August, 2006

One of the most closely watched farmland preservation programs this summer has been the Federal Farm and Ranch Lands Protection Program (FRPP). The Natural Resources Conservation Service (NRCS) has released an interim final rule for the program and new FRPP legislation was introduced in both the House in Senate. While the timing of these three events was purely coincidental, they were by no means unrelated.

Tensions between the NRCS and cooperating entities (program participants) have been building over the past several years, because of a number of FRPP policies recently implemented by the agency. The policies are the outcome of an internal audit of NRCS easement programs and are designed to bring the FRPP into compliance with other sections of the federal code. Cooperating entities however, view the policies as burdensome requirements that decrease participation in the program, and effect the ability of state and local programs to operate efficiently. The cooperating entities also questioned the agency’s ability to implement new policies without going through the formal federal rulemaking process.

In response to these criticisms, the NRCS released an interim final rule for the FRPP in the July 27, 2006 edition of the Federal Register. The notice seeks to clarify and formalize many of the policies and requirements that the agency has implemented over the past several years. The interim final rule (IFR) focuses on changes in eight specific areas:

• Definition of Fair Market Value – The IFR proposes to change the way easement prices are determined. The new method will calculate the difference between an appraisal of the whole property before the easement and an appraisal of the whole property after the easement.
• Eligibility of Forest Lands - Not more than two-thirds of the easement acreage may be occupied by forested acreage. This is an increase from the 50 percent figure found in the previous rule.
• Real Property Interest of the United States – According to the FRPP statute the United States is acquiring an interest in property under the FRPP. The IFR proposes to formalize this process by providing the United States with a right as a grantee rather than a contingent right and by ensuring that the rights are presently vested instead of based on the discretion of the Secretary.
• Title Review – According to federal statute, the Attorney General or their designee must review the legal sufficiency of title of all properties in which the government is acquiring an interest. The IFR requires the USDA to review and approve the title of all FRPP easements prior to conveyance.
• Exercising the United States’ Rights – The IFR outlines the process that the USDA will follow when exercising the United States’ rights to enforce or take sole title of an easement. The process includes written notice of the noncompliance and provides a 60 day period to take corrective action.
• Appraisal – The IFR requires that all appraisals be completed by a State-certified general appraiser and requires appraisers to use the Uniform Appraisal Standards for Federal Land Acquisition (Yellow Book) and the Uniform Standards of Professional Appraisal Practices (USPAP), rather than one or the other as required by the earlier regulation.
• Impervious Surface Limitations - The IFR formalizes the two percent impervious surface limitation and outlines the procedure for states to obtain a waiver of up to      six percent on easements of less than 50 acres. This provision relies heavily on the program’s statutory purpose to protect topsoil.   
• Indemnification – The IFR requires an indemnification clause that ensures that the landowner is responsible for liabilities arising from the property.

Because many of the proposals included in the IFR are mandated by federal statute, farmland protection advocates have been working with Congressional supporters to develop legislation that would correct many of these issues and enable the program to operate in an efficient and effective manner. The first attempts to amend the FRPP statute occurred at the end of July when Senator Rick Santorum (R-PA) introduced S. 3720 and Rep. Tim Holden (D-PA) introduced H. R. 6000. The bills differ in a number of ways, but they each embrace a few common themes in their attempt to address the complaints expressed by cooperating entities. The bills propose to expand the purpose of the FRPP from protecting topsoil to protecting the agricultural production capacity of the land. They both outline a certification process for cooperating entities that was originally proposed by the Northeast Association of State Departments of Agriculture (NEASDA) in a letter to the NRCS.