[Federal Register Volume 87, Number 102 (Thursday, May 26, 2022)]
[Notices]
[Pages 31974-31976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-11286]


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DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service

[Docket No. NRCS-2020-0009]


Final Guidance for Identification of Nonindustrial Private Forest 
Land (NIPF)

AGENCY: Natural Resources Conservation Service (NRCS), U.S. Department 
of Agriculture (USDA).

ACTION: Notice.

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SUMMARY: On December 17, 2020, NRCS published a notice of proposed 
guidance for NIPF identification and provided a 30-day public comment 
period for input. NRCS received 139 comments from different members of 
the public, including Indian Tribes, State agencies, non-governmental 
organizations, and individuals. Several of these comments provided 
coordinated input from many organizations, including one letter that 
provided input from over 60 organizations. This document responds to 
comments received during the public comment period, which closed on 
January 19, 2021, and, for the reasons stated in this document, 
identifies that NRCS will not adopt the guidance it proposed in its 
December 2020 notice.

APPLICABLE DATE: May 26, 2022.

FOR FURTHER INFORMATION CONTACT: Martha Joseph, telephone: (814) 203-
5562; email: [email protected].

SUPPLEMENTARY INFORMATION:

Background

    NRCS is one of the USDA agencies that identifies NIPF for program 
enrollment. In particular, NRCS identifies NIPF for enrollment in the 
Agricultural Conservation Easement Program (ACEP), the Conservation 
Stewardship Program (CSP), the Environmental Quality Incentives Program 
(EQIP), and the Regional Conservation Partnership Program (RCPP).
    Identification for NIPF enrollment under these NRCS programs is 
based on section 1201(a)(18) of the Food Security Act of 1985 (the 1985 
Farm Bill) (16 U.S.C. 3801), which defines NIPF as rural land, as 
determined by the Secretary, that:
     Has existing tree cover or is suitable for growing trees; 
and
     Is owned by any nonindustrial private individual, group, 
association, corporation, Indian Tribe, or other private legal entity 
that has definitive decision-making authority over the land.
    Since the NIPF definition was first established several decades 
ago, changes have occurred in the forestry industry. In particular, 
foresters would identify the ``industrial'' status of a parcel of land 
by whether or not a company was vertically integrated (for example, the 
landowner owned both forestland and primary wood processing 
facilities). However, the ability to distinguish whether a particular 
parcel of land is industrial or nonindustrial became complicated when 
companies started to divest either their land or mills at the turn of 
the 21st century and timber investment management organizations (TIMOs) 
and real estate investment trusts (REITs) reflected an increasing 
amount of industrial forest land ownership.
    To address these changes in the forestry industry, NRCS described 
in its December 2020 notice, proposed guidance that would be used to 
identify NIPF as defined by the 1985 Farm Bill and NRCS program 
regulations. NRCS was not re-defining NIPF but was providing guidelines 
for helping its staff identify the various components of the statutory 
definition. Referencing criteria used by other conservation agencies 
(the USDA Forest Service and Farm Service Agency), NRCS proposed to 
clarify how to identify a nonindustrial private landowner if they:
    (1)(i) Own fewer than 45,000 acres of forest land in the United 
States; and
    (ii) Do not own or operate an industrial mill for the primary 
processing of raw wood products as determined by NRCS in consultation 
with the State Technical Committee; or
    (2) Meet criteria established for a nonindustrial private landowner 
by NRCS in a State in consultation with the State Technical Committee.
    NRCS received a total of 91 letters or emails containing 139 
comments. The comments were from forestry or agricultural stakeholders, 
conservation organizations, individuals, Tribal entities, other 
organizations, and governmental agencies. One of the letters was signed 
by over 60 organizations. NRCS review of the comments revealed a clear 
stakeholder preference that NRCS continue to use the existing 
programmatic framework until Congress can address how the changes in 
the forestry industry should

[[Page 31975]]

affect eligibility for certain NRCS programs.

Comment Topics

    This document summarizes the comments and explains the NRCS 
decision not to adopt revised NIPF technical guidance at this time. The 
comments are organized alphabetically by topic. The topics include: 
Adjusted Gross Income (AGI) limitation, funding, general criticism or 
support, landscape-level conservation benefits, large NIPF holdings, 
and mill ownership.

AGI

    Comment: NRCS should use the AGI limits instead of the proposed 
NIPF criteria. One comment also requested that NIPF be removed from AGI 
regulations.
    Response: Prior to the Agriculture Improvement Act of 2018 (the 
2018 Farm Bill), the AGI payment eligibility provisions indirectly 
assisted identification of non-industrial forestry landowners by 
excluding more affluent corporate landowners from being eligible for 
conservation payments. Additionally, under the Agricultural Act of 2014 
(the 2014 Farm Bill), participants in RCPP, through the Healthy Forests 
Reserve Program (HFRP), were not subject to the NIPF land eligibility 
restriction or the AGI limitation.
    However, the 2018 Farm Bill codified RCPP as a stand-alone program 
and limited forest land eligibility to NIPF, necessitating criteria to 
identify individual industrial landowners. The availability of the 
general AGI waiver and the more program-specific AGI waiver has the 
potential to allow more affluent corporate owners to participate.
    NRCS has decided that it would be more appropriate to rely, in 
part, upon the AGI limitation and waiver criteria \1\ to make NIPF 
eligibility determinations so that forestry operations continue to be 
treated similarly to agricultural operations.
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    \1\ See 7 CFR 1400.500(f) for the waiver criteria.
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Funding

    Comment: Protecting forests, especially in the drought-plagued 
West, is essential for survival of the ecosystem, and as such should 
receive greater funding.
    Response: NRCS appreciates the expressions of support for 
protecting forests.

General Criticism

    Comment: Several comments expressed a general dissatisfaction with 
any proposed changes to the definition. Some comments suggested NRCS 
wait until the next Farm Bill to implement any change, which would 
allow Congress to provide greater guidance. Others suggested that any 
change must be vetted by the Joint Forestry Team (JFT), which is a 
multilateral partnership including public and private entities. Several 
comments expressed confusion over the proposed guidance, arguing that 
the guidance is unnecessary. One comment simply stated that large 
forests are important, implying that the acreage cap presents an undue 
impediment.
    Response: NRCS believes that technical guidance such as that 
proposed in its December 17, 2020, notice would be helpful to 
distinguish industrial from nonindustrial land holdings. As described 
in the original notice, forestry industry changes resulted in many 
industrial landholdings divesting themselves from their mill 
facilities, though the industrial production methods on such lands 
remained. NRCS believes that the development of technical guidance will 
have greater receptivity in the conservation community with more 
specific Congressional guidance about where resources should be focused 
in light of these forest industry changes.
    NRCS considers the JFT a valuable resource for receiving input with 
respect to forestry issues, and the public comment period provided JFT 
member organizations an opportunity to provide input to the guidance. 
Additionally, NRCS understands the sentiment to receive additional 
input from Congress, and therefore, NRCS is not going to adopt revised 
technical guidance at this time.

General Support

    Comment: Some comments expressed general support for NRCS 
activities that promote forest conservation. Others specifically 
supported aspects of the NIPF definition. Some expressed support for 
the acreage limit or the mill criterion, while other lauded either the 
narrowness or breadth of who may qualify as an NIPF landowner. Several 
expressed appreciation for the involvement of State technical 
committees.
    Response: NRCS appreciates the general support it received from 
producers and partners with respect to the proposed NIPF guidelines.

Landscape Level Conservation Benefits

    Comment: Some expressed that the guidance specifying a 45,000-acre 
threshold would exclude important conservation lands as well as 
pathways for wildlife migration. Some comments recommend allowing large 
landowners to participate in landscape-level conservation efforts to 
effectively address resource concerns and reduce implementation costs 
for individual landowners. One comment approved excluding corporate 
landowners and recommended using the American Tree Farm Program private 
forest landowner definition.
    Response: NRCS recognizes that large, contiguous tracts provide 
significant conservation benefits, including providing pathways for 
wildlife migration. Congress specified that Farm Bill funding should be 
targeted to nonindustrial forestry landowners, but whether large tracts 
of forest land provide conservation benefits is a separate 
consideration. NRCS believes that it can still obtain significant 
conservation benefits through enrollment of contiguous small tracts and 
by coordinating with partners who can contribute more of their 
resources to protecting large tracts that may not meet AGI eligibility 
or AGI waiver requirements.

Large NIPF Holdings

    Comment: Comments related to the acreage criterion threshold of 
45,000 acres came from a range of commenters. One of the comments was 
signed by approximately 61 different forestry or conservation 
stakeholders.
    Additional comments were specific to the applicability of the 
threshold with respect to Tribal land, especially land owned by Alaska 
Native Corporations (ANCs). The comments received from Tribal entities 
such as ANCs expressed concern that the acreage limitation did not 
consider the sovereign nature of Tribal landholdings or that ANCs often 
have very large acreages that would be excluded from NRCS assistance.
    Many of the comments opposed the acreage criterion, stating that 
the acreage limitation was arbitrary, that such a limitation does not 
exist in statute, and that imposition of the acreage threshold would 
eliminate valuable conservation opportunities. Several of these 
comments identified that it was an error to equate large commercial 
land holdings with the term ``industrial'' since much of this land must 
be subject to stewardship requirements. These commenters also expressed 
the view that it was a mistake to equate commercial thinning and 
logging activities with the term ``industrial.''
    However, NRCS also received many comments expressing support for 
the 45,000-acre threshold, but criticism that this threshold was too 
large for someone to identify themselves as non-industrial, and 
recommendations instead for a

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10,000 or lower acreage threshold. Several of these comments expressed 
concern that landowners with large acreages would outcompete and divert 
limited conservation dollars from smaller forestry operations that 
needed the financial assistance. Other comments expressed strong 
support for the acreage criterion because they believe TIMOs or REITs 
with large acreage should be ineligible for conservation assistance. 
Several comments identified that State-level assistance to family 
forestry operations have a far lower acreage threshold of less than a 
few hundred acres.
    Response: NRCS considered several options in response to these 
comments. In particular, NRCS considered:
    (1) Making all forest land eligible;
    (2) Issuing the proposed guidance as final with no changes;
    (3) Relying completely on whether there is a mill on site to 
determine whether land is industrial;
    (4) Revising the guidance to identify exceptions to the mill and 
acreage criteria; or
    (5) Continuing to rely, in part, upon AGI and other payment 
eligibility requirements to act as a surrogate for identification of 
industrial land holdings.
    NRCS rejected the first option as Congress specified that only NIPF 
lands were eligible for certain NRCS programs. NRCS also rejected 
reliance on the mill criterion alone as it failed to accommodate the 
last couple decades of development in the forestry industry. Given the 
concerns regarding the establishment of the acreage criterion, NRCS 
believes that it should maintain its reliance upon the mill criterion 
in conjunction with the AGI limitation, AGI waiver criteria, and 
related payment attribution eligibility to help make NIPF eligibility 
determinations.

Mill Criterion

    Comment: NRCS received comments with respect to the mill criterion, 
including:
     Expressing concern about small portable mills and impact 
to family operations,
     Recommending that NRCS use output thresholds,
     Recommending removal of the mill criterion entirely,
     Supporting that the State Conservationist defines what 
constitutes a mill,
     Expressing concern about potential inconsistency across 
States; and
     Recommending AGI for the mill criterion.
    Response: As identified in the large NIPF holdings discussion 
above, NRCS believes it should keep the mill criterion as it has long 
been used to assist with the identification of NIPF acreage. However, 
since there are small operations that have mills, and portable mills 
are used to assist with conservation activities (for example, wildfire 
management), NRCS wants to take this opportunity to clarify that the 
presence of these mills will not affect the parcel's eligibility as 
NIPF.

Current Technical Guidance

    In response to the comments summarized above, NRCS will not be 
issuing new technical guidance to identify NIPF for program eligibility 
purposes. In particular, NRCS will continue to identify forest land 
eligibility using the traditional NIPF identification criteria, such as 
the presence of an industrial mill, in conjunction with payment 
eligibility criteria that address, in part, the changes in forest land 
ownership by large corporate entities.

Louis Aspey,
Associate Chief, Natural Resources Conservation Service.
[FR Doc. 2022-11286 Filed 5-25-22; 8:45 am]
BILLING CODE 3410-16-P