To reserve a small percentage of the amounts made available to the Secretary of Agriculture for the farmland protection program to fund challenge grants to encourage the purchase of conservation easements and other interests in land to be held by a State agency, county, or other eligible entity, and for other purposes.

To reserve a small percentage of the amounts made available to the Secretary of Agriculture for the farmland protection program to fund challenge grants to encourage the purchase of conservation easements and other interests in land to be held by a State agency, county, or other eligible entity, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Farmland Protection Program Challenge Grant Act of 2003'.

SEC. 2. ADDITIONAL TITLE-HOLDING OPTION UNDER FARMLAND PROTECTION PROGRAM.

Section 1238I of the Farm Security Act of 1985 (16 U.S.C. 3838i) is amended by adding at the end the following new subsection:

`(d) OPTION FOR TITLE TO BE HELD BY ELIGIBLE ENTITY-

`(1) RESERVATION OF FUNDS; PURPOSE- Of the funds made available under section 1241(a)(4) for fiscal year 2003 and thereafter to carry out this section, the Secretary shall use not less than 15 percent to make grants to support cooperative efforts by an eligible State agency, a county, and one or more other eligible entities to purchase conservation easements and other interests in eligible land under subsection (a), the title to which will be held by an eligible entity rather than the United States.

`(2) COST SHARING- Notwithstanding subsection (c)(1), the share of the cost of purchasing a conservation easement or other interest in eligible land borne by the United States under this subsection shall not exceed 25 percent. The State agency involved in the purchase shall contribute 25 percent of the purchase price, the county involved in the purchase shall contribute 25 percent of the purchase price, and the other eligible entities involved in the purchase shall contribute 25 percent of the purchase price.

`(3) PROHIBITION ON USE OF GRANT FUNDS- Federal funds made available under this subsection may not be used by grant recipients for administrative purposes.'.