03-13930. Wisconsin Forest Landowner Grant Program; Determination of Primary Purpose of Certain Payments for Federal Tax Purposes

AGENCY:

Office of the Secretary, USDA.

ACTION:

Notice of determination.

SUMMARY:

The Secretary of Agriculture has determined that cost-share payments made to individuals under the State of Wisconsin, Department of Natural Resources, Forest Landowner Grant Program (WFLGP) are made primarily for the purpose of conserving soil and water resources, improving forests, and protecting and restoring the environment. This determination permits recipients to exclude all or part of certain cost-share payments under WFLGP from gross income for Federal income tax purposes to the extent allowed by the Internal Revenue Service.

DATES:

The Secretary's determination was signed on May 22, 2003.

ADDRESSES:

Questions may be addressed to Linda DePaul, Wisconsin Department of Natural Resources, Bureau of Forestry, PO Box 7921, 101 Webster St., Madison, WI 53707-7921. A copy of the determination is available upon request.

FOR FURTHER INFORMATION CONTACT:

Linda DePaul, Wisconsin Department of Natural Resources, Bureau of Forestry, [phone].

SUPPLEMENTARY INFORMATION:

Section 126 of the Internal Revenue Code (26 U.S.C. 126, as amended) provides that all or part of certain payments made to persons under State programs may be excluded from the recipient's gross income for Federal income tax purposes under two conditions: (1) If the Secretary of Agriculture determines that the payments are made primarily for the purpose of conserving soil and water resources, protecting or restoring the environment, improving forests, or providing wildlife habitat (the criteria for making such a determination are set forth in 7 CFR part 14, Determining the Primary Purpose of Certain Payments for Federal Tax Purposes), and (2) If the payments are determined by the Secretary of the Treasury as not increasing substantially the annual income derived from the property.

To make such a determination, the Secretary of Agriculture evaluates a cost-share conservation program based on the criteria set forth in 7 CFR part 14. Following a primary purpose determination by the Secretary of Agriculture, the Secretary of the Treasury must determine that payments made under the conservation program do not substantially increase the annual income derived from the property benefited by the payments.

Therefore, having carefully examined the authorizing legislation for the Wisconsin Forest Landowner Grant Program (WFLGP) and the planned operating procedures, the Secretary of Agriculture, according to the criteria set forth in 7 CFR part 14, has determined that the cost-share payments for implementing approved practices under WFLGP are made primarily for the purpose of conserving soil and water resources, improving forests, protecting and restoring the environment, and providing a habitat for wildlife.

Subject to further determination by the Secretary of the Treasury that payments made under WFLGP do not substantially increase the annual income derived from the property benefited by these payments, this determination by the Secretary of Agriculture permits payment recipients to exclude from gross income for Federal income tax purposes, all or part of the cost-share payments made under the program to the extent allowed by the Internal Revenue Service.

Dated: May 22, 2003.

Ann M. Veneman,

Secretary of Agriculture.