[Federal Register Volume 71, Number 245 (Thursday, December 21, 2006)]
[Notices]
[Page 76635]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-21845]



[[Page 76635]]

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DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service


The Secretary of Agriculture's Determination of the Primary 
Purpose of the Commonwealth of Massachusetts' Small Renewables 
Initiative Program

AGENCY: Natural Resources Conservation Service (NRCS), USDA.

ACTION: Notice of determination.

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SUMMARY: The Natural Resources Conservation Service (NRCS) is providing 
public notice that the Secretary of Agriculture has determined the 
cost-share payments made under the Commonwealth of Massachusetts' Small 
Renewables Initiative Program are primarily for the purpose of 
protecting or restoring the environment. NRCS was assigned technical 
and administrative responsibility for reviewing the Commonwealth of 
Massachusetts' Program and making appropriate recommendations for the 
Secretary's determination of primary purpose. This determination is in 
accordance with Section 126 of the Internal Revenue Code of 1954, as 
amended (26 U.S.C. 126), and permits recipients of cost-share payments 
to exclude from gross income to the extent allowed by the Internal 
Revenue Service.

FOR FURTHER INFORMATION CONTACT: Mr. Philip F. Holahan, Deputy 
Executive Director and General Counsel, Massachusetts Technology 
Collaborative, 75 North Drive, Westborough, Massachusetts 01581 or 
Branch Chief, Environmental Improvement Programs, Natural Resources 
Conservation Service, 1400 Independence Avenue, SW., Washington, DC 
20250.

SUPPLEMENTARY INFORMATION: Under section 126(a)(10) of the Internal 
Revenue Code, gross income does not include the ``excludable portion'' 
of payments received under any program of a State under which payments 
are made to individuals primarily for the purpose of protecting or 
restoring the environment. In general, a cost-share payment for 
selected conservation practices is exempt from Federal taxation, if it 
meets three tests: (1) It was for a capital expense, (2) it does not 
substantially increase the operator's annual income from the property 
for which it is made, and (3) the Secretary of Agriculture certified 
that the payment was made primarily for conserving soil and water 
resources, protecting or restoring the environment, improving forests, 
or providing habitat for wildlife.
    The Secretary of Agriculture evaluates a conservation program on 
the basis of criteria set forth in 7 CFR part 14, and makes a ``primary 
purpose'' determination for the payments made under the program. The 
objective of the determinations made under part 14 is to provide 
maximum conservation, environmental, forestry improvement, and wildlife 
benefits to the general public from the operation of applicable 
programs. Final determinations are made on the basis of program, 
category of practices, or individual practices. Following a primary 
purpose determination by the Secretary of Agriculture, the Secretary of 
the Treasury determines if the payments made under the conservation 
program substantially increase the annual income derived from the 
property benefited by the payments.

Determination

    The Massachusetts Technology Park Corporation uses the Small 
Renewables Initiative Program to offer cost-share incentives for the 
installation of small renewable energy systems, totaling not more that 
10kw of capacity per installation. The objectives of the program are 
met through a market-based incentive structure that is designed to 
provide a level of support that will promote the installation of 
renewables, and encourage a paradigm shift toward increased adoption of 
renewable energy technologies and energy-efficient, high-performance 
design elements in Massachusetts buildings. By promoting renewable 
energy sources, the Small Renewables Initiative Program reduces the 
negative environmental impacts generally associated with more 
traditional methods of electricity generation.
    As provided for by Section 126 of the Internal Revenue Code, the 
Secretary examined the authorizing legislation, regulations, and 
operating procedures regarding the identified programs. In accordance 
with the criteria setout in 7 CFR part 14, the Secretary has determined 
the cost-share payments made under the Commonwealth of Massachusetts' 
Small Renewables Initiative Program are primarily for the purpose of 
protecting and restoring the environment.
    A ``Record of Decision'' has been prepared and is available upon 
request from the Branch Chief, Environmental Improvement Programs, 
Natural Resources Conservation Service, 1400 Independence Avenue, SW., 
Washington, DC 20250.

    Signed in Washington, DC.
Arlen L. Lancaster,
Chief.
 [FR Doc. E6-21845 Filed 12-20-06; 8:45 am]
BILLING CODE 3410-16-P