[Federal Register Volume 81, Number 92 (Thursday, May 12, 2016)]
[Rules and Regulations]
[Pages 29471-29483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-10161]



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  Federal Register / Vol. 81, No. 92 / Thursday, May 12, 2016 / Rules 
and Regulations  

[[Page 29471]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1466

[Docket No. NRCS-2014-0007]
RIN 0578-AA62


Environmental Quality Incentives Program (EQIP)

AGENCIES: Natural Resources Conservation Service (NRCS) and the 
Commodity Credit Corporation (CCC), U.S. Department of Agriculture 
(USDA).

ACTION: Interim rule adopted as final with changes.

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

SUMMARY: An interim rule, with request for comments, was published on 
December 12, 2014, to implement changes to EQIP that were either 
required by the Agricultural Act of 2014 (the 2014 Act) or required to 
implement administrative streamlining improvements and clarifications. 
This document provides background on the final rule, issues the final 
rule to make permanent these changes, responds to comments, and makes 
further adjustments in response to some of the comments received.

DATES: Effective Date: This rule is effective May 12, 2016.

FOR FURTHER INFORMATION CONTACT: Mark Rose, Director, Financial 
Assistance Programs Division, U.S. Department of Agriculture, Natural 
Resources Conservation Service, Post Office Box 2890, Washington, DC 
20013-2890; telephone: (202) 720-1845; fax: (202) 720-4265. Persons 
with disabilities who require alternate means for communication 
(Braille, large print, audio tape, etc.) should contact the USDA TARGET 
Center at: (202) 720-2600 (voice and TDD).

SUPPLEMENTARY INFORMATION: 

Background

    The 2014 Act reauthorized and amended EQIP. EQIP is implemented 
under the general supervision and direction of the Chief of NRCS, who 
is a Vice President of CCC.
    Through EQIP, NRCS incentivizes agricultural producers to conserve 
and enhance soil, water, air, plants, animals (including wildlife), 
energy, and related natural resources on their land. In particular NRCS 
provides technical and financial assistance to implement conservation 
practices in a manner that promotes agricultural production, forest 
management, and environmental quality as compatible goals; optimize 
conservation benefits; and help agricultural producers meet Federal, 
State, and local environmental requirements. Conservation benefits are 
reflected in the differences between anticipated effects of treatment 
in comparison to existing or benchmark conditions. Differences may be 
expressed by narrative, quantitative, visual, or other means. Estimated 
or projected impacts are used as a basis for making informed 
conservation decisions by applicants and NRCS to help determine which 
projects to approve for EQIP assistance.
    Eligible lands include cropland, grassland, rangeland, pasture, 
wetlands, nonindustrial private forest land, and other land on which 
agricultural or forest-related products or livestock are produced and 
natural resource concerns may be addressed. Participation in the 
program is voluntary.
    On December 12, 2014, the EQIP interim final rule with request for 
comments was published in the Federal Register (79 FR 73953) that 
amended the EQIP regulations at 7 CFR part 1466 to implement changes 
made by the 2014 Act. The changes made to the EQIP regulation by the 
interim rule include:
     Eliminating the requirement that the program contract 
remain in place for a minimum of 1 year after the last practice is 
implemented, but keeping the requirement that the contract term not 
exceed 10 years;
     Consolidating elements of the Wildlife Habitat Incentive 
Program (WHIP) in light of the 2014 Act repealing the WHIP authority 
and incorporating its purposes into EQIP;
     Targeting at least five percent of available EQIP funds 
for wildlife-related conservation practices for each fiscal year (FY) 
from 2014 to 2018;
     Replacing the rolling 6-year payment limitation with an 
established payment limitation for FY 2014 to FY 2018;
     Requiring Conservation Innovation Grants (CIG) to report 
no later than Dec 31, 2014, and every 2 years thereafter;
     Establishing a $450,000 payment limitation and eliminating 
payment limit waiver authority.
     Modifying the special rule for foregone income payments 
for certain associated management practices and resource concern 
priorities;
     Revising availability of advance payments to up to 50 
percent for eligible historically underserved participants to purchase 
material or contract services instead of the previous 30 percent;
     Providing flexibility for repayment of advance payment if 
payments are not expended within 90 days;
     Identifying EQIP as a contributing program authorized 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) (Seven percent of EQIP's funding is transferred to 
facilitate implementation of RCPP); and
     Adding provisions to target assistance to veteran farmers 
and ranchers.
    In addition to updating the EQIP regulation to reflect changes made 
by the 2014 Act, the following administrative changes in the EQIP 
interim rule were made:
     Incorporating nonindustrial private forest owners and 
Indian Tribes where appropriate;
     Making reference to Tribal Conservation Advisory Councils 
when appropriate;
     Clarifying the issues where State Technical Committees and 
Tribal Conservation Advisory Councils provide input;
     Adjusting definitions to conform to definitions in other 
NRCS and USDA regulations;
     Clarifying definitions and requirements for development of 
Comprehensive Nutrient Management Plans (CNMP) associated with Animal 
Feeding Operations (AFO);
     Clarifying outreach activities and adding language that 
NRCS will ensure outreach is provided so as to not limit producer 
participation because of size

[[Page 29472]]

or type of operation, or production system, including specialty crop 
and organic production;
     For irrigation and water management practices, allowing an 
exception to the requirement that land has to have been irrigated 2 of 
the previous 5 years. The Chief may grant a waiver where there was a 
loss of access to water due to circumstances beyond the producer's 
control;
     Changing the contract limitation to correspond with the 
new payment limitation and clarify that such limitations do not apply 
to Indian Tribes;
     Revising the rule to clarify when payment rates may be 
reduced as a result of NRCS entering into a formal agreement with a 
partner who provides payments to producers participating under general 
EQIP implementation, i.e. outside of RCPP;
     Revising and adding definitions to reflect EQIP authority 
to encourage development of wildlife habitat;
     Clarifying terminology and procedures associated with the 
development of payment schedules documenting practice payment rates;
     Simplifying language throughout to improve the 
regulation's readability; and
     Removing provisions in the rule that relate solely to 
internal agency administrative procedures that do not impact any rights 
or responsibilities of participants in the program;

Summary of EQIP Comments

    The interim final rule had a 60-day comment period ending February 
10, 2015. There were received 65 timely submitted responses to the 
rule, constituting 331 comments. This final rule responds to comments 
received during the public comment period and incorporates changes as 
appropriate. In this preamble, the comments have been organized 
alphabetically by topic. The topics include: Acreage cap, 
administration, advanced payments, allocations, comprehensive nutrient 
management plan, conservation activity plans, conservation innovation 
grants, conservation plan, conservation practices, contract length, 
contract violation and terminations, definitions, EQIP plan of 
operations, forestry funding, fund management, grouping and selecting 
applications, irrigation history, national priorities, payment 
limitations, program requirements, regional conservation partnership 
program, regional conservationist approval, regulatory certifications, 
Transparency Act requirements, technical service providers, veteran 
farmer or ranchers, and wildlife funding. Additionally, NRCS received 
34 comments that were general in nature, most of which expressed 
support for the program or how the program has benefitted particular 
operations. The topics that generated the greatest response include the 
irrigation history requirement waiver, wildlife funding, and funding 
for animal feeding operations.

1. Acreage Cap

    Comment: NRCS received one comment recommending that NRCS establish 
a maximum acreage cap for EQIP contracts.
    NRCS Response: NRCS implements EQIP in a size-neutral way. The EQIP 
statute provides a payment limitation and the regulation further 
provides for a contract limitation. NRCS does not believe any further 
limitations are necessary to ensure broad participation on farms and 
ranches of all sizes. No changes were made in response to this comment.

2. Administration

    Comment: NRCS received nine comments related to Administration, 
Sec.  1466.2, most of which were from Conservation Districts. The 
commenters requested that there be waiver authority for EQIP regulatory 
provisions for all EQIP implementation, and not limited to RCPP 
implementation. Several of the comments recommended that NRCS provide 
greater emphasis to local working groups, identifying that local work 
groups were removed from the State Technical Committee final rule in 
2009. One of the comments also requested that coordination with Indian 
Tribes be incorporated into the Administration section.
    NRCS Response: Local working groups remain an integral component of 
the operations of the State Technical Committee. They were fully 
incorporated into the State Technical Committee final rule and 
operating procedures. The comments about local working groups do not 
relate to EQIP implementation directly, or to the EQIP final rule, and 
therefore no changes were made.
    NRCS limits the ability to waive EQIP regulatory provisions to the 
authority provided by statute under RCPP, and believes that it is not 
appropriate to extend such waiver authority further. With its review of 
project-wide considerations, RCPP provides a structured format for 
consideration of waiver requests that helps ensure waivers are not 
granted in an arbitrary fashion. This safeguard is not available for 
consideration of waiver requests during a general EQIP sign-up. No 
changes were made to the regulation in response to the recommendation 
that the regulatory waiver authority be extended to all EQIP contracts.
    NRCS coordinates with Indian Tribes to ensure that program 
opportunities are available on Tribal lands to Tribal members. NRCS 
currently identifies this coordination with Indian Tribes, including 
with the Tribal Conservation Advisory Council (TCAC), the State 
Technical Committee, and local working groups, in Sec.  1466.2 and 
throughout the regulation.
    NRCS policy related to coordination with Indian Tribes and Tribal 
members is found at Part 405 of Title 410 of the NRCS General Manual. 
In its policy, NRCS identifies that an Indian Tribe may designate a 
TCAC to provide input on NRCS programs and the conservation needs of 
the Tribe and Tribal producers. The TCAC may:
     Be an existing Tribal committee or department, including a 
Tribal conservation district;
     Consist of an association of member Tribes that provide 
direct consultation to NRCS at the State, regional, and national 
levels; or
     Include a Tribal designee (or designees) from a State 
Association of Tribal Conservation Districts that represents them and 
participates as part of the TCAC.
    Since coordination with Indian Tribes is established as part of the 
regulation and NRCS policy, no change was made to the EQIP regulation 
in response to this comment.

3. Advanced Payments

    Comment: NRCS received seven comments expressing approval for the 
additional flexibility available for advanced payments.
    NRCS Response: NRCS appreciates the positive feedback. The 
additional flexibility for advanced payments is provided to assist 
historically underserved producers meet their responsibilities under 
the EQIP contract. No changes were necessitated by the comments 
expressed by the respondents.

4. Allocations

    Comment: NRCS received five comments requesting more transparency 
in the method used to allocate EQIP resources between States. These 
comments recommended against the use of the 2011 State Resource 
Assessment (SRA).
    NRCS Response: The SRA process has been improved significantly 
since 2011 and now allows States to leverage national, State, and local 
data to present funding needs and demand in a flexible

[[Page 29473]]

and transparent manner. At the national level, this process enables 
NRCS to focus funding on the highest priority resource needs across all 
States. The resulting annual allocation reflects State-demonstrated 
need and available funding. In addition, NRCS maintains the flexibility 
to adjust annual allocations in order to address emerging issues. For 
example, in FY 2014, NRCS was able to send several States severely 
impacted by drought an additional $20 million above their annual 
allocation in order to provide critical assistance to the impacted 
producers.

5. Animal Feeding Operations

    Comment: NRCS received nine comments expressing concern about using 
EQIP funds for new or expanding Confined Animal Feeding Operations 
(CAFOs). Some comments recommended that NRCS require a CAFO applicant 
to complete a CNMP as a prerequisite to receiving any EQIP funds to 
build a waste storage or treatment facility. Other comments recommended 
that NRCS undertake a full environmental review of the impact of EQIP 
CAFO funding.
    NRCS Response: Section 1240E(a)(3) of the Food Security Act of 1985 
(1985 Act), as amended, authorizes payments for AFOs provided the 
producer submits a plan of operations that provides for development and 
implementation of a CNMP. In the interim rule, NRCS revised the 
definition for AFO and CNMP, and revised Sec.  1466.7, EQIP Plan of 
Operations, to clarify that if an EQIP plan of operations includes an 
animal waste storage or treatment facility to be implemented on an AFO, 
the participant must agree to develop and implement a CNMP by the end 
of the contract period. This requirement is further mirrored at Sec.  
1466.21, Contract Requirements, to state that a CNMP should be 
implemented when an EQIP contract includes an animal waste facility on 
an AFO. NRCS currently provides EQIP assistance for existing and 
expanding CAFO's in accordance with statutory regulations that require 
EQIP to provide assistance in situations where resource concerns 
currently exists.
    As provided by statute and rule, NRCS already requires development 
of a CNMP as a condition to implement waste facility practices. Since 
some practices must be implemented prior to others, it is infeasible to 
require full implementation of a CNMP as a precondition for EQIP 
assistance for applicable practices.
    As identified above and in the regulatory certifications, two 
respondents recommended that NRCS undertake an environmental analysis 
of the effects of providing EQIP assistance to CAFOs. NRCS has and will 
continue to conduct an environmental evaluation before providing EQIP 
financial assistance to any producer to ensure EQIP financial 
assistance does not result in significant adverse impacts to the 
quality of the human environment. The environmental evaluation is used 
to aid NRCS in compliance with the National Environmental Policy Act 
(NEPA) and helps NRCS determine the need for an environmental analysis 
(EA) or environmental impact statement (EIS) when the impacts of the 
proposed action do not fall within a categorical exclusion or have not 
already been addressed in the EQIP programmatic EA.

6. Comprehensive Nutrient Management Plan (CNMP)

    Comment: NRCS received three comments recommending that 
participants develop a CNMP prior to funding waste storage practices.
    NRCS Response: The EQIP regulation at Sec.  1466.7, EQIP Plan of 
Operations, requires a CNMP to be implemented if an EQIP plan of 
operations includes an animal waste storage on an AFO. This requirement 
is further mirrored in Sec.  1466.21, Contract Requirements, to state 
that a CNMP will be implemented when an EQIP contracts includes an 
animal waste facility on an AFO. No changes were made to the EQIP 
regulations in response to these comments.

7. Conservation Activity Plans

    Comment: NRCS received one comment, disagreeing with the NRCS 
technical policy determination that Conservation Activity Plan (CAP) 
142 on forest land must be approved by a Technical Service Provider 
(TSP) certified for forestry planning.
    NRCS Response: Section 1240E of the EQIP statute requires that EQIP 
payments for a practice related to forest land must be consistent with 
the provisions of a ``forest management plan that is approved by the 
Secretary.'' This requirement was incorporated into the EQIP interim 
rule at 7 CFR 1466.7(e).
    CAP 142 is a wildlife habitat management plan. Under the TSP 
provisions at 7 CFR part 652, a TSP hired by a program participant may 
utilize the services of another TSP to provide specific technical 
services or expertise needed by the participant. However, it remains 
the responsibility of the TSP hired by the participant to ensure that 
any technical services provided to them meets NRCS standards and 
specifications, and are consistent with the Certification Agreement the 
TSP entered into with NRCS at the time of Certification. Therefore, on 
a project-by-project basis, when CAP 142 on forested lands identifies 
the use of complex forestry conservation practice standards, such as 
Forest Stand Improvement (FSI), the plan must be approved by a TSP that 
also has been certified as having the requisite forestry technical 
skills. Other CAP 142 wildlife habitat management plans may not include 
forestry practices as complicated as FSI. Depending on the geographic 
location and the particular practices being planned and implemented, 
NRCS maintains the flexibility to determine when CAP 142 projects on 
forested lands need to be approved by TSPs who also have been certified 
for particular forestry conservation practices. As a result, no changes 
were made in response to this comment.

8. Conservation Innovation Grants (CIG)

    Comment: NRCS received six comments concerning CIG, three of which 
were recommendations. In particular, one commenter recommended that the 
NRCS State Conservationist, in consultation with the State Technical 
Committee, should be able to identify other resource concerns for State 
CIG projects and not be limited to either the national resource 
concerns or a subset of those concerns. Another commenter recommended 
that NRCS aggressively promote the on-farm research and development 
option, including a special focus on and significant funding for 
projects of this nature in each year's CIG announcement of program 
funding (APF). A third commenter recommended that NRCS continue to 
publish the APF in the Federal Register.
    NRCS Response: The EQIP regulation currently allows flexibility for 
NRCS to implement State-level CIGs, with resource priorities identified 
by the State Conservationist in consultation with the State Technical 
Committee. In particular, funding availability, application, and 
submission information for State competition are announced through 
public notice (Grants.gov) separately from the national notice. The 
State Conservationist determines the State component categories to be 
offered annually. The regulation already addresses the comment 
regarding State identification of CIG priorities and no changes are 
needed.
    For the first time the 2014 Act included language to allow CIG to 
fund on-farm research and development of technologies and approaches, 
and this

[[Page 29474]]

authority was incorporated into the EQIP regulation. NRCS now provides 
support through CIG to on-farm conservation research, pilot projects, 
and field demonstrations of promising approaches or technologies. CIG 
applications should demonstrate the use of innovative approaches and 
technologies to leverage the Federal investment in environmental 
enhancement and protection, in conjunction with agricultural 
production. NRCS appreciates the comment recommending vigorous support 
for these efforts, but no further change is needed to the regulation in 
order for NRCS to provide such support.
    NRCS supports the broad dissemination of the public announcement of 
national CIG competition. The CIG APF contains guidance on how to apply 
for the grants competition. NRCS, at one time, used the Federal 
Register for CIG announcements, but removed the requirement in the 
interim rule in order to speed up and simplify the process of making 
funding announcements. CIG opportunities are now advertised through the 
NRCS Web site and Grants.gov. No changes were made in response to this 
recommendation given the wide availability of notice about the CIG APF 
through other avenues.

9. Conservation Plan

    Comment: NRCS received one comment recommending that a 
comprehensive conservation plan should be required prior to obtaining 
assistance.
    NRCS Response: NRCS supports and believes that comprehensive 
conservation planning is a valuable conservation tool for producers, 
but does not agree it should make EQIP assistance contingent upon an 
applicant having obtained a comprehensive conservation plan. Section 
1240F of the EQIP statute requires NRCS to assist producers by 
``providing payments for developing and implementing 1 or more 
practices, as appropriate'' and ``providing the producer with 
information and training to aid in implementation of the plan.'' Given 
that the statute provides the flexibility for NRCS to provide EQIP 
assistance to implement only one practice, NRCS believes that the 
intent is for the planning to be similarly flexible to meet the current 
conservation needs of its participants. No changes were made in 
response to this comment.

10. Conservation Practices

    Comment: NRCS received seven comments regarding conservation 
practices, six of which were recommendations. A couple of the 
commenters recommended that NRCS allow treatment to be done on the 
highest priority soils or ecological sites within a Conservation 
Management Unit, without making the rest of the land unit ineligible 
for future treatments. One commenter recommended a review and expansion 
of available conservation practices to better serve historically 
underserved, veteran, organic, small farmer, and other diverse 
producers. One commenter recommended adding to the regulation the 
requirement that financial assistance only be made for conservation 
practices that address the Priority Natural Resource Concerns 
identified in the EQIP Plan of Operations. One commenter recommended 
that NRCS annually consult with the State fish and wildlife agencies 
and the U.S. Fish and Wildlife Service (FWS).
    NRCS Response: NRCS policy authorizes repeated implementation of 
conservation practices on land where the subsequent implementation of 
the practice will significantly improve the level of treatment 
addressing a resource concern. EQIP assistance is provided to the 
highest priority applications based upon the ranking criteria developed 
in consultation with the State Technical Committees. FWS and State fish 
and wildlife agencies are members of the NRCS State Technical Committee 
and therefore do not need to be identified separately in the EQIP 
regulation. NRCS continually reviews its conservation practices and 
whether NRCS assistance is able to address the resource concerns that 
the diversity of producers may have. No changes were needed in response 
to these comments.

11. Contract Length

    Comment: NRCS received one comment recommending that the maximum 
contract length be reduced from 10 years to 5 years.
    NRCS Response: Section 1240B of the EQIP statute allows an EQIP 
contract to have a 10-year duration. Congress has consistently retained 
this contract term in statute, recognizing the need for variation in 
contract duration. NRCS believes it must provide the flexibility 
authorized under the statute and that there are situations where 
implementation of conservation practices over a longer contract period 
is needed to address the resource concern. Therefore, no changes were 
made to the regulation in response to this comment.
    In addition, a ranking criterion was added at 7 CFR 1466.20(b) to 
provide priority to applicants who indicate a willingness to complete 
all conservation practices in an expedited manner. NRCS identified that 
the purpose of this ranking criterion was to further statutory intent 
and to ensure timely and effective conservation improvements. NRCS 
continues to support the policy behind this regulation. NRCS implements 
this regulatory provision during the ranking process for applicants 
that indicate a willingness to implement all conservation practices 
within 3 years. While the statute authorizes contracts can be for up to 
10 years in duration, NRCS implements this criterion for those funding 
pools where the nature and type of the resource concern to be addressed 
and practices applied do not require longer term conservation 
treatment, such as with applications for exclusion fences or other 
applications with comparatively low application costs. Additionally, 
NRCS recognizes that this criterion may not be appropriate to implement 
in funding pools set aside for historically underserved or limited 
resource producers, or in cases where infrastructure construction is 
necessary, as financially these producers or projects may need a longer 
implementation schedule.

12. Contract Violation and Terminations

    Comment: NRCS received seven comments opposed to the removal of the 
specific reference to conservation districts in EQIP contract 
termination decisions.
    NRCS Response: The EQIP interim rule removed the provision at 7 CFR 
1466.26 which identified that NRCS may consult with conservation 
districts in EQIP contract termination decisions. NRCS removed this 
section due to the limitations on the disclosure of certain types of 
information provided by an agricultural producer under Section 1619 of 
the Food, Conservation, and Energy Act of 2008 (2008 Act). NRCS will 
continue to work closely with its conservation district partners in the 
implementation of EQIP and its other conservation programs. No changes 
were made in response to these comments.
    The EQIP contract violation provisions (7 CFR 1466.25) address 
circumstances in which a participant violates their EQIP contract by 
losing control of the land under contract. NRCS may allow a participant 
to transfer the EQIP contract rights to an eligible producer provided 
the participant notifies NRCS of the loss of control within the time 
specified in the contract, NRCS determines that the new producer is 
eligible to participate in the program, and the transfer of the 
contract

[[Page 29475]]

rights does not interfere with meeting program objectives.
    Given that the new producer is not a party to the EQIP contract 
until NRCS approves the contract transfer and adds the new producer to 
the contract, a new producer may not be aware they are not eligible for 
payment until the contract transfer has been approved by NRCS. In 
particular, any practices that a new producer implements prior to NRCS 
approval of the contract transfer is not eligible for payment because 
they are not a program participant at the time of implementation. 
Changes to 7 CFR 1466.25 clarify a participant's responsibility to 
notify NRCS about any loss of control of land, the timing of when a new 
producer must be identified, the timing of when a new producer becomes 
eligible for payment, and the circumstances when partial or full 
termination of the contract may be appropriate. These changes do not 
affect the substance of the EQIP regulatory and policy framework 
regarding land transfers.

13. Definitions

    Comment: NRCS received 27 comments related to the definitions found 
at 7 CFR 1466.3 of the EQIP interim rule. Amongst these comments, there 
were a few comments regarding how historic use areas by Indian Tribes 
should be considered as areas of an agricultural operation.
    NRCS Response: Most of the comments were from the same respondent, 
and related to suggested edits to the wildlife definitions. NRCS 
recognizes the unique status that Tribal lands and treaties have and 
will work with Tribal entities to ensure that agricultural operations 
are properly delineated. These comments did not require any changes to 
the regulation.

14. EQIP Plan of Operations

    Comment: NRCS received 11 comments related to 7 CFR 1466.7, EQIP 
Plan of Operations. The comments related to CNMPs have been discussed 
above. Other comments recommended that the regulation specify that all 
conservation practices in the EQIP plan of operations must be approved 
by NRCS or an NRCS-approved TSP with appropriate job approval authority 
in accordance with the applicable NRCS Conservation Practice Standards 
in the Field Office Technical Guide. Some comments also recommended 
that the EQIP plan of operations identify the specific resource 
concerns to be addressed, which currently is not included.
    NRCS Response: NRCS currently requires that the EQIP plan of 
operations be approved by NRCS or a certified TSP, and these comments 
do not require any changes be made to the EQIP regulation. The EQIP 
plan of operations is intended to inform producers what practices are 
included in the contract, the payment rate for the practice, and when 
the practice must be installed. Information related to the resource 
concerns being addressed are included in the conservation plan folder, 
the environmental evaluation documentation (NRCS-CPA-52), and are the 
basis for many of the program ranking criteria. As such, it is not 
necessary to duplicate this information in the EQIP Plan of Operations. 
No changes were made in response to these comments.

15. Forestry Funding

    Comment: NRCS received one comment to the EQIP interim rule, 
recommending that at least 5 percent of EQIP funds be dedicated to 
forestry practices.
    NRCS Response: Greater than 5 percent of EQIP funds have been 
dedicated to forestry practices following the increased emphasis upon 
providing assistance to non-industrial private forestlands since the 
2008 Act. No changes are needed in order to meet the respondent's 
recommendations. However, NRCS notes that two of its regulatory 
provisions may inadvertently hinder participation by forest landowners. 
Namely, Sec. Sec.  1466.7(e) and 1466.21(b)(3)(v) require that if an 
EQIP plan of operations includes conservation practices that address 
forest-land-related resource concerns, the participant must develop and 
implement a forest management plan by the end of the contract period. 
Often, a forestry management plan extends beyond 10 years and thus 
beyond the maximum duration of an EQIP contract. As such, it may not be 
feasible for a forestry landowner to implement fully the forestry 
management plan during the EQIP contract term. Unlike a CNMP that 
covers a specific type of operation with practices that can be more 
immediately implemented, a forestry management plan deals with managing 
a landscape which may require several years for the forest to respond 
to a treatment before another can be applied. Therefore, the provisions 
at Sec. Sec.  1466.7(e) and 1466.21(b)(3)(v) are modified to require a 
participant to implement conservation practices consistent with an 
approved forest management plan if the EQIP plan of operations 
addresses forest-land-related resource concerns.

16. Fund Management

    Comment: NRCS received one recommendation that it dedicate a 
specific amount of EQIP funding for specific categories (cover crops, 
CAFOs, etc.) to avoid situations where NRCS and producers are unsure of 
the level of funding available. The commenter expressed that this 
creates situations where producers scramble to get their paperwork 
submitted to meet deadlines only to learn later that they will not be 
funded.
    NRCS Response: NRCS identifies the resource concerns that will 
receive priority through the posting of its ranking criteria and 
associated application deadlines, including special announcements of 
initiative funding. NRCS believes that this provides producers with 
information necessary to know what activities will receive funding 
priority. EQIP is only able to fund about 37 percent of the eligible 
applications it receives. No changes were made in response to these 
comments.

17. Grouping and Ranking Applications

    Comment: NRCS received 15 comments about ranking and 5 comments 
about grouping applications. The ranking recommendations included that 
NRCS should:
     Have no ranking;
     Streamline the application process and ranking;
     Not prioritize applications based upon a producer's 
ability to expedite practice implementation;
     Prioritize grass-based systems over AFOs;
     Encourage transition to more sustainable practices;
     Prioritize greenhouse gas reduction and carbon 
sequestration; and
     Include consistency with Tribal law as well as State law 
related to irrigation practice provisions.
    As to the grouping of applications, one commenter felt that 
beginning farmers and ranchers received too much emphasis. One 
commenter felt that there were too many funding pools, while another 
recommended that States with at-risk species have more funding pools. 
One commenter recommended that operations compete against operations of 
similar sizes, while another commenter recommended prohibiting separate 
funding pools for CAFOs and instead encourage grazing plans for 
livestock.
    NRCS Response: NRCS accepts EQIP applications on a continuous 
basis, but establishes application ``cut-off'' or submission deadline 
dates for evaluation and ranking of eligible

[[Page 29476]]

applications. Depending upon annual funding levels, NRCS will allocate 
specific amounts of EQIP funding to meet legislative requirements, 
address certain national priorities, and also make funds available for 
NRCS State Conservationists to help address resource priorities 
identified by State Technical Committees. These priorities are then 
incorporated into ranking criteria, based upon the factors identified 
in statute and in Sec.  1466.20 of the EQIP rule. In response to the 
request to streamline the application and ranking process, for many 
years NRCS has utilized screening factors as part of its evaluation and 
ranking of priority projects. To clarify that these screening factors 
are part of the ranking process, slight adjustments have been made in 
Sec.  1466.20(b) to identify how these screening factors are used as 
part of the evaluation and selection of projects.
    In evaluating EQIP applications, NRCS strives to obtain input from 
Tribes, States, and other affected constituents through seeking advice 
from the State Technical Committees, TCACs, and local working groups. 
For water conservation or irrigation-related practices, TCACs routinely 
have the opportunity to identify issues, including those that raise 
concerns related to Tribal laws, in order to advise NRCS on more 
effective ways to deliver programs and on the application process. 
While not explicitly stated in the regulation, NRCS believes that this 
advisory process with State Technical Committees and TCACs is 
considerate of and consistent with applicable State and Tribal laws.
    Additionally, in its ranking, NRCS groups applications to the 
greatest extent possible by similar crop, forestry, or livestock 
operations for evaluation purposes or otherwise evaluating each 
application relative to other applications of similar agricultural 
operations. NRCS establishes a funding pool for beginning farmer and 
ranchers in accordance with statutory set-aside requirements. 
Subaccounts may also be developed to address a specific resource 
concern, geographic area, or type of agricultural operation, such as 
addressing habitat needs of at-risk species. However, to promote 
efficient and timely delivery of program assistance, NRCS policy 
encourages States to limit creating subaccounts in ProTracts to the 
minimum number needed to effectively rank and approve applications. 
EQIP policy currently addresses the respondents concerns regarding 
grouping applications and no changes were made to the regulation.

18. Irrigation History

    Comment: NRCS received 73 comments related to the irrigation 
history requirement and the criteria that NRCS should consider for 
waiving it. The following summarizes the general content of these 
comments, recommending:
     Support for the new waiver provision;
     The requirements for the waiver be less restrictive;
     That Indian Tribes be exempt from the irrigation history 
requirement altogether, or at least not subject to the agricultural 
history waiver criterion, provided the Tribe has a secured legal water 
right;
     The irrigation history requirement be completely removed;
     All producers, not just limited resource or socially 
disadvantaged producers, be eligible for a waiver; and
     Specific recommendations related to the waiver criteria, 
such as:
    [cir] Removing the proposed acreage limit;
    [cir] Removing the exclusion of land that has been subject to a 
water shortage;
    [cir] Prohibiting waivers on native prairie and grasslands with no 
prior cropping history;
    [cir] Clarifying the types of practices that are considered 
irrigation practices;
    [cir] Clarifying whether the acreage limitation is per operation or 
per year; and
    [cir] Considering impacts to wildlife when implementing irrigation 
practices.
    NRCS Response: NRCS proposed several criteria and requested public 
comments on the criteria that will be used to determine whether to 
waive the irrigation history requirement, including whether:
     The waiver provision should be limited to applicants who 
are limited resource or socially disadvantaged producers (including 
Indian Tribal producers). Beginning farmers and ranchers were excluded 
from this consideration;
     The irrigation practices are necessary for the adoption of 
a sustainable agricultural production method, such as the adoption of 
cover crops to improve the soil condition;
     The land has been in active agriculture (cropped, hayed, 
or grazed) for 4 of the last 6 years;
     The waiver would adversely impact limited surface or 
groundwater supplies; and
     An acreage limitation should be applied, such as 50 acres 
per producer or 200 acres per Tribe.
    In order to implement the waiver provision, NRCS developed and 
issued program policy at Title 440 Conservation Programs Manual, Part 
515, Section 515.52, reflecting all criteria in the preamble of the 
EQIP rule except for the acreage limitation. NRCS believes that the 
criteria incorporated into policy ensure that program participants will 
be able to obtain access to EQIP to address resource concerns in a 
manner that does not adversely affect available water supplies. NRCS 
will continue to evaluate the utility of these criteria as it reviews 
actual waiver requests and may make adjustments based upon the 
experience obtained from actual implementation of the waiver provision.

19. National Priorities

    Comment: NRCS received one comment on national priorities, 
recommending broadening national priority related to threatened and 
endangered species under the Endangered Species Act.
    NRCS Response: As identified in the EQIP regulation, the national 
priority is not limited to Federally-listed threatened and endangered 
species, but identifies the promotion of habitat conservation for ``at-
risk'' species habitat conservation. ``At-risk'' species include any 
plant or animal listed as threatened or endangered; proposed or a 
candidate for listing under the Endangered Species Act; a species 
listed as threatened or endangered under State law or Tribal law on 
Tribal land; State or Tribal land species of conservation concern; or 
other plant or animal species or community, as determined by the State 
Conservationist, with advice from the State Technical Committee or 
TCAC, that has undergone, or is likely to undergo, population decline 
and may become imperiled without direct intervention. No changes were 
made in response to this recommendation.

20. Outreach Activities

    Comment: NRCS received six comments on outreach, five of which 
expressed approval for NRCS' current efforts with respect to 
historically underserved producers and recommending that NRCS maintain 
and expand outreach to these producers. One commenter recommended 
increasing participation among forestry landowners.
    NRCS Response: NRCS will continue to expand its outreach to 
historically underserved producers.
    NRCS is working in coordination with other USDA and Federal 
agencies to ensure that we are consistent with our outreach approach to 
serve historically underserved producers in rural and urban areas. NRCS 
is collaborating and

[[Page 29477]]

working cooperatively with a variety of community-based organizations 
to ensure all customers receive high quality service and the 
information necessary to fully participate in all of its programs and 
services. For example, most recently, NRCS initiated a major 
partnership project in Alabama, North Carolina, and South Carolina to 
assist African American forest landowners in adopting and applying 
sustainable forest management practices to improve the value of their 
forestlands. Due to the success of this partnership, NRCS is looking to 
expand this project into Arkansas, Georgia, Mississippi, Virginia, and 
Indian Country.

21. Payment Limitations

    Comment: NRCS received eight comments concerning payment 
limitations, five of which recommending a separate payment limitation 
lower than the current statutory levels.
    NRCS Response: Section 1240G of the EQIP statute specifies a 
$450,000 payment limitation for persons and legal entities. The EQIP 
statute does not provide authority to mandate a lower payment 
limitation. No changes were made to the regulation in response to this 
comment.

22. Program Requirements

    Comment: NRCS received 13 comments regarding various program 
requirements, 11 of which made specific recommendations including:
     Higher payment rates for historically underserved 
producers with one commenter expressing disagreement for higher payment 
rates, while another commenter expressed support for veteran farmers or 
ranchers receiving a higher payment rate;
     Payment schedule scenarios, with two commenters 
recommending that payment scenarios be published on NRCS State Web 
sites, one commenter recommending that NRCS address disparities between 
small or large operations of payments for management practices that are 
based on number of acres, while another commenter recommending that 
NRCS have additional organic production scenarios; and
     Initiatives, with the commenter requesting clarification 
about when NRCS may reduce the level of EQIP assistance provided due to 
a contribution by a partnering entity.
    NRCS Response: NRCS will continue to encourage enrollment by 
historically underserved producers through statutory tools such as 
higher payment rates and funding pool set asides, and programmatic 
policy emphasis and outreach efforts. NRCS will consider the 
recommendations regarding its payment schedules in its fiscal year 2016 
and future payment schedule development efforts. Section 1466.23(b)(4) 
of the EQIP regulation requires NRCS to adjust program payment 
percentages to a participant when NRCS enters into a formal agreement 
with partners who also provide financial support to the participant to 
help implement program initiatives. This adjustment ensures 
coordination of conservation investment under formal partnership 
agreements to encourage the voluntary adoption of practices and not as 
a windfall to producers. This adjustment does not apply to situations 
where NRCS and other conservation organizations are independently 
providing assistance to a producer.

23. Regional Conservation Partnership Program (RCPP)

    Comment: NRCS received three comments on RCPP. The commenters 
recommended that RCPP requirements be subject to public comment, that 
NRCS explain the contribution requirement under RCPP, and identify in 
the EQIP regulation that EQIP is a covered program under RCPP.
    NRCS Response: NRCS has held numerous stakeholder meetings across 
the country to obtain input concerning RCPP procedures and 
requirements, and incorporates this feedback into the APF. The RCPP 
statute requires partners to contribute a significant portion of the 
overall costs of the project. This contribution of resources is 
reflected in the partnership agreement entered into between NRCS and a 
partner. The overall cost includes all direct and indirect costs 
associated with implementation, from NRCS and partner(s). Partners may 
include funds they have received from other Federal sources as part of 
their contribution to the project, provided they submit a written 
commitment from the Federal agency confirming such funds can be used in 
conjunction with NRCS funds. NRCS provides greater priority to 
applicants that are able to contribute at least 50 percent of the 
resources needed to implement a project. A minor change has been made 
to the EQIP final rule to clarify that EQIP is a covered program under 
RCPP.

24. Regional Conservationist Approval

    Comment: NRCS received seven comments on the removal of the 
requirement that the Regional Conservationist approve contracts 
obligating funds over $150,000. Three respondents expressed support for 
the removal, while four recommended that NRCS re-institute the 
requirement.
    NRCS Response: The requirement concerning the approval of contracts 
by the Regional Conservationist has been removed from the regulation as 
it is an internal administrative matter. NRCS bases its internal review 
requirements in a manner that balances ensuring financial integrity 
with administrative efficiency. NRCS adjusts these requirements based 
upon findings from its quality assurance reviews. No changes were made 
to the regulation in response to these recommendations.

25. Regulatory Certifications

    Comment: NRCS received 13 comments related to various regulatory 
certifications that appeared in the preamble of the interim rule. 
Namely, five commenters stated that consultation was required under 
Executive Order 13175 since they believe that EQIP imposes substantial 
costs on Tribal governments associated with environmental and cultural 
resource compliance; three comments stated that Executive Order 13132 
required NRCS to coordinate with Conservation Districts, as well as 
other State and local governments, prior to publishing the EQIP interim 
rule; and five commenters stated NRCS failed to meet the requirements 
of Executive Order 13563 to improve coordination across agencies to 
reduce costs and simplify rules.
    NRCS Response: NRCS met its responsibilities under Executive Orders 
13175, 13132, and 13563. Section 5 of Executive Order 13175 provides 
that an agency should not promulgate any regulation that imposes 
substantial direct compliance costs on Tribal governments that is not 
required by statute unless funds necessary to pay the direct costs 
incurred by the Tribal government or the Tribe in complying with the 
regulation are provided by the Federal government; or alternatively, 
the agency, prior to the formal promulgation of the regulation, 
consulted with Tribal officials early in the process of developing the 
proposed regulation.
    While Indian Tribes and their members are eligible to participate 
in EQIP, such participation is voluntary and does not mandate 
compliance costs on the part of the Tribe. Additionally, in response to 
the 2014 Act enactment, NRCS developed and implemented an outreach plan 
to obtain meaningful input from Indian Tribes regarding all NRCS 
conservation programs, including EQIP. NRCS consultation policies 
related to Executive Order 13175 are currently contained in the NRCS 
General Manual (GM) at 410 GM Part

[[Page 29478]]

405, 180 GM Parts 401 and 404, and 420 GM Part 401. For ongoing NRCS 
program activities, NRCS State Conservationists have primary 
responsibility for engaging with Indian Tribes and ensuring that NRCS' 
Tribal consultation responsibilities have been met.
    Executive Order 13132 governs how agencies should develop policies 
that have federalism implications. Under Executive Order 13132, 
``policies that have federalism implications'' refers to regulations 
that have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
EQIP is a voluntary program to provide assistance to producers of 
eligible lands. As stated in the EQIP interim rule preamble, EQIP does 
not have a substantial direct effect on States, the relationship 
between the Federal government and the States, or the distribution of 
power and responsibilities.
    Section 2 of Executive Order 13563 requires that regulations be 
adopted through a process that involves public participation, and to 
the extent feasible and consistent with law, the open exchange of 
information and perspectives among State, local, and Tribal officials, 
experts in relevant disciplines, affected stakeholders in the private 
sector, and the public as a whole. Section 1246 of the 1985 Act 
requires publication of the EQIP regulation as an interim rule with an 
opportunity for public comment. The EQIP interim rule published on 
December 12, 2014, included a 60-day public comment period, during 
which the comments regarding Executive Order 13563 were received by 
NRCS.

26. Transparency Act Requirements

    Comment: NRCS received five comments expressing concern about the 
applicability of the Federal Funding Accountability and Transparency 
Act (Transparency Act) requirements to EQIP contracts and the impact 
failure to comply with these requirements have upon agricultural 
producers.
    NRCS Response: The Office of Management and Budget (OMB) 
regulations at 2 CFR parts 25 and 170 implement the Transparency Act 
and are government-wide requirements. The Transparency Act regulations 
apply to awards of financial assistance to non-Federal entities. EQIP 
assistance is financial assistance, thus the Transparency Act 
requirements apply to its implementation of awards to non-Federal 
entities. No changes were made in response to these comments.

27. Technical Service Providers (TSPs)

    Comment: NRCS received one comment expressing approval for the 
utilization of TSPs.
    NRCS Response: NRCS appreciates the comment and will continue to 
encourage the utilization of TSPs in the implementation of EQIP. No 
changes were necessitated by this comment.

28. Veteran Farmer or Ranchers

    Comment: NRCS received five comments expressing support for the 
priority provided to veteran farmers and ranchers.
    NRCS Response: NRCS appreciates the comment and will continue to 
encourage participation in EQIP by veteran farmers or ranchers. No 
changes were necessitated by this comment.

29. Wildlife Funding

    Comment: NRCS received 16 comments expressing concern that 5 
percent was the minimum funding available for wildlife-focused 
activities and that wildlife is not being partitioned clearly to 
demonstrate an additive effect. Some commenters recommended that 
wildlife funding be tracked based on ranking of resource concerns and 
not by targeting specific practices. Others recommended that only those 
16 conservation practice standards that have fish and wildlife as a 
primary purpose should be used to track the wildlife fund requirement.
    NRCS Response: The 2014 Act repealed WHIP and incorporated its 
purposes into EQIP. Under the 2014 Act, at least 5 percent of EQIP 
assistance must be targeted towards conservation practices with a 
specific purpose related to wildlife habitat. Since this is an 
administrative requirement, NRCS did not include it in the EQIP 
regulation, but discussed in the preamble of the interim rule how it 
will meet the requirement. In particular, NRCS identified that it will 
track its compliance with this requirement by identifying those 
conservation practices where wildlife habitat is the primary purpose. 
Out of more than 160 existing conservation practice standards, 16 have 
wildlife habitat as a primary purpose, in addition to approximately 45 
standards that are often used to benefit wildlife. The preamble also 
identified that in certain situations, such as wildlife-focused 
initiatives, other practices may also be tracked where the practices 
are designed to achieve specific wildlife objectives.
    Given the statutory language, it is appropriate to track both the 
16 wildlife-specific practices and, in wildlife-focused initiatives, 
the 45 standards that are utilized to benefit wildlife. No changes were 
made to the regulation in response to these comments.

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. OMB designated this 
final rule a significant regulatory action. The administrative record 
is available for public inspection at NRCS National Headquarters 
located at 1400 Independence Avenue Southwest, South Building, Room 
5831, Washington, DC 20250-2890. Pursuant to Executive Order 12866, 
NRCS conducted an economic analysis of the potential impacts associated 
with this program. A summary of the economic analysis can be found at 
the end of the regulatory certifications section of this preamble, and 
a copy of the analysis is available upon request from the Director of 
NRCS' Financial Assistance Programs Division or electronically at: 
http://www.nrcs.usda.gov/programs/eqip/ under the EQIP Rules and 
Notices with Supporting Documents title.

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. Regardless, 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 is incentive-
based, and therefore only impacts those who participate voluntarily in 
the program. Small entity

[[Page 29479]]

applicants will not be affected to a greater extent than large entity 
applicants.

Congressional Review Act

    Section 1246(c) of the 1985 Act, as amended by section 2608 of the 
2014 Act, enables the Secretary of Agriculture to use the authority 
granted in section 808(2) of Title 5 of the United States Code to 
forego the Congressional Review Act's 60-day Congressional review, 
which delays the effective date of major regulations, if the agency 
finds that there is a good cause to do so. NRCS hereby determines that 
it has good cause to do so in order to meet the Congressional intent to 
have the conservation programs, authorized or amended under Title 7 of 
the 1985 Act, in effect as soon as possible. NRCS also determined it 
has good cause to forgo delaying the effective date given the critical 
need to let agricultural producers know what programmatic changes are 
being made so that they can make financial plans accordingly prior to 
planting season. For these reasons, this rule is effective upon 
publication in the Federal Register.

Environmental Analysis

    NRCS prepared a programmatic EA in association with the EQIP 
rulemaking to aid in its compliance with NEPA when expending EQIP funds 
in implementing site-specific actions (40 CFR 1501.3(b)). As a result 
of the analysis, the Chief of NRCS determined that there will not be a 
significant impact to the human environment as a result of the changes 
implemented by this rule; therefore, an EIS was not required (40 CFR 
1508.13). Only one comment was received on the EA. The commenter 
expressed that EQIP has not allowed for seed producers to adequately 
respond to programs that are announced after the seed production season 
and requested communication improvements. This comment did not provide 
new information that is relevant to environmental concerns or that 
bears on the proposed action or its impacts that warrants supplementing 
or revising the EQIP EA and Finding of No Significant Impact.
    Two additional letters were received providing comments on the 
interim final rule recommending that NRCS undertake an EA of the 
effects of providing EQIP assistance to CAFOs. NRCS considered this 
input and determined it lacks discretion on whether to provide 
assistance to existing or expanding CAFOs. NRCS made this determination 
based on its review of the EQIP legislative history, the purposes of 
EQIP--which include assisting producers to meet regulatory requirements 
related to soil and water quality--and the fact that in the Farm 
Security and Rural Investment Act of 2002, Congress removed the 
restriction on providing financial assistance to large confined 
livestock operations to construct animal waste management facilities 
and required NRCS to direct 60 percent of its EQIP assistance to 
livestock producers. NRCS has, and will continue to conduct an 
environmental evaluation before providing EQIP financial assistance to 
any producer to determine the need for an EA or EIS. NRCS regulations 
in 7 CFR part 652 define the environmental evaluation as the part of 
the NRCS planning process that inventories and estimates the potential 
effects on the human environment of alternative solutions to resource 
problems. The environmental evaluation is used to determine the need 
for an EA or EIS, and aids in the consideration of alternatives and in 
the identification of available resources when an EA or EIS is not 
required (7 CFR 650.4(c)).
    NRCS will also use the environmental evaluation to evaluate the 
environmental effects of specific requests to grant irrigation waivers. 
It is not possible to meaningfully analyze the effects of these waivers 
at a national level because of site-specific factors. NRCS would have 
to speculate as to the types of requests that might be received and 
granted, and NEPA does not require analysis of speculative actions. As 
a result, the programmatic EA prepared to identify the effects of the 
EQIP rule does not analyze the effects of waiver requests.
    A copy of the EA and FONSI may be obtained from the following Web 
site: http://www.nrcs.usda.gov/ea. A hard copy may also be obtained in 
any of the following ways: (1) Send an email to 
[email protected] with ``Request for EA'' in the subject 
line, or (2) mail a written request to: National Environmental 
Coordinator, Natural Resources Conservation Service, Ecological 
Sciences Division, Post Office Box 2890, Washington, DC 20013-2890.

Civil Rights Impact Analysis

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

Paperwork Reduction Act

    Section 1246 of the 1985 Act, as amended by the 2014 Act, requires 
that implementation of programs authorized by Title 7 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 final 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 final 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 may have substantial direct effects 
on one or more Indian Tribes, the relationship between the Federal

[[Page 29480]]

government and Indian Tribes, or the distribution of power and 
responsibilities between the Federal government and Indian Tribes. NRCS 
has assessed the impact of this final rule on Indian Tribes and 
determined that Tribal consultation under Executive Order 13175 does 
not apply. However, NRCS believes that consultation with Tribes is 
critical to ensuring that the program is administered in a fair and 
equitable manner. Therefore, NRCS has reviewed letters and comments 
submitted by and on behalf of Tribes during the public comment period 
leading to an additional public presentation and information gathering 
on the final rule with Tribes, Tribal representatives, and Tribal 
members on December 7th in Las Vegas, Nevada. NRCS made several changes 
to the final rule to address concerns raised by Tribes and Tribal 
representatives throughout the NRCS outreach and collaboration process. 
NRCS developed and implemented an outreach and collaboration plan to 
use while developing its policy regarding the 2014 Act. If a Tribe 
requests consultation, NRCS will work at the appropriate local, State, 
or national level, including with the USDA Office of Tribal Relations, 
to ensure meaningful consultation is provided where changes, additions, 
and modifications identified herein are not expressly mandated by 
Congress.

Unfunded Mandates Reform Act of 1995

    Title 2 of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 
U.S.C. 1531-1538) 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 1 year. When such a 
statement is needed for a rule, section 205 of UMRA requires agencies 
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 2 of 
UMRA, for State, local, and Tribal governments or the private sector. 
Therefore, a statement under section 202 of UMRA is not required.

Executive Order 13132

    NRCS has considered this final rule in accordance with Executive 
Order 13132, issued August 4, 1999, and has determined that the final 
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 Federal government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
Therefore, NRCS concludes that this final rule does not have Federalism 
implications.

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

    Pursuant to section 304 of the Federal Crop Insurance Reform Act of 
1994 (Pub. L. 103-354), USDA has estimated that this regulation will 
not have an annual impact on the economy of $100,000,000 in 1994 
dollars, and therefore, is not a major regulation. As such, a risk 
analysis was not conducted.

Executive Order 13211

    This rule is not a significant regulatory action subject to 
Executive Order 13211, Energy Effects.

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

    OMB published two regulations, codified at 2 CFR part 25 and 2 CFR 
part 170, to assist agencies and recipients of Federal financial 
assistance in complying with the Federal Funding Accountability and 
Transparency Act of 2006 (FFATA) (Pub. L. 109-282, as amended). Both 
regulations have implementation requirements effective as of October 1, 
2010.
    The regulations at 2 CFR part 25 require, with some exceptions, 
recipients of Federal financial assistance to apply for and receive a 
Dun and Bradstreet Universal Numbering Systems (DUNS) number and 
register in the Central Contractor Registry (CCR). The regulations at 2 
CFR part 170 establish new requirements for Federal financial 
assistance applicants, recipients, and sub-recipients. The regulation 
provides standard wording that each agency must include in its awarding 
of financial assistance that requires recipients to report information 
about first-tier sub-awards and executive compensation under those 
awards.
    The regulations at 2 CFR part 25 and 2 CFR part 170 apply to EQIP 
financial assistance provided to entities and, therefore, these 
registration and reporting requirements will continue to include in the 
requisite provisions as part of EQIP financial assistance contracts.

Regulatory Impact Analysis--Executive Summary

    Pursuant to Executive Order 12866, Regulatory Planning and Review, 
NRCS has conducted a Regulatory Impact Analysis (RIA) of EQIP as 
pursuant to the changes of the 2014 Act. On December 12, 2014, an 
interim rule and an accompanying RIA, with request for comments, was 
published which implemented changes to EQIP necessitated by the 
enactment of the 2014 Act or required to implement administrative 
clarifications and streamlining improvements. NRCS received 331 
comments from 65 respondents to the interim rule. NRCS received no 
comments on the RIA. The final rule makes permanent the changes 
proposed in the interim rule along with some minor adjustments based on 
public comments. NRCS determined that these minor adjustments would not 
significantly alter the RIA.
    In considering alternatives for implementing EQIP, USDA followed 
the legislative intent to maximize beneficial conservation impacts, 
address natural resource concerns, establish an open participatory 
process, and provide flexible assistance to producers who apply 
appropriate conservation measures to comply with Federal, State, and 
Tribal environmental requirements. Because EQIP is a voluntary program, 
the program will not impose any obligation or burden upon agricultural 
producers who choose not to participate.
    EQIP has been authorized by the Congress in the 2014 Farm Bill at 
$8 billion over the 5-year period beginning in FY 2014 and proceeding 
through 2018, with annual amounts of $1.35 billion in FY 2014, $1.60 
billion in FY 2015, $1.65 billion in FY 2016, $1.65 billion in FY 2017, 
and $1.75 billion in FY 2018. EQIP and WHIP had been previously 
authorized under the 2008 Act with annual amounts of $1.32 billion for 
FY 2008, $1.37 billion in FY 2009, $1.55 billion in FY 2010, $1.66 
billion in FY 2011, and $1.75 billion in FY 2012 to FY 2013. Despite 
this authorization, EQIP and WHIP received only $7.75 billion in 
funding from FY 2008 through FY 2013. Funds received annually over this 
period were $1.09 billion in FY 2008, $1.15 billion in FY 2009, $1.27 
billion in FY 2010, $1.32 billion in FY 2011, $1.45 billion in FY 2012, 
and $1.47 billion in FY 2013. Since the enactment of the 2014 Act EQIP 
received $1.35 billion, the full amount authorized in FY 2014, but only 
$1.347 billion in FY 2015 rather the

[[Page 29481]]

$1.60 billion authorized by the 2014 Act.
    The 1985 Act, as amended by the 2014 Act, makes several changes to 
EQIP. The changes include consolidating elements of the former WHIP 
into EQIP, expanding participation among military veteran farmers or 
ranchers, requiring that funds provided in advance that are not 
expended during the 90-day period beginning on the date of receipt of 
funds be returned, establishing an overall payment limitation over FY 
2014 through FY 2018 of $450,000, providing that EQIP funding 
authorized by the 2014 Act remains available until expended, and 
requiring that at least 5 percent of available EQIP funds to be 
targeted for wildlife conservation practices for each fiscal year from 
2014 to 2018. This 5 percent for wildlife habitat practices is based 
upon the total EQIP funding allocated as financial assistance available 
nationally for producer contracts. Based upon historical expenditures 
of wildlife-related practices in both WHIP and EQIP, and with emphasis 
to prioritize funding applications that address wildlife resource 
concerns, the agency anticipates that the actual funding associated 
with developing wildlife practices through EQIP will exceed the 5 
percent national target. In FY 2014, about 6.5 percent of EQIP funds 
($60.8 million) were devoted to wildlife conservation practices. Seven 
percent of EQIP funds are available for eligible RCPP contracts. 
Additional explanation regarding funding pools and EQIP program 
priorities is provided in the Background section of the preamble.
    EQIP technical assistance and financial assistance facilitates the 
adoption of conservation practices that address natural resource 
concerns. Those practices improve on-site resource conditions and 
produce offsite environmental benefits for the public. Water erosion 
conservation practices reduce the flow of pollutants off of fields, 
thus improving freshwater and marine water quality, including 
protecting fish habitat, enhancing aquatic recreation opportunities, 
and reducing sedimentation of reservoirs, streams, and drainage 
channels. More efficient irrigation practices conserve scarce water, 
making it available for other uses. Wind erosion control practices 
improve air quality and some practices increase carbon in the soil 
profile. Wildlife habitat conservation practices increase wildlife 
habitat, enhance scenic value, and provide opportunities for 
recreation. A definition of ``habitat development'' was added and 
adopted to encompass the conservation practices that support the 
wildlife habitat activities authorized by section 1240B(g) of the 2014 
Act. The term, as originally defined in the WHIP regulation, is added 
to EQIP at section 1466.3, ``Definitions.'' The definition, consistent 
with EQIP authority to assist with implementation of conservation 
practices that include the specific technical purpose of habitat 
development, provides for the conservation of wildlife species.
    Other impacts of conservation practices may accrue to the producer. 
Examples of these impacts include the maintenance of the long-term 
productivity of the land, improved irrigation efficiency, improved 
grazing productivity, more efficient crop use of animal waste and 
fertilizer, and increased profits from energy conservation.
    Most of this rule's impacts consist of transfer payments from the 
Federal government to producers. While those transfers create 
incentives that very likely cause changes in the way society uses its 
resources, we lack data with which to quantify the resulting social 
costs or benefits. Given the existing limitation and lack of data, NRCS 
will investigate ways to quantify the incremental benefits obtained 
from this program. Despite the limitations on our ability to quantify 
and estimate the value of social costs or benefits from the 
implementation of conservation practices, EQIP, as amended under the 
2014 Act, is expected to positively affect natural resources and 
mitigate environmental degradation. Results from the national 
Conservation Effects Assessment Project conducted by NRCS demonstrate 
that implementation of the types of conservation practices funded under 
EQIP reduce sediment and nutrient loss from agricultural fields and 
improve water quality nationwide.
    The 2014 Act increases EQIP funding over the amount provided by 
Congress for both EQIP and WHIP from FY 2008 through FY 2013 by 24 
percent on an annualized basis to $1.6 billion per year. From FY 2008 
through FY 2013, the authorized level for EQIP and WHIP was a total of 
$9.585 billion, but annual restrictions on EQIP and WHIP obligations 
enacted in the annual appropriations bills resulted in the actual 
authority being $7.748 billion, for an annualized amount of $1.291 
billion. In contrast, the authorized level for EQIP under the 2014 Act 
for FY 2014 through FY 2018 is $8 billion, for an annualized amount of 
$1.6 billion (this assumes future funding caps are set at the 
authorized amounts). Actual authority for EQIP funding in FY 2014 of 
$1.350 billion matched the amount authorized in the 2014 Act while 
restrictions limited actual EQIP funding in FY 2015 to $1.347 million. 
These changes reduce the authorized level of spending for EQIP for FY 
2014 through FY 2018 to $7.747 million. Additionally, the 2014 Act 
changed the period of availability for EQIP funding from 1-year to no-
year funding, which means the funds remain available until expended. 
Thus, any unobligated balance at the end of a fiscal year could be 
available for obligation in the subsequent year. It is estimated that 
the conservation practices implemented with this funding will continue 
to contribute to reductions of water and wind erosion on cropland, 
pasture, and rangeland; reduce nutrient losses to streams, rivers, 
lakes, and estuaries; increase wildlife habitat; and provide other 
private and public environmental benefits. It is also expected that 
continued implementation of practices which treat and manage animal 
waste through EQIP will directly contribute to improvements in water 
quality and associated improvements in air quality from, for example, 
reduction in emissions such as methane. NRCS estimates that the 
cost,\1\ from both public and private sources, of implementing the 
conservation practices with EQIP funding will be $11,519 million 
dollars (FY 2014 through FY 2018). Cost estimates are presented in 
Table 1 below.
---------------------------------------------------------------------------

    \1\ Public costs include total TA and FA funds outlined in the 
Congressional Budget Office's (CBO) scoring of the 2014 Act. Private 
costs are out-of-pocket costs paid voluntarily by participants.

[[Page 29482]]



         Table 1--Projected Technical Assistance and Transfer Payments, as Authorized, FY 2014-FY 2018 a
----------------------------------------------------------------------------------------------------------------
                                  NRCS technical     Transfer
                                    assistance        payment      Public costs    Private costs    Total costs
                                       million $       million $       million $       million $       million $
----------------------------------------------------------------------------------------------------------------
FY 2014 \b\.....................          $368.0          $982.0        $1,350.0          $654.6        $2,004.6
FY 2015 \b\.....................           360.0           987.0         1,347.0           657.9         2,004.9
FY 2016.........................           445.5         1,204.5         1,650.0           803.6         2,453.6
FY 2017.........................           445.5         1,204.5         1,650.0           803.6         2,453.6
FY 2018.........................           472.5         1,277.5         1,750.0           852.2         2,602.2
                                 -------------------------------------------------------------------------------
    Total.......................         2,090.5         5,655.5         7,747.0         3,779.2        11,518.9
----------------------------------------------------------------------------------------------------------------
\a\ Based on a historical average participant cost of 40 percent and a historical average technical assistance
  share of 27 percent.
\b\ FY 2014 and FY 2015 represent actual funds received.

Conclusions

    Program features of EQIP, except for the increase in wildlife 
focus, remains essentially unchanged from the 2008 Act. The increased 
funding over the period of FY 2014 through FY 2018 will increase the 
amount of conservation applied by agricultural producers, support 
continued improvement in the natural resource base (i.e. soil, water, 
air, and wildlife), and mitigate agriculture's potentially adverse 
effects on the environment. The statutory requirement that at least 5 
percent of available EQIP funding be targeted to practices that address 
wildlife habitat will be met by focusing a portion of the funding on 
applications that address wildlife resource concerns.
    Overall, the conservation effects resulting from transferring $5.7 
billion to producers and providing $2.1 billion in technical assistance 
from FY 2014 through FY 2018 will be reflected in nine primary resource 
categories and lead to improvements in cropland and grazing land 
productivity, water quality, air quality, water use efficiency, energy 
use efficiency, carbon sequestration and wildlife habitat.

List of Subjects in 7 CFR Part 1466

    Agricultural operations, Animal feeding operations, Conservation 
payments, Conservation practices, Contract, Forestry management, 
Natural resources, Payment rates, Soil and water conservation, Soil 
quality, Water quality and water conservation, Wildlife.

    Accordingly, the interim rule amending 7 CFR part 1466, which was 
published at 79 FR 73953 on December 12, 2014, is adopted as a final 
rule with the following changes:

PART 1466--ENVIRONMENTAL QUALITY INCENTIVES PROGRAM

0
1. The authority citation for part 1466 continues to read as follows:

    Authority: 15 U.S.C. 714b and 714c; 16 U.S.C. 3839aa-3839-8.


0
2. Amend Sec.  1466.2 by revising paragraph (c) to read as follows:


Sec.  1466.2  Administration.

* * * * *
    (c) 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. Since EQIP is a covered program under the Regional 
Conservation Partnership Program (RCPP), the Chief may modify or waive 
a discretionary provision of this part with respect to contracts 
entered into under RCPP if the Chief determines that such an adjustment 
is necessary to achieve the purposes of EQIP. Consistent with section 
1271C(c)(3) of the Food Security Act of 1985, 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 program 
participants if the Chief determines that the waiver is necessary to 
fulfill RCPP objectives.
* * * * *

0
3. Amend Sec.  1466.7 by revising paragraph (e) to read as follows:


Sec.  1466.7  EQIP plan of operations.

* * * * *
    (e) If an EQIP plan of operations addresses forest land related 
resource concerns, the participant must implement conservation 
practices consistent with an approved forest management plan.
* * * * *

0
4. Amend Sec.  1466.20 by revising paragraphs (b) introductory text, 
(b)(1) introductory text, and (b)(5) to read as follows:


Sec.  1466.20  Application for contracts and selecting applications.

* * * * *
    (b) In selecting EQIP applications, NRCS, with advice from the 
State Technical Committee, Tribal Conservation Advisory Council, or 
local working group, may establish ranking pools to address a specific 
resource concern, geographic area, or agricultural operation type or 
develop an evaluation process to prioritize and rank applications for 
funding that address national, State, and local priority resource 
concerns, taking into account the following guidelines:
    (1) NRCS will select applications for funding based on applicant 
eligibility, fund availability, and the NRCS evaluation process. NRCS 
will rank applications according to the following factors related to 
conservation benefits to address identified resource concerns through 
implementation of conservation practices:
* * * * *
    (5) The evaluation process will determine the order in which 
applications will be selected for funding. To improve administrative 
efficiency, NRCS may use screening factors as part of its evaluation 
process that may include sorting applications into high, medium, or low 
priority. If screening factors are used to designate a higher priority 
for ranking, all eligible applications with a higher priority and that 
address an eligible resource concern are ranked and considered for 
funding before ranking or considering for funding applications that are 
a lower priority. The approving authority for EQIP contracts will be 
NRCS.
* * * * *

0
5. Amend Sec.  1466.21 by revising paragraph (b)(3)(v) to read as 
follows:


Sec.  1466.21  Contract requirements.

* * * * *
    (b) * * *
    (3) * * *

[[Page 29483]]

    (v) Implement conservation practices consistent with an approved 
forest management plan when the EQIP plan of operations includes 
forest-related practices that address resource concerns on NIPF,
* * * * *

0
6. Amend Sec.  1466.25 by revising paragraphs (b) through (d), 
redesignating paragraph (e) as paragraph (f), and adding a new 
paragraph (e) to read as follows:


Sec.  1466.25  Contract modifications and transfers of land.

* * * * *
    (b) Within the time specified in the contract, the participant must 
provide NRCS with written notice regarding any voluntary or involuntary 
loss of control of any acreage under the EQIP contract, which includes 
changes in a participant's ownership structure or corporate form. 
Failure to provide timely notice will result in termination of the 
entire contract.
    (c) Unless NRCS approves a transfer of contract rights under this 
paragraph (c), a participant losing control of any acreage will 
constitute a violation of the EQIP contract and NRCS will terminate the 
contract and require a participant to refund all or a portion of any 
financial assistance provided. NRCS may approve a transfer of the 
contract if:
    (1) NRCS receives written notice that identifies the new producer 
who will take control of the acreage, as required in paragraph (d) of 
this section;
    (2) The new producer meets program eligibility requirements within 
a reasonable time frame, as specified in the EQIP contract;
    (3) The new producer agrees to assume the rights and 
responsibilities for the acreage under the contract; and
    (4) NRCS determines that the purposes of the program will continue 
to be met despite the original participant's losing control of all or a 
portion of the land under contract.
    (d) Until NRCS approves the transfer of contract rights, the new 
producer is not a participant in the program and may not receive 
payment for conservation activities commenced prior to approval of the 
contract transfer.
    (e) NRCS may not approve a contract transfer and may terminate the 
contract in its entirety if NRCS determines that the loss of control is 
voluntary, the new producer is not eligible or willing to assume 
responsibilities under the contract, or the purposes of the program 
cannot be met.
* * * * *

    Signed this 26th day of April, 2016, in Washington, DC.
Jason A. Weller,
Vice President, Commodity Credit Corporation, and Chief, Natural 
Resources Conservation Service.
[FR Doc. 2016-10161 Filed 5-11-16; 8:45 am]
 BILLING CODE 3410-16-P