[Federal Register Volume 79, Number 214 (Wednesday, November 5, 2014)]
[Rules and Regulations]
[Pages 65836-65852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-26295]



[[Page 65835]]

Vol. 79

Wednesday,

No. 214

November 5, 2014

Part IV





Department of Agriculture





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Natural Resources Conservation Service





Commodity Credit Corporation





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7 CFR Part 1470





Conservation Stewardship Program (CSP) Interim Rule; Interim Rule

  Federal Register / Vol. 79 , No. 214 / Wednesday, November 5, 2014 / 
Rules and Regulations  

[[Page 65836]]


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DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service

Commodity Credit Corporation

7 CFR Part 1470

RIN 0578-AA63
[Docket No. NRCS-2014-0008]


Conservation Stewardship Program (CSP) Interim Rule

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

ACTION: Interim rule with request for comment.

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SUMMARY: This interim rule with request for comment amends the existing 
Natural Resources Conservation Service (NRCS) regulation for the 
Conservation Stewardship Program (CSP) to incorporate programmatic 
changes as authorized by amendments in the Agricultural Act of 2014 
(2014 Act).

DATES: Effective date: This rule is effective November 5, 2014.
    Comment date: Submit comments on or before January 5, 2015.

ADDRESSES: You may submit comments using one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments for Docket No. NRCS-
2014-0008.
     U.S. mail or hand delivery: Public Comments Processing, 
Attn: Docket No. NRCS-2014-0008, Regulatory and Agency Policy Team, 
Strategic Planning and Accountability, U.S. Department of Agriculture, 
Natural Resources Conservation Service, 5601 Sunnyside Avenue, Building 
1-1112D, Beltsville, MD 20705.
    NRCS will post all comments on http://www.regulations.gov. If your 
comment includes your address, phone number, email address, or other 
personal identifying information, please be aware that your entire 
comment, including this personal information, will be made publicly 
available. Do not include personal information with your comment 
submission if you do not wish for it to be made public.

FOR FURTHER INFORMATION CONTACT: Director, Financial Assistance 
Programs Division, U.S. Department of Agriculture, Natural Resources 
Conservation Service, P.O. Box 2890, Washington, DC 20013-2890. 
Telephone: (202) 720-1845. Fax: (202) 720-4265.

SUPPLEMENTARY INFORMATION:

Regulatory Certifications

Executive Order 12866 and 13563

    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
directs agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasizes the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility. Upon implementation of 
this rule the Natural Resources Conservation Service intends to conduct 
a retrospective review of this rule with the purpose of improving 
program performance, emphasizing priority enhancements, and better 
understanding the longevity of conservation implementation.
    The Office of Management and Budget (OMB) designated this interim 
rule with request for comment a significant regulatory action. The 
administrative record is available for public inspection in Room 5831 
South Building, USDA, 14th and Independence Avenue SW., Washington, DC. 
Pursuant to Executive Order 12866, NRCS conducted a cost-effectiveness 
analysis (CEA) of the potential impacts associated with this program. A 
summary of the effectiveness analysis can be found at the end of this 
preamble and a copy of the analysis is available upon request from the 
Director, Financial Assistance Programs Division, Natural Resources 
Conservation Service, P.O. Box 2890, Washington, DC 20250-2890 or 
electronically at: http://www.nrcs.usda.gov/programs/csp/ under the CSP 
Rules and Notices with Supporting Documents title.
    Executive Order 12866, as supplemented by Executive Order 13563, 
requires each agency to write all rules in plain language. In addition 
to your substantive comments on this interim rule, we invite your 
comments on how to make the provisions easier to understand. For 
example:
     Are the requirements in the rule clearly stated? Are the 
scope and intent of the rule clear?
     Does the rule contain technical language or jargon that is 
not clear?
     Is the material logically organized?
     Would changing the grouping or order of sections or adding 
headings make the rule easier to understand?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     Would more, but shorter, sections be better? Are there 
specific sections that are too long or confusing?
     What else could we do to make the rule easier to 
understand?

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA) generally 
requires an agency to prepare a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements under the 
Administrative Procedure Act or any other statute. NRCS did not prepare 
a regulatory flexibility analysis for this rule because NRCS is not 
required by 5 U.S.C. 553, or any other provision of law, to publish a 
notice of proposed rulemaking with respect to the subject matter of 
this rule. Even so, NRCS has determined that this action, while mostly 
affecting small entities, will not have a significant economic impact 
on a substantial number of these small entities. NRCS made this 
determination based on the fact that this regulation only impacts those 
who choose to participate in the program. Small entity applicants will 
not be affected to a greater extent than large entity applicants.

Environmental Analysis

    NRCS has determined that changes made by this rule fall within a 
category of actions that are excluded from the requirement to prepare 
either an Environmental Assessment (EA) or Environmental Impact 
Statement (EIS). The changes made by the rule are primarily those 
mandated by the 2014 Act, though there are additional administrative 
changes made to improve consistency with other NRCS programs and make 
other clarifications. NRCS has no discretion with respect to changes 
mandated by the 2014 Act; therefore the National Environmental Policy 
Act (NEPA) does not apply. Administrative changes made in this rule 
fall within a categorical exclusion for policy development relating to 
routine activities and similar administrative functions (7 CFR 
1b.3(a)(1)) and NRCS has identified no extraordinary circumstances that 
would otherwise require preparation of an EA or EIS.
    To further its site-specific compliance with NEPA, NRCS reviewed 
the 2009 CSP Programmatic EA, and found this rule makes no substantial 
changes that are relevant to environmental concerns as compared to the 
EA proposed action. Furthermore, NRCS has not found any significant new 
circumstances or information relevant to environmental concerns. As a 
result, NRCS will continue to tier to the 2009 CSP

[[Page 65837]]

Programmatic EA as appropriate to meet NEPA requirements related to 
site-specific activities.
    Public comment on the environmental analysis only may be submitted 
by any of the following means: (1) Email comments to 
[email protected], (2) go to http://www.regulations.gov and 
follow the instructions for submitting comments for Docket No. NRCS-
2014-0008, or (3) mail written comments to: National Environmental 
Coordinator, Natural Resources Conservation Service, Ecological 
Sciences Division, Room 6159-S, P.O. Box 2890, Washington, DC 20013-
2890.

Civil Rights Impact Analysis

    NRCS has determined through a Civil Rights Impact Analysis that the 
interim rule discloses no disproportionately adverse impacts for 
minorities, women, or persons with disabilities. The national target of 
setting aside 5 percent of CSP acres for socially disadvantaged farmers 
and ranchers and an additional 5 percent of CSP acres for beginning 
farmers and ranchers; and prioritizing veterans applications that are 
competing in these subaccounts for socially disadvantaged farmers or 
ranchers and beginning farmer or ranchers is expected to increase 
participation among these groups.
    The data presented in the analysis indicates producers who are 
members of the protected groups have participated in NRCS conservation 
programs at parity with other producers. Extrapolating from historical 
participation data, it is reasonable to conclude that CSP will continue 
to be administered in a nondiscriminatory manner. Outreach and 
communication strategies are in place to ensure all producers will be 
provided the same information to allow them to make informed decisions 
regarding the use of their lands that will affect their participation 
in USDA programs. NRCS conservation programs apply to all persons 
equally regardless of their race, color, national origin, gender, sex, 
or disability status. Therefore, this interim rule portends no adverse 
civil rights implications for women, minorities and persons with 
disabilities.

Paperwork Reduction Act

    Section 1246 of the Food Security Act of 1985 (the 1985 Act) 
provides that implementation of programs authorized by Title XII of the 
1985 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 
interim rule.

Government Paperwork Elimination Act

    NRCS is committed to compliance with the Government Paperwork 
Elimination Act and the Freedom to E-File Act, which require 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 13175

    This interim rule has been reviewed in accordance with the 
requirements of Executive Order 13175, Consultation and Coordination 
with Indian Tribal Governments. Executive Order 13175 requires Federal 
agencies to consult and coordinate with Tribes on a government-to-
government basis on policies that have Tribal implications, including 
regulations, legislative comments or proposed legislation, and other 
policy statements or actions that have substantial direct effects on 
one or more Indian Tribes, on the relationship between the Federal 
Government and Indian Tribes, or on the distribution of power and 
responsibilities between the Federal Government and Indian Tribes. NRCS 
has assessed the impact of this interim rule on Indian Tribes and 
determined that this rule does not have Tribal implications that 
require Tribal consultation under E.O. 13175. The rule neither imposes 
substantial direct compliance costs on Tribal Governments nor preempts 
Tribal law. The agency has developed an outreach/collaboration plan 
that it will implement as it develops its Farm Bill policy. If a Tribe 
requests consultation, NRCS will work with the Office of Tribal 
Relations to ensure meaningful consultation is provided where changes, 
additions, and modifications identified herein are not expressly 
mandated by Congress.
    The 2014 Act changes to CSP that address participation by Indian 
Tribes are limited to special funding arrangements from the CSP-
specific provisions of Section 1241 of the 1985 Act, and streamlining 
the use of the definition of Indian Tribes. These changes are discussed 
more fully herein.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, requires Federal agencies to assess the effects of their 
regulatory actions on State, local, and Tribal Governments or the 
private sector of $100 million or more in any one year. When such a 
statement is needed for a rule, section 205 of the UMRA requires NRCS 
to prepare a written statement, including a cost-benefit assessment, 
for proposed and final rules with ``Federal mandates'' that may result 
in such expenditures for State, local, or Tribal Governments, in the 
aggregate, or to the private sector. UMRA generally requires agencies 
to consider alternatives and adopt the more cost effective or least 
burdensome alternative that achieves the objectives of the rule.
    This rule contains no Federal mandates, as defined under Title II 
of the UMRA, for State, local, and Tribal Governments or the private 
sector. Thus, this rule is not subject to the requirements of sections 
202 and 205 of UMRA.

Executive Order 13132

    NRCS has considered this interim rule in accordance with Executive 
Order 13132, issued August 4, 1999. NRCS has determined that the 
interim rule conforms with the Federalism principles set out in this 
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 National Government and the States, nor on the 
distribution of power and responsibilities among the various levels of 
government. Therefore, NRCS concludes that this interim rule does not 
have Federalism implications.

Economic Analysis--Executive Summary

    The Conservation Stewardship Program (CSP) is authorized under the 
provisions of Chapter 2, Subtitle D of Title XII of the Food Security 
Act of 1985 (1985 Act), as amended by Title II, Subtitle D of the Food, 
Conservation, and Energy Act of 2008 (2008 Act) and by Title II, 
Subtitle B of the Agriculture Act of 2014 (2014 Act). The Secretary of 
Agriculture, acting through the Chief of the Natural Resources 
Conservation Service (NRCS), administers the program.
    As part of the 2014 Act, Congress reauthorized CSP and capped 
enrollment at 10 million acres for each fiscal year (FY) during the 
period February 7, 2014, through September 30, 2022; however, the 2014 
Act only provided funding through FY 2018. CSP contracts run for 5 
years and include the potential for a one-time renewal for an 
additional 5 years, thus creating financial obligations through FY 2027

[[Page 65838]]

for commitments made during FY 2014 to FY 2018. Nationally, program 
costs cannot exceed an annual average rate of $18 per acre. For each of 
the five FY signups (FY 2014 to FY 2018) including a one-time contract 
renewal for an additional 5 years, Congress committed a maximum of $1.8 
billion. Total authorized funding equals $9 billion for the five 
signups (FY 2014 to FY 2018).
    Participation in CSP is voluntary. Agricultural and forestry 
producers decide whether or not CSP participation helps them achieve 
their conservation objectives. Hence, CSP participation is not expected 
to negatively impact program participants and nonparticipants.
    Pursuant to Executive Order 12866 and OMB Circular A-4 that 
provides guidance in conducting regulatory analyses, NRCS conducted an 
assessment of CSP consistent with this rule's designation as a 
significant regulatory action. Most of this rule's impacts consist of 
transfers from the Federal Government to producers. Although these 
transfers create incentives that very likely cause changes in the way 
society uses its resources, we lack data to estimate the resulting 
social costs or benefits. This analysis therefore, includes a summary 
of program costs and qualitative assessment of program impacts.
    Total projected government program obligations for CSP are shown in 
table 1. Obligations include only costs to the government between FY 
2014 and FY 2027 (five signups with one-time, 5-year contract 
renewals). Projected maximum program obligations in nominal dollars 
equal $9 billion. Given a 3 percent discount rate, projected cumulative 
program obligations equal $6,405 billion in constant 2014 dollars. At a 
7 percent discount rate, maximum program obligations equal $4,942 
billion in constant 2014 dollars. Average annualized obligations at the 
3 percent and 7 percent discount rates equal $567 million and $565 
million, respectively.

                                    Table 1--Total Projected Program Obligations for CSP, FY 2014 Through FY 2027 \a\
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                                                                            Obligation                    Present  value                  Present  value
                                          Obligation \b\     GDP price       constant        Discount           of           Discount           of
               Fiscal year                  (million $)    deflator \c\       dollars      factors  for   obligation--3%    factors for   obligation--7%
                                                            (2014=100)      (million $)         3%          (million $)         7%          (million $)
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FY14....................................             180        100.0000             180          0.9709             175          0.9346             168
FY15....................................             360        102.1000             353          0.9426             332          0.8734             308
FY16....................................             540        104.2441             518          0.9151             474          0.8163             423
FY17....................................             720        106.4332             676          0.8885             601          0.7629             516
FY18....................................             900        108.6683             828          0.8626             714          0.7130             591
FY19....................................             900        110.9504             811          0.8375             679          0.6663             541
FY20....................................             900        113.0584             796          0.8131             647          0.6227             496
FY21....................................             900        115.2065             781          0.7894             617          0.5820             455
FY22....................................             900        117.3954             767          0.7664             588          0.5439             417
FY23....................................             900        119.6260             752          0.7441             560          0.5083             382
FY24....................................             720        121.8989             591          0.7224             427          0.4751             281
FY25....................................             540        124.2149             435          0.7014             305          0.4440             193
FY26....................................             360        126.5750             284          0.6810             194          0.4150             118
FY27....................................             180        128.9799             140          0.6611              92          0.3878              54
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    Total...............................           9,000  ..............           7,912  ..............           6,405  ..............           4,942
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Annualized Obligations..................  ..............  ..............  ..............  ..............             567  ..............             565
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\a\ Table 1 in the main document.
\b\ Congress set a maximum of 10 million acres per signup and a national payment rate of $18 per acre. With a one-time contract renewal option, each
  signup equals $1.8 billion in projected program obligations over its 10-year period. Congress authorized five signups.
\c\ For years 1 to 5, the GDP adjustment is 2.10 percent (OMB); for years 6 to 14, the GDP adjustment factor is 1.90 percent (average growth since
  1993).

    Compared to CSP as authorized under the 2008 Act, Congress 
significantly reduced its size but left much of CSP's underlying 
structure intact. In addition, the Secretary of Agriculture proposed a 
number of discretionary administrative changes as a means of improving 
program implementation.
    As shown in table 2, the downsizing of CSP from an annual 12.769 
million acre program to an annual 10 million acre program has the 
greatest impact on program funds, conservation activities, and cost-
effectiveness. Program funds, which include financial and technical 
assistance, decrease by $2.492 billion (nominal dollars) compared to 
CSP under the 2008 Act. With fewer acres and fewer dollars, fewer 
contracts will be funded under the 2014 Act. The new conservation 
activities that would have been applied to enhance the existing 
activities on the lost 2.769 million acres will not be applied to the 
Nation's working lands. However, cost-effectiveness, defined as dollars 
per additional unit of conservation effect, will improve slightly 
because lower ranked eligible applications are the first ones cut from 
every State's ranking pools. That is, obligations per unit of 
conservation effect will be lower under the 2014 Act. Properly 
implemented, a smaller sized CSP will be neutral in its impacts across 
all producer types, including beginning and socially disadvantaged 
groups.

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              Table 2--Program Impacts of the Statutory Requirements and Discretionary Actions \a\
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                                   Based on 2008 CSP Farm Bill Provisions: 12.769 Millions Acres vs. 10 Million
                                                                       Acres
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            Statutory                Program Funds        Impacts of      Cost-Effectiveness      Participant
                                                          Conservation                             Diversity
                                                           Activities
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Acreage Enrollment Limitations..  -$2.492 billion in  Significantly       Slight improvement  No impact.
                                   program funds.      large decrease.
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                                           2008 CSP at 10 Million Acres vs. 2014 CSP at 10 Million Acres
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            Statutory                Program Funds        Impacts of      Cost-Effectiveness      Participant
                                                          Conservation                             Diversity
                                                           Activities
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Conditions for Contract Renewal.  Small/Moderate      Increase..........  Improvement.......  No Impact.
                                   decrease.
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          Discretionary              Program Funds        Impacts of      Cost-Effectiveness      Participant
                                                          Conservation                             Diversity
                                                           Activities
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Contract Renewal: To renew        Moderate decrease.  Marginal Increase.  Marginal            No Impact.
 contracts, shift eligibility                                              Improvement.
 determinations to applicable
 priority resource concerns.
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\a\ Shortened version of table 10 in the accompanying regulatory impact analysis.

    One additional legislated change in the 2014 Act, additional 
contract renewal requirements is also expected to generate smaller, yet 
important program impacts. The legislated 2014 contract renewal 
requirements--producer agrees to meet the stewardship thresholds for at 
least two additional priority resource concerns by the end of the 
renewed contract period or to exceed the stewardship thresholds of at 
least two existing priority resource concerns specified in the original 
contract--will likely result in a slightly larger portion of CSP 
participants not renewing their contracts compared to a comparably 
sized 2008 CSP and renewal rate. The 2008 Act only requires the 
addition of one or more new conservation activities for contract 
renewal. However, CSP participants under the 2014 Act are required to 
add activities to meet or exceed stewardship thresholds for at least 
two priority resource concerns, thus likely increasing the number of 
additional activities applied during the second 5-year period. With 
yearly payments extended and more activities being applied under 2014 
Act renewals, a small improvement in cost-effectiveness is expected. 
Overall no differential impacts are expected between general 
agricultural and general forest producers and beginning and socially 
disadvantaged producers, including veteran status.
    An important discretionary change is clearly defining the terms 
``applicable priority resource concerns'' and ``other priority resource 
concerns.'' ``Applicable priority resource concerns'' represent 
resource issues within a watershed or portion of a State that NRCS is 
targeting for improvement. ``Other priority resource concerns'' are 
resource concerns that are currently not being targeted for 
improvement. These definitions allow NRCS to better describe how it is 
targeting resources to meet statutory objectives.
    In summary, differences in program impacts between the 2008 CSP and 
the 2014 CSP can be attributed primarily to the program's smaller acre 
cap of 10 million acres. Statutory requirements related to contract 
renewals and proposed discretionary actions will result in a more 
focused approach to meeting conservation objectives.

Comments Invited

    NRCS invites interested persons to participate in this rulemaking 
by submitting written comments or views about the changes made by this 
interim rule. The most helpful comments reference a specific portion of 
the regulation, explain the reason for any recommended changes, and 
include supporting data and references to statutory language. All 
comments received on or before the closing date for comments will be 
considered. This regulation may be changed because of the comments 
received. All comments received, as well as a report summarizing each 
substantive public comment received concerning this interim rule will 
be filed in the docket (No. NRCS-2014-0008). The docket, including any 
personal information provided, will be made available for public 
inspection.

Discussion of Conservation Stewardship Program (7 CFR Part 1470)

    The Food, Conservation, and Energy Act of 2008 Act (2008 Act) 
amended the Food Security Act of 1985 (1985 Act) to establish the 
Conservation Stewardship Program (CSP) and authorize the program in FY 
2009 through FY 2013. The Agriculture Act of 2014 (the 2014 Act) 
reauthorizes and revises CSP.
    The purpose of CSP is to encourage producers to address priority 
resource concerns and improve and conserve the quality and condition of 
the natural resources in a comprehensive manner by: (1) Undertaking 
additional conservation activities; and (2) improving, maintaining, and 
managing existing conservation activities. The Secretary of Agriculture 
delegated authority to the Chief, NRCS, to administer CSP.
    Through CSP, NRCS provides financial and technical assistance to 
eligible producers to conserve and enhance soil, water, air, and 
related natural resources on their land. Eligible lands include private 
or tribal cropland, grassland, pastureland, rangeland, nonindustrial 
private forest lands and other land in agricultural areas (including 
cropped woodland, marshes, and agricultural land or capable of being 
used for the production of livestock) on which resource concerns 
related to agricultural production could be addressed. Participation in 
the program is voluntary.
    CSP encourages land stewards to improve their conservation 
performance by installing and adopting additional activities, and 
improving, maintaining, and managing existing activities on

[[Page 65840]]

eligible land. NRCS makes funding for CSP available nationwide on a 
continuous application basis.
    NRCS coordinates its implementation of CSP with the other premier 
Farm Bill working lands program, the Environmental Quality Incentives 
Program (EQIP). CSP and EQIP work in a complementary manner to address 
conservation issues associated with agricultural operations. In 
particular, EQIP emphasizes assistance upon the magnitude of the 
expected conservation benefit and thus address those natural resource 
concerns that are creating significant environmental impact, while CSP 
emphasizes assistance to producers who are already addressing some of 
these potential environmental impacts by meeting a priority resource 
concern's stewardship level of treatment and encourages these producers 
to achieve greater stewardship performance in a comprehensive manner. 
Thus, a producer can receive assistance to install conservation 
practices under EQIP that enables the producer to meet the stewardship 
threshold for a priority resource concern, which in turn enables the 
producer to be eligible for CSP. In this way, CSP builds upon the 
conservation efforts initiated under EQIP and expands upon them to a 
new level of conservation performance.

Summary of CSP Provisions

    The CSP regulation is organized into three subparts: Subpart A--
General Provisions; Subpart B--Contracts; and Subpart C--General 
Administration. Below is a summary of the changes made to each subpart 
based upon the changes made to CSP by the 2014 Act.
    The 2014 Act made the following changes to CSP implementation:
     Establishes implementation for FY 2014 through FY 2018 
(the 2008 Act was for FY 2008 through FY 2014);
     Limits eligible land to land in production for at least 
four of the 6 years preceding February 7, 2014, the date of enactment 
of the Agricultural Act of 2014 (previous date was June 18, 2008);
     Requires contract offers to meet or exceed the stewardship 
threshold for at least two priority resource concerns (the 2008 Act 
only required one resource concern) and meet or exceed the stewardship 
threshold for one additional priority resource concern by the end of 
the contract (the 2008 Act required one priority resource concern);
     Strikes the definition and references to ``conservation 
measurement tools'' (the 2008 Act did not contain a similar provision);
     Requires that the contract must include all eligible land 
under the effective control of the applicant that is operated 
substantially separate from other operations for the term of the 
contract;
     Allows enrollment of lands that are protected by an 
agricultural land easement under the newly authorized Agricultural 
Conservation Easement Program (ACEP) (the 2008 Act did not include 
ACEP);
     Allows enrollment of lands that are in the last year of 
the Conservation Reserve Program (CRP) (the 2008 Act did not contain a 
similar provision). The CRP contract must expire at the end of the 
fiscal year in which the land is to be enrolled in CSP, and the CRP 
payment for enrolled land must cease before the first CSP payment is 
made;
     Allows contract to be renewed if the threshold for two 
additional priority resource concerns will be met or the stewardship 
threshold will be exceeded for two existing priority resource concerns 
(the 2008 Act did not contain a similar provision);
     Requires that at least five priority resource concerns be 
identified for each area or watershed (the 2008 Act required three to 
five priority resource concerns);
     Requires NRCS to establish a science-based stewardship 
threshold for each priority resource concern (the 2008 Act did not 
contain a similar provision);
     Authorizes NRCS to prorate conservation performance so 
that a participant may receive equal annual payments to the greatest 
extent practicable;
     Emphasizes conservation activities to be implemented 
across the agricultural operation;
     Authorizes a supplemental payment for improving resource 
conserving crop rotations (the 2008 Act did not contain a similar 
provision);
     Removed the 10 percent cap on nonindustrial private forest 
land enrollment;
     Included a preference for veterans (the 2008 Act did not 
contain a similar provision);
     Reduces the annual enrollment limit from 12,769,000 to 
10,000,000 acres; and
     Establishes CSP as a covered program authorized to be used 
to accomplish the purposes of the Regional Conservation Partnership 
Program (RCPP) (Subtitle I of Title XII of the Food Security Act of 
1985, as amended by the 2014 Act) (the 2008 Act did not contain a 
similar provision).

Subpart A--General Provisions

Section 1470.1 Applicability

    Section 1470.1, ``Applicability,'' sets forth the policies, 
procedures, and requirements of CSP. In paragraph (a), NRCS clarifies 
that contracts entered into prior to the 2014 Act are administered 
according to the CSP regulation in effect prior to enactment, and that 
contracts entered into after enactment of the 2014 Act will be 
administered under these regulations. Paragraph (b) updates CSP 
purposes consistent with the changes made to CSP purposes by the 2014 
Act.

Section 1470.2 Administration

    Section 1470.2, ``Administration,'' describes the roles of NRCS at 
the National and State levels. Paragraph (b) is revised to clarify the 
scope of the authority of the Chief to change delegations within the 
agency or to modify or waive certain discretionary provisions of this 
regulation. As revised by the 2014 Act, NRCS replaced reference in 
paragraph (c) to ``conservation measurement tools'' with the 
establishment of ``science-based stewardship thresholds for each 
priority resource concern.'' NRCS revised paragraph (d) to identify 
that between FY 2014 and FY 2022, NRCS will enroll an additional 
10,000,000 acres in each fiscal year and continue operating the program 
to achieve a national average rate of $18 per acre, which includes the 
costs to the Federal Government for all financial and technical 
assistance, and any other expenses associated with program enrollment 
and participation.
    NRCS modified paragraph (e)(1)(ii) to require that NRCS will 
identify not less than five applicable priority resource concerns in 
particular watersheds, geographic areas, or other appropriate regions 
within a State, as required by statute. Applicable priority resource 
concerns are selected by the State from a defined list of priority 
resource concerns identified at the national level and have the most 
important environmental challenges associated with agricultural 
production in the State or region. The current suite of priority 
resource concerns is comprised of the following: air quality, animal, 
energy, plants, soil erosion, soil quality, water quality, and water 
quantity. NRCS retains the authority to modify this suite of priority 
resource concerns. For example, the Chief may want to target a 
geographic area where expanding wildlife concerns are deemed more 
significant as compared to energy concerns. This requirement is now 
captured in (e)(2). NRCS removed paragraphs (e)(1)(iv) and (v) 
consistent with the 2014 Act changes to remove on-farm research and 
demonstration and pilot projects under CSP, and to reflect the repeal 
of the Cooperative Conservation Partnership Initiative.

[[Page 65841]]

Section 1470.3 Definitions

    Section 1470.3, ``Definitions,'' sets forth definitions for terms 
used throughout this regulation. The following definitions have been 
modified to reflect changes made by the 2014 Act: ``agricultural 
operation,'' ``conservation activities,'' and ``priority resource 
concern.'' The terms ``conservation measurement tool'' and ``resource 
concern'' have been removed to conform to changes made by the 2014 Act.
    The term ``animal waste storage or treatment facility'' was also 
removed. This avoids unnecessarily narrowing the application of the 
term.
    The term ``conservation planning'' was removed because its terms 
are covered in Sec.  1470.22, Conservation Stewardship Plan. The 
definition of ``conservation practice'' was modified to be more 
consistent with the definition used in the Environmental Quality 
Incentives Program (EQIP). The definition of ``conservation stewardship 
plan'' was modified to be consistent with Sec.  1470.22, Conservation 
Stewardship Plan.
    The term ``designated conservationist'' was removed since it is no 
longer used in the regulation.
    Throughout, the term ``agricultural land'' was removed and replaced 
with ``eligible land,'' which describes those areas identified by CSP's 
authorizing legislation--working agricultural land being actively 
managed for agricultural production purposes upon which CSP will be 
focused. The definition for eligible land is consistent with that term 
added by the 2014 Act to section 1238D(4) of the Food Security Act of 
1985.
    The term ``enhancement'' was modified to link an enhancement's 
management intensity with the Field Office Technical Guide quality 
criteria, Section III, for each resource concern. Quality criteria 
specifics are located at: http://efotg.sc.egov.usda.gov/.
    The term ``enrollment'' was removed. Since this definition was 
unique to the FY 2009 enrollment, it is no longer needed.
    The term ``historically underserved producer'' was added to 
simplify references to several statutorily-defined categories of 
producers who are frequently referred to collectively.
    The definition of ``legal entity'' was modified to be consistent 
with the definition used in EQIP.
    The definition of ``limited resource farmer or rancher,'' was 
modified by removing the reference to ``$142,000'' that applied in 2010 
only, and clarifying how the term is applied to legal entities or joint 
operations.
    The definition of ``National Organic Program'' was modified to 
include the reference to the Organic Foods Production Act of 1990 (7 
U.S.C. 6501 et seq.).
    The definition of ``operation and maintenance'' was modified to be 
consistent with the definition in the EQIP regulation.
    The definition of ``priority resource concern'' was amended to 
conform to the statute which defines the term as a natural resource 
concern or problem that is identified at the national, State, or local 
level and to explain the terms ``applicable'' priority resource 
concerns and ``other'' priority resource concerns in the context of the 
base term.
    The definition of ``producer'' was modified to correct a citation.
    The definition of ``socially disadvantaged producer'' was amended 
to conform to the statutory definition of the term.
    The term ``state conservationist'' was removed and replaced 
throughout with the term ``NRCS'' to allow more flexibility in internal 
agency delegation of authority.
    The definition of ``stewardship threshold'' was modified to remove 
reference to the conservation measurement tool (CMT) consistent with 
its removal by the 2014 Act. Additionally, NRCS removed the clause 
``natural resource conservation and environment.'' The stewardship 
threshold is used to determine if an applicant meets the minimum 
treatment requirements to be eligible for CSP, and is also used as part 
of the ranking process. NRCS guides its efforts to set stewardship 
thresholds at sustainable levels for natural resource treatment.
    The definition of ``technical service providers'' was modified to 
be consistent with 7 CFR part 652.
    The definition of ``veteran farmer or rancher'' was added to 
address the new provision in the 2014 Act to prioritize individuals 
under this category.
    Several other definitions in this rule were amended for clarity and 
to be consistent with definitions adopted for other conservation 
programs.

Section 1470.4 Allocation and Management

    Section 1470.4, ``Allocation and management,'' addresses national 
allocations and how the proportion of eligible land will be used as the 
primary means to distribute CSP acres and associated funds among 
States. The agency plans to use a nationally consistent method to 
document resource needs and provide a foundation for establishing 
priorities within States. Inputs may include National Resources 
Inventory (NRI) land use data, NRI soil erosion estimates, NRI 
Rangeland Resource Assessment rangeland health data, NRI CEAP soil 
organic carbon data, and various attributes from the Soil Survey 
Geographic database. These and other data layers maybe used to 
calculate critical acres by State and resource concern. The 
considerations listed in paragraph (a)(2) have been modified to follow 
statutory allocation criteria provided in section 1238G(b)(2) of the 
Food Security Act. The 2014 Act amended section 1241(h) of the Food 
Security Act of 1985 to extend the assistance available to ``certain 
farmers or ranchers for conservation access'' for FY 2014 through FY 
2018. Therefore, NRCS modified paragraph (c) to reflect that 5 percent 
of the CSP acres in each of FY 2014 through FY 2018 will be available 
to assist socially disadvantaged farmers or ranchers and 5 percent of 
the CSP acres in each of FY 2014 through FY 2018 will be available to 
assist beginning farmers or ranchers. Additionally, the 2014 Act added 
a priority within the conservation access acreage set-aside for veteran 
farmer or ranchers. This priority has been added to paragraph (d).
    The original language in paragraph (e) has been removed from the 
regulation, consistent with the repeal of the Cooperative Conservation 
Partnership Initiative. NRCS identifies in the revised paragraph (e) 
that certain adjustments, based on resource assessments, may need to be 
made to the allocation of acres to States to ensure equitable and 
effective implementation to meet the purposes of the program and ensure 
National enrollment. In particular, NRCS may know at the time of 
determining a fiscal year's allocation of acres that while the 
allocation is based primarily on each State's proportion of eligible 
land to the total acreage of eligible land in all States, resource 
assessment adjustments are needed to ensure that each State's 
allocation does not exceed its ability to enroll land into the program. 
Additionally, once allocations have been made, a reallocation of acres 
may be necessary because one State is unable to meet its enrollment 
targets while demand of high priority projects is available in another 
State.

Section 1470.5 Outreach Activities

    NRCS removed paragraph (d) to align the CSP rule with the EQIP 
rule.

Section 1470.6 Eligibility requirements

    Section 1470.6, ``Eligibility requirements,'' sets forth the 
criteria for determining applicant and land eligibility. NRCS adjusted 
the regulatory

[[Page 65842]]

language slightly to address ``other producers'' who are not identified 
as the operator in the Farm Service Agency farm records system but 
otherwise meet program eligibility criteria. NRCS modified the rule to 
reflect several changes made in the Food Security Act of 1985 by the 
2014 Act. Paragraph (b) was modified to use the new term ``eligible 
land,'' that reflects the new statutory definition.

Subpart B--Contracts and Payments

Section 1470.20 Application for Contracts and Selecting Offers From 
Applicants

    Section 1470.20, ``Application for contracts and selecting offers 
from applicants,'' identifies procedures associated with contract 
application requirements, the application evaluation process, and 
application acceptance. NRCS amended paragraph (a) to clarify that 
applicants may submit an application for the agricultural operation. 
Paragraph (b) defines contract application requirements. Consistent 
with the 2014 Act revision to enrollment eligibility, NRCS modified 
paragraph (b)(1) to specify that an applicant must meet a stewardship 
threshold for at least two priority resource concerns at the time of 
contract offer. The 2008 Act had only required an applicant to meet one 
resource concern at the time of application. NRCS also amended 
paragraph (b)(2) to clarify that an applicant must meet or exceed the 
stewardship threshold for at least one additional priority resource 
concern by the end of the conservation stewardship contract. An 
applicant accomplishes this by installing and adopting additional 
conservation activities and by improving, maintaining, and managing 
existing conservation activities across the entire agricultural 
operation in a manner that increases or extends the conservation 
benefits in place at the time the contract application is accepted by 
NRCS.
    NRCS removed paragraph (b)(4) as it addressed on-farm research and 
demonstration activities or pilot testing, which are activities removed 
from stewardship contracts by the 2014 Act.
    The 2014 Act specified application ranking factors and paragraph 
(c) was modified to conform to the amended statutory ranking factors. 
The 2014 Act slightly modified the phraseology used to describe the 
ranking factors that had originally been identified in the 2008 Act and 
added a new factor related to the extent to which priority resource 
concerns will be addressed when transitioning from CRP to agricultural 
production.
    NRCS removed reference to the CMT that had previously been 
identified in the ranking factors. However, the removal of the 
statutory and regulatory reference does not prohibit NRCS from 
utilizing the CMT or equivalent methodology, but simply removes the 
requirement that it be used.
    Paragraph (d) on weighting of ranking factors was modified to 
clarify the authority of the Chief to adjust these factors as required 
to address any program objective, including placing emphasis on 
increasing net conservation benefits. Previously, the regulation simply 
identified the Chief could adjust the weighting of ranking factors to 
increase net conservation benefit.
    During the first years of program implementation, NRCS ranked every 
application within a pool according to equally weighted ranking 
factors. NRCS selected applications for enrollment beginning with the 
highest ranked one and worked down the ranked list until a pool's 
funding limit or acreage limit was reached. This translated into an 
effective weighting scheme that shifted the program towards enrollment 
based upon additionality.
    For the 2014 Act, the Chief will apply weights to the ranking 
factors to address evolving resource issues and priority adjustments. 
As reflected by the statutory ranking factors, NRCS will maintain 
weightings of ranking factors that continue to emphasize greatly the 
extent to which additional activities will be adopted. For example, the 
NRCS Chief may decide to place increased weights to those factors that 
relate to additional activities in order to increase the net new 
conservation benefit. Further, the NRCS Chief may make adjustments to 
ensure that the consideration of the enrollment of transitioning CRP 
lands as a ranking factor are fully assimilated with the other ranking 
factors so that such applications are equitably evaluated.
    NRCS is seeking specific comment on how the factor for CRP land 
should be weighted in proportion to other ranking factors giving 
consideration for other lands being offered for enrollment.
    NRCS removed from paragraph (f) the reference to NIPF enrollment 
limitation that had been removed by the 2014 Act.

Section 1470.21 Contract Requirements

    Section 1470.21, ``Contract requirements,'' identifies elements 
contained within a contract and the responsibilities of a CSP 
participant. A participant must enter into a CSP contract, including a 
conservation stewardship plan, to enroll their eligible land and to 
receive payment. NRCS modified paragraph (b)(4)(i) to clarify that the 
participant must implement the conservation stewardship plan. NRCS also 
clarified at paragraph (b)(4)(vi) that a participant is required to 
``maintain and supply information'' as requested by NRCS to determine 
``compliance with the conservation stewardship plan and any other 
requirements of the program.'' Similarly, NRCS clarified at paragraph 
(b)(4)(vii) that a participant must not conduct any activities on the 
agricultural operation that would tend to defeat the purposes of the 
program. These participant requirements are included in the 2014 Act 
revisions to the participant's responsibilities under CSP.

Section 1470.22 Conservation Stewardship Plan

    Section 1470.22, ``Conservation stewardship plan,'' describes that 
NRCS will use the conservation planning process to encourage producers 
to address priority resource concerns in a comprehensive manner. The 
conservation stewardship plan contains a record of the participant's 
decisions on the schedule of conservation activities to be implemented, 
managed, and improved under CSP.
    NRCS added language at paragraph (c) that the conservation 
stewardship plan describes ``conservation activities to be implemented, 
managed, or improved.'' Additionally, NRCS removed the references to 
the CMT, revised the term ``resource concerns'' to be ``priority 
resource concerns, and removed the reference to on-farm research and 
demonstration or pilot testing, consistent with such changes made by 
the 2014 Act.

Section 1470.24 Payments

    Section 1470.24, ``Payments,'' describes the types of payments 
issued under CSP, how payments will be derived, and payment 
limitations. The 2014 Act revisions to CSP require NRCS to make several 
changes to the provisions at Sec.  1470.24. Section 1470.24 was 
modified to remove all references to the CMT. NRCS also modified 
paragraph (a) by adding the payment factors required by the 2014 Act.
    Under paragraph (b), a participant may receive supplemental 
payments when he or she adopts a resource-conserving crop rotation. 
NRCS modified paragraph (b), consistent with 2014 Act, to identify that 
a participant is eligible for a supplemental payment if the participant 
agrees to adopt or improve beneficial crop rotations as appropriate for 
the eligible land of the participant.

[[Page 65843]]

    NRCS removed the provision related to on-farm research and 
demonstration or pilot testing at paragraph (c), and re-designated the 
remaining paragraphs as appropriate.
    As re-designated, paragraph (f) addresses payment limitations 
applicable to a person or legal entity. Consistent with the 2014 Act 
revision, NRCS replaced the rolling 5-year period with the time period 
FY 2014 through FY 2018. NRCS also simplified the references to 
``federally-recognized'' Indian Tribes, consistent with the definition 
of Indian Tribe at section 1201(14) of the Food Security Act of 1985 
and corresponding to the streamlining of terminology at section 
1238G(f) made by the 2014 Act.
    The 2008 Act required that a person or legal entity may not 
receive, directly or indirectly, payments that, in the aggregate, 
exceed $200,000 for all contracts entered into during any 5-year 
period. The 2014 Act replaced this ``rolling'' 5-year payment 
limitation with a $200,000 limitation for all contracts entered into 
between FY 2014 and FY 2018. The regulation continues to include an 
annual payment limit of $40,000 during any fiscal year to a person or 
legal entity. This annual limit was originally added to reduce the 
chance that participants would reach their $200,000 5-year limit early 
in their contract term and have diminished incentive to meet their 
obligations over the 5-year life of the contract. NRCS clarified that 
participants that in the aggregate exceed $200,000 for all contracts 
entered into prior to the end of the applicable period are expected to 
fulfill their contract obligation during the full term of the contract. 
NRCS monitors person or legal entity payment limitations through direct 
attribution to real persons.
    The absence of a contract payment limitation in the 2008 Act caused 
concern because of the potential for excessively large contracts. Since 
each member of a joint operation is treated as a separate person or 
legal entity with payments directly attributed to them, contracts with 
a joint operation could be very large. For example, a contract with a 
joint operation with five members who each reach their $200,000 per 
person or legal entity limit could have contract payments of $1 
million. This created the potential for a high percentage of allocated 
acres and funds to be utilized in contracts with large joint operations 
to the detriment of smaller operations. To prevent large contracts of 
this nature, the 2010 final rule included a contract limit of $200,000 
over the term of the initial contract period with the exception of 
joint operations that could receive up to $400,000 over the term of the 
initial contract period. This same limitation remains in this interim 
rule.
    With regard to the payment limitation as it applies to contracts 
with Indians represented by the Bureau of Indian Affairs (BIA) or an 
Indian Tribe, payments exceeding the payment limitation may be made to 
the Tribal participant if the BIA or Tribal official certifies in 
writing that no individual will receive more than the payment 
limitation. The BIA or Tribe 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 BIA or Indian Tribe must also 
produce, at the request of NRCS, proof of payments made to the person 
or legal entity that incurred costs or had income foregone related to 
conservation practice implementation.
    NRCS also removed paragraph (l) related to payment data as the 
requirement to detail and segment CSP data has been removed from the 
CSP statute.

Section 1470.25 Contract Modifications and Transfers of Land

    Changes made to section 1470.25, ``Contract modifications and 
transfers of land,'' clarify agency policy regarding voluntary contract 
modifications, consistent with the 2014 Act. NRCS modified paragraph 
(b) to authorize the removal of acres from CSP to enroll in the 
Conservation Reserve Program (CRP), in a wetland easement through the 
Agricultural Conservation Easement Program (ACEP-WRE), other Federal or 
State program that offers greater natural resource protection. NRCS may 
also approve modifications related to voluntary land use changes to 
another land use, eligible or ineligible, that the participant wishes 
to make within particular parameters to ensure program purposes can be 
met. Prior to approving any modification, NRCS must determine that the 
modification is consistent with CSP purposes.
    Paragraph (c) states that NRCS will not modify a contract to 
increase the contract obligation beyond the amount of the initial 
contract, except to implement an appeal determination or correct an 
administrative error as approved by NRCS. Modifications to transfer the 
contract to a successor in interest and changes made to the structure 
of an operation are not excluded from this provision. NRCS also has 
clarified policy with respect to transfer of land.

Section 1470.26 Contract Renewal

    Under Sec.  1470.26, ``Contract renewal,'' NRCS may allow a 
participant to renew the contract for one additional 5-year period if 
they meet specific criteria. These criteria were modified by the 2014 
Act, and therefore, paragraph (b) updates the criteria. NRCS is 
specifying that ``applicable'' priority resource concerns be addressed 
at the time of renewal given that the original contract addressed at 
least one or more priority resource concerns identified by the State 
and the test for renewal is whether existing or additional priority 
resource concerns identified by the State will be addressed during the 
renewed contract period. Previously, the requirement was that a 
participant only had to meet or exceed the stewardship threshold for 
one additional priority resource concern identified by the State.
    In addition to incorporating the changes made by the 2014 Act, NRCS 
is taking this opportunity to clarify a few administrative provisions. 
Additionally, NRCS is simplifying the administrative complexity of the 
CSP rule by streamlining the regulation to focus upon only those 
provisions that relate to conservation program participants' rights and 
responsibilities under the program. In multiple places NRCS removed 
references to duties of specific NRCS positions, including the State 
Conservationist, and purely internal NRCS processes.

Subpart C--General Administration

Section 1470.37 Environmental Credits for Conservation Improvements

    Changes made to section 1470.37 clarify that environmental benefits 
achieved through participation in the CSP program may qualify for 
environmental credits under an environmental credit-trading program, 
and that NRCS asserts no direct or indirect interest in these credits. 
Further, any requirements or standards of such environmental market 
program to receive credits must be compatible with the purposes of the 
CSP contract.

Regulatory Changes

List of Subjects in 7 CFR Part 1470

    Agricultural operation, Conservation activities, Natural resources, 
Priority resource concern, Stewardship threshold, Resource-conserving 
crop rotation, Soil and water conservation, Soil quality, Water quality 
and water conservation, Wildlife and forest management.
    For the reasons stated in the preamble, part 1470 of title 7 of the 
Code of Federal Regulations is revised to read as follows:

[[Page 65844]]

PART 1470--CONSERVATION STEWARDSHIP PROGRAM

Subpart A--General Provisions
Sec.
1470.1 Applicability.
1470.2 Administration.
1470.3 Definitions.
1470.4 Allocation and management.
1470.5 Outreach activities.
1470.6 Eligibility requirements.
1470.7 Enhancements and conservation practices.
1470.8 Technical and other assistance.
Subpart B--Contracts and Payments
1470.20 Application for contracts and selecting offers from 
applicants.
1470.21 Contract requirements.
1470.22 Conservation stewardship plan.
1470.23 Conservation activity operation and maintenance.
1470.24 Payments.
1470.25 Voluntary contract modifications and transfers of land.
1470.26 Contract renewal.
1470.27 Contract violations and termination.
Subpart C--General Administration
1470.30 Fair treatment of tenants and sharecroppers.
1470.31 Appeals.
1470.32 Compliance with regulatory measures.
1470.33 Access to agricultural operation.
1470.34 Equitable relief.
1470.35 Offsets and assignments.
1470.36 Misrepresentation and scheme or device.
1470.37 Environmental credits for conservation improvements.

    Authority:  16 U.S.C. 3838d-3838g.

Subpart A--General Provisions


Sec.  1470.1  Applicability.

    (a) This part sets forth the policies, procedures, and requirements 
for the Conservation Stewardship Program (CSP) as administered by the 
Natural Resources Conservation Service (NRCS), for enrollment during 
fiscal year (FY) 2014 and thereafter. Contracts entered into prior to 
FY 2014 will use the regulations and policies in effect the date prior 
to February 7, 2014.
    (b) The purpose of CSP is to encourage producers to address 
priority resource concerns and improve and conserve the quality and 
condition of natural resources in a comprehensive manner by:
    (1) Undertaking additional conservation activities; and
    (2) Improving, maintaining, and managing existing conservation 
activities.
    (c) CSP is applicable in any of the 50 States, District of 
Columbia, Commonwealth of Puerto Rico, Guam, Virgin Islands of the 
United States, American Samoa, and Commonwealth of the Northern Mariana 
Islands.
    (d) NRCS provides financial and technical assistance to eligible 
producers.


Sec.  1470.2  Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the Chief, NRCS, who is a Vice 
President of the Commodity Credit Corporation (CCC).
    (b) No delegation in the administration of this part to lower 
organizational levels will preclude the Chief from making any 
determinations under this part, re-delegating to other organizational 
levels, or from reversing or modifying any determination made under 
this part. The Chief may modify or waive a nonstatutory, discretionary 
provision of this part if the Chief determines:
    (1) The application of that provision to a particular limited 
situation to be inappropriate and inconsistent with the purposes of the 
program; or
    (2) The waiver of such discretionary provision is necessary to 
further the purposes of CSP under the Regional Conservation Partnership 
Program (RCPP) authorized by Subtitle I of Title XII of the Food 
Security Act of 1985. To assist in RCPP implementation, the Chief may 
also waive the applicability of the adjusted gross income (AGI) 
limitation in section 1001D(b)(2) of the Food Security Act of 1985 for 
participating producers if the Chief determines that the waiver is 
necessary to fulfill RCPP objectives.
    (c) To achieve the conservation goals of CSP, NRCS will:
    (1) Make the program available nationwide to eligible applicants on 
a continuous application basis with one or more ranking periods to 
determine enrollments. One of the ranking periods will occur in the 
first quarter of each fiscal year to the extent practicable.
    (2) Establish a science-based stewardship threshold for each 
priority resource concern at the level of management required to 
conserve and improve the quality and condition of a natural resource.
    (d) During the period beginning on February 7, 2014, and ending on 
September 30, 2022, NRCS will, to the maximum extent practicable:
    (1) Enroll in CSP an additional 10,000,000 acres for each fiscal 
year; and
    (2) Manage CSP to achieve a national average rate of $18 per acre, 
which includes the Federal costs of all financial and technical 
assistance and any other expenses associated with program enrollment 
and participation.
    (e) NRCS will develop State level technical, outreach, and program 
materials, with the advice of the State Technical Committee and local 
working groups, including:
    (1) Establishment of ranking pools appropriate for the conduct of 
CSP within the State to ensure program availability and better 
distribution of the funds. Ranking pools may be based on watersheds, 
geographic areas, or other appropriate regions within a State and may 
consider high-priority regional and State-level resource concern areas;
    (2) Identification of not less than five applicable priority 
resource concerns in particular geographic areas, or other appropriate 
regions within a State; and
    (3) Identification of resource-conserving crops that will be part 
of resource-conserving crop rotations.
    (f) NRCS may enter into agreements with Federal, State, and local 
agencies, conservation districts, Indian Tribes, private entities, and 
individuals to assist NRCS with program implementation.


Sec.  1470.3  Definitions.

    The following definitions will apply to this part and all documents 
issued in accordance with this part, unless specified otherwise:
    Agricultural operation means all eligible land, as determined by 
NRCS, whether contiguous or noncontiguous that is:
    (1) Under the effective control of a producer at the time of 
enrollment in the program; and
    (2) Operated by the producer with equipment, labor, management, and 
production or cultivation practices that are substantially separate 
from other agricultural operations.
    Applicant means a producer who has requested in writing to 
participate in CSP.
    Beginning farmer or rancher means a person or legal entity who:
    (1) Has not operated a farm, ranch, or nonindustrial private forest 
land (NIPF), or who has operated a farm, ranch, or NIPF for not more 
than 10 consecutive years. This requirement applies to all members of a 
legal entity who will materially and substantially participate in the 
operation of the farm or ranch.
    (2) In the case of a contract 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 contract with a legal entity or joint 
operation, all members must materially and

[[Page 65845]]

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, United States Department of 
Agricultural (USDA), or designee.
    Conservation activities mean conservation systems, practices, 
enhancements or management measures. The term conservation activities 
includes structural measures, vegetative measures, and land management 
measures, including agricultural drainage management systems as 
determined by NRCS, and planning needed to address a priority resource 
concern.
    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,'' ``land conservation committee,'' ``natural 
resource district,'' or similar name.
    Conservation practice means structural practices, land management 
practices, vegetative practices, forest management practices, and other 
improvements that achieve the program purposes, including such items as 
Comprehensive Nutrient Management Plans, agricultural energy management 
plans, dryland transition plans, forest management plans, integrated 
pest management and other actions as approved by the Chief. Approved 
conservation practices are listed in the NRCS Field Office Technical 
Guide (FOTG).
    Conservation stewardship plan means a plan developed in accordance 
with the requirements of Sec.  1470.22.
    Conservation system means a combination of conservation practices, 
management measures, and enhancements used to address natural resource 
and environmental concerns in a comprehensive, holistic, and integrated 
manner.
    Contract means a legal document that specifies the rights and 
obligations of any participant who has been accepted into the program. 
A CSP contract is a binding agreement for the transfer of assistance 
from NRCS to the participant for installing, adopting, improving, 
managing, and maintaining conservation activities.
    Effective control means possession of the land by ownership, 
written lease, or other legal agreement and authority to act as 
decision maker for the day-to-day management of the operation both at 
the time the applicant enters into a stewardship contract and for the 
required period of the contract.
    Eligible land means:
    (1) Private and tribal land on which agricultural commodities, 
livestock, or forest-related products are produced; and
    (2) Upon which priority resource concerns could be addressed 
through a contract under the program. Eligible land includes cropland, 
grassland, rangeland, pastureland, nonindustrial private forest land, 
and other agricultural lands including cropped woodland, marshes, and 
agricultural land used or capable of being used for the production of 
livestock as determine by the Chief.
    Enhancement means a type of conservation activity used to treat 
natural resources and improve conservation performance. Enhancements 
are equal to or greater than the performance level for the quality 
criteria identified for a given resource concern. Quality criteria are 
defined for each resource concern in Section III--Conservation 
Management Systems, Field Office Technical Guide.
    Field office technical guide means the official local NRCS source 
of resource information and interpretations of guidelines, quality 
criteria, and standards for planning and implementation of conservation 
practices. It contains detailed information on the quality standard to 
achieve conservation of soil, water, air, plant, energy, and animal 
resources applicable to the local area for which it is prepared.
    Historically underserved producer means a person, joint operation, 
legal entity, or Indian Tribes who is a beginning farmer or rancher, 
socially disadvantaged farmer or rancher, or limited resource farmer or 
rancher.
    Indian lands means land held in trust by the United States for 
individual Indians or Indian Tribes, or all land titles held by 
individual Indians or Tribes, subject to Federal restrictions against 
alienation or encumbrance, or land which is subject to the rights of 
use, occupancy, and/or benefit of certain Indian Tribes. This term also 
includes lands for which the title is held in fee status by an Indian, 
Indian family, or Indian Tribe.
    Indian Tribe means any Indian Tribe, band, nation, pueblo, 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.), 
which is recognized as 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 owns land or an agricultural 
commodity, product, or livestock; or produces an agricultural 
commodity, product, or livestock.
    Limited Resource Farmer or Rancher means:
    (1) A person with direct or indirect gross farm sales not more than 
the current indexed value in each of the previous 2 fiscal years 
(adjusted for inflation using Prices Paid by Farmer Index as compiled 
by the 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 Department of Commerce Data).
    (3) It also includes a legal entity or joint operation if all 
individual members independently qualify under paragraphs (1) and (2) 
of this definition.
    Liquidated damages means a sum of money stipulated in the CSP 
contract that the participant agrees to pay NRCS if the participant 
fails to fulfill the terms of the contract. The sum represents an 
estimate of the technical assistance expenses incurred to service the 
contract, and reflects the difficulties of proof of loss and the 
inconvenience or non-feasibility of otherwise obtaining an adequate 
remedy.
    Management measure means one or more specific actions that is not a 
conservation practice, but has the effect of alleviating problems or 
improving the treatment of the natural resources.
    National Organic Program means the program established under the 
Organic Foods Production Act of 1990 (7 U.S.C. 6501 et seq.), 
administered by the Agricultural Marketing Service, which regulates the 
standards for any farm, wild crop harvesting, or handling operation 
that wants to market an agricultural product as organically produced.

[[Page 65846]]

    Natural Resources Conservation Service means an agency of USDA 
which has responsibility for administering CSP using the funds, 
facilities, and authorities of the CCC.
    Nonindustrial private forest land means rural land, as determined 
by NRCS, 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 decision-making authority over the land.
    Operation and maintenance means work performed by the participant 
to maintain existing conservation activities to at least the level of 
conservation performance identified at the time of enrollment, and 
maintain additional conservation activities installed and adopted over 
the contract period. 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 activity, repairing damage, replacement or 
restoration of the activity to its original condition if one or more 
components fail.
    Participant means a producer that has entered into a CSP contract 
and is receiving payment or is responsible for implementing the terms 
and conditions of a CSP contract.
    Payment means financial assistance provided to the participant 
under the terms of the CSP contract.
    Person means, as defined in 7 CFR part 1400, an individual, natural 
person and does not include a legal entity.
    Priority resource concern means a natural resource concern or 
problem, as determined by NRCS, and is likely to be addressed 
successfully through implementation of conservation activities under 
this program. The term ``applicable'' priority resource concern means a 
resource concern identified by the State as a priority for a particular 
area of a State or region, and the term ``other'' priority resource 
concern means a resource concerns identified at the National level.
    Producer means a person, legal entity, joint operation, or Indian 
Tribe who either has an interest in the agricultural operation or who 
NRCS determines is engaged in agricultural production or forestry 
management on the agricultural operation.
    Resource-conserving crop means a crop that is one of the following:
    (1) A perennial grass;
    (2) A legume grown for use as forage, seed for planting, or green 
manure;
    (3) A legume-grass mixture;
    (4) A small grain grown in combination with a grass, legume, forbs, 
grass-forbs mixture, whether inter-seeded or planted in rotation.
    Resource-conserving crop rotation means a crop rotation that:
    (1) Includes at least one resource- conserving crop as determined 
by NRCS;
    (2) Reduces erosion;
    (3) Improves soil fertility and tilth;
    (4) Interrupts pest cycles; and
    (5) In applicable areas, reduces depletion of soil moisture or 
otherwise reduces the need for irrigation.
    Secretary means the Secretary of USDA.
    Socially disadvantaged farmer or rancher means a producer who is a 
member of a group whose members have been subjected to racial or ethnic 
prejudices without regard to its members' individual qualities.
    State Technical Committee means a committee established by the NRCS 
in a State pursuant to 7 CFR part 610, subpart C.
    Stewardship threshold means the level of management required, as 
determined by NRCS, to conserve and improve the quality and condition 
of a natural resource.
    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, 
Indian Tribes, forest producers, and other eligible entities, such as 
conservation planning, technical consultation, preparation of forest 
stewardship management plans, and assistance with the design and 
implementation of conservation activities; and
    (2) Technical infrastructure, including 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 (TSP) means an individual, private-
sector entity, Indian Tribe, or public agency certified by NRCS 
pursuant to 7 CFR part 652 and placed on the approved list to provide 
technical services to participants; or 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.
    Veteran farmer or rancher means a producer who meets the definition 
in section 2501(e) of the Food, Agriculture, Conservation, and Trade 
Act of 1990, as amended (7 U.S.C. 2279(e)).


Sec.  1470.4  Allocation and management.

    (a) The Chief will allocate acres and associated funds to States:
    (1) Based on the consideration of:
    (i) Each State's proportion of eligible land to the total acreage 
of eligible land in all States:
    (ii) The extent and magnitude of the conservation needs associated 
with agricultural production in each State,
    (iii) The degree to which implementation of the program in the 
State is, or will be, effective in helping producers address those 
needs, and
    (iv) Other considerations determined by the Chief to achieve 
equitable geographic distribution of program funds.
    (b) NRCS will allocate acres to ranking pools, to the extent 
practicable, based on the same factors the Chief considers in making 
allocations to States.
    (c) Of the acres made available for each of fiscal years 2014 
through 2018 to carry out CSP, NRCS will use, as a minimum:
    (1) Five percent to assist beginning farmers or ranchers, and
    (2) Five percent to assist socially disadvantaged farmers or 
ranchers.
    (d) NRCS will provide priority under paragraph (c) to any producer 
who is a veteran farmer or rancher.
    (e) NRCS may adjust the allocations to States in any fiscal year if 
it is determined an allocation cannot be utilized in a State. 
Additionally, allocated acres that are not enrolled by a date 
determined by NRCS may be reallocated with associated funds for use in 
that fiscal year under CSP. As part of the adjustments or reallocation 
process, NRCS will consider several factors, including demand from 
applicants, national and regional conservation priorities, and prior-
year CSP performance in States.


Sec.  1470.5  Outreach activities.

    (a) NRCS will establish program outreach activities at the 
national, State, and local levels to ensure that potential applicants 
who control eligible land are aware and informed that they may be 
eligible to apply for program assistance.
    (b) Special outreach will be made to eligible producers with 
historically low participation rates, including but not restricted to, 
beginning farmers or ranchers, limited resource farmers or ranchers, 
and socially disadvantaged farmers or ranchers.
    (c) NRCS will ensure that outreach is provided so as not to limit 
producer

[[Page 65847]]

participation because of size or type of operation or production 
system, including specialty crop and organic production.


Sec.  1470.6  Eligibility requirements.

    (a) Eligible applicant. To apply for CSP, a producer must:
    (1) Be the operator of an agricultural operation in the Farm 
Service Agency (FSA) farm records management system. Potential 
applicants who are not in the FSA farm records management system must 
establish records with FSA. Applicants whose records are not current in 
the FSA farm records management system must update those records prior 
to the close of the evaluation period to be considered eligible. NRCS 
may grant exceptions to the ``operator of record'' requirement for 
producers, tenants, landlords, sharecroppers, and owners in the FSA 
farm records management system that can demonstrate, to the 
satisfaction of NRCS, they will operate and have effective control of 
the land, that they share in the risk of producing a crop and are 
entitled to share in the crop available for marketing from the farm (or 
would have shared had the crop been produced), and that they are part 
of the daily management, administration, and performance of the 
operation and share in the risk;
    (2) Have effective control of the land unless an exception is made 
by the Chief in the case of land administered by the BIA, Indian lands, 
or other instances in which the Chief determines that there is 
sufficient assurance of control;
    (3) Be in compliance with the highly erodible land and wetland 
conservation provisions found at 7 CFR part 12;
    (4) Be in compliance with Adjusted Gross Income provisions found at 
7 CFR part 1400;
    (5) Supply information, as required by NRCS, to determine 
eligibility for the program, including but not limited to, information 
related to eligibility requirements and ranking factors; conservation 
activity and production system records; information to verify the 
applicant's status as an historically underserved producer or a veteran 
farmer or rancher, if applicable; and payment eligibility as 
established by 7 CFR part 1400;
    (6) 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; and
    (7) Provide a list of all members of the legal entity or joint 
operation, as applicable, and embedded entities along with members' tax 
identification numbers and percentage interest in the legal entity or 
joint operation. Where applicable; American Indians, Alaska Natives, 
and Pacific Islanders may use another unique identification number for 
each individual eligible for payments.
    (b) Eligible land. A contract application must include all of the 
eligible land on an applicant's agricultural operation. A participant 
may submit an application(s) to enter into an additional contract(s) 
for newly acquired or newly eligible land, which would then compete 
with other applications in a subsequent ranking period.
    (c) Ineligible land. The following ineligible lands (even if 
covered by the definition of eligible land) are part of the 
agricultural operation, but ineligible for inclusion in the contract or 
for payment in CSP:
    (1) Land enrolled in the Conservation Reserve Program (CRP), 7 CFR 
part 1410 unless--
    (i) The conservation reserve contract will expire at the end of the 
fiscal year in which the land is to be enrolled in the program, and
    (ii) Conservation reserve program payments for land enrolled in the 
program cease before the first program payment is made to the applicant 
under this subchapter;
    (2) Land enrolled in a wetland reserve easement through the 
Agricultural Conservation Easement Program;
    (3) Land enrolled in the Conservation Security Program, 7 CFR part 
1469;
    (4) Public land including land owned by a Federal, State, or local 
unit of government; and
    (5) Land used for crop production after February 7, 2014, the date 
of enactment of the Agricultural Act of 2014, that had not been 
planted, considered to be planted, or devoted to crop production for at 
least 4 of the 6 years preceding that date, unless the land does not 
meet such requirements because that land:
    (i) Had previously been enrolled in CRP,
    (ii) Has been maintained using long- term crop rotation practices 
as determined by the NRCS, or
    (iii) Is incidental land needed for efficient operation of the farm 
or ranch as determined by NRCS.


Sec.  1470.7  Enhancements and conservation practices.

    (a) Participant decisions describing the additional enhancements 
and conservation practices to be implemented under the conservation 
stewardship contract will be recorded in the conservation stewardship 
plan.
    (b) NRCS will make available to the public the list of conservation 
activities available to be installed, adopted, maintained, and managed 
through the CSP.
    (c) NRCS will make available bundled suites of conservation 
enhancements for participants to select voluntarily to include as part 
of their conservation stewardship plans. The bundles will be designed 
to coordinate the installation and adoption of enhancements with each 
other to address resource concerns in a more comprehensive and cost-
effective manner.
    (d) CSP encourages the use of other NRCS programs to install 
conservation practices that are required to meet agreed-upon 
stewardship thresholds, but the practices may not be compensated 
through CSP.


Sec.  1470.8  Technical and other assistance.

    (a) NRCS may provide technical assistance to an eligible applicant 
or participant either directly or through a technical service provider 
(TSP) as set forth in 7 CFR part 652.
    (b) NRCS retains approval authority over certification of work done 
by non-NRCS personnel for the purpose of approving CSP payments.
    (c) NRCS will ensure that technical assistance is available and 
program specifications are appropriate so as not to limit producer 
participation because of size or type or operation or production 
system, including specialty crop and organic production. In providing 
technical assistance to specialty crop and organic producers, NRCS will 
provide appropriate training to field staff to enable them to work with 
these producers and to utilize cooperative agreements and contracts 
with nongovernmental organizations with expertise in delivering 
technical assistance to these producers.
    (d) NRCS will assist potential applicants dealing with the 
requirements of certification under the National Organic Program and 
CSP requirements concerning how to coordinate and simultaneously meet 
eligibility standards under each program.
    (e) NRCS may utilize the services of State foresters and existing 
technical assistance programs such as the Forest Stewardship Program of 
the U.S. Forest Service, in coordinating assistance to NIPF owners.

Subpart B--Contracts and Payments


Sec.  1470.20  Application for contracts and selecting offers from 
applicants.

    (a) Submission of contract applications. Applicants may submit an

[[Page 65848]]

application for the agricultural operation to enroll all of their 
eligible land into CSP on a continuous basis.
    (b) Stewardship threshold requirement. To be eligible to 
participate in CSP, an applicant must submit to NRCS for approval, a 
contract offer for the agricultural operation that:
    (1) Demonstrates that the applicant's conservation activities, at 
the time of contract offer, meet or exceed a stewardship threshold for 
at least two priority resource concerns; and
    (2) Would, at a minimum, meet or exceed a stewardship threshold for 
at least one additional priority resource concern by the end of the 
conservation stewardship contract by:
    (i) Installing and adopting additional conservation activities, and
    (ii) Improving, maintaining, and managing existing conservation 
activities across the entire agricultural operation in a manner that 
increases or extends the conservation benefits in place at the time the 
contract application is accepted by NRCS;
    (3) Provides a map, aerial photograph, or overlay that:
    (i) Identifies the applicant's agricultural operation, and
    (ii) Delineates eligible land with associated acreage amounts.
    (c) Evaluation of contract applications. NRCS will conduct one or 
more ranking periods each fiscal year.
    (1) To the extent practicable, one ranking period will occur in the 
first quarter of the fiscal year;
    (2) In evaluating CSP applications, NRCS will rank applications 
based on the following factors, to the maximum extent practicable:
    (i) Level of conservation treatment on all applicable priority 
resource concerns at the time of application,
    (ii) Degree to which the proposed conservation activities 
effectively increase conservation performance,
    (iii) Number of applicable priority resource concerns proposed to 
be treated to meet or exceed the stewardship threshold by the end of 
the contract,
    (iv) Extent to which other priority resource concerns will be 
addressed to meet or exceed the stewardship threshold by the end of the 
contract period, and
    (v) Extent to which priority resource concerns will be addressed 
when transitioning from the conservation reserve program to 
agricultural production;
    (3) In the event that application ranking scores from paragraph (2) 
above are similar, the application that represents the least cost to 
the program will be given higher priority; and
    (4) NRCS may not assign a higher priority to any application 
because the applicant is willing to accept a lower payment than the 
applicant would otherwise be eligible to receive.
    (d) Weighting of ranking factors. The weight given to each ranking 
factor may be adjusted to achieve program objectives, as determined by 
the Chief.
    (e) National, State, and local priorities. The Chief may develop 
and use additional criteria that are determined necessary to ensure 
that national, State, and local priority resource concerns are 
effectively addressed.
    (f) Ranking pools. Ranking pools will be established in accordance 
with Sec.  1470.2(e)(1).
    (1) NIPF will compete in ranking pools separate from other eligible 
land. An applicant with both NIPF and other eligible land will submit 
one application for NIPF and one application for all other eligible 
land.
    (2) An applicant with an agricultural operation that crosses 
ranking pool boundaries will make application and be ranked in the 
ranking pool where the largest acreage portion of their operation 
occurs.
    (3) Within each State or established ranking pool, NRCS will 
address conservation access for certain farmers or ranchers, including:
    (i) Socially disadvantaged farmers or ranchers,
    (ii) Beginning farmers or ranchers, and
    (iii) Producers who are veteran farmers or ranchers.
    (g) Application pre-approval. NRCS will make application pre-
approval determinations during established ranking periods based on 
eligibility and ranking score.
    (h) Field verification. NRCS will conduct onsite field verification 
prior to entering into an agreement to substantiate the accuracy of the 
information provided by pre-approved applicants during the application 
process.


Sec.  1470.21  Contract requirements.

    (a) After a determination that the application will be approved and 
a conservation stewardship plan will be developed in accordance with 
Sec.  1470.22, NRCS will enter into a conservation stewardship contract 
with the participant to enroll all of the eligible land on a 
participant's agricultural operation.
    (b) The conservation stewardship contract will:
    (1) Provide for payments over a period of 5 years;
    (2) Incorporate by reference the conservation stewardship plan;
    (3) State the payment amount NRCS agrees to make to the participant 
annually, subject to the availability of funds;
    (4) Incorporate all provisions as required by law or statute, 
including requirements that the participant will:
    (i) Implement the conservation stewardship plan as described in 
Sec.  1470.22,
    (ii) Operate and maintain conservation activities on the 
agricultural operation consistent with Sec.  1470.23,
    (iii) Comply with the terms of the contract or documents 
incorporated by reference into the contract,
    (iv) Refund as determined by NRCS, any program payments received 
with interest, and forfeit any future payments under the program, upon 
the violation of a term or condition of the contract, consistent with 
Sec.  1470.27,
    (v) Refund as determined by NRCS, all program payments received 
with interest, upon the transfer of the right and interest of the 
participant, in land subject to the contract, unless the transferee of 
the right and interest agrees to assume all obligations of the 
contract, consistent with Sec.  1470.25,
    (vi) Maintain and supply information as requested by NRCS, to 
determine compliance with the conservation stewardship plan and any 
other requirements of the program, and
    (vii) Not to conduct any activities on the agricultural operation 
that would tend to defeat the purposes of the program;
    (5) Permit all economic uses of the eligible land that:
    (i) Maintain the agricultural or forestry nature of the land, and
    (ii) Are consistent with the conservation purposes of the contract;
    (6) Include a provision to ensure that a participant will not be 
considered in violation of the contract for failure to comply with the 
contract due to circumstances beyond the control of the participant, 
including a disaster or related condition, as determined by NRCS; and
    (7) Include such other provisions as NRCS determines necessary to 
ensure the purposes of the program are achieved.


Sec.  1470.22  Conservation stewardship plan.

    (a) NRCS will use the conservation planning process as outlined in 
the National Planning Procedures Handbook to encourage participants to 
address resource concerns in a comprehensive manner.
    (b) The conservation stewardship plan will contain a record of the 
participant's decisions that describes the schedule of

[[Page 65849]]

conservation activities to be implemented, managed, or improved under 
the conservation stewardship contract. The plan will describe the 
program purposes to be achieved through one or more conservation 
activities.
    (c) Associated supporting information maintained with the 
participant's plan will include:
    (1) Documentation that will be the basis for:
    (i) Identifying and inventorying priority resource concerns,
    (ii) Establishing benchmark data on the condition of existing 
conservation activities,
    (iii) Describing conservation activities to be implemented, 
managed, or improved, and
    (iv) Documenting the participant's conservation objectives to reach 
and exceed stewardship thresholds;
    (2) A plan map delineating the land area identified and included in 
the program contract with associated acreage amounts;
    (3) In the case where a participant wishes to initiate or retain 
organic certification, documentation that will support the 
participant's transition to or participation in the National Organic 
Program; and
    (4) Other information as determined appropriate by NRCS.


Sec.  1470.23  Conservation activity operation and maintenance.

    The participant will maintain and manage existing conservation 
activities across the entire agricultural operation to at least the 
level of conservation performance identified at the time of enrollment 
for the conservation stewardship contract period, and additional 
activities installed and adopted over the term of the conservation 
stewardship contract.


Sec.  1470.24  Payments.

    (a) Annual payments. Subject to the availability of funds, NRCS 
will provide, as appropriate, annual payments under the program to 
compensate a participant for installing and adopting additional 
conservation activities, and improving, maintaining, and managing 
existing conservation activities across the entire agricultural 
operation in a manner that increases or extends the conservation 
benefits in place at the time the contract offer is accepted by NRCS. A 
split-rate annual payment structure is used to provide separate 
payments for additional and existing conservation activities in order 
to place emphasis on implementing additional conservation.
    (1) To receive annual payments, a participant must:
    (i) Install and adopt additional conservation activities as 
scheduled in the conservation stewardship plan. At least one additional 
conservation activity must be scheduled, installed, and adopted in the 
first fiscal year of the contract. All enhancements must be scheduled, 
installed, and adopted by the end of the third fiscal year of the 
contract. Installed enhancements must be maintained for the remainder 
of the contract period and adopted enhancements must recur for the 
remainder of the contract period.
    (ii) At a minimum, maintain activities to the level of existing 
conservation performance identified at the time of enrollment for the 
conservation stewardship contract period, and
    (2) To earn annual payments for an eligible land use, a participant 
must schedule, install, and adopt at least one additional conservation 
activity on that land-use type. Eligible land-use types that fail to 
have at least one additional conservation activity scheduled, 
installed, and adopted will not receive annual payments;
    (3) A participant's annual payments will be determined using the 
conservation performance computed by land-use type for eligible land 
earning payments. Conservation performance is prorated over the 
contract term so as to accommodate, to the extent practicable, 
participants earning equal annual payments in each fiscal year;
    (4) The annual payment rates will be based to the maximum extent 
practicable, on the following factors:
    (i) Costs incurred by the participant associated with planning, 
design, materials, installation, labor, management, maintenance, or 
training,
    (ii) Income foregone by the participant,
    (iii) Expected conservation benefits,
    (iv) The extent to which priority resource concerns will be 
addressed through the installation and adoption of conservation 
activities on the agricultural operation,
    (v) The level of stewardship in place at the time of application 
and maintained over the term of the contract,
    (vi) The degree to which the conservation activities will be 
integrated across the entire agricultural operation for all applicable 
priority resource concerns over the term of the contract, and
    (vii) Such other factors as determined by the Chief.
    (5) The annual payment will accommodate some participant 
operational adjustments.
    (i) Enhancements may be replaced with similar enhancements without 
adjustment of annual payment as long as the conservation performance is 
determined by NRCS to be equal to or better than the conservation 
performance of the additional enhancements offered at enrollment. An 
enhancement replacement that results in a decline below that 
conservation performance level will be considered a violation of the 
contract, and
    (ii) Adjustments to existing activities may occur consistent with 
conservation performance requirements from Sec.  1470.23; and
    (6) Conservation activities may be applied on other land included 
in an agricultural operation, as determined by NRCS.
    (b) Supplemental payments. Subject to the availability of funds, 
NRCS will provide a supplemental payment to a participant receiving 
annual payments, who also agrees to adopt or improve a resource-
conserving crop rotation as defined by NRCS to achieve beneficial crop 
rotations as appropriate for the eligible land of the participant.
    (1) NRCS will determine whether a resource-conserving crop rotation 
is eligible for supplemental payments based on whether the resource-
conserving crop rotation is designed to provide natural resource 
conservation and production benefits;
    (2) A participant must adopt or improve the resource-conserving 
crop rotation for the term of the contract to be eligible to receive a 
supplemental payment. A resource-conserving crop rotation is considered 
adopted when the resource-conserving crop is planted on at least one-
third of the rotation acres. The resource-conserving crop must be 
adopted by the third fiscal year of the contract and planted on all 
rotation acres by the fifth fiscal year of the contract; and
    (3) The supplemental payment is to encourage a producer to adopt or 
improve a resource-conserving crop rotation and will be based, to the 
maximum extent practicable, on the factors from Sec.  1470.24(a)(4).
    (c) Minimum contract payment. NRCS will make a minimum contract 
payment to participants who are historically underserved producers, at 
a rate determined by the Chief in any fiscal year that a contract's 
payment amount total is less than $1,000.
    (d) Timing of payments. NRCS will make payments as soon as 
practicable after October 1 of each fiscal year for activities carried 
out in the previous fiscal year. For newly enrolled contracts, payments 
will be made as soon as practicable after October 1 following the 
fiscal year of enrollment.

[[Page 65850]]

    (e) Noncompensatory matters. A CSP payment to a participant will 
not be provided for:
    (1) New conservation activities applied with financial assistance 
through other USDA conservation programs;
    (2) The design, construction, or maintenance of animal waste 
storage or treatment facilities, or associated waste transport or 
transfer devices for animal feeding operations; or
    (3) Conservation activities for which there is no cost incurred or 
income foregone by the participant.
    (f) Payment limits. A person or legal entity may not receive, 
directly or indirectly, payments that, in the aggregate, exceed $40,000 
during any fiscal year for all CSP contracts entered into, and $200,000 
under all CSP contracts entered into during fiscal years 2014 through 
2018, excluding funding arrangements with Indian tribes, regardless of 
the number of contracts entered into under the CSP by the person or 
legal entity. NRCS may waive the annual payment limitations in this 
section where NRCS determines that due to circumstances beyond the 
participant's control, payment for implementation for a fiscal year's 
activities cannot be made as scheduled under the CSP contract.
    (g) Contract limits. Each conservation stewardship contract will be 
limited to $200,000 over the term of the initial contract period, 
except that conservation stewardship contracts with joint operations 
will be limited to $80,000 per fiscal year and $400,000 over the term 
of the initial contract period.
    (h) Payment and contract limitation provisions for individual 
Indians and Indian Tribes. Payment limitations apply to individual 
tribal member(s) when applying and subsequently being granted a 
contract as an individual(s). Contracts with Indian Tribes are not 
subject to payment or contract limitations. Indian Tribes and BIA will 
certify in writing that no one individual, directly or indirectly, will 
receive more than the payment limitation. Certification provided at the 
time of enrollment will cover the entire contract period. The Tribal 
entity must also provide, upon request from NRCS, a listing of 
individuals and payment made, by Social Security number or other unique 
identification number, during the previous year for calculation of 
overall payment limitations.
    (i) Tax Identification Number. To be eligible to receive a CSP 
payment, all legal entities or persons applying, either alone or as 
part of a joint operation, must provide a tax identification number and 
percentage interest in the legal entity. In accordance with 7 CFR part 
1400, an applicant applying as a joint operation or legal entity must 
provide a list of all members of the legal entity and joint operation 
and associated embedded entities, along with the members' Social 
Security numbers and percentage of interest in the joint operation or 
legal entity. Payments will be directly attributed to legal entity 
members for the purpose of complying with Sec.  1470.24(f). Applicant 
applying as a joint operation must provide an EIN for the joint 
operation to qualify for the contract limit available under Sec.  
1470.24(g).
    (j) Unique tax identification numbers. American Indians, Alaska 
Natives, and Pacific Islanders may use another unique identification 
number for each individual eligible for payment. Any participant that 
utilizes a unique identification number as an alternative to a tax 
identification number will utilize only that identifier for all CSP 
contracts to which the participant is a party.


Sec.  1470.25  Voluntary contract modifications and transfers of land.

    (a) NRCS may modify a conservation stewardship contract, if:
    (1) The participant agrees to the modification, and
    (2) NRCS determines the modification is in the public interest.
    (b) NRCS may allow modification to a conservation stewardship 
contract to accommodate certain changes in the agricultural operation, 
such as to remove contract acres to be enrolled in CRP, protected by a 
wetland reserve easement through ACEP, or enrolled in other Federal or 
State programs that offer greater natural resource protection through 
an easement, long-term contract, land use restrictions, or similar 
authority as determined by NRCS. Payments for such modified contracts 
will be reduced to reflect the modified acreage and performance. 
Participants will not be subject to liquidated damages or refund of 
payments received for enrolling land in these programs. NRCS may also 
approve modification to a conservation stewardship contract to 
accommodate other limited changes on land that the participant has 
effective control in response to a participant's request made prior to 
implementing the change that would take land out of production or 
convert an area under contract to a different land use. Prior to 
approval, NRCS must determine that any modification under this section 
is authorized by the provisions of 16 U.S.C. 3838d-3838g.
    (c) A voluntary contract modification under this section will not 
increase the scheduled annual payments under the program, except to 
implement an appeal determination or correct an administrative error as 
approved by NRCS. Successor in interest or other changes made to the 
structure of an operation are subject to this limitation on contract 
agreement.
    (d) Land under contract will be considered transferred if the 
participant loses control of the acreage for any reason.
    (1) The participant is responsible to notify NRCS prior to any 
voluntary or involuntary transfer of eligible land under contract;
    (2) If all or part of the eligible land under contract is 
transferred, the contract terminates with respect to the transferred 
land unless:
    (i) The transferor of the land provides written notice within 60 
days to NRCS that all duties and rights under the contract have been 
transferred to, and assumed by, the transferee for the portion of the 
land transferred, and
    (ii) The transferee meets the eligibility requirements of the 
program, and
    (iii) NRCS approves the transfer of all duties and rights under the 
contract.


Sec.  1470.26  Contract renewal.

    (a) At the end of the initial 5-year contract period, NRCS may 
allow a participant to renew the contract to receive payments for one 
additional 5-year period, subject to the availability of funds, if the 
participant meets criteria from paragraph (b) of this section.
    (b) To be considered for contract renewal, the participant must:
    (1) Be in compliance with the terms of their initial contract as 
determined by NRCS;
    (2) Add any newly acquired eligible land that is part of the 
agricultural operation that NRCS determines must be included in the 
renewal contract, except that any newly enrolled acres will be included 
in the yearly annual 10 million acre cap on new enrollment;
    (3) Agree to adopt and continue to integrate conservation 
activities across the entire agricultural operation as determine by 
NRCS; and
    (4) Agree, at a minimum, to meet or exceed the stewardship 
thresholds for at least two additional applicable priority resource 
concerns on the agricultural operation; or to exceed the stewardship 
threshold of two existing applicable priority resource concerns that 
are specified by the Chief in the initial contract by the end of the 
renewed contract period.

[[Page 65851]]

Sec.  1470.27  Contract violations and termination.

    (a) NRCS may terminate a contract:
    (1) Without the consent of the participant where it determines that 
the participant:
    (i) Violated the contract; or
    (ii) Is unable to comply with the terms of the contract as the 
result of conditions beyond their control.
    (2) With the consent of the participant if NRCS determines that the 
termination is in the public interest.
    (b) NRCS may allow a participant in a contract terminated in 
accordance with the provisions of paragraph (a) of this section, to 
retain a portion of any payments received appropriate to the effort the 
participant has made to comply with the contract, or in cases of 
hardship, where forces beyond the participant's control prevented 
compliance with the contract. The condition that is the basis for the 
participant's inability to comply with the contract must not have 
existed at the time the contract was executed by the participant. If a 
participant believes that such a hardship condition exists, the 
participant may submit a request with NRCS for relief pursuant to this 
paragraph and any such request must contain documentation sufficient 
for NRCS to make a determination that this hardship condition exists.
    (c) If NRCS determines that a participant is not in compliance with 
the contract terms or documents incorporated therein, NRCS will notify 
the participant about the actions the participant must take to be 
determined in compliance and the consequences of the failure to remedy 
the violation. NRCS will provide a reasonable period of time for the 
participant to complete all necessary actions, not to exceed one year. 
NRCS may authorize an additional period of time if NRCS determines that 
the participant is willing and able to comply but has not been able to 
complete the necessary actions during the initial period of time as a 
result of conditions beyond their control. If a participant continues 
in violation, NRCS may terminate the CSP contract in accordance with 
paragraph (e) of this section.
    (d) Notwithstanding the provisions of paragraph (c) of this 
section, a contract termination will be effective immediately upon a 
determination by NRCS that the participant:
    (1) Has submitted false information or filed a false claim;
    (2) Engaged in any act, scheme, or device for which a finding of 
ineligibility for payments is permitted under the provisions of Sec.  
1470.36; or
    (3) Incurred in a violation of the contract provisions that cannot 
be corrected in a timeframe established by NRCS.
    (e) If NRCS terminates a contract, the participant will forfeit all 
rights to future payments under the contract, pay liquidated damages, 
and refund all or part of the payments received, plus interest.
    (1) NRCS may require a participant to provide only a partial refund 
of the payments received if a previously installed conservation 
activity has achieved the expected conservation performance 
improvement, is not adversely affected by the violation or the absence 
of other conservation activities that would have been installed under 
the contract, and has met the associated operation and maintenance 
requirement of the activity; and
    (2) NRCS will have the option to reduce or waive the liquidated 
damages, depending upon the circumstances of the case when terminating 
a contract, NRCS may reduce the amount of money owed by the participant 
by a proportion that reflects the good faith effort of the participant 
to comply with the contract or the existence of hardships beyond the 
participant's control that have prevented compliance with the contract.

Subpart C--General Administration


Sec.  1470.30  Fair treatment of tenants and sharecroppers.

    Payments received under this part must be divided in the manner 
specified in the applicable contract. NRCS will ensure that tenants and 
sharecroppers who would have an interest in acreage being offered 
receive treatment which NRCS deems to be equitable, as determined by 
NRCS. NRCS may refuse to enter into a contract when there is a 
disagreement among joint applicants seeking enrollment as to an 
applicant's eligibility to participate in the contract as a tenant.


Sec.  1470.31  Appeals.

    A participant may obtain administrative review of an adverse 
decision under this part in accordance with 7 CFR parts 11 and 614. 
Determinations in matters of general applicability, such as payment 
rates, payment limits, the designation of identified priority resource 
concerns, and eligible conservation activities are not subject to 
appeal.


Sec.  1470.32  Compliance with regulatory measures.

    Participants will be responsible for obtaining the authorities, 
rights, easements, permits, or other approvals or legal compliance 
necessary for the implementation, operation, and maintenance associated 
with the conservation stewardship plan. Participants will be 
responsible for compliance with all laws and for all effects or actions 
resulting from the implementation of the contract.


Sec.  1470.33  Access to agricultural operation.

    NRCS, or its authorized representative, will have the right to 
enter an agricultural operation for the purpose of determining 
eligibility and for ascertaining the accuracy of any representations, 
including natural resource information provided by an applicant for the 
purpose of evaluating a contract application. Access will include the 
right to provide technical assistance, determine eligibility, assess 
natural resource conditions, inspect any work undertaken under the 
contract, and collect information necessary to evaluate the 
implementation of conservation activities in the contract. NRCS, or its 
authorized representative, will make an effort to contact the 
participant prior to the exercise of this provision.


Sec.  1470.34  Equitable relief.

    (a) If a participant relied upon the advice or action of NRCS and 
did not know, or have reason to know, that the action or advice was 
improper or erroneous, the participant may be eligible for equitable 
relief under 7 CFR part 635. The financial or technical liability for 
any action by a participant that was taken based on the advice of a TSP 
will remain with the TSP and will not be assumed by NRCS.
    (b) If a participant has been found in violation of a provision of 
the conservation stewardship contract or any document incorporated by 
reference through failure to comply fully with that provision, the 
participant may be eligible for equitable relief under 7 CFR part 635.


Sec.  1470.35  Offsets and assignments.

    (a) Any payment or portion thereof due to any participant under 
this part will be allowed without regard to any claim or lien in favor 
of any creditor, except agencies of the United States Government. The 
regulations governing offsets and withholdings found at 7 CFR part 1403 
will be applicable to contract payments.
    (b) Any participant entitled to any payment may assign such 
payments in accordance with regulations governing assignment of payment 
found at 7 CFR part 1404.

[[Page 65852]]

Sec.  1470.36  Misrepresentation and scheme or device.

    (a) If NRCS determines that an applicant intentionally 
misrepresented any fact affecting a CSP determination, the application 
will be determined ineligible immediately.
    (b) 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 contract payments and must refund to NRCS 
all payments, plus interest determined in accordance with 7 CFR part 
1403.
    (c) A participant will refund to NRCS all payments, plus interest 
determined in accordance with 7 CFR part 1403, received by such 
participant with respect to all CSP contracts if they are determined to 
have:
    (1) Adopted any scheme or device that tends to defeat the purpose 
of the program;
    (2) Made any fraudulent representation;
    (3) Adopted any scheme or device for the purpose of depriving any 
tenant or sharecropper of the payments to which such person would 
otherwise be entitled under the program; or
    (4) Misrepresented any fact affecting a program determination.
    (d) Participants determined to have committed actions identified in 
paragraph (c) of this section will have their interest in all CSP 
contracts terminated.


Sec.  1470.37  Environmental credits for conservation improvements.

    (a) A participant in CSP may achieve environmental benefits that 
qualify for environmental credits under an environmental credit-trading 
program. NRCS asserts no direct or indirect interest in these credits. 
However, NRCS retains the authority to ensure that CSP purposes are 
met. In addition, any requirements or standards of an environmental 
market program in which a CSP participant simultaneously enrolls to 
receive environmental credits must be compatible with the purposes and 
requirements of the CSP contract and with this part.
    (b) The participant must meet all operation and maintenance (O&M) 
requirements for CSP-funded activities, consistent with Sec. Sec.  
1470.21 and 1470.23. Where activities required under an environmental 
credit agreement may affect the land and conservation activities under 
a CSP contract, NRCS recommends that CSP participants request 
assistance with the development of a compatibility assessment prior to 
entering into any credit agreement. The CSP contract may be modified in 
accordance with policies outlined in Sec.  1470.25 provided the 
modification meet CSP purposes and is in compliance with this part.
    (c) CSP participants may not use CSP funds to implement 
conservation practices and activities that the participant is required 
to establish as a result of a court order.

    Signed this 31 day of October, 2014, in Washington, DC.
Jason A. Weller,
Chief, Natural Resources Conservation Service and Vice President, 
Commodity Credit Corporation.
[FR Doc. 2014-26295 Filed 11-4-14; 8:45 am]
BILLING CODE 3410-16-P