[Federal Register Volume 69, Number 182 (Tuesday, September 21, 2004)]
[Rules and Regulations]
[Pages 56345-56348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20783]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 69, No. 182 / Tuesday, September 21, 2004 / 
Rules and Regulations  

[[Page 56345]]



DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service

7 CFR Part 635

RIN 0578-AA16


NRCS Procedures for Granting Equitable Relief

AGENCY: Natural Resources Conservation Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Natural Resources Conservation Service (NRCS), United 
States Department of Agriculture (USDA) issues its final rule 
implementing the equitable relief authority and the procedures set 
forth at Section 1613 of the Farm Security and Rural Investment Act of 
2002 (the 2002 Act), relating to relief for participants for covered 
programs administered by NRCS. The relief applies to cases where the 
applicant for relief took action to the applicant's detriment based on 
action or advice from departmental officials. This rule also addresses 
situations where the participant simply, but in good faith, failed to 
fully comply with program requirements. The rule implements Section 
1613 as it applies to NRCS administered conservation programs.

DATES: Effective October 21, 2004.

ADDRESSES: This final rule can be accessed via the internet. Users can 
access the NRCS homepage at: http://www.nrcs.usda.gov/.

FOR FURTHER INFORMATION CONTACT: Beth A. Schuler, Conservation Planning 
and Technical Assistance Division, Room 6103A-S, 1400 Independence Ave, 
SW. 103, Washington, DC 20250. Telephone: (202) 720-8851. e-mail: 
[email protected]. Persons with disabilities who require 
alternative means for communication (Braille, large print, audio tape, 
etc.) should contact the USDA Target Center at (202) 720-2600 (voice 
and TDD).

SUPPLEMENTARY INFORMATION: 

Notice and Comment

    Section 1601(c) of the 2002 Act requires that the regulations 
needed to implement Title I of the 2002 Act are to be promulgated 
without regard to the notice and comment provisions of 5 U.S.C. 553 or 
the Statement of Policy of the Secretary of Agriculture effective July 
24, 1971 (36 FR 13804) relating to notices of proposed rulemaking and 
public participation in rulemaking. Accordingly, these regulations are 
issued as final.

Executive Order 12866

    This final rule has been determined to be not significant under 
Executive Order 12866 and has not been reviewed by the Office of 
Management and Budget (OMB).

Federal Assistance Programs

    This rule has a potential impact on all programs listed in the 
Catalog of Federal Domestic Assistance in the Agency Program Index 
under the Department of Agriculture, Farm Service Agency and Natural 
Resources Conservation Service. Other assistance programs are also 
affected.

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this rule 
because neither the Secretary of Agriculture nor NRCS are required by 5 
U.S.C. 553 or any other law to publish a notice of proposed rulemaking 
for the subject matter of this rule.

Environmental Assessment

    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., and NRCS has concluded that 
promulgation of this rule is categorically excluded from NEPA's 
requirement from an environmental impact analysis under the Department 
of Agriculture regulations, 7 CFR 1b.3(a)(1). Actions implemented under 
this rule fall in the category of policy development, planning and 
implementation which relates to routine activities and similar 
administrative functions and no circumstances exist that would require 
preparation of an environmental assessment or environmental impact 
statement.

Executive Order 12778

    The final rule has been reviewed in accordance with Executive Order 
12778. This final rule preempts State laws that are inconsistent with 
its provisions. Before a judicial action may be brought concerning this 
rule, all administrative remedies must be exhausted.

Unfunded Mandates

    The provisions of Title II of the Unfunded Mandates Reform Act of 
1995 (UMRA) do not apply to this rule because neither the Secretary of 
Agriculture nor NRCS are required by 5 U.S.C. 553 or any other law to 
publish a notice of proposed rulemaking for the subject matter of this 
rule. Also, the rule imposes no mandates as defined in UMRA.

Small Business Regulatory Enforcement Fairness Act of 1996

    Section 1601(c) of the 2002 Act requires that the regulations 
necessary to implement Title I of the 2002 Act must be issued within 90 
days of enactment and that such regulations shall be issued without 
regard to the notice and comment provisions of 5 U.S.C. 553. Section 
1601(c) further requires that the Secretary use the authority in 
section 808 of the Small Business Regulatory Enforcement Fairness Act 
of 1996, Public Law 104-121 (SBREFA), which allows an agency to forgo 
SBREFA's usual 60-day congressional review delay of the effective date 
of a major regulation if the agency finds that there is a good cause to 
make the regulation effective in less than 60 days. Since this 
regulation is neither major nor significant, it is therefore not 
subject to the SBREFA 60-day requirement. Accordingly, this rule is 
effective 30 days after publication in the Federal Register.

Paperwork Reduction Act

    Section 2702 of the 2002 Act requires that the implementation of 
this provision be carried out without regard to the Paperwork Reduction 
Act, Chapter 35 of title 44, United States Code. Therefore, NRCS is not 
reporting recordkeeping or estimated paperwork burden associated with 
this final rule.

[[Page 56346]]

Government Paperwork Elimination Act

    NRCS is committed to compliance with the Government Paperwork 
Elimination Act as well as continued pursuit of providing all services 
electronically when practicable. This rule requires that a program 
participant must make a written request for equitable relief for a 
program administered by NRCS. In part, this rule lends itself to 
electronic request and submission. To that end, NRCS and the Farm 
Services Agency (FSA) are jointly pursuing the development an 
application that will allow program participants to apply for equitable 
relief online. It will also enable both FSA and NRCS to manage the 
requests and reporting aspects electronically.

Discussion of the Rule

Part 635--Equitable Relief From Ineligibility

Section 635.1 Definitions and Abbreviations

    This section sets forth the statutory definitions provided in 
Section 1613(a). Specifically, section 635.2 defines ``agricultural 
commodity'' as any agricultural commodity, food, feed, fiber, or 
livestock that is subject to a ``covered program.'' The rule defines 
``participant'' as a participant in a ``covered program''. A ``covered 
program'' is defined as: (1) A program administered by the Secretary of 
Agriculture (Secretary) under which price or income support, or 
production or market loss assistance, is provided to producers of 
``agricultural commodities;'' and (2) a conservation program 
administered by the Secretary. However, this section of the rule also 
provides, as does the statutory authority, that ``covered programs'' do 
not include: (1) An agricultural credit program carried out under the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.); or 
(2) the crop insurance program carried out under the Federal Crop 
Insurance Act (7 U.S.C. 1501 et seq.).

Section 635.2 Applicability

    Section 1613 of the 2002 Act authorizes relief when a participant 
in a covered conservation program is determined to be not in compliance 
with the requirements of the covered program and, therefore, would be 
ineligible for a loan, payment, or other benefit under the covered 
program, and it is further determined that the participant acted in 
good faith and in reliance on the action or advice of an agency 
employee to the detriment of the participant or failed to fully comply 
with the requirements of the covered program but made a good faith 
effort to comply with the requirements. Section 635.2 sets forth the 
general applicability of relief to be provided under this regulation.
    This section also provides, at 635.2(b), that the provisions of 
this rule will only be implemented prospectively; that is, it applies 
only to actions for which relief is sought that occurred after the 
implementation date of the authorizing statute, May 13, 2003. This is 
because the statute does not provide for retroactive application.

Section 635.3 Reliance on Incorrect Actions or Information

    The Secretary at 7 CFR 2.61 has delegated her authority to provide 
equitable relief and to track such relief to the Chief of NRCS. 
Accordingly, section 635.3 provides that the Chief may provide relief 
to any participant that is determined to be not in compliance with the 
requirements of a covered program and therefore ineligible for a loan, 
payment, or other benefit under the covered program, if the participant 
acted in good faith and relied on the action or advice of the 
Secretary, or an authorized representative, to the detriment of the 
participant.

Section 635.4 Failure To Fully Comply

    This section implements Section 1613(b)(2) of the statute and 
provides that the Chief may provide relief to any participant that is 
determined to be not in compliance with the requirements of a covered 
program, and therefore ineligible for a loan, payment, or other benefit 
under the covered program, when the participant failed to comply fully 
with the requirements of the covered program but made a good faith 
effort to do so.

Section 635.5 Forms of Relief

    This section sets forth the forms of relief that the deciding 
official (the Chief or the State Conservationist, as appropriate) may 
grant, including permitting a participant to: (1) Retain loans, 
payments, or other benefits received under the covered program; (2) 
continue to receive loans, payments, and other benefits under the 
covered program; (3) continue to participate, in whole or in part, 
under any contract executed under the covered program; (4) re-enroll 
all or part of the land covered by the applicable conservation program; 
and (5) receive such other equitable relief as the Chief determines 
appropriate. Section 1613(d) of the statute also specifies that the 
Secretary may condition the approval of relief under this section on 
the participant agreeing to remedy their failure to meet the program 
requirements. Section 635.6(b) implements this statutory provision.

Section 635.6 Equitable Relief by State Conservationists

    In addition, the statute provides authority for FSA State Directors 
and NRCS State Conservationists to grant equitable relief. In general, 
section 1613(e) provides that the State Director and the State 
Conservationist, in the case of programs administered by their 
respective offices, may grant relief to a participant (subject to 
certain limitations) if: (1) The amount of loans, payments, and 
benefits for which relief will be provided to the participant under 
this authority is less than $20,000; (2) the total amount of loans, 
payments, and benefits for which relief has been previously provided to 
the participant under this authority is not more than $5,000; and (3) 
the total amount of loans, payments, and benefits for which relief is 
provided to similarly situated participants is not more than 
$1,000,000, as determined by the Secretary. This rule addresses only 
programs administered through NRCS and, hence, through State 
Conservationists. Another rule at 7 CFR Part 718, Subpart D, Equitable 
Relief from Ineligibility, has been promulgated by FSA which addresses 
the equitable relief authority provided under Section 1613 for programs 
administered by FSA.
    Further, the rule at section 635.6 provides that State 
Conservationist grants of relief: (1) Shall not require prior approval 
by the Chief of the Department of Agriculture's Natural Resources 
Conservation Service, or any other officer or employee of the Service; 
(2) shall be made only after consultation with, and the approval of, 
the Office of General Counsel of the Department of Agriculture; and (3) 
are subject to reversal only by the Secretary (who may not delegate the 
reversal authority). This rule also specifies that the State 
Conservationist's authority to grant relief applies only to eligibility 
under covered conservation programs and does not apply to the 
administration of: (1) Payment limitations under (i) Sections 1001 
through 1001F of the Food Security Act of 1985 (7 U.S.C. 1308 et seq.), 
or (ii) a conservation program administered by the Secretary; or to (2) 
highly erodible land and wetland conservation requirements under 
subtitle B or C of title XII of the Food Security Act of 1985 (16 
U.S.C. 3811 et seq. A discretionary decision by the Secretary, the 
State Director, or the State Conservationist under Section

[[Page 56347]]

1613 to grant relief is final, and is not subject to judicial review 
under chapter 7 of title 5, United States Code.
    Section 635.6(e) of this regulation implements Section 1613(e)(4) 
of the statute by providing that the authority set forth in this 
section is in addition to any other authority provided in that or any 
other Act.
    As previously stated, the statute sets forth certain dollar limits 
when the State Conservationist is granting equitable relief. The agency 
has interpreted these dollars limits to be aggregate limits provided 
NRCS-wide over a fiscal year period per participant. The Section 
1613(e)(1) dollar limits are not tied to a particular time period or 
official. However, given the normal yearly orientation of agricultural 
commodity and conservation programs (as is reflected in the reporting 
requirements of the statute), it makes sense to provide yearly limits 
in the rule upon which such dollar computations may be made. Otherwise, 
the monetary limitation set forth in the statute would be difficult to 
compute. Equitable relief granted by NRCS to a particular participant 
must be included in the computation regarding the specific dollar 
limitations for any request for equitable relief by such participant in 
the same fiscal year.
    Given the Department's past experience in providing equitable 
relief, the agency anticipates that the dollar amounts involved in 
granting relief will be small in most cases, both for individual 
participants and in aggregate among States.

Section 635.7 Procedures for Granting Equitable Relief

    In this section, NRCS sets forth the procedure by which a 
participant in a covered conservation program must follow to apply for 
equitable relief under this part.

List of Subjects in 7 CFR Part 635

    Administrative practice and procedure, Agriculture, Conservation 
programs, Equitable relief.

0
Accordingly, for the reasons set forth in the preamble, 7 CFR Part 635 
is added to read as follows:

PART 635--EQUITABLE RELIEF FROM INELIGIBILITY

Sec.
635.1 Definitions and abbreviations.
635.2 Applicability.
635.3 Reliance on incorrect actions or information.
635.4 Failure to fully comply.
635.5 Forms of relief.
635.6 Equitable relief by State Conservationists.
635.7 Procedures for granting equitable relief.

    Authority: 7 U.S.C. 7996.


Sec.  635.1  Definitions and abbreviations.

    The following terms apply to this part:
    Covered program means a natural resource conservation program 
specified in Sec.  635.3.
    Chief means the Chief of the Natural Resources Conservation Service 
or the person delegated authority to act for the Chief.
    FSA means the Farm Service Agency of the United States Department 
of Agriculture.
    NRCS means the Natural Resources Conservation Service of the United 
States Department of Agriculture.
    OGC means the Office of the General Counsel of the United States 
Department of Agriculture.
    Secretary means the Secretary of the U.S. Department of 
Agriculture.
    State Conservationist means the NRCS employee authorized to direct 
and supervise NRCS activities in a State, the Caribbean Area, or the 
Pacific Basin area, or the State Conservationist's designee.


Sec.  635.2  Applicability.

    (a) This part is applicable to all covered conservation programs 
administered by the Natural Resources Conservation Service, except for 
the Highly Erodible Land and Wetland Conservation provisions of Title 
XII, subtitles B and C of the Food Security Act of 1985, as amended, 
(16 U.S.C. 3811 et seq.). Administration of this part shall be under 
the supervision of the Chief, except that such authority shall not 
limit the exercise of authority by State Conservationists of the 
Natural Resources Conservation Service provided in Sec.  635.6.
    (b) The equitable relief available under this part does not apply 
where the action for which relief is requested occurred before May 13, 
2002. In such cases, authority that was effective prior to May 13, 
2002, shall be applied.
    (c) This part does not apply to a conservation program administered 
by the Farm Service Agency of the United States Department of 
Agriculture.


Sec.  635.3  Reliance on incorrect actions or information.

    (a) The Chief, or designee, may grant relief by extending benefits 
or payments in accordance with Sec.  635.5 when any participant that 
has been determined to be not in compliance with the requirements of a 
covered NRCS program, and therefore ineligible for a loan, payment, or 
other benefit under the covered program, if the participant, acting in 
good faith, relied upon the action or advice of an NRCS employee or 
representative of the United States Department of Agriculture, to the 
detriment of the participant.
    (b) This section applies only to a participant who relied upon the 
action of, or information provided by, an NRCS employee, or 
representative of USDA, and the participant acted, or failed to act, as 
a result of that action or information. This part does not apply to 
cases where the participant had sufficient reason to know that the 
action or information upon which they relied was improper or erroneous 
or where the participant acted in reliance on their own 
misunderstanding or misinterpretation of program provisions, notices or 
information.


Sec.  635.4  Failure to fully comply.

    (a) When a participant fails to fully comply with the terms and 
conditions of a covered program, the Chief, or designee, may grant 
relief in accordance with Sec.  635.5 if the participant made a good 
faith effort to comply fully with the requirements of the covered 
program.
    (b) This section only applies to participants who are determined by 
the Chief to have made a good faith effort to comply fully with the 
terms and conditions of the program and rendered substantial 
performance.
    (c) In determining whether a participant acted in good faith and 
rendered substantial performance under paragraph (b) of this section, 
the Chief, or designee, shall consider such factors as whether--
    (1) Performance of the primary conservation program requirements 
were completed; or
    (2) The actions of the participant resulted in minimal damages or 
failure that were minor in nature.


Sec.  635.5  Forms of relief.

    (a) The Chief, or designee, may authorize a participant in a 
covered program to:
    (1) Retain loans, payments, or other benefits received under the 
covered program;
    (2) Continue to receive loans, payments, and other benefits under 
the covered program;
    (3) Continue to participate, in whole or in part, under any 
contract executed under the covered program;
    (4) In the case of a conservation program, re-enroll all or part of 
the land covered by the program; and

[[Page 56348]]

    (5) Receive such other equitable relief as determined to be 
appropriate.
    (b) As a condition of receiving relief under this part, the 
participant may be required to remedy their failure to meet the program 
requirement or mitigate its affects.


Sec.  635.6  Equitable relief by State Conservationists.

    (a) General nature of the authority. Notwithstanding provisions in 
this part providing supervision and relief authority to other 
officials, the State Conservationist, without further review by other 
officials (other than the Secretary), may grant relief as set forth in 
Sec.  635.5 to a participant under the provisions of Sec.  635.3 and 
Sec.  635.4 so long as:
    (1) The program matter with respect to which the relief is sought 
is a program matter in a covered program which is operated within the 
State under the control of the State Conservationist;
    (2) The total amount of relief which will be provided to the 
participant (that is, to the individual or entity that applies for the 
relief) under this authority for errors during the fiscal year is less 
than $20,000 (included in that calculation, any loan amount or other 
benefit of any kind payable for the fiscal year);
    (3) The total amount of such relief which has been previously 
provided to the participant using this authority for errors in a fiscal 
year, as calculated in paragraph (a)(2) of this section, is not more 
than $5,000;
    (4) The total amount of loans, payments, and benefits of any kind 
for which relief is provided to similarly situated participants by a 
State Conservationist for errors for a fiscal year under the authority 
provided in this section, as calculated in paragraph (a)(2), is not 
more than $1,000,000.
    (b) Additional limits on the authority. The authority provided 
under this section does not extend to the administration of:
    (1) Payment limitations under 7 CFR part 1400;
    (2) Payment limitations under a conservation program administered 
by the Secretary; or
    (3) The highly erodible land and wetland conservation requirements 
under subtitles B or C of Title XII of the Food Security Act of 1985 
(16 U.S.C. 3811 et seq.).
    (c) Relief shall only be made under this part after consultation 
with, and the approval of, the Office of the General Counsel.
    (d) Secretary's reversal authority. A decision made under this part 
by the State Conservationist may be reversed only by the Secretary, who 
may not delegate that authority.
    (e) Relation to other authorities. The authority provided under 
this section is in addition to any other applicable authority that may 
allow relief.


Sec.  635.7  Procedures for granting equitable relief.

    (a) Application for equitable relief by covered program 
participants. For the purposes of this part, the following conservation 
programs administered by NRCS are identified as ``covered programs'':

(1) Agricultural Management Assistance (AMA);
(2) Conservation Security Program (CSP);
(3) Emergency Watershed Protection, Floodplain Easement Component (EWP-
FPE);
(4) Environmental Quality Incentives Program (EQIP);
(5) Farm and Ranch Lands Protection Program (FRPP);
(6) Grassland Reserve Program (GRP);
(7) Resource Conservation and Development Program (RC&D);
(8) Water Bank Program (WBP);
(9) Watershed Protection and Flood Prevention Program, (WPFPP) (long-
term contracts only);
(10) Wetlands Reserve Program (WRP);
(11) Wildlife Habitat Incentives Program (WHIP);
(12) Any other conservation program administered by NRCS which 
subsequently incorporates these procedures within the program 
regulations or policies.

    (b) Participants may request equitable relief from the Chief or the 
State Conservationist with respect to:
    (1) Reliance on the actions or advice of an authorized NRCS 
representative; or
    (2) Failure to fully comply with the program requirements but made 
a good faith effort to comply.
    (c) Only a participant directly affected by the non-compliance with 
the covered program requirements may seek equitable relief under Sec.  
635.6.
    (d) Requests for equitable relief must be made in writing, no later 
than 30 calendar days from the date of receipt of the notification of 
non-compliance with the requirements of the covered conservation 
program.
    (e) Requests for equitable relief shall include the following 
information:
    (1) The reason why the participant was unable to comply with the 
requirements of the conservation program;
    (2) Details regarding how much of the required action had been 
completed;
    (3) Why the participant did not have sufficient reason to know that 
the action or information relied upon was improper or erroneous;
    (4) Whether the participant did not act in reliance on their own 
misunderstanding or misinterpretation of the conservation program 
provisions, notices, or information; and
    (5) Any other pertinent facts or supporting documentation.

    Signed in Washington, DC, on August 31, 2004.
Bruce I. Knight,
Chief, Natural Resources Conservation Service, Vice President, 
Commodity Credit Corporation.
[FR Doc. 04-20783 Filed 9-20-04; 8:45 am]
BILLING CODE 3410-16-P