Farmland Protection Policy

DEPARTMENT OF AGRICULTURE

Soil Conservation Service

7 CFR Part 658

Farmland Protection Policy

AGENCY: Soil Conservation Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule amends part 658 of title 7 of the Code of Federal

Regulations which implements the Farmland Protection Policy Act (FPPA).

The amendments contained in this rule are necessary to enable the

Department of Agriculture to effectively implement the FPPA, as

amended. They request reports by federal agencies, recognize the

statutory authority of a governor of a state to bring legal actions to

enforce the FPPA, provide policy direction regarding federal assistance

and federal programs, and they restore a subsection of the existing

rule that was omitted from publication by clerical error.

EFFECTIVE DATE: This rule becomes effective June 17, 1994.

FOR FURTHER INFORMATION CONTACT:

Lloyd E. Wright, Director, Basin and Area Planning, Soil Conservation

Service, PO Box 2890, Washington, DC 20013, telephone 202-720-2847.

SUPPLEMENTARY INFORMATION: The regulations of the United States

Department of Agriculture (the Department) implementing the Farmland

Protection Policy Act (FPPA) are contained in 7 CFR part 658. A

proposed rule, setting forth several amendments to these regulations,

was published for public comment on January 14, 1987, at 52 FR 1465.

The comment period closed February 27, 1987, during which time nineteen

sets of comments were received from five federal agencies; four state

agencies; seven national organizations in the agricultural, resource

conservation, and planning fields; one county board of supervisors; and

two individuals.

The proposed rule, as discussed below, contained six amendments to

the Department's existing regulations. Of these six amendments, three

were being proposed as a result of the specific changes in the FPPA

that Congress had enacted in section 1255 of the Food Security Act of

1985, Public Law 99-198, 99 Stat. 1518. Another amendment to the

existing rule was to correct a clerical mistake. These four amendments,

with minor changes, are made final by this rule.

The two remaining amendments, of the six included in the proposed

rule, were not responses to any new direction enacted by Congress, but

were the Department's proposals to change its policy in the

interpretation of FPPA provisions. These two amendments were a

departure from the policy that the Department had announced when the

existing regulations were promulgated on July 5, 1984, 49 FR 27716. The

existing sections of part 658 that would be changed by these two

amendments are Secs. 658.2(a) and 658.3(c). The rationale underlying

the provisions of the existing regulations is set forth in the preamble

of the final rule publication, which is found at 49 FR 27716-27724. The

rationale for the proposed changes is set forth in the preamble of the

proposed rule at 52 FR 1465-1468. After reviewing the policy

considerations that led to the adoption of the existing regulations in

1984, as well as considering the proposed changes and the public

comments to the proposed rule, the Department has concluded that the

proposed amendments to Sec. 658.2(a) should be adopted with some

additional interpretive clarification, as discussed below.

In addition, the Department has concluded that Sec. 658.3(c) should

be amended as proposed to comport with the authority of a governor of a

state to take action to enforce the provisions of the FPPA with regard

to a policy or program of the affected state for the protection of

farmland.

I. Background

The FPPA was enacted as Subtitle I, sections 1539-1549, of Title XV

of the Agriculture and Food Act of 1981, Public Law 98-98, 7 U.S.C.

4201-4209. In enacting the FPPA, Congress found that the Nation's

farmland was ``a unique natural resource'' and that each year, ``a

large among of the Nation's farmland'' was being ``irrevocably

converted from actual or potential agricultural use to nonagricultural

use,'' in many cases as a result of action taken or assisted by the

federal government. The FPPA directs federal agencies to identify and

take into account the adverse effects of federal programs on the

preservation of farmland; consider alternative actions, as appropriate,

that could lessen such adverse effects; and assure that such federal

programs, to the extent practicable, are compatible with state

government, local government, and private programs and policies to

protect farmland.

In order to guide the federal agencies in implementing the FPPA,

section 1541(a) of the Act, 7 U.S.C. 4202(a), directs the Department of

Agriculture, in cooperation with other departments, agencies,

independent commissions, and other units of the federal government, to

``develop criteria for identifying the effects of Federal programs on

the conversion of farmland to nonagricultural uses.'' The Department

issued these criteria in its current rule implementing the FPPA at 7

CFR 658.4 and 658.5. The FPPA also authorizes the Department to provide

technical assistance to federal, state, and local government agencies

to develop programs or policies to limit the conversion of productive

farmland to nonagricultural uses, and this is covered in the current

rule at 7 CFR 658.7.

In addition, section 1542 of the FPPA, 7 U.S.C. 4203, requires

``each department, agency, independent commission, or other unit of the

Federal Government'' to review its laws, administrative rules, policies

and procedures ``to determine whether any provision thereof will

prevent'' the federal entity ``from taking appropriate action to comply

fully'' with the FPPA, and to ``develop proposals for action to bring

its programs, authorities, and administrative activities into

conformity with the purpose and policy'' of the FPPA.

The Act does not expressly require a federal agency to modify any

project solely to avoid or minimize the effects of conversion of

farmland to nonagricultural uses. The Act merely requires that, before

taking or approving any action that would result in conversion of

farmland as defined by the FPPA, the federal agency examine the effects

of that action using the criteria which the Department of Agriculture

has supplied and, if there are adverse effects, to consider

alternatives to lessen those effects. Once the agency has completed

this examination, it may proceed with a project that would convert

farmland to nonagricultural uses.

As originally enacted, the FPPA contained a prohibition against the

use of the Act as a basis for litigation. Section 1548 states that the

FPPA ``shall not be deemed to provide a basis'' for any litigation

'`challenging a Federal project, program or other activity that may

affect farmland.'' 7 U.S.C. 4209. In the 1985 amendments to the FPPA,

Congress amended this section to allow the governor of a state to bring

a suit to enforce compliance with section 1542 (7 U.S.C. 4202) and

related regulations.

II. Discussion of the Existing Regulations to Implement the FPPA

The current regulations were promulgated principally to enable

federal agencies, with the help of the Soil Conservation Service (SCS),

to measure the adverse effects, if any, of their programs and projects

on farmland. The SCS has developed a Farmland Conversion Impact Rating

Form, Form AD-1006, for this purpose. A federal agency considering a

project on or affecting farmland completes and submits a Form AD-1006

to a local SCS office. The SCS determines if the proposed site or sites

contain farmland subject to the FPPA, i.e., farmland that is ``prime,''

``unique,'' or of ``statewide or local importance,'' as defined by the

FPPA. If SCS determines that the site or sites are not subject to the

Act, SCS returns the form to the agency with that determination noted.

However, if SCS determines that the FPPA applies, SCS measures the

``relative value'' of the site or sites as farmland on a scale of 0 to

100, enters this score on the Form AD-1006 and returns the form to the

federal agency. At this stage, the agency prepares a site assessment

using twelve criteria set forth in the rule. After scoring each of the

criteria and arriving at a total site assessment score, up to a maximum

of 160 points, the agency adds this site assessment score to the

``relative value'' score that was supplied by the SCS on the Form AD-

1006. The higher the combined score, the more suitable the site would

be for protection as farmland. On the other hand, if a site receives a

combined score of less than 160 points, the regulation recommends that

it be given only ``a minimal level of consideration for protection''

and that additional sites do not need to be evaluated as alternatives.

Although the primary purpose of the Department's regulations

implementing the FPPA was to impart these criteria and the guidelines

for their use by agencies, the rule, in addition, established the

Department's policy as to the farmlands that are subject to the FPPA,

and as to the effect that the FPPA could have on private parties and

nonFederal units of government applying for federal assistance to

convert farmland to nonagricultural uses.

With regard to the first matter, the FPPA's definition of ``prime

farmland,'' excludes ``land already in or committed to urban

development or water storage.'' Section 1540(c)(1)(A), 7 U.S.C.

4201(c)(1)(A). The current regulation, Sec. 658.2(a), provides that

prime farmland is ``committed to urban development or water storage''

if a local zoning code or ordinance or current local comprehensive land

use plan designated this land for commercial or industrial use or for

residential use that is not intended at the same time to protect

farmland.

With regard to the second issue, the current regulation,

Sec. 658.3(c), sets forth the Department's determination that the FPPA

does not authorize a federal agency to withhold assistance to a project

solely because that project was going to convert farmland to

nonagricultural uses.

III. Discussion of the Amendments to the Existing Regulations

A. The Two Amendments Necessary for the Annual FPPA Report to Congress

Section 1546 of the FPPA, as enacted in 1981 (99 Stat. 1343-1344),

required the Secretary of Agriculture to report to Congress on the

progress made in implementing the FPPA. Only one report was required;

and it was due within one year after the date of enactment, December

22, 1981. Section 1546 provided that the report should include

information on:

(1) The effects, if any, of federal programs, authorities, and

administrative activities with respect to the protection of United

States farmland; and

(2) The results of the reviews of existing policies and procedures

required under section 1542(a) of the Act.

As amended by section 1255 of the Food Security Act of 1985,

section 1546 (7 U.S.C. 4207) now requires an annual report due at the

beginning of each calendar year. The existing regulation, which was

published prior to the amendment of section 1546, does not include any

provisions for an annual report to Congress. Further, under the

existing regulation, once agencies have completed their site

assessments on the Farmland Conversion Impact Rating Form (Form AD-

1006), they retain these forms and proceed to make their own decisions

regarding the use of the site for the project in question. They do not

make a regular practice of returning the form or a copy of it to SCS.

Thus, SCS receives no record of the agency's use of the form or the

agency's ultimate decision on the project.

Similarly, the existing regulation does not require a federal

agency to report regularly to the Department on the progress made with

the review of current provisions of law, administrative rules and

regulations, and policies and procedures applicable to the federal

agency to determine whether any provision thereof will prevent such

unit of the federal government from taking appropriate action to comply

fully with the provisions of the FPPA. This review is required by

section 1502(a) of the Act, 7 U.S.C. 4203(a).

Now that the Act requires an annual report that includes both the

effects of federal activities on the protection of farmland and the

reviews undertaken by agencies, it is necessary for the Department to

modify its existing regulations. Accordingly, the proposed rule in 1987

included two amendments to the existing regulations to enable the

Department to carry out its reporting obligations.

The first of these amendments would have added a new Sec. 658.4(g)

to request federal agencies to return a copy of their completed Form

AD-1006 to SCS after a final decision on a project has been made. This

amendment received support in comments from all nongovernmental

organizations and individuals, from the State of Rhode Island Statewide

Planning Program, and from the Clarke County (Virginia) Board of

Supervisors. However, the response was different from federal and state

agencies that work with Form AD-1006 and would be responsible for

returning it to the SCS.

Two federal agencies, the Federal Highway Administration (FHWA) and

the Department of Housing and Urban Development (HUD), and the Michigan

Department of Transportation and that of Oklahoma expressed concern

that this requirement would generate additional, burdensome paperwork.

The FHWA suggested that only those forms in which the selected site had

a score of more than 160 be returned to SCS. HUD proposed to advise SCS

of any tracts of farmland for which financing of housing subdivisions

was being approved, but said it would be hard-pressed to return a Form

AD-1006 for each action taken by HUD, especially those involving

individual mortgage insurance.

The Michigan Department of Transportation and that of Oklahoma made

comments that were almost identical to one another. On federally

supported highway projects requiring environmental assessments or

impact statements, the Form AD-1006 is included in such documentation

and SCS receives a copy of the final document. Lesser projects, on the

other hand, do not require an environmental assessment or impact

statement, because they are often categorically excluded from review by

regulations implementing the National Environmental Policy Act. These

projects ``usually require only minor amounts of right-of-way and thus

have a very minimal impact on prime farmland,'' the Oklahoma Department

of Transportation stated. Both Michigan and Oklahoma objected to having

to submit Form AD-1006 on these types of projects.

The Department recognizes that this change in its regulation may

increase the paperwork requirement on federal public works and other

federally, assisted programs that are already burdened with reporting

requirements. Congress, however, directed that each year the Department

is to report on the effects federal programs and actions are having on

farmland, and the Department believes that collecting the Form AD-1006

data generated by the affected federal agencies is the best way to

compile this information.

The Department has made changes in the final rule to reduce

reporting burdens. Under the current rule, SCS determines whether the

site or sites in question are of the type of farmland subject to the

FPPA. Even in cases where SCS determines the FPPA does not apply and

SCS returns a Form AD-1006 to the referring agency, further tracking of

agency decisionmaking is carried out with a report back to SCS on the

final decision regarding the initial referral. New procedures set forth

in Sec. 658.4(g), give agencies the option of referring questions of

FPPA applicability to SCS or of making these determinations themselves,

and in cases where SCS makes a negative determination, there is no

further tracking of matters in which none of the alternatives involve

farmland subject to the FPPA.

The second amendment to the existing regulations related to the

annual reporting function is a new Sec. 658.7(d). This new paragraph

(d) will require each federal agency to report to the Chief of SCS the

agency's progress during the prior fiscal year in reviewing its

authorities, internal rules, policies and procedures, and the agency's

development of proposals to bring its programs, authorities, and

administrative activities into conformity with the FPPA, pursuant to

section 1542 of the FPPA, 7 U.S.C. 4203.

This second amendment drew a pattern of comments similar to those

offered for amendment one. The organizations and individuals who

generally supported the amendments in the proposed rule were in support

of this subsection. However, three of the federal agencies that would

be required to make these yearly reports to SCS were critical.

The Farmers Home Administration (FmHA) proposed that once an agency

has demonstrated that its programs, authorities, and administrative

activities are in compliance with the FPPA, it should not be required

to make an annual report. Rather, The FmHA asserted, such an agency

should be requested to report only in a year in which it either plans

to change its FPPA compliance process or undertakes a new program that

may be subject to the FPPA.

The FHWA commented that a single report from an agency should be

sufficient until any future revisions to the FPPA or the SCS

regulations are made.

The Tennessee Valley Authority (TVA) asked for additional guidance

concerning the type of information in the report, and recommended that

the annual report be an assessment of the progress made in implementing

the FPPA, without excessive and burdensome documentation of specific

farmland conversion or protection activities.

The Department has incorporated the suggestion offered by the FmHA

in the final rule. Although the request for an annual report will

remain, once the agency has completed the review of its policies and

procedures and revised them as needed to comply with the Act, no

additional reports are requested. In years in which the agency has

changed its FPPA compliance process, a report is requested.

As for the concern expressed by the TVA, the scope of the agencies'

reports to SCS under the new Sec. 658.7(d) is that which is established

in section 1542 of the FPPA and which is set forth in the unchanged

sections of the existing regulations, 7 CFR 658.7(a) and (b). In other

words, the annual reports the agencies are to submit to SCS are to be

limited to the reviews of laws, regulations, policies, and procedures

that the agencies have conducted under section 1542(a) of the FPPA and

the proposals for action, if any, that the agency has developed

pursuant to section 1542(b). In addition, SCS will be receiving data

from the agencies on their individual project decisions involving

farmland, but this data will come from the various AD-1006 forms that

the agencies are to return to SCS after making their action decisions.

B. Amendment to Recognize Change in Limitation on Litigation

Section 1255(b) of the Food Security Act of 1985, 99 Stat. 1518,

amended section 1548 of the FPPA, 7 U.S.C. 4209, which originally

prohibited states, local governments, and private parties using the

FPPA as a basis to bring actions challenging Federal activities. Prior

to the amendment, the language of section 1548 was as follows:

This subtitle shall not be deemed to provide a basis for any action,

either legal or equitable, by any State, local unit of government,

or any persons challenging a Federal project, program, or other

activity that may affect farmland. 95 Stat. 1344.

As amended, section 1548 (7 U.S.C. 4209) now reads as follows:

This subtitle shall not be deemed to provide a basis for any action,

either legal or equitable, by any state, local unit of government,

or any persons challenging a Federal project, program, or other

activity that may affect farmland. 95 Stat. 1344.

This subtitle shall not be deemed to provide a basis for any action,

either legal or equitable, by any person or class of persons

challenging a Federal project, program, or other activity that may

affect farmland: Provided, that the Governor of an affected State

where a State policy or program exists to protect farmland may bring

an action in the Federal district court of the district where a

Federal program is proposed to enforce the requirements of section

1541 of this subtitle and regulations issued pursuant thereto.

Accordingly, Sec. 658.3(d) of the existing regulation, which is simply

a restatement of section 1548 in its original form, needs to be amended

to conform with section 1548, as amended. None of the commenting

parties expressed opposition to the proposal for this change in the

regulation, and it is incorporated in this rule.

C. Amendment to restore Sec. 658.7(b)

When 7 CFR part 658 was published as a final rule in 1984, it was

intended to include Sec. 658.7(b), which simply incorporates the

provision of section 1542(b) of the Act requiring the federal agencies

to develop proposals for action to bring their programs, authorities,

and administrative activities into conformity with the FPPA. However,

in the draft of the rule submitted to the Federal Register, paragraph

(b) was inadvertently omitted, leaving a gap between Sec. 658.7(a) and

Sec. 658.7(c) as they appeared in the published rule at 49 FR 27727.

The proposed rule of January 14, 1987 included an amendment to restore

this missing paragraph. None of the commenting parties expressed

opposition to this correction, and it is incorporated in the final

rule.

D. Amendment to Change Definition of ``Prime Farmland Committed to

Urban Development of Water Storage''

The FPPA does not include all farmland under its protection. In

section 1540(c), 7 U.S.C. 4201(c), the specific farmland covered by the

FPPA is defined. This is farmland that is either ``prime farmland,''

``unique farmland,'' or ``farmland, other than prime or unique

farmland, that is of statewide or local importance.'' Each one of these

terms is further defined and qualified in the FPPA and, in the

definition of ``prime farmland, there is an exclusion of ``land already

in or committed to urban development or water storage.'' Federal

agencies are not required to consider the impact of their projects on

prime farmland that is ``already in or committed to urban development

or water storage,'' even if this land would otherwise fall within the

definition of ``prime farmland.''

In developing the existing regulations, the Department adopted

standards for determining if prime farmland is ``already in urban

development'' and whether land, although not ``in urban development,''

was nevertheless ``committed to urban development.'' Under

Sec. 658.2(a) of the current regulation, prime farmland which had been

zoned for nonagricultural use by a state or local government with

jurisdiction over the land, or which was designated in a current state

or local land use plan for nonagricultural use, is regarded as

``committed to urban development.'' This would mean that projects on

prime farmland in those areas would not have to be analyzed by agencies

for their effect on prime farmland.

The Department noted in the preamble to the 1984 final rule, at 49

FR 27720, that land use planning and zoning ``are prerogatives of state

and local government, not the Federal Government,'' and supplied the

following rationale for the conclusion that prime farmland under

nonagricultural zoning or planning was excluded from the FPPA:

If a federal agency were required by the Act to assess the impacts

of a project on prime farmland not yet in urban development but

already designated by the state or local government for urban

development through planning or zoning, the only purpose of the

requirement would be for that agency to weigh alternative sites that

would lessen the impact of the project on farmland. If the agency,

based on its assessment pursuant to the Act, should then decide to

refrain from building its project on the proposed site, it would be

declining itself to use the proposed site for urban development when

local or state planning or zoning had already declared urban uses to

be acceptable on the site. This would be an intrusion by the Federal

Government in the function of land use planning of state and local

governments.

In the proposed rule, the Department offered for public comment a

proposal that would abrogate the Department's previous interpretation

of this question. In the definition of ``prime farmland,'' there would

no longer be an exclusion based solely on the designation of the land

in a land use plan or zoning code or ordinance for nonagricultural

uses. The proposed rule amendment would provide that once a project

site had been analyzed and given a combined score of 160 points or

less, it would be considered ``committed to urban development'' and

thus no longer covered by the FPPA.

The preamble to the 1987 proposed rule, at 52 FR 1466-1467, cited

three reasons for introducing these changes. First, it stated that the

existing definition ``is inconsistent with the definitions of prime

farmland used in almost all other State and Federal programs which use

the definition.'' Second, it noted that the existing definition

requires the SCS district conservationists to review local plans and

land use regulations and that many of them do not have the background

in land use planning to make the proper determinations as to whether a

given project site is truly ``committed to urban development.'' Third,

because land ``committed to urban development'' is excluded in the

FPPA's definition of ``prime farmland'' but not from the FPPA's

definitions of farmland that is ``unique'' or ``of statewide or local

importance,'' it is an anomaly that this type of ``prime farmland'' can

be so easily and categorically put outside the reach of the FPPA while

farmland that is ``unique'' or ``of statewide or local importance'' is

covered by the FPPA despite the existence of zoning designations or

land use plans that would allow urban development of such lands.

The comments on the proposed rule were sharply divided on whether

the Department should change the identification of farmland ``committed

to urban development.'' The American Farmland Trust ``strongly''

supported the proposed change, calling the existing rule ``confusing

and inconsistent with the intent of the legislation.'' The Natural

Resources Defense Council (NRDC) also supported the proposed change

since it did not approve of farmland being excluded from the FPPA's

coverage just because local land-use plans or zoning ordinances would

allow urban development on it. This, the NRDC stated, would be an

``arbitrary `grandfather' exclusion * * * even where there is no

current nonagricultural development and the prospect of future

nonagricultural development is highly speculative.'' The American Land

Resource Association agreed with the proposed change, claiming that the

existing rule worked ``inadequately'' for protection of prime farmland

and caused ``unnecessary confusion among Federal agencies implementing

the FPPA.'' The Farmers Home Administration and the Rhode Island

Statewide Planning Program supported the change. Other commenting

parties agreed with the change as part of their general support of all

the amendments being proposed.

However, the Department of Housing and Urban Development (HUD), the

Federal Highway Administration (FHWA), and the Michigan Department of

Transportation opposed making the change in the Department's

interpretation of farmland ``committed to urban development.'' In

particular, HUD devoted the principal thrust of its comments to this

provision, objecting ``strongly'' to the change and outlining the

importance of retaining the Department's current interpretation that

land under planning or zoning for nonagricultural use was ``committed

to urban development.'' HUD stated:

This procedure ignores and undermines a local government's land use

decisions made through zoning, comprehensive planning, and

subdivision regulations which are adopted to guide and direct urban

development and growth * * * By changing the definition of `farmland

committed to urban development' and requiring a Farmland Conversion

Impact Rating (AD-1006) be prepared, which must result in an

aggregated score of 160 points or less before it is considered

`farmland committed to urban development,' certainly qualified USDA

as taking a ``big brother'' approach to local land use plans and

decisions.

HUD explained that whenever an application for project assistance

is submitted to HUD, it must receive approval of local authorities.

Since 1985, HUD's principal method for issuing mortgage insurance on

single, family homes in housing subdivisions has been to wait until the

local government has approved the subdivision plan and construction of

the necessary streets and water and sewer systems. Under the existing

rule, HUD would not have to analyze this land as ``prime farmland''

under FPPA. HUD argued that under the proposed rule, it would be

required to complete the AD-1006 form on this land, which it termed a

``useless exercise'' at that point.

Aside from the mechanics of the proposed amendment, HUD made these

comments about the general problem of farmland protection measures that

the agency might undertake:

In the single family housing program (which actions are most likely

to be on the fringes of urban areas), preservation of farmland would

require that we would have to either be involved in the local

planning and zoning process at the earliest conceptual stages or by

prohibitive and restrictive regulations which would withhold

assistance for projects which had converted farmland to

nonagricultural uses. Taking either action could easily be

interpreted as an indirect way to regulate the use of private land

or affect the property rights of the owners of such lands. We do not

believe that to be the intent of Congress. Putting a penalty on the

land, either directly or indirectly, could result in creating a

greater housing shortage, especially for low and moderate income

families who are the primary users of HUD mortgage housing programs.

The FHWA, likewise, objected to the proposal on the grounds that it

would require preparation of a site assessment on every project that

requires rights-of-way. This would require ``an enormous amount of time

and resources to be provided by Federal, State and/or local agencies''

and in many cases there would be ``no apparent justification.'' FHWA

suggested that the same exclusion of farmland ``committed to urban

development'' that the Department has applied to ``prime farmland''

should be applied to the other two categories in the FPPA, ``unique''

farmland and farmland ``of local or statewide importance.''

The Michigan Department of Transportation had similar objections.

It explained that the current rule ``screens out many projects and

constitutes a real time savings * * * If the local entities have

designated the land for other uses, it doesn't warrant a high degree of

protection as resource base at the federal level.'' On the other hand,

if the rule were changed, it would require site assessments of ``each

project that required rights-of-way.''

As noted in the preamble to the proposed rule at 52 FR 1467, the

zoning and land use plans that are applicable to a particular site will

be considered in conjunction with other criteria that are designed to

assess the degree to which the site is committed to urban development.

In this way, the prerogatives of state and local government, as

exercised in zoning codes and land use plans, will play a role in

determining whether a site should be given further FPPA review. Because

the amended regulations will neither prohibit the providing of federal

assistance to convert farmland nor preclude the conversion of farmland

through non-federal means, the Department believes that the amended

rule, as proposed, will not interfere with local land use planning, and

will assure that prime farmlands will, to the full extent of the law,

be given appropriate consideration.

Under the current regulation, sites that contain prime farmland

that otherwise would have been exempted due to being ``in or committed

to urban development'' would have still been covered by the FPPA if the

site also contained lands of statewide or local importance. The

exclusion of lands ``in or committed to urban development'' would have

limited effect. After consideration of the comments, the Department is

amending the rule to apply the exemption for farmland ``in or committed

to urban development'' to all four types of farmland. It is clear from

the comments provided by a number of federal agencies that they are

already applying the exemption to all four types of farmland. Section

658.2(a) is being revised to remove the word ``prime'' before the word

``farmland,'' thereby, making the exemption apply to all farmland.

An AD-1006 for a site that is located in urban areas need not be

sent to SCS for evaluation. In addition, some agencies would like to

use available mapped information to make their determinations without

sending a Form AD-1006 to SCS. To facilitate the use of such

information, Sec. 658.2(a) will be revised to clarify that farmland

``already in'' urban development or water storage may be identified by

an area shown as ``urbanized area'' (UA) on the Census Bureau map, or

shown as an urban tint outline or urban area map on U.S.G.S.

topographical maps, or shown as urban-built-up on the USDA Important

Farmland Maps. Areas shown as white on the USDA Important Farmland Maps

are not farmland and, therefore, are not subject to the Act. In

addition, Sec. 658.4(a) is being amended to clarify that federal

agencies may determine whether or not a site contains farmland as

defined in Sec. 658.2(a) without sending a Form AD-1006 to SCS. Where

SCS is asked to complete the land evaluation portion of Form AD-1006

before the Federal agency completes the site assessment portion, and

SCS determines that the site is subject to the FPPA, then when SCS

returns the form to the agency for completion of the site assessment

portion, SCS will at the same time provide the agency with the

requested information and data necessary for the Federal agency to

complete and score the site assessment factor questions, and where the

agency chooses to complete the site assessment portion of the form

first, SCS will cooperate in providing timely information and data to

enable the Federal agency to score the site assessment factor

questions.

E. Amendment to Allow an Agency to Either Provide or Deny Assistance to

a Project to Convert Farmland

The existing regulations, at Sec. 658.3(c), interpret the extent to

which an agency can use the FPPA as a basis for denying assistance to a

project that would convert farmland. The paragraph reads as follows:

The Act and these regulations do not authorize the Federal

Government in any way to regulate the use of private or nonfederal

land, or in any way affect the property rights of owners of such

land. The Act and these regulations do not provide authority for the

withholding of federal assistance to convert farmland to

nonagricultural uses. In case where either a private party or a

nonfederal unit of government applies for federal assistance to

convert farmland to a nonagricultural use, the federal agency should

use the criteria set forth in this part to identify and take into

account any adverse effects on farmland of the assistance requested

and develop alternative actions that could avoid or mitigate such

adverse effects. If, after consideration of the adverse effects and

suggested alternatives, the applicant wants to proceed with the

conversion, the federal agency may not, on the basis of the Act or

these regulations, refuse to provide the requested assistance.

The proposed rule contained an amendment that would change the

Department's interpretation of the effect of the FPPA by revising this

paragraph significantly. This amendment would drop the second sentence.

In the closing sentence, instead of retaining the language that the

federal agency ``may not, on the basis of the Act or these regulations,

refuse to provide the requested assistance,'' the new language would

state that the agency, after doing the required analysis and following

its internal policies or procedures, would be free to deny as well as

provide the assistance. See 52 FR 1467.

The rationale for this proposed change, as stated in the preamble

to the proposed rule at 52 FR 1466, is that the FPPA leaves to the

discretion of each agency ``the determination of whether the providing

or the denial of Federal assistance for farmland conversion will, in a

given situation, comply with the policy and purpose of the FPPA.'' It

was further noted that the rule, as presently written, ``may be misread

as a limitation on the previously described discretion provided by

Congress to Federal agencies,'' and thus the amendment was needed ``to

recognize that discretion and the general process through which it is

exercised.''

Under the current regulation, when private landowners as well as

state and local governments apply for assistance for a project

involving the conversion of farmland subject to the FPPA, the federal

agency is required to examine the effects of the project and

alternatives but may not, based on the FPPA, refuse to provide the

assistance. The amendment in the proposed rule would avoid making this

analysis a pointless exercise by removing the rigid restriction on

agency deliberations and allowing the agency to use the FPPA analysis

as a basis for withholding assistance to the project in order to

achieve the policies and objectives of the Act.

None of the parties who commented raised opposition to this

proposal to change the existing regulation. A number of them supported

it vigorously or proposed that it be made even stronger. The FmHA

suggested the rule should provide that ``if a clear alternative exists

to avoiding a proposed conversion of important farmland and the

applicant for Federal assistance is unwilling to pursue such an

alternative, the Federal agency cannot provide financial assistance.''

FmHA went on to argue that if the FPPA did not impose this

``affirmative duty'' on agencies to deny assistance, ``then other

significant provisions of the Act become meaningless, such as (1) the

ability of a governor to bring action in Federal district court to

enforce the requirements of the FPPA, and (2) the requirement that each

Federal agency identify and report to Congress any provisions of law,

administrative rules, regulations, policies, and procedures applicable

to it which prevent it from complying fully with the FPPA. What can

governors enforce, what possible legislative or regulatory conflicts

can exist, if the FPPA allows a Federal agency total discretion in

deciding whether or not to finance an unnecessary conversion of

important farmland?''

The Natural Resources Defense Council, the American Land Resource

Association, and the American Farmland Trust also supported the change

and, like the FmHA, proposed that it contain requirements that federal

assistance be withheld from nonagricultural development in cases where

alternatives mitigating or avoiding prime farmland conversion are

available.

The Department, after considering the comments, believes that the

proposed rule amendment is necessary to achieve the intent of Congress

under the FPPA and, therefore, adopts that amendment in this rule. The

amended Sec. 658.3(c) allows the various federal agencies to consider

the particular facts relating to their proposed assistance activities

and to decide, in light of the policies of the FPPA and their own

authorities, which reasonable alternative action will best achieve

their mission and comply with the FPPA.

In similar deference to the agency discretion provided by the FPPA,

the Department has determined not to accept the recommendations for a

complete withholding of federal assistance to convert farmland in

situations where alternatives exists to avoid or mitigate the effects

of conversion. There may be, specific situations, compelling reasons of

national, state, or local importance that would outweigh the protective

policies of the Act. The federal agencies, in exercising the

responsibility provided by the FPPA, can best analyze the facts of

those situations, and their discretion to do so should not be

unnecessarily constrained.

The Department notes that the Congress, during deliberations on

proposed amendments to the FPPA as part of the Food Security Act of

1985, Public Law 99-198, considered and rejected a ban on federal

assistance to convert farmland in situations where reasonable

alternatives to conversion exist. See H.R. Conf. Rep. No. 447, 99th

Cong., 1st Sess. 472 (1985), reprinted in 1985 U.S. Code Cong. & Admin.

News 2398. The final rule allows the intentions of Congress, as

expressed in the FPPA and in the 1985 deliberations, to be carried out.

During consideration of the comments received on the proposed rule

and in interagency discussions within the Department, a

misunderstanding of the scope of the analysis required by the FPPA and

the regulations surfaced. This related to the extent to which federal

agencies are required to identify and assess the potential for future

conversion of farmland as a result of present activities and

assistance.

As with other natural resource or environmental evaluations, such

as the analyses required by the National Environmental Policy Act, the

scope of the review must be related to the scope of the activity under

consideration. In complying with the requirements of section 1542 of

the Act (7 U.S.C. 4203) that each federal agency review its programs,

authorities, policies, and procedures and take appropriate measures to

assure that they conform with the purposes of the FPPA, an agency may

properly consider the broader implications that its programs and

policies have toward the potential for future conversions of farmland

to nonagricultural uses. However, in considering whether a specific

project or assistance activity of the agency will result in the

irreversible conversion of farmland, the focus will be on those direct

and indirect effects of the activity that can be reasonably identified

and evaluated. In a review of a specific activity which does not

contain proposals for, nor necessarily lead to, future activities that

may convert farmland, the potential activities may be too general or

speculative to adequately identify and usefully consider. The scope of

each evaluation is determined by the scope of the objectives and facts

of the agency activity under consideration.

It should be noted that the guidance provided in Sec. 658.3(c), as

amended by this rule, regarding the providing of federal assistance to

convert farmland clearly applies beyond situations where a federal

agency has been requested to provide assistance. Federal activities

that are the result of federal initiatives, rather than requests for

federal assistance, necessarily involve the same farmland protection

policy considerations. In a situation where a Federal agency is

contemplating an action that would convert farmland to a

nonagricultural use and which is not the result of a direct request for

federal assistance, the federal agency may decide, after conducting the

analysis required by the FPPA, not to proceed with the action in order

to achieve the objectives of the FPPA.

Implementation of the policy objectives of the FPPA in the manner

discussed above and as contained in this final rule not only respects

the traditional deference to state and local land use decisionmaking

reflected in the FPPA, but also comports with and furthers the

principles of federalism contained in Executive Order No. 12612 of

October 26, 1987, 52 FR 41685. Local zoning and land use plans will be

considered in determining if a site has been committed to urban

development. Further, a federal agency may support state and local

efforts to protect farmland by deciding not to provide federal

assistance that would be used to convert farmland.

The wording of Sec. 658.3(c) has been slightly modified from that

of the proposed rule to clarify that any agency policies or procedures

for implementing the Act may be considered by an agency in deciding how

to proceed with an activity.

F. Additional Considerations

Some federal agencies raised concerns as to actions subject to the

Act. The current regulation, at Sec. 658.2(c), provides an exemption

for federal permitting, licensing, or rate approval programs. Federal

regulatory activities are not considered as federal assistance that

could convert farmland. Therefore, federal regulatory activities are

exempted from the Act. For example, in cases where a Clean Water Act

section 404 permittee is required by the Corps of Engineers to perform

compensatory mitigation on farmed wetland, thereby converting the

wetland actual or potential use of farmland to a nonagricultural use,

that conversion is not subject to FPPA. In complying with Sec. 658.7

(a) and (b), Federal agencies may identify those programs that they

determine are not subject to the Act and provide details on how other

programs will be implemented consistent with the Act.

As further clarification, it should be noted that only those

actions that will or could convert farmland to nonagricultural uses are

subject to the Act. Assistance provided to purchase, maintain,

renovate, or replace a structure that already exists is not subject to

the Act, because any conversion of farmland took place at the time the

structure was constructed. The addition of minor new ancillary

structures, such as garages or sheds, to serve existing structures is

also not included under the Act. Even in cases where loans are made for

new houses, that action is not subject to the FPPA if the request for

assistance and commitment by the federal agency was made after the

house was constructed. Likewise, once one Federal agency has performed

an analysis under the FPPA for the conversion of a site, that agency's

or a second Federal agency's determination with regard to additional

assistance or actions on the same site do not require additional,

redundant FPPA analysis. Section 658.4(h) is being added to the final

rule to reflect this clarification.

Several federal agencies cited concern for the application of the

FPPA to land acquisitions by these agencies, providing temporary,

intermediate ownership by the Federal Government such as through

foreclosure, the acquisition of assets of an insolvent thrift

institution or through forfeiture in criminal law enforcement

proceedings. They expressed concern for potential conflicts between

their statutory responsibilities to obtain prompt, high value disposal

of these assets and the analysis procedures required under the FPPA.

The definition of ``Federal program'' in the FPPA, 7 U.S.C.

4201(c)(4), extends the coverage of the FPPA to ``acquiring, managing,

or disposing of Federal lands and facilities.'' If an agency determines

that its program does not result in a sufficient acquisition of legal

or equitable title by the United States to characterize the property as

``Federal land or facilities,'' then the agency may exclude such land

through its own policies and procedures for implementing the FPPA.

However, the Department has determined that an interpretive

clarification of the term ``Federal land and facilities'' as used in

the definition of ``Federal programs'' covered by the FPPA would be

useful. In that regard, the Department believes that the use of the

word ``Federal'' to modify the words ``land and facilities'' indicates

an intent by Congress to focus the scope of federal programs covered by

the FPPA to lands and facilities acquired or managed by federal

agencies as necessary proprietary elements of federal programs, such as

national forests, national parks, or military bases. The use of the

modifier ``Federal'' is significant; if the intent was to include the

acquisition, management, or disposal of any land or facility by a

federal agency, regardless of the purpose of the use of the land or

facility, Congress could have omitted the modifier and simply stated,

``acquiring, managing, or disposing of lands and facilities.''

Accordingly, the Department has amended the definition of ``Federal

program'' contained in Sec. 658.2(c) to clarify that, for the purposes

of the FPPA and these regulations, the phrase ``acquiring, managing, or

disposing of federal lands and facilities'' refers to lands and

facilities that are acquired, managed, or were used by a federal agency

specifically in support of a federal activity or program. It does not

include lands or facilities that are acquired, managed, or disposed of

by a federal agency as the incidental result of actions by that agency

through which the agency has temporary ownership or custody of the land

or facility, such as acquisition pursuant to a lien for delinquent

taxes, the exercise of conservationship or receivership authority, or

the exercise of civil or criminal law enforcement forfeiture or seizure

authority.

The Department has also incorporated in the definition of ``Federal

program'' interpretive clarification that loan guarantees or loan

insurance of the construction of buildings or other structures is

covered by the phrase ``undertaking, financing, or assisting

construction or improvement projects'' contained in the definition of

``Federal program.'' This interpretation was previously provided in the

preamble of the final rule that promulgated the current regulations.

See 49 FR 27720, July 5, 1984. Further in this regard, the Department

has clarified that the acquisition, management, and disposal of land or

facilities that a federal agency obtains as the result of foreclosure

or other actions taken under a loan, loan guarantee, or other financial

assistance proved by the agency directly and specifically for that

property or facility is likewise within the definition of ``Federal

program.''

A federal agency may develop and use procedures to implement the

FPPA for its loan, loan guarantee, or other financial assistance

programs on either a specific project/loan basis or on the basis of an

entire program. Further, if an agency has conducted a FPPA review of a

loan or other financial assistance for the conversion of farmland and

the agency or any other federal agency subsequently acquires the

property related to that assistance, the previously conducted FPPA

review will be sufficient to constitute compliance with the FPPA for

the management an eventual disposal of the property.

More importantly, an agency may develop and use specific policies

and procedures for the management and disposal of property acquired

through foreclosure, forfeiture, or other such means that taken into

consideration its primary statutory authorities regarding such

properties. Clearly, these determinations can be best made by the

particular agencies involved through their respective FPPA policies and

procedures, in consideration of the statutory requirements under which

they operate. The Department will consult with agencies, pursuant to

section 1542 of the FPPA, 7 U.S.C. 4203, to address these concerns.

Some federal agencies would like to exempt certain sites related to

the expansion of existing linear projects that would convert only a few

acres of farmland but would avoid the conversion of a large number of

acres. Some statewide LESA systems currently include exemptions of 10

acres per bridge and 3 acres per mile on existing highways. The

construction of bridges and widening of existing highways is a farmland

protection method. USDA will consult with Federal Highway

Administration, on actions that are designed to improve existing linear

projects so as to avoid the conversion of land that would occur if a

new linear project were to be constructed.

This rule has been reviewed under USDA procedures established in

accordance with provisions of Departmental Regulations 1512-1 and has

been designated ``non-major.''

It has been determined that this action will not have an economic

impact on the economy of $100 million or more; result in a major

increase in costs or prices for consumers, individual industries,

federal, state, or local government agencies, or geographic regions; or

result in significant adverse effects on competition; employment,

investment, productivity, innovation, or on the ability of U.S.-based

enterprises to compete with foreign, based enterprises in domestic or

export markets.

This rule does not contain information collection requirements that

require approval by the Office of Management and Budget under 44 U.S.C.

3501 et seq.

This document has been prepared in the Office of the Secretary,

USDA, with the assistance of the Basin and Area Planning Division of

the Soil Conservation Service.

List of Subjects in 7 CFR Part 658

Agriculture, Farmland, Soil conservation.

Accordingly, part 658 of title 7 of the Code of Federal Regulations

is amended as follows:

PART 658--[AMENDED]

1. The authority citation for part 658 is revised to read:

Authority: 7 U.S.C. 4201-4209.

2. Section 658.2 is amended by revising paragraphs (a) and (c) to

read as follows:

Sec. 658.2 Definitions.

(a) Farmland means prime or unique farmlands as defined in section

1540(c)(1) of the Act or farmland that is determined by the appropriate

state or unit of local government agency or agencies with concurrence

of the Secretary to be farmland of statewide of local importance.

``Farmland'' does not include land already in or committed to urban

development or water storage. Farmland ``already in'' urban development

or water storage includes all such land with a density of 30 structures

per 40-acre area. Farmland already in urban development also includes

lands identified as ``urbanized area'' (UA) on the Census Bureau Map,

or as urban area mapped with a ``tint overprint'' on the USGS

topographical maps, or as ``urban-built-up'' on the USDA Important

Farmland Maps. Areas shown as white on the USDA Important Farmland Maps

are not ``farmland'' and, therefore, are not subject to the Act.

Farmland ``committed to urban development or water storage'' includes

all such land that receives a combined score of 160 points or less from

the land evaluation and site assessment criteria.

* * * * *

(c) Federal program means those activities or responsibilities of a

Federal agency that involve undertaking, financing, or assisting

construction or improvement projects or acquiring, managing, or

disposing of Federal lands and facilities.

(1) The term ``Federal program'' does not include:

(i) Federal permitting, licensing, or rate approval programs for

activities on private or non-Federal lands; and

(ii) construction or improvement projects that were beyond the

planning stage and were in either the active design or construction

state on August 4, 1984.

(2) For the purposes of this section, a project is considered to be

``beyond the planning stage and in either the active design or

construction state on August 4, 1984'' if, on or before that date,

actual construction of the project had commenced or:

(i) acquisition of land or easements for the project had occurred

or all required Federal agency planning documents and steps were

completed and accepted, endorsed, or approved by the appropriate

agency;

(ii) a final environmental impact statement was filed with the

Environmental Protection Agency or an environmental assessment was

completed and a finding of no significant impact was executed by the

appropriate agency official; and

(iii) the engineering or architectural design had begun or such

services had been secured by contract. The phrase ``undertaking,

financing, or assisting construction or improvement projects'' includes

providing loan guarantees or loan insurance for such projects and

includes the acquisition, management and disposal of land or facilities

that a Federal agency obtains as the result of foreclosure or other

actions taken under a loan or other financial assistance provided by

the agency directly and specifically for that property. For the

purposes of this section, the phrase ``acquiring, managing, or

disposing of Federal lands and facilities'' refers to lands and

facilities that are acquired, managed, or used by a Federal agency

specifically in support of a Federal activity or program, such as

national parks, national forests, or military bases, and does not refer

to lands and facilities that are acquired by a Federal agency as the

incidental result of actions by the agency that give the agency

temporary custody or ownership of the lands or facilities, such as

acquisition pursuant to a lien for delinquent taxes, the exercise of

conservatorship or receivership authority, or the exercise of civil or

criminal law enforcement forfeiture or seizure authority.

* * * * *

3. Section 658.3 is amended by revising paragraphs (c) and (d) to

read as follows:

Sec. 658.3 Applicability and exemptions.

* * * * *

(c) The Act and these regulations do not authorize the Federal

Government in any way to regulate the use of private or nonfederal

land, or in any way affect the property rights of owners of such land.

In cases where either a private party or a nonfederal unit of

government applies for federal assistance to convert farmland to a

nonagricultural use, the federal agency should use the criteria set

forth in this part to identify and take into account any adverse

effects on farmland of the assistance requested and develop alternative

actions that would avoid or mitigate such adverse effects. If, after

consideration of the adverse effects and suggested alternatives, the

landowners want to proceed with conversion, the federal agency, on the

basis of the analysis set forth in Sec. 658.4 and any agency policies

or procedures for implementing the Act, may provide or deny the

requested assistance. Only assistance and actions that would convert

farmland to nonagricultural uses are subject to this Act. Assistance

and actions related to the purchase, maintenance, renovation, or

replacement of existing structures and sites converted prior to the

time of an application for assistance from a federal agency, including

assistance and actions related to the construction of minor new

ancillary structures (such as garages or sheds), are not subject to the

Act.

(d) Section 1548 of the Act, as amended, 7 U.S.C. 4209, states that

the Act shall not be deemed to provide a basis for any action, either

legal or equitable, by any person or class of persons challenging a

federal project, program, or other activity that may affect farmland.

Neither the Act nor this rule, therefore, shall afford any basis for

such an action. However, as further provided in section 1548, the

governor of an affected state, where a state policy or program exists

to protect farmland, may bring an action in the federal district court

of the district where a federal program is proposed to enforce the

requirements of section 1541 of the Act, 7 U.S.C. 4202, and regulations

issued pursuant to that section.

4. Section 658.4 is amended by revising paragraphs (a) and (c)(2),

and by adding two new paragraphs (g) and (h) to read as follows:

Sec. 658.4 Guidelines for use of criteria.

* * * * *

(a) An agency may determine whether or not a site is farmland as

defined in Sec. 658.2(a) or the agency may request that SCS make such a

determination. If an agency elects not to make its own determination,

it should make a request to SCS on Form AD-1006, the Farmland

Conversion Impact Rating Form, available at SCS offices, for

determination of whether the site is farmland subject to the Act. If

neither the entire site nor any part of it are subject to the Act, then

the Act will not apply and SCS will so notify the agency. If the site

is determined by SCS to be subject to the Act, then SCS will measure

the relative value of the site as farmland on a scale of 0 to 100

according to the information sources listed in Sec. 658.5(a). SCS will

respond to these requests within 10 working days of their receipt

except that in cases where a site visit or land evaluation system

design is needed, SCS will respond in 30 working days. In the event

that SCS fails to complete its response within the required period, if

further delay would interfere with construction activities, the agency

should proceed as though the site were not farmland.

* * * * *

(c) * * *

(2) Sites receiving a total score of less than 160 need not be

given further consideration for protection and no additional sites need

to be evaluated.

* * * * *

(g) To meet reporting requirements of section 1546 of the Act, 7

U.S.C. 4207, and for data collection purposes, after the agency has

made a final decision on a project in which one or more of the

alternative sites contain farmland subject to the FPPA, the agency is

requested to return a copy of the Form AD-1006, which indicates the

final decision of the agency, to the SCS field office.

(h) Once a Federal agency has performed an analysis under the FPPA

for the conversion of a site, that agency's, or a second Federal

agency's determination with regard to additional assistance or actions

on the same site do not require additional redundant FPPA analysis.

5. Section 658.7 is amended by redesignating paragraph (b) as

paragraph (c) and adding paragraphs (b) and (d) to read as follows:

Sec. 658.7 USDA assistance with Federal agencies' reviews of policies

and procedures.

* * * * *

(b) Section 1542(b) of the Act, 7 U.S.C. 4203, requires, as

appropriate, each department, agency, independent commission, or other

unit of the Federal Government, with the assistance of the Department

of Agriculture, to develop proposals for action to bring its programs,

authorities, and administrative activities into conformity with the

purpose and policy of the Act.

* * * * *

(d) To meet the reporting requirements of section 1546 of the Act,

7 U.S.C. 4207, and for data collection purposes, each Federal agency is

requested to report to the Chief of the Soil Conservation Service by

November 15th of each year on progress made during the prior fiscal

year to implement sections 1542 (a) and (b) of the Act, 7 U.S.C. 4203

(a) and (b). Until an agency fully implements those sections, the

agency should continue to make the annual report, but may omit the

report upon full implementation. However, an agency is requested to

file an annual report for any future year in which the agency has

substantially changed its process for compliance with the Act.

Dated: June 8, 1994.

Mike Espy,

Secretary of Agriculture.

[FR Doc. 94-14548 Filed 6-16-94; 8:45 am]

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