[Federal Register Volume 68, Number 107 (Wednesday, June 4, 2003)]
[Notices]
[Page 33443]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13928]


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 Notices
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  Federal Register / Vol. 68, No. 107 / Wednesday, June 4, 2003 / 
Notices  

[[Page 33443]]



DEPARTMENT OF AGRICULTURE

Office of the Secretary


Forest Land Enhancement Program; Determination of Primary Purpose 
of Certain Payments for Federal Tax Purposes

AGENCY: Office of the Secretary, USDA.

ACTION: Notice of determination.

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SUMMARY: The Secretary of Agriculture has determined that cost-share 
payments made to individuals under the Forest Land Enhancement Program 
(FLEP) are made primarily for the purpose of conserving soil and water 
resources, protecting or restoring the environment, improving forests, 
or providing a habitat for wildlife. This determination permits 
recipients to exclude certain payments under FLEP from gross income for 
Federal income tax purposes to the extent allowed by the Internal 
Revenue Service.

DATES: The Secretary's determination was signed May 21, 2003.

ADDRESSES: Questions may be addressed to Hal Brockman, Program Manager, 
Forest Land Enhancement Program, Cooperative Forestry Staff, Forest 
Service, USDA, 1400 Independence Avenue, SW., Mail Stop 1123, 
Washington, DC 20250-1123. A copy of the determination is available 
upon request. Information about the Forest Land Enhancement Program may 
also be obtained from the World Wide Web/Internet at http://www.fs.fed.us/spf/coop/flep.htm.

FOR FURTHER INFORMATION CONTACT: Hal Brockman, Cooperative Forestry 
Staff, USDA Forest Service, (202) 205-1694.

SUPPLEMENTARY INFORMATION: Section 126 of the Internal Revenue Code (26 
U.S.C. 126, as amended) provides that all or part of payments made to 
persons under certain cost-sharing programs in 26 U.S.C. (a)(1) through 
(10) may be excluded from the recipient's gross income for Federal 
income tax purposes under two conditions: (1) If the Secretary of 
Agriculture determines that the payments are made primarily for the 
purpose of conserving soil and water resources, protecting or restoring 
the environment, improving forests, or providing a habitat for wildlife 
(the criteria for making such a determination are set forth in 7 CFR 
part 14, Determining the Primary Purpose of Certain Payments for 
Federal Tax Purposes), and (2) If the payments are determined by the 
Secretary of the Treasury as not increasing substantially the annual 
income derived from the property.
    To make such a determination, the Secretary of Agriculture 
evaluates a cost-share conservation program based on the criteria set 
out in 7 CFR part 14. Following a primary purpose determination by the 
Secretary of Agriculture, the Secretary of the Treasury must determine 
that payments made under the cost-share conservation program do not 
substantially increase the annual income derived from the property 
benefited by the payments.
    Therefore, having carefully examined the authorizing legislation 
for the Forest Land Enhancement Program (FLEP) (Title VIII of the Farm 
Security and Rural Investment Act of 2002; Pub. L. 107-171) and the 
planned operating procedures, the Secretary of Agriculture has 
determined, according to the criteria set forth in 7 CFR part 14, that 
the cost-share payments for implementing approved practices under FLEP 
are made primarily for the purpose of conserving soil and water 
resources, improving forests, protecting and restoring the environment, 
and providing a habitat for wildlife.
    Subject to further determination by the Secretary of the Treasury 
that payments made under FLEP do not substantially increase the annual 
income derived from the property benefited by these payments, this 
determination by the Secretary of Agriculture permits payment 
recipients to exclude from gross income for Federal income tax 
purposes, all or part of the cost-share payments made under this 
program to the extent allowed by the Internal Revenue Service.

    Dated: May 21, 2003.
Ann M. Veneman,
Secretary of Agriculture.
[FR Doc. 03-13928 Filed 6-3-03; 8:45 am]
BILLING CODE 3410-11-P