[Federal Register Volume 63, Number 188 (Tuesday, September 29, 1998)]
[Rules and Regulations]
[Pages 51777-51792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25923]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 63, No. 188 / Tuesday, September 29, 1998 /
Rules and Regulations
[[Page 51777]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1468
RIN 0578-AA20
Conservation Farm Option
AGENCY: Commodity Credit Corporation, Department of Agriculture.
ACTION: Final rule.
-----------------------------------------------------------------------
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) establishing 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 by the
Executive Vice President of the CCC who is the Administrator of the
Farm Service Agency (FSA). This final rule describes how CCC will
implement CFO as authorized by the 1985 Act, responds to comments
received from the public during the comment period, and makes
clarifications to improve implementation of the program.
EFFECTIVE DATE: September 29, 1998.
ADDRESSES: This rule may also be accessed via Internet. Users can
access the Natural Resources Conservation Service (NRCS) homepage at
http://www.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:
da.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
The Office of Management and Budget (OMB) determined that this
final rule is significant and was reviewed by OMB under Executive Order
12866. Pursuant to section 6(a)(3) of Executive Order 12866, CCC
conducted a benefit-cost analysis. The analysis estimates CFO will have
a beneficial impact on the adoption of conservation practices and, when
installed or applied according to technical standards, will increase
net farm income through a reduction in soil erosion, improved water
quality, and wildlife habitat. 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 upon agricultural producers or owners that choose not to
participate.
A copy of this analysis is available upon request from Daniel
Smith, Conservation Operations Division, Natural Resources Conservation
Service, P.O. Box 2890, Washington, D.C. 20013-2890.
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 determined through an Environmental Assessment for the
Conservation Farm Option Program, dated January 15, 1998, that the
issuance of this final 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, P.O. Box 2890, Washington, DC 20013-2890.
Paperwork Reduction Act
No substantive changes have been made in this final rule which
affect the recordkeeping requirements and estimated burdens previously
reviewed and approved under OMB control number 0560-0174.
Executive Order 12988
This final rule has been reviewed in accordance with Executive
Order 12988. The provisions of this final rule are not retroactive.
Furthermore, the provisions of this final rule preempt State and local
laws to the extent such laws are inconsistent with this final 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 final 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.
Small Business Regulatory Enforcement Fairness Act of 1996
Pursuant to 5 U.S.C. Sec. 808 of the Small Business Regulatory
Enforcement Fairness Act of 1996, it has been determined by CCC that it
is impractical, unnecessary, and contrary to the public interest to
delay the effective date of this rule. Making this final rule effective
immediately will permit CCC to obligate fiscal year 1998 funds which
would otherwise be forfeited. Furthermore, if this final publication is
further delayed, program implementation will not begin until 2000.
Accordingly, this rule is effective upon publication in the Federal
Register.
[[Page 51778]]
Discussion of Program
Background
The Federal Agriculture Improvement and Reform Act of 1996 (the
1996 Act) (Pub. L. 104-127, April 4, 1996) amended the Food Security
Act of 1985 (the 1985 Act) (16 U.S.C. 3801 et seq.) and established the
Conservation Farm Option (CFO) pilot program. Under the 1985 Act, CCC
is authorized under CFO to provide direct payment to producers of
wheat, feed grains, upland cotton, and rice. Accordingly, other
entities, such as groups which coordinate, organize, administer,
monitor, and evaluate pilot projects are not eligible for direct CCC
payment, although an organization such as that described may be
reimbursed by the landowner. Upon a landowner or producer's request,
CCC will provide technical support to assist in implementing the
provisions of this part. Traditional agricultural conservation programs
have provided farmers and ranchers with cost share, land retirement,
and wetland restoration payments as incentives to protect and conserve
soil, water, and other natural resources. However, participation in
several individual programs for which a farmer could be eligible may
require more than one conservation plan and contract for the farm or
ranch, and it may also require numerous payments throughout the year
without an assurance that, in the aggregate, all of the farm's
environmental needs are met. Through CFO, CCC provides a single
contract, conservation farm plan, and payment for implementation of
innovative and environmentally-sound methods for addressing natural
resource concerns and results in the consolidation of payments that
would have been available under the Conservation Reserve Program (CRP),
the Wetlands Reserve Program (WRP), and the Environmental Quality
Incentives Program (EQIP).
NRCS will provide overall program management and implementation
leadership for CFO, including technical leadership for conservation
planning and implementation; while FSA will be responsible for the
administrative processes and procedures for applications, contracting,
program allocations and accounting.
Participation in CFO pilot projects is open to all production
flexibility contract holders within an approved pilot project area who
are eligible for CRP, EQIP, or WRP, without regard to race, color,
national origin, gender, religion, age, disability, political beliefs,
sexual orientation, and marital or family status. Persons with
disabilities who require alternative means for communication of program
information should contact USDA's TARGET Center at: (202) 720-2600
(voice and TDD). To file a complaint of discrimination, write USDA,
Director, Office of Civil Rights, Room 326W, Whitten Building, 14th and
Independence Avenue, S.W., Washington, D.C. 20250-9410 or call (202)
720-5964 (voice or TDD). USDA is an equal opportunity provider and
employer.
Overview of the Conservation Farm Option Pilot Program
As specified in the 1985 Act, the CFO program is available to
producers of wheat, feed grains, upland cotton, and rice. Additionally,
owners and producers must have a farm with contract acres enrolled in
CCC's production flexibility contracts established under Title I of the
1996 Act and meet the eligibility requirements in either CRP, EQIP, or
WRP in order to participate in the CFO program. Owners and producers
accepted into the CFO must enter into 10-year contracts, which may be
extended an additional 5 years.
CFO participation is determined in a two step process: First, CCC
selects CFO pilot project areas based on proposals submitted by the
public; then, CCC accepts applications from eligible producers within
the selected pilot project area.
Pilot Projects
CFO pilot projects are intended to 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. CCC will select CFO pilot
project areas based on the extent that the proposal:
1. Demonstrates innovative approaches to conservation program
delivery and administration;
2. Proposes innovative conservation technologies and systems;
3. Provides assurances that the greatest amount of environmental
benefits will be delivered in a cost effective manner;
4. Ensures effective monitoring and evaluation of the pilot effort;
5. Considers multiple stakeholder participation within the pilot
area;
6. Provides additional non-Federal funding; and
7. Addresses conservation of soil, water, and related resources,
water quality protection or improvement; wetland restoration and
protection; and wildlife habitat development and protection; or other
similar conservation purposes.
An interdepartmental committee made up of representatives of
several Federal agencies will review the proposals and make
recommendations to the NRCS Chief, who is a Vice President of the CCC,
based on criteria available to the public in the CFO proposal package.
The Chief, NRCS, with FSA concurrence, will select proposals for
funding.
CFO proposals may be developed for an individual or group of
eligible producers. Individual and groups that desire to coordinate
individual producer plan development and implementation activities may
submit pilot project proposals. If the proposal is funded, the
individual or group will be responsible for providing leadership in the
overall local planning effort, including activities such as information
delivery, monitoring, evaluation, and coordination with local agencies,
States or subdivisions thereof, Tribal, and Federal agencies. However,
because authorizing legislation specifies that CFO funds are available
only to producers of wheat, feed grains, upland cotton, and rice,
entities not meeting this criteria are not eligible for CCC payment.
Despite the restriction on CCC funding third parties, producers are not
precluded from making a payment to a third party.
Determining Eligibility Within Approved Pilot Project Areas
After selection of pilot project areas, all producers or owners
with production flexibility contracts within the project area and who
are eligible for either CRP, EQIP, or WRP will be eligible to enroll in
the program. The 1985 Act requires eligible producers and owners to
prepare a conservation farm plan, which becomes part of the CFO
contract. This conservation farm plan can be developed for a portion of
the farm or the entire farm. The plan describes all conservation
practices, acreage retired, and wetland restoration, or protection
practices to be implemented and maintained on acreage subject to
contract. The 1985 Act also requires the plan to contain a schedule for
the implementation and maintenance of the practices and to comply with
highly erodible land and wetland conservation requirements of Title XII
of the 1985 Act.
The 1985 Act further requires participants to agree to forgo
payments under CRP, EQIP, and WRP. 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 participant would have received
had they participated in the CRP, EQIP, or WRP. Because of this
[[Page 51779]]
statutory requirement, payments, payment limitations, participant and
land eligibility requirements, and practices for CFO are determined
utilizing the applicable regulatory provisions under the CRP, EQIP, and
WRP. Therefore, this final regulation references the regulations for
CRP (Part 1410), EQIP (Part 1466), and WRP (Part 1467) when setting
forth the provisions for:
1. Eligible conservation practices,
2. Eligibility to earn land retirement rental payments,
3. Eligible land upon which such practices can be installed and on
which such land retirement rental payments can be made,
4. The eligibility requirements for the participant,
5. The payment calculations, and
6. The payments issued to a ``person'' for payment limitation
purposes.
For example, the CFO conservation farm plan and contract specify a
conservation practice on field 1 similar to those eligible under EQIP,
and a land retirement rental payment and conservation practice on field
2 similar to those eligible under CRP. The regulations in Part 1466 for
EQIP will be referenced to determine eligible practices, eligible land,
participant eligibility, payment, and payment limitation for field 1.
Likewise, the regulations in Part 1410 for CRP will be referenced to
determine eligible practices, eligible land, participant eligibility,
land retirement rental payment and conservation cost-share payment, and
payment limitation for field 2. The total payments calculated and
limited by the applicable provisions in Parts 1466 and 1410 will be
totaled to determine the amount which will be issued for the CFO annual
rental payment.
Because the regulations at Parts 1410, 1466, and 1467 could be
revised which would require a corresponding revision of this part, the
provisions on eligible practices, eligible land, participant
eligibility, land retirement rental payment, and conservation cost-
share payment, and payment limitation are provided for CFO through
references to the regulations for CRP, EQIP, and WRP. CFO is not
authorized to acquire easements. Therefore, acreage that is subject to
a WRP easement will not be included in the CFO contract and WRP
easement payments will not be incorporated into the CFO annual payment.
However, CFO will be used to install any reasonable practice needed to
restore wetlands, and appropriate adjacent uplands.
Although CCC funds for CFO are not authorized for technical
assistance, upon a participant's request, NRCS may provide technical
assistance to a participant. Participants may, at their own cost, use
qualified professionals, other than NRCS personnel, to provide
technical assistance, such as conservation planning; conservation
practice survey, design, layout, and installation; information,
education, and training for producers; and training and quality
assurance for professional conservationists. In all situations, NRCS
retains approval authority over the technical adequacy of work
accomplished by non-NRCS personnel for the purpose of maintaining
compliance within CFO.
Ranking and Selecting Applications Within Approved Pilot Project Areas
After a pilot project area has been approved, the NRCS Chief will
notify the appropriate group or individual. Once notified, the
individual will contact the appropriate NRCS field office to complete
the CFO contract. For group proposals, the NRCS Chief will notify the
appropriate group sponsor and corresponding NRCS and FSA field offices.
Once notified CCC will accept applications throughout the fiscal year.
Periodically, as determined by the State Conservationist based on the
needs of the pilot project area, applications will be ranked and
selected according to selected ranking criteria. Once the applicant is
determined to be eligible to participate in CFO, the NRCS designated
conservationist will meet with the applicant to calculate the offer
index. The offer index will include: an inventory of resources;
identification of natural resource problems and concerns; treatment
needs; incentive payment levels; and cost-share and land retirement
rates that the producer may accept. The applicant may improve his/her
offer index by one or more of the following: providing additional
environmental benefits without increasing the program costs, or
accepting a rate or payment level less than the established rate or
payment level. The designated conservationist, in consultation with the
local work group, will utilize selected ranking criteria to prioritize
applications from the same pilot project area. The designated
conservationist, in consultation with the local work group, 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 farm plan which will meet
the purposes of the program;
3. An estimate of the cost of the planned conservation practices,
the program payments that will be paid to the applicant, and other
factors for determining which applications may present the least cost
to the program; and
4. The environmental benefits per dollar expended.
In creating this criteria, the designated conservationist, in
consultation with the local work group will consider the following
factors:
(1) Soil erosion;
(2) Water quality;
(3) Wildlife benefits;
(4) Soil productivity;
(5) Conservation compliance considerations;
(6) Likelihood to remain in conserving uses beyond the contract
period, including tree planting and permanent wildlife habitat;
(7) State water quality priority areas; and
(8) The environmental benefits per dollar expended.
The FSA county committee will approve funding in the pilot project
area in accordance with the NRCS ranking.
Payments
When enrolling in CFO, the participant enrolls the entire farm, as
constituted by FSA. Once enrolled, the individual will forego accepting
any future payment, under CRP, EQIP, or WRP on the farm, except for
payments earned but not paid before enrollment in CFO.
CCC will determine annual payments, subject to the availability of
funds, based on the value of the expected payments that would have been
paid to the participant under CRP, EQIP, or WRP. For example, a
practice that is determined eligible under WRP will receive the cost-
share rate for that practice in accordance with WRP. The same holds
true for land retirement rates under CRP and cost-share rates under
both CRP and EQIP. If a participant chooses to acquire a land
retirement rental payment and also wishes to install a practice on that
particular parcel in which he/she is receiving the land retirement
payment, CRP cost-share rates will be utilized. For new technologies
and innovations, the cost-share rate received will be equivalent to
that received under EQIP. Cost-share rates shall not exceed the total
amounts calculated among these three programs. For a practice that is
eligible under all three programs, the participant will chose between
CRP, EQIP, or WRP to determine what type of cost-share the
[[Page 51780]]
participant will receive. Where cost-share payments to a participant
exceed 100 percent of the actual cost of the practice, the CCC payments
to a participant shall be reduced so that the total financial
contributions for a structural or vegetative practice from all public
and private entity sources do not exceed the cost of the practice.
Cost-share or incentive payments will not be made to a participant
who has applied or initiated the application of a conservation practice
prior to approval of the contract.
Transferring from CRP, EQIP, or WRP to CFO
Producers or owners who wish to participate in CFO do not need to
be enrolled in CRP, EQIP, or WRP to be eligible for CFO. Producers or
owners who are currently enrolled in CRP, EQIP, or WRP must terminate
the existing contract(s). Remaining rights and obligations under CRP,
EQIP, or WRP will be incorporated into the new CFO contract. Practices
included in CRP or EQIP contracts or WRP cost-share agreements must be
included in a CFO contract if an owner or producer wishes to
participate. Participants in CFO with CRP, EQIP, or WRP practices
incorporated into CFO contracts are responsible for operating and
maintaining these practices for the balance of the period specified in
the original program contract, unless otherwise stated in the
conservation farm plan and CFO contract.
In cases where a participant transfers from CRP to CFO, the
participant must ensure that net environmental benefits under a CRP
contract are maintained or exceeded under the CFO contract. For
example, a landowner who was enrolled under CRP may opt to crop retired
land acreage, once the acreage is enrolled under CFO. This may be done
without liquidated damages, as long as the environmental benefits under
the former CRP contract are maintained or exceeded for the whole farm,
according to the approved conservation farm plan and CFO contract.
Under this scenario, the landowner may forego his CRP rental payment
and receive payments for a particular structural or vegetative
practice, if applicable.
Analysis of Public Comment
On April 2, 1998, the CCC issued a proposed rule with requests for
comments (63 FR 16142). The proposed rule described program
administration and program requirements that CCC would use to implement
the program. Thirty-three responses, containing nearly 200 specific
comments were received during the 60-day comment period. Entities
responding included individuals, national conservation organizations,
national farm and commodity organizations, national wildlife
organizations, State natural resource agencies, State associations, and
community development organizations. Changes in this final rule are
based on consideration of the comments received. Other minor changes
have been made in the text for clarity and to facilitate the
application of the regulation.
General Comments
Nine comments were received about the comment period on the
proposed regulation and the pilot project proposal application period
for 1998. All nine respondents felt the time constraints were limiting.
Several of these respondents commented that the application process
occurred at an inappropriate time of year, planting season, for
prospective participants to provide serious thought into the
application process. Respondents also had difficulty obtaining
information on the types of practices that would qualify. One
respondent commented that the time constraint provided an advantage to
existing projects and there was insufficient time to develop new or
innovative ideas.
Response: CCC believes that a sufficient length of time was
provided; however, in the future, consideration will be given
concerning the time of year that the request for proposals is
announced.
Both positive and negative comments were received about the general
nature of the program. Four respondents had reservations about the
program; one respondent was disappointed that the CFO program appeared
to be a duplication of existing programs; another questioned the
advantage of enrolling acreage in CFO versus the individual
conservation programs; and the other two thought the program should
offer more flexibility. One commented on the program goals and
requested that the program should encourage innovative activities. One
supported implementing CFO in a manner consistent with the
``Discussion'' section of the preamble. One indicated the program has
the potential to be a true locally led process with opportunities for
partners to implement a program without sideboards or constraints
imposed by a State Committee.
Response: CCC intends for the CFO program to be a flexible program
that offers participants an opportunity to treat all of their natural
resource concerns on the farm without limiting planning efforts to
certain types of acreage. It enables the participant to achieve the
environmental benefits of all the other programs under a single
contract and a single conservation farm plan. Although the CFO has
these advantages, the CFO program is still subject to the sideboards
established in the authorizing language. CCC is required to consider
certain provisions in the other programs such as eligible practices,
payments the participant would have received under these programs when
determining CFO payments, and county land retirement acreage
limitations. CCC appreciates these comments, however, these comments do
not address language in the regulation. Therefore, changes have not
been made in the final regulation as a result of these comments.
Two comments were received regarding agency workload concerns and
the lack of NRCS personnel available to handle the additional work
created by CFO.
Response: USDA considered these comments; however, it believes that
the additional work caused by CFO will be manageable. These comments
did not justify a modification to the final rule.
Forms
Twelve comments were received on the application form. Five of
these respondents felt the application was difficult to understand,
intimidating or frustrating. One of these respondents indicated that
although the form was a detriment to the program, they were provided
support from USDA staff which enabled the form to be completed. One
respondent requested that the application include more details,
especially where innovative practices are discussed. One respondent
indicated farmers were most frustrated with presenting budget
information. These farmers questioned how lump sum payments would be
used in determining costs and benefits of the project; how will it
impact ranking without providing more information; whether there are
project or individual contract limitations; and whether contributions
from other sources have to be secured at the time the proposal is
written. One respondent commented on the length of time it took to
complete the form. It took this respondent twice as long to complete
the work as was projected by CCC. Clarification is needed in
instructional materials. However, this respondent indicated that the
process was beneficial because it forced the producer to articulate the
long-range goals for the farm. Two respondents submitted positive
comments about the process, citing the
[[Page 51781]]
instructional addendum and the availability of the scoring sheet to
prospective participants. One respondent recommended CCC determine
through a public forum whether a CFO-specific form would be more
appropriate.
Response: Although these comments do not directly relate to the
provisions in the proposed rule, CCC plans to reexamine the application
form, and where necessary revise it, prior to the start of fiscal year
2000, the next time when CCC will solicit the public for CFO pilot
project area proposals. CCC believes that monitoring and evaluation of
the fiscal year 1998 pilot project areas will assist in making this
application form more concise and user-friendly. In addition to
revising the application form, CCC will analyze the instructional
materials and the application process to determine where it can be
improved for the next proposal submission period. The public burden
estimate related to completing the form will also be evaluated to
determine whether adjustments need to be made.
CFO Interface With Other Conservation Programs
Twenty-two comments were received regarding the relationship
between CFO and the CRP, WRP, and EQIP. Ten of these comments simply
requested clarification of how the interface between the three programs
will be handled. Eight respondents were concerned about the ability to
switch from CRP, EQIP, or WRP to CFO and expressed that penalties
should not apply. One comment was concerned about whether payment
limitations applied, and five sought innovative practices and project
designs that may not be permitted under the other conservation
programs.
Three respondents commented that CFO could be a positive
alternative to CRP; however, one of these warned against creating a
program like CRP because of its adverse impacts on certain farmers. For
one respondent this comment was due to CRP's impact on persons wanting
to lease acreage for agricultural activities; the second respondent
wanted CFO to be available to those whose acreage was not accepted into
CRP. One respondent recommended that CFO have no impact on WRP 30-year
or permanent easements. Two comments were received regarding program
payments. One respondent requested that the WRP component of a CFO
contract only consider potential cost-share payments and the other
requested that CRP payments remain separate from CFO contracts due to
the high cost and concern about contract payment limitations.
Response: CCC agrees that the proposed rule provided little
information regarding the relationship between CFO and the other
conservation programs. Language has been clarified and sections revised
throughout the rule to provide clarification regarding the impact of
persons offering acreage for CFO when they are already participating in
CRP, WRP, or EQIP or when they have land that is eligible for these
programs. To clarify, producers or owners who wish to participate in
CFO do not need to be enrolled in CRP, EQIP, or WRP to be eligible for
CFO.
However, eligible producers or owners, in an approved pilot project
area who are currently enrolled in CRP, EQIP, or WRP must terminate
such contracts and transfer the remaining practices and land retirement
rental payments to a CFO contract. In cases where a participant
transfers from CRP to CFO, the participant must ensure that net
environmental benefits under a CRP contract are maintained or exceeded
under the CFO contract. The landowner is also required to maintain
practices that were enrolled under the terminated CRP or EQIP contract,
or WRP cost-share agreement. These remaining rights and obligations
under CRP, EQIP, or WRP will be incorporated into the new CFO contract.
Practices included in CRP or EQIP contracts or WRP cost-share
agreements must be included in a CFO contract if an owner or producer
wishes to participate, unless otherwise stated in the approved
conservation farm plan and CFO contract. Participants in CFO with CRP,
EQIP, or WRP practices incorporated into CFO contracts are responsible
for operating and maintaining these practices for the balance of the
period specified in the original program contract, unless the lifespan
of the practice has been extended under the CFO contract.
The CFO authorizing language provides that in exchange for CFO
payments, the participant shall not participate in and shall forgo
payments under CRP, WRP and EQIP. Therefore, a CFO participant cannot
offer to enroll CFO contract acreage in CRP, EQIP, or WRP. Likewise,
when the CFO contract is approved any existing CRP or EQIP contract, or
WRP cost-share agreement will be simultaneously terminated without
penalty. CFO will not impact any acreage subject to a WRP easement nor
will this acreage be included in a CFO contract. Payments that have
been earned before the CFO contract is approved may be provided to the
producer or owner under the terms of that program. Future payments that
would have been earned under such contract or agreement will be
incorporated into the CFO contract and included in the CFO payment. The
CFO authorizing language has no payment limitation. Payment limitation
will apply to the extent that the total payments calculated, in
accordance with Parts 1466, 1467 and 1410, are limited in the
applicable provisions in Parts 1466 and 1410. The payments will be
totaled to determine the amount which will be issued for the CFO annual
payment.
Third Party Organization Administrative Issues
Sixteen comments were received regarding other organizations
performing certain activities under CFO. Eleven respondents requested
that CFO provide funding to non-government, non-profit organizations.
One of these respondents requested that the final rule add specific
authorization for direct funding for group proposals for project
planning, education, outreach, conservation farm research design,
monitoring, evaluation, and administration. Another recommended 20
percent of a pilot project funds be available to pay for the services
of the proposing organization, including non-profits. According to the
respondent, CFO will never reach its full potential if only individual
farmers apply. Another respondent commented that it is an
``administrative nightmare'' to have after-the-fact subcontracting with
each individual participant which results in higher administrative
costs. Several comments were related to the role of non-profit
organizations and state and local agencies within the context of CFO.
While one respondent requested clarification of the role of local non-
profit organizations, another comment suggested that USDA should
develop incentives for state and field offices to be more proactive in
program implementation. One respondent requested that funding be
available for information outreach efforts to change behavior and
achieve practice adoption.
Response: Under the 1985 Act, CCC is authorized under CFO, to
provide direct payment to producers of wheat, feed grains, upland
cotton, and rice. Accordingly, other entities, such as groups which
coordinate, organize, administer, monitor, and evaluate pilot projects
are not eligible for direct CCC payment, although an organization such
as that described, may be reimbursed by the landowner.
[[Page 51782]]
Program Administration
Fourteen comments were received regarding program administration.
One respondent requested general clarification. Three respondents
requested that states and local entities be permitted to participate in
the process of implementing the program by either contracting through
private businesses or by allocating program funds to these
organizations through a grant or loan program.
Response: Under the 1985 Act, CCC is authorized under CFO to
provide direct payment to producers of wheat, feed grains, upland
cotton, and rice. Other entities, such as groups which coordinate,
organize, administer, monitor, and evaluate pilot projects are not
eligible for CCC payment, although an organization such as that
described, may be reimbursed by the landowner.
One comment requested that the role of the Federal-state-local
relationship be clarified.
Response: CCC will coordinate with Federal, state, and local
agencies where necessary and has attempted to clarify this intent
throughout Part 1468. For example, the final rule has clarified that
the local work group assists in ranking CFO applications.
One respondent encouraged USDA to integrate and coordinate CFO
pilot project areas with state-level recommendations already identified
in conservation programs. However, existing rankings of affected
watersheds for other farm bill or state programs should not completely
supersede local efforts to delineate new watersheds or areas for
consideration.
Response: CCC concurs with this philosophy and believes that the
participation of the local work group will assist in integrating pilot
project areas with state-level recommendations; however, direct
proposal submission to the national level will also assist lower state-
ranked watersheds to acquire some assistance if that pilot project area
meets CFO objectives and requirements.
One comment requested clarification on whether Soil and Water
Conservation District (SWCD) cost-sharing programs can be identified as
partnership contributions, or if a specific allocation for a specific
proposal must be secured.
Response: Soil and Water Conservation District contributions,
including technical and cost-share assistance, may be considered
partnership contributions. Currently, CCC does not have specific
requirements as to the extent that matching funds must be secured from
other agencies or organizations.
One comment urges CCC to actively seek to develop cooperative
agreements or Memorandums of Understanding (MOUs) at the local, state
and Federal levels to ensure compliance with state and Federal
regulations for farmers and ranchers to participate. Two responses were
received regarding the impact of the Endangered Species Act and other
environmental requirements on CFO participants. One respondent
indicated that landowners need assurance that the actions they
undertake under the CFO which benefit endangered and/or threatened
species will not result in penalties during or after the contract
period. Without a cooperative agreement between CCC and the U.S. Fish
and Wildlife Service (FWS) integrating ``safe harbor'' type assurances
into the CFO, or a formal recognition by FWS of CFO plans as habitat
conservation plans, landowners will not have adequate legal protection.
The other respondent provided that any MOU or agreements should provide
reduced liability associated with off-farm environmental degradation or
nuisance law suits. This so-called ``safe harbor'' or environmental
assurance that incorporates relief from additional regulations and
enforcement is necessary to ensure active voluntary participation.
Response: Where local and State people request NRCS to arrange such
cooperative agreements to ensure compliance with state regulations,
NRCS is authorized to enter into these agreements. However, in
situations such as the Endangered Species Act, while CCC is sensitive
to its requirements, CCC does not have the authority to provide safe
harbor for those wishing to ensure compliance with other Federal
regulations, including the Endangered Species Act.
Three comments were received regarding the joint program
administration between NRCS and FSA. One respondent indicated the
administration provisions are confusing as written; the second
respondent did not want joint agency concurrence on environmental
issues. The third respondent wanted to know which agency ensures proper
administration of the program and what is the role of the Cooperative
State Research, Education, and Extension Service (CSREES).
Response: Administration of CFO is shared by the Natural Resources
Conservation Service and the Farm Service Agency. NRCS will provide
overall program management and implementation leadership for CFO,
including technical leadership for conservation planning and
implementation, while FSA will be responsible for the administrative
processes and procedures for applications, contracting, program
allocations and accounting. CCC believes that CSREES will play an
instrumental role in assisting with outreach and education both within
and outside selected pilot project areas. As a result of these
comments, Section 1468.2 has been revised to provide clarification
regarding the responsibilities of the agencies involved with
implementing the program.
One respondent recommended a new section (f) be added to indicate
that NRCS and FSA shall cooperate and make the best use of agency
programs that support CFO management and implementation, including, but
not limited to programs that support assessment and planning
activities.
Response: This recommendation has not been adopted as the
regulation is sufficiently flexible to permit this activity.
Definitions
Three respondents requested that the definition of ``conservation
farm plan'' be changed. All respondents felt the definition in the
proposed regulation does not reflect the most recent information on
farm planning. One respondent requested the definition be expanded to
indicate that conservation plans should be based on an adequate
assessment of conservation needs. The other two respondents requested
more extensive changes to reflect participant's resource problems and
ecologically based management of the whole farm or ranch.
Response: The definition of conservation farm plan has been altered
to match the definition found in NRCS' National Planning Procedures
Handbook (NPPH). This has been done in order to create consistency
across USDA program boundaries.
One respondent recommended revising the definition of technical
assistance to include reference to site-specific assessments.
Response: CCC believes that site-specific assessments are an
integral part of the conservation planning process and have been
adopted throughout the National Planning Procedures Handbook (NPPH),
NRCS' policy manual for conservation planning. According to the NPPH,
site-specific assessments are necessary in planning; therefore, any
reference to conservation farm plans or conservation planning assumes
that a site-specific assessment has been conducted.
One respondent requested that the definition of conservation
practices be amended to allow for practices approved by NRCS for
experimentation and testing.
[[Page 51783]]
Response: NRCS existing standards and specifications for interim
practices already permit experimentation and testing; therefore, this
recommendation has not been adopted.
One respondent recommended the definition of land management
practice be revised to include ``resource conserving crop rotations,
cover crop management, and soil organic matter and carbon sink
management.''
Response: The sample of land management practices included in the
definition was not intended to identify all potential practices.
However, CCC adopted this recommendation to ensure users of this
regulation understand that the term ``land management practices''
includes resource conserving crop rotations, cover crop management, and
organic matter and carbon sink management.
Ten respondents requested clarification of the term, A innovative
technologies.''
Response: A definition of innovative technologies has been included
in Section 1468. 3.
Several other comments were received regarding the definitions in
the proposed regulation. CCC determined that the definitions of these
other terms are sufficiently flexible to meet the needs of the
respondent and the program.
Program Requirements
Five respondents requested the requirement that a producer be
participating in production flexibility contracts be removed. One of
these respondents indicated this requirement would make implementation
of CFO on Tribal, allotted or Indian trust land impossible. While
another indicated it may adversely impact limited resource and minority
farmer's participation.
Response: CCC cannot adopt this recommendation because the CFO
authorizing language requires that a producer be participating in the
Agriculture Market Transition Program and have a production flexibility
contract in order to participate in CFO.
Two respondents recommended subsection (a) be revised to include
sustainable agriculture production practices and crop rotation systems.
Response: CCC believes that the term ``conservation practices''
embodies the concept of sustainable agricultural practices. This
includes resource-conserving practices, such as crop rotation systems,
conservation tillage, and other sustainable agricultural practices.
One respondent requested provisions regarding persons who inherited
property or obtained the property as a result of death but did not have
a producer interest in the property when eligibility of the program was
determined.
Response: The final rule has been revised in section 1468.5 to
clarify the eligibility of persons who obtain interest in acreage as a
result of death. Under CFO, eligibility requirements mimic the
eligibility requirements of CRP, EQIP, and WRP, depending on which
program is the source of CFO practices to be implemented.
One respondent recommended the language in subpart (c)(4) be
revised to indicate that CCC will consider whether the participant has
conducted adequate assessment activities to identify resource needs
when considering the acceptability of the plan.
Response: CCC believes that the conservation planning process
adequately takes into account assessment activities in identifying
resource needs.
One respondent questioned whether CFO participation would preclude
participation in any future USDA or other Federal conservation or
environmental protection incentive programs and whether producers or
owners are foregoing other program by their participation in CFO.
Response: The CFO authorizing language only requires that
participants forego participation in the Conservation Reserve Program
(CRP), the Wetlands Reserve Program (WRP) and the Environmental Quality
Incentives Program (EQIP) for the term of the CFO contract.
Participation in CFO does not necessarily inhibit a person from
participating in other USDA programs, such as the Wildlife Habitat
Incentives Program, Forestry Incentives Program, etc.
One respondent questioned whether CFO proposals are limited to only
pilot areas.
Response: Currently, CFO is authorized as a pilot program in the
1985 Act. As a result, it is limited to pilot project areas. These
pilot project areas will test not only practices, but also the program,
itself.
This section has been revised throughout the rule for clarity, and
therefore no specific references to section numbers have been made.
Innovative Technology
Several comments were received regarding innovative technology.
Eight of these respondents indicated the final regulation needs to
provide more information about the use of innovative technology. One
respondent wanted the innovative technology to have scientific merit
and a high chance of success before tax dollars are expended on testing
such technology. One respondent indicated that innovative projects
cannot be planned in fiscal year 1998. This respondent provided
administrative alternatives to solve this issue. Another respondent
identified technologies such as remote sensing, satellite and aerial
imaging that will offer the ability to identify what plant nutrients
are available in crops, identify stress points in a field as well as
identify drainage problems in fields. Two respondents recommended that
the regulation be revised to indicate that practices need not be
eligible under EQIP, CRP, or WRP, as long as they are approved by the
NRCS.
One respondent wanted clarification regarding the process for
approving innovative technologies. This respondent wanted language
added to encourage innovation and to stimulate experimentation and
adaptive research and demonstration.
Response: To be considered as an eligible conservation practice,
the innovative technology must provide beneficial, cost-effective
approaches for participants to change or adopt operations to conserve
or improve soil, water, or related natural resources. Innovative
technologies and practices are authorized under CFO. Payment for
innovative technologies is limited to what would be received under EQIP
since EQIP is the only program of the three programs which authorizes
innovative technologies. NRCS will authorize, at the state and national
level, interim practice standards and cost-share payments for
innovative technologies that it deems has an environmental benefit. The
policy outlining innovative practices and technology is further
clarified in 1468.7.
CFO Pilot Project Areas
Eleven comments were received regarding CFO pilot program area
proposals. One respondent provided that as a result of the leadership
requirements in the overall planning process, it is doubtful that
individual farmers will participate.
Response: CCC disagrees with this comment. One hundred twenty-one
applications, covering over 14 million acres were received from farmers
or farm groups. Forty-two of these proposals were from individual
farmers. CCC believes that had farmers been provided more time to
develop proposals, the number of submitted proposals would have grown
substantially. This comment is not reflected in the text of the final
regulation.
[[Page 51784]]
One respondent supported wetland restoration and protection through
CFO but expressed concern regarding converting valuable wildlife
habitats to wetlands. The respondent requested that the pilot projects
include evaluations for the quality of existing habitats that may be
destroyed for wetland creation projects.
Response: As outlined in 1468.20, the NRCS designated
conservationist will work with the applicant to ensure that wildlife
benefits will be accounted for when determining the ranking of the
application. CCC believes that the site assessment conducted during the
conservation planning process with the participant will give a good
indication of what habitats to protect, conserve, or create.
One respondent indicated the small acreage requirement provides a
disincentive for group projects.
Response: CFO does not have a maximum acreage requirement in the
final rule; however, the CCC process scoring sheet does award points to
project areas under 32,000 acres. For areas less than 64,000 acres,
which have less than 25 inches per year in annual precipitation or are
predominantly forest or rangeland, the acreage points are also awarded.
CCC supports this rationale due to limited funds in the initial years;
however, as funding increases, CCC anticipates that targeting to larger
acreage may become more prevalent. If CCC changes the targeting to
larger acreage, CCC will adjust the scoring accordingly.
One respondent recommended a criterion be added to reflect the
Scoring Sheet's preference for smaller rather than larger pilot
projects or areas.
Response: This comment was considered; however, it was not
reflected in the text of the final rule, since the amount of points
awarded for each criterion is not specified in the final rule. In any
case, the points awarded for size on the CCC-1211 are sufficient and
further criteria for size limitations are not necessary.
One respondent indicated that innovative practices need more points
in order to be funded.
Response: This comment was considered; however, it was not
reflected in the text of the final rule. CCC believes that the points
allocated to innovative technologies are sufficient.
One respondent indicated that the 1998 pilot project area response
was not reflective of program interest. Program interest was severely
comprised by a short timeframe at the worst time of year; lack of
access to information and forms at the local level; and disallowing
non-NRCS entities to apply for funds despite explicit encouragement to
apply.
Response: In the future, CCC will take into consideration the
timing of when the request for proposals is announced and ensure that
adequate information and forms are provided at the local level. This
comment was considered; however, it was not germane to the development
of the final rule.
One respondent requested that applications be approved under a
continuous sign-up basis.
Response: Once a pilot project area has been approved, CCC will
accept applications throughout the year. CCC will rank and select
applicants' offers periodically, as determined by the State
Conservationist, based on the needs of the pilot project area. This
process is clarified in Sec. 1468.20.
One respondent requested that the language in (a)(2) reflect the 7-
point criteria found in the ``Discussion of the Program'' section of
the proposed regulation.
Response: This recommendation has been adopted.
One respondent recommended that priority be given to proposals that
could not be funded by other programs such as CRP, EQIP, and WRP.
Response: This recommendation has not been adopted due to the fact
that it may limit USDA's ability to enroll some of the Nation's most
environmentally sensitive areas.
Three respondents requested new language be included that would
require CCC to evaluate whether the participant has conducted adequate
assessment activities to identify resource needs when selecting
proposals. Another respondent wanted the regulation to emphasize the
necessity for assessment and planning. At a minimum, CCC should reward
detailed assessment and planning by those who partake in these
activities by enhancing their eligibility for the program.
Response: CCC agrees with the need for adequate assessment and
believes that for the most part, the content and quality of the
proposals which are received will indicate how much assessment and
planning has been conducted.
Five respondents commented on the selection process. Four of these
respondents commented on the national process and one requested
clarification regarding how applicants in approved pilot areas will be
ranked at the national and local levels. Two respondents requested that
local and state or other entities with an interest in CFO be permitted
to be involved in the review of the proposals. One respondent indicated
that the national team review should also include filtering out
proposals which are not based on ``sound science or research''. One
respondent commented that national reviewers may lack the experience
necessary to competently review ``innovative'' proposals. This
respondent provided recommendations for obtaining the required
experience to make competent recommendations to the selecting official.
Response: Periodically, a request for proposals will be announced
in the Federal Register. In this request, CCC will solicit proposals
from individuals, States, or subdivisions thereof, Tribes,
universities, and other organizations to cooperate in the development
and implementation of CFO pilot programs. The request for proposals
will contain the CFO proposal form, instructions for completion of the
CFO proposal form, and the criteria for evaluating proposals. A
national interdepartmental team, consisting of representatives from
several Federal agencies, will use this published criteria to rank and
select the proposals. Consisting of individuals who have a wide variety
of expertise, the interdepartmental team will select proposals which
meet program guidelines and will provide its recommendations to the
NRCS Chief. The Chief, with FSA concurrence, will approve proposals.
CCC will utilize a national interdepartmental team to make decisions
not only because the size of the interdepartmental team would be too
large and cumbersome to be efficient, but also because CCC believes
adequate state and local input should be obtained at the local level
when group proposals are submitted.
Conservation Plan
Five respondents requested clarification or more specific language
regarding conservation planning requirements.
Response: CCC has attempted to clarify planning requirements in
Part 1468.9 and in the following response:
A conservation farm plan is a record of a participant's decisions,
and supporting information for treatment of a unit of land or water as
a result of the planning process, that meets the local NRCS field
office technical guide (FOTG) criteria for each natural resource and
takes into account economic and social considerations. The plan
describes the schedule of operations and activities needed to solve
identified natural resource problems, and takes advantage of
opportunities, at a conservation management system level. NRCS adopts a
nine-step planning procedure process in order to thoroughly assess the
value of the
[[Page 51785]]
natural resources on the participating acreage. In the nine-step
conservation planning process, problems and opportunities are
identified; the participant's objectives are determined; resources are
inventoried and analyzed; alternatives are formulated and evaluated;
decisions are made; the plan is implemented and finally evaluated. This
process is a cyclical one which changes as the resource conditions and
the participant's objectives change.
Under CFO, a conservation farm plan must meet the objectives of the
pilot project area; address the pilot project area's resource concerns;
and allow the participant to achieve a cost-effective resource
management system, or some portion of that system. While a conservation
farm plan that includes all acres on the farm is not required, it is
encouraged. Moreover, while a participant is encouraged to develop a
resource management system (RMS) that identifies and treats every
concern on the farm, a RMS level of treatment is not required. To
simplify the conservation planning process for the participant, the
conservation farm plan may include Federal, state, Tribal, or local
government program or regulatory requirements. The development or
approval of a conservation farm plan will not be deemed to constitute
compliance with program or regulatory requirements administered or
enforced by another agency, unless so indicated by that agency. It is
the participant's responsibility to comply with all applicable
statutory and regulatory requirements.
Participants are responsible for implementing the conservation farm
plan. CCC may accept an existing plan developed for another USDA or CCC
program if the conservation farm plan meets the requirements of CFO.
When a participant develops a conservation plan for more than one
program, the participant will clearly identify the portions of the plan
that are applicable to the CFO contract. Previously installed CRP,
EQIP, and WRP practices along with their operation and maintenance
requirements will also be incorporated into the CFO plan, unless
otherwise specified in the conservation farm plan and CFO contract. The
conservation farm plan forms the basis of the CFO contract.
One respondent requested that the following language be inserted to
1468.6(a), ``Reflect adequate assessment activities to identify natural
resource needs and conservation practices.''
Response: CCC believes that the conservation planning process
adequately takes into account assessment activities in identifying
resource needs.
One respondent requested that the following words be added to
1468.6(d)(1) ``NRCS should actively pursue assistance in providing
services such as site-specific assessments.''
Response: This recommendation has not been adopted. The language as
written provides CCC the authority to utilize the services of others.
One respondent requested CCC identify the items that would be
included as technical assistance that may be provided by others,
including but not limited to: site specific assessments to identify
planning needs; conservation planning; conservation practice survey,
layout, design and installation; information, education, and training
for producers; and training, and quality assurance for professional
conservationists.
Response: Upon a participant's request, NRCS may provide technical
assistance to a participant. Participants may, at their own cost, use
qualified professionals, other than NRCS personnel, to provide
technical assistance, such as conservation planning; conservation
practice survey, design, layout, and installation; information,
education, and training for producers; and training and quality
assurance for professional conservationists. In all situations, NRCS
retains approval authority over the technical adequacy of work
accomplished by non-NRCS personnel for the purpose of maintaining
compliance within CFO.
Three respondents requested changes to the provision that does not
provide funding for technical assistance offered by ``qualified
professionals.'' One of these respondents commented that the provision
to make participants pay for their own specialized technical assistance
is unfair to participants. Group projects would be inefficient since
specialized technical assistance could not be provided on a farm-by-
farm basis. In addition, some innovative practices could be too
technical for NRCS employees.
Response: CCC supports the use of qualified professionals, other
than NRCS personnel, to assist in providing technical assistance;
however, CCC is not authorized to pay individuals other than those who
are actual program participants. As a result, it is up to the
participant to utilize and pay for these third-party qualified
professionals.
Two respondents requested the final rule differentiate the
difference between ``private agribusiness sector'' and ``qualified
professionals'' or clarify the term ``qualified professionals'' who
provide technical assistance.
Response: The term ``qualified professionals'' indicates
professionals employed by either the public or private sector. Private
agribusiness indicates those individuals who are employed by the
private sector. Throughout Part 1468, CCC will attempt to clarify and
differentiate between the two terms.
One respondent encouraged NRCS to limit the amount of time for
developing a conservation plan until an applicant is accepted into the
program.
Response: CCC shares the concern in limiting the amount of time for
developing a conservation farm plan; however, in order to effectively
evaluate proposals, CCC believes that a conservation farm plan must be
written in order to ascertain resource needs and to rank applications
on a fair and equitable basis.
One respondent indicated it would be a major disincentive to
voluntary participation if farmers and ranchers could not satisfy all
or at least most program requirements and environmental regulations by
working with one agency and one plan.
Response: CCC supports the idea of having its conservation farm
plans assist farmers and ranchers in meeting environmental regulations;
however, it is the Federal, state, and local agencies, not CCC, who
determine whether a conservation farm plan meets environmental
regulations and program requirements.
Two respondents commented on the confidentiality of CFO plans. One
of these respondents noted a discrepancy in the ``Overview'' section of
the preamble and Section 1468.21(b)(1) regarding the conservation
plan's relationship with the CFO contract. The Overview indicated the
conservation farm plan will become part of the CFO contract while
section 1468.21(b)(1) provides that only those portions applicable to
CFO will be included with the CFO contract. The respondent preferred
the language in section 1468.21.
Response: These concerns are reflected in Section 1468.9(h)(2).
One respondent explained that crop rotations are a valuable land
management practice and should be encouraged and used as part of the
conservation plan. However, there should be flexibility to allow the
farmer to contemplate different mixes of crops that could occur over
the 10-year contract period.
Response: The conservation planning process and the CFO regulation
allow for modifications to the contract. Section 1468.24, Contract
Modifications
[[Page 51786]]
and Transfers of Land, provides that the participant and CCC may modify
a contract if the participant and CCC agree to the contract
modification and the conservation farm plan is revised in accordance
with CCC requirements. This final rule requires that the conservation
farm plan modification be approved by the Conservation District.
Conservation Practices
One respondent would like to see hybrid poplars established as an
eligible crop on CFO acres, with rotational harvesting, allowed
following the 10-year contract period.
Response: Innovative technology may include vegetative measures
such as establishing hybrid poplars. To be considered as an eligible
conservation practice under CFO, the innovative technology must provide
beneficial cost-effective approaches for the conservation and
improvement of soil, water, or related resources. For practices such as
the establishment of hybrid poplars, NRCS may authorize, at the state
and national levels, interim practice standards and cost-share payments
for innovative technologies that it deems has an environmental benefit.
Application for CFO Program Participation
One respondent recommended that when selecting participants, CCC
should place emphasis on a watershed or landscape-based pilot project
area. One respondent requested CCC to consider the degree to which the
application reflects an adequate assessment of conservation needs of a
particular farm or ranch, while one respondent recommended the ranking
criteria be expanded to include the degree to which the farm plan
reflects integrated, site-specific, multiple resource design and
strategy.
Response: In selecting pilot project areas, CCC will consider areas
that meet the criteria outlined in 1468.4.
Contract Requirements
One respondent recommended USDA encourage continuation of the CFO
practices beyond the contract period with some ongoing incentives.
Response: CCC does not have authority to provide incentives to
participants beyond the contract period.
One respondent indicated the 10-year contract commitment may
discourage some from participating when EQIP agreements can be for 5
years.
Response: Contract duration is established in the authorizing CFO
language and cannot be altered by CCC. Therefore, this comment was
considered, but rejected in the development of the final rule.
One respondent expressed that whole farm contracts should make
whole farm planning efficient and flexible.
Response: CCC supports the concept of a whole farm contract and the
whole farm plan; however, while a whole farm plan is encouraged, it is
not required for participation in CFO.
One respondent requested clarification regarding the provision that
contract participants be required to comply with ``such other terms as
the Secretary may require.'' The respondent wanted an indication of
what ``other terms'' might mean.
Response: CCC adds this language to ensure that it is not
constrained by the regulation if future conditions change. An example
of this may be a change in programs that are incorporated into CFO.
Annual Payments
Three respondents commented on the program funding level. These
comments were not directed to the proposed rule itself, and therefore
were not considered in the development of this final regulation. One
respondent liked the overall concept of one payment. One respondent
commented that the proposed rule provided limited information on the
amount participants could earn for the practices that may be
implemented.
Response: Section 1468.23 has been revised to clarify how payments
are calculated. The CCC cost-share payment to a participant will be
reduced so that total financial contributions for a structural or
vegetative practice from all public and private entity sources do not
exceed the cost of the practice.
Appeals
One respondent recommends that decisions made by the State
Conservationist on whether to accept innovative technologies, practices
and systems should be appealable.
Response: The decision on whether to accept or reject innovative
technologies is appealable. For information on the appeal process,
consult 7 CFR Parts 11 and 614.
One respondent expressed that this section needs clarification.
Response: This final regulation adopts as final, the language in
section 1468.30 which clarifies the appeal process.
One respondent requested adding an appeal process at the national
level for cases where an innovative practice was wrongly denied.
Response: The decision on whether to accept or reject innovative
technologies is appealable. For information on the appeal process,
consult 7 CFR Parts 11 and 614.
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 Purpose.
1468.2 Administration.
1468.3 Definitions.
1468.4 Establishing Conservation Farm Option (CFO) pilot project
areas.
1468.5 General provisions.
1468.6 Practice eligibility provisions.
1468.7 Participant eligibility provisions.
1468.8 Land eligibility provisions
1468.9 Conservation farm 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 Compliance with regulatory measures.
1468.32 Access to operating unit.
1468.33 Performance based upon advice or action of representatives
of CCC.
1468.34 Offsets and assignments.
1468.35 Misrepresentation and scheme or device.
Authority: 16 U.S.C. 3839bb.
Subpart A--General Provisions
Sec. 1468.1 Purpose.
(a) Through the Conservation Farm Option (CFO), the Commodity
Credit Corporation (CCC) provides financial assistance to eligible
farmers and ranchers to address soil, water, and related natural
resource concerns, water quality protection or improvement; wetland
restoration and protection; wildlife habitat development and
protection; and other similar conservation purposes on their lands in
an environmentally beneficial and cost-effective manner. The Natural
Resources Conservation Service (NRCS) may provide technical assistance,
upon request by the producer or landowner.
(b) The CCC provides a single contract and annual payments for
implementation of innovative and environmentally-sound methods for
addressing natural resource concerns for producers of wheat, feed
grains, cotton, and rice, resulting in consolidation of
[[Page 51787]]
payments that would have been available under the Conservation Reserve
Program (CRP), the Wetlands Reserve Program cost-share agreements
(WRP), and the Environmental Quality Incentives Program (EQIP). CFO
participation is determined through two step process: first, the Chief,
with FSA concurrence, selects CFO pilot project areas based on
proposals submitted by the public; then CCC accepts applications from
eligible producers or owners within the selected pilot project area.
Sec. 1468.2 Administration.
(a) CFO is carried out using Commodity Credit Corporation funds and
will be administered on behalf of CCC by the Natural Resources
Conservation Service (NRCS) and the Farm Service Agency (FSA) as set
forth below.
(b) NRCS will:
(1) Provide overall program management and implementation for CFO;
(2) Establish policies, procedures, priorities, and guidance for
program implementation, including determination of pilot project areas;
(3) Establish annual payment rates consistent with EQIP, CRP, and
WRP payment rates;
(4) Make funding decisions and determine allocations of program
funds, with FSA concurrence;
(5) Determine eligibility of practices;
(6) Provide technical leadership for conservation planning and
implementation, quality assurance, and evaluation of program
performance.
(c) FSA will:
(1) Be responsible for the administrative processes and procedures
including applications, contracting, and financial matters, such as
payments to participants, assistance in determining participant
eligibility, and program accounting; and
(2) Provide leadership for establishing, implementing, and
overseeing administrative processes for applications, contracts,
payment processes, and administrative and financial performance
reporting.
(d) NRCS and FSA will 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 apply to this part and all documents
issued in accordance with this part, unless specified otherwise:
Applicant means a producer or owner in an approved pilot project
area 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 farm plan means a record of a participant's decisions,
and supporting information for treatment of a unit of land or water as
a result of the planning process, that meets the local NRCS Field
Office Technical Guide (FOTG) criteria for each natural resource and
takes into account economic and social considerations. The plan
describes the schedule of operations and activities needed to solve
identified natural resource problems, and take advantage of
opportunities, at a conservation management system level. In the
conservation farm plan, the needs of the client, the resources, and
Federal, state, Tribal, and local requirements will be met.
Conservation practice means a specified treatment, such as
structural, vegetative, 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.
Farm Service Agency County 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. The guide contains
detailed information on the conservation of soil, water, air, plant,
and animal resources applicable to the local area for which it is
prepared. A copy of the guide for that area is available at the
appropriate NRCS field office.
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.
Innovative technology means the use of new management techniques,
specific treatments, or procedures such as structural or vegetative
measures used in field trials or as interim conservation practice
standards that have the purpose of solving or reducing the severity of
natural resource use problems or that take advantage of resource
opportunities. Innovative technologies used by program participants
must be able to achieve the required level of resource protection.
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, wildlife
management, resource conserving crop rotations, cover crop management,
and organic matter and carbon sink 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.
Local work group means representatives of FSA, the Cooperative
State Research, Education, and Extension Service (CSREES), the
conservation district, and other Federal, State, and local government
agencies, including Tribes and Resource Conservation and Development
councils, with expertise in natural resources who consult with NRCS on
[[Page 51788]]
decisions related to CFO implementation.
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.
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 Establishing Conservation Farm Option (CFO) pilot project
areas.
(a) CCC may periodically solicit proposals from the public to
establish pilot project areas in the Federal Register.
(b) Pilot projects may involve one or more participants. Each owner
or producer within an approved pilot project area must submit an
application in order to be considered for enrollment in the CFO. This
pilot project area may be a watershed, a subwatershed, an area, or an
individual farm that can be geographically described and has specific
environmental sensitivities or significant soil, water, and related
natural resource concerns. The pilot project area must have acreage
enrolled in a production flexibility contract, which is authorized by
the Agricultural Marketing and Transition Act of 1996. After these
pilot project area proposals are received, the Chief, with FSA
concurrence, will select proposals for funding.
(c) CCC will select pilot project areas based on the extent the
individual proposal:
(1) Demonstrates innovative approaches to conservation program
delivery and administration;
(2) Proposes innovative conservation technologies and system;
(3) Provides assurances that the greatest amount of environmental
benefits will be delivered in a cost effective manner;
(4) Ensures effective monitoring and evaluation of the pilot
effort;
(5) Considers multiple stakeholder participation (partnerships)
within the pilot area;
(6) Provides additional non-Federal funding; and
(7) Addresses the following:
(i) Conservation of soil, water, and related natural resources,
(ii) Water quality protection or improvement,
(iii) Wetland restoration and protection, and
(iv) Wildlife habitat development and protection,
(v) Or other similar conservation purposes.
Sec. 1468.5 General provisions.
(a) Program participation is voluntary.
(b) Participation in the CFO is limited to producers of wheat, feed
grains, cotton, or rice who have a production flexibility contract, in
accordance with part 1412 of this chapter, on the farm enrolling in CFO
and who are eligible for either CRP (7 CFR part 1410), EQIP (7 CFR part
1466), or WRP (7 CFR part 1467).
(c) The participant is responsible for the development of a
conservation farm plan for the farm or ranch and may request assistance
from NRCS or a third party in writing both the conservation farm plan
and installing the practices outlined within the plan. Conservation
practices in the conservation farm plan that would have been eligible
for payment under CRP, EQIP, or cost-share agreements under WRP are
eligible for CFO payment. The provisions for determining eligibility
for payment and the calculation of payment under CFO will be similar to
those specified for the eligible conservation practices under CRP,
EQIP, or cost-share agreements under WRP. For land retirement payments,
the CRP payment schedule in effect for the applicable soils at the time
the CFO contract is signed will be utilized. CCC will provide annual
payments to a participant for such conservation practices as specified
in the time schedule set forth in the conservation farm plan.
Sec. 1468.6 Practice eligibility provisions.
(a) Practices may be eligible for payment under CFO if the
conservation practice specified in the conservation farm plan is
determined to be an eligible practice, as determined by the Chief, in
accordance with:
(1) 7 CFR part 1410 for land retirement rental payments and
practices that are eligible under CRP;
(2) 7 CFR part 1467 for wetland restoration or protection practices
that are eligible under WRP; or
(3) 7 CFR part 1466 for conservation practices that are eligible
under EQIP.
(b) For practices that are installed on retired land, the CRP cost-
share rate for practices must be utilized.
Sec. 1468.7 Participant eligibility provisions.
Participants in the CFO must at the time of enrollment:
(a) Have a production flexibility contract in accordance with part
1412 of this chapter on the farm enrolling in CFO.
(b) Agree to forgo earning future payments under the Conservation
Reserve Program authorized by part 1410 of this chapter, the Wetlands
Reserve Program cost-share payments authorized by part 1467 of this
chapter, and Environmental Quality Incentives Program authorized by
part 1466 of this chapter, on the farm enrolled in the CFO for the term
of the CFO contract.
(c) Be in compliance with the highly erodible land and wetland
conservation provisions found at part 12 of this title;
(d) Have control of the land for the term of the proposed contract
period;
(1) 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.
(2) 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.
(3) If the applicant is a landowner, the landowner is presumed to
have control.
(e) Submit a proposed conservation farm plan to CCC that is in
compliance with the terms and conditions of the program. To receive
payment under the CFO, the participant must also meet the eligibility
requirements, as determined by the Chief, in:
(1) 7 CFR part 1410 if the land retirement rental payment and
practice determined eligible in accordance with Sec. 1468.6(a);
(2) 7 CFR part 1467 if the wetland restoration or protection
practice was determined eligible in accordance with Sec. 1468.6(b), or
[[Page 51789]]
(3) 7 CFR part 1466, if the conservation practice was determined
eligible in accordance with Sec. 1468.6(c).
(4) 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.
(5) Supply information as required by CCC to determine eligibility
for the program.
(6) Comply with all the provisions of the CFO contract which
includes the conservation farm plan approved by the local conservation
district.
Sec. 1468.8 Land eligibility provisions.
Land may be eligible for enrollment in CFO, if CCC determines that
the farm or ranch is enrolled in a production flexibility contract,
authorized by the Agricultural Marketing Transition Act of 1996 and if
the land upon which the CFO conservation practice, will be applied is
determined to be eligible land as determined by the Chief, in
accordance with:
(a) 7 CFR part 1410, if the practice was determined an eligible
land retirement rental payment and cost-share practice similar to CRP
in accordance with Sec. 1468.6(a);
(b) 7 CFR part 1467, if the practice was determined an eligible
wetland restoration or protection practice similar to WRP in accordance
with Sec. 1468.6(b); or
(c) 7 CFR part 1466, if the practice was determined an eligible
conservation practice similar to EQIP in accordance with
Sec. 1468.6(c).
Sec. 1468.9 Conservation farm plan.
(a) The conservation farm plan forms the basis of the CFO contract.
Prior to contract approval, a conservation farm plan must be written
and approved. In deciding whether to approve a conservation farm plan,
CCC may consider whether:
(1) The participant will use conservation practices to solve the
natural resource concerns that will maximize environmental benefits per
dollar expended, and
(2) The conservation practice would have been eligible for
enrollment in the CRP, EQIP, or under the WRP cost-share agreements.
(b) The conservation farm 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;
(2) Address the resource concerns identified in the CFO pilot
project area proposal;
(3) Contain a schedule for the implementation and maintenance of
the practices described in the conservation farm plan;
(4) Ensure that net environmental benefits under a CRP contract are
maintained or exceeded for the whole farm, as constituted by FSA, when
terminating a CRP contract and enrolling in a CFO contract; and
(5) Meet the objectives of the pilot project area.
(c) The conservation farm plan is part of the CFO contract.
(d) The conservation farm 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.
(e) Participants are responsible for implementing the conservation
farm plan in compliance with this part.
(f) Upon a participant's request, the NRCS may provide technical
assistance to a participant.
(1) Participants may, at their own cost, use qualified
professionals, other than NRCS personnel, 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.
(2) Technical and other assistance provided by qualified personnel
not 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.
(g) All conservation practices scheduled in the conservation farm
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.
(h)(1) To simplify the conservation planning process for the
participant, the conservation farm 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. CCC development or approval of a conservation farm plan
shall not constitute compliance with program, statutory and regulatory
requirements administered or enforced by a non-USDA 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 farm 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 owner or producer 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(s) of FSA or NRCS,
where the pilot project area is located.
(b) CCC will accept applications throughout the fiscal year. CCC
will rank and select the offers of applicants periodically, as
determined appropriate by the State Conservationist. The application
period will begin after a pilot project area has been approved.
(c) The designated conservationist, in consultation with the local
work group, will develop ranking criteria to prioritize applications
within a pilot project area which consists of more than one owner or
producer. NRCS will prioritize applications from the same pilot project
area using the criteria specific to the area. The FSA county committee,
with the assistance of the designated conservationist and designated
FSA official, will approve for funding the application in a pilot
project area based on eligibility factors of the applicant and the NRCS
ranking.
(d) The designated conservationist will work with the applicant to
collect the information necessary to evaluate the application using the
ranking criteria. An applicant has the option of offering and accepting
less than the maximum program payments allowed, offering to apply more
conservation practices to the land in order to increase the likelihood
of being enrolled. In evaluating the applications, the designated
conservationist will take into consideration the following factors:
(1) Soil erosion;
(2) Water quality;
(3) Wildlife benefits;
(4) Soil productivity;
[[Page 51790]]
(5) Conservation compliance considerations;
(6) Likelihood to remain in conserving uses beyond the contract
period, including tree planting and permanent wildlife habitat;
(7) State water quality priority areas;
(8) The environmental benefits per dollar expended; and
(9) The degree to which application is consistent with the pilot
project proposal.
(e) 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 must enter into a contract agreeing to implement a
conservation farm plan. The FSA county committee, with NRCS
concurrence, will use the NRCS ranking consistent with the provisions
of Sec. 1468.20 and grant final approval of the contract.
(b) A CFO contract will:
(1) Incorporate by reference all portions of a conservation farm
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 tend to defeat the
purposes of the contract, or reduce net environmental and societal
benefits;
(ii) 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, in accordance with the provisions of
Sec. 1468.25 of this part;
(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;
(iv) Agree to forego participation in CRP, EQIP, and the cost-share
agreements under WRP, along with future payments associated with these
programs, with regard to the land under the CFO contract;
(v) 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 constituted by FSA.
(d) The contract will incorporate the operation and maintenance of
conservation practices applied under the contract, including those
practices transferred from terminated CRP and EQIP contracts and WRP
cost-share agreements. For persons wishing to transfer from CRP, EQIP,
or WRP to CFO, practices included in CRP or EQIP contracts or WRP cost-
share agreements must be included in a CFO contract if an owner or
producer wishes to participate, unless otherwise stated in the
conservation farm plan.
(e) Acreage that is subject to a WRP easement will not be included
in the CFO contract.
(f) Upon completion, the participant must certify that a
conservation practice is completed in accordance with the conservation
farm plan to establish compliance with the contract.
Sec. 1468.22 Conservation practice operation and maintenance.
(a) The participant will operate and maintain the conservation
practice for its intended purpose for the life span of the conservation
practice, as identified in the conservation farm plan. Conservation
practices installed before the execution of a CFO contract, but needed
in the contract to obtain the environmental benefits agreed upon, are
to be operated and maintained as specified in the contract. NRCS may
periodically inspect the conservation practice during the lifespan of
the practice as specified in the contract to ensure that the operation
and maintenance is occurring.
(b) For those persons who are signatories to existing CRP or EQIP
contracts, or WRP cost-share agreements, practices will be transferred
from EQIP and CRP contracts or WRP cost-share agreements, as agreed
upon in the CFO conservation farm plan and CFO contract. Remaining
rights and obligations under CRP, EQIP, or WRP will be incorporated
into the new CFO contract. Practices included in CRP, EQIP, or WRP will
be incorporated into the new CFO contract. Practices included in CRP or
EQIP contracts or WRP cost-share agreements must be included in a CFO
contract if an owner or producer wishes to participate. Participants in
CFO with CRP, EQIP, or WRP practices incorporated into CFO contracts
are responsible for operating and maintaining these practices for the
balance of the period specified in the original program contract,
unless otherwise stated in the conservation farm plan and CFO contract.
Sec. 1468.23 Annual payments.
(a) CCC will determine annual payments, subject to the availability
of funds, based on the value of the expected payments that would have
been paid to the participant for that practice as specified in:
(1) Part 1410 of this chapter, if the practice is a land retirement
rental payment or cost-share practice which would have qualified for
payment under CRP in accordance with Sec. 1468.6(a);
(2) Part 1467 of this chapter, if the practice is a wetland
restoration or protection practice which would have qualified for
payment under WRP which was determined eligible in accordance with
Sec. 1468.6(b);
(3) Part 1466 of this chapter, if the practice was a conservation
practice which would have qualified for payment under EQIP which was
determined eligible in accordance with Sec. 1468.6(c);
(b) The maximum amount of annual payments which a person may
receive under the CFO for any fiscal year shall not exceed the total of
the amounts calculated in accordance with paragraph (a) of this section
after being limited as follows:
(1) The payment calculated in accordance with paragraph (a)(1) of
this section is limited in accordance with CRP payment limitation
provisions set forth in part 1410 of this chapter.
(2) The payment calculated in accordance with Sec. 1467.9(a)(2) of
this chapter is not limited.
(3) The payment calculated in accordance with Sec. 1466.23(a)(3) of
this chapter is limited in accordance with EQIP payment limitation
provisions in Sec. 1466.23(b) of this chapter.
(c) The regulations set forth at part 1400 of this chapter will be
applicable in making payment eligibility determinations for CFO and in
making person determination as they apply to the limitation of payments
determined in accordance with paragraph (b) of this section.
(d) The CCC cost-share payments to a participant shall be reduced
so that total financial contributions for a structural or vegetative
practice from all public and private entity sources do not exceed the
cost of the practice.
(e) A landowner or producer that enrolls in CFO and terminates a
CRP or EQIP contract or WRP cost-share
[[Page 51791]]
agreement will be eligible to receive payments for practices which have
been determined, established, or completed by the technical agency
under those contracts or agreements. Once the CFO contract is
effective, all payments for practices, including any practice
transferred from the terminated contract agreement will be made under
the CFO contract, except for payments already earned under prior
contracts or cost-share agreements.
(f) Payments will not be made to a participant who has applied or
initiated the application of a conservation practice for the purposes
of CFO prior to approval of the CFO contract.
(g) When requested by the State Conservationist on a case-by-case
basis, the Chief may approve, based upon availability of funding, cost
share on the reapplication of a practice to replace or repair practice
destroyed by unusual circumstances beyond the control of the landowner.
(h) The participant and NRCS must certify that a conservation
practice is completed in accordance with the conservation farm plan to
establish compliance with the contract before the CCC will approve the
payment of any cost-share, incentive, or land retirement payment.
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 farm plan is revised in accordance with CCC requirements
and is approved by the conservation district.
(b) The participant may agree to transfer a contract to another
eligible owner or operator with the agreement of CCC. The transferee
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. By
agreeing to participate in CFO, CCC may require operation and
maintenance of those conservation practices installed under CRP, EQIP,
or WRP.
(c) CCC may require a participant to refund all or a portion of any
assistance earned under a CRP or EQIP contract, or WRP cost-share
agreement that was terminated as a condition of participation in CFO,
if the participant sells or loses control of the land under a CFO
contract and the new owner or controller does not assume responsibility
under the contract.
Sec. 1468.25 Contract violations and termination.
(a)(1) If it is determined that a participant is in violation of
the provisions of this part, or the terms of the contract including
portions of the contract that incorporate transferred obligations from
CRP or EQIP contracts, or WRP cost-share agreements, CCC will give the
participant written notice of a reasonable time to correct the
violation and comply with the terms of the contract and attachments
thereto, as determined by the FSA county committee, in consultation
with NRCS. If a participant continues in violation after the time to
comply has elapsed, the FSA county committee may, in consultation with
NRCS, terminate the CFO contract.
(2) Notwithstanding the provisions of paragraph (a)(1) of this
section, a contract termination shall be effective immediately upon a
determination by the FSA county committee, in consultation with NRCS,
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 shall refund all
or part of the payments received, plus interest, determined in
accordance with part 1403 of this chapter. CCC 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 for any reason stated above,
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 without
penalty, if CCC determines that such termination would be in the public
interest.
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 11 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;
(3) Payment rates, and cost-share percentages;
(4) Science-based formulas and factor values;
(5) Soils mapping and information; and
(6) Other matters of general applicability.
Sec. 1468.31 Compliance with regulatory measures.
Participants who carry out conservation practices shall be
responsible for obtaining the authorities, rights, easements, permits,
or other approvals necessary for the implementation, operation, and
maintenance of the conservation practices in keeping with applicable
laws and regulations. Participants shall be responsible for compliance
with all laws and for all effects or actions resulting from the
participant's performance under the contract.
Sec. 1468.32 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. 1468.33 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 FSA county committee,
in consultation with NRCS, may accept the advice or action as meeting
the
[[Page 51792]]
requirements of the program and may grant relief, to the extent it is
deemed desirable, to provide a fair and equitable treatment because of
the good-faith reliance on the part of the participant.
Sec. 1468.34 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. 1468.35 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 September 23, 1998.
Pearlie S. Reed,
Vice President, Commodity Credit Corporation.
[FR Doc. 98-25923 Filed 9-28-98; 8:45 am]
BILLING CODE 3410-16-P
