful restoration of such land and 
the resultant wetland values merit inclusion of such land in the 
program, taking into consideration the cost of such restoration.
    (4) Land may be considered farmed wetland or converted wetland 
under paragraph (3)(ii)(A) of this section if such land is identified 
by NRCS as:
    (i) Wetlands farmed under natural conditions, farmed wetlands, 
prior converted cropland, commenced conversion wetlands, farmed wetland 
pastures, and lands substantially altered by flooding so as to develop 
wetland functions and values; or
    (ii) Former or degraded wetlands that occur on lands that have been 
used or are currently being used for the production of food and fiber, 
including rangeland and forest production lands, where the hydrology 
has been significantly degraded or modified and will be substantially 
restored.
    (5) Land under paragraph (e)(3)(ii)(B) of this section may be 
considered for enrollment into 30-year easements if it meets the 
criteria under paragraph (e)(3) of this section, it is located in the 
Prairie Pothole Region as defined under

[[Page 2332]]

Sec.  1467.3 of this part, and the size of the parcel offered for 
enrollment is a minimum of 20 contiguous acres. Such land meets the 
requirement of likelihood of successful restoration only if the soils 
are hydric and the depth of water is 6.5 feet or less at the time of 
enrollment.
    (6) If land offered for enrollment is determined eligible under 
paragraph (e)(3) and (e)(5) of this section, then NRCS may also enroll 
land adjacent or contiguous to such eligible land together with the 
eligible land, if such land maximizes wildlife benefits and:
    (i) Is farmed wetland and adjoining lands enrolled in CRP, with the 
highest wetland functions and values, and is likely to return to 
production after it leaves CRP;
    (ii) Is a riparian area along streams or other waterways that links 
or, after restoring the riparian area, will link wetlands which are 
protected by an easement or other device or circumstance that achieves 
the same objectives as an easement; or
    (iii) Land adjacent to the eligible land that would contribute 
significantly to wetland functions and values, such as buffer areas, 
wetland creations, non-cropped natural wetlands, and restored wetlands, 
but not more than the State Conservationist, in consultation with the 
State Technical Committee, determines is necessary for such 
contribution.
    (7) To be enrolled in the program, eligible land must be configured 
in a size and with boundaries that allow for the efficient management 
of the area for program purposes and otherwise promote and enhance 
program objectives, as determined by NRCS.
    (f) Enrollment of CRP lands. Land subject to an existing CRP 
contract may be enrolled in the WRP only if the land and landowner meet 
the requirements of this part, and the enrollment is requested by the 
landowner and agreed to by NRCS. To enroll in WRP, the CRP contract for 
the property must be terminated or otherwise modified subject to such 
terms and conditions as are mutually agreed upon by FSA and the 
landowner.
    (g) Ineligible land. The following land is not eligible for 
enrollment in the WRP:
    (1) Converted wetlands if the conversion was commenced after 
December 23, 1985;
    (2) Land that contains timber stands established under a CRP 
contract or pastureland established to trees under a CRP contract;
    (3) Lands owned by an agency of the United States, other than held 
in trust for Indian Tribes;
    (4) Lands owned in fee title by a State, including an agency or a 
subdivision of a State, or a unit of local government;
    (5) Land subject to an easement or deed restriction which, as 
determined by NRCS, provides similar restoration and protection of 
wetland functions and values as would be provided by enrollment in WRP; 
and
    (6) Lands where implementation of restoration practices would be 
undermined due to on-site or off-site conditions, such as risk of 
hazardous substances either on-site or off-site, proposed or existing 
rights of way, either on-site or off-site, for infrastructure 
development, or adjacent land uses, such as airports, that would either 
impede complete restoration or prevent wetland functions and values 
from being fully restored.


Sec.  1467.5  Application procedures.

    (a) Application for participation. To apply for enrollment, a 
landowner must submit an Application for Participation in the WRP.
    (b) Preliminary agency actions. By filing an Application for 
Participation, the landowner consents to an NRCS representative 
entering upon the land for purposes of assessing the wetland functions 
and values, and for other activities, such as the development of the 
preliminary WRPO, that are necessary or desirable for NRCS to evaluate 
applications. The landowner is entitled to accompany an NRCS 
representative on any site visits.
    (c) Voluntary reduction in compensation. In order to enhance the 
probability of enrollment in WRP, a landowner may voluntarily offer to 
accept a lesser payment than is being offered by NRCS.


Sec.  1467.6  Establishing priority for enrollment of properties in 
WRP.

    (a) When evaluating easement, 30-year contract, or restoration 
cost-share agreement offers from landowners, the NRCS, with advice from 
the State Technical Committee, may consider:
    (1) The conservation benefits of obtaining an easement, or other 
interest in the land;
    (2) The cost effectiveness of each easement or other interest in 
eligible land, so as to maximize the environmental benefits per dollar 
expended;
    (3) Whether the landowner or another person is offering to 
contribute financially to the cost of the easement or other interest in 
the land to leverage Federal funds;
    (4) The extent to which the purposes of the easement program would 
be achieved on the land;
    (5) The productivity of the land; and
    (6) The on-farm and off-farm environmental threats if the land is 
used for the production of agricultural commodities.
    (b) To the extent practicable, taking into consideration costs and 
future agricultural and food needs, NRCS shall give priority to:
    (1) Obtaining permanent easements over shorter term easements; and
    (2) Acquiring easements based on the value of the easement for 
protecting and enhancing habitat for migratory birds and other 
wildlife, in consultation with FWS.
    (c) NRCS, in consultation with the State Technical Committee, may 
place higher priority on certain geographic regions of the State where 
restoration of wetlands may better achieve State and regional goals and 
objectives.
    (d) Notwithstanding any limitation of this part, the State 
Conservationist may, at any time, exclude enrollment of otherwise 
eligible lands if the participation of the adjacent landowners is 
essential to the successful restoration of the wetlands and those 
adjacent landowners are unwilling or ineligible to participate. The 
State Conservationist may coordinate with other Federal, State, and 
nonprofit organizations to encourage the restoration of wetlands on 
adjacent ineligible lands, especially in priority geographic areas.
    (e)(1) The Chief will conduct an assessment during fiscal year 2008 
and each subsequent fiscal year for the purpose of determining the 
interest and allocations for the Prairie Pothole Region to enroll land 
determined eligible under Sec.  1467.4(d)(5) of this part into 30-year 
easements. Annually, the Chief will provide specific instructions for 
the assessment in writing to the applicable State Conservationists.
    (2) The Chief will make an adjustment to the allocation for an 
applicable State for a fiscal year, based on the results of the 
assessment conducted under paragraph (e)(1) of this section for the 
State during the previous fiscal year.


Sec.  1467.7  Enrollment process.

    (a) Tentative Selection. Based on the priority ranking, NRCS will 
notify an affected landowner of tentative acceptance into the program.
    (b) Effect of notice of tentative selection. The notice of 
tentative acceptance into the program does not bind NRCS or the United 
States to enroll the proposed project in WRP, nor does it bind the 
landowner to continue with enrollment in the program. The notice 
informs the landowner of NRCS' intent to continue the enrollment 
process on

[[Page 2333]]

their land unless otherwise notified by the landowner.
    (c) Acceptance and effect of offer of enrollment.
    (1) Easement. For applications requesting enrollment through an 
easement, an option agreement to purchase will be presented by NRCS to 
the landowner, which will describe the easement area; the easement 
compensation amount; the easement terms and conditions; the landowner's 
obligations if the land is sold before restoration to an ineligible 
landowner; and other terms and conditions for participation that may be 
required by NRCS as appropriate. The landowner accepts enrollment in 
the WRP by signing the option agreement to purchase. NRCS will continue 
with easement acquisition activities after the property has been 
enrolled.
    (2) Restoration cost-share agreement. For applications requesting 
enrollment through the restoration cost-share agreement option, a 
restoration cost-share agreement shall be presented by NRCS to the 
landowner, which will describe the enrolled area, the agreement terms 
and conditions, and other terms and conditions for participation that 
may be required by NRCS as appropriate. The landowner accepts 
enrollment in the WRP by signing the restoration cost-share agreement. 
NRCS will proceed with implementation of the WRPO after the property 
has been enrolled.
    (3) 30-year contract. For applications requesting enrollment 
through the 30-year contract option, a 30-year contract shall be 
presented by NRCS to the landowner, which will describe the contract 
area, the contract terms and conditions, and other terms and conditions 
for participation that may be required by NRCS as appropriate. The 
landowner accepts enrollment in the WRP by signing the 30-year 
contract. NRCS will proceed with implementation of the WRPO after the 
property has been enrolled.
    (d) Withdrawal of offer of enrollment Prior to execution of the 
easement deed by the United States and the landowner, NRCS may withdraw 
the land from enrollment at any time due to lack of availability of 
funds, inability to clear title, sale of the land, risk of hazardous 
substance contamination, or other reasons. The offer of enrollment to 
the landowner shall be void if not executed by the landowner within the 
time specified.


Sec.  1467.8  Compensation for easements and 30-year contracts.

    (a) Determination of easement payment rates. (1) Compensation for 
an easement under this part shall be made in cash in such amount as is 
agreed to and specified in the option agreement to purchase or 30-year 
contract.
    (2) Payments for non-permanent easements or 30-year contracts shall 
be not more than 75 percent of that which would have been paid for a 
permanent easement as determined by the methods listed in paragraph 
(a)(3) of this section.
    (3) NRCS shall pay as compensation the lowest of the following:
    (i) The fair market value of the land using the Uniform Standards 
for Professional Appraisal Practices, or based on an area-wide market 
analysis or survey;
    (ii) The geographic area rate cap determined under paragraph (a)(4) 
of this section; or
    (iii) The landowner offer.
    (4) The State Conservationist, in consultation with the State 
Technical Committee, shall establish one or more geographic area rate 
caps within a state. The State Conservationist shall submit geographic 
area rate caps and supporting documentation to the Chief for approval. 
Each State Conservationist will determine the geographic area rate cap 
using the best information which is readily available in that State. 
Such information may include: Soil types, type(s) of crops capable of 
being grown, production history, location, real estate market values, 
and tax rates and assessments.
    (b) Acceptance of offered easement compensation. (1) NRCS will not 
acquire any easement unless the landowner accepts the amount of the 
easement payment offered by NRCS. The easement payment may or may not 
equal the fair market value of the interests and rights to be conveyed 
by the landowner under the easement. By voluntarily participating in 
the program, a landowner waives any claim to additional compensation 
based on fair market value.
    (2)(i) For easements or 30-year contracts valued at $500,000 or 
less, NRCS will provide compensation in up to 30 annual payments, as 
requested by the participant, as specified in the option agreement to 
purchase or 30-year contract between NRCS and the participant.
    (ii) For easements or 30-year contracts valued at more than 
$500,000, the Secretary may provide compensation in at least 5, but not 
more than 30 annual payments. NRCS may provide compensation in a single 
payment for such easements or 30-year contracts when, as determined by 
the Chief, it would further the purposes of the program. The applicable 
payment schedule will be specified in the option agreement to purchase, 
warranty easement deed, or 30-year contract between NRCS and the 
participant.
    (c) Reimbursement of a landowner's expenses. For completed easement 
conveyances, NRCS will reimburse participants for their fair and 
reasonable expenses, if any, incurred for legal boundary surveys and 
other related costs, as determined by NRCS. The State Conservationist, 
in consultation with the State Technical Committee, may establish 
maximum payments to reimburse participants for reasonable expenses, if 
incurred.
    (d) Tax implications of easement conveyances. Subject to applicable 
regulations of the Internal Revenue Service, a participant may be 
eligible for a bargain sale tax deduction which is the difference 
between the fair market value of the easement conveyed to the United 
States and the easement payment made to the participant. NRCS disclaims 
any representations concerning the tax implications of any easement or 
cost-share transaction.
    (e) Per acre basis calculations. If easement payments are 
calculated on a per acre basis, adjustment to stated easement payment 
will be made based on final determination of acreage.


Sec.  1467.9  Wetlands Reserve Enhancement Program.

    (a) Wetlands Reserve Enhancement Program (WREP). (1) The purpose of 
WREP is to target and leverage resources to address high priority 
wetlands protection, restoration, and enhancement objectives through 
agreements with States (including a political subdivision or agency of 
a State), nongovernmental organizations, and Indian Tribes.
    (2) Funding for WREP agreements will be announced in the Federal 
Register.
    (i) The announcement will provide details on the priorities for 
funding, required level of partner matching funds, ranking criteria, 
level of available funding, and additional criteria as determined by 
the Chief.
    (ii) The Chief will determine the funding level for WREP on an 
annual basis. Funds for WREP are derived from funds available for WRP.
    (3) Proposals will be submitted to the State Conservationist of the 
State in which the majority of the project area resides.
    (i) State Conservationists will evaluate proposals based on the 
ranking criteria established in the announcement and provide proposals 
recommended for funding to the Chief.
    (ii) The Chief will evaluate proposals recommended for funding and 
make final funding selections, in accordance

[[Page 2334]]

with ranking factors identified in the announcement.
    (4) Selected proposals and associated funding will be provided to 
the State Conservationist to enter into WREP agreements with the 
eligible partner to carry out the project.
    (b) Reserved Rights Pilot. (1) The Chief shall carry out a reserved 
rights pilot subject to the requirements established in this part.
    (2) Under the reserved rights pilot, a landowner may reserve 
grazing rights in the warranty easement deed or 30-year contract, if 
the State Conservationist determines that the reservation and use of 
the grazing rights:
    (i) Is compatible with the land subject to the easement or 30-year 
contract; and
    (ii) Is consistent with the long-term wetland protection and 
enhancement goals for which the easement or 30-year contract was 
established; and
    (iii) Complies with a WRPO developed with NRCS.
    (3) The State Conservationist will provide public notice of the 
availability of the reserved rights pilot and the reserved rights 
template deed or 30-year contract, approved by the Chief, to be used in 
the pilot.
    (4) Compensation for easements or 30-year contracts entered into 
under the reserved rights pilot will be based on the method described 
in Sec.  1467.8 with the following exceptions:
    (i) Section 1467.8(a)(3)(i) is adjusted to reduce the fair market 
value of the land by an amount equal to the value of the retained 
grazing rights as determined by a Uniform Standards for Professional 
Appraisal Practices appraisal or a market survey; and
    (ii) Section 1467.8(a)(3)(ii) is adjusted to reduce the geographic 
area rate cap determined as described in Sec.  1467.8(a)(4) by an 
amount equal to the value of the retained grazing rights.


Sec.  1467.10  Cost-share payments.

    (a) NRCS may share the cost with participants of implementing the 
WRPO on the enrolled land. The amount and terms and conditions of the 
cost-share assistance shall be subject to the following restrictions on 
the costs of establishing or installing conservation practices or 
activities specified in the WRPO:
    (1) On enrolled land subject to a permanent easement, NRCS will 
offer to pay at least 75 percent but not more than 100 percent of such 
costs; and
    (2) On enrolled land subject to a non-permanent easement, 30-year 
contract, or restoration cost-share agreement, NRCS will offer to pay 
at least 50 percent but not more than 75 percent of such costs.
    (3) The total amount of payments that a person or legal entity may 
receive, directly or indirectly, for one or more restoration cost-share 
agreements, for any year, may not exceed $50,000.
    (b) Cost-share payments may be made only upon a determination by 
NRCS that an eligible conservation practice or component of the 
conservation practice has been implemented in compliance with 
appropriate NRCS standards and specifications; or an eligible activity 
has been implemented in compliance with the appropriate requirements 
detailed in the WRPO. Identified conservation practices or activities 
may be implemented by the participant, NRCS, or other NRCS designee.
    (c) Cost-share payments may be made for replacement of an eligible 
conservation practice, if NRCS determines that the practice is still 
needed and that the failure of the original conservation practice was 
due to reasons beyond the control of the participant.
    (d) A participant may seek additional cost-share assistance from 
other public or private organizations as long as the conservation 
practices or activities funded are in compliance with this part. In no 
event shall the participant receive an amount that exceeds 100 percent 
of the total actual cost of the restoration.
    (e)(1) If land subject to an easement or 30-year contract is sold, 
the participant with the contractual obligation with NRCS will be 
responsible for implementation of any remaining items identified in the 
WRPO, unless the new landowner is an eligible participant, agrees to a 
transfer of the WRPO, and the voluntary transfer is approved in advance 
by NRCS. Cost-share payments will be made to the new eligible landowner 
upon presentation of an assignment of rights or other evidence that 
title has passed, proof of eligibility, and the new owner completes 
implementation of the WRPO.
    (2) If the new landowner is not eligible for participation in WRP, 
the participant with the contractual obligation with NRCS will be 
responsible for implementation of any remaining items identified in the 
WRPO unless the new landowner agrees to implement the WRPO without NRCS 
assistance. The new landowner will be responsible for the 
implementation of conservation practices or activities necessary for 
maintenance of the easement functions and values as determined by NRCS. 
The contract between NRCS and the participant with the contractual 
obligation with NRCS will specify that NRCS will seek a refund of 
easement or 30-year contract compensation and restoration payments from 
the participant with the contractual obligation with NRCS, unless the 
new landowner agrees to the transfer and completion of the WRPO with no 
NRCS assistance or a transfer of the restoration contract occurs as set 
forth above. In cases where payment recoupment occurs, the WRP easement 
remains in full force and effect.
    (3) If land subject to a restoration cost-share agreement is sold 
prior to the completion of the restoration cost-share agreement and the 
new landowner is not eligible for participation in WRP or unwilling to 
complete implementation of the restoration cost-share agreement without 
NRCS assistance, the agreement will be cancelled, and the acres will be 
removed from enrollment. NRCS will seek refund of the restoration 
payments from the participant with the contractual obligation with 
NRCS.
    (4) If land subject to a restoration cost-share agreement is sold 
prior to the expiration of the agreement and the new landowner is an 
eligible participant, the new landowner may agree to the transfer of 
the agreement and to completion of the agreement with NRCS assistance. 
If the new eligible landowner refuses to accept the transfer, the 
participant with the contractual obligation with NRCS must complete the 
implementation of the WRPO without NRCS assistance or the agreement 
will be cancelled and the acres removed from enrollment. NRCS will seek 
refund of the restoration payments from the participant with the 
contractual obligation with NRCS.


Sec.  1467.11  Easement and 30-year contract participation 
requirements.

    (a) Easement requirements. (1) To enroll land in WRP through the 
permanent or non-permanent easement option, a landowner shall grant an 
easement to the United States. The easement shall require that the 
easement area be maintained in accordance with WRP goals and objectives 
for the duration of the term of the easement, including the 
restoration, protection, enhancement, maintenance, and management of 
wetland and other land functions and values.
    (2) For the duration of its term, the easement shall require, at a 
minimum, that the participant, and the participant's heirs, successors 
and assigns, shall, consistent with the terms of this part, cooperate 
in the restoration, protection, enhancement, maintenance, and 
management of the land in accordance with the warranty easement deed 
and with the terms of the WRPO. In addition, the easement shall grant 
to the United States, through NRCS:

[[Page 2335]]

    (i) A right of access to the easement area;
    (ii) The right to permit compatible uses of the easement area, 
including such activities as hunting and fishing, managed timber 
harvest, or periodic haying or grazing, if such use is consistent with 
the long-term protection and enhancement of the wetland resources for 
which the easement was established;
    (iii) All rights, title and interest in the easement area; and
    (iv) The right to ensure restoration, protection, enhancement, 
maintenance, and management activities on the easement area.
    (3) The participant shall convey title to the easement in a manner 
that is acceptable to NRCS. The participant shall warrant that the 
easement granted to the United States is superior to the rights of all 
others, except for exceptions to the title that are deemed acceptable 
by NRCS.
    (4) The participant shall:
    (i) Comply with the terms of the easement;
    (ii) Comply with all terms and conditions of any associated 
contract or agreement;
    (iii) Agree to the permanent retirement of any existing cropland 
base and allotment history for the easement area under any program 
administered by the Secretary, as determined by the FSA;
    (iv) Agree to the long-term restoration, protection, enhancement, 
maintenance, and management of the easement in accordance with the 
terms of the easement and related agreements;
    (v) Have the option to enter into an agreement with governmental or 
private organizations to assist in carrying out any participant 
responsibilities on the easement area; and
    (vi) Agree that each person or legal entity that is subject to the 
easement shall be jointly and severally responsible for compliance with 
the easement and the provisions of this part and for any refunds or 
payment adjustment which may be required for violation of any terms or 
conditions of the easement or the provisions of this part.
    (5) For all lands enrolled in the WRP, NRCS shall develop a WRPO. 
The WRPO and any subsequent revisions will be signed by the NRCS and 
the participant to acknowledge discussion and receipt of the WRPO.
    (b) 30-year contract requirements. (1) To enroll land in WRP 
through the 30-year contract option, a landowner shall enter into a 
contract with NRCS. The contract shall require that the enrolled area 
be maintained in accordance with WRP goals and objectives for the 
duration of the contract, including the restoration, protection, 
enhancement, maintenance, and management of wetland and other land 
functions and values.
    (2) For the 30-year duration, the contract shall require, at a 
minimum, that the participant, and the participant's heirs, successors 
and assigns, shall, consistent with the terms of this part, cooperate 
in the restoration, protection, enhancement, maintenance, and 
management of the land in accordance with the contract and with the 
terms of the WRPO. In addition, the contract shall grant to NRCS:
    (i) A right of access to the contract area;
    (ii) The right to permit compatible uses of the contract area, 
including such activities as a traditional Tribal use of the land, 
hunting and fishing, managed timber harvest, or periodic haying or 
grazing, if such use is consistent with the long-term protection and 
enhancement of the wetland resources for which the contract was 
established; and
    (iii) The right to ensure restoration, protection, enhancement, 
maintenance, and management activities on the enrolled area.
    (3) The participant shall:
    (i) Comply with the terms of the contract;
    (ii) Comply with all terms and conditions of any associated 
agreement;
    (iii) Agree to the long-term restoration, protection, enhancement, 
maintenance, and management of the enrolled area in accordance with the 
terms of the contract and related agreements;
    (iv) Have the option to enter into an agreement with governmental 
or private organizations to assist in carrying out any participant 
responsibilities on the enrolled area;
    (v) Agree that each person or legal entity that is subject to the 
contract shall be jointly and severally responsible for compliance with 
the contract and the provisions of this part and for any refunds or 
payment adjustment which may be required for violation of any terms or 
conditions of the contract or the provisions of this part.
    (4) For all lands enrolled in the WRP, NRCS shall develop a WRPO. 
The WRPO and any subsequent revisions will be signed by the NRCS and 
the participant to acknowledge discussion and receipt of the WRPO.


Sec.  1467.12  The WRPO development.

    (a) The development of the WRPO will be made through the local NRCS 
representative, in consultation with the State Technical Committee, 
with consideration of site-specific technical input from FWS and the 
Conservation District.
    (b) The WRPO will specify the manner in which the enrolled land 
shall be restored, protected, enhanced, maintained, and managed to 
accomplish the goals of the program. The WRPO will be developed to 
ensure that cost-effective restoration and maximization of wildlife 
benefits and wetland functions and values will result. Specifically, 
the WRPO will consider and address, to the extent practicable, the on-
site alternations and the off-site watershed conditions that adversely 
impact the hydrology and associated wildlife and wetland functions and 
values.


Sec.  1467.13  Modifications.

    (a) Easements. (1) After an easement has been recorded, no 
modification will be made in the easement except by mutual agreement 
with the Chief and the participant. The Chief will consult with FWS and 
the Conservation District prior to making any modifications to 
easements.
    (2) Approved modifications will be made only in an amended 
easement, which is duly prepared and recorded in conformity with 
standard real estate practices, including requirements for title 
approval, subordination of liens, and recordation.
    (3) The Chief may approve modifications to facilitate the practical 
administration and management of the easement area or the program so 
long as the modification will not adversely affect the wetland 
functions and values for which the easement was acquired or when 
adverse impacts will be mitigated by enrollment and restoration of 
other lands that provide greater wetland functions and values at no 
additional cost to the government.
    (4) Modifications must result in equal or greater environmental and 
economic values to the United States and address a compelling public 
need, as determined by the Chief.
    (b) WRPO. Insofar as is consistent with the easement and applicable 
law, the State Conservationist may approve modifications to the WRPO 
that do not affect provisions of the easement in consultation with the 
participant and with consideration of site specific technical input 
from the FWS and the Conservation District. Any WRPO modification must 
meet WRP regulations and program objectives, comply with the definition 
of wetland restoration as defined in Sec.  1467.3, must result in equal 
or greater wildlife benefits, wetland functions and values,

[[Page 2336]]

and ecological and economic values to the United States.


Sec.  1467.14  Transfer of land.

    (a) Offers voided. Any transfer of the property prior to the 
enrollment of the easement, 30-year contract, or restoration cost-share 
agreement contract, including the landowner entering into a contract or 
purchase agreement to sell the land subject to offer, shall void the 
offer of enrollment.
    (b) Payments to landowners. For easements with multiple annual 
payments, any remaining easement payments will be made to the original 
participant unless NRCS receives an assignment of proceeds.
    (c) Claims to payments. With respect to any and all payments owed 
to participants, NRCS shall bear no responsibility for any full 
payments or partial distributions of funds between the original 
participant and the participant's successor. In the event of a dispute 
or claim on the distribution of cost-share payments, NRCS may withhold 
payments without the accrual of interest pending an agreement or 
adjudication on the rights to the funds.


Sec.  1467.15  Violations and remedies.

    (a) Easement violations. (1) In the event of a violation of the 
easement, 30-year contract, or any restoration cost-share agreement 
involving the participant, the participant 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 determines is necessary to correct the violation at the 
landowner's expense.
    (2) Notwithstanding paragraph (a)(1) of this section, NRCS reserves 
the right to enter upon the easement area at any time to remedy 
deficiencies or easement violations. Such entry may be made at the 
discretion of NRCS when such actions are deemed necessary to protect 
important wetland functions and values or other rights of the United 
States under the easement. The participant shall be liable for any 
costs incurred by the United States as a result of the participant's 
negligence or failure to comply with easement or contractual 
obligations.
    (3) At any time there is a material breach of the easement 
covenants or any associated agreement, the easement shall remain in 
force and NRCS may withhold or require the refund of any easement and 
cost-share payments owed or paid to participants. Such withheld or 
refunded funds may be used to offset costs incurred by the United 
States in any remedial actions or retained as damages pursuant to court 
order or settlement agreement. This remedy is in addition to any and 
all legal or equitable remedies available to the United States under 
applicable Federal or State law.
    (4) The United States 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.
    (b) 30-year Contract and Restoration Cost-Share Agreement 
violations. (1) If the NRCS determines that a participant is in 
violation of the terms of a 30-year contract, or restoration cost-share 
agreement, or documents incorporated by reference into the 30-year 
contract or restoration cost-share agreement, the participant 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 determines is necessary to correct 
the violation. If the violation continues, the State Conservationist 
may terminate the 30-year contract or restoration cost-share agreement.
    (2) Notwithstanding the provisions of paragraph (b)(1) of this 
section, a restoration cost-share agreement or 30-year contract 
termination is effective immediately upon a determination by the State 
Conservationist that the participant has:
    (i) Submitted false information;
    (ii) Filed a false claim;
    (iii) Engaged in any act for which a finding of ineligibility for 
payments is permitted under this part; or
    (iv) Taken actions NRCS deems to be sufficiently purposeful or 
negligent to warrant a termination without delay.
    (3) If NRCS terminates a restoration cost-share agreement or 30-
year contract, the participant will forfeit all rights for future 
payments under the restoration cost-share agreement or 30-year 
contract, and must refund all or part, as determined by NRCS, of the 
payments received, plus interest.


Sec.  1467.16  Payments not subject to claims.

    Any cost-share, contract, or easement payment or portion thereof 
due any person under this part shall be allowed without regard to any 
claim or lien in favor of any creditor, except agencies of the United 
States Government.


Sec.  1467.17  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.  1467.18  Appeals.

    (a) A person participating in the WRP may obtain a review of any 
administrative determination concerning eligibility for participation 
utilizing the administrative appeal regulations provided in 7 CFR part 
614.
    (b) Before a person may seek judicial review of any administrative 
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 the NRCS under 
these procedures.
    (c) Any appraisals, market analysis, or supporting documentation 
that may be used by the NRCS in determining property value are 
considered confidential information, and shall only be disclosed as 
determined at the sole discretion of the NRCS in accordance with 
applicable law.
    (d) Enforcement actions undertaken by the NRCS in furtherance of 
its federally held property rights are under the jurisdiction of the 
federal courts and not subject to review under administrative appeal 
regulations.


Sec.  1467.19  Scheme and device.

    (a) If it is determined by the NRCS that a participant has employed 
a scheme or device to defeat the purposes of this part, any part of any 
program payment otherwise due or paid such participant during the 
applicable period may be withheld or be required to be refunded with 
interest thereon, as determined appropriate by NRCS.
    (b) A scheme or device includes, but is not limited to, coercion, 
fraud, misrepresentation, depriving any other person of payments for 
cost-share practices, contracts, or easements for the purpose of 
obtaining a payment to which a person would otherwise not be entitled.
    (c) A 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.


Sec.  1467.20  Market-based conservation initiatives.

    (a) Acceptance and use of contributions. Section 1241(e) of the 
Food Security Act of 1985, as amended, (16 U.S.C. 3841(e)), allows the 
Chief to accept and use contributions of non-Federal funds to support 
the purposes of the program. These funds shall be available without 
further appropriation and until expended, to carry out the program.

[[Page 2337]]

    (b) Ecosystem Services Credits for Conservation Improvements. (1) 
USDA recognizes that environmental benefits will be achieved by 
implementing conservation practices and activities funded through WRP, 
and that environmental credits may be gained as a result of 
implementing activities compatible with the purposes of a WRP easement, 
30-year contract, or restoration cost-share agreement. NRCS asserts no 
direct or indirect interest in these credits. However, NRCS retains the 
authority to ensure that the requirements of the WRPO, contract, and 
easement deed are met. Where activities required under an environmental 
credit agreement may affect land covered under a WRP easement, 30-year 
contract, or restoration cost-share agreement, participants are highly 
encouraged to request a compatibility assessment from NRCS prior to 
entering into such agreements.
    (2) Section 1222(f)(2) of the Food Security Act of 1985 as amended, 
does not allow wetlands restored with Federal funds to be utilized for 
Food Security Act wetland mitigation purposes.

    Signed this 9th day of January 2009, in Washington, DC.
Arlen L. Lancaster,
Vice President, Commodity Credit Corporation and Chief, Natural 
Resources Conservation Service.
[FR Doc. E9-735 Filed 1-14-09; 8:45 am]
BILLING CODE 3410-16-P


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