SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Farm and Ranch Land Protection 
Flexibility Act of 2006''.

SEC. 2. FARMLAND PROTECTION PROGRAM.

    (a) Definitions.--Section 1238H of the Food Security Act of 1985 
(16 U.S.C. 3838h) is amended--
            (1) in paragraph (1)(B)--
                    (A) in clause (iii), by striking ``or'';
                    (B) in clause (iv), by striking the period at the 
                end and inserting ``; or''; and
                    (C) by adding at the end the following:
                            ``(v) meets certification requirements 
                        described in paragraph (6)(B).'';
            (2) by striking paragraph (2) and inserting the following:
            ``(2) Eligible land.--The term `eligible land' means land 
        on a farm or ranch that is--
                    ``(A) cropland;
                    ``(B) rangeland;
                    ``(C) grassland;
                    ``(D) pasture land; or
                    ``(E) forest land that is an incidental part of an 
                agricultural operation, as determined by the Secretary, 
                including woodlots, wooded corners, and forested 
                riparian areas that may comprise up to 50 percent of 
                the offered acreage.'';
            (3) by redesignating paragraph (4) as paragraph (5);
            (4) by inserting after paragraph (3) the following:
            ``(4) Permanent conservation easement.--The term `permanent 
        conservation easement' means a conservation easement or other 
        interest in eligible land that--
                    ``(A) is for the primary purpose of protecting the 
                agricultural production capacity of the eligible land; 
                and
                    ``(B) is permanent or for the maximum duration 
                allowed under State law.''; and
            (5) by adding at the end the following:
            ``(6) Qualified state or local entity.--The term `qualified 
        State or local entity' means a public or private entity that--
                    ``(A) operates a farm and ranch land protection 
                program that--
                            ``(i) has for at least 3 calendar or fiscal 
                        years used or provided public or private funds 
                        to purchase permanent conservation easements on 
                        not less than 10 farms or ranches;
                            ``(ii) has the necessary authority under 
                        State law, as well as the technical and 
                        financial capacity--
                                    ``(I) to monitor and enforce the 
                                terms of the permanent conservation 
                                easements so that the purpose of the 
                                permanent conservation easements is 
                                carried out for the maximum allowable 
                                duration; or
                                    ``(II) in the case of a 
                                governmental entity, to require other 
                                public or private holders of the 
                                permanent conservation easements 
                                acquired with public funding to hold, 
                                monitor, and enforce the permanent 
                                conservation easements for the purpose 
                                described in subclause (I); and
                            ``(iii) has financial control policies to 
                        ensure that, on average, the purchase price of 
                        the permanent conservation easements does not 
                        exceed the appraised fair market value of the 
                        permanent conservation easements; and
                    ``(B) is certified by the Secretary in accordance 
                with a process under which the entity shall 
                demonstrate--
                            ``(i) strategic planning and articulated 
                        objectives;
                            ``(ii) long-term commitment and 
                        organizational viability;
                            ``(iii) a record of funds management and 
                        accountability; and
                            ``(iv) a history of successfully completing 
                        projects.''.
    (b) Farmland Protection.--Section 1238I of the Food Security Act of 
1985 (16 U.S.C. 3838i) is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (d) and (e), respectively;
            (2) by striking subsection (a) and inserting the following:
    ``(a) Program.--
            ``(1) In general.--The Secretary, acting through the 
        Natural Resources Conservation Service, shall carry out a farm 
        and ranch land protection program under which the Secretary 
        shall facilitate the purchase of conservation easements or 
        other interests in eligible land for the purpose of protecting 
        the agricultural production capacity of the land by limiting 
        incompatible nonagricultural uses of the land.
            ``(2) Priority.--In carrying out the program, the Secretary 
        shall give priority to protecting farm and ranch land--
                    ``(A) with prime, unique, or other productive soils 
                that are at risk of non-agricultural development;
                    ``(B) that shall stay in production agriculture;
                    ``(C) in rural communities that face intense 
                conversion pressure, as defined by the Secretary;
                    ``(D) in areas that have locally-led land-use 
                planning and zoning strategies; and
                    ``(E) in watersheds that would benefit most from 
                the protection of farm and ranch resources, as 
                determined by the Secretary.
    ``(b) Grants.--
            ``(1) In general.--The Secretary shall use not less than 75 
        percent of the funds made available to carry out this 
        subchapter for each fiscal year to award grants, administered 
        by the Natural Resources Conservation Service State 
        Conservationists in consultation with the appropriate State 
        technical committees established under section 1261, to 
        qualified State or local entities for the purchase of permanent 
        conservation easements.
            ``(2) Distribution.--The Secretary shall distribute grants 
        described in paragraph (1) among States based on--
                    ``(A) the demonstrated need for farm and ranch land 
                protection; and
                    ``(B) the relative contribution of funds provided 
                by State or local entities for the protection of farm 
                and ranch land.
            ``(3) Use of grants.--A qualified State or local entity 
        that receives a grant under this subsection--
                    ``(A) may use the grant funds to purchase 1 or more 
                permanent conservation easements, regardless of whether 
                the qualified State or local entity has a pending 
                purchase offer for any of the permanent conversation 
                easements at the time of receiving the grant; and
                    ``(B) shall use the grant funds only for the 
                purchase of permanent conservation easements.
    ``(c) Grant Agreements.--
            ``(1) In general.--The Secretary, acting through the 
        Natural Resources Conservation Service, may enter into 
        agreements with qualified State or local entities, under which 
        a State or local entity may purchase permanent conservation 
        easements using a combination of the funds of the entity and 
        grant funds made available by the Secretary under subsection 
        (b).
            ``(2) Terms and conditions.--
                    ``(A) In general.--Subject to subparagraph (B), an 
                agreement described in paragraph (1) shall stipulate 
                the terms and conditions under which qualified State or 
                local entities shall use grant funds distributed by the 
                Secretary under subsection (b).
                    ``(B) Requirements.--Each agreement shall--
                            ``(i) authorize the State or local entity 
                        to determine the criteria and priorities of the 
                        entity for purchasing permanent conservation 
                        easements;
                            ``(ii) authorize the State or local entity 
                        to establish terms and conditions for permanent 
                        conservation easements, if the attorney general 
                        of the State in which the farm or ranch is 
                        located certifies to the Secretary that State 
                        law permits the State or local entity to 
                        achieve and permit effective enforcement of the 
                        conservation purposes of the permanent 
                        conservation easements; and
                            ``(iii) not require a Federal contingent 
                        right of enforcement or reversionary interest 
                        in the permanent conservation easement, if the 
                        attorney general of the State in which the farm 
                        or ranch is located certifies to the Secretary 
                        that the State has a direct or contingent right 
                        of enforcement or reversionary interest in the 
                        permanent conservation easement.
                    ``(C) Amount of matching funds.--
                            ``(i) In general.--The Secretary shall 
                        determine the percentage of matching funds (up 
                        to 100 percent) that each qualified State or 
                        local entity is required to provide as a 
                        condition of receiving a grant under subsection 
                        (b) based on the proposal submitted by the 
                        qualified State or local entity.
                            ``(ii) Requirements.--A proposal described 
                        in clause (i) shall include a description of--
                                    ``(I) the amount of matching funds 
                                of the qualified State or local entity 
                                available for the purchase of permanent 
                                conservation easements; and
                                    ``(II) the commitment of the 
                                qualified State or local entity to 
                                achieve the priorities of the 
                                program.'';
            (3) in subsection (d) (as redesignated by paragraph (1)) by 
        striking ``Any'' and inserting ``Notwithstanding subsection 
        (c)(2)(B)(ii), any'';
            (4) in paragraph (1) of subsection (e) (as redesignated by 
        paragraph (1))--
                    (A) in subparagraph (A), by striking ``exceed'' and 
                all that follows through ``land.'' and inserting the 
                following: ``exceed the higher of--
                            ``(i) 50 percent of the appraised fair 
                        market value of the conservation easement or 
                        other interest in eligible land; or
                            ``(ii) if a qualified conservation 
                        contribution (as defined by section 170(h) of 
                        the Internal Revenue Code of 1986) of at least 
                        25 percent of the market value is made by the 
                        landowner in connection with the purchase of a 
                        conservation easement or other interest in 
                        land, two-thirds of the actual cost of 
                        purchasing the conservation easement or other 
                        interest in land.''; and
                    (B) in subparagraph (B)--
                            (i) by striking ``an eligible'' and 
                        inserting ``a qualified State or local agency 
                        or other eligible'';
                            (ii) by striking ``charitable donation'' 
                        and inserting ``qualified conservation 
                        contribution''; and
                            (iii) by striking ``25'' and inserting 
                        ``50''; and
            (5) by adding at the end the following:
    ``(f) Performance Measures.--The Secretary shall establish 
performance measures for farm and ranch land protection, including 
performance measurements for qualified State and local entities that 
receive funding under this section.
    ``(g) Program Coordination.--The Secretary shall carry out the 
program under this section and the grassland reserve program under 
subchapter C with a minimum amount of program redundancy, considering 
the unique role of each program.
    ``(h) Availability of Funds.--Grant funds and technical assistance 
made available to a qualified State or local entity under this section 
shall remain available for a period of time that the Secretary 
considers to be reasonable (but not less than 18 months) to allow the 
qualified State or local entity to finalize the purchase of permanent 
conservation easements in accordance with the grant agreement.''.
Farm and Ranch Land Protection Flexibility Act of 2006 - Amends the Food Security Act of 1985 to revise the farmland protection program.

Includes as eligible program land woodlots, wooded corners, and forested riparian areas that comprise up to 50% of the offered acreage.

Defines: (1) "permanent conservation easement"; and (2) "qualified state or local entity."

 Gives priority to farm and ranchland: (1) with prime, unique, or other productive soils at risk of nonagricultural development; (2) that will stay in production agriculture; (3) in rural communities that face intense conversion pressure; (4) in areas that have locally-led land-use planning and zoning strategies; and (5) in watersheds that would benefit most from the protection of farm and ranch resources.

Provides for: (1) grants to eligible state or local entities to purchase permanent conservation easements; and (2) grant agreements with eligible state or local entities to purchase conservation easements using a combination of their own funds and grant funds.

Sets forth matching grant and performance standard provisions.
A bill to amend the Food Security Act of 1985 to improve the protection of farm and ranch land.