Highly Erodible Land and Wetland Conservation

SUMMARY: The United States Department of Agriculture (USDA) is issuing

an interim final rule for the Highly Erodible Land and Wetland

Conservation provisions of the Food Security Act of 1985, as amended.

This interim final rule incorporates specific changes required by the

Federal Agriculture Improvement and Reform Act of 1996 and makes other

changes to improve the administration of these provisions. USDA is

seeking comments from the public which will be considered prior to

issuing a final rule.

DATES: Effective Dates: September 6, 1996.

Comments must be received by November 5, 1996.

ADDRESSES: All comments concerning this interim final rule should be

addressed to Lloyd E. Wright, Director, Conservation Ecosystems

Assistance Division, Natural Resources Conservation service, P.O. Box

2890, Washington, D.C. 20013-2890. Attention: HELWC. Fax: 202-720-1838.

This rule may also be accessed, and comments submitted, via Internet.

Users can access the NRCS Federal Register homepage and submit comments

at http:/astro.itc.nrcs.usda.gov:6500.

FOR FURTHER INFORMATION CONTACT:

Sandra N. Penn, Conservation Ecosystems Assistance Division, Natural

Resources Conservation Service, 202-720-1845.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be significant and was reviewed by

the Office of Management and Budget (OMB) under Executive Order 12866.

Pursuant to Sec. 6(a)(3) of Executive Order 12866, CCC and NRCS have

conducted an economic analysis of the potential impacts associated with

this interim final rule. The economic analysis concluded that the past

ten years of experience in implementing these provisions demonstrates

that the provisions are an effective incentive to implementing

conservation practices. Changes in the 1985 Act and the implementing

regulations will help to increase that incentive by making compliance

achievable by more producers, providing more liberal technical

assistance, and increasing flexibility in farm operations that deterred

some producers from participation in USDA programs in the past. A copy

of this cost-benefit analysis is available upon request from Sandra N.

Penn, Conservation Ecosystems Assistance Division, Natural Resources

Conservation Service, P.O. Box 1890, Washington, D.C. 20013-1890.

Regulatory Flexibility Act

The Regulatory Flexibility Act is not applicable to this rule

because USDA is not required by 5 U.S.C. 533 or any other provisions of

law to publish a notice of proposed rulemaking with respect to the

subject matter of this rule.

Environmental Evaluation

It has been determined through an environmental assessment that the

issuance of this interim final rule will not have a significant impact

upon the human environment. Copies of the environmental assessment may

be obtained from Sandra N. Penn, Conservation Ecosystems Assistance

Division, Natural Resources Conservation Service, P.O. Box 2890,

Washington, D.C. 20013-2890.

Paperwork Reduction Act

No substantive changes have been made in this interim final rule

that affect the recordkeeping requirements and estimated burdens

previously reviewed and approved under OMB control number 0560-0004.

Executive Order 12788

This interim final rule has been reviewed in accordance with

Executive Order 12778. The provisions of this interim final rule are

not retroactive except for Sec. 12.5(b)(4)-(8) in relation to certain

actions or determinations that occurred after December 23, 1985,

relative to the conversion of wetlands or the production of an

agricultural commodity upon a converted wetland. Furthermore, the

provisions of this final interim rule preempt State and local laws to

the extent such laws are inconsistent with this interim final rule.

Before an action may be brought in a Federal court of competent

jurisdiction, the administrative appeal rights afforded persons at CFR

parts 11,614,780 and 1900 Subpart B of this title, as appropriate, must

be exercised and exhausted.

Unfunded Mandates Reform Act of 1995

Pursuant to Title II of the unfunded Mandates Reform Act of 1995,

Pub. L. 104-4, the effects of this rulemaking action on State, local,

and tribal governments, and the public have been assessed. This action

does not compel the expenditure of $100 million or more by any State,

local, or tribal governments, or anyone in the private sector;

therefore a statement under Sec. 202 of the Unfunded Mandates Reform

Act of 1995 is not required.

Discussion of Provisions

Title XII of the Food Security Act of 1985, as amended (the 1985

Act), encourages participants in United States Department of

Agriculture (USDA) programs to adopt land management measures by

linking eligibility for USDA program benefits to farming practices on

highly erodible land and converted wetlands. In particular, the highly

erodible land provisions (HEL) of the 1985 Act provide that after

December 23, 1985, a program participant is ineligible for certain USDA

program benefits for the production of an agricultural commodity on a

field in which highly erodible land is predominant. Additionally, the

wetland conservation (WC) provisions of the 1985 Act provide that after

December 23, 1985, a program participant is ineligible for certain USDA

program benefits for the production of an agricultural commodity on a

converted

[[Page 47020]]

wetland, or after November 28, 1990, for the conversion of a wetland

that makes the production of an agriculture commodity possible. The

1985 Act, however, affords relief to program participants who meet

certain conditions identified under the 1985 Act by exempting such

actions from the ineligibility provisions.

The USDA issued a final rule implementing the HEL and WC provisions

of the 1985 Act on September 17, 1987. These regulations, found at 7

CFR part 12, provided the terms of program ineligibility, described the

several exemptions from ineligibility, outlined the responsibilities of

the several USDA agencies involved in implementing the provisions, and

generally established the framework for administration of the

provisions.

The Food, Agriculture, Conservation, and Trade Act of 1990 (the

1990 Act), amended the 1985 Act and made some significant modifications

to the HEL and WC conservation provisions. These statutory changes were

incorporated into part 12 through amendments issued April 23, 1991, and

May 23, 1991.

The implementing regulations mirror the 1985 Act's structure by

listing the activities that will cause a person to lose program

benefits, the program benefits that are at risk, and the conditions

under which these activities can occur without losing program

eligibility. The current regulations are divided into three subparts.

Subpart A describes the terms of ineligibility, USDA programs

encompassed by its terms, the list of exemptions from ineligibility,

the agency responsibilities, and the appeal provisions for persons

adversely affected by an agency determination. Subpart B describes in

greater detail the technical aspects of the highly erodible land

provisions, including the criteria for identification of highly

erodible lands, criteria for highly erodible field determinations, and

requirements for the development of conservation plans and conservation

systems. Subpart C describes in greater detail the technical aspects of

the wetland conservation provisions, including the criteria for

determining a wetland, the criteria for determining a converted

wetland, and the uses of wetlands and converted wetlands that can be

made without losing program eligibility.

Since December 23, 1985, program participants have farmed in a more

sustainable manner, resulting in more soil remaining on the field and

more wetlands remaining available to wildlife and migratory fowl.

Meeting the objectives of the HEL and WC provisions, however, has been

difficult for some producers. Wherever possible, USDA helps individual

program participants address their unique resources concerns in a

manner that meets the requirements of the HEL and WC provisions. The

Federal Agriculture Improvement and Reform Act (the 1996 Act), enacted

April 4, 1996, made several modifications to the HEL and WC provisions

which will increase USDA's ability to meet these individual situations

in a more flexible manner.

The Federal Agriculture Improvement and Reform Act

The 1996 Act amendments to the HEL and WC provisions became

effective 90 days after the date of enactment, i.e., July 3, 1996.

Accordingly, delaying implementation of this rule would be contrary to

the public interest and it has been determined that this rule should,

therefore, be effective when issued but subject to further review based

on comments submitted in response to this interim final rule.

The 1996 Act made the following changes to the implementation of

the HEL and WC provisions:

Adds new programs to the list of USDA program benefits

covered.

Deletes some programs from the list of USDA program

benefits covered.

Under certain conditions, allows a person who is

determined to be ineligible for USDA program benefits because of

failure to apply a conservation system up to 1 year to implement the

necessary practices without loss of benefits.

Provides for expedited variances related to weather, pest,

and disease problems and establishes a time period to render a decision

on whether to grant those variances.

Requires a measurement of soil erosion on a highly

erodible field prior to the implementation of a conservation system,

based on estimated average annual soil erosion rates.

Provides for self-certification of compliance for HEL and

authorizes the Natural Resources Conservation Service (NRCS) to exclude

that person from status review on the basis of that certification of

compliance.

Provides for revision or modification of a conservation

plan by a person if the same level of treatment is maintained.

Permits a person to use, on a field-trial basis,

conservation practices other than those currently approved if NRCS

determines in advance that the practices have a reasonable likelihood

of success.

Provides for a review, and relief to a person, by the

local county committee if applying a conservation system would cause

the person undue economic hardship.

Requires that an employee of USDA who notices a

conservation compliance deficiency on a person's farm while providing

technical assistance on other land inform the person of the deficiency

and actions necessary to come into compliance, and allow up to 1 year

for the person to fully implement corrective action before reporting

the observation as a compliance violation.

Requires that highly erodible land exiting the

Conservation Reserve Program not be held to a higher conservation

compliance standard than similar cropland in the same area.

Permits a person to cease using farmed wetlands, or

farmed-wetland pastures, as identified by NRCS, for cropping or forage

production, and allows the lands to return to wetland conditions, and

subsequently bring these lands back into agricultural production after

any length of time without loss of eligibility for USDA program

benefits, given certain conditions.

Allows flexibility in determining the programs for which a

person who violates wetland conservation provisions will become

ineligible.

Ensures that persons the right to request and appeal a

certified wetland determination.

Provides that a certified wetland delineation will remain

in effect until the person requests a new determination and

certification.

Ensures that wetlands that were certified as prior-

converted cropland will continue to be considered prior-converted

cropland even if wetland characteristics return as a result of lack of

maintenance of the land or other circumstances beyond the person's

control provided the prior-converted cropland continues to be used for

agricultural purposes.

Requires USDA to identify on a regional basis which

categories of activities constitute a minimal effect on wetland

functions and values.

Provides persons who convert a wetland greater flexibility

to mitigate the loss of wetland functions and values through

restoration, enhancement, or creation of wetlands.

Allows the Farm Service Agency (FSA) to waive a person's

ineligibility for benefits if FSA believes the person acted in good

faith and without intent to violate the wetland provisions.

Provides for a pilot program for wetland mitigation

banking.

Repeals the requirements for consultation with the Fish

and Wildlife Service (FWS).

[[Page 47021]]

Provides that benefits of affiliates of a business

enterprise who violate HEL or WC provisions will be reduced in

proportion to the interest held by the affiliate in the business

enterprise.

Defines ``agricultural lands'' for the purpose of

implementing the January 6, 1994, interagency memorandum of agreement

on Federal wetland delineations on agricultural lands.

Public Listing Forums

In April 1996, USDA held nine forums to provide opportunities for

public comment in advance of this rulemaking action. These forums were

held at Sacramento, California; Longmont, Colorado; Columbus, Georgia;

Springfield, Illinois; Wyomissing, Pennsylvania; Sioux Falls, South

Dakota; Abilene, Texas, Spokane, Washington; and, Washington, D.C. More

than 850 people, including 206 speakers, attended these forums. In

addition, USDA accepted written comments. The USDA considered the

public comments provided at these forums in the preparation of this

interim final rule. The documents relating to these forums are

available for public inspection at Room 6029 South Building, USDA, 14th

and Independence Ave. SW, Washington, D.C. The following discussion is

a brief 3summary of how USDA responded to the issues generated by the

comments:

USDA received seven comments related to the granting of variance

for persons who fail to meet the highly erodible land conservation

requirements. Section 12.5(a)(6)(ii) addresses procedures for granting

variances for weather, pest, and disease problems, and the factors that

NRCS will consider in granting those variances.

USDA received three comments related to procedures for determining

whether a conservation system results in a substantial reduction in

erosion. Section 12.23 addresses procedures for evaluating conservation

systems for land with and without cropping history.

USDA received 25 comments related to policies regarding when a

violation is in good faith. Sections 12.5(a)(5) and (b)(5) address

procedures for determining when a violation is in good faith.

USDA received 16 comments related to procedures for conducting

status reviews. Although procedures for conducting status reviews are

not addressed in the rule, the NRCS will consider these comments in

preparing its internal operating procedures.

USDA received 46 comments related to procedures on wetland

mitigation; these included the suggestion that mitigation always be in

the same watershed; that mitigation should place priority on

restoration or enhancement rather than creation of wetlands; that

mitigation should be flexible; and, that mitigation should meet the

requirements of the WC provision. Section 12.5(b)(4) sets forth

procedures to be used for wetland mitigation, and adds that the State

Conservationist may determine that mitigation for certain types or

classes of wetlands will not be considered because it is not possible

to achieve equivalent replacement of wetland functions and values

within a reasonable time frame. USDA received another 28 comments

related to mitigation banking.

USDA received 68 comments related to certification of wetland

determinations. Some commenters favored reviewing all wetland

determinations and correcting errors; other commenters favored not

reviewing existing wetland determinations. Some commenters suggested

that landowners should be formally notified of the certification of

wetland determinations. Some commenters suggested that NRCS should be

the lead agency for wetland determinations. Section 12.30(c) describes

the proposed approach to certification of wetland determinations. It

also specifies that a certified wetland determination will remain valid

and in effect until the person affected by the certification requests

review of the certification by NRCS.

USDA received 17 comments related to the role of FWS in carrying

out the wetland conservation provisions. Of these, four commenters

expressed support for FWS involvement and eight commenters favored

decreasing the role of the FWS. Five commenters made no specific

recommendation. The 1996 Act removed the requirement for consultation

with FWS, and that requirement has been removed from the rule. In

addition, Sec. 12.30 defines the role of the FWS in carrying out the

wetland conservation provisions.

USDA received 36 comments related to prior-converted cropland

issues and abandonment of wetlands. Of these, 19 commenters expressed

support for the ``once a PC, always a PC'' change made by the 1996 Act;

three commenters expressed concern over that change. Section 12.33

incorporates changes made by the 1996 Act amendments.

USDA received four comments stating that NRCS should withdraw from

the Interagency Memorandum of Agreement on Wetlands (MOA) with FWS,

Environmental Protection Agency (EPA), and the U.S. Army Corps of

Engineers (Corps). This comment is outside the scope of this rule, but

as discussed in greater detail below, NRCS is dedicated to continued

coordination with the other Federal agencies with wetland

responsibilities. Currently, the MOA provides a useful and available

framework for this coordination.

Description of Amendments

As the summary of the forum comments indicates, the statutory

changes affect provisions throughout 7 CFR part 12. Because of these

numerous changes, USDA will republish part 12 in its entirety to help

the public form opinions and offer comments. When USDA reviews the

comments received from the public, those comments concerning new

regulatory provisions will receive greater consideration.

In addition to revisions necessary to accommodate changes in the

Act, USDA makes several changes to interpret, clarify, or specify

procedures followed in the implementation for the HEL and WC

provisions. USDA invites public comment on these changes.

Amendments to the HEL Provisions

USDA finds that the following regulatory changes will improve the

quality of implementation of the HEL provisions of the 1985 Act:

Section 12.5(a)(6)(ii) is amended to list factors that

NRCS will consider when a landowner requests a variance related to

weather, pest, or disease problems.

Section 12.22(c) is added to clarify that when fields are

combined, the part of the new field that was previously a highly

erodible field shall continue to be subject to the highly erodible land

requirements.

Section 12.23(a) is amended to clarify that the adequacy

of a conservation system will be evaluated according to whether it

conforms to the NRCS field office technical guide in use at the time

that the plan or system is developed or revised.

Section 12.23(b) is added to clarify procedures to be used

to evaluate the adequacy of conservation systems for achieving

substantial reduction in soil erosion on land with and without cropping

history.

Section 12.23(c) is added to specify that conservation

field trials included in a person's conservation plan must have prior

approval by NRCS and must be documented in the person's conservation

plan specifying the limited time period during which the field trial is

in effect.

Section 12.23(j) sets forth the factors to be considered

by the FSA State Committee in determining whether to grant a person's

request for relief based on undue economic

[[Page 47022]]

hardship in implementing a conservation system.

Amendments to the WC Provisions

USDA finds that the following changes will improve the

implementation of the WC provisions of the 1985 Act (WC provisions):

Identification of wetland types: The WC provisions clearly limit

the conversion of wetlands and the planting of an agricultural

commodity on a converted wetland, yet the technical identification of

when these provisions are triggered can prove complex. Even though the

1985 Act implicitly identifies three distinct land types (wetlands,

converted wetlands, and non-wetlands), the inherent complexity of

natural systems and the diversity of land management methods available

to an agricultural producer require that greater sophistication be used

in application of broad national standards to local conditions. Some

areas of land have been planted to an agricultural commodity but still

exhibit the characteristic of a natural wetland if cropping ceases for

even a short period of time. Likewise, areas managed for hay or pasture

can exhibit the characteristics of a natural wetland if the management

of the area ceases. Some activities can permanently remove most of the

water from an area without making the production of an agricultural

commodity possible while natural events can make the production of an

agricultural commodity possible without permanently removing water from

an area.

Since 1987, USDA has identified in policy the threshold

characteristics that define when: a wetland has been manipulated

sufficiently to make the production of an agricultural commodity

possible; a wetland is ``converted;'' conditions meet a particular

exemption identified under the 1985 Act; and a producer has expanded

the drainage system beyond what existed prior to December 23, 1985. The

USDA is adding definitions to Sec. 12.2 to state more precisely the

variety of wetland types found in the agricultural landscape. Section

12.5 and Secs. 12.30-12.33 are amended to describe how these wetland

types relate to particular exemptions from ineligibility. In this

manner, agricultural producers are provided the maximum flexibility to

manage their lands in a manner that will not trigger the ineligibility

provisions of the 1985 Act.

Coordination with other Federal agencies: Consistent with the

intent expressed in the Manager's Report accompanying the 1996 Act

amendments, the changes made in this rule ``do not supersede the

wetland protection authorities and responsibilities of the

Environmental Protection Agency [EPA] or the Corps of Engineers [the

Corps] under Section 404 of the Clean Water Act.'' This rule is

promulgated under the authority of the 1985 Act, as amended, and

therefore does not affect the obligations of any person under other

Federal statutes, or the legal authorities of any other Federal agency

including, for example, EPA's authority to determine the geographic

scope of Clean Water Act jurisdiction. Nonetheless, NRCS, the Corps,

and EPA place a high priority on adopting procedures and policies that

minimize duplication and inconsistencies between the wetland

conservation provisions of the 1985 Act and the Clean Water Act section

404 programs. To help achieve these important policy objectives, on

January 6, 1994, four Federal agencies with wetland responsibilities

(USDA, EPA, the Department of the Interior, the Department of the Army)

entered into a Memorandum of Agreement (MOA), regarding the delineation

of wetlands for purposes of section 404 of the Clean Water Act and the

WC provisions. This MOA provides a framework for continuing

coordination between the Federal agencies regarding the administration

of Federal wetland laws. Consistent with the objectives of the MOA, the

NRCS will continue to coordinate with the other Federal agencies in the

development of its policies and procedures related to the

implementation of these regulations.

More specifically, the agencies will coordinate to develop policies

and procedures for evaluating the accuracy of existing non-certified

wetland determinations made by NRCS. The necessary first step in these

procedures will be to make an assessment of the quality of previous

determinations. After completing the quality assessment, in order to

provide certainty for the agricultural community, the Federal agencies

will complete the process of validating prior determinations in an

expeditious manner.

It is also the goal of the agencies to minimize duplication and

inconsistencies between the WC provisions and the Clean Water Act. The

agencies will coordinate to develop policies and procedures to minimize

duplication and inconsistencies between the WC provisions and the Clean

Water Act programs regarding other issues; in particular, conversion

for non-agricultural use, minimal effects determinations (including

categorical minimal effects exemptions), mitigation determination, or

other written agreements between persons and NRCS, the re-establishment

of agriculture use on abandoned farmed wetlands and farmed-wetland

pasture, conversions due to NRCS wetland determination errors, and

drainage maintenance. As part of this effort, the Corps intends to

develop a new Clean Water Act nationwide permit that addresses NRCS

minimal effects determinations, NRCS mitigation requirements, and

modify the existing nationwide permit that addresses voluntary wetland

restoration (See 61 FR part VII (June 17, 1996)).

In the MOA, the agencies agreed to follow certain guidelines for

delineating wetlands. The MOA agencies currently use the 1987 Corps of

Engineers Wetland Delineation Manual (1987 Corps Manual) for

delineating wetlands on areas where the native vegetation is intact

(i.e., non-agricultural lands) and use the National Food Security Act

Manual, Third ed. (NFSAM), for delineating wetlands on areas where the

native vegetation has been removed due to ongoing agricultural

activities (i.e., agricultural lands).

Copies of the NFSAM and the MOA are available from the NRCS, P.O.

Box 2890, Washington, D.C., 20013. Copies of the 1987 Corps Manual are

available from the National Technical Information Service (NTIS), 5285

Port Royal Road, Attn: Order Department, Springfield, Virginia, 22171.

Copies of the Supplemental guidance issued by the Corps concerning use

of the 1987 Manual (i.e., the October 7, 1991, Questions and Answers,

and the March 6, 1992, Clarification and Interpretation Memorandum) may

be obtained by contacting the Regulatory Branch of the local Corps

district, the EPA Wetlands Hotline at (800) 832-7828, or the Regulatory

Branch of Corps headquarters (Office of the Chief of Engineers) at

(202) 272-0199. NRCS will publish notice in the Federal Register

concerning a change in the Federal wetland delineation criteria that

may be used in implementation of the WC provisions.

This interim final rule, however, only applies to administration of

Title XII of the 1985 Act. As discussed earlier, the four agencies have

identified a need to expand and revise the MOA to assure consistency

and fairness in the implementation of these acts. The current MOA will

remain in effect until it is amended or rescinded by the four agencies.

A goal of the Administration's 1993 Wetlands Plan is to harmonize

the WC provisions and the Clean Water Act to the extent practicable.

These regulations are modified in several ways to further the

President's Wetlands Plan. In

[[Page 47023]]

particular, Sec. 12.5(b)(5) provides that when a person requests relief

on the basis that an action was conducted in good faith, USDA may

consider whether the person has a record of violating the wetland

provisions of these regulations or other Federal, State, or local

wetland provisions.

Additionally, Sec. 12.6(e) is added to state that NRCS may accept

the assistance of other Federal agencies to carry out the wetland

responsibilities of these regulations. Sections 12.30(a) and (b)

provide that NRCS will consult with FWS at the State level to develop a

process for implementation of the WC provisions.

Section 12.30(c) describes the procedure for certification of

wetland determinations and specifies that certified wetland

determinations will meet current Federal mapping conventions.

A certified wetland determination will remain in effect unless the

person affected by the certification requests a review under certain

circumstances or the wetland characteristics are changed as a result of

human activities.

Section 12.31(b)(3) is amended to provide that the determination of

prevalence of hydrophytic vegetation will be made in accordance with

the current Federal wetland delineation methodology in use at the time

of the determination. This change assures that the four agencies will

utilize consistent and up-to-date technical standards and criteria.

Summary of Rule Modifications

Based on the changes in the 1996 Act and the other considerations

set forth above, the changes to 7 CFR part 12 adopted in this notice

are as follows:

Subpart A

This interim final rule adds several new definitions to Sec. 12.2.

The Department of Agriculture Reorganization Act of 1994 abolished

several agencies and established new agencies to assume Department

responsibilities. Therefore, Sec. 12.2 is amended to reflect the new

agencies with responsibilities for implementation of these regulations.

Section 12.2: This interim final rule adds new definitions for

``conservation plan,'' ``conservation system,'' and ``field'' as stated

in the statute. It also adds several new definitions related to types

of wetlands and management actions related to wetlands that have

previously only been identified in policy. Definitions for ``prior-

converted cropland,'' ``farmed wetland,'' ``farmed-wetland pasture,''

and ``commenced-conversion wetland'' have been added. Other provisions

of the rule have been amended, including Sec. 12.5 and Secs. 12.31-.33,

to incorporate these new definitions where applicable.

The 1996 Act amendments provide that a person who converts a

wetland may remain eligible for USDA program benefits if the loss of

wetland functions and values are mitigated through the restoration,

enhancement, or creation of a wetland. Therefore, definitions for

``creation'', ``enhancement'', and ``restoration'', have been added to

clarify this new flexibility.

Section 12.3: This interim final rule applies to all actions taken

after July 3, 1996, and to determinations made after, or pending on,

July 3, 1996, the date on which the HEL and WC statutory amendments

become effective. This section is amended to reflect the passage of the

1996 Act and the scope of these new provisions.

Section 12.4: Section 12.4 describes the actions that will cause a

person to lose eligibility for USDA program benefits and the program

benefits that are subject to reduction or loss. The 1996 Act treats HEL

and WC differently regarding the programs encompassed by each provision

and the extent of the sanctions if the provisions are violated. Section

12.4 deletes applicability to some programs, such as crop insurance and

obsolete programs. A person who violates the WC provisions may lose all

or only a portion of certain USDA benefits, but a person who violates

HEL could lose all of of these same benefits and additional program

benefits. Sections 12.4(c) is amended to include an interpretation of

which crop year's benefits are affected by a violation decision, and

sets forth the factors that FSA will consider in determining the extent

of benefits to be lost based on the seriousness of the violation.

Section 12.5: The 1996 Act amendments modify the provisions of

Sec. 12.5 regarding the exemptions from ineligibility for USDA program

benefits. Section 12.5(a) addresses the exemptions that apply to HEL

and Sec. 12.5(b) addresses the exemptions that apply to WC.

Section 12.5(a)(5) specifies that HEL violations that are

determined to have been made in good-faith are eligible for graduated

sanctions if they were on land that was converted from native

vegetation, i.e., rangeland or woodland, to crop production after

December 23, 1985. For good faith violations on land that was converted

from native vegetation, i.e., rangeland or woodland, to crop production

before December 23, 1985, the person will be allowed up to one year to

correct the problem before being found ineligible. After one year, if

the problem is not corrected, the ineligibility provisions of Sec. 12.4

will apply. Section 12.5(a)(6) grants an automatic variance if within

30 days NRCS fails to respond to a persons request for a variance

because of weather, pest, or disease. It describes criteria that NRCS

will consider when determining whether to grant a variance for a

natural disaster such as weather, pest, or disease. NRCS is especially

soliciting comments on how these criteria may be specified to ensure

that variances are granted where appropriate.

Under Sec. 12.5(b), the exemptions from ineligibility relative to

wetland conservation, there exists a new exemption for land that was

certified as having been converted prior to December 23, 1985, (prior-

converted croplands), but had returned to wetland characteristics after

that date. This exemption provides that if certain requirements are

met, a prior-converted cropland will not be considered abandoned for

purposes of implementation of these regulations. Likewise, there exists

another new exemption for areas that NRCS determined were manipulated

but were not completely converted prior to December 23, 1985, (farmed

wetlands and farmed-wetland pastures), but may revert to wetland status

through a voluntary restoration, enhancement, or creation action. This

exemption provides that if certain requirements are met, the area will

not be considered abandoned for purposes of implementation of these

regulations.

These exemptions do not address how the Corps may treat these

wetland types for purposes of section 404 of the Clean Water Act. The

Corps has a notice in 61 FR part VII (June 17, 1996) to issue, reissue,

and modify the nationwide permits for section 404 of the Clean Water

Act that addresses these issues.

The 1996 Act provides that certain wetland conversion activities

that were conducted pursuant to a permit issued under section 404 of

the Clean Water Act may be exempt from ineligibility under the WC

provisions, if the conversion activity was adequately mitigated for

purposes of these provisions. This rule provides that a person who

received an individual permit under section 404 of the Clean Water Act

after December 23, 1985, and met certain sequencing requirements, is

exempt from the ineligibility provisions of these regulations.

This rule, however, provides that a person whose conversion

activity is encompassed by a nationwide or regional general permit

issued pursuant to section 404 of the Clean Water Act

[[Page 47024]]

may not be exempt under these regulations. USDA will evaluate whether

any mitigation was required, and whether the wetland functions and

values lost by the conversion activity were adequately replaced before

USDA decides whether the conversion activity is exempt from

ineligibility under these regulations.

The regulations that existed prior to this interim final rule

described a detailed procedure by which a person could receive a

commenced conversion determination from FSA. Persons who believed that

they qualified for such a determination had to request one from FSA by

September 19, 1988. The purpose of the determination was to minimize

any unnecessary economic hardship to someone who had incurred

substantial financial obligations related to the conversion of a

wetland prior to December 23, 1985, but had not actually converted the

wetland by that date. Any person who received a commenced-conversion

wetland determination had to complete the conversion activity by

January 1, 1995, to retain the exemption status. Because the commenced

conversion determination had to be received by 1988 and the conversion

had to be completed by the end of 1994, the references in the rule

related to the process to obtain a determination have been removed. If

a person completed conversion activity by January 1, 1995, the land

will qualify for the same exemptions from ineligibility as prior-

converted cropland. If, however, a person did not complete the

conversion activity by that date, the land will be subject to the same

requirements under this rule as farmed wetlands.

The 1996 Act provides that a person may remain eligible for an

action resulting in the conversion of a wetland if the wetland

functions and values are adequately mitigated through the restoration

of a converted wetland, the enhancement of an existing wetland, or the

creation of a new wetland. Section 12.5(b)(4) provides that this

exemption applies if the mitigation is completed in accordance with

several requirements, including that the person implement a mitigation

plan approved by NRCS. The mitigation plan may be a single document or

it may be a component of a larger conservation plan created voluntarily

by the program participant. The requirements for this exemption are

similar to the requirements for restoration of a converted wetland

under the current regulations, such as the granting of an easement to

USDA, recording an easement on the public land records, and that such

mitigation not be at the expense of the Federal government.

The 1996 Act provides that USDA may expend Federal funds for the

establishment of a pilot program for mitigation banking. USDA has not

yet decided whether it will establish such a pilot program or what the

particulars of such a program would be. During the public comment

period, USDA is especially soliciting comments from the public

regarding this subject.

The 1996 Act removes the requirement for graduated sanctions if the

FSA determines that a wetland violation was committed in good faith.

Central to the determination about whether a person acted in good faith

is the knowledge available to the person concerning the existence of a

wetland on the subject land. This knowledge can either be direct, such

as information received from NRCS in the form of a wetland

determination, or can be inferred from a person's past experience with

violating wetland laws or regulations. This interim final rule provides

that if a person is considered to have acted in good faith and the

person agrees to implement a mitigation plan, then USDA may waive

applying the ineligibility provisions of Sec. 12.4.

Section 12.6: Section 12.6 concerns the respective responsibilities

of USDA agencies; the new responsibilities created by the 1996 Act have

been added. Section 12.6(b) is amended to specify that FSA is

responsible for determining the extent of reduction in benefits for

wetland violations based on the seriousness of the violation, and for

determining whether a person should receive relief because application

of a conservation system would result in undue economic hardship.

Section 12.6(c) is amended to reflect that NRCS is responsible for

providing information to FSA relating to the seriousness of a

violation.

In response to the need to coordinate with the MOA agencies

regarding wetland determinations, a new paragraph has been added to

Sec. 12.6 New paragraph (f) provides that NRCS may accept the

assistance of the MOA agencies in implementing these regulations. This

paragraph also confirms that NRCS will continue to seek the

coordination of the other agencies on wetland matters to increase the

public's understanding of the importance of wetland functions and

values and the objectives of the WC provisions and the Clean Water Act.

Section 12.7: Section 12.7 addresses certification by a program

participant that such participant is in compliance with the HEL and WC

provisions. Section 12.7 is amended to allow a person to certify

application of practices in a plan or measurement of residue required

by a plan.

Section 12.8: Section 12.8 is amended to revise the definition of

affiliated persons for the purpose of determining whose benefits may be

affected by a decision and to what extent. In particular, Sec. 12.8(b)

is amended to provide that spouses who provide sufficient evidence of

separate operations shall not be considered affiliates, and

partnerships, trusts, and joint ventures are not considered affiliates

if the interest is held indirectly through another business enterprise.

Section 12.8(d) limits the reduction in payments for partnerships,

joint ventures, trust, or other enterprises to the extent of interest

held by the person responsible for the violation. Section 12.8(e)

states that limitations on affiliations if action has been taken to

avoid payment reductions for partnerships, joint ventures, trusts, or

the application of the sanctions provided for in the regulations.

Subpart B

Section 12.21: Section 12.21 is amended to include a reference to

publication of soil loss equations at 7 CFR part 610.

Section 12.22: Section 12.22 is amended to allow combining HEL and

non-HEL fields, but the requirements of these regulations continue to

apply to the previous HEL portion only.

Section 12.23: Section 12.23 is amended to specify that:

conservation systems shall be technically and economically feasible

(based on local resource conditions and available technology), cost

effective, and shall not cause undue economic hardship; the standard

for determining whether a plan provides a substantial reduction in

erosion is the estimated annual level of erosion compared to the level

before the system is applied; for new land brought into production, in

no case will the required conservation system permit a substantial

increase in erosion; procedures for conducting field trials as on-farm

reseach; and procedures and criteria used by FSA when a person requests

relief based on undue economic hardship.

Subpart C

Subpart C addresses the technical responsibilities of NRCS and the

technical criteria used to make the necessary determinations for

wetland conservation under these regulations.

Section 12.30: Section 12.30 is amended to reflect that NRCS will

continue to work with the Corps, EPA, and FWS to improve the quality of

wetland determinations and other

[[Page 47025]]

processes that affect the implementation of the WC provisions.

The 1996 Act repealed the requirement for consultation with FWS,

thus allowing the Secretary to determine under what circumstances FWS

should be utilized in the implementation of the WC provisions. Section

12.30 is amended to reflect that NRCS will develop a process at the

State level, in coordination with FWS, for implementing the WC

provisions and review such implementation on an annual basis. The

technical expertise of FWS may be utilized whenever NRCS determines

that such expertise is needed to address adequately the requirements of

the WC provisions or to enhance the quality of implementation.

Under the new mitigation flexibility provided by the 1996 Act, the

expertise of FWS will be valuable for conducting wetland functional

assessments associated with minimal effects determinations and

formulation of mitigation plans. The State-level process is intended,

in part, to identify any geographic or programmatic areas where NRCS

may need additional technical expertise to assess biological impacts of

proposed wetland conversions.

Section 12.30 is also amended to address the process for

certification of wetland determinations for the implementation of the

WC provisions of the 1985 Act. If NRCS certified a wetland

determination prior to July 3, 1996, the certification will remain

valid. Upon request, a person may obtain certification of a wetland

determination. A certified wetland determination means that the

determination is of sufficient quality to make a determination of

ineligibility for program benefits under these regulations. As

indicated above, NRCS will continue to work with the other MOA agencies

to coordinate the identification and certification of wetlands for the

purposes of these regulations and for the Clean Water Act. The agencies

recognize the importance of providing certainty for the agricultural

community as to the status of their wetland determinations which have

not been certified. The Federal agencies are therefore considering

establishing a specific time frame for completing the evaluation of

existing wetland determinations. During this time frame, an evaluation

would be made as to the accuracy of wetland determinations within a

given geographic area or of a specific type of wetland. Based on the

evaluation, landowners would be notified whether their current wetland

determinations are acceptable for both the WC provisions and the Clean

Water Act. USDA is especially seeking comments regarding implementation

of this process.

Section 12.31; Section 12.31 is amended to reflect that NRCS will

utilize the 1987 Corps Manual for determining the prevalence of

hydrophytic vegetation. Section 12.31 is also amended to add the

criteria for determining ``categorical minimal effect exemptions.'' If

NRCS identifies any categories of conversion activities and conditions

which would only have a minimal effect on wetland functions and values,

then such activities and conditions will be placed on a list of

``categorical minimal effect exemptions'' and such conversion

activities and conditions will be considered exempt from the

ineligibility provisions of these regulations. NRCS will incorporate

such activities and conditions in the provisions of these regulations

USDA is especially seeking comments regarding implementation of this

new exemption. For purposes of the Clean Water Act, the Corps intends

to address this provision as part of its reissuance of the Clean Water

Act section 404 nationwide permits (See 61 FR part VII (June 17,

1996)).

Sections 12.32 and 12.33: Sections 12.32 and 12.33 have been

amended to incorporate the definitions for farmed wetland, farmed-

wetland pasture, commenced-conversion wetland, and prior-converted

cropland, where appropriate.

Section 12.33: Section 12.33 has also been amended to modify the

conditions under which NRCS will consider a particular site to be

abandoned for purposes of these regulations. A person who wishes to

allow a particular site to revert to wetland conditions should contact

NRCS to ascertain what documentation is necessary to prevent such land

from being considered abandoned for purposes of the WC provisions of

these regulations. For purposes of the Clean Water Act, the Corps

intends to address this provision as part of its re-issuance of the

Clean Water Act section 404 nationwide permits (See 61 FR part VII

(June 17, 1996)).

The amendments to part 12 do not affect the recordkeeping

requirements and estimated burdens previously reviewed and approved

under Office of Management and Budget control number 0560-0004.

List of Subjects in 7 CFR Part 12

Administrative practices and procedures, Soil Conservation,

Wetlands.

Accordingly, Title 7 of the Code of Federal Regulations is amended

by revising Part 12 as follows:

PART 12--HIGHLY ERODIBLE LAND AND WETLAND CONSERVATION

Subpart A--General Provisions

Sec.

12.1 General.

12.2 Definitions.

12.3 Applicability.

12.4 Determination of ineligibility.

12.5 Exemptions.

12.6 Administration.

12.7 Certification of compliance.

12.8 Affiliated persons.

12.9 Landlords and tenants.

12.10 Scheme or device.

12.11 Action based upon advice or action of USDA.

12.12 Appeals.

Subpart B--Highly Erodible Land Conservation

12.20 NRCS responsibilities regarding highly erodible land.

12.21 Identification of highly erodible lands criteria.

12.22 Highly erodible field determination criteria.

12.23 Conservation plans and conservation systems.

Subpart C--Wetland Conservation

12.30 NRCS responsibilities regarding wetlands.

12.31 Onn-site wetland identification criteria.

12.32 Converted wetland identification criteria.

12.33 Use of wetland and converted wetland.

12.34 Paperwork Reduction Act assigned number.

Authority: 16 U.S.C. 3801 et seq.

Subpart A--General Provisions

Sec. 12.1 General.

(a) Scope. This part sets forth the terms and conditions under

which a person who produces an agricultural commodity on highly

erodible land or designates such land for conservation use, plants an

agricultural commodity on a converted wetland, or converts a wetland

shall be determined to be ineligible for certain benefits provided by

the United States Department of Agriculture (USDA) and agencies and

instrumentalities of USDA.

(b) Purpose. The purpose of the provisions of this part are to

remove certain incentives for persons to produce agricultural

commodities on highly erodible land or converted wetland and to

thereby--

(1) Reduce soil loss due to wind and water erosion;

(2) Protect the Nation's long-term capability to produce food and

fiber;

(3) Reduce sedimentation and improve water quality; and

(4) Assist in preserving the functions and values of the Nation's

wetlands.

[[Page 47026]]

Sec. 12.2 Definitions.

(a) General. The following definitions shall be applicable for the

purposes of this part:

Agricultural commodity means any crop planted and produced by

annual tilling of the soil, including tilling by one-trip planters, or

sugarcane.

CCC means the Commodity Credit Corporation, wholly-owned government

corporation within USDA organized under the provisions of 15 U.S.C. 714

et seq.

Conservation District (CD) means a subdivision of a State or local

government organized pursuant to the applicable law to develop and

implement soil and water conservation activities or programs.

Conservation plan means the document that--

(1) Applies to highly erodible cropland;

(2) Describes the conservation system applicable to the highly

erodible cropland and describes the decisions of the person with

respect to location, land use, tillage systems, and conservation

treatment measures and schedules; and

(3) Is approved by the local soil conservation district in

consultation with the local committees established under section

8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 U.S.C.

590h(b)(5)) and the Natural Resources Conservation Service (NRCS) for

purposes of compliance with this part.

Conservation system means a combination of one or more conservation

measures or management practices that are--

(1) Based on local resource conditions, available conservation

technology, and the standards and guidelines contained in the NRCS

field office technical guides (available from NRCS State offices); and

(2) Designed for purposes of this part to achieve, in a cost-

effective and technically practicable manner, a substantial reduction

in soil erosion or a substantial improvement in soil conditions on a

field or group of fields containing highly erodible cropland when

compared to the level of erosion or soil conditions that existed before

the application of the conservation measures and management practices.

Conservation use or set aside means cropland that is designated as

conservation-use acreage, set aside, or other similar designation for

the purpose of fulfilling provisions under any acreage-limitation or

land-diversion program administered by the Secretary of Agriculture

requiring that the producer devote a specified acreage to conservation

or other non-crop production uses.

Creation of a wetland means the development of the hydrologic,

geochemical, and biological components necessary to support and

maintain a wetland where a wetland did not previously exist. Any

wetland established on a non-hydric soil will be considered a created

wetland.

CSREES means the Cooperative State Research, Education, and

Extension Service, an agency of USDA which is generally responsible for

coordinating the information and educational programs of USDA.

Department means the United States Department of Agriculture

(USDA).

Enhancement of a wetland means the alteration of an existing

wetland to increase its specific functions and values. Enhancement

actions include new capabilities, management options, structures, or

other actions to influence one or several functions and values.

Erodibility index means a numerical value that expresses the

potential erodibility of a soil in relation to its soil loss tolerance

value without consideration of applied conservation practices or

management.

FSA means the Farm Service Agency, an agency of USDA which is

generally responsible for administering commodity production adjustment

and certain conservation programs of USDA.

Field means a part of a farm that is separated from the balance of

the farm by permanent boundaries such as fences, roads, permanent

waterways, or other similar features. At the option of the owner or

operator of the farm, croplines may also be used to delineate a field

if farming practices make it probable that the croplines are not

subject to change. Any highly erodible land on which an agricultural

commodity is produced after December 23, 1985, and is not exempt under

Sec. 12.5(a), shall be considered part of the field in which the land

was included on December 23, 1985, unless, to carry out this title, the

owner and FSA agree to modify the boundaries of the field.

Highly erodible land means land that has an erodibility index of 8

or more.

Hydric soils means soils that, in an undrained condition, are

saturated, flooded, or ponded long enough during a growing season to

develop an anaerobic condition that supports the growth and

regeneration of hydrophytic vegetation.

Hydrophytic vegetation means plants growing in water or in a

substrate that is at least periodically deficient in oxygen during a

growing season as a result of excessive water content.

Landlord means a person who rents or leases farmland to another

person.

Local FSA office means the county office of the Farm Service Agency

serving the county or a combination of counties in the area in which a

person's land is located for administrative purposes.

NRCS means the Natural Resources Conservation Service, an agency

within USDA which is generally responsible for providing technical

assistance in matters of natural resources conservation and for

administering certain conservation programs of USDA.

Operator means the person who is in general control of the farming

operations on the farm during the crop year.

Owner means a person who is determined to have legal ownership of

farmland and shall include a person who is purchasing farmland under

contract.

Person means an individual, partnership, association, corporation,

cooperative, estate, trust, joint venture, joint operation, or other

business enterprise or other legal entity and, whenever applicable, a

State, a political subdivision of a State, or any agency thereof, and

such person's affiliates as provided in Sec. 12.8 of this part.

Restoration of a wetland means the re-establishment of wetland

conditions, including hydrologic condition or native hydrophytic

vegetation, to an area where a wetland had previously existed.

Secretary means the Secretary of USDA.

Sharecropper means a person who performs work in connection with

the production of a crop under the supervision of the operator and who

receives a share of such crop for such labor.

Soil map unit means an area of the landscape shown on a soil map

which consists of one or more soils.

State means each of the 50 states, the District of Columbia, the

Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United

States, American Samoa, the Commonwealth of the Northern Mariana

Islands, or the Trust Territory of the Pacific Islands.

Tenant means a person usually called a ``cash tenant'', ``fixed-

rent tenant'', or ``standing rent tenant'' who rents land from another

for a fixed amount of cash or a fixed amount of a commodity to be paid

as rent; or a person (other than a sharecropper) usually called a

``share tenant'' who rents land from another person and pays as rent a

share of the crops or proceeds therefrom. A tenant shall not be

considered the farm operator unless the tenant is determined

[[Page 47027]]

to be the operator pursuant to this part and 7 CFR part 718.

Wetland, except when such term is a part of the term ``converted

wetland'', means land that--

(1) Has predominance of hydric soils;

(2) Is inundated or saturated by surface or groundwater at a

frequency and duration sufficient to support a prevalence of

hydrophytic vegetation typically adapted for life in saturated soil

conditions; and

(3) Under normal circumstances does not support a prevalence of

such vegetation, except that this term does not include lands in Alaska

identified as having a high potential for agricultural development and

a predominance of permafrost soils.

Wetland determination means a decision regarding whether or not an

area is a wetland, including identification of wetland type and size. A

wetland determination may include identification of an area as one of

the following types of wetland--

(1) Artificial wetland is an area that was formerly non-wetland,

but now meets wetland criteria due to human activities, such as:

(i) An artificial lake or pond created by excavating or diking land

that is not a wetland to collect and retain water that is used

primarily for livestock, fish production, irrigation, wildlife, fire

control, flood control, cranberry growing, or rice production, or as a

settling pond; or

(ii) A wetland that is temporarily or incidentally created as a

result of adjacent development activity;

(2) Commenced-conversion wetland is a wetland, farmed wetland,

farmed-wetland pasture, or a converted wetland on which conversion

began, but was not completed, prior to December 23, 1985.

(3) Converted wetland is a wetland that has been drained, dredged,

filled, leveled, or otherwise manipulated (including the removal of

woody vegetation or any activity that results in impairing or reducing

the flow and circulation of water) for the purpose of or to have the

effect of making possible the production of an agricultural commodity

without further application of the manipulations described herein if:

(i) Such production would not have been possible but for such

action, and

(ii) Before such action such land was wetland, farmed wetland, or

farmed-wetland pasture and was neither highly erodible land nor highly

erodible cropland;

(4) Farmed wetland is a wetland that prior to December 23, 1985,

was manipulated and used to produce an agricultural commodity, and on

December 23, 1985, did not support woody vegetation and met the

following hydrologic criteria:

(i) Is inundated for 15 consecutive days or more during the growing

season or 10 percent of the growing season, whichever is less, in most

years (50 percent chance or more), or

(ii) If a pothole, playa, or pocosion, is ponded for 7 or more

consecutive days during the growing season in most years (50 percent

chance of more) or is saturated for 14 or more consecutive days during

the growing season in most years (50 percent chance or more);

(5) Farmed-wetland pasture is wetland that was manipulated and

managed for pasture or hayland prior to December 23, 1985, and on

December 23, 1985, met the following hydrologic criteria:

(i) Inundated or ponded for 7 or more consecutive days during the

growing season in most years (5) percent chance or more), or

(ii) Saturated for 14 or more consecutive days during the growing

season in most years (50 percent chance or more);

(6) Not-inventoried land, is an area for which no evaluation of

soils, vegetation, or hydrology has been conducted to determine if

wetland criteria are met;

(7) Non-wetland is;

(i) Land that under natural conditions does not meet wetland

criteria, or

(ii) Is converted wetland the conversion of which occurred prior to

December 23, 1985, and on that date, the land did not meet wetland

criteria but and agricultural commodity was not produced and the area

was not managed for pasture or hay;

(8) Prior-converted cropland is a converted wetland where the

conversion occurred prior to December 23, 1985, an agricultural

commodity had been produced at least once before December 23, 1985, and

as of December 23, 1985, the converted wetland did not support woody

vegetation and met the following hydrologic criteria:

(i) Inundation was less than 15 consecutive days during the growing

season or 10 percent of the growing season, whichever is less, in most

years (50 percent chance or more); and

(ii) If a pothole, playa or pocosin, ponding was less than 7

consecutive days during the growing season in most years (50 percent

chance or more) and saturation was less than 14 consecutive days during

the growing season most years (50 percent chance or more); or

(9) Wetland, as defined above in this section.

Wetland delineation means outlining the boundaries of a wetland

determination on aerial photography, digital imagery, other graphic

representation of the area, or on the land.

(b) Terms for FSA operations. In the regulations in this part, and

in all instructions, forms, and documents in connection therewith, all

other words and phrases specifically relating to FSA operations shall,

unless required by the subject matter or the specific provisions of

this part, have the meanings assigned to them in the regulations at

part 718 of this title that govern reconstitutions of farms,

allotments, and bases and any subsequent amendment thereto.

Sec. 12.3 Applicability.

(a) Geographic scope. The provisions of this part shall apply to

all land, including Indian tribal land, in the fifty States, the

District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin

Island of the United States, American Samoa, the Commonwealth of the

Northern Mariana Islands, and the Federated States of Micronesia, the

Republic of Palau, and the Republic of the Marshall Islands.

(b) Effective date. The provisions of this part apply to all

actions taken after July 3, 1996, and to determinations made after or

pending on July 3, 1996, except to the extent that Sec. 12.5(a)(5) and

12.5 (b)(4) through (b)(8) specify retroactive application on December

23, 1985, and November 28, 1990, for certain actions and determinations

regarding wetlands and converted wetlands. Actions taken and

determinations made prior to July 3, 1996, are subject to regulations

set forth in this part as of July 2, 1996, except as otherwise provided

in this part. Further, to the extent that a person may be eligible for

an exemption for an action taken before July 3, 1996, the action is

subject to the provisions of this part.

Sec. 12.4 Determination of ineligibility.

(a) Actions. Except as provided in Sec. 12.5, a person shall be

ineligible for all or a portion of USDA program benefits listed in this

section if:

(1) The person produces an agricultural commodity on a field in

which highly erodible land is predominant, or designates such a field

for conservation use;

(2) The person produces an agricultural commodity on wetland that

was converted after December 23, 1995; or

(3) After November 28, 1990, the person converts a wetland by

draining, dredging, filling, leveling, removing woody vegetation, or

other means for the purpose, or to have the effect, of making the

production of an agricultural commodity possible.

[[Page 47028]]

(b) Highly erodible land. A person determined to be ineligible

under paragraph (a)(1) of this section may be ineligible for all

program benefits listed in (d) and (e) of this section.

(c) Wetland conservation. A person determined to be ineligible

under paragraph (a)(2) of this section shall be ineligible for all or a

portion of the USDA program benefits listed in paragraph (d) of this

section for which the person otherwise would have been eligible during

the crop year of the commodity that was planted on the converted

wetland. A person determined to be ineligible under paragraph (a)(3) of

this section for the conversion of a wetland shall be ineligible for

all or a portion of the USDA program benefits listed in paragraph (d)

of this section for which the person otherwise would have been eligible

during the crop year which is equal to the calendar year during which

the violation occurred and each subsequent crop year until the

converted wetland is restored or the loss of wetland functions and

values have been mitigated prior to the beginning of such calendar year

in accordance with Sec. 12.5(b)(4)(i) (A) and (C) through (F) of this

part. Ineligibility under paragraph (a)(2) or (a)(3) of this section

may be reduced, in lieu of the loss of all benefits specified under

paragraph (d) of this section for such crop year, based on the

seriousness of the violation, as determined by the FSA Deputy

Administrator for Farm Programs or designee upon recommendation by the

FSA County Committee. Factors such as the information that was

available to the affected person prior to the violation, previous land

use patterns, the existence of previous wetland violations under this

part or under other Federal, State, or local wetland provisions, the

wetland functions and values affected, the recovery time for full

mitigation of the wetland functions and values, and the impact that a

reduction in payments would have on the person's ability to repay a

USDA farm loan shall be considered to making this determination.

(d) Programs subject to either highly erodible land or wetland

conservation. USDA program benefits covered by a determination of

ineligibility under this rule are:

(1) Contract payments under a production flexibility contract,

marketing assistance loans, and any type of price support or payment

made available under the Agricultural Market Transition Act, the

Commodity Credit Corporation Charter Act (15 U.S.C. 714 et seq.), or

any other Act;

(2) A farm credit program loan made or guaranteed under the

Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) or

any other provision of law administered by FSA if the Secretary

determines that the proceeds of such loan will be used for a purpose

that contributes to the conversion of wetlands that would make

production of an agricultural commodity possible or for a purpose that

contributes to excessive erosion of highly erodible land (i.e.,

production of an agricultural commodity or highly erodible land without

a conservation plan or conservation system as required by this part);

(3) A payment made pursuant to a contract entered into under the

Environmental Quality Incentives Program under chapter 4 of subtitle D

of the Food Security Act of 1985, as amended; or a payment under any

other provision of Subtitle D of that Act;

(4) A payment made under section 401 or 402 of the Agricultural

Credit Act of 1978 (16 U.S.C. 2201 or 2202);

(5) A payment, loan, or other assistance under section 3 or 8 of

the Watershed Protection and Flood Prevention Act (16 U.S.C. 1003 or

1006a).

(e) Programs subject to highly erodible land only. In addition to

programs listed in paragraph (d) of this section, a person determined

to be ineligible under paragraph (a)(1) of this section shall be

ineligible as determined by FSA for the following USDA program benefits

for which the person otherwise would have been eligible during the crop

year for which the determination applies:

(1) A farm storage facility loan made under section 4(h) of the

Commodity Credit Corporation Charter Act (15 U.S.C. 714b(h));

(2) A disaster payment made under the Federal Agricultural

Improvement and Reform Act, Pub. L. 104-127, or any other act; and

(3) A payment made under section 4 or 5 of the Commodity Credit

Corporation Charter Act (15 U.S.C. 714b or 714c) for the storage of an

agricultural commodity acquired by the Commodity Credit Corporation.

(f) Prior loans. The provisions of paragraphs (a), (b), and (c) of

this section do not apply to any loan described in paragraphs (d) or

(e) of this section that was made prior to December 23, 1985.

(g) Determination of ineligibility. For the purpose of paragraph

(a) of this section, a person shall be determined to have produced an

agricultural commodity on a field in which highly erodible land is

predominant or to have designated such a field for conservation use, to

have produced an agricultural commodity on converted wetland, or to

have converted a wetland if:

(1) NRCS has determined that--

(i) Highly erodible land is predominant in such field, or

(ii) All or a portion of the field is converted wetland; and

(2) FSA has determined that the person is or was the owner or

operator of the land, or entitled to share in the crops available from

the land, or in the proceeds thereof; and

(3) With regard to the provisions of paragraph (a)(1) and (a)(2) of

this section, FSA has determined that the land is or was planted to an

agricultural commodity or was designated as conversation use during the

year for which the person is requesting benefits.

(h) Intent to participate in USDA programs. Persons who wish to

participate in any of the USDA programs described in paragraph (d) or

(e) of this section are responsible for contacting the appropriate

agency of USDA well in advance of the intended participated date so

that Form AD-1026 can be completed. This contact will help assure that

the appropriate determinations regarding highly erodible land or

wetland, and conversation plans or conversation systems are scheduled

in a timely manner. A late contact may not allow sufficient time for

USDA to service the request and could result in a substantial delay in

receiving a USDA determination of eligibility or ineligibility.

Sec. 12.5 Exemption.

(a) Exemptions regarding highly erodible land.

(1) Highly erodible cropland in production or in USDA programs

during 1981 through 1985 crop years. During the period beginning on

December 23, 1985, and ending on the later of January 1, 1990, or the

date that is two years after the date the cropland on which an

agricultural commodity is produced was surveyed by NRCS to determine if

such land is highly erodible, no person shall be determined to be

ineligible for benefits as provided in Sec. 12.4 as the result of the

production of an agricultural commodity on any highly erodible land:

(i) That was planted to an agricultural commodity in any year 1081

through 1985; or

(ii) That was set aside, diverted, or otherwise not cultivated in

any such crop years under a program administered by the Secretary for

any such crops to reduce production of an agricultural commodity.

[[Page 47029]]

(2) Compliance with a conservation plan or conservation system. as

further specified in this part, no person shall be ineligible for the

program benefits described in Sec. 12.4 as the result of production of

an agricultural commodity on highly erodible land or the designation of

such land for conservation use if such production or designation is in

compliance with a conservation plan or conservation system approved

under paragraph (a)(2)(i) or (a)(2)(ii) of this section. A person shall

not be ineligible for program benefits under Sec. 12.4 as the result of

the production of an agricultural commodity on highly erodible land or

as the result of designation of such land as conservation use if the

production or designation is:

(i) In an area within a CD, under a conservation system that has

been approved by the CD after the CD determines that the conservation

system is in conformity with technical standards set forth in the NRCS

field office technical guide for such district; or

(ii) In an area not within a CD, under a conservation system that

has been approved by NRCS to be adequate for the production of such

agricultural commodity on highly erodible land or for the designation

of such land as conservation use.

(3) Reliance upon NRCS determination for highly erodible land. A

person may be relieved from ineligibility for program benefits as the

result of the production of an agricultural commodity which was

produced on highly erodible land or for the designation of such land as

conservation use in reliance on a determination by NRCS that such land

was not highly erodible land, except that this paragraph shall not

apply to any agricultural commodity that was planted on highly erodible

land, or for the designation of highly erodible land as conservation

use after NRCS determines that such land is highly erodible land, and

the person is notified of such determinations.

(4) Areas of 2 acres or less. No person shall be determined to be

ineligible under Sec. 12.4 for noncommercial production of agricultural

commodities on highly erodible land on an area of 2 acres or less if it

is determined by FSA that such production is not intended to circumvent

the conservation requirements otherwise applicable under this part.

(5) Good faith.

(i) No person shall become ineligible under Sec. 12.4 as a result

of the failure of such person to apply a conservation system on highly

erodible land that was converted from native vegetation, i.e. rangeland

or woodland, to crop production before December 23, 1985, if FSA

determines such person has acted in good faith and without the intent

to violate the provisions of this part and if NRCS determines that the

person complies with paragraph (a)(5)(ii) of this section.

(ii) A person is who determined to meet the requirements of

paragraph (a)(5)(i) of this section shall be allowed a reasonable

period of time, as determined by NRCS, but not to exceed one year,

during which to implement the measures and practices necessary to be

considered applying the person's conservation plan. If a person does

not take the required corrective actions, the person may be determined

to be ineligible for the crop year during which such actions were to be

taken as well as any subsequent crop years. Notwithstanding the good-

faith requirements of paragraph (a)(5)(i) of this section, if NRCS

observes a possible compliance deficiency while providing on-site

technical assistance, NRCS shall provide to the responsible person, not

later than 45 days after observing the possible violation, information

regarding actions needed to comply with the plan and this subtitle.

NRCS shall provide this information in lieu of reporting the

observation as a violation, if the responsible person attempts to

correct the deficiencies as soon as practicable, as determined by NRCS,

after receiving the information, and if the person takes corrective

action as directed by NRCS not later than one year after receiving the

information. If a person does not take the required corrective actions,

the person may be determined to be ineligible for the crop year during

which the compliance deficiencies occurred as well as any subsequent

crop years.

(iii) No person shall become ineligible under Sec. 12.4 as a result

of failure to apply a conservation system with respect to highly

erodible cropland that was converted from native vegetation, i.e.,

rangeland or woodland, to crop production after December 23, 1985, if

such person has acted in good faith and without an intent to violate

the provisions of this part. The person shall, in lieu of the loss of

all benefits specified under Sec. 12.4 (d) and (e) for such crop year,

be subject to a reduction in benefits of not less than $500 nor more

than $5,000 depending upon the seriousness of the violation, as

determined by FSA. The dollar amount of the reduction will be

determined by FSA and may be based on the number of acres and the

degree of erosion hazard for the area in violation, as determined by

NRCS, or upon such other factors as FSA deems appropriate.

(iv) Any person whose benefits are reduced in a crop year under

paragraph (a)(5) of this section may be eligible for all of the

benefits specified under Sec. 12.4 (d) and (e) for any subsequent crop

year if NRCS determines that such person is applying a conservation

plan according to the schedule set forth in the plan on all highly

erodible land planted to an agricultural commodity or designated as

conservation use.

(6) Allowable variances.

(i) Notwithstanding any other provisions of this part, no person

shall be determined to be ineligible for benefits as a result of the

failure of such person to apply a conservation system if NRCS

determines that--

(A) The failure is technical and minor in nature and that such

violation has little effect on the erosion control purposes of the

conservation plan applicable to the land on which the violation has

occurred; or

(B) The failure is due to circumstances beyond the control of the

person; or

(C) NRCS grants a temporary variance from the practices specified

in the plan for the purpose of handling a specific problem, including

weather, pest, and disease problems, which NRCS determines cannot

reasonably be addressed except through such variance.

(ii) If the person's request for a temporary variance involves the

use of practices or measures to address weather, pest, or disease

problems, NRCS shall make a decision on whether to grant the variance

during the 30-day period beginning on the date of receipt of the

request. If NRCS fails to render a decision during the period, the

temporary variance shall be considered granted unless the person

seeking the variance had reason to know that the variance would not be

granted. In determining whether to grant a variance for natural

disasters such as weather, pest, or disease problems, NRCS will

consider such factors as:

(A) The percent of a stand damaged or destroyed by the event;

(B) The percent of expected crop production compared to normal

production for that crop;

(C) The documented invasion of non-native insects, weeds, or

diseases for which no recognized treatment exists;

(D) Whether an event is severe or unusual based on historical

weather records; and

(E) Other specific circumstances caused by a natural event that

prevented the implementation of conservation practices or systems,

installation of structures, or planting of cover crops.

[[Page 47030]]

(b) Exemptions for wetlands and converted wetlands.

(1) General exemptions. A person shall not be determined to be

ineligible for program benefits under Sec. 12.4 as the result of the

production of an agricultural commodity on converted wetland or the

conversion of wetland if:

(i) The land is a prior-converted cropland and meets the definition

of a prior-converted cropland as of the date of a wetland determination

by NRCS;

(ii) The land has been determined by NRCS to be a prior-converted

cropland and such determination has been certified, and NRCS determines

that the wetland characteristics returned after the date of the wetland

certification as a result of--

(A) The lack of maintenance of drainage, dikes, levees, or similar

structures,

(B) The lack of management of the lands containing the wetland, or

(C) Circumstances beyond the control of the person;

(iii) The land was determined by NRCS to be a farmed wetland or a

farmed-wetland pasture and--

(A) Such land meets wetland criteria through a voluntary

restoration, enhancement, or creation action after that determination,

(B) The technical determinations regarding the baseline site

conditions and the restoration, enhancement, or creation action have

been adequately documented by NRCS,

(C) The proposed conversion action is documented by the NRCS prior

to implementation, and

(D) The extent of the proposed conversion is limited so that the

conditions will be at least equivalent to the wetland functions and

values that existed at the time of implementation of the voluntary

wetland restoration, enhancement, or creation action;

(iv) NRCS has determined that the conversion if for a purpose that

does not make the production of an agricultural commodity possible,

such as conversions for fish production, trees, vineyards, shrubs,

cranberries, agricultural waste management structures, livestock ponds,

fire control, or building and road construction and no agricultural

commodity is produced on such land;

(v) NRCS has determined that the actions of the person with respect

to the conversion of the wetland or the combined effect of the

production of an agricultural commodity on a wetland converted by the

person or by someone else, individually and in connection with all

other similar actions authorized by NRCS in the area, would have only a

minimal effect on the wetland functions and values of wetlands in the

area;

(vi) (A) After December 23, 1985, the Army Corps of Engineers

issued an individual permit pursuant to section 404 of the Clean Water

Act, 33 U.S.C. 1344, authorizing such action and the permit required

mitigation that adequately replaced the functions and values of the

wetlands converted, as determined by NRCS, or

(B) After December 23, 1985, the action is encompassed under

section 404 of the Clean Water Act, 33 U.S.C. 1344, by an Army Corps of

Engineers nationwide or regional general permit and the wetland

functions and values were adequately mitigated, as determined by NRCS;

or

(vii) The land is determined by NRCS to be--

(A) An artificial wetland,

(B) A wet area created by a water delivery system, irrigation,

irrigation system, or application of water for irrigation,

(C) A nontidal drainage or irrigation ditch excavated in non-

wetland, or

(D) A wetland converted by actions of persons other than the person

applying for USDA program benefits or any of the person's predecessors

in interest after December 23, 1985, if such conversion was not the

result of a scheme or device to avoid compliance with this part.

Further drainage improvement on such land is not permitted without loss

of eligibility for USDA program benefits, unless NRCS determines under

paragraph (b)(1)(v) of this section that further drainage activities

applied to such land would have minimal effect on the wetland functions

and values in the area. In applying this paragraph, a converted wetland

shall be presumed to have been converted by the person applying for

USDA program benefits unless the person can show that the conversion

was caused by a third party with whom the person was not associated

through a scheme or device as described under Sec. 12.10 of this part.

In this regard, activities of a water resource district, drainage

district, or similar entity will be attributed to all persons within

the jurisdiction of the district or other entity who are assessed for

the activities of the district or entity. Accordingly, where a person's

wetland is converted due to the actions of the district or entity, the

person shall be considered to have caused or permitted the drainage.

Notwithstanding the provisions of the preceding sentences and as

determined by FSA to be consistent with the purposes of this part, the

activities of a drainage district or other similar entity will not be

attributed to a person to the extent that the activities of the

district or entity were beyond the control of the person and the

wetland converted is not used by the person for the production of an

agricultural commodity or a forage crop for harvest by mechanical means

or mitigation for the converted wetland occurs in accordance with this

part.

(2) Commenced conversion wetlands.

(i) The purpose of a determination of a commenced conversion made

under this paragraph is to implement the legislative intent that those

persons who had actually started conversion of a wetland or obligated

funds for conversion prior to December 23, 1985, would be allowed to

complete the conversion so as to avoid unnecessary economic hardship.

(ii) All persons who believed they had a wetland or converted

wetland for which conversion began but was not completed prior to

December 23, 1985, must have requested by September 19, 1988, FSA to

make a determination of commencement in order to be considered exempt

under this section.

(iii) Any conversion activity considered by FSA to be commenced

under this section lost its exempt status if such activity as not

completed on or before January 1, 1995. For purposes of this part, land

on which such conversion activities were completed by January 1, 1995,

shall be evaluated by the same standards and qualify for the same

exemptions as prior-converted croplands. For purposes of this part,

land on which such conversion activities were not completed by January

1, 1995, shall be evaluated by the same standards and qualify for the

same exemptions as wetlands or famed wetlands, as applicable.

(iv) Only those wetlands for which the construction had begun, or

to which the contract or purchased supplies and materials related,

qualified for a determination of commencement. However, in those

circumstances where the conversion of wetland did not meet the specific

requirements of this paragraph, the person could have requested a

commencement of conversion determination from the FSA Deputy

Administrator for Farm Programs, upon a showing that undue economic

hardship would have resulted because of substantial financial

obligations incurred prior to December 23, 1985, for the primary and

direct purpose of converting the wetland.

(3) Wetlands farmed under natural conditions. A person shall not be

determined to be ineligible for program benefits under Sec. 12.4 of

this part as a result of the production of an agricultural commodity on

a wetland on which the owner or operator of a farm

[[Page 47031]]

or ranch uses normal cropping or ranching practices to produce

agricultural commodities in a manner that is consistent for the area,

where such production is possible as a result of natural conditions,

such as drought, and is without action by the producer that alters the

hydrology or removes woody vegetation.

(4) Mitigation.

(i) No person shall be determined to be ineligible under Sec. 12.4

for any action associated with the conversion of a wetland if the

wetland functions and values are adequately mitigated, as determined by

NRCS, through the restoration of a converted wetland, the enhancement

of an existing wetland, or the creation of a new wetland, if the

mitigation--

(A) Is in accordance with a mitigation plan approved by NRCS;

(B) Is in advance of, or concurrent with, the wetland conversion or

the production of an agricultural commodity, as applicable;

(C) Is not at the expense of the federal government in either

supporting the direct or indirect costs of the restoration activity or

costs associated with acquiring or securing mitigation sites, except if

conducted under a mitigation banking pilot program established by USDA;

(D) Occurs on lands in the same general area of the local watershed

as the converted wetlands, provided that for purposes of this

paragraph, lands in the same general area of the local watershed may

include regional mitigation banks;

(E) Is on lands for which the owner has granted an easement to

USDA, recorded the easement on public land records, and has agreed to

the maintenance of the restored, created, or enhanced wetland for as

long as the converted wetland for which the mitigation occurred remains

in agricultural use or is not returned to its original wetland

classification with equivalent functions and values; and

(F) Provides the equivalent functions and values that will be lost

as a result of the wetland conversion.

(ii) A mitigation plan is a record of decisions that document the

actions necessary to compensate for the loss of wetland functions and

values that result from converting a wetland. The mitigation plan may

be a component of a larger natural resources conservation plan.

(iii) The State Conservationist, in consultation with the State

Technical Committee, may name certain types or classes of wetland not

eligible for exemption under paragraph (b)(4)(i) of this section where

the State Conservationist determines that mitigation will not achieve

equivalent replacement of wetland functions and values within a

reasonable time frame or for other reasons identified by the State

Conservationist. Any type or class of wetland that a State

Conservationist identifies as not eligible for exemption under

paragraph (b)(4)(i) of this section will be published in the Federal

Register for inclusion in this part.

(5) Good Faith Violations.

(i) A person who is determined under Sec. 12.4 to be ineligible for

benefits as the result of the production of an agricultural commodity

on a wetland converted after December 23, 1985, or as the result of the

conversion of a wetland after November 28, 1990, may regain eligibility

for benefits if--

(A) FSA determines that such person acted in good faith and without

the intent to violate the wetland provisions of this part, and

(B) NRCS determines that the person within an agreed to period, not

to exceed 1 year, is implementing all practices in a mitigation plan.

(ii) In determining whether a person acted in good faith under

paragraph (b)(5)(i)(A) of this section, the FSA shall consider such

factors as whether--

(A) The characteristics of the site were such that the person

should have been aware that a wetland existed on the subject land,

(B) NRCS had informed the person about the existence of a wetland

on the subject land,

(C) The person did not convert the wetland, but planted an

agricultural commodity on converted wetland when the person should have

known that a wetland previously existed on the subject land,

(D) The person has a record of violating the wetland provisions of

this part or other Federal, State, or local wetland provisions, or

(E) There exists other information that demonstrates that the

person acted with the intent to violate the wetland provisions of this

part.

(iii) After the requirements of paragraph (b)(5)(i) of this section

are met, USDA may waive applying the ineligibility provisions of

Sec. 12.4.

(6) Reliance upon NRCS wetland determination. (i) A person shall

not be ineligible for program benefits as a result of taking an action

in reliance on a previous certified wetland determination by NRCS.

(ii) A person who may be ineligible for program benefits as the

result of the production of an agricultural commodity on converted

wetland or for the conversion of a wetland may seek relief under

Sec. 12.11 of this part if such action was taken in reliance on an

incorrect technical determination by NRCS as to the status of such

land. If the error caused the person to make a substantial financial

investment, as determined by the NRCS, for the conversion of a wetland,

the person may be relieved of ineligibility for actions related to that

portion of the converted wetland for which the substantial financial

investment was expended in conversion activities. The relief available

under this paragraph shall not apply to situations in which the person

knew or reasonably should have known that the determination was in

error because the characteristics of the site were such that the person

should have been aware that a wetland existed on the subject land, or

for other reasons.

(7) Responsibliity to provide evidence. It is the responsibility of

the person seeking an exemption related to converted wetlands under

this section to provide evidence, such as receipts, crop-history data,

drawings, plans or similar information, for purposes of determining

whether the conversion or other action is exempt in accordance with

this section.

Sec. 12.6 Administration.

(a) General. A determination of ineligibility for benefits in

accordance with the provisions of this part shall be made by the agency

of USDA to which the person has applied for benefits. All

determinations required to be made under the provisions of this part

shall be made by the agency responsible for making such determinations,

as provided in this section.

(b) Administration by FSA.

(1) The provisions of this part which are applicable to FSA will be

administered under the general supervision of the Administrator, FSA,

and shall be carried out in the field in part by State FSA committees

and county FSA committees (COC).

(2) The FSA Deputy Administrator for Farm Programs may determine

any question arising under the provisions of this part which are

applicable to FSA and may reverse or modify any determination of

eligibility with respect to programs administered by FSA made by a

State FSA committee or COC or any other FSA office or FSA official

(except the Administrator) in connection with the provisions of this

part.

(3) FSA shall make the following determinations which are required

to be made in accordance with this part:

(i) Whether a person produced an agricultural commodity on a

particular field as determined under Sec. 12.5(a)(1);

(ii) The establishment of field boundaries;

[[Page 47032]]

(iii) Whether land was planted to an agricultural commodity in any

of the years, 1981 through 1985, for the purposes of Sec. 12.5(a)(1);

(iv) Whether land was set aside, diverted, or otherwise not

cultivated under a program administered by the Secretary for any crop

to reduce production of an agricultural commodity under Sec. 12.4(g)

and Sec. 12.5(a)(1);

(v) Whether for the purposes of Sec. 12.9, the production of an

agricultural commodity on highly erodible land or converted wetland by

a landlord's tenant or sharecropper is required under the terms and

conditions of the agreement between the landlord and such tenant or

sharecropper;

(vi) Whether the conversion of a particular wetland was commenced

before December 23, 1985, for the purposes of Sec. 12.5(b)(3);

(vii) Whether the conversion of a wetland was caused by a third

party under Sec. 12.5(b)(1)(vii)(D);

(viii) Whether certain violations were made in good faith under

Secs. 12.5(a)(5) or 12.5(b)(5);

(ix) The determination of the amount of reduction in benefits based

on the seriousness of the violation, based on technical information

provided by NRCS;

(x) The determination of whether the application of the producer's

conservation system would impose an undue economic hardship on the

producer; and

(xi) Whether the proceeds of a farm loan made, insured, or

guaranteed by FSA will be used for a purpose that will contribute to

excessive erosion of highly erodible land or to the conversion of

wetland.

(4) A representative number of farms selected in accordance with

instructions issued by the Deputy Administrator shall be inspected by

an authorized representative of FSA to determine compliance with any

requirement specified in this part as a prerequisite for obtaining

program benefits.

(5) FSA may consult with U.S. Fish and Wildlife Service on third-

party determinations.

(c) Administraiton by NRCS.

(1) The provisions of this part that are applicable to NRCS shall

be administered under the general supervision of the Deputy Chief for

Natural Resources Conservation Programs, and shall be carried out in

the field by the regional conservationist, state conservationist, area

conservationist, and district conservationist or other NRCS

representative.

(2) An NRCS representative shall make the following determinations

which are required to be made in accordance with this part:

(i) Whether land is highly erodible or has a wetland type or a

converted wetland identified in accordance with the provisions of this

part;

(ii) Whether highly erodible land is predominant on a particular

field under Sec. 12.22;

(iii) Whether the conservation plan that a person is applying is

based on the local NRCS field office technical guide and is approved

by--

(A) The CD and NRCS, or

(B) By NRCS;

(iv) Whether the conservation system that a person is using has

been approved by the CD under Sec. 12.5(a)(2) or, in an area not within

a CD, a conservation system approved by NRCS to be adequate for the

production of an agricultural commodity on highly erodible land;

(v) Whether the actions of a person(s) with respect to the

conversion of a wetland or production of an agricultural commodity on

converted wetland would have only a minimal effect on the functions and

values of wetlands in the area;

(vi) Whether an approved conservation plan is being applied on

highly erodible fields in accordance with the schedule specified

therein or whether a failure to apply the plan is technical and minor

in nature, due to circumstances beyond the control of the person, or

whether a temporary variance form the requirements of the plan should

be granted;

(vii) Whether an approved conservation system is being used on a

highly erodible field;

(viii) Whether the conversion of a wetland is for the purpose or

has the effect of making the production of an agricultural commodity

possible;

(ix) Whether a farmed wetland or farmed-wetland pasture is

abandoned;

(x) Whether the planting of an agricultural commodity on a wetland

is possible under natural conditions;

(xi) Whether maintenance of existing drainage of a wetland

described in Sec. 12.33 exceeds the scope and effect of the original

drainage;

(xii) Whether a plan for the mitigation of a converted wetland will

be approved and whether the mitigation of a converted wetland is

accomplished according to the approved mitigation plan;

(xiii) Whether all technical information relating to the

determination of a violation and severity of a violation has been

provided to FSA for making payment-reduction determinations; and

(xiv) Whether or not a commenced-conversion activity was completed

by January 1, 1995.

(3) NRCS may provide such other technical assistance for

implementation of the provisions of this part as is determined to be

necessary.

(4) A person may obtain a highly erodible land or a wetland scope-

and-effect determination by making a written request on Form AD-1026.

The determination will be made in writing, and a copy will be provided

to the person.

(5) A determination of whether or not an area meets the highly

erodible land criteria or whether wetland criteria, identified in

accordance with the current Federal wetland delineation methodology in

use at the time of the determination and that are consistent with

current mapping conventions, may be made by the NRCS representative

based upon existing records or other information and without the need

for an on-site determination. This determination will be made by the

NRCS representative as soon as possible following a request for such a

determination.

(6) An on-site determination as to whether an area meets the

applicable criteria shall be made by an NRCS representative if the

person has disagreed with the determination made under paragraph (c)(5)

of this section, or if adequate information is not otherwise available

to an NRCS representative on which to make an off-site determination.

(7) An on-site determination, where applicable, will be made by the

NRCS representative as soon as possible following a request for such a

determination, but only when site conditions are favorable for the

evaluation of soils, hydrology, or vegetation.

(8) With regard to wetland determinations, if an area is

continuously inundated or saturated for long periods of time during the

growing season to such an extent that access by foot to make a

determination of predominance of hydric soils or prevalence of

hydrophytic vegetation is not feasible, the area will be determined to

be a wetland.

(9) Persons who are adversely affected by a determination made

under this section and believe that the requirements of this part were

improperly applied may appeal, under Sec. 12.12 of this part, any

determination by NRCS.

(d) Administration by CSREES. The CSREES shall coordinate the

related information and education program for

[[Page 47033]]

USDA concerning implementation of this rule.

(e) Assistance of other Federal agencies. If NRCS determines,

through agreement or otherwise, that the purposes of this part would be

furthered by the assistance of other Federal agencies with wetland

responsibilities, NRCS may accept such assistance and adopt any or all

such actions by these agencies as an action by an NRCS representative

under this part.

Sec. 12.7 Certification of compliance.

(a) Self-certification. In order for a person to be determined to

be eligible for any of the benefits specified in Sec. 12.4:

(1) It must be determined by USDA whether any field in which the

person applying for the benefits has an interest and intends to produce

an agricultural commodity contains highly erodible land;

(2) The person applying for or receiving the benefits must certify

in writing on Form AD-1026 that such person will not produce an

agricultural commodity on highly erodible land, or designate such land

for conservation use; or plant an agricultural commodity on a converted

wetland; or convert a wetland to make possible the production of an

agricultural commodity during the crop year in which the person is

seeking such benefits, unless such actions are exempt, under Sec. 12.5,

from the provisions of Sec. 12.4 of this part;

(3) A person may certify application of practices required by the

person's conservation plan. NRCS shall permit a person who makes such a

certification with respect to a conservation plan to revise the

conservation plan in any manner, if the same level of conservation

treatment provided for by the conservation system under the person's

conservation plan is maintained. NRCS may not revise the person's

conservation plan without the concurrence of the person;

(4) The person applying for a FSA direct or guaranteed farm credit

program loan must certify that such person shall not use the proceeds

of the loan for a purpose that will contribute to excessive erosion on

highly erodible land or to conversion of wetlands for the purpose, or

to have the effect, of making the production of an agricultural

commodity possible; and

(5) The person applying for the benefits must authorize and provide

representatives of USDA access to all land in which such person has an

interest for the purpose of verifying any such certification.

(b) Availability to other agencies. Each agency of USDA shall make

all certifications of compliance received by such agency and the

results of investigations concerning such certifications of compliance

available to other agencies.

(c) Compliance. A certification made in accordance with this

section does not relieve any person from compliance with provisions of

this part.

Sec. 12.8 Affiliated persons.

(a) Ineligibility of affiliated persons. Ineligibility of an

individual or entity under this part for benefits shall also be an

ineligibility for benefits for ``affiliated persons'' as defined in

this section.

(b) Affiliated persons of an individual. If the person requesting

benefits is an individual, the affiliated persons are:

(1) The spouse and minor child of such person or guardian of such

child; except that spouses who establish to the satisfaction of the COC

that operations of the husband and wife are maintained separately and

independently shall not be considered affiliates;

(2) Any partnership, joint venture, or other enterprise in which

the person or any person listed in paragraphs (b)(1) has an ownership

interest or financial interest; unless such interest is held indirectly

through another business enterprise; or

(3) Any trust in which the individual, business enterprise, or any

person listed in paragraph (b)(1) is a beneficiary or has a financial

interest, unless such interest is held indirectly through another

business enterprise.

(c) Affiliated persons of an entity. If the person who has

requested benefits from USDA is a corporation, partnership, or other

joint venture, the affiliated persons are any participant or

stockholder therein of the corporation, partnership, or other joint

venture, except for persons who have an indirect interest through

another business enterprise in such corporation, partnership, or other

joint venture or persons with a 20 percent or less share in a

corporation.

(d) Limitation. Any reduction in payments which results only from

the application of the affiliation provisions of this section to a

partnership, joint venture, trust, or other enterprise shall be limited

to the extent of interest held in such partnership, joint venture,

trust, or other enterprise by the person or business enterprise that

committed the violation. However, for violations for which the business

enterprise is considered directly responsible under the provisions of

this part, the business enterprise shall be subject to a full loss of

benefits, including those instances in which the business enterprise

has an interest in the land where the violation occurred or where the

business enterprise had an interest in the crops produced on the land.

(e) Avoidance of this part. Limitations on affiliation shall not

apply as needed to correct for any action that would otherwise tend to

defeat the purposes of this part.

Sec. 12.9 Landlords and tenants.

(a) Landlord eligibility.

(1) Except as provided in paragraph (a)(2) of this section, the

ineligibility of a tenant or sharecropper for benefits (as determined

under Sec. 12.4) shall not cause a landlord to be ineligible for USDA

program benefits accruing with respect to land other than those in

which the tenant or sharecropper has an interest.

(2) The provisions of paragraph (a)(1) of this section shall not be

applicable to a landlord if the production of an agricultural commodity

on highly erodible land or converted wetland by the landlord's tenant

or sharecropper is required under the terms and conditions of the

agreement between the landlord and such tenant or sharecropper and such

agreement was entered into after December 23, 1985, or if the landlord

has acquiesced in such activities by the tenant or sharecropper.

(b) Tenant or renter eligibility.

(1) The ineligibility of a tenant or renter may be limited to the

program benefits listed in Sec. 12.4(c) accruing with respect to only

the farm on which the violation occurred if:

(i) The tenant or renter shows that a good-faith effort was made to

comply by developing an approved conservation plan for the highly

erodible land in a timely manner and prior to any violation of the

provisions of this part; and

(ii) The owner of such farm refuses to apply such a plan and

prevents the tenant or renter from implementing certain practices that

are a part of the approved conservation plan; and

(iii) FSA determines that the lack of compliance is not a part of a

scheme or device as described in Sec. 12.10.

(2) If relief is granted under paragraph (b)(1) of this section,

the tenant or renter must actively apply those conservation treatment

measures that are determined to be within the control of the tenant or

renter.

Sec. 12.10 Scheme or device.

All or any part of the benefits listed in Sec. 12.4 otherwise due a

person from USDA may be withheld or required to be refunded if the

person adopts or participates in adopting any scheme or

[[Page 47034]]

device designed to evade, or which has the effect of evading, the

provisions of this part. Such acts shall include, but are not limited

to, concealing from USDA any information having a bearing on the

application of the provisions of this part or submitting false

information to USDA or creating entities for the purpose of concealing

the interest of a person in a farming operation or to otherwise avoid

compliance with the provisions of this part. Such acts shall also

include acquiescence in, approval of, or assistance to acts which have

the effect of, or the purpose of, circumventing these regulations.

Sec. 12.11 Action based upon advice or action of USDA.

The provisions of part 718 of this Title, as amended, relating to

performance based upon the action or advice of a County Committee (COC)

or State FSA Committee shall be applicable to the provisions of this

part. In addition, if it is determined by the appropriate USDA agency

that the action of a person which would form the basis of any

ineligibility under this part was taken by such person in good-faith

reliance on erroneous advice, information, or action of any other

authorized representative of USDA, the appropriate agency may make such

benefits available to the extent that similar relief would be allowed

under 7 CFR part 718.

Sec. 12.12 Appeals.

Any person who has been or who would be denied program benefits in

accordance with Sec. 12.4 as the result of any determination made in

accordance with the provisions of this part may obtain a review of such

determination in accordance with the administrative appeals procedures

of the agency which rendered such determination. Agency appeal

procedures are contained in the Code of Federal Regulations as follows:

FSA, part 780 of this title; NRCS, part 614 of this title; Rural

Utilities Service, part 1900, subpart B of this title.

Subpart B--Highly Erodible Land Conservation

Sec. 12.20 NRCS responsibilities regarding highly erodible land.

In implementing the provisions of this part, NRCS shall, to the

extent practicable:

(a) Develop and maintain criteria for identifying highly erodible

lands;

(b) Prepare and make available to the public lists of highly

erodible soil map units;

(c) Make soil surveys for purposes of identifying highly erodible

land; and

(d) Provide technical guidance to conservation districts which

approve conservation plans and systems, in consultation with local

county FSA committees, for the purposes of this part.

Sec. 12.21 Identification of highly erodible lands criteria.

(A) Basis for identification as highly erodible. Soil map units and

an erodibility index will be used as the basis for identifying highly

erodible land. The erodibility index for a soil is determined by

dividing the potential average annual rate of erosion for each soil by

its predetermined soil loss tolerance (T) value. The T value represents

the maximum annual rate of soil erosion that could occur without

causing a decline in long-term productivity. The equation for measuring

erosion is described below.

(1) The potential average annual rate of sheet and rill erosion is

estimated by multiplying the following factors of the Universal Soil

Loss Equation (USLE):

(i) Rainfall and runoff (R);

(ii) The degree to which the soil resists water erosion (K); and

(iii) The function (LS), which includes the effects of slope length

(L) and steepness (S).

(2) The potential average annual rate of wind erosion is estimated

by multiplying the following factors of the Wind Erosion Equation

(WEQ): Climatic characterization of windspeed and surface soil moisture

(C) and the degree to which soil resists wind erosion (I).

(3) The USLE is explained in the U.S. Department of Agriculture

Handbook 537, ``Predicting Rainfall Erosion Losses.'' The WEQ is

explained in the paper by Woodruff, N.P., and F. H. Siddaway, 1965, ``A

Wind Erosion Equation,'' Soil Science Society of America Proceedings,

Vol. 29. No. 5, pages 602-608. Values for all the factors used in these

equations are contained in the NRCS field office technical guide and

the references which are a part of the guide. The Universal Soil Loss

Equation, the Revised Universal Soil Loss Equation, and the Wind

Erosion Equation and the rules under which NRCS uses the equations are

published at Secs. 610.11 through 610.15 of this title.

(b) Highly erodible. A soil map unit shall be determined to be

highly erodible if either the RKLS/T or the CI/T value for the map unit

equals or exceeds 8.

(c) Potentially highly erodible. Whenever a soil map unit

description contains a range of a slope length and steepness

characteristics that produce a range of LS values which result in RKLS/

T quotients both above and below 8, the soil map unit will be entered

on the list of highly erodible soil map units as ``potentially highly

erodible.'' The final determination of erodibility for an individual

field containing these soil map unit delineations will be made by an

on-site investigation.

Sec. 12.22 Highly erodible field determination criteria.

(a) Predominance. Highly erodible land shall be considered to be

predominant on a field if either:

(1) 33.33 percent or more of the total field acreage is identified

as soil map units which are highly erodible; or

(2) 50 or more acres in such field are identified as soil map units

which are highly erodible.

(b) Modification of field boundaries. A person may request the

modification of field boundaries for the purpose of excluding highly

erodible land from a field. Such a request must be submitted to, and is

subject to the approval of, FSA. FSA shall use the technical

determination of NRCS in approving this request.

(C) Impact of changing field boundaries. When field boundaries are

changed to include areas of land that were included in a field that was

previously determined to be predominately highly erodible according to

paragraph (a) of this section, such areas shall continue to be subject

to the requirements for predominately highly erodible fields, except as

provided in paragraph (b) of this section.

(d) Small area of noncropland. Small areas of noncropland within or

adjacent to the boundaries of existing highly erodible crop fields such

as abandoned farmsteads, areas around filled or capped wells, rock

piles, trees, or brush which are converted to cropland are considered

to meet the requirement of Sec. 12.5(a)(2) if they are included in an

approved conservation plan for the entire highly erodible field.

Sec. 12.23 Conservation plans and conservation systems.

(a) Use of field office technical guide. A conservation plan or

conservation system developed for the purposes of Sec. 12.5(a) must be

based on, and to the extent practicable conform with, the NRCS field

office technical guide in use at the time the plan is developed or

revised. For highly erodible croplands which were used to produce

agricultural commodities prior to December 23, 1985, the applicable

conservation systems in the field office technical guide are designed

to achieve substantial reductions in soil erosion. Conservation systems

shall be

[[Page 47035]]

technically and economically feasible; based on local resource

conditions and available conservation technology; cost-effective; and

shall not cause undue economic hardship on the person applying the

conservation system. Any conservation plans or systems that were

approved prior to July 3, 1996, are deemed to be in compliance with

this paragraph.

(b) Substantial reduction in soil erosion. For the purpose of

determining whether there is a substantial reduction in soil erosion on

a field containing highly erodible cropland which was used to produce

an agricultural commodity prior to December 23, 1985, the measurement

of erosion reduction achieved by applying a conservation plan or system

shall be based on a comparison of the estimated annual level of erosion

that is expected to occur on that portion of the field for which a

conservation plan or system was developed and is being applied, to the

estimated annual level of erosion that existed on that same portion of

the field before the application of a conservation plan or system. On a

field that is converted from native vegetation after July 3, 1996, and

where any crop production will result in increased erosion, in no case

will the required conservation plan or system permit a substantial

increase in erosion.

(c) Field trials. NRCS may allow a person to include in the

person's conservation plan or a conservation system under the plan, on

a field-trial basis, practices that are not currently approved but that

NRCS considers have a reasonable likelihood of success. These trials

must have prior approval by NRCS, and must be documented in the

person's conservation plan specifying the limited time period during

which the field trial is in effect. If, at the end of the conservation

field trial period, NRCS finds that the practice does not meet

conservation compliance requirements, the person will not be ineligible

for USDA program benefits during the period of the field trial.

(d) Highly erodible land previously under a Conservation Reserve

Program contract. Any person who owns or operates highly erodible land

that was under a Conservation Reserve Program contract as authorized by

section 1231 of the Food Security Act of 1985, as amended, shall have 2

years after the expiration of termination of the contract to fully

apply a conservation system if the conservation plan for such land

requires the installation of structural measures for the production of

an agricultural commodity. NRCS officials may extend this period one

additional year for circumstances beyond the control of the person. The

person shall not be required to meet a higher conservation standard

than the standard applied to other highly erodible cropland located

within the area served by the field office technical guide for the area

in which the field is located.

(e) Information regarding conservation options. NRCS, in providing

assistance to a person for the preparation or revision of a

conservation plan under this part, will provide such person with

information concerning cost-effective and applicable erosion control

alternatives, crop flexibility, or other conservation assistance

options that may be available.

(f) Timely request for assistance. Persons who require NRCS

assistance for the development of a conservation plan or the

installation of a conservation system are encouraged to request this

assistance well in advance of deadline dates for compliance; otherwise

the person may not be able to comply with these provisions and maintain

eligibility for USDA program benefits.

(g) Action by conservation districts. Conservation districts

approve or disapprove conservation plans or conservation systems after

NRCS determines that the plans or systems conform to the NRCS field

office technical guide. If a conservation district fails, without due

cause, to act on a request for conservation plan or conservation system

approval within 45 days, or if no conservation district exists, NRCS

will approve or disapprove, as appropriate, the conservation plan or

system in question.

(h) Application of a conservation plan or system. A person is

considered to be applying a conservation plan for purposes of

Sec. 12.5(a) if the conservation system or plan being applied achieves

or exceeds the substantial reduction in soil erosion as described in

paragraph (b) which the conservation system or plan was designed to

achieve. It is the responsibility of the person to:

(1) Certify that the conservation plan or system is being applied;

and

(2) Arrange for a revision of the conservation plan with NRCS, if

changes are made in land use, crop rotation or management, conservation

practices, or in the original schedule of practice installation that

would affect the achievement of substantial reduction in soil erosion

in a given crop year.

(i) Appeal to FSA. Persons who are adversely affected by the

determinations made under this subpart and believe that the

requirements of this subpart were improperly applied may appeal the

decision to FSA under Sec. 12.12.

(j) Undue economic hardship. After a technical determination has

been made, the FSA county committee shall, if a person asserts that the

application of the person's conservation system would impose an undue

economic hardship on the person, make a recommendation to the State FSA

Committee as to whether or not the application of the conservation

system would impose an undue economic hardship. The State FSA Committee

may provide the person with a variance on the basis of the hardship.

Under this variance, and any conditions that may be required in the

variance, the person will be considered to be in compliance with the

applicable provisions of this part. The State FSA Committee will

consider relevant factors, such as the cost of installation of required

conservation practices and benefits earned through programs subject to

compliance with this part, and the person's general economic situation.

Subpart C--Wetland Conservation

Sec. 12.30 NRCS responsibilities regarding wetlands.

(a) Technical and coordination responsibilities. In carrying out

the provisions of this part, NRCS shall:

(1) Oversee the development and application of criteria to identify

hydric soils in consultation with the National Technical Committee for

Hydric Soils and make available to the public an approved county list

of hydric soil map units, which is based upon the National List of

Hydric Soils;

(2) Coordinate with the U.S. Fish and Wildlife Service and others

in updating the National List of Plant Species that Occur in Wetlands;

(3) Make or approve wetland determinations, delineations and

certifications, functional assessments, mitigation plans, categorical

minimal effects, and other technical determinations relative to the

implementation of the wetland conservation provisions of this part;

(4) Develop and utilize off-site and on-site wetland identification

procedures;

(5) Assure quality of service and determinations through procedures

developed by NRCS in consultation with other Federal agencies that have

wetland responsibilities;

(6) Investigate complaints and make technical determinations

regarding potential violations;

(7) Develop a process at the state level, in coordination with the

U.S. Fish and Wildlife Service, to ensure that these provisions are

carried out in a technically defensible and timely

[[Page 47036]]

manner, seek assistance as appropriate, and annually review the

progress being made on implementation; and

(8) Conduct reviews of implementation and provide the Army Corps of

Engineers, Environmental Protection Agency, and the U.S. Fish and

Wildlife Service an opportunity to participate in this review.

(b) Technical assistance from others In carrying out the provisions

of this part, NRCS may request technical assistance from the U.S. Fish

and Wildlife Service, State or local agencies conservation districts,

or qualified private entities when NRCS determines that additional

staff resources or technical expertise are needed to address adequately

the requirements of this part or to enhance the quality of

implementation of this part.

(c) Certification of wetland determinations and wetland

delineations.

(1) Certification of a wetland determination means that the wetland

determination is of sufficient quality to make a determination of

ineligibility for program benefits under Sec. 12.4 of this part.

Certification of a wetland determination shall be completed according

to delineation procedures agreed to by the Army Corps of Engineers, the

Environmental Protection Agency, the U.S. Fish and Wildlife Service and

NRCS. NRCS may certify a wetland determination without making a field

investigation. NRCS will notify the person affected by the

certification and provide an opportunity to appeal the certification

prior to the certification becoming final. All wetland determinations

made after July 3, 1996, will be done on a tract basis and will be

considered certified wetland determinations. A not-inventoried

designation within a certified wetland is subject to change when the

soil, hydrology, and vegetation evaluation is completed and identified

as to type of wetland or as a non-wetland. This change from a not-

inventoried designation to an approved wetland designation will be done

at the request of the landowner or during a formal investigation of a

potential violation.

(2) The wetland determination and wetland delineation shall be

certified as final by the NRCS official 30 days after providing the

person notice of certification or, if an appeal is filed with USDA,

after the administrative appeal procedures are exhausted.

(3) In the case of an appeal, NRCS will review and certify the

accuracy of the determination of all lands subject to the appeal to

ensure that the subject lands have been accurately delineated. Prior to

a decision being rendered on the appeal, NRCS will conduct an on-site

investigation of the subject land.

(4) Before any benefits are withheld, an on-site investigation of a

potential wetland violation will be made by NRCS. The affected person

will be provided an opportunity to appeal the on-site determination to

USDA if the on-site determination differs from the original

determination. Such action by NRCS shall be considered a review of the

prior determination and certification of the delineation. If the prior

determination was a certified wetland determination, an appeal of the

NRCS on-site determination shall be limited to the determination that

the wetland was converted in violation of this part.

(5) A copy of the information from the final certified wetland

determination and the wetland delineation shall be recorded on official

USDA aerial photography, digital imagery, or other graphic

representation of the area.

(6) As long as the affected person is in compliance with the

wetland conservation provision of this part, and as long as the area is

devoted to the use and management of the land for production of food,

fiber, horticultural crops, a certification made under this section

will remain valid and in effect until such time as the person affected

by the certification requests review of the certification by NRCS. A

person may request review of a certification only if a natural event

alters the topography or hydrology of the subject land to the extent

that the final certification is no longer a reliable indication of site

conditions, or if NRCS concurs with an affected person that an error

exists in the current wetland determination

Sec. 12.31 On-site wetland identification criteria.

(a) Hydric soils.

(1) NRCS shall identify hydric soils through the use of published

soil maps which reflect soil surveys completed by NRCS or through the

use of on-site reviews. If a published soil map is unavailable for a

given area, NRCS may use unpublished soil maps which were made

according to the specifications of the National Cooperative Soil Survey

or may conduct an on-site evaluation of the land.

(2) NRCS shall determine whether an area of a field or other parcel

of land has a predominance of hydric soils that are inundated or

saturated as follows:

(i) If a soil map unit has hydric soil as all or part of its name,

that soil map unit or portion of the map unit related to the hydric

soil shall be determined to have a predominance of hydric soils;

(ii) If a soil map unit is named for a miscellaneous area that

meets the criteria for hydric soils (i.e., riverwash, playas, beaches,

or water) the soil map unit shall be determined to have a predominance

of hydric soils; or

(iii) If a soil map unit contains inclusions of hydric soils, that

portion of the soil map unit identified as hydric soil shall be

determined to have a predominance of hydric soils.

(3) List of hydric soils.

(i) Hydric soils are those soils which meet criteria set forth in

the publication ``Hydric Soils of the United States 1985'' which was

developed by the National Technical Committee for Hydric Soils and

which is incorporated by reference. This publication may be obtained

upon request by writing NRCS at U.S. Department of Agriculture, P.O.

Box 2890, Washington, DC 20013, and is available for inspection at the

Office of the Federal Register Information Center, 800 North Capitol

Street NW., Suite 700, Washington, DC 20408. Incorporation of this

publication by reference was approved by the Director of the Federal

Register on June 24, 1986. The materials are incorporated as they exist

on the date of the approval and a notice of any change in these

materials will be published in the Federal Register.

(ii) An official list of hydric soil map units shall be maintained

at the local NRCS office and shall include--

(A) All soils from the National List of Hydric Soils that can be

found in that field office area, and

(B) Any soil map units or areas which the state conservationist

determines to meet such hydric soil criteria.

(iii) Any deletions of a hydric soil unit from the hydric soil map

unit list must be made according to the established procedure contained

in the publication ``Hydric Soils of the United States 1985'' for

adding or deleting soils from the National List of Hydric Soils.

(b) Hydrophytic vegetation. Hydrophytic vegetation consists of

plants growing in water or in a substrate that is at least periodically

deficient in oxygen during a growing season as a result of excessive

water content.

(1) A plant shall be considered to be a plant species that occurs

in wetland if such plant is listed in the National List of Plant

Species that Occur in Wetlands. The publication may be obtained upon

request from the U.S. Fish and Wildlife Service at National Wetland

Inventory, Monroe Bldg. Suite 101, 9720 Executive Center Drive, St.

Petersburg, Florida 33702.

(2) For the purposes of the definition of ``wetland'' in Sec. 12.2

of this part, land shall be determined to have a prevalence of

hydrophytic vegetation if:

(i) NRCS determines through the criteria specified in paragraph

(b)(3) of

[[Page 47037]]

this section that under normal circumstances such land supports a

prevalence of hydrophytic vegetation. The term ``normal circumstances''

refers to the soil and hydrologic conditions that are normally present,

without regard to whether the vegetation has been removed; or

(ii) In the event the vegetation on such land has been altered or

removed, NRCS will determine if a prevalence of hydrophytic vegetation

typically exists in the local area on the same hydric soil map unit

under non-altered hydrologic conditions.

(3) The determination of prevalence of hydrophytic vegetation will

be made in accordance with the current Federal wetland delineation

methodology in use by NRCS at the time of the determination.

(c) Mitigation wetlands. Notwithstanding the provisions of this

section, wetlands which are created in order to mitigate the loss of

other wetlands as a result of irrigation, recreation, municipal water,

flood control, or other similar projects shall not be considered to be

artificial wetland for the purposes of Sec. 12.5(b)(1)(vii)(A) of this

part.

(d) Minimal effect determination. For the purposes of

Sec. 12.5(b)(1)(v) of this part, NRCS shall determine whether the

effect of any action of a person associated with the conversion of a

wetland, the conversion of wetland and the production of an

agricultural commodity on converted wetland, or the combined effect of

the production of an agricultural commodity on a wetland converted by

someone else has a minimal effect on the functions and values of

wetlands in the area. Such determination shall be based upon a

functional assessment of functions and values of the wetland under

consideration and other related wetlands in the area, and will be made

through an on-site evaluation. A request for such determination will be

made prior to the beginning of activities that would convert the

wetland. If a person has converted a wetland and then seeks a

determination that the effect of such conversion on wetland was

minimal, the burden will be upon the person to demonstrate to the

satisfaction of NRCS that the effect was minimal.

The production of an agricultural commodity on any portion of a

converted wetland in conformance with a minimal-effect determination by

NRCS is exempt under Sec. 12.5(b)(1)(v) of this part. However, any

additional action of a person that will change the functions and values

of a wetland for which a minimal-effect determination has been made

shall be reported to NRCS for a determination of whether the effect

continues to be minimal. The loss of a minimal effect determination

will cause a person who produces an agricultural commodity on the

converted wetland after such change in status to be ineligible, under

Sec. 12.4, for certain program benefits. In situations where the

wetland functions and values are replaced by the restoration,

enhancement or creation of a wetland in accordance with a mitigation

plan approved by NRCS, the exemption provided by the determination will

be effective after NRCS determines that all practices in a mitigation

plan are being implemented.

(e) Categorical Minimal Effect Exemptions.

(1) The state conservationist, in consultation with the state

technical committee established under 16 U.S.C. 3861, shall identify

any categories of conversion activities and conditions which are

routinely determined by NRCS to have minimal effect on wetland

functions and values, as described in paragraph (d) of this section,

and recommend to the Chief, NRCS, or a designee, inclusion on a list of

categorical minimal effect exemptions.

(2) The Chief, or designee, shall evaluate the conversion practices

recommended by the state conservationists in the region to ensure

consistency across State and regional lines, and to determine whether

any categories of conversion activities identified pursuant to

paragraph (e)(1) of this section, if such activities were exempt from

the ineligibility provisions of Sec. 12.4, would only have a minimal

effect on wetland functions and values in a wetland system within the

region.

(3) Any categories of conversion activities which meet the criteria

of paragraph (e)(2) of this section will be published in the Federal

register for inclusion in this part and shall be exempt under

Sec. 12.5(b)(1)(v) of this part.

(4) The NRCS local field office shall maintain a list of any

activities and conditions which are determined by the Chief, or

designee, exempt pursuant to this section and will provide the list to

a person upon request.

Sec. 12.32 Converted wetland identification criteria.

(a) Converted wetland shall be identified by determining whether

the wetland was altered so as to meet the definition of converted

wetland. In making this determination, the following factors are to be

considered:

(1) Where hydric soils have been used for production of an

agricultural commodity and the effect of the drainage or other altering

activity is not clearly discernible, NRCS will compare the site with

other sites containing the same hydric soils in a natural condition to

determine if the hydric soils can or cannot be used to produce an

agricultural commodity under natural conditions. If the soil on the

comparison site could not produce an agricultural commodity under

natural conditions, the subject wetland will be considered to be

converted wetland.

(2) Where woody hydrophytic vegetation has been removed from hydric

soils for the purpose of or permitting the production of an

agricultural commodity, the area will be considered to be converted

wetland.

(b) A wetland shall not be considered to be converted if:

(1) Production of an agricultural commodity on such land is

possible as a result of a natural condition, such as drought, and it is

determined that the actions of the person producing such agricultural

commodity does not permanently alter or destroy natural wetland

characteristics. Destruction of herbaceous hydrophytic vegetation

(i.e., plants other than woody shrubs or trees) as a result of the

production of an agricultural commodity shall not be considered as

altering or destroying natural wetland characteristic if such

vegetation could return following cessation of the natural condition

which made production of the agricultural commodity possible; or

(2) Such land is correctly identified as farmed wetland or farmed-

wetland pasture.

Sec. 12.33 Use of wetland and converted wetland.

(a) The provisions of Sec. 12.32(b)(2) are intended to protect

remaining functions and values of the wetlands described therein.

Persons may continue to farm such wetlands under natural conditions or

as they did prior to December 23, 1985. However, no action can be taken

to increase effects on the water regime beyond that which existed on

such lands on or before December 23, 1985, unless NRCS determines the

effect on losing remaining wetland values would be minimal under

Sec. 12.5(b)(1)(v). If, after December 23, 1985, changes due to human

activity occurred in the watershed and resulted in an increase in the

water regime on a person's land, the person may be allowed to adjust

the existing drainage system to accommodate the increased water regime

on the condition that the person affected by this additional water

provides NRCS with appropriate documentation of the increased water

regime, the causes thereof, and the

[[Page 47038]]

planned changes in the existing drainage system. In order to maintain

program eligibility, a person must provide sufficient documentation and

receive approval from NRCS prior to making any changes that will have

the effect of increasing the capacity of the existing drainage systems.

(b) Unless otherwise provided in this part, the production of an

agricultural commodity on land determined by NRCS to be prior-converted

cropland is exempted by law from these regulations for the area which

was converted. Maintenance or improvement of drainage systems on prior-

converted croplands are not subject to this rule so long as the prior-

converted croplands are used for the production of food, forage, or

fiber and as long as such actions do not alter the hydrology of nearby

wetlands or do not make possible the production of an agricultural

commodity on these other wetlands. Other wetlands under this section

means any natural wetland, farmed wetland, farmed-wetland pasture, or

any converted wetland that is not exempt under Sec. 12.5 of this part.

(c) Abandonment is the cessation for five consecutive years of

management or maintenance operations related to the use of a farmed

wetland or a farmed-wetland pasture. Unless the criteria for receiving

an exemption under Sec. 12.5(b)(1)(iii) are met, such land is

considered to be abandoned when the land meets the wetland criteria of

Sec. 12.31. In order for documentation of site conditions to be

considered adequate under Sec. 12.5(b)(1)(iii), the affected person

must provide to NRCS available information concerning the extent of

hydrological manipulation, the extent of woody vegetation, and the

history of use. In accordance with Sec. 12.5(b)(1)(iii), participation

in a USDA approved wetland restoration, set-aside, diverted acres, or

similar programs shall not be deemed to constitute abandonment.

(d) The maintenance of the drainage capacity or any alteration or

manipulation, including the maintenance of a natural waterway operated

and maintained as a drainage outlet, that affects the circulation and

flow of water made to a farmed wetland or farmed-wetland pasture would

not cause a person to be determined to be ineligible under this part,

provided that the maintenance does not exceed the scope and effect of

the original alteration or manipulation, as determined by NRCS, and

provided that the area is not abandoned. Any resultant conversion of

wetlands is to be at the minimum extent practicable, as determined by

NRCS.

Sec. 12.34 Paperwork Reduction Act assigned number.

The information collection requirements contained in this

regulation (7 CFR part 12) have been approved by the Office of

Management and Budget under provisions of 44 U.S.C. chapter 35 and have

been assigned OMB Number 0560-0004.

Signed at Washington, D.C. on August 23, 1996.

Dan Glickman,

Secretary.

[FR Doc. 96-22784 Filed 9-5-96; 8:45 am]

BILLING CODE 3410-01-M