[Federal Register Volume 60, Number 20 (Tuesday, January 31, 1995)]
[Notices]
[Pages 5895-5896]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2356]
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Notices
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains documents other than rules
or proposed rules that are applicable to the public. Notices of hearings
and investigations, committee meetings, agency decisions and rulings,
delegations of authority, filing of petitions and applications and agency
statements of organization and functions are examples of documents
appearing in this section.
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Federal Register / Vol. 60, No. 20 / Tuesday, January 31, 1995 /
Notices
[[Page 5895]]
DEPARTMENT OF AGRICULTURE
Office of the Secretary
Stewardship Incentive Program; Determination of Primary Purpose
of Program Payments for Consideration as Excludable from Income Under
Section 126 of the Internal Revenue Code
AGENCY: Office of the Secretary, USDA.
ACTION: Notice of determination.
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SUMMARY: The Secretary of Agriculture has determined that certain
Federal cost-share payments made to individuals under the Stewardship
Incentive Program (SIP) are made primarily for the purpose of
conserving soil and water resources, protecting or restoring the
environment, improving forests, and providing a habitat for wildlife.
This determination is made in accordance with Section 126(b) of the
Internal Revenue Code and permits recipients of these cost-share
payments to exclude them from gross income for Federal income tax
purposes to the extent allowed by the Internal Revenue Service.
FOR FURTHER INFORMATION CONTACT: Director, Cooperative Forestry Staff,
Forest Service, USDA, P.O. Box 96090, Washington, D.C. 20090-6090,
(202) 205-1389.
SUPPLEMENTARY INFORMATION: Section 126 of the Internal Revenue Code of
1954, as amended by the Revenue Act of 1978 and the Technical
Corrections Act of 1979, 26 U.S.C. 126, provides that certain cost-
sharing payments made to persons under certain small watershed programs
administered by the Secretary of Agriculture which are determined by
the Secretary of the Treasury or his delegate to be substantially
similar to the type of programs described in Section 126(a) (1) through
(8) may be excluded from the recipients's gross income for Federal
income tax purposes if certain determinations are made. One such
determination if a determination by the Secretary of Agriculture that
payments are made ``primarily for the purpose of conserving soil and
water resources, protecting or restoring the environment, improving
forests, or providing a habitat for wildlife.'' To make a ``primary
purpose'' determination, the Secretary evaluates a cost-share
conservation program based on criteria set forth at 7 CFR Part 14.
Following a determination by the Secretary of Agriculture, the
Secretary of the Treasury must then determine that payments made under
these conservation programs do not substantially increase the annual
income derived from the property benefited by the payments.
The Stewardship Incentive Program is a cost-sharing conservation
program administered by the Department of Agriculture under the
authority of Title XII of the Food, Agriculture, Conservation and Trade
Act of 1990, Pub. L. No. 101-624, 104 Stat. 3359, 3521 (codified at 16
U.S.C. 2103b). The Commissioner of the Internal Revenue Service issued
Revenue Ruling 94-27 on April 11, 1994, which sets forth his
determination that the Stewardship Incentive Program is substantially
similar to the type of program described in Section 126(a)(1) through
(8), so that Section 126 improvements made in connection with small
watershed and under the Stewardship Incentive Program are within the
scope of Section 126(a)(9).
The Stewardship Incentive Program provides cost-share assistance to
private nonindustrial landowners to implement approved forestry
practices on their forest land. The conservation objectives of the
program are referred to specifically in House Conference Report No.
101-916 which provides the practices must include (1) management of
forests for conservation purposes; (2) substainable timber production;
(3) protection and management of wetlands; (4) management of native
vegetation; (5) agroforestry; (6) forest management for energy
conservation purposes; (7) management for fish and wildlife; (8)
management for recreation; and (9) other activities approved by the
Secretary.
This program is administered by the Forest Service, Department of
Agriculture, through state forestry agencies nationwide. Each state
forester, in consultation with the State Forest Stewardship Committee,
determines cost-share levels, practice priorities, and minimum acreage
requirements. The Consolidation Farm Service Agency, Department of
Agriculture, provides administrative assistance by accepting
applications and arranging for disbursement of payments. Technical
responsibilities for SIP practices may be assigned to other agencies
and resource professionals through memoranda for understanding and
cooperative agreements. The program regulations are set forth at 36 CFR
part 230, State and Private Forestry Assistance; Stewardship Incentive
Program, Interim Rule.
The overall goal of the Stewardship Incentive Program is to enhance
forest management on private lands through a long term commitment to
stewardship. Under this program, eligible landowners may receive up to
75 percent cost-sharing to install approved practices to: establish and
manage forests for conservation and timber production; protect forested
wetlands and riparian areas; improve water quality and soil
productivity; enhance fish and wildlife habitat; and establish
windbreaks. The cost-share payments may not exceed $10,000 per owner
per fiscal year. Eligible landowners must agree to follow a Forest
Stewardship Management Plan developed by a professional resource
manager in accordance with the landowner's goals. Landowners are
required to maintain and protect SIP funded practices for a minimum of
10 years.
Program objectives are achieved through the development and
implementation of a forest stewardship management plan approved by a
professional resource manager for an eligible landowner. To obtain
approval, the plan must include forest management practices that ensure
both forest productivity and environmental protection of the lands to
be treated under the management plan. Program objectives are further
achieved through the installation of approved multi-resource management
activities aimed at enhancing management of nonindustrial private
forest lands for economic, environmental and social benefits.
Having carefully examined the authorizing legislation, regulations,
and operating procedures for the Stewardship Incentive Program using
[[Page 5896]] the criteria set forth at 7 CFR part 14, the Secretary of
Agriculture has concluded that the cost-share payments for implementing
approved practices under this program are made to eligible persons
primarily for the purposes of conserving soil and water resources,
protecting or restoring the environment, improving forests, and
providing a habitat for wildlife.
Determination
As required by section 126(b) of the Internal Revenue Code, the
authorizing legislation, regulations, and operating procedures
regarding the Stewardship Incentive Program have been examined in
accordance with the criteria set out at 7 CFR part 14. Based on this
examination, I hereby determine that those cost-share payments made for
planning and installing approved practices under this program are
primarily for the purpose of conserving soil and water resources,
protecting or restoring the environment, improving forests, and
providing a habitat for wildlife. Subject to further determination by
the Secretary of the Treasury, that payments made under these
conservation programs do not substantially increase the annual income
derived from the property benefited by these payments, this
determination permits payment recipients to exclude from gross income,
for Federal income tax purposes, all or part of the cost-share payments
made under said program to the extent allowed by the Internal Revenue
Service.
Dated: January 24, 1995.
Richard Rominger,
Acting Secretary of Agriculture.
[FR Doc. 95-2356 Filed 1-30-95; 8:45 am]
BILLING CODE 3410-11-M
