[Federal Register Volume 61, Number 185 (Monday, September 23, 1996)]
[Proposed Rules]
[Pages 49697-49711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24268]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 61, No. 185 / Monday, September 23, 1996 / 
Proposed Rules  

[[Page 49697]]



DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 704

Commodity Credit Corporation

7 CFR Part 1410

RIN 0560-AE95


Conservation Reserve Program--Long-Term Policy

AGENCY: Farm Service Agency and Commodity Credit Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Commodity Credit Corporation (CCC) and the Farm Service 
Agency (FSA) propose to amend the Conservation Reserve Program (CRP) 
regulations to: set forth the terms and conditions of enrolling acreage 
in the CRP; update program eligibility requirements; consolidate and 
reorganize all CRP regulations into one regulation to cover all 
existing contracts; and eliminate unnecessary regulations. This action 
is being taken to cost effectively target the CRP to more 
environmentally sensitive acreage and because The Federal Agriculture 
Improvement and Reform Act of 1996 (the 1996 Act) authorized the use of 
CCC funds to implement the CRP.
    These actions will: Update program eligibility requirements; 
eliminate unnecessary regulations; improve remaining regulations; and 
complete some of the actions being taken by FSA as part of the National 
Performance Review Initiative to eliminate unnecessary regulations and 
improve those that remain in force.

DATES: Comments must be received on or before November 7, 1996 to be 
assured of consideration.

ADDRESSES: Comments and requests for additional information should be 
directed to Cheryl Zavodny, Conservation and Environmental Protection 
Division, FSA, P.O. Box 2415, STOP 0513, Washington, DC 20250-0513, 
telephone 202-720-7333.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed rule has been determined to be Economically 
Significant and was reviewed by Office of Management and Budget (OMB) 
under Executive Order 12866.

Cost-Benefit Assessment

    A cost-benefit assessment was prepared to assist in implementing 
provisions of the 1996 Act amendments to the Food Security Act of 1985, 
as amended, and setting forth long-term CRP policy relating to 
extension of enrollment authority, changes in eligibility, and related 
adjustments in CRP. Key environmental impacts are considered in the 
cost-benefit assessment.
    Although the proposed rule does not specify an acreage target for 
future enrollment, enrolled acres are projected in the cost-benefit 
assessment to decline to 28.1 million acres by 2002. However, while 
instructive, the analysis should not be viewed as an indication of 
future enrollment policy. Without the authority to extend or enroll 
acreage the expiration of the existing contracts would result in an 
estimated decline in enrolled acreage to 1.7 million acres by 2002.
    As noted in the cost-benefit assessment, which was based on the 
issues that are discussed in the Background section, continued 
enrollment would generate an estimated $17 billion in added income to 
program crop producers during the period 1997 to 2002 as a result of 
higher crop prices and CRP rental payments. Government outlays with 
continued enrollment would be about $7 billion higher during the period 
compared to outlays without continued enrollment. Additional 
expenditures by domestic and foreign purchasers of the commodities 
would total about $19 billion over the 1997 to 2002 period. This 
exceeds net farm income adjusted for CRP payments by $8.4 billion. 
However, this assessment is incomplete because it does not include any 
measure of the value of the benefits gained from enrolling the 
environmentally sensitive cropland in CRP which is the primary purpose 
of the program. Total funds available for production flexibility 
contracts do not vary with CRP enrollment, although payment rates for 
participating producers will decline as additional acreage is removed 
from CRP and becomes eligible for contract payments.
    Also evaluated in the cost-benefit assessment are the impacts from 
changes in acreage eligible for early release, incentive payments for 
enrollment of high-valued environmental practices, enrollment of 
wetlands, designation criteria for priority areas, and potential 
provisions for limited haying and grazing on enrolled acres. The 
impacts of these changes are modest, although the general thrust is to 
enhance the environmental benefits from the program with little effect 
on outlays or farm income.

Risk Assessment

    A risk assessment and related cost-benefit analysis are required to 
accompany proposed major rules, as defined under Section 304 of Public 
Law (P.L.) 103-354. Because agricultural producers need to know long-
term objectives of the CRP as soon as possible in order to formulate 
production plans for 1997 and because completion of the regulatory 
analysis required by Section 304 of P.L. 103-354 to accompany a 
proposed regulation is not practicable in the time available, the 
Director, Office of Risk Assessment and Cost-Benefit Analysis (ORACBA), 
has concluded that it is appropriate to extend the time allowed for 
completion of the required analyses. A general time line for conducting 
the required analyses developed by the Director and the FSA involves a 
three-phase approach.
    Phase 1. Available upon request will be: (a) an environmental 
assessment and (b) an acceptable outline to guide the development of 
the required risk assessment.
    Phase 2. Accompanying the final rule will be: (a) the completed 
environmental risk assessment, as described in this proposed rule; (b) 
an outline of a cost-benefit analysis of mitigation measures; (c) a 
comparison of the relative risks managed by CRP and by other programs 
in the Department which address similar risks resulting from comparable 
activities; and (d) a plan for monitoring of the risk reduction 
expected to occur as a result of the CRP (as called for in P.L. 104-
127). Evaluation and monitoring will allow completion of a meaningful 
cost-benefit analysis of the current and potential

[[Page 49698]]

enrollment practices compared to measured environmental benefits.
    Phase 3. One year after the final rule has been promulgated, the 
cost-benefit analysis of mitigation measures will be completed. This 
cost-benefit analysis will address the costs associated with 
implementation and compliance with the regulation and the qualitative 
and quantitative benefits of the regulation.
    After the final rule has been promulgated, FSA, in consultation 
with ORACBA, will conduct the comprehensive risk management assessment 
which will evaluate the effectiveness of the program in protecting the 
environmental attributes managed by this program.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this proposed rule because neither the FSA nor the CCC is 
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 Evaluation

    It has been determined by an environmental assessment that this 
rule does not have a significant adverse impact on the environmental, 
historical, social or economic resources of the Nation. Therefore, it 
has been determined that these actions will not require an 
Environmental Impact Statement.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require intergovernmental consultation with State and 
local officials. See notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115 (June 24, 1983).

Unfunded Mandates

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Pub. L. 
104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, CCC 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, or tribal governments, in 
the aggregate, or the private sector, of $100 million or more in any 
one year. When such a statement is needed for a rule, section 205 of 
the UMRA generally requires CCC to identify and consider a reasonable 
number of regulatory alternatives and adopt the least costly, more 
cost-effective or least burdensome alternative that achieves the 
objectives of the rule. This rule contains no Federal mandates (under 
the regulatory provisions of Title II of the UMRA) for State, local, 
and tribal governments or the private sector. Therefore, this rule is 
not subject to the requirements of sections 202 and 205 of the UMRA.

Federal Domestic Assistance Program

    The title and number of the Federal Domestic Assistance Program, as 
found in the Catalog of Federal Domestic Assistance, to which this rule 
applies, is the Conservation Program--10.069.

Paperwork Reduction Act

    The CRP is a voluntary program in which landowners and operators 
can enter into long-term contracts with the CCC to establish permanent 
vegetation cover for land that is highly erodible or is contributing to 
a serious water quality or other environmental problem. Landowners and 
operators interested in participating in the program submit offers 
which, if accepted, result in contracts. The CCC provides contract 
participants with cost-share assistance for cover establishment and 
annual rental payments for the term of the contract.
    Information collections are used by interested parties in 
submitting offers and enrolling in the program, and by participants in 
documenting requests for program payments, reporting annual program 
compliance, and documenting other actions relating to program 
administration.
    Title: 7 CFR Part 704, 1986-1990 Conservation Reserve Program and 7 
CFR Part 1410, 1991-1995 Conservation Reserve Program.
    OMB Number: 0560-0125.
    Approval Date of Expiration: February 28, 1997.
    Type of Request: Revision of a previously approved information 
collection.
    Abstract: It is proposed that all CRP information collections will 
be consolidated in 7 CFR Part 1410 and cease under 7 CFR Part 704. 
Total public burden hours are based on the following assumptions:
    1. CRP contracts average 100 acres per contract.
    2. CRP contracts for approximately 23 million acres are scheduled 
to expire on September 30, 1997. The Secretary has the authority to 
maintain up to 36.4 million acres in the program through 2002. The 
agency assumed for purposes of this notice that approximately 4.0 
million acres will be newly enrolled or re-enrolled in each of the 
years 1997 through 2002.
    3. Twenty-five percent of the producers requesting early releases 
will not release all of their contract acreage.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .126132 hours per response.
    Respondents: Owners, operators, and other producers on eligible 
cropland.
    Estimated Number of Respondents: 272,500
    Estimated Number of Responses per Respondent: 1
    Estimated Total Annual Burden Hours on Respondents: 34,371
    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of collection of information on those who are to 
respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology. Comments may be sent to Desk 
Officer for Agriculture, Office of Information and Regulatory Affairs, 
OMB, Washington, D.C. 20503 and to Cheryl Zavodny, Chief, Conservation 
Programs Branch, Conservation and Environmental Protection Division, 
USDA, FSA, P.O. Box 2415, STOP 0513, Washington, D.C. 20013, (202) 720-
7333.
    Copies of information collection may be obtained from Cheryl 
Zavodny, Chief, Conservation Programs Branch, Conservation and 
Environmental Protection Division, USDA, FSA, P.O. Box 2415, STOP 0513, 
Washington, D.C. 20013, (202) 720-7333.
    OMB is required to make a decision concerning the collection(s) of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment to the Department of Agriculture 
on any substantive CRP regulations that may be the subject of other 
notices.
    All responses will be summarized and included in the request for 
OMB

[[Page 49699]]

approval. All comments will also become a matter of public record.

Executive Order 12778

    This proposed rule has been reviewed in accordance with Executive 
Order 12778. The provisions of this rule are not retroactive and 
preempt State and local laws to the extent such laws are inconsistent 
with the provisions of this rule. Before any action may be brought in a 
Federal court of competent jurisdiction, the administrative appeal 
rights afforded program participants at 7 CFR parts 11, 624, and 780 
must be exhausted.

Background

    The CRP was authorized by the Food Security Act of 1985 (1985 Act), 
and amended by the Food, Agriculture, Conservation, and Trade Act of 
1990 (1990 Act). The Code of Federal Regulations contains two parts 
established for the CRP. An agency regulation, 7 CFR Part 704, contains 
provisions regarding the CRP acreage enrolled under the 1985 Act from 
1986 through 1990. A Commodity Credit Corporation regulation, 7 CFR 
Part 1410, contains provisions regarding the CRP acreage enrolled under 
the 1990 Act from 1991 through 1995.
    The 1985 Act was further amended by the Federal Agriculture 
Improvement and Reform Act of 1996 (1996 Act) which provided the 
Secretary the authority to maintain up to 36.4 million acres in the 
CRP.
    The purpose of CRP is to cost effectively assist owners and 
operators in conserving and improving soil, water, and wildlife 
resources by converting highly erodible and other environmentally 
sensitive acreage normally devoted to the production of agricultural 
commodities to a long term vegetative cover. CRP participants enroll 
contracts for 10 to 15 years and, in some cases, easements, in exchange 
for annual rental payments and cost share assistance for installing 
certain conservation practices. In determining the amount of annual 
rental payments to be paid, CCC considers, among other things, the 
amount necessary to encourage owners or operators of eligible cropland 
to participate in the CRP. Applicants submit bids in such a manner as 
the Secretary prescribes. The maximum rental payments CCC will pay 
reflect site-based soil productivity, prevailing local cash equivalent 
rental rates and maintenance cost. Bids offered by producers who 
request rental payments greater than the amount which CCC is willing to 
pay for their soil type are automatically rejected by CCC. Except for 
the continuous signup process implemented in September 1996, remaining 
bids are evaluated for possible acceptance based on a comparison of 
environmental benefits indicators with the rental payment cost. The 
continuous signup process does not include an evaluation based on 
environmental benefits indicators because only those practices designed 
to obtain high environmental benefits will be eligible to be offered 
during the continuous signup. Acreage determined eligible for 
continuous signup by the Secretary is automatically accepted in the 
program providing all other eligibility requirements are met.

Program Changes

    The Department proposes to remove 7 CFR Part 704 and combine those 
remaining regulations still in effect into 7 CFR Part 1410. It is 
proposed that Part 1410 be reissued in its entirety.
    The 1996 Act provides guidance regarding conservation priority 
areas under Environmental Conservation Acreage Reserve Program. Section 
1410.3 has been amended accordingly to reflect the new provisions.
    With respect to land eligibility, CCC proposes to change, in 
Section 1410.6, the existing criteria to include wetlands and certain 
acreage enrolled in the Water Bank Program (WBP) administered by the 
Natural Resource Conservation Service. Wetlands are intrinsically 
valuable natural resources that provide important benefits to people 
and the environment. Wetlands improve water quality, reduce flood and 
storm damage, help control soil erosion, and provide important fish and 
wildlife habitat. Certain wetlands provide particularly important 
filtering functions because of their location between land and water. 
WBP acreage to the extent it otherwise meets statutory CRP criteria 
would only be eligible to be enrolled in the CRP during the final year 
of the WBP agreement. Further, only those WBP acres that are not 
classified as naturally occurring types 3 through 7 wetlands would be 
eligible to be enrolled in the CRP. Naturally occurring types 3 through 
7 wetlands are considered permanently under water and, therefore, would 
continue to be ineligible.
    The 1985 Act authorized the watershed areas of the Chesapeake Bay 
Region, the Great Lakes Region, the Long Island Sound Region, and other 
areas of special environmental sensitivity to be designated as 
conservation priority areas for a period of 5 years subject to 
redesignation. A number of these areas are approaching the expiration 
of their initial designation.
    Prior to the 1996 amendments to the 1985 Act, the conservation 
priority area authority applied only to CRP. CRP's conservation 
priority area authority includes addressing ``actual and significant 
adverse water quality or habitat impacts related to agricultural 
production activities.'' The 1996 Act amendments also authorized 
conservation priority areas applied to the CRP, the Wetlands Reserve 
Program (WRP), and the Environmental Quality Incentives Program (EQIP) 
to ``assist * * * agricultural producers * * * to comply with nonpoint 
source pollution requirements * * * and other Federal and State 
environmental laws and to meet other conservation needs.''
    In Section 1410.8, CCC proposes to restrict the total area in a 
State that may be designated as a conservation priority area to no more 
than 10 percent of the cropland in the State. When submitting requests 
for conservation priority designation, State FSA committees will be 
required to develop an evaluation and monitoring system to determine 
the effectiveness of designating a particular area a priority.
    With respect to wetland enrollment, CCC proposes, in Section 
1410.11, to provide CRP cost-share assistance under certain conditions. 
The decision to restore wetlands enrolled in the CRP is voluntary; 
however, offers for enrollment will be evaluated based on the level of 
restoration a producer is willing to install. CCC proposes to offer a 
financial incentive of up to 25 percent of the cost of restoring the 
hydrology in order to encourage participants to restore wetland 
acreage. This incentive is in addition to any applicable annual rental 
or cost share payments, not to exceed 50 percent of the land value. 
Producers who want to restore wetlands enrolled in the CRP may also 
elect to transfer acreage from the CRP to the Wetlands Reserve Program 
(WRP) if the acreage is suitable and approved by CCC. Transferred 
acreage shall be removed from the CRP, without penalty, effective the 
day an easement is filed.
    To encourage producers to enroll certain acreage in the CRP, CCC 
proposes to offer financial incentives, in addition to the normal 
annual rental payment and cost-share assistance, to enroll filter 
strips, riparian buffers, field windbreaks, grass waterways, and 
acreage located in Environmental Protection Agency (EPA) designated 
wellhead protection areas. These acres offer an environmental targeting 
tool for water quality, wildlife habitat, soil erosion and have 
positive environmental impacts to much larger acreage. Accepting 
acreage suitable for these practices into the CRP results in

[[Page 49700]]

converting cropland acreage to areas of grass or trees that primarily: 
(1) reduce sedimentation, organic matter, and pollutants from 
subsurface runoff and subsurface flow; (2) reduce wind and water 
erosion; and, (3) enhance wildlife habitat. Therefore, the regulation 
at Section 1410.42 provides for a special monetary incentive to 
encourage enrolling such acreage in the CRP.
    The 1985 Act, as amended, generally provided that no commercial use 
can be made of the enrolled CRP acreage but permits haying or grazing 
during droughts or similar emergencies. Accordingly, CCC proposes to 
limit haying and grazing of acreage enrolled in the CRP to these 
instances. As explained later, CCC seeks comments on development of 
periodic managed haying or grazing provisions.
    The Agriculture, Rural Development, Food and Drug Administration, 
and Related Agencies Appropriation Act, 1997 (Public Law 104-180), 
provides that, for fiscal year 1997, none of the funds made available 
by that Act can be used to extend any existing or expiring contract in 
the CRP. Any acreage which a participant currently has in the program 
for which the participant is seeking continued enrollment shall compete 
for enrollment based on its environmental benefits relative to the cost 
of enrolling acreage in the program and shall be subject to the maximum 
payment rates, as determined by CCC, based on soil productivity and 
prevailing local cash or cash equivalent rental rates. Under the terms 
of the proposed rule, eligibility for new enrollment of acreage already 
enrolled in the CRP will be based on the same criteria for enrolling 
new acreage.
    With respect to the unilateral early contract termination 
provisions for certain acreage authorized by the 1996 Act, CCC proposes 
to expand the list of ineligible acreage to include: (1) all wetlands, 
not just those enrolled under signup 8 and 9 criteria; (2) land subject 
to frequent flooding, as determined by CCC; (3) EPA designated wellhead 
protection areas; and (4) any wetland buffers that may be required 
according to the conservation plan to protect the functions and values 
of wetland acreage.
    Interim rules published on May 8, 1995, and March 15, 1996, allowed 
for the early termination of some acreage from certain contracts. The 
1996 Act amendments to the 1985 Act provided that for certain existing 
contracts CRP participants could unilaterally obtain an early release 
from contract obligations. Since the initial interim rule published in 
the Federal Register, CCC has modified ineligible land categories. In 
all cases, however, USDA has based its determinations on two factors: 
(1) redirecting CRP enrollment from productive, less erodible land to 
more environmentally sensitive acreage; and (2) weighing its 
responsibility of ensuring a grain supply that meets market demand. In 
comparison, CCC offers incentive payments for the enrollment of land to 
be devoted to certain environmental practices. In addition to the 
factors described above, in designating which practices are eligible 
for incentive payments, USDA also considers such other factors as 
necessary, including, but not limited to: (1) whether to encourage the 
adoption of a particular environmentally related management practice; 
(2) what rate is complementary to the adoption of such practice; and 
(3) any budget impacts.
    The CRP will be carried out by CCC through the FSA using FSA State 
and county offices. State technical committees and local conservation 
districts will also be involved in the operation of the CRP. In order 
to maximize the environmental and conservation benefit for funds to be 
expended, conservation practices and the land for which offers may be 
accepted may vary as conditions change. However, CCC intends to rank 
competitively all offers based on the environmental benefits index 
taking into account the Government cost of the contract except for 
those contracts the acceptance of which would provide especially high 
environmental benefits. In those cases, CCC would accept those offers 
without additional evaluation when the requested rental rate is less 
than or equal to the maximum rental rate CCC is prepared to pay.
    The proposed regulation provides, in Section 1410.31, that in 
determining acceptability of offers, the Secretary may use a formula 
based upon a number of environmental factors to help determine an 
environmental benefits index value for the management practice or 
practices offered for the program. Along with Government cost of 
enrolling the acreage, these environmental factors are used to 
construct an environmental benefits index value to compare offers of 
acreage providing multiple environmental benefits. CCC proposes to use 
a system that considers soil erosion, water quality, wildlife habitat, 
and cost while also considering other technical factors such as, but 
not limited to, recommendations of State technical committee, 
conservation priority areas, permanent wildlife habitat, tree 
plantings, wetlands functions and values, and conservation compliance 
requirements.
    Section 1410.64 is proposed to comply with Section 226(c) of the 
Department of Agriculture Reorganization Act of 1994 that requires FSA, 
in establishing policies, priorities, and guidelines, to obtain the 
concurrence of the Natural Resources Conservation Service at national, 
State and, local levels.
    Additionally, there are four issues for which CCC is seeking 
comment but which are not in the proposed rule. The first issue is in 
regard to whether and in what manner CRP acreage could be devoted to 
the production of biomass crops and whether such use would be 
consistent with the policy and provisions of the authorizing 
legislation. The Conference Report accompanying the 1996 Act indicated 
that ``the Managers recommend that the Secretary consider allowing 
biomass production as an acceptable cover crop practice during the 
period of a contract, provided that no harvesting is allowed until 
after the contract is completed or terminated.'' The purpose of such 
use of CRP acreage would be to pursue the cost-effective development 
and commercialization of integrated biomass energy systems to 
positively impact global climate change and to promote rural 
development.
    The second issue is in regard to periodic nonemergency haying or 
grazing of CRP acreage. According to reports from various conservation 
and environmental groups, haying or grazing of CRP grass acreage every 
three years, if performed according to a plan, could benefit wildlife 
habitat and improve cover quality. However, several States have 
received approval to hay and graze CRP more often under emergency 
provisions. If managed haying or grazing is essential to the 
conservation benefit of a particular site and if such activity does not 
negatively affect the local livestock and forage markets, periodic 
nonemergency haying and grazing could possibly be authorized under the 
authority that the Secretary has to modify contracts to accomplish the 
goals of the program without interfering with the policy underlying the 
provision of the statute forbidding, generally, the commercial use of 
the CRP forage. Within those parameters, examples of periodic managed 
haying and grazing include, but are not limited to: (1) allowing haying 
and grazing once every 3 years as a management tool for wildlife 
habitat and for other purposes for certain CRP practices according to a 
plan with an associated payment reduction based on the value of the 
forage provided the applicant agrees to forego emergency haying and 
grazing provisions; (2) allowing haying and grazing once every 3 years 
as a management tool for wildlife habitat

[[Page 49701]]

and for other purposes for certain CRP practices according to a plan 
with an associated payment reduction equal to a percent of the annual 
CRP rental rate for haying and for grazing equal to an appropriate 
animal unit per month charge, provided the applicant agrees to forego 
``emergency'' haying and grazing provisions if allowed thereafter for 
other participants; (3) allowing haying and grazing once every 3 years 
as a management tool for wildlife habitat and for other purposes for 
certain CRP practices according to a conservation plan without an 
associated payment reduction provided the applicant agrees to forego 
emergency haying and grazing provisions; or, (4) allowing haying every 
year of small amounts of acreage enrolled in CRP and devoted to 
specific uses such as filter strips or grass waterways under a 
conservation plan. Further, within the context or providing an 
essential conservation benefit of a particular site provided such 
activity does not negatively affect the local livestock and forage 
markets, public comment is sought regarding the utility and, if 
authorized, terms and frequency upon which periodic nonemergency haying 
and grazing would be conducted.
    The third issue is in regard to whether and in what manner CCC 
should implement the conservation priority area authority applicable to 
CRP, WRP, and EQIP. It is recognized that the identified environmental 
problem in a geographic area may be best served by only one of the 
programs. However, in some cases, the coordinated efforts of two 
programs or all three programs may be desirable to address the 
identified environmental problem. Accordingly, CCC seeks comment on 
practical, cost-effective, suggestions to implement the conservation 
priority area authority, when needed, in a coordinated manner.
    The fourth issue also is in regard to conservation priority areas. 
As previously indicated, a number of the conservation priority area 
designations are scheduled to expire in the near future. Among these 
are the Chesapeake Bay Region, the Great Lakes Region, and the Long 
Island Sound Region. CCC seeks comment on the most appropriate, cost-
effective manner in which to consider redesignation of these and other 
conservation priority areas.
    It has been determined that the comment period for this proposed 
rule will be 45 days as it was determined that a longer period would be 
contrary to the public interest. Limiting the period to 45 days will 
allow for the consideration of comments and publication of a final rule 
in time to hold a sign-up for the program in advance of the next spring 
planting season. Delay of the signup beyond that time would unduly 
inhibit the ability of the program to achieve the important public 
benefits which were the purpose of the recent amendments to the CRP and 
the other provisions of the 1996 Act dealing with conservation.
    Comments on the proposed rule are solicited from interested parties 
and will be considered for a period of 45 days after the date of 
publication of this proposed rule in the Federal Register. Any comments 
that are offered during the public comment period will be evaluated in 
the development of the final rule.

List of Subjects in 7 CFR Parts 704 and 1410

    Administrative practices and procedures, Base protection, 
Conservation plan, Contracts, Environmental indicators, Natural 
resources, and Technical assistance.

    Accordingly, 7 CFR Parts 704 and 1410 are proposed to be amended as 
follows:

PART 704--[REMOVED]

    1. Part 704 is removed.
    2. Part 1410 is revised to read as follows:

PART 1410--CONSERVATION RESERVE PROGRAM

Sec.
1410.1  Administration.
1410.2  Definitions.
1410.3  General Description.
1410.4  Maximum county average.
1410.5  Eligible persons.
1410.6  Eligible land.
1410.7  Duration of contracts.
1410.8  Conservation priority areas.
1410.9  Alley-cropping.
1410.10  Conversion to trees.
1410.11  Restoration of wetlands.
1410.12-1410.19  [Reserved]
1410.20  Obligations of participant.
1410.21  Obligations of the Commodity Credit Corporation.
1410.22  Conservation plan.
1410.23  Eligible practices.
1410.24-1410.29  [Reserved]
1410.30  Signup.
1410.31  Acceptability of offers.
1410.32  CRP contract.
1410.33  Contract modifications.
1410.34  Extended base protection.
1410.35-1410.39  [Reserved]
1410.40  Cost-share payments.
1410.41  Levels and rates for cost-share payments.
1410.42  Annual rental payments.
1410.43  Method of payment.
1410.44-1410.49  [Reserved]
1410.50  State enhancement program.
1410.51  Transfer of land.
1410.52  Violations.
1410.53  Executed CRP contract not in conformity with regulations.
1410.54  Performance based upon advice or action of the Department.
1410.55  Access to land under contract.
1410.56  Division of program payments and provisions relating to 
tenants and sharecroppers.
1410.57  Payments not subject to claims.
1410.58  Assignments.
1410.59  Appeals.
1410.60  Scheme or device.
1410.61  Filing of false claims.
1410.62  Miscellaneous.
1410.63  Permissive uses.
1410.64  Special concurrence requirements for certain functions.
1410.65  Paperwork Reduction Act assigned numbers.

    Authority: 15 U.S.C. 714b and 714c; 16 U.S.C. 3801-3847.


Sec. 1410.1   Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the Executive Vice President, 
Commodity Credit Corporation (CCC), and the Administrator, Farm Service 
Agency (FSA), through the Deputy Administrator. In the field, the 
regulations in this part will be administered by the State and county 
FSA committees (``State committees'' and ``county committees'', 
respectively).
    (b) State executive directors, county executive directors, and 
State and county committees do not have the authority to modify or 
waive any of the provisions in this part unless specifically authorized 
by the Deputy Administrator.
    (c) The State committee may take any action authorized or required 
by this part to be taken by the county committee which has not been 
taken by such committee, such as:
    (1) Correct or require a county committee to correct any action 
taken by such county committee which is not in accordance with this 
part; or
    (2) Require a county committee to withhold taking any action which 
is not in accordance with this part.
    (d) No delegation herein to a State or county committee shall 
preclude the Executive Vice President, CCC, and the Administrator, FSA, 
or a designee, or the Deputy Administrator from determining any 
question arising under this part or from reversing or modifying any 
determination made by a State or county committee.
    (e) Data furnished by the applicants will be used to determine 
eligibility for program benefits. Furnishing the data is voluntary; 
however, without it, program benefits will not be provided.
    (f) Notwithstanding other provisions of the preceding paragraphs of 
this section, the EI, suitability of land for permanent vegetative or 
water cover, factors for determining the likelihood of

[[Page 49702]]

improved water quality and adequacy of the planned practice to achieve 
desired objectives shall be determined by the Natural Resource 
Conservation Service (NRCS) or any other non-USDA source approved by 
NRCS, in accordance with the Field Office Technical Guide or other 
guidelines deemed appropriate by the NRCS, except that no such 
determination by NRCS shall compel CCC to execute a contract which CCC 
does not believe will serve the purposes of the program established by 
this part.
    (g) State committees, with NRCS, may develop a State evaluation 
process to rank acreage based on State specific goals and objectives. 
Such State committees may choose between developing a State ranking 
process or utilizing the national ranking process. States' ranking 
processes shall be developed based on recommendations from State 
Technical committees, follow national guidelines, and be approved by 
the Deputy Administrator.
    (h) CCC may consult with the Forest Service (FS) or the State 
forestry agency for such assistance as is determined by CCC to be 
necessary for developing and implementing conservation plans which 
include tree planting as the appropriate practice or as a component of 
a practice.
    (i) CCC may consult with the Cooperative State Research, Education, 
and Extension Service to coordinate a related information and education 
program as deemed appropriate to implement the Conservation Reserve 
Program (CRP).


Sec. 1410.2  Definitions.

    The following definitions shall be applicable to this part:
    Agricultural commodity means any crop planted and produced by 
annual tilling of the soil or on an annual basis by one trip planters 
or sugar cane planted or produced in a state or alfalfa and other multi 
year grasses and legumes in rotation as approved by the Secretary. For 
purposes of determining crop history, as relevant to eligibility to 
enroll land in the program, land shall be considered planted to an 
agricultural commodity during a crop year if, as determined by CCC, an 
action of the Secretary prevented land from being planted to the 
commodity during the crop year.
    Alley-cropping means the practice of planting rows of trees 
surrounded by a strip of vegetative cover, alternated with wider strips 
of agricultural commodities planted in accordance with a conservation 
plan of operation approved by the local Conservation District and CCC.
    Allotment means an acreage for a commodity allocated to a farm in 
accordance with the Agricultural Adjustment Act of 1938, as amended, 
and applicable commodity regulations.
    Alternative perennials means woody species of plants grown on 
certain CRP acres, including, but not limited to shrubs, bushes, and 
vines.
    Annual rental payment means, unless the context indicates 
otherwise, the annual payment specified in the CRP contract which, 
subject to the availability of funds, is made to a participant to 
compensate such participant for placing eligible land in the CRP.
    Applicant means a person who submits an offer to CCC to enter into 
a CRP contract.
    Arid area means acreage located west of the 100th meridian that 
receives less than 25 inches of average annual precipitation.
    Bid or offer means, unless the context indicates otherwise, if 
required by CCC, the per acre rental payment requested by the owner or 
operator in such owner's or operator's offer to participate in the CRP.
    Conservation District means a political subdivision of a State, 
Native American Tribe, or territory, organized pursuant to the State or 
territorial soil conservation district law, or Tribal law. The 
subdivision may be a conservation district, soil conservation district, 
soil and water conservation district, resource conservation district, 
natural resource district, land conservation committee, or similar 
legally constituted body.
    Conservation plan means a record of the participant's decisions, 
and supporting information, for treatment of a unit of land or water, 
and includes a schedule of operations, activities, and estimated 
expenditures needed to solve identified natural resource problems by 
devoting eligible land to permanent vegetative cover or other 
comparable measures.
    Contour grass strip means a vegetation area that follows the 
contour of the land the width of which is determined by the appropriate 
Field Office Technical Guide and the designation of which is included 
as a contour grass strip by a conservation plan required under this 
part.
    Contract Period means the period of time, of not less than 10 nor 
more than 15 years, the CRP contract is in effect.
    Cost-share payment means the payment made by CCC to assist program 
participants in establishing the practices required in a contract.
    Crop Acreage Base (CAB) means the acreage base for a crop on a farm 
which was established according to part 1413 of this chapter before 
enactment of the Federal Agriculture Improvement and Reform Act of 
1996.
    Cropland means land defined as cropland in accordance with the 
provisions of part 718 of this title, except for land in terraces that 
are no longer capable of being cropped.
    Deputy Administrator means the Deputy Administrator for Farm 
Programs, FSA, or designee.
    Designated 319 areas means areas approved by States under the Clean 
Water Act, as amended, administered by Environmental Protection Agency 
(EPA) and designated by the Deputy Administrator as eligible for entry 
into the CRP.
    Easement means the real property interest designated as such 
acquired by FSA, NRCS, or CCC under this part, to be filed with the 
appropriate local or State governmental official of office.
    Environmental Quality Incentives Program (EQIP) means the program 
authorized by the Food Security Act of 1985 (16 U.S.C. 3839aa-3839aa-7) 
in which eligible persons enter into contracts with CCC to address 
threats to soil, water, and related natural resources and for other 
purposes.
    Erodibility index (EI) means the factor used to determine the 
inherent erodibility of a soil by dividing the potential average annual 
rate of erosion without management for each soil by the predetermined T 
value for the soil.
    Federally owned land means land owned by the Federal Government or 
any department bureau, or agency thereof, or any corporation whose 
stock is wholly owned by the Federal Government.
    Field means a part of a farm which is separated from the balance of 
the farm by permanent boundaries such as fences, roads, permanent 
waterways, woodlands, other similar features, or croplines, except that 
croplines will be considered as separate fields only in cases where the 
eligible cropland and farming practices divide the land into manageable 
units and it is likely, as determined by CCC, that such cropline is not 
subject to change during the duration of the contract.
    Field Office Technical Guide means the official NRCS guidelines, 
criteria, and standards for planning and applying conservation 
treatments and conservation management systems. It contains detailed 
information on the conservation of soil, water, air, plant, and animal 
resources applicable to the local area for which it is prepared.
    Field windbreak, shelterbelt, and living snowfence mean a 
vegetative barrier with a linear configuration composed of trees or 
shrubs which are designated as such practices in a

[[Page 49703]]

conservation plan and which are planted for the purpose of reducing 
wind erosion, snow control, wildlife habitat, and energy conservation.
    Filterstrip means a strip or area of vegetation of a width 
determined appropriate for the purpose by the applicable Field Office 
Technical Guide.
    Highly erodible land applies to certain acreage enrolled in CRP 
before January 1, 1995, and means land which is classified by NRCS as:
    (1) Being predominantly Land Capability Classes II, III, IV, and V 
with:
    (i) An average annual erosion rate of at least 2T or;
    (ii) A serious gully erosion problem as determined by the Deputy 
Administrator;
    (2) Being predominantly Land Capability Classes VI, VII, or VIII;
    (3) If trees are to be planted under the conservation plan, eroding 
at the rate of at least 2T; or
    (4) Having:
    (i) An erodibility index equal to or greater than 8 for either wind 
or water erosion; and
    (ii) An erosion rate greater than T.
    Landlord means a person who rents or leases acreage to another 
person.
    Local FSA office means the FSA office serving the area in which the 
FSA records are located for the farm or ranch.
    Manageable unit means a part of a field that could be farmed in a 
normal manner as a self-contained unit.
    Offer or bid means, unless the context indicates otherwise, if 
required by CCC, the per acre rental payment requested by the owner or 
operator in such owner's or operator's offer to participate in the CRP.
    Operator means a person who is in general control of the farming 
operation on the farm, as determined by CCC.
    Owner means a person or entity who is determined by FSA to have 
sufficient legal ownership of the land, including a person who is 
buying the acreage under a purchase agreement; each spouse in a 
community property State; each spouse when spouses own property jointly 
and a person who has life-estate in a property.
    Participant means an owner or operator or tenant who has entered 
into a contract. Payment period means the 10-15 year contract period 
for which the participant receives an annual rental payment.
    Permanent vegetative cover means perennial stands of approved 
combinations of certain grasses, legumes, forbs, and shrubs with a life 
span of 10 or more years, or trees.
    Permanent wildlife habitat means a permanent vegetative cover with 
the specific purpose of providing habitat, food, or cover for wildlife 
and protecting other environmental concerns.
    Practice means a conservation, wildlife habitat, or water quality 
measure with appropriate operations and management as agreed to in the 
conservation plan to accomplish the desired program objectives 
according to NRCS standards and specifications as a part of a 
conservation management system.
    Predominantly highly erodible field means:
    (1) A field in which at least 66\2/3\ percent of the land in such 
field is highly erodible; or
    (2) A field on which the participant agrees to plant trees, as 
determined necessary by the Deputy Administrator to achieve overall 
program goals, which is at least 33\1/3\ percent highly erodible land.
    Quota means the pounds allocated to a farm for a commodity as 
prescribed in the applicable program regulations.
    Riparian buffer means areas adjacent to permanent or intermittent 
streams (as designated on United States Geological Survey topographic 
maps), permanent lakes, or wetlands that are influenced biologically 
and physically by the water regime of the water body. Riparian buffers 
shall be a minimum width as determined appropriate for the purpose of 
the practice by the Field Office Technical Guide.
    Soil Loss Tolerance (T) means the maximum average annual erosion 
rate specified in the Field Office Technical Guide that will not 
adversely impact the long term productivity of the soil.
    State Technical Committee means that committee established pursuant 
to 16 U.S.C. 3861 to provide information, analysis, and recommendations 
to the Department of Agriculture.
    State Water Quality Priority Areas means any area designated by the 
State committee and NRCS, in consultation with the State Technical 
Committee where agricultural nonpoint source pollutants or agricultural 
point source pollutants contribute or create the potential for failure 
to meet applicable water quality standards or the goals and 
requirements of Federal or State water quality laws. These areas may 
include areas designated under section 319 of the Federal Water 
Pollution Control Act (33 U.S.C. 1329) as water quality protection 
areas, sole source aquifers or other designated areas that result from 
agricultural nonpoint sources of pollution. Acreage in these areas 
could be determined eligible as conservation priority areas.
    Technical assistance means the assistance provided in connection 
with the CRP to owners or operators by NRCS, FS, or another source as 
approved by the NRCS or FS, as appropriate, in classifying cropland, 
developing conservation plans, determining the eligibility of land, and 
implementing and certifying practices, and forestry issues.
    Water bank program (WBP) means the program authorized by the Water 
Bank Act of 1970 (16 U.S.C. 1301-1311) in which eligible persons enter 
into 10 year agreements with NRCS to preserve, restore, and improve 
wetlands.
    Water cover means flooding of land by water either to develop or 
restore shallow water areas for wildlife or wetlands, or as a result of 
a natural disaster.
    Wellhead means the actual location of a well, as determined by CCC, 
for water being drawn for public use, as defined for public use by the 
Safe Drinking Water Act, as amended.
    Wetlands Reserve Program (WRP) means the program authorized by the 
Food Security Act of 1985 (16 U.S.C 3837-3837f) in which eligible 
persons enter to long-term agreements to restore and protect wetlands.


Sec. 1410.3  General description.

    (a) Under the CRP, the CCC will enter into contracts with eligible 
producers to convert eligible land to a conserving use for a minimum of 
10 years in return for financial and technical assistance.
    (b) A conservation plan for eligible acreage shall be approved by 
the Conservation District in which the lands are located.
    (c) The objectives of the CRP are to cost effectively reduce water 
and wind erosion, protect the Nation's long-term capability to produce 
food and fiber, reduce sedimentation, improve water quality, create and 
enhance wildlife habitat, and other objectives including encouraging 
more permanent conservation practices and tree planting.
    (d) Except as otherwise provided, a participant may, in addition to 
any payment under this part, receive cost-share assistance, rental 
payments, or tax benefits from a State, subdivision of such State, or a 
private organization in return for enrolling lands in CRP. However, a 
participant may not receive or retain CRP cost-share assistance if 
other Federal cost-share assistance is provided for such acreage under 
any other provision of law, as determined by the Deputy Administrator. 
Further, under no circumstances may the cost-share payments received 
under this part or otherwise exceed the cost of the practice, as 
determined by CCC.

[[Page 49704]]

Sec. 1410.4  Maximum county acreage.

    The maximum acreage which may be placed in the CRP and the WRP may 
not exceed 25 percent of the total cropland in the county of which no 
more than 10 percent of the cropland in the county may be subject, in 
the aggregate, to a CRP or WRP easement, unless CCC determines that 
such action would not adversely affect the local economy of the county. 
This restriction on participation shall be in addition to any other 
restriction imposed by law.


Sec. 1410.5  Eligible persons.

    (a) In order to be eligible to enter into a CRP contract in 
accordance with this part, a person must be an owner, operator, or 
tenant of eligible cropland and:
    (1) If an operator of eligible cropland must have operated such 
cropland for at least 1 year prior to the close of the applicable 
signup period and must provide satisfactory evidence that such operator 
will be in control of such cropland for the full term of the CRP 
contract period;
    (2) If an owner of eligible cropland, must have owned such cropland 
for at least 1 calendar year prior to the close of the applicable 
signup period, unless:
    (i) The new owner acquired such cropland by will or succession as a 
result of the death of the previous owner;
    (ii) The only ownership change in the 1-year period occurred due to 
foreclosure on the land and the owner of the land, immediately before 
the foreclosure, exercises a timely right of redemption from the 
mortgage holder in accordance with State law; or
    (iii) As determined by the Deputy Administrator, the circumstances 
of the acquisition are such as present adequate assurance that the new 
owner of such cropland did not acquire such cropland for the purpose of 
placing it in the CRP; or
    (3) If a tenant, the tenant is a participant with an eligible owner 
or operator.
    (b) Notwithstanding paragraph (a) of this section, under continuous 
signup provisions authorized by Sec. 1410.30, an otherwise eligible 
person must have owned or operated, as appropriate, the eligible 
cropland for at least 1 year prior to submission of a bid or offer.


Sec. 1410.6  Eligible land.

    (a) Except as otherwise provided in this section, in order to be 
eligible to be placed in the CRP, land must:
    (1) Have been annually planted or considered planted to an 
agricultural commodity in 2 of the 5 most recent crop years, as 
determined by the Deputy Administrator;
    (2) Be physically and legally possible to be planted in a normal 
manner to an agricultural commodity, as determined by the Deputy 
Administrator; and
    (3) Except as provided in paragraph (b) of this section, if in a 
redefined field, be a manageable unit which meets the minimum acreage 
requirements, as determined by the Deputy Administrator, for the 
county.
    (b) A field or portion of a field determined to be suitable for use 
as a permanent wildlife habitat, filterstrip, riparian buffer, contour 
grass strip, grass waterway, field windbreak, shelterbelt, living 
snowfence, or vegetation on salinity producing areas, and any area 
determined eligible for the CRP based on wetland or wellhead protection 
area criteria shall be eligible to be placed in the CRP, even if it 
does not meet the definition of a manageable unit. A field or portion 
of a field may be considered to be suitable for use as a filterstrip or 
riparian buffer only if it, as determined by NRCS:
    (1) Is located adjacent to a stream, other water of a permanent 
nature (such as a lake, pond, or wetland), sinkholes, or wetland 
excluding such areas as gullies or sod waterways; and
    (2) Is capable, when permanent grass, forbs, shrubs or trees are 
grown, of substantially reducing pollutant loadings or sediment that 
otherwise would be delivered to the adjacent stream or waterbody.
    (c) (1) A field which has evidence of scour erosion caused by out-
of-bank flows of water, as determined by NRCS, may be eligible to be 
placed in the CRP, even if the field does not meet the requirement of 
paragraph (a)(3) of this section.
    (2) In order for land to be eligible for enrollment in the CRP 
under this paragraph (c), such land must otherwise meet the 
requirements of paragraph (a) of this section.
    (3) Such land must in addition:
    (i) Be expected to flood a minimum of once every 10 years; and
    (ii) Have evidence of scour erosion as a result of such flooding.
    (4) To the extent practicable, only cropland areas of a field may 
be enrolled in the CRP under this paragraph. The entire cropland area 
of an eligible field may be enrolled if:
    (i) The size of the field is 9 acres or less; or
    (ii) More than one third of the cropland in the field is land which 
lies between the water source and the inland limit of the scour 
erosion.
    (5) If the full field is not eligible for enrollment under this 
paragraph, the portion of the field eligible for enrollment shall be 
that portion of the cropland between the water body and the inland 
limit of the scour erosion together with, as determined by the Deputy 
Administrator, additional areas which would otherwise be unmanageable 
and would be isolated by the eligible areas.
    (6) Cropland approved for enrollment under this paragraph shall be 
planted to an appropriate tree species or mix thereof according to the 
Field Office Technical Guide, unless tree planting is determined to be 
inappropriate by NRCS in consultation with FS, in which case the 
eligible cropland shall be devoted to another acceptable permanent 
vegetative cover in accordance with the Field Office Technical Guide.
    (d) Notwithstanding paragraph (a)(3) of this section, the following 
land may also, as determined by the Deputy Administrator, be considered 
eligible for the CRP under the provisions of this part, provided that 
all other provisions of paragraph (a) of this section are met:
    (1) Land contributing to the degradation of water quality or posing 
an on-site or off-site environmental threat to water quality if such 
land remains in production so long as water quality objectives, with 
respect to such land, cannot be obtained under other Federal programs, 
including but not limited to EQIP.
    (2) Land devoted to living snowfences, grass waterways, field 
windbreaks, wildlife habitat, shelterbelts, filterstrips, or riparian 
buffers;
    (3) Land devoted to certain covers, as determined by the Deputy 
Administrator, which are established and maintained according to the 
Field Office Technical Guide providing such acreage is not under life-
span requirements established under any other Federal Programs; or
    (4) Non-irrigated or irrigated cropland which produces or serves as 
the recharge area, as determined by the Deputy Administrator, saline 
seeps, or acreage which is functionally related to such saline seeps, 
or where a rising water table contributes to increased levels of 
salinity at or near the ground surface.
    (e) Federal lands, lands acquired by an agency of the Federal 
Government, or by a quasi-federal entity are ineligible for the CRP.
    (f) Except as provided in paragraph (h) of this section and unless 
otherwise approved by the Deputy Administrator, land otherwise eligible 
for the CRP shall not be eligible if the land is subject to a deed or 
other restriction prohibiting

[[Page 49705]]

the production of agricultural commodities.
    (g) Acreage currently enrolled in the CRP may be eligible to be 
reoffered for enrollment if the scheduled expiration date of the 
current CRP contract is to occur before the available effective date of 
a new CRP contract, as determined by the Deputy Administrator, and if 
the acreage is otherwise eligible according to this part, as determined 
by the Deputy Administrator.
    (h) Except as otherwise provided in this section, eligible land 
must be:
    (1) Land with an EI greater than or equal to 8, calculated by using 
the weighted average of the EI's of Soil Map Units within a field;
    (2) Land having evidence of scour erosion caused by out-of-bank 
water flows;
    (3) Land within a public wellhead protection area established by 
the EPA or in a Hydrologic Unit Area approved by the Secretary;
    (4) Land within a designated conservation priority area;
    (5) A field or part of a field determined suitable for filter 
strip, grass waterway, field windbreak, shelterbelt, living snowfence, 
or vegetation on salinity producing areas, including any applicable 
recharge areas;
    (6) A field or part of a field determined suitable for riparian 
buffer, in which case the provisions of paragraph (a) need not apply;
    (7) Acreage designated a farmed wetland by NRCS according to part 
12 of this title; or
    (8) Acreage enrolled in the WBP, in which case the provisions of 
paragraph (a) of this section need not apply, provided that WBP land 
may not be enrolled unless:
    (i) The acreage is in the final year of the WBP agreement;
    (ii) The acreage is not classified as naturally occurring type 3 
through 7 wetlands, as determined by CCC including acreage protected by 
a Federal agency easement or mortgage restriction (types 3 through 7 
wetlands that are normally artificially flooded shall not be precluded 
from eligibility);
    (iii) The acreage meets statutory criteria for enrollment; and
    (iv) Enrollment in the CRP would cost-effectively enhance the 
environmental benefits of the site, as determined by CCC.


Sec. 1410.7  Duration of contracts.

    (a) Except as provided in paragraph (b) of this section, contracts 
under this part shall be 10 years in duration.
    (b) In the case of land devoted to hardwood trees, shelterbelts, 
windbreaks, or wildlife corridors under the original terms of a 
contract subject to this part or for land devoted to such use under a 
contract modified under Sec. 1410.10, the participant may specify the 
duration of the contract provided that such contracts must be at least 
10 years and no more than a total of 15 years in length.
    (c) Within the constraints of paragraphs (a) and (b) of this 
section, all contracts shall expire on September 30 of the appropriate 
year.


Sec. 1410.8  Conservation priority areas.

    (a) The Deputy Administrator may designate other areas of special 
environmental sensitivity as conservation priority areas.
    (b) State FSA committees, in consultation with NRCS and State 
Technical Committees, may submit an application within guidelines 
established by the Deputy Administrator for designation of other areas 
to the Deputy Administrator. Such applications should contain clearly 
defined conservation and environmental objectives and analysis how CRP 
can cost-effectively address such objectives. Generally, the total 
acreage of conservation priority areas, in aggregate, shall not total 
more than 10 percent of the cropland in a State, as determined by CCC.
    (c) Watersheds shall be eligible for designation as a priority area 
only if the watershed has actual significant adverse water quality or 
wildlife habitat impacts related to activities of agricultural 
production.
    (d) Conservation priority area designations expire after 5 years 
unless redesignated, except they may be withdrawn:
    (1) Upon application by the appropriate State water quality agency; 
or
    (2) By the Secretary, if such areas no longer contain actual and 
significant adverse water quality, wildlife habitat, or other 
environmental impacts in association with agricultural production 
activities.
    (e) In those areas designated as priority areas, under this 
section, special emphasis will be placed on maximizing water quality, 
including assisting agricultural producers to comply with nonpoint 
source pollution requirements, or wildlife habitat benefits through the 
implementation of the CRP by cost-effectively promoting a significant 
level of enrollment of lands within such designated areas, as 
determined by the Deputy Administrator, which are determined to be 
appropriate and consistent with the purposes of the program.


Sec. 1410.9  Alley-cropping.

    (a) Alley-cropping on CRP land may be permitted by CCC if:
    (1) The land is planted to, or converted to, hardwood trees in 
accordance with Sec. 1410.10;
    (2) Agricultural commodities are planted in accordance with an 
approved conservation plan in close proximity to such hardwood trees; 
and
    (3) The owner and operator of such land agree to implement 
appropriate conservation measures on such land.
    (b) CCC may solicit bids for alley-cropping permission for CRP 
land. Annual rental payments for the term of any contract modified 
under this section shall be reduced by at least 50 percent of the 
original amount of the total rental payment in the original contract 
and total annual rental payments over the term of any contract modified 
under this section may not exceed the total annual rental payments 
specified in the original contract.
    (c) The actual reduction in rental payment will be determined by 
CCC, based upon criteria, such as percentage of the total acreage that 
will be available for cropping and projected returns to the producer 
from such cropping.
    (d) The area available for cropping will be chosen according to the 
Field Office Technical Guide and will be farmed in accordance with an 
approved conservation plan so as to minimize erosion and degradation of 
water quality during those years when the areas are devoted to an 
agricultural commodity.


Sec. 1410.10  Conversion to trees.

    An owner or operator who has entered into a contract prior to 
November 28, 1990, may elect to convert areas of highly erodible 
cropland, subject to such contract, which is devoted to permanent 
vegetative cover, from such cover to hardwood trees (including alley 
cropping where permitted by CCC), windbreaks, shelterbelts, or wildlife 
corridors.
    (a) With respect to any contract modified under this section, the 
participant may elect to extend such contract in accordance with the 
provisions of Sec. 1410.7 (b).
    (b) With respect to any contract modified under this section in 
which such areas are converted to windbreaks, shelterbelts, or wildlife 
corridors, the owner of such land must agree to maintain such plantings 
for a time period established by the Deputy Administrator.
    (c) CCC shall, as it determines appropriate, pay up to 50 percent 
of the eligible cost of establishing new conservation measures 
authorized under

[[Page 49706]]

this section, except that the total cost-share paid with respect to 
such contract, including cost-share assistance paid when the original 
cover was established, may not exceed the amount by which CCC would 
have paid had such land been originally devoted to such new 
conservation measures.
    (d) With respect to any contract modified under this section, the 
participant must participate in the Forest Stewardship Program (16 
U.S.C. 2103a).


Sec. 1410.11  Restoration of wetlands.

    (a) An owner or operator who entered into a contract under part 704 
of this chapter prior to November 28, 1990, on land that is suitable 
for restoration to wetlands or that was restored to wetlands while 
under such contract, may, if approved by CCC, apply to transfer such 
eligible acres subject to such contract, which are devoted to an 
approved cover, from the CRP to the WRP. Transferred acreage shall be 
terminated from the CRP effective the day an easement is filed. 
Participants will receive a prorated CRP annual payment for that part 
of the year the acreage was enrolled in the CRP according to 
Sec. 1410.42. Refunds of cost-share payments or any applicable 
incentive payments need not be required.
    (b) An owner or operator may, if approved by CCC, restore suitable 
acres to wetlands while under the CRP without Federal cost-share 
assistance if CRP cost share assistance was previously provided, since 
water is an approved cover. The approved restoration shall become a 
part of the conservation plan for the contracted area.
    (c) An owner or operator who has enrolled acreage in the CRP under 
the wetland eligibility criteria may restore suitable acres to wetlands 
with cost-share assistance. In addition to the cost-share limitation in 
Sec. 1410.41, an additional rental amount as a financial incentive may 
be provided to encourage wetland restoration.


Secs. 1410.12--1410.19  [Reserved]


Sec. 1410.20  Obligations of participant.

    (a) All participants subject to a CRP contract must agree to:
    (1) Carry out the terms and conditions of such CRP contract;
    (2) Implement the conservation plan which is part of such contract 
in accordance with the schedule of dates included in such conservation 
plan unless the Deputy Administrator determines that the participant 
cannot fully implement the conservation plan for reasons beyond the 
participant's control;
    (3) Establish temporary vegetative cover when required by the 
conservation plan or, as determined by the Deputy Administrator, if the 
permanent vegetative cover cannot be timely established;
    (4)(i) Reduce the aggregate total allotments and quotas for the 
contract period for each farm which contains land subject to such CRP 
contract by an amount based upon the ratio between the acres in the CRP 
contract and the total cropland acreage on such farm. Allotments and 
quotas reduced during the contract period shall be returned at the end 
of the contract period in the same amounts as would apply had the land 
not been enrolled in the CRP unless CCC approves, in accordance with 
the provisions of Sec. 1410.34, an extension of such protection; and
    (ii) reduce Agricultural Market Transition Act contract acres 
enrolled under part 1412 of this chapter or CRP acres enrolled under 
this part to the extent that the total of such acres exceeds the 
cropland on the farm;
    (5) Not produce an agricultural commodity on highly erodible land, 
in a county which has not met or exceeded the acreage limitation under 
Sec. 1410.4, which was acquired on or after November 28, 1990, unless 
such land, as determined by CCC, has a history in the most recent five 
year period of producing an agricultural commodity other than forage 
crops;
    (6) Comply with all requirements of part 12 of this title;
    (7) Not allow grazing, harvesting, or other commercial use of any 
crop from the cropland subject to such contract except for those 
periods of time in accordance with instructions issued by the Deputy 
Administrator;
    (8) Establish and maintain the required vegetative or water cover 
and the required practices on the land subject to such contract and 
take other actions that may be required by CCC to achieve the desired 
environmental benefits and to maintain the productive capability of the 
soil throughout the CRP contract period;
    (9) Comply with noxious weed laws of the applicable State or local 
jurisdiction on such land;
    (10) Control on land subject to such contract all weeds, insects, 
pests and other undesirable species to the extent necessary to ensure 
that the establishment and maintenance of the approved cover is 
adequately protected, taking into consideration the needs of water 
quality and wildlife, as determined by CCC; and
    (11) Be jointly and severally responsible for compliance with such 
contract and the provisions of this part and for any refunds or payment 
adjustments which may be required for violations of any of the terms 
and conditions of the CRP contract and provisions of this part except 
that for acreage enrolled after January 1, 1995, a participant shall 
only be jointly and severally liable for contract compliance when the 
share of the payment attributable to the participant is greater than 
zero
    (b) [Reserved].


Sec. 1410.21  Obligations of the Commodity Credit Corporation.

    CCC shall, subject to the availability of funds:
    (a) Share the cost with participants of establishing eligible 
practices specified in the conservation plan at the levels and rates of 
cost-sharing determined in accordance with the provisions of this part;
    (b) Pay to the participant for a period of years not in excess of 
the contract period an annual rental payment in such amounts as may be 
specified in the CRP contract;
    (c) Provide such technical assistance as may be necessary to assist 
the participant in carrying out the CRP contract; and
    (d) Permit grazing on CRP land where the grazing is incidental to 
the gleaning of crop residues on fields where the contracted land is 
located. Such incidental grazing shall be limited to the 7-month period 
in which grazing of conservation use acreage was allowed, as determined 
by CCC, in a State under the provisions of the Agricultural Act of 1949 
(7 U.S.C. 1421 et seq.), or after the producer harvests the grain crop 
of the surrounding field. Further, CCC may provide approval of the 
incidental grazing of the CRP only in exchange for an applicable 
reduction in the annual rental payment, as determined appropriate by 
the Deputy Administrator.


Sec. 1410.22  Conservation plan.

    (a) The applicant shall develop and submit a conservation plan 
which is acceptable to NRCS and is approved by the Conservation 
District for the land to be entered in CRP.
    (b) The practices included in the conservation plan and agreed to 
by the participant must cost-effectively achieve the reduction in 
erosion necessary to maintain the productive capability of the soil, 
improvement in water quality, protection for wildlife or wetlands, 
protection of a public well head, or

[[Page 49707]]

achieve other environmental benefits as applicable.
    (c) If applicable, a tree planting plan shall be developed and 
included in the conservation plan. Such tree planting plan may allow up 
to 3 years to complete plantings if 10 or more acres of hardwood trees 
are to be established.
    (d) All conservation plans and revisions of such plans shall be 
subject to the approval of CCC and the Conservation District.


Sec. 1410.23  Eligible practices.

    (a) Eligible practices are those practices specified in the 
conservation plan that meet all quantity and quality standards needed 
to cost-effectively:
    (1) Establish permanent vegetative or water cover, including 
introduced or native species of grasses and legumes, forest trees, 
permanent wildlife habitat, field windbreaks, and shallow water areas 
for wildlife;
    (2) Meet other environmental benefits, as applicable, for the 
contract period; and
    (3) Accomplish other purposes of the program.
    (b) Water cover is eligible cover for purposes of paragraph (a) of 
this section only if approved by the Deputy Administrator for the 
enhancement of wildlife, improvement of water quality, or otherwise, 
provided further that such water cover shall not include ponds for the 
purpose of watering livestock, irrigating crops, or raising fish for 
commercial purposes.


Secs. 1410.24-1410.29  [Reserved]


Sec. 1410.30  Signup.

    Offers for contracts shall be submitted only during signup periods 
as announced periodically by the Deputy Administrator, except that CCC 
may hold a continuous signup for land to be devoted to particular uses, 
as CCC deems desirable.


Sec. 1410.31  Acceptability of offers.

    (a) Except as provided in paragraph (c) of this section, producers 
may submit bids for the amounts in dollars they are willing to accept 
as rental payments to enroll their acreage in the CRP. The bids shall, 
to the extent practicable, be evaluated on a competitive basis in which 
the bids selected will be those where the greatest environmental 
benefits are generated for the Federal dollars expended provided the 
bid is not in excess of the maximum acceptable payment rate established 
for the county by or for the Deputy Administrator in accordance with 
established procedure.
    (b) In evaluating contract offers, different factors, as determined 
by CCC, may be established from time to time for priority purposes to 
accomplish the goals of the program. Such factors may include, but are 
not limited to:
    (1) Soil erosion;
    (2) Water quality (both surface and ground water);
    (3) Wildlife benefits;
    (4) Conservation priority area designation for selection as 
provided by Sec. 1410.8;
    (5) Soil productivity;
    (6) Conservation compliance considerations;
    (7) Likelihood to remain in conserving uses beyond the contract 
period, including tree planting and permanent wildlife habitat;
    (8) State water quality priority areas; and
    (9) Cost of enrolling acreage in the program.
    (c) Acreage determined eligible for continuous signup, as provided 
in Sec. 1410.30, shall be automatically accepted in the program if the:
    (1) Land is eligible in accordance with the provisions of 
Sec. 1410.6;
    (2) Applicant is eligible in accordance with the provisions of 
Sec. 1410.5; and
    (3) Applicant accepts either the maximum payment rate CCC is 
willing to offer to enroll the acreage in the program or a lesser 
amount.


Sec. 1410.32  CRP contract.

    (a) In order to enroll land in the CRP, the participant must enter 
into a contract with CCC.
    (b) The CRP contract will be comprised of:
    (1) The terms and conditions for participation in the CRP;
    (2) The conservation plan; and
    (3) Any other materials or agreements determined necessary by CCC.
    (c)(1) In order to enter into a CRP contract, the applicant must 
submit an offer to participate at the local FSA office as provided in 
Sec. 1410.30;
    (2) An offer to enroll land in the CRP shall be irrevocable for 
such period as is determined and announced by CCC. The applicant shall 
be liable to CCC for liquidated damages if the applicant revokes an 
offer during the period in which the offer is irrevocable as determined 
by the Deputy Administrator. CCC may waive payment of such liquidated 
damages if CCC determines that the assessment of such damages, in a 
particular case, is not in the best interest of CCC.
    (d) The CRP contract must, within the dates established by CCC, be 
signed by:
    (1) The applicant; and
    (2) The owners of the cropland to be placed in the CRP, if 
applicable.
    (e) The Deputy Administrator or designee is authorized to approve 
CRP contracts on behalf of CCC.
    (f) As determined by CCC, CRP contracts may be terminated before 
the expiration date when:
    (1) The owner loses control of or transfers all or part of the 
acreage under contract and the new owner does not wish to continue the 
contract;
    (2) The participant(s) voluntary request in writing to terminate 
the contract and obtain the approval of CCC according to terms and 
conditions as determined by CCC;
    (3) The participant(s) are not in compliance with the terms and 
conditions of the contract;
    (4) Acreage is enrolled in another State, Federal or local 
conservation program;
    (5) The CRP practice fails after a certain time period, as 
determined by the Deputy Administrator, and the county committee 
determines the cost of restoring the cover outweighs the benefits 
received from the restoration; or
    (6) The CRP contract was approved based on erroneous eligibility 
determinations.
    (g)(1) Contracts for land enrolled in CRP before January 1, 1995, 
which have been in effect for at least 5 years may be unilaterally 
terminated by all CRP participants on a contract except for contract 
acreage:
    (i) Located within an average of 100 feet of a perennial stream or 
other permanent waterbody;
    (ii) On which a CRP easement is filed;
    (iii) That is considered to be a wetland by NRCS;
    (iv) Located within an EPA designated wellhead protection area;
    (v) That is subject to frequent flooding;
    (vi) That may be required to serve as a wetland buffer according to 
the Field Office Technical Guide to protect the functions and values of 
a wetland; or
    (vii) On which there exist one or more of the following practices, 
installed or developed as a result of participation in the CRP or as 
otherwise required by the conservation plan:
    (A) Grass waterways;
    (B) Filter strips;
    (C) Shallow water areas for wildlife;
    (D) Bottomland timber established on wetlands;
    (E) Field windbreaks; and
    (F) Shelterbelts.
    (2) For any land for which an early termination is sought, the land 
must have an EI of 15 or less.
    (3) With respect to terminations under this paragraph:
    (i) The termination shall become effective 60 days from the date 
the

[[Page 49708]]

participant(s) submits notification to CCC of the participant's desire 
to terminate the contract;
    (ii) Acreage terminated under this provision is eligible to be re-
offered for CRP during future signup periods providing the acreage 
otherwise meets the eligibility criteria established for that signup; 
and
    (iii) Participants shall be required to meet conservation 
compliance requirements of part 12 of this title to the extent 
applicable to other land.
    (h) Except as approved by CCC, where the new owner is a Federal 
agency that agrees to abide by the terms and conditions of the 
terminated contract, the participant in a contract that has been 
terminated must refund all or part of the payments made with respect to 
such contract plus interest thereon, as determined by CCC, and shall 
pay liquidated damages as provided for in such contract. CCC, in its 
discretion, may permit the amount to be repaid to be reduced to the 
extent that such a reduction will not impair program operations. 
Further, no refund of rental and cost-share payments shall be required 
from a participant who is otherwise in full compliance with the CRP 
contract when the land is purchased by or for the Fish and Wildlife 
Service.


Sec. 1410.33  Contract modifications.

    (a) By mutual agreement between CCC and the participant, a CRP 
contract may be modified in order to:
    (1) Decrease acreage in the CRP;
    (2) Permit the production of an agricultural commodity under 
extraordinary circumstances during a crop year on all or part of the 
land subject to the CRP contract as determined by the Deputy 
Administrator;
    (3) Facilitate the practical administration of the CRP; or
    (4) Accomplish the goals and objectives of the CRP, as determined 
by the Deputy Administrator.
    (b) CCC may modify CRP contracts to add, delete, or substitute 
practices when:
    (1) The installed practice failed to adequately provide for the 
desired environmental benefit through no fault of the participant; or
    (2) The installed measure deteriorated because of conditions beyond 
the control of the participant; and
    (3) Another practice will achieve at least the same level of 
environmental benefit.
    (c) Offers to extend contracts may be made available to the extent 
otherwise allowed by law.


Sec. 1410.34   Extended base protection.

    (a) In the final year of the contract, participants may, subject to 
approval by the Deputy Administrator, request to extend the 
preservation of cropland base, quota, and allotment history for 5 
years, without payment. Such approval may be given by CCC only if 
participants agree to continue for that period to abide by the terms 
and conditions which applied to the relevant contract relating to the 
conservation of the property for the term in which payments were to be 
made.
    (b) Where such an extension is approved, no additional cost share, 
annual rental, or bonus payment shall be made that would not have been 
made under the original contract for its original term.
    (c) Haying and grazing of the acreage subject to such an extension 
may be permitted during the extension period, except during any 
consecutive 5-month period between April 1 and October 31 of any year 
as shall be established by the State committee. In the event of a 
natural disaster, however, CCC may permit unlimited haying and grazing 
of such acreage.
    (d) In the event of a violation of any CRP contract extended under 
this section, CCC may reduce or terminate the amount of cropland base, 
quota, and allotment history otherwise preserved under the contract or 
under an extension of the contract.


Secs. 1410.35-1410.39   [Reserved]


Sec. 1410.40   Cost-share payments.

    (a) Cost-share payments shall be made available upon a 
determination by CCC that an eligible practice, or an identifiable unit 
thereof, has been established in compliance with the appropriate 
standards and specifications.
    (b) Except as otherwise provided for in this part, cost-share 
payments may be made under the CRP only for the cost-effective 
establishment or installation of an eligible practice.
    (c) Except as provided in paragraph (d) of this section, cost-share 
payments shall not be made to the same owner or operator on the same 
acreage for any eligible practices which have been previously 
established, or for which such owner or operator has received cost-
share assistance from the Department or other Federal agency.
    (d) Except as provided for under Sec. 1410.10(c), cost-share 
payments may be authorized for the replacement or restoration of 
practices for which cost-share assistance has been previously allowed 
under the CRP, only if:
    (1) Replacement or restoration of the practice is needed to achieve 
adequate erosion control, enhanced water quality, wildlife habitat, or 
increased protection of public wellheads; and
    (2) The failure of the original practice was due to reasons beyond 
the control of the participant.
    (e) The cost-share payment made to a participant shall not exceed 
the participant's actual contribution to the cost of establishing the 
practice and the amount of the cost-share may not be an amount which, 
when added to assistance from other sources, exceeds the cost of the 
practices.
    (f) In the case of land devoted to hardwood trees, windbreaks, 
shelterbelts, or wildlife corridors under a contract subject to this 
part or in the case of land converted to such use under Sec. 1410.10, 
CCC may pay up to 50 percent of appropriate costs, as determined by 
CCC, to the participant for the estimated costs of maintaining such 
plantings, including the cost of replanting if such plantings are lost 
for reasons beyond the control of the participant, during not less than 
the 2-year nor more than the 4-year period commencing on the date of 
such plantings.
    (g) CCC shall not make cost-share payments with respect to a CRP 
contract if any other Federal cost-share assistance has been, or is 
being, made on land subject to such contract.


Sec. 1410.41   Levels and rates for cost-share payments.

    (a) As determined by the Deputy Administrator, CCC may not pay more 
than 50 percent of the actual or average cost of establishing eligible 
practices specified in the conservation plan, except that CCC may allow 
cost-share payments for maintenance costs to the extent required by 
Sec. 1410.40(f) and CCC may determine the period and amount of such 
cost-share payments.
    (b) The average cost of performing a practice may be determined by 
CCC based on recommendations from the State Technical Committee. Such 
cost may be the average cost in a State, a county, or a part of a 
county or counties as determined by the Deputy Administrator.
    (c) A rental amount as a financial incentive, in an amount up to 25 
percent of restoring the hydrology on the site, may be offered to 
participants that restore eligible wetlands in accordance with the 
provisions of Sec. 1410.11.


Sec. 1410.42   Annual rental payments.

    (a) Subject to the availability of funds, annual rental payments 
shall be made in such amount and in accordance with

[[Page 49709]]

such time schedule as may be agreed upon and specified in the CRP 
contract.
    (b) The annual rental payment shall be divided among the 
participants on a single contract in the manner agreed upon in such 
contract.
    (c) The maximum amount of rental payments which a person may 
receive under the CRP for any fiscal year shall not exceed $50,000. The 
regulations set forth at part 1400 of this chapter shall be applicable 
in making certain eligibility and ``person'' determinations as they 
apply to payment limitations under this part, except that the 
regulations set forth in part 795 of this title may be applied to 
contracts approved before August 1, 1988.
    (d) In the case of a contract succession, annual rental payments 
shall be divided between the predecessor and the successor participants 
as agreed to among the participants and approved by CCC. If there is no 
agreement among the participants, annual rental payments shall be 
divided based on the actual days of ownership of the property as 
reflected in applicable appropriately filed land records.
    (e) CCC may reject any and all offers received from applicants who 
had previously entered into CRP contracts with CCC if the total annual 
rental payments due under such prior contracts (excluding contracts 
entered into in accordance with the provisions of Sec. 1410.51 plus the 
total annual rental payments called for in the offer) exceed $50,000.
    (f) CCC shall, when appropriate, prepare a schedule for each county 
that shows the rental rate CCC may pay for different soil types. As 
determined by the Deputy Administrator, such schedule shall be 
calculated based on the relative productivity of soils within the 
county using NRCS data and local FSA average dryland cash rental 
estimates. The schedule shall be posted in the local FSA office. As 
determined by the Deputy Administrator, the schedule shall indicate, 
when appropriate, that:
    (1) Contracts offered by producers who request rental payments 
greater than the schedule for their soil(s) will be rejected;
    (2) Offers of contracts that are expected to provide especially 
high environmental benefits, as determined by the Deputy Administrator, 
may be the accepted without further evaluation when the requested 
rental rate is less than or equal to the corresponding soil(s) 
schedule; and
    (3) Remaining contracts offered shall be ranked competitively based 
on the environmental benefits index, taking into account the Government 
cost of the contract, in order to provide the most cost effective 
environmental benefits, as determined by the Deputy Administrator.
    (g) Additional financial incentives may be provided to producers 
offering contracts expected to provide especially high environmental 
benefits through an increased annual rental payment of not more than 25 
percent as determined by the Deputy Administrator.


Sec. 1410.43   Method of payment.

    Except as provided in Sec. 1410.50, payments made by CCC under this 
part may be made in cash, in kind, in commodity certificates, or in any 
combination of such methods of payment in accordance with part 1401 of 
this chapter, unless otherwise specified by CCC.


Secs. 1410.44-1410.49   [Reserved]


Sec. 1410.50   State enhancement program.

    (a) For contracts to which a State, political subdivision, or 
agency thereof has succeeded in connection with an approved 
conservation reserve enhancement program, payments shall be made in the 
form of cash only. The provisions that limit the amount of payments per 
year that a person may receive under this part shall not be applicable 
to payments received by such State, political subdivision, or agency 
thereof in connection with agreements entered into under such program 
carried out by such State, political subdivision, or agency thereof 
which has been approved by the Secretary.
    (b) CCC may enter into other agreements with States, as approved by 
the Secretary, to utilize the CRP to further the conservation and 
environmental objectives of that State and the Nation.


Sec. 1410.51   Transfer of land.

    (a) (1) If a new owner or operator purchases or obtains the right 
and interest in, or right to occupancy of, the land subject to a CRP 
contract, as determined by the Deputy Administrator, such new owner or 
operator, upon the approval of CCC, may become a participant to a new 
CRP contract with CCC with respect to such transferred land.
    (2) With respect to the transferred land, if the new owner or 
operator becomes a successor to the existing CRP contract, the new 
owner or operator shall assume all obligations under the CRP contract 
of the previous participant.
    (3) If the new owner or operator becomes a successor to a CRP 
contract with CCC:
    (i) Cost-share payments shall be made to the participant, past or 
present, who established the practice; and
    (ii) Annual rental payments to be paid during the fiscal year when 
the land was transferred shall be divided between the new participant 
and the previous participant in the manner specified in Sec. 1410.42.
    (b) If a participant transfers all or part of the right and 
interest in, or right to occupancy of, land subject to a CRP contract 
and the new owner or operator does not become a successor to such 
contract within 60 days of such transfer, such contract shall be 
terminated with respect to the affected portion of such land and the 
original participant:
    (1) Must forfeit all rights to any future payments with respect to 
such acreage; and
    (2) Shall comply with the provisions of Sec. 1410.32(h).
    (c) Federal agencies acquiring property, by foreclosure or 
otherwise, that contains CRP contract acreage cannot be a party to the 
contract by succession. However, through an addendum to the CRP 
contract, if the current operator of the property is one of the 
participants on such contract, such operator may, as permitted by CCC, 
continue to receive payments provided for in such contract so long as:
    (1) The property is maintained in accordance with the terms of the 
contract;
    (2) Such operator continues to be the operator of the property; and
    (3) Ownership of the property remains with such federal agency.


Sec. 1410.52   Violations.

    (a) (1) If a participant fails to carry out the terms and 
conditions of a CRP contract, CCC may terminate the CRP contract.
    (2) If the CRP contract is terminated by CCC in accordance with 
this paragraph:
    (i) The participant shall forfeit all rights to further payments 
under such contract and refund all payments previously received 
together with interest; and
    (ii) Pay liquidated damages to CCC in such amount as specified in 
such contract.
    (b) If the Deputy Administrator determines such failure does not 
warrant termination of such contract, the Deputy Administrator may 
authorize relief as the Deputy Administrator deems appropriate.
    (c) CCC may also terminate a CRP contract if the participant agrees 
to such termination and CCC determines such termination to be in the 
public interest.
    (d) CCC may reduce a demand for a refund under this section to the 
extent

[[Page 49710]]

CCC determines that such relief would be appropriate and will not deter 
the accomplishment of the goals of the program.


Sec. 1410.53   Executed CRP contract not in conformity with 
regulations.

    If, after a CRP contract is approved by CCC, it is discovered that 
such CRP contract is not in conformity with the provisions of this 
part, the provisions of the regulations shall prevail.


Sec. 1410.54   Performance based upon advice or action of the 
Department.

    The provisions of Sec. 718.8 of this title relating to performance 
based upon the action or advice of a representative of the Department 
shall be applicable to this part.


Sec. 1410.55   Access to land under contract.

    (a) Any representative of the Department, or designee thereof, 
shall be provided by the applicant or participant as the case may be, 
with access to land which is:
    (1) The subject of an application for a program under this part; or
    (2) Under contract or otherwise subject to this part.
    (b) With respect to such land identified in paragraph (a) of this 
section the participant or applicant shall provide such representatives 
with access to examine records with respect to such land for the 
purpose of determining land classification and erosion rates and for 
the purpose of determining whether there is compliance with the terms 
and conditions of the CRP.


Sec. 1410.56   Division of program payments and provisions relating to 
tenants and sharecroppers.

    (a) Payments received under this part shall be divided in the 
manner specified in the applicable contract or agreement and CCC shall 
ensure that producers who would have shared in the risk of producing 
crops on land subject to such contract and who continue to maintain an 
interest in such acreage, receive treatment deemed to be equitable. CCC 
may refuse to enter into a contract when there is a disagreement among 
persons seeking enrollment as to a tenant's eligibility and there is 
insufficient evidence to indicate whether a tenant does or does not 
have an interest in the acreage.
    (b) CCC may remove an operator or tenant from a CRP contract when 
the operator or tenant:
    (1) Requests, in writing to be removed from CRP-1;
    (2) Files for bankruptcy and the trustee or debtor in possession 
fails to affirm the contract, to the extent permitted by the provisions 
of applicable bankruptcy laws;
    (3) Dies during the contract period and the Administrator of the 
estate fails to succeed to the contract within a period of time 
determined acceptable by the Deputy Administrator; or
    (4) For acreage enrolled under contracts executed after January 1, 
1995, if a court-ordered directive to remove the operator or tenant is 
received by FSA.
    (c) For acreage enrolled under contracts executed after January 1, 
1995, in addition to the provisions in paragraph (b) of this section, 
tenants shall maintain their tenancy throughout the contract period in 
order to remain on a contract. If a tenant fails to maintain their 
tenancy under applicable State law, CCC may remove a tenant from a 
contract. CCC shall assume the tenancy is being maintained unless 
notified otherwise by a CRP participant on the applicable contract.


Sec. 1410.57   Payments not subject to claims.

    Subject to part 1403 of this chapter, any cost-share or annual 
payment or portion thereof due any person under this part shall be 
allowed without regard to questions of title under State law, and 
without regard to any claim or lien in favor of any creditor, except 
agencies of the United States Government.


Sec. 1410.58   Assignments.

    Any participant who may be entitled to any cash payment under this 
program may assign the right to receive such cash payments, in whole or 
in part, as provided in part 1404 of this chapter, except that 
assignments may also be made to secure or pay pre-existing 
indebtedness.


Sec. 1410.59   Appeals.

    (a) Except as provided in paragraph (b) of this section, a 
participant or person seeking participation may appeal or request 
reconsideration of an adverse determination rendered with regard to 
such participation in accordance with the administrative appeal 
regulations at parts 11 and 780 of this title.
    (b) Determinations by NRCS concerning land classification, erosion 
rates, water quality ratings or other technical determinations may be 
appealed in accordance with procedures established under part 614 of 
this title or otherwise established by NRCS.


Sec. 1410.60   Scheme or device.

    (a) If it is determined by CCC that a person has employed a scheme 
or device to defeat the purposes of this part, any part of any program 
payments otherwise due or paid such person during the applicable period 
may be withheld or required to be refunded with interest thereon as 
determined appropriate by CCC.
    (b) A scheme or device includes, but is not limited to, coercion, 
fraud, misrepresentation, depriving any other person of cost-share 
assistance or land rental payments, or obtaining a payment that 
otherwise would not be payable.
    (c) A new owner or operator or tenant of land subject to this part 
who succeeds to the responsibilities under this part shall report in 
writing to CCC any interest of any kind in the land subject to this 
part that is retained by a previous participant. Such interest shall 
include a present, future, or conditional interest, reversionary 
interest, or any option, future or present, with respect to such land 
and any interest of any lender in such land where the lender has, will, 
or can obtain, a right of occupancy to such land or an interest in the 
equity in such land other than an interest in the appreciation in the 
value of such land occurring after the loan was made. Failure to fully 
disclose such interest shall be considered a scheme or device under 
this section.


Sec. 1410.61   Filing of false claims.

    If it is determined by CCC that any participant has knowingly 
supplied false information or has knowingly filed a false claim, such 
participant shall be ineligible for payments under this part with 
respect to the program year in which the false information or claim was 
filed and the contract may be terminated in which case a full refund of 
all prior payments may be demanded. False information or false claims 
include, but are not limited to, claims for payment for practices which 
do not meet the specifications of the applicable conservation plan. Any 
amounts paid under these circumstances shall be refunded, together with 
interest as determined by CCC, and any amounts otherwise due such 
participant shall be withheld. The remedies provided for in this 
section shall be in addition to any and all other remedies, criminal 
and/or civil that may apply.


Sec. 1410.62   Miscellaneous.

    (a) Except as otherwise provided in this part, in the case of 
death, incompetency, or disappearance of any participant, any payment 
due under this part shall be paid to the participant's successor in 
accordance with the provisions of part 707 of this title.
    (b) Unless otherwise specified in this part, payments under this 
part shall be subject to the requirements of part 12 of this title 
concerning highly-erodible land and wetland conservation and

[[Page 49711]]

payments that otherwise could be made under this part may be withheld 
to the extent provided for in part 12 of this title.
    (c) Any remedies permitted CCC under this part shall be in addition 
to any other remedy, including, but not limited to criminal remedies, 
or actions for damages in favor of CCC, or the United States, as may be 
permitted by law.
    (d) Absent a scheme or device to defeat the purpose of the program, 
when an owner loses control of CRP acreage due to foreclosure and the 
new owner chooses not to continue the contract according to 
Sec. 1410.51, refunds shall not be required from any participant on the 
contract.
    (e) Crop insurance requirements in part 1405 of this chapter apply 
to all acreage initially enrolled after October 12, 1994, as determined 
by the Deputy Administrator.
    (f) Land enrolled in CRP shall be classified as cropland for the 
time period enrolled in CRP and, after the time period of enrollment, 
shall be removed from such classification upon a determination by the 
county committee that such land no longer meets the conditions 
identified in part 718 of this title.
    (g) Research projects may be proposed by the State committee and 
authorized by the Deputy Administrator to address defined conservation 
or land use problems, water quality issues, or wildlife habitat. The 
research projects must include objectives that are consistent with this 
part, involve land that otherwise meets required eligibility criteria, 
provide beneficial information on economically and environmentally 
sound agricultural practices, not adversely affect local agricultural 
markets, and be conducted and monitored by a bona fide research entity.


Sec. 1410.63   Permissive uses.

    Unless otherwise specified by the Deputy Administrator, no crops of 
any kind may be planted or harvested from designated CRP acreage during 
the contract period.


Sec. 1410.64   Special concurrence requirements for certain functions

    In establishing policies, priorities, and guidelines, FSA shall 
obtain the concurrence of the NRCS at national, State, and local 
levels.


Sec. 1410.65   Paperwork Reduction Act assigned numbers.

    The Office of Management and Budget has approved the information 
collection requirements contained in these regulations under provisions 
44 U.S.C. Chapter 35 and OMB number 0560-0125 has been assigned.

    Signed at Washington, DC, on September 17, 1996.
Bruce R. Weber,
Acting Administrator, Farm Service Agency, and Acting Executive Vice 
President, Commodity Credit Corporation.
[FR Doc. 96-24268 Filed 9-19-96; 8:45 am]
BILLING CODE 3410-05-P