[Federal Register Volume 71, Number 128 (Wednesday, July 5, 2006)]
[Notices]
[Page 38128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-10420]


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 Notices
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 This section of the FEDERAL REGISTER contains documents other than rules 
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  Federal Register / Vol. 71, No. 128 / Wednesday, July 5, 2006 / 
Notices  

[[Page 38128]]



DEPARTMENT OF AGRICULTURE

Office of the Secretary


Forest Land Recovery 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 Recovery Program 
(FLRP) are made primarily for the purpose of conserving soil and water 
resources, restoring the environment, restoring and improving forests, 
or restoring and providing a habitat for wildlife. This determination 
permits recipients to exclude certain payments under the FLRP from 
gross income for Federal income tax purposes to the extent allowed by 
the Internal Revenue Service.

DATES: The Secretary's determination was signed on June 21, 2006.

ADDRESSES: Questions may be addressed to Karl R. Dalla Rosa, 
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.

FOR FURTHER INFORMATION CONTACT: Karl R. Dalla Rosa, Cooperative 
Forestry Staff, USDA Forest Service, 202-205-6206.

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 Recovery Program (FLRP) (Section 110 of the The 
Military Construction Appropriations and Emergency Hurricane 
Supplemental Appropriations Act of 2005; Pub. L. 108-324) 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 the 
FLRP 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 the FLRP 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: June 21, 2006.
Mike Johanns,
Secretary.
 [FR Doc. E6-10420 Filed 7-3-06; 8:45 am]
BILLING CODE 4310-11-P