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Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations
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made to the regulation in response to this issue.
Comment: NRCS received comment requesting clarification in the preamble as to whether a qualified farmer or rancher includes those who do not file a Schedule F, such as a farmer in an S
corporation.
Response: IRS Form 1040 or 1040SR, Schedule F, Profit or Loss from Farming, is the preferred documentation and is consistent with other NRCS and USDA programs.
However, NRCS will also consider circumstances in which other forms of IRS documentation identifying the landowners engagement in an agricultural operation may be appropriate.
ALE Contribution Requirements Under both the 2014 and 2018 Farm Bills, NRCS may provide a Federal share that does not exceed 50 percent of the FMV of the agricultural land easement and requires the eligible entity to provide a share at least equivalent to that provided by NRCS, except in the case of grasslands of special environmental significance. For grasslands of special environmental significance, NRCS may provide a Federal share that does not exceed 75
percent of the easement FMV and the non-Federal share requirement is adjusted accordingly. The 2018 Farm Bill removed the 50-percent cash contribution requirement on the part of the eligible entity and identified permissible sources of the non-Federal share. NRCS received the following comments.
Comment: NRCS received comment in support of removing the requirement for the eligible entity to provide a minimum cash contribution toward the purchase of the agricultural land easement and allowing donations of land by the landowner and eligible entity expenses for procured items to satisfy the nonFederal share requirements. Other comments did not support eligible entities no longer being required to provide a minimum cash contribution.
Response: The regulatory changes follow requirements of the 2018 Farm Bill. No change is made to the regulation in response to this issue.
Comment: NRCS received comment suggesting changes to how NRCS
structured the non-Federal share in the regulation. They asked that the and at the end of the list be replaced with an or.
Response: NRCS is clarifying that the sources comprising the non-Federal share are listed in order, and proceeding through the list, once the minimum non-Federal share amount is met,
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additional sources and amounts do not need to be identified.
Additionally, given that an eligible entitys contribution may be related to cash resources expended for the purchase of the land prior to the easement transaction, NRCS has clarified in the regulation that for BPS
transactions, part of the non-Federal share provided by an eligible entity may include that portion of the fair market value of the agricultural land easement that is not provided as the Federal share.
Comment: NRCS received comment requesting clarification about the timing and the type of documentation that would be required for procured costs incurred by the eligible entity if relied upon to meet the non-Federal share requirement.
Response: The regulation states that documentation requirements for procured costs are included in the ALE
agreement. NRCS recognizes that, at the time of agreement, costs for procured items are estimated amounts and have not yet been incurred. Such estimates are needed in order to calculate the amount of the Federal share that may be obligated. No change is made to the regulation in response to this issue.
Comment: NRCS received comment requesting that baseline reports and mineral assessments be added to the list of procured costs that may be included in the non-Federal share.
Response: NRCS added baseline reports and mineral assessments to the list of items that may be included in the non-Federal share if these items are procured by the eligible entity from third parties.
Comment: NRCS received comment asking that a Federal share of up to 75
percent of easement costs be provided in communities that do not have eligible entities present.
Response: The statute limits NRCSs authority to provide a Federal share of up to 75 percent of the easement value to grasslands of special environmental significance only. No other types of transactions are authorized to receive up to 75 percent of the easement value, including transactions that occur in communities that do not have an eligible entity present. No change is made to the regulation in response to this issue.
Comment: NRCS received comment requesting a change to clarify that the non-Federal share provided by the eligible entity for ACEPALE grasslands of special environmental significance must comprise the difference between the Federal share and the remainder of the FMV. The comment requested removal of the provision that, in the
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event the non-Federal share provided by the eligible entity is less than such amount, NRCS will provide a Federal share equivalent to the non-Federal share being provided.
Response: The interim rule mirrors the statute. Additionally, the language allows for the possibility that, in the event that the non-Federal share provided by the eligible entity does not comprise the difference between the Federal share and the remainder of the FMV of the easement, NRCS could still provide a lesser amount that is equivalent to the non-Federal share.
Although this is unlikely, removing the language from the regulation would eliminate this possibility. No change is made to the regulation in response to this issue.
ALE Deed Requirements and Terms NRCS received comment related to the topic of ALE deed requirements and deed terms as follows:
Comment: NRCS received comment related to the ALE deed template review, recommending that the deed template review be limited to ensuring that the minimum deed terms are incorporated and that other terms are not contrary to the purpose of ACEP.
Response: The NRCS review of ALE
deed templates focuses on ensuring that minimum deed terms MDT are incorporated and ensuring other terms are not contrary to the purpose of the program. Review of other items may be necessary to ensure that the document will work effectively as a template for the acquisition of agricultural land easements on multiple parcels. No change is made to the regulation in response to this issue.
Comment: NRCS received comment about deed provisions related to agricultural use, including a request to strike the phrase consistent with agricultural use and replace it with the phrase does not negatively affect agricultural use as to commercial uses.
Another comment recommended that NRCS limit its ability to impose greater deed restrictions in instances where the State definition of agricultural uses may result in the degradation of the soils, agricultural nature of the land, or related natural resources.
Response: This phrase consistent with agricultural use is unchanged from the previous ACEP regulation and is expansive enough to apply to farmland and grassland enrollments and is sufficient to prevent commercial uses that may negatively affect agricultural uses. NRCS may impose deed restrictions needed to ensure ACEP
ALE purposes will be met in exchange for the Federal investment. No change is
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