[Federal Register Volume 68, Number 89 (Thursday, May 8, 2003)]
[Rules and Regulations]
[Pages 24830-24845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11405]



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Part IV





Department of Agriculture





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Commodity Credit Corporation



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7 CFR Part 1410



2002 Farm Bill--Conservation Reserve Program--Long-Term Policy; Interim 
Rule

  Federal Register / Vol. 68, No. 89 / Thursday, May 8, 2003 / Rules 
and Regulations  

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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1410

RIN 0560-AG74


2002 Farm Bill--Conservation Reserve Program--Long-Term Policy

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Interim rule.

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SUMMARY: The Commodity Credit Corporation (CCC) amends the Conservation 
Reserve Program (CRP) regulations to set forth the terms and conditions 
of enrolling acreage in the CRP, update program eligibility 
requirements, eliminate unnecessary regulations and improve the 
remaining regulations. This action is being taken to cost-effectively 
target the CRP to more environmentally sensitive acreage and to comply 
with amendments made by the Farm Security and Rural Investment Act of 
2002 (2002 Act).

DATES: This rule is effective May 5, 2003. Comments must be received on 
or before July 7, 2003 to be assured of consideration.

ADDRESSES: Comments should be directed to Matt Ponish at Mangi 
Environmental Group, 7915 Jones Branch Drive, Suite 2300 McLean, 
Virginia 22102, by calling 800-760-1421, by faxing at 703-760-4899, or 
by e-mail at [email protected].

FOR FURTHER INFORMATION CONTACT: Beverly J. Preston, CRP Program 
Manager, at USDA/FSA/CEPD/STOP 0513, 1400 Independence Avenue SW., 
Washington, DC 20250-0513; telephone 202-720-9563; e-mail: Beverly 
[email protected]. Persons with disabilities who require alternative 
means for communication (braille, large print, audiotape, etc.) should 
contact the USDA Target Center at 202-720-2600 (voice and ADD).

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be economically significant and 
was reviewed by the Office of Management and Budget (OMB) under 
Executive Order 12866. A Cost/Benefit Analysis was completed and is 
summarized following the Background section.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this interim rule because the Commodity Credit 
Corporation (CCC) is not required by 5 U.S.C. 553 or any other 
provision of law to publish a notice of proposed rulemaking with 
respect to the subject matter of this rule. CCC is authorized by 
section 2702 of the 2002 Act to issue an interim rule.

Environmental Evaluation

    The environmental impacts of this rule have been considered in 
accordance with the provisions of the National Environmental Policy Act 
of 1969 (NEPA), 42 U.S.C. 4321 et seq.; the regulations of the Council 
on Environmental Quality (40 CFR parts 1500-1508); and FSA's 
regulations for compliance with NEPA at 7 CFR part 799. It was 
determined that this rule constitutes a major Federal action. 
Therefore, FSA completed a final Environmental Impact Statement, which 
is on file and available to the public in the Administrative Record at 
the address specified in the ADDRESSES section. It is also available 
electronically at: http://www.fsa.usda.gov/dafp/cepd/epb/nepa.htm.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require intergovernmental consultation with State and 
local officials. See 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 that impose ``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. This rule contains no Federal mandates as defined by Title II 
of UMRA. Therefore, this rule is not subject to sections 202 and 205 of 
the UMRA.

Federal Domestic Assistance Program

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

Paperwork Reduction Act

    The 2002 Act specified that the issuance of regulations promulgated 
pursuant to this new authority would be made without regard to chapter 
35 of title 44, U.S. Code (commonly known as the ``Paperwork Reduction 
Act'').

Executive Order 12778

    This interim rule has been reviewed under Executive Order 12778. 
The provisions of this rule are not retroactive and preempt State and 
local laws that are inconsistent with this rule. Before any judicial 
action may be brought concerning this rule, appeal rights afforded 
program participants at 7 CFR parts 11, 624, and 780 must be exhausted.

Government Paperwork Elimination Act

    FSA is working to comply with the Government Paperwork Elimination 
Act (GPEA) and the Freedom to E-File Act, which require Government 
agencies in general and FSA in particular to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible. The forms and other information 
collection activities required for participation in the program are not 
yet fully implemented for the public to conduct business with FSA 
electronically.
    Currently, four CRP forms are available electronically through the 
USDA eForms Web site at www.sc.egov.usda.gov for downloading and 
regulations are available on the Internet at www.fsa.usda.gov/dafp/cepd. Offers may be submitted at FSA county offices, by mail, or by 
FAX. At this time, electronic submission is not available, but full 
implementation of electronic submission is underway.

Background

    This rule revises the regulations of the Conservation Reserve 
Program (CRP) at 7 CFR part 1410 to improve the overall administration 
of the program and to implement statutory changes to the CRP. The CRP 
was first authorized by the Food Security Act of 1985 (1985 Act), which 
was recently amended by the Farm Security and Rural Investment Act of 
2002, Public Law 107-171 (2002 Act), which, among other things, 
provided the Secretary of Agriculture (Secretary) the authority to 
maintain up to 39.2 million acres in the CRP. The purpose of the CRP 
continues to be cost-effectively assisting producers in conserving and 
improving soil, water, and wildlife resources by converting highly 
erodible and other environmentally-sensitive acreage generally devoted 
to the production of agricultural commodities to a long-term vegetative 
cover. CRP participants enroll land under contracts for 10 to 15 years 
in exchange for annual rental payments and financial assistance to 
install certain conservation practices and to

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maintain approved vegetative or tree covers.
    Native seed and vegetation species that are suited to the soil and 
climatic conditions of a site provide high wildlife benefits. 
Accordingly, FSA encourages the use of native vegetation whenever 
suitable. The CRP application selection criteria (i.e., the 
Environmental Benefits Index (EBI)) gives greater weight to contract 
offers that devote acreage to native seeds and plantings that are 
consistent with the ecosystem (discussed below). In some cases, 
however, critical area planting (e.g., land that is severely sloped or 
has high potential for erosion) may require the use of introduced 
vegetation species because they can stabilize the soil more quickly in 
order to protect the soil and water resources. In addition, introduced 
species may be easier to establish and provide more cost-effective 
conservation covers.
    In determining the amount of annual rental payments to be paid, CCC 
considers, among other things, the amount necessary to encourage owners 
or operators of eligible land to participate in the CRP. The maximum 
rental payment CCC will pay reflects site-based soil productivity, 
prevailing local cash-equivalent rental rates, and maintenance costs. 
Offers to participate in the CRP are submitted in such a manner as the 
Secretary prescribes. Requests for rental payments greater than the 
amount that CCC determines to be reasonable for the area and soil type 
are automatically rejected. In order to maximize the environmental and 
conservation benefit of the funds to be expended, conservation 
practices and the land for which offers may be accepted may vary as 
conditions change.
    CCC conducts periodic, competitive general signups in which all 
offers are ranked competitively based on their environmental benefits 
considering the cost of the contract. The acceptability of such offers 
is determined by a formula based upon a number of environmental factors 
and benefits. Along with the cost of enrolling the acreage, these 
factors are used to construct an EBI to compare offers.
    CCC scores general signup offers using the EBI, which measures the 
anticipated environmental benefits from several factors and costs. The 
Department has used an EBI to prioritize and rank CRP offers since the 
tenth signup in March 1991. It was developed to comply with the section 
1234(c) of the 1985 Act. The goal of the EBI is to provide a relative 
rank order of submitted offers based on environmental factors and cost 
in a uniform and consistent manner for all offers. In addition, the EBI 
provides incentives to increase cost-effectiveness. Ultimately, the EBI 
is used to rank the anticipated environmental benefits from each CRP 
offer.
    The EBI considers a number of environment factors, including water 
quality, soil erosion, air quality, and enduring benefits. In addition 
to these factors, wildlife and the quality of vegetation for wildlife 
habitat are factors in the ranking criteria. Because native grasses 
generally offer better habitat than introduced grasses, the FSA has 
revised the EBI selection criteria to give greater weight to the use of 
native seed and vegetation species. This provides incentives for 
producers to offer and use native species in their CRP contracts.
    The effect of the greater EBI weight given for using species can be 
seen by examining the change in the proportion of CRP enrolled acres 
planted in native grasses. In 1993, when there were nearly 30 million 
acres of grass in the CRP, only 28 percent of these acres were planted 
in native grasses. Since 1998, 67 percent of the grasses established 
under new CRP contracts used native grasses.
    Since 1996, between 70,000 and 280,000 offers were received during 
each four- to six-week signup period. Environmental data were collected 
for each of the EBI ranking factors and subfactors. Each offer was 
assigned a point score based upon the relative environmental indices 
scores. All offers were ranked in comparison to all other offers and 
the selections were made from that ranking.
    CCC also conducts continuous, non-competitive signup of certain 
acreage. Under the CRP continuous signup process implemented in 
September 1996 and the Conservation Reserve Enhancement Program (CREP) 
signup process implemented in February 1997, only those practices 
determined to have relatively high environmental benefits are eligible. 
Acreage determined to be eligible for the continuous CRP or CREP signup 
is automatically accepted if all other eligibility requirements are 
met. Continuous signup affords farmers and ranchers the management 
flexibility in implementing certain working lands conservation 
practices on cropland such as filter strips, riparian buffers, 
shelterbelts, field windbreaks, living snow fences, grass waterways, 
shallow water areas for wildlife, salt-tolerant vegetation and 
practices to protect certain approved public wellhead protection areas. 
These practices are designed to achieve significant environmental 
benefits, giving participants a flexible option to enroll acres on a 
continuous basis to help protect and enhance wildlife habitat, improve 
air quality, and improve the condition of streams, rivers, and 
permanent water bodies. While acreage is accepted on a non-competitive 
basis, the practices provide environmental benefits that likely would 
consistently exceed the highest EBI score making this acreage 
acceptable for enrollment under a general signup.
    Further, CCC may enter into a CREP agreement with States, Tribes, 
local governments, or private entities to use the CRP to cost-
effectively address specific conservation and environmental issues of 
the State and the nation. Proposals, developed locally and submitted 
for approval by the Secretary, must address resource concerns, provide 
for cooperation with the CREP partners, present clear program goals 
with measurable objectives, and detail non-federal financial 
contributions.
    The 2001 Agricultural Appropriations Act amended the 1985 Act and 
authorized a Farmable Wetlands Pilot Program (FWP) to enroll in the 
States of Iowa, Minnesota, Montana, Nebraska, North Dakota, and South 
Dakota certain wetlands and buffer acreage on a pilot basis. Enrollment 
under this pilot could not exceed 500,000 acres for all States and 
150,000 acres in any State. The maximum enrollment for both the wetland 
and buffer acreage could not exceed 40 acres per tract. Also, wetlands 
could not exceed five acres in size to be eligible for enrollment. 
Acreage enrolled must be cropland that has a cropping history in at 
least three of the most recent ten years. Acreage offered under this 
pilot uses the CRP's continuous signup procedures.
    On December 6, 2001, CCC published a proposed rule (66 FR 63339) 
that proposed a series of amendments that, if adopted, would make 
certain orchard lands, vineyards, berry lands, and hay lands eligible 
for enrollment, provide for acquisition of private sector technical 
assistance and make minor technical and clerical adjustments to the 
regulations. This action was taken to allow producers greater 
flexibility in enrolling in the CRP and enhance the environmental 
benefits under the CRP. CCC proposed that for the continuous signups 
held for the CRP and for enrollments in the CREP, certain orchard 
lands, vineyards, berry fields, and hay land be permitted to be 
enrolled. The 2002 Farm Bill broadened land eligibility to include hay 
lands if the land is otherwise cropland that has been devoted to a 
conserving use and expanded authority for the use of private-sector and 
other technical service providers. These provisions are

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included in this interim rule. Fourteen comments supported the 
inclusion of certain orchard lands, vineyards, or berry lands as 
proposed. There were no comments opposed to the proposed inclusion. 
Therefore, the interim rule also makes certain orchard lands, 
vineyards, or berry lands eligible for enrollment under the continuous 
CRP and CREP.

Discussion of the Interim Rule

    Based on the 2002 Act and FSA discretion, changes have been made to 
cropping history requirements, eligible land, the EBI, the FWP, managed 
haying and grazing authorities, and providers of technical assistance.
    Generally, by statute, CRP land enrolled in the program must be 
cropland, but the rules for the program provide that the crop history 
must generally be a history of production of tillable crops. That 
limitation provides for focusing the CRP on the conversion of land with 
the most intensive uses to a cover crop. Also, this focus emphasizes 
the ``reserve'' nature of the program and can provide a greater amount 
of public benefit by producing savings in other programs as recompense 
for the funds spent on this program.
    This rule, at 7 CFR part 1410.6(a)(3)(b)(13), makes certain orchard 
lands, vineyards and berry lands eligible for the continuous sign-ups 
held for the CRP and for enrollments in the CREP. FSA has determined 
that these lands could provide significant environmental benefits in 
these signups which involve certain geographical practices such as 
conservation buffers along stream banks. Such an expansion of the 
eligibility criteria for the program was requested by a number of State 
governments involved in CREP agreements.

Cropping History Requirements

    This rule, at 7 CFR part 1410.6(a), changes the cropping history 
requirements required for certain land to be eligible. Before, by rule, 
land must have been cropped in two of the five years preceding 
enrollment to be eligible. However, the 2002 Act changed that 
requirement so that cropland, to be eligible, must be planted or 
considered planted for four of the six years preceding the date of 
enactment of the 2002 Act on May 13, 2002. Also, in 7 CFR part 1410.6, 
this rule provides that land may be eligible if it was devoted to a 
conserving use under section 1231(c) of the 1985 Act. For CRP purposes, 
conserving use means, during 1996 through 2001, any planted alfalfa and 
planted other multi-year grasses and legumes and summer fallow in a 
rotation with agricultural commodities are defined as conserving uses 
for CRP purposes.

Other Changes in Land Eligibility Requirements

    The 2002 Act amendments to the 1985 Act expanded eligibility 
authority for marginal pasture land from riparian buffers ``devoted to 
trees'' to ``devoted to appropriate vegetation, including trees,'' in 
or near riparian areas. Thus, under 7 CFR part 1410.6, CCC has made 
marginal pasture land acreage eligible if it is devoted to a riparian 
buffer practice, a new wetland practice, or a new wildlife habitat 
buffer practice. This enhancement will allow riparian buffers, 
wetlands, and wildlife habitat practices intrinsically valuable in 
addressing Federal and State environmental and wildlife issues near 
streams, rivers, or other water bodies to be established where tree 
plantings are not practical or appropriate. These practices improve 
water quality, reduce flood and storm event damage, help control soil 
erosion, and provide important fish and wildlife habitat. Certain 
wetlands are also valuable in providing filtering functions because of 
their location between land and water.
    The 2002 Act amendments also extends eligibility to cropland when 
enrollment would facilitate a net savings in groundwater or surface 
water resources of the agricultural operation of the producer. To 
implement this new provision, CCC has added to the list of eligible 
conservation practices in 7 CFR part 1410.6 a practice that has water 
savings as its primary function. Water savings will advance the goal of 
providing the nation and States with adequate water to meet farming and 
ranching needs as well as the needs of an increasing population.
    Another new land eligibility provision in the 2002 Act amendments 
provides that the remainder of cropland in a field that is not enrolled 
as a ``buffer'' may be enrolled if it is less than 50 percent of the 
cropland in that field, is infeasible to farm, and is enrolled at 
regular enrollment rates. For this provision, at 7 CFR part 1410.6 
provides that a ``buffer'' will be considered to be riparian buffers, 
filter strips, or areas buffering wellhead protection areas. 
``Infeasible to farm'' is defined as areas that are too small or 
isolated to be economically farmed, as determined by the FSA.
    The 2002 Act also made land enrolled in the CRP but nearing 
contract completion eligible for new enrollment. Accordingly, any 
acreage currently in the CRP will be basically eligible to be offered 
for continued enrollment if the current contract is scheduled to expire 
the day before a new contract would become effective. However, land 
will be ineligible for enrollment if it is subject to a CRP useful life 
easement that extends beyond the current contract term. The interim 
rule provides that re-enrollment of currently enrolled acreage will be 
based on the same criteria as for enrolling new acreage.
    The EBI has been modified after extensive negotiations with 
resource professionals from the Forest Service, Natural Resource 
Conservation Service (NRCS), U.S. Environmental Protection Agency, U.S. 
and Wildlife Service (FWS), U.S. Geological Survey (USGS) and others 
and from public scoping and public comments submitted during 
development of the programmatic environmental impact statement.
    The 2002 Act made no changes to the EBI authority. However, the EBI 
has been re-engineered to continue to encourage the restoration of 
plantings consistent with the ecosystem where the land is offered. The 
EBI has also been simplified to enable producers to run different 
scenarios independently, reduce error rates, improve customer service 
by significantly reducing the time needed for a producer to submit an 
offer, and reduce resources needed to process an offer.
    The index may include consideration of soil erosion, water quality, 
wildlife habitat, enduring benefits, air quality, and cost while also 
including consideration of other technical factors such as 
recommendations of the State technical committee, conservation priority 
areas, permanent wildlife habitat, and tree plantings.

Farmable Wetlands Program (FWP)

    Under the 2002 Act amendments, the FWP, at 7 CFR part 1410.11, was 
expanded from a six-State pilot to all States and may include up to a 
total of 1 million acres. In general, up to 100,000 acres may be 
enrolled in any State, except that enrollment of a State may be 
increased to 150,000 acres after 3 years. The 2002 Act amendments also 
changed the maximum size of any wetland enrolled under the FWP from 
five to ten contiguous acres, of which not more than five acres shall 
be eligible for payment. No more than 40 acres from a tract may be 
enrolled under the FWP. All acres, including acres ineligible for 
payment, must be maintained according to an approved conservation plan.

Managed Haying and Grazing

    Before the 2002 Act amendments, the 1985 Act generally provided 
that no

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commercial use could be made of land enrolled in CRP but permitted 
haying or grazing during droughts or similar weather-related 
emergencies. The 2002 Act amended that provision by adding an exception 
for managed harvesting and grazing, including the managed harvesting of 
biomass and the installation of wind turbines.
    Wind turbines generally have a limited impact on the environment 
due to their small footprint of approximately one-tenth acre. They are 
non-polluting sources of energy and generally have a limited impact on 
wildlife. Wind turbines will be installed according to standards and in 
such numbers as determined appropriate by FSA.
    Managed haying and grazing is anticipated to be a useful tool to 
manage CRP stands and to assist CRP participants in managing their 
operation. Allowing non-emergency managed haying and grazing, conducted 
in accordance with a conservation plan, will increase the amount of 
cover disturbance that will occur. Managed disturbance of vegetative 
covers (i.e., a disturbance cycle) established on CRP land generally 
increases diversity and quality of vegetative covers and improves 
wildlife habitat benefits. Based on surveys of CRP participants, these 
managed haying uses could potentially affect about 25 percent of 
eligible CRP grassland acreage. Haying and grazing will be limited to 
no more than once every 3 years, depending on conservation plan 
guidelines, with additional restrictions in environmentally sensitive 
areas or practices.
    All haying and grazing activities will be conducted only after a 
detailed conservation plan is developed for haying or grazing 
management according to the NRCS Field Office Technical Guide (FOTG) 
haying and grazing standards. The conservation plan will ensure the 
long-term viability of the stand while protecting and enhancing the 
soil, water, wildlife and other natural resources of the CRP acreage. 
The conservation plan will require the control of noxious weeds and 
other weeds, insects, and pests. All haying and grazing activities must 
be conducted consistent with the terms and conditions of the haying and 
grazing management plan. USDA will conduct compliance reviews to ensure 
compliance.
    In November 2001, a panel of grassland ecologists with special 
expertise in grassland bird ecology representing academia, Government 
and non-profit organizations developed a number of consensus 
recommendations for guidance regarding haying and grazing of CRP as 
well as long-term protection of existing grasslands.
    The panel's consensus view was ``to establish a general rule 
favoring grazing 1 in 3 years on one-third of the enrolled CRP lands.'' 
Other species-specific haying and grazing requirements were also 
recommended. However, FSA was advised that the specific recommendations 
assumed a mono-culture for a particular species (e.g., short-grass 
prairie) and did not take into account the landscape's natural 
diversity. Therefore, FSA adopted the NRCS FOTG haying and grazing 
standard to augment the panel's consensus view.
    FSA determined that managed haying and grazing of CRP acreage once 
every 3 years as recommended by the grassland ecologist panel was the 
appropriate disturbance cycle. State committees will not be 
establishing disturbance cycles more frequently than the 1-in-3 year 
cycle. Less frequent disturbance cycles may be established by State 
committees with State Technical Committee consultation. The year 2003 
will be considered year 1 of the management cycle for all CRP contracts 
in effect. For all new CRP contracts, the disturbance cycle will begin 
when the cover is established.
    For contracts where all eligible acreage is already established, 
year 1 of the disturbance cycle will begin during the first managed 
haying and grazing period after the CRP contract is approved. For 
contract acreage where an acceptable cover may need to be established, 
year 1 will begin during the managed haying and grazing period 12 
months after the applicable cover is fully established. This will 
ensure that the applicable acreage will be capable of withstanding the 
applied haying or grazing pressure without failing to recover.
    Farm Service Agency State committees, in consultation with State 
technical committees, will determine the beginning of the primary 
nesting and brood rearing season during which managed haying and 
grazing will not be performed. The ending dates were established by 
FSA, in consultation with the FWS, in the 1990's and are not intended 
to be changed. The appropriate managed haying and grazing period, which 
may not overlap with the primary nesting and brood-rearing season, will 
be determined by the FSA State committee in consultation with the NRCS 
State technical committee.
    Managed haying and grazing will interact with emergency 
authorizations of haying and grazing by including acres hayed or grazed 
under the emergency authority into the managed haying and grazing 
disturbance cycle. Thus, any acreage hayed or grazed under emergency 
authority would not be eligible to be hayed or grazed under managed 
haying or grazing provisions the following 2 years. Managed haying or 
grazing of CRP does not affect the eligibility of CRP acreage for 
emergency haying or grazing.

Emergency Haying and Grazing

    Under existing emergency authority, any eligible CRP acreage may be 
hayed or grazed each year the county is approved. Under the new rule, 
any CRP acreage eligible for emergency haying or grazing within the 
county may be hayed or grazed within the emergency authorization 
regardless of whether it was hayed or grazed in previous years under 
managed provisions or emergency authority. This would remain consistent 
with current emergency authority. However, any eligible acreage hayed 
or grazed under either managed or emergency provisions would not be 
eligible for managed haying or grazing for the next two years.

Providers of Technical Assistance

    The CRP is carried out by CCC through FSA using FSA State and 
county offices. The Farm Service Agency supplements its staff by using 
providers of technical assistance including, for example, NRCS, FS 
State foresters, individuals, private-sector entities, and public 
agencies certified under the regulations at 7 CFR part 652.

Conservation Priority Areas (CPA's)

    Land designated as either a State or National CPA is considered 
eligible to be offered for enrollment in the CRP (provided it meets the 
cropping history and physically and legally capable of being cropped 
standards). Although land is considered eligible for enrollment, the 
offer is not automatically acceptable. CPA's are designated based on 
entire counties or hydrologic unit codes (HUC's). All CPA's must have a 
primary purpose of wildlife, water quality, or air quality. State and 
National CPA's may have a designated zone associated with the CPA. The 
zone must be designated as either a wildlife, water quality, or air 
quality zone. Acreage offered for enrollment in the CRP that is 
designated as a CPA and is located within the applicable zone is 
awarded EBI points.
    The 2002 Act re-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

[[Page 24834]]

of 5 years, subject to re-designation. 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. In addition to the national priority areas 
provided in the 1985 Act, CCC re-authorized two other national 
conservation priority areas: the Prairie Pothole and Longleaf Pine 
Regions with certain adjustments, as explained later. CCC will continue 
national conservation priority areas after reviewing and revising them, 
as appropriate, to conform to HUC's or county boundaries.
    CCC also re-authorized State conservation priority areas. Prior to 
the 2002 Act, State conservation priority areas were limited to no more 
than 10 percent of the cropland (net of any national conservation 
priority area) in the State. When requesting conservation priority area 
designation, FSA State committees were required to develop an 
evaluation and monitoring system to determine the effectiveness of 
designating a particular area as a priority. Designations are valid for 
5 years and many of these areas are approaching the expiration of their 
5-year designation.
    The regulations at 7 CFR part 1410.8 authorize FSA State committees 
to designate State conservation priority areas after consulting with 
the NRCS State technical committee. Conservation priority areas make 
cropland basically eligible for enrollment. Other qualifications 
including the physically and legally capable of being cropped standards 
at 7 CFR part 1410.6 and ownership eligibility at 7 CFR part 1410.5 
continue to apply. This rule, in 7 CFR part 1410.8, changes the total 
area in a State eligible to be designated as a State conservation 
priority area from no more than 10 percent to no more than 33 percent 
of the cropland in the State. This change increases local flexibility 
in enrolling eligible land into the program and provide local natural 
resource managers increased flexibility in achieving environmental 
improvement and in achieving water quality objectives under the Clean 
Water Act. The increase from 10 percent to 33 percent will assist USDA 
in addressing certain water quality issues and is consistent with water 
quality areas designated for certain environmental benefit ranking 
factors.

Mid-Contract Cover Management

    USDA will require that all new covers under new contract to be 
maintained and managed in a manner that will maximize wildlife benefits 
while ensuring soil, water, and other resources are protected. Eligible 
management activities incorporating native seeds and planting will be 
developed by FSA State committees based on recommendations from State 
technical committees with input from resource professionals with 
knowledge of wildlife, forestry, hydrology and other appropriate 
disciplines. Other management activities could include light discing 
and burning. Mid-cover management shall be conducted according to an 
approved conservation plan as part of the CRP contractual obligation 
that will maximize wildlife benefits while ensuring soil, water, and 
other resources are protected as determined by FSA.

Request for Comment

    The regulations at 7 CFR part 1410.30 provide for enrollment 
methods that generally include periodic competitive signup periods and, 
for certain environmental practices, continuous non-competitive 
enrollments. Since 1996 when continuous signup was authorized, FSA has 
expanded the kinds of environmental practices to meet legislative and 
other needs. The added practices include contour grass strips on 
terraces, two farmable wetland practices and the marginal pasture land 
practices. Further, USDA recently announced the intention to include 
certain hardwoods under continuous signup.
    We request comments on environmental and other criteria that should 
be used to qualify practices for a continuous signup and to distinguish 
the non-competitive from the competitive general signup.

Cost-Benefit Assessment (CBA)

    The CBA analyzes the environmental, economic, and budgetary impacts 
of enrolling additional land in CRP under provisions of the 
accompanying rule. Principal issues analyzed are land eligibility 
changes and extension of authority to enroll new lands in CRP. Two 
enrollment options are considered: (1) Enrollment of additional acres 
under general signup provisions to reach the statutory maximum 
enrollment of 39.2 million acres and (2) enrollment of additional 
acreage under general signup provisions up to the pre-existing 36.4 
million-acre cap. The first scenario is the selected option. It 
corresponds to enrollment levels included in the Office of Management 
and Budget's Fiscal Year (FY) 2003 Mid-Session Review budget baseline, 
and includes enrollment of an additional 2.8 million acres compared 
with option 2. Other issues analyzed include basic cropland and 
resource-based eligibility criteria, FWP expansion, eligibility of 
infeasible-to-farm field remainders, and management of enrolled fields 
to maintain and improve vegetative vigor and diversity.
    Cropland eligibility will be based on crop history during 1996 
through 2001. To be eligible, land must have been cropped, considered 
cropped, or in conserving uses in at least 4 of the 6 years. Land 
planted to an agricultural commodity at least 4 of the 6 years is 
estimated to total 310 million acres. Allowing land in crop/fallow 
rotations adds about 28.3 million acres, primarily in the Northern 
Plains and Mountain regions where wheat/fallow rotations are common. 
Including land in hay/crop rotations (25.2 million acres) brings total 
land meeting crop history requirements to 363.5 million acres, a 1.9 
million-acre (0.5 percent) increase from estimated eligibility under 
prior provisions.
    About 268 million acres, or 74 percent, of land meeting crop 
history requirements are estimated to meet one or more resource-based 
eligibility criteria, including 104 million acres of highly erodible 
cropland, 116 million acres in national conservation priority areas, 
and up to 94 million acres in State conservation priority areas. 
Because CRP enrollment in a county is limited to 25 percent of cropland 
in the county, only about 106 million of these acres are potentially 
enrollable.
    Allowing non-emergency managed haying or grazing, conducted in 
accordance with a conservation plan, will increase the amount of cover 
disturbance that will occur. Managed disturbance of vegetative covers 
established on CRP land generally increases diversity and quality of 
vegetative covers, improving wildlife habitat benefits. Based on 
surveys of CRP participants, these managed uses could potentially 
affect about 25 percent of eligible CRP grassland acreage. Haying and 
grazing will be limited to no more than once every 3 years, depending 
on conservation plan guidelines, with additional restrictions in 
environmentally sensitive areas or practices. Thus, around 2 to 3 
million acres could be hayed or grazed in any year, improving wildlife 
habitat benefits on a total of about 7 million acres. If the current 
25-percent payment reduction is applied and there is equitable regional 
distribution of participation, CRP outlays could be reduced by $20 
million to $25 million per year.
    Establishing long-term vegetative cover on the additional 2.8 
million acres of cropland enrolled under the selected option (option 1) 
will provide numerous environmental benefits. Soil productivity is 
enhanced because erosion is essentially ceased during the 10- to 15-
year contract period. CRP enrollment reduces sheet and rill (water

[[Page 24835]]

driven) soil erosion, and the quantity of agricultural pollutants 
available to reach water bodies and impair water uses. Reduced wind 
erosion provides air quality benefits. The additional 2.8 million acres 
will reduce estimated annual erosion 21 million tons compared with 1997 
erosion rates: sheet and rill and wind erosion will be reduced by about 
10 million tons and 11 million tons, respectively. Carbon 
sequestration, the storage of carbon in soils and vegetation, will 
increase by an estimated 1.3 million metric tons per year.
    While comprehensive estimates of changes in wildlife populations 
are not generally available, expanded and enhanced wildlife habitat 
should result in substantial increases in the abundance of game and 
non-game species. Many CRP practices are specifically or primarily 
directed toward improving wildlife habitat. Almost 10 million acres are 
currently enrolled in conservation priority areas, selected for 
wildlife habitat enhancement purposes. Over 3 million acres of specific 
wildlife practices, including wildlife corridors, shallow water areas 
for wildlife, riparian buffers, and wetland restoration, currently 
provide critical wildlife habitat benefits. In addition, 1.4 million 
flood-prone and riparian area acres and 3.4 million cropped wetland and 
wetland complex acres are currently enrolled. Wildlife benefits are 
further enhanced by establishment of 374,000 acres of rare and 
declining habitats, 2.3 million acres of permanent wildlife habitat, 
and enrollment of 92,000 acres of former water bank land. Many of these 
wildlife-enhancing practices will be included in the 2.8 million acres 
enrolled under the selected option.
    Comprehensive measures of environmental benefit values obtained 
from enrolling environmentally sensitive land in CRP do not currently 
exist. Published estimates of CRP benefits, based on currently and 
previously enrolled acreage, using indirect measures or secondary 
sources generally provide regional estimates of benefits per acre 
enrolled or per ton erosion reduction. Using these derived estimates 
enrolling the additional 2.8 million acres is estimated to provide 
environmental benefits of $129 million per year. These benefits 
include: $11 million from improved soil productivity, $19 million from 
improved surface water quality, $41 million from enhanced wildlife 
viewing opportunities, $57 million in small game and migratory 
waterfowl hunting benefits, and $2 million in air quality benefits. 
Many major benefit categories are not yet quantified, including 
benefits from numerous recreational activities, big game hunting, 
flood-control, wetland restoration, groundwater quality, improved human 
health from improved water and air quality, fishing, and carbon 
sequestration.
    With about 350 million acres typically in crop production annually, 
idling an additional 2.8 million acres under CRP (less than 1 percent 
of plantings) will have minimal impacts on crop production, crop 
prices, and farm income. Net crop sector income is estimated to 
increase $307 million per year (1 percent) during the 2003-2012 crop 
years, due to the additional CRP enrollment. This increase is a result 
of larger estimated market-based net returns ($349 million per year), 
decreased commodity program payments ($186 million per year), and 
increased net CRP payments ($144 million per year) over the 10-year 
period. Underlying these changes is a 900,000 acre estimated decline in 
combined wheat, feed grains, and soybean plantings per year over the 
period. As a result of these reduced plantings, crop prices are 
estimated to increase on average $0.02 per bushel for wheat, $0.02 for 
corn, $0.01 to $0.02 for other feed grains, and $0.06 for soybeans per 
year.
    Total CRP outlays are estimated to increase $1.5 billion, while 
commodity program outlays are estimated to decline about $1.7 billion 
during FY 2003 through 2012, primarily due to a $1.5 billion counter-
cyclical payment decline. The additional 2.8 million-acre enrollment is 
estimated to decrease combined CRP and commodity program outlays by 
$208 million annually during the 10-year period.
    Total estimated impacts for the additional CRP enrollment, 
including $326 million annual economic losses due to higher crop prices 
and reduced crop supplies (buyers' loss) and estimated average annual 
economic benefits (increased farm incomes and environmental benefits), 
results in estimated net economic benefits of $131 million per year. 
This amount probably understates the net impacts to society because 
many of the environmental benefits are not included.

List of Subjects in 7 CFR Part 1410

    Administrative practices and procedures, Agriculture, Conservation 
plan, Contracts, Environmental protection, Natural resources, Soil 
conservation, Water resources, and Wildlife.

0
Accordingly, 7 CFR 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 acreage.
1410.5 Eligible persons.
1410.6 Eligible land.
1410.7 Duration of contracts.
1410.8 Conservation priority areas.
1410.9 Conversion to trees.
1410.10 Restoration of wetlands.
1410.11 Farmable Wetlands Program.
1410.12-1410.19 [Reserved]
1410.20 Obligations of participant.
1410.21 Obligations of the Commodity Credit Corporation.
1410.22 CRP 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.
1410.34-1410.39 [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 Adjusted Gross Income
1410.45-1410.49 [Reserved]
1410.50 Enhancement programs.
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 payments and provisions about 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.

    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 implemented under the 
general supervision and direction of the Executive Vice President, 
Commodity Credit Corporation (CCC), the Administrator, Farm Service 
Agency (FSA), or a designee, or the Deputy Administrator, FSA. In the 
field, the regulations in this part will be implemented by the FSA 
State and county 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

[[Page 24836]]

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 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 that is not in accordance with this 
part; or
    (2) Require a county committee to withhold taking any action that 
is not in accordance with this part.
    (d) No delegation of authority 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 prospective participants 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 this section, the 
Erodibility Index (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 other sources approved by CCC, in accordance with the 
Field Office Technical Guide (FOTG) of NRCS or other guidelines deemed 
appropriate by NRCS. In no case shall such determination compel CCC to 
execute a contract that CCC does not believe will serve the purposes of 
the program established by this part. Any approved technical authority 
shall utilize CRP guidelines established by CCC.
    (g) CCC may consult with the Forest Service (FS), a State forestry 
agency, or other organizations as determined by CCC to be necessary for 
developing and implementing conservation plans that include tree 
planting as the appropriate practice or as a component of a practice.
    (h) 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).
    (i) CCC may consult with the National Marine Fisheries Service, 
U.S. Fish and Wildlife Service (FWS), or State wildlife agencies for 
such assistance as is determined necessary by CCC to implement the CRP.
    (j) The regulations governing the CRP as of May 12, 2002, shall 
continue to govern contracts in effect as of that date (see 7 CFR part 
1410 contained in the edition of 7 CFR Parts 1200 to 1599 revised as of 
January 1, 2003). This part shall apply to contracts executed on or 
after May 13, 2002


Sec.  1410.2  Definitions.

    (a) The definitions 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 be applicable to this part:
    Agricultural commodity means any crop planted and produced:
    (1) By annual tilling of the soil;
    (2) On an annual basis by one-trip planters; or
    (3) Sugarcane planted or produced in a State.
    Annual rental payment means, unless the context indicates 
otherwise, the annual payment specified in the CRP contract that, 
subject to the availability of funds, is made to a participant to 
compensate a participant for placing eligible land in the CRP.
    Conservation district means a political subdivision of a State, 
Indian Tribe, or territory, organized pursuant to the State or 
territorial soil conservation district law, or Tribal law. The 
subdivision may be a conservation district, soil conservation district, 
soil and water conservation district, resource conservation district, 
natural resource district, land conservation committee, or similar 
legally constituted body.
    Conservation 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 an area designated with actual and 
adverse water quality, wildlife habitat, air quality, or other natural 
resource impacts related to agricultural production activities or to 
assist agricultural producers to comply with Federal and State 
environmental laws or to meet other conservation needs, such as for air 
quality, as determined by the Deputy Administrator.
    Conserving use means any alfalfa, other multi-year grasses and 
legumes planted during 1996 through 2001, and any summer fallow during 
1996 through 2001.
    Considered planted means: land devoted to a conserving use or land 
enrolled in the WBP during the crop year or during any of the 2 years 
preceding the crop year if the contract expired or will expire during 
calendar year 2000, 2001, or 2002; cropland enrolled in CRP; or land 
for which the producer received insurance indemnity payment for 
prevented planting.
    Contour grass strip means a vegetation area that follows the 
contour of the land that complies with the FOTG and a conservation plan 
developed under this part.
    Contract period means the term of the contract which is 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 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, the CRP Program Manager, or a designee.
    Erodibility Index (EI) is, as prescribed by CCC, used to determine 
the inherent erodibility (water or wind) of a soil.
    Farmed wetlands means land defined as farmed wetlands in 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 that is separated from the balance of 
the farm by permanent boundaries such as fences, roads, permanent 
waterways, woodlands, other similar features, or crop-lines, as 
determined by CCC.
    Field Office Technical Guide (FOTG) means the official USDA 
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, animal resources, and cultural resources applicable to the local 
area for which it is prepared.
    Field windbreak, shelterbelt, and/or living snowfence mean a 
vegetative barrier with a linear configuration composed of trees, 
shrubs, or other vegetation, as determined by CCC, that are designated 
as such in a conservation

[[Page 24837]]

plan and that are planted for the purpose of reducing wind erosion, 
controlling snow, improving wildlife habitat, or conserving energy.
    Filter strip means a strip or area of vegetation adjacent to a body 
of water 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 Deputy Administrator.
    Highly Erodible Land (HEL) means land determined to have an EI 
equal to or greater than 8 on the acreage offered.
    Infeasible to farm means an area that is too small or isolated to 
be economically farmed, as determined by the Deputy Administrator.
    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.
    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.
    Offeror means an eligible person as determined by CCC who submits 
an offer of eligible acreage for enrollment into the CRP to enter into 
a CRP contract.
    Operator means a person who is in general control of the farming 
operation on the farm, as determined by CCC.
    Payment period means the 10- to 15-year contract period for which 
the participant receives an annual rental payment.
    Perennial crop means an agricultural commodity that is produced 
from the same root structure for two or more years, as determined by 
CCC.
    Permanent vegetative cover means perennial stands of approved 
combinations of certain grasses, legumes, forbs, shrubs and trees with 
a life span of 10 or more years.
    Permanent wildlife habitat means a vegetative cover with the 
specific purpose of providing habitat, food, or cover for wildlife and 
protecting other environmental concerns for the life of the contract.
    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 FOTG standards and specifications as a part of a 
conservation management system.
    Riparian buffer means a strip or area of vegetation adjacent to a 
river or stream of sufficient width as determined by the Deputy 
Administrator 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 means State agencies, departments, districts, county or city 
governments, municipalities or any other State or local government of 
the State.
    State Technical Committee means a committee established pursuant to 
part 610 of this chapter 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, in consultation with the State Technical 
Committee, where agricultural pollutants contribute to water 
degradation 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 as approved by CCC, for developing 
conservation and/or tree planting plans, determining the eligibility of 
land and practices, implementing and certifying practices, and ensuring 
contract performance.
    Violation means an act by the participant, either intentional or 
unintentional, that would cause the participant to no longer be 
eligible for all or a portion of cost-share, incentive, or annual 
contract payments.
    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 EPA or 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 part 
1467 of this chapter 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 during the 
contract period in return for financial and technical assistance.
    (b) A participant must obtain and adhere to a conservation plan 
prepared in accordance with CRP guidelines, as established and 
determined by CCC. A conservation plan for eligible acreage must be 
obtained by a participant and 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 the provider of 
technical assistance 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 payments under this part, receive cost-share assistance, rental or 
easement payments, tax benefits, or other payments from a State or a 
private organization in return for enrolling lands in CRP. However, a 
participant

[[Page 24838]]

may not receive or retain CRP cost-share assistance if other Federal 
cost-share assistance is provided for such acreage under any 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.

    (a) Except as provided in paragraph (b) of this section, the 
maximum acreage that may be placed in the CRP and the WRP may not 
exceed 25 percent of the total cropland in the county; further, no more 
than 10 percent of the cropland may be subject, in the aggregate, to a 
CRP or WRP easement.
    (b) The restrictions in paragraph (a) of this section may be waived 
by CCC if CCC determines that such action would not adversely affect 
the local economy of the county and that operators in the county are 
having difficulties complying with conservation plans implemented under 
part 12 of this title.
    (c) These restrictions 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;
    (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; or
    (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 before submitting the offer.


Sec.  1410.6  Eligible land.

    (a) In order to be eligible to be placed in the CRP, land must be 
one of the following:
    (1) Cropland that is subject to a conservation plan and has been 
annually planted or considered planted, as defined in Sec.  1410.2, to 
an agricultural commodity in 4 of the 6 crop years from 1996 through 
2001, as determined by the Deputy Administrator, provided further that 
field margins that are incidental to the planting of crops may also be 
considered qualifying cropland to the extent determined appropriate by 
the Deputy Administrator; and is physically and legally capable of 
being planted in a normal manner to an agricultural commodity, as 
determined by the Deputy Administrator; or
    (2) marginal pasture land, as determined by the Deputy 
Administrator, that:
    (i) is enrolled in the crop year or has been enrolled during any of 
the 2 years preceding the crop year in the WBP; and
    (A) The WBP contract of the owner or operator of the cropland 
expired or will expire in calendar year 2000, 2001, or 2002; and
    (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 
CCC, 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, or when planted with appropriate vegetation for the area, 
including vegetation suitable for wetland restoration or wildlife 
habitat, as determined appropriate by the Deputy Administrator, of 
substantially reducing sediment and/or nutrient runoff that otherwise 
would be delivered to the adjacent stream or waterbody or for water 
quality purposes; or
    (3) Must be acreage enrolled in the CRP during the final year of 
the CRP contract provided the scheduled expiration date of the current 
CRP contract is before the effective date the new CRP contract, as 
determined by the Deputy Administrator.
    (b) Land qualifying under paragraphs (a)(1) or (a) (2) of this 
section must also meet one of the following criteria, to be eligible 
for a contract:
    (1) Be a field or portion of a field determined to be suitable for 
use, as determined by the Deputy Administrator, as a permanent wildlife 
habitat, filter strip, riparian buffer, contour grass strip, grass 
waterway, field windbreak, shelterbelt, living snowfence, other uses as 
determined by the Deputy Administrator, land devoted to 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. 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 CCC:
    (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 or nutrient runoff that 
otherwise would be delivered to the adjacent stream or waterbody;
    (2) Be a field that has evidence of scour erosion caused by out-of-
bank flows of water, as determined by CCC:
    (i) 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 that 
lies between the water source and the inland limit of the scour 
erosion.
    (iii) Or, if the full field is not eligible for enrollment under 
this paragraph, be the cropland between the waterbody and inland limit 
of the scour erosion together with, as determined by the Deputy 
Administrator, additional areas that would otherwise be unmanageable

[[Page 24839]]

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 the Forest Service, in which case the eligible 
cropland shall be devoted to another acceptable permanent vegetative 
cover in accordance with the FOTG;
    (3) Be cropland that would facilitate a net savings in groundwater 
or surface water of the agricultural operation of the producer as 
determined by CCC;
    (4) Be cropland in a portion of a field not enrolled in the CRP, if 
more than 50 percent of the remainder of the field is enrolled as a 
buffer practice, if the portion of the field not enrolled in the CRP 
will be enrolled as part of the buffer practice, and if as determined 
by CCC:
    (i) The remainder of the field is infeasible to farm; and
    (ii) The remainder of the field is enrolled at an annual payment 
rate not to exceed the maximum annual calculated soil rental rate;
    (5) 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;
    (6) Be devoted to certain covers, as determined by the Deputy 
Administrator, that 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;
    (7) Be non-irrigated or irrigated cropland that produces or serves 
as the recharge area, as determined by the Deputy Administrator, for 
saline seeps, or acreage that 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;
    (8) 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;
    (9) Be within a public wellhead protection area;
    (10) Be within a designated conservation priority area;
    (11) Be designated as a cropped wetland and appropriate associated 
acreage, as determined by the Deputy Administrator;
    (12) Be cropland that, as determined by the Deputy Administrator, 
is associated with noncropped wetlands and would provide significant 
environmental benefits; or
    (13) Notwithstanding paragraph (a)(1) of this section, be cropland 
devoted to a perennial crop, as determined by CCC; such cropland will 
only be eligible for continuous signup practices authorized by Sec.  
1410.30 and CREP practices authorized by Sec.  1410.50(b).
    (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 during any part of the contract term except 
for eligible land under paragraph (a)(2) and (3) of this section, as 
determined by CCC; or
    (3) Land already enrolled in the CRP unless authorized by Sec.  
1410.6(a)(3), as determined by the Deputy Administrator.


Sec.  1410.7  Duration of contracts.

    (a) Except as provided in paragraphs (b) or (c) 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 
between 10 years and 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) Subject to CCC review, State FSA committees, in consultation 
with NRCS and the State Technical Committee, may designate conservation 
priority areas within guidelines established by the Deputy 
Administrator. Such designation must clearly define conservation and 
environmental objectives and provide analysis of how CRP can cost-
effectively address such objectives. Generally, the total acreage of 
all conservation priority areas, in aggregate, shall not total more 
than 33 percent of the cropland in a State unless there are identified 
and documented extraordinary environmental needs, as determined by the 
Deputy Administrator.
    (c) As determined by the Deputy Administrator, a region shall be 
eligible for designation as a priority area only if the region has 
actual significant adverse water quality, air quality, wildlife 
habitat, or other natural resource 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 re-designated, except they may be withdrawn:
    (1) At the request of the appropriate State water quality agency; 
or
    (2) By the Deputy Administrator.
    (e) In those areas designated as conservation priority areas, under 
this section, cropland is considered eligible for enrollment according 
Sec.  1410.6(b)(10) based 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 threatened and endangered 
species or those species that may become threatened and endangered), as 
determined by the Deputy Administrator.


Sec.  1410.9  Conversion to trees.

    An owner or operator who has entered into a CRP contract prior to 
November 28, 1990, may elect to convert areas of highly erodible 
cropland, subject to such contract, that is devoted to permanent 
vegetative cover, from such cover to hardwood trees, (including alley 
cropping and riparian buffers of hardwood trees, where permitted by 
CCC), windbreaks, shelterbelts, or wildlife corridors.
    (a) For 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) For any contract modified under this section in which such 
areas are converted to windbreaks, shelterbelts, or wildlife corridors, 
the owner must agree to maintain such plantings for a time period 
established by the Deputy Administrator at the time of the contract 
modification.
    (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 
under 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

[[Page 24840]]

been originally devoted to such new conservation measures.
    (d) For any contract modified under this section, the participant 
must participate in the Forest Stewardship Program (16 U.S.C. 2103a).


Sec.  1410.10  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 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 applicable incentive payments need not be 
refunded 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 received for wetland restoration on the same land. In 
addition to the cost-share limitation in Sec.  1410.41, an additional 
one-time financial incentive may be provided to encourage restoration 
of the hydrology of the site.


Sec.  1410.11  Farmable Wetlands Program.

    (a) In addition to other allowable enrollments, land may be 
enrolled in this program through the Farmable Wetlands Program within 
the overall Conservation Reserve Program provided for in this part.
    (b) As determined by the Deputy Administrator, owners and/or 
operators may enroll cropland that has been planted or considered 
planted to an agricultural commodity, as defined in Sec.  1410.2 in 
three of the ten most recent crop years, provided that the cropland:
    (1) Is a wetland, including a converted wetland, as determined by 
CCC, that does not exceed the size limitations of this section; and
    (2) Subject to other provisions of this section, is buffer acreage 
that provides protection for and is contiguous to the wetland.
    (c) An owner or operator may not enroll in this program any 
wetland, or land in a flood plain, that:
    (1) Is located adjacent to a perennial riverine system wetland as 
identified on the final national wetland inventory map of the 
Department of the Interior; or
    (2) Is located adjacent to a perennial stream identified on a 1-
24,000 scale map of the United States Geological Survey, when the area 
is not delineated on a final national wetland inventory map.
    (d) Total enrollment in the CRP under this section shall not exceed 
1 million acres.
    (e) The maximum size of a wetland enrolled under this section shall 
be 10 contiguous acres of which only the first 5 acres shall be 
eligible for payments.
    (f) The maximum size of any buffer acreage described in paragraph 
(b)(2)(ii) of this section shall be the greater of:
    (1) An area three times the size of the wetland described in 
paragraph (b)(1) of this section; or
    (2) An area that continues no more than 150 feet from the edge of 
the wetland.
    (g) The maximum total acreage enrolled in the CRP under this 
section, including any wetland and buffer acreage described in 
paragraph (b)(2) of this section, in a tract, as determined by the 
Deputy Administrator, of an owner or operator, is 40 acres.
    (h) All participants subject to a CRP contract under this section 
must agree to restore the hydrology of the wetland described in 
paragraph (b)(1) of this section to the maximum extent possible, as 
determined by the Deputy Administrator, in accordance with the FOTG.
    (i) Offers for contracts under this section shall be submitted 
under continuous signup provisions as authorized in Sec.  1410.30.
    (j) Except as otherwise determined by the Deputy Administrator, all 
other requirements of this part shall apply to enrollments under this 
section, and the Deputy Administrator by contract or otherwise may add 
such other requirements or conditions as are deemed necessary. Such 
additional conditions include but are not limited to payment 
limitations, adjusted gross income limitations, and limitations on the 
amount of acreage that can be enrolled in any one county.


Sec. Sec.  1410.12-Sec. 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. 
However, a contract will not be terminated for failure to establish an 
approved vegetative or water cover on the land if, as determined by the 
Deputy Administrator:
    (i) The failure to plant or establish such cover was due to 
excessive rainfall, flooding, or drought;
    (ii) The land subject to the contract on which the participant 
could practicably plant or establish to such cover is planted or 
established to such cover; and
    (iii) The land on which the participant was unable to plant or 
establish such cover is planted or established to such cover after the 
wet or drought conditions that prevented the planting or establishment 
subside;
    (3) Establish temporary vegetative cover either when required by 
the conservation plan or, as determined by the Deputy Administrator, if 
the permanent vegetative cover cannot be timely established;
    (4) Comply with part 12 of this title;
    (5) 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;
    (6) 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 contract period;
    (7) Comply with noxious weed laws of the applicable State or local 
jurisdiction on such land;
    (8) 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 as 
necessary or may be specified in the CRP conservation plan and to avoid 
an adverse impact on surrounding land, taking into consideration water 
quality, wildlife, and other needs, as determined by the Deputy 
Administrator; and
    (9) Be jointly and severally responsible, if the participant has a 
share of the payment greater than zero, with the other contract 
participants in compliance with the provisions of such contract and the 
provisions of this part and for any refunds or payment adjustments that 
may be required for

[[Page 24841]]

violations of any of the terms and conditions of the CRP contract and 
this part.


Sec.  1410.21  Obligations of the Commodity Credit Corporation.

    CCC shall, subject to the availability of funds:
    (a) Share up to 50 percent of 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; and
    (b) Pay to the participant for a period of years not in excess of 
the contract period an annual rental payment, including applicable 
incentive payments, in such amounts as may be specified in the CRP 
contract.


Sec.  1410.22  CRP conservation plan.

    (a) The producer shall obtain a CRP conservation plan that complies 
with CCC guidelines and is approved by the conservation district for 
the land to be entered in the CRP. If the conservation district 
declines to review the CRP conservation plan, or disapproves the 
conservation plan, such approval may be waived by CCC.
    (b) The practices included in the CRP 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 CRP 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 CRP conservation plan shall address the 
goals included in the conservation priority area designation authorized 
under Sec.  1410.8.
    (e) All CRP conservation plans and revisions of such plans shall be 
subject to the approval of CCC.
    (f) Mid-cover management shall be conducted according to an 
approved conservation plan as part of the CRP contractual obligation 
such as light discing and burning as determined by the Deputy 
Administrator.


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 aquiculture for 
commercial purposes.


Sec. Sec.  1410.24-1410.29  [Reserved]


Sec.  1410.30  Signup.

    Offers for contracts shall be submitted only during signup periods 
as announced periodically by the Deputy Administrator, except that CCC 
may hold a continuous signup for land to be devoted to particular uses, 
as CCC deems necessary. Generally, continuous signup is limited to 
those offers that would otherwise rank highly under Sec.  1410.31(b) 
and may include high priority practices such as filter strips, riparian 
buffers, shelterbelts, field windbreaks, and living snow fences, grass 
waterways, shallow water areas for wildlife, salt-tolerant vegetation, 
and practices to benefit certain approved public wellhead protection 
areas.


Sec.  1410.31  Acceptability of offers.

    (a) Except as provided in paragraph (c) of this section, producers 
may submit offers for the amounts they are willing to accept as rental 
payments to enroll their acreage in the CRP. The offers may, to the 
extent practicable, be evaluated on a competitive basis in which the 
offers selected will be those where the greatest environmental benefits 
relative to cost are generated, and provided that the offer is not in 
excess of the maximum acceptable payment rate established by the Deputy 
Administrator for the for the area offered. Acceptance or rejection of 
any offer, however, shall be in the sole discretion of the CCC and 
offers may be rejected for any reason as determined needed to 
accomplish the goals of the program.
    (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) Soil productivity;
    (5) Likelihood that enrolled land will remain in non-agriculture 
use beyond the contract period, considering, for example, tree 
planting, permanent wildlife habitat, or commitments by a participant 
to a State or other entity to extend the conservation plan;
    (6) Air quality; and
    (7) Cost of enrolling acreage in the program.
    (c) Acreage determined eligible for continuous signup, as provided 
in Sec.  1410.30, may be automatically accepted in the program if the:
    (1) Land is eligible under Sec.  1410.6, as determined by the 
Deputy Administrator;
    (2) A producer is eligible under Sec.  1410.5; and
    (3) A producer 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 is comprised of:
    (1) The terms and conditions for participation in the CRP;
    (2) The CRP conservation plan; and
    (3) Any other materials or agreements determined necessary by CCC.
    (c)(1) In order to enter into a CRP contract, the producer 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 producer 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 producer; and
    (2) The owners of the cropland to be placed in the CRP and other 
eligible participants, 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;

[[Page 24842]]

    (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 Federal, State or local 
conservation program;
    (5) The CRP practice fails or is not established after a certain 
time period, as determined by the Deputy Administrator, and 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) CCC determines that such a termination is needed in the public 
interest.
    (g)(1) Contracts for land enrolled in CRP before January 1, 1995, 
that have been continuously in effect may be unilaterally terminated by 
all CRP participants on a contract except for contract acreage:
    (i) Located within a certain distance 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 USDA according to part 
12 of this title;
    (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 by the 
participant 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 CRP during future signup periods, provided that the acreage 
otherwise meets the current eligibility criteria; and
    (iv) Participants must 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 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 all payments 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) As agreed 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, as determined by the Deputy Administrator:
    (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 as 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. Sec.  1410.34-1410.39  [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 only for the cost-effective establishment or 
installation of an eligible practice, as determined by CCC.
    (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 that 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.  1410.9(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, enhance water quality, wildlife habitat, or 
increase 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 that, 
when added to such 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. CCC may allow 
cost-share payments for maintenance costs, consistent with the 
provisions of 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

[[Page 24843]]

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) 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 or a private organization in 
return for enrolling lands in CRP. However, as provided under Sec.  
1410.40(f), 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 
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) Annual rental payments, except for land accepted that was 
formerly enrolled under the WBP, include a payment based on a weighted 
average soil rental rate or marginal pastureland rental rate, as 
appropriate, and an incentive payment as a portion of the annual 
payment of certain practices, as determined by the Deputy 
Administrator. Payments for land accepted that was formerly enrolled 
under the WBP are limited to annual rental payments received under the 
WBP.
    (c) The annual rental payment shall be divided among the 
participants on a single contract as agreed to in such contract.
    (d) The maximum amount of rental payments that 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.
    (e) 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 prorated based on the actual days of 
ownership of the property by each party.
    (f) 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 available 
in the local FSA office and, as determined by the Deputy Administrator, 
shall indicate, when appropriate, that:
    (1) Offers of contracts by producers who request rental payments 
greater than the schedule for their soil(s) will be rejected;
    (2) Offers of contracts submitted under continuous signup 
authorized at Sec.  1410.30 may be accepted without further evaluation 
when the requested rental rate is less than or equal to the calculated 
weighted soil rental rate, based on the three predominant soils listed; 
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.
    (g) Additional financial incentives may be provided to producers 
who offer contracts expected to provide especially high environmental 
benefits, 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  Adjusted Gross Income.

    Benefits under this part shall not be available to persons whose 
adjusted gross income exceeds 2.5 million dollars annually as 
determined under the standards set out in part 1400 of this chapter 
which shall be applicable in making adjusted gross income 
determinations as they apply to the CRP.


Sec. Sec.  1410.45-1410.49  [Reserved]


Sec.  1410.50  Enhancement programs.

    (a) For contracts to which a State, political subdivision, or 
agency thereof, has succeeded in connection with an approved 
conservation reserve state 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 that has been approved for 
that purpose by CCC.
    (b) CCC may enter into other conservation reserve enhancement 
program agreements in accordance with terms deemed appropriate by CCC, 
with a State, political subdivision, or agency thereof, 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 for the transferred land.
    (2) For 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 of the CRP contract of the previous 
participant.
    (3) If the new owner or operator is approved as 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 past or present 
participant 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, or such other time as the Deputy Administrator 
determines to be appropriate, of such transfer, such contract shall be 
terminated with respect to the affected portion of such land and the 
original participant:
    (1) Forfeits all rights to any future payments for that acreage;
    (2) Shall refund all previous payments received under the contract 
by the participant or prior participants, plus interest, except as 
otherwise specified

[[Page 24844]]

by the Deputy Administrator. The provisions of Sec.  1410.32(h) shall 
apply.
    (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 
contract participants, such operator may, as permitted by CCC, continue 
to receive payments under such contract if:
    (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, plus interest; and
    (ii) Pay liquidated damages to CCC in an amount as specified in the 
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 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 this part, these 
regulations shall prevail, and CCC may, at its sole discretion, 
terminate or modify the CRP contract, effective immediately or at a 
later date as CCC determines appropriate.


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

    The provisions of Sec.  718.8 of this chapter relating to 
performance based upon the action or advice of an authorized 
representative of the Department shall be applicable to this part, and 
may be considered as a basis to provide relief to persons subject to 
sanctions under this part to the extent that relief is otherwise 
required by this part.


Sec.  1410.55  Access to land under contract.

    (a) Any representative of the U.S. Department of Agriculture, or 
designee thereof, shall, for purposes related to this program, be 
provided by the offeror or participant as the case may be, with access 
to land that is:
    (1) The subject of an application for a contract under this part; 
or
    (2) Under contract or otherwise subject to this part.
    (b) For land identified in paragraph (a) of this section, the 
participant or producer shall provide such representatives with access 
to examine records for the land to determine land classification, 
erosion rates, or other purposes and to determine whether it is in 
compliance with the terms and conditions of the CRP contract.


Sec.  1410.56  Division of payments and provisions about tenants and 
sharecroppers.

    (a) Payments received under this part shall be divided as specified 
in the applicable contract and CCC shall ensure that producers who 
would have an interest in acreage being offered receive treatment that 
is 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:
    (1) The operator or tenant requests in writing to be removed from 
the CRP contract;
    (2) The operator or tenant files for bankruptcy and the trustee or 
debtor in possession fails to affirm the contract, to the extent 
permitted by applicable bankruptcy laws;
    (3) The operator or tenant 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) A court of competent jurisdiction orders 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 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 applicable 
State law, may be removed from a contract by CCC. CCC shall assume the 
tenancy is being maintained unless notified otherwise by a party to 
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.

    Participants 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 in accordance with the 
administrative appeal regulations at parts 11 and 780 of this title.
    (b) Determinations by NRCS assigned to make such determination for 
the Deputy Administrator 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 CCC determines that a person has employed a scheme or device 
to defeat the purposes of this part, or 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 contract responsibilities 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, on such land, and any interest of any lender 
in such land where the lender has, will, or can

[[Page 24845]]

legally 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 CCC determines 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 that do not 
comply with the conservation plan. Any amounts paid under these 
circumstances shall be refunded, together plus with interest as 
determined by CCC, and any amounts otherwise due to the 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 payments 
due under this part shall be paid to the participant's successor(s) 
under 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.
    (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 that 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) Cropland 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 definition in part 718 of this title.
    (f) 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, as determined by the Deputy 
Administrator.


Sec.  1410.63  Permissive uses.

    (a) Unless otherwise specified by the Deputy Administrator, no uses 
of any kind are authorized on designated CRP acreage during the 
contract period.
    (b) Commercial shooting preserves may be operated on CRP acreage 
provided:
    (1) The commercial shooting preserve is licensed by a State agency 
such as the State fish and wildlife agency or State department of 
natural resources;
    (2) The commercial shooting preserve is operated in a manner 
consistent with the applicable State agency rules governing commercial 
shooting preserves;
    (3) CRP cover is maintained according to the conservation plan; and
    (4) No barrier fencing or boundary limitations exist that prohibit 
wildlife access to or from the CRP acreage unless required by State 
law.
    (c) The following activities may be permitted on CRP enrolled land:
    (1) Managed haying and grazing, including the harvest of biomass:
    (i) In exchange for a reduction of the annual payment in an amount 
determined by the Deputy Administrator;
    (ii) Not to exceed once every three years after the CRP vegetative 
cover has been established; and
    (iii) According to an approved CRP conservation plan consistent 
with the conservation of soil, water quality, and wildlife habitat 
(including habitat during nesting and brood rearing seasons) and in 
accordance with FOTG standards.
    (2) Managed grazing that is incidental to the gleaning of crop 
residue, but only in exchange for a reduction in the annual rental 
payment, as determined appropriate by the Deputy Administrator.
    (3) Wind turbines on CRP land installed in numbers and locations as 
determined appropriate by the Deputy Administrator considering the 
location, size, and other physical characteristics of the land, the 
extent to which the land contains wildlife, wildlife habitat, and the 
purposes of the CRP.
    (4) Spot grazing, if necessary for control of weed infestation, not 
to exceed a 30-day period according to an approved conservation plan, 
but only in exchange for a payment reduction determined by the Deputy 
Administrator.
    (5) Forestry maintenance such as pruning, thinning, and timber 
stand improvement on lands converted to forestry use only in accordance 
with a conservation plan and in exchange for an applicable reduction in 
the annual rental payment as determined by the Deputy Administrator.
    (6) The sale of carbon, water quality, or other environmental 
credits, as determined by the Deputy Administrator.

    Signed at Washington, DC, on May 2, 2003.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 03-11405 Filed 5-5-03; 3:35 pm]
BILLING CODE 3410-05-P