[Federal Register Volume 69, Number 43 (Thursday, March 4, 2004)]
[Rules and Regulations]
[Pages 10300-10306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-4861]



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Part II





Department of Agriculture





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Farm Service Agency



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7 CFR Part 701



Emergency Conservation Program; Final Rule

  Federal Register / Vol. 69, No. 43 / Thursday, March 4, 2004 / Rules 
and Regulations  

[[Page 10300]]


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DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 701

RIN 0560-AG26


Emergency Conservation Program

AGENCY: Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: This final rule adopts with revisions a proposed rule that set 
out regulations for the Emergency Conservation Program (ECP) and also 
provides for resolving matters related to other programs that have been 
administered under the same part. The revisions made are essentially 
technical in nature.

DATES: March 4, 2004.

FOR FURTHER INFORMATION CONTACT: Clayton Furukawa, ECP Program Manager, 
Conservation and Environmental Programs Division, USDA/FSA/CEPD, STOP 
0513, 1400 Independence Avenue, SW., Washington, DC 20250-0513, 
telephone 202-690-0571. Electronic mail: [email protected].

SUPPLEMENTARY INFORMATION:

Discussion of Final Rule

    The Emergency Conservation Program (ECP) provides cost-share 
assistance to farmers and ranchers to rehabilitate farmland damaged by 
wind erosion, floods, hurricanes, or other natural disasters, and for 
carrying out emergency water conservation measures during periods of 
severe drought.
    On August 1, 2002, FSA published a proposed rule in the Federal 
Register (67 FR 49879). The proposed rule removed references to the 
Agricultural Conservation Program (ACP) and the Forestry Incentives 
Program (FIP). ACP was repealed by the Federal Agriculture Improvement 
and Reform Act of 1996 (Pub. L. 104-127) and administration of FIP was 
reassigned to the Natural Resources Conservation Service (NRCS) by the 
Department of Agriculture Reorganization Act of 1994 (Pub. L. 103-354). 
The proposed rule also proposed to clarify, expand, and revise the ECP 
to reflect current policy and make the program more efficient and 
easier to administer. The proposed rule had a 60-day comment period, 
which ended September 30, 2002.

Changes From Proposed Rule

    No substantive changes were made to the proposed rule. The Agency 
removed provisions that made participants ineligible for ECP if they 
received an FSA emergency loan. Also, section 701.15 of this rule 
provides for cost sharing for producers who started a practice up to 60 
days before their county received a disaster designation. And the 
part's sections were renumbered.

Summary of Public Comments

    Comments in response to the proposed rule were received from one 
farmer organization. The comments are addressed as follows:

Assistance to Confinement Operations

    First, the respondent noted that in the preamble of the proposed 
rule FSA stated that it was considering allowing ECP assistance for 
confined livestock operations for natural disasters other than drought, 
to include assistance such as debris removal, and that the proposed 
rule gave no indication of what other options were being considered. 
The proposed rule described the only option being considered, that is, 
allowing ECP assistance for cleanup of confinement buildings in non-
drought disasters, and included it in the proposed rule in order to 
obtain public comments. The respondent does not believe such assistance 
should be allowed. FSA agrees and did not include that change in the 
final rule.
    Second, the respondent agrees with the provision making land used 
for greenhouses or other confined areas, such as corrals, milking 
parlors, barn lots or feeding areas, ineligible. However, they also 
believe restoration of animal waste lagoons should be ineligible as 
well. The rule does not specifically address restoration of animal 
waste lagoons. However, conservation structures are eligible under the 
statute and are specifically provided for in section 701.12. The 
lagoons are considered to be conservation structures. The respondent's 
suggestion was therefore not adopted in the final rule.

Agency Discretion

    The respondent believes the proposed rule allows FSA too much 
discretion in determinations that should be spelled out in the rule and 
subject to public notice and comment, as exemplified by the frequent 
use of the phrase ``as determined by the Deputy Administrator.'' The 
respondent identifies several specific areas of concern.
    First, the rule allows FSA discretion in determining broad program 
decisions such as application periods, deadlines and provisions for 
late applications. The respondent agrees that such discretion is 
appropriate and no change was made in the final rule in that respect.
    Second, FSA issues notices, handbooks and other policy statements 
regarding the ECP, as it does for all of its programs. These internal 
directives are available to the public at any FSA office. The 
respondent believes that the rule leaves too many substantive 
provisions to be implemented through such vehicles rather than through 
public notice and comment rulemaking. The respondent cites a specific 
provision, what qualifies as farmland for ECP purposes, as an example, 
and believes FSA should include such standards in the rule. FSA agrees 
that substantive program provisions should be described in as detailed 
a manner as possible in the rule. The final rule was revised to explain 
provisions more thoroughly and minimize the number of discretionary 
provisions and exceptions. However, the possible situations and 
disasters that the ECP may need to address in the future is too great 
for the regulation to leave the agency without considerable 
flexibility. Thus, in the final rule, a number of determinations are 
left to FSA's discretion.
    Third, the respondent states that section 701.80 of the proposed 
rule, Not an entitlement program, which states that the regulations do 
not create an entitlement and that the Deputy Administrator's powers 
are permissive, could deter producer challenges to agency decisions. 
The respondent argues that the final rule should make it clear that 
producers may appeal decisions of the Deputy Administrator to the 
extent they turn on questions of fact and compliance with clear 
standards, whether in a rule or a policy statement. To avoid any 
possible misunderstanding, that section was removed. It should be noted 
that section 701.34 of the final rule addresses appeals and 
incorporates by reference the appeal regulations at 7 CFR parts 7 and 
780, which apply to all FSA programs. It should also be noted, however, 
that section 701.80 of the proposed rule was accurate in setting out 
that the ECP is not an entitlement program. A provision to that effect 
has been added elsewhere in the regulations. ECP requests can be denied 
for any reason and all claims are subject to the availability of funds. 
Also, a provision in section 701.1 relating to appeals was dropped as 
unnecessary because the other provisions in the rule relating to 
appeals are governing on the matter.

Cost-Share Levels

    The proposed rule proposed simplifying the calculation of maximum

[[Page 10301]]

ECP cost-share levels by providing for a standard maximum cost-share of 
75 percent of the maximum allowable cost of a practice, as opposed to 
the previously used sliding scale that provided lower percentages for 
increasing costs. The respondent agrees that the calculation should be 
simplified, but offers a suggestion for a somewhat different process. 
By its suggestion, the maximum cost share might be 75 percent up to the 
median of ECP costs for the last three years, based on a survey of FSA 
program use, plus a substantially lower rate, perhaps 30 percent, of 
remaining costs. Such a process, the respondent argues, would be easier 
to administer than the old one, would retain the benefits of a tiered 
system, and would prevent limited ECP funds from being exhausted by a 
few large programs.
    FSA did not adopt the suggestion. The Agency feels a 75-percent 
cost-share rate, as proposed, is sound for several reasons, primarily 
because practice costs vary between regions and often from county to 
county. Basing eligible costs on a statistical median determined at the 
national level could be detrimental to producers in high-cost areas 
relative to those in low-cost areas. Conversely, costs based on smaller 
geographic areas could be highly inaccurate because the smaller areas 
may have had insufficient similar practices completed during the survey 
period, be it 3 years or another period. Inaccuracy would increase as 
the area and number of observations used to calculate the median cost 
declined. Also, there is not a discrete number of eligible ECP 
practices. Practices may include combinations of activities to address 
the problems caused by the disaster. Analyzing the costs to obtain a 
National costs for conservation measures would be impractical. Thus, 
FSA feels that State and County committees are in the best position to 
determine costs for conservation practices in their area, subject to 
guidance provided by National Office directives, and to limit the 
Agency's share of that cost as provided in this rule. The respondent's 
concern that large or expensive projects will exhaust available funding 
is mitigated by the limitations on payments per person and per practice 
provided in the rule.

Assistance for Limited Resource Farmers

    The proposed rule solicited comments on providing increased cost 
shares of up to 90 percent to limited resource farmers. The respondent 
supports such a change and also suggests that FSA develop guidelines 
for outreach to limited resource farmers. FSA agrees and the final rule 
provides for cost shares of up to 90 percent to limited resource 
farmers. With regard to outreach, FSA has procedures for outreach to 
limited resource farmers and intends to continue to implement them.

Reduction for Emergency Loans

    The proposed rule provided that FSA emergency loans received by a 
farmer for ``same or similar expenses'' as the ECP would be counted as 
duplicate payments, and ECP cost-share payments would be reduced 
accordingly. The respondent suggests that this provision be removed 
because loans, unlike grants, must be repaid, and thus are not truly 
cost-share payments. FSA agrees and removed the provision from the 
final rule but retains the right to adjust benefits to avoid 
duplication with other programs.

Duplicate Payments and Effect of Other Assistance on Eligible Costs

    The respondent states that the proposed rule is not clear on how 
receipt of outside assistance would affect eligibility for ECP, partly 
because the issue is addressed in several different sections in ways 
that appear to be inconsistent and partly by confusing duplicate 
payments with a higher rate of cost share. The Agency agrees that the 
issue could be explained more clearly. In this rule the Agency clearly 
labeled the section limiting the maximum cost share per practice, 
separated the maximum cost share per person into a distinct section, 
and clarified that participation in other conservation programs that 
overlap the ECP land and practice can affect the amount of ECP cost 
share a participant may receive. Also, the agency tried to limit 
confusion by placing the limits and restrictions as close to each other 
in the rule, and in as logical an order, as possible.

Offsets

    Section 701.87 of the proposed rule proposed to make ECP payments 
subject to collection by administrative and Treasury offsets. The 
respondent urges FSA to use statutory authority to exempt disaster-
related payments from offsets and not offset ECP payments. However, 
there is no statutory authority for USDA on its own to exempt ECP 
payments from offsets, and USDA does not feel in any event that such an 
exemption is justified at this time, but will continue to review that 
consideration as the need arises. Generally, it is essential that 
farmers remain current with their obligations or seek specific relief 
related to those perennial difficulties if the farmer is going to 
continue to make use of Federal agricultural programs.

Water Resources

    The respondent mentions that the current rule refers to affected 
farmland and water resources but the proposed rule only refers to 
farmland. The respondent assumes that water resources that meet all 
other eligibility requirements would continue to be eligible for 
assistance under the proposed rule.
    The former rule provided regulations for three conservation 
programs: ACP, FIP and ECP. This rule provides regulations for only the 
ECP, and the ECP is not changed as it relates to water resources. 
Specifically defining water resources as eligible throughout the rule 
was not necessary as water-related eligibilities are defined and set 
out elsewhere by specific provisions in the regulations. FSA will 
continue to administer the ECP in accordance with authorizing law and 
provide assistance for water resources if authorized.

Other Changes

    Other clarifying or technical changes have been made. For example, 
a provision related to liability for suits against the U.S. in the 
event of a practice failure or problem was removed as redundant and as 
stating the obvious.

Executive Order 12866

    In conformance with Executive Order 12866 this rule has been 
determined to be not significant and, therefore, it has not been 
reviewed by the Office of Management and Budget.

Federal Assistance Programs

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

Regulatory Flexibility Act

    This rule is not subject to the Regulatory Flexibility Act because 
the Farm Service Agency (FSA) is not required by 5 U.S.C. 553 or any 
other law to publish a notice of proposed rulemaking for this rule.

Environmental Review

    The Agency completed a final environmental impact statement and 
record of decision, which are on file and available to the public in 
the Administrative Record at the address specified in the ADDRESSES 
section. It is

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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 requires intergovernmental consultation with State and 
local officials. See the notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115 (June 24, 1983).

Executive Order 12612

    This rule does not have Federalism implications that warrant the 
preparation of a Federalism Assessment. This rule will not have a 
substantial direct effect on States or their political subdivisions or 
on the distribution of power and responsibilities among the various 
levels of government.

Executive Order 12988

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

Unfunded Mandates Reform Act of 1995 (UMRA)

    This rule contains no Federal mandates under the regulatory 
provisions of Title II of the UMRA for State, local, and tribal 
government or the private sector. Therefore, this rule is not subject 
to the requirements of sections 202 and 205 of the UMRA.

Paperwork Reduction Act

    The Office of Management and Budget approved the information 
collection requirements of this regulation, provided an expiration date 
of October 31, 2005, and assigned it OMB control number 0560-0082.

List of Subjects in 7 CFR Part 701

    Agriculture, Disaster assistance, Environmental protection, Natural 
resources, Reporting and recordkeeping requirements, Soil conservation, 
Water resources.

0
Accordingly, 7 CFR part 701 is revised to read as follows:

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

Sec.
701.1 Administration.
701.2 Definitions.
701.3 Scope.
701.4 Producer eligibility.
701.5 Land eligibility.
701.6-701.9 [Reserved]
701.10 Qualifying minimum cost of restoration.
701.11 Prohibition on duplicate payments.
701.12 Eligible ECP practices.
701.13 Submitting requests.
701.14 Onsite inspections.
701.15 Starting practices before cost-share request is submitted; 
non-entitlement to payment; payment subject to the availability of 
funds.
701.16 Practice approval.
701.17-701.20 [Reserved]
701.21 Filing payment application.
701.22 Eligibility to file for cost-share assistance.
701.23 Eligible costs.
701.24 Dividing cost-share among more than one participant.
701.25 Practices carried out with aid from ineligible persons.
701.26 Maximum cost-share percentage.
701.27 Maximum ECP payments per person.
701.28-701.30 [Reserved]
701.31 Maintenance and proper use of practices.
701.32 Failure to comply with program provisions.
701.33 Death, incompetency, or disappearance.
701.34 Appeals.
701.35 Compliance with regulatory measures.
701.36 Schemes and devices and claims avoidances.
701.37 Loss of control of property during the practice life span.
701.38-701.40 [Reserved]
701.41 Cost-share assistance not subject to claims.
701.42 Assignments.
701.43 Information collection requirements.
701.44 Agricultural Conservation Program (ACP) contracts.
701.45 Forestry Incentives Program (FIP) contracts.

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


Sec.  701.1  Administration.

    (a) Subject to the availability of funds, this part provides the 
terms, conditions and requirements of the Emergency Conservation 
Program (ECP) administered by the Farm Service Agency (FSA).
    (b) ECP is administered by the Administrator, FSA through the 
Deputy Administrator, FSA, and shall be carried out in the field by 
State and county FSA committees (State and county committees), subject 
to the availability of funds. Except as otherwise provided in this 
rule, discretionary determinations to be made under this rule will be 
made by the Deputy Administrator. Matters committed to the discretion 
of the Deputy Administrator shall be considered in all cases to be 
permissive powers and no person shall, under any circumstances, be 
considered to be entitled to an exercise of such power in their favor.
    (c) State and county committees, and representatives and employees, 
do not have authority to modify or waive any regulations in this part.
    (d) The State committee may take any action authorized or required 
of the county committee by this part, but which the county committee 
has not taken, such as:
    (1) Correct or require a county committee to correct any action 
taken by such county committee that is not in accordance with this 
part; or
    (2) Require a county committee to withhold taking any action that 
is not in accordance with this part.
    (e) No provision or delegation herein to a State or county 
committee shall preclude the Administrator, FSA, or a designee, from 
determining any question arising under the program or from reversing or 
modifying any determination made by a State or county committee.
    (f) The Deputy Administrator may authorize State and county 
committees to waive or modify deadlines and other requirements in cases 
where lateness or failure to meet such other requirements does not 
adversely affect the operation of the program.
    (g) The Deputy Administrator may limit the authority of state and 
county committees to approve cost share in excess of specified amounts.
    (h) Data furnished by the applicants will be used to determine 
eligibility for program benefits. Furnishing the data is voluntary; 
however, the failure to provide data could result in program benefits 
being withheld or denied.
    (i) FSA may consult with any other USDA agency for such assistance 
as is determined by FSA to be necessary to implement the ECP. FSA is 
responsible for the technical aspects of ECP but may enter into a 
Memorandum of Agreement with another party to provide technical 
assistance. If this limitation results in significant hardship to 
producers in a county the State committee may request in writing that 
the Deputy Administrator waive this requirement for that county.
    (j) The provisions in this part shall not create an entitlement in 
any person to any ECP cost share or claim or any particular notice or 
form or procedure.
    (k) Additional terms and conditions may be set forth in the 
application or the forms participants will be required to sign for 
participation in the ECP.

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Sec.  701.2  Definitions.

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


Sec.  701.3  Scope.

    (a) FSA will provide cost-share assistance to farmers and ranchers 
to rehabilitate farmland damaged by wind erosion, floods, hurricanes, 
or other natural disasters as determined by the Deputy Administrator, 
and to carry out emergency water conservation measures during periods 
of severe drought.
    (b) The objective of the ECP is to make cost-share assistance 
available to eligible participants on eligible land for certain 
practices, to rehabilitate farmland damaged by floods, hurricanes, wind 
erosion, or other natural disasters, and for the installation of water 
conservation measures during periods of severe drought.
    (c) Payments may also be made under this part for:
    (1) Emergency water conservation or water enhancement measures 
(including measures to assist confined livestock) during periods of 
severe drought; and
    (2) Floodplain easements for runoff and other emergency measures 
that the Deputy Administrator determines is necessary to safeguard life 
and property from floods, drought, and the products of erosion on any 
watershed whenever fire, flood, or other natural occurrence is causing 
or has caused, a sudden impairment of the watershed.
    (d) Payments under this part are subject to the availability of 
appropriated funds and any limitations that may otherwise be provided 
for by Congress.


Sec.  701.4  Producer eligibility.

    (a) To be eligible to participate in the ECP the Deputy 
Administrator must determine that a person is an agricultural producer 
with an interest in the land affected by the natural disaster, and that 
person must be liable for or have paid the expense that is the subject 
of the cost share. The applicant must be a landowner or user in the 
area where the qualifying event has occurred, and must be a party who 
will incur the expense that is the subject of the cost share.
    (b) Federal agencies and States, including all agencies and 
political subdivisions of a State, are ineligible to participate in the 
ECP.
    (c) All producer eligibility is subject to the availability of 
funds and an application may be denied for any reason.


Sec.  701.5  Land eligibility.

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

[[Page 10304]]

location of the land, the history of damage to the land, and whether 
the land was or could have been protected by a functioning levee or 
dike built to U. S. Army Corps of Engineers, NRCS, or comparable 
standards. Further, in making such determinations, information may be 
obtained and used from the Federal Emergency Management Agency or any 
other Federal, State (including State agencies or political 
subdivisions), or other entity or individual providing information 
regarding, for example, flood susceptibility for the land, soil 
surveys, aerial photographs, or flood plain data or other relevant 
information.


Sec. Sec.  701.6-701.9  [Reserved]


Sec.  701.10  Qualifying minimum cost of restoration.

    (a) To qualify for assistance under Sec.  701.3(a), the eligible 
damage must be so costly that Federal assistance is or will be required 
to return the land to productive agricultural use or to provide 
emergency water for livestock.
    (b) The Deputy Administrator shall establish the minimum qualifying 
cost of restoration. Each affected State may be allowed to establish a 
higher minimum qualifying cost of restoration.
    (c) A producer may request a waiver of the qualifying minimum cost 
of restoration. The waiver request shall document how failure to grant 
the waiver will result in environmental damage or hardship to the 
producer and how the waiver will accomplish the goals of the program. 
Denial of a request for a waiver is not subject to appeal.


Sec.  701.11  Prohibition on duplicate payments.

    (a) Duplicate payments. Participants are not eligible to receive 
funding under the ECP for land on which the participant has or will 
receive funding under:
    (1) The Wetland Reserve Program (WRP) provided for in 7 CFR part 
1467;
    (2) The Emergency Wetland Reserve Program (EWRP) provided for in 7 
CFR part 623;
    (3) The Emergency Watershed Protection Program (EWP) provided for 
in 7 CFR part 624; or
    (4) Any other program that covers the same or similar expenses so 
as to create duplicate payments, or, in effect, a higher rate of cost 
share than is allowed under this part.
    (b) Refund. Participants who receive any duplicate funds, payments, 
or benefits shall refund any ECP payments received.


Sec.  701.12  Eligible ECP practices.

    (a) Cost-share assistance may be offered for ECP practices to 
replace or restore farmland, fences, or conservation structures to a 
condition similar to that existing before the natural disaster. No 
relief under this part shall be allowed to address conservation 
problems existing before the disaster.
    (b) The practice or practices made available when the ECP is 
implemented shall be only those practices authorized by FSA for which 
cost-share assistance is essential to permit accomplishment of the 
program goals.
    (c) Cost-share assistance may be provided for permanent vegetative 
cover, including establishment of the cover where needed, only in 
conjunction with eligible structures or installations where cover is 
needed to prevent erosion and/or siltation or to accomplish some other 
ECP purpose.
    (d) Practice specifications shall represent the minimum levels of 
performance needed to address the ECP need.


Sec.  701.13  Submitting requests.

    (a) Subject to the availability of funds, the Deputy Administrator 
shall provide for an enrollment period for submitting ECP cost-share 
requests.
    (b) Requests may be accepted after the announced enrollment period, 
if such acceptance is approved by the Deputy Administrator and is in 
accordance with the purposes of the program.


Sec.  701.14  Onsite inspections.

    An onsite inspection must be made before approval of any request 
for ECP assistance.


Sec.  701.15  Starting practices before cost-share request is 
submitted; non-entitlement to payment; payment subject to the 
availability of funds.

    (a) Subject to paragraphs (b) and (c) of this section, costs will 
not be shared for practices or components of practices that are started 
before a request for cost share under this part is submitted with the 
applicable county FSA office.
    (b) Costs may be shared for drought and non-drought ECP practices 
or components of practices that are started before a request is 
submitted with the county FSA office, only if:
    (1) Considered and approved on a case-by-case basis in accordance 
with instructions of the Deputy Administrator;
    (2) The disaster that is the basis of a claim for cost-share 
assistance created a situation that required the producer to take 
immediate action to prevent further losses;
    (3) The Deputy Administrator determines that the request for 
assistance was filed within a reasonable amount of time after the start 
of the enrollment period; and
    (4) The practice was started no more than 60 days before the ECP 
designation was approved for the applicable county office.
    (c) Any action taken prior to approval of a claim is taken at the 
producer's own risk.
    (d) An application for relief may be denied for any reason.
    (e) All payments under this part are subject to the availability of 
funds.


Sec.  701.16  Practice approval.

    (a) Requests shall be prioritized before approval based on factors 
deemed appropriate by FSA, which include, but are not limited to:
    (1) Type and degree of damage;
    (2) Type of practices needed to address the problem;
    (3) Availability of funds;
    (4) Availability of technical assistance;
    (5) Environmental concerns;
    (6) Safety factors; or
    (7) Welfare of eligible livestock.
    (b) Requests for cost-share assistance may be approved if:
    (1) Funds are available; and
    (2) The requested practice is determined eligible.


Sec. Sec.  701.17-701-20  [Reserved]


Sec.  701.21  Filing payment application.

    Cost-share assistance is conditioned upon the availability of funds 
and the performance of the practice in compliance with all applicable 
specifications and program regulations.
    (a) Completion of practice. After completion of the approved 
practice, the participant must certify completion and request payment 
by the payment request deadline. FSA will provide the participant with 
a form or another manner to be used to request payment.
    (b) Proof of completion. Participants shall submit to FSA, at the 
local county office, the information needed to establish the extent of 
the performance of approved practices and compliance with applicable 
program provisions.
    (c) Payment request deadline. The time limits for submission of 
information shall be determined by the Deputy Administrator. The 
payment request deadline for each ECP practice will be provided in the 
agreement after the application is approved. Time limits may be 
extended where failure to submit required information within the 
applicable time limits is due to reasons beyond the control of the 
participant.

[[Page 10305]]

Sec.  701.22  Eligibility to file for cost-share assistance.

    Any eligible participant, as defined in this part, who paid part of 
the cost of an approved practice may file an application for cost-share 
payment.


Sec.  701.23  Eligible costs.

    (a) Cost-share assistance may be authorized for all reasonable 
costs incurred in the completion of the practice, up to the maximums 
provided in Sec. Sec.  701.26 and 701.27.
    (b) Eligible costs shall be limited as follows:
    (1) Costs for use of personal equipment shall be limited to those 
incurred beyond the normal operation of the farm or ranch.
    (2) Costs for personal labor shall be limited to personal labor not 
normally required in the operation of the farm or ranch.
    (3) Costs for the use of personal equipment and labor must be less 
than that charged for such equipment and labor by commercial 
contractors regularly employed in such areas.
    (4) Costs shall not exceed those needed to achieve the minimum 
performance necessary to resolve the problem being corrected by the 
practice. Any costs above those levels shall not be considered to be 
eligible costs for purposes of calculations made under this part.
    (c) Costs shall not exceed the practice specifications in Sec.  
701.12(d) for cost-share calculations.
    (d) The gross amount on which the cost-share eligibility may be 
computed will not include any costs that were reimbursed by a third 
party including, but not limited to, an insurance indemnity payment.
    (e) Total cost-share payments from all sources shall not exceed the 
total of eligible costs of the practice to the applicant.


Sec.  701.24  Dividing cost-share among more than one participant.

    (a) For qualifying cost-share assistance under this part, the cost 
shall be credited to the participant who personally performed the 
practice or who paid to have it performed by a third party. If a 
payment or credit was made by one participant to another potential 
participant, paragraph (c) of this section shall apply.
    (b) If more than one participant contributed to the performance of 
the practice, the cost-share assistance for the practice shall be 
divided among those eligible participants in the proportion they 
contributed to the performance of the practice. FSA may determine what 
proportion was contributed by each participant by considering the value 
of the labor, equipment, or material contributed by each participant 
and any other factors deemed relevant toward performance.
    (c) Allowance by a participant of a credit to another participant 
through adjustment in rent, cash or other consideration, may be 
considered as a cost of a practice to the paying party only if FSA 
determines that such credit is directly related to the practice. An 
applicant who was fully reimbursed shall be considered as not having 
contributed to the practice performance.


Sec.  701.25  Practices carried out with aid from ineligible persons.

    Any assistance provided by someone other than the eligible 
participant, including assistance from a State or Federal agency, shall 
be deducted from the participant's total costs incurred for the 
practice for the purpose of computing ECP cost shares. If unusual 
conditions exist, the Deputy Administrator may waive deduction of such 
contributions upon a request from the State committee and demonstration 
of the need for such a waiver.


Sec.  701.26  Maximum cost-share percentage.

    (a) In addition to other restrictions that may be applied by FSA, 
an ECP participant shall not receive more than 75 percent of the lesser 
of the participant's total actual cost or of the total allowable costs, 
as determined by this part, to perform the practice.
    (b) However, notwithstanding paragraph (a) of this section, a 
qualified limited resource producer that participates in the ECP may 
receive no more than 90 percent of the participant's actual cost to 
perform the practice or 90 percent of the total allowable costs for the 
practice as determined under this part.
    (c) In addition to other limitations that apply, in no case shall 
the ECP payment exceed 50 percent of what the Deputy Administrator has 
determined is the agricultural value of the affected land.


Sec.  701.27  Maximum ECP payments per person.

    A person, as defined in part 1400 of this title, is limited to a 
maximum cost-share of $200,000 per person, per disaster.


Sec. Sec.  701.28-701.30  [Reserved]


Sec.  701.31  Maintenance and proper use of practices.

    (a) Each participant receiving cost-share assistance is responsible 
for the required maintenance and proper use of the practice. Some 
practices have an established life span or minimum period of time 
during which they are expected to function as a conservation practice 
with proper maintenance. Cost-share assistance shall not be authorized 
for normal upkeep or maintenance of any practice.
    (b) If a practice is not properly maintained for the established 
life span, the participant may be required to refund all or part of 
cost-share assistance received. The Deputy Administrator will determine 
what constitutes failure to maintain a practice and the amount that 
must be refunded.


Sec.  701.32  Failure to comply with program provisions.

    Costs may be shared for performance actually rendered even though 
the minimum requirements otherwise established for a practice have not 
been satisfied if a reasonable effort was made to satisfy the minimum 
requirements and if the practice, as performed, will adequately address 
the need for the practice.


Sec.  701.33  Death, incompetency, or disappearance.

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


Sec.  701.34  Appeals.

    Part 11 of this title and part 780 of this chapter apply to 
determinations made under this part.


Sec.  701.35  Compliance with regulatory measures.

    Participants who perform practices shall be responsible for 
obtaining the authorities, permits, rights, easements, or other 
approvals necessary to the performance and maintenance of the practices 
according to applicable laws and regulations. The ECP participant shall 
be wholly responsible for any actions taken with respect to the project 
and shall, in addition, be responsible for returning and refunding any 
ECP cost shares made, where the purpose of the project cannot be 
accomplished because of the applicants' lack of clearances or other 
problems.


Sec.  701.36  Schemes and devices and claims avoidances.

    (a) If FSA determines that a participant has taken any action 
designed to defeat, or has the effect of defeating, the purposes of 
this program, the participant shall be required to refund all or part 
of any of the program payments otherwise due or paid that participant 
or related person for that

[[Page 10306]]

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


Sec.  701.37  Loss of control of the property during the practice life 
span.

    In the event of voluntary or involuntary loss of control of the 
land by the ECP cost-share recipient during the practice life-span, if 
the person acquiring control elects not to become a successor to the 
ECP agreement and the practice is not maintained, each participant who 
received cost-share assistance for the practice may be jointly and 
severally liable for refunding any ECP cost-share assistance related to 
that practice. The practice life span, for purposes of this section, 
includes any maintenance period that is essential to its success.


Sec. Sec.  701.38-701.40  [Reserved]


Sec.  701.41  Cost-share assistance not subject to claims.

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


Sec.  701.42  Assignments.

    Participants may assign ECP cost-share assistance payments, in 
whole or in part, according to part 1404 of this title.


Sec.  701.43  Information collection requirements.

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


Sec.  701.44  Agricultural Conservation Program (ACP) contracts.

    Contracts for ACP that are, or were, administered under this part 
or similar contracts executed in connection with the Interim 
Environmental Quality Incentives Program, shall, unless the Deputy 
Administrator determines otherwise, be administered under, and be 
subject to, the regulations for ACP contracts and the ACP program that 
were contained in the 7 CFR, parts 700 to 899, edition revised as of 
January 1, 1998, and under the terms of the agreements that were 
entered into with participants.


Sec.  701.45  Forestry Incentives Program (FIP) contracts.

    The regulations governing the FIP as of July 31, 2002, and 
contained in the 7 CFR, parts 700 to 899, edition revised as of January 
1, 2002, shall continue to apply to FIP contracts in effect as of that 
date, except as provided in accord with a delegation of the 
administration of that program and such delegation and actions taken 
thereunder shall apply to any other FIP matters as may be at issue or 
in dispute.

    Signed in Washington, DC on February 5, 2004.
James R. Little,
Administrator, Farm Service Agency.
[FR Doc. 04-4861 Filed 3-3-04; 8:45 am]
BILLING CODE 3410-05-P