2022-24937. Determination of the Primary Purpose of the New York Suffolk County Septic Improvement Program (SIP)

AGENCY:

Natural Resources Conservation Service, USDA.

ACTION:

Notice.

SUMMARY:

USDA is providing public notice that the Secretary of Agriculture has determined that cost share payments made by the New York Suffolk County SIP are primarily for the purpose of conserving soil and water resources or protecting and restoring the environment. The Natural Resources Conservation Service (NRCS) was assigned technical and administrative responsibility for reviewing the New York Suffolk County SIP and for making appropriate recommendations for the Secretary's determination of primary purpose. The Secretary's determination permits recipients of cost share payments to exclude such payments from gross income to the extent allowed by the Internal Revenue Service.

FOR FURTHER INFORMATION CONTACT:

Ronnie Maurer; telephone [phone]; or email: [e-mail]. Persons with disabilities who require alternative means for communication should contact the USDA Target Center at [phone] (voice and text telephone (TTY)) or dial 711 for Telecommunications Relay Service (both voice and text telephone users can initiate this call from any telephone).

SUPPLEMENTARY INFORMATION:

Background

Under Section 126(a)(8) of the Internal Revenue Code of 1954, as amended (26 U.S.C. 126) gross income does not include the “excludable portion” of payments received under any program of a State, or a political subdivision of a State, under which payments are made to individuals primarily for the purpose of protecting or restoring the environment. In general, a cost share payment for selected conservation practices is exempt from Federal taxation if it meets three tests:

(1) It was for a capital expense;

(2) It does not substantially increase the operator's annual income from the property for which it is made; and

(3) The Secretary of Agriculture certified that the payment was made primarily for conserving soil and water resources, protecting, or restoring the environment, improving forests, or providing habitat for wildlife.

The Secretary of Agriculture evaluates a conservation program on the basis of criteria specified in 7 CFR part 14 and makes a “primary purpose” determination for the payments made under the conservation program. The objective of the determination made under part 14 is to provide maximum conservation, environmental, forestry improvement, and wildlife benefits to the general public from the operation of applicable programs. Final determinations are made on the basis of program, category of practices, or individual practices.

NRCS was assigned technical and administrative responsibility for reviewing the New York Suffolk County SIP and for making appropriate recommendations for the Secretary's determination of primary purpose.

Following a primary purpose determination by the Secretary of Agriculture, the Secretary of the Treasury determines if the payments made under the conservation program substantially increases the annual income derived from the property benefited by the payments.

Environmental Review

From this Federal action, approving tax deferral will not result in impacts to the environment, therefore, no further National Environmental Policy Act (NEPA) documentation will be prepared.

Determination

As provided for by Section 126 of the Internal Revenue Code, the Secretary examined the authorizing legislation, regulations, and operating procedures regarding the New York Suffolk County SIP. In accordance with the criteria specified in 7 CFR part 14, the Secretary has determined the primary purpose of cost share payments made under the New York Suffolk County SIP is conserving soil and water resources or protecting and restoring the environment.

A current residential property owner residing in any area of Suffolk County may apply for a SIP grant to design, purchase, or install an Innovative and Alternative Onsite Wastewater Treatment System (I/A OWTS). The I/A OWTS must be approved for use by the Suffolk County Department of Health. All residential property owners are eligible because nitrogen loading does not affect just the property on which it occurs, but instead affects the entire regional area. However, since there are properties in areas that are even more susceptible to damage, the Suffolk County Commissioner of Health Services may authorize preferential review of an application for a grant if the grant application is for a residence in an area specified by Health Services as environmentally sensitive.

Rules were developed that allow for a priority order on the issuance of grants, based on the environmental sensitivity of the area (for example, groundwater travel time to surface water in the home's geographic area). Suffolk County executes a grant contract with the property owner, which is recorded, but Suffolk County directly pays the designer, installer, or manufacturer of the I/A OWTS from a list established by the County. The amount of the grant award is based on actual eligible costs, up to $20,000, with the property owner incurring any additional expenses for the design, purchase, and installation costs over the grant amount.

A “Record of Decision” for the New York Suffolk County SIP to provide grants to homeowners to design, purchase, or install an I/A OWTS has been prepared and is available upon request from the Acting Director, Financial Assistance Programs Division, NRCS, 1400 Independence Avenue SW, Room 4529 South Building, Washington, DC 20250.

The Secretary's determination is in accordance with section 126 of the Internal Revenue Code, and permits recipients of cost share payments to exclude those payments from gross income to the extent allowed by the Internal Revenue Service.

USDA Non-Discrimination Policy

In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family or parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.

Persons with disabilities who require alternative means of communication for program information (for example, braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Agency or USDA TARGET Center at [phone] (voice and text telephone (TTY) or dial 711 for Telecommunications Relay Service (both voice and text telephone users can initiate this call from any telephone). Additionally, program information may be made available in languages other than English.

To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at https://www.usda.gov/​oascr/​how-to-file-a-program-discrimination-complaint and at any USDA office or write a letter addressed to USDA and provide in the letter all the information requested in the form. To request a copy of the complaint form, call [phone]. Submit your completed form or letter to USDA by mail to: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 20250-9410 or email: [e-mail].

USDA is an equal opportunity provider, employer, and lender.

Terry Cosby,

Chief, Natural Resources Conservation Service.