[Federal Register Volume 61, Number 189 (Friday, September 27, 1996)]
[Notices]
[Pages 50800-50801]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24757]


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 Notices
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains documents other than rules 
 or proposed rules that are applicable to the public. Notices of hearings 
 and investigations, committee meetings, agency decisions and rulings, 
 delegations of authority, filing of petitions and applications and agency 
 statements of organization and functions are examples of documents 
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  Federal Register / Vol. 61, No. 189 / Friday, September 27, 1996 / 
Notices  

[[Page 50800]]



DEPARTMENT OF AGRICULTURE

Office of the Secretary


New York State Agricultural Nonpoint Sources Abatement and 
Control Matching Grant Program, Determination of Primary Purpose of 
Program Payments for Consideration as Excludable From Income Under 
Section 126 of the Internal Revenue Code of 1954

AGENCY: Office of the Secretary, USDA.

ACTION: Notice of determination.

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SUMMARY: The Secretary of Agriculture has determined that all cost-
share payments awarded to individuals by the New York State Soil and 
Water Conservation Committee through participating county soil and 
water conservation districts under the State Agricultural Nonpoint 
Source Abatement and Control Matching Grant Program have been made 
primarily for the purpose of soil and water conservation, protecting or 
restoring the environment, and improving the quality of water in 
priority waterbodies of the State. This determination is made in 
accordance with Section 126 of the Internal Revenue Code of 1954, as 
amended, 26 U.S.C. 126. The determination permits recipients of these 
cost-share payments to exclude them from gross income to the extent 
allowed by the Internal Revenue Service.

FOR FURTHER INFORMATION CONTACT: David Pendergast, Executive Director, 
New York State Soil and Water Conservation Committee, 1 Winners Circle, 
Capital Plaza, Albany NY 12235, 518-457-3738.

SUPPLEMENTARY INFORMATION: Section 126 of the Internal Revenue Code of 
1954, as amended by the Revenue Act of 1978 and the Technical 
Corrections Act of 1979, 26 U.S.C. 126, provides that certain payments 
made to persons under State or local conservation programs may be 
excluded from a recipient's gross income for Federal income tax 
purposes, if the Secretary of Agriculture determines that payments are 
made ``primarily for the purpose of soil and water conservation, 
protecting or restoring the environment, improving forests, or 
providing a habitat for wildlife.'' The Secretary of Agriculture 
evaluates the conservation programs on the basis of criteria set forth 
in 7 NYCRR Part 14, and makes a ``primary Purpose'' determination for 
the payments made under these conservation programs do not 
substantially increase the annual income derived from property 
benefited by the payments.
    Section 11-b of the New York Soil and Water Conservation Districts 
Law establishes a matching grant program to fund the implementation of 
agricultural nonpoint source abatement and control projects. The 
section was added by Chapter 436 of the Laws of 1989. The New York 
Environmental Protection Act of 1993 established an Environmental 
Protection Fund which authorizes use of Fund monies for Section 11-b 
projects. Eight hundred thousands dollars has been allocated for such 
projects in 1994-95.
    ``Agricultural nonpoint source abatement and control program'' has 
been defined in Section 3 of the Soil and Water Conservation Districts 
Law as ``a program consisting of activities and projects for the 
abatement and reduction of water pollution from agricultural nonpoint 
sources through the installation, operation and maintenance of best 
management practices.'' The program must include activities and 
projects for controlling losses from the land, including nutrients, 
particularly nitrogen and phosphorus, pathogens, toxic contamination of 
surface waters and ground waters from heavy metals, pesticides of 
siltation and eutrophication of streams, rivers, lakes and other water 
bodies.
    Projects must be located within a priority water body as identified 
by the Commissioner of Environmental Conservation and must propose to 
implement best management practices such as structural and 
nonstructural controls and operation and maintenance procedures 
designed to prevent or reduce the amount of pollutants generated by 
nonpoint sources. Matching grants will be awarded up to a maximum of 50 
percent of the eligible costs for any specific project. The maximum 
shall be increased up to 75 percent of eligible costs depending on 
contributions by the owner or operator of agricultural land upon which 
the project is being conducted.

Procedural Matters

    The authorizing legislation, guidance documents, and operating 
procedures regarding the New York State Agricultural Nonpoint Source 
Abatement and Control Matching Grant Program have been examined using 
the criteria set forth in 7 CFR Part 14. The Department of Agriculture 
has concluded that the cost-share payments made for installation of 
capital improvements and implementation of best management practices 
under this Program are made to provide financial assistance to eligible 
persons primarily for the purpose of soil and water conservation, and 
protecting or restoring the environment, by abating and controlling 
agricultural nonpoint sources of pollution.
    A ``Record of Decision, New York State Agricultural Nonpoint Source 
Abatement and Control Matching Grant Program, Primary Purpose 
Determination for Federal Tax ``Purpose'' has been prepared and is 
available upon request from the Director, Conservation and Ecosystem 
Assistance Division, Natural Resources Conservation Service, P.O. Box 
2890, Washington, D.C. 20013, or the Executive Director of the New York 
State Soil and Water Conservation Committee, 1 Winners Circle, Capital 
Plaza, Albany, NY 12235.

Determination

    As required by Section 126(b) of the Internal Revenue Code of 1954, 
as amended, I have examined the authorizing legislation, guidance 
documents, and operating procedures regarding the New York State 
Agricultural Nonpoint Source Abatement and Control Program. In 
accordance with the criteria set out in 7 CFR Part 14, I have 
determined that all cost-share payments for purchase and installation 
of capital improvements or implementation of best management practices 
made under this Program are primarily for the purpose of soil and water 
conservation, and protecting or restoring the environment, by abating 
and controlling agricultural nonpoint sources of pollution. Subject to 
further

[[Page 50801]]

determination by the Secretary of the Treasury, that payments made 
under these conservation programs do not substantially increase the 
annual income derived from the property benefitting by these payments, 
this determination permits payment recipients to exclude from gross 
income, for Federal income tax purposes, all or part of such cost-share 
payments made under said program.

    Signed at Washington, DC on August 21, 1996.
Dan Glickman,
Secretary of Agriculture.
[FR Doc. 96-24757 Filed 9-26-96; 8:45 am]
BILLING CODE 3410-01-M