766.110—Conservation Contract.
(a) General.
(1)
A debtor with only SA or Non-program loans is not eligible for a Conservation Contract. However, an SA or Non-program loan may be considered for a Conservation Contract if the borrower also has program loans.
(2)
A current or financially distressed borrower may request a Conservation Contract at any time prior to becoming 90 days past due.
(3)
A delinquent borrower may request a Conservation Contract during the same 60-day time period in which the borrower may apply for primary loan servicing. The borrower eligibility requirements in § 766.104 will apply.
(5)
The land under a Conservation Contract cannot be used for the production of agricultural commodities during the term of the contract.
(6)
Only loans secured by the real estate that will be subject to the easement, may be considered for a Conservation Contract.
(b) Eligible lands.
The following types of lands are eligible to be considered for a Conservation Contract by the Conservation Contract review team:
(i)
Land containing aquatic life, endangered species, or wildlife habitat of local, State, tribal, or national importance;
(iv)
Historic or cultural properties listed in or eligible for the National Register of Historic Places;
(viii)
Areas within or adjacent to Federal, State, tribal, or locally administered conservation areas.
(2)
It has on-site or off-site conditions that prohibit the use of the land for conservation, wildlife, or recreational purposes; or
(3)
The Conservation Contract review team determines that the land is not suitable for conservation, wildlife, or recreational purposes.
(d) Conservation Contract terms.
The borrower selects the term of the contract, which may be 10, 30, or 50 years.
(e) Conservation management plan.
The Agency, through the recommendations of the Conservation Contract review team, is responsible for approving the conservation management plan.
(f) Management authority.
The Agency has enforcement authority over the Conservation Contract. The Agency, however, may delegate contract management to another entity if doing so is in the Agency's interest.
(2)
Result in a feasible plan with or without primary loan servicing for financially distressed or delinquent borrowers; and
(h) Maximum debt reduction for a financially distressed or current borrower.
The amount of debt reduction by a Conservation Contract is calculated as follows:
(1)
Divide the contract acres by the total acres that secure the borrower's FLP loans to determine the contract acres percentage.
Code of Federal Regulations
(2)
Multiply the borrower's total unpaid FLP loan balance (principal, interest, and recoverable costs already paid by the Agency) by the percentage calculated under paragraph (h)(1) of this section to determine the amount of FLP debt that is secured by the contract acreage.
Code of Federal Regulations
(3)
Multiply the borrower's total unpaid FLP loan balance (principal, interest, and recoverable costs already paid by the Agency) by 33 percent.
Code of Federal Regulations
(4)
The lesser of the amounts calculated in paragraphs (h)(2) and (h)(3) of this section is the maximum amount of debt reduction for a 50-year contract.
(5)
The borrower will receive 60 percent of the amount calculated in paragraph (h)(4) of this section for a 30-year contract.
Code of Federal Regulations
(6)
The borrower will receive 20 percent of the amount calculated in paragraph (h)(4) of this section for a 10-year contract.
Code of Federal Regulations
(i) Maximum debt reduction for a delinquent borrower.
The amount of debt reduction by a Conservation Contract is calculated as follows:
(1)
Divide the contract acres by the total acres that secure the borrower's FLP loans to determine the contract acres percentage.
Code of Federal Regulations
(2)
Multiply the borrower's total unpaid FLP loan balance (principal, interest, and recoverable costs already paid by the Agency) by the percentage calculated in paragraph (i)(1) of this section to determine the amount of FLP debt that is secured by the contract acreage.
Code of Federal Regulations
(3)
Multiply the market value of the total acres, less contributory value of any structural improvements, that secure the borrower's FLP loans by the percent calculated in paragraph (i)(1) of this section to determine the current value of the acres in the contract.
Code of Federal Regulations
(4)
Subtract the market value of the contract acres calculated in paragraph (i)(3) of this section from the FLP debt secured by the contract acres as calculated in paragraph (i)(2) of this section.
Code of Federal Regulations
(5)
Select the greater of the amounts calculated in either paragraphs (i)(3) and (i)(4) of this section.
(6)
The lesser of the amounts calculated in paragraphs (i)(2) and (i)(5) of this section will be the maximum amount of debt reduction for a 50-year contract term.
(7)
The borrower will receive 60 percent of the amount calculated in paragraph (i)(6) of this section for a 30-year contract term.
Code of Federal Regulations
(8)
The borrower will receive 20 percent of the amount calculated in paragraph (i)(6) of this section for a 10-year contract term.
Code of Federal Regulations
(j) Conservation Contract Agreement.
The borrower must sign the Conservation Contract Agreement establishing the contract's terms and conditions.
(k) Transferring title to land under Conservation Contract.
If the borrower or any subsequent landowner transfers title to the property, the Conservation Contract will remain in effect for the duration of the contract term.
(l) Borrower appeals of technical decisions.
Borrower appeals of the Natural Resources Conservation Service's (NRCS) technical decisions made in connection with a Conservation Contract, will be handled in accordance with applicable NRCS regulations. Other aspects of the denial of a conservation contract may be appealed in accordance with 7 CFR parts 11 and 780.