Environmental Quality Incentives Program

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1466

RIN 0578-AA19

Environmental Quality Incentives Program

AGENCY: Commodity Credit Corporation, United States Department of

Agriculture.

ACTION: Final rule.

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SUMMARY: The Commodity Credit Corporation (CCC) is issuing a final rule

for the Environmental Quality Incentives Program (EQIP). CCC published

a proposed rule for EQIP in the Federal Register on October 11, 1996

(61 FR 53574) and solicited comments from the public. This final rule

establishes the process by which CCC will administer EQIP, responds to

comments received from the public during the 45-day comment period, and

incorporates clarifications to improve implementation of the program.

EFFECTIVE DATE: May 22, 1997.

ADDRESSES: This final rule may be accessed via Internet. Users can

access the Natural Resources Conservation Service (NRCS) homepage at

http://www.ftw.nrcs.usda.gov; select the 1996 Farm Bill Conservation

Programs from the menu.

FOR FURTHER INFORMATION CONTACT: Jeffrey R. Loser, Conservation

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

2890, Washington, D.C. 20013-2890. Phone: 202-720-1845. Fax: 202-720-

1838.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

Pursuant to Executive Order 12866, Regulatory Planning and Review

(58 FR 51735, October 4, 1993), the Office of Management and Budget

(OMB) has determined that this final rule is an economically

significant regulatory action because it may result in an annual effect

on the economy of $100 million or more. The administrative record is

available for public inspection in Room 6029, South Building, USDA,

14th and Independence Ave, SW, Washington, D.C.

Pursuant to Executive Order 12866, NRCS conducted an economic

analysis of the potential impacts associated with this program, and

included the analysis as part of a Regulatory Impact Analysis document

prepared for this rule. The analysis estimates EQIP will have a

beneficial impact on the adoption of conservation practices and, when

installed or applied to technical standards, will increase net farm

income. In addition, benefits would accrue to society for long-term

productivity, maintenance of the resource base, non-point source

pollution damage reductions, and wildlife enhancements. As a voluntary

program, EQIP will not impose any obligation or burden upon

agricultural producers that choose not to participate. The program was

authorized at $1.3 billion over the seven-year period of FY 1996

through FY 2002, with annual amounts of $200 million per year after the

initial interim year of $130 million. During the interim administration

period in FY 1996 authorized by 16 U.S.C. 3839aa-8, the CCC used the

$130 million to continue implementation of the terms and conditions of

the superseded programs to the extent that such terms and conditions

were consistent with the statutory provisions of EQIP.

In considering alternatives for implementing the program, NRCS

followed the legislative intent to maximize environmental benefits per

dollar expended, address natural resource problems and concerns,

establish an open participatory process that emphasizes priority areas,

and provide flexible assistance to producers who apply appropriate

conservation measures while complying with Federal, State, and tribal

environmental laws. The baseline alternative recognizes that the four

former conservation programs--the Agricultural Conservation Program

(ACP), Water Quality Incentives Program (WQIP), Great Plains

Conservation Program (GPCP), and Colorado River Basin Salinity Control

Program (CRSCP)--ceased to exist on April 4, 1996, with the passage of

the authorized amendments in the Federal Agriculture Improvement and

Reform Act of 1996 (the 1996 Act) to the Food Security Act of 1985 (the

1985 Act); an interim program extended until October 4, 1996. The

baseline assumes that no new program would replace the former programs,

resulting in a substantial decrease in funding for USDA conservation

efforts. It is recognized that some conservation adoption by

agricultural producers would continue in the absence of these programs

(e.g., up to 20 percent of producers according to Cooper and Keim's

assessment of WQIP). (Reference: Cooper, J.C., R.W. Keim. ``Incentive

Payments to Encourage Farmer Adoption of Water Quality Protection

Practices.'' American Journal of Agricultural Economics, Volume 78

(February 1996), pages 54-64.) The baseline alternative further

recognizes that several other Federal conservation programs will be

implemented which will generate environmental benefits. The

Conservation Reserve Program (CRP), Wetland Reserve Program (WRP) and

the recently established Wildlife Habitat Incentive Program (WHIP) will

be implemented during the same time period as authorized for EQIP. The

highly erodible land and wetland conservation compliance requirements

will continue to be in effect.

Based on the economic analysis, assuming the level of funding

authorized by the 1996 Act, an estimated 35.7 million acres of

agricultural land would be treated over the seven years of the program,

including 18.5 million acres of cropland, 3.7 million acres of pasture,

and 13.5 million acres of rangeland. Of the total agricultural land

treated, an estimated 26.8 million acres are expected to be in priority

areas. In regards to livestock operations needing assistance with

animal waste management facilities, NRCS estimates that over 10,000

small- to medium-sized livestock operations will be assisted with EQIP;

65 percent are expected to be in priority areas.

The off-farm public benefits associated with on-farm conservation

efforts are directly dependent upon the on-farm treatment needs and

associated benefits. In the case of non-point source pollution from

agricultural sources, for instance, public benefits are not achieved

until private landuser behavior changes and on-site conservation

measures are applied. Some of the off-site benefits are attributable to

improvements made to enhance freshwater and marine water quality and

fish habitat, improved aquatic recreation opportunities, reduced

sedimentation of reservoirs, streams, and drainage channels, and

reduced flood damages. Additional benefits are from reduced pollution

of surface and groundwater from agrochemical management, improvements

in air quality by reducing wind erosion, and enhancements to wildlife

habitat. EQIP encourages participants to adopt a comprehensive approach

to solving natural resource and environmental concerns. The program is

designed to take full advantage of the relationships among and between

conservation practices and the natural resources they are designed to

protect. Unlike CRP and WRP, EQIP provides for treatment of natural

resource concerns while enabling the land to be used for the production

of food and fiber. Furthermore, by replacing the four former

conservation

[[Page 28259]]

programs, the single program will reduce the administrative costs for

both farmers or ranchers and the Federal government.

In addition to the expected disbursements for cost-share and

incentive payments, EQIP costs include staff costs for actual delivery

of technical assistance for practice application and educational

assistance to agricultural producers on appropriate conservation

methods. Technical assistance costs will vary according to the type of

expertise required, the complexity and scope of the natural resource

concerns being addressed, and the objectives of the landowner.

Technical assistance services are also needed to help producers install

conservation practices that may be partially supported by EQIP, other

Federal programs, and by State or local government, or private

financial assistance programs. In terms of public and private

investment, USDA experience indicates that private landuser costs per

acre for conservation nearly equal Federal costs when analyzed on a

consistent basis. Private landuser costs per year for conservation

averaged about $10 per acre nationally, according to a 1995-96

evaluation NRCS conducted for its conservation technical assistance and

watershed protection program activities.

Total discounted benefits on cropland for EQIP are estimated at

$1651 million. This includes on-site production benefits of $544

million, other reduced input benefits (such as irrigation savings) of

$181 million, and off-site benefits of $924 million. This compares to

estimates of $504 million and $410 million for federal and private

costs, respectively.

Total discounted benefits for pasture are estimated at $324

million. These benefits compare to Federal and private costs of $51

million and $63 million, respectively. Total discounted benefits for

rangeland are estimated at $438 million, compared to Federal and

private costs of $204 million and $83 million, respectively.

The total discounted present value of benefits for EQIP (excluding

any benefits from conservation practices for treatment of animal waste)

amount to $2.41 billion while the present value of total discounted

costs, both public and private, are estimated at $1.65 billion. The net

benefits (estimated benefits less all costs) amount to $759 million

expressed in discounted present value dollars. Providing for an

allowance for the accrual of treated acreage over time and adjusting to

an annual basis (at a 3 percent interest rate), the annualized net

benefits are estimated to be $76 million, of which 62%, or $47 million,

are on-site benefits. Other studies have determined off-site benefits

as approximately 2 to 3 times the amount of on-site benefits (Resources

Conservation Act, USDA, 1989). Assuming the net off-site benefits are a

medium level of 2.5 times that of on-site benefits, then net off-site

benefits will be $118.3 million annually, for a total on-and off-site

benefits of $165.6 million annually.

The overall benefit to cost ratio is estimated to be 1.46, even

though off-site benefits for pasture and rangeland and total benefits

for animal waste management were not estimated due to unavailability of

data. The benefit to cost ratios for the major land types are:

cropland, 1.81; pasture, 2.84; and rangeland, 1.52. Cropland treatment

will produce the largest on-site and off-site benefits. The on-site

benefit to private cost ratios for cropland, pasture, and range are

1.77, 5.12, and 5.25 respectively.

A copy of this analysis is available upon request from Jeffrey R.

Loser, Conservation Operations Division, Natural Resources Conservation

Service, P.O. Box 2890, Washington, D.C. 20013-2890.

Regulatory Flexibility Act

The Regulatory Flexibility Act is not applicable to this rule

because CCC is not required by 5 U.S.C. 533 or any other provision of

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

subject matter of this rule.

Environmental Analysis

CCC has determined through an amendment to the ``Environment

Assessment for the Environmental Quality Incentives Program, August 1,

1996'' that the issuance of this final rule will not have a significant

effect on the human environment. Copies of the Environmental

Assessment, the amendment, and the finding of no significant impact may

be obtained from Jeffrey R. Loser, Conservation Operations 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 final rule which

affect the recordkeeping requirements and estimated burdens previously

reviewed and approved under OMB control number 0560-0174.

Executive Order 12998

This final rule has been reviewed in accordance with Executive

Order 12998. The provisions of this final rule are not retroactive.

Furthermore, the provisions of this final rule preempt State and local

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

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

jurisdiction, the administrative appeal rights afforded persons at 7

CFR parts 614 and 11 must be exhausted.

Federal Crop Insurance Reform and Department of Agriculture

Reorganization Act of 1994

Pursuant to Sec. 304 of the Department of Agriculture

Reorganization Act of 1994, Pub. L. 103-354, USDA classified this final

rule as major and CCC conducted a risk assessment. Available upon

request is an environmental risk assessment including a comparison of

the relative risks managed by EQIP and other programs in the Department

which address similar risks resulting from comparable activities. One

year after the final rule is promulgated, the economic analysis based

on a risk management assessment will address the costs associated with

implementation and compliance of the regulation and qualitative and

quantitative benefits of the regulation. A copy of the risk assessment

is available upon request from Jeffrey R. Loser, Conservation

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

2890, Washington, D.C., 20013-2890.

Unfunded Mandates Reform Act of 1995

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

Pub. L. 104-4, CCC assessed the effects of this rulemaking action on

State, local, and tribal governments, and the public. This action does

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

or tribal government, or the private sector; therefore a statement

under Sec. 202 of the Unfunded Mandates Reform Act of 1995 is not

required.

Small Business Regulatory Enforcement Fairness Act of 1996

Pursuant to 5 U.S.C. Sec. 808 of the Small Business Regulatory

Enforcement Fairness Act of 1996, it has been determined by CCC that it

is impracticable, unnecessary, and contrary to the public interest to

delay the effective date of this rule. Making this final rule effective

immediately will permit CCC to offer the public timely, reliable

information about funding for conservation practices as early before

the start of the spring 1997 planting season as possible. Information

about the availability of the program for establishing conservation

practices may

[[Page 28260]]

influence planting decisions and should, therefore, be disseminated to

producers before planting decisions are made. Failure to provide this

information in a timely manner may mean that the realization of

important conservation benefits available under EQIP may be delayed for

another year before the start of another planting season. Further,

since the four former conservation programs ceased to exist on April 4,

1996, and the temporary or interim authority to administer EQIP ended

on October 4, 1996, there is no program in operation nationally that

provides technical, financial, and educational assistance of this kind

to producers for natural resource conservation purposes. Accordingly,

this rule is effective upon publication in the Federal Register.

Discussion of Program

The Federal Agriculture Improvement and Reform Act of 1996 (the

1996 Act) (Pub. L. 104-127, April 4, 1996) amended the Food Security

Act of 1985 (the 1985 Act) (16 U.S.C. 3801 et seq.) to re-authorize the

Environmental Conservation Acreage Reserve Program as the umbrella

conservation program encompassing the Conservation Reserve Program

(CRP) (16 U.S.C. 3831-3836), the Wetlands Reserve Program (WRP) (16

U.S.C. 3837 et seq.), and the newly created Environmental Quality

Incentives Program (EQIP) (16 U.S.C. 3840). Under the Environmental

Conservation Acreage Reserve Program, the Secretary of Agriculture may

designate areas as conservation priority areas to assist landowners to

meet nonpoint source pollution requirements, other Federal and State

environmental laws, and to meet other conservation needs.

EQIP combines into one program the functions of several

conservation programs administered by the Secretary of Agriculture,

including the Agricultural Conservation Program (ACP), the Agricultural

Water Quality Incentives Program, the Colorado River Salinity Control

Program (CRSCP), and the Great Plains Conservation Program (GPCP),

which are rescinded by the 1996 Act. Through EQIP, flexible technical,

financial, and educational assistance is provided to farmers and

ranchers who face serious threats to soil, water, and related natural

resources on their land, including grazing lands, wetlands, forest

land, and wildlife habitat. Participation in the program is voluntary.

The assistance is provided in a manner that maximizes environmental

benefits per dollar expended, helps producers comply with the

eligibility provisions of the 1985 Act, and helps farmers and ranchers

meet Federal and State environmental requirements. A consolidated and

simplified conservation planning process will be used to reduce any

administrative burdens that would otherwise be placed on producers.

The 1985 Act provides that funds of the CCC will be used to fund

the assistance provided under EQIP. For fiscal year 1996, $130 million

was made available to administer an interim program; a minimum of $200

million is to be made available for each of fiscal years 1997 through

2002. Fifty percent of the funding available for the program will be

targeted at practices relating to livestock production.

The CCC is a government-owned and operated corporation, chartered

in the 1930's to help stabilize and support farm prices and income, and

to maintain balanced supplies and orderly distribution of agricultural

commodities. The 1996 Act expanded the mission of the CCC to include

the power to carry out conservation or environmental programs

authorized by law.

The CCC is run by a Board of Directors, and the Secretary of

Agriculture serves as the Chairman of the Board. The Administrator of

Farm Service Agency (FSA) and the Chief of NRCS serve as officers of

the corporation. The CCC does not have its own operating personnel, and

all work done on behalf of the CCC is performed by personnel of

agencies within USDA. Pursuant to CCC bylaws, the NRCS Chief and the

FSA Administrator, as officers of the corporation, may use NRCS and FSA

personnel, respectively, to conduct work for CCC.

EQIP is a CCC-funded program, as reflected by the placement of this

regulation with other CCC program regulations and the designation of

CCC throughout the regulation itself. On behalf of the CCC, the NRCS

and FSA share administration of EQIP. Where appropriate, this final

regulation describes the CCC responsibilities performed by personnel

from the two respective agencies.

On October 11, 1996, CCC published a proposed rule with request for

comments. The proposed rule described the program requirements,

administrative processes, and eligibility criteria that CCC would use

in implementation of EQIP. The proposed rule also described how

priority areas and significant statewide natural resource concerns for

program funding would be designated and what information would be

considered in making those designations. Over 800 separate responses

containing about 2500 specific comments were received during the 45-day

comment period: 360 responses from farmers, ranchers, and other

individuals, 121 from agricultural and rural community organizations,

49 from environmental organizations, 111 from conservation districts

and related groups, 66 from business entities, and 109 from State and

local agencies.

Additional responses were received from Federal agencies and

employees; their comments are not included in the following analysis of

public comments. These responses were treated as inter-and intra-agency

comments and considered along with the public comments where

appropriate.

All comments received are available for review in Room 6032-S,

South Building, 14th and Independence Ave., S.W., Washington, D.C.,

during regular business hours (8 a.m. to 5 p.m.) Monday through Friday.

Analysis of Public Comment

Overall, almost all respondents expressed appreciation for the

opportunity to comment on the EQIP proposed rule. Many offered valuable

suggestions for improving or clarifying specific sections of the

proposed rule. Some of these suggestions were group efforts, where

individual responses used similar or identical language to identify and

describe their interests, concerns, and recommended modifications to

the proposed rule.

The majority of comments centered on six major issues in the

proposed rule: definition of large confined livestock operation;

focusing the program in priority areas; local work groups; requirement

for a conservation plan and long-term contract; roles of agencies; and

delayed payments in the first fiscal year of a contract. Several

comments either commended or criticized specific statutory

requirements. These comments were considered as part of the rulemaking

record to the extent that they were relevant to the provisions of the

rulemaking. Numerous minor editorial and other changes in the text were

suggested; these comments are not included in the following analysis

but all were considered and many of the minor technical changes were

included in the final rule.

To implement the final rule, NRCS will, with concurrence from FSA,

be responsible for establishing and documenting in program guidance the

overall policies, priorities, procedures, and guidelines for EQIP. NRCS

will seek the review and input by other Federal agencies, as

appropriate, when developing the guidance document.

[[Page 28261]]

General Comments on 7 CFR Part 1466

Under the proposed rule, CCC would set out EQIP regulations in 7

CFR part 1466. The following summarizes general comments received on

the proposed rule and CCC's response to them.

1. The 1996 Act

Support for the introduction of EQIP and the proposed method for

implementing its provisions was expressed in 78 comments. An additional

29 comments express general disagreement with the introduction of a new

program, its proposed method for implementation, and the elimination of

programs such as the ACP that have been in existence for many years.

The Department recognizes that EQIP provides a new direction for

natural resources conservation programs and, as such, may create

concern among those familiar with former programs. However, Congress

established EQIP to combine into a single program the functions of the

former programs and to carry out the single program in a manner that

maximizes environmental benefits per dollar expended, and the

Department is required to administer the laws as passed by Congress.

2. Preamble Language in the Proposed Rule

Nineteen comments concern the length of the public comment period.

Twelve comments request an extension of the comment period by at least

30 to 45 days. Seven of the comments appreciate the opportunity given

for input and the varied mediums by which comments would be accepted.

Over 800 responses were received from a range of interested parties

from across the Nation. CCC believes that a sufficient length of time

was provided and it has received sufficient input to proceed to a final

rule.

Five comments concern the benefit cost assessment conducted

pursuant to Executive Order 12866. These comments suggest that most

environmental benefits occur off-site, recognize the difficulty in

quantifying off-site environmental benefits, and support Federal

incentives for producers to adopt on-site practices. The comments were

considered along with other information and data to finalize the

benefit cost assessment.

The preamble to the proposed rule included a discussion of the

efforts being made to improve program outreach to all eligible citizens

and solicited suggestions regarding how program delivery can be

improved on environmentally sensitive land managed by producers who

have not participated historically in the Department's conservation

programs. There were 25 comments received in response to this request.

Five comments express general support for USDA outreach efforts. Nine

comments express concern that EQIP will primarily benefit large

agricultural operations to the detriment of smaller, family-run

operations. One comment states that it appeared the midwestern farmers

would benefit to a greater extent than those in the southeast and

recommends the program provide equal benefits all over the country.

Several other miscellaneous comments were received on outreach.

Seven comments made specific recommendations for increasing USDA's

outreach efforts. These recommendations include: permit flexible

schedules for applying practices and systems; offer low-cost

conservation practice alternatives; consider the value of a producer's

labor as the producer's share of the cost; utilize local cooperative

extension service agencies in the education efforts; conduct a survey

of producers who do not normally participate and ask them the reasons

for their non-participation; provide flexibility regarding the control

of land for American Indians and others; and, coordinate the various

conservation programs such as CRP, WRP, and EQIP. Several comments

suggest Amish and Old Order Mennonite producers, Tribes, and Pacific

Islanders are groups that have not participated historically and USDA

should encourage greater participation. The Department remains

dedicated to increasing program availability to all eligible citizens.

The recommendations made in the public comments have been incorporated

in the final rule where applicable or will be included in program

guidance and delivery activities.

Section-by-Section Comments on 7 CFR Part 1466

Section 1466.1 Applicability

The proposed rule indicated that farmers and ranchers could receive

program assistance to address soil, water and related natural resources

concerns. There were 44 comments expressing support for wildlife

habitat concerns receiving program assistance on par with soil and

water issues and many of these comments wanted the final rule to

reflect the emphasis on wildlife issues to a greater extent. Three

comments voice concern that a balance should be attempted among soil

conservation, water quality, and other natural resource concerns; one

commenter believes EQIP should not be targeted as an environmental

program; and seven commenters identify particular natural resource

concerns that EQIP should encompass. EQIP shall be implemented in a

balanced manner in accordance with the statutory purposes for which

EQIP was established, including the statutory admonition to achieve

environmental benefits in a cost-effective manner. The proposed rule

contained broad language to facilitate the identification of a broad

range of natural resource concerns at the local level and the

Department still believes that this is the appropriate approach.

Therefore, no change is made in this section's language related to

natural resource concerns. The final rule now contains, however, a new

definition for ``related natural resources'' to help clarify the broad

range of natural resource concerns that are intended.

Seven comments support cost-share assistance for the implementation

of profitable practices. Several of these comments indicate that a

practice may prove profitable for a producer to implement in the long

term but the initial cost of installation may limit the extent of its

adoption. These commenters suggest that EQIP should provide cost-share

to off-set the initial outlay. Three commenters specifically indicate

that cost-share assistance should not be provided for practices that

are locally accepted as being sound and necessary components of a

profitable agricultural operation. EQIP assistance is not to assist

producers in the performance of normal or routine farming operations,

but to encourage the adoption of practices which address particular

natural resource concerns. During program implementation, the

Department will scrutinize the profitability of certain practices,

ascertain whether such practices would likely be adopted absent program

assistance, and direct program assistance accordingly. Even though EQIP

assistance may not be available for a practice determined to be a

``profitable practice,'' other Federal, State, tribal, or local

programs may provide credit or other types of assistance to producers

for initial outlay costs. Producers can obtain information regarding

other USDA program assistance from their local USDA service center.

Five comments suggest the rule and the processes for implementation

of EQIP should be simplified, but gave no further specific examples of

how this could be accomplished. The Department will evaluate on a

continuing basis ways to improve program delivery, including making the

application process simpler

[[Page 28262]]

and removing unnecessary administrative steps for the participant.

Section 1466.2 Administration

In this section, the respective roles of the NRCS and FSA were

identified, and provided for other agencies to assist NRCS and FSA with

implementing EQIP. Five comments express approval of the roles outlined

for the two agencies. Three comments express specific disapproval of

NRCS and FSA sharing responsibility for program implementation and 3

comments believe that such an arrangement would prove cumbersome. Two

comments express the importance that the agencies administer the

program in a simple and coordinated manner. Four comments desire

further clarification of the respective roles of the agencies. One

comment notes that successful program implementation requires the

agencies to train their personnel. USDA believes that it is important

for both NRCS and FSA to share in administrative responsibilities for

the program and that the respective roles of each agency are

satisfactorily identified. The proposed arrangement takes advantage of

the proven expertise of both NRCS and FSA. USDA established the

respective roles for NRCS and FSA and continues to find this shared

responsibility for program implementation to be an effective

utilization of Department resources. Training of NRCS, FSA, and

cooperating agency employees will be conducted to ensure that employees

can perform their jobs in a highly skilled, quality manner.

Accordingly, no change has been made in the final rule concerning the

shared responsibilities of NRCS and FSA.

Fifteen comments concern NRCS leadership of the program. Ten of the

comments support the NRCS State conservationist making local program

and funding decisions. One comment supports NRCS making funding

decisions and allocation determinations with FSA concurrence as

proposed in the rule. Two comments urge that FSA should not be involved

at all except for administrative purposes. Two comments state that FSA

should not be involved in the program because of the different missions

between NRCS and FSA.

There were 45 comments regarding the roles of FSA and FSA county

committees in the program. Twenty-six comments favor the administration

of the program should be fully carried out by FSA county committees.

Nine comments state that the program should be fully carried out

through the FSA. Eight comments suggest that FSA continue to perform

their same duties as in the former ACP, with NRCS providing technical

assistance only. Two comments state that FSA and FSA county committees

should administer EQIP due to the cost-effectiveness of the CRP and the

ACP.

The Department believes that the framework identified for delivery

of the program utilizes the proven expertise of NRCS and FSA to the

fullest extent possible. This framework identifies the primary role of

NRCS to be the Department's primary agency for natural resource

conservation on private lands. It also meets a basic intent of the

Department to simplify delivery of programs and improve their

flexibility and efficiency with both agencies playing a major role in

their delivery. EQIP places a much stronger emphasis on long-term

natural resource planning and assessment than was emphasized under ACP.

The core elements of the program require a higher level of technical

expertise on a broader scale than performed under previous conservation

programs. NRCS has the technical capability to meet these strengthened

technical assistance requirements and FSA can provide efficient

administrative expertise to support the program. No change was made in

the final rule concerning the roles of the agencies in the program.

Two comments make the suggestion that NRCS attempt to

quantitatively evaluate each contract, within the context of its

watershed, in order to fulfill its responsibility to evaluate program

success. One comment notes that the benefits of the conservation

practices may be much greater off-site and NRCS should consider such

benefits when evaluating the success of a particular contract. NRCS

will evaluate the program's performance at the farm and ranch, priority

area, State, regional, and national levels to: ensure that the program

purposes are met; evaluate the net benefits of different conservation

practices; and, understand ways to improve performance of the program.

The program evaluation and assessment process will include, but not be

limited to: determination of benchmark or baseline natural resource

conditions; establishment of performance indicators; measurement of

conservation effects and outcomes; determination of financial

investment; and, compilation of program accomplishments. National

program assessments will be done by aggregating assessments, data, and

information from the farm/ranch, priority area, State, and regional

levels.

In regards to funding decisions in paragraph 1466.2(b)(6), 52

comments suggest that FSA county committees should have authority to

make all funding and allocation determinations. Twelve comments support

NRCS having authority to make funding and allocation decisions. One

comment suggests that NRCS and FSA should share responsibility for

making funding decisions and allocation determinations. One comment

states that site-specific funding decisions and ranking producer

applications are the sole responsibility of NRCS and FSA county

committees must fund ranked plans. The framework that the Secretary

approved for delivery of the program provides for an adequate

concurrence mechanism regarding funding and allocation determinations

between NRCS and FSA. NRCS, as the lead agency, is in the best position

to make initial funding recommendations and then work closely with FSA

to obtain necessary concurrence. No change was made in the final rule

regarding these comments.

There were 31 comments on paragraph 1466.2(c) regarding the use of

the local, county, and State committees established under section 8(b)

of the Soil Conservation and Domestic Allotment Act of 1936 in

administering subtitle III conservation programs. The commenters

suggest the Secretary should provide the FSA committees with the same

authorities as under the former conservation programs. The Department

believes that the local, county, and State committees are being used in

a manner that is consistent with section 8(b) of the Soil Conservation

and Domestic Allotment Act of 1936. The committees have specified

responsibilities on local work groups or State technical committees,

and in administrative processes and procedures for applications,

contracting, and financial matters. Additionally, USDA believes that

the FSA county committee system will continue to serve a vital role by

representing the resource concerns of their production agriculture

constituents. FSA county committees have built a foundation of trust

over the years with many farmers and ranchers throughout the Nation. As

a full partner on the local work groups the FSA county committees will

be able to gain the involvement of and acceptance by the farmers and

ranchers whom they represent in the locally-led conservation effort.

FSA county committees are an integral component of the local work group

and their input and judgment is important to the effort. All members of

the local work group will need to create working relationships with

others so that the collaborative efforts of the group will result in a

successful

[[Page 28263]]

program. No change was made in the final rule concerning the roles of

FSA county committees.

In reference to paragraph 1466.2(f), nineteen comments want the

State FSA Committees to have approval authority for all applications

and cooperative agreements with other entities. Eight comments support

the proposed rule language that provides for cooperative agreements

with other entities, believing that such arrangements could improve

delivery of the program and address natural resource concerns in

coordination with others. Four comments express support for the

agencies to incorporate local information and to utilize existing state

and local coalitions and partnerships. Two comments indicate that CCC

should provide funding to partnering agencies. Ten comments express

concern that such arrangements would increase the administrative costs

of the program and thus result in less conservation on the ground. The

Department believes that the opportunity to work with other Federal

agencies, local and State partners, including those in the private

sector, will improve delivery of the program and is essential to the

successful resolution of an area's natural resource concerns. The

Department currently uses cooperative agreements and other instruments

for activities other than EQIP which involve both financial and in-kind

service considerations. Such partnerships have proven to be cost-

effective. Both NRCS and FSA may enter into cooperative agreements with

others to assist with implementation of the program elements for which

the respective agency has principal responsibility. The final rule

language has not been changed regarding cooperative agreements.

A general comment recommends the dissemination of information

regarding EQIP through regular channels now in existence and via the

Internet. The commenter proposes that an Internet homepage be developed

and be placed on-line within 3 months of approval of the final rule.

The homepage would contain a copy of the final rule, National and

regional points of contact, a list of the priority areas, a list of

innovative practices and technologies in use and a point of contact for

more information, a list of NRCS offices and links to State NRCS web

sites. USDA and NRCS currently have home pages where information can be

obtained. NRCS currently has the EQIP proposed rule and several EQIP

fact sheets available, along with a list of NRCS State offices and

links to NRCS State web sites. NRCS plans to use all available avenues

of media, including the Internet, to provide the final rule, lists of

priority areas, the EQIP guidance documents, and other information to

the general public. The USDA homepage can be accessed at http://

www.usda.gov. The NRCS homepage can be accessed at http://

www.ftw.nrcs.usda.gov. No change has been made to the final rule

concerning this comment.

Section 1466.3 Definitions

Agricultural Land

Two comments on this definition: one comment suggests that the term

should mean an area on which crops or livestock are intensively

produced, while the other comment suggests including the examples given

in paragraph 1466.4(d). The definition has been modified in the final

rule to be consistent with the examples given in paragraph 1466.4(d).

Confined Livestock Operation

Three comments on this definition: one comment supports the

definition as proposed; one comment suggests that a size element be

included in the definition; the remaining comment suggests that the

days of confinement be extended from 45 days to 60 days. A definition

of confined livestock operation has been included in the final rule. It

includes the parameters regarding ``confinement'' that were included in

the proposed rule. The 45 days included in the definition is unchanged

so that it is consistent with a definition for confinement used in the

Clean Water Act. This definition is commonly understood and accepted.

The Department does not desire to create another definition that may

cause confusion or unnecessary administrative burdens on producers.

Section 1466.7 addresses how the Department intends to administer large

confined livestock operations in the program.

Conservation District

One comment suggests the term ``Native American Tribe'' not be used

in the definition but be replaced with ``Indian Tribe'' according to

the Indian Self-Determination and Education Assistance Act of 1975. The

Department agrees with the suggestion on Indian tribes and has

incorporated the change in the final rule. A definition of Indian tribe

has also been included in the final rule.

Conservation Management System

One comment requests this definition be clarified in order to

distinguish a conservation management system from a resource management

system. A resource management system is a conservation management

system that achieves or exceeds a sustainable treatment level for the

natural resources. Conservation management systems include other

systems that do not achieve sustainability for one or all the natural

resources. The definition has been clarified in the final rule.

Conservation Plan

Six comments on this definition suggest the phrase ``record of a

participant's decisions...for treatment of a unit of land or water''

unduly limits the nature and purpose of a conservation plan. Some of

these comments state that a conservation plan consists of more than a

record of decisions and that the definition should include language

such as: identified natural resource problems; a participant's own

goals; alternative solutions considered to reach those goals; and,

selected solutions to achieve cost-effective environmental management.

Additionally, the comments suggest the concept of whole-farm planning

be added. The Department believes that these concerns are addressed

adequately in Sec. 1466.6 which describes the purposes and requirements

of a conservation plan in greater detail and provides for the broader

goals expressed in the comments. No change has been made to the

definition.

Conservation Practice

One comment suggests this definition be expanded to include

integrated pest management (IPM) and that IPM should include integrated

weed management. Since the definition for conservation practice

includes reference to a land management practice, and the definition of

land management practice includes IPM, the definition of conservation

practice includes IPM. The Department believes that IPM includes

integrated weed management and further definition is unnecessary. The

definition is intended to be generic in nature and reference to

specific practices was not intended. Therefore, the definition for

conservation practice remains as proposed.

Land Management Practice

Fifty-two comments suggest changes to this definition. Thirteen

comments request ``irrigation management'' should be included under the

definition of land management practice. Efficient irrigation practices

are supported in 36 comments and most of these comments suggest the

term ``efficient irrigation'' be added to the description of eligible

conservation practices. The proposed

[[Page 28264]]

rule included irrigation management under this definition. The

Department has modified this in the final rule by referring to

``irrigation water management'' which better describes the intent of

the practices and incorporates the concept of efficient irrigation.

The other comments request additions to the example practices

listed under land management practices: two comments suggest adding

tree planting and one comment suggests adding wellhead protection, crop

rotation, cover crop management, and numerous other practices. One

comment suggests adding ``including grazing lands, wetlands, and

wildlife habitat'' after ``related natural resource concern.'' The

practices listed in the definition are illustrative and not intended to

be exhaustive. Tree planting is a vegetative practice and has been

included in that definition. A definition of ``related natural

resource'' has been included in the final rule. The Department believes

that the definition of ``land management practice'', as proposed,

encompassed the suggested concepts adequately and does not require

changes.

Livestock, Livestock Production, and Livestock-related Natural Resource

Concern

One comment suggests the definition of livestock should include

honeybees. One comment on livestock production suggests rotational

grazing, fencing, and water development practices should be included in

the definition. One comment on livestock-related natural resource

concern suggests the spread of noxious weeds via animal waste from

confined feeding operations should meet the requirements of this

definition. The Department believes that honeybees should not be

considered as livestock but honey is an agricultural food product, thus

honeybee keepers are eligible agricultural producers. The other

specific suggestions are best left to the NRCS State conservationist in

consultation with the State technical committee. No changes have been

made to the subject definitions in the final rule.

Local Work Group

Forty comments concern this definition. Most of the comments

request the membership of the local work groups be expanded to others

outside of government and provide excellent reasons why certain

individuals and organizations could provide information and ideas that

would be valuable to the program and the responsibility of the local

work groups. Membership of the local work groups is limited to Federal,

State, Indian Tribe, and local government representatives because of

restrictions applicable to private advisory panels by the Federal

Advisory Committee Act (FACA). Given that almost 3500 separate local

work groups are estimated to be established to advise on the

implementation of the program, the Department felt that it was

unfeasible and burdensome to fulfill possible FACA requirements when

establishing each local work group. The Department expects and

anticipates that these various representatives who serve on the local

work group will request and receive ample information and ideas from

the public and their respective constituents. Therefore, no changes are

made to this definition.

Private Agribusiness Sector

Five comments suggest the term ``agricultural input retail

dealers'' should be included in the definition since this term was used

in the statute. One comment recommends a very broad interpretation of

``agribusiness.'' The Department intends to have a broad interpretation

of this definition so that the largest number of private sector

professionals may provide services for the program. The final rule has

been changed to include ``agricultural input retail dealers.''

Resource Management System

Two comments request this definition include grazing lands,

wetlands, and wildlife habitat. The term ``related natural resources,''

which has been included in the final rule, includes these concerns and

further inclusion in the definition of resource management system would

be redundant. Therefore, no changes were made to this definition.

State Technical Committee

Six comments concern representation on the State technical

committee and guidelines concerning the structure and operation of such

committees. NRCS intends to publish a rule on the structure and purpose

of the State technical committee in a separate rulemaking, and shall

consider these recommendations regarding committee representation and

guidelines as it develops that rule.

Structural Practice

Four comments recommend this definition include specific mention of

``irrigation water, conveyance, and application equipment'' as examples

of structural practices. The practices listed in the definition are

illustrative and not intended to be exhaustive. The Department believes

that the definition as proposed encompassed the suggested concepts

adequately and does not require changes.

Unit of Concern

Eight comments request clarification of this definition, one of

which expresses concern that the definition had no limits, three of

which recommend inserting the concept of whole-farm planning, and the

remaining four of which recommend limiting the definition to the

portion of the property upon which the conservation practice will

occur. The Department believes that a unit of concern can vary

depending on the natural resource concerns and the objectives of the

participant. A unit of concern can be a whole farm or a portion

thereof. The conservation plan must address the conditions that cause

or influence the natural resource concern for which the plan is being

developed. Therefore, information from outside the defined unit of

concern may be considered where it is necessary to develop the best

strategy for meeting the producer's objectives and resolving the

natural resource concern. No changes have been made in the final rule

for this definition.

Vegetative Practice

Four comments concern the examples used to describe vegetative

practices, one of which recommends deleting permanent wildlife habitat

as an example and the remaining three of which recommend including tree

planting as an example. The practices listed in the definition are

illustrative and not intended to be exhaustive. Tree planting has been

added as an example in the final rule. Permanent wildlife habitat was

listed as an example in the statute and has been retained in the final

rule.

New Definitions

Several commenters suggest new definitions be included in the final

rule, including: agricultural producer (2 comments); cost-share and

incentive payments (4 comments); environmental benefits index (1

comment); Indian tribe (1 comment); Indian trust lands (2 comments);

and liquidated damages (1 comment). The Department will include a

procedure in its program guidance for determining an eligible

agricultural producer. The term ``environmental benefits index'' is not

used in the final rule and, therefore, has not been defined.

Definitions for cost-share payments, incentive payments, Indian tribe,

Indian trust lands, and liquidated damages have been included in the

final rule.

[[Page 28265]]

Section 1466.4 Program Requirements

Four comments support the voluntary aspect of the program. No

change was made in the final rule concerning the voluntary aspect of

the program.

One commenter suggests the wording of the second sentence in

paragraph 1466.4(a) should be changed to indicate a participant should

develop a conservation plan ``in accordance with'' the local

conservation district, instead of ``in cooperation with.'' As provided

in 1466.6(a), USDA agrees that the conservation plan should be approved

by the local conservation district, but the plan must also meet the

purpose of the program and be acceptable to NRCS. The Department

believes the phrase ``in cooperation with'' better reflects the role of

the local conservation district. No change was made in the final rule

regarding this comment.

There were 37 comments regarding the use of EQIP funds for

providing technical assistance. Although not included in the proposed

rule, 21 comments recommend an unspecified maximum cap be established

for the use of program funds for technical assistance, one commenter

suggests a 10 percent cap, and eight commenters suggest a 5 percent cap

to be consistent with the former ACP. One comment supports funds for

technical assistance but recommended that FSA committees should

determine the amount. One comment said that no funds should go to

technical assistance but it should all go to farmers. Four comments

support the use of funds for technical assistance noting that without

sufficient technical assistance funding it will be difficult for

farmers to satisfactorily perform the conservation work. One commenter

suggests the cooperative extension service should receive EQIP

technical assistance funding for personnel who are providing assistance

to producers. USDA believes that voluntary conservation programs are

most successful when sufficient amounts of technical assistance,

educational assistance, and financial assistance are provided to

producers to aid them in natural resource conservation activities. The

1996 Act amended the 1985 Act to provide that the Secretary of

Agriculture is authorized to provide technical, educational, and

financial assistance to eligible farmers and ranchers using EQIP. The

1996 Act further stated that the amount of technical assistance

provided should be in an amount according to the type of expertise

needed, the quantity of time involved, and other factors as determined

appropriate by the Secretary. USDA believes that EQIP will require a

greater level of technical assistance than the former ACP because EQIP

will be dealing with a broader array and more difficult natural

resource concerns. Unlike ACP, EQIP will also include conservation

plans and long-term contracts for all participants. The 5 percent

reimbursement in ACP was not intended to reflect the actual cost for

technical assistance. Further, the former GPCP and CRSCP, which were

also replaced by EQIP, required technical assistance levels in excess

of 5 percent to attain the conservation purposes of the programs. The

former conservation programs have shown USDA that a specified rate of

technical assistance funding should not be established by rule because

natural resource conditions and concerns change over time and the

Department needs the ability to adapt to those changing conditions and

concerns. USDA believes that NRCS, which will deliver much of the

technical assistance in EQIP, should determine the amount of funds

needed for this purpose. When making this determination, NRCS will

consider its available resources from all programs, and those of other

public and private sources of technical assistance. Paragraph 1466.4(b)

has not been changed in the final rule.

Two comments were received regarding control of land as provided in

paragraph 1466.4(c)(2)(i). One comment suggests a separate paragraph

should be added concerning ``Indian trust land'' because the proposed

rule does not clearly show that Indian tribes are among the eligible

parties. Another commenter suggests ``communal land'' ownership and

leasing arrangements in the Pacific Basin should be eligible for EQIP,

including those cultural situations where land assignments are given

without written leases. Program guidance will identify the type of

evidence needed to show that an applicant has an adequate control of

land. Written leases may be one of the types of evidence, as will

historical use of the land and other evidence. Paragraph 1466.4(d) has

been amended to clearly show that tribal, allotted, and Indian trust

lands are eligible lands.

One comment states it is burdensome for tribal governments

responsible for a vast and complex system of agricultural lands to be

required to list all lands under their control, and requests the

informational requirements should be lessened for tribes. The

Department believes this comment concerned the requirement for listing

agricultural lands so that it can determine if an applicant is in

compliance with the highly erodible land and wetland conservation

provisions. All applicants must comply with these provisions to be

eligible for EQIP, including Tribes that receive certain Departmental

benefits. However, the Department will work with Tribes to develop

processes which minimize the administrative burden while meeting the

requirements for eligibility. For example, an authorized representative

of the Tribe or Bureau of Indian Affairs may certify compliance with

the highly erodible land and wetland conservation provisions on behalf

of the entire Tribe.

Five commenters express concern that EQIP does not appear to

include forest lands. Two comments state a concern that tree planting

will not be eligible for program assistance. The Department believes

that forest land, like all other eligible land, must have natural

resource problems or pose a threat to natural resources to be eligible

for EQIP assistance. Tree planting and other forest land-related

conservation practices are eligible for EQIP assistance if they are

used to address or resolve the identified natural resource concern.

Paragraph 1466.4(d) of the final rule states that forest land may be

eligible for enrollment in EQIP; this has not been changed from the

proposed rule.

The Department received 13 comments about the targeting of 50

percent of EQIP funds to livestock-related natural resource concerns.

Four comments support this targeting level. One comment urges that

funding should be targeted to conservation practices other than

expensive animal waste management facilities. One comment suggests the

funds should not be targeted to livestock but should be targeted toward

encouraging new methods of crop production that reduce soil erosion and

improve water quality. One comment encourages a minimum level of $50

million annually be targeted to conservation on private grazing land.

One comment recommends the 50 percent level be distributed and measured

at the state level, not at the national or local level. Six comments

note that only the preamble to the proposed rule mentioned the 50

percent target level and the final rule should clarify the targeting of

funds toward livestock-related natural resource concerns. The 1996 Act

requires that 50 percent of available funds be targeted to conservation

practices related to livestock production. The final rule has been

clarified by adding paragraph 1466.4(e) which addresses the targeting

of available EQIP funds to livestock-related natural resource concerns,

including concerns on grazing lands and other lands directly

attributable to livestock. The target of 50 percent of the funds will

be measured at the national

[[Page 28266]]

level since livestock-related natural resource concerns are not evenly

distributed in States or at the local level. USDA believes that some

priority areas may have none or little natural resource concerns

related to livestock production, while other priority areas may have

significant concerns related to livestock production. For that reason,

no further targeting of funds will be made such as the suggestion to

target $50 million to grazing land management. Conservation practices

that could be eligible to address livestock-related natural resource

concerns include, but are not limited to, grazing land management,

livestock exclusion, animal waste management facilities, nutrient

management, and streambank and riparian area protection. Consistent

with the overall goal of maximization of environmental benefits per

dollar expended, the Department will place emphasis on low-cost

measures which result in the highest benefits; higher cost practices,

such as animal waste management facilities, will be eligible if the

investment yields substantially high environment benefits.

Four comments concerned paragraph 1466.4(d)(2) which places

restrictions on the eligibility of publicly owned land. One commenter

supports the provisions in the rule because it would allow ranchers to

use EQIP to apply conservation practices on leased public grazing

lands. One commenter suggests publicly owned school land should be

eligible if leased to farmers. One commenter suggests that sentence

1466.4(d)(2)(ii) of the proposed rule should not restrict practices

which will primarily benefit the government landowner but should permit

funding of practices that are consistent with management plans of the

public landowner. One commenter suggests that sentence

1466.4(d)(2)(iii) should be rewritten to ``conservation practices will

contribute to an improvement in the identified natural resource

concern.'' The Department believes that the program should be used to

benefit the environment, including those instances where producers use

publically owned land. The proposed rule sentence stating that

government landowners should not be primary beneficiaries of the

program has been deleted in the final rule. Paragraph 1466.4(d)(2)

allows ranchers who lease public grazing lands and producers who lease

public school land to use EQIP on the publicly owned land if the stated

criteria are met. Sentence 1466.4(d)(2)(ii) has been rewritten in the

final rule to ``conservation practices will contribute to an

improvement in the identified natural resource concern.'' USDA believes

the provision in sentence 1466.4(d)(2)(iii) requiring written

authorization from the government landowner enables the government

landowner to ensure the conservation practices are consistent with

public land management plans; this sentence has not been changed in the

final rule.

Section 1466.5 Priority Areas and Significant Statewide Natural

Resource Concerns.

USDA received 27 comments in support of focusing the program in

priority areas. One statement that typifies the comments said this

focus ``reinforces the concept these are not ``entitlement'' dollars

but funds intended to meet Congressional articulated goals of improved

water quality and natural resource conservation.'' Thirty-eight

comments disagree with the focus of the program in priority areas

mostly because it will restrict availability of funds to the specific

priority areas. Eighteen comments indicate support to continue ACP or

to use the ACP process of allocating funds to all counties to, as one

commenter stated, ``ensure that every county gets a piece of the pie.''

USDA believes that primarily offering the program in priority areas

throughout the Nation is needed to help assure that the most

environmentally sensitive areas are considered and funds are directed

to the areas in most need. The use of the priority area concept focuses

assistance on those areas that pose the most serious threats to soil,

water, and related natural resources, including wildlife habitat and

natural resources on grazing land and wetlands, and to make

environmental enhancements. The program will also provide the most

important natural resource benefits in a cost-effective manner.

Implementation of conservation measures will be accelerated in these

areas. Past experience has shown that by focusing program assistance,

greater environmental benefits are derived. Providing program

assistance to significant statewide natural resource concerns outside

of funded priority areas will result in widespread eligibility of

producer. No change was made in the final rule concerning the focusing

of the program in priority areas.

One comment indicates natural resources that are shared by multiple

counties and States merit special consideration in the program. USDA

agrees with this comment. This was addressed in large by defining

priority areas as watersheds, regions, or areas of special

environmental sensitivity or having significant soil, water, or related

natural resource concerns. Using environmental and natural resource

concerns means that political boundaries should be ignored. The NRCS

Regional conservationists will coordinate guidance for multi-state

areas and regions. No change was made in the final rule concerning

natural resources that are shared by multiple counties and states.

Several comments suggest specific natural resource concerns should

have higher priority or consideration when determining priority areas.

Five comments favor water quality. Six comments favor wildlife habitat

with one commenter suggesting that wildlife should be a required

concern in all priority areas. Urban-influenced or non-agricultural

areas are favored by three comments. Pollution prevention is favored by

two comments in lieu of clean-up or corrective measures to existing

problems. Three comments favor a balanced, comprehensive approach to

natural resource concerns instead of solely addressing water quality.

The Department believes that a balanced, comprehensive approach should

be used to address natural resource concerns to provide the greatest

net benefits to society. Soil, water, air, grazing land, wetland,

forest land, wildlife habitat, and other related natural resources are

given equal initial consideration for treatment in the program. A

definition of ``related natural resources'' has been added in the final

rule. The final rule has also been changed in several areas to better

clarify this equality of natural resource concerns.

Five comments concern the coordination of priority areas in EQIP,

the CRP, WRP, and other programs. Two of these comments recommend a

consolidated or uniform selection process for priority areas in these

programs. One comment suggests these programs should be leveraged

together to ensure successful implementation of priority areas. Two

comments said it would be beneficial if each program had its own

priority areas. USDA agrees with aspects of each of these comments.

Close coordination of priority areas in these various program is very

important. The programs can be used collectively, but without

duplication, in certain priority areas to successfully achieve the

goals of the priority area. Likewise, certain priority areas may only

need one of the individual programs. The locally led conservation

efforts will advise and assist the Department with identifying how and

where the various conservation programs can be utilized best. USDA is

working on the development of a single, coordinated, and consistent

process for

[[Page 28267]]

selection of priority areas for each of the USDA conservation programs.

Included in this process will be the ability to have specific priority

areas for each program. Therefore, no change has been made to the final

rule concerning coordination of priority areas in EQIP, CRP, WRP, and

other programs.

Two comments suggest the priority area designation process is too

encumbered, subject to too many layers and reviews, and should be

streamlined. The hallmark of the process for selection of priority

areas is the locally led conservation effort which features the

involvement of local work groups and State technical committees

providing advice and recommendations to the Department. This process

may include several layers of review and recommendations, but the

Department believes this process will result in the greatest possible

involvement of local and State stakeholders and flexible assistance to

farmers and ranchers. Further streamlining of the process may result in

a less localized decision-making process with most decisions made at

the national level. No changes have been made in the final rule

concerning the priority area designation process.

USDA received 14 comments suggesting local work groups need to have

more involvement by producers, producer organizations, the private

agribusiness sector, and other stakeholders at the local level. USDA

agrees that involvement of producers, producer organizations, the

private agribusiness sector, and other stakeholders at the local level

is important for the local work group to effectively provide advice and

recommendations concerning the program. USDA believes, however, this

involvement and input can be better achieved with local conservation

districts leading the groups which include FSA county committees. Local

work groups will be able to work efficiently as they consider the

public input and provide information to the Department and others. Some

members of the local work group already are farmers and ranchers. The

public, including producers, producer organizations, the private

agribusiness sector, and other stakeholders at the local level, are

encouraged to provide input and information to the local work group.

The final rule has been changed to encourage the public to provide

input and information to the local work group.

One comment asks if priority areas will change each year or if they

are established through fiscal year 2002. Another comment states there

should be a procedure for refining or terminating a priority area. USDA

believes priority areas can have various periods of time that they will

be designated and funded. Some priority areas may need only one to

three years to accept a sufficient number of contracts that, when fully

implemented, will achieve the natural resource goals identified for the

area, while other priority areas with extensive or complex concerns may

require a longer period to enter into contracts to achieve the natural

resource goals. Nevertheless, it is expected that EQIP assistance to a

priority area should be limited to a reasonable number of years to

enter into contracts to achieve the natural resource goals. This will

enable other priority areas to be designated and funded in a more

timely manner. The final rule has been changed to clarify that funding

may be approved for one or more years. Program guidance will be

developed on terminating or ceasing funding to a priority area.

One comment urges the Department to reconsider the maximum area to

be included in a priority area. The commenter notes that the North

Dakota prairie pothole region is a large area of the state and would

not qualify as a priority area under the proposed rule. USDA had not

specified a maximum or minimum size constraint for a priority area in

the proposed rule. USDA does not believe a rigid size constraint should

be incorporated in the rule because natural resource concerns vary

significantly in scope and extent. Program guidance will be developed

for priority areas concerning size or scope, however, so that natural

resource goals of the priority area are measurable and achievable in a

reasonable period of time. No addition was made in the final rule

concerning maximum or minimum size of priority areas.

One comment suggests the ``shall'' in the second sentence of

paragraph 1466.5(a) be changed to ``may.'' This would then indicate

that NRCS may give special consideration to applicants in priority

areas who have conservation plans that address the natural resource

concern(s) for which the priority area was designated. USDA believes

that providing special consideration to applicants that address the

natural resource concern(s) for which a priority area was designated is

consistent with Sec. 1240C of the 1985 Food Security Act, as amended by

the 1996 Act, which states ``the Secretary shall accord a higher

priority to assistance and payments that (1) Are provided in

conservation priority areas.'' Providing special consideration to

applicants that address the natural resource concern(s) for which a

priority area was designated will enable the natural resource goals in

the priority area to be achieved. No change was made in the final rule

concerning the suggested comment.

Six comments support the provision in paragraph 1466.5(b) which

allows the use of program assistance to address significant statewide

natural resource concerns that are outside of priority areas. No change

was made to the final rule concerning program assistance to address

significant statewide natural resource concerns.

The Department received 36 comments that support the use of local

work groups and the locally led conservation activities as described in

paragraph 1466.5(c). Most comments note that identification of natural

resource concerns and priorities is done best at the local, grass-roots

level. Two comments suggest the local FSA county committees should be

equal partners and have input in determining priority areas. Nine

additional comments disagree with the locally-led process. Two of these

commenters disagree because they believe the decisions should be made

at the state level; two said there are too many players or layers of

bureaucracy involved; one said that FSA county committees should make

the decisions. The Department believes that locally led conservation

efforts, including those which involve local work groups, are very

important to the success of program. Local work groups provide

information to the Department on EQIP-related items and on other

conservation programs and activities. FSA county committees are equal

members of the local work group and, as such, will have input in

developing and recommending priority area proposals. This process may

include several layers of review and recommendations, but the

Department believes this process will result in the greatest possible

involvement of local and State stakeholders and flexible assistance to

farmers and ranchers. Further streamlining of the process may result in

a less localized decision-making process with most decisions made at

the national level. The roles of the local work group have been

retained in the final rule.

Three comments concern the designation of the chair of the local

work group. One comment favors NRCS chairing the group and two comments

disagree with this approach, suggesting the local work group should

select the chair. The Department has decided that NRCS should not be

required to be the chair of the local work group and the members of the

local work group should decide who should be the chair, if one is

needed.

[[Page 28268]]

One comment suggests that because conservation districts will be

organizing local stakeholder groups to guide the delivery of Federal

conservation programs at the local level, the name of the group which

will advise USDA should be called the ``USDA Local Farm Bill Team.''

This would help to differentiate the two groups and should help dispel

the perception that the new programs, including EQIP, will not be as

locally driven as Congress intended. The Department applauds the

efforts of conservation districts to organize local stakeholder groups

to provide input into the locally led conservation effort but does not

believe the use of the term local work group will create a

misunderstanding at the local level. The local work groups may advise

the Department on EQIP-related items and on other conservation programs

and activities. They may also choose to advise other organizations and

government agencies. No change was made in the final rule concerning

this comment.

One commenter notes that conservation districts are not organized

in all areas of the Nation and that provisions should be made for

another agency or group to lead and coordinate the local work group in

the absence of a conservation district. Program guidance will include a

provision whereby NRCS shall convene the local work group in the

absence of a conservation district.

USDA received one comment that recommends that entities other than

a Federal, State, or local government agency should be able to make a

proposal for a priority area. Paragraph 1466.5(c) in the final rule has

been modified to enable private entities to identify a priority area to

the local work group.

USDA received three comments suggesting that working procedures for

local work groups should be clarified. The Department does not believe

that working procedures need to be included in the final rule. Working

procedures and other suggestions for effective organization and

operation will be provided in guidance documents.

Three comments encourage multi-county local work groups for multi-

county priority areas. One commenter supports the designation of a lead

NRCS conservationist to coordinate activities between the local work

groups in a multi-county priority area. The Department agrees with

these comments and will incorporate these recommendations in program

guidance.

One comment recommends that conservation districts should provide

public notice of intent to organize a local work group. Due to the

membership of the local work group, publishing a public notice of

intent to organize a local work group is not required by Federal law.

Conservation districts, as subdivisions of State governments, may need

to consider this recommendation if required by a State law. Also,

conservation districts may chose to publish public notices even if not

required by law but the district decides this is the best way to

proceed.

USDA received one comment suggesting that because Indian tribes are

sovereign governments, they should be on local work groups. The

definition of local work groups in the proposed rule identified Indian

tribes as members and this definition has been retained in the final

rule. A definition of Indian tribes has been included in Sec. 1466.3 of

the final rule.

Twelve comments concerned the priority area assessment. Two

comments said the assessment will be too troublesome and time-

consuming. Seven comments suggest the use of existing natural resource

assessments, studies, data, and plans to avoid duplication of work and

to increase credibility of the priority area assessment. Two commenters

ask if demographic information on population meant that EQIP would

favor an area with greater population instead of selecting areas

because of environmental conditions. One comment suggests the

assessment described in paragraph 1466.5(c) should have quantified

information ``when and where possible'' and that the ways ``and means''

to measure performance should be included. The final rule refers to

priority area ``proposals'' (instead of assessments) to better reflect

the nature of the item and to reduce confusion with other natural

resource assessments. USDA believes the proposals are needed to

adequately and correctly designate an area as a priority area, and

agrees that existing natural resource assessments, studies, data, and

plans should be incorporated into the proposal. Environmental and

natural resource conditions, as described in paragraph 1466.5(d)(1),

are the principal factors which will be considered when designating a

priority area. The recommended language change concerning use of

quantified information and ways and means to measure performance have

been included in the final rule.

Six comments suggest NRCS, State technical committees, and local

work groups should closely coordinate the process to assess natural

resource concerns and identify priority areas with existing efforts at

the local and state level. Such efforts may be water resource planning

activities, nutrient and manure management programs, or state

agricultural conservation programs. The Department agrees with the

recommendation and such guidance will be incorporated in guidance

documents being developed to assist the local work groups.

One comment suggests paragraph 1466.5(c)(4) be modified to read

``The existing staff and incentive, education, and on-farm research

programs available at the Federal, State, and local levels, both public

and private, to assist with the areawide activities.'' The suggestion

has been included in the final rule.

USDA received 25 comments in support of the State technical

committee making recommendations and the decisionmaking role of NRCS

State conservationists. Three comments disagree with the roles of the

State technical committee and the NRCS State conservationist,

suggesting the decisions should be made at the national level. USDA

believes the roles of the State technical committee and the NRCS State

conservationist are best performed at the state level and not at the

national level. No change was made in the final rule concerning these

comments.

One comment suggests the State technical committee should develop

guidance to local work groups on natural resource information, data,

and priorities. State technical committees and State conservationists

may develop guidance to assist local work groups. This will be set

forth in program guidance.

USDA received two comments suggesting the State technical committee

and State conservationist should ``concur as much as possible'' with

the input from local work groups on designations of priority areas.

Paragraph 1466.5(d) of the final rule identifies how and on what the

NRCS State conservationists shall base their decisions to designate

priority areas. State conservationists will base decisions on the

recommendation of the local work group and State technical committee,

among other factors. Only after considering the various criteria and

factors identified in this paragraph, and determining that a proposed

priority area is worthy of program assistance, will a State

conservationist designate a priority area for EQIP assistance.

Several comments address State technical committees issues that are

not EQIP-related, including: one comment suggests the ``consensus

process'' is unrealistic and that voting should be used instead; one

comment states the State technical committee should have

[[Page 28269]]

Indian tribe representation; and, three comments offer procedural and

membership suggestions for State technical committees. The Department

will consider these comments in the rulemaking process for State

technical committees.

One comment recommends State governments should be allowed to

designate their own priority areas. The Department believes that the

final rule provides State governments with the ability to make

proposals for priority areas and no further change has been made to the

final rule.

One comment supports the provision in per paragraph 1466.5(d)(1)

that enables NRCS to consider wildlife and wildlife habitat quality and

quantity in determining the significance of natural resource concerns

in a priority area. No change has been made to the final rule

concerning this comment.

Two comments suggest paragraph 1466.5(d) should state ``NRCS will

give special consideration to priority areas that contain multiple

conservation benefits.'' USDA believes that multiplicity of

conservation benefits alone does not justify special treatment. The

priority area, whether achieving a single conservation benefit or a

range of benefits, must result in significant environmental benefits to

justify the expenditure of EQIP funds. The final rule includes a

sentence reflecting this consideration.

One comment suggests 1466.5(d)(1)(v) should recognize the

importance of saline characteristics of land and water. USDA agrees

with the comment and the final rule has been revised to ``(v) Saline

characteristics of land or water.''

One comment suggests 1466.5(d)(1)(viii) should state ``Quality and

intended use of the receiving waters, including fishery habitat and

source of drinking water supply.'' USDA agrees with the comment and the

final rule has been revised as suggested.

One comment suggests 1466.5(d)(1)(xi) should indicate that natural

hazards may include pest problems which threaten natural resources.

USDA agrees with the comment and the final rule has been revised to

``(xi) Other natural hazards or other factors, including the existing

agricultural management practices of the producers in the area or pest

problems which may threaten natural resources.''

Five comments refer to consideration of the coordination with and

level of support from other programs when allocating funds to priority

areas. One comment supports the consideration of the level of support

from other State or local programs. One suggests better coordination

effort between programs is needed so that taxpayer's money is not

wasted. One suggests EQIP funds will be most effectively spent in areas

that have no other funding sources. Two suggest funding sources such as

from private programs should be considered. One comment suggests both

direct and in-kind contributions should be considered. The Department

believes that Federal program funds can be effectively spent in areas

where other sources of funding are also available, thus allowing both

the Federal and other funding sources to be stretched and made

available in other areas. It also agrees that coordination between

Federal, State, and local programs is important, and that private

funding sources, direct, and in-kind contributions should be

considered. Paragraphs 1466.5(d)(2)(vi) and 1466.5(f)(2)(vi) have been

revised in the final rule to reflect these recommendations.

One comment suggests EQIP should be used to assist producers in

complying with Tribal environmental laws as well as with Federal and

State environmental laws. USDA agrees with the comment and has included

the suggestion in 1466.5(d)(2)(vii) and 1466.5(f)(2)(vii) of the final

rule.

USDA received several other comments concerning the criteria or

factors which should be used to select or fund priority areas,

including national conservation priority areas. Two comments suggest

that clear, minimum criteria should be established to assist with the

selection process. One comment suggests the criteria should include

soil quality. One comment recommends that existence of education,

research, and demonstration farm plans should be part of the criteria.

One comment recommends that existence of monitoring and evaluation

plans be included. The Department suggested criteria or factors in the

proposed rule language in paragraphs 1466.5(d)(2) and 1466.5(f)(2) to

facilitate a broad range of considerations and still believes that this

is the appropriate approach. The specific recommendations of the

commenters will be included as illustrations of ``other factors'' in

the guidance being developed for the program. No change has been made

in the final rule to address the comments.

USDA received comments on paragraph 1466.5(e) concerning the

approval of significant statewide natural resource concerns. One

comment suggests using criteria such as adjacency to a public natural

resource, site characteristics that will affect the likelihood of

achieving conservation objectives, and cost to achieve the benefits.

One comment suggests that wellhead protection and capping abandoned

wells would be good examples of significant statewide natural resource

concerns. The Department agrees with the concepts suggested in the

comments and will include this information in program guidance. Actual

determinations of significant statewide natural resource concerns are

made by the NRCS State conservationist, in consultation with a State

technical committee. No change has been made in the final rule to

address the comments.

In regards to national conservation priority areas in 1466.5(f),

two comments specifically favor the designation process described in

the proposed rule. One comment disagrees with the process, preferring

that all decisions should be made at the state level. One comment

received by USDA said that the process for identifying national

priorities is in part only ``lip service'' to certain groups. The

commenter finds the proposed rule lacking as to the significance of

national conservation priority area designation and suggests that the

designation should result in additional funds to the area. The

Department believes the process described in the proposed rule is

appropriate, has value, and will result in greater emphasis for

assistance being placed in the designated area(s). Areas of national

significance should be designated at the national level. No change has

been made in the final rule to address the comments.

USDA received three comments which suggest use of a national

technical committee is needed to ensure participation by national level

partners. Eleven comments suggest or nominate specific areas as

national conservation priority areas, including: Colorado River basin

(5 comments), Great Lakes basin (2), Illinois River basin (2),

Chesapeake Bay basin (1), Devil's Lake basin, ND (1), Hudson River

basin (1), California pilot recharge program (1). USDA does not believe

that a national technical committee is needed to ensure participation

of national level partners. The Department has made effective use of

interagency teams throughout the development of the EQIP program and

other conservation programs and believes that an interagency team

consisting of Federal agency partners will ensure national level

participation. The Department will consider the suggestions made when

designating national conservation priority areas. Paragraph

1466.5(f)(1) has been changed in the final rule to enable nominations

for designating national

[[Page 28270]]

conservation priority areas to be made to the Chief from Federal,

State, tribal, or local government agencies, or from private groups or

entities.

USDA received two comments recommending that the national

conservation priority area designations should be subject to formal

rulemaking procedures with public input to assure that the designations

have merit. The Department believes the process established in the

final rule will assure that the public has the opportunity to provide

input into the designation and that the designations have merit. No

change has been made in the final rule to address the comments.

Concerning the criteria to be considered when selecting national

conservation priority areas, several comments were received. One

comment suggests environmental significance and multi-state natural

resource concerns should be primary selection criteria. Two comments

recommend a greater emphasis on international, interstate, or regional

concerns, such as migratory bird habitat, be considered. These comments

are consistent with the national program objectives and criteria that

the Department intends to use when designating national conservation

priority areas. These suggestions will be incorporated in national

guidance developed for the program. No change has been made in the

final rule to address the comments.

Twenty comments support the educational assistance to be provided

in the program. Of these comments, two also note that the proposed rule

did not include specific mention of how the education assistance would

be provided. Seven of the comments state the Extension system should be

the primary delivery mechanism for the educational needs. Three of the

comments state the Extension system and other public and private

education providers should be involved. One of the comments suggests

wellhead protection should be the topic of education and another

comment suggests education on control of noxious weeds. USDA's

development and delivery of high-quality educational opportunities to

farmers, ranchers, and assistance providers should enhance the public's

knowledge about the conservation opportunities available through EQIP,

will aid in implementing their conservation plans, and enhance the

overall benefits that will be realized through the implementation of

the program. Appropriate education will maximize public benefits by

creating a knowledge base (among producers, agency staff, and private

consultants) that will extend direct EQIP benefits beyond the actual

acreage and life expectancy of financial and technical assistance

programs. The final rule includes specific direction for the delivery

of education assistance in paragraph 1466.5(h). The provision specifies

that NRCS will develop an education plan for a State or priority area.

The plan will include, among other things, a description of who will be

the education providers. While USDA expects the Extension system to

play a significant role in developing the education plans and

delivering educational assistance, other public and private education

providers are also expected to have significant roles where

appropriate. Thus the need for cooperation and coordination among all

education providers. The Department believes there are many important

topics that can be the focus of educational efforts, including wellhead

protection and control of noxious weeds in an environmentally sound

manner, but the specific education topics should be determined at the

State and local level.

USDA received numerous comments concerning the funding decisions

for EQIP. Two comments support the need for fund decisions at the

national level. One comment suggests the NRCS Regional conservationist

should make the funding decisions. Eight comments recommend the funding

decisions be made at the state level and twelve comments suggest that

all funding decisions should be made at the local level. The Department

has revised the provisions for funding decisions in paragraph 1466.5(i)

to clarify how these decisions will be made to meet the purposes and

intents of the program. USDA believes EQIP must be administered

differently than the programs it replaces, including the methods for

making funding decisions.

The Department is committed to making funding decisions based on:

The environmental needs and natural resource concerns; the need to

maximize environmental benefits per dollar expended; the capability of

the partners involved in the proposal to provide flexible technical,

educational, and financial assistance; the conservation needs of

farmers and ranchers in complying with the highly erodible land and

wetland conservation provisions of part 12 of this title and Federal,

State, and tribal environmental laws; the opportunity for encouraging

environmental enhancement; the anticipated or proven performance of the

partners involved in the proposal in delivering the program; and, other

relevant information. Funding proposals for State-level approved

priority areas are reviewed and competitively ranked in consultation

with the State technical committee.

The State technical committee is comprised of professional natural

resource managers who represent a variety of disciplines in soil,

water, wetlands, plants, wildlife management, and related natural

resource and environmental sciences. Members come from agencies such

as: NRCS, FSA, Forest Service, CSREES, U.S. Fish and Wildlife Service,

Environmental Protection Agency, and other Federal agencies; State

agencies responsible for fish and wildlife, forestry, water resources,

agriculture, soil and water conservation, and conservation districts;

private groups, organizations, or individuals representing agriculture,

commodities, agribusiness, environment, land and water management; and,

persons knowledgeable about economic and environmental impacts.

After the NRCS State conservationist approves the priority areas,

the regional and National levels review the proposals to verify that

they meet program guidance and will meet program goals and objectives.

A national-level interagency team representing Federal agencies with

appropriate expertise and information assists the Chief by reviewing

the submitted proposals and making recommendations on adequacy of

proposals. The Chief determines funding levels to be allocated to the

States, with the concurrence of the FSA Administrator, considering such

information as: the environmental and natural resource conditions

across the Nation; the interagency team recommendations;

recommendations from NRCS Regional conservationists and staff; the

funding proposals; and other information identified above in this

response. The Chief will also allocate some funds each year using a

performance-based incentive reward for the anticipated or proven

performance of the partners involved in a proposal in delivering the

program in an exceptional manner, and for issues or concerns determined

to be of national importance.

After funds are allocated to the NRCS State conservationist, the

State technical committee is again consulted on which State-approved

priority areas that meet program guidance should be funded and in what

amount. The consultation process with the State technical committee in

the proposal-approval stage and the funding decision stage helps to

ensure that the best proposals are selected and funded.

Twenty-six comments disagree with priority areas receiving the

[[Page 28271]]

predominance of funds, but did not recommend a funding level. Five

believe priority areas should receive 75 percent of the funds with the

remaining 25 percent to significant statewide natural resource concerns

outside of priority areas. Three comments suggest a 60 percent priority

area to 40 percent outside priority area split. Nine comments favor a

55 percent priority area to 45 percent outside priority area split.

Seven comments support a 50 percent priority area to 50 percent outside

priority area split. Nine comments favor a 25 percent priority area to

75 percent outside priority area split. Five comments suggest a phase-

in approach, starting with more funds to outside priority area and

progressively reaching the 75 percent to priority areas in three years.

Seven comments suggest no funding percentage should be used to allocate

funds but all decisions should be based on environmental need. Two

comments suggest each state should receive at least a $2 million base

level for work throughout the state. USDA believes that primarily

offering the program in priority areas throughout the Nation is needed

to help assure that the most environmentally sensitive areas are

considered and funds are directed to the areas in most need. The use of

the priority area concept focuses assistance on those areas that pose

the most serious threats to soil, water, and related natural resources,

including wildlife habitat and natural resources on grazing land and

wetlands, and to make environmental enhancements.

The Department intends to provide more funds where the natural

resource and environmental need is greatest but does not intend on

having a prescribed percentage or formula published in the final rule

because this will limit the Department's ability to respond to changing

conditions and needs. However, for FY 1997, at least 65 percent of the

available funds nationally will be used in priority areas. To meet

future needs, the Department will move to have more funds, perhaps 75

percent or more, directed to priority areas. Providing program

assistance to significant statewide natural resource concerns outside

of funded priority areas will result in widespread eligibility of

producers on the most important natural resource concerns. No change

was made in the final rule concerning the focusing of the program in

priority areas.

One comment requests that USDA honor all existing commitments to

Indian tribes under the former Great Plains Conservation Program. All

contractual commitments to Indian tribes and other contract holders

under the former Great Plains Conservation Program, Colorado River

Salinity Control Program, Agricultural Conservation Program, and the

Water Quality Incentives Program will be honored by USDA. No change was

made in the final rule concerning the comment.

Four comments request that funds should be provided to conservation

districts for the administrative work they perform associated with the

local work group and other program aspects. The final rule does not

require conservation districts to perform administrative duties in the

program. Most of the administrative work will be performed by FSA and

the FSA county committees. The final rule enables, but does not

require, conservation districts to participate on local work groups and

to approve conservation plans which will be used as the basis for EQIP

contracts. This is done to meet the spirit of the Congressional

Conference Managers who wrote in their Conference Report ``In

particular, Congress intends for the Secretary to acknowledge and

maintain the historic role of conservation districts in assessing

natural resource priorities, approving site-specific conservation

plans, and coordinating the delivery of federal conservation programs

at the local level.'' The Department does not intend to reimburse

conservation districts for their involvement on local work groups or

their approval of conservation plans. No change was made in the final

rule concerning the comments.

One comment suggests the Chief should reject or not approve funding

to any State-approved priority area, statewide concern, or national

conservation priority area that fails to target efforts to the most

pressing environmental problems. The Department agrees with the comment

and intends on providing program funds where the natural resource and

environmental need is greatest and where the program can be used most

cost-effectively. No change was made in the final rule concerning the

comment.

USDA also received six comments on miscellaneous aspects of fund

management that were not described in the proposed rule or its

preamble. USDA will consider these comments as it develops its program

guidance documents.

Section 1466.6 Conservation Plan

USDA received nine comments supporting the development and use of

conservation plans as described in the proposed rule. One comment

opposes the development of plans as a program requirement. The 1996 Act

requires program participants to implement a plan in order to receive

program assistance. This provision was incorporated in the proposed

rule and no change was made in the final rule concerning the comments.

Two comments suggest the final rule should include more precise

criteria and definitions concerning the acceptability of conservation

plans. The Department will incorporate criteria concerning

acceptability of conservation plans in its program guidance documents.

No change was made in the final rule concerning the comments.

USDA received one comment requesting NRCS to develop all

conservation plans after a producer applies for the program. Another

comment states a farmer who must hire someone to write a detailed plan

should have some assurance they will be considered for program

payments. The 1996 Act requires program participants to submit to the

Secretary for approval a plan that incorporates conservation practices

and is based on such principles as the Secretary considers necessary to

carry out the program. Additionally, the 1996 Act requires the

Secretary to ensure that the processes of writing and developing

proposals and plans for contracts are open to individuals in the

agribusiness sector. These provisions were incorporated in the proposed

rule and the Department believes that requiring all conservation plans

to be developed by NRCS would be inconsistent with the statute. NRCS

will, however, be available to provide an eligibility assessment of the

farming or ranching operation of the producer as a basis for developing

the plan. Additionally, NRCS will be available to assist producers

develop conservation plans if requested. No changes were made in the

final rule concerning the comment.

One comment suggests the plans should be called ``EQIP plans.'' The

term ``conservation plan'' is used to reinforce the concept of a single

plan for all natural resource conservation activities on a farm or

ranch unit of concern. In the past, specific program plans have been

developed on the same farm or ranch and, occasionally, the specific

plans were in conflict or confusing to the producer. A single

conservation plan, if requested by a producer, will help to reduce the

potential conflicts and confusion, and will reduce the administrative

burdens on the producer. No changes were made in the final rule

concerning the comment.

Two comments suggest the use of the term ``unit of concern'' was

confusing. One of these commenters recommended

[[Page 28272]]

revising the wording in paragraphs 1466.6(a) and 1466.6(e) to read

``for the farm or ranch unit of concern.'' USDA agrees with the

comments and have changed paragraphs 1466.6(a) and 1466.6(e) in the

final rule.

USDA received one comment recommending a provision be made for a

participant to revise a conservation plan (and contract) if necessary

to reflect changes in the farm or ranch operation, conservation needs,

or schedule of implementation. The recommended provision is commonly

provided for in all Departmental conservation program guidance and will

be included in the program guidance documents for EQIP. No changes were

made in the final rule concerning the comment.

USDA received three comments concerning the role of conservation

districts in approving conservation plans. Two comments express

appreciation for conservation districts approving all conservation

plans used in the program. One comment opposes the conservation

district role of approving conservation plans. One comment suggests

conservation districts should have a role in approving revisions to

conservation plans and should have a role in the event a plan is

appealed by a participant at a later date. The Department believes the

provision for conservation districts approving conservation plans as a

part of the program maintains the historic role of conservation

districts approving site-specific conservation plans. Conservation

districts will also approve revisions to conservation plans. Roles of

agencies during the appeal by a participant of a determination

affecting participation are identified in parts 11 and 614 of this

title. In its role during appeals, NRCS may consult with the

conservation district. No changes were made in the final rule

concerning the comments.

USDA received one comment suggesting paragraph 1466.6(a)(1) be

revised to indicate that natural resource concerns will include crop

pest concerns. Another comment suggests paragraph 1466.6(a)(2) be

revised to indicate that that resource management systems will include

pest management systems. USDA does not believe the suggested revisions

are needed. While EQIP will not fund normal and routine farming

practices which simply protect crop production, crop pest concerns may

create natural resource concerns which EQIP may appropriately address.

Likewise, pest management systems, such as integrated pest management,

may be considered a resource management system where the adoption of

such system would not likely occur absent program assistance and its

implementation could yield significant environment benefits. Therefore,

the Department did not make changes to the final rule concerning these

comments.

USDA received two comments suggesting paragraph 1466.6(a) should

include the words ``including grazing lands, wetlands, or wildlife

habitat'' to further describe the related natural resources. USDA added

a definition of ``related natural resources'' which incorporates the

suggested words and believes this adequately addresses the comments.

USDA received one comment suggesting a provision in paragraph

1466.6(a)(2) to allow conservation plans to vary from the NRCS field

office technical guide as needed to foster higher value wildlife

habitats. A conservation plan submitted by a participant may foster

higher value wildlife habitats or other resource management system, or

some portion of that system, than identified in the applicable NRCS

field office technical guide. NRCS, as provided in paragraph

1466.6(a)(1), will consider whether the participant will use the most

cost-effective conservation practices to maximize the environmental

benefits. No change has been made to the final rule concerning this

comment.

USDA received numerous comments concerning the level of treatment

that should be required in the program. Three comments suggest total

resource management systems be required. Three comments oppose a

requirement for total resource management systems. Five comments

support encouragement to achieve a resource management system and use

of a flexible, progressive planning approach. The Department believes

that the program should provide flexibility to participants who desire

to implement one or more conservation practices which impact a range of

natural resource concerns. The program has been designed to encourage,

but not require, the voluntarily implementation of a total resource

management system. However, the number of natural resource concerns

incorporated into a conservation plan will not, in and of itself,

justify special priority treatment. The conservation plan, whether

addressing a single natural resource concern or several, must result in

significant environmental benefits to justify the expenditure of EQIP

funds. No change has been made to the final rule concerning these

comments.

One comment recommends conservation plans should not focus

exclusively on the priorities identified in a priority area or on the

significant statewide natural resource concerns, but other concerns

should also be addressed. To meet the purpose and intent of the

program, the Department believes the conservation plans submitted by

participants must address the priority natural resource concern in the

priority area or the significant statewide natural resource concern

outside a funded priority area if natural resource conservation goals

and objectives in a priority area, a State, or the Nation are to be

achieved. Directing program funds to address other concerns will divert

funds from higher priority natural resource concerns. No change has

been made to the final rule concerning this comment.

A tiered, multi-level approach to financial assistance is suggested

in two comments. This approach would establish a lesser amount of

payments (i.e. up to $5,000 per year) for participants who develop a

conservation plan with one or two practices to address a single

concern. The second level would allow more payments (i.e. up to $7,500

per year) for participants who develop a whole farm conservation plan

with resource management systems to address multiple concerns. The

highest level would allow the maximum payments (up to $10,000 per year)

for using the second level plan plus incorporating a well-designed, on-

farm demonstration or research project. The Department believes the

suggestion is a creative manner of providing financial assistance that

encourages increased level of treatment to address priority natural

resource concerns. The suggestion, however, provides for payment

restrictions that are not supported by the 1996 Act, nor do they relate

to the actual cost of implementing conservation practices. The

Department believes that the proposed rule also provides for voluntary

encouragement for increased level of treatment to address priority

natural resource concerns without restricting payments arbitrarily. The

concept of the suggestion will be incorporated in the program guidance

documents. No change has been made to the final rule concerning these

comments.

USDA received numerous comments concerning the use of whole farm or

ranch plans. Ten comments suggest that whole farm or ranch plans should

be required to be eligible for the program. One comment suggests whole

farm and ranch planning should be the focus of plans for the program

or, at the least, to reward participants who develop whole farm or

ranch plans. Eleven comments oppose requiring whole farm or ranch

[[Page 28273]]

plans. Seven comments suggest the program should be used to encourage,

but not to require, the development of whole farm or ranch plans by

providing a higher ranking to applications, payments for developing

such a plan, or providing higher payments to implement the plan. The

1996 Act enables a participant to implement one conservation practice

using EQIP. The Department believes that in order to meet this

statutory requirement a whole farm or ranch plan should not be

required. However, the program has been designed by the Department to

provide for flexibility in carrying out the program. Participants will

be encouraged, but not be required, to voluntarily develop a whole farm

or ranch plan. The conservation plan will address the conditions that

cause or influence the natural resource concern for which the plan is

being developed. Therefore, even when a whole farm or ranch plan is not

developed, information from outside the defined unit of concern may be

considered where it is necessary to develop the best strategy for

meeting the producer's objectives and resolving the natural resource

concern. Participants who submit a whole farm or ranch plan that

maximizes environmental benefits per dollar expended will likely be

assigned a higher priority for a contract than would participants who

do not submit such a plan. The likelihood of being assigned a higher

priority depends on whether the plan will result in significant

environmental benefits to justify its priority.

Ten comments concerned who may provide technical assistance to a

participant for the purposes of developing a conservation plan. Nine of

the comments support the latitude given to participants to select the

service provider. Several of these comments also suggest specific

service providers, such as professional foresters, certified crop

advisors, and other qualified organizations. One comment states no plan

should utilize the products or services sold or owned by the private

agribusiness developer of the plan to avoid bias in the plan. The

Department believes that the provisions in paragraph 1466.6(b) of the

proposed rule provide the flexibility that the participant needs to

select a service provider that is qualified. The provision refers to

cooperating agencies, private agribusinesses, and other organizations,

and the Department believes that more specific identification is not

required. The Department further believes that the program will have

sufficient safeguards and oversight so that any bias that may be

created by private agribusinesses or other organizations providing

technical assistance services will not cause a misuse of program funds.

No change was made in the final rule concerning these comments.

One comment states paragraph 1466.6(b) implies that producers must

submit a plan in order to receive technical assistance, and this should

be removed. The first sentence of paragraph 1466.6(b) of the proposed

rule stated ``Upon a participant's request, the NRCS may provide

technical assistance to a participant.'' The Department does not intend

to imply that a producer must first submit a plan to receive technical

assistance. A participant must request NRCS to provide the technical

assistance, including the development of a conservation plan, if that

is the desire of the participant. No change was made in the final rule

concerning this comment.

One comment suggests the final rule provide more clarity on the

procedures NRCS will use to address private sector requirements and

approval of assistance. Due to the varying complexities of the

technical assistance services that may be provided by non-NRCS

personnel, the Department does not believe that program regulations are

the most appropriate way to establish these procedures. The program

guidance document being developed by the Department will include

guidance concerning acceptance of conservation plans, requirements of

the private sector and other service providers, and approval of the

technical adequacy of work done by non-NRCS personnel. No change was

made in the final rule concerning this comment.

USDA received several comments concerning the use of NRCS field

office technical guides (FOTG) for conservation practices. Four

comments support the use of the FOTG for conservation practices and

methods. Nine comments state the FOTG's are either too narrow in scope

or require updating and revising in a timely manner to reflect current

conservation practices and technologies, and one of these commenters

suggest NRCS should use other documents or references which provide

more up-to-date information. Two comments suggest NRCS should assure

that FOTG information is shared and consistent across state lines and

the NRCS Regional conservationists could be used to assure this

happens. Two comments promote involvement of private industry, State,

and Federal agencies in the development of FOTG information. One

comment asks what standards are used to determine if a natural resource

has been protected or improved. The NRCS FOTG is a dynamic technical

document. The FOTG contains the standards for the conservation

practices which may be funded in the program. It also includes a

section containing many references and documents published by non-NRCS

sources, including private agribusinesses and research institutions.

NRCS intends to review, on a regular basis, the content of the FOTG to

assure that they include the most current elements of conservation

practices, including innovations and new technologies. To assist with

maintaining the most current elements of conservation practices,

including innovations and new technologies, NRCS welcomes the

information and input from producers, natural resource conservation

professionals, scientists, and the private agribusiness sector. This

review, update, and revision is a part of the overall conservation

technical assistance activities of NRCS and is not specific to EQIP. In

recognition of the rapid change of technology, paragraph 1466.7(a)(3)

of the rule provides for pilot work using new technologies or

conservation practices. No changes were made to the final rule

concerning these comments.

Ten comments concern the contents of a conservation plan. Two of

the comments support the list of conservation plan contents. Two

comments suggest the landowner's primary and secondary objectives

should be included. One comment states forest types should be included

in the plan. Five comments suggest monitoring and evaluation mechanisms

must be components of each plan so that outputs can be measured. The

Department believes that an evaluation mechanism is needed so that the

outputs and outcomes of each conservation plan, each priority area and

natural resource concern, and the entire program can be measured. Each

conservation plan will contain information which can be used in the

evaluation mechanism. NRCS and FSA will each be using automated data

collection systems to assist in the evaluation of the program at all

levels. The natural resources identified in sentence 1466.6(e)(2) are

intended to be illustrative and are not all-inclusive. Sentences

1466.6(e) (3) and (4) have been amended in the final rule to identify

the objectives as those of the participant.

On the subject of a simplified conservation planning process, seven

comments support the proposed rule provision for a single conservation

plan. One comment suggest the single plan could include government

regulatory

[[Page 28274]]

requirements. Another comment suggest that the process should assure

participants that the single plan will be recognized by other Federal

regulatory agencies. One comment encourages the use of broad-scale

planning efforts so that a separate individual plan development and

approval process would not be needed when the individual plan is

consistent with the broad-scale plan. The Department will work with

Federal regulatory agencies to provide a mechanism for a single

conservation plan which they will recognize for their purposes. USDA

agrees that the conservation plan development and approval process can

be further simplified where broad-scale plans have been developed and

is using its conservation programs to encourage the development of such

plans. The final rule has been amended to indicate that a single

conservation plan could contain government regulatory requirements, to

the extent possible.

One comment suggests paragraph 1466.6(f) be amended to indicate

that a single conservation plan could incorporate tribal program

requirements. The Department agrees and has incorporated the suggestion

in the final rule.

Twelve comments state the conservation plan and supporting

documentation must be considered as confidential information. Without

confidentiality of the records producers will be reluctant to

participate in the program. CCC has determined that conservation plans

and certain supporting documentation developed or submitted for EQIP

purposes are Federal records and, as such, are subject to the Freedom

of Information Act, 5 U.S.C. 552, and the Privacy Act of 1974, 5 U.S.C.

552a. Requests for records will be reviewed under normal rules that

apply to such information, with all due concern given to the desire for

confidentiality. No amendment was made to the final rule concerning

these comments.

Section 1466.7 Conservation Practices

USDA received 13 comments in support of providing financial

assistance for needed conservation practices. Another comment supports

financial assistance for upgrading or enhancing existing practices used

by participants. A participant may receive financial assistance for

enhancing an existing practice if the existing practice has exceeded

its useful life span or if the enhancement provides for substantive

improvement in the practice so that it provides a greater impact on the

natural resource concern and maximizes environmental benefits per

dollar expended. The program guidance document will incorporate this

provision and no change has been made to the final rule concerning

these comments.

One comment opposes providing financial assistance for vegetative

practices. The 1996 Act provides for cost-share assistance for

``structural'' practices which includes vegetative practices. The

Department believed it was confusing to describe vegetative practices

as ``structural'' and incorporated a definition of both structural

practice and vegetative practice in the proposed rule. The Department

believes the 1996 Act intended to authorize financial assistance for

vegetative practices and, therefore, included this provision in the

proposed rule. Vegetative practices often provide the most cost-

effective conservation alternative to address certain environmental

concerns and many structural practices, such as grassed waterways and

terraces, incorporate vegetative treatment in the practice. No change

has been made in the final rule concerning this comment.

Seventeen comments express support for financial assistance for

various conservation practices, including: water storage pits, pipeline

installation, cross-fencing in pastures, vegetative buffers,

conservation tillage, livestock watering facilities, pest management,

noxious weed management, riparian area protection, wellhead protection

and sealing, terraces, controlled drainage, agricultural chemical

mixing and storage facilities, oil recycling, tile set-backs, precision

farming, fuel storage containment dikes, forage storage leachate

control, waste utilization and composting equipment, composting,

sustainable farming practices, and grassed waterways. USDA believes

these are examples of conservation practices which may be eligible in

EQIP where they provide environmental benefits. To be eligible, the

practice must provide the most beneficial, cost-effective approaches

for participants to change or adapt operations to conserve or improve

natural resources or to provide for environmental enhancement.

Conservation practices must meet NRCS standards in accordance with the

applicable NRCS field office technical guide. No change has been made

in the final rule concerning the eligibility of conservation practices.

USDA received two comments in support of practices that were

eligible under the former USDA conservation programs. Conservation

practices eligible in the program to address the natural resource

concerns will be identified at the local and State level. Conservation

practices which were eligible in the former USDA conservation programs

may be eligible if determined to be appropriate to address the priority

natural resource concerns. No change has been made in the final rule

concerning eligibility of conservation practices.

USDA received 85 comments which oppose financial assistance for

construction of animal waste storage facilities. Most of these comments

oppose financial assistance specifically to open lagoons citing

problems with odors and leaks. These include 33 comments which oppose

funding lagoons for large confined livestock operations but express

support for funding other livestock-related conservation practices,

such as composting, nutrient management, rotational grazing, pasture

management, nutrient testing, and riparian area protection. Three

comments agree that financial assistance should be used for

construction of animal waste storage facilities, including lagoons. One

comment opposes providing 100 percent of the cost to construct manure

handling systems. One comment suggests reduced cost-share rates should

be given to manure storages as compared to other practices. The 1996

Act did not limit financial assistance for construction of animal waste

management facilities, except for those constructed by a producer who

owns or operates a large confined livestock operation. However, the

Department believes that placing an emphasis on low-cost practices

which yield significant environmental benefits will better achieve the

statutory goal of maximization of environmental benefits per dollar

expended than a focus on high-cost practices. The Department believes

animal waste management facilities are viable conservation practices

that, when used in combination of other conservation practices, such as

nutrient management, can provide the most cost-effective system for

managing animal wastes to address natural resource concerns. Neither

the proposed or final rule provides financial assistance of up to 100

percent of the cost of animal waste management facilities but limits

the cost-share rate at 75 percent. No change has been made in the final

rule concerning these comments.

USDA received 28 comments in support of manure and nutrient

management systems and other livestock-related conservation practices

in lieu of providing cost-sharing for manure storages such as lagoons.

Twenty-seven comments express support for financial assistance for

[[Page 28275]]

conservation practices relating to wildlife habitat, including eleven

in support of native plants to aid with wildlife habitat. USDA received

19 comments in support of tree planting, reforestation, or other

forestland management measures as eligible conservation practices and

another 22 comments were in support of windbreaks and shelterbelts. The

proposed rule provides for land management practices, such as nutrient

management, manure management, and wildlife habitat management, for

incentive payments, and for cost-sharing of vegetative practices for

critical area plantings and permanent wildlife habitat. NRCS vegetative

practice standards provide for use of native plants. The conservation

practices listed in the rule are for illustrative purposes only and are

not intended to be an exhaustive list of eligible practices.

Conservation practices eligible in the program to address the natural

resource concerns will be identified at the local and State level.

Conservation practices may be eligible if determined to be appropriate

to address the priority natural resource concerns. Tree planting is a

vegetative practice and has been included in that definition. No

further changes were made in the final rule concerning these comments.

Seven comments support the proposed rule process for determining

conservation practice eligibility, especially involving State technical

committees and local work groups. No changes were made to the final

rule concerning these comments.

One comment expresses the need to have public comment, through a

public notice procedure, on proposed eligible practices in a priority

area or state. Another comment expressed the need to involve private

agribusinesses in this process. The public and private agribusinesses

will have the opportunity to provide input to the local work group on

eligible conservation practices. No changes were made to the final rule

concerning these comments.

Twenty-four comments express support for the proposed pilot work

for new technologies and practices. Of these comments, three indicate

support for the involvement of others in the pilot testing, such as

wildlife specialists, private agribusinesses, producers, and producer

organizations. Four commenters indicate alternative livestock

practices, pilot programs and on-farm research and demonstration

components should be used in EQIP as a means to encourage the use of

innovative conservation practices. Two comments express the need to

expedite the approval procedure for interim conservation practice

standards used on pilot activities. One comment suggests incentives

should be provided to users of environmental assessment tools, such as

Farm*A*Syst. Another commenter stresses a key to successful

implementation of EQIP is flexibility in terms of allowing participants

and conservation partners to develop and implement unconventional

methods or practices that could spark enthusiasm for the program. No

change has been made in the final rule. NRCS will approve interim

conservation practice standards used for pilot work in a manner that

allows for timely implementation. The use of environmental assessment

tools are encouraged by the Department as a part of the conservation

planning process for EQIP, other conservation programs, and

conservation planning in general. NRCS State conservationists, using

the advice of State technical committees, will determine which

conservation practices are needed and are eligible for program

payments.

USDA received the most comments concerning the issue of defining

large confined livestock operations for the purposes of providing cost-

share payments for construction of an animal waste management facility.

USDA received 161 comments in favor of a national definition of

large confined livestock operations of 1,000 animal unit (AU)

equivalents. These commenters favor this option primarily because it

will provide greater funds to small and moderate farms and ranches and

it is consistent with the size requirements for non-point discharge

elimination system permits. Six of the commenters also suggest NRCS

State conservationists should be encouraged to lower the size limit to

fit circumstances in the state, such as State regulations. Three of the

commenters suggest the size limit should be less than 1,000 AU in many

circumstances.

USDA received several comments which suggest a variety of size

limits be established as the national definition. One comment suggests

limits of 400 beef cattle, 280 dairy cattle, 40,000 poultry, and 1,000

hogs. One comment favored a 500 beef cattle and 250 hog limit. One

comment suggests a 800 beef cattle and 1,000 hog limit. One comment

favors a 2,000 hog limit. One favors a single national definition but

offers no suggestion on what the definition should be.

Two comments suggest the aggregate total of animals owned by a

farmer or rancher at all locations should be the basis for defining a

large livestock operation.

USDA received 22 comments which suggest no program funds should go

to ``publicly-held'' or ``investor-owned'' corporations. Program

funding to only small and moderate farms and ranches is favored by 63

comments.

USDA received 22 comments that state NRCS State conservationists

could not or should not decide the definition. A variety of reasons

were given in these comments, including five comments about the

pressure that would come from inappropriate lobbying by livestock

producers; four comments thought the NRCS State conservationist was a

State government official; three comments express concern that unfair

competition will be created between States due to different

definitions; and three comments oppose different definitions in each

State.

USDA received 29 comments which favor the proposed rule procedure

for defining large confined livestock operation. One of the commenters

also recommends allowing exceptions to the State-level definition. One

of the commenters suggests the State conservationist could decide up to

a limit of 8,000 animals (animal type was not stated). One of the

comments also suggests that no more that 20 percent of the livestock

operations in a State should exceed the defined limit. Two of the

commenters suggest a gross income level of $2 million be used to

determine large.

USDA also received 32 comments which favor no size limits be

established for large confined livestock operations. Most of these

comments recommend the program emphasize environmental benefits rather

than size when deciding who should receive payments.

Under provisions of the 1996 Act, producers with ``large confined

livestock operations'' are not eligible for cost-share payments on

animal waste management facilities, but are eligible for technical

assistance on these facilities and program assistance on other

conservation practices. The 1996 Act leaves the determination of

``large confined livestock operation'' to the Secretary. In considering

how to define large livestock operations, CCC considered the public and

agency comments and explored a number of options.

CCC considered establishing a national 1,000 AU threshold, with

some exceptions authorized, using the consideration elements specified

in the Conference Manager's report. The 1,000-AU threshold was

considered because it is employed in the National Pollution Discharge

Elimination System (NPDES), authorized by the Clean Water

[[Page 28276]]

Act, and used by the Environmental Protection Agency (EPA). This option

offers some advantages, because it is consistent with the NPDES, and

most family and small-to moderate-size farms are under this threshold

and will be eligible for cost-sharing. This option would target more

program funds to smaller operations, reduce funds to large operations,

and provide flexibility to address State and local environmental needs

when exceptions are granted. However, CCC believes this option lacks

sufficient flexibility to address State and local variations in

operations, creates an exaggerated discrepancy between the

implementation of this provision with the overall program goal to

maximize environmental benefits per dollar expended, and relates only

indirectly to the likelihood that the livestock producer would not

otherwise construct a waste management system.

Another option considered was to base the national definition on

the amount and environmental threat of manure and other animal waste

generated in the confined livestock operation. Although this option

would allow choices more closely related to the environmental issues

and problems resulting from the animal manure, it also uses a complex

and easily challenged process of defining thresholds by weight, volume,

or environmental threat.

A third option considered was the use of an economic achievability

analysis, which considers the ability to pay for measures to meet

environmental objectives. One such analysis is that conducted by EPA,

the ``Economic Impact Analysis of National Nonpoint Source Management

Measures Affecting Confined Animal Facilities,'' which was completed in

1995. This type of analysis will most likely result in defining the

term ``large'' differently for different animal types. EPA's analysis

indicates that dairies with 98 AU or more can generally afford to

implement animal waste runoff and storage systems without cost-shares.

Thresholds for other animal types, as identified by EPA, are: beef

feedlots, 300 AU; horse stables, 400 AU; poultry broilers and layers,

150 AU for liquid manure systems, 495 AU for continuous overflow

watering; turkeys, 2,475 AU; and swine, 80 AU. This option would be

most sensitive to a producer's ability to pay for needed facilities and

would make more program funds available to small operations. It would

also provide flexibility to address State and local environmental

needs. However, there are problems inherent in translating national

level data to State and local conditions. Some operations with high

potential for environmental benefits would be eliminated from program

eligibility. It would be more restrictive toward hog and dairy

operations because of the very low threshold levels. If EPA's analysis

were used as the basis for determining eligibility, an estimated 45

percent of dairy farms and 20 percent of hog farms would not be

eligible. Another problem with this approach is that producers would be

required to provide financial records or other evidence of their

inability to pay without financial assistance.

A fourth option considered was that an operation would not be

eligible for program cost-share funds if the animal waste management

facility requires a NPDES permit. No exceptions to this limit would be

authorized because its proponents believe that the necessity for a

permit is all the incentive that a producer needs to install an animal

waste management facility. This option was not accepted because it

would provide no flexibility to address State and local environmental

needs. Further, EPA has determined that a totally enclosed animal waste

management facility with no discharge (and no anticipated or potential

discharge) of animal waste to waters of the United States is not

subject to the NPDES program. This would make certain ``large''

operations eligible for cost-shares, regardless of a person's ability

to pay.

Therefore, having considered all these options and the comments

received on the proposed rule, CCC has chosen to not use a hard and

fast animal unit number nationally to define a large livestock

operation. CCC will consider producers with 1,000 AU or less as

eligible for financial assistance for animal waste management

facilities if otherwise eligible based on the intent of the program to

maximize environmental benefits for dollars spent. The NRCS State

conservationist, in consultation with the State technical committee,

may develop criteria to use when defining a large confined livestock

operation. This State-level definition will be used to determine

eligibility for receiving cost-share payments for animal waste

management facilities. CCC will provide national guidance, developed by

NRCS in consultation with other Federal agencies, to NRCS State

conservationists to clearly specify the factors and considerations

involved in developing the requirements for program eligibility. The

criteria will provide consideration of the elements specified in the

Conference Manager's report cited above, including the cost-

effectiveness of the application, the ability of producers to pay for

such facilities without financial assistance, the significance of the

natural resource concerns resulting from the operation, and the

prevailing State, tribe or local implementation of environmental laws,

such as the Clean Water Act. In considering this definition, priority

emphasis will be placed on assisting family farmers and ranchers,

especially small- and medium-scale producers, and not meatpackers,

processors, and vertical integrators. Small- and medium-scale family

farms and ranches that have contracts with meatpackers, processors, and

vertical integrators would be eligible. A variable cost-share rate

could be considered at the State level, so that limited resource

farmers and small-scale operations would receive a higher Federal cost-

shares.

The NRCS State conservationist's definitions must be approved by

the Chief, who will consider the justification of the definition and

consistency in the definitions, to the greatest extent possible, used

between and among States.

All participants who receive cost-shares to install animal waste

management facilities must follow an approved animal waste management

plan in accordance with NRCS conservation practice standards, which may

require the use of a nutrient management plan, including the

satisfactory use, treatment, or disposal of animal wastes. When

determining the number of livestock in the participant's operation for

eligibility purposes, the total number of animals confined at all

locations of the participant's livestock operation will be used, not

just the animals at the site of the proposed animal waste management

facility. The average annual number of livestock in the operation, for

the 12-month period before making application, will be used for this

calculation. This places an emphasis on the economic factors associated

with the livestock enterprise, especially reflecting the ability to pay

for the conservation practice. Also, guidance will be provided on using

EQIP funds to cost share animal waste management facilities for

expanding and new livestock operations. While such use of funds would

be permitted, guidance will emphasize that NRCS State conservationists

should place the highest priority on the most significant natural

resource concerns and that they have the flexibility to place higher

priority on assistance to existing livestock operations. Livestock

operations that expand to the level contained in the State-defined

definition of a large confined livestock operation would not be

eligible for cost-

[[Page 28277]]

share assistance for the animal waste management facility. The Chief

will report to the Secretary periodically on the implementation of this

policy, especially on the impact that may be occurring to the

environment and to the structure of livestock agriculture. The report,

submitted to the Secretary every six months for the first two years the

program is implemented, will be based on information received from the

NRCS Regional and State conservationists, and from other sources.

CCC believes this option provides significant flexibility for State

and local decision-makers, where the needs of the environment and the

livestock operator are best determined, and thus best meets the intent

of the 1996 Act. This method will provide the program with the maximum

ability to resolve environmental problems in priority areas and other

locations where the program is delivered. It also incorporates the

consideration of a person's ability to pay, regardless of the size of

the operation. This option considers prevailing State or local

implementation of various Federal, State, and tribal environmental

authorities and requirements, including the Clean Water Act and other

water quality authorities. It will allow CCC to consider modern

livestock operation characteristics, which vary depending on types of

livestock, marketing strategies, geography, and State and local

economic factors, from a State and local perspective.

Section 1466.8 Technical and Other Assistance Provided by Qualified

Personnel Not Affiliated With USDA

USDA received 16 comments that express support for allowing the use

of technical and other assistance from entities outside of USDA. Two

comments suggest the use of planning grants as a means to obtain

assistance from other entities and one comment suggests a finder's fee

be available for any assistance provided for the identification of

potential program participants. Six additional comments urge USDA to

include specific mention of particular qualified personnel or agencies

available to provide technical assistance, such as mention of tribal

agencies, agriculture input retail dealers, biologists, and qualified

individuals. USDA believes flexibility for technical assistance will

increase the utility of the program for addressing natural resource

concerns. USDA does not have the authority to make planning grants or

provide finder's fees. USDA utilized broad language in the proposed

rule to increase the flexibility of the program and believes that

mention of particular entities is unnecessary. No changes have been

made in the final rule concerning these comments.

USDA received fourteen comments that suggest the participant's cost

for technical assistance from non-USDA sources be paid with EQIP funds.

Four additional comments indicate USDA should reflect the reduced

agency costs in overhead resulting from the use of non-USDA sources of

technical assistance. One comment states EQIP funds should not be used

for the technical assistance provided by non-USDA sources. Six comments

request USDA provide funding for the services provided in EQIP by

conservation districts and four comments simply request USDA explain in

greater detail how it will contract to pay for technical assistance

provided by non-USDA sources. USDA encourages the use of non-USDA

sources of technical assistance, including private sources, but does

not agree that EQIP technical assistance funds should be provided to

participants who chose to use technical assistance provided by non-USDA

sources. Participants have the flexibility to use the services provided

by private sources, NRCS, conservation districts, State and local

government agencies, and other qualified natural resource

professionals. Many of these sources of assistance provide the

technical assistance using other forms of tax-payer support. USDA does

not agree that conservation districts should be paid with EQIP funds

for administrative or planning services provided as a member of the

local work group. In those instances where NRCS is requested by a

participant to provide technical assistance, and NRCS is unable to

provide that technical assistance, NRCS has the ability to use

qualified non-USDA personnel through contracts with private sources or

through cooperative agreements with other Federal, State, or local

government agencies as authorized in Sec. 1466.6(b). No changes have

been made in the final rule concerning these comments.

The Department received 16 comments regarding the standards it will

use to assess the quality of technical and other assistance provided by

outside sources. The breakdown of these 16 comments is as follows: 2

comments expressly support NRCS oversight of the technical assistance

provided by outside sources; 2 comments suggest the conservation

district should assume that responsibility; 4 comments recommend

Certified Crop Advisors should be authorized to submit field and whole

farm nutrient and pest management plans for EQIP; 1 comment states

``certification, benchmark standards or other additional demonstrations

of knowledge'' do not belong in USDA rules and procedures; 2 comments

suggest the final rule provide greater clarity about any qualifications

that NRCS will require; 3 comments suggest NRCS establish a

certification process or conduct qualification workshops; and 1 comment

states technically qualified organizations should be qualified as

organizations eligible to provide technical assistance. NRCS intends to

hold personnel from non-USDA agencies and private sources of technical

and other assistance to the same standards or criteria it expects from

USDA employees. At this time, since adequate certification programs are

available from other sources, NRCS does not intend to establish a

certification process and generally will accept the certification

provided to professional conservationists by other organizations.

Qualified personnel from agencies and groups not affiliated with USDA

will be expected to have knowledge of how the program works and the

requirements of the program. NRCS may provide training to personnel

from other agencies and groups about the program and its requirements

either individually or in workshops. No changes have been made in the

final rule concerning these comments.

Section 1466.20 Application for Contracts and Selecting Offers From

Producers

USDA received one comment which suggests that ``shall'' be replaced

with ``may'' throughout this section. USDA believes the agencies have

sufficient discretion to administer EQIP in a flexible manner to meet

varied resource needs, and, therefore, sees no need to replace the word

``shall'' with ``may'' in Sec. 1466.20.

USDA received six comments regarding the submission of

applications. Of these six comments, one comment supports the ability

to sign up at the USDA service center, three support the continuous

sign-up process, one comment requests USDA clarify how often the

agencies will rank applications, and one comment inquires when the

continuous sign-up would commence. USDA believes the announcement of

sign-up periods, the timing, and frequency of application ranking is

contingent on the specific logistical requirements of each approved

priority area and significant statewide natural resource concern. It is

imperative that enough flexibility be in place to address varying

farming and ranching regimes throughout the

[[Page 28278]]

country. No changes have been made in the final rule concerning these

comments.

USDA received 13 comments regarding the application process. Of

these 13 comments, 10 raise questions and concerns regarding any

proposed ``bidding'' process, including whether there would be bidding.

Two comments raise concern regarding the length of the application and

ranking process and urge timely approval be given. One comment

indicates a producer does not become a participant until the

application has been approved, yet it is unclear at what time a

producer assumes rights and obligations under a contract. Section

1466.20(a) indicates that any producer with eligible land may submit an

application for participation in the program. The Department expects to

receive far more applications for participation than existing funding

levels can accommodate. Therefore, the Department will select projects

through a competitive process, though not necessarily a bidding

process. Applications are ranked on a number of factors, cost being

only one of the factors considered. Because the competitive process

aims to achieve maximization of environmental benefits per dollar

expended, an applicant can improve the attractiveness of the proposed

project by electing to accept lower program payments than authorized or

by developing a management system that increases the project's

environmental benefits.

It is not USDA's intention to create a process that will take an

excessive amount of time from date of application to the commencement

of work on a project. However, all practices and conservation plans are

different; some practices require an extensive investment of time in

planning, designing, and engineering a structural practice, e.g. animal

waste management structure. NRCS may contract for technical services if

the workload is such that timely approval is not otherwise possible.

The producer is a participant and has legally enforceable rights and

responsibilities under an EQIP contract when the contract is executed

by the producer and the USDA. No changes have been made in the final

rule concerning these comments.

USDA received three comments regarding the role of the State

technical committee in the ranking process. Of the three comments, one

comment supports the involvement of the State technical committee, one

comment disagrees, and the third comment requests any advice provided

by the State technical committee be available for public comment. USDA

intends to allow State technical committees to recommend to NRCS State

conservationists guidelines for developing ranking criteria for

evaluating applications that are consistent with the criteria set forth

under Sec. 1466.20. Local work groups will develop additional criteria

within these statewide parameters to address local natural resource

concerns. Guidelines developed at the state and local level will be

available for public review and opportunities will be available for

pubic input. No changes have been made in the final rule concerning

these comments.

USDA received five comments regarding the role of the local work

groups in the development of ranking criteria. Of these five, two

comments requests clarification regarding the actual role of the local

work groups and three comments request local work groups apply ranking

criteria in addition to developing the criteria. USDA feels the current

language adequately addresses the commenter's concerns. The local work

groups and their members recommend ranking criteria but do not have a

vote in the approval process. The FSA county committee, with assistance

of the NRCS designated conservationist and the FSA county executive

director, shall use the ranking criteria and grant final approval for a

contract.

USDA received 48 comments regarding the respective roles of the

agencies in the ranking and application approval process. Of these 48

comments, 45 comments express concern that the FSA county committees

were merely a rubber stamp and 3 comments recommend the county

committee system be utilized greater in concert with the NRCS ranking

system. The administration of USDA conservation programs has moved

beyond the traditional FSA committee system of approvals due to the

implementation of the 1996 Act which folded the functions of the

existing conservation programs into EQIP. USDA believes all of the

agencies and committees with roles in the program have important

responsibilities in line with their expertise, and the language in the

proposed rule adequately defines the roles of the respective agencies.

No changes have been made in the final rule concerning these comments.

USDA received 14 comments regarding the ranking criteria for the

selection of applications. Of these 14 comments, seven comments

recommend particular factors that a ranking system should address. In

particular, comments suggest including evaluating off-site and on-site

benefits, credit for applicants who have installed practices under

different programs, and applications that address several natural

resource concerns receiving a higher ranking against those that address

only one natural resource concern. Five comments discuss an

environmental benefit index, including four comments which express

support for the concept but caution against a national index, and one

comment which did not support the concept. The two remaining comments

ask how the agencies would determine cost and express the opinion that

cost was an arbitrary factor to base acceptance upon. USDA believes it

is important to allow flexibility in the selection of ranking factors,

both on the State and local level, to best address local natural

resource needs, and does not intend to establish national level ranking

factors. Ranking factors will vary between approved priority areas and

significant statewide natural resource concerns. The cost of a

conservation practice will be estimated by NRCS using knowledge of

local practice costs collected and provided by FSA. National level

direction will place emphasis on developing ranking criteria which

presents the least cost to the program since the maximization of

environmental benefits per dollar expended is an integral facet of the

program and is clearly articulated in the statute. No changes have been

made in the final rule concerning these comments.

USDA received 26 comments regarding the impact the ranking criteria

will have upon participation by tribal, minority, and limited resource

farmers. Of these 26 comments, 19 comments specifically state the

application and ranking process will discriminate against minority and

limited resource farmers. A different comment recommends that potential

discrimination could be avoided by assuring that limited resource

farmers had a voice on the local work groups. One comment states the

process was unduly burdensome upon tribal governments because of the

requirement to list all lands under their control. Three comments raise

concern that the emphasis upon cost could discourage limited resource

farmers from participating because wealthier applicants would rank

higher on that factor alone, regardless of which applicant has the more

critical resource concern. The statute mandates that USDA achieve the

greatest environmental benefit per federal dollar expended. This does

not translate into a simple calculation that applicants

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who contribute more towards the cost of a practice will rank higher.

USDA focuses upon the environmental benefits achieved in the most cost-

efficient manner. An applicant can improve the cost-efficiency of the

proposed project in several ways, including filing a joint application

with similarly situated individuals, providing like-kind services, and

focusing upon an appropriately scaled solution to any given concern.

USDA intends to provide guidance in program guidance documents that

stresses the need to apply all program elements and activities in a

manner that does not discriminate against any farmer or rancher who are

potential participants in the program. No changes have been made in the

final rule concerning these comments.

One comment states producers who do not have bank accounts would be

excluded from EQIP participation due to the electronic funds deposit

policy of the 1996 Act and alternative methods of issuing checks should

be provided as a options. In accordance with the Debt Collection

Improvement Act of 1996 (Pub. L. 104-134), payments made in Federal

programs will be disbursed by electronic funds transfer (EFT).

Recipients of Federal payments must provide financial institution

information necessary to receive payment via EFT. Waiver of the EFT

requirement may be granted by FSA through December 31, 1998, if the

recipient provides a written certification that the recipient does not

have an account with a financial institution or an authorized payment

agent. No change was made in the final rule concerning this comment.

Section 1466.21 Contract Requirements

Of the various contract requirements outlined in Sec. 1466.21, USDA

received the greatest number of comments regarding the statutory

requirement that EQIP contracts be for not less than five years and not

more than 10 years. Of the 32 comments received on this subject, six

comments express support for the 5 to 10 year contract duration. One

comment suggests no contract at all should be required for cost-share

assistance. Three comments recommend a specific shorter duration, such

as 3-10 years or on an emergency basis. Twenty-two comments state

producers would not be receptive to 5-10 year contracts based on the

assumption that long-term contracts are cumbersome, five-year minimum

contracts are unnecessary to address single natural resource concerns,

and the duration of contracts are detrimental to small-scale and

limited resource farmers. The 1996 Act requires that payments be made

to participants through an EQIP contract, and the contracts be a

minimum of 5 years and a maximum of 10 years. The Department cannot

modify these requirements. EQIP did not combine the functions of

emergency conservation programs from either FSA or NRCS into its

programs. The emergency conservation program and the emergency

watersheds program will likely continue in some form to address these

emergency situations. No changes have been made in the final rule

concerning these comments.

USDA received eight comments that state EQIP plans should be

limited to those practices being implemented for which cost-share is

received. USDA believes some conservation plans do require

implementation of non-cost-shared conservation practices or operations

in order to ensure that cost-shared practices are functional and

accomplishing the plan's stated goals in addressing the identified

natural resource concerns. No changes have been made in the final rule

concerning these comments.

One comment states controlling noxious weeds should be added to the

list of contract requirements. Control of noxious weeds is frequently a

requirement of State or local laws and those laws can be enforced in

the normal manner. No changes have been made in the final rule

concerning this comment.

USDA received 18 comments regarding the role of FSA county

committees, seventeen of which suggest the rule explicitly state that

FSA county committees may either approve or disapprove contracts. The

remaining comment recommends county offices should have authority to

modify contracts in order to transfer money from one contract to

another to balance contract cost overruns with shortfalls on other

contracts. USDA feels the current language is sufficient and in

accordance with the reorganization decisions made within the Department

in the last two years. Program guidance will specify how unused funds

may be used. No changes have been made in the final rule concerning

these comments.

USDA received three comments regarding the limitation of one EQIP

contract at any one time for each tract of agricultural land. Of these,

one comment proposes allowing the local work group flexibility to

define areas of natural resource concerns, one comment proposes all

properties owned by a single person be counted as one, and the third

comment expresses the concern that this requirement would create a

paperwork nightmare. USDA believes the curren

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