[Federal Register Volume 67, Number 148 (Thursday, August 1, 2002)]
[Proposed Rules]
[Pages 49879-49887]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-19259]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 701

RIN 0560-AG26


Emergency Conservation Program

AGENCY: Farm Service Agency, USDA

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would revise the regulations for the 
Agricultural Conservation Program (ACP), the Forestry Incentives 
Program (FIP) and the regulations for the Emergency Conservation 
Program (ECP). Existing ACP contracts would continue, however, to be 
subject to the previously published regulations. The ECP revisions are 
those needed to reflect the reorganization of this part. In addition, 
the ECP regulation is proposed to be updated regarding current 
policies.

DATES: Comments must be received on or before September 30, 2002 to be 
assured of consideration.

ADDRESSES: Comments should be directed to Robert Stephenson, Director, 
Conservation and Environmental Programs Division, USDA, FSA, CEPD, STOP 
0513, 1400 Independence Avenue, S.W., Washington, DC 20250-0513, 
telephone 202-720-6221; facsimile (202) 720-4619; or e-mail at 
[email protected].

FOR FURTHER INFORMATION CONTACT: Robert Stephenson, (202) 720-6221.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed rule is issued in conformance with Executive Order 
12866 and has been determined to be significant. It has been reviewed 
by the Office of Management and Budget.

Federal Assistance Program

    The titles and numbers of the Federal Assistance Programs, as found 
in the Catalog of Federal Domestic Assistance, to which this rule 
applies are: Agricultural Conservation Program (ACP)--10.063; Emergency 
Conservation Program (ECP)--10.054, and Forestry Incentives Program 
(FIP)--10.064.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this rule since the Farm Service Agency (FSA) is not 
required by 5 U.S.C. 553 or any other provision of law to publish a 
notice of proposed rulemaking with respect to the subject matter of 
this rule.

[[Page 49880]]

Environmental Evaluation

    It has been determined by an environmental evaluation that this 
action may have the potential to significantly impact on the quality of 
the human environment. Therefore, FSA has prepared an Environmental 
Impact Statement (EIS). A copy of the draft EIS will be available for 
public comment and a notice of its availability for comment will be 
published in the Federal Register.

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).

Executive Order 12612

    It has been determined that this rule does not have sufficient 
Federalism implications to warrant the preparation of a Federalism 
Assessment. The provisions contained in this rule will not have a 
substantial direct effect on States or their political subdivisions, or 
on the distribution of power and responsibilities among the various 
levels of government.

Executive Order 12988

    This proposed rule has been reviewed in accordance with Executive 
Order 12988. The provisions of this proposed rule are not retroactive 
and preempt State laws to the extent they are not consistent with the 
provisions of this proposed rule. Before any judicial action may be 
brought regarding the provisions of this rule the administrative appeal 
provisions of 7 CFR parts 11 and 780 must be exhausted.

Unfunded Mandates Reform Act of 1995

    The provisions of Title II of the Unfunded Mandates Reform Act of 
1995 are not applicable to this rule because the USDA is not required 
by 5 U.S.C. 553 or any other provision of law to publish a notice of 
proposed rulemaking with respect to the subject matter of this rule and 
because the rule does not contain any unfunded mandates.

Paperwork Reduction Act

    Title: 7 CFR 701, Conservation and Environmental Programs.
    OMB Control Number: 0560-0082.
    Expiration Date: March 31, 2002.
    Type of Request: Request for extension of previously approved 
information collection.
    Abstract: USDA will collect information from owners, operators, and 
other agricultural producers who voluntarily request cost-share 
assistance under the, FIP and ECP. Cost-share assistance is provided to 
perform practices on forest lands, and to rehabilitate farmlands 
damaged by natural disaster and carrying out emergency water 
conservation measures during periods of severe drought. The information 
is collected under Office of Management and Budget (OMB) Control Number 
0560-0082.
    Estimate of Burden: The estimated average public reporting burden 
for information collection requirements for this regulation is 
estimated to average 15 minutes per respondent.
    Respondents: Owners, operators, and other eligible agricultural 
producers on eligible farmland.
    Estimated Number of Respondents: 250,000.
    Estimated Number of Responses per respondent: 1.
    Estimated Total Annual Burden Hours on Respondents: 187,667.
    In addition to commenting on the substance of the regulation, the 
public is invited to comment on the information collection. Proposed 
topics include the following: (a) Whether the proposed collection of 
information is necessary for the proper performance of the function of 
the agency, including whether the information will have practical 
utility; (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the collection of information on those who 
are to respond, including using appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology. These comments should be sent to the Desk 
Officer for Agriculture, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Washington, DC 20503, and to Robert 
Stephenson, Director, Conservation and Environmental Programs Division, 
FSA, USDA, STOP 0513, 1400 Independence Ave. SW, Washington, DC 20250-
0513. Comments will be summarized and included in the request for OMB 
approval of the information collection. All comments will become a 
matter of public record.

Background

    For many years, regulations in 7 CFR part 701 contained regulations 
for three conservation programs administered by the Farm Service Agency 
(FSA) of the Department of Agriculture (USDA): (1) The Agricultural 
Conservation Program (ACP) which was authorized by the Soil 
Conservation and Domestic Allotment Act of 1935, 16 U.S.C. 590a et seq; 
(2) the Forestry Incentives Program (FIP) authorized by the Cooperative 
Forestry Assistance Act of 1978, 16 U.S.C. 2101 et seq.; and (3) the 
Emergency Conservation Program (ECP) authorized by the Agricultural 
Credit Act of 1978, 16 U.S.C. 2201 et seq.
    Under the ACP, certain cost-share agreements, some of which were 
long-term agreements, were executed between the Government and private 
individuals to accomplish certain conservation measures in situations 
in which, unlike with the ECP, there need not be a natural disaster 
involved. Among other things, ACP agreements provided financing, in the 
form of cost-shares, for animal waste management projects. However, the 
Federal Agriculture Improvement and Reform Act of 1996 (1996 Act), 
Public Law 104-127, repealed the ACP authority and accordingly, except 
for certain interim measures, the making of further ACP agreements. 
Rather, the 1996 Act, which became law on April 4, 1996, authorized, by 
amendment to the Food Security Act of 1985 (16 U.S.C. 3839aa et seq.) 
(1985 Act), the Environmental Quality Incentives Program (EQIP). That 
program is administered within USDA by the Commodity Credit Corporation 
through the Natural Resources Conservation Service (NRCS) under rules 
at 7 CFR part 1466.
    In addition, the 1996 Act, as an amendment to the 1985 Act, 
authorized an interim EQIP program as a transition from ACP to EQIP. 
For the transition period, which ended September 30, 1996, the 1996 Act 
provided that technical assistance, cost-share payments, and incentive 
payments could continue to be made in certain cases using new 
agreements utilizing the terms and conditions of the ACP. The 
transition period is now over and, because of the replacement of the 
ACP by EQIP, there will be no new ACP agreements. For that reason, it 
is proposed that the ACP regulations be removed from 7 CFR part 701 
with a provision specifying (as would be implicit in any event) that 
the existing rules in 7 CFR part 701, as previously published, would 
continue to govern existing ACP agreements, including those executed 
during the interim EQIP period.
    This rule, further, would remove the FIP regulations because that 
program was reassigned from FSA to NRCS

[[Page 49881]]

under provisions of the Department of Agriculture Reorganization Act of 
1994, 7 U.S.C. 6912. The NRCS is considering the development of changes 
to the existing regulations for the implementation of the FIP. Until 
such time as those changes are promulgated, the NRCS will continue to 
administer the FIP pursuant to the regulations relating to FIP in 7 CFR 
part 701 as they are in effect immediately prior to the effective date 
of any rule issued following this notice.
    This rule would, in addition, modify and reorganize the remaining 
regulations in 7 CFR part 701, for the ECP, which are continuing, and 
which allow for payments of cost-shares in emergency situations to deal 
with extraordinary damage that might not otherwise be corrected because 
of the extent of the damage and the expense involved. More 
specifically, as is set out in the proposed rule, the ECP is designed 
to provide cost-share assistance to farmers and ranchers to 
rehabilitate farmland damaged by wind erosion, floods, hurricanes, or 
other natural disasters, and for carrying out emergency water 
conservation measures during periods of severe drought. The authorizing 
legislation for the ECP specifies, in Section 401 of the Agricultural 
Credit Act of 1978, Pub. L. 95-334, as amended (the 1978 Act), that for 
the loss to qualify, the natural disaster must create new conservation 
problems which, if not treated, would: (1) Impair or endanger the land; 
(2) materially affect the productive capacity of the land; (3) 
represent unusual damage which, except for wind erosion, is not of the 
type to recur frequently in the same area; and (4) be determined to be 
so costly to repair that Federal assistance is or will be required to 
return the land to productive agricultural use. Conservation problems 
existing prior to the disaster are not eligible for cost-share 
assistance. Section 402 of the 1978 Act also allows for payments, 
during a drought, for emergency water conservation or water enhancing 
measures. Further, Section 403 authorizes the purchase of easements and 
other measures to safeguard life and property from flood, drought, and 
the products of erosion on any watershed whenever a fire, flood, or 
other natural occurrence is causing or has caused a sudden impairment 
of that watershed.

Program Changes

    This rule, if adopted, would revise 7 CFR part 701 to remove the 
FIP and ACP regulations. Also, the ECP regulations would be clarified 
and expanded to reflect current policy. For example, provisions will be 
added to 7 CFR part 701, consistent with FSA's practice since 1990, 
specifying that in certain instances ECP funding can be made available 
for certain drought measures dealing with confined livestock. This 
proposed regulation provides assistance to confined livestock 
operations only in times of severe drought. FSA has considered 
expanding the ECP to allow for cost-share assistance for confined 
livestock operations for natural disasters other than drought. 
Assistance for confined livestock operations cannot be for replacing or 
repairing buildings but could be used to help with cleanup efforts on 
those buildings. USDA will finalize ECP policy concerning confined 
livestock operations after reviewing comments to the proposed 
regulation.
    Other technical and clarifying changes have been made and 
provisions have been added regarding schemes and devices and debt 
avoidance to assure that the ECP is operated in a manner that is most 
beneficial for farmers and the public. In addition, provisions have 
been added to assure that special consideration may be given to limited 
resource producers in order that the most beneficial use of limited ECP 
funds may be obtained.
    In a change from current practice, this rule also would change how 
the maximum cost-share level is computed. Under the current 
regulations, the maximum rate of cost-share is calculated according to 
a sliding scale, with a higher cost-share percentage being allowed for 
the first part of the costs of the practice up to a certain limit, and 
a lower percentage being allowed for additional costs (if there are 
any). To eliminate confusion, without compromising the achievement of 
the program's goal, this rule would provide, instead, for a standard 
maximum percentage to be used for all costs associated with the 
practice for which the cost-share is to be received. This change would 
make the program easier to administer without significant additional 
costs. Payments however, will continue to be limited by a number of 
other criteria and by the provision that in no case may the 
reimbursement exceed $200,000 per ``person'' per disaster using the 
customary USDA standards of determining who is a separate ``person'' 
for payment limitation purposes. In this rule, the local county FSA 
committee would be allowed to permit reimbursements of up to 75 percent 
for all reimbursable costs, subject to the same per ``person'' 
limitations that now exist in the regulations. In addition, we are 
considering providing certain additional allowances for limited 
resource producers. The Farm Security and Rural Investment Act of 2002 
permits reimbursements of up to 90 percent for limited resources 
producers for certain other programs. FSA is interested in receiving 
comment on providing similar ECP reimbursements of up to 90 percent, or 
any other percentage, for limited resource producers.
    The 75 percent rate, like the sliding rate contained in current 
regulations, goes to determining the maximum total amount that can be 
paid to all participants, together, that are involved with all 
practices applied for that particular disaster. By contrast the 
$200,000 limit is, and would remain under this rule, a separate and 
distinct limit which would limit how much an individual ``person'', as 
defined in customary USDA rules, could receive for a particular 
disaster. Thus, for example, for a $500,000 practice, the cost-share, 
at 75 percent, would work out to be $375,000; one ``person'' operation 
could receive only $200,000 as a cost-share because of the $200,000 per 
``person'' limit, whereas, on the other hand, a two ``person'' 
operation with two equal partners could receive the full $375,000 ( 
$187,500 per ``person''). If the 75 percent limit had produced a 
$175,000 maximum then a one ``person'' operation could receive the full 
amount ($175,000) because the $200,000 limit would not be reached.
    The per ``person'' limitations have been, to date, in 
appropriations bills rather than in the basic program statute found at 
16 U.S.C. 2201 et seq. Here, the proposed rule would adopt such a limit 
utilizing the discretion afforded under the ECP statute which by its 
terms provides for a discretionary program. The limit will allow for a 
better distribution of program funds to farmers in need.

List of Subjects in 7 CFR Part 701

    Disaster assistance, Forest and forest products, Grant programs-
agriculture, Grant programs-natural resources, Reporting and record 
keeping requirements, Rural areas, Soil conservation, Water resources, 
Wildlife.

    For the reasons set forth in the preamble, 7 CFR part 701 is 
proposed to be revised to read as follows:

PART 701--EMERGENCY CONSERVATION PROGRAM AND CERTAIN RELATED 
PROGRAMS PREVIOUSLY ADMINISTERED UNDER THIS PART

Sec.
701.1   Administration.
701.2   Definitions.

[[Page 49882]]

701.3   General description.
701.4   Program Implementation.
701.5   Producer eligibility.
701.6   Land eligibility.
701.7   Qualifying minimum cost of restoration and waiver.
701.8   Prohibition on duplicate payments.
701.9-701.19   [Reserved]
701.20   Eligible ECP practices.
701.21   Onsite inspections.
701.22-701.30   [Reserved]
701.31   Filing requests.
701.32   Starting practices before cost-share request is filed.
701.33   Practice approval.
701.34   Approving requests.
701.35   Practices involving the establishment or improvement of 
vegetative cover.
701.36-701.39   [Reserved]
701.40  Completion of practices; agreements.
701.41  Time of filing payment application.
701.42-701.49   [Reserved]
701.50   Eligibility to file for payment of cost-share assistance.
701.51   Eligible costs.
701.52-701.59   [Reserved]
701.60   Division of cost-share assistance.
701.61   Payments for uncompleted practices.
701.62   Maximum potential cost-share for practices.
701.63   Practices carried out with aid from ineligible persons.
701.64   Maximum payment limitation.
701.65   Limits on county committee and State committee approval 
authority.
701.66-701.69   [Reserved]
701.70   Maintenance and proper use of practice.
701.71   Failure to meet minimum requirements or failure to fully 
comply with program provisions.
701.72-701.79   [Reserved]
701.80   Not an entitlement program.
701.81   Death, incompetency, or disappearance.
701.82   Appeals.
701.83   Performance based on advice or action of USDA employee.
701.84   Compliance with regulatory measures.
701.85   Schemes and devices and claims avoidances.
701.86   Loss of control of property during the practice lifespan.
701.87   Cost-share assistance not subject to claims.
701.88   Assignments.
701.89   [Reserved]
701.90   Environmental considerations.
701.91   Information collection requirements.
701.92   Agricultural Conservation Program (ACP) contracts.
701.93   Forestry Incentives Program (FIP) contracts.

    Authority: Pub. L. 95-334, 92 Stat. 420, 16 U.S.C. 2201 et. seq.


Sec. 701.1  Administration.

    (a) Subject to the availability of funds, except as otherwise 
specified, the regulations in this part will be administered under the 
general supervision of the Administrator, Farm Service Agency (FSA), 
through the Deputy Administrator. Locally, the regulations in this part 
will be administered by the State and county FSA committees (``State 
committees'' and ``county committees,'' respectively). This part shall 
apply only to the Emergency Conservation Program (ECP) provided for in 
16 U.S.C. 2201-2205, et seq.
    (b) State and county committees, and State and county executive 
directors do not have the authority to modify or waive any of the 
provisions of 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, but which the county 
committee has not taken, such as:
    (1) Correct or require a county committee to correct any action 
taken by such county committee that is not in accordance with the 
regulations of this part, or
    (2) Require a county committee to withhold taking any action that 
is not in accordance with the regulations of this part.
    (d) No delegation in this part to a State or county committee shall 
preclude 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 or from modifying non-statutory 
deadlines or other non-statutory requirements provided for in this 
part, when to do so would serve the purposes of the program or 
accomplish greater fairness in the operation of the program, as 
determined by the Deputy Administrator.
    (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) FSA may consult with the Natural Resources Conservation Service 
(NRCS), Forest Service (FS), Cooperative State Research, Education, and 
Extension Service (CSREES), or others, for such assistance as is 
determined by FSA to be necessary to implement the ECP. FSA, however, 
is responsible for the technical aspects of ECP but may, as determined 
appropriate by the Deputy Administrator, enter into a Memorandum of 
Agreement with another party for the provision of technical assistance. 
No more than 10 percent of the amount of ECP funds obligated within a 
county may be utilized for technical assistance unless the Deputy 
Administrator approves otherwise.


Sec. 701.2  Definitions.

    (a) The terms defined in part 718 of this chapter shall be 
applicable to this part and all documents issued in accordance with 
this part, except as otherwise provided in this section.
    (b) The following definitions shall apply to this part:
    Agricultural producer means an owner, operator, or tenant of a farm 
or ranch used to produce, for food or fiber, crops (including but not 
limited to, grain or row crops; seed crops; vegetables or fruits; hay 
forage or pasture; orchards or vineyards; flowers or bulbs; or field 
grown ornamentals) or livestock (including but not limited to, dairy or 
beef cattle; poultry; swine; sheep or goats; fish or other animals 
raised by aquaculture; other livestock or fowl), for commercial 
production, as determined by the Deputy Administrator. Producers of 
animals raised for recreational uses only are not considered 
agricultural producers.
    Annual agricultural production means production of crops for food 
or fiber in a commercial operation which occurs on an annual basis 
under normal conditions, as determined by the Deputy Administrator.
    Applicant means a person who has submitted to FSA a request to 
participate in the ECP.
    Cost-share payment means the payment made by FSA to assist a 
program participant under this part in establishing the practices 
required to address qualifying damage suffered in connection with a 
qualifying disaster.
    Deputy Administrator means the Deputy Administrator for Farm 
Programs, FSA, or designee.
    Farmland means land devoted to agricultural production, including 
land used for aquacultural purposes, as determined by the Deputy 
Administrator.
    Program year means the applicable Federal fiscal year.


Sec. 701.3  General description.

    (a) Under the ECP, FSA will provide cost-share assistance to 
farmers and ranchers to rehabilitate farmland damaged by wind erosion, 
floods, hurricanes, or other natural disasters, and to carry out 
emergency water conservation measures during periods of severe drought. 
The natural disaster must have created new conservation problems which, 
if not treated, would:
    (1) Impair or endanger the land;
    (2) Materially affect the productive capacity of the land;
    (3) Represent unusual damage that, except for wind erosion, is not 
the type likely to recur frequently in the same area; and

[[Page 49883]]

    (4) Be so costly to repair that Federal assistance is or will be 
required to return the land to productive agricultural use. 
Conservation problems existing prior to the disaster are not eligible 
for cost-share assistance.
    (b) The objective of the ECP is to make, consistent with this part 
and the authorizing legislation, cost-share assistance available to 
eligible participants on eligible land for certain practices to 
rehabilitate farmland damaged by floods, hurricanes, wind erosion, or 
other natural disasters, and for the installation of water conservation 
measures during periods of severe drought.
    (c) Payments may also be made under this part, in addition, for:
    (1) Emergency water conservation or water enhancement measures 
(including measures to assist confined livestock) during periods of 
severe drought; and
    (2) Floodplain easements for runoff and other emergency measures, 
as determined by the Deputy Administrator, to safeguard life and 
property from floods, drought, and the products of erosion on any 
watershed whenever fire, flood, or other natural occurrence is causing 
or has caused, a sudden impairment of the watershed.
    (d) In addition to other requirements as may apply, payments under 
this part are subject to the availability of funds and to any 
limitations that may otherwise be provided for by Congress in laws 
appropriating such funds.
    (e) Total cost-share payments, from all sources, shall not exceed 
the cost of the practice to the applicant, as determined by the Deputy 
Administrator.


Sec. 701.4  Program implementation.

    Subject to the availability of funds and as determined by the 
Deputy Administrator, the county committee may implement the ECP and 
accept ECP applications according to this part when new conservation 
problems resulting from a natural disaster have been created on 
farmland as provided in Sec. 701.3(a), provided that the approval of 
the Deputy Administrator shall be needed to carry out emergency water 
conservation and water enhancement measures during periods of severe 
drought and for authorization of other special practices as referenced 
in Sec. 701.3(c)


Sec. 701.5  Producer eligibility.

    (a) In order to be eligible to participate in the ECP under 
Sec. 701.3(a) and (c)(1), a person must be an agricultural producer 
with an interest in the land, as determined by the Deputy 
Administrator, affected by the natural disaster and must be liable for 
the expense which is the subject of the cost-share. Under 
Sec. 701.3(c)(2) the payee must be a landowner or/and user in the area 
where the qualifying event has occurred and must be a party who will 
incur the expense which is the subject of the cost-share.
    (b) Federal agencies and States, including all agencies and 
political subdivisions of a State, are ineligible to participate in the 
ECP.


Sec. 701.6  Land eligibility.

    (a) In order for a producer to be eligible for ECP benefits under 
Sec. 701.3(a) the land which is the subject of the cost-share must, as 
determined by the Deputy Administrator:
    (1) Have new conservation problems caused as a result of a natural 
disaster that, if not treated, would:
    (i) Impair or endanger the land;
    (ii) Materially affect the productive capacity of the land;
    (iii) Represent unusual damage that, except for wind erosion, is 
not of the type likely to recur frequently in the same area; and
    (iv) Be so costly to repair that Federal assistance is or will be 
required to return the land to productive agricultural use. 
Conservation problems existing prior to the disaster are not eligible 
for cost-share assistance;
    (2) Be physically located in a county in which the ECP has been 
implemented; and
    (3) Be one of the following:
    (i) Expected to have annual agricultural production, as determined 
by the Deputy Administrator; or
    (ii) A field windbreak or a farmstead shelterbelt on which the ECP 
practice to be implemented involves removing debris that interferes 
with normal farming operations on the farm and correcting damage caused 
by the disaster; or
    (iii) A farm access road on which debris interfering with the 
normal farming operation needs to be removed.
    (b) Land meeting the qualifying requirements of paragraph (a) of 
this section that is protected by a levee or dike shall be eligible to 
be the subject of a cost-share only if, as determined by the Deputy 
Administrator, such levee or dike was effectively and properly 
functioning prior to the disaster.
    (c) Notwithstanding paragraphs (a) and (b) of this section, land 
shall be considered ineligible to be the subject of a cost-share of the 
kind referenced in Sec. 701.3(a), if, as determined by the Deputy 
Administrator, such land is:
    (1) Owned or controlled by the United States;
    (2) Owned or controlled by States, including State agencies or 
other political subdivisions of a State;
    (3) Protected by a levee or dike that was not effectively and 
properly functioning prior to the disaster, or is protected, or 
intended to be protected, by a levee or dike not built to U.S. Army 
Corps of Engineers, NRCS, or comparable standards, as determined by the 
Deputy Administrator;
    (4) Adjacent to water impoundment reservoirs that are subject to 
inundation when the reservoir is filled to capacity;
    (5) Land on which levees or dikes are located;
    (6) Subject to frequent damage or susceptible to severe damage 
according to paragraph (d) of this section;
    (7) Subject to flowage or flood easements and inundation when water 
is released in normal operations;
    (8) Between any levee or dike and a stream, river, or body of 
water, including land between two or more levees or dikes;
    (9) Located in an old or new channel of a stream, creek, river or 
other similar body of water, except that land located within or on the 
banks of an irrigation canal may be approved by the Deputy 
Administrator if the canal is not a channel subject to flooding;
    (10) In greenhouses or other confined areas, including but not 
limited to, land in corrals, milking parlors, barn lots, or feeding 
areas;
    (11) Land on which poor farming practices, such as failure to farm 
on the contour, have materially contributed to damaging the land;
    (12) Unless otherwise provided for, not considered to be in annual 
agricultural production, as determined by the Deputy Administrator, 
such as land devoted to stream banks, channels, levees, dikes, native 
woodland areas, roads, and recreational uses; or
    (13) Devoted to trees for timber production, including, but not 
limited to, the production of Christmas trees.
    (d) For purposes of making determinations of the likely frequency 
of damage and of the susceptibility of the land to severe damage under 
paragraph (c)(6) of this section, the Deputy Administrator will base 
such determinations on consideration of all factors deemed relevant, 
which may include, but need not be limited to, the location of the 
land, the history of damage to the land, and whether the land was or 
could have been protected by a functioning levee or dike built to U. S. 
Army Corps of Engineers, NRCS, or comparable standards. Further, in 
making such determinations information may be obtained and used from 
the Federal Emergency Management Agency (FEMA) or any other Federal, 
State (including State agencies or political subdivisions), or

[[Page 49884]]

other entity or individual providing, for example, flood susceptibility 
for the land, soil surveys, aerial photographs, or flood plain data.
    (e) For ECP payments under Sec. 701.3(c), the provisions of 
paragraphs (a) through (d) of this section shall be applied as 
determined applicable and appropriate by the Deputy Administrator 
consistent with the overall goals of the program.


Sec. 701.7  Qualifying minimum cost of restoration and waiver.

    (a) In order to qualify for assistance under Sec. 701.3(a), 
farmland must have suffered significant eligible damage that is so 
costly to repair that Federal assistance is or will be required to 
return the land to productive agricultural use, as provided in 
Sec. 701.6(a)(1). A qualifying minimum level of the cost of restoration 
may be established as determined by the Deputy Administrator. The 
Deputy Administrator may allow:
    (1) A State Committee to establish a higher minimum qualifying 
level of the cost of restoration; and
    (2) Waivers to the qualifying minimum level of the cost of 
restoration on a case-by-case basis where appropriate.
    (b) An agricultural producer may, pursuant to paragraph (a)(2) of 
this section, request a waiver of the qualifying minimum level of the 
cost of restoration. A waiver request shall contain sufficient 
documentation, as determined necessary by the Deputy Administrator, to 
demonstrate that Federal assistance, with the waiver, is required to 
accomplish the goals of the program.
    (c) For payments under Sec. 701.3(c), the standards in paragraphs 
(a) and (b) of this section shall be applied as determined appropriate 
by the Deputy Administrator and subject to such other limitations as 
may also be determined appropriate.


Sec. 701.8  Prohibition on duplicate payments.

    (a) Participants are not eligible to receive funding under the ECP 
for land on which the participant has or will receive funding under:
    (1) The Wetland Reserve Program (WRP) provided for in 7 CFR part 
1467;
    (2) The Emergency Wetland Reserve Program (EWRP) provided for in 7 
CFR part 623;
    (3) The Emergency Watershed Protection Program (EWP) provided for 
in 7 CFR part 624;
    (4) Any FSA or CCC emergency loan program or other government 
program to cover the same or similar expenses so as to create duplicate 
payments, or, in effect, a higher rate of cost-share than is allowed 
under this part;
    (5) Any other program, function, or activity as designated by the 
Deputy Administrator.
    (b) Participants who are determined to have received any funds, 
payments, or other benefits covered by the limitation in paragraph (a) 
of this section shall be required to refund ECP payments as determined 
by the Deputy Administrator.


Secs. 701.9-701.19  [Reserved]


Sec. 701.20  Eligible ECP practices.

    (a) With respect to relief under Sec. 701.3(a), cost-share 
assistance may be offered for emergency conservation practices only to 
replace or restore farmland, fences, or conservation structures to a 
condition similar to that existing before the natural disaster. No 
relief under any provision of this part shall be offered or allowed for 
the solution of conservation problems existing before the disaster.
    (b) The practice or practices made available when the ECP is 
implemented shall be only those practices authorized by the Deputy 
Administrator for which cost-share assistance is essential to permit 
accomplishment of the program goals.
    (c) In order that the program may be operated in the most cost-
effective manner possible, practice specifications, as determined by 
the Deputy Administrator, shall represent the minimum levels of 
performance needed to address the ECP need. Any costs above these 
minimum levels shall be considered ineligible costs for purposes of 
cost share calculations.


Sec. 701.21  Onsite inspections.

    As determined by the Deputy Administrator, an onsite inspection 
must be made prior to approval of any request for ECP assistance.


Secs. 701.22-701.30  [Reserved]


Sec. 701.31  Filing requests.

    (a) The Deputy Administrator shall provide for an enrollment period 
for filing ECP cost-share requests.
    (b) Enrollment periods shall be at least 30 calendar days in length 
but not more than 60 calendar days in length, unless otherwise approved 
by the Deputy Administrator.
    (c) Late-filed requests may be accepted, as determined by the 
Deputy Administrator.


Sec. 701.32  Starting practices before cost-share request is filed.

    (a) Except as provided in paragraph (b) and (c) of this section, 
costs will not be shared for practices or components of practices that 
are started before a request for cost-share under this part is filed 
with the applicable county FSA office.
    (b) Costs may be shared for non-drought ECP practices or components 
of practices that are started before a request is filed with the county 
FSA office, as determined by the Deputy Administrator, only if:
    (1) Approved on a case-by-case basis;
    (2) It is determined that the disaster, which is the basis of a 
claim for cost-share assistance, created a situation that required the 
producer to take immediate action to prevent further losses; and,
    (3) The request for assistance was filed within a reasonable amount 
of time after the start of the enrollment period, as determined by the 
Deputy Administrator.
    (c) Costs may be shared for drought ECP practices or components of 
practices that are started before a request is filed with the county 
FSA office, as determined by the Deputy Administrator only if the 
provisions in paragraphs (b)(1), (2) and (3) of this section are met 
and the practice was started after ECP drought designation was 
requested by the applicable County office.


Sec. 701.33  Practice approval.

    (a) All requests shall be prioritized before approval. 
Prioritization shall be based on such factors as are deemed appropriate 
by the Deputy Administrator.
    (b)The factors that may be taken into account in setting priorities 
under paragraph (a) of this section may include, but are not limited 
to:
    (1) Type and degree of damage;
    (2) Type of practices needed to address the problem;
    (3) Availability of funds;
    (4) Availability of technical assistance;
    (5) Environmental concerns;
    (6) Safety factors; or
    (7) Welfare of eligible livestock.


Sec. 701.34  Approving requests.

    Requests for cost-share assistance may be approved, as determined 
by the Deputy Administrator, only if:
    (a) Funds are available;
    (b) An onsite inspection has been performed; and
    (c) The requested practice has been determined to be eligible for 
cost-share assistance.


Sec. 701.35  Practices involving the establishment or improvement of 
vegetative cover.

    Cost-share assistance may be provided for permanent vegetative 
cover,

[[Page 49885]]

including re-establishment of the cover where needed, only in 
conjunction with eligible structures or installations where such 
assistance is needed to prevent erosion and/or siltation, as determined 
by the Deputy Administrator, or if needed to accomplish some other ECP 
purpose in accord with the provisions of this part.


Secs. 701.36-701.39  [Reserved]


Sec. 701.40  Completion of practices; agreements.

    Payment of cost-share assistance for the practices as authorized in 
this part is conditioned upon the performance of the practice in 
compliance with all applicable specifications and program provisions, 
as determined by the Deputy Administrator. Participants will be 
required to sign an ECP agreement in which they acknowledge their ECP 
obligations.


Sec. 701.41  Time of filing payment application.

    After completion of the approved practice, the participant must 
certify completion and request payment in a manner as determined by the 
Deputy Administrator. Participants shall submit to FSA at the local 
county office the information needed to establish the extent of the 
performance of approved practices and compliance with applicable 
program provisions. The time limits for submission of such information 
shall be as determined by the Deputy Administrator. Such time limits 
shall be designed to afford a full and fair opportunity to those 
eligible to submit the information within the period prescribed. 
Exceptions to the time limits may be made in cases where a failure to 
submit required forms and information within the applicable time limits 
is due to reasons beyond the control of the participant.


Secs. 701.42-701.49  [Reserved]


Sec. 701.50  Eligibility to file for payment of cost-share assistance.

    Any eligible participant as defined in Sec. 701.5 who bore a part 
of the cost of an approved practice, may file an application for cost-
share payment.


Sec. 701.51  Eligible costs.

    (a) Subject to paragraphs (b) and (c) of this section and other 
limitations provided for in this part, cost-share assistance may be 
authorized for all reasonable costs incurred in the completion of the 
practice, as determined by the Deputy Administrator, up to the maximum 
amounts allowed in Sec. 701.62 and Sec. 701.63.
    (b) As determined by the Deputy Administrator:
    (1) Eligible costs for use of personal equipment shall be limited 
to costs incurred which are beyond costs that are part or could be part 
of the normal farming operation of the farm or ranch.
    (2) Eligible costs for personal labor shall be limited to personal 
labor not normally required in the operation of the farm or ranch.
    (3) Allowable eligible costs for the use of eligible personal 
equipment and labor must be less than that charged by commercial 
contractors who are regularly employed in such pursuits.
    (4) Eligible costs shall not exceed that needed to achieve the 
minimum level of performance necessary to resolve the need that creates 
the application for cost-share assistance. Any costs above those levels 
shall not be considered to be eligible costs for purposes of 
calculations made under this part.
    (c) Any costs above the practice specifications as provided in 
Sec. 701.20(c) shall be considered ineligible costs for purposes of 
cost-share calculations made under this part.
    (d) Eligible costs for purposes of computing the gross amount on 
which the cost-share eligibility may be computed will not include any 
costs that were reimbursed by a third party such as, but not limited 
to, those costs that have been or will be reimbursed through an 
insurance indemnity payment.


Secs. 701.52-701.59  [Reserved]


Sec. 701.60  Division of cost-share assistance.

    (a) For purposes of qualifying for cost-share assistance under this 
part, the cost shall be credited to the eligible participant who 
personally performed the practice or who paid to have the practice 
performed by a third party. In the case where a payment or credit has 
been made by one eligible participant to another potentially eligible 
participant, the provisions of paragraph (c) of this section shall 
apply.
    (b) If more than one eligible participant contributed to the 
performance of the practice, the cost-share assistance for the practice 
shall be divided among those eligible participants in the proportion 
they contributed to the performance of the practice, as determined by 
the Deputy Administrator. In making this determination, the Deputy 
Administrator may consider the value of the labor, equipment, or 
material contributed by each participant and any other factors deemed 
relevant toward performance.
    (c) The allowance by an eligible participant of a credit to another 
eligible participant in the form of an adjustment in rent, or as an 
exchange of cash or other consideration, shall not be considered as a 
contribution to the performance of any practice by the party making the 
credit available, unless the county committee is satisfied that such 
credit is directly related to the cost of the practice. In the event 
that an applicant was fully reimbursed through an adjustment of rent, 
an exchange of cash, or other consideration, the applicant shall not be 
considered as having contributed to the practice performance.


Sec. 701.61  Payments for uncompleted practices.

    Cost-share assistance approved under these programs shall not be 
considered earned until all components of the approved practice are 
completed, as determined by the Deputy Administrator. Cost-share 
assistance for completed components of an approved practice may be paid 
only on the condition that the eligible participant will complete the 
remaining components of the practice within the time prescribed, unless 
they are prevented from doing so because of reasons beyond their 
control, as determined by the Deputy Administrator.


Sec. 701.62  Maximum potential cost-share for practices.

    (a) Subject to Sec. 701.66 and other applicable restrictions, as 
determined by the Deputy Administrator, FSA shall not pay more than 75 
percent of the maximum allowable cost as defined in paragraph (b) of 
this section subject to a maximum limitation of $200,000 per person as 
defined in Sec. 701.65.
    (b) The maximum allowable cost prior to the application of the 100 
percent factor is an amount that is equal to the lesser of:
    (1) the average cost for performing the practice in the county; or
    (2) the actual cost to perform the practice.
    (c) Notwithstanding paragraphs (a) and (b) of this section, in no 
case shall the ECP payment exceed 50 percent of the agricultural market 
value of the affected land, as determined by the Deputy Administrator.


Sec. 701.63  Practices carried out with aid from ineligible persons.

    Financial assistance that is made available, or that will be made 
available, to a participant from a third party who is ineligible to 
receive ECP cost-share assistance, including assistance from a State or 
Federal agency other than ECP cost-share assistance made available 
under this part, shall be deducted from

[[Page 49886]]

the participant's total costs incurred for the practice for purposes of 
determining the eligible reimbursable costs under this part, as 
determined by the Deputy Administrator. If unusual conditions exist, 
the Deputy Administrator may waive deduction of such contributions.


Sec. 701.64  Maximum payment limitation.

    In addition to other limits as may apply, a participant is limited 
to a maximum cost share of $200,000 per ``person'' per disaster. The 
regulations at part 1400 of this title shall be applicable in making 
``person'' determinations as they apply to payment limitations under 
this part.


Sec. 701.65  Limits on county committee and State committee approval 
authority.

    Regardless of the amount payable to the participant, the Deputy 
Administrator may limit the authority of the county and State 
committees to approve cost-share payments in excess of specified 
amounts.


Secs. 701.66-701.69  [Reserved]


Sec. 701.70  Maintenance and proper use of practices.

    (a) Each participant receiving cost-share assistance is responsible 
for the required maintenance and proper use of the practice. Some 
practices have an established lifespan or minimum period of time during 
which they are expected to function as a conservation practice with 
proper maintenance. Cost-share assistance shall not be authorized for 
normal upkeep or maintenance of any practice except where such relief 
is approved by the Deputy Administrator.
    (b) If, as determined by the Deputy Administrator, a practice has 
not been properly maintained for the established lifespan, the 
participant receiving the cost-share assistance may be required to 
refund all or any part of such cost-share assistance, as determined 
appropriate by the Deputy Administrator.


Sec. 701.71  Failure to meet minimum requirements or failure to fully 
comply with program provisions.

    (a) Costs may be shared for performance actually rendered even 
though the minimum requirements for a practice have not been satisfied, 
if it is determined by the Deputy Administrator that a reasonable 
effort was made to satisfy the minimum requirements and that the 
practice as performed will adequately address the need for the 
practice.
    (b) The Deputy Administrator may, within statutory limits and 
utilizing the standards that are provided for certain price support 
matters in part 718 of this chapter, authorize relief when a 
participant acting in good faith has failed to fully comply with the 
program provisions and where it is determined by the Deputy 
Administrator that waiving non-statutory requirements would serve the 
purposes of this part.


Sec. 701.72-701.79  [Reserved]


Sec. 701.80  Not an entitlement program.

    The provisions in this part shall not be read to create an 
entitlement in any person to any ECP cost-share or claim or any 
particular notice or form or procedure. Matters committed to the 
discretion of the Deputy Administrator shall be considered in all cases 
to be permissive powers and no person shall, under any circumstances, 
be considered to be entitled to an exercise of such power in their 
favor.


Sec. 701.81  Death, incompetency, or disappearance.

    In case of death, incompetency, or disappearance of any 
participant, any cost-shares payment due shall be paid to the 
successor, determined in accordance with provisions of the regulations 
in part 707 of this chapter.


Sec. 701.82  Appeals.

    Any participant may obtain reconsideration and review of 
determinations affecting participation in these programs, in accordance 
with parts 11 and 780 of this chapter.


Sec. 701.83  Performance based on advice or action of USDA employee.

    Cases involving performance rendered in good faith in reliance upon 
action or advice of an authorized representative of USDA shall be 
considered in accordance with standards provided for price support in 
part 718 of this chapter and in accordance with the provisions of 
Sec. 701.71.


Sec. 701.84  Compliance with regulatory measures.

    Participants who perform practices shall be responsible for 
obtaining the authorities, rights, easements, or other approvals 
necessary to the performance and maintenance of the practices according 
to applicable laws and regulations. The participant(s) with whom the 
cost of the practice is shared shall be wholly responsible for any 
actions taken with respect to the project and shall in addition be 
responsible for returning and refunding any ECP cost-shares made where 
the purpose of the project cannot be accomplished because of the 
participant's lack of clearances or other problems. The participant 
shall also be responsible for reimbursing the United States and its 
instrumentalities for any losses sustained as a result of any project 
and for indemnifying the United States and its instrumentalities for 
any claims made against the United States and its instrumentalities 
with respect to the project and for the costs incurred by the United 
States and its instrumentalities with respect to such claims. Nothing 
in this section, however, shall be read or understood as establishing, 
or tending to establish, that any such claims against the United 
States, its instrumentalities or agents is permissible or proper.


Sec. 701.85  Schemes and devices and claims avoidances.

    (a) If the Deputy Administrator determines that a participant has 
taken any action that is designed to defeat, or has the effect of 
defeating, the purposes of this program, the participant shall be 
required to refund all or part of any of the program payments otherwise 
due or paid to that participant or related person for that particular 
disaster. These actions include, but are not limited to, failure to 
properly maintain or deliberately destroying a practice, and providing 
false or misleading information related to practices, costs, or 
arrangements between entities or individuals which would have an effect 
on ``person'' determinations made under this part.
    (b) All or any part of cost-share assistance that otherwise would 
be due any participant may be withheld, or required to be refunded, if 
the participant has adopted, or participated in, any scheme or device 
designed to evade the maximum cost-share limitation that applies to the 
ECP or to evade any other requirement or provision of the program or 
this part.
    (c) If the Deputy Administrator determines that any participant has 
employed any scheme or device to deprive any other person of cost-share 
assistance, or has engaged in any actions to receive payments under 
this part which also were designed to avoid claims of the United States 
or its instrumentalities or agents against that party or related 
parties, or third parties, the participant shall be required to refund 
all or part of any of those program payments otherwise due or paid to 
that participant during the program year or for the project.
    (d) For purposes of this section, a scheme or device can include, 
but is not limited to, instances of coercion, fraud, or 
misrepresentation regarding the claim for ECP assistance and the facts 
and circumstances surrounding such claim.
    (e) If the Deputy Administrator determines that any participant has 
knowingly supplied false information or filed a false claim, that 
participant shall

[[Page 49887]]

be considered ineligible for cost-share assistance of any kind for any 
project related to the disaster for which the false information was 
filed for the remaining program year and for any such longer period as 
the Deputy Administrator deems to be appropriate. False information or 
a false claim includes, but is not limited to, a request for payment 
for a practice not carried out, a false billing, or a billing for 
practices which do not meet the required specifications.


Sec. 701.86  Loss of control of the property during the practice 
lifespan.

    If, during the practice lifespan, there is voluntary loss of 
control of the land by the participant receiving the cost-share 
assistance and the person acquiring control of such land elects not to 
become a successor-in-interest to the agreement and the practice is not 
maintained, then each participant who received cost-share assistance 
for the practice may be jointly and severally liable for refunding any 
ECP cost-share assistance that has been received with respect to the 
practice, as determined by the Deputy Administrator. The practice 
lifespan for purposes of this section shall include any maintenance 
period that is essential to the success of the practice.


Sec. 701.87  Cost-share assistance not subject to claims.

    Any cost-share assistance or portion thereof due any participant 
under this part shall be allowed without regard to questions of title 
under State law, and without regard to any claim or lien against any 
crop or property, or proceeds thereof, except liens and other claims of 
the United States or its instrumentalities. The regulations governing 
offsets and withholdings at part 792 and 1403 of this title shall be 
applicable to this program, and the provisions most favorable to a 
collection of the debt shall control.


Sec. 701.88  Assignments.

    Any participant who may be entitled to any cost-share assistance 
under this program may assign the right thereto, in whole or in part, 
according to the regulations governing the assignment of payments at 
part 1404 of this title.


Sec. 701.89  [Reserved]


Sec. 701.90  Environmental considerations.

    The provisions at part 799 of this chapter shall apply as 
applicable.


Sec. 701.91  Information collection requirements.

    Information collection requirements contained in this part [are in 
the process of being reapproved by the Office of Management and Budget 
under the provisions at 44 U.S.C. Chapter 35 and] have been assigned 
OMB Number 0560-0082.


Sec. 701.92  Agricultural Conservation Program (ACP) contracts.

    Contracts for the ACP which are, or were, administered under this 
part or similar contracts executed in connection with the Interim 
Environmental Quality Incentives Program, operated under provisions of 
the Federal Agriculture Improvement and Reform Act of 1996, Public Law 
104-127, shall, unless the Deputy Administrator determines otherwise, 
be administered under, and be subject to, the regulations for ACP 
contracts and the ACP program that were contained in the 7 CFR, parts 
700 to 899, edition revised as of January 1, 1998, and under the terms 
of the agreements that were entered into with participants.


Sec. 701.93  Forestry Incentives Program (FIP) contracts.

    The regulations governing the FIP as of July 31, 2002, and 
contained in the 7 CFR, parts 700 to 899, edition revised as of January 
1, 2002, shall continue to be applicable to FIP contracts in effect as 
of that date.

    Signed at Washington, DC, on July 25, 2002.
James R. Little,
Administrator, Farm Service Agency.
[FR Doc. 02-19259 Filed 7-31-02; 8:45 am]
BILLING CODE 3410-05-P