S01 - ATTACHMENT ONE - SOW.pdf

SCOPE OF WORK FOR

TITLE EVIDENCE, UPDATE AND CLOSING SERVICES

FOR THE NATURAL RESOURCES CONSERVATION SERVICE’S

ACQUISITION OF CONSERVATION EASEMENTS

IN THE STATE OF TEXAS

I. OBJECTIVE

The objective is to obtain services in the State of Texas (TX) for a title search (preliminary evidence of title) , USA Policy of Title Insurance on Form T-11, USA Policy Endorsement Form T-12, Title Update and Closing services for acquisitions of conservation easements on behalf of the United States of America, acting by and through the Natural Resources Conservation Service (NRCS), United States Department of Agriculture, pursuant various authorities.

II. BACKGROUND

The Agriculture Conservation Easement Program (ACEP) is a voluntary program to restore, protect and enhance wetlands, protect the agriculture use and future viability of farmland and protect grazing uses and related conservation values of grasslands. Depending on the program, the NRCS is authorized to acquire easements (program easements) from willing landowners (seller/grantor) to achieve such statutory purposes. The NRCS is the lead agency within the United States Department of Agriculture charged with administering these programs.

III. DESCRIPTION OF AGREEMENT (STATEMENT OF WORK)

A. SCOPE

The Contractor shall furnish all reasonable and necessary services, including title searches, title evidence (on the Form T11 USA Policy of Title Insurance) and closing services, in connection with the acquisition of a program easement (and access easement if necessary) by the United States of America in the State of TX.

The contractor must coordinate, facilitate, and perform the following services:

1. Provide sufficient evidence of title for NRCS to make a preliminary land eligibility determination. This can be in the form of a Commitment for Title Insurance (T-7) or other methods approved by NRCS. This will include copies of all instruments shown as title exceptions and other instruments that created rights, interests or encumbrances based on a preliminary legal description and an estimated easement purchase price.

2. Provide a policy of title insurance Form T-11: United States Policy, including copies of all instruments shown as title exceptions and other instruments that created rights, interests, or encumbrances, for the easement boundary and ingress-egress legal descriptions.

3. Work with NRCS and the landowners to clear exceptions on title to the property.

4. Hold funds in escrow, provide closing protection coverage, and provide payment to proper recipient, comply with Internal Revenue Service (IRS) requirements and prepare the IRS tax reporting Form 1099.

5. Obtain signatures on warranty easement deeds provided by NRCS and other documents as required by NRCS.

6. Obtain signatures on subordination agreements and limited lien waivers, affidavits, and any other necessary documents as required by NRCS.

7. Provide notary public services for all documents to be signed.

8. Record documents in the local land records office (e.g., the applicable county clerk’s office).

9. After closing, provide the Endorsement USA T-12.

10. Provide other services, as necessary, to finalize the easement acquisition transaction.

The contractor will provide the above-listed items to the designated NRCS contact identified on this statement of work.

B. STANDARDS

1. The acquisition of the program easement and any access easement is governed by the following requirements:

a) Department of Justice Title Standards 2001 (“Standards”);

b) Department of Justice Regulations Concerning Approval of Title, as amended

(“Regulations);

c) Department of Justice’s Procedural Guide for the Acquisition of Real Property by

Governmental Agencies; and

d) Applicable NRCS regulations and policies governing the applicable NRCS program under which the program easement is being acquired.

2. All services provided by the Contractor under this Scope will be in compliance with the forgoing requirements and with the requirements of TX law and the rules and regulations governing the title insurance industry in TX.

3. Contractor will perform the same services which are customarily provided in a commercial transaction in TX including obtaining and recording deeds and any necessary curative documents to assure title to the program easement (and any access easement) is vested in the United States of America. Those services will include providing title evidence as specified in this Scope, obtaining signatures and acknowledgments on documents, recording documents, disbursing funds and protecting funds prior to disbursement.

4. The title to the program easement and any access easement which are to be acquired must be insurable by the title insurance company and acceptable to the NRCS and the Office of the General Counsel (OGC). All title exceptions appearing on the title insurance policy must be acceptable to and approved by NRCS and OGC.

5. A boundary survey will be provided to the contractor. An updated Title commitment will be performed before closing services can happen.

6. The closing services will be performed in State of TX and may be performed in the county in which the program easement is located. The Contractor, the landowner and the NRCS will mutually agree to a time and location for the closing.

7. The contractor must obtain a valid Dun and Bradstreet Data Universal Numbering System (DUNS, https://fedgov.dnb.com/webform) number and must maintain active registration in System for Award Management (www.SAM.gov) for the duration of any contracts to provide services to the NRCS.

8. The contractor must provide evidence of liability insurance coverage or indemnification in an amount equal to the amount of Federal funds for each easement satisfactory to NRCS, acting on behalf of the Commodity Credit Corporation, providing for reimbursement to NRCS for any loss of Federal funds caused by errors, omissions, fraud, dishonesty, negligence, or failure by the attorneys, agents, or closing agent employees to comply with NRCS’s written closing instructions. The TDI Form T-51: Purchase/Seller Insured Closing Service Letter (06/10/2018) is satisfactory to meet this condition of responsibility.

9. For each closing transaction, the contractor will execute the USDA NRCS Closing Agent Requirements for Easement Programs.

10. The contractor must establish an escrow account in an FDIC-insured account at a financial institution for the payment of the acquisition cost for the easement and associated costs for the closing and include the escrow account information in their System for Award Management (SAM) registration.

C. DESCRIPTION OF SERVICES TO BE PROVIDED

1. Task 1 – Preliminary Title Search/Commitment/Evidence of Title Within 22 business days of the order, the contractor shall provide the NRCS a title search that documents all owners of record, outstanding mortgages, liens, judgments, pending suits, outstanding tax claims, easements or rights of ways of any type, whether oil, gas, and mineral interests have been severed, and any other exceptions that may affect or cloud the title of the easement to be purchased. This assurance of title may be provided by a Commitment for Title https://fedgov.dnb.com/webform http://www.sam.gov/

Insurance Form T-7 or other forms approved by NRCS. Contractor will provide copies of all instruments creating title exceptions and those that created rights, interests or encumbrances on the proposed easement property. The name of the insured will be the “United States of America” for an amount estimated by NRCS. The Commitment will be allowed to expire 90 days after the issue date according to state law.

The NRCS will provide the following for the contractor to complete this task:

a) Vesting deed/ownership records provided by the potential seller (landowner).

b) Preliminary legal description of the proposed easement area with a map. This will include estimated acres in the easement area as well as the parent tract. NRCS understands that without a legal survey, the title company may include exceptions not clearly defined to the proposed easement area.

c) Insured value based on an estimated easement purchase price.

2. Task 2 – Update Title Search and Issuance of Policy

a) The contractor must issue a Policy of Title Insurance to cover both the easement area and access easement to and from the easement area based on a recent survey provided by NRCS. The Form T-11, Policy of Title Insurance (USA) shall be used. The name of the insured on the policy shall read: United States of America.

The policy will reflect the status and ownership of title as it exists prior to closing. A title search will be performed for a sufficient period of time for the title insurance company to insure the title without objectionable exceptions. The title search will document all owners of record, outstanding mortgages, liens, judgments, pending suits, outstanding tax claims, easements or rights of ways of any type, whether oil, gas, and mineral interests have been severed, and any other exceptions that may affect or cloud the title of the easement to be purchased.

Upon completion of the title search and the issuance of the Form T-11, the contractor shall prepare and forward the following documents to the NRCS contact

1. The original Policy of Title Insurance (USA) on Form T-11

2. Legible copies of all recorded documents described on Schedule B as title exceptions or encumbrances.

3. Other documentation as may be required.

Upon receipt of the T-11 and copies of recorded exceptions, NRCS will forward the documents and other related documentation to the USDA Office of the General Counsel (OGC) regional attorney for a Preliminary Title Opinion (PTO).

If any outstanding issues remain, NRCS will work with OGC to determine which exceptions are acceptable and which exceptions must be cured. The title policy (T-11) must not contain an exception related to the terms and conditions of the Warranty Easement Deed to be recorded at closing. However, if such exception is required by the title company, the proposed language for such exception must be approved prior to closing by OGC.

Submit the above documents to NRCS and the Contracting Officer (CO) not later than 60 calendar days after receipt of the request for closing services.

3. Task 3 – Closing Services

a) Approval to Close – Upon receipt of the required documents, the NRCS will obtain from its Office of General Counsel (“OGC”) a Preliminary Title Opinion (“PTO”) and Closing Instructions. The Closing Instructions will prescribe the requirements for the closing including identifying which title exceptions are acceptable and which exceptions must be cured. The Closing Instructions will make other requirements to be satisfied prior to or at closing. The Closing Instructions, Warranty Easement Deed and other documents required by the OGC will be transmitted to the contractor by the NRCS.

Notification of NRCS of the Closing - When the contractor is ready to close the transaction the contractor will notify the NRCS and will provide a copy of the proposed HUD-1 Settlement Statement (or equivalent) to NRCS. The contractor shall not close the transaction prior to receiving the Closing Instructions.

b) Processing of the Payment - After receipt and approval of the proposed HUD-1 Settlement Statement (or equivalent), after receipt of proof of any other pre-closing requirements, and after receipt of the contractor’s notification that the transaction is ready to close, the NRCS will process the easement payment. Pay requests are forwarded by NRCS to the contractor’s escrow account for disbursement at closing. NRCS will only provide the easement purchase funds at closing through an ACH transaction. All other costs are paid outside closing or “POC” following the issuance of the OGC Final Title Opinion.

c) Taxes for the Current Year of Closing – All taxes which are payable at closing must be fully paid and there may be no exception on the title insurance policy for these taxes or any lien for these taxes. Current year taxes must be paid or provision must be made for their payment. Taxes for the current year are liens on the property as of January 1st but are not payable until October 1st.

d) The contractor is required to close within 30 calendar days of receipt of the

Federal funds from the U.S Treasury by electronic funds transfer. The contractor will not close any transaction or record deeds or other instruments prior to receiving the NRCS closing instructions letter and OGC PTO requirements.

e) Submitting the Closing Documents – The following documents shall be returned to the NRCS within ten business days following closing:

1. The invoice covering the agreed upon closing cost.

2. The original Endorsement on Form T-12 with the “United States of America” named as the insured party in the full amount of the easement compensation amount identified on the Warranty Easement Deed as of the time and date of the recording of the Warranty Easement Deed. The Endorsement must be free and clear of any and all encumbrances to the title except those shown as acceptable in the NRCS closing instructions and insure the United States’ interest in the easement area and the right of ingress-egress thereto. The Endorsement should reflect the title to the estate or interest vested in The United States of America.

3. The original, recorded Warranty Easement Deed with all applicable exhibits.

4. A copy of the signed HUD-1 Settlement Statement (or equivalent)

5. The originals or Certified copies of all title clearance documents. For those documents which have been recorded, the copy must show the recordation date and recording information (such as volume and page number).

6. Any other documents required by the Closing Instructions.

f) Issuance of Final Title Opinion – Upon receipt of the final documents, NRCS will request a Final Title Opinion ("FTO") from the OGC. To issue a favorable FTO, the Contractor will be required to make any corrections to the Endorsement T-12 or other closing documents as instructed by the OGC.

4. General Closing Instructions:

Prior to closing the easement, the contractor must ensure that the following have occurred:

1. No new encumbrances have been recorded against the subject property since the date of the most recent title commitment/binder, no adverse change in title has occurred, and there are no intervening matters affecting title that might result in a new title exception to the policy. If any new encumbrances have been recorded against the subject property or other adverse changes in title have occurred since the date of the most recent title commitment/binder, notify the NRCS technical representative immediately and do not proceed until further instructions are received. The contractor may be required to provide a pro forma title policy or marked up title commitment, or an updated title commitment, to confirm all title requirements will be met at or prior to closing.

2. The contractor has received the electronic funds transfer of the easement payment in his or her escrow account.

3. The contractor is prepared to issue the policy of title insurance referred below.

4. All exceptions required to be removed, released, subordinated, waived, or otherwise handled as set forth in the NRCS closing instructions have been completed and the applicable clearance documents recorded, and all other requirements met. Proposed subordination agreements, satisfactions, releases, partial releases, and other title curative documents to be signed at closing will be provided to NRCS for review by the OGC for approval at least 3 business days prior to closing.

5. Review the Warranty Easement Deed according to the NRCS closing instructions and ensure the proper names and marital status are correct.

6. The contractor must provide a copy of the proposed HUD-1 settlement statement (or equivalent) to NRCS for review and approval as least 3 business days prior to closing.

The contractor must schedule the execution of the Warranty Easement Deed with the landowner at a mutually agreed upon location and time. The preferred location is the contractor’s office or a local NRCS service center; however, the deed execution may take place at any agreed-upon location. Mobile notary public services are acceptable. The contractor must obtain properly executed and acknowledged deed from the landowners conveying the conservation easement, including the associated ingress and egress easement to the easement area as instructed by the OGC. The contractor must ensure that the deed contains all required signatures, and that all signatures are in proper form and have been acknowledged, that the acknowledgement certificates are in proper form and have been completed correctly, and that the deed contains all the necessary exhibits.

The contractor must return the following package to the designated NRCS contact identified on the attachment to this statement of work within 5 business days of receipt of recorded documents from the local land records office:

1. Endorsement T-12

3. The original, recorded ACEP-WRE Warranty Easement Deed or a certified copy of the ACEP-WRE Warranty Easement Deed and a recording receipt

4. The original, recorded curative documents (if any), including subordination agreements or a certified copy of the same.

5. Original and one copy of executed settlement statements

6. Record of disbursement of funds to the landowner

7. Completed IRS Form 1099 issued to the landowners

8. Other documents required by the OGC Closing Instructions.

Upon receipt of the final documents, NRCS will request a final title opinion (FTO) from the OGC. If OGC identifies issues that were not resolved by the contractor in accordance with the NRCS closing instructions and OGC PTO requirements, NRCS will notify the contractor of required remedies. If necessary, corrections were originally identified in the NRCS closing agent requirements form or NRCS closing instructions, such corrections must be done at no additional cost to NRCS and returned to the NRCS technical representative within 14 days of notification of such issue.

IV. CONTRACTOR QUALIFICATIONS

Contractor must:

1. If an attorney, be licensed to practice law in the State of TX and be in good standing. If a title company, be qualified and authorized by law to furnish title evidence and title insurance policies in TX;

2. Be familiar with and experienced in closing real estate transactions, disbursing funds at closing, preparation of title evidence and issuing title insurance policies in TX.

Contractor must have current knowledge of the requirements of TX law (including title examination standards) concerning title searches, closing real estate transactions, title clearance and issuing title insurance policies;

3. Be experienced, financially responsible and reputable;

4. Must be authorized or licensed to conduct title insurance business in TX including closing real estate transactions, disbursing funds at closing, and issuing title insurance policies;

5. Must be able to issue or write a title insurance policy for the acquisition. The title insurance company issuing the title insurance policy must be authorized to conduct business in and to issue title insurance policies in TX.

6. Maintain a permanent office in TX.

7. Have no interest in the land to be acquired; and not be related to the sellers of the land.

VI. NON-REIMBURSEABLE AND REIMBURSABLE COSTS

This Scope of Work is based upon a flat fee for the services and reimbursement for actual necessary costs advanced by the Contractor. NRCS will reimburse the Contractor for actual costs incurred and advanced by the Contractor which are necessary to effect the services under the order. Invoices for reimbursable costs may be submitted with the invoice for the completed services.

1. Non-Reimbursable Items: Non-reimbursable items are to be included in the Contractor’s bid or basic fee and are those items which the Contractor would reasonably and ordinarily be expected to incur in the performance of the Services to be provided under this Part except for those items identified as Reimbursable Items. Non-reimbursable items include expenses and costs for: travel; telephone; copying or mailing; internet and emailing;

personnel, equipment and office space; certification of abstracts; preparation and providing commitment(s) for title insurance; providing copies of title exception documents; providing proposed curative title documents; accepting program funds by EFT; performing the “gap” title check prior to closing; providing a site for the closing;

closing the transaction and disbursing funds at closing; obtaining signatures on documents; providing copies of title curative documents and recorded title curative documents; acknowledging signatures on documents; preparing a HUD-1 settlement statement; preparing and filing the IRS 1099-S form; providing a closing protection letter or providing fidelity insurance coverage; and preparing the title insurance policy.

2. Reimbursable Items: Reimbursable items are costs and expenses for: premium for the title insurance policy; recording fees for recording the deed to the United States, _________ [costs which could vary based upon size of tract, number of tracts, sale price, etc.??]. No other items may be included under Reimbursable Items unless approved in advance by the Contracting Officer.

3. For any specific cost or expense exceeding $_______ or for cumulative costs or expenses exceeding $__________, the Contractor must obtain the prior written approval of the Contracting Officer before incurring the cost or expense. [DISCUSSION]

4. Curative Title Documents: The costs and expenses associated with the preparation and recording of curative title documents are the responsibility of the seller or grantor.

VII. ITEMS PROVIDED TO THE CONTRACTOR

Upon award, NRCS will provide the Contractor the following for purposes of evidence of title:

1. Legal description of the property to be acquired under the conservation easement

2. Legal description of access for ingress and egress to the property (if necessary)

3. One large copy of a 24 x 36 plat map (additional copies can be provided)

4. Copy of purchase agreement with any amendment that reflect the final purchase price and the amount of coverage.

5. Copy of the proposed conservation easement deed.

VIII. PAYMENT

Invoices for the agreed-upon price schedule will be submitted to the Invoice Processing Platform (IPP) at www.ipp.gov. The contractor will be paid a flat fee for services rendered, including all travel expenses, copy costs, telephone charges, and the like. The contractor must provide documentation for reimbursable expenses, such as recording costs.

Separate invoices will be submitted, and payments will be made for each Task.

1. Task 1 – Preliminary Title Search, Commitment and/or Evidence of Title

2. Task 2 – Update Title Search and Policy of Title Insurance T-11

3. Task 3 – Closing Services plus actual Recording Fees http://www.ipp.gov/

Upon receipt of an OGC FTO indicating that all NRCS closing instruction and OGC PTO requirements have been met, NRCS will process the contractor’s payment for title insurance and closing services (Tasks 2 and 3).

IV. LEGAL CONSULTATION

The USDA-NRCS Office shall be the contact for the Contractor for any legal consultation necessary in connection with the services to be provided under this BPA. The primary contact person is:

Darren Clark Natural Resource Specialist 101 South Main St.

Temple, TX 76501 254-742-9947 Darren.Clark@usda.gov

X. AUTHORITY

Only the NRCS Contracting Officer may authorize a modification to this contract. Any questions or requests may be directed to the Contracting Officers Representative (COR).

XI. CONFLICT OF INTEREST

The Contractor will not close on an easement purchase when: the Contractor is an individual and a spouse, children, partner(s), or business associate(s) has a financial interest in the real estate to be covered by the proposed easement; or when the Contractor is an entity, and any employee, officer or director, or a spouse, child, partner, or business associate of any employee, officer or director has a financial interest in the real estate to be covered by the proposed easement.

XII. AUTHORITY

Only the NRCS Contracting Officer(s) may place orders under this BPA. Any modifications or questions may be directed to the originating Contracting Officer.

XII. NON-DISCLOSURE

Work performance required by this Scope of Work will involve access to potentially sensitive information about governmental and landowner issues. All Contractor personnel must comply with the terms of AGAR 452.224-70, Confidentiality of Information, as well as provisions of the Privacy Act of 1974, 5 U. S. C. 552a. Additionally, the Contractor's employees shall comply with privacy of personal information relating to natural resources conservation programs in accordance with Section 1244 of Title II of the Farm Security and Rural Investment Act of 2002 (P.L. 107-171).

XIII. CIVIL RIGHTS AND PROGRAM DELIVERY

By signing this agreement the Contractor assures the Department of Agriculture that the program or activities provided for under this agreement will be conducted in compliance with all applicable Federal civil rights laws, rules, regulations, and policies.