This Agreement is entered into between the U.S. Department of Agriculture (USDA), Commodity Credit Corporation (CCC), and the State of North Carolina (North Carolina) to implement a Conservation Reserve Enhancement Program (CREP) for the enhancement of water quality by reduction of sediment and nutrients, and the enhancement of fisheries and wildlife habitats for State and federally listed threatened and endangered species, the Tar River spiny mussel and the dwarf wedge mussel. The CREP is part of the national Conservation Reserve Program (CRP), operated by USDA for CCC.

The purpose of this Agreement is to allow, where deemed desirable by USDA, CCC, and North Carolina, certain acreage in the targeted watersheds to be enrolled under the CREP.

The goals for this CREP are to significantly reduce the amount of nutrients entering estuaries from agricultural sources through a voluntary, incentive-based program; to assist North Carolina in achieving the nutrient reduction goals for agriculture in the area; to significantly reduce the amount of sediment entering water courses; to enhance habitat for a range of threatened and endangered species dependent on riparian areas; and to decrease excess pulses of freshwater in primary nursery areas. Pulses of fresh water that enter a salt water systems at rates greater than historical flow can alter certain temperature and salinity regimes that are critical to the development of juvenile fish species.

Of the seventeen river basins in North Carolina, three (Chowan, Neuse, Tar-Pamlico (basins)) have been classified as nutrient sensitive waters (NSW). The North Carolina Environmental Management Commission may classify any surface waters of the state NSW upon finding that such waters are experiencing or are subject to excessive growths of microscopic or macroscopic vegetation that may cause substantial water quality impairment and preclude the designated use of the waterway. These basins also lie within the Albemarle-Pamlico Estuarine System (APES) which is the second largest estuarine complex in the country. There are approximately 1,266 miles of streams which do not fully support their designated uses within the Chowan, Neuse, and Tar-Pamlico basins. Nutrients and sediment contributions entering the Chowan, Neuse, and Tar-Pamlico basins are causes of water quality concern. Within the Neuse and Tar-Pamlico basins, recent outbreaks of pfiesteria are being attributed to nutrient impacts to the basins. The Jordan Lake Watershed, located within the Cape Fear River basin, has also been classified as NSW, and has approximately 332 miles of streams that do not fully support their designated uses. Within each of these areas, the impact of agriculture, including cropping systems and livestock grazing along stream corridors, is one of the factors which can contribute to water quality degradation and habitat loss in North Carolina.

The primary objectives of this agreement are to achieve, to the extent practicable, the following:

1. Provide an opportunity for farmers in North Carolina to voluntarily establish riparian and wetland areas through financial and technical assistance.

2. Restore and enhance riparian habitat corridors next to streams, drainage ditches, estuaries, wetlands, and other water courses by enrolling up to 85,000 acres of riparian forested buffers and grass filter strips.

3. Restore up to 15,000 acres of non-riparian wetlands either associated with drainage ditches or adjacent to primary fishery nursery areas to address impacts associated with drainage.

4. Provide a mechanism to help farmers comply with the Neuse Nitrogen Reduction Rules and potential regulations or goals.

A. Federal

B.     State

USDA, CCC, and North Carolina agree that:

A. The CREP will consist of a continuous sign-up CRP component and a State of North Carolina State Incentive Program. The CREP will seek to enroll 100,000 acres in the CRP of environmentally sensitive acreage in areas where water quality may be adversely affected by agriculture throughout the range of water quality impacts. These enrollments are intended to be designed to provide habitat associated with bottomland and wetland hardwoods for fin and shellfish, migratory birds, mammals, and amphibians.

B. The CREP will target enrollment of 85,000 acres of riparian areas, and 15,000 acres of non-riparian wetlands within the Basins.

C. Land may, on a continuous basis, be enrolled in the program if it meets CRP cropping and land ownership requirements, land eligibility criteria, conservation practice criteria, and any other CREP or CRP criteria set forth in this Agreement or the CRP regulations and the CREP standard operating procedures manual. Eligible lands may be no wider than the width specified in paragraph E of this section. USDA and North Carolina may, if they agree jointly, provide further restrictions on enrollment eligibility in particular cases or in the CREP standard operating procedures without amendment of this Agreement, but any extension of eligibility criteria shall require amendment of the Agreement. Proposed non-riparian wetland enrollments may be targeted to specific resource needs to determine that they meet priorities of the program.

D. Conservation plans for the land enrolled in this program shall meet but may exceed the minimum criteria of the following CRP practices and of the applicable Natural Resources Conservation Service (NRCS) Field Office Technical Guide (FOTG). The eligibility criteria described in paragraph E of this section shall be used to determine which lands may be enrolled in this CREP, but the practice criteria specified in this section shall govern the conservation plans that must be developed on these lands and the plan must meet one of the following practice specifications:

1. For land to be enrolled for maintenance as a non-riparian wetland:

CRP Practice CP 23 (Wetland Restoration)

2. For land to be enrolled for maintenance as a riparian area:

CRP Practice 3A (Hardwood Tree Planting)

CRP Practice CP 21 (Filter Strip)

CRP Practice CP 22 (Riparian Buffer)

CRP Practice CP 23 (Wetland Restoration)

CRP Practice CP 25 (Rare and Declining Habitat)

Practices will be installed to meet the criteria of the applicable FOTG Practices may include structural measures as appropriate.

E. The following enrollment criteria, in addition to other applicable CRP criteria, shall apply:

1. Land to be enrolled as non-riparian wetlands may be enrolled on hydric soils if land eligibility criteria and program priorities are met. Enrollment of the lands should help address excess pulses of pollutants or freshwater into primary fish nursery area and/or the filtering of water associated with drainage ditches.

2. Land to be enrolled as riparian wetland may also be approved in accordance with the following criteria: (a) land is entirely hydric soils; or (b) land is predominantly hydric soils which lie within 750 feet from the top of the stream bank.

3. Lands to be enrolled for wetland restoration shall not be enrolled unless it can be restored to wetland status as defined by the NRCS FOTG and all enrollments will receive hydrologic restoration to the greatest extent practicable. The restoration will include, but is not limited to, the restricting of conveyances and drainage devices in order to allow hydrologic restoration to naturally occur.

4. For the riparian forested buffer practice (CP 22), the practice will be implemented according to NC Practice Standard 391 contained in the NRCS FOTG.

5. Land to be enrolled in grassed filter strips (CP 21) will be implemented according to NC Practice Standard 393 in the NRCS FOTG . In no case may a filter strip exceed 350 feet in width.

6. No enrollments shall be less than 0.1 acre per contract.

7. Enrollments, otherwise restricted by this agreement, may also be extended a modest additional width, as permitted by CCC, to include land that would become an unmanageable unit as a result of establishment of the enrollment.

F. The following special criteria shall apply to the North Carolina State Incentive Program and to the relationship between it and CRP:

1. Lands to be enrolled as riparian areas that have an average width greater than 100 feet and that total more than 10 acres per tract shall only be accepted under this CREP if the landowner also enters into an agreement under the State Incentive Program to extend the period of conservation by an additional fifteen years or permanently.

2. Enrollments of land using CP23 shall only be accepted under this CREP if the landowner also enters into a permanent conservation agreement with the state.

3. Extended conservation agreements with the State shall only be accepted if lands are hydrologically restored to the greatest extent practicable and if, where feasible, enrollments allow the use of trees as the natural cover. Such enrollments may, however, include an outer buffer layer of native grasses as specified in the practice criteria between cropped areas and the trees.

4. For land to be enrolled in forest cover in an extended conservation agreement with the State, the conservation plan may, as appropriate and as designated in the standard operating procedures for this CREP, provide for some natural regeneration.

G. Eligible producers will not be denied the opportunity to offer eligible acreage for enrollment during other CRP enrollment periods.

H. CRP contracts executed under this Agreement will be administered in accordance with the CRP regulations at 7 CFR part 1410, and the provisions of this Agreement and any conditions required by the State of North Carolina.

I. This Agreement may be terminated by either party at any time after written notice. Such termination will not alter existing contractual obligations under the NC CREP between participants, and North Carolina, or CCC.

USDA and CCC agree to:

A. Pay for 50 percent of the reimbursable costs of conservation practices not to exceed 50% of the land value for vegetative practices, and pay as additional rent a one-time incentive equal to 25% of the normal costs of hydrologic restoration as specified in CCC regulations.

B. Enroll lands that meet the eligibility criteria with the designated practice specifications on a continuous basis in accordance with the general purposes and terms of CRP as defined elsewhere in this agreement.

C. Make rental payments under the CRP contract at established CRP county average rental rates where the enrollment is for less than 10 acres, and at CRP county soil rental rates for enrollments in excess of 10 acres. Make special CREP incentive payments, as a percentage of the CRP maximum annual rental rate otherwise applicable to the land to be enrolled in the NC CREP, in amounts not to exceed the following percentages of such rate:

1. for dry land to be established as filter strips, 70 percent,

2. for dry land to be established as riparian forest areas, 100 percent,

3. for wetland restoration, 100 percent,

5. for dry land to be established as rare and declining habitat, 100 percent.

D. Pay additional rental incentives, if any, as would otherwise normally apply under CRP, including any incentives for obligations of maintenance consistent with the applicable CRP payment process used for general sign-ups; provided further, that the maximum annual payment for any enrollment shall not exceed $150 per acre.

E. Administer contracts for lands approved under the NC CREP.

F. Work cooperatively with North Carolina, as set forth in the Standard Operating Procedures, in the development or review of conservation plans for applicants offering to enroll eligible acreage in the NC CREP.

G. Conduct required status reviews to ensure compliance with the CRP contract.

H. Provide information to landowners concerning NC CREP and technical assistance for implementing the NC CREP in general.

I. Permit successors-in-interest to the NC CREP contracts in the same manner as allowed for other CRP contracts.

North Carolina agrees to:

A. Seek applicants willing to offer eligible and appropriate land for enrollment in the NC CREP.

B. Enroll CREP landowners who decide to participate in the State Incentive Program into an additional agreement, as referenced by the CREP standard operating procedures manual, which will supplement the federal CRP agreement and extend the benefits of CRP enrollments either an additional 15 years or permanently with North Carolina. The agreements shall be with the State of North Carolina or with an appropriate entity designated by the State of North Carolina.

C. Make payments to landowners participating in the State Incentive Program as follows:

1. Pay landowners who enroll solely in a 10 year CRP contract the following cost share payments: 25% of the approved costs of establishing trees and 25% of the approved costs of livestock exclusion and remote watering, and 25% of the costs of installing grassed filter strips. For lands planted in trees, North Carolina shall also make a $100 bonus payment per contract.

2. Pay landowners who enroll solely in a 15 year CRP contract the following cost share payments: 30% of the approved costs of establishing trees and 30% of the costs for other approved cost share practices (including site preparation, plantings and the costs of livestock exclusion and remote watering,). For CRP lands planted in trees, North Carolina shall also make a $100 bonus payment per contract.

3. Pay landowners who enroll in a permanent conservation agreement an upfront bonus payment equal to 25% of the aggregate CRP payments over fifteen years plus cost share payments according to the following schedule: for wetland enrollments, 50% of the costs of wetland plantings and 25% of the costs of hydrologic restoration; for non-wetland enrollments, 50% of the costs of approved cost share practices (including site preparation, plantings and the costs of livestock exclusion and remote watering). For lands enrolled in trees, North Carolina shall also make a $100 bonus payment per contract.

4. Pay landowners who enroll in a 30 year conservation agreement with the State, a bonus payment equal to 50% of the bonus that would otherwise apply for a permanent agreement and 40% of the costs of approved conservation practices (including site preparation, plantings, and the costs of livestock exclusion and remote watering). For lands enrolled in trees, North Carolina shall also make a $100 bonus payment per contract.

D. Pay all costs associated with North Carolina's annual environmental monitoring programs as described in its CREP proposal.

E. Engage in an outreach program at state expense as described in its CREP application.

F. Provide technical assistance through the local Soil and Water Conservation Districts and appropriate field staff from other North Carolina agencies.

G. Pay a total of 20% of the overall costs of implementing this program.

H. Ensure that the NC CREP is coordinated with other natural resource conservation programs at the State and Federal level.

I. During the period of a participant’s CRP contract, to temporarily release the participant from any easement restrictions on crop production if such release is deemed needed by the Secretary of Agriculture in order to address a national emergency.

J. Within 90 days of the end of each federal fiscal year, provide a report to USDA summarizing the status of enrollments under this Enhancement Program and progress in fulfilling the other commitments of this Enhancement Program. The annual report to USDA will include: level of program participation, the results of any environmental monitoring program, a summary of non-federal CREP program expenditures, and recommendations to improve the program.

A. Funding commitments by USDA and North Carolina are subject to the availability of funds. In the event either party is subject to funding limitation, that party will notify the other party expeditiously and appropriate modifications may be made to this Agreement.

B. All CRP contracts under this CREP shall be subject to the limitations set forth in the regulations at 7 CFR Part 1410 regarding such matters as economic use, transferability, violations, and contract modifications.

C. Neither North Carolina nor USDA shall assign or transfer any rights or obligations under this Agreement without the prior written approval of the other party.

D. Easements or contracts entered into under the NC CREP may not be assigned or transferred without approval of the landowners.

E. Any amendments to this Agreement shall be in writing and shall be executed by the same parties who executed the original Agreement, or their successors in office.

F. North Carolina and USDA agree that each party will be responsible for its own acts and or omissions and results thereof to the extent authorized by law and shall not be responsible for the acts or omissions of any others and the results thereof.

G. The books, records, documents, and accounting procedures and practices of the USDA and North Carolina relevant to this Agreement shall be subject to examination for audit by the appropriate Federal authority and/or State Authority except as otherwise provided in law.

/s/   3/1/1999 

Honorable Dan Glickman
Secretary
U.S. Department of Agriculture and
Chairman of the Board
Commodity Credit Corporation

/s/  3/1/1999