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PA Bulletin, Doc. No. 04-803

RULES AND REGULATIONS

Title 7--AGRICULTURE

DEPARTMENT OF AGRICULTURE

[7 PA. CODE CHS. 138, 138e AND 138l]

Agricultural Area Security Program; Agricultural Conservation Easement Purchase Program; Agricultural Security Area Program

[34 Pa.B. 2421]

   The Department of Agriculture (Department) deletes Chapter 138, amends Chapter 138e (relating to agricultural conservation easement purchase program) and adds Chapter 138l (relating to agricultural security area program) to read as set forth in Annex A.

Statutory Authority

   The Agricultural Area Security Law (act) (3 P. S. §§ 901--915) provides the legal authority for this final-form rulemaking. Section 15 of the act (3 P. S. § 915) requires the Department to promulgate regulations necessary to promote the efficient, uniform and Statewide administration of the act.

Purpose

   The final-form rulemaking accomplishes several regulatory objectives.

   First, it replaces the outdated regulations in Chapter 138 with Chapter 138l that: (a) more accurately tracks with the act; (b) reflects the experience the Department has gained in administering Chapter 138 over many years; (c) implements the numerous amendments that have been made to the act over the years; and (d) provides the regulated community with a more user-friendly set of standards and procedures with respect to agricultural security areas (ASA).

   Second, it revises Chapter 138e to: (a) reflect various amendments of the act--most recently by the act of May 30 2001 (P. L. 103, No. 14) (Act 14); and (b) reflect the experience the Department has gained in administering the Agricultural Conservation Easement Purchase Program and Chapter 138e since it was last amended.

Need for the Final-Form Rulemaking

   The final-form rulemaking is clearly needed. As previously explained, it implements various revisions to the act that have occurred since the ASA and agricultural conservation easement regulations were last amended. In addition, it contains provisions intended to resolve questions and ''gray areas'' encountered by the Department in its administration of these regulations over the years. It also formally implements a number of effective informal procedures that have evolved over the years. The Department is satisfied of the need for the final-form rulemaking.

Comments

   Notice of proposed rulemaking was published at 32 Pa.B. 775 (February 9, 2002) and provided for a 30-day public comment period.

   Comments were received from the Independent Regulatory Review Commission (IRRC); Senator Mike Waugh, Chairperson of the Senate Agriculture and Rural Affairs Committee; Representative Raymond Bunt, Jr., Chairperson of the House Agriculture and Rural Affairs Committee during the legislative comment period; the Pennsylvania Association of Realtors (Association); the Farm and Natural Lands Trust of York County; the Pennsylvania Farm Bureau (Bureau); Christopher Hartman, Esq., Chairperson of the Agricultural Law Committee of the Pennsylvania Bar Association; the Pennsylvania Farmland Preservation Association (PFPA); the Bradford County Agricultural Land Preservation Board (Bradford County Board); the Lancaster County Agricultural Preserve Board (Lancaster County Board); the Lehigh County Agricultural Land Preservation Board (Lehigh County Board); and the York County Agricultural Land Preservation Board (York County Board).

   Comment 1: The Lancaster County Board expressed general concern regarding the ''subdivision'' of a farm subject to an agricultural conservation easement. The act does not define the term ''subdivision,'' although it prescribes a process by which an owner of farmland under agricultural conservation easement must obtain county board and State Agricultural Land Preservation Board (State Board) approval to subdivide the restricted land.

   Section 138e.3 (relating to definitions) defined ''subdivision'' in much the same way it is defined in Pennsylvania Municipalities Planning Code (53 P. S. §§ 10101--11201). In simple terms, this definition describes the acquisition of a new legal right to sell something less than the entirety of a larger tract. For example, where the owner of a 50-acre tract seeks to acquire the legal right to divide the tract into 25 2-acre parcels and sell each of those parcels, he must go through the ''subdivision'' process.

   The Lancaster County Board would prefer the term ''subdivision'' mean the transfer of anything less than all of the land described in a single deed of agricultural conservation easement.

   The following illustrates the Lancaster County Board's point: A landowner might combine a number of separately deeded tracts into a single application for the sale of an agricultural conservation easement. For illustrative purposes, assume a 5-acre tract, a 10-acre tract, a 50-acre tract and a 100-acre tract are combined on a single application seeking to sell an agricultural conservation easement with respect to the entire 165 acres. After the easement is sold, assume the landowner seeks to sell the 5-acre tract to a third party. The current definition of ''subdivision'' does not address this proposed sale, and the subdivision review described in the act would not be required. By contrast, if a single 165-acre tract was the subject of an agricultural conservation easement, the subdivision review described in the act would be required if the landowner sought to convey anything less than the entire 165-acre tract.

   The Lancaster County Board's point is that although the act uses the term ''subdivision,'' the term should be interpreted as meaning ''the transfer of anything less than the entirety of the acreage described in a single deed of agricultural conservation easement.''

   The commentator acknowledges that it might be necessary to address this situation by amending the act, rather than the regulations, and encourages the Department to do something to address this problem.

   Response: The commentator's point is well taken. The Department agrees the use of the undefined term ''subdivision'' in the act presents the potential problems described by the commentator, but believes a statutory amendment is the procedure by which this problem must be rectified. The Department has drafted proposed statutory language to require advance county and State Board approval of any transaction which would result in the sale of anything less than the entirety of the acreage described in a single deed of agricultural conservation easement, and plans to pursue this revision.

   Comment 2: Proposed § 138e.11(d) (relating to general requirements) would require a county agricultural land preservation program to contain provisions addressing the participation of a local government unit in the agricultural conservation easement purchase process. The York County Board recommended additional language be added to specify that any easement purchase in which a local government unit seeks to acquire the easement as a joint owner with a county or the Commonwealth be subject to the same eligibility and ranking standards that would apply if the local government unit was not involved in the transaction.

   Response: Section 14.1(b.1)(4) of the act (3 P. S. § 914.1(b.1)(4)) requires that an agricultural conservation easement purchase involving local government unit participation be made under the same criteria applied by a county in all of its agricultural conservation easement purchase transactions. Since proposed § 138e.11(d)(4) referenced this statutory requirement, the Department does not believe the additional language recommended by the commentator is necessary.

   Comment 3: The Lehigh County Board reviewed proposed § 138e.16 (relating to minimum criteria for applications), and asked whether it is correct in its interpretation that there is no authority for a county board to acquire an agricultural conservation easement with respect to a tract of farmland that straddles the line between the purchasing county and an adjoining county, with part of the land being within an ASA established within the purchasing county and part being of the land being within a different ASA organized in the adjoining county.

   The Pennsylvania Farmland Protection Association offered essentially the same comment as the Lehigh County Board. Both commentators conceded that the language in proposed § 138e.16 derives from language added to the act by Act 14.

   The Lehigh County Board offered a revision to proposed § 138e.16(a)(1)(i) to allow a tract with land located in ''one or more'' ASAs of 500 acres or more to be considered for easement purchase. The commentator offered a related comment with respect to proposed § 138e.61 (relating to application).

   Response: The interpretation offered by the Lehigh County Board is correct. Act 14 revised section 14.1(b)(2)(i)(B) of the act to prescribe specific conditions under which an agricultural conservation easement can be purchased with respect to a tract of land that straddles county boundary lines, but only allows this type of purchase where the portion in one of the counties ''is not within an agricultural security area.'' For this reason, the Department cannot implement the revision offered by the Lehigh County Board.

   Comment 4: Representative Bunt suggested that proposed § 138e.16(a)(2) be revised to decrease the minimum number of contiguous acres necessary for a tract of land to be eligible for agricultural conservation easement purchase. The current provision requires at least 50 contiguous acres. Representative Bunt proposes this be reduced to 25 acres. In support of his proposal, Representative Bunt noted proposed § 138e.255(b)(3)(i)(B) (relating to State Board review of applications) would allow the Department to reimburse a portion of the costs incurred by a land trust in the acquisition of an agricultural conservation easement on as few as 25 contiguous acres. The Representative also noted:

. . . there are a growing number of eligible counties receiving applications from productive farms which are less than 50 acres and are not adjacent to other preserved land. There are various situations and reasons why the farms remain productive on smaller areas of acreage, and why they will never qualify for state funding under the current regulations. . .

   Response: The Department declines to implement the suggested decrease in the minimum amount of contiguous acreage necessary for a tract of land to be eligible for agricultural conservation easement purchase.

   The Supplemental Agricultural Conservation Easement Purchase Program, in section 14.5(a)(3) of the act (3 P. S. § 914.5(a)(3)), dedicated up to $500,000 ''to reimburse land trusts for expenses incurred to acquire agricultural conservation easements,'' and limited this reimbursement to no more than $5,000 per easement. The Department established the Land Trust Reimbursement Grant Program (Program) under this authority. Some time after the comment period for the proposed rulemaking expired, the Department amended the procedures and standards for the Program by deleting the requirement that an agricultural conservation easement acquired by a land trust be of any specific minimum acreage for the land trust to be eligible for reimbursement of a portion of its expenses under that Program. This revision was published at 33 Pa.B. 39 (January 4, 2003), and has been incorporated into the final-form rulemaking in § 138e.255(b)(3). This change does not substantively affect the Department's response to the comment.

   The Department's basis for its position is as follows:

   First: As a general rule, the larger the tract of land being considered for agricultural conservation easement purchase, the more likely that tract is to remain a viable, productive farm well into the future. The Department acknowledges there are exceptions to this general rule, but believes its role as a steward of the public funds available for agricultural conservation easement purchases under the act is best served by acquiring agricultural conservation easements on larger tracts of qualified land.

   Second: The per-acre cost of preserving larger farms is, as a general principle, lower than the per-acre cost of preserving smaller farms. Smaller farms tend to be in areas facing the greatest development pressure, and this typically results in an increase in the appraised value (and purchase price) of an agricultural conservation easement.

   Third: The typical agricultural conservation easement purchase transaction results in several thousand dollars of ''incidental costs'' (survey costs, appraisal costs, legal costs, filing fees, and the like). These costs are paid from the pool of money available for easement purchases. By way of illustration, the Department believes it would be better to incur incidental costs relating to a single 100-acre easement purchase than to incur four separate sets of incidental costs to preserve four 25-acre farms.

   Fourth: Currently (and for the foreseeable future), the Agricultural Conservation Easement Purchase Program is a ''buyer's market.'' There is a large backlog of owners of farms of 50 acres or more waiting for consideration of their applications to sell agricultural conservation easements. The Department believes that in the absence of a shortage of applicants to sell agricultural conservation easements with respect to farms of 50 acres or more, it should not lower the 50-acre minimum standard. In fact, the current backlog of applications suggests it would not be unreasonable to increase the minimum acreage necessary for easement purchase to 75 or 100 acres. The Department is willing to revisit this issue if the day comes when there is a shortage of applications to sell agricultural conservation easements.

   Fifth: The 25-acre-minimum standard referenced by the commentator has--since the close of the applicable comment period for the proposed rulemaking--been rescinded. The Program no longer requires that an agricultural conservation easement acquired by a land trust be of any particular minimum acreage for the land trust to be eligible for reimbursement of up to $5,000 of the costs it incurred in acquiring the easement. The Department disagrees with the suggestion that the previous 25-acre minimum requirement (or the current absence of a minimum acreage requirement) under the Program should be equated with a determination by the Department that less than 50 acres is an acceptable minimum size for a farm being considered for agricultural conservation easement purchase. Under the Program, a land trust, rather than the Commonwealth or a county, is the holder of the easement. The purpose of the Program is to supplement the Commonwealth's agricultural conservation easement purchase effort by facilitating the acquisition of easements by private trusts on lands that might not ordinarily qualify for easement purchase under the act, but that enhance the overall agricultural conservation easement purchase effort. This is discussed in the response to Comment 5.

   Comment 5: IRRC observed that proposed § 138e.16(a)(2)(i) references a 50-acre minimum standard for an agricultural conservation easement purchase, while proposed § 138e.255(b)(3)(i)(B) would require at least 25 acres of land be placed under agricultural conservation easement for a land trust to receive a donated easement to be eligible for reimbursement of part of its expenses in acquiring the easement. IRRC recommended the Department either ''make both of these requirements 25 acres or explain why different standards are appropriate.''

   Response: As described in the previous response, proposed § 138e.255(b)(3) has been revised by deleting the requirement that an agricultural conservation easement acquired by a land trust be of any particular minimum acreage for the land trust to be eligible for reimbursement under the Program. The reimbursement is for up to $5,000 of the costs incurred by the land trust in acquiring the easement. This change does not substantively affect the Department's response to the comment.

   A number of qualified land trusts recommended that the Program's minimum acreage requirements for grant eligibility be revised to include a broader range of agricultural conservation easements. This would include agricultural conservation easements that, although limiting the subject land to agricultural production in perpetuity, would not qualify for purchase by the Commonwealth, an eligible county or a local government unit (or some combination thereof) under the act. The Department heeded these suggestions and revised the minimum criteria for participation in the Program twice by: (1) reducing the original 50-acre minimum acreage to 25 acres; and (2) doing away with a minimum acreage requirement altogether. This approach allows eligible counties to coordinate with qualified land trusts in their farmland preservation activities and facilitate the acquisition of agricultural conservation easements on tracts of land which--although not by themselves ''economically viable for agricultural production'' under the strict definition of that term--help create larger blocks of contiguous preserved farmland or otherwise further the eligible county's farmland preservation effort. The Department believes this approach is consistent with the statutory authority for the Program.

   Comment 6: As part of its recommendation with respect to proposed § 138e.16, the Lehigh County Board recommended proposed § 138e.61 be revised to require the application for agricultural conservation easement sale to provide space for an applicant to designate whether the farm is located within more than one ASA.

   Response: The Department cannot make the requested revision. There is only statutory authority for the purchase of an agricultural conservation easement on a tract of land that straddles county boundary lines where the portion in one of the counties is not within an ASA. This is discussed in the response to Comment 3. However, a county has the option to add additional information on the application for agricultural conservation easements to meet the needs and requirements of that particular county program. It is already permitted for additional space to be added for ASA designations. A county may request as much information as it deems necessary to evaluate an easement application.

   Comment 7: Proposed § 138e.61(b)(2)(ii) would require a county board to provide a ''breakdown of the acreage proposed for purchase in each local government unit and a breakdown of the number of acres of viable agricultural land in the acreage proposed for easement purchase in each local government unit'' on an agricultural conservation easement purchase application. The Lancaster County Board questioned the relevance of this information and the purpose of the proposed requirement.

   The commentator also asked whether the term ''viable agricultural land'' has been defined.

   The commentator offered that the referenced language ''appears to serve no valuable purpose and oddly enough the same has not been clearly specified in the following section addressing a farmland tract that is bisected by the dividing line between two or more counties.''

   Response: The Department declines to revise the referenced subparagraphs. Proposed § 138e.61(b)(ii) and (iii) illustrates a distinction in the requirements that must be met with respect to a proposed agricultural conservation easement purchase on land that straddles the dividing line between two units of local government and an easement purchase on land that straddles the dividing line between two counties. Although the acreage information requested in proposed § 138e.61(b)(2)(ii) is necessary in the context of a proposed agricultural conservation easement purchase involving a tract that straddles lines between units of local government, it is not necessary in the context of a proposed easement purchase involving a tract that straddles county lines unless there is no mansion house on that tract.

   Act 14 revised section 14.1(b)(2)(i)(B) of the act to allow for the purchase of agricultural conservation easements on land bisected by the dividing line between two units of local government where the portion of the land in one unit of local government is within an ASA and the portion within the other unit of local government is not. The ''majority of the farm's viable agricultural land'' must be located within the ASA for this purchase to proceed. The Department believes it is reasonable to require an application for this type of easement purchase to specify the number of ''acres of viable agricultural land'' in each unit of local government in which the land is located. The transaction cannot proceed without the majority of the viable agricultural land being located within an ASA.

   The Department differs with the commentator's assertion that proposed § 138e.61(b)(iii) does not clearly specify the circumstances under which the acreage and viable agricultural land information must be provided. This acreage information does not come into play unless there is no ''mansion house'' on the tract being considered for agricultural conservation easement purchase. For example, if a 100-acre tract straddles a county line, with 98 acres in county A and 2 acres in county B, and the mansion house is on that 2-acre portion, county B may purchase an easement on the entire 100-acre tract. The acreage of the viable agricultural land lying in county A and county B does not become important unless there is no mansion house. In a situation such as this, the majority of the viable agricultural land of the tract must be within the county that seeks to purchase the agricultural conservation easement. It is therefore reasonable for the Department to require a breakdown of these acreages in proposed § 138e.61(b)(ii)(C).

   The commentator also asked whether the term ''viable agricultural land'' has been defined. The term is defined in section 3 of the act (3 P. S. § 903).

   Comment 8: The Bradford County Board offered a comment with respect to proposed § 138e.65(b) (relating to easement value and purchase price). The proposed rulemaking deleted the $10,000 per acre cap on the amount of State funds that can be used for the purchase of an agricultural conservation easement. The Bradford County Board believes this cap should remain in place, arguing the removal of the cap: (1) ''severely challenges the cost-effectiveness of a program touted for the number of acres it preserves''; (2) is ''contrary to addressing the pending backlog of applications'' for sale of agricultural conservation easements; (3) appears to favor a minority of interests and locations; (4) facilitates the purchase of agricultural conservation easements in areas where agriculture and development are in competition, leading to higher easement prices and an increased potential for conflicts, easement violations and agriculture-related nuisance issues; (5) benefits eligible counties that already receive the greatest percentage of allocations and matching funds for agricultural conservation easement purchases; (6) creates a situation where ''one (1) acre of farmland under extreme development pressure is being preserved at the expense of preserving seven to ten (7-10) acres elsewhere''; and (7) ''decreases the ability to achieve an even distribution of agricultural conservation easements across the State.''

   Response: The commentator makes a number of valid points. The proposed amendment to § 138e.65(b) does nothing more than implement the statutory amendment in Act 14 that deleted the $10,000 per acre purchase price cap from section 14.1(g) of the act. The Department has no discretion to establish through regulation a cap the General Assembly has rescinded through legislation. The county still has the ability to set a maximum per acre or a percentage cap if it is established in an approved county program.

   Comment 9: The Department has, over the course of administering the Agricultural Conservation Easement Purchase Program effort, received suggestions that § 138e.68 (relating to title insurance) be revised to specify that the amount of title insurance coverage should be at least equal to the appraised value of the agricultural conservation easement at the time of purchase.

   Response: The Department has implemented this suggestion in the final-form rulemaking.

   Comment 10: The York County Board, the Lancaster County Board, the Lehigh County Board, the Pennsylvania Farmland Protection Association, IRRC and Senator Waugh offered comments with respect to proposed § 138e.73 (relating to survey requirements).

   The York County Board recommended the survey requirements proposed in § 138e.73 be reviewed by various survey firms to determine whether the firms have the technological ability to meet these standards and, if so, whether meeting these standards would require a significant increase in the cost of the survey.

   The Lehigh County Board was also concerned with potential survey cost increases, and planned to run a ''test case'' with its surveyor to determine the extent of any increase. IRRC expanded on this cost issue, and asked the cost of a typical survey that would meet the requirements of the proposed rulemaking.

   The Lehigh County Board, the York County Board and the Pennsylvania Farmland Protection Association expressed apprehension as to whether surveyors commonly have the global positioning gear necessary to provide the Geographic Information System information described in proposed § 138e.73, and as to the cost of acquiring this gear if they do not already have it. The Pennsylvania Farmland Protection Association requested clarification as to the type of global positioning equipment that would be necessary to obtain the +/- 2-meter horizontal accuracy for the two control points.

   The York County Board also expressed agreement with the proposed language requiring surveys to be in compliance with standards published by the Pennsylvania Society of Land Surveyors, referring to these standards as efficient, cost-effective, uniform and user-friendly.

   The Lehigh County Board related its general support for the proposed language requiring geo references (coordinates calculated using global positioning equipment) in boundary surveys and requiring more permanent monumentation for the two ground control points located along the boundary survey.

   The Lehigh County Board, the Lancaster County Board and the Pennsylvania Farmland Protection Association expressed strong concerns relating to the cost of meeting the proposed survey requirements. The commentators also expressed concern regarding whether surveyors typically have the global positioning equipment that would be required for a survey to meet the proposed survey requirements.

   The Pennsylvania Farmland Protection Association offered the suggestion the digital survey requirements be made optional, rather than mandatory.

   Senator Waugh and Representative Bunt requested the Department carefully consider the various comments offered with respect to proposed § 138e.73.

   Response: The Department gave careful consideration to the commentators' concerns and recommendations. As far as the requirements relating to global positioning equipment are concerned, the Department has deleted the specific requirement that global positioning system (GPS) coordinates be obtained, or that they be ''accurate to within 2 meters horizontally.'' This deletion removes any potential significant cost increase with respect to the collection of survey data. Coordinate values can be obtained by using relatively inexpensive GPS units, and these units are already in extensive use among surveyors.

   The Department agrees with the Lehigh County Board concerning the need for more permanent monumentation for the two ground control points located along the boundary survey, and has revised proposed § 138e.73(c) to be more specific in this regard. These monumentation requirements are consistent with the current ''Manual of Practice for Professional Land Surveyors in the Commonwealth of Pennsylvania,'' (Manual).

   The Department has also removed any reference to ''unmovable'' monumentation and the term ''rebar.''

   Comment 11: IRRC raised three questions with respect to proposed § 138e.73(a): (1) where the ''standards published by the Pennsylvania Society of Land Surveyors'' could be found; (2) how a person could determine whether these standards are the most current version of the standards; and (3) whether a survey conducted in accordance with these standards would be acceptable if--after the survey is conducted--the standards are revised so that the survey would not meet these revised standards.

   Response: The Department is satisfied that land surveyors in this Commonwealth are quite familiar with the boundary survey measurement standards published by the Pennsylvania Society of Land Surveyors, 2040 Singleton Road, Suite 200, Harrisburg, PA 17110. The current standards are published in the Manual, which was adopted by the Pennsylvania Society of Land Surveyors on July 10, 1998. Proposed § 138e.73(a) has been revised to more specifically set forth this reference. Interested persons can obtain a copy of these standards through the Pennsylvania Society of Land Surveyors.

   The Department expects surveying professionals to be familiar with the most recent version of these standards of practice. As an added precaution, however, it will notify administrators of county programs in the event it learns these standards are going to be or have been revised.

   In the event the referenced standards change after the survey is completed and before the subject agricultural conservation easement is considered for approval by the State Board, the Department will consider the survey to be acceptable as long as--at the time the survey was done--it was completed in accordance with the standards that were in effect at that time.

   Comment 12: IRRC reviewed proposed § 138e.73(c) and asked for clarification as to what would qualify as an ''unmovable monument.'' The commentator also recommended the phrase ''reinforcing bar'' be used in place of ''rebar'' in that subsection.

   Response: The Department has removed both of these terms from the final-form rulemaking.

   Comment 13: Proposed § 138e.91(1) (relating to recommendation for purchase) would require a county to submit 25 copies of a summary report to the Department. IRRC noted this creates a significant paper burden, and asked whether the need for this many copies is outdated and whether there is a practical means by which a county might provide this material electronically.

   Response: Although the Department understands the desirability of reducing the amount of paperwork involved in an agricultural conservation easement purchase transaction, experience has shown these transactions are--of necessity--paperwork intensive. There are 17 members of the State Board, each of whom receives and reviews a copy of the documents described in proposed § 138e.91. The additional eight copies are required for internal review by the Department (Bureau of Farmland Preservation administrators and staff, Deputy Secretaries and additional file copies).

   There is not a practical means by which a county could provide the information described in proposed § 138e.91 electronically. The documents include maps, tables, appraisals, title insurance documents, IRS forms, letters, a conservation plan and, as required, a nutrient management plan. Although the Department will remain mindful of the need to reduce the paperwork burden on the regulated community wherever practicable, an agricultural conservation easement purchase transaction simply does not lend itself to an electronic filing format.

   Comment 14: Proposed § 138e.91(8) would require that a copy of an approved conservation plan and a conservation plan agreement form be submitted to the Department as part of a county board's recommendation of State Board approval of a particular agricultural conservation easement purchase. The York County Board, the Lancaster County Board, IRRC and Senator Waugh offered comments with respect to proposed § 138e.91(8).

   The York County Board believes it is unreasonable to require this material prior to State Board review. Instead, the commentator proposes that a county board be required to submit a letter verifying that a conservation plan shall be completed and in place prior to settlement on the easement purchase transaction. The conservation plan and conservation plan agreement form could then be provided to the Department prior to settlement. The commentator believes this would help conservation and preservation officials prioritize their workloads. IRRC also made note of this comment, and requested an explanation of the need for a fully-executed conservation plan agreement at this point in the agricultural conservation easement purchase process.

   The York County Board also believes the proposed requirements would result in some counties not being able to submit these required materials in time to meet year-end deadlines for the encumbrance of funds by the Department for agricultural conservation easement purchases.

   The York County Board also notes that the type of conservation plan required in York County is the ''Resource Management Plan,'' and suggested the final-form rulemaking provide more detail as to what constitutes an acceptable conservation plan.

   The Lancaster County Board questions the need for the proposed conservation plan agreement form, and whether the requirement would be legal. The commentator offered that ''frequently it is the tenant farmer who is farming the ground and has the Conservation Plan for the subject property,'' and suggested the conservation plan agreement form would be ''another piece of paper that may or may not be useful.''

   IRRC noted the proposed subsection would reference a ''conservation plan agreement form as described in § 138e.222(a)  . . .'' and that § 138e.222(a) (relating to conservation plan) does not specifically mention this form. IRRC recommended these provisions be reconciled.

   Senator Waugh and Representative Bunt requested the Department carefully consider the various comments offered with respect to proposed § 138e.91(8).

   Response: The regulatory requirement that there be a written conservation plan, and that it be submitted along with the other materials in support of a county board's recommendation that the State Board approve a particular agricultural conservation easement purchase, exists under the current regulation and is not proposed as a new requirement. Although the Department has revised proposed § 138e.91(8) by deleting the requirement that a fully-executed conservation plan agreement form be part of the submittal described in the preceding sentence, it declines to revise the requirement that the conservation plan, itself, be part of the submittal. Given that the decision to purchase an agricultural conservation easement is largely premised upon the quality of the soil on the land that would be subject to the easement, the Department believes it makes good sense for it to have a conservation plan in-hand as part of the materials to be reviewed by the State Board in considering whether to purchase the easement in the first place. The implementation of the conservation plan on land that is subject to an agricultural conservation easement is perhaps the ultimate protection of the public's investment in that easement.

   The final-form rulemaking still requires that a conservation plan agreement form be executed and recorded with respect to each agricultural conservation easement purchase transaction, but does not require this document until settlement. Proposed § 138e.93 (relating to postsettlement recording and reporting procedures) and § 138e.222 have been revised to implement this change.

   The Department's experience has been that the most common violations of the terms of a deed of agricultural conservation easement relate to the failure of a landowner to fully-implement the conservation plan or required nutrient management practices. These violations are almost always unintentional oversights on the landowners' part, and are readily corrected. The number of these unintentional violations suggests that the regulation should attempt to place greater emphasis on the importance of fully-implementing conservation plans.

   A typical conservation plan, which is prepared by the United States Department of Agriculture--Natural Resources Conservation Service (USDA-NRCS) and approved by the local conservation district, does not contain a formal written acknowledgment on the landowner's part that he will fully-implement all of the conservation measures recommended in the plan. The Department believes that by obtaining this formal written acknowledgment--the conservation plan agreement form described in proposed § 138e.222--the number of unintentional violations relating to failure to implement conservation plans will decrease and the owners of land subject to agricultural conservation easements will have a better understanding of their responsibilities. The Department is aware that several county programs (including Chester County) have taken a similar approach to that proposed by the Department, and that this approach has met with success in reaching the objectives described in the preceding sentence.

   The Department understands that the Chester County Agricultural Land Preservation Program currently requires the recording of a conservation plan agreement form as part of the settlement on an agricultural conservation easement purchase transaction, and believes this is a good approach that should be implemented Statewide.

   The Department also gave thought to whether the regulatory requirements with respect to conservation plans impose too great a burden and would cause counties to miss year-end deadlines for the encumbrance of funds available for agricultural conservation easement purchases. As previously stated, the requirement of a conservation plan is not new. The USDA-NRCS and the local conservation district are the entities that, respectively, prepare and approve conservation plans. The Department conducted an informal survey among the USDA-NRCS field offices with the largest conservation planning workloads. It was the unanimous opinion of the USDA-NRCS district conservationists that the conservation plan can be completed in accordance with the requirements of the final-form rulemaking. The State resource conservationist for the USDA-NRCS concurred with this opinion. USDA-NRCS field personnel stressed that as soon as the application ranking process is complete and a county board prioritizes its planned agricultural conservation easement purchase recommendations, the USDA-NRCS should be notified and should begin preparation of the conservation plan. If this timetable is kept, the USDA-NRCS would typically have approximately 1 year within which to complete the conservation plan before the county board is ready to submit its easement purchase recommendation to the Department in accordance with proposed § 138e.91. Given this time period, the USDA-NRCS expressed confidence it can complete conservation plans within sufficient time to avoid delaying the progress of an agricultural conservation easement purchase application through the regulatory process.

   As to the York County Board's suggestion that the final-form rulemaking contain more detail as to the contents of a conservation plan, the Department believes the definition of ''conservation plan'' in § 138e.3 and the references to conservation plans in § 138e.222 provide adequate detail and guidance in this regard.

   The Lancaster County Board is correct when it notes that it is not uncommon for land that is subject to an agricultural conservation easement to be farmed by tenant farmers, rather than the landowners. Even when this is the case, the Department believes it is the landowner who is ultimately responsible for implementation of the conservation plan.

   Comment 15: The Association expressed concern that smaller counties or rural counties might not have the administrative capacity to comply with the postsettlement recording and reporting procedures set forth in proposed § 138e.93.

   Response: Although § 138e.93 is a new, it does not (with the exception of the conservation plan agreement form described in the response to Comment 14) impose requirements that are new or different. Eligible counties have been following these procedures since the inception of the Commonwealth's Agricultural Conservation Easement Purchase Program without raising a complaint concerning administrative or financial burdens. In addition, the postsettlement recordings are normally carried out by the settlement agent, placing no burden on the county staff.

   Comment 16: The Lancaster County Board offered several comments with respect to proposed § 138e.93. IRRC joined in several of these comments.

   First, the Lancaster County Board reviewed subsection (a) and asked what purpose is served by the proposed requirement that the county retain copies of various essential documents of the agricultural conservation easement purchase transaction. The commentator believes this might be a redundant or unnecessary requirement, and sought the Department's rationale for this provision.

   Second, the Lancaster County Board recommended proposed subsection (d)(1)(iii) be revised to address the possibility a settlement agent might not require a settlement sheet at the settlement on an agricultural conservation easement purchase transaction. The commentator offered language for the recommended revision. IRRC offered its agreement with the commentator on this point.

   Third, the Lancaster County Board suggested proposed subsection (d)(1)(iv) be revised to address the possibility the actual title insurance policy--as opposed to a marked-up title insurance commitment--might be available immediately after settlement. IRRC offered its agreement with the commentator on this point.

   Fourth, the Lancaster County Board questioned whether it is necessary for a county board to provide the Department certified copies of the recorded deed of agricultural conservation easement and other documents referenced in proposed subsection (e).

   Response: The Department offers its response to the correspondingly-designated paragraphs of the comment:

   First, the Department believes that the essential documents of the agricultural conservation easement purchase transaction should be retained for a subsequent audit (whether by county, State or Federal entities). In addition, these documents might comprise important evidence in the event the county must go to court to correct a violation of the terms of an agricultural conservation easement or address a title issue. The county board has primary enforcement authority with respect to these easements, and should retain the documents potentially necessary to its performance of that responsibility.

   Second, the Department agrees that proposed § 138e.93(d)(1)(iii) should be revised to address the possibility a settlement agent might not require a formal settlement sheet at the settlement on an agricultural conservation easement purchase transaction. The referenced provision in the final-form rulemaking has been revised to implement the Lancaster County Board's suggested revision.

   Third, the Department agrees proposed § 138e.93(d) (1)(iv) should be revised to address the possibility the title insurance policy might be available immediately after settlement. The suggestion has been implemented in the final-form rulemaking.

   Fourth, the Department agrees with the commentator and has removed the word ''certified'' from the referenced subparagraph.

   Comment 17: IRRC requested the Department explain what is intended by the use of the word ''promptly'' in proposed § 138e.93(b) and (c). The commentator also asked what happens if a local government unit fails to ''promptly'' record documents as required.

   Response: The Department agrees to remove the term ''promptly'' from § 138e.93(b) and (c) in the final-form rulemaking.

   Comment 18: The Lehigh County Board reviewed proposed § 138e.93(c). Subsection (e) would require a local governing body to promptly record the inclusion of land into an ASA if the land has been automatically incorporated into an ASA upon the purchase of an agricultural conservation easement, and report that recording to the county board. The commentator believes this provision will be difficult to enforce, since its experience has been that townships are frequently remiss in recording their ASAs in a timely fashion. The commentator asked what would happen to a township that failed to record an addition to its ASA. It also noted that some townships might balk at having to pay for recording the addition of land located in another township or county in its ASA.

   Response: The Department agrees, but notes that this recording is required under section 5(a.2)(2) of the act (3 P. S. § 905(a.2)(2)).

   Comment 19: Proposed § 138e.102(h) (relating to allocation of funds to counties) would require an eligible county that seeks to purchase an agricultural conservation easement in its own name using State matching funds to provide a copy of the signed agreement of sale for the proposed transaction and a written certification from the county governing body confirming the availability of the specific amount of county matching funds necessary for the proposed purchase. Receipt of these two documents would result in the Department encumbering the State funds sought by the eligible county for the transaction.

   The Lehigh County Board commented that the certification of available county matching funds for the transaction seems duplicative, since the county is already required to provide the Department an annual certification of the amount of county matching funds available for agricultural conservation easement purchases. This certification is described in § 138e.102.

   The commentator suggested that if a second certification is necessary, it would be preferable if the certification could be issued by the county executive or chief fiscal officer. IRRC offered its agreement with the commentator on this point.

   Response: The Department agrees with the commentator's suggestion and has deleted proposed § 138e.102(h) from the final-form rulemaking.

   Comment 20: The Association reviewed proposed § 138e.104 (relating to installment sales). Section 5(a) of the act authorizes the Department to spend up to $500,000 to acquire technical assistance to facilitate long-term installment purchases of agricultural conservation easements. The commentator asked whether the Department has a plan for the expenditure of this $500,000 sum, and emphasized the sum should be used ''solely for the purchase of easements and not for administrative purposes.''

   Response: The Department has used these funds to develop basic forms and a process for long-term installment purchases of agricultural conservation easements, but has declined to use any of these funds for its own administrative purposes. The entire $500,000 sum has been spent or encumbered.

   Comment 21: The Lehigh County Board suggested the first word of proposed § 138e.104(d)(5) should be ''The'' instead of ''If.'' IRRC also recommended this provision be reworded for clarity.

   Response: The Department agrees with the commentator and has implemented the suggestion in the final-form rulemaking.

   Comment 22: The York County Board requested that language be added to proposed § 138e.201 (relating to responsibility) to clarify that the agricultural conservation easements for which a county board has inspection and enforcement responsibilities do not include easements purchased by private land trusts or local government units. The commentator suggested a county might elect to assume these responsibilities under a cooperative agreement detailing the conditions of inspection and enforcement.

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