[Federal Register Volume 63, Number 63 (Thursday, April 2, 1998)]
[Proposed Rules]
[Pages 16142-16148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8505]
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1468
RIN 0578-AA20
Conservation Farm Option
AGENCY: Commodity Credit Corporation, Department of Agriculture.
ACTION: Proposed Rule.
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SUMMARY: Section 335 of the Federal Agriculture Improvement and Reform
Act of 1996 (the 1996 Act) amended the Food Security Act of 1985 (the
1985 Act) to establish the Conservation Farm Option (CFO) Program. The
Commodity Credit Corporation (CCC) administers the CFO under the
supervision of the Vice President of the CCC who is the Chief of the
Natural Resources Conservation Service (NRCS), with concurrence
throughout the process by a Executive Vice President of the CCC who is
the Administrator of the Farm Service Agency (FSA). The CCC is issuing
a proposed rule for the CFO. This proposed rule describes how CCC will
implement CFO as authorized by the 1985 Act. The CCC seeks comments
from the public which will be used to make revisions, if necessary,
that will be issued in a final rule.
DATES: Comments must be received by June 1, 1998.
ADDRESSES: All comments concerning this proposed rule should be
addressed to Gary R. Nordstrom, Director, Conservation Operations
Division, Natural Resources Conservation Service, PO Box 2890,
Washington, DC 20013-2890. Attention: CFO. FAX: 202-720-1838. This rule
may also be accessed,
[[Page 16143]]
and comments submitted, via Internet. Users can access the Natural
Resources Conservation Service (NRCS) homepage at http://
www.ftw.nrcs.usda.gov; select the 1996 Farm Bill Conservation Programs
from the menu.
FOR FURTHER INFORMATION CONTACT: Daniel Smith, Water Issues Team
Leader, Conservation Operations Division, Natural Resources
Conservation Service; phone: 202-720-3524; fax: 202-720-4265; e-mail:
dan.smith@usda.gov, Attention: CFO; or Edward Rall, Economic and Policy
Analysis Staff, Farm Service Agency; phone: 202-720-7795; fax: 202-720-
8261; e-mail: erall@wdc.fsa.usda.gov, Attention: CFO.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
Pursuant to Executive Order 12866, Regulatory Planning and Review
(58 FR 51735, October 4, 1993), the Office of Management and Budget
(OMB) has determined that this proposed rule is a significant
regulatory action. It will not result in an annual effect on the
economy of $100 million or more, and therefore is not an economically
significant regulatory action. The administrative record is available
for public inspection in Room 6037, South Building, USDA, 14th and
Independence Ave, SW, Washington, D.C.
Pursuant to Executive Order 12866, CCC conducted an economic
analysis of the potential impacts associated with this program, and
included the analysis as part of a Cost Benefit Analysis document
prepared for this rule. The analysis estimates CFO will have a
beneficial impact on the adoption of conservation practices and, when
installed or applied to technical standards, will increase net farm
income. In addition, benefits would accrue to society through
maintenance of long-term productivity, enhancement of the resource
base, non-point source pollution damage reductions, and wildlife
enhancements. As a voluntary program, CFO will not impose any
obligation or burden upon agricultural producers that choose not to
participate.
Regulatory Flexibility Act
The Regulatory Flexibility Act is not applicable to this rule
because CCC is not required by 5 U.S.C. 553 or any other provision of
law to publish a notice of proposed rulemaking with respect to the
subject matter of this rule.
Environmental Analysis
CCC has determined through an Environmental Assessment for the
Conservation Farm Option Program, dated August 1, 1996, that the
issuance of this proposed rule will not have a significant effect on
the human environment. Copies of the Environmental Assessment and the
Finding of No Significant Impact may be obtained from Daniel Smith,
Conservation Operations Division, Natural Resources Conservation
Service, PO Box 2890, Washington, DC 20013-2890.
Paperwork Reduction Act
This proposed rule sets forth procedures for implementing CFO. CCC
needs certain information from potential applicants in order to carry
out the requirements of the program. CCC submitted information
collection requirements to the Office of Management and Budget (OMB)
for approval under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
FSA has requested reinstatement of OMB 0560-0174 which covers both CFO
and EQIP. This package contains the forms necessary for program
implementation and include Forms CCC-1200, CCC 1210, and CCC-1245.
Form CCC-1200 is the Conservation Program Contract used in both the
CFO and Environmental Quality Incentive Program (EQIP) and allows a
farmer, rancher, or landowner to apply for conservation benefits under
the terms and conditions of the contract.
Form CCC-1210 is the Conservation Farm Option Pilot Proposal form
used only in the CFO program and allows farmers, groups and other
entities to propose geographic areas for inclusion as pilot areas in
the CFO.
Form CCC-1245 is the Practice Approval and Payment Application used
in both the CFO and EQIP and allows the participant to submit
performance data in order to be paid for the practices installed by the
participant under the program.
A regular information collection submission for CFO and EQIP is in
clearance and a notice will be published in the Federal Register
shortly.
Executive Order 12988
This proposed rule has been reviewed in accordance with Executive
Order 12988. The provisions of this proposed rule are not retroactive.
Furthermore, the provisions of this proposed rule preempt State and
local laws to the extent such laws are inconsistent with this proposed
rule. Before an action may be brought in a Federal court of competent
jurisdiction, the administrative appeal rights afforded persons at 7
CFR parts 11 and 614 must be exhausted.
Federal Crop Insurance Reform and Department of Agriculture
Reorganization Act of 1994
USDA classified this proposed rule as not major, therefore,
pursuant to Section 304 of the Department of Agriculture Reorganization
Act of 1994, a risk assessment is not required.
Unfunded Mandates Reform Act of 1995
Pursuant to Title II of the Unfunded Mandates Reform Act of 1995,
CCC assessed the effects of this rulemaking action on State, local, and
tribal governments, and the public. This action does not compel the
expenditure of $100 million or more by any State, local, or tribal
governments, or anyone in the private sector; therefore a statement
under Section 202 of the Unfunded Mandates Reform Act of 1995 is not
required.
Discussion of Program
Background
Traditional agricultural conservation programs provide farmers and
ranchers with cost share and land retirement payments as incentives to
protect and conserve soil, water, and other natural resources, and
provide technical assistance to implement conservation practices. In
certain cases, however, these traditional programs lack sufficient
flexibility to allow farmers and ranchers to operate in a manner they
consider optimal or to address natural resource concerns which warrant
innovative solutions. The CFO is intended to promote innovative and
environmentally-sound methods for addressing these concerns.
Overview of the Conservation Farm Option Pilot Program
In accordance with the 1985 Act, CCC will establish CFO pilot
programs for producers of wheat, feed grains, upland cotton, and rice.
Only those owners and producers that have a farm with contract acres
enrolled in production flexibility contracts established under the 1996
Act are eligible to participate in the CFO. Producers accepted into the
CFO must enter into 10-year contracts which may be extended an
additional 5 years. The purposes of CFO pilot programs include: (1)
Conservation of soil, water, and related resources; (2) water quality
protection or improvement; (3) wetland restoration, protection, and
creation; (4) wildlife habitat development and protection; and (5)
other similar conservation purposes. To enroll in the program, the 1985
Act requires producers to prepare a conservation farm plan which
becomes part of the
[[Page 16144]]
CFO contract. The plan describes all conservation practices to be
implemented and maintained on acreage subject to contract. An important
goal is to promote the adoption of resource conserving crop rotations
while maintaining agricultural production and maximizing environmental
benefits. The 1985 Act also requires the plan to contain a schedule for
the implementation and maintenance of the practices, comply with highly
erodible land and wetland conservation requirements of Title XII of the
1985 Act, and contain such other terms as the Secretary may require.
Producers must also agree to forgo payments under the Conservation
Reserve Program (CRP), the Wetlands Reserve Program (WRP), and the
Environmental Quality Incentives Program (EQIP). In lieu of these
payments, the 1985 Act requires the Secretary to offer annual payments
under the contract that are equivalent to the payments the owner or
producer would have received had the owner or producer participated in
the CRP, the WRP and the EQIP. CCC will determine the CFO payment rates
taking into consideration the payments that would have been received
under the CRP, WRP, and EQIP, as applicable. CRP payments will not
exceed the maximum bid price accepted for similar land in the vicinity.
The CFO pilot program will substitute a single annual payment for
the different types of payments available under the CRP, the WRP, and
EQIP, provide an incentive for coordinated, long-term natural resource
planning, and be flexible enough to allow farmers and ranchers to
operate in economically efficient, but innovative ways. The CFO
provides for a locally-led approach by allowing individual farmers and
ranchers, or groups of farmers and ranchers to implement innovative
solutions to natural resource problems and encourages implementation of
sustainable agricultural production practices. The CFO is a program
that permits farmers and ranchers to maximize environmental benefits
with minimal land retirement, while maintaining agricultural
production.
CCC will determine CFO participation in a two step process: First,
CCC will select CFO pilot project areas based on proposals submitted by
the public; then, CCC will accept applications from eligible producers
within the selected pilot project area.
CFO Pilot Projects
CFO pilot projects will address resource problems and needs that
are well documented and on a scale that will facilitate the evaluation
of the effectiveness of the systems and practices installed, as well as
that of the entire program. CFO pilot projects are intended to be
simple, flexible, and should encourage sustainable agricultural
production practices and support locally led conservation goals.
CCC will select CFO pilot project areas based on the extent of the
proposal:
1. Demonstrates innovative approaches to conservation program
delivery and administration;
2. Demonstrates innovative conservation technologies and systems;
3. Creates environmental benefits in a cost effective manner;
4. Addresses conservation of soil, water, and related resources,
water quality protection or improvement; wetland restoration,
protection, and creation; and wildlife habitat development and
protection;
5. Ensures effective monitoring and evaluation of the pilot effort;
6. Considers multiple stakeholder participation (partnerships)
within the pilot area; and
7. Provides additional non-Federal funding.
An interdepartmental committee made up of representatives of
several Federal agencies will review the proposals and make
recommendations to the Chief, NRCS, who is a Vice President of the CCC,
based on criteria available to the public in the CFO proposal package.
The CFO proposal package includes the CFO Pilot Proposal Form CCC-1210,
instructions for completion of the CCC-1210, and the criteria for
evaluating proposals. The CFO proposal package is available from any
FSA or NRCS office. CCC will give preference to proposals that have
high ratings based on the criteria upon which proposals will be
evaluated.
Pilot projects can involve either an individual or a group. In
either case, to be considered for enrollment in CFO, each individual or
entity within an approved pilot project area must submit an application
which is the basis for the contract between the participant and CCC.
Pilot Project Area Proposal Submission
CCC requests recommendations from the public regarding
establishment of pilot project areas for fiscal year (FY) 1998. In FY
1999 through FY 2002, the CCC may establish additional pilot projects,
as funding allows. Pilot projects will be fully funded upon selection.
CFO proposals may be developed for a group of eligible producers by
organizations or entities that desire to coordinate individual producer
plan development and implementation activities. These group proposals
may promote the adoption of sustainable farming or other conservation
practices on several farms, thus, expanding the opportunity for greater
acceptance of innovative and environmentally sound farming practices.
Achievements from these efforts may serve as on-farm models to
encourage others to accept new measures without government assistance.
Moreover, groups participating will promote program success stories to
enhance the CFO based on proven results.
The proposals for pilot project areas must be for the purpose(s) of
conserving soil, water, and related resources; protecting or improving
water quality; restoring, protecting and creating wetlands; developing
and protecting wildlife habitat; or other similar conservation
purposes.
An individual, organization, or entity submitting the proposal will
be responsible for providing leadership in the overall local planning
effort, including activities such as education, information delivery,
monitoring and coordination with local agencies, States or subdivisions
thereof, tribal, and Federal agencies.
Selection Of Participants Within Pilot Project Areas
Upon selection of pilot project areas, all producers with
production flexibility contracts within the project area will be
eligible to participate in the CFO. NRCS will approve CFO conservation
farm plans and the local FSA office will approve the CFO contracts and
make payments on behalf of CCC.
Participation in CFO projects is open to all production flexibility
contract holders without regard to race, color, national origin, sex,
religion, age, disability, political beliefs and marital or familial
status.
List of Subjects in 7 CFR Part 1468
Administrative practices and procedures, Conservation plan,
Contracts, Natural resources, Payment rates, Soil conservation,
Technical assistance, Water resources, and Wetlands.
Accordingly, Title 7 of the Code of Federal Regulations is amended
by adding a new part 1468 to read as follows:
PART 1468--CONSERVATION FARM OPTION
Subpart A--General Provisions
Sec.
1468.1 Applicability.
1468.2 Administration.
[[Page 16145]]
1468.3 Definitions.
1468.4 Program requirements.
1468.5 CFO pilot project areas.
1468.6 Conservation plan.
Subpart B--Contracts
1468.20 Application for CFO program participation.
1468.21 Contract requirements.
1468.22 Conservation practice operation and maintenance.
1468.23 Annual payments.
1468.24 Contract modifications and transfers of land.
1468.25 Contract violations and termination.
Subpart C--General Administration
1468.30 Appeals.
1468.31 Access to operating unit.
1468.32 Performance based upon advice or action of representatives
of CCC.
1468.33 Offsets and assignments.
1468.34 Misrepresentation and scheme or device.
Authority: 16 U.S.C. 3839bb.
Subpart A--General Provisions
Sec. 1468.1 Applicability.
Through the Conservation Farm Option, the Commodity Credit
Corporation (CCC) provides financial assistance to eligible farmers and
ranchers to address soil, water, and related natural resources
concerns, water quality protection or improvement; wetland restoration,
protection, and creation; wildlife habitat development and protection
and other similar conservation purposes on their lands in an
environmentally beneficial and cost-effective manner. An important
purpose is to promote the adoption of resource-conserving crop
rotations while maintaining agricultural production and maximizing
environmental benefits through the implementation of structural,
vegetative, and land management practices on eligible land.
Sec. 1468.2 Administration.
(a) Administration of CFO is shared by the Natural Resources
Conservation Service (NRCS) and the Farm Service Agency (FSA) as set
forth below.
(b) NRCS shall:
(1) Provide overall program management and implementation of the
CFO;
(2) Establish policies, procedures, priorities, and guidance for
program implementation, including determination of pilot project areas;
(3) Establish annual payment rates;
(4) Make funding decisions and determine allocations of program
funds;
(c) FSA shall be responsible for the administrative processes and
procedures for applications, contracting, financial matters, program
accounting and distribution of allocations;
(d) NRCS and FSA shall cooperate in establishing program policies,
priorities, and guidelines related to the implementation of this part.
(e) No delegation herein to lower organizational levels shall
preclude the Chief of NRCS, or the Administrator of FSA, or a designee,
from determining any question arising under this part or from reversing
or modifying any determination made under this part that is the
responsibility of their respective agencies.
Sec. 1468.3 Definitions.
The following definitions shall apply to this part and all
documents issued in accordance with this part, unless specified
otherwise:
Applicant means a producer who has requested in writing to
participate in CFO.
Chief means the Chief of NRCS, or designee.
Conservation district means a political subdivision of a State,
Indian tribe, or territory, organized pursuant to the State or
territorial soil conservation district law, or tribal law. The
subdivision may be a conservation district, soil conservation district,
soil and water conservation district, resource conservation district,
natural resource district, land conservation committee, or similar
legally constituted body.
Conservation plan means a record of a participant's decisions, and
supporting information for treatment of a unit of land or water,
including the schedule of operations, activities, and estimated
expenditures needed to solve identified natural resource problems.
Conservation practice means a specified treatment, such as a
structural or vegetative practice or a land management practice, which
is planned and applied according to NRCS standards and specifications.
Contract means a legal document that specifies the rights and
obligations of any person who has been accepted for participation in
the program.
County executive director means the FSA employee responsible for
directing and managing program and administrative operations in one or
more FSA county offices.
County Farm Service Agency Committee means a committee elected by
the agricultural producers in the county or area, in accordance with
Sec. 8(b) of the Soil Conservation and Domestic Allotment Act, as
amended, or designee.
Field office technical guide means the official NRCS guidelines,
criteria, and standards for planning and applying conservation
treatments and conservation management systems. It contains detailed
information on the conservation of soil, water, air, plant, and animal
resources applicable to the local area for which it is prepared.
Indian tribe means any Indian tribe, band, nation, or other
organized group or community, including any Alaska Native village or
regional or village corporation as defined in or established pursuant
to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.)
which is recognized as eligible for the special programs and services
provided by the United States to Indians because of their status as
Indians.
Land management practice means conservation practices that
primarily require site-specific management techniques and methods to
conserve, protect from degradation, or improve soil, water, or related
natural resources in the most cost-effective manner. Land management
practices include, but are not limited to, nutrient management, manure
management, integrated pest management, integrated crop management,
irrigation water management, tillage or residue management,
stripcropping, contour farming, grazing management, and wildlife
habitat management.
Liquidated damages means a sum of money stipulated in the contract
which the participant agrees to pay, in addition to refunds and other
charges, if the participant breaches the contract, and represents an
estimate of the anticipated or actual harm caused by the breach, and
reflects the difficulties of proof of loss and the inconvenience or
nonfeasibility of otherwise obtaining an adequate remedy.
Operation and maintenance means work performed by the participant
to keep the applied conservation practice functioning for the intended
purpose during its life span. Operation includes the administration,
management, and performance of non-maintenance actions needed to keep
the completed practice safe and functioning as intended. Maintenance
includes work to prevent deterioration of the practice, repairing
damage, or replacement of the practice to its original condition if one
or more components fail.
Participant means an applicant who is a party to a CFO contract.
Secretary means the Secretary of the United States Department of
Agriculture.
State conservationist means the NRCS employee authorized to direct
and supervise NRCS activities in a State, the Caribbean Area, or the
Pacific Basin Area.
[[Page 16146]]
State technical committee means a committee established by the
Secretary in a State pursuant to 16 U.S.C. 3861.
Technical assistance means the personnel and support resources
needed to conduct conservation planning; conservation practice survey,
layout, design, installation, and certification; training,
certification, and quality assurance for professional conservationists;
and evaluation and assessment of the program.
Unit of concern means a parcel of agricultural land that has
natural resource conditions that are of concern to the participant.
Sec. 1468.4 Program requirements
(a) Program participation is voluntary. The participant is
responsible for the development of a conservation plan for the farm or
ranching unit of concern. The participant's conservation plan is a part
of the CFO contract. CCC will provide annual payments to a participant
to apply needed conservation practices and land use adjustments as
specified in a time schedule set forth in the conservation plan.
(b) To be eligible to participate in CFO, an applicant must have a
production flexibility contract in accordance with part 1412 of this
chapter.
(c) Participants in the CFO must:
(1) Agree to forgo payments under the Conservation Reserve Program
authorized by part 1410 of this chapter, the Wetlands Reserve Program
authorized by part 1467 of chapter, and Environmental Quality
Incentives Program authorized by part 1466 of this chapter, on the farm
enrolled in the CFO.
(2) Be in compliance with the highly erodible land and wetland
conservation provisions found at part 12 of this title;
(3) Have control of the land for the term of the proposed contract
period.
(i) An exception may be made by the Chief in the case of land
allotted by the Bureau of Indian Affairs (BIA), tribal land, or other
instances in which the Chief determines that there is sufficient
assurance of control;
(ii) and if the applicant is a tenant of the land involved in
agricultural production the applicant shall provide CCC with the
written authorization by the landowner to apply the structural or
vegetative practice.
(4) Submit a proposed conservation plan to CCC. When considering
the acceptability of the plan, CCC will consider whether the
participant will use the most cost-effective conservation practices to
solve the natural resource concerns and maximize environmental benefits
per dollar expended. The conservation practices must be eligible
practices under CRP, WRP, or EQIP, or some other innovative
conservation measure approved by the State Conservationist.
(5) Comply with the provisions at Sec. 1412.304 of this chapter for
protecting the interests of tenants and sharecroppers, including
provisions for sharing, on a fair and equitable basis, payments made
available under this part, as may be applicable;
(6) Supply information as required by CCC to determine eligibility
for the program.
(7) Comply with all the provisions of the CFO contract which
includes the conservation plan approved by CCC.
(d) States, political subdivisions, and agencies thereof are not
eligible to participate in CFO.
(e) Land may be eligible for enrollment in CFO if such land is
otherwise eligible for the program and used as:
(1) Cropland;
(2) Rangeland;
(3) Pasture;
(4) Forest land;
(5) Other land on which crops or livestock are produced; and
(6) Other agricultural land that NRCS determines poses a serious
threat to soil, water, or related natural resources by reason of the
soil types, terrain, climate, soil, saline characteristics, or other
factors or natural hazards, such as the existing agricultural
management practices of the applicant.
(f) In addition to meeting the land eligibility requirements in
paragraph(e) of this section, land may be only considered for
enrollment in CFO if CCC determines that the land is:
(1) Privately-owned land;
(2) Publicly-owned land where--
(i) The land is under private control for the contract period and
is included in the participant's operating unit;
(ii) Installation of conservation practices will not primarily
benefit the government landowner;
(iii) Conservation practices will contribute to an improvement in
the identified natural resource concern; and
(iv) The participant has provided CCC with written authorization
from the government landowner to apply the conservation practices; or
(3) Tribal, allotted, or Indian trust land.
Sec. 1468.5 CFO Pilot project areas
(a)(1) CCC may solicit proposals from the public to establish pilot
project areas.
(2) CCC shall select pilot project areas based on the extent the
individual proposal:
(i) Demonstrates innovative approaches to conservation program
delivery and administration;
(ii) Proposes innovative conservation technologies and system;
(iii) Proposes cost effective solutions to environmental concerns;
(iv) Ensures effective evaluation of the pilot effort; and
(v) Addresses the following:
(A) Conservation of soil, water, and related resources,
(B) Water quality protection or improvement,
(C) Wetland restoration, protection, and creation, and
(D) Wildlife habitat development and protection.
(b) Pilot projects may involve one or more participants. Each
individual or entity within an approved pilot project area must submit
an application in order to be considered for enrollment in the CFO.
Sec. 1468.6 Conservation plan
(a) The conservation plan for the farm or ranch unit of concern
shall:
(1) Describe any resource conserving crop rotation, and all other
conservation practices, to be implemented and maintained on the acreage
that is subject to contract during the contact period; and
(2) Address the resource concerns identified in the CFO Pilot
Proposal through the methods, systems or practices specified in the CFO
Pilot Proposal.
(3) Contain a schedule for the implementation and maintenance of
the practices described in the conservation farm plan; and
(b) The conservation plan is part of the CFO contract.
(c) The conservation plan must allow the participant to achieve a
cost-effective resource management system, or some appropriate portion
of that system, identified in the applicable NRCS field office
technical guide or as approved by the State Conservationist.
(d) Upon a participant's request, the NRCS may provide technical
assistance to a participant.
(1) NRCS may utilize the services of qualified personnel of
cooperating Federal, State, or local agencies, Indian tribes, or
private agribusiness sector or organizations, in performing its
responsibilities for technical assistance.
(2) Participants may, at their own cost, use qualified
professionals to provide technical assistance. NRCS retains approval
authority over the technical adequacy of work done by non-NRCS
personnel for the purpose of determining CFO contract compliance.
(3) Technical and other assistance provided by qualified personnel
not
[[Page 16147]]
affiliated with NRCS may include, but not limited to: conservation
planning; conservation practice survey, layout, design, and
installation; information, education, and training for producers; and
training, and quality assurance for professional conservationists.
(e) Participants are responsible for implementing the conservation
plan. A participant may seek additional assistance from other public or
private organizations or private agribusiness sector as long as the
activities funded are in compliance with this part.
(f) All conservation practices scheduled in the conservation plan
are to be carried out in accordance with the applicable NRCS field
office technical guide. The State Conservationist may approve use of
innovative conservation measures that are not contained in the NRCS
field office technical guide.
(g)(1) To simplify the conservation planning process for the
participant, the conservation plan may be developed, at the request of
the participant, as a single plan that incorporates, other Federal,
State, tribal, or local government program or regulatory requirements;
and the CCC development or approval of a conservation plan shall not
constitute compliance with program, statutory and regulatory
requirements administered or enforced by another agency, except as
agreed to by the participant and the relevant Federal, State, local or
tribal entities.
(2) CCC may accept an existing conservation plan developed and
required for participation in any other CCC or USDA program if the
conservation plan otherwise meets the requirements of this part. When a
participant develops a single conservation plan for more than one
program, the participant shall clearly identify the portions of the
plan that are applicable to the CFO contract. It is the responsibility
of the participant to ascertain and comply with all applicable
statutory and regulatory requirements.
Subpart B--Contracts
Sec. 1468.20 Application for CFO Program Participation
(a) Any eligible farmer or rancher within an approved pilot project
area, may submit an application for participation in the CFO to a
service center or other USDA county or field office of FSA or NRCS.
(b) CCC will accept applications throughout the year. CCC will rank
and select the offers of applicants periodically, as determined
appropriate by CCC.
(c) CCC will develop ranking criteria to prioritize applications
within a pilot project area; and will accept applications in a pilot
project area based on eligibility factors of the applicant and this
ranking.
(d) An applicant has the option of offering and accepting less than
the maximum program payments allowed.
(e) CCC will rank all applications using criteria that will
consider
(1) The degree to which the application is consistent with the
pilot project proposal;
(2) The environmental benefits that will be derived by applying the
conservation practices in the conservation plan which will meet the
purposes of the program;
(3) An estimate of the cost of annual payments; and
(4) The environmental benefits per dollar expend;
(f) If two or more applications have an equal rank, the application
that will result in the least cost to the program will be given greater
consideration.
Sec. 1468.21 Contract requirements
(a) In order for an applicant to receive annual payments, the
applicant shall enter into a contract agreeing to implement a
conservation plan.
(b) A CFO contract shall:
(1) Incorporate by reference all portions of a conservation plan
applicable to CFO;
(2) Be for a duration of 10 years, and may be renewed, subject to
the availability of funds, for a period not to exceed 5 years upon
mutual agreement of CCC and the participant;
(3) Provide that the participant will:
(i) Not conduct any practices on the farm or ranch unit of concern
consistent with the goals of the contract that would attend to defeat
the purposes of the contract, and reduce net environmental and societal
benefits,
(ii) In accordance with the provisions of Sec. 1468.25 of this
part, refund with interest any program payments received and forfeit
any future payments under the program, on the violation of a term or
condition of the contract.
(iii) Refund all program payments received on the transfer of the
right and interest of the producer in land subject to the contract,
unless the transferee of the right and interest agrees to assume all
obligations of the contract, in accordance with the provisions of
Sec. 1468.24 of this part, and
(iv) Supply information as required by CCC to determine compliance
with the contract and requirements of the program;
(4) Specify the participant's requirements for operation and
maintenance of the applied conservation practices in accordance with
the provisions of Sec. 1468.22 of this part, and
(5) Include any other provision determined necessary or appropriate
by CCC.
(c) There is a limit of one CFO contract at any one time for each
farm, as identified with FSA number, determined at the time of the
application for CFO assistance.
Sec. 1468.23 Annual payments.
(a) Annual payments, subject to the availability of funds, will be
based on the value of the expected payments that would have been paid
to the participant under CRP, WRP, or EQIP, as applicable.
(b) The participant must certify that a conservation practice is
completed in accordance with the conservation plan to establish
compliance with the contract.
Sec. 1468.24 Contract modifications and transfers of land.
(a) The participant and CCC may modify a contract if the
participant and CCC agree to the contract modification and the
conservation plan is revised in accordance with CCC requirements.
(b) The parties may agree to transfer a contract with the agreement
of all parties to the contract. The transferee must be determined by
CCC to be eligible and shall assume full responsibility under the
contract, including operation and maintenance of those conservation
practices already installed and to be installed as a condition of the
contract.
Sec. 1468.25 Contract violations and termination.
(a)(1) If CCC determines that a participant is in violation of the
terms of a contract or the provisions of this part, CCC may give the
participant a reasonable time to correct the violation. If a
participant continues in violation, CCC will terminate the CFO
contract.
(2) Notwithstanding the provisions of (a)(1), a contract
termination shall be effective immediately upon a determination by CCC,
that the participant has submitted false information, filed a false
claim, or engaged in any act for which a finding of ineligibility for
payments is permitted under the provisions of Sec. 1468.35 of this
part, or in a case in which the actions of the party involved are
deemed to be sufficiently purposeful or negligent to warrant a
termination without delay.
(b)(1) If CCC terminates a contract, the participant shall forfeit
all rights for future payments under the contract and
[[Page 16148]]
shall refund all or part of the payments received, plus interest,
determined in accordance with part 1403 of this chapter. The county FSA
committee, in consultation with NRCS, has the option of requiring only
partial refund of the payments received if a previously installed
conservation practice can function independently, is not affected by
the violation or other conservation practices that would have been
installed under the contract, and the participant agrees to operate and
maintain the installed conservation practice for the life span of the
practice.
(2) If CCC terminates a contract due to breach of contract or the
participant voluntarily terminates the contract before any contractual
payments have been made, the participant shall forfeit all rights for
further payments under the contract and shall pay such liquidated
damages as are prescribed in the contract.
(3) When making all contract termination decisions, CCC may reduce
the amount of money owed by the participant by a proportion which
reflects the good-faith effort of the participant to comply with the
contract, or the hardships beyond the participant's control that have
prevented compliance with the contract.
(4) The participant may voluntarily terminate a contract if, based
on CCC's determination that such termination would be in the public
interest, CCC approves the termination.
Subpart C--General Administration
Sec. 1468.30 Appeals.
(a) An applicant or participant may obtain administrative review of
an adverse decision made with respect to this part and the CFO contract
in accordance with parts 2 and 614 of this title, except as provided in
paragraph (b) of this section.
(b) The following decisions are not appealable:
(1) CCC funding allocations;
(2) Eligible conservation practices; and
(3) Other matters of general applicability.
Sec. 1468.31 Access to operating unit.
Any authorized CCC representative shall have the right to enter an
operating unit or tract for the purpose of ascertaining the accuracy of
any representations made in a contract or in anticipation of entering a
contract, or as to the performance of the terms and conditions of the
contract. Access shall include the right to provide technical
assistance and inspect any work undertaken under the contract. The CCC
representative shall make a reasonable effort to contact the
participant prior to the exercise of this right to access.
Sec. 1468.32 Performance based upon advice or action of
representatives of CCC.
If a participant relied upon the advice or action of any authorized
representative of CCC, and did not know or have reason to know that the
action or advice was improper or erroneous, the county FSA committee,
in consultation with NRCS, may accept the advice or action as meeting
the requirements of the program and may grant relief, to the extent it
is deemed desirable by CCC, to provide a fair and equitable treatment
because of the good-faith reliance on the part of the participant.
Sec. 1468.33 Offsets and assignments.
(a) Except as provided in paragraph (b) of this section, any
payment or portion thereof to any participant shall be made without
regard to questions of title under State law and without regard to any
claim or lien against the crop, or proceeds thereof, in favor of the
owner or any other creditor except agencies of the United States. The
regulations governing offsets and withholdings found at part 1403 of
this chapter shall apply to contract payments.
(b) Any participant entitled to any payment may assign any payments
in accordance with regulations governing assignment of payment found at
part 1404 of this chapter.
Sec. 1468.34 Misrepresentation and scheme or device.
(a) A participant who is determined to have erroneously represented
any fact affecting a program determination made in accordance with this
part shall not be entitled to contract payments and must refund to CCC
all payments, plus interest determined in accordance with part 1403 of
this chapter.
(b) An applicant or participant who is determined to have knowingly
adopted any scheme or device that tends to defeat the purpose of the
program, made any fraudulent representation, or misrepresented any fact
affecting a program determination, shall refund to CCC all payments,
plus interest determined in accordance with part 1403 of this chapter,
received by such applicant or participant with respect to CFO
contracts.
Signed in Washington, D.C. on March 26, 1998.
Pearlie S. Reed,
Vice President, Commodity Credit Corporation.
[FR Doc. 98-8505 Filed 4-1-98; 8:45 am]
BILLING CODE 3410-16-P
