[Federal Register Volume 62, Number 33 (Wednesday, February 19, 1997)]
[Rules and Regulations]
[Pages 7602-7635]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3861]



[[Page 7601]]

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Part III





Department of Agriculture





_______________________________________________________________________



Farm Service Agency



Commodity Credit Corporation



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7 CFR Parts 704 and 1410



Conservation Reserve Program--Long-Term Policy; Final Rule

  Federal Register / Vol. 62, No. 33 /  Wednesday, February 19, 1997 / 
Rules and Regulations  

[[Page 7602]]



DEPARTMENT OF AGRICULTURE

Farm Service Agency
Commodity Credit Corporation

7 CFR Parts 704 and 1410

RIN 0560-AE95


Conservation Reserve Program--Long-Term Policy

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

ACTION: Final rule.

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SUMMARY: This final rule amends the Conservation Reserve Program (CRP) 
regulations to: Revise the terms and conditions for enrolling acreage 
in the CRP; update other program eligibility requirements; consolidate 
and reorganize all existing CRP regulations into one regulation; and 
eliminate unnecessary provisions. This action is being taken to cost-
effectively target the CRP to more environmentally sensitive acreage. 
This action is also part of the National Performance Review Initiative 
to eliminate unnecessary regulations and improve those that remain in 
force.

EFFECTIVE DATE: This regulation is effective February 12, 1997.

FOR FURTHER INFORMATION CONTACT: Ms. Cheryl Zavodny, 202-720-7333, or 
via E-mail at [email protected] or on the FSA home page at 
http://www.fsa.usda.gov/.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

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

Benefit/Cost Analysis

    To comply with Executive Order 12866, USDA prepared a benefit/cost 
analysis for the final rule. It analyzes the economic, environmental, 
and budgetary impacts of three alternative CRP enrollment scenarios. 
The first scenario assumes the maximum permitted enrollment level, 36.4 
million acres. The second scenario assumes an enrollment level of 28.0 
million acres. This level corresponds to the enrollment scenario 
included in the FY 1997 President's Budget Baseline that was published 
prior to enactment of the 1996 Act. The final scenario presents 
estimates of the enrollment situation that would occur if enrollment 
authority for new acreage had not been provided in amendments to the 
Food Security Act of 1985 (the 1985 Act) by the 1996 Act and no 
existing contracts are extended. Under this scenario, the expiration of 
existing contracts would result in an estimated decline in enrollment 
to 1.7 million acres by 2002.
    Establishment of long-term vegetative cover on cropland reduces 
soil erosion and the quantity of soil and other agricultural pollutants 
that may reach water bodies and impair water uses. Proper CRP cover 
practices in certain areas of the Northern Plains and Mountain regions 
are extremely important to waterfowl and grassland bird species, both 
of which have experienced significant reductions in numbers until 
recent years. Enrollment of environmentally sensitive areas such as 
flood-prone and riparian acres benefits wildlife and water quality by 
providing cover for protection, moderation of the temperatures of 
streams and other water bodies, food sources for wildlife, and 
protection of waterbodies from sediment, pesticide, and nutrient 
pollution. Environmental benefits are also enhanced by enrollment of 
wetlands and associated uplands, and enrollment of habitats important 
to threatened and endangered species.
    Comprehensive measures of the value of the environmental benefits 
obtained from enrolling environmentally sensitive acreage do not 
currently exist. Estimates reported in the literature for acreage 
currently enrolled in the program are mostly based on indirect measures 
or secondary sources. Such estimates could be used to provide rough 
approximations of the potential value of the benefits to be realized 
from the alternative enrollment level scenarios, but must be discussed 
with a great deal of caution and qualification. Some of the 
environmental benefits that have been estimated and applied to the CRP 
enrollment scenarios include: soil productivity ($150 million annually 
for the 28.0-million-acre scenario and $195 million annually for the 
36.4-million-acre scenario), improved water quality ($350 million and 
$455 million, respectively), and increased consumptive and non-
consumptive uses of wildlife ($1.5 billion and $2.0 billion, 
respectively). The sum of these 3 categories, which would only be a 
partial accounting of the environmental benefits, is $2.0 billion per 
year and $2.7 billion per year, for the 28.0-million-acre and 36.4-
million-acre scenarios, respectively.
    Enrollment of 28.0 million acres and 36.4 million acres is expected 
to increase annual net farm income from production of feedgrains, 
wheat, cotton, and soybeans, CRP payments, and production flexibility 
contract payments by about $5.8 billion and $7.6 billion, respectively, 
compared with the no CRP continuation scenario. The increased net farm 
income results from higher commodity prices, reduced production 
expenses, and higher CRP rental payments to participants. Compared with 
the no continuation scenario, corn, wheat, and soybean prices each 
average about 9 percent, 8 percent, and 11 percent higher, respectively 
under the 28.0-million-acre scenario, and about 12 percent, 15 percent, 
and 13 percent higher under the 36.4-million-acre scenario.
    Average annual CRP outlays under the 28.0-million-acre and 36.4-
million-acre options average about $1.1 billion and $1.2 billion, 
respectively, higher than under the no continuation scenario.
    Because enrollment in CRP reduces planted acreage and commodity 
production and increases commodity prices, projected annual 
expenditures for feedgrains, wheat, cotton, and soybeans are estimated 
to be $3.7 billion and $4.9 billion higher with enrollment at the 28.0-
million-acre and 36.4-million-acre levels, respectively, relative to 
the no continuation scenario for domestic purchasers. For foreign 
purchasers, average annual expenditures are $1.9 billion and $2.6 
billion higher. Thus, impacts on commodity expenditures for all 
purchasers is about $5.6 billion and $7.5 billion annually. 
Consequently, the net economic costs of a 28.0-million-acre and a 36.4-
million-acre program, compared with no continuation are $0.9 billion 
and $1.5 billion per year, respectively. The net economic cost is the 
sum of the impacts of the positive change to society in farm income, 
the negative impact to society of the increased expense for taxpayers 
from the CRP outlays, and the negative impact of the increased 
expenditures for a smaller quantity of commodities.
    Comparison of the rough approximations of environmental benefits 
derived from the estimates for currently enrolled acreage, with the 
economic cost estimates derived from the analysis of projected 
enrollment under the 1996 Act provisions, results in total estimated 
annual benefits to society that exceed costs by $1.1 billion and $1.2 
billion, respectively, for the 28.0-million-acre and 36.4-million-acre 
scenarios. The uncertainty of the magnitude of errors of the 
environmental benefits estimates, and to a lesser extent those of the 
economic costs estimates, makes evaluation of this preliminary 
comparison difficult. Making the comparison even more difficult is the 
incompleteness of the environmental estimates (e.g., values of

[[Page 7603]]

increased wetland conservation, endangered species habitat, trees and 
open spaces, and reduced nutrients and pesticides in the environment). 
If the environmental estimates were more complete, it is likely that 
the estimated net impacts to society of maintaining enrollment of both 
28.0 million and 36.4 million acres would be higher, and the difference 
in benefits between the 28.0-million-acre option and the 36.4-million-
acre option would be greater.

Risk Assessment

    A risk assessment and related benefit-cost analysis are required to 
accompany proposed major rules, as defined under section 304 of Public 
Law (P.L.) 103-354. Because agricultural producers needed 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 Public Law 103-354 to accompany a 
proposed regulation was not practicable in the time available, the 
Director, Office of Risk Assessment and Cost-Benefit Analysis (ORACBA), 
concluded that it was 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, ORACBA, and the FSA 
involves a two-phase approach.
    Phase 1. Available upon request are (a) an environmental 
assessment, and (b) an environmental risk assessment, (c) an outline of 
a benefit/cost analysis of mitigation measures, (d) 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 
(e) a plan for monitoring the risk reduction expected to occur as a 
result of the CRP in accordance with Public Law 104-127. Evaluation and 
monitoring would allow completion of a meaningful cost-benefit analysis 
of the current and potential enrollment practices compared to measured 
environmental benefits.
    Phase 2. One year after the final rule is promulgated, the benefit-
cost analysis of mitigation measures will be completed. This benefit-
cost analysis will address the costs associated with implementation and 
compliance with the regulation and the qualitative and quantitative 
benefits of the regulation.
    Initially, the principal focus of the CRP was to address the 
excessive erosion problems of highly erodible cropland. However, the 
development and widespread adoption of improved tillage systems have 
significantly increased producers' ability to control erosion on much 
of U.S. cropland at levels that do not cause substantial environmental 
degradation. Consequently, the focus of the program has been broadened 
to include those situations where long-term conversion of cropland to 
non-cropping uses is required to solve significant agriculture-related 
environmental problems.
    The purposes of the risk assessment are to (1) identify and 
characterize the major production activities occurring on U.S. cropland 
that create stresses on the elements of the natural environment that 
CRP must protect under its legislative mandate, (2) identify the 
stresses that are created by these activities, (3) describe the adverse 
relationships between the stresses and the affected elements of the 
environment, and (4) estimate the amount of the adverse impacts.
    Specific resource concerns or values to be protected that are 
defined in the 1985 Act include (1) soil erosion (including cropland 
productivity), (2) ground water and surface water quality, (3) habitat 
for wildlife (including threatened and endangered species), (4) wetland 
functions and values, and (5) compliance with Federal and State 
environmental laws including air quality.
    The major agricultural cropping practices connected to the 
environmental risks include (1) disturbance of soil and land, (2) 
application of irrigation water, (3) application of pesticides, and (4) 
application of nutrients. Enrollment of cropland in CRP largely 
eliminates these activities as well as the stresses and adverse 
impacts.
    The objective of the CRP risk assessment is to provide information 
that can assist program managers in developing guidelines, 
requirements, and policies that will lead to enrollment of acreage that 
addresses the most severe resource situations in the most cost-
effective manner.
    From the information reviewed, it is clear (and well recognized) 
that crop production activities can sometimes have adverse impacts on 
one or more elements of the natural resource base. The significance and 
severity of these impacts can vary significantly among geographic 
areas.
    For example, soil and land disturbance can create excessive erosion 
that lead to reductions in the quality and productivity of soils, 
creates sediment that pollutes water bodies and destroys wetland, and 
becomes airborne and creates human health and safety problems. Land 
disturbance, especially land conversion to intensive row cropping uses 
(or conversions of wetlands) can also degrade important wildlife 
habitats.
    Productivity losses resulting from soil erosion will likely average 
about 1 percent over the next 100 years for all U.S. cropland if 
erosion continues at the levels occurring in 1992. However, potential 
productivity losses are much greater for different commodities in 
different areas, e.g., more than 3 percent for corn and soybeans in the 
Lake States, and 2.3 percent for cotton in the Southern Plains.
    Projected levels of sediment loadings from cropland total about 350 
million tons per year, nearly 30 percent of total annual sheet and rill 
erosion. About two-fifths of the sedimentation occurs in the Corn Belt, 
but the Northern Plains and Appalachian regions also have significant 
sedimentation problems. Wind erosion resulting from cropping practices 
are projected to be about 940 million tons per year in the United 
States. Most occurs in the Great Plains, Mountain, and northern 
portions of the Pacific region. Airborne dust particulate matter 
problems are most significant in the Columbia Plateau area of southeast 
Washington State and the southern high plains region of Texas and New 
Mexico.
    Conversion of grasslands and wetlands to cropping uses has 
contributed to a significant decline in habitat for many grassland and 
wetland bird and animal species, particularly in portions of the Corn 
Belt and Northern and Southern Plains regions. CRP can be useful in 
reducing threats to species population declines and in maintaining 
stable populations of wildlife.
    Other significant problems include the contamination of surface and 
ground water supplies by nutrients (primarily nitrogen and phosphorous) 
and pesticides. Nutrient (fertilizer) use and runoff appear to be 
highest in the Corn Belt and Northern Plains regions, areas along the 
Mississippi River, and the eastern Coastal Plain.
    Pesticide use is highest in the Corn Belt and the Northern Plains, 
while pesticide runoff potential is greatest in the Corn Belt, the 
southern portion of the Lake States, and along the Mississippi River in 
the Delta region. Areas with potential problems of pesticides leaching 
into ground water area are primarily located in the Southeast region, 
portions of the Corn Belt, and along the Mississippi River in the Delta 
region.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this final rule because CCC is not required by 5 U.S.C. 
553 or any other provision of law to publish a

[[Page 7604]]

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 requires intergovernmental consultation with State and 
local officials. See the 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), Public 
Law 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, are the Conservation Program-10.069.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule has been determined to be major under the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA). It has been 
determined that, pursuant to section 808 of SBREFA, it is 
impracticable, unnecessary, and contrary to the public interest to 
delay the effective date of this rule. Making this final rule effective 
immediately will permit CCC to conduct a general sign-up period for the 
program in advance of this spring's planting season. Delay of the sign-
up period beyond that time would unduly limit the supply of land 
available for enrollment in the CRP by not allowing for enrollment and 
planning in sufficient time for new contracts to be in effect on 
October 1 and thereby 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. Accordingly, this rule is effective upon publication 
in the Federal Register.

Paperwork Reduction Act

    Information collections contained in this rule have been previously 
cleared by OMB under 0560-0125.

Executive Order 12988

    This final rule has been reviewed in accordance with Executive 
Order 12988. 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 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 resource-conserving cover. CRP participants 
enroll contracts for periods from 10- to 15-years in exchange for 
annual rental payments and cost-share assistance for installing certain 
conservation practices. Applicants submit offers in such a manner as 
the Secretary prescribes.
    The CRP is authorized by the 1985 Act. The Code of Federal 
Regulations (CFR) has contained two parts for the CRP: 7 CFR part 704 
has contained provisions regarding the CRP acreage enrolled from 1986 
through 1990 and 7 CFR part 1410 has contained provisions regarding the 
CRP acreage enrolled since 1991 under the amendments to the 1985 Act 
made by the Food, Agriculture, Conservation, and Trade Act of 1990.
    An interim rule was published on August 27, 1996 (61 FR 43943), 
implementing provisions of the 1996 Act amendments.
    The 1996 Act amended the 1985 Act to provide for extension of 
enrollment authority for up to 36.4 million acres at any one time 
through 2002 and a desire to improve the program, prompted development 
of a proposed rule which was published on September 23, 1996 (61 FR 
49697), that sought comment on long-term CRP policies. The comment 
period ended November 7, 1996.

Proposed Rule Summary

    Among other proposals, with respect to land eligibility, CCC 
proposed to change, in Sec. 1410.6, the existing CRP land eligibility 
criteria to include, as eligible lands, wetlands and their appropriate 
associated acreage, as determined by CCC, certain acreage enrolled in 
the Water Bank Program (WBP) administered by the Natural Resource 
Conservation Service (NRCS), and certain cropland associated to 
noncropped wetlands, as determined appropriate by CCC. 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. It was proposed for WBP land that certain WBP 
acreage, to the extent it otherwise meets statutory CRP criteria, would 
be eligible to be enrolled in the CRP during the final year of the WBP 
agreement.
    Also, 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. The 1996 Act further amended the 
provisions regarding conservation priority areas under Environmental 
Conservation Acreage Reserve Program. The proposed rule set out 
proposed amendments to Sec. 1410.8 to reflect the new provisions.
    Further, CCC proposed to generally restrict the total cropland in a 
State that could be designated as a conservation priority area to no 
more than 10 percent. The rule proposed certain procedures for priority 
designations.

[[Page 7605]]

    With respect to wetland enrollment, CCC proposed allowing 
additional incentives for such enrollments.
    CCC also proposed to offer enhanced financial incentives, to obtain 
enrollments of filter strips, riparian buffers, field windbreaks, grass 
waterways, and acreage located in wellhead protection areas designated 
by the applicable State Agency or the Environmental Protection Agency 
(EPA).
    The 1985 Act generally provided that no commercial use can be made 
of the enrolled CRP acreage but permits haying or grazing during 
droughts or similar emergencies. CCC also sought comment generally on 
haying and grazing of CRP land.
    CCC noted that as a result of provisions in the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriation Act, 1997 (the 1997 Appropriations Act), contract 
extensions would not be available in Fiscal Year (FY) 1997 and proposed 
that acreage already enrolled in the CRP could be offered for re-
enrollment based on the same criteria applicable to other offers.
    With respect to the unilateral early contract termination 
provisions for certain acreage authorized by the 1996 Act amendments, 
CCC proposed to expand the list of acreage not eligible for early 
termination 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.
    The proposed rule also proposed that the CRP would be carried out 
by CCC through the Farm Service Agency (FSA) using State and county FSA 
offices and that CCC intended 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 
are known to provide especially high environmental benefits.
    CCC proposed to use a system that considers, for indexing purposes, 
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.
    Additionally, there were four issues for which CCC sought comment 
but which were not the subject of proposed amendment to existing 
regulations: (1) 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 1985 Act; (2) 
periodic nonemergency haying or grazing of CRP acreage; (3) the 
relationship of priority designations for the CRP, Wetlands Reserve 
Program (WRP), and Environmental Quality Incentives Program (EQIP); and 
(4) the methodology of making priority designations. Further, the 
proposed rule, by consolidating parts 704 and 1410, set out the 
entirety of the program regulations for review and comment in preparing 
the program for future enrollments.

Summary of Comments

    CCC received 3,467 comments concerning the proposed rule. Entities 
responding included individuals, State governments, local governments, 
State farm organizations, national conservation organizations, national 
farm and commodity organizations, and Members of Congress. Comments 
came from all States except Delaware, Maine, Nevada, and West Virginia, 
and comments came from the District of Columbia and Canada.
    In addition to the comments received in Washington, D.C., USDA 
conducted public listening forums in each State where comments on the 
CRP proposed rule were made for inclusion in the administrative record. 
These comments were included in the development of this final rule.
    Changes in this final rule from the proposed rule of September 23, 
1996, are based upon CCC's experience in implementing CRP since 1986 
and on consideration of the comments received. Numerous minor editorial 
and other changes have been made in the text and order of the 
regulations for clarity and to facilitate the application of the 
regulations.

General Comments

    Many comments were not directed to the proposed rule itself, but to 
related matters such as the enrollment level of the program, program 
development, and geographical distribution of the enrolled acreage. 
There were other comments which were not germane to CRP, were vague, or 
were not submitted timely; those comments were not considered.
    There were 487 comments supporting the implementation of the CRP 
and citing the individual or collective conservation, environmental, or 
other benefits of the program obtained as a result of CRP. These 
benefits included reduced soil erosion, improved air quality, enhanced 
wildlife habitat, surface and ground water conservation, commodity 
price and supply stabilization, and enhanced personal and community 
economies.
    One comment suggested that any program changes should be made 
gradually rather than immediately as indicated in the proposed rule. If 
the proposed rule had proposed dramatic changes or shifts in policy, 
such a suggestion would have merit. However, since 1987, when the use 
of an Erodibility Index (EI) was initiated, CRP has evolved to a more 
environmentally-sensitive program. The proposed rule has merely 
continued these prior incremental changes and the changes set forth in 
the proposed rule are not as dramatic in nature as prior amendments.
    Three comments suggested that no funding shifts occur between CRP 
and other farm programs. As a result of the 1996 Act, CRP is now funded 
through CCC's borrowing authority and implementation of the CRP will 
not affect CCC's ability to carry out other programs.
    One comment suggested that more field personnel are needed to 
inspect and monitor producers who are receiving Government subsidies. 
FSA has a thorough compliance program which includes the annual review 
of contract compliance on a statistically significant sample.
    Three comments suggested that the deadline for comments be extended 
and eight comments recommended timely approval of the final rule or no 
delays in signup. The comment deadline will not be extended due to the 
need to finalize this rule in a timely manner as set out above. Four 
comments suggested that the current program be extended for another 
year to fully assess the environmental and economic costs of the 
proposed rule. However, as indicated in the Program Changes section of 
the proposed rule, Congressional provisions contained in the 1997 
Appropriations Act effectively precluded the extension of any CRP 
contract expiring in FY 1997. CCC is very concerned that to delay 
action further could disrupt the farming and ranching community where 
planning is already underway for the upcoming cropping season. CCC 
intends to conduct a signup as soon as possible to alleviate any 
planning difficulties.
    Four comments opposed the CRP because they suggested it was paid 
for by taxes, hurts new farmers, benefits foreign countries, or because 
of its

[[Page 7606]]

economic impact. Twenty comments suggested that the need to subsidize 
the agricultural community has passed and that the land with expiring 
CRP contracts should be returned to production. Several comments 
opposed unspecified program changes. Congress has, in the 1996 Act, 
reauthorized the CRP, and the CRP continues to provide environmental 
benefits as was outlined in the proposed rule.
    One comment opposed the CRP being used as the all-purpose 
conservation program. CRP is operated in compliance with the 1985 Act. 
Another comment suggested that stricter regulations be implemented for 
people who have contracts for real estate investment purposes. The CRP 
regulations are designed to in fact assure the maximum benefit to the 
public for money spent in the program. The proposed regulations 
accomplish that function.
    One comment suggested that deed restrictions may be placed 
subsequent to enrollment to maintain desirable environmental benefits. 
Post-contract deed restrictions are not prohibited by the 1985 Act.
    Another comment suggested that the cost of returning CRP acreage to 
production would be a hardship. However, there are no CRP requirements 
as to the use of acreage after a CRP contract has matured.
    One comment suggested that the proposed rule was too complex 
without offering any suggestions to simplify the final rule. CCC has 
endeavored to limit this rulemaking to ensure that it does not 
overreach its legislated authority in implementing the program while 
informing the public of CRP goals and policies. The final rule has been 
reviewed extensively for simplification wherever possible.
    One comment suggested that CCC follow National Environmental Policy 
Act (NEPA) requirements regarding the impacts of the proposed rule. The 
proposed rule indicated that an environmental assessment had been 
completed with a finding that the proposed rule did not have a 
significant adverse impact on the environmental, historical, or social 
resources of the Nation, as required by NEPA.
    Another comment suggested that the proposed rule imposes an 
unfunded mandate on conservation districts. While conservation 
districts perform a vital function in the development and 
implementation of CRP, the regulations for the CRP impose no mandates 
on anyone. The decision of a conservation districts to assist in CRP 
enrollments is purely voluntary.

Program Development

    Seven comments opposed a perceived shift in emphasis from soil 
erosion to improvement of water quality. One comment supported a 
perceived change in CRP's emphasis from protecting individual's farms 
to protecting the ``public water.'' Three comments supported the 
expanded eligibility requirements and asked that erosion control 
remains a priority objective of the CRP. The water quality provisions 
under CRP are not new. Eligibility was expanded beginning in 1988 to 
include filter strips. In 1989, eligibility criteria was expanded to 
include cropped wetlands and areas subject to scour erosion.
    Another comment suggested that CRP could be used to tie programs 
together and that there should be cooperation between local, State, and 
Federal Governments to provide innovative opportunities in ways that 
maximize private participation and flexible utilization for perennial 
crops, biomass production, or other creative initiatives. CCC continues 
to be responsive to initiatives that can be demonstrated to cost-
effectively develop new uses and technologies consistent with the 1985 
Act.
    Two comments suggested pilot programs to implement provisions of 
the proposed rule. However, the 1985 Act provides no authority to 
conduct pilot programs.

Enrollment Level

    Fifty-nine comments supported a program level of 36.4 million 
acres. Four comments opposed the projected decline of the CRP to 28.1 
million acres by 2002, which was an estimate contained in the cost-
benefit assessment section of the proposed rule. Another comment 
suggested any references to downsizing CRP be removed from the rule. 
However, neither the proposed nor final rules contain any reference to 
an authorized level. CCC intends to enroll up to 36.4 million acres by 
accepting the acreage that maximizes environmental benefits but must be 
able to adjust to changing circumstances.
    One comment indicated that idling 36.4 million acres is not prudent 
but offered no concrete suggestions. Another comment suggested that the 
program be terminated over a three year period by terminating contracts 
now or agreeing to accept reduced rental payments with greater haying 
and grazing privileges. However, this is not consistent with the 1996 
Act amendments. CCC will carefully consider the amount of acreage to 
enroll by maximizing environmental benefits and cost.
    Two comments suggested that sufficient acreage remain available for 
enrollment for conservation priority areas or practices. CCC intends to 
continue its continuous signup of certain highly beneficial 
environmental practices.

Geographic Distribution

    Five comments suggested that the enrollment distribution among 
States and regions of the country should not change. One comment was in 
favor of a geographical balance. However, CCC intends to enroll the 
most environmentally sensitive acreage to obtain the greatest 
nationwide benefit.

Other Issues

    Fifty-seven comments generally favored the production of biomass 
crops on CRP. Fifty comments were generally opposed and of those, 29 
comments were opposed because of potential harm to wildlife. CCC has 
adopted the policy outlined in the Conference Report accompanying the 
1996 Act, which indicated that biomass production be considered an 
acceptable cover crop practice ``provided that no harvesting is allowed 
until after the contract is completed or terminated.'' In addition, the 
1985 Act generally prohibits the commercial use of CRP acreage.
    With respect to the periodic nonemergency haying or grazing of CRP 
acreage, three hundred and twenty-five comments were received. While 
the majority of respondents favored periodic nonemergency haying and 
grazing, there was a lack of consensus regarding how the process should 
be implemented. A number of comments were in support of some form of 
haying and grazing and a smaller number opposed the provision.
    One comment suggested a forage reserve program with haying in 
blocks and not strips to preserve habitat. Another comment suggested a 
grass bank so that one producer could rest native grass by grazing CRP 
owned by another person. Three comments recommended that CRP contract 
holders be limited as to any profit earned from hay produced on CRP 
acreage.
    In view of the divergence of opinions expressed by respondents on 
how the provision should be implemented, CCC will seek legislative 
amendments to modify the existing provisions relating to haying and 
grazing of CRP acreage and obtain specific authority for periodic 
managed haying and grazing. However, existing provisions of the 1985 
Act generally prohibit the non-

[[Page 7607]]

 emergency haying or grazing of CRP acreage.
    With respect to issues concerning implementation of the 
conservation priority area authority applicable to CRP, EQIP, and WRP 
and the manner in which to consider redesignation of soon-to-expire 
conservation priority area designations, respectively, these issues are 
addressed in the discussion of Sec. 1410.8.


Sec. 1410.1  Administration.

    Four comments supported the inclusion of specific reference to the 
U.S. Forest Service and State forestry agencies for consultation on 
tree planting practices. However, three of the comments suggest making 
consultation with the Forest Service or State forestry agencies a 
requirement rather than an option. This recommendation will not be 
adopted because there are areas in the country where these services are 
not available.
    Eighteen comments suggested that Sec. 1410.1 be amended to provide 
that: ``CCC may consult with the U.S. Fish and Wildlife Service (FWS) 
or the State wildlife agency for assistance as is determined by CCC to 
be necessary for developing and implementing conservation plans and 
practices in a manner to optimize benefits to wildlife habitat.'' 
Several comments specifically stated that wildlife agencies should also 
be consulted on tree planting practices in addition to consultation 
with forestry agencies. Two comments suggest that FSA should take every 
opportunity to work with wildlife professionals to ensure that the 
USDA-mandated wildlife benefits of this new CRP are incorporated into 
contracts whenever possible. The FWS and State wildlife agencies are 
represented on State Technical Committees and the FWS is a member of a 
national multi-agency team established to provide recommendations to 
the Secretary on CRP policy. The Department also consulted with various 
wildlife agencies when formulating CRP policies. CCC and FWS will work 
together on as needed basis. Therefore, this suggestion was adopted.
    There were several comments supporting the State and county FSA 
committees as the proper authorities to implement CRP including bid 
ranking, rulemaking, eligibility criteria, ranking plans and contract 
approval. CCC has delegated substantial authority to State committees 
which, acting upon recommendations from the State Technical Committees 
(see 7 CFR part 610) chaired by NRCS, assist in CRP operations within a 
State. Field level representatives of FSA and NRCS also participated in 
the development of issues prior to the preparation of the final rule.
    One comment suggested that the rule should be amended to clearly 
identify the role of the State Technical Committees. The role of the 
State Technical Committees is defined in 7 CFR part 610.
    One comment suggested that the local NRCS field office, along with 
local conservation districts, should have the ability to accept 
applications and approve contracts. Conservation districts are not 
federal agencies and, therefore, cannot obligate federal funds. During 
continuous signup, both NRCS and FSA have the ability to take requests 
for enrolling acreage in CRP. In order to maintain the fiscal integrity 
and consistency of the program, however, only one agency, FSA, will be 
responsible for approving contracts on behalf of CCC.
    Five comments suggested that State ranking plans be reviewed by 
NRCS and FSA national offices to ensure all objectives of the program 
are met. The national offices of NRCS and FSA, acting on behalf of CCC, 
will review all proposed State ranking plans.
    One comment suggested that rules for developing and applying an 
approved State ranking plan should be clear and available to those who 
will be affected by them and also suggests that offers in States with 
ranking plans should not be subject to ranking according to the 
national ranking plan. Another comment stated that national ranking was 
not desirable and that contracts should be approved at the local level. 
All State ranking plans will be public information and provided to 
interested applicants when requested. The national ranking process will 
only be used to determine the number of acres allocated to a State when 
State ranking plans are used. All offers will then be ranked according 
to the State plan. CRP contracts will be all approved in local FSA 
offices.
    There were a number of comments suggesting that drainage districts 
be afforded special authority to approve or deny a producer's request 
or otherwise limit a request for enrollment to protect the mission of 
the drainage district. There is no authority for a district to control 
program benefits. However, they are free to make their concerns about 
particular practices known.
    One comment suggested that contract approval be delegated to the 
local office level and implied that national ranking for acceptability 
is not desirable. CRP contracts are approved locally. The national 
office does not approve contracts. State FSA Committees, based on 
recommendations from State Technical Committees, determine whether a 
State or national ranking process is implemented. In States that use a 
national ranking plan, the national office uses an objective ranking 
process. In States that use a State ranking plan, the ranking process 
is used to determine the number of acres accepted in that State. In all 
cases, the CCC is attempting to achieve the maximum benefit for the 
nation as a whole.


Sec. 1410.2  Definitions.

    Some commenters suggested that ``permanent wildlife habitat'' and 
``wildlife corridor'' were used interchangeably in the rule. The 
permanent wildlife habitat was amended to make clear that it includes 
wildlife corridors.
    One comment suggested the definition of permanent wildlife habitat 
is not adequate because it does not take into consideration fish 
habitat. As ``wildlife'' can include both terrestrial and aquatic 
species, this recommendation has not been adopted.
    Three comments opposed the definition of ``predominately highly 
erodible field'' with no suggested change provided. Twelve comments 
suggested that because the definition of highly erodible land is land 
that has an erosion rate greater than ``T,'' it appears to penalize 
landowners who are doing a good job by preventing them from enrolling, 
while rewarding those who are doing a poor job of soil conservation. 
Another comment opposed the defining of highly erodible land as 
``erosion rate greater than T.'' Two comments suggested that the NRCS 
definition for ``predominantly highly erodible'' be set to use a 
predominance percentage of 33\1/3\ if this definition is going to be 
used to determine CRP program eligibility. Another comment suggests 
changing the definition for ``predominantly highly erodible field'' by 
replacing ``66\2/3\ percent of the land'' with ``75 percent of the 
land.'' One comment suggested that in the definition of ``predominantly 
highly erodible field'' the special allowance for the participants who 
agree to plant trees be expanded to include, also, those who will plant 
native grasses or create shallow water area for wildlife. Three 
comments suggested changing the fourth sentence defining HEL to read 
``having an erodibility index equal to or greater than 8 for both wind 
and water erosion and an erosion rate greater than T.'' One comment 
suggested adding ``or a combination of both'' in the definition of 
highly erodible land after the word ``erosion.'' One comment suggested 
replacing the word ``and'' with ``or'' in subparagraph (4)(i) in the 
definition of highly erodible land. One comment

[[Page 7608]]

suggested the definition of soil loss tolerance was inconsistent with 
the definition in the current highly erodible land regulations. The 
land eligibility provisions have been revised to be consistent with 
those published in 7 CFR part 12. Those standards are known and there 
is no need for an inconsistency for CRP eligibility determinations. 
Therefore, those lands basically eligible for CRP will include acreage 
which is subject to the conservation compliance provisions of 7 CFR 
part 12. Differences in erosion can be accounted for by ranking.
    Two comments suggested that the definition of conservation district 
be amended to use the more generic reference ``State or territorial 
conservation district law, or tribal law.'' Another comment suggests 
the definition of conservation district include the term natural 
resources district. The definition in the proposed rule already 
included these terms and is consistent with the definition of 
conservation district in other USDA programs.
    One comment suggested adding a definition for ``conservation 
priority area.'' This recommendation was adopted.
    Six comments suggested that for purposes of this rule a shelterbelt 
renovation be included in the definition of ``field windbreak, 
shelterbelt and living snow fence.'' However, there is no need to 
modify the definition. Any windbreak, shelterbelt, or living snow fence 
that is no longer functioning properly for the intended purpose is 
eligible to be enhanced or restored.
    Four comments suggested the creation and definition of ``State 
wildlife priority areas'' that could also be determined eligible as 
conservation priority areas and that these areas should be designated 
in consultation with State NRCS technical committee and state wildlife 
agency. The definition of conservation priority areas is sufficiently 
flexible to include this recommendation.
    One comment suggested changing the definition of agricultural 
commodity in the CRP rule to the definition used in other 1996 Act 
programs. The term ``agricultural commodity'' is defined for CRP 
purposes by the 1985 Act.
    Two comments suggested the definition of agricultural commodity be 
clarified to take into consideration tillage under crop residue 
management practices. The 1985 Act's definition is sufficiently 
flexible to consider tillage operations under crop residue management 
practices.
    One comment suggested that the definition of ``agricultural 
commodity'' should treat crops produced by so-called ``no-till'' 
practices in the same manner as crops produced normally. This 
recommendation will not be adopted as it is unnecessary. So called 
``no-till'' crops, as the term is normally used, do involve sufficient 
tilling for these purposes.
    One comment suggested USDA add tall prairie grass windbreaks in the 
definition of ``windbreaks.'' This recommendation will not be adopted 
because there is no assurance that the longevity of the practice can be 
assured.
    Several comments were received regarding definitions of ``cropped 
wetlands.'' One comment suggested adding a new definition of ``cropped 
wetland'' to mean ``any wetland farmed under natural conditions, any 
wetland designated a farmed wetland, or any restorable areas designated 
as prior converted cropland according to part 12 of this title.'' 
Another comment suggested defining ``cropped wetland'' to mean ``any 
wetland, farmed wetland or restored prior-converted wetland within a 
field that has been annually planted or considered planted to an 
agricultural commodity in two of the 5 most recent crop years.'' A 
third comment recommended adding language to the ``cropped wetland'' 
definition to include wetlands farmed under natural conditions, without 
manipulation. To provide for consistently with 7 CFR part 12, new 
definitions have been to the CRP rules for ``cropped wetlands,'' 
``farmed wetlands'' and ``wetlands farmed under natural conditions.'' 
Those definitions draw on part 12.
    One comment suggested adding a new definition for ``vegetative 
cover'' to mean native grasses or favorable introduced warm-season 
grasses, preferably multiple species and including some species of 
annual vegetation in planting mixtures. It is not appropriate to 
restrict vegetative cover as suggested. However, additional 
consideration may be awarded in the bidding process for more desirable 
covers.
    One comment suggested that ``reducing water erosion'' needs to be 
added to the purposes included in the definition for ``field windbreak, 
shelterbelt, and living snowfence.'' The proposal is inconsistent with 
the windbreak standards and specifications and could cause rill and/or 
ephemeral gully erosion if a grassed waterway filter strip, or some 
other practice is not established along side of the windbreak.
    Four comments suggested defining the term ``environmental benefits 
index'' to include the factors which comprise the ranking process. The 
recommendation was adopted.
    One comment suggested the definition of a conservation plan should 
clearly indicate that the definition only applies to the CRP or, 
alternatively, that the requirement for vegetative cover should be 
modified. The definition has been modified to read ``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, trees, water, or other comparable 
measures.''
    One comment suggested the exception for land in terraces that are 
no longer capable of being cropped be removed from the definition of 
``cropland.'' 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, resource-conserving cover. Acreage that is 
no longer capable of being cropped has already been removed from crop 
production. Therefore, this suggestion is not being adopted.
    One comment suggested the definition of a ``field'' is inconsistent 
with the 1985 Act. No basis was provided, or found, for the suggestion. 
Therefore, the recommendation was not adopted.
    One comment suggested the term ``vegetation'' be defined and 
include woody vegetation in the definition. Vegetation is included in 
the final rule definition of ``permanent vegetative cover'' as 
``perennial stands of approved combinations of certain grasses, 
legumes, forbs, and shrubs with a lifespan of 10 or more years, or 
trees.''
    Eight comments suggested changing the 3.0 acre minimum requirement 
in determining a manageable unit. On review, the manageable unit 
provision was determined to be unnecessary and removed.


Sec. 1410.3  General description.

    One comment suggested CRP regulations should target environmentally 
sensitive acreage while returning quality land back to production. This 
rule has been published consistent with CCC's goals to retarget CRP to 
more environmentally sensitive acreage. This includes a minimum 
erodibility index level to help ensure that CRP does not remove from

[[Page 7609]]

production land that is not environmentally sensitive. It is a goal of 
CCC to only retire land from agricultural production where the benefits 
to the Nation are greater from enrollment than in keeping land in 
continued agricultural production.


Sec. 1410.4  Maximum county acreage.

    Some commenters suggested that there should be no exceptions to the 
25 percent of a county's cropland enrollment prohibition and suggested 
setting an administrative limit of generally between 10 percent to 15 
percent as a maximum. Section 1243(b)(1) of the 1985 Act provides that 
``The Secretary shall not enroll more than 25 percent of the cropland 
in any county in the programs administered under the conservation 
reserve and wetlands reserve programs. . . .'' Accordingly, the 
reduction of the limitation would be inconsistent with the 1985 Act and 
would unduly limit CCC's options. As to any exceptions, CCC has 
heretofore not approved a recommendation for an exception unless NRCS, 
conservation districts, the Extension Service, and the Forest Service 
(FS) have made a favorable recommendation and only after local 
producers, agricultural-related businesses, and others were polled.
    Regarding county and State acreage limitations, some suggested that 
a limitation should be implemented on land that can be placed in CRP by 
counties and States. Each State should have a minimum and maximum 
number of acres allotted to be maintained and the regulatory limits on 
total designated acreage should be flexible where there are direct and 
serious considerations for protecting sources for drinking water. 
Arbitrarily establishing limits for enrollment by State inhibits CCC 
from maximizing environmental benefits achieved per federal dollar 
expended.


Sec. 1410.5  Eligible person.

    One comment suggested the term ``calendar'' be removed because the 
requirement is for one year not one calendar year. Another comment 
suggested the one year requirement be removed. Two comments suggested 
that the land ownership time requirement be eliminated if the goal of 
the program is erosion control and water quality. One comment concerned 
producers who assume CRP contracts who may not have owned the land to 
meet the necessary 1-year ownership requirement prior to the next CRP 
signup. After careful review, the term ``calendar year'' has been 
removed and replaced with the term ``12 months.'' The ownership 
eligibility requirement is a 1985 Act requirement and cannot be 
administratively eliminated. The proposed and final rule do not 
preclude those producers who succeeded to existing contracts within 12 
months of the next CRP signup period from reoffering such acreage.
    One comment supported reducing the land ownership requirement from 
three years to one year. This change is consistent with the 1996 Act 
amendments to the 1985 Act.
    One comment suggested adding ``and grazing land'' following all 
references to cropland in Sec. 1410.5. The term ``cropland'' has been 
replaced with the term ``eligible land'' now that certain marginal 
pasture land has been made eligible for CRP.
    One comment suggested that if a landowner receives government money 
for their CRP land, the landowner should fit some sort of definition of 
a farmer. The 1985 Act does not restrict participation in the program 
to ``farmers.'' Eligible producers include owners and operators of 
eligible land; therefore, this suggestion will not be adopted.


Sec. 1410.6  Land Eligibility.

Cropping History Requirement

    Nine comments suggested changes to the cropping eligibility 
requirement such as allowing flexibility to consider crop rotations or 
only requiring that acreage be planted or considered planted in two of 
the last ten crop years. Ten comments suggested that the cropping 
eligibility requirement be waived under emergency situations or for 
certain practices, such as filter strips and riparian buffers, or for 
certain land, such as land that has the potential to create erosion 
concerns, land subject to long term flooding, and land already devoted 
to waterways. The CRP is a voluntary program with the purpose of cost-
effectively assisting eligible owners and operators in conserving and 
improving soil, water, and wildlife resources by converting highly 
erodible land and other environmentally sensitive acreage normally 
devoted to the production of agricultural commodities to an approved 
long-term resource-conserving cover. The current cropping history 
requirement is necessary to obtain and maintain the purpose of the CRP 
consistent with the 1985 Act which, except for very limited situations 
dealing with marginal pasture lands, limits CRP eligibility to 
``cropland.'' Therefore, these suggestions will not be adopted.
    One comment supported the current cropland eligibility base period.
    One comment suggested that land coming out of CRP should not 
automatically be eligible to re-enroll. Two comments suggest that land 
known to be going out of agricultural production should not be allowed 
to be offered for CRP. These suggestions have not produced a rule 
change as the relative value of offers is taken into account in the 
ranking process and there is no automatic eligibility for old CRP 
lands.
    Two comments suggested that information be released to clarify 
whether land under CRP contract during the cropping eligibility base 
period would be considered as meeting the cropping eligibility 
requirements. Current CRP land may be offered for re-enrollment if its 
meets the new eligibility criteria. The Deputy Administrator of FSA may 
develop further refinements on this issue as needed to deal with delays 
in re-enrollment.

Erodibility Index

    Several hundred comments were received regarding the provisions 
relating to the EI of 8. There was little agreement among respondents 
regarding the appropriate minimum eligibility standard.
    Fourteen comments supported maintaining the EI enrollment 
eligibility level of 8 to make more acres of productive land available 
for farmers. One comment supported using a weighted average EI for 
eligibility.
    Seventy-six comments generally opposed the erodibility criteria and 
suggest that land with an EI of less than 8 be eligible to be enrolled 
in the CRP. Some comments suggested eligibility levels ranging from 5 
to 7 as an alternative. Four comments suggested that the EI of greater 
than 8 level be used as a guideline while allowing flexibility to 
enroll land with an EI of less than 8 when environmental or economic 
benefits justify such a decision. Eight comments suggest using the same 
EI level to determine both HEL compliance and CRP eligibility.
    Sixty-four comments supported the concept of targeting only 
environmentally sensitive land and placing more productive land in 
production. Of the 64 comments, 39 comments suggested that an EI 
eligibility level of 15 or greater be established.
    Thirty comments suggested giving more consideration to increasing 
land terrain as a qualifying factor. The concern is that previously 
eligible land does not qualify and is highly erodible from snow melt, 
rain, and wind.

[[Page 7610]]

    The erodibility index will be retained in the final rule including 
the present minimum value of 8. At this level, a majority of the lands 
that have a serious erosion problem without adequate erosion protection 
will be basically eligible for enrollment in the program. Further, it 
is a natural break point consistent with HEL determinations under the 
conservation compliance provisions in 7 CFR part 12. Specifically, 
acreage that is considered HEL under the regulations at part 12 will be 
basically eligible to be offered for CRP. Acreage within a field that 
has been redefined will have to meet the weighted average EI of 8 
criteria. In order to implement the program in a reasonable manner, 
some cut-off value which is consistent with the program's purpose must 
be used. The breakpoint value of 8 or greater has been determined to be 
the level which is most consistent with these purposes.

Water Bank Program

    Four comments suggested that eligibility criteria be expanded to 
include lands no longer enrolled in the WBP or that were never enrolled 
in the WBP if the land is type 3 through 7 wetlands which are not 
naturally occurring. That is, if eligibility criteria are met, allow 
the land to be enrolled regardless of WBP status or relationship. 
Neither the proposed nor final rule precludes the enrollment of 
eligible acreage not previously enrolled in the WBP.
    One comment suggested including an associated wetland buffer with 
any WBP contract acreage converted to the CRP. Neither the proposed nor 
the final rule preclude the enrollment of eligible acreage as wetland 
buffers. In addition, a substantial portion of acreage enrolled in the 
WBP included associated buffer acres.
    Four comments suggested adding type 4 wetlands to the WBP acreage 
eligible to be converted to the CRP. Neither the proposed nor the final 
rule preclude WBP acreage which is type 4 wetlands that are normally 
artificially flooded from eligibility for the CRP. Such wetlands that 
are not normally artificially flooded should not be enrolled in the CRP 
because such enrollments would tend to defeat the purpose of the 
program because such lands are naturally permanently under water, which 
is not consistent with the eligibility criteria and purposes of the 
CRP.
    Three comments suggested that artificially flooded WBP wetlands and 
wetlands with a history of cropping before WBP should be eligible for 
conversion to the CRP. Two comments suggested that eligibility for 
conversion from the WBP to the CRP apply to ``managed wetlands where 
water is intentionally applied to increase and/or enhance wetland 
functions and values and are classified as types 3 through 7 
wetlands.'' Neither the proposed nor the final rule preclude types 3 
through 7 wetlands that are normally artificially flooded from 
eligibility.
    Three comments supported the eligibility of WBP acres for CRP. One 
comment suggests not limiting WBP acreage eligibility to just the final 
WBP year. The Department has determined that to enroll acreage that is 
currently enrolled in a land retirement program is not a cost-effective 
use of the CRP and defeats the purpose of the program. Accordingly, the 
suggestion is not adopted.

Cropped Wetlands

    One comment suggested that allowing farmed wetlands into the CRP 
will lessen the incentive for farmers to enroll wetlands into long-term 
or permanent easements in the WRP. The CRP final rule allows the 
enrollment of cropped wetlands and appropriate associated upland 
acreage to restore and protect wetland functions and values without 
unduly competing with existing programs like WRP. The 1997 
Appropriations Act limited fiscal year 1997 WRP enrollment to 130,000 
acres. Permitting the enrollment of cropped wetlands in CRP allows CCC 
to obtain significant wildlife habitat, water quality, erosion control, 
and flood control benefits. The proposed rule inadvertently listed 
``farmed wetlands'' as eligible for enrollment. Beyond ``farmed 
wetlands,'' cropped wetlands also includes ``wetlands farmed under 
natural conditions.'
    Forty-four comments suggested that uplands associated with cropped 
wetlands be included as eligible land. Several comments provided 
suggested language for eligible land under the cropped wetlands 
provision: ``Acreage designated a farmed wetland or a wetland farmed 
under natural conditions by NRCS according to part 12 of this title, 
together with the appropriate amount of associated upland, as 
determined by the State Technical Committee to be necessary to protect 
the wetland and meet wildlife habitat needs.'' Most of these comments 
suggest a ratio of six upland acres per wetland acre or six upland 
acres per wetland basin; however, one of these comments suggested the 
upland acres should be kept to a minimum to balance the needs of the 
landowner. The final rule has been amended to provide that cropped 
wetlands and appropriate associated cropland will be basically eligible 
for CRP. In addition, appropriate associated cropland with noncropped 
wetlands will also be basically eligible to be enrolled providing the 
acreage meets other cropland eligibility requirements. The NRCS will 
determine the associated acreage that is necessary to maintain the 
viability of the wetland area not to exceed a 6 acre of cropland to 1 
acre of wetland ratio.
    Sixty comments suggested including wetlands as eligible land for 
the CRP. The purpose of the CRP is to cost-effectively assist eligible 
owners and operators in conserving and improving soil, water, and 
wildlife resources by converting highly erodible land and other 
environmentally sensitive acreage normally devoted to the production of 
agricultural commodities to an approved long term resource conserving 
cover. The Department has determined that to enroll such acreage is not 
a cost effective use of the CRP and is not consistent with the purpose 
of the program. Accordingly, the suggestion is not adopted.
    One comment opposed provisions making all cropped wetlands eligible 
for CRP. Cropped wetlands are a vital natural resource which provide 
significant environmental benefits. Therefore, this suggestion was not 
adopted.
    Two comments suggested that the ``type 1-20'' wetland 
classification system be replaced with the Department of Interior's 
Classification of Wetlands and Deepwater Habitats of the United States. 
For example, ``type 3 through 7'' land would be reclassified as 
``semipermanently flooded, permanently flooded, scrub, shrub, and 
wooded wetlands.'' The WBP authorizing legislation, however, bases WBP 
eligibility on the old classification system and that system should, 
therefore, for consistency and ease of administration, continue to be 
the standard used in this rule for types 3 through 7 wetlands. One 
comment suggested that FSA be assigned responsibility for delineating 
wetlands. Neither the proposed nor the final rule delineates wetlands 
or changes any wetland classifications. The final rule allows cropped 
wetlands, as determined by the NRCS, to be basically eligible for 
enrollment in the CRP. Accordingly, these suggestions are not adopted.
    One comment suggested that opportunities for wetland conservation 
and restoration should remain available through both the WRP and the 
CRP. Neither the proposed nor the final rule restrict the opportunity 
for producers to enroll in the WRP.

[[Page 7611]]

    One comment supported eligibility of wetlands but suggested that 
the need for regulatory reform not be replaced by what should only be 
an option similar to mitigation. It does not appear that permitting 
cropped wetlands to be enrolled in the CRP impacts any options 
available to producers regarding mitigation.

Air Quality

    Four comments suggested that air quality be considered adequately 
for eligibility and evaluation. Two comments suggested that the purpose 
of the CRP be expanded to include air quality for lands contributing to 
an EPA designated PM<10 non-attainment area and went on to suggest that 
lands contributing to the air quality problem in such an area should be 
automatically eligible for the CRP. A factor has been added to the 
ranking process to evaluate air quality improvements from reducing 
airborne dust and particulate from cropland wind erosion. In addition, 
State FSA Committees have the authority to request conservation 
priority areas to target wind erosion concerns.

Wind Erosion

    One hundred thirty four comments suggested that failing to 
adequately consider wind erosion as an eligibility or evaluation factor 
would unfairly exclude too many erodible acres from CRP eligibility. 
Several of the 134 comments suggested combining wind and water erosion 
when calculating the EI of a field. The EI measures soil erosion caused 
by both wind as well as water. The EI of a field is established based 
on the higher of the two indexes. Wind erosion receives equal weighting 
with water erosion in determining eligibility for enrollment in CRP. 
Furthermore NRCS has indicated that the EI values for wind erosion and 
water erosion should not be combined. While wind and water erosion may 
occur on the same field, both erosion types do not necessarily occur on 
the same acre nor do both types of erosion occur at the same time of 
the year. Thus, whatever is the most prevalent type of erosion, either 
wind or water, will be used to establish the EI value. Accordingly, 
these suggestions are not adopted.

Scour Erosion

    One comment suggested that scour erosion eligibility criteria be 
flexible to allow scoured areas not adjacent to the water body to be 
eligible. One comment suggested that lands eligible under the scour 
erosion provisions of Sec. 1410.6(c) should be planted to an 
appropriate tree species or mixed species of trees. Neither the 
proposed nor the final rule require land to be adjacent to a waterbody 
to meet the requirements of the scour erosion eligibility criteria. The 
proposed and final rule requires that cropland approved for enrollment 
under the scour erosion criteria to be planted to an appropriate tree 
species unless NRCS or FS certify that the site is not suitable for 
trees.

Wildlife

    One comment suggested wildlife benefits not be an eligibility 
consideration for enrollment in the program. Five comments suggested 
that wildlife habitat should not be a sole criteria for CRP 
eligibility. Seventy comments suggested that a wildlife exemption or 
wildlife criteria be developed for determining eligibility. One comment 
suggested that a natural heritage eligibility criterion be developed 
for wildlife habitat.
    Wildlife habitat will be positively benefitted from the inclusion 
of cropped wetlands, certain WBP acreage, special practices offered in 
the continuous signup provisions such as riparian buffers, and 
potentially through State and national conservation priority areas. 
Therefore, these suggestions will not be adopted.
    One comment suggested that any permanent vegetative cover be 
acceptable wildlife cover as determined by the State wildlife agency in 
consultation with the State Technical Committee. It is the applicant's 
decision as to which practice and acreage to offer for enrollment. 
Certain practices requested by applicants are not intended for wildlife 
or do not provide wildlife benefits. Therefore, this recommendation is 
not being adopted.

Filter Strips and Riparian Buffers

    Several comments were received regarding the size of filter strips 
and riparian buffers and the eligibility of such practices on certain 
land. Four comments suggested that a minimum width for filter strips be 
established. Four comments suggested 33 feet instead of 66 feet as was 
printed in a previous Agency directive. Nine comments suggested that 
the State FSA Committee or other local officials should be responsible 
for determining the size of filter strips and riparian buffers. One 
comment suggested filter strips and riparian buffers need to be clearly 
defined so farmers will have a quick snapshot of what these terms mean.
    The size requirement of filter strips and riparian buffers is not 
incorporated as part of the CRP proposed or final rule. Previous 
versions of 7 CFR part 1410 included minimum and maximum size 
requirements for filter strips. The Conference Report accompanying the 
1996 Act provided that the Managers intend for the Secretary, to the 
extent practicable, to consider local conditions when determining 
minimum required widths for vegetative strips in CRP. Complaints were 
received from the public that the regulation was not flexible enough to 
meet the needs of intended CRP sites in all States. Therefore, 
determinations on size requirements will continue to be made at the 
local level utilizing the NRCS office Field Office Technical Guide 
(FOTG).
    Two comments suggested making riparian buffers on marginal pasture 
land eligible for CRP. Two comments suggested allowing filter strips 
and riparian buffers along dry streams, swales, sod waterways, and 
riparian buffer areas around feedlots. Ten comments suggested allowing 
filter strips along intermittent streams and drainage ditches, and 
making field end rows and headlands eligible for filter strips during 
continuous signup. Riparian buffers on eligible marginal pasture land 
may be offered for enrollment in the CRP but only for planting to 
trees, as is provided for in the 1985 Act. Filter strips and riparian 
buffers along dry streams, swales, feedlots and waterways do not obtain 
the benefits, goals, and objectives of such practices and is not 
consistent with the 1985 Act. Neither the proposed nor the final rule 
preclude filter strips adjacent to seasonal streams and drainage 
ditches.

Wellhead Protection Areas

    Several comments suggested expanding or changing which agency's 
designation of wellhead protection areas will be used to determine CRP 
eligibility. After careful review, the final rule has been amended to 
provide that ``wellhead protection areas'' will mean those approved by 
appropriate State agencies or the EPA.
    One comment suggested that wellhead protection provisions support 
local communities, but do nothing for rural areas. Wellhead protection 
areas may be designated in areas served by rural water lines and 
enrollment of surrounding land in the CRP can provide substantial water 
quality benefits.
    One comment supported the inclusion of wellhead protection areas as 
environmentally sensitive lands eligible for the CRP.

[[Page 7612]]

Trees

    One comment suggested that established pine stands on CRP land be 
renewed and remain in the CRP program to prevent conversion of the land 
back to crop production. Four comments suggested that CRP contracts 
planted to loblolly or slash pine should not be re-enrolled because of 
projected high retention rates, economic returns, and limited wildlife 
benefits. Any acreage currently in the CRP, is considered to be capable 
of being planted. Any untimely tree destruction could be accounted for 
in the ranking process. That process may also take other relevant 
factors into account.

Enrolling Existing Contracts

    Sixty-six comments opposed the land eligibility requirements 
because land currently enrolled in the CRP may not be eligible to be 
re-enrolled. Several comments suggested allowing at least 50 percent of 
all land currently enrolled in the CRP to be re-enrolled regardless of 
the eligibility requirements. Several other comments suggested allowing 
at least 50 percent of all land enrolled in the CRP to be re-enrolled 
if wildlife benefits will be enhanced. As indicated in the proposed 
rule, the 1997 Appropriations Act effectively precludes the extension 
of any CRP contract in FY 1997. The eligibility criteria is designed to 
assure maximum achievement of the program's goals.
    One comment supported the requirement for re-enrolled bids to 
compete with new bids.

Other Issues

    One comment suggested no restrictive eligibility criteria be used 
to determine enrollment in the CRP. While this recommendation allows 
all acreage to compete based on the ranking process, it unnecessarily 
increases workload to a point that it may become unmanageable. 
Accordingly, this suggestion will not be adopted.
    Six comments suggested that whole farm enrollment not be allowed. 
The 1985 Act does not direct that we deny enrollment of otherwise 
eligible acreage based on the size of the field and adding such a 
requirement would unduly limit CCC's options. Therefore, this 
suggestion will not be adopted.
    Two comments suggested that land subject to flooding during one 
year out of ten years be eligible for the CRP even if there is no 
evidence of scour erosion. There are other Federal programs available 
to address these concerns. The CRP is not a flood risk reduction 
program. The final rule does not preclude such land from enrollment if 
it meets one of the land eligibility criteria.
    Two comments suggested that a new eligibility criterion for ``Lands 
adjacent to existing CRP land, wildlife management areas, national 
wildlife refuges and other natural areas.'' Eligibility for such land 
is not necessary and may not be a cost-effective use of the CRP; 
however, CCC recognizes the benefits of such contiguity and such land 
will be appropriately considered under the ranking process. Therefore, 
these suggestions will not be adopted.
    One comment suggested changing Sec. 1410.6(h)(4) to include 
``emergency priority areas'' as eligible areas along with designated 
conservation priority areas. The commenter was not clear as to what was 
intended as ``emergency priority areas;'' therefore, this comment will 
not be adopted.
    One comment suggested clarifying the text of Sec. 1410.6 by 
creating three lists that clearly define (1) all provisions which must 
be met if land is to be eligible, (2) exceptions under which those 
lands not meeting those provisions will still be eligible, and (3) 
conditions under which no lands will be eligible. Another comment 
suggests that the practices listed under Sec. 1410.6(b) and 
Sec. 1410.6(h)(5) be the same and include all those practices listed in 
Sec. 1410.6(b). The final rule amends Sec. 1410.6 to clarify these 
provisions.
    Two comments suggested that wildlife habitat, riparian buffer, and 
contour grass strips be added to the list of special practices for 
which eligibility for otherwise eligible land is prescribed in 
Sec. 1410.6(h)(5). Both the proposed and final rule provide eligibility 
for otherwise eligible land determined suitable for such practices. 
However, Sec. 1410.6 has been amended for clarity.
    Two comments suggested that references to acreage protected by 
easements or mortgage restrictions be removed or clarified. One comment 
suggested permanent conservation easements for either the entire farm 
or those portions being retired from cropping. These recommendations 
will not be adopted because there does not appear to be a substantial 
program benefit from enrolling limited lands, there is no authority in 
the 1985 Act to require conservation easements on new CRP contracts, 
and such easements could discourage enrollment and raise costs. On 
review, in addition, the provision appears to be sufficiently clear.
    One comment suggested that language in Sec. 1410.6(d)(1) be changed 
regarding the provision for the ineligibility of land where the water 
quality objectives can be obtained in another program if the CRP 
eligibility determination to be was unduly delayed. This has been 
accomplished by inserting the words ``in a reasonable and timely 
fashion'' after the word ``obtained'' in the regulation.
    One comment suggested not allowing early termination if the intent 
is to re-offer the same land at a higher rental rate. The 1985 Act does 
not restrict early termination to only those persons who intend not to 
re-offer the acreage. The 1985 Act provides that such acreage may be 
re-offered during a subsequent signup period. Therefore, this 
suggestion will not be adopted. It should be further noted that the 
early termination provisions only apply to contracts initially enrolled 
prior to January 1, 1995. Accordingly, all contracts enrolled after 
that time regardless of whether the acreage was under an earlier 
contract will not contain the unilateral early termination authority.
    One comment suggested that highly erodible land that can be farmed 
should be left in crop production, especially where technology has been 
improved to control erosion. The CRP is a voluntary program with the 
objective of cost-effectively assisting eligible owners and operators 
in conserving and improving soil, water, and wildlife resources by 
converting highly erodible land and other environmentally sensitive 
acreage normally devoted to the production of agricultural commodities 
to an approved long term resource conserving cover. The CRP can be used 
to assist owners and operators to meet conservation compliance 
requirements and improve farming practices. To exclude highly erodible 
land that can be farmed from the program would limit CCC's ability to 
assist such land owners and operators and remove a valuable tool used 
to conserve the nations'' resources. However, CCC will endeavor to not 
enroll land which is better put to agricultural production. 
Accordingly, this suggestion is not adopted.
    Two comments suggested that flooded pasture land and acres 
currently under water which has been cropped in the past should be 
eligible to enroll into CRP. Enrolling acreage not capable of being 
cropped is not cost-effective and tends to defeat the purpose of the 
program.


Sec. 1410.7  Duration of contracts.

    Several comments suggested the Department should consider a shorter 
contract period for contracts that have already been extended or should 
allow contracts to be extended rather than be re-offered for enrollment 
or allowed to exit CRP in an orderly fashion. The 1985 Act provides 
that contracts can be no

[[Page 7613]]

less than 10 nor more than 15 years. Further, the 1997 Appropriations 
Act effectively precluded the extension of existing contracts in FY 
1997.
    Several comments suggested establishing varying years of duration 
of contracts between 10 and 15 years for various reasons, such as to 
lessen the effects of returning vast acres to crop production; for 
wellhead protection areas; tree planting; in return for contracting 
with Federal, State or local government to lengthen the term of the 
contract or for a permanent easement; or when landowners voluntarily 
commit to maintain the conservation measures for several years 
following contract expiration. In accordance with the requirements of 
the 1985 Act, the final rule provides that contracts devoted to 
hardwood trees, shelterbelts, windbreaks, or wildlife corridors may be 
for the length specified by the producer, so long as the contract is 
not less than 10, and not more than 15, years in length. Otherwise, 
however, the contracts will be 10 years to preserve CCC's flexibility 
and reduce CCC's financial exposure.


Sec. 1410.8  Conservation priority areas.

    One hundred ten comments were received recommending a specific area 
be identified as a conservation priority area. One comment supported 
the cropped wetland exemption but stated that for the Prairie Pothole 
region a wildlife exemption should be established to reaffirm the 
longstanding, successful relationship CRP has developed between 
sportsmen and farms. Another comment suggested the local conservation 
district be the lead agency responsible for nominating conservation 
priority areas in a State. The following have been designated as 
national conservation priority areas: Chesapeake Bay, Long Island 
Sound, Great Lakes region, and the Prairie Pothole region. 
Recommendations for State-designated conservation priority areas may be 
submitted by State FSA Committees based on recommendations from State 
Technical Committees to the Deputy Administrator for Farm Programs, FSA 
(Deputy Administrator). Land located within a designated CRP 
conservation priority area is eligible to be offered for enrollment, 
although the acreage still must compete with all other offers for 
actual enrollment.
    Seventy-five comments were received regarding the proposed 10 
percent cropland limitation per State. Several comments suggested that 
the limitation was too low or should be otherwise adjusted such as 
allowing designation of an additional 10 percent for a wildlife 
conservation priority area or allowing State FSA Committees to exceed 
the 10-percent limit to meet Federal clear air standards. Other 
comments supported the limitation, or suggested it was too high or was 
arbitrary. After reviewing the public comments, CCC has determined to 
maintain the 10-percent limitation. Providing a limitation ensures the 
strength of the priority area concept by allowing designation of only 
the highest priority needs within a State. States will designate the 
purpose of the priority area as enhancing either water quality, 
wildlife habitat, or other environmental concerns. The 10-percent 
limitation could be exceeded for extraordinary circumstances, if 
approved by the Deputy Administrator. All recommendations for State-
designated conservation priority areas will be reviewed by a national 
interagency team to ensure that the purpose is clearly defined and to 
ensure consistency among States and with the intent of the program.
    Several comments suggested that a conservation priority area may 
need to be designated exclusively for wildlife or wildlife habitat 
plantings or should be used to protect lands from wind and water 
erosion, while others suggested that a priority area should not be 
established based on wildlife habitat alone. Several emphasized major 
watersheds for conservation priority areas especially where drinking 
water is impacted, and a few comments suggested that Soil and Water 
Conservation Districts or the State Technical Committee be given the 
authority to designate conservation priority areas. A few comments 
suggested priority areas be based on improving water quality and 
wildlife habitat that cannot be achieved through other programs or 
suggested that State wildlife agencies be allowed to designate 
conservation priority areas for wildlife. Several comments suggested 
that designation of conservation priority areas be allowed for the 
mitigation of natural resource emergencies or to give priority to those 
contracts already established. State FSA committees, based on their 
review of the recommendations of the State Technical Committee, will 
have the opportunity to recommend designation of conservation priority 
areas based on actual adverse impacts of agricultural activities on 
water quality, wildlife habitat, or other environmental concerns. 
Recommendations will be required to define the conservation and 
environmental objectives and analyze how CRP can cost-effectively 
address such objectives. The scarcity of a habitat or wildlife species 
is a key factor in establishing a wildlife habitat-based conservation 
priority area so the CRP can be effective as a means to avoid wildlife 
species population declines and preserve rare or disappearing habitat. 
The CRP is not an emergency program; other USDA programs exist to 
address emergencies affecting natural resources. Giving priority to 
contracts already established would decrease the Department's ability 
to achieve its goal of cost-effectively enrolling the most 
environmentally sensitive acreage.
    Some comments suggested conservation priority areas should provide 
preference to but not automatic eligibility of lands offered within an 
area, or that location within a conservation priority area should 
become a part of an environmental benefits index for ranking rather 
than eligibility. Other comments suggested allowing a certain type of 
land to be considered as a conservation priority area rather than a 
specific geographic area. One suggested land type was center pivot 
corners. Another comment suggested geographically balancing the 
conservation priority areas, targeting areas with diverse conservation 
needs. Other respondents suggested that USDA should guard against 
conservation priority areas enrolling land which would not normally 
qualify under other criteria, or opposed establishment of conservation 
priority areas due to unspecified adverse impacts. One comment 
suggested the review of accomplishments within designated conservation 
priority areas at the time of redesignation.
    Land located within a CRP conservation priority area is eligible to 
be offered for enrollment, although the acreage still must compete with 
all other offers for actual enrollment. Location within a conservation 
priority area will be considered in the ranking process. State FSA 
committees have the authority, based on recommendations from State 
Technical Committees, to recommend a conservation priority area based 
upon a specific, identifiable land quality provided the priority area 
still serves the purpose of water quality, air quality, or wildlife 
habitat concerns and the State can provide a map indicating the 
location of the priority area. State FSA committees in all 50 States 
are eligible to submit recommendations for conservation priority areas. 
All existing CRP conservation priority areas have expired or have been 
withdrawn. State FSA committees must submit new recommendations for any 
conservation priority area to be effective. Each recommendation must 
include an evaluation and monitoring plan before the priority area can 
be approved.

[[Page 7614]]

    Several comments addressed the issue of utilizing the same 
conservation priority areas for the CRP, WRP, and EQIP. Some stated 
that the conservation priority areas should be cross-referenced or 
coordinated so that benefits from multiple programs could apply; for 
example, CRP could be used in a WRP priority area to stop erosion from 
filling in a protected or restored wetland. One comment suggested 
including EQIP State-designated conservation priority areas for CRP. 
Another suggested that conservation priority areas should be 
implemented by receiving a percentage of the funding, with the 
remainder of the funds going to general disbursement. Others suggested 
it would be unwise to closely link the conservation priority areas for 
the different programs and that all three programs should have 
conservation priority areas. A respondent suggested, for example, that 
EQIP conservation priority areas will likely result in very little 
incentive for tree planting, but that the CRP has valuable tree 
planting incentives. Some comments suggested that it would not be 
possible to put CRP conservation priority areas in tandem with the 
other programs because EQIP and WRP are locally based and it is hard to 
set priorities at the national level, and that conservation priority 
areas set, for example, for the WRP should be used only for WRP, with 
the goal of permanent restoration of diverse wetland functions and 
values. One comment suggested that the implementation of conservation 
priority area authority should be limited to noninvasive technical 
assistance from USDA, and several comments suggested that the State or 
State FSA committee should establish conservation priority areas, not 
the Federal government.
    State FSA committees, based on the recommendation of State 
Technical Committees, recommend conservation priority areas based on 
State specific environmental needs and objectives. The Deputy 
Administrator reviews State recommendations and makes approvals that 
are consistent with the goals and objectives of the CRP. Land located 
within a CRP conservation priority area is eligible to be offered for 
enrollment, although the acreage still must compete with all other 
offers for actual enrollment. CRP funding is not determined based upon 
location inside or outside of a priority area but upon actual 
enrollment. Further, the CRP is available for all eligible acreage, 
including that located within WRP or EQIP conservation priority areas. 
State FSA committees, based on recommendations from State Technical 
Committees, may submit EQIP conservation priority areas as CRP 
conservation priority areas. The recommendation, however, must meet the 
requirements established for CRP, such as the 10-percent cropland 
limitation.
    The Department agrees that the purposes of the CRP, WRP, and EQIP 
differ, but believes that the determination of conservation priority 
areas may be coordinated in the future.


Sec. 1410.9  Alley-cropping.

    One comment suggested that alley-cropping not be limited to 
contracts requiring the planting of hardwood trees. That limit is 
consistent with the 1985 Act.


Sec. 1410.10  Conversion to trees.

    Several comments suggested that the special provisions for 
converting CRP land to hardwood trees and for allowing three years, 
with certain limits and in certain cases, to plant the trees be 
extended to softwood trees. The limitation with respect to hardwood 
trees in both cases is statutory. Also it was suggested that site-
specific selection of tree species for tree planting purposes be made 
by professional foresters. Such consultation can be obtained if needed.
    Two comments suggested that the requirement to reduce the cost-
share payment by the amount of the original cost-share payment be 
eliminated and a bonus equal to 25 percent of the cost of establishing 
these new covers be provided. The comments cannot be adopted. The 1985 
Act provides that the Secretary will not incur any additional expense 
for the acres converted, including the expense involved in the original 
establishment of the vegetative cover, that would result in cost share 
for costs in excess of the costs that would have been subject to cost 
share for the new practice had that practice been the original 
practice.
    Three respondents commented on the requirement that for conversions 
made under this section, the CRP participant must agree to also agree 
to participate in the Forest Stewardship Program. One supports the 
requirement while another suggests elimination and a third suggests 
that participants only be encouraged to participate when converting to 
trees. The required participation in the Forest Stewardship Program is 
statutory.
    A few comments suggested that riparian corridors containing 
hardwood trees be added to the list of special to which the conversion 
provisions apply, and that the Deputy Administrator offer 15-year 
contracts on all CRP lands to be planted to hardwoods. Areas devoted to 
hardwood trees or which can be considered as wildlife corridors are 
already eligible under the proposed rule. Also, the rule provided that 
contracts for hardwood tree plantings could be for 10- to 15-years at 
the producer's discretion. Requiring that the producer always take a 
15-year contract does not appear to be necessary or cost-effective.
    One comment suggested that trees be harvested on acres that were 
converted to such plantings. The 1985 Act prohibits the harvesting of 
the trees during the contract period and prohibits any commercial use 
of trees on land that is subject to a CRP contract unless it is 
expressly permitted in the contract. Participants are, however, allowed 
to conduct pruning, thinning, stand improvement, or other activities 
consistent with customary forestry practices on land that is planted to 
trees. The landowner may harvest the trees only after the contract 
expires.


Sec. 1410.11  Restoration of wetlands.

    Comments generally supported the restoration of eligible wetlands 
in the CRP but discouraged competition with the WRP. Comments varied on 
the administrative mechanism used to accomplish restoration. Two 
comments suggested that wetlands enrolled in CRP be required to be 
restored with no mention of incentives or additional compensation. 
Several comments related to incentives offered to landowners. One 
comment suggested a 25-percent bonus be added to the annual payment 
rate and two others support unspecified additions. Other incentives to 
be implemented should accomplish this objective at much lower cost to 
the program.
    Two comments suggested that wetlands enrolled in CRP, regardless of 
initial enrollment date, either be restored with a 25-percent cost-
share incentive or be transferred to WRP. The date restriction in the 
regulation is required by the 1985 Act. One comment suggested that the 
highest quality wetlands, regardless of size, be directed to the WRP 
for long-term protection. However, program requirements differ between 
CRP and WRP, making transfer an issue for landowner consideration. 
Inclusion of bonus points in the criteria are supported in two comments 
as a method of encouraging restoration.
    One comment recommended limiting CRP enrollment to only wetlands so 
that land coming out would be available for production. The 1985 Act as 
it relates to CRP is directed at highly erodible lands, as well as 
other sensitive lands, and a limitation to wetland enrollment would,

[[Page 7615]]

accordingly, not be appropriate. Another comment suggested that land 
coming out of CRP contract should reflect the land use prior to 
enrollment, including wetlands. Once a contract expires, the 
participant is under no further obligation to abide by any terms or 
conditions of the CRP contract except as may be required to meet 
conservation compliance or wetland conservation provisions of 7 CFR 
part 12 to obtain benefits for certain other USDA programs. Such a 
change, in addition, would be cost-effective even if undertaken for a 
limited time.
    One comment suggested that drained lands be eligible for CRP 
without requiring that ditches be plugged or tile broken. Although CCC 
will provide financial incentives to restore wetlands and additional 
consideration is provided in the ranking process for acceptance into 
the program, wetland restoration will only occur by voluntary 
agreement. Accordingly, this suggestion has not been adopted.


Sec. 1410.20  Obligations of participant.

    Four comments suggested the reduction of allotments and quotas for 
tobacco and peanuts interferes with the economic soundness of the 
family farm and is too harsh on tobacco and peanut quota holders 
because they no longer have the ability to reduce their crop acreage 
bases. The respondents suggested that tobacco and peanut allotments and 
quotas be exempt from reduction. This recommendation is not adopted 
because the reduction is required by the 1985 Act. Crop acreage bases, 
for other crops which had deficiency programs, ceased being used after 
enactment of the 1996 Act.
    The majority of comments on this section dealt with weed control. 
Two comments suggested that weed control should be mandatory. One of 
the two comments suggested that those not complying should be penalized 
only on those acres affected, not the entire contract acres and not to 
exceed one year's payment. The other comment suggests that NRCS and FSA 
accept and seek information and assistance from landowners or the 
general public without creating a contract compliance issue. CRP 
participants are required to maintain the acreage according to the 
conservation plan of operation developed by NRCS. Participants who do 
not comply with the plan are assessed payment reductions or the 
applicable contract acreage is terminated. Noxious weeds must be 
controlled in accordance with local laws on all contracts at all times. 
It is not necessary to file a complaint to have CRP acreage checked for 
compliance with the plan.
    Eleven comments suggested weed control should be targeted only to 
those weeds officially listed as ``noxious weeds'' by the applicable 
State. Three comments suggest that the requirement for general control 
of weeds be eliminated. CRP practices are installed to meet a 
particular environmental or conservation objective. Plants that impede 
that particular objective must be controlled. CCC believes that it is 
important to control weeds that are detrimental to the purpose of the 
selected cover. Therefore, this recommendation will not be adopted. 
However, CCC will work with CRP participants to preserve the 
environmental benefits including, where appropriate, spot mowing and 
other spot treatments.


Sec. 1410.21  Obligations of the Commodity Credit Corporation.

    One comment suggested that the meaning of ``subject to the 
availability of funds'' is unclear, given that rental payments will be 
made under the authority of the CCC. CCC is now authorized to use its 
borrowing authority to fund the CRP. However, it is necessary to 
maintain this language since CCC funds will not be earmarked in 
advance.
    Nineteen comments were received in support of the incidental 
gleaning of certain CRP acreage and one comment was in opposition. 
Incidental grazing associated with gleaning of crop residues is 
authorized by the 1985 Act and can provide a worthwhile additional 
incentive for participants without a significant effect on other 
parties; such gleaning is limited both by the regulations and the 
conservation plan.
    One comment suggested that should funds cease to be available, land 
enrolled in CRP would be freed from the contract obligations without 
causing default on the part of the landowner, and that the landowner 
would be provided at least 12 months' notice of USDA's termination. 
Another comment suggested that CRP contracts must be considered legally 
binding on both the landowner and the CCC and rental payments should be 
made to landowners in a timely manner as provided in the contract. 
Since inception, all CRP rental payments have been made, subject to 
statutory constraints. That should continue to be the case.
    Two respondents suggested that any bases being protected should not 
be released because it would only reduce farm program payments. This 
recommendation will not be adopted. Once the CRP contract expires there 
is no authority to protect allotments or quotas in accordance with the 
1985 Act. The eligibility of current holders of CRP contracts to 
participate in the production flexibility contracts authorized by the 
1996 Act is statutory. However, CRP acreage that is reenrolled will be 
considered to be under a new contract and will lose any ``base'' 
protection for production flexibility contracts that otherwise applied 
since such bases were terminated by the 1996 Act. If a farm with 
tobacco quotas or allotments or peanut quotas is enrolled in the CRP, 
such allotments and quotas must be reduced but will be restored in 
accordance with the statutory provisions in effect when the CRP 
contract is terminated.
    Two comments suggest the quota for peanuts or tobacco on land being 
enrolled in CRP should not be reduced. This recommendation will not be 
adopted because the reduction is required by 1985 Act.


Sec. 1410.22  Conservation plan.

    One comment suggested wildlife habitat creation be included as a 
requirement in the conservation plan. Another comment suggested that 
FSA and NRCS, in conjunction with wildlife managers, work to ensure 
that partial field practices also provide habitat benefits for 
wildlife. This recommendation will not be adopted. It would be 
inappropriate to require wildlife provisions if the purpose of the 
practice is not wildlife.
    One comment suggested that the local weed control representatives 
be requested to participate in developing a plan for evaluating noxious 
weed control on contracts requesting extension and for assuring 
adequate noxious weed control on active contracts. Participants are 
required to control noxious and other weeds to protect the cover and 
the conservation plan will include any control techniques. CCC relies 
on local weed officials to enforce State laws regarding the existence 
of any noxious weeds on CRP acreage.
    Three comments opposed the requirement that landowners control all 
weeds, insects, and pests because some weeds being controlled in most 
cases offer the highest wildlife values and places unnecessary 
constraints on program participants. This requirement applies only when 
the approved cover has been damaged by the existence of weeds, insects, 
or pests.
    One comment suggested that contracts allow for spot mowing and spot 
treatment of weeds. Procedure will

[[Page 7616]]

encourage this provision where technically appropriate. However, 
disturbance of the cover will not be permitted during the primary 
nesting period.
    Five comments supported NRCS supervision to create firebreaks with 
light tillage on CRP land and would like the issue addressed in the 
regulations. This recommendation will not be adopted. However, 
firebreaks are allowed on CRP acreage when required by State and local 
units of government to include barren firebreaks where erosion is not a 
hazard and documented in the conservation plan.
    One comment suggested that in order to create and enhance wildlife 
habitat, pine plantations and fescue monocultures should be eligible 
for reenrollment only if they are improved substantially for wildlife 
through habitat diversification. This recommendation will not be 
adopted as the indexing system will allow for taking those factors into 
account, along with others, to maximize achievement of the program's 
objectives. However, improving cover for the benefit of wildlife will 
enhance the likelihood of acceptance in the program.
    Regarding native plant species, five comments suggested that native 
plant species be required for cover plantings. Two comments suggested 
the use of seeds on CRP land represent the type of vegetative 
communities native to that area. Three comments suggested that a 
stronger emphasis be placed on diversifying cover plantings on CRP 
contracts to include native species where applicable. One comment 
suggested that the regulations should provide, generally, that land 
cover should use vegetation native to the region and include as diverse 
a mixture as is environmentally valuable and cost effective. Two 
comments suggested that eligible practices should state a clear 
preference for establishing native species of grasses, legumes, shrubs, 
and trees and to the extent practicable, landowners should be 
encouraged to plant locally derived plant materials. Two comments 
suggested that the regulations require the use of native warm season 
grasses on lands enrolled CRP where grassland is the desired cover 
type.
    The CRP has multiple purposes and it is a voluntary program. A 
producer selects the practices most desirable for his or her farming 
operation. If the producer's objective requires an introduced species, 
it would be inappropriate and inefficient for CCC to require that a 
native species be used.
    One respondent suggested that Sec. 1410.22(b) should be amended to 
replace ``or'' with ``and'' when listing the purposes of the practices 
to be included in the conservation plan. Conservation plans are drafted 
according to the primary purpose of the practice. To modify such a plan 
to include all objectives may unnecessarily compromise the 
environmental benefits to be obtained.
    One comment suggested the choice of the species to be planted 
should be an option of the landowner and professional forester as 
determined by both to be best suitable for the site and the owner 
objectives. Flexibility on this issue reflects current CCC policy. 
However, species will be considered when evaluating offers.
    One comment suggested the local NRCS offices have the flexibility 
to develop grass roots maintenance plans that would achieve the overall 
CRP objectives, which would include determining stocking rates and time 
of implementation based on local conditions, climate and topography. 
The conservation plan is written to include appropriate maintenance 
provisions. Therefore, this recommendation will not be adopted.
    Eight comments suggested that the conservation plan should allow 
landowners to irrigate crops from water cover located on the CRP acres 
with an appropriate reduction in the rental rate. Generally, acreage 
accepted with water as an approved cover was done so for water quality 
and wildlife purposes. To drain such acreage for crop production could 
adversely impact the land directly counter to the purposes for which 
the acreage was accepted. Further, such activities could be destructive 
to the cover and do not appear to be needed or cost-effective.
    One comment suggested that the conservation plan should allow 
appropriate maintenance of permanent cover and should not have required 
management of anything other than CRP contract acreage unless the 
producer requests a more comprehensive plan. The CRP conservation plan 
does make allowance for the appropriate maintenance for only the cover.
    One comment opposed eliminating the minimum widths for the strip 
practices and suggests, in all cases, the area of the strips should be 
computer based on the average width, not the minimum. Other comments 
suggested a minimum width. The Conference Report accompanying the 1996 
Act suggested that, to the extent practicable, that local conditions 
should be considered when determining minimum required widths for 
vegetative strips in CRP. Further, complaints were received from the 
public that previous regulations were not flexible to meet the needs of 
intended CRP sites in all States. Accordingly, it has been determined 
that decisions on these size requirements will be made at the local 
level.
    One comment suggested that the conservation plan should take into 
account any abnormal weather patterns and should the cover fail through 
no fault of the contract holder, NRCS should work with the producer in 
order to assure that the cover is replaced in the most cost-efficient 
manner. It is unclear how a technician can develop a plan for abnormal 
weather patterns. However, NRCS will work closely with a participant in 
such circumstances. Similarly, USDA will work with landowners so that 
all options for land use and Federal and State assistance are known.
    One comment suggested that NRCS cooperate with producers who put 
land back into production and organizations or agencies cooperating in 
the funding of the program must diligently respect private property 
rights. The Conference Report accompanying the 1996 Act suggested that 
lands exiting the CRP under the early termination provisions of the 
1985 Act not be held to a higher conservation compliance standard than 
similar cropland in the area. NRCS will work with a landowner in 
providing technical assistance on potential conservation compliance 
problems and to provide an appropriate conservation plan.
    Several comments suggested that silvaculture thinning from 8 to 10 
years of age and subsequently every 3 to 5 years thereafter until final 
harvest be allowed with a reduced payment during the years of 
commercial activity. The final rule has been amended in Sec. 1410.21 to 
provide for normal forestry maintenance activities consistent with the 
1985 Act.
    One comment suggested that filter strips and riparian buffers 
should be allowed to be contracted anywhere determined necessary, not 
just along permanent streams and that minimum widths for all the strip 
practices not be eliminated with ephemeral waterways allowed to flow 
through the middle of the strip. This recommendation did not reflect 
the 1985 Act limitations on eligible land such as the enrollment of 
cropland and marginal pasture lands. Accordingly, this comment can not 
been adopted.
    One comment suggested prioritizing between filter strips and 
riparian buffers when there is an adjacent water course involved. The 
filter strip and riparian buffer standards provides the needed 
flexibility for NRCS to make these

[[Page 7617]]

eligibility determinations. Accordingly, this comment has not been 
adopted.
    One comment suggested that fields should not be considered a 
qualified established stand unless a majority of the specified and 
drilled grasses are present and flourishing. This is already a 
requirement for practice certification.
    One comment suggested that the conservation plan should allow for 
the addition of structures, grassed waterways, terraces, and settlement 
ponds on land enrolled in CRP which will be returning to production. 
CRP's purposes do not include preparing land for a return to 
production. Therefore, this recommendation has not been adopted.
    Two comments suggest the terms, conditions, and requirements of CRP 
maintenance contracts be made known to farmers prior to commitment. The 
required maintenance provisions are included in the conservation plan 
and are reviewed and discussed with CRP participants by NRCS prior to 
contract approval.


Sec. 1410.23  Eligible practices.

    One comment supported sound conservation practices such as filter 
strips, waterways, headlands, and riparian buffers but did not support 
an annual payment from CCC to maintain them. CCC provides a nominal 
additional rental rate incentive, up to $5 per acre as part of the 
maximum rental rate calculation, to ensure that participants are 
willing to enroll land for those practices and then properly maintain 
them. Actual cost-share rates are set in accordance with the 1985 Act. 
CCC will continue to set rental rates in a way that reflects true costs 
and which achieve the intended environmental goals of the program. 
These additional incentives, because of the special nature of the 
contracts, are needed and warranted. Offering a lesser amount, however, 
enhance the ranking of the offer.
    One comment suggested riparian criteria include flooded and scour 
areas rather than be set in terms of the number of feet from the water 
course. The current rule and this final rule already provide for 
establishing such criteria in either manner.
    Three comments suggested that eligible practices include naturally 
occurring grasses and other covers. The rule allows for such action by 
CCC so no change was made from the proposed rule.
    Two comments suggested that tree planting should be a priority in 
areas subject to scour erosion and also in riparian areas. Tree 
planting is a requirement in scour erosion areas. Sec. 1410.6 provides 
that cropland approved for enrollment under scour erosion criteria must 
be planted to an appropriate tree species or mix thereof according to 
the FOTG, unless NRCS, in consultation with FS, determines that tree 
planting is not appropriate. Trees or shrubs are required for the 
riparian buffer practice.
    One comment suggested that riparian corridors containing hardwood 
trees should be added to the eligible practices. The final rule has 
been amended to remove references to specific eligible practices.
    One comment suggested that FSA, NRCS, and wildlife managers should 
strive to ensure whole field practices are considered. This is not 
precluded under the final rule.
    One comment suggested the State FSA committee include the 
implementation of practices which will benefit successful native field 
habitats. The final rule allows such a priority if deemed appropriate 
in particular cases.
    Three comments suggested that the regulations allow the use of 
native vegetation/natural succession on lands enrolled in CRP and cost-
share periodic maintenance, for example, by light discing. Cost-share 
payments are made as authorized in the 1985 Act and incentives may be 
included in rental payments to reflect special burdens. Such incentives 
will be added as needed. Acreage with covers already established are 
permitted to be enrolled provided all other eligibility criteria are 
met.
    One comment suggested that for lands planted to trees there be a 
maximum of 436 trees per acre, a minimum of 30 foot unplanted buffer of 
natural vegetation or wildlife plantings along the edge of fields, a 
minimum of 10 percent of the former agricultural field maintained in 
wildlife openings (includes acreage in unplanted buffer), and cost-
share on seeding of up to 25 percent of the field with perennial or 
reseeding legumes (when site conditions are appropriate). This 
recommendation will not be adopted. These are specific practice 
requirements that are more appropriate for the FOTG.
    Five comments supported a new practice for wildlife habitat. Two 
comments suggested forest trees be an acceptable permanent vegetative 
cover. There is no need to create a new practice. CRP already has two 
practices for wildlife habitat. Both hardwood and softwood trees are 
acceptable covers.
    Two comments stated that the proposed rule does not adequately 
address prairie wildlife protection. The final rule continues the 
provisions for establishing grassland cover that has benefitted prairie 
wildlife species and resulted in habitat that has assisted in the 
population recovery of water fowl and other migratory bird species in 
the Great Plains States.
    Two comments suggested the wildlife water cover restrictions placed 
in the 1985 Act should not apply to this section. This recommendation 
can not be adopted due to the provisions of the 1985 Act.
    One comment suggested that annually planted wind strips be an 
eligible practice. 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 resource conserving cover. 
Therefore, this recommendation will not be adopted.


Sec. 1410.30  Signup.

    The comments received suggested including agricultural drainage 
wells, field border strips, center pivot circle corners, grassed 
terraces, linear grass strips, shrub plantings arranged in irregular 
blocks, and land currently enrolled in WBP. The practices eligible for 
continuous signup may be implemented on field borders and center pivot 
corners if such land is determined eligible and suitable for the 
intended practice. As to the other suggestions, their adoption would 
not be cost-effective uses of the CRP. The land and practices eligible 
for continuous signup generally provide benefits to large areas when 
compared to the acreage on which the practice is implemented.
    One comment suggested all lands USDA intends to be eligible for the 
continuous enrollment process should be listed in the regulations. 
Specific practice eligibility determinations will not be included in 
the regulations so as to provide the needed flexibility to be able to 
modify the available practices to respond to agricultural, 
environmental, and economical changes. Therefore, this suggestion is 
not being adopted.
    Twenty-seven comments supported the new continuous signup 
implemented in 1996.
    Several comments were received regarding the CRP enrollment period. 
Two comments suggest the State FSA committee establish the enrollment 
period and one comment suggests a constant annual enrollment period be 
established through 2002. The CRP acreage limitation is a national 
limitation allowing CCC the discretionary authority to determine the

[[Page 7618]]

maximum acreage level up to 36.4 million acres. The desired maximum 
acreage limit determines when enrollment periods are announced 
considering the number of acres currently enrolled and the schedule for 
acres exiting the program. The maximum acreage level at any time can be 
dependent upon market conditions, farm financial conditions, and 
national and local environmental concerns that must be evaluated 
nationally, with other factors. A rigid schedule would unduly limit 
CCC's options and would not allow adjustments to changed circumstances.
    One comment suggested participants be allowed to choose any year to 
be the effective year of the contract. To allow producers to pick any 
effective year for the contract prevents from CCC maintaining current 
acreage levels. However, producers, who enroll acreage under the 
continuous signup provisions, choose when to enroll acreage and are 
permitted to defer the effective date of the contract for up to six 
months.
    Several comments suggested the strip practices, ``contour grass 
strips'' and ``wildlife corridors'' be made eligible for immediate 
enrollment under the continuous signup provisions. Like the permanent 
wildlife habitat practice, wildlife corridors are eligible for the 
continuous sign-up when located in wellhead protection areas. Contour 
grass strips are eligible. The rule, however, will continue to allow 
complete flexibility for CCC on determining which practices are chosen 
for continuous signup.
    One comment suggested there should be no discrimination against 
smaller acre bids when they provide big benefits. CCC recognizes the 
value of certain practices which generally enroll small acres in 
providing significant benefits by allowing otherwise eligible offers 
for these practices to be enrolled without further evaluation.


Sec. 1410.31  Acceptability of offers.

General

    Four comments suggested that the ranking structure was one of few 
Federal programs that ``helps our citizens and wildlife.'' Two comments 
suggested that expiring contracts not be allowed any advantage in 
subsequent enrollment. Each offer will be evaluated on its own merits. 
Existing CRP offers that will use current covers will have reduced 
costs and would have, in that sense, some advantage.
    Another comment suggested that the bidding process should be 
replaced with a set amount of $25.00 to $35.00 per acre. The report 
accompanying the 1997 Appropriations Act reaffirmed previous 
Congressional direction that CRP rates should not exceed the prevailing 
rental rates for comparable land in the local area. Establishing 
arbitrary values would be inconsistent with this directive.
    Four comments requested an opportunity to review and comment on the 
ranking process. The ranking process, as set forth in the proposed 
rule, was developed by an interagency task force consisting of several 
USDA Agencies, the Environmental Protection Agency, and the U.S. Fish 
and Wildlife Service. The ranking process, moreover, is not a rigid 
schedule but may be adjusted depending on the progress of the 
enrollments, or changed priorities. Interested parties have been, and 
may continue, to make their views on priorities known.
    Another comment suggested that more of the matters now set forth in 
technical manuals should be incorporated into the proposed rule. This 
is not a CRP rule issue. Section 343 of the 1996 Act requires that any 
future revisions to NRCS technical guides be made available for public 
notice and comment.

Process

    Nine comments suggested that producers currently enrolled in the 
CRP should not be required to rebid if their land qualifies for 
enrollment. The comment was not clear on the basis on why existing 
acreage should be considered differently from acreage seeking 
enrollment for the first time. Requiring all expiring CRP acreage to be 
rebid will allow CCC to treat all eligible owners and operators on the 
same basis. Accordingly, this recommendation will not be accepted.
    Fourteen comments suggested that clear guidelines for acceptance be 
published in advance to make the approval process observable and more 
predictable. CCC intends to continue its efforts ensuring that the 
public is fully informed and will make available programmatic 
information prior to enrollment. CCC also intends an element of 
competition between bids to increase the cost-effectiveness of the 
program.
    Five comments suggested the conservation priority areas be taken 
out of the eligibility criteria and placed in the ranking process. The 
conservation priority areas allow acreage that does not meet the 
regular eligibility criteria but that meets some other identified 
environmental need to be offered for the program but to ensure maximum 
environmental benefits the offered acreage will compete with other 
acreage being offered. The ranking process contains credit for being 
located in a conservation priority area to account for the cumulative 
environmental benefit that accrues within the CPA.
    One comment supported the use of a ranking process that does not 
favor one habitat or environmental factor. However, the commenter also 
suggested some kind of additional consideration be given for a number 
of categories of acreage predominantly related to current CRP 
contracts. The ranking process contains credit for acreage where the 
appropriate cover is already established. Other comments suggested that 
additional credit be given for State and federal endangered, 
threatened, or candidate species. This comment was adopted.
    One comment opposes the proposed rule's emphasis on tree plantings. 
However, the 1985 Act establishes, as a goal, not less than one-eighth 
of the land enrolled during 1991 through 2002 being established to 
trees and other specified covers. The ranking process will contain 
criteria that will encourage tree planting and other practices that 
have long-term retention after the contract expires.
    One comment suggested the rule concentrate more on water quality 
than air quality. The overlapping nature of the natural resource 
factors yields multiple benefits that can rarely be accorded to one 
factor. For example, substantial air quality benefits have been 
obtained in the Great Plains States for land which was enrolled under 
earlier soil erosion criteria. The commenter also suggested the EI of 8 
will overlook land that yields substantial benefits while it may have 
an EI of less than 8. The standard used to define highly erodible land 
provides a rational break for enrollment. Land with an EI of less than 
8 which provides identified environmental benefits may be eligible 
under the conservation priority area authorized under Sec. 1410.8. The 
ranking process will contain criteria that includes both water and air 
quality along with other factors. Lands with an EI less than 8 that 
contribute to air quality problems could be recommended as a 
conservation priority area.
    Three comments suggested that land offered within national and 
State conservation priority areas should receive consideration in the 
ranking process. This comment was adopted.

Ranking Plans

    One comment suggested the bid against each other process be 
eliminated and that the local FSA offices have the control of the 
selection of suitable CRP

[[Page 7619]]

land. This recommendation did not alternatively describe how the 
maximum environmental benefits could be obtained under the recommended 
scenario and will not be adopted.
    A number of comments suggested that FSA work with State and local 
resource professionals. State FSA committees, in consultation with 
State Technical Committees will be afforded an opportunity prior to 
signup to develop a State ranking plan consistent with stated broad 
natural resource goals. Members of the State Technical Committees 
include Federal and State resource professionals and others.
    One commenter suggested that the State Technical Committee, not 
CCC, should establish ranking factors, conservation priority areas, and 
priority purposes. However, the statutory mandate for State Technical 
Committees limits its authority to recommendations.

Natural Resource Factors

    There were a number of comments suggesting that land under contract 
should be afforded some special status. Provided an appropriate cover 
is established, the ranking process will make an allowance because of 
the reduced establishment cost. However, it would be inappropriate and 
unduly complex to establish separate types of acreage to be evaluated 
for enrollment.
    Another comment suggested that the natural resource factors should 
be feasible for all geographical regions. Enhancement of wildlife 
habitat, water quality, and air quality; reduction of erosion, and 
benefits from establishing longer term practices are goals applicable 
throughout the country. The ranking process incorporates all of these 
natural resource factors.
    Other comments suggested that priority be given to acres that are 
within several miles of lakes, rivers, marshes, woody areas, greatest 
acreage of wetlands, to large blocks of land, and to upland acreage 
near wetlands. The ranking process will consider similar factors. The 
ranking process will consider areas within proximity of protected 
acreage. CRP in proximity to lakes, rivers, and marshes will also be 
considered.
    Two comments suggested the ranking process needs to give better 
recognition and greater benefits to restoration of native vegetation or 
prairies and to mixed species of trees. The ranking process will take 
into account these comments.
    One comment suggested that the playa basins be given a high 
ranking. Restoration of wetlands or land adjacent to playa basins will 
be considered in the ranking process.
    One comment suggests that CRP eligibility should be designed to fit 
into all agricultural ecosystems and not be based solely on erosion 
index factors or designated conservation priority areas. The ranking 
process is designed to be a broad natural resource based formula to 
assist CCC in ranking offers.
    Seventeen comments suggested that the final rule should include 
language that recognizes wildlife habitat as a co-objective of CRP and 
lands should be ranked based on wildlife objectives. Sec. 1410.3 lists 
wildlife habitat as one of the objectives of CRP.
    Comments relating to specific factors follow.

Wildlife Habitat Benefits

    Eleven comments suggested that the final rule exclude wildlife 
habitat benefits from being considered as a separate criteria. Since 
CRP can prevent decline of wildlife populations thus avoiding the 
listing of a species under the Endangered Species Act and enhancing the 
recovery of an already listed species, CCC considers wildlife an 
appropriate factor. Other comments suggested that additional emphasis 
be placed on the enrollment of wildlife habitat benefits including 
higher priority, larger tracts, or requiring wildlife improvements. 
Vast improvements in the recovery of various wildlife have been 
attributed to CRP and will continue to be an integral part of CRP's 
purpose with reduction of soil erosion and improvement in water 
quality. CRP provides significant environmental and economic benefits 
through the enhancement of wildlife habitat.
    Other comments suggested that consideration be given to large 
contiguous blocks of land. The relative size of acreage offered for CRP 
is considered during the ranking process. In general, for most 
terrestrial and bird species, large blocks of land are more valuable 
for wildlife.

Water Quality Benefits

    One comment recommended the ranking process incorporate water 
conservation benefits. To the extent that improved water quality 
includes the conservation of water resources, this recommendation was 
adopted. It is otherwise unclear how an assurance can be obtained that 
the conserved water would not be devoted to other uses.
    Two comments suggest that ``drinking water quality'' should be 
specifically mentioned as one of the factors for prioritizing offers. 
``Drinking water quality'' is an inherent subset of the water quality 
factor.

Reduced Erosion

    One comment suggested that soil erosion be changed to soil loss. 
The commenter did not make clear the basis upon which the comment was 
offered. Accordingly, the comment was not adopted.
    Another comment suggested that enrollment priority be given to land 
that cannot be farmed under a conservation plan without using 
alternative conservation systems. There is a direct connection between 
the amount of credit awarded under the ranking process and the EI of 
the acreage offered which is consistent with the suggestion.

Likely Long-Term Benefits

    Two comments recommended the elimination of tree planting and one 
of those comments recommended creating a prairie restoration practice 
and the establishment of native grasses will continue to be permitted 
in CRP.
    Another comment suggested that grassland establishment rather than 
tree planting be a priority. The 1985 Act, however, establishes tree 
planting as a goal of the program. Accordingly, this recommendation 
will not be adopted.
    Another comment suggested there was a ``penalty'' for the Great 
Plains associated with tree planting. However, there was no ``penalty'' 
or other reduction applicable to the Great Plains or any other 
geographic area proposed except that, of course, the cost of tree 
planting can differ in different regions and those costs must be taken 
into account.

Air Quality Benefits

    Two comments suggested that wind erosion should be considered more 
heavily. A new natural resource factor for air quality was added to 
reflect the benefits from reduced wind erosion.

Cost Factor

    A number of comments suggested a cost bonus factor that takes into 
account the reduced expenditures necessary on lands already in CRP with 
established cover. This comment was adopted.
    One comment suggested not considering the rental rates in the next 
CRP signup. However, rental rates are key to the cost-effectiveness of 
the program. Therefore, this suggestion can not be adopted.
    Five comments suggested that the renewal of present contracts 
should be considered first for re-enrollment because there would not be 
any cost-share expense for seeding. Because the goal of the CRP is to 
achieve specified conservation benefits, CCC does not believe it 
appropriate to consider a differentiation in classes of acreage.

[[Page 7620]]

However, the ranking process will consider whether the appropriate 
cover has been established.


Sec. 1410.32  CRP contract.

    There were six comments that suggested the CRP contract not be 
binding, be revocable before contract approval at producer election, be 
subject to drainage district concurrence, or not have terms to require 
the refund of payments or interest upon termination. All of these 
suggested actions would diminish the value of the contract, would be 
contrary to 1985 Act, and, accordingly, have not been adopted.
    Another comment suggested that the ``Super Sod Buster'' provisions 
be eliminated from contracts enrolled since 1991 because it is not 
consistent with earlier enrolled contracts. This provision and limit 
are required by the 1985 Act.
    Nine comments suggested that various contract lengths be 
considered, including those with five-year increments starting at ten 
years as a minimum and going to at least 20 or 25-years. However, 1985 
Act establishes the time period as 10 to 15-years. Accordingly, this 
suggestion was not adopted.
    One comment suggested that extensions of existing CRP contracts 
should be allowed for wildlife benefits if the owner should choose this 
option. However, as indicated in the proposed rule, Congressional 
directives contained in the 1997 Appropriations Act effectively 
precluded the extension of any CRP contracts in FY 1997. Accordingly, 
this suggestion was not adopted.
    One comment suggested more specific guidance regarding when 
production of an agricultural commodity on CRP land would be 
authorized. CCC is committed to the release of acreage under CRP 
contract only in severe circumstances, and consistent with 1985 Act. As 
such, it would not be appropriate to speculate as to what set of 
consequences would trigger the release of acreage for agricultural 
production.

Early Termination

    Eleven comments supported the early termination provisions 
including those practices that are ineligible for early termination. Of 
those, one comment recommended a reduction in the minimum average width 
required to remain in CRP near a permanent water body. However, that 
reduction may not be environmentally appropriate in all areas of the 
country.
    One comment suggested that filter strips may not need to be as wide 
as presently required. This recommendation was adopted. The appropriate 
width of a filter strip will be determined by referring to the 
applicable FOTG.
    Eleven comments suggested an expansion of the early-termination 
list of ineligible acres to include other grass or forested areas in 
reducing erosion, areas of high wildlife value, areas likely to have an 
impact on drinking water, or within 100 feet or adjacent to any 
temporary, semi-permanent or permanent stream, wetland, or other water 
body. However, early termination was authorized by the 1996 Act 
amendments to the 1985 Act. It is likely that the recommendations, 
taken collectively, would result in substantial acreage made ineligible 
for early termination, which is not consistent with the purpose of the 
early termination provision as authorized by the 1985 Act.
    Two comments were not supportive of either the early termination 
proposal generally or the exemption of certain practices. However, the 
allowance, its limits, and the exemption of the particular practices 
mentioned, are all statutory.


Sec. 1410.33  Contract modifications.

    The majority of comments received on this section pertained to 
contract extensions. However, the 1997 Appropriations Act effectively 
precluded the extension of any CRP contract in FY 1997.
    One comment suggested using the expiration date of the original 
contract as the starting point for ten-year re-enrollments. Contracts 
for acreage accepted for new enrollment would not begin until the 
original contract expired.
    Another comment suggested that CRP contracts should not be 
terminated when grain prices are high. The CRP still provides a reserve 
and CCC must maintain all of its options. Further, before any contract 
termination, CCC will carefully review the environmental impacts and 
net benefits.


Sec. 1410.34  Extended program protection.

    Four comments suggested an extension of the existing program 
preservation agreement for five to ten years. The final rule reflects, 
consistent with the 1985 Act, that program preservation agreements will 
initially be effective for 5 years with an option to renew every five 
years. As indicated earlier, however, the importance of this provision 
has been changed by the change in the nature of commodity programs.


Sec. 1410.40  Cost-share payments.

    Comments relating to cost-share payments generally involved 
suggestions on increasing or limiting rates, liberalizing 
applicability, or clarifying terminology. Four comments suggested 
modifying Sec. 1410.40(g) in order to limit federal cost-share rates, 
in combination, to 50 percent. This comment is not adopted since except 
for special cases identified in the rule, the 1985 Act limits the 
program cost share to 50 percent. One comment suggested increasing 
cost-share rates for native grass establishment. Eight comments 
supported additional cost-sharing for wildlife habitat restoration, 
maintenance of plantings for wildlife corridors, eligible practices 
such as shallow water areas for wildlife and permanent wildlife 
habitat, and restoration of wetland hydrology. The 50 percent limit, as 
indicated, is statutory. As for rental rates, those rates can be 
adjusted as needed, consistent with statutory law.
    Several comments suggested liberalized eligibility. Two comments 
suggested adding riparian buffers consisting mainly of woody plantings 
to the list for cost sharing of maintenance for two to four years. CCC 
provides a nominal amount in the annual rental payment for maintenance 
requirements associated with the conservation plan. Two comments 
suggested allowing cost-share to increase species diversity of cover 
plantings. Eight comments supported cost-share for replacing or 
restoring practices as needed to achieve adequate wildlife habitat. 
Cost-share for diversifying cover previously established and for 
replacing covers that do not become established is generally 
authorized. One comment suggested cost-share for fencing and water 
impoundment on CRP acres. This provision is available for certain 
practices. One comment suggested providing cost-share for prescribed 
burning in young longleaf pine plantings. Habitat disturbance such as 
fire is often an important part of the maintenance of healthy 
biological systems. By statute, cost-share is not available on 
maintenance of existing practices except in very limited cases. 
However, rental incentives are used as needed to encourage enrollment 
of these activities. One comment suggested that language should be 
added that State wildlife agencies and other nonprofit conservation 
organizations should be eligible for cost-share assistance not to 
exceed 100 percent of the cost. Another comment suggested that CRP land 
should not be excluded from the benefits of other Federal cost-share

[[Page 7621]]

programs. These comments raise the same statutory issue and have not 
been adopted.
    One comment suggested allowing a three-year establishment period 
for softwood plantings and 50-percent cost-share for hardwood planting. 
A three-year establishment period for softwood planting is not 
necessary because the planting effectiveness for such trees is 
generally greater than for hardwood species. The three year allowance 
for hardwood trees is established by the 1985 Act and the cost-share 
rates are set in accordance with that Act. Another comment suggested 
that maintenance on tree projects should be kept to the minimum needed 
to establish the trees. Forest management plans stipulate maintenance 
needs and are not addressed by the proposed rule. One comment suggested 
that a maintenance allowance be included in the law to eradicate 
noxious weeds and that payment reductions for noncompliance should stay 
in the State to pay for weed control. No provisions exist in the 1985 
Act for payments to States for control of noxious weeds or for specific 
payments for weed control in general. Rental rates, however, will 
provide incentives for farmers to comply with all CRP provisions.
    One comment requested clarification between cost-share payments and 
rental incentives. A cost-share payment is required by the 1985 Act to 
assist participants in establishing all eligible conservation 
practices, and is based on actual costs at a specific site. Rental 
incentives are designed to encourage particular enrollments and do not, 
as such, involve a percentage share of particular costs incurred. With 
a rental incentive, any special costs will be strictly the burden of 
the participant.


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

    Comments on cost-share levels and rates generally recommended 
either limiting or increasing practice eligibility or rates made 
available to producers. Two comments suggest a $3,500 limit on the 
total cost-share available to any landowner and another suggests 
limiting cost-share to 50 percent regardless of the source of the cost. 
Rate suggestions included one comment that recommended increasing cost-
share assistance to 75 percent for limited resource producers and one 
that recommended a 50 percent incentive payment be paid to cover all 
costs of wetland restoration. The 50 percent cost-share rate is 
statutory and the suggested $3,500 limit would unduly limit 
participation in the program. However, participants may receive 
additional funding through State or private organizations. Five 
comments supported the use of cost-share assistance to encourage 
restoration. In addition to eligible wetlands, restoration activities 
on other lands may also be included by CCC after carefully reviewing 
all environmental factors and cost.


Sec. 1410.42  Annual rental payments.

    Ninety-seven respondents supported the proposal to base the 
schedule of rates that FSA will pay for different soil types within a 
county on the local average dryland cash rental estimate or similar 
concept. Of those, 12 comments suggested using a crop share or the cash 
equivalent rather than cash rent. Six other comments suggested basing 
the rental payments on the market value or sale price of the ground. 
One respondent stated rates in counties influenced by urban areas 
should be higher and another comment urged that rates be lowered so 
that ground will return to production.
    Ninety-four respondents indicated opposition to the manner in which 
CRP rental rates were proposed to be established. Of those, 36 
suggested that because the more erodible and fragile type soils will 
have a lower rental rate, they may be less likely to be bid into CRP or 
more likely to be removed by the producer than more productive soils. 
Three of the comments simply stated that the new price structure would 
be devastating or would not work but offered no basis for the comments 
or suggestion for improvements. CCC will not be constrained to using 
only a dryland basis in order in establishing maximum payment rates to 
meet program and environmental goals and requirements.
    Fifty-two respondents urged that rental rates remain at the current 
contract rate. A few urged the same rate for five years or to use the 
current CRP contract rates unless the cash rental equivalent were 
higher. Forty-six respondents recommended that current CRP rental rates 
simply be reduced with suggested amounts ranging from 60 to 90 percent 
reduction. A few also suggested reducing payments for participants who 
used cover for haying and grazing or to thin tree plantings.
    Several comments suggested using other methods for setting the 
rental payments such as using either the average county cash rental 
rate or the average CRP annual rental payment from signups one through 
13; using a simple, valid formula for each county developed by the 
Economic Research Service; setting rates equivalent to the WBP rates; 
setting a single minimum rental rate for all soils in the State of 
North Dakota; using the estimated CCC program payment yield; reducing 
existing contract rates by 10 percent per year until optimum levels are 
reached; or using a five-year rolling average of an unspecified 
calculation. Several respondents suggested that rates be increased to 
provide for taxes and inflation or to take into consideration CCC 
production flexibility contracts, and two comments recommended local 
conservation districts have a role in estimating payment rates. Twenty-
one respondents urged that rental payments be set at a fair rate that 
is high enough to keep ground in the CRP, but made no comment regarding 
the efficacy of the proposed method. One comment suggested that rates 
provide for calculations to reflect fair market values in riparian 
areas.
    As indicated previously, the report accompanying the 1997 
Appropriations Act reaffirmed previous Congressional direction that CRP 
contract rates should not exceed the prevailing rental rates for 
comparable land in the local area. Various methodologies for 
determining CRP payment rates equivalent to the prevailing local rental 
rates were reviewed by an interagency workgroup and the determination 
was made that the local average cash rental rate as determined by the 
county FSA committees, adjusted for the relative productivity of the 
soil, would provide the most accurate and uniform methodology. 
Instructions to county FSA committees for establishing the payment 
rates provided that in areas where share rents are most common they use 
the cash equivalent of share rents. Instructions further provided for 
taking into consideration, where necessary, hydric soils whose 
productivity is impacted by the presence or absence of drainage 
systems. The county average cash rental rate, or equivalent, as 
established by county FSA committees would inherently reflect distance 
to market and other conditions affecting rental rates in the county. 
The county FSA committees received recommendations from local teams.
    Participants who are approved to hay and graze established long-
term vegetative cover under emergency conditions in accordance with an 
approved conservation plan are subject to a reduction of their CRP 
annual payment. Similar provisions will be implemented for participants 
that conduct normal forestry maintenance in accordance with an approved 
conservation plan.
    A few comments addressed the soil rental rate methodology. One

[[Page 7622]]

respondent recommended that a single predominant soil type be used per 
participant rather than multiple soil types in a field. Three comments 
suggested that rates on similar soil types should be the same from 
State to State, and another recommended that the same rates be used in 
a county for all producers having the same soil type. One respondent 
suggested allowing different soil rental rates for the same soil within 
the same county based on different distances to markets and other 
conditions. Another comment recommended adding a premium based on the 
erodibility index of the soil. A few comments suggested that prices be 
set to save the time and expense of bidding.
    CRP operating procedure provides that up to three predominant soils 
in a field be used in determining the soil rental rate. This approach 
is designed to help ensure the equivalent treatment of fields having 
more than one soil type. Interested applicants may make offers to 
enroll acreage in the CRP during an announced signup period. The offers 
will compete for enrollment. The maximum amount that CCC will pay for 
an offer is determined and made known to the applicant at the time of 
application. Although the same soil type may occur in more than one 
county or State, other market factors may the soil rental rate to 
differ. Soil rental rates for the same soil type within the same 
county, however, are expected to be consistent.
    Forty-one comments suggested financial incentives be provided for 
various purposes. The majority of comments encouraged financial 
incentives to promote installation of various practices considered of 
high environmental value. Two comments suggested the State Technical 
Committee should have flexibility to establish practice and incentives 
of the greatest value in their State. One comment strongly opposed 
incentives.
    Based on the comments received, CCC has determined to continue to 
offer incentives through an increased annual rental payment for certain 
practices of high environmental value, including but not limited to 
field windbreaks, grassed waterways, filter strips, riparian buffers, 
and acreage located with an approved EPA wellhead protection area. 
Incentives and practices available will continue to be determined at 
the national level; eligibility and technical suitability of the 
appropriate practice will continue to be determined for each offer at 
the local level.
    Several comments were received regarding other aspects of the 
annual rental payments. Eight comments suggested that the $50,000 
payment limitation is too strict. Seven comments urged that interest be 
paid if payments are more than 30 days past due. Other respondents 
suggested that CRP payments be considered rental income for tax 
purposes, that the three entity rule, used in applying the payment 
limit, be eliminated, and that the lifetime payment limitation may 
limit the amount of targeted land in previous signups. Two comments 
recommended providing compensation to participants for practice 
maintenance, and one respondent suggested dividing payments for land 
sold at public auction according to State law.
    Section 1234(f) of the 1985 Act requires the $50,000 payment 
limitation. CCC has implemented the provisions of the limitation 
consistent with the implementation of other CCC programs with similar 
payment limitation requirements. Provided the participant has otherwise 
met all requirements for payment, if the CRP payment is not issued to 
the participant within 30 days after the date county FSA offices 
receive notification to make annual rental payments, the participant 
may be eligible to receive interest in accordance with existing 
procedures. Program payments issued are reported to the Internal 
Revenue Service; determination of the treatment of income for tax 
purposes is the responsibility of the participant. Regarding the 
lifetime original contract limitation of $50,000, this provision would 
not allow farmers who had transferred land with CRP contracts to 
acquire new contracts if the total of the old and new payments would 
exceed $50,000 per year even though the farmer would currently only be 
receiving the new payments of under $50,000 per year. This provision 
was designed to avoid circumvention of the three-year ownership rule. 
CCC has removed this provision from the final rule because the three-
year ownership rule has been modified by the 1985 Act to be a one-year 
ownership rule. The maintenance suggestion has been addressed earlier. 
For land sold at auction, CRP payments, if due, will be divided in 
accordance with current rules so as to allow for uniform practice. CCC 
payment are not subject to the requirements imposed by State law.


Sec. 1410.50  State enhancement program.

    Seven comments supported the conservation reserve enhancement 
program including a detailed proposal outlining minimum requirements 
for eligibility. State Governments may develop conservation reserve 
enhancement program proposals and submit to their respective State FSA 
office. An ideal use of such proposals would be to address Endangered 
Species Act concerns; however, proposals addressing conservation and 
environmental objectives of the State and nation will also be 
considered.
    Two comments suggested that the waiver of the $50,000 payment 
limitation be applied to private and nonprofit conservation 
organizations in addition to a State, a political subdivision, or 
agency thereof. The 1985 Act limits the waiver of the $50,000 payment 
limitation only for States, a political subdivision, or agency. 
Therefore, this recommendation can not be adopted.
    One comment suggested that efforts be made to protect 
environmentally sensitive lands in States that are able to provide 
additional funds to secure longer term or permanent easements. The 
final rule does not preclude such a program.
    One comment suggested that CCC work with States to provide cost-
share assistance with respect to conservation efforts such as the 
control of noxious weeds on CRP land. Control of noxious weeds is 
already required as a condition for enrollment in CRP. Maintenance 
costs are the responsibility of the participant. There is no authority 
for the suggested additional payments.


Sec. 1410.51  Transfer of land.

    Four comments were received concerning this section. Two comments 
suggested the same provisions in this section for lands acquired by 
Federal agencies also be applied when a State or local agency or 
private organization acquires a property or interest in CRP acreage 
with the intent of keeping it in a conservation use. Another comment 
suggested that consideration should be given to maintaining a contract 
for environmentally sensitive land even though the ownership may be 
transferred.
    Any State or local agency or private organization participating in 
CRP would be subject to the provisions in this section. The special 
provisions for acquisitions by Federal agencies reflect that other 
Federal agencies cannot be contract participants and have a special 
opportunity for cooperation with the operating agency. With respect to 
the other comments, the CRP contract is an agreement with the owner or 
operator and does not attach any restrictions to property titles. 
Accordingly, once ownership transfers the new owner is not obligated to 
the terms and conditions of the contract unless the new owner decides 
to become a participant as a successor in interest.

[[Page 7623]]

    One comment suggested that maximum flexibility be allowed for 
Federal, State, or local agencies or private organizations or 
individuals to purchase lands enrolled in CRP if it is likely that the 
land will remain in a cover similar to that established under the CRP. 
It is unclear how this comment relates to the proposed rule. Landowners 
who enroll acreage in CRP maintain their ownership interest. The 
decision to transfer ownership remains with the landowner. Particular 
proposals for enhancing the program through agreements with other 
agencies can be handled as they arise.


Sec. 1410.52  Violations.

    Four comments were received regarding violation provisions. Three 
comments suggested that an explicit provision for relief in the case of 
a good-faith violation, similar to the HEL good-faith provisions, is 
appropriate. The comments also suggested the loss of all payments 
should only apply to those found using a scheme or device. Another 
comment suggests violations should result in more severe penalties to 
promote active annual control of all weeds.
    This section conforms with the provisions of the 1985 Act. CCC may, 
in its discretion, reduce a demand for a refund to the extent CCC 
determines that such relief would be appropriate and will not deter the 
accomplishment of the goals of the program.


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

    Four comments supported and 11 comments opposed the landlord/tenant 
provisions of the proposed rule. Of those supporting the provisions, 
three suggested that landowners be allowed to discharge the tenant on 
land with expiring CRP contract acres being rebid into the program. Of 
those opposing the provisions, four suggested that the removal of 
tenants from the CRP contract would adversely impact the local economy 
and one expressed concern about the lack of protection for tenants, 
particularly with absentee landowners. Another comment expressed 
concern about the operator receiving a share of the payment. None of 
the recommendations were adopted except with respect to the issue of 
tenants on farms with existing CRP contracts re-bid into the program. 
Tenants are required to be on new CRP contracts if the tenant has an 
interest in the acreage being offered for enrollment. For land which is 
subject of a re-bid, the tenant must also be expected to have an 
interest when the new contract is begun. If at some time during the 
life of the contract the tenant fails to maintain tenancy, under 
applicable State laws, the tenant can be removed from such contract. 
These rules attempt to strike a balance between the interests of 
landlords and tenants by protecting active tenants but not 
unnecessarily extending that protection to two full CRP periods when 
the relationship between the landlord and tenant has effectively ended. 
The new rules encourage landlords and tenants to have a firm 
understanding of their relationship with respect to each other with 
respect to the CRP for the full CRP period and allow greater 
flexibility in handling these situations by allowing a greater 
opportunity for taking the facts of a particular case into account.
    One comment suggested the relationship and share of payments may be 
somewhat different for re-enrolled land. The comment suggests the issue 
be addressed very carefully and clarified in the final rule. Re-
enrolled CRP acreage will be subject to a new contract. If the interest 
of the participants in the farming operation has changed their share of 
the payment on the new contract would, presumably, be different than on 
the expiring contract.


Sec. 1410.60  Scheme or device.

    One comment suggested the proposed wording was too harsh and 
suggested that if a prima facie case can be made then payments should 
be made if the issue is not fully resolved by the administrative 
appeals process and, in emergencies, the funds should be held in 
escrow. The terms of the rule are intended to ensure that the integrity 
of the program is maintained and that language is needed. Given the 
severity of the prior instances involving schemes or devices to defeat 
the objectives of the program, CCC believes that the remedy provided 
for in the rule is appropriate. Holding funds in escrow is not needed 
and would be administratively burdensome. Therefore, this 
recommendation was not adopted.


Sec. 1410.61  Filing of false claims.

    The proposed rule provided that when a false claim is filed the CRP 
contract may be terminated. One comment suggested a requirement that 
the contract be terminated. However, to do so could unnecessarily 
restrict CCC's options in handling special cases. Therefore, this 
recommendation was not adopted.


Sec. 1410.62  Miscellaneous.

    Several comments were received regarding: requiring CRP acreage to 
meet conservation compliance requirements before being used for crop 
production; demonstration or research project areas; cropland 
classification with crop acreage bases remaining intact; providing 
incentives for contour strips to reduce wind erosion; and special 
mitigation provisions for emergency natural resource problems or 
wetland banking. The final rule has not been revised to require that 
CRP acreage meet conservation compliance requirements before being used 
for crop production. There is no statutory authority to enforce such a 
provision. CRP acreage meets the conservation compliance requirements 
while it is under contract providing the conservation plan is being 
followed. In addition, no substantive revisions were made regarding 
demonstration or research projects because paragraph (g) of this 
section authorizes the approval of such projects. Further, the 1996 Act 
eliminated crop acreage bases; therefore, for new contracts, there are 
no bases to preserve. However, cropland status will continue to be 
maintained through the CRP contract period. The final rule did not need 
to be revised to incorporate incentives for contour strips because 
Sec. 1410.42 already allows for incentives for various practices. 
However, the final rule has been revised, in paragraph (h) of this 
section, to provide for wetland mitigation banking.
    One comment suggested that in paragraph (f), with respect to 
cropland status, the following be inserted after the word 
``classification'': ``except as provided in Sec. 1410.34.'' It is 
unnecessary to add this language because acreage subject to the 
provisions in Sec. 1410.34 is still governed by the terms and 
conditions of the contract including the cropland classification 
provision.
    Four comments recommended practices for land coming out of CRP. CRP 
practices provide for long term resource conservation or protection. 
Land coming out of the CRP will be subject to the provisions of 7 CFR 
part 12. Requiring more would be contrary to the temporary term of the 
CRP contract and would not be cost-effective. USDA will continue its 
information efforts about options available under USDA and other 
programs regarding conserving uses.
    One comment suggested that field visits be required for all CRP 
land that is reoffered in future signups before the acreage is 
accepted. This recommendation has not been adopted due to the cost-
prohibitive nature of the volume of work associated with enrolling up 
to 24 million acres.

[[Page 7624]]

Sec. 1410.63  Permissive uses.

    Thirteen comments were received for this section. Of those, one 
comment suggested that participants be allowed to do anything with CRP 
acres as long as erosion is controlled. Another suggested producers be 
allowed to harvest grass seed on CRP acres. These recommendations were 
not adopted. According to the 1985 Act, producers must agree that there 
will be no haying or grazing of the CRP acreage and that there be no 
use of the CRP acreage for commercial purposes, except under specified 
conditions. There are additional, but limited, allowances for the 
production of trees on CRP acreage. In addition, the purposes of CRP 
include more than just soil erosion. To only focus on one purpose may 
unnecessarily damage wildlife, water quality, or other important 
natural resource goals. Further, there is no authority to use the CRP 
for producers seeking an opportunity to farm.
    One comment suggested the rule should encourage the injection of 
animal waste on CRP acres without prior approval from the county 
committee. This recommendation will not be adopted. County FSA 
committees have the responsibility to ensure that the integrity of CCC 
programs is maintained. The injection of animal waste could cause 
significant environmental damage. To ensure the objectives of the CRP 
are met, county FSA committees will continue monitoring activities on 
CRP acreage.
    One comment suggested contract holders be required to participate 
financially if block spraying programs are implemented. The 1985 Act 
provides no authority to implement this suggestion. Participants are 
required to follow a conservation plan of operation that includes 
maintenance provisions for the length of the contract period. Those who 
fail to comply with the plan are subject to payment reductions or 
termination of the contract. Therefore, the final rule has not been 
revised to adopt this recommendation.
    Several comments suggested that landowners should allow the public 
open access to enrolled acres for hunting. Another comment suggested 
hunters be required to purchase a wildlife stamp. The funds received 
from the sale would be used to enroll additional acreage in the 
program. The CRP is a contractual relationship between CCC and 
producers. The 1985 Act does not provide any authority for requiring 
public hunting on CRP acreage.
    One comment suggested allowing burning as a permissive use. Burning 
is currently permitted in areas where NRCS determines the practice is 
normal, customary, needed, and in compliance with all applicable 
environmental rules for the CRP acreage.

Substantive Changes Compared to the Proposed Rule

    Substantive changes compared to the proposed rule include:


Sec. 1410.2  Definitions.

    The proposed rule defined Highly Erodible Land (HEL) as certain 
acreage enrolled in CRP before January 1, 1995, 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.
    The proposed rule defined predominantly highly erodible field as:
    (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.
    The definitions of HEL and predominantly highly erodible field were 
amended in the final rule to be consistent with the definitions found 
in 7 CFR part 12. The Department determined to use, to the extent 
practicable, the same criteria for the CRP as is used for conservation 
compliance when determining if acreage is HEL and if a field is 
predominately highly erodible. Except for redefined fields, in order to 
avoid abuse, the change will allow land that is subject to conservation 
compliance to be basically eligible for the CRP and will provide 
consistency between the two programs.


Sec. 1410.6  Eligible land.

    Sec. 1410.6 was rewritten for the final rule to provide clearer, 
more concise provisions regarding land eligibility for the CRP. In 
addition, the final rule amended Sec. 1410.6 by:
    (1) removing the minimum acreage for a manageable unit requirement. 
Such requirements were better determined at the local level by approved 
local technical authorities based on the actual site;
    (2) adding marginal pasture land that is suitable for use as a 
riparian buffer so long as it is planted to trees, as determined by 
NRCS. CRP could cost-effectively provide substantial water quality, 
erosion, wildlife, and other environmental benefits by enrolling such 
acreage.
    (3) changing the manner in which the EI is calculated, except for 
redefined fields, to be consistent with the conservation compliance 
provisions found in 7 CFR part 12. The proposed rule required an EI of 
8 or greater, calculated by using the weighted average of the EI's of 
Soil Map Units within a field, to determine if land was basically 
eligible for enrollment in the CRP. The final rule uses the same EI 
value of 8 or greater to determine if land is basically eligible for 
enrollment in the CRP; however, the EI is calculated according to the 
conservation compliance provisions in 7 CFR part 12 if the field has 
not been redefined. The change will allow most land that is subject to 
conservation compliance to be basically eligible for the CRP and will 
provide consistency between the two programs. For redefined fields, the 
EI of 8 will continue to be calculated by using the weighted average of 
the EI's of Soil Map Units within the field;
    (4) generally making acreage associated with noncropped wetlands, 
as determined by the Deputy Administrator, eligible for enrollment in 
the CRP if such acreage meets the cropping requirements. Such acreage 
provides high environmental benefits, such as erosion control, wetland 
protection, wildlife habitat, and water quality, and can be a cost-
effective use of the CRP;
    (5) changing the term ``farmed wetlands'' to ``cropped wetlands.'' 
The proposed rule inadvertently listed ``farmed wetlands'' as eligible 
for enrollment in the CRP. The final rule has been amended to correct 
this oversight.
    (6) making eligible field margins which are incidental to the 
planting of crops as determined appropriate by the Deputy 
Administrator.


Sec. 1410.31  Acceptability of offers.

    The final rule amended Sec. 1410.31 to add ``air quality'' as a 
possible factor that may be included in the evaluation of contract 
offers. Air quality was not included in the proposed rule. The CRP has 
proven to be an efficient tool in improving the air quality throughout 
the nation by reducing the amount of air pollution caused by blowing 
dust from

[[Page 7625]]

cropland production. Accordingly, it has been determined that air 
quality is an appropriate factor to be used in the evaluation of 
contract offers.


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

    The final rule amends Sec. 1410.41 to add language clarifying that 
participants 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. The 1985 Act prohibits participants from 
receiving or retaining CRP cost-share assistance in such instances. 
However, other non-Federal cost-share assistance may be available.


Sec. 1410.42  Annual rental payments.

    The proposed rule provided that 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. This applied regardless of the 
current level of payments received by the participants. The final rule 
amends Sec. 1410.42 to remove this provision. CCC determined that 
changes in the 1985 Act made this provision unnecessary. It is 
important to note this is does not affect the $50,000 annual payment 
limitation for all current payments provided for in the 1985 Act and as 
explained earlier.

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 part 704 is removed and part 1410 is revised 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 program 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  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, 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, the failure to provide data could result in program benefits 
being withheld or denied.
    (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 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 of NRCS 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 
where such an evaluation process would further the goals of CRP. Such 
State committees may choose between developing a State ranking system 
or using the national ranking system. 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), a State forestry 
agency, or other organization 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).
    (j) CCC may consult with the U.S. Fish and Wildlife Service (FWS) 
or State wildlife agencies for such assistance as

[[Page 7626]]

is determined necessary by CCC to implement the CRP.
    (k) The regulations governing the CRP as of February 11, 1997, 
shall continue to be applicable to contracts in effect as of that date. 
The regulations set forth in this part as of February 12, 1997, shall 
be applicable to contracts executed on or after that date.


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 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.
    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 request 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, trees, water, or 
other comparable measures.
    Conservation priority area means areas so designated by the Deputy 
Administrator with actual and adverse water quality or habitat impacts 
related to agricultural production activities or to assist agricultural 
producers to comply with Federal and State environmental laws and to 
meet other conservation needs, such as for air quality, as determined 
by the Deputy Administrator.
    Contour grass strip means a vegetation area that follows the 
contour of the land, the width of which is determined using the 
appropriate FOTG and which is so designated by a conservation plan 
developed under this part.
    Contract period means the term of the contract which shall be not 
less than 10, nor more than 15, years.
    Cost-share payment means the payment made by CCC to assist program 
participants in establishing the practices required in a contract.
    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.
    Cropped wetlands means farmed wetlands and wetlands farmed under 
natural conditions.
    Deputy Administrator means the Deputy Administrator for Farm 
Programs, FSA, or a designee.
    Environmental Quality Incentives Program (EQIP) means the program 
authorized by the Food Security Act of 1985, as amended, 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, as calculated by NRCS, 
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.
    Farmed wetlands means land defined as farmed wetlands in accordance 
with the provisions of part 12 of this title.
    Federally owned land means land owned by the Federal Government or 
any department, instrumentality, 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, as 
determined by CCC.
    Field Office Technical Guide (FOTG) 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, 
shrubs, or other vegetation, as determined by CCC, which are designated 
as such practices in a conservation plan and which are planted for the 
purpose of reducing wind erosion, snow control, wildlife habitat, and 
energy conservation.
    Filter strip means a strip or area of vegetation the purpose of 
which is to remove nutrients, sediment, organic matter, pesticides, and 
other pollutants from surface runoff and subsurface flow by deposition, 
absorption, plant uptake, and other processes, thereby reducing 
pollution and protecting surface water and subsurface water quality and 
of a width determined appropriate for the purpose by the applicable 
FOTG.
    Highly erodible land (HEL) means that land determined to be HEL in 
accordance with the provisions of part 12 of this title.
    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.
    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.

[[Page 7627]]

    Participant means an owner or operator or tenant who has entered 
into a contract.
    Payment period means the 10- to 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 CRP and NRCS standards and specifications as a part of a 
conservation management system.
    Predominantly highly erodible field means that land defined has a 
predominantly highly field in accordance with the provisions of part 12 
of this title.
    Quota means the pounds of tobacco or peanuts or other commodity 
allocated to a farm for commodity support purposes or control pursuant 
to the terms of the Agricultural Adjustment Act of 1938, as amended.
    Riparian buffer means a strip or area of vegetation of a width 
determined appropriate by the applicable FOTG the purpose of which is 
to remove nutrients, sediment, organic matter, pesticides, and other 
pollutants from surface runoff and subsurface flow by deposition, 
absorption, plant uptake, and other processes, thereby reducing 
pollution and protecting surface water and subsurface water quality 
which are also intended to provide shade to reduce water temperature 
for improved habitat for aquatic organisms and supply large woody 
debris for aquatic organisms and habitat for wildlife.
    Soil loss tolerance (T) means the maximum average annual erosion 
rate specified in the FOTG 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 U.S. Department of Agriculture.
    State water quality priority areas means any area so 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 may 
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, as amended, in which eligible persons enter into 10-
year agreements 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 protection area means the area designated by the 
appropriate State agency with an Environmental Protection Agency 
approved Wellhead Protection Program for water being drawn for public 
use, as defined for public use by the Safe Drinking Water Act, as 
amended.
    Wetland means land defined as wetland in accordance with provisions 
of part 12 of this title.
    Wetlands farmed under natural conditions means land defined as 
wetlands farmed under natural conditions in accordance with provisions 
of part 12 of this title.
    Wetlands Reserve Program (WRP) means the program authorized by the 
Food Security Act of 1985, as amended, in which eligible persons enter 
into long-term agreements to restore and protect wetlands.


Sec. 1410.3  General description.

    (a) Under the CRP, CCC will enter into contracts with eligible 
participants to convert eligible land to a conserving use for a period 
of time of not less than 10 nor more than 15 years in return for 
financial and technical assistance.
    (b) A conservation plan for eligible acreage must be obtained by a 
participant which must be approved by the conservation district in 
which the lands are located unless the conservation district declines 
to review the plan in which case NRCS may take such further action as 
is needed to account for lack of such review.
    (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 or 
easement 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.


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 land and:
    (1) If an operator of eligible land, seeking to participate without 
the owner, must have operated such land for at least 12 months prior to 
the close of the applicable signup period and must provide satisfactory 
evidence that such operator will be in control of such eligible land 
for the full term of the CRP contract period;
    (2) If an owner of eligible land, must have owned such land for at 
least 12 months prior to the close of the applicable signup period, 
unless:
    (i) The new owner acquired such land by will or succession as a 
result of the death of the previous owner;

[[Page 7628]]

    (ii) The only ownership change in the 12 month 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;
    (iii) As determined by the Deputy Administrator, the circumstances 
of the acquisition are such that present adequate assurance that the 
new owner of such eligible land did not acquire such land 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 land 
for at least 12 months prior to submission of an offer.


Sec. 1410.6  Eligible land.

    (a) In order to be eligible to be placed in the CRP, land:
    (1) Must be cropland that:
    (i) Has 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, provided further that field 
margins which are incidental to the planting of crops may also be 
considered qualifying cropland to the extent determined appropriate by 
the Deputy Administrator; and
    (ii) Is physically and legally capable of being planted in a normal 
manner to an agricultural commodity, as determined by the Deputy 
Administrator.
    (2) Must be marginal pasture land, as determined by the Deputy 
Administrator, that:
    (i) Is enrolled or has recently been enrolled in the WBP provided:
    (A) The acreage is in the final year of the WBP agreement or, if 
not in the final year of the WBP agreement and only for enrollments in 
the CRP for FY 1997, is acreage for which the WBP agreement expired on 
December 31, 1996, where the land would be considered in compliance if 
such agreement was still in effect, as determined by the Deputy 
Administrator;
    (B) The acreage is not classified as naturally occurring type 3 
through 7 wetlands, as determined by the Deputy Administrator 
regardless of whether the acreage is or is not 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), and;
    (C) Enrollment in CRP would enhance the environmental benefits of 
the site, as determined by Deputy Administrator; or
    (ii) Is determined to be suitable for use as a riparian buffer. A 
field or portion of a field of marginal pasture land may be considered 
to be suitable for use as a riparian buffer only if, as determined by 
NRCS, it:
    (A) Is located adjacent to permanent stream corridors excluding 
corridors that are considered gullies or sod waterways; and
    (B) Is capable, when permanent grass, forbs, shrubs or trees are 
grown, of substantially reducing sediment that otherwise would be 
delivered to the adjacent stream or waterbody; or
    (3) Must be acreage currently enrolled in the CRP provided 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, provided the acreage is 
otherwise eligible according to this part, as determined by the Deputy 
Administrator.
    (b) Any land qualifying under the provisions of paragraph (a)(1) 
must also, to be eligible for a contract:
    (1) Be a field or portion of a field determined to be suitable for 
use as a permanent wildlife habitat, filter strip, riparian buffer, 
contour grass strip, grass waterway, field windbreak, shelterbelt, 
living snowfence, other uses as may be determined by the Deputy 
Administrator, vegetation on salinity producing areas, including any 
applicable recharge area, or any area determined eligible for CRP based 
on wetland or wellhead protection area criteria to be eligible to be 
placed in the CRP. A field or portion of a field may be considered to 
be suitable for use as a filter strip or riparian buffer only if it, as 
determined by NRCS:
    (i) Is located adjacent to a stream, other waterbody of a permanent 
nature (such as a lake, pond, or sinkhole), or wetland excluding such 
areas as gullies or sod waterways; and
    (ii) Is capable, when permanent grass, forbs, shrubs or trees are 
grown, of substantially reducing sediment that otherwise would be 
delivered to the adjacent stream or waterbody; or
    (2) (i) Be a field which has evidence of scour erosion caused by 
out-of-bank flows of water, as determined by NRCS. In addition such 
land must:
    (A) Be expected to flood a minimum of once every 10 years; and
    (B) Have evidence of scour erosion as a result of such flooding.
    (ii) To the extent practicable, be the actual affected cropland 
areas of a field; however, the entire cropland area of an eligible 
field may be enrolled if:
    (A) The size of the field is 9 acres or less; or
    (B) 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.
    (iii) If the full field is not eligible for enrollment under this 
paragraph (b)(2), be that portion of the cropland between the waterbody 
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.
    (iv) Be planted to an appropriate tree species according to the 
FOTG, unless tree planting is determined to be inappropriate by NRCS, 
in consultation with Forest Service, in which case the eligible 
cropland shall be devoted to another acceptable permanent vegetative 
cover in accordance with the FOTG; or
    (3) Be 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 authorized under part 1466 of this 
chapter; or
    (4) Be devoted to certain covers, as determined by the Deputy 
Administrator, which are established and maintained according to the 
FOTG provided such acreage is not required to be maintained as such 
under any life-span obligations, as determined by the Deputy 
Administrator; or
    (5) Be non-irrigated or irrigated cropland which produces or serves 
as the recharge area, as determined by the Deputy Administrator, for 
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; or
    (6) Be considered HEL according to conservation compliance 
provisions under part 12 of this chapter; or
    (7) For redefined fields, have an EI of greater than or equal to 8, 
calculated by using the weighted average of the EI's of soil map units 
within the field; or
    (8) Be within a public wellhead protection area or in an approved 
Hydrologic Unit Area; or
    (9) Be within a designated conservation priority area; or
    (10) Be designated as a cropped wetland and appropriate associated 
acreage, as determined by the Deputy Administrator; or

[[Page 7629]]

    (11) Be cropland which, as determined by the Deputy Administrator, 
is associated with noncropped wetlands and would provide significant 
environmental benefits; or
    (c) Notwithstanding paragraphs (a) and (b) of this section, land 
shall be ineligible for enrollment if, as determined by the Deputy 
Administrator, land is:
    (1) Federally owned land unless the applicant has a lease for the 
contract period;
    (2) Land on which the use of the land is restricted through deed or 
other restriction prior to enrollment in CRP prohibiting the production 
of agricultural commodities except for eligible land under paragraph 
(a)(2) of this section; or
    (3) Land already enrolled in the CRP unless the scheduled 
expiration date of the current contract is to occur before the 
available effective date of a new CRP contract, as determined by the 
Deputy Administrator.


Sec. 1410.7  Duration of contracts.

    (a) Except as provided in paragraph (b) of this section, contracts 
under this part shall be for a term of 10 years.
    (b) In the case of land devoted to riparian buffers, filter strips, 
restoration of wetlands, hardwood trees, shelterbelts, windbreaks, 
wildlife corridors, or other practices deemed appropriate by CCC under 
the original terms of a contract subject to this part or for land 
devoted to eligible practices 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) All contracts shall expire on September 30 of the appropriate 
year.


Sec. 1410.8  Conservation priority areas.

    (a) CCC may designate National conservation priority areas 
according to paragraph (c) of this section.
    (b) State FSA committees, in consultation with NRCS and State 
Technical Committees, may submit a recommendation to the Deputy 
Administrator within guidelines established by the Deputy Administrator 
for designation of conservation priority areas. Such recommendations 
should contain clearly defined conservation and environmental 
objectives and analysis of how CRP can cost-effectively address such 
objectives. The purpose of the conservation priority area designation 
is to enhance the CRP by better addressing conservation and 
environmental issues in a planned and coordinated manner within a 
State. Generally, the total acreage of conservation priority areas, in 
aggregate, shall not total more than 10 percent of the cropland in a 
State unless there are identified and documented extraordinary 
environmental needs, as determined by Deputy Administrator.
    (c) A region shall be eligible for designation as a priority area 
only if the region has actual significant adverse water quality or 
wildlife habitat impacts related to activities of agricultural 
production or if the designation helps agricultural producers to comply 
with Federal and State environmental laws.
    (d) Conservation priority area designations shall 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 Deputy Administrator.
    (e) In those areas designated as conservation priority areas, under 
this section, special emphasis will be placed on identified 
environmental concerns. These concerns may include water quality, such 
as assisting agricultural producers to comply with nonpoint source 
pollution requirements, air quality, or wildlife habitat (especially 
for currently listed threatened and endangered species or to prevent 
other species from becoming threatened and endangered), as determined 
by the Deputy Administrator.


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 a 
prior, site-specific and NRCS 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, in the case of any contract modified to change from another cover 
crop, the total annual rental payments over the term of any such 
contract 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 
FOTG 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 and riparian buffers limited to hardwood trees 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 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 CRP contract on land 
that is suitable for restoration to wetlands or that was restored to 
wetlands while under such contract, may, if approved by CCC, subject to 
any restrictions as may be imposed by law, apply to transfer such 
eligible acres subject to such contract that are devoted to an approved 
cover from the CRP to the WRP. Transferred acreage shall be terminated 
from the CRP effective the

[[Page 7630]]

day a WRP 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 unless specified 
by the Deputy Administrator.
    (b) An owner or operator who has enrolled acreage in the CRP may, 
as determined and approved by CCC, restore suitable acres to wetlands 
with cost-share assistance provided that Federal cost-share assistance 
has not been previously provided specifically for wetland restoration 
on the proposed restoration site. In addition to the cost-share 
limitation in Sec. 1410.41 of this part, an additional one time 
financial incentive may be provided to encourage restoration of the 
hydrology of the site.


Sec. 1410.12--Sec. 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 and CCC agrees to a modified plan;
    (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) A reduction in the aggregate total quotas and acreage 
allotments 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. Quotas and acreage allotments 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 production flexibility contract acres enrolled under 
part 1412 of this chapter or CRP acres enrolled under this part so that 
the total of such acres does not exceed the total 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 approved 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 and to provide such maintenance as necessary, or 
may be specified in the CRP conservation plan, to avoid an adverse 
impact on surrounding land, taking into consideration water quality, 
wildlife, and other needs, as determined by the Deputy Administrator; 
and
    (11) Be jointly and severally responsible, if the participant has a 
share of the payment greater than zero, with the other contract 
participants 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.


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 to the extent determined appropriate 
by the Deputy Administrator where the grazing is incidental to the 
gleaning of crop residues on fields where the contracted land is 
located. Such incidental gleaning shall be limited to the 7-month 
period in which grazing of conservation use acreage was previously 
allowed, as determined by CCC, in a State under the provisions of the 
Agricultural Act of 1949, as amended, or after the producer harvests 
the grain crop of the surrounding field. Further, CCC may provide 
approval of the incidental grazing of the CRP, but only in exchange for 
an applicable reduction in the annual rental payment, as determined 
appropriate by the Deputy Administrator.
    (e) Provide approval of normal forestry maintenance such as 
pruning, thinning, and timber stand improvement on lands converted to 
forestry use only in accordance with a conservation plan 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 the CRP. If the conservation 
district declines to review the conservation plan, such approval by the 
conservation district may be waived.
    (b) The practices included in the conservation plan and agreed to 
by the participant must cost-effectively reduce erosion necessary to 
maintain the productive capability of the soil, improve water quality, 
protect wildlife or wetlands, protect a public well head, or 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) If applicable, the conservation plan shall address the goals 
included in the conservation priority designation authorized under 
Sec. 1410.8 of this part.
    (e) All conservation plans and revisions of such plans shall be 
subject to the approval of CCC and NRCS.

[[Page 7631]]

Sec. 1410.23  Eligible practices.

    (a) Eligible practices are those practices specified in the 
conservation plan that meet all standards needed to cost-effectively:
    (1) Establish permanent vegetative or water cover, including 
introduced or native species of grasses and legumes, forest trees, and 
permanent wildlife habitat;
    (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 purposes 
such as the enhancement of wildlife or the improvement of water 
quality. Such water cover shall not include ponds for the purpose of 
watering livestock, irrigating crops, or raising for commercial 
purposes.


Sec. 1410.24-Sec. 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 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 
relative to cost are generated, provided the bid is not in excess of 
the maximum acceptable payment rate established for the for the area 
offered by or for the Deputy Administrator.
    (b) In evaluating contract offers, different factors, as determined 
by CCC, may be considered 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 designations;
    (5) Soil productivity;
    (6) Conservation compliance considerations;
    (7) Likelihood that enrolled land will remain in conserving uses 
beyond the contract period, which may be indicated by, for example, 
tree planting, permanent wildlife habitat, or commitments by a 
participant to a State or other entity to extend the conservation plan;
    (8) Air quality; 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 applicable provisions 
of Sec. 1410.6, as determined by the Deputy Administrator;
    (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 rate.


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 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 and the program.
    (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 is authorized to approve CRP contracts 
on behalf of CCC.
    (f) CRP contracts may be terminated by CCC before the full term of 
the contract has expired if:
    (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 voluntarily requests in writing to terminate 
the contract and obtains the approval of CCC according to terms and 
conditions as determined by CCC;
    (3) The participant is 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 practice outweighs the benefits 
received from the restoration;
    (6) The CRP contract was approved based on erroneous eligibility 
determinations; or
    (7) It is determined by CCC that such a release is needed in the 
public interest.
    (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 a width determined appropriate by the applicable 
FOTG of a perennial stream or other permanent waterbody to reduce 
pollution and to protect surface and subsurface water quality;
    (ii) On which a CRP easement is filed;
    (iii) That is considered to be a wetland by NRCS;
    (iv) Located within a wellhead protection area;
    (v) That is subject to frequent flooding, as determined by the 
Deputy Administrator;
    (vi) That may be required to serve as a wetland buffer according to 
the FOTG 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) Bottom land timber established on wetlands;
    (E) Field windbreaks; and
    (F) Shelterbelts.
    (2) With respect to terminations under this paragraph:
    (i) Any land for which an early termination is sought must have an 
EI of 15 or less;
    (ii) The termination shall become effective 60 days from the date 
the participant submits notification to CCC of the participant's desire 
to terminate the contract;
    (iii) Acreage terminated under this provision is eligible to be re-
offered for

[[Page 7632]]

CRP during future signup periods, provided that the acreage otherwise 
meets the current eligibility criteria; and
    (iv) 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 allowed and approved by CCC where the new owner of 
land enrolled in CRP 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 the contract plus interest thereon, as 
determined by CCC, and shall pay liquidated damages as provided for in 
the 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 the purposes of the program. Further, a refund of an annual 
rental and cost-share payment need not be required from a participant 
who is otherwise in full compliance with the CRP contract when the land 
is purchased by or for the United States, as determined by CCC.


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.
    (d) CCC may terminate a CRP contract if the participant agrees to 
such termination and CCC determines such termination to be in the 
public interest.


Sec. 1410.34  Extended program protection.

    (a) In the final year of the contract, participants may, subject to 
the terms and conditions announced by CCC request to extend the 
preservation of quota and acreage allotment history for 5 years (and, 
if announced by CCC, in successive 5-year increments). Such approval 
may be given by CCC only if the participant agrees to continue for that 
period, but without payment, 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 other payment shall be made.
    (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 established by the State committee. In the event of a natural 
disaster, 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, retroactively, 
prospectively, or both, the amount of quota, and acreage allotment 
history otherwise preserved under the extended contract.


Sec. 1410.35-Sec. 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 any 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) 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 with respect to the establishment of the cover crop on land 
subject to such contract.


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

    (a) As determined by the Deputy Administrator, CCC shall 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 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 State 
or county, as determined by the Deputy Administrator.
    (c) A one-time financial incentive, may be offered to participants 
who restore the hydrology of eligible wetlands in accordance with the 
provisions of Sec. 1410.11(b) or other lands as determined by the 
Deputy Administrator; such incentives will not be greater than 25 
percent of the cost of restoring such wetlands or other lands, as 
determined by CCC.
    (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, as 
provided under Sec. 1410.40(f) of this part, a participant may not 
receive or retain CRP cost-share assistance if other Federal cost-share 
assistance is provided for such acreage, as determined by the Deputy 
Administrator. Further, under no circumstances may the cost-share 
payments received under this part, or

[[Page 7633]]

otherwise, exceed the cost of the practice, as determined by CCC.


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 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 eligibility and ``person'' determinations as they apply to 
payment limitations under this part.
    (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 in such manner deemed appropriate by the Deputy Administrator 
and such distribution may be based on the actual days of ownership of 
the property.
    (e) CCC shall, when appropriate, prepare a schedule for each county 
that shows the maximum soil rental rate CCC may pay which may be 
supplemented to reflect special contract requirements. As determined by 
the Deputy Administrator, such schedule will be calculated based on the 
relative productivity of soils within the county using NRCS data and 
local FSA average cash rental estimates. The schedule will 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 accepted without further evaluation when the requested rental 
rate is less than or equal to the corresponding soil schedule; and
    (3) Otherwise qualifying offers shall be ranked competitively based 
on factors established under Sec. 1410.31 of this part in order to 
provide the most cost-effective environmental benefits, as determined 
by the Deputy Administrator.
    (f) Additional financial incentives may be provided to producers 
offering contracts expected to provide especially high environmental 
benefits through an increased annual rental payment or incentive 
payment 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 or other methods of payment in accordance with 
part 1401 of this chapter, unless otherwise specified by CCC.


Sec. 1410.44-Sec. 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 
enhancement programs carried out by such State, political subdivision, 
or agency thereof which has been approved for that purpose by CCC.
    (b) CCC may enter into other agreements in accordance with terms 
deemed appropriate by CCC, with States to use the CRP to cost-
effectively further specific 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, then, except as otherwise determined appropriate by 
the Deputy Administrator:
    (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;
    (2) Shall comply with the provisions of Sec. 1410.32(h); and
    (3) Refund all previous payments received under the contract by the 
participant or prior participants, plus interest, except as otherwise 
specified by the Deputy Administrator.
    (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 reduce a demand for a refund under this section to the 
extent CCC determines that such relief would be appropriate and will 
not deter the

[[Page 7634]]

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 contract 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 contract.


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 an interest in acreage being 
offered receive treatment which CCC deems to be equitable, as 
determined by the Deputy Administrator. CCC may refuse to enter into a 
contract when there is a disagreement among persons seeking enrollment 
as to a person's eligibility to participate in the contract as a tenant 
and there is insufficient evidence to indicate whether the person 
seeking participation as a tenant does or does not have an interest in 
the acreage offered for enrollment in the CRP.
    (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 the CRP contract;
    (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 by the Deputy Administrator; or
    (4) Is the subject of an order of a court of competent jurisdiction 
requiring the removal from the CRP contract of the operator or tenant 
and such order is received by FSA, as determined by the Deputy 
Administrator.
    (c) 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. Tenants who fail to maintain tenancy on 
the acreage under contract, including failure to comply with provisions 
under applicable State law, may be removed from a contract by CCC. CCC 
shall assume the tenancy is being maintained unless notified otherwise 
by a CRP participant specified in 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.


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 
payment otherwise due or paid such person during the applicable period 
may be 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 annual 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 payments 
that otherwise could be made

[[Page 7635]]

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; provided further the Deputy Administrator may add to 
the contract such additional terms as needed to enforce these 
regulations which shall be binding on the parties and may be enforced 
to the same degree as provisions of these regulations.
    (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 in accordance with 
Sec. 1410.51, refunds shall not be required from any participant on the 
contract to the extent that the Deputy Administrator determines that 
forgiving such repayment is appropriate in order to provide fair and 
equitable treatment.
    (e) Crop insurance purchase requirements in part 1405 of this 
chapter apply to contracts executed in accordance with this part.
    (f) Land enrolled in CRP shall be classified as cropland for the 
time period enrolled in CRP and, after the time period of enrollment, 
may 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 submitted by the State committee and 
authorized by the Deputy Administrator to further the purposes of CRP. 
The research projects must include objectives that are consistent with 
this part, provide economic and environmental information not adversely 
affect local agricultural markets, and be conducted and monitored by a 
bona fide research entity.
    (h) CCC may enter into other agreements, as approved by the Deputy 
Administrator, to use the CRP to meet authorized wetland mitigation 
banking pilot projects.


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  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 February 11, 1997.
Grant Buntrock,
Administrator, Farm Service Agency, and Executive Vice President, 
Commodity Credit Corporation.
[FR Doc. 97-3861 Filed 2-12-97; 10:37am]
BILLING CODE 3410-05-P