[Federal Register Volume 75, Number 225 (Tuesday, November 23, 2010)]
[Rules and Regulations]
[Pages 71325-71344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-29394]



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  Federal Register / Vol. 75, No. 225 / Tuesday, November 23, 2010 / 
Rules and Regulations  

[[Page 71325]]



DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service

7 CFR Part 636

RIN 0578-AA49


Wildlife Habitat Incentive Program

AGENCY: Commodity Credit Corporation, Natural Resources Conservation 
Service, United States Department of Agriculture.

ACTION: Final rule.

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

SUMMARY: The Natural Resources Conservation Service (NRCS), an agency 
of the United States Department of Agriculture (USDA), is issuing a 
final rule for the Wildlife Habitat Incentive Program (WHIP). This 
final rule sets forth how NRCS, using the funds, facilities, and 
authorities of the Commodity Credit Corporation (CCC), will implement 
WHIP in response to changes made by the Food, Conservation, and Energy 
Act of 2008 (2008 Act). NRCS published an interim final rule with 
request for comment in the Federal Register on January 16, 2009, an 
amendment was published on March 12, 2009, with a request for public 
comment, and another amendment was published on July 15, 2009, with a 
request for public comment. NRCS is publishing a final rule that 
addresses the comments received on the interim final rule and to 
clarify policies to improve program implementation.

DATES: Effective Date: The rule is effective November 23, 2010.

FOR FURTHER INFORMATION CONTACT: Gregory K. Johnson, Director, 
Financial Assistance Programs Division, Department of Agriculture, 
Natural Resources Conservation Service, 1400 Independence Avenue, SW., 
Room 5237 South Building, Washington, DC 20250; Telephone: (202) 720-
1844; Fax: (202) 720-4265.
    Persons with disabilities who require alternative means for 
communicating (Braille, large print, audiotape, etc.) should contact 
the USDA Target Center at (202) 720-2600 (voice and TDD).

SUPPLEMENTARY INFORMATION:

Regulatory Certifications

Executive Order 12866

    Pursuant to Executive Order 12866, this final rule has been 
determined to be a significant regulatory action. The administrative 
record is available for public inspection at the Department of 
Agriculture, 1400 Independence Avenue, SW., Room 5241 South Building, 
Washington, DC 20250. In accordance with Executive Order 12866, NRCS 
conducted an economic analysis of the potential impacts associated with 
this program. A summary of the economic analysis can be found at the 
end of the regulatory certifications of the preamble, and a copy of the 
analysis is available upon request from Gregory K. Johnson, Director, 
Financial Assistance Programs Division, Department of Agriculture, 
Natural Resources Conservation Service, 1400 Independence Avenue, SW., 
Room 5237 South Building, Washington, DC 20250.

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this final rule 
because NRCS is not required by 5 U.S.C. 553, or by any other provision 
of law, to publish a notice of proposed rulemaking with respect to the 
subject matter of this rule.

Environmental Analysis

    In compliance with the National Environmental Policy Act, a 
Programmatic Environmental Assessment (EA) was prepared in association 
with the interim final rule. The analysis determined there will not be 
a significant impact to the human environment and as a result, an 
Environmental Impact Statement was not required to be prepared (40 CFR 
1508.13). The Programmatic EA and Finding of No Significant Impact 
(FONSI) were made available for public review for 60 days, which also 
coincided with the public review timeframe for the interim final rule. 
Comments were received on the Programmatic EA and FONSI, and responses 
to those comments have been prepared and can be reviewed along with a 
copy of the EA and FONSI from the following Web site: http://www.nrcs.usda.gov/programs/Env_Assess/. Additional program 
requirements that were not in the interim final rule, and that are now 
in the final rule, are minor program element changes that do not affect 
the overall effects or analysis in the Programmatic EA. As a result, 
preparation of a supplemental Programmatic EA has been determined not 
to be necessary.

Civil Rights Impact Analysis

    NRCS has determined through a Civil Rights Impact Analysis that 
this final rule discloses no disproportionately adverse impacts for 
minorities, women, or persons with disabilities. Outreach and 
communication strategies are in place to ensure all producers will be 
provided the same information to allow them to make informed compliance 
decisions regarding the use of their lands that will affect their 
participation in USDA programs. WHIP applies to all persons equally 
regardless of their race, color, national origin, gender, sex, or 
disability status. Therefore, this final rule will not result in 
adverse civil rights implications for women, minorities, and persons 
with disabilities.
    Copies of the Civil Rights Impact Analysis are available from 
Albert Cerna, National Wildlife Habitat Incentive Program Manager, 
Financial Assistance Programs Division, Department of Agriculture, 
Natural Resources Conservation Service, 1400 Independence Avenue, SW., 
Room 5233 South Building, Washington, DC 20250, or electronically at 
http://www.nrcs.usda.gov/Programs/farmbill/2008/civilrightsimpact.html.

Paperwork Reduction Act

    Section 2904 of the 2008 Act requires that the implementation of 
programs authorized under Title II of the Act be made without regard to 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). 
Therefore, NRCS is not reporting recordkeeping or estimated paperwork 
burden associated with this final rule.

Government Paperwork Elimination Act

    NRCS is committed to compliance with the Government Paperwork

[[Page 71326]]

Elimination Act and the Freedom to E-File Act, which requires 
government agencies in general, to provide the public the option of 
submitting information or transacting business electronically to the 
maximum extent possible. To better accommodate public access, NRCS has 
developed an online application and information system for public use.

Executive Order 12988

    This final rule has been reviewed in accordance with Executive 
Order 12988, Civil Justice Reform. The rule is not retroactive and 
preempts State and local laws to the extent such laws are inconsistent 
with this rule. Before an action may be brought in a Federal court of 
competent jurisdiction, the administrative appeal rights afforded 
persons at 7 CFR parts 11 and 614 must be exhausted.

Federal Crop Insurance Reform and Department of Agriculture 
Reorganization Act of 1994

    Pursuant to section 304 of the Federal Crop Insurance Reform Act of 
1994 (Pub. L. 103-354), USDA classified this rule as non-major. 
Therefore, a risk analysis was not conducted.

Unfunded Mandates Reform Act of 1995

    NRCS assessed the affects of this final rule on State, local, and 
tribal governments, and the public. This action does not compel the 
expenditure of $100 million or more in any one year (adjusted for 
inflation) by any State, local, or tribal governments, or anyone in the 
private sector; therefore, a statement under section 202 of the 
Unfunded Mandates Reform Act of 1995 is not required.

Executive Order 13132

    This final rule has been reviewed in accordance with the 
requirements of Executive Order 13132, Federalism. USDA has determined 
that this final rule conforms with the Federalism principles set forth 
in the Executive Order; would not impose any compliance costs on the 
States; and would not have substantial direct effects on the States, on 
the relationship between the Federal Government and the States, or on 
the distribution of power and responsibilities on the various levels of 
government. Therefore, USDA concludes that this final rule does not 
have Federalism implications.

Executive Order 13175

    This final rule has been reviewed in accordance with the 
requirements of Executive Order 13175, Consultation and Coordination 
with Indian Tribal Governments. NRCS has assessed the impact of this 
final rule on Indian tribal governments and concluded that this final 
rule will not negatively affect Indian tribal governments or their 
communities. The rule neither imposes substantial direct compliance 
costs on tribal governments nor preempts tribal law. However, NRCS 
plans to undertake a series of at least six regional tribal 
consultation sessions before December 30, 2010, on the impact of NRCS 
conservation programs and services on tribal governments and their 
members to establish a baseline of consultation for future actions. 
Reports from these sessions will be made part of the USDA annual 
reporting on Tribal Consultation and Collaboration. NRCS will respond 
in a timely and meaningful manner to all tribal governments' requests 
for consultation.

Small Business Regulatory Enforcement Fairness Act of 1996

    Section 2904(c) of the 2008 Act requires that the Secretary use the 
authority in section 808(2) of Title 5, U.S.C., which allows an agency 
to forego the Small Business Regulatory Enforcement Fairness Act of 
1996 usual 60-day congressional review delay of the effective date of a 
regulation if the agency finds that there is a good cause to do so. 
NRCS hereby determines that it has good cause to do so in order to meet 
the congressional intent to have the conservation programs authorized 
or amended by Title II of the 2008 Act in effect as soon as possible. 
Accordingly, this rule is effective upon filing for public inspection 
by the Office of the Federal Register.

Section 2708 of the 2008 Act

    Section 2708, ``Compliance and Performance,'' of the 2008 Act added 
a paragraph to section 1244(g) of the Food Security Act of 1985, as 
amended entitled, ``Administrative Requirements for Conservation 
Programs,'' which states the following: ``(g) Compliance and 
performance.--For each conservation program under Subtitle D, the 
Secretary shall develop procedures--
    (1) To monitor compliance with program requirements;
    (2) To measure program performance;
    (3) To demonstrate whether long-term conservation benefits of the 
program are being achieved;
    (4) To track participation by crop and livestock type; and
    (5) To coordinate activities described in this subsection with the 
national conservation program authorized under section 5 of the Soil 
and Water Resources Conservation Act of 1977 (16 U.S.C. 2004).''
    This new provision presents in one place the accountability 
requirements placed on the agency as it implements conservation 
programs and reports on program results. The requirements apply to all 
programs under Subtitle D, including the Wetlands Reserve Program, the 
Conservation Security Program, the Conservation Stewardship Program, 
the Farm and Ranch Lands Protection Program, the Grassland Reserve 
Program, the Environmental Quality Incentives Program (including the 
Agricultural Water Enhancement Program), the Wildlife Habitat Incentive 
Program, and the Chesapeake Bay Watershed Initiative. These 
requirements are not directly incorporated into these regulations, 
which set out requirements for program participants. However, certain 
provisions within these regulations relate to elements of section 
1244(g) of the Food Security Act of 1985, as amended and the agency's 
accountability responsibilities regarding program performance. NRCS is 
taking this opportunity to describe existing procedures that relate to 
meeting the requirements of section 1244(g) of the Food Security Act of 
1985, as amended and agency expectations for improving its ability to 
report on each program's performance and the achievement of long-term 
conservation benefits. Also included is reference to the sections of 
these regulations that apply to program participants and that relate to 
the agency accountability requirements as outlined in section 1244(g) 
of the Food Security Act of 1985, as amended.
    Monitor compliance with program requirements. NRCS has established 
application procedures to ensure that participants meet eligibility 
requirements and follow-up procedures to ensure that participants are 
complying with the terms and conditions of their contractual 
arrangement with the government, and that the installed conservation 
measures are operating as intended. These and related program 
compliance evaluation policies are set forth in agency guidance (CPM-
440-512 and CPM-440-517) (http://directives.sc.egov.usda.gov/).
    The program requirements applicable to participants that relate to 
compliance are set forth in these regulations in Sec.  636.4 ``Program 
requirements,'' Sec.  636.8 ``WHIP Plan of Operations,'' and Sec.  
636.9 ``Cost-share agreements.'' These sections make clear the general 
program eligibility requirements, participant obligations for 
implementing a WHIP plan of operations, participant cost-share 
agreement obligations, and

[[Page 71327]]

requirements for operating and maintaining WHIP-funded conservation 
improvements.
    Measure program performance. Pursuant to the requirements of the 
Government Performance and Results Act of 1993 (Pub. L. 103-62, Sec. 
1116) and guidance provided by OMB Circular A-11, NRCS has established 
performance measures for its conservation programs. Program-funded 
conservation activity is captured through automated field-level 
business tools, and the information is available at http://ias.sc.egov.usda.gov/PRSHOME/. Program performance also is reported 
annually to Congress and the public through the annual performance 
budget, annual accomplishments report, and the USDA Performance 
Accountability Report. Related performance measurement and reporting 
policies are set forth in agency guidance (GM-340-401 and GM-340-403) 
(http://directives.sc.egov.usda.gov/).
    The conservation actions undertaken by participants are the basis 
for measuring program performance--specific actions are tracked and 
reported annually, while the effects of those actions relate to whether 
the long-term benefits of the program are being achieved. The program 
requirements applicable to participants that relate to undertaking 
conservation actions are set forth in these regulations in Sec.  636.8 
``WHIP Plan of Operations,'' and Sec.  636.9 ``Cost-share agreements.'' 
These sections make clear participant obligations for implementing, 
operating, and maintaining WHIP-funded conservation improvements, which 
in aggregate result in the program performance that is reflected in 
agency performance reports.
    Demonstrate whether long-term conservation benefits of the program 
are being achieved. Demonstrating the long-term natural resource 
benefits achieved through conservation programs is subject to the 
availability of needed data, the capacity and capability of modeling 
approaches, and the external influences that affect actual natural 
resource condition. While NRCS captures many measures of ``output'' 
data, such as acres of conservation practices, it is still in the 
process of developing methods to quantify the contribution of those 
outputs to environmental outcomes. NRCS currently uses a mix of 
approaches to evaluate whether long-term conservation benefits are 
being achieved through its programs. Since 1982, NRCS has reported on 
certain natural resource status and trends through the National 
Resources Inventory (NRI), which provides statistically reliable, 
nationally consistent land cover/use and related natural resource data. 
However, a connection between these data and specific conservation 
programs (with the exception of the Conservation Reserve Program, since 
1987 the NRI has reported acreage enrolled in CRP) has been lacking. In 
the future, the interagency Conservation Effects Assessment Project 
(CEAP), which has been underway since 2003, will provide nationally 
consistent estimates of environmental effects resulting from 
conservation practices and systems applied. CEAP results will be used 
in conjunction with performance data gathered through agency field-
level business tools to help produce estimates of environmental effects 
accomplished through agency programs, such as WHIP. In 2006, a Blue 
Ribbon panel evaluation of CEAP strongly endorsed the project's 
purpose, but concluded ``CEAP must change direction'' to achieve its 
purposes. (See Soil and Water Conservation Society. 2006. Final Report 
from the Blue Ribbon Panel Conducting an External Review of the U.S. 
Department of Agriculture Conservation Effects Assessment Project. 
Ankeny, IA: Soil and Water Conservation Society. This review is 
available at http://www.nrcs.usda.gov/technical/NRI/ceap/.) In 
response, CEAP has focused on priorities identified by the Panel and 
clarified that its purpose is to quantify the effects of conservation 
practices applied on the landscape. Information regarding CEAP, 
including reviews and current status, is available at http://www.nrcs.usda.gov/technical/NRI/ceap/.
    Since 2004 and the initial establishment of long-term performance 
measures by program, NRCS has been estimating and reporting progress 
toward long-term program goals. Natural resource inventory and 
assessment and performance measurement and reporting policies are set 
forth in agency guidance (GM-290-400; GM-340-401; and GM-340-403) 
(http://directives.sc.egov.usda.gov/).
    Demonstrating the long-term conservation benefits of conservation 
programs is an Agency responsibility. Through CEAP, NRCS is in the 
process of evaluating how these long-term benefits can be achieved 
through the conservation practices and systems applied by participants 
under the program. The program requirements applicable to participants 
that relate to producing long-term conservation benefits are described 
previously under ``measuring program performance,'' i.e., Sec.  636.8 
``WHIP Plan of Operations,'' and Sec.  636.9 ``Cost-share agreements.'' 
These and related program management procedures supporting program 
implementation are set forth in agency guidance (CPM-440-512 and CPM-
440-515).
    Coordinate these actions with the national conservation program 
authorized under the Soil and Water Resources Conservation Act (RCA). 
The 2008 Act reauthorized and expanded on a number of elements of the 
RCA related to evaluating program performance and conservation 
benefits. Specifically, the 2008 Act added a provision stating, 
``Appraisal and inventory of resources, assessment and inventory of 
conservation needs, evaluation of the effects of conservation 
practices, and analyses of alternative approaches to existing 
conservation programs are basic to effective soil, water, and related 
natural resources conservation.''
    The program, performance, and natural resource and effects data 
described previously will serve as a foundation for the next RCA, which 
will also identify and fill, to the extent possible, data and 
information gaps. Policy and procedures related to the RCA are set 
forth in agency guidance (GM-290-400; CPM-440-525; and GM-130-402) 
(http://directives.sc.egov.usda.gov/).
    The coordination of the previously described components with the 
RCA is an agency responsibility and is not reflected in these 
regulations. However, it is likely that results from the RCA process 
will result in modifications to the program and performance data 
collected, to the systems used to acquire data and information, and 
potentially to the program itself. Thus, as the Secretary proceeds to 
implement the RCA in accordance with the statute, the approaches and 
processes developed will improve existing program performance 
measurement and outcome reporting capability and provide the foundation 
for improved implementation of the program performance requirements of 
section 1244(g) of the Food Security Act of 1985, as amended.

Economic Analysis--Executive Summary

    WHIP provides direct technical and financial assistance to improve 
fish and wildlife habitat on eligible agricultural, nonindustrial 
private forest land (NIPF), and Indian land. The focus of the program 
is on national, regional, and State-directed fish and wildlife 
priorities, including rare and declining species. These priorities are 
established with input from the regional, State, and local stakeholders 
through the State Technical Committee. Because these efforts involve 
both onsite and offsite specific impacts, and these impacts

[[Page 71328]]

affect a host of non-market valued attributes ecosystem services, 
performing a traditional benefit-cost analysis is challenging. Even 
with these limitations, a benefit-cost analysis offers a means to 
identify the main costs and benefits and explore policy and program 
alternatives.
    The primary costs associated with WHIP include the cost-share 
outlays by NRCS and the matching funds of the participant to fully pay 
for the restoration and improvements in fish and wildlife habitat 
within the agricultural, forestry operation, or Indian land. These 
primary costs must then be compared with the benefits of the habitat 
improvement realized through these efforts, mainly the improvements of 
the flow of ecological goods and services and provision of non-market 
valued amenities, such as more scenic views, as well as providing fish 
and wildlife habitat.
    The results of this benefit-cost analysis suggest that the WHIP 
assistance to participants will result in positive net benefits, 
especially in areas where fish and wildlife habitat is deteriorating or 
being lost. The changes to WHIP made by the 2008 Act do not change this 
conclusion. Copies of the economic analysis may be obtained from 
Gregory K. Johnson, Director, Financial Assistance Programs Division, 
Department of Agriculture, Natural Resources Conservation Service, 1400 
Independence Avenue, SW., Room 5237 South Building, Washington, DC 
20250.

Discussion of Program

    WHIP is a voluntary program administered by NRCS using the funds 
and authorities of the CCC. WHIP is available in any of the 50 States, 
District of Columbia, Puerto Rico, Guam, the Virgin Islands of the 
United States, American Samoa, and the Commonwealth of the Northern 
Mariana Islands. Through WHIP, NRCS provides technical and financial 
assistance to participants to develop upland, wetland, and aquatic 
wildlife habitat, as well as fish and wildlife habitat on other areas 
and to develop habitat for at-risk species, including threatened and 
endangered species. NRCS first allocated funds for WHIP in 1997. Over 
the life of the program, NRCS has entered into over 29,000 cost-share 
agreements that cover over 4.7 million acres.
    WHIP was originally authorized under section 387 of the Federal 
Agriculture Improvement and Reform Act of 1996 (Pub. L. 104-127). In 
1997, NRCS published regulations to implement WHIP at 7 CFR part 636. 
Section 2502 of the Farm Security and Rural Investment Act of 2002 
(Pub. L. 107-171) repealed the original WHIP authority and established 
a new WHIP under section 1240N of the Food Security Act of 1985, as 
amended. Section 2602 of the 2008 Act made further changes to WHIP.
    These recent changes included restricting eligible lands to private 
agricultural land, NIPF, and Indian land; clarifying the phrase ``other 
types of habitat'' to include habitat developed on pivot corners and 
irregular areas; increasing the proportion of annual funds available 
for long-term agreements that are 15 years or longer to not more than 
25 percent; providing the Secretary with discretionary authority to 
address State, regional, and national conservation initiatives; and 
establishing a $50,000 annual payment limitation per person or legal 
entity. The WHIP statute uses tribal, but NRCS will use Indian and 
tribal interchangeably to be consistent with other programs.

Registration and Reporting Requirements of the Federal Funding and 
Transparency Act of 2006

    The Office of Management and Budget recently published two 
regulations, 2 CFR part 25 and 2 CFR part 170, to assist agencies and 
recipients of Federal financial assistance comply with the Federal 
Funding Accountability and Transparency Act of 2006 (FFATA) (Pub. L. 
109-282, as amended). Both regulations have implementation requirements 
beginning October 1, 2010.
    The regulations at 2 CFR part 25 require, with some exceptions, 
recipients of Federal financial assistance to apply for and receive a 
Dun and Bradstreet Universal Numbering System (DUNS) number and 
register in the Central Contractor Registry (CCR). The regulations at 2 
CFR part 170 establish new requirements for Federal financial 
assistance applicants, recipients, and sub recipients. The regulation 
provides standard wording that each agency must include in its awarding 
of financial assistance that requires recipients to report information 
about first-tier sub awards and executive compensation under those 
awards.
    NRCS has determined that 2 CFR part 25 and 2 CFR part 170 apply to 
certain awards of financial assistance provided under WHIP. Therefore, 
NRCS has incorporated, by reference, these registration and reporting 
requirements at Sec.  636.4 and will include the requisite provisions 
as part of the WHIP contract.

Analysis of Public Comment

    On January 16, 2009, NRCS published an interim final rule in the 
Federal Register. On March 12, 2009, NRCS published an amendment to the 
interim final rule addressing the incorrect application of the $50,000 
annual payment limitation to joint operations and requesting public 
comment on how USDA's conservation programs can further the Nation's 
ability to increase renewable energy production and conservation, 
mitigate the effects and adapt to climate change, and reduce net carbon 
and greenhouse gas (GHG) emissions.
    Following this amendment and request for comment, NRCS published an 
additional amendment to the interim final rule, with a request for 
comment, on July 15, 2009, redefining the term agricultural lands to be 
more inclusive of lands that have the potential to produce agricultural 
products or livestock. The comments received on the interim final rule 
and amendments were consolidated and are addressed in this public 
comment analysis. In total, 43 comments were received during the 
comment periods; 3 were from individuals, 15 from State agencies, 2 
from Federal agencies, 2 from Indian tribes, and 23 from 
nongovernmental organizations. All comments received are available for 
review at http://www.nrcs.usda.gov/programs/farmbill/2008/public-comments.html.
    The discussion that follows is organized in the same sequence as 
the interim final rule.

Section 636.1 Applicability

    Section 636.1 sets forth WHIP's purpose and scope, stating that 
``the purpose of the program is to help participants develop fish and 
wildlife habitat on private agricultural land, NIPF, and Indian land.''
    Comments: One respondent expressed concern about NRCS proposing to 
strike the term species from the program's purpose statement, shifting 
the program focus from species to land and water resources.
    Response: The interim final rule replaced the phrase ``for upland 
wildlife, wetland wildlife, threatened and endangered species, fish, 
and other types of wildlife'' with the phrase ``develop fish and 
wildlife habitat on private agricultural land, NIPF, and Indian land,'' 
in an effort to be consistent with the program's statutory authority. 
The simplified language provided the appropriate broad interpretation 
for the types of habitat to be developed on eligible lands, including a 
new statutory requirement to encourage the development of habitat for 
native and managed pollinators. No changes were made to the final rule.
    Comments: Numerous respondents requested that NRCS extend WHIP's

[[Page 71329]]

program purpose and scope to pollinators, specifically. Five 
respondents requested that NRCS reference native and managed pollinator 
habitat, while four of the five respondents wanted WHIP to focus on 
native pollinators and their habitats and not managed pollinators, 
leaving managed pollinator habitat to other conservation programs like 
the Environmental Quality Incentives Program (EQIP).
    Response: Section 1244(h) of the Food Security Act of 1985, as 
amended states:
    ``In carrying out any conservation program administered by the 
Secretary, the Secretary may, as appropriate, encourage (1) the 
development of habitat for native and managed pollinators; and (2) the 
use of conservation practices that benefit native and managed 
pollinators.''
    Section 1244(h) includes both managed and native pollinators. In 
section 1244(h), WHIP's authority focuses on wildlife habitat with no 
distinction made between native and managed species. As part of the 
development of habitats in many projects, WHIP plants grasses, forbs, 
shrubs, and trees that provide habitats for pollinator species as a 
consequence of providing habitats for prioritized wildlife. NRCS 
chooses to retain the interim final rule's original language which 
follows the intent of section 1244(h) and WHIP's legislative authority 
that makes no distinction between restoring or enhancing native and 
managed pollinator species' habitats.
    Comments: Several respondents requested that NRCS focus its 
technical assistance efforts on improving pollinator habitat. One 
respondent wanted NRCS to designate a national coordinator to advance 
habitat for honey bees and expand its outreach to potential 
participants. Another respondent expressed concern that with a lack of 
emphasis in a regulation, pollinator habitat may be disregarded by 
individual States. Another respondent wanted to ensure that expedited 
efforts were made to update and revise the conservation practice 
standards and technical notes, assuring that these standards and 
technical notes were appropriate and relevant to the local habitat and 
species' needs. Moreover, the respondent wanted NRCS to provide input 
to the National Institute of Food and Agriculture and Agricultural 
Research Service about additional research needed to improve the 
science regarding wildlife habitat and conservation practices that are 
best for native and managed pollinators.
    Response: No changes were made to the rule in response to these 
comments. State Conservationists have been encouraged to establish 
pollinator species as State priorities, and they have done so. In 
fiscal year (FY) 2009, NRCS funded 54 projects to restore and improve 
pollinator habitat through the WHIP and the Conservation Innovation 
Grants (CIG) program. Interim conservation practice standards and 
technical notes have been and are in the process of being established. 
State Conservationists are providing information to producers that 
conservation practices which benefit pollinator species are eligible 
for cost-share. NRCS does not conduct research, but has established 
partnerships with agencies that provide information from research.

Section 636.2 Administration

    Section 636.2 sets forth the policies related to NRCS and its 
agreements with partners.
    Comments: Two respondents requested that NRCS include marketing and 
outreach as eligible work for partner agreements, also known as 
contribution agreements. Several respondents supported the flexibility 
to enter into agreements with Federal and State agencies and Indian 
tribes to assist with program implementation.
    Response: Since WHIP's inception, NRCS has used partnership 
agreements with Federal, State, and local agencies to implement the 
program. NRCS has the ability to include marketing and outreach in 
these agreements.
    Aside from working through contribution agreements, NRCS also has 
the ability to enter into agreements with Technical Service Providers 
(TSPs) to assist in implementing conservation programs. Section 2706 of 
the 2008 Act amended the Food Security Act of 1985, as amended to 
authorize payments to TSPs for related technical assistance services 
that accelerate program delivery. Related technical assistance services 
include, but are not limited to, conservation planning documentation, 
payment scheduling, and documentation. Technical standards for 
certifying other services like outreach and marketing TSPs will be 
formulated during FY 2010.
    As in the case of other Title XII conservation programs, a WHIP 
participant or NRCS may use the services of a qualified TSP to install 
and implement conservation practices. Technical services provided may 
include conservation planning; conservation practice survey, layout, 
design, installation, and certification; and related technical 
assistance services as described above. To clarify that TSPs may be 
used to expedite WHIP conservation program delivery, NRCS has added 
related technical assistance services to Sec.  636.18(c): ``Technical 
services provided by qualified personnel not affiliated with USDA may 
include, but is not limited to, conservation planning; conservation 
practice survey, layout, design, installation, and certification; and 
related technical assistance services as defined in 7 CFR part 652.''

Section 636.3 Definitions

    When NRCS published the WHIP interim final rule, it revised many of 
WHIP's definitions to be consistent with other NRCS conservation 
programs and to avoid confusion among NRCS field personnel and 
customers. A majority of the comments received during the interim final 
rule's request for comment period were definitions contained in section 
636.3. Following are definitions received from public comments.

Agricultural Lands

    Comments: Over 20 respondents commented on the agricultural lands 
definition. The majority of respondents stated that the definition of 
agricultural lands was too limited. The respondents requested that NRCS 
expand the definition to include ``lands on which agricultural and 
forest products may be produced or have the potential to be produced.'' 
They cited that many rural, privately owned lands offer significant 
wildlife habitat potential, despite the fact that they are not 
currently used for agricultural production.
    Response: NRCS concurs with this recommendation and on July 15, 
2009, published an amendment to the interim final rule which defined 
agricultural lands as: ``Cropland, grassland, rangeland, pastureland, 
and other land determined by NRCS to be suitable for fish and wildlife 
habitat development on which agricultural and forest-related products 
or livestock are or have the potential to be produced. Agricultural 
lands may include cropped woodland, wetlands, waterways, streams, 
incidental areas included in the agricultural operation, and other 
types of land used for or have the potential to be used for 
production.''
    Under WHIP, NRCS has the discretion to define agricultural lands in 
order to meet the program objectives. In the past, WHIP served as a 
niche program through its ability to improve wildlife habitat on areas 
that were not otherwise eligible for NRCS conservation assistance. NRCS 
believes that the interim final rule's agricultural lands definition 
was too narrow in its interpretation of the statute, especially since 
lands that are not currently under

[[Page 71330]]

production oftentimes can most readily be improved for wildlife 
habitat, and that there are many active conservationists who wish to 
enhance wildlife habitat but may not be actively producing a commodity 
or raising livestock. As noted above, this change was adopted in the 
amendment to the interim final rule.
    Comments: Two respondents requested that NRCS add specific language 
to modify the agricultural lands definition to make it consistent with 
the Farm Credit Administration's (FCA) definition of agricultural land. 
The intent behind making the WHIP definition consistent with FCA's 
definition was similar to the rationale described above --expand the 
types of eligible lands to those that have the potential or are 
available to produce a crop, fruits, timber, or livestock.
    Response: Based upon the rationale set forth above, NRCS concurs 
with this recommendation and on July 15, 2009, published an amendment 
to the interim final rule which changed the definition of agricultural 
lands.
    Comments: Nearly a dozen respondents requested that specific areas 
be identified in the definition of agricultural lands. Areas mentioned 
included wetlands, riparian areas, aspen groves, streams, canals, 
shelterbelts, buffer strips, and waterways.
    Response: NRCS has chosen to retain the current definition of 
agricultural lands with the slight modification of changing marshes to 
wetlands, since wetlands is a more inclusive term to describe areas 
WHIP seeks to restore and enhance. NRCS has also chosen to add the 
terms waterways and streams. NRCS believes areas like canals, 
shelterbelts, aspen groves, and buffer strips would be determined to be 
eligible since they would be considered lands incidental to the 
agricultural or forestry operation.

Applicant

    Comments: Six respondents requested changing the definition of 
applicant. As currently defined, an applicant must have an interest in 
an agricultural operation. Such a requirement prohibits NIPF landowners 
and others who own or operate agricultural land with the potential to 
produce an agricultural crop or livestock from participating.
    Response: NRCS accepts this recommendation to revise the term 
applicant, and modifies the definition in this final rule as follows: 
``Applicant means a person, legal entity, joint operation, or Indian 
tribe that has an interest in agricultural land, NIPF, Indian land, or 
other lands identified in Sec.  636.4(c)4, who has requested in writing 
to participate in WHIP.''

At-Risk Species

    Comments: In the interim final rule published on January 16, 2009, 
NRCS specifically requested comment on its definition of at-risk 
species. Approximately 20 individuals and organizations responded to 
this request, providing suggestions on how NRCS could modify this 
definition.
    Fifteen respondents suggested using the definition that exists in 
the Memorandum of Understanding (MOU) with the U.S. Fish and Wildlife 
Service (USFWS), NRCS, and the Association of Fish and Wildlife 
Agencies. As stated in the MOU, ``at-risk species refers to plant and 
animal species in that area listed as threatened or endangered under 
the Endangered Species Act (ESA); proposed or candidates for listing 
under ESA: likely to become candidates for listing in the near future; 
species listed as endangered or threatened (or similar classification) 
under State law; and State species of conservation concern (i.e., those 
species identified by State fish and wildlife agencies in State 
wildlife action plans or other State agency conservation strategies and 
plans that include species identified as being in greatest need of 
conservation concern).''
    One respondent suggested that State agencies determine at-risk 
species, while another respondent suggested that NRCS retain the 
interim final rule definition as follows: ``Any plant or animal species 
as determined by the State Conservationist, with advice from the State 
Technical Committee, needing direct intervention to halt its population 
decline.'' Another respondent wanted NRCS to take into account global 
species of concern generated by The Nature Conservancy and a similar 
list generated by the International Union of Conservation of Nature. 
One respondent recommended that consideration should also be extended 
to ecosystems at-risk as well as species.
    One respondent suggested using the MOU definition, in conjunction 
with NRCS' definition, specifically rewording the definition as 
follows: ``At-risk species refers to (1) any plant or animal species 
listed as threatened or endangered under ESA, (2) proposed for listing 
under ESA, (3) a candidate for listing in the near future, (4) likely 
to become a candidate for listing in the near future, (5) listed as 
endangered or threatened (or similar classification) under State law, 
(6) a species of conservation concern, or (7) other species determined 
by the State Conservationist, with advice from the State Technical 
Committee, to need direct intervention to halt its population 
decline.'' Another respondent suggested that NRCS expand the definition 
beyond the MOU definition by adding the following sentence to the MOU 
definition: ``At-risk species may also include native species 
identified by the Chief, in consultation with the State Conservationist 
and State Technical Committee, and with advice from the USFWS, National 
Marine Fisheries Service, or other experts as at-risk because of 
population vulnerability due to climate change, catastrophic events, or 
pest/pathogen outbreaks.''
    Two respondents defined at-risk species more broadly stating at-
risk means any plant or animal species as determined by the State 
Conservationist, with advice from the State Technical Committee, the 
USFWS, the State agency responsible for fish and wildlife, and in 
consultation with the State wildlife action plan to include species 
listed as endangered or threatened under ESA and proposed or candidate 
species for listing under ESA (this allows determination by the State 
Conservationist), while another respondent requested that NRCS allow 
for a localized area to give a designation.
    Response: Section 636.3 in the interim final rule defines at-risk 
species as ``any plant or animal species as determined by the State 
Conservationist, with advice from the State Technical Committee, to 
need direct intervention to halt its population decline.'' NRCS 
developed this definition to provide maximum flexibility and allow the 
State Conservationist to enroll acres for any type of species, provided 
it is experiencing population decline. For example, the at-risk 
definition has enabled NRCS to restore wildlife habitat for species 
that have experienced population decline from a natural disaster or 
other situation, without the requirement that the species be included 
on a list.
    NRCS determined, based on the public comments, to revise its 
definition to read as follows: ``At-risk species means any plant or 
animal species listed as threatened or endangered; proposed or 
candidate for listing under the ESA; a species listed as threatened or 
endangered under State law or tribal law on tribal land; State or 
tribal land species of conservation concern; or other plant or animal 
species or community, as determined by the State Conservationist, with 
advice from the State Technical Committee and Tribal Conservation 
Advisory Council (for tribal land), that has undergone, or likely to 
undergo, population decline

[[Page 71331]]

and may become imperiled without direct intervention.''

Habitat Development

    Comments: Two respondents requested that NRCS modify the habitat 
development definition solely to address native conditions for fish and 
wildlife habitat.
    Response: WHIP's authority focuses on wildlife habitat with no 
distinction made between native and managed species and no distinction 
made on native or managed conditions. NRCS chooses to retain the 
flexibility afforded by the program's enabling legislation and leave it 
to the discretion of the State Conservationist, with advice from the 
State Technical Committee, to restore or enhance wildlife for those 
species that are deemed to need habitat restoration or enhancement in 
that geographic area or State. No changes were made to the final rule.

Historically Underserved Producer

    Comments: Three respondents requested that NRCS expand WHIP's 
applicability to include NIPF landowners or family forest owners, along 
with farmers and ranchers, in the definition of historically 
underserved producer.
    Response: NRCS' current definition of historically underserved 
producer is as follows: ``Historically underserved producer means an 
eligible person, joint operation, or legal entity who is a beginning 
farmer or rancher, socially disadvantaged farmer or rancher, or limited 
resource farmer or rancher.''
    NIPF landowners are eligible for the increased WHIP cost-share 
rates afforded to historically underserved agricultural producers, 
provided they meet the same quantifiable criteria contained within the 
separate definitions for beginning farmer or rancher, limited resource 
farmer or rancher, or socially disadvantaged farmer or rancher. Section 
636.3 defines each of these terms.
    To clarify that NIPF landowners can qualify for the increased cost-
share rates, NRCS revises the historically underserved producer 
definition as follows: ``Historically underserved producer means an 
eligible person, joint operation, legal entity, or Indian tribe who is 
a beginning farmer or rancher, socially disadvantaged farmer or 
rancher, limited resource farmer or rancher, or NIPF landowner who 
meets the beginning, socially disadvantaged, or limited resource 
qualifications set forth in Sec.  636.3.''

Livestock

    Comments: Two respondents request that NRCS revise the definition 
of livestock to limit the terminology to ``all domesticated animals 
kept on farms and ranches for the production of agricultural goods, as 
determined by the Chief.''
    Response: NRCS retains the interim final rule's definition since 
some animals raised on a farm or ranch such as bison, fish, or emus may 
not be considered domesticated species. As defined, ``livestock means 
all animals produced on farms and ranches, as determined by the 
Chief.''

Resource Concern

    Comments: Four respondents requested that NRCS modify the 
definition of resource concern, striking the phrase by producers and 
replacing it with by participants.
    Response: NRCS accepts this recommendation since the term 
participant is the term used to describe a person, joint operation, or 
legal entity that has responsibility to implement the contract. 
Therefore, the final rule definition is as follows: ``Resource concern 
means a specific natural resource problem that represents a significant 
concern in a State or region, and is likely to be addressed 
successfully through the implementation of the conservation activities 
by participants.''

Wildlife

    Comments: Four respondents requested that NRCS include mollusks in 
the definition of wildlife.
    Response: Mollusks are considered invertebrates; therefore, NRCS 
retains the definition of wildlife as stated in the interim final rule: 
``Wildlife means non-domesticated birds, fishes, reptiles, amphibians, 
invertebrates, and mammals.''

Section 636.4 Program Requirements

    Section 636.4 articulates program eligibility requirements. In the 
interim final rule, NRCS made several adjustments to Sec.  636.4(b) to 
incorporate the 2008 Act changes to land eligibility and to conform the 
eligibility language to the new definitions described in Sec.  636.3. 
In particular, NRCS identified in Sec.  636.4(b) that eligible lands 
included agricultural land, NIPF, and Indian land as defined in Sec.  
636.3. Most of the comments received for this section focused on 
eligible lands and the role of other agencies in determining what lands 
are eligible for WHIP assistance.

Land Eligibility

    Comments: Several respondents were disappointed that NRCS limited 
the program to private agricultural lands, NIPF, and tribal lands, 
stating that a lot of wildlife benefits can occur on public lands. 
Another respondent recommended that the public lands restriction be 
revised when significant habitat gains can accrue on public lands, 
while another respondent suggested that NRCS allow public lands if it 
is a working component of the participant's agricultural or forestry 
operation, and where an at-risk species on private land would benefit. 
Ten respondents suggested that public lands leased by private 
landowners who have control over the land for the contract period be 
eligible. Nine of those respondents also wanted NRCS to allow public 
lands that were held in trust for the beneficiaries of a State's 
education system. Another respondent requested that WHIP allow for a 
small number of strategically located projects on private non-
agricultural land, State, or locally-owned public lands.
    Response: The 2008 Act amended section 1240N of the Food Security 
Act of 1985, as amended to limit WHIP's scope to ``wildlife habitat on 
private agricultural land, NIPF, and tribal lands.'' Consequently, 
public lands are ineligible for WHIP assistance, even those leased by 
private landowners or States' education systems. Based on this 
authority, WHIP's activities on streams and waterways are limited to 
the extent that these lands are considered private lands. The final 
rule is being revised to provide that certain trust lands are eligible 
for assistance.

Hawaii and Other Pacific Trust Lands

    Comments: Several respondents requested that NRCS allow public 
leaseholder land in the State of Hawaii to be eligible for WHIP cost-
share assistance. In addition to Hawaii homelands, several respondents 
also requested that NRCS expand the definition of Indian land beyond 
tribal and trust land held by Alaska Natives to include trust lands in 
the Pacific.
    Response: The respondents accurately note that many public trust 
lands in Hawaii and other Pacific locations operate as the equivalent 
of private land and leaseholders hold such land under very long-term 
leases (99 years in the case of Hawaii) and often without any payment 
to the government at issue including any requirement to share any 
profits made from agricultural operations. While such trust lands 
cannot fall under the statutory definition of tribal lands as urged by 
the

[[Page 71332]]

respondents, as set forth below, the rule is being revised to make such 
trust lands eligible for WHIP assistance when the Chief determines 
trust land is held under a long-term lease by a person or 
nongovernmental entity and when the Chief determines that (i) By the 
nature of the lease, such land is tantamount to private agricultural 
land; (ii) the duration of the lease is at least the length of any WHIP 
agreement; and (iii) no funds under the WHIP program are paid to a 
governmental entity.
    Comments: Ten respondents requested that NRCS allow stream systems, 
including stream bottoms, to be eligible, while another respondent 
requested that NRCS allow streams to be eligible if the activity is for 
dam removal. Six respondents requested that NRCS allow stream systems 
to be eligible when the landowner who operates the land within these 
landscapes is willing to participate. Two respondents supported the 
rationale to allow streams to be enrolled, particularly if it is public 
land that remains under private control during the contract period. Two 
respondents stated that the intent of WHIP was to limit WHIP's use in 
State Parks and wildlife areas, not where private land surrounds the 
stream or waterway.
    Response: NRCS will enroll streams and stream bottoms provided the 
governmental entity with authority over State or Federal waters 
provides documentation certifying that the stream and the stream bottom 
are considered private land. The processes for obtaining this approval 
will be outlined in 440 Conservation Programs Manual, Part 517, Section 
517.22 Eligibility.
    Comments: Section 1240N(b) directs the Secretary to ``make cost-
share payments to owners of lands referred to in subsection (a) to 
develop (A) upland wildlife habitat; (B) wetland wildlife habitat; (C) 
habitat for threatened and endangered species; (D) fish habitat; and 
other types of wildlife habitat approved by the Secretary, including 
habitat developed on pivot corners and irregular areas.'' One 
respondent supported Congress' addition of pivot corners into WHIP.
    Response: Prior to the 2008 Act, the existing WHIP regulation 
encompassed habitats on areas such as pivot corners; therefore, NRCS 
determined that it did not need to amend the final rule, although the 
preamble clarified that pivot corners were considered eligible lands.
    Comments: Several respondents requested that NRCS involve other 
agencies in the determination of public lands. Specifically, four 
respondents recommended that NRCS modify 636.4(c), to allow the USFWS 
and State agencies to be involved in determining land that is 
ineligible. Specifically, they request that NRCS revise paragraph (c) 
as follows: ``Ineligible land. NRCS will not provide cost-share 
assistance if after coordination with the State fish and wildlife 
agency and USFWS with respect to conservation practices on land * * *''
    Response: NRCS chooses to retain the interim final rule's language 
in Sec.  636.4 which does not specify consultation with State fish and 
wildlife agencies or USFWS. The State Conservationist may consult with 
the State fish and wildlife agency and USFWS on ineligible land 
determinations as stated in 440 Conservation Programs Manual, Part 517, 
Section 517.22; however, the final decision rests with the State 
Conservationist.
    Comments: One respondent requested that NRCS broaden the scope of 
Sec.  636.4(c)(3) to include not just threatened and endangered 
species, but also at-risk species. In essence, the respondent requested 
that NRCS not provide assistance on land where at-risk species may be 
adversely affected, while two additional respondents requested that 
NRCS expand the list to proposed or candidates for listing under ESA or 
likely to become candidates under ESA or similar classification under 
State law.
    Response: NRCS retains the reference to threatened and endangered 
species in Sec.  636.4(c)(3), since the proposed categorized species 
are broader categories of species that are experiencing population 
decline and such species may not undergo the same scrutiny and 
information gathering process in their labeling as threatened or 
endangered species.
    Comments: Section 636.4(c)(4) sets forth the types of lands 
ineligible for WHIP assistance. Three respondents requested that NRCS 
revise Sec.  636.4(c)(4) regarding ineligible land to read: ``Lands 
owned in fee title by an agency of the United States, other than land 
held in trust for Indian tribes, and (ii) lands owned in fee title by a 
State, including an agency or subdivision of a State or a unit of 
government.''
    Response: NRCS supports the recommended wording change and adopts 
it.

Person Eligibility

    Comments: Several respondents commented on person eligibility. One 
respondent supported NRCS' ability to grant waivers for persons and 
legal entities who exceed the Adjusted Gross Income (AGI) limitation as 
specified in 7 CFR part 1400. Section 1400.500 allows the Chief to 
grant a waiver ``for the protection of environmentally sensitive land 
of special significance.'' Such a waiver proves helpful to States like 
Hawaii, where high real estate prices, wealthy landowners, and critical 
natural resources exist. Two respondents questioned whether tribes were 
exempt from the AGI limitation.
    Response: Tribes are exempt from AGI limits in accordance with 7 
CFR part 1400, ``Farm Program Payment Limitation and Payment 
Eligibility for 2009 and Subsequent Crop, Program, or Fiscal Years.''
    Comments: One respondent requested that WHIP should reflect the 
policy outlined in 7 CFR part 1466, EQIP, which clearly exempts Indian 
tribes or Indians represented by the Bureau of Indian Affairs (BIA) 
from the limitations.
    Response: 7 CFR 1400.4 excludes tribes from payment limitation and 
eligibility provisions related to the AGI: ``Provisions of this part do 
not apply to Indian tribes as defined in section 1400.3.'' The 
regulation's corresponding preamble states the following:

    ``In this rule, section 1400.4 exempts Indian tribes, as defined 
in 1400.3, from all requirements of this part. Provisions of this 
part apply to persons or legal entities. Indian tribes are not 
included under the definition of person or legal entity as provided 
by the 2008 Act for the application of payment eligibility and 
payment limitation provisions. The 2008 Act does not impose any 
limitations or restrictions on programs payments and benefits to 
federally recognized Indian tribes. This exemption to the provisions 
of this part only applies to Indian tribes. The payment eligibility 
and payment limitation requirements remain applicable to individual 
American Indians or Alaska Natives receiving program payment and 
benefits as individuals, or through a group in which all members of 
the group are American Indians or Alaska Natives.''

    For this reason, persons and legal entities within the tribe will 
be subject to limitations in accordance with Sec.  636.4(a)(9); 
however, payments made to tribal groups may exceed the payment 
limitation if the BIA or a tribal official certifies that no one 
individual will receive more than the established payment limitation.
    Comments: As it relates to tribes, one respondent requested that 
NRCS form a partnership via a Memorandum of Agreement or MOU between 
NRCS and the tribe to ensure that tribal members comply with tribal law 
before applying for WHIP benefits as well as operational consideration. 
An individual tribal member must comply with a tribal management plan 
and be able to show proper documentation for land control pursuant to 
the tribal nation.

[[Page 71333]]

    Response: The NRCS policy is to work with all tribes to meet all of 
their resource needs. No changes were made to the final rule.
    Comments: Related to payment matters, one respondent requested that 
NRCS rephrase Sec.  636.9(c) to add: ``Deferment will be eligible for 
payments for foregone income when deferment of use is needed to meet 
habitat need and achieve program objectives.''
    Response: Section 1240N identifies that NRCS is to provide cost-
share assistance to private agricultural landowners to develop wildlife 
habitat. The statutory authority does not restrict cost-share 
assistance to any particular identified aspect of the cost of habitat 
development. As can be gleaned from other financial assistance 
programs, the costs associated for implementing a conservation 
practice, activity, or other fish and wildlife habitat development 
action includes the income forgone from its implementation, and thus, 
income foregone is an appropriate consideration for determining the 
level of cost-share assistance that should be made available under the 
program. Therefore, NRCS will review and develop payment rates wildlife 
habitat development actions where the income foregone by the WHIP 
participant to implement those actions is appropriate to be included in 
the cost-share payments made under the WHIP contract. NRCS has made 
editorial adjustments throughout the final rule to clarify that cost-
share assistance is available for the implementation of cost-share 
practices, activities, and other habitat development actions, and that 
such cost-share assistance includes income foregone. Therefore, NRCS 
has added a new term, ``conservation activities,'' to encompass the 
range of habitat development actions eligible for cost-share 
assistance, and incorporated the term throughout the final rule where 
appropriate.
    Comments: One respondent suggested that NRCS clarify when the 
operation and maintenance (O&M) agreement will be signed.
    Response: The O&M agreement will continue to be signed at the time 
that the WHIP plan of operations cost-share agreement is signed. In 
accordance with Sec.  636.8, the WHIP plan of operations forms the 
basis for the WHIP cost-share agreement, along with the O&M agreement. 
The WHIP plan of operations includes a schedule for the implementation 
and maintenance of the conservation activities, as determined by NRCS.

Section 636.5 National Priorities

    Section 636.5 provides that NRCS will establish national priorities 
to guide funding to the State offices, selection of WHIP cost-share 
agreements, and implementation priority for WHIP conservation 
practices.
    Comments: NRCS received over 20 comments pertaining to WHIP's 
national priorities. Nine respondents supported WHIP's national 
priorities outlined in section 636.5(a). Several others supported 
WHIP's priorities, but wanted to see pollinators addressed as part of 
the priorities. Several of those respondents wanted only native 
pollinators to be considered national priorities. Another respondent 
wanted honey bees to be a national priority. Six respondents requested 
giving priority to unique habitats or special geographic areas 
identified by the State, while two other respondents requested that 
natural disasters, such as catastrophic wildfires, insect and disease 
outbreaks, invasive, and other natural disasters be considered a 
national priority. Several respondents requested that WHIP address 
these priorities and other additional priorities identified in section 
8001 of the 2008 Act.
    Response: Although these are good comments, they are too specific. 
The existing WHIP national priorities are broad and include these 
recommendations.
    Comments: One respondent requested that WHIP address State, 
regional, or national conservation initiatives in its list of national 
priorities.
    Response: NRCS believes that it is not necessary to add this last 
recommendation to Sec.  636.5, since State, regional, and national 
conservation initiatives are already addressed in Sec.  636.6, 
``Establishing priority for enrollment in WHIP.''
    Comments: One respondent requested that NRCS add the following to 
its list of priorities: ``(a)(5) Protect, restore, develop, or enhance 
important migration and other movement corridors for wildlife.''
    Response: NRCS has added the above-mentioned migration or movement 
corridor to 636.5 (a)(5) as WHIP's fifth national priority since it is 
neither species nor land-use specific.
    Comments: Several organizations commented on WHIP's priority 
setting process. One respondent would like the process for establishing 
national priorities promulgated in the regulation, while others 
requested outside agency input.
    Response: NRCS is not making changes to the final rule in response 
to these comments because the rulemaking process enables respondents to 
comment on WHIP's national priorities. In addition, Sec.  636.5(b) 
articulates the policy to undertake periodic review of the agency's 
national priorities.

Section 636.6 Establishing Priority for Enrollment in WHIP

    Section 636.6 establishes the policies and procedures for enrolling 
lands in WHIP at the State and local levels.
    Comments: A majority of the comments received focused on priority 
setting, requesting that NRCS name specific priorities and policies in 
the regulation, while others commented on specific ranking criteria. 
Other respondents supported NRCS' emphasis on local input, while others 
raised concern about the Chief being able to limit the program to 
specific geographic areas. Finally, some respondents requested specific 
wording changes.
    For example, several respondents requested amending Sec.  636.6 to 
add after paragraph (a): ``These conservation initiatives may include 
such things as the North American Waterfowl Management Plan, the 
National Fish Habitat Action Plan, the Greater Sage-Grouse Conservation 
Strategy, the State Comprehensive Wildlife Conservation Strategies 
(also referred to as the State Wildlife Action Plan), the Northern 
Bobwhite Conservation Initiative, and State forest resource 
strategies.'' One respondent requested adding ``and other conservation 
plans designated by the Chief'' to the list. Three other respondents 
requested that NRCS amend Sec.  636.6(c) to include priority forest 
areas or regions identified in the State Forest Resource Assessments 
and Strategies required by section 8002 of the 2008 Act.
    Response: In order to maintain flexibility when addressing wildlife 
habitat needs, the State Conservationist, with input from the State 
Technical Committee, identifies appropriate ranking criteria and uses 
the agency-approved Application Evaluation and Ranking Tool (AERT) to 
prioritize all eligible applications. Ranking priority is given to 
those applications that complement the goals and objectives of relevant 
fish and wildlife conservation initiatives at the State, regional, and 
national levels, including the current and successor plans of the 
initiatives identified by the respondents.
    Comments: Several respondents suggested specific wording revisions 
in Sec.  636.6(a) by changing the word ``and'' to ``or.'' Another 
respondent suggested that NRCS change the word limit to focus.
    Response: NRCS accepts these recommendations and has reworded 
paragraph (a) as follows: ``NRCS, in consultation with Federal and 
State agencies, tribal, and conservation partners, may identify 
priorities for

[[Page 71334]]

enrollment in WHIP that will complement the goals and objectives of 
relevant fish and wildlife conservation initiatives at the State, 
regional, tribal land, or national levels. In response to national, 
tribal, regional, or State fish and wildlife habitat concerns, the 
Chief may focus program implementation in any given year to specific 
geographic areas or to address specific habitat development needs.''
    Comments: As it relates to Sec.  636.6(c)(1), several respondents 
recommended the paragraph be revised as follows: ``Contribution to 
resolving an identified habitat concern of national, regional, or State 
importance, including habitat to benefit at-risk species.'' One 
respondent supports NRCS' change in terminology from needs to concern.
    Response: NRCS accepts these suggestions and has incorporated them 
into the final rule.
    Comments: NRCS received several comments on the 2-year-completion 
criteria. Several respondents expressed concern that giving priority to 
applicants who are willing to complete all conservation practices 
within 2 years discriminates against more complex projects. Three 
respondents suggest offering a higher cost-share rate during the first 
2 years of the contract to motivate completion of a contract. Two 
respondents say that completing a contract will be difficult in 2 
years, but that higher cost-share rates during the first 2 years would 
promote completion. One respondent supports NRCS emphasis on a 2-year 
agreement.
    Response: Section 636.6(c) of the interim final rule states the 
following: ``(c) NRCS will evaluate the applications and make 
enrollment decisions based on the fish and wildlife habitat need using 
some or all of the following criteria * * * (8) Willingness of the 
applicant to complete all conservation improvements during the first 2 
years of the WHIP cost-share agreement.'' The State Conservationist, 
with advice from the State Technical Committee, has discretion to use 
one or more of the criteria listed in Sec.  636.6(c). Depending on the 
needs of the particular geographic area or State, the State 
Conservationist may or may not use a participant's willingness to 
complete the application within the first 2 years. However, to ensure 
more complex projects have an opportunity to be funded, at-risk species 
is added to 636.6 (c)(1). NRCS amends Sec.  636.6(c)(1) in the interim 
final rule to read as follows: ``Contribution to resolving an 
identified habitat concern of national, tribal, regional, or State 
importance including at-risk species.''

Section 636.7 Cost-Share Payments

    Section 636.7 sets forth the payment rates, payment limitations, 
and requirements for receiving payments under WHIP. In the interim 
final rule, NRCS adopted a number of payment policies to address the 
2008 Act requirements and to make WHIP consistent with other NRCS 
conservation programs. These policies included: Revising WHIP cost-
share rates, stipulating that NRCS will offer to pay no more than 75 
percent of the costs of establishing conservation practices; adding a 
new provision as Sec.  636.7(a)(2) to allow NRCS to provide additional 
cost-share incentives to historically underserved producers that 
include limited resource farmers or ranchers, beginning farmers or 
ranchers, and socially disadvantaged farmers or ranchers; and 
instituting a payment limitation of $50,000 per person or legal entity 
per year as required under section 1244(a)(2) of the Food Security Act 
of 1985, as amended.
    Comments: Several respondents requested that NRCS make WHIP 
consistent with other NRCS programs, like EQIP, by paying for activity 
plans and income foregone. They specifically suggested rewording Sec.  
636.7(d) as follows: ``NRCS, in consultation with the State Technical 
Committee, will identify and provide public notice of the conservation 
practices eligible for payment under the program. Conservation 
practices eligible for payment include development and implementation 
of conservation activity plans including grazing, haying, forestry, and 
stubble management.''
    In line with compensating producers for income foregone, one 
respondent supported a payment that recognized game damage.
    Response: NRCS does not have authorization in WHIP to make payments 
based on any method other than cost-sharing to develop upland wildlife 
habitat, wetland wildlife habitat, habitat for threatened and 
endangered species, fish habitat, and other types of wildlife habitat 
approved by the Secretary, including habitat developed on pivot corners 
and irregular areas. Accordingly, NRCS cannot provide payments for 
conservation activity plans. However, as discussed above, NRCS is 
modifying this final rule to include income foregone as a cost element 
of wildlife habitat development that will be included in payment rates.
    Comments: Several respondents requested that WHIP's payments be 
flexible based on the type of species targeted. Specifically, 10 
respondents requested to allow waivers to the 75 percent Federal cost-
share cap when dealing with at-risk species, while several of these 
respondents specifically requested that the cost-share rate be raised 
up to 90 percent for threatened and endangered species, pollinators, 
and other species considered to be at-risk or declining. One respondent 
recommended specific wording changes to Sec.  636.7. The comment called 
for a change in the 15-year minimum contract to 5 years for 90 percent 
cost-share for Federal or State threatened and endangered recovery 
plans.
    Response: NRCS chooses to retain the language in the interim final 
rule which gives flexibility to the State Conservationist to establish 
cost-share rates up to 75 percent and up to 90 percent for specified 
cost-share agreements. Section 636.7(a)(1) sets forth that NRCS will 
not pay more than 75 percent of the costs to develop fish and wildlife 
habitat, including those that target at-risk or declining species. For 
cost-share agreements that are 15 years or more and whose habitat 
development actions have been determined to protect essential plant or 
animal habitat, NRCS may provide up to 90 percent of those habitat 
development actions. For participants who are considered historically 
underserved, NRCS may issue payments not less than 25 percent above the 
applicable payment rate, provided that this increase does not exceed 90 
percent of the estimated incurred costs associated with the 
conservation practice.
    Comments: NRCS received several comments on the 25 percent set-
aside for cost-share agreements exceeding 15 years.
    Response: Section 1240N(b)(2)(B) of the Food Security Act of 1985, 
as amended specifies NRCS may use up to 25 percent of WHIP funds to 
carry out cost-share agreements that extend 15 years or more. Prior to 
the 2008 Act, NRCS had the legislative authority to use up to 15 
percent of WHIP funds to carry out these longer-term agreements.
    Comments: One respondent suggested NRCS should track the 25 percent 
set-aside for cost-share agreements described in Sec.  636.9(c) at the 
national level, instead of requiring 25 percent of all State funds for 
these projects, since annual allocations are typically small amounts.
    Response: NRCS already tracks the 25 percent annual reserve for 
longer-term agreements on a State and national level. NRCS uses its 
contracting software to track this and all other information about its 
cost-share agreements. Tracking is an

[[Page 71335]]

administrative action; therefore, no changes were made to the final 
rule.
    Comments: NRCS received numerous comments on the $50,000 annual 
payment limitation. Several of the respondents requested that NRCS 
waive the $50,000 annual payment limitation for a variety of reasons 
including waiving the limitation for non-profit entities; at-risk and 
declining species; or projects, not landowners. Five respondents 
requested that NRCS clarify how the $50,000 annual payment limitation 
works over multi-years. They stated that the payment limitation should 
be clarified as follows: ``A multiple contract may exceed $50,000 
provided the payments made or attributed to a participant, directly or 
indirectly, may not exceed, in the aggregate, $50,000 per year.''
    Response: NRCS has no authority to waive the annual payment 
limitation. Section 1240N(e) directs the Secretary to limit payments 
not to exceed $50,000 per year. Therefore, NRCS retains the payment 
limitation as set forth in Sec.  636.7(f).
    A WHIP project may exceed $50,000 provided no one individual 
exceeds the annual payment limitation. This may extend to a project 
with multiple landowners or to where there is one landowner who wishes 
to extend his payment over multiple years. For example, for one 
landowner who wishes to install 45,000 trees and plants, 5,000 trees 
per year at a cost of $10.00 per tree (including labor), the payments 
may be as follows: $50,000 annual payment limitation for a 10-year 
contract beginning with FY 2009 with 75 percent cost-share. A total of 
45,000 trees will be planted at a rate of 5,000 trees per year with a 
cost of $10.00 per tree including labor:

FY 2009
FY 2010 = $50,000
FY 2011 = $50,000
FY 2012 = $50,000
FY 2013 = $50,000
FY 2014 = $50,000
FY 2015 = $50,000
FY 2016 = $50,000
FY 2017 = $50,000
FY 2018 = $50,000 = Total payments = $450,000
FY 2019 = all plantings were completed in FY 2018 and no payment this 
year as this is a maintenance year.

    However, under the annual payment limitation, if the same 
participant elects to complete all plantings in one fiscal year, i.e., 
FY 2009, the participant will be limited to one payment of $50,000.

Section 636.8 WHIP Plan of Operations

    Section 636.8 sets forth the WHIP plan of operation's basic 
requirements, including habitat types that should be addressed under a 
WHIP plan of operations.
    Comments: Most of the comments generated in this section focused on 
what types of habitats should receive emphasis in a WHIP plan of 
operations. While some respondents requested that NRCS amend Sec.  
636.6 to prioritize habitats that have been impacted by natural 
disasters, such as catastrophic wildfires, insect and disease 
outbreaks, and invasive species, a majority of respondents requested 
that NRCS place a priority on restoring and enhancing pollinator 
habitat.
    Response: NRCS has chosen to leave its regulation species neutral 
so that species are not inadvertently ignored by highlighting some and 
not others. In accordance with Sec.  636.6, the Chief or State 
Conservationist has the discretion to address initiatives. NRCS accepts 
the recommendation to amend Sec.  636.8(a)(2) and reference Sec.  
636.6(a); however, NRCS chooses to not identify specific land uses 
within WHIP's national priorities. Specifically, Sec.  636.8(a)(2) is 
revised as follows: ``Fish and wildlife habitat concerns identified in 
State, regional, tribal land, or national conservation initiatives, as 
referenced in Sec.  636.6(a).''
    NRCS placed the NRCS Conservation Practice Standards in the Federal 
Register request for comments. A number of suggestions dealt with 
better inclusion of concern for pollinators and pollinator habitat 
within the practice standard. NRCS anticipates that many of the 
suggestions will be incorporated into revised Conservation Practice 
Standards. Increased concern for pollinator habitat is evident through 
both national and State-specific technical notes over the past few 
years concerning the enhancement and protection of pollinator habitat.
    Currently, 23 State offices have identified to the public through 
their Web page that pollinator habitat is a priority in their State. 
Fifteen States have FY 2009 pollinator WHIP contracts. NRCS State 
offices have been encouraged to provide incentives in appropriate 
conservation programs (e.g., EQIP, WHIP, and CSP) for the creation of 
pollinator habitat, and a recently approved NRCS Pollinator Initiative 
will implement increased attention to pollinators through an agency 
pollinator policy, additional conservation program incentives, new and 
stronger pollinator-focused partnerships, and far-reaching 
informational and educational outreach efforts.
    Comments: In addition to requesting that pollinator habitat be 
emphasized in the WHIP plan of operations, one respondent requested 
that NRCS ensure that its updates and revisions to conservation 
practice standards and the development of its technical notes for 
native and managed pollinators move forward on an expedited basis. The 
respondent also requested that NRCS increase outreach to producers on 
methods in which they can address pollinator habitat through its cost-
share assistance and requested that NRCS use WHIP to create 
conservation corridors.
    Response: NRCS will continue to address pollinator needs, as 
appropriate, in the WHIP plan of operations, but has chosen to leave 
the regulation species neutral, so that species are not inadvertently 
ignored by highlighting some and not others. NRCS has taken and will 
continue to take a proactive approach to addressing pollinator habitat, 
including the development of wildlife corridors. State Conservationists 
have been encouraged to establish pollinator species as State 
priorities, and they have been proactive in establishing pollinator 
habitat as State priorities and interim conservation standards and 
technical notes related to pollinator species and their habitat. NRCS 
has also established partnerships with agencies that provide 
information on pollinator research. In 2008, NRCS funded a bat habitat 
enhancement project through the CIG program. In 2009, CIG funded 5 
pollinator projects and WHIP funded 49 pollinator contracts nationwide.
    Comments: As it relates to practice life spans, one respondent 
requested that NRCS codify that management practices have a one-year 
minimum and establish a 5-year minimum for structural and vegetative 
practices.
    Response: NRCS is not including in this rulemaking practice life 
spans, because NRCS' existing practice is to set forth such information 
in the NRCS Field Office Technical Guide (FOTG). The FOTG is supported 
by national standards based upon USDA's scientific and technical 
findings.
    Comments: Several other respondents requested that NRCS accept 
conservation plans, such as a forest management plan, which may be 
developed by another agency as a foundation to the WHIP plan of 
operations and ensure that such plans complement one another.
    Response: NRCS agrees that habitat, forestry, and other natural 
resource plans should complement one another. Section 636.8 enables 
NRCS to consult

[[Page 71336]]

with ``other public or private natural resource professionals,'' such 
as State or regional foresters, to develop a WHIP plan of operations 
that may be compatible with a forest management plan. Therefore, no 
changes were made to the final rule.

Section 636.9 Cost-Share Agreements

    Section 636.9 sets forth the duration of the cost-share agreement. 
Prior to the interim final rule, all long-term WHIP agreements were 5 
to 10 years in duration. The interim final rule established a minimum 
duration of one year after the completion of all conservation practices 
and a maximum of 10 years, with the exception of longer-term agreements 
as established under Sec.  636.9(c). This revised contract length 
provided the flexibility needed for establishing agreement lengths 
based on wildlife habitat needs and other factors.
    Comments: One respondent expressed confusion about NRCS' intent to 
implement shorter-term WHIP contracts and simultaneously encourage 
longer-term cost-share agreements, while another respondent supported 
setting aside 25 percent for longer-term agreements. Several 
respondents expressed concern that giving priority to applicants who 
are willing to complete all conservation practices within 2 years 
discriminates against more complex projects.
    Response: Section 1240N(b)(2) enables the Secretary to provide up 
to 25 percent of the funds made available for cost-share agreements 
that are at least 15 years in length. NRCS is retaining the original 
language of the interim final rule because it encourages both shorter 
and longer-term cost-agreements. Such language provides the State 
Conservationists flexibility to address resource concerns based on both 
the short and long-term needs of the State or geographic area. 
Furthermore, a State Conservationist has the discretion to raise or 
lower cost-share rates to create an incentive to complete the contract 
in a timely manner.

Section 636.10 Modifications

    Section 636.10 sets forth the policies and procedures to modify a 
cost-share agreement.
    Comments: One respondent supported WHIP's modification provisions. 
Another respondent requested that NRCS recognize the right of contract 
holders to control wildlife in any way possible when animals cause 
damage to property or threaten personal safety.
    Response: NRCS respects the need to modify a contract where a 
health or safety issue exists. To accommodate instances where public 
health or safety is jeopardized, NRCS adds paragraph (d) to Sec.  
636.10: ``Where circumstances beyond the participant's control or when 
it is in the public interest, such as a matter of health or safety, the 
State Conservationist may independently or by mutual agreement with the 
parties, modify or terminate the cost-share agreement as provided for 
in stated in Sec.  636.12.''

Section 636.11 Transfer of Interest in a Cost-Share Agreement

    Section 636.11 sets forth the policies and procedures regarding the 
transfer of interest in a cost-share agreement.
    Comments: Five respondents requested that NRCS change producer to 
participant to be more inclusive of the type of individuals and 
entities that participate in WHIP.
    Response: NRCS accepts this recommendation and rewords Sec.  
636.11(b) as follows: ``The participant and NRCS may agree to transfer 
a cost-share agreement to another potential participant. The transferee 
must be determined by NRCS to be eligible to participate in WHIP and 
must assume full responsibility under the cost-share agreement.''

Section 636.12 Termination of Cost-Share Agreements

    Section 636.12 sets forth the conditions and procedures under which 
a cost-share agreement may be terminated. No comments were received on 
this section; therefore, no changes were made to the final rule.

Section 636.13 Violations and Remedies

    Section 636.13 sets forth the policies and procedures as it relates 
to contract violations and remedies to recoup the Federal investment. 
No substantive comments were received; therefore, no changes were made 
to the final rule.

Section 636.14 Misrepresentation and Scheme or Device

    Section 636.14 establishes the policies and procedures when a 
participant knowingly misrepresented any fact that affected program 
determination of their WHIP cost-share agreement. No comments were 
received on this section; therefore, no changes were made to the final 
rule.

Section 636.15 Offsets and Assignments

    Section 636.15 establishes offsets and assignments of payments. No 
comments were received on this section; therefore, no changes were made 
to the final rule.

Section 636.16 Appeals

    Section 636.16 sets forth the policies and procedures regarding 
program appeals. No comments were received on this section; therefore, 
no changes were made to the final rule.

Section 636.17 Compliance With Regulatory Measures

    NRCS added Sec.  636.17 to identify clearly a participant's 
responsibilities associated with other regulatory measures. This change 
reflects standard NRCS language applicable to multiple programs.
    Comments: Seven respondents requested that NRCS not issue payments 
until the participant has obtained and complied with all applicable 
local, State, and Federal permits.
    Response: NRCS does not accept the comment, but instead adjusts 
636.17 (a) as follows: ``Participants who carry out conservation 
practices will be responsible for obtaining the authorities, rights, 
easements, permits, or other approvals necessary for the 
implementation, operation, and maintenance of the conservation 
activities in keeping with applicable laws and regulations. The 
requirement for the participant to obtain necessary permits is included 
in the terms and conditions of the contract appendix.''

Section 636.18 Technical Services Provided by Qualified, Non-USDA 
Personnel

    NRCS added Sec.  636.18 in the interim final rule to incorporate 
the TSP provisions in place since 2002, but not included in the WHIP 
regulation.
    Comments: One respondent supported the use of TSPs.
    Response: Section 2706 of the 2008 Act amended the Food Security 
Act of 1985, as amended to authorize payments to third party TSPs or 
``related technical assistance services that accelerate program 
delivery.'' Related technical assistance services include, but are not 
limited to, conservation planning documentation, payment scheduling and 
documentation, and other services.
    To reflect the new statutory authority that TSPs may be used to 
expedite WHIP conservation program delivery, NRCS has added ``related 
technical services'' to Sec.  636.18(c). As in the case of other Food 
Security Act of 1985, as amended conservation programs, NRCS or a WHIP 
participant may use the services of a qualified TSP to install and 
implement the WHIP plan of operations. Technical services provided may

[[Page 71337]]

include conservation planning; conservation practice survey, layout, 
design, installation, and certification; and related technical 
assistance services as described above.
    Accordingly, NRCS is revising Sec.  636.18(c) as follows: 
``Technical services provided by qualified personnel not affiliated 
with USDA may include, but is not limited to, conservation planning; 
conservation practice survey, layout, design, installation, and 
certification; and related technical services as defined in 7 CFR part 
652.''

Section 636.19 Access to Operating Unit

    Section 636.19 establishes the policies shared by all NRCS programs 
about access to a participant's operating unit.
    Comments: Four respondents want to add including TSPs after NRCS 
representatives to clarify that TSPs have the right to enter the 
premises. They also request that NRCS revise the language from 
agricultural operation or tract to a participant's property.
    Response: Under WHIP and other NRCS conservation programs, a 
participant or NRCS may use the services of a qualified TSP to plan, 
design, install, and check-out conservation practices. TSPs are 
authorized to access the property where they have been delegated 
authority to conduct NRCS activities via the contract or through an 
agreement between NRCS and the TSP. Section 636.4(a)(7) provides that 
participants agree to grant to NRCS, or its representatives, access to 
the land for purposes related to application, assessment, monitoring, 
enforcement, verification of certifications, or other actions required 
to implement this part. To ensure that participant's are aware that 
TSPs, as a representative of NRCS, may enter the property, NRCS will 
amend the Appendix to the contract so that participants are fully 
informed that NRCS or the TSP, acting on behalf of NRCS, may enter a 
property for program purposes.

Section 636.20 Equitable Relief

    NRCS added Sec.  636.20, Equitable relief, in the interim final 
rule to be consistent with other NRCS conservation programs. This 
section clarified that WHIP participants who acted in good faith based 
on erroneous information provided by NRCS or its representatives may be 
granted equitable relief if such action resulted in a violation of the 
cost-share agreement. No comments were received on this section; 
therefore, no changes were made to the final rule.

Section 636.21 Environmental Services Credits for Conservation 
Improvements

    NRCS included Sec.  636.21, Environmental services credits for 
conservation improvements, in the interim final rule which acknowledged 
participants' rights to the environmental benefits achieved by 
conservation programs like WHIP.
    Comments: Three respondents supported NRCS' provision pertaining to 
environmental credits, while another respondent requested that NRCS 
calculate what portion of the potential credit NRCS has financed and 
what portion remains that could be sold into an ecosystem services 
market. The same respondent also requested that NRCS require a 
compatibility assessment. Seven respondents requested that NRCS add a 
modification option to the environmental credits provision similar to 
the Healthy Forest Reserve Program.
    Response: NRCS retains the interim final rule's provision on 
environmental credits and adds language to accommodate a possible 
modification for an environmental credits provision that is consistent 
with the purposes of the cost-share agreement: ``NRCS recognizes that 
environmental benefits will be achieved by implementing conservation 
practices funded through WHIP, and environmental credits may be gained 
as a result of implementing conservation practices compatible with the 
purposes of a WHIP cost-share agreement. NRCS asserts no direct or 
indirect interest on these credits. However, NRCS retains the authority 
to ensure that program purposes are met, maintained, and consistent 
with Sec. Sec.  636.8 and 636.9. Where activities required under an 
environmental credit agreement may affect land covered under a WHIP 
cost-share agreement, participants are highly encouraged to request an 
O&M compatibility assessment from NRCS prior to entering into any such 
credit agreements. The WHIP cost-share agreement may be modified, in 
accordance with policies outlined in Sec.  636.10, provided the 
modification meets WHIP purposes and is in compliance with this part.''
    Comments: Another respondent requests that NRCS coordinate this 
type of activity with the Office of Ecosystem and Markets.
    Response: As a preliminary matter, NRCS notes that the Office of 
Ecosystem Services and Markets has changed its name to the Office of 
Environmental Markets (OEM). No changes were made to the final rule. 
Development of ecosystems services markets under the WHIP program is 
beyond the statutory authority of that program. To the extent 
appropriate, NRCS coordinates with OEM and other relevant offices when 
formulating policy.

Climate Change

    Comments: On March 12, 2009, NRCS published an amendment to the 
interim final rule with a request for public comment on how 
conservation programs, like WHIP, could be used to mitigate climate 
change, conserve energy, and reduce net carbon emissions. Four 
respondents provided comments on how WHIP could be used to reduce the 
impacts of climate change. All respondents stated that WHIP's primary 
focus should continue to be fish and wildlife habitat since WHIP is the 
only conservation program focused solely on fish and wildlife habitat. 
However, each of these respondents believed that practices applied in 
WHIP may assist in meeting the challenges posed by climate change. One 
respondent stated that WHIP should promote practices that involve 
perennial vegetation, draw attention to the energy-conservation value 
of many WHIP practices, and collaborate with conservation districts. 
The respondent cited specifically that control of invasive species and 
removal of wood damaged by pests may help meet the goal of renewable 
energy.
    Another respondent stated it would be inappropriate for NRCS to use 
WHIP to support projects focused primarily on advancing renewable 
energy and energy conservation, it should only be supported where such 
production is a co-benefit of the practice. The same respondent stated 
that NRCS should consider activities to monitor and measure GHG 
reductions that are generated by the project, but it should not make 
extra payments for carbon sequestration. This respondent also 
reiterated that the enhancement and restoration of wildlife corridors 
and other forms of perennial vegetation are practices that would 
provide dual benefits and also help species adapt to climate change.
    Two respondents requested that when examining practices such as 
wildlife migration corridors, NRCS add points in WHIP project selection 
criteria that would, with other wildlife habitat benefits being equal, 
provide a preference for projects that reduce net carbon emissions or 
boost carbon storage. To evaluate this, they suggested making 
accommodations at the regional level so that if points are awarded, 
they are based on reasonable expectations for fish or wildlife benefits 
to the location.
    Response: NRCS will continue to place its primary focus on fish and 
wildlife habitat. However, NRCS accepts

[[Page 71338]]

the respondents' comments that some practices can serve multiple 
purposes, such as riparian migration corridors, which not only 
sequester carbon and provide essential fish and wildlife habitat, but 
also help species adapt to climate change. NRCS accepts the 
respondents' suggestions that additional ranking points may be assigned 
to practices that offer multiple benefits in WHIP's AERT. NRCS also 
agrees with the respondents that additional WHIP payments should not be 
issued for practices which are already being compensated under wildlife 
habitat cost-share.

List of Subjects in 7 CFR Part 636

    Administrative practice and procedure, Agriculture, Conservation, 
Endangered and threatened species, Natural resources, Soil 
conservation, and Wildlife.

0
For reasons stated above, the CCC revises part 636 of Title 7 of the 
CFR to read as follows:

PART 636--WILDLIFE HABITAT INCENTIVE PROGRAM

Sec.
636.1 Applicability.
636.2 Administration.
636.3 Definitions.
636.4 Program requirements.
636.5 National priorities.
636.6 Establishing priority for enrollment in WHIP.
636.7 Cost-share payments.
636.8 WHIP plan of operation.
636.9 Cost-share agreements.
636.10 Modifications.
636.11 Transfer of interest in a cost-share agreement.
636.12 Termination of cost-share agreements.
636.13 Violations and remedies.
636.14 Misrepresentation and scheme or device.
636.15 Offsets and assignments.
636.16 Appeals.
636.17 Compliance with regulatory measures.
636.18 Technical services provided by qualified personnel not 
affiliated with USDA.
636.19 Access to operating unit.
636.20 Equitable relief.
636.21 Environmental services credits for conservation improvements.

    Authority:  16 U.S.C. 3839bb-1.


Sec.  636.1  Applicability.

    (a) The purpose of the Wildlife Habitat Incentive Program (WHIP) is 
to help participants develop fish and wildlife habitat on private 
agricultural land, nonindustrial private forest land (NIPF), and Indian 
land.
    (b) The regulations in this part set forth the requirements for 
WHIP.
    (c) The Chief, Natural Resources Conservation Service (NRCS), may 
implement WHIP in any of the 50 States, District of Columbia, Puerto 
Rico, Guam, the Virgin Islands of the United States, American Samoa, 
and the Commonwealth of the Northern Mariana Islands.


Sec.  636.2  Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the Chief. The funds, facilities, 
and authorities of the Commodity Credit Corporation (CCC) are available 
to NRCS to carry out WHIP. Accordingly, where NRCS is mentioned in this 
part, it also refers to CCC's funds, facilities, and authorities, where 
applicable.
    (b) The State Conservationist may accept recommendations from the 
State Technical Committee and Tribal Conservation Advisory Council (for 
tribal land) in the implementation of the program and in establishing 
program direction for WHIP in the applicable State or tribal land. The 
State Conservationist has the authority to accept or reject the State 
Technical Committee and the Tribal Conservation Advisory Council's (for 
tribal land) recommendation; however, the State Conservationist will 
give strong consideration to the State Technical Committee and the 
Tribal Conservation Advisory Council's recommendation.
    (c) NRCS may enter into agreements with Federal and State agencies, 
Indian tribes, conservation districts, local units of government, 
public and private organizations, and individuals to assist with 
program implementation, including the provision of technical 
assistance. NRCS may make payments pursuant to said agreements for 
program implementation and for other goals consistent with the program 
provided for in this part.
    (d) NRCS will provide the public with notice of opportunities to 
apply for participation in the program.
    (e) No delegation in this part to lower organizational levels will 
preclude the Chief, or designee, from determining any issues arising 
under this part or from reversing or modifying any determination made 
under this part.


Sec.  636.3  Definitions.

    The following definitions will apply to this part, and all 
documents issued in accordance with this part, unless specified 
otherwise:
    Agricultural lands means cropland, grassland, rangeland, 
pastureland, and other land determined by NRCS to be suitable for fish 
and wildlife habitat development on which agricultural and forest-
related products or livestock are or have the potential to be produced. 
Agricultural lands may include cropped woodland, wetlands, waterways, 
streams, incidental areas included in the agricultural operation, and 
other types of land used for or have the potential to be used for 
production.
    Applicant means a person, legal entity, joint operation, or Indian 
tribe that has an interest in agricultural land, NIPF, Indian land, or 
other lands identified in 636.4(c)4, who has requested in writing to 
participate in WHIP.
    At-risk species means any plant or animal species listed as 
threatened or endangered; proposed or candidate for listing under the 
Endangered Species Act (ESA); a species listed as threatened or 
endangered under State law or tribal law on tribal land; State or 
tribal land species of conservation concern; or other plant or animal 
species or community, as determined by the State Conservationist, with 
advice from the State Technical Committee and Tribal Conservation 
Advisory Council (for tribal land), that has undergone, or likely to 
undergo, population decline and may become imperiled without direct 
intervention.
    Beginning farmer or rancher means an individual or entity who:
    (1) Has not operated a farm or ranch, or who has operated a farm or 
ranch for not more than 10 consecutive years. This requirement applies 
to all members of an entity, who will materially and substantially 
participate in the operation of the farm or ranch.
    (2) In the case of a cost-share agreement with an individual, 
individually, or with the immediate family, material and substantial 
participation requires that the individual provide substantial day-to-
day labor and management of the farm or ranch consistent with the 
practices in the county or State where the farm is located.
    (3) In the case of a cost-share agreement with an entity or joint 
operation, all members must materially and substantially participate in 
the operation of the farm or ranch. Material and substantial 
participation requires that each of the members provide some amount of 
the management, or labor and management necessary for day-to-day 
activities, such that if each of the members did not provide these 
inputs, operation of the farm or ranch would be seriously impaired.
    Chief means the Chief of NRCS or designee.
    Conservation activities means conservation systems, practices, or 
management measures needed to

[[Page 71339]]

address a resource concern or improve environmental quality through the 
treatment of natural resources, and includes structural, vegetative, 
and management activities, as determined by NRCS.
    Conservation district means any district or unit of State, tribal, 
or local government formed under State, tribal, or territorial law for 
the express purpose of developing and carrying out a local soil and 
water conservation program. Such district or unit of government may be 
referred to as a conservation district, soil conservation district, 
soil and water conservation district, resource conservation district, 
natural resource district, land conservation committee, or similar 
name.
    Conservation practice means one or more conservation improvements 
and activities, including structural practices, land management 
practices, vegetative practices, forest management, and other 
improvements that benefit the eligible land and achieve program 
purposes. Approved conservation practices are listed in the NRCS Field 
Office Technical Guide (FOTG).
    Cost-share agreement means a financial assistance document that 
specifies the rights and obligations of any participant accepted into 
the program. A WHIP cost-share agreement is a binding agreement for the 
transfer of assistance from the Department of Agriculture (USDA) to the 
participant to share in the costs of applying conservation activities.
    Cost-share payment means the payments under the WHIP cost-share 
agreement to develop fish and wildlife habitat or accomplish other 
goals consistent with the program provided for in this part.
    Designated conservationist means an NRCS employee whom the State 
Conservationist has designated as responsible for WHIP administration 
in a specific area.
    Field Office Technical Guide means the official local NRCS source 
of resource information and interpretations of guidelines, criteria, 
and requirements for planning and applying conservation practices and 
conservation management systems. It contains detailed information on 
the conservation of soil, water, air, plant, and animal resources 
applicable to the local area for which it is prepared.
    Habitat development means the conservation activities implemented 
to establish, improve, protect, enhance, or restore the conditions of 
the land for the specific purpose of improving conditions for fish and 
wildlife.
    Historically underserved producer means an eligible person, joint 
operation, legal entity, or Indian tribe who is a beginning farmer or 
rancher, socially disadvantaged farmer or rancher, limited resource 
farmer or rancher, or NIPF landowner who meets the beginning, socially 
disadvantaged, or limited resource qualifications set forth in Sec.  
636.3.
    Indian land means:
    (1) Land held in trust by the United States for individual Indians 
or Indian tribes, or
    (2) Land, the title to which is held by individual Indians or 
Indian tribes subject to Federal restrictions against alienation or 
encumbrance, or
    (3) Land which is subject to rights of use, occupancy, and benefit 
of certain Indian tribes, or
    (4) Land held in fee title by an Indian, Indian family, or Indian 
tribe.
    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.) 
that is eligible for the special programs and services provided by the 
United States to Indians because of their status as Indians.
    Joint operation means, as defined in 7 CFR part 1400, a general 
partnership, joint venture, or other similar business organization in 
which the members are jointly and severally liable for the obligations 
of the organization.
    Legal entity means, as defined in 7 CFR part 1400, an entity 
created under Federal or State law that:
    (1) Owns land or an agricultural commodity, product, or livestock; 
or
    (2) Produces an agricultural commodity, product, or livestock.
    Lifespan means the period of time during which a conservation 
practice is to be operated and maintained for the intended purpose.
    Limited resource farmer or rancher means:
    (1) A person with direct or indirect gross farm sales of not more 
than $142,000 in each of the previous 2 years (this is the amount for 
2010, and adjusted for inflation using Prices Paid by Farmer Index as 
compiled by National Agricultural Statistical Service); and
    (2) Has a total household income at or below the national poverty 
level for a family of four, or less than 50 percent of county median 
household income in each of the previous 2 years (to be determined 
annually using the Department of Commerce Data).
    Liquidated damages means a sum of money stipulated in the WHIP 
cost-share agreement that the participant agrees to pay NRCS if the 
participant fails to adequately complete the terms of the cost-share 
agreement. The sum represents an estimate of the technical assistance 
expenses incurred to service the agreement, and reflects the 
difficulties of proof of loss and the inconvenience or non-feasibility 
of otherwise obtaining an adequate remedy.
    Livestock means all animals produced on farms and ranches, as 
determined by the Chief.
    Natural Resources Conservation Service is an agency of USDA, which 
has the responsibility for administering WHIP using the funds, 
facilities, and authorities of the CCC.
    Nonindustrial private forest land means rural land, as determined 
by the Secretary, that has existing tree cover or is suitable for 
growing trees and is owned by any nonindustrial private individual, 
group, association, corporation, Indian tribe, or other private legal 
entity that has definitive decisionmaking authority over the land.
    Operation and maintenance means work performed by the participant 
to keep the applied conservation activities functioning for the 
intended purpose during the conservation practice lifespan. Operation 
includes the administration, management, and performance of non-
maintenance actions needed to keep the completed activity functioning 
as intended. Maintenance includes work to prevent deterioration of the 
practice, repairing damage, or replacement of the practice to its 
original condition if one or more components fail.
    Operation and maintenance agreement means the document that, in 
conjunction with the WHIP plan of operations, specifies the operation 
and maintenance (O&M) responsibilities of the participants for 
conservation activities implemented with WHIP assistance.
    Participant means a person, legal entity, joint operation, or 
Indian tribe that is receiving payment or is responsible for 
implementing the terms and conditions of a WHIP cost-share agreement.
    Person means, as defined in 7 CFR part 1400, an individual, natural 
person and does not include a legal entity.
    Producer means, as defined in 7 CFR part 1400, a person, legal 
entity, joint operation, or Indian tribe who has an interest in the 
agricultural operation or who is engaged in agricultural production or 
forestry management.
    Resource concern means a specific natural resource problem that 
represents a significant concern in a State or region, and is likely to 
be addressed

[[Page 71340]]

successfully through the implementation of the conservation activities 
by participants.
    Secretary means the Secretary of USDA.
    Socially disadvantaged farmer or rancher means a farmer or rancher 
who has been subjected to racial or ethnic prejudices because of their 
identity as a member of a group without regard to their individual 
qualities. Those groups include African Americans, American Indians or 
Alaskan Natives, Hispanics, and Asians or Pacific Islanders.
    State Conservationist means the NRCS employee authorized to 
implement WHIP and direct and supervise NRCS activities in a State, 
Caribbean Area, or the Pacific Islands Area.
    State Technical Committee means a committee established by the 
Secretary in a State pursuant to 16 U.S.C. 3861.
    Technical assistance means technical expertise, information, and 
tools necessary for the conservation of natural resources on land 
active in agricultural, forestry, or related uses. The term includes 
the following:
    (1) Technical services provided directly to farmers, ranchers, and 
other eligible entities, such as conservation planning, technical 
consultation, and assistance with design and implementation of 
conservation practices; and
    (2) Technical infrastructure, including activities, processes, 
tools, and agency functions needed to support delivery of technical 
services, such as technical standards, resource inventories, training, 
data, technology, monitoring, and effects analyses.
    Technical service provider means an individual, entity, Indian 
tribe, or public agency either:
    (1) Certified by NRCS and placed on the approved list to provide 
technical services to participants; or
    (2) Selected by the Department to assist the Department in the 
implementation of conservation programs covered by this part through a 
procurement contract, contribution agreement, or cooperative agreement 
with the Department.
    Tribal Conservation Advisory Council means a committee established 
by a State Conservationist to implement consultation as defined in 
General Manual 410 Part 405.
    WHIP plan of operations means the document that identifies the 
location and timing of conservation activities that the participant 
agrees to implement on eligible land in order to develop fish and 
wildlife habitat and provide environmental benefits. The WHIP plan of 
operations is a part of the WHIP cost-share agreement.
    Wildlife means non-domesticated birds, fishes, reptiles, 
amphibians, invertebrates, and mammals.
    Wildlife habitat means the aquatic and terrestrial environments 
required for fish and wildlife to complete their life cycles, providing 
air, food, cover, water, and spatial requirements.


Sec.  636.4  Program requirements.

    (a) To participate in WHIP, an applicant must:
    (1) Be in compliance with the highly erodible and wetland 
conservation provisions found in 7 CFR part 12;
    (2) Be in compliance with the terms of all other USDA-administered 
conservation program contracts to which the participant is a party;
    (3) Develop and agree to comply with a WHIP plan of operations and 
O&M agreement, as described in Sec.  636.8;
    (4) Enter into a cost-share agreement for the development of fish 
and wildlife habitat as described in Sec.  636.9;
    (5) Provide NRCS with written evidence of ownership or legal 
control of land for the term of the proposed cost-share agreement, 
including the O&M agreement. An exception may be made by the Chief in 
the case of land allotted by the Bureau of Indian Affairs (BIA) or 
Indian land where there is sufficient assurance of control;
    (6) Agree to provide all information to NRCS determined to be 
necessary to assess the merits of a proposed project and to monitor 
cost-share agreement compliance;
    (7) Agree to grant to NRCS or its representatives access to the 
land for purposes related to application, assessment, monitoring, 
enforcement, verification of certifications, or other actions required 
to implement this part;
    (8) Provide a list of all members of the legal entity and embedded 
entities along with members' tax identification numbers and percentage 
interest in the entity. Where applicable, American Indians, Alaska 
Natives, and Pacific Islanders may use another unique identification 
number for each individual eligible for payment;
    (9) With regard to cost-share agreements with individual Indians or 
Indians represented by the BIA, payments exceeding the payment 
limitation may be made to the tribal participant if a BIA or tribal 
official certifies in writing that no one individual, directly or 
indirectly, will receive more than the payment limitation. The BIA or 
tribal entity must also provide annually, a listing of individuals and 
payments made, by tax identification number or other unique 
identification number, during the previous year for calculation of 
overall payment limitations. The tribal entity must also produce, at 
the request of NRCS, proof of payments made to the person or legal 
entity that incurred costs related to conservation activity 
implementation;
    (10) Supply information, as required by NRCS, to determine 
eligibility for the program including, but not limited to, information 
to verify the applicant's status as a limited resource farmer or 
rancher or beginning farmer or rancher and payment eligibility as 
established by 7 CFR part 1400, Adjusted Gross Income (AGI);
    (11) With regard to any participant that utilizes a unique 
identification number as an alternative to a tax identification number, 
the participant will utilize only that identifier for any and all other 
WHIP cost-share agreements to which the participant is a party. 
Violators will be considered to have provided fraudulent representation 
and are subject to Sec.  636.13; and
    (12) Comply with applicable registration and reporting requirements 
of the Federal Funding Accountability and Transparency Act of 2006 
(Pub. L. 109-282, as amended) and 2 CFR parts 25 and 170.
    (b) Eligible land includes:
    (1) Private agricultural land;
    (2) NIPF;
    (3) Indian land; and
    (4) Trust land owned in fee title by a State, including an agency 
or subdivision of a State, when such trust land is held under a long-
term lease by a person or nongovernmental entity and when the Chief 
determines that (i) by the nature of the lease, such land is tantamount 
to private agricultural land; (ii) the duration of the lease is at 
least the length of any WHIP agreement; and (iii) no funds under the 
WHIP program are paid to a governmental entity.
    (c) Ineligible land. NRCS will not provide cost-share assistance 
with respect to land:
    (1) Enrolled in a program where fish and wildlife habitat 
objectives have been sufficiently achieved, as determined by NRCS;
    (2) With onsite or offsite conditions which NRCS determines would 
undermine the benefits of the habitat development or otherwise reduce 
its value;
    (3) On which habitat for threatened or endangered species, as 
defined in section 3 of the ESA, 16 U.S.C. 1532, would be adversely 
affected; or
    (4) That is owned in fee title by an agency of the United States, 
other than:
    (i) Land held in trust for Indian tribes, and

[[Page 71341]]

    (ii) Lands owned in fee title by a State, including an agency or 
subdivision of a State or a unit of government except as provided in 
Sec.  636.4(b)(4).


Sec.  636.5  National priorities.

    (a) The following national priorities will be used in WHIP 
implementation:
    (1) Promote the restoration of declining or important native fish 
and wildlife habitats;
    (2) Protect, restore, develop, or enhance fish and wildlife habitat 
to benefit at-risk species;
    (3) Reduce the impacts of invasive species on fish and wildlife 
habitats;
    (4) Protect, restore, develop, or enhance declining or important 
aquatic wildlife species' habitats; and
    (5) Protect, restore, develop, or enhance important migration and 
other movement corridors for wildlife.
    (b) NRCS, with advice of other Federal agencies, will undertake 
periodic reviews of the national priorities and the effects of program 
delivery at the State, tribal, and local levels to adapt the program to 
address emerging resource issues. NRCS will:
    (1) Use the national priorities to guide the allocation of WHIP 
funds to the State offices;
    (2) Use the national priorities in conjunction with State, tribal, 
and local priorities to assist with prioritization and selection of 
WHIP applications; and
    (3) Periodically review and update the national priorities 
utilizing input from the public, Indian tribes, and affected 
stakeholders to ensure that the program continues to address priority 
resource concerns.


Sec.  636.6  Establishing priority for enrollment in WHIP.

    (a) NRCS, in consultation with Federal and State agencies, tribal, 
and conservation partners, may identify priorities for enrollment in 
WHIP that will complement the goals and objectives of relevant fish and 
wildlife conservation initiatives at the State, regional, tribal land, 
or national levels. In response to national, tribal, regional, or State 
fish and wildlife habitat concerns, the Chief may focus program 
implementation in any given year to specific geographic areas or to 
address specific habitat development needs.
    (b) The State Conservationist, with recommendations from the State 
Technical Committee and Tribal Conservation Advisory Council (for 
tribal land), may give priority to WHIP projects that will address 
unique habitats or special geographic areas identified in the State. 
Subsequent cost-share agreement offers that would complement previous 
cost-share agreements due to geographic proximity of the lands involved 
or other relationships may receive priority consideration for 
participation.
    (c) NRCS will evaluate the applications and make enrollment 
decisions based on the fish and wildlife habitat need using some or all 
of the following criteria:
    (1) Contribution to resolving an identified habitat concern of 
national, tribal, regional, or State importance including at-risk 
species;
    (2) Relationship to any established wildlife or conservation 
priority areas;
    (3) Duration of benefits to be obtained from the habitat 
development practices;
    (4) Self-sustaining nature of the habitat development practices;
    (5) Availability of other partnership matching funds or reduced 
funding request by the person applying for participation;
    (6) Estimated costs of fish and wildlife habitat development 
activities;
    (7) Other factors determined appropriate by NRCS to meet the 
objectives of the program; and
    (8) Willingness of the applicant to complete all conservation 
improvements during the first 2 years of the WHIP cost-share agreement.


Sec.  636.7  Cost-share payments.

    (a) NRCS may share the cost with a participant for implementing the 
conservation activities as provided in the WHIP plan of operations that 
is a component of the WHIP cost-share agreement:
    (1) Except as provided in paragraph (a)(2) of this section and in 
Sec.  636.9(c), NRCS will offer to pay no more than 75 percent of the 
costs to develop fish and wildlife habitat. The cost-share payment to a 
participant will be reduced proportionately below 75 percent to the 
extent that direct Federal financial assistance is provided to the 
participant from sources other than NRCS, except for certain cases that 
merit additional cost-share assistance to achieve the intended goals of 
the program, as determined by the State Conservationist.
    (2) Historically underserved producers, as defined in Sec.  636.3, 
and Indian tribes may receive the applicable payment rate and an 
additional rate that is not less than 25 percent above the applicable 
rate, provided that this increase does not exceed 90 percent of the 
estimated costs associated with WHIP plan of operations implementation.
    (b) Cost-share payments may be made only upon a determination by 
NRCS that a conservation activity or an identifiable component of a 
conservation activity has been established in compliance with 
appropriate standards and specifications.
    (c) Payments will not be made for a conservation activity that was:
    (1) Applied prior to application for the program; or
    (2) Initiated or implemented prior to cost-share agreement 
approval, unless a waiver was granted by the State Conservationist or 
designated conservationist prior to implementation.
    (d) NRCS, in consultation with the State Technical Committee, will 
identify and provide public notice of the conservation activities 
eligible for payment under the program.
    (e) Cost-share payments may be made for the establishment and 
installation of additional eligible conservation activities, or the 
maintenance or replacement of an eligible conservation activity, but 
only if NRCS determines the conservation activity is needed to meet the 
objectives of the program, or that the failure of the original project 
was due to reasons beyond the control of the participant.
    (f) Payments made or attributed to a participant, directly or 
indirectly, may not exceed, in the aggregate, $50,000 per year.
    (g) Eligibility for payment in accordance with 7 CFR part 1400, 
subpart G, average AGI limitation, will be determined prior to cost-
share agreement approval.
    (h) Subject to fund availability, the payment rates identified in a 
WHIP contract may be adjusted by NRCS to reflect increased costs.
    (i) A participant will not be eligible for payments for 
conservation activities on eligible land if the participant receives 
payments or other benefits for the same activity on the same land under 
any other conservation program administered by USDA.
    (j) Before NRCS will approve and issue final payment, the 
participant must certify that the conservation activity has been 
completed in accordance with the cost-share agreement, and NRCS or an 
approved Technical Service Provider (TSP) must certify that the 
activity has been carried out in accordance with the applicable FOTG.
    (k) NRCS, for a fiscal year, may use up to 25 percent of WHIP funds 
to carry out cost-share agreements described in Sec.  636.9(c).


Sec.  636.8  WHIP plan of operations.

    (a) As a condition of participation, the participant develops a 
WHIP plan of operations with the assistance of NRCS or other public or 
private natural

[[Page 71342]]

resource professionals who are approved by NRCS. A WHIP plan of 
operations encompasses the parcel of land where habitat will be 
established, improved, protected, enhanced, or restored. The WHIP plan 
of operations will be approved by NRCS and address at least one of the 
following as determined by NRCS:
    (1) Fish and wildlife habitat conditions that are of concern to the 
participant;
    (2) Fish and wildlife habitat concerns identified in State, 
regional, tribal land, or national conservation initiatives, as 
referenced in Sec.  636.6(a); or
    (3) Fish and wildlife habitat concerns identified in an approved 
area-wide plan that addresses the wildlife resource habitat concern.
    (b) The WHIP plan of operations forms the basis for the WHIP cost-
share agreement and will be attached and included as part of the cost-
share agreement, along with the O&M agreement. The WHIP plan of 
operations includes a schedule for implementation and maintenance of 
the conservation activities, as determined by NRCS.
    (c) The WHIP plan of operations may be modified in accordance with 
Sec.  636.10.
    (d) All conservation activities in the WHIP plan of operations must 
be approved by NRCS and developed and carried out in accordance with 
the applicable FOTG.
    (e) The participant is responsible for the implementation of the 
WHIP plan of operations.


Sec.  636.9  Cost-share agreements.

    (a) To apply for WHIP cost-share assistance, a person, tribe, or 
legal entity must submit an application for participation at a USDA 
Service Center to an NRCS representative.
    (b) A WHIP cost-share agreement will:
    (1) Incorporate the WHIP plan of operations;
    (2) Be for a time period agreed to by the participant and NRCS, 
with a minimum duration of one year after the completion of 
conservation activities identified in the WHIP plan of operations and a 
maximum of 10 years, except for agreements entered into under paragraph 
(c) of this section;
    (3) Include all provisions as required by law or statute;
    (4) Include any participant reporting and recordkeeping 
requirements to determine compliance with the cost-share agreement and 
program;
    (5) Be signed by the participant;
    (6) Specify payment limits described in Sec.  636.7(f) including 
any additional payment limitation associated with determinations made 
under Sec.  636.7(g);
    (7) Include an O&M agreement that describes the O&M for each 
conservation activity and the agency expectation that WHIP-funded 
conservation activities will be operated and maintained for their 
expected lifespan; and
    (8) Include any other provision determined necessary or appropriate 
by the NRCS representative.
    (c) Notwithstanding any limitation of this part, NRCS may enter 
into a long-term cost-share agreement that:
    (1) Is for a term of at least 15 years;
    (2) Protects and restores essential plant or animal habitat, as 
determined by NRCS; and
    (3) Provides cost-share payments of no more than 90 percent of the 
cost of implementing the WHIP plan of operations to develop fish and 
wildlife habitat.


Sec.  636.10  Modifications.

    (a) The participant and NRCS may modify a cost-share agreement if 
both parties agree to the modification. The WHIP plan of operations is 
revised in accordance with NRCS requirements, and the agreement is 
approved by the designated conservationist.
    (b) Any modifications made under this section must meet WHIP 
program objectives and must be in compliance with this part.
    (c) In the event implementation of a conservation activity fails 
through no fault of the participant, the State Conservationist may 
modify the cost-share agreement in order to issue payments to re-
implement the activity, at the rates established in accordance with 
Sec.  636.7, provided such payments do not exceed the payment 
limitation requirements as set forth in Sec.  636.7.
    (d) Where circumstances beyond the participant's control or when it 
is in the public interest, such as matters of health or safety, the 
State Conservationist may independently or by mutual agreement with the 
parties modify or terminate the cost-share agreement as provided for in 
Sec.  636.12.


Sec.  636.11  Transfer of interest in a cost-share agreement.

    (a) A participant is responsible for notifying NRCS when he or she 
anticipates the voluntary or involuntary loss of control of the land 
covered by a WHIP cost-share agreement during the term of the 
agreement.
    (b) The participant and NRCS may agree to transfer a cost-share 
agreement to another potential participant. The transferee must be 
determined by NRCS to be eligible to participate in WHIP and must 
assume full responsibility under the cost-share agreement.
    (c) With respect to any and all payments owed to participants who 
wish to transfer ownership or control of land subject to a cost-share 
agreement, the division of payment will be determined by the original 
party and that party's successor. In the event of a dispute or claim on 
the distribution of cost-share payments, NRCS may withhold payments 
without the accrual of interest pending a settlement or adjudication on 
the rights to the funds.
    (d) If new participants are not willing or not eligible to assume 
the responsibilities of an existing WHIP cost-share agreement, 
including the O&M agreement, and the participant fails to implement the 
cost-share agreement, then NRCS will terminate the agreement and may 
require that all cost-share payments be forfeited, refunded, or both, 
with applicable interest in accordance with Sec.  636.12. Participants 
may be subject to liquidated damages in accordance with Sec.  636.12.


Sec.  636.12  Termination of cost-share agreements.

    (a) The State Conservationist may, independently or by mutual 
agreement with the parties to the cost-share agreement, terminate the 
cost-share agreement where:
    (1) The parties to the cost-share agreement are unable to comply 
with the terms of the cost-share agreement as the result of conditions 
beyond their control;
    (2) Termination of the cost-share agreement would, as determined by 
the State Conservationist, be in the public interest; or
    (3) A participant fails to correct a violation of a cost-share 
agreement within the period provided by NRCS in accordance with Sec.  
636.13.
    (b) If NRCS terminates a cost-share agreement, in accordance with 
the provisions of paragraphs (a)(1) and (a)(2) of this section the 
State Conservationist may allow the participant to retain a portion of 
any payments received appropriate to the effort the participant has 
made to comply with the contract.
    (1) NRCS may require a participant to provide only a partial refund 
of the payments received if a previously implemented conservation 
activity can function independently, and is not adversely affected by 
the violation or the absence of other conservation activities that 
would have been implemented under the cost-share agreement; and
    (2) The State Conservationist will have the option to waive all or 
part of the liquidated damages assessed,

[[Page 71343]]

depending upon the circumstances of the case.
    (c) When making termination decisions, NRCS may reduce the amount 
of money owed by the participant by a proportion that reflects:
    (1) The good faith effort of the participant to comply with the 
cost-share agreement; or
    (2) The existence of hardships beyond the participant's control 
that have prevented compliance. If a participant claims hardship, that 
claim must be documented and cannot have existed when the applicant 
applied for participation in the program.


Sec.  636.13  Violations and remedies.

    (a) If NRCS determines that a participant is in violation of a 
cost-share agreement, NRCS will give the parties to the cost-share 
agreement notice of the violation and a minimum of 60 days to correct 
the violation and comply with the terms of the cost-share agreement and 
attachments thereto.
    (b) If the participant fails to correct the violation of a cost-
share agreement within the period provided by NRCS under paragraph (a) 
of this section, NRCS may terminate the agreement and require the 
participant to refund all or part of any of the funds issued under that 
cost-share agreement, plus interest, and may assess liquidated damages 
as indicated in the cost-share agreement appendix, as well as require 
the participant to forfeit all rights to any future payment under the 
agreement.
    (c) If NRCS terminates a cost-share agreement due to breach of 
contract, the participant will forfeit all rights to future payments 
under the agreement, may be required to pay liquidated damages in an 
amount determined by the State Conservationist in accordance with the 
terms of the agreement, and will refund all or part of the payments 
received, plus interest. Participants violating WHIP cost-share 
agreements may be determined ineligible for future NRCS-administered 
conservation program funding.


Sec.  636.14  Misrepresentation and scheme or device.

    (a) A participant who is determined to have erroneously represented 
any fact affecting a program determination made in accordance with this 
part, will not be entitled to cost-share agreement payments and must 
refund to NRCS all payments and pay liquidated damages, plus interest, 
as determined by NRCS.
    (b) A participant will refund to NRCS all payments, plus interest, 
as determined by NRCS, with respect to all NRCS cost-share agreements 
to which they are a party if they are determined to have knowingly:
    (1) Adopted any scheme or device that tends to defeat the purpose 
of the program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a program determination.
    (c) Other NRCS cost-share agreements where this person is a 
participant may be terminated.


Sec.  636.15  Offsets and assignments.

    (a) Except as provided in paragraph (b) of this section, any 
payment or portion thereof to any person or legal entity will be made 
without regard to questions of title under State law and without regard 
to any claim or lien against the land, or proceeds thereof, in favor of 
the owner or any other creditor except agencies of the United States 
Government. The regulations governing offsets and withholdings found at 
7 CFR part 1403 of this title will be applicable to cost-share 
agreement payments.
    (b) WHIP participants may assign any payments in accordance with 7 
CFR part 1404.


Sec.  636.16  Appeals.

    (a) Any participant may obtain reconsideration and review of 
determinations affecting participation in this program in accordance 
with 7 CFR parts 11 and 614, except as provided in paragraph (b) of 
this section.
    (b) In accordance with the provisions of the Department of 
Agriculture Reorganization Act of 1994, Public Law 103-354 (7 U.S.C. 
6901), the following decisions are not appealable:
    (1) Payment rates, payment limits, and cost-share percentages;
    (2) The designation of approved fish and wildlife priority areas, 
habitats, or activities;
    (3) NRCS program funding decisions;
    (4) Eligible conservation activities; and
    (5) Other matters of general applicability.
    (c) Before a participant may seek judicial review of any action 
taken under this part, the participant must exhaust all administrative 
appeal procedures set forth in paragraph (a) of this section.


Sec.  636.17  Compliance with regulatory measures.

    (a) Participants who implement the WHIP plan of operations will be 
responsible for obtaining the authorities, rights, easements, permits, 
or other approvals necessary for the implementation, operation, and 
maintenance of the conservation activities in keeping with applicable 
laws and regulations. The requirement for the participant to obtain 
necessary permits is included in the terms and conditions of the 
contract appendix.
    (b) Participants will be responsible for compliance with all laws 
and for all effects or actions resulting from the participants' 
performance under the cost-share agreement.


Sec.  636.18  Technical services provided by qualified personnel not 
affiliated with USDA.

    (a) NRCS may use the services of qualified TSPs in performing its 
responsibilities for technical assistance.
    (b) Participants may use technical services from qualified 
personnel of other Federal, State, and local agencies, Indian tribes, 
or individuals who are certified as TSPs by NRCS.
    (c) Technical services provided by qualified personnel not 
affiliated with USDA may include, but are not limited to, conservation 
planning; conservation practice survey, layout, design, installation, 
and certification; and related technical services as defined in 7 CFR 
part 652.
    (d) NRCS retains approval authority over certification of work done 
by non-NRCS personnel for the purpose of approving WHIP payments.


Sec.  636.19  Access to operating unit.

    As a condition of program participation, any authorized NRCS 
representative will have the right to enter an agricultural operation 
or tract for the purposes of determining eligibility and for 
ascertaining the accuracy of any representations related to cost-share 
agreements and performance. Access will include the right to provide 
technical assistance; determine eligibility; inspect any work 
undertaken under the cost-share agreements, including the WHIP plan of 
operations and O&M agreement; and collect information necessary to 
evaluate the habitat development performance specified in the cost-
share agreements. The NRCS representative will make a reasonable effort 
to contact the participant prior to the exercising of this provision.


Sec.  636.20  Equitable relief.

    (a) If a participant relied upon the advice or action of any 
authorized NRCS representative and did not know, or have reason to 
know, that the advice or action was improper or erroneous, NRCS may 
grant relief in accordance with 7 CFR part 635. Where a participant 
believes that detrimental reliance on the advice or action of a NRCS 
representative resulted in an

[[Page 71344]]

ineligibility or program violation, the participant may request 
equitable relief under 7 CFR 635.3. The financial or technical 
liability for any action by a participant that was taken based on the 
advice of a NRCS certified non-USDA TSP is the responsibility of the 
certified TSP and will not be assumed by NRCS when NRCS authorizes 
payment.
    (b) If during the term of a WHIP cost-share agreement a participant 
has been found in violation of a provision of the cost-share agreement, 
the O&M agreement, or any document incorporated by reference through 
failure to fully comply with that provision, the participant may be 
eligible for equitable relief under 7 CFR 635.4.


Sec.  636.21  Environmental services credits for conservation 
improvements.

    USDA recognizes that environmental benefits will be achieved by 
implementing conservation activities funded through WHIP, and that 
environmental credits may be gained as a result of implementing 
activities compatible with the purposes of a WHIP cost-share agreement. 
NRCS asserts no direct or indirect interest on any such credits. 
However, NRCS retains the authority to ensure that program purposes are 
met and the requirements for WHIP funded improvements are met and 
maintained consistent with Sec. Sec.  636.8 and 636.9. Where activities 
required under an environmental credit agreement may affect land 
covered under a WHIP cost-share agreement, participants are highly 
encouraged to request a compatibility assessment from NRCS prior to 
entering into such agreements. The WHIP cost-share agreement may be 
modified, in accordance with policies outlined in Sec.  636.10, 
provided the modification meets WHIP purposes and is in compliance with 
this part.

    Signed this 17th day of November, 2010, in Washington, DC.
Dave White,
Vice President, Commodity Credit Corporation and Chief, Natural 
Resources Conservation Service.
[FR Doc. 2010-29394 Filed 11-22-10; 8:45 am]
BILLING CODE 3410-16-P