Farm and Ranch Lands Protection Program The proposed rule

1. United States Department of Agriculture Natural Resources Conservation Service Farm and Ranch Lands Protection ProgramThe proposed rule

2. Program Authority • Authority: • The Farm Security and Rural Investment Act of 2002 repealed the Farmland Protection Program and amended the Food Security Act of 1985 by adding Chapter 2, Subchapter B, Farmland Protection Program • Scope • All 50 states, Caribbean Area, and the Pacific Basin Area

3. A Name Change . . . The new program will be called the Farm and Ranch Lands Protection Program (FRPP) to distinguish it from the former Program and better describe the land it seeks to protect.

4. Purpose The purpose of the FRPP remains the same as the FPP – to purchase conservation easements for the purpose of protecting topsoil by limiting nonagricultural uses of the land.

5. Entity Eligibility Who is eligible? The 2002 Act expanded entity eligibility to include not only: • State or Local Governments, and • Federally Recognized Indian Tribes, But also: • Non-Governmental Organizations.

6. Eligible Land • To be eligible, farms or ranches must be privately owned and contain: • at least 50% of prime, unique, or statewide or locally important soil, or • a historical or archaeological resource. • Eligible land must be owned by landowners who certify that they do not exceed the Adjusted Gross Income limitation eligibility requirements. • Subject to a pending offer.

7. The Request for Proposals (RFP) • NRCS will continue to use the public notice process to request FRPP applications. The proposed rule sets forth the program policies and guidelines. • Although NRCS has the authority to acquire other interests in land, the RFP will seek to fund only perpetual conservation easements.

8. FRPP Ranking Entity and parcel selection will be based on national criteria as determined by the NRCS Chief, set forth in the RFP, and additional State criteria as determined by the appropriate State Conservationist, with advice from the State Technical Committee.

9. Funding • Under FRPP, NRCS may provide up to 50% of the appraised fair market value, entities are required to supplement the NRCS share of the cost of the conservation easement. • Landowner donations up to 25% of the appraised fair market value of the conservation easement may be considered part of the entity’s matching offer. • The entity must provide at least 25% of the appraised fair market value or 50% of the purchase price in cash.

10. Providing an Example: • The total appraised fair market value of a conservation easement is $1 million. • The landowner chooses to donate 75 percent of the appraised fair market value, resulting in the actual easement purchase price being $250,000. • In this case, NRCS and the cooperating entity both contribute $125,000 (50% of the purchase price). • By providing the option for the entity has the option to choose the least cost option for them.

11. Sources of Money • Other Federal and state funds are allowed to be part of an entity’s cash match as long as they have been “laundered” by the entity. If they are the entity’s funds, they can be used as a cash match. • If the funds used for FRPP and the funds awarded are contingent upon another goal or objective being achieved on the specific parcel of land, approval by NRCS and OGC may be needed. • No in-kind contributions allowed.

12. Conservation Plan • A conservation plan will be developed by NRCS in consultation with the landowner on highly erodible cropland. • The conservation plan will be developed and managed in accordance with: • the standards and specifications outlined in the NRCS Field Office Technical Guide, • the Food Security Act of 1985, as amended, 7 CFR Part 12, and • other requirements if deemed appropriate by the State Conservationist and cooperating entity. • The local conservation district will approve the conservation plan.

13. Appraisals • All parcels must have an appraisal prior to fund disbursement. Appraisals shall be completed and signed by a State certified or licensed appraiser. • The appraisal shall conform to the Uniform Appraisal Standards for Federal Land Acquisitions, or the Uniform Appraisal Standards of Professional Appraisal Practices. • Alternative real estate evaluation systems are no longer permitted.

14. The Conservation Easement • The standard conservation easement template shall: • be approved by the Office of General Counsel; • contain a “contingent right” clause that provides that all rights conveyed by the landowner under the document will become vested in the United States should the eligible entity abandon or attempt to terminate the conservation easement; and • contain paragraphs outlining conservation plan requirements and indemnification language to protect the U.S. interest. Note: The proposed rule allows for the NRCS Chief to develop a standard easement deed, if the Chief deems appropriate.

15. A Timeline . . . -The deadline for entities to submit their 2003 requests is May 19, 2003. -The FRPP final rule is expected to be published in Spring 2003. At that time, the name of the program will officially change from the Farmland Protection Program to the Farm and Ranch Lands Protection Program. -States complete ranking and evaluating their parcels (June 15-July 1). -The cooperative agreement template is released to states, June 15, 2003. -All cooperative agreements and FRPP money must be obligated by September 30, 2003. -With the publication of the new rule, new fact sheets and a new manual will be published.

16. Authorized Funding Levels • FY 2002-$50 million • FY 2003-$100 million • FY 2004-$125 million • FY 2005-$125 million • FY 2006-$100 million • FY 2007-$97 million • Total Funds-$597 million

17. Looking at the Program Nationally . . .