02-18660. Environmental Quality Incentives Program

AGENCY:

Commodity Credit Corporation, USDA.

ACTION:

Notice of availability of program funds for the Environmental Quality Incentives Program (EQIP).

SUMMARY:

The Farm Security and Rural Investment Act of 2002, increased the funding authorized to implement the Environmental Quality Incentives Program (EQIP). The Commodity Credit Corporation (CCC) administers EQIP under the general supervision of the Chief of the Natural Resources Conservation Service (NRCS), who is one of the vice presidents of CCC. CCC hereby announces the availability of up to an additional $200 million in FY 02 funds to provide technical, financial, and educational assistance under EQIP for farmers and ranchers to promote agricultural production and environmental quality as compatible National goals for working agricultural lands. CCC also announces the availability of up to an additional $25 million of EQIP funds in FY 02 to provide technical and financial assistance for ground and surface water conservation. Finally, CCC announces the availability of up to an additional $50 million of EQIP funds to carry out water conservation activities in the Klamath Basin in California and Oregon.

This notice applies only to funds made available and obligated in FY 02. CCC will, at a later date, issue a proposed rule for FY 03 through FY 07 program implementation. The proposed rule will address and seek comment on a number of issues including: the process for establishing National priorities and criteria for optimizing environmental benefits, the administration of incentive payments and their potential for promoting innovation and technological improvements and rewarding performance, the process of allocating and focusing funding at state and local levels, and the systematic evaluation of program performance. It will also consider other issues including creation of an innovative grant program, integration of air quality as a program goal, and the ground and surface water conservation program.

DATES:

July 24, 2002 to September 30, 2002.

FOR FURTHER INFORMATION CONTACT:

Mark W. Berkland, Director, Conservation Operations Division, Natural Resources Conservation Service, PO Box 2890, Washington, DC 20013; [phone]; fax: [phone]. Submit electronic requests for additional information to: [e-mail].

SUPPLEMENTARY INFORMATION:

CCC hereby announces the availability of up to an additional $200 million in FY 02 funds to provide technical, financial, and educational assistance under EQIP, 16 U.S.C. 3839aa, for farmers and ranchers to promote agricultural production and environmental quality as compatible goals for working agricultural lands. CCC announces the availability of up to an additional $25 million of EQIP funds in FY 02 to provide technical and financial assistance for ground and surface water conservation. Finally, CCC announces the availability of up to an additional $50 million of EQIP funds to carry out water conservation activities in the Klamath Basin in California and Oregon.

EQIP assistance promotes agricultural production and environmental quality as compatible goals, and strives to optimize environmental benefits. Through EQIP, CCC provides flexible technical, financial, and educational assistance to producers to install and maintain conservation systems that enhance soil, water, air quality, related natural resources, and wildlife while sustaining production of food and fiber. The statutory purposes for EQIP are to promote agricultural production and environmental quality as compatible goals and to optimize environmental benefits.

Background

EQIP was initially authorized by amendments made by the Federal Agriculture Improvement and Reform Act of 1996, Public Law 104-127 (the 1996 Act), to the Food Security Act of 1985, Public Law 99-198 (the 1985 Act). Since FY 96, CCC has implemented EQIP through regulations promulgated at 7 CFR part 1466. These regulations continue to govern contracts entered into with funds made available prior to the passage of the Farm Security and Rural Investment Act of 2002, Public Law 107-171 (the 2002 Act). Producers who entered into EQIP contracts in FY 02 prior to May 13, 2002, may modify their FY 02 contracts to avail themselves of the changes made by the 2002 Act.

CCC administers EQIP funds under the general supervision of the Chief of the Natural Resources Conservation Service (NRCS), who is a vice president of CCC. The Farm Service Agency (FSA) provides support for program administrative processes.

Implementation of the 2002 Act in Fiscal Year 2002

Section 2301 of the 2002 Act made several changes to the implementation of EQIP that must be applied in order to implement the program in FY 02. CCC shall implement these statutory provisions in contracts entered into with the funds made available by the 2002 Act for FY 02 and described in this notice of availability. CCC will implement these new EQIP contracts in accordance with the program regulations found at 7 CFR part 1466 as conditioned by the changes required by the 2002 Act. Where there are inconsistencies or conflicts between the statute and regulations, the statutory provisions will prevail. The 2002 Act made the following changes to the implementation of EQIP necessary for FY 02:

1. The process of designating conservation priority areas has been eliminated and will no longer be used.

2. The requirement to maximize environmental benefits per dollar spent has been eliminated. In accordance with the 2002 Act, CCC will seek to optimize environmental benefits as determined by the NRCS State Conservationist with advice from the State Technical Committee.

3. If the environmental values of two or more applications are comparable, CCC will not assign a higher priority to an application simply because it would present the least cost to the program.

4. In evaluating applications, CCC will accord a higher priority to applications that encourage the use of cost-effective conservation practices and address national conservation priorities.

5. The limitation on the size of livestock operations eligible to receive financial assistance has been removed. All livestock operations are now eligible to receive financial and technical assistance as long as all other eligibility criteria are met. The 2002 Act also increased from 50 percent to 60 percent the total amount of funding to be obligated nationally for livestock practices. Thus the regulatory provisions found at 7 CFR 1466.4(e), 1466.7(b), and related limitations will not apply to new contracts entered into or modified under the 2002 Act.

6. CCC is now authorized to make incentive payments to producers to develop comprehensive nutrient management plans for confined livestock feed operations. In the case of a confined livestock feeding operation, to be eligible to receive cost-share payments or incentives payments for animal waste management under EQIP, a producer must submit a plan of operations that provides for developing and implementing a comprehensive nutrient management plan.

7. An EQIP contract must extend at least one year after the implementation of the last practice, but not exceed a total of 10 years in duration. Additionally, a producer may now receive payment during the first year of the contract period.

8. Participants are now subject to different payment limitation requirements. An individual or entity may not receive, directly or indirectly, on the aggregate, $450,000 for all EQIP contracts entered into by the individual or entity during the period of FY 02 through FY 07. Therefore, the current contract and payment limitations found at 7 CFR 1466.23(b) through (e) will not apply to new contracts entered into or modified under the 2002 Act. For a producer who inherits land under an EQIP contract during the contract period, the $450,000 individual or entity payment limitation will not apply to the extent that the payments from any contract on the inherited land causes any heir who was party to an EQIP contract on other lands prior to the inheritance to exceed the annual limit.

With regard to EQIP contracts on Tribal land, Indian trust land, or Bureau of Indian Affairs (BIA) allotted land, payments exceeding the $450,000 individual or entity payment limitation may be made to the Tribal venture if an official of the BIA or Tribal official certifies in writing that no one person directly or indirectly will receive more than the $450,000 payment during the period of FY 02 through FY 07. BIA or Tribal officials will be required to submit a listing of individuals that are receiving any of the EQIP funding and identify how much each individual has received.

A broad purpose for EQIP continues to be assisting producers comply voluntarily with local, State, and national environmental quality regulatory requirements concerning soil, water, and air quality; wildlife habitat; and surface and ground water conservation.

Application Process

CCC will consider for funding under this notice applications received throughout FY 02. The State Conservationist, working with the State Technical Committee, will widely distribute information on the availability of assistance, State and local goals, and the information needed to submit applications.

The applicants must meet the definition of “person” as set out in Section 1001(5) of the 1985 Act, as amended, 7 U.S.C. 1308(5), as determined by the Farm Service Agency (FSA). Any cooperative association of producers that markets commodities for producers shall not be considered to be a person eligible for payment.

Applicants must submit an application (CCC-1200 form) to CCC to be considered for participation in EQIP. Any producer who has eligible land may obtain and submit by mail, fax, or electronically an application for participation in EQIP to a USDA Service Center. Producers who are members of a joint operation must file a single application for the joint operation. An NRCS conservationist will be available to work with the applicant to collect the information necessary to evaluate the application using the current State or locally developed ranking criteria.

Additional requirements and information pertaining to the EQIP program relating to contracts, administrative requirements, and other matters can be found on CCC form CCC-1200, the Conservation Program Contract, and the appendix to form CCC-1200, both of which are available at local USDA service centers. Information is also available on the World Wide Web (WWW) at http://www.nrcs.usda.gov/​programs/​farmbill/​2002.

Civil Rights

NRCS and CCC have collected civil rights data on farmers/ranchers participating in conservation programs. Based on past participation, it is estimated that the funding being made available with this notice will not negatively or disproportionately affect minorities, women, or persons with disabilities who are program beneficiaries or applicants for program benefits in NRCS- or CCC-assisted programs.

Environmental Evaluation

The Secretary of Agriculture will determine the actual level of funding for FY 02 from funds made available under the 1985 Act, as amended by the 2002 Act. While the actual level of funding is unknown at this time, based on the participation in existing soil and water conservation programs, it is estimated that this assistance could result in approximately 25,000 contracts. The environmental effects of any proposed actions under the EQIP contracts will be evaluated on an individual basis. Such individual evaluation is used to determine whether further environmental analysis is required. An Environmental Assessment was prepared for EQIP in 1996 and it is anticipated that the effects from EQIP activities authorized in FY 02 will not be significantly different than those identified in that assessment. Accordingly, neither an Environmental Assessment nor an Environmental Impact Statement has been prepared for this notice.

Signed in Washington, DC, on July 10, 2002.

Bruce I. Knight,

Vice President, Commodity Credit Corporation and Chief, Natural Resources Conservation Service.