Conservation Stewardship Program (CSP) Interim Rule

 
CONTENT
Federal Register, Volume 84 Issue 218 (Tuesday, November 12, 2019)
[Federal Register Volume 84, Number 218 (Tuesday, November 12, 2019)]
[Rules and Regulations]
[Pages 60883-60900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24367]
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Rules and Regulations
                                                Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 84, No. 218 / Tuesday, November 12, 2019 /
Rules and Regulations
[[Page 60883]]
DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1470
[Docket No. NRCS-2019-0020]
RIN 0578-AA67
Conservation Stewardship Program (CSP) Interim Rule
AGENCY: Commodity Credit Corporation, United States Department of
Agriculture.
ACTION: Interim rule.
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SUMMARY: This interim rule with request for comment amends the existing
regulation for CSP to incorporate programmatic changes as authorized by
amendments in the Agriculture Improvement Act of 2018 (2018 Farm Bill).
DATES:
    Effective: November 12, 2019.
    Comment date: Submit comments on or before January 13, 2020.
    Comment date for Environmental Review: Submit comments on the draft
Environmental Analysis (EA) and Finding of No Significant Impact
(FONSI) on or before December 12, 2019.
ADDRESSES: We invite you to submit comments on this rule. In your
comments, include the date, volume, and page number of this issue of
the Federal Register, and the title of notice. You may submit comments
by the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov/ and search for Docket ID NRCS-2019-0020. Follow
the online instructions for submitting comments.
    All written comments received will be publicly available on http://www.regulations.gov.
    A copy of the draft Environmental Assessment (EA) and Finding of No
Significant Impact (FONSI) may be obtained from either of the following
websites: www.regulations.gov or https://www.nrcs.usda.gov/wps/portal/nrcs/detail/national/technical/ecosciences/ec. A hard copy may also be
requested in one of the following ways:
     Via mail: [email protected] with ``Request for EA'' in
the subject line; or
     A written request: Karen Fullen, Environmental Compliance
Specialist, Natural Resources Conservation Service, 9173 W Barnes Dr.,
Suite C, Boise, ID 83709.
FOR FURTHER INFORMATION CONTACT: Sarah Brooks; phone: (720) 544-2825;
or email: [email protected]. Persons with disabilities who require
alternative means for communication should contact the USDA Target
Center at (202) 720-2600 (voice).
SUPPLEMENTARY INFORMATION:
Discussion of Conservation Stewardship Program (7 CFR Part 1470)
    The Food, Conservation, and Energy Act of 2008 (2008 Farm Bill)
amended the Food Security Act of 1985 to establish CSP and authorize
the program in fiscal years (FY) 2009 through 2013. The Agricultural
Act of 2014 (2014 Farm Bill) reauthorized and revised CSP through FY
2018. NRCS promulgated an interim rule on November 5, 2014, and
subsequently made final those changes on March 10, 2016, through
issuance of a final rule. The Agriculture Improvement Act of 2018 (2018
Farm Bill) moved CSP from subchapter B of chapter 2 of subtitle D of
title XII of the Food Security Act of 1985 to a new subchapter B of
chapter 4 of subtitle D of title XII of the Food Security Act of 1985,
and then repealed subchapter B of chapter 2 as amended.
    The purpose of CSP is to encourage producers to address priority
resource concerns and improve and conserve the quality and condition of
the natural resources in a comprehensive manner by: (1) Undertaking
additional conservation activities; and (2) improving, maintaining, and
managing existing conservation activities. The Secretary of Agriculture
delegated authority to the Chief, Natural Resources Conservation
Service (NRCS), to administer CSP.
    Through CSP, NRCS provides financial and technical assistance to
eligible producers to conserve and enhance soil, water, air, and
related natural resources on their land. Eligible lands include private
or Tribal cropland, grassland, pastureland, rangeland, nonindustrial
private forest lands, and other land in agricultural areas (including
cropped woodland, marshes, and agricultural land or land capable of
being used for the production of livestock) on which resource concerns
related to agricultural production could be addressed. Eligible lands
also include lands associated with these private or Tribal agricultural
lands on which a priority resource concern can be addressed through a
CSP contract. Participation in the program is voluntary.
    CSP encourages land stewards to improve their conservation
performance by installing and adopting additional conservation
activities, and improving, maintaining, and managing existing
conservation activities on eligible land. NRCS accepts applications for
CSP at any time, but specifically identifies one batching cutoff period
in the first quarter of each fiscal year. NRCS then ranks and makes
funding decisions based on the applications received on or before the
established cutoff date. Depending upon the availability of funds or
whether there existed sufficient competition amongst high quality
applications during the first ranking and selection period, NRCS can
establish additional ranking and selection periods during the remainder
of the fiscal year.
    NRCS continues to streamline and coordinate administration of both
CSP and the Environmental Quality Incentives Program (EQIP) as directed
by the 2018 Farm Bill. Through this effort, NRCS has evaluated several
administrative processes in order to establish standard methodologies
for both programs. Some examples include: Using payment schedules to
develop the payment rates for all conservation practices and activities
used by the programs; tying all enhancements to NRCS conservation
practice standards; using Farm Service Agency (FSA) records to ensure
that program participants represent themselves the same way across all
USDA programs; aligning payment and modification processes to the
greatest extent possible recognizing that CSP has certain statutory
requirements for annual payment timing; and requiring implementation of
at least one new conservation practice or activity within the first 12
months of the contract.
[[Page 60884]]
    In addition, CSP and EQIP work in a complementary manner to address
conservation issues associated with agricultural operations. While EQIP
focuses on the implementation of conservation practices at the field
level to address specific natural resource concerns, CSP emphasizes the
use of conservation activities, which include practices, enhancements,
and bundles, implemented at the agricultural operation level.
Conservation practices have a conservation practice physical effect
(CPPE) score that provides a measure of the positive or negative effect
of the practice on any given resource concern. Similarly, NRCS has
developed enhancement physical effect (EPE) scores for each enhancement
that provide a measure of environmental benefit for each resource
concern.
    NRCS also recognizes that not all enhancements will achieve the
same benefit with respect to a specific resource concern and the agency
continues to move toward quantifying the benefits based upon scientific
information made available through Conservation Effects and Assessment
Project (CEAP) studies. A producer who installs conservation practices
under EQIP to meet one or more resource concerns is then better
positioned to meet the CSP stewardship threshold. NRCS encourages a
producer enrolled in CSP to achieve increased environmental benefits
through the adoption of conservation activities that focus on increased
positive impacts to a specific resource concern as documented by the
EPE score. In this way, CSP builds upon the conservation efforts
initiated under EQIP and expands upon them to a new level of
conservation performance.
Summary of CSP Provisions
    The CSP regulation is organized into three subparts: (1) Subpart
A--General Provisions, (2) Subpart B--Contracts, and (3) Subpart C--
General Administration. Below is a summary of the changes made to each
subpart based upon the changes made to CSP by the 2018 Farm Bill.
    The 2018 Farm Bill made the following changes to CSP program
requirements:
     Confirms validity of CSP contracts entered into prior to
2018 Farm Bill enactment, authorizes the ability to extend contracts
that are due to expire on or before December 31, 2019, and authorizes
renewal of such contracts through the new CSP authority.
     Defines new terms and adjusts existing terms, such as
expanding the definition of ``conservation activities'' and defining
the term ``comprehensive conservation plan.''
     Simplifies CSP ranking criteria and requires that both new
contracts and contract renewals be ranked based on those criteria.
     Requires that if two or more applications receive the same
ranking, they be ranked on the extent to which actual and anticipated
conservation benefits from each contract are provided at the lowest
cost relative to other similarly beneficial offers.
     Provides opportunity for participants to renew their
contracts in the first half of the fifth year of the 5-year contract.
     Bases program allocations on funds rather than acres and
eliminates the requirement that NRCS administer the program at $18 per
acre average nationally.
     Incentivizes certain activities, including authorizing
payment for cover crop activities at not less than 125 percent of the
annual payment amount, and authorizes a supplemental payment for
advanced grazing management or resource-conserving crop rotations at
not less than 150 percent of the annual payment amount.
     Provides a one-time payment to participants who agree to
develop a comprehensive conservation plan.
     Continues a $200,000 payment limitation for individuals
and legal entities for all contracts entered into during FY 2019
through 2023.
     Requires that States be given an allocation to support
organic production based on the certified and transitioning organic
operations of the State and the number of certified and transitioning
organic acres of the State.
     Requires that CSP be streamlined and aligned with EQIP,
including applications, contracting, conservation planning,
conservation practices, and related administrative procedures.
     Requires that to the greatest extent practicable, the
program should be managed to enhance soil health.
     Requires NRCS to submit an annual report to Congress on
payment rates along with an analysis of whether payment rates can be
reduced for the most expensive conservation activities.
     Authorizes a CSP-Grasslands Conservation Initiative to
help producers with certain base acres in protecting grazing land uses,
conserving and improving soil, water and wildlife resources and waives
several program requirements to facilitate enrollment under the
initiative.
     Authorizes funding for CSP at--
    [cir] $700 million for FY 2019.
    [cir] $725 million for FY 2020.
    [cir] $750 million for FY 2021.
    [cir] $800 million for FY 2022.
    [cir] $1 billion for FY 2023.
    NRCS is making the following mandatory and discretionary changes to
the CSP regulation based upon these changes made by the 2018 Farm Bill:
    Mandatory Changes--
     Removes regulatory language that addressed CSP
implementation under the Regional Conservation Partnership Program
(RCPP) since the 2018 Farm Bill removed the requirement that RCPP be
implemented through CSP and the other ``covered programs.'' (See Sec.
1470.2(b).)
     Removes reference to acreage cap and dollar amount per
acre limit (See Sec.  1470.2(d).)
     Adds the following definitions to reflect statutory
changes: Advanced grazing management, comprehensive conservation plan,
and management-intensive rotational grazing. (See Sec.  1470.3.)
     Adds a new paragraph to address State organic allocations
which will be based on the number of organic and transitioning-to-
organic operations in a State and the number of organic and
transitioning-to-organic acres in a State. (See Sec.  1470.4(b).)
     Requires that if two or more applications receive the same
ranking, they be ranked on the extent to which actual and anticipated
conservation benefits from each contract are provided at the lowest
cost relative to other similarly beneficial offers. (See Sec.
1470.24(c).)
     Adds advanced grazing management as another type of
supplemental payment. (See Sec.  1470.24(b).)
     Includes language for the one-time payment option for
development of a comprehensive conservation plan. (See Sec.
1470.24(c).)
     Incorporates language about opportunity for participants
to renew their contracts in the first half of the fifth year of the 5-
year contract. (See Sec.  1470.26(a).)
     Outlines the requirements and parameters of CSP-GCI. (See
Sec.  1470.28.)
    Discretionary Changes--
     Removes identification of Chief as a Vice President of the
Commodity Credit Corporation. (See Sec.  1470.2(a).)
     Modifies existing terms to reflect changes in terminology,
to more closely align CSP program administration with EQIP, and for
clarity. (See Sec.  1470.3.) These include, but are not limited to--
    [cir] Modifying ``eligible land'' to include public land when the
land is a working component of the participant's agricultural or
forestry operation.
[[Page 60885]]
    [cir] Modifying the definition of ``veteran farmers or ranchers''
to cite the statutory reference in the 2018 Act.
    [cir] Clarifying ``enhancement'', ``participant'', and
``stewardship threshold.''
     Specifies eligibility requirements for all applicants
sharing in the risk and participating in day-to-day activities. (See
Sec.  1470.6(a).)
     Expands the potential scope of bundles and provides NRCS
with discretionary authority for offering bundles. (See Sec.
1470.7(c).)
     Removes the requirements associated with an operation
crossing ranking pool boundaries to increase applicant flexibility.
(See Sec.  1470.20(d).)
     Adds organic producers or producers transitioning to
organic as a category of producer with a targeted ranking pool. (See
Sec.  1470.20(d).)
     Clarifies the annual payment structure and adjusted the
timeframe for implementing the first conservation activity to align
with EQIP. (See Sec.  1470.24(a).)
     Adds language stating that, unless a waiver is granted,
participants will not receive payment for conservation activities
initiated or implemented prior to contract approval. (See Sec.
1470.24(f).)
     Expands the regulatory $400,000 contract limit for all
joint operations. (See Sec.  1470.24(h).)
     Adds language to allow for contract increases due to minor
adjustments made to conservation activities at the discretion of NRCS.
(See Sec.  1470.25(c).)
     Modifies language to provide greater consideration to a
participant's circumstances with respect to operational changes. (See
Sec.  1470.25(b).)
    Adds language to address contract changes that arise due to the
death, incompetence, or disappearance of a program participant. (See
Sec.  1470.25(h).)
     Includes an eligibility restriction for renewal-eligible
participants who choose not to renew in favor of competing for a new
contract. (See Sec.  1470.26(c).)
     Removes language related to training NRCS staff. (See
Sec.  1470.8(c).)
     Adjusts definitions to conform to those in other NRCS or
Department regulations. (See Sec.  1470.3.)
USDA 2018 Farm Bill Listening Session
    On February 14, 2019, the Farm Service Agency (FSA), NRCS, and the
Risk Management Agency (RMA) published a notice in the Federal Register
(84 FR 4041-4044) announcing a listening session for initial public
input on the changes to existing programs implemented by the agencies.
Each agency will take into account stakeholder input when making
discretionary decisions on program implementation. The agencies also
announced an opportunity for the public to make written statements
through March 1, 2019. The listening session was held on February 26,
2019. The Commodity, Credit, and Crop Insurance titles, and parts of
the Conservation, Energy, and Miscellaneous titles were covered during
the listening session.
    FSA, NRCS, and RMA received 183 written comments from individuals,
trade groups, other organizations, and State entities. All written
comments are available to the public for review at: https://www.regulations.gov/document?D=USDA-2019-0001-0001. In addition to
program-specific comments, there were recurring overarching comments
about placing a priority on information sharing between agencies for
data collection regarding soil health and conservation practices.
    Among the comments submitted concerning CSP, NRCS received 20
comments related to program delivery and administration. Numerous
comments called for the immediate start of the sign-up period for CSP
and for more flexibility on eligibility requirements involving land
control, lower-cost practices, and past participation in other
conservation programs. Some comments emphasized consideration of local
priorities and protection of treaty-reserved resources in identifying
resource concerns. Other comments focused on increased payments for
practices associated with soil health, cover crops, resource-conserving
crop rotations, and advanced grazing management.
    NRCS also received five comments that underlined the adoption of
robust conservation management activities under the initiative. Other
comments sought for clear guidance on program eligibility and effective
outreach to producers regarding enrollment options.
    NRCS received three comments on the funding allocation to support
organic production and transition to organic production. Two of the
comments recommended that the allocation formula be based on the
current Farm Bill and on feedback from States regarding projected
demand from organic and transitioning farmers. The other comment
stressed the need for additional financial support and technical
assistance among transitioning organic farmers.
    NRCS received a couple comments on reevaluating the definition of
resource-conserving crop rotation to include the required use of
perennial grass or legume and rotations of annual crops, such as
sorghum. Another comment recommended that the resource-conserving crop
rotation be included in the FY 2019 sign up.
    Finally, NRCS received two comments on prioritizing incentives for
practices that improve soil health: One comment supporting the
development of conservation enhancements for advanced grazing
management, and one comment requesting guidance on practices that can
be implemented under CSP that will help in coping with weather
volatility.
    NRCS evaluated the changes made by the 2018 Farm Bill and the
comments received during the listening session and is hereby
promulgating this interim rule with request for comments to incorporate
the 2018 Farm Bill changes to CSP program administration and make other
adjustments based on public comment. This action is pursuant to section
1246 of the Food Security Act of 1985 which requires implementation of
title XII of the Food Security Act through an interim rule with request
for comments. Section 2504 of the 2018 Farm Bill states that NRCS may
implement the Farm Bill conservation provisions under their current
regulations to the extent that such regulations are consistent with the
2018 Farm Bill provisions. This interim authority enabled NRCS to hold
CSP program enrollment in FY 2019. It expires September 30, 2019.
Subpart A--General Provisions
Sec.  1470.1 Applicability
    This section sets forth the policies, procedures, and requirements
of CSP. In paragraph (a), NRCS clarifies that contracts entered into
prior to the 2018 Farm Bill are administered according to the CSP
regulation in effect prior to enactment, and that contracts entered
into after enactment of the 2018 Farm Bill will be administered under
these regulations.
Sec.  1470.2 Administration
    This section describes the roles of NRCS at the National and State
levels. Paragraph (a) was changed to remove reference to the NRCS Chief
being an officer of the Commodity Credit Corporation. When USDA
established the Farm Production and Conservation (FPAC) Mission Area,
officer positions were delegated to the mission area Under Secretary
and the FPAC Business Center Chief Operating Officer.
    Paragraph (b) is revised to remove any reference to the Regional
Conservation Partnership Program, which will have its own regulations
and fiscal allocations consistent with the 2018
[[Page 60886]]
Farm Bill. NRCS removed paragraph (d) because CSP no longer has an
acreage cap, nor is it limited to any dollar amount per acre.
Subsequent paragraphs were redesignated accordingly. NRCS amended
redesignated paragraph (d)(2) to remove the ``applicable'' modifier for
priority resource concerns to improve readability. NRCS added paragraph
(d)(4) to cover new information related to advanced grazing management.
Sec.  1470.3 Definitions
    This section sets forth definitions for terms used throughout this
regulation. The following definitions have been added to reflect
changes made by the 2018 Farm Bill: Advanced grazing management,
comprehensive conservation plan, and management-intensive rotational
grazing.
    The term conservation activities was modified to include several
additional examples consistent with the 2018 Farm Bill.
    The term conservation practice was modified to reflect the
technical definition used in other NRCS manuals.
    The term effective control was modified for clarity.
    The term eligible land was modified to include privately controlled
public land when the land is a working component of the participant's
agricultural or forestry operation. The CSP statute identifies that
eligible land includes lands associated with the producer's private or
Tribal agricultural or forestry operation provided that priority
resource concerns could be addressed through a contract under the
program on that associated land. NRCS has interpreted that this
language regarding associated lands allows producers to enroll the
public land components of their overall agricultural or forestry
operation, if such land is managed as part of the private or Tribal
producer's operation pursuant to a long-term lease from a public agency
and the enrollment of the land will contribute to an improvement in an
identified priority resource concern. NRCS makes this change to align
CSP program administration more closely with EQIP as required by the
2018 Farm Bill.
    The terms enhancement and field office technical guide were
modified to reflect a change in terminology from ``quality criteria''
to ``planning criteria''.
    The term historically underserved producer was modified to include
veteran farmers or ranchers.
    The term participant was modified to clarify that a participant
must first apply and be accepted into the program to qualify as a
participant.
    The term priority resource concern was simplified by removing the
additional qualifiers of ``applicable'' and ``other'' and thus aligns
the term more closely with the statutory definition and improves
readability of the regulation.
    The term resource-conserving crop rotation was modified to add
``building soil organic matter'' as a requirement. The term resource-
conserving crop was modified to clarify that NRCS determines whether a
crop is resource conserving, and expanded the definition to include a
small grain or ``other resource-demanding'' crop grown in combination
with a grass, legume, forbs, or grass-forbs mixture.
    The definition of stewardship threshold was modified to delineate
the means by which the stewardship threshold may be reached.
    The definition of technical assistance was modified to remove the
specific reference to development of forest stewardship plans. The
intent was simply to broaden the language to encompass all plans,
including the new plans authorized under the 2018 Farm Bill, and the
development of forest stewardship plans remains encompassed within the
definition of technical assistance.
    The definition of technical service provider was modified to be
consistent with the potential for a technical service provider to be
certified through a third-party certifying organization.
    The definition of veteran farmer or rancher was modified to
correctly cite the statutory reference as amended by the 2018 Farm
Bill.
Sec.  1470.4 Allocation and Management
    This section addresses national allocations and how the proportion
of eligible land will be used as the primary means to distribute CSP
funds among States. The NRCS Chief has discretionary authority to
adjust the weighting of the statutorily prescribed allocation factors
to better distribute funds and address program purposes. NRCS seeks
public comment on the weighting of the statutory factors and whether
other factors should be considered to achieve equitable geographic
distribution of program funds or enhance environmental benefits
realized through the program. This section has been modified to address
the change in the CSP program from an acre-based program to a dollar-
based program by the 2018 Farm Bill. References to acreage have been
removed from this section and language has been modified to clarify
that allocations of funding are not tied to any acreage cap. NRCS
removed paragraph (d) that identified veteran farmer or rancher
priority since veteran farmer or rancher access, which includes
prioritization, is addressed through Sec.  1470.20. NRCS revised
paragraph (b) to address State organic allocations as required by
statute which will be based on the number of organic and transitioning-
to-organic operations in a State and the number of organic and
transitioning-to-organic acres in a State.
Sec.  1470.5 Outreach Activities
    This section addresses NRCS outreach activities. NRCS has made
minor editorial adjustments to this section to improve clarity by using
the term historically underserved producers.
Sec.  1470.6 Eligibility Requirements
    This section sets forth the criteria for determining applicant and
land eligibility. The CSP statute identifies that producers with
effective control of the land are eligible to participate. Since 2010,
the CSP regulation required that the producer be the operator of record
in the Farm Service Agency (FSA) farm records system but allowed NRCS
to waive the operator of record requirements. While this regulatory
requirement seemed to provide a clear standard for determining producer
eligibility, given the variety of agricultural operations and land
tenancy it resulted in creating unnecessary administrative hurdles for
many otherwise eligible producers to participate. Therefore, NRCS
expanded paragraph (a)(1) to include owners and other tenants as
identified in the FSA farm records system as potential eligible
applicants and removed the operator of record waiver authority as the
waiver is no longer needed. NRCS believes that this change will improve
customer service, simplify the application and contracting process, and
reduce the burden on field office staff.
    Further, NRCS redesignated paragraphs (a)(2) through (5) as
paragraphs (a)(3) through (6) and inserted a new paragraph (a)(2) to
specify eligibility requirements for all applicants related to sharing
in the risk and participating in the day-to-day management of the
operation. In paragraph (a)(6), NRCS removed the reference to veteran
farmers or ranchers as redundant since the term farmer and rancher is
incorporated into the term historically underserved producer. NRCS
removed reference to Conservation Security Program contracts as there
are no longer any active contracts under the repealed program.
    The CSP statute defines eligible land as ``private or tribal land
on which agricultural commodities, livestock, or forest-related
products are produced'' and includes ``associated lands.''
[[Page 60887]]
Western producers often lease or have a permit to use public land as
part of their operation and have been discouraged from participating in
CSP even though such lands are an integral part of their operation.
NRCS has amended the CSP regulatory definition of eligible land to
allow the enrollment of public lands that are associated with eligible
land under the effective control of the producer as part of their
private agricultural operation. This change provides consistency with
EQIP program administration since EQIP currently allows public lands
that are part of a private producer's operation to be enrolled in an
EQIP contract. Because of the inclusion of public land under the
definition of eligible land, NRCS removed paragraph (c)(4) which
previously identified public lands as ineligible. In paragraph (c)(3),
the dates were modified to address the scope of the 2018 Farm Bill.
Sec.  1470.7 Conservation Activities
    This section describes the range of activities and practices
covered by CSP. The name of this section was updated for simplification
to incorporate conservation practices, enhancements and bundles.
Previously, Sec.  1470.7 identified that NRCS will make available
bundled suites of conservation enhancements for participants to select
voluntarily to include as part of their conservation stewardship plans.
These ``bundled suites of conservation enhancements'' included multiple
enhancements whose installation as a group was designed to improve
conservation performance and address resource concerns in a more
comprehensive and cost-effective manner. NRCS modified paragraph (c) to
expand the potential scope of bundles to include both practices and
enhancements by using the term ``conservation activity'' as defined in
Sec.  1470.3. NRCS also adjusted the language to allow the agency
discretion in offering bundles as there may be particular contexts
where bundling of activities will not improve conservation performance.
NRCS removed paragraph (d) that encouraged the use of other NRCS
programs to implement conservation practices to meet agreed-upon
stewardship levels, though not compensated under CSP, due to
programmatic changes that now allow broader practice implementation and
compensation under CSP.
Sec.  1470.8 Technical and Other Assistance
    This section explains that NRCS or other technical service
providers (TSPs) not directly affiliated with NRCS could provide the
technical consultation for installing conservation activities under
CSP. NRCS modified paragraph (c) to remove language related to training
NRCS staff as this is an internal agency administrative matter.
Subpart B--Contracts and Payments
Sec.  1470.20 Application for Contracts and Selecting Offers From
Applicants
    This section identifies procedures associated with contract
application requirements, the application evaluation process, and
application acceptance. NRCS intends to continue evaluating
applications based on the level of expected environmental benefit
achieved through adoption of additional conservation activities.
Currently, NRCS provides higher ranking points to applicants who agree
to adopt more conservation activities in order to meet or exceed the
stewardship threshold of a higher number of resource concerns, agree to
adopt the additional conservation activities over a greater percentage
of their operation, adopt bundles, and adopt conservation activities
that target wildlife habitat improvement and soil health. NRCS also
uses an efficiency score component in the ranking which considers the
environmental benefit associated with an applicant's planned additional
conservation activities and the costs associated with implementing
these activities. In this way, NRCS prioritizes applications that will
provide higher levels of conservation and environmental benefits across
the agricultural or forestry operation. NRCS amended paragraph (c) to
incorporate the new criteria established in the 2018 Farm Bill. NRCS
removed the discretionary provision related to weighting of ranking
factors as this determination is more administrative rather than
regulatory in nature. NRCS incorporated the language regarding
national, state and local priorities into paragraph (c)(2)(iii). In
paragraph (d), NRCS removed the requirements associated with an
operation crossing ranking pool boundaries to increase applicant
flexibility. NRCS establishes ranking pools based on watersheds,
geographic areas, or other high priority areas within a State or
region. Nationally, NRCS requires States to establish separate ranking
pools for beginning farmer or ranchers, socially disadvantaged farmer
or ranchers, and through the 2018 Farm Bill, organic producers or
producers transitioning to organic. In addition, NRCS may establish
national or State initiatives which would have a unique ranking pool.
NRCS continues to provide priority to veteran farmers or ranchers
within the beginning farmer or rancher or socially disadvantaged farmer
or rancher ranking pools. NRCS modified paragraph (e) to authorize NRCS
to make application determinations throughout the fiscal year to
provide additional flexibility to program administration. Similarly,
NRCS modified paragraph (f) to use consistent terminology with respect
to CSP contracts.
Sec.  1470.21 Contract Requirements
    This section identifies elements contained within a contract and
the responsibilities of a CSP participant. A participant must enter
into a CSP contract, including a conservation stewardship plan, to
enroll their eligible land and to receive payment. NRCS modifies this
section only to improve the clarity of language.
Sec.  1470.22 Conservation Stewardship Plan
    This section describes that NRCS will use the conservation planning
process to encourage producers to address priority resource concerns in
a comprehensive manner. The conservation stewardship plan contains a
record of the participant's decisions on the schedule of conservation
activities to be implemented, managed, and improved under CSP. NRCS
modifies this section to consolidate duplicative information and to
ensure consistent language is used throughout this part. This section
was also modified to remove reference to documentation that is
addressed as part of NRCS actions, including documentation related to
meeting or exceeding the applicable stewardship thresholds.
Sec.  1470.23 Conservation Activity Operation and Maintenance
    This section addresses the participant's responsibility for
managing and maintaining existing conservation activities on the
agricultural operation to at least the level of conservation
performance identified at the time of application for the conservation
stewardship contract period. Additional activities installed and
adopted over the term of the conservation stewardship contract also
need to be maintained. NRCS simplifies the language in this section.
Sec.  1470.24 Payments
    This section describes the types of payments issued under CSP, how
payments will be derived, and payment limitations. NRCS modified
paragraph (a) to consolidate duplicative information, remove outdated
[[Page 60888]]
information, and to improve clarity by using the active voice.
Specifically, NRCS clarified the annual payment structure and adjusted
the timeframe for implementing the first conservation activity to align
with EQIP. NRCS added language requiring a higher payment percentage
for cover crop activities as stipulated in the 2018 Farm Bill.
    The 2018 Farm Bill added advanced grazing management as another
type of supplemental payment and included payment for development of a
comprehensive conservation plan. NRCS incorporated advanced grazing
management in paragraph (b) and added language for supplemental payment
rates as prescribed in the 2018 Farm Bill. NRCS inserted paragraph (c)
to incorporate a one-time payment option for development of a
comprehensive conservation plan.
    Under paragraph (f), ``Noncompensatory Matters,'' NRCS describes
situations in which a participant may not receive payment. To avoid
duplicate payments, participants are required to certify on the payment
application that they have not received payment under any other USDA
program for the same conservation activity(ies) as discussed in
paragraph (f)(1). Paragraph (f)(4) includes an additional
noncompensatory matter stating that participants will not receive
payment for conservation activities initiated or implemented prior to
contract approval, unless NRCS grants a waiver prior to the participant
starting the activity. NRCS maintains the statutory payment limitation
but removed the annual payment limitation from paragraph (g) and the
annual contract payment limitation from paragraph (h).
    The CSP statute has an aggregate $200,000 payment limitation for
persons and legal entities for all CSP contracts entered into between
FY 2019 through 2023. In addition to the statutory aggregate payment
limitation, NRCS retains the $200,000 contract limitation for
individual and entity participants in paragraph (h) and expands the
higher $400,000 contract limit to include all joint operations,
regardless of whether the joint operation uses an Employer
Identification Number (EIN) or member Social Security Numbers (SSNs).
This policy prohibits large joint operations from entering into
multimillion-dollar CSP contracts while still offering a contract limit
that does not discourage them from participating in CSP.
Sec.  1470.25 Voluntary Contract Modifications and Transfers of Land
    This section identifies the actions that NRCS might take to modify
or terminate a contract and the notice and process requirements for
transfers of land under a CSP contract. Because CSP was previously
subject to a national average rate of $18 per acre, NRCS restricted the
extent to which a CSP contract could be modified to ensure that
subsequent contract actions would not result in NRCS exceeding the
statutory limit. The 2018 Farm Bill removes the $18 per acre
restriction and encourages more coordination between how contracts are
administered under both CSP and EQIP. Therefore, NRCS made several
changes to Sec.  1470.25 to incorporate the new flexibility provided
through the 2018 Farm Bill. Specifically, NRCS modified paragraph
(b)(2) to add clarification that participant requests to take land out
of production or convert an area under contract to a different land use
do not include changes made to a land use as a result of involuntary
loss of land. NRCS moved and simplified language related to
conservation activity substitution from Sec.  1470.24, Payments, and
inserted this as paragraph (b)(3) of this section. NRCS added language
to paragraph (c) to allow for contract increases due to minor
adjustments made to conservation activities at the discretion of NRCS.
The above referenced changes align CSP contract administration with
EQIP contract administration as encouraged by the 2018 Farm Bill. NRCS
modified paragraphs (d) and (e) to change language from mandatory to
discretionary to provide greater consideration to a participant's
circumstances with respect to operational changes and to provide
greater consistency with other provisions in this section and
throughout the part.
    NRCS added a new paragraph (h) at the end of Sec.  1470.25 to
address contract changes in the cases of death, incompetency, or
disappearance of any participant. The new paragraph helps to streamline
contract matters at a difficult time for a participant's family and
provides greater consistency between how NRCS and FSA addresses these
sensitive issues.
Sec.  1470.26 Contract Renewal
    In this section, NRCS may allow a participant to renew the contract
for one additional 5-year period if they meet specific criteria. NRCS
updates this section to incorporate language from the 2018 Farm Bill,
including that renewals will now be ranked and compete for available
funding. Consistent with the 2018 Farm Bill, NRCS included a provision
that participants may be given the opportunity to renew in the first
half of the fifth year of their existing contract period. NRCS added
paragraph (c) to include an eligibility restriction for renewal-
eligible participants who elect not to renew in favor of competing for
a new contract under the general program provisions. NRCS also updated
this section to ensure consistent language and to remove the reference
to the acreage cap.
Sec.  1470.27 Contract Violations and Termination
    This section addresses the procedures that NRCS will take when a
violation has occurred or a contract termination is needed. NRCS made
changes throughout the section to align violation procedures with EQIP,
consolidate duplicative information, eliminate redundancy, and improve
clarity.
Sec.  1470.28 Grassland Conservation Initiative Contracts
    This section is added to incorporate this new initiative authorized
through the 2018 Farm Bill. The grassland conservation initiative will
assist producers in protecting grazing uses; conserving and improving
soil, water, and wildlife resources; and achieving related conservation
values by conserving eligible land through grassland conservation
contracts. Paragraph (b) explains that the initiative is applicable on
eligible cropland for which base acres have been maintained by the
Secretary under section 1112(d)(3) of the Agricultural Act of 2014 (7
U.S.C. 9012(d)(3)). NRCS will allow a GCI participant to plant crops on
land enrolled in GCI if the participant meets specific resource
conditions analogous to if the land were planted or maintained to
grass. Conditions include development of a conservation plan and the
participant must adopt the identified conservation activities to
receive the $18 per acre payment to ensure that the resource concerns
associated with grassland are met.
    Paragraph (c) identifies that the producer with eligible land is
provided one opportunity to enroll in the initiative during FY 2019
through 2023; however, a producer has the option to defer enrollment to
any year within this period. Producers with land eligible for the
initiative may not have the same land enrolled under the initiative and
the general CSP at the same time. Through paragraph (d), participants
enrolled in the initiative must agree to meet or exceed the stewardship
threshold for at least one priority resource concern before the end of
the contract. Paragraph (e) defines the contract period as one 5-year
term. Initiative contracts are not subject to
[[Page 60889]]
renewal at the end of the initial 5-year term. Initiative contracts
will receive payment of $18 per acre not to exceed the acres enrolled
in the initiative contract per paragraph (f). Paragraph (f) also
provides that initiative contracts are not subject to the payment
limitations or contract limits provided in Sec.  1470.24(f) and (g),
nor are they eligible for supplemental payments as provided in Sec.
1470.24(b). The participant may request to terminate their initiative
contract at any time and retain payments already received under the
contract in accordance with paragraph (g).
Subpart C--General Administration
Sec.  1470.30 Fair Treatment of Tenants and Sharecroppers
    This section specifies that any CSP payments received must be
divided in the manner specified in the contract. Where conflicts arise
between an operator and landowner, NRCS may refuse to enter into a CSP
contract.
Sec.  1470.33 Access to Agricultural Operation
    This section notifies potential CSP applicants and CSP participants
that an authorized NRCS representative may enter an operating unit for
the purpose of determining eligibility, ascertaining accuracy of any
representations, and confirming compliance with the program
requirements during the term of the contract.
Sec.  1470.34 Equitable Relief
    This section notifies a participant that he or she may be eligible
for equitable relief in accordance with 7 CFR part 635, if the
participant relied upon the advice or action of NRCS and did not know
that the action or advice was erroneous.
Sec.  1470.37 Environmental Credits for Conservation Improvements
    This section is changed to conform its language to section 1244(o)
of the Food Security Act of 1985, as amended by clarifying that
environmental benefits achieved through participation in the CSP
program may qualify for environmental credits under an environmental
credit-trading program, and that NRCS asserts no direct or indirect
interest in these credits. Further, any requirements or standards of
such environmental market program to receive credits must be compatible
with the purposes of the CSP contract.
Effective Date, Notice and Comment, and Paperwork Reduction Act
    In general, the Administrative Procedure Act (APA) (5 U.S.C. 553)
requires that a notice of proposed rulemaking be published in the
Federal Register and interested persons be given an opportunity to
participate in the rulemaking through submission of written data,
views, or arguments with or without opportunity for oral presentation,
except when the rule involves a matter relating to public property,
loans, grants, benefits, or contracts. This rule involves matters
relating to benefits and therefore is exempt from the APA requirements.
Further, the regulations to implement the programs of chapter 58 of
title 16 of the U.S. Code, as specified in 16 U.S.C. 3846, and the
administration of those programs, are:
     To be made as an interim rule effective on publication,
with an opportunity for notice and comment,
     Exempt from the Paperwork Reduction Act (44 U.S.C. ch.
35), and
     To use the authority under 5 U.S.C. 808 related to
Congressional review and any potential delay in the effective date.
    For major rules, the Congressional Review Act requires a delay in
the effect date of 60-days after publication to allow for Congressional
Review. This rule is a major under the Congressional Review Act, as
defined by 5 U.S.C. 804(2). The authority in 5 U.S.C. 808 provides that
when an agency finds for good cause that notice and public procedure
are impracticable, unnecessary, or contrary to the public interest,
that the rule may take effect at such time as the agency determines.
Due to the nature of the rule, the mandatory requirements of the 2018
Farm Bill, and the need to implement the CSP regulations expeditiously
to provide assistance to producers, NRCS and CCC find that notice and
public procedure are contrary to the public interest. Therefore, even
though this rule is a major rule for purposes of the Congressional
Review Act of 1996, NRCS and CCC are not required to delay the
effective date for 60 days from the date of publication to allow for
Congressional review. Therefore, this rule is effective on the date of
publication in the Federal Register
    NRCS invites interested persons to participate in this rulemaking
by submitting written comments or views about the changes made by this
interim rule. The most helpful comments reference a specific portion of
the regulation, explain the reason for any recommended changes, and
include supporting data and references to relevant section of either
the 2018 Farm Bill or the 1985 Farm Bill. All comments received on or
before the closing date for comments will be considered. NRCS will
review and respond to the public comments in the CSP final rule.
Executive Orders 12866, 13563, 13771, and 13777
    Executive Order 12866, ``Regulatory Planning and Review,'' and
Executive Order 13563, ``Improving Regulation and Regulatory Review,''
direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). Executive Order 13563 emphasized the importance
of quantifying both costs and benefits, of reducing costs, of
harmonizing rules, and of promoting flexibility. Executive Order 13777,
``Enforcing the Regulatory Reform Agenda,'' established a federal
policy to alleviate unnecessary regulatory burdens on the American
people.
    The Office of Management and Budget (OMB) designated this rule as
economically significant under Executive Order 12866, and therefore,
OMB has reviewed this rule. The costs and benefits of this proposed
rule are summarized below. The full cost benefit analysis is available
on https://www.regulations.gov/. Executive Order 13771, ``Reducing
Regulation and Controlling Regulatory Costs,'' requires that, to manage
the private costs required to comply with federal regulations for every
new significant or economically significant regulation issued, the new
costs must be offset by the elimination of at least two prior
regulations. This rule involves transfer payments and does not rise to
the level required to comply with Executive Order 13771.
Clarity of the Regulation
    Executive Order 12866, as supplemented by Executive Order 13563,
requires each agency to write all rules in plain language. In addition
to your substantive comments on this rule, we invite your comments on
how to make the rule easier to understand. For example:
     Are the requirements in the rule clearly stated? Are the
scope and intent of the rule clear?
     Does the rule contain technical language or jargon that is
not clear?
     Is the material logically organized?
     Would changing the grouping or order of sections or adding
headings make the rule easier to understand?
     Could we improve clarity by adding tables, lists, or
diagrams?
[[Page 60890]]
     Would more, but shorter, sections be better? Are there
specific sections that are too long or confusing?
     What else could we do to make the rule easier to
understand?
Cost Benefit Analysis Summary
    Compared to CSP as authorized under the 2014 Farm Bill, Congress
significantly reduced the program's size in the 2018 Farm Bill--from $9
billion \1\ to $3.975 billion over 5 years--but left much of CSP's
underlying structure intact. With fewer dollars available, fewer
contracts will be funded under the 2018 Farm Bill. However, CSP will
continue to fund high-ranking applications across all States, with the
aim of improving cost effectiveness based on dollars per additional
unit of conservation effect.
---------------------------------------------------------------------------
    \1\ This includes funding for renewing contracts for an
additional five years.
---------------------------------------------------------------------------
    Funds for all activities conducted under the CSP contract are
obligated up front and funds for contract renewals will come from the
available funds at the time of contract renewal. The 2018 Farm Bill
also eliminated the 10-million-acre cap on enrollment and the annual
$18 per acre cap on program costs, moving to an annual funding level
for new CSP contracts similar to EQIP.
    Regarding changes beyond funding and the elimination of the acreage
cap, only revised CSP contract renewal conditions are expected to
generate impacts that are moderately different from the 2014 Farm Bill.
CSP contracts continue to run for 5 years and include the potential for
a 1-time renewal option for an additional 5 years. Under the 2014 Farm
Bill, renewals were non-competitive and at the request of the contract
holder. Under the 2018 Farm Bill, contract renewals will be ranked
against other contract renewals and funded based on the availability of
funds in the year of renewal. The requirement to compete against other
applicants for funds will reduce the number of contracts renewed and
reduce the funding available for new contracts, reducing the number of
conservation activities undertaken. Cost-effectiveness of CSP may
increase as lower ranked applications will not be funded.
    The 2018 Farm Bill also mandates the establishment of the Grassland
Conservation Initiative for eligible producers with base acres where
the entire farm was planted to grass or pasture, or was idle or fallow,
from January 1, 2009 to December 31, 2017. Beginning in FY 2019, the
Secretary provided a 1-time election for a producer to enroll eligible
land for a 5-year non-renewable term. Participants must meet CSP
eligibility conditions, but do not go through the ranking process.
Participating producers must agree to meet or exceed the stewardship
threshold for not less than 1 priority resource concern by the date on
which the contract expires. The annual payment is limited to $18 per
acre, and enrolled acreage cannot exceed the number of base acres on a
farm.
    An estimated 2.4 million acres meet the 2009 to 2017 criterion
noted above and are eligible for the Grassland Conservation Initiative.
Although these eligible acres are concentrated in Texas, Oklahoma, and
Kansas, there is eligible acreage throughout most of the country. The
Grassland Conservation Initiative is expected to cost $214.9 million
over 5 years, representing 5.5-percent of total authorized CSP funding
under the 2018 Farm Bill. Cost-effectiveness may be affected marginally
as fewer funds will be available for higher ranked applications and
contract renewals.
    In implementing the 2018 Farm Bill, USDA is following legislative
intent to maximize conservation impacts, address natural resource
concerns, establish an open participatory process, and provide flexible
assistance to producers who apply appropriate conservation measures to
comply with Federal, State, and Tribal environmental requirements.
Participation in CSP is voluntary. Hence, CSP participation is not
expected to negatively impact program participants and nonparticipants.
Regulatory Flexibility Act
    The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by
the Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA), generally requires an agency to prepare a regulatory analysis
of any rule whenever an agency is required by APA or any other law to
publish a proposed rule, unless the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities. This rule is not subject to the Regulatory Flexibility Act
because no law requires that a proposed rule be published for this
rulemaking initiative. Despite the Regulatory Flexibility Act not
applying to this rule, the action only affects those entities who
voluntarily participate in CSP and in doing so receive its benefits.
Compliance with the provisions of CSP regulations is only required for
those entities who choose to participate in this voluntary program.
Environmental Review
    The environmental impacts of this rule have been considered in a
manner consistent with the provisions of the National Environmental
Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council
on Environmental Quality (40 CFR parts 1500-1508), and the NRCS
regulations for compliance with NEPA (7 CFR part 650). The 2018 Farm
Bill requires minor changes to NRCS conservation programs, and there
are no changes to the basic structure of the programs. NRCS conducted
an analysis of the CSP interim rule and the analysis has determined
there will not be a significant impact to the human environment and as
a result, an environmental impact statement (EIS) is not required to be
prepared (40 CFR 1508.13). While OMB has designated this rule as
``economically significant'' under Executive Order 12866, ``. . .
economic or social effects are not intended by themselves to require
preparation of an environmental impact statement'' (40 CFR 1508.14),
when not interrelated to natural or physical environmental effects. The
Environmental Assessment (EA) and Finding of No Significant Impact
(FONSI) are available for review and comment for 30 days from the date
of publication of this interim rule in the Federal Register. NRCS will
consider this input and determine whether there is any new information
provided that is relevant to environmental concerns and bearing on the
proposed action or its impacts that warrant supplementing or revising
the current available draft of the CSP EA and FONSI.
Executive Order 12372
    Executive Order 12372, ``Intergovernmental Review of Federal
Programs,'' requires consultation with State and local officials that
would be directly affected by proposed Federal financial assistance.
The objectives of the Executive order are to foster an
intergovernmental partnership and a strengthened federalism, by relying
on State and local processes for State and local government
coordination and review of proposed Federal financial assistance and
direct Federal development. For reasons specified in the final rule
related notice regarding 7 CFR part 3015, subpart V (48 FR 29115, June
24, 1983), the programs and activities in this rule are excluded from
the scope of Executive Order 12372.
Executive Order 12988
    This rule has been reviewed under Executive Order 12988, ``Civil
Justice Reform.'' This rule will not preempt State or local laws,
regulations, or policies unless they represent an irreconcilable
conflict with this rule.
[[Page 60891]]
Before any judicial actions may be brought regarding the provisions of
this rule, the administrative appeal provisions of 7 CFR part 11 are to
be exhausted.
Executive Order 13132
    This rule has been reviewed under Executive Order 13132,
``Federalism.'' The policies contained in this rule do not have any
substantial direct effect on States, on the relationship between the
Federal Government and the States, or on the distribution of power and
responsibilities among the various levels of government, except as
required by law. Nor does this rule impose substantial direct
compliance costs on State and local governments. Therefore,
consultation with the States is not required.
Executive Order 13175
    This rule has been reviewed in accordance with the requirements of
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments.'' Executive Order 13175 requires Federal agencies
to consult and coordinate with Tribes on a Government-to-Government
basis on policies that have Tribal implications, including regulations,
legislative comments or proposed legislation, and other policy
statements or actions that have substantial direct effects on one or
more Indian Tribes, on the relationship between the Federal Government
and Indian Tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes.
    The USDA's Office of Tribal Relations (OTR) has assessed the impact
of this rule on Indian Tribes and determined that this rule does not
have Tribal implication that requires Tribal consultation under
Executive Order 13175. If a Tribe requests consultation, NRCS and CCC
will work with OTR to ensure meaningful consultation is provided where
changes, additions, and modifications identified in this rule are not
expressly mandated by the 2018 Farm Bill.
    Separate from Tribal consultation, communication and outreach
efforts are in place to assure that all producers, including Tribes (or
their members), are provided information about the regulation changes.
Specifically, NRCS obtains input through Tribal Conservation Advisory
Councils. A Tribal Conservation Advisory Council may be an existing
Tribal committee or department and may also constitute an association
of member Tribes organized to provide direct consultation to NRCS at
the State, regional, and national levels to provide input on NRCS
rules, policies, programs, and impacts on Tribes. Tribal Conservation
Advisory Councils provide a venue for agency leaders to gather input on
Tribal interests. Additionally, NRCS will be holding several sessions
with Indian Tribes and Tribal entities across the country to describe
the 2018 Farm Bill changes to NRCS conservation programs, obtain input
about how to improve Tribal and Tribal member access to NRCS
conservation assistance, and make any appropriate adjustments to the
regulations that will foster such improved access.
Unfunded Mandates
    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub.
L. 104-4), requires Federal agencies to assess the effects of their
regulatory actions on State, local, and Tribal governments or the
private sector. Agencies generally must prepare a written statement,
including cost-benefits analysis, for proposed and final rules with
Federal mandates that may result in expenditures of $100 million or
more in any 1 year for State, local, or Tribal governments, in the
aggregate, or to the private sector. UMRA generally requires agencies
to consider alternatives and adopt the more cost-effective or least
burdensome alternative that achieves the objectives of the rule. This
rule contains no Federal mandates, as defined under title II of UMRA,
for State, local, and Tribal governments or the private sector.
Therefore, this rule is not subject to the requirements of UMRA.
Federal Assistance Programs
    The title and number of the Federal Domestic Assistance Programs in
the Catalog of Federal Domestic Assistance to which this rule applies
is 10.924--Conservation Stewardship Program.
E-Government Act Compliance
    NRCS and CCC are committed to complying with the E-Government Act,
to promote the use of the internet and other information technologies
to provide increased opportunities for citizen access to government
information and services, and for other purposes.
List of Subjects in 7 CFR Part 1470
    Agricultural operation, Conservation activities, Natural resources,
Priority resource concern, Resource-conserving crop rotation, Soil and
water conservation, Soil quality, Stewardship threshold, Water quality
and water conservation, Wildlife and forest management.
0
For the reasons stated in the preamble, part 1470 of title 7 of the
Code of Federal Regulations is revised to read as follows:
PART 1470--CONSERVATION STEWARDSHIP PROGRAM
Subpart A--General Provisions
Sec.
1470.1 Applicability.
1470.2 Administration.
1470.3 Definitions.
1470.4 Allocation and management.
1470.5 Outreach activities.
1470.6 Eligibility requirements.
1470.7 Conservation activities.
1470.8 Technical and other assistance.
Subpart B--Contracts and Payments
1470.20 Application for contracts and selecting offers from
applicants.
1470.21 Contract requirements.
1470.22 Conservation stewardship plan.
1470.23 Conservation activity operation and maintenance.
1470.24 Payments.
1470.25 Contract modifications and transfers of land.
1470.26 Contract renewal.
1470.27 Contract violations and termination.
1470.28 Grassland conservation initiative contracts.
Subpart C--General Administration
1470.30 Fair treatment of tenants and sharecroppers.
1470.31 Appeals.
1470.32 Compliance with regulatory measures.
1470.33 Access to agricultural operation.
1470.34 Equitable relief.
1470.35 Offsets and assignments.
1470.36 Misrepresentation and scheme or device.
1470.37 Environmental credits for conservation improvements.
    Authority:  16 U.S.C. 3839aa-21-3839aa-25.
Subpart A--General Provisions
Sec.  1470.1  Applicability.
    (a) This part sets forth the policies, procedures, and requirements
for the Conservation Stewardship Program (CSP) as administered by the
Natural Resources Conservation Service (NRCS), for enrollment during
fiscal year (FY) 2019 and thereafter. Contracts entered into prior to
FY 2019 will use the regulations and policies in effect prior to
December 20, 2018.
    (b) The purpose of CSP is to encourage producers to address
priority resource concerns and improve and conserve the quality and
condition of natural resources in a comprehensive manner by--
    (1) Undertaking additional conservation activities; and
[[Page 60892]]
    (2) Improving, maintaining, and managing existing conservation
activities.
    (c) CSP is applicable in any of the 50 States, District of
Columbia, Commonwealth of Puerto Rico, Guam, Virgin Islands of the
United States, American Samoa, and Commonwealth of the Northern Mariana
Islands.
    (d) NRCS provides financial and technical assistance to eligible
producers.
Sec.  1470.2   Administration.
    (a) The regulations in this part will be administered under the
general supervision and direction of the Chief, NRCS.
    (b) No delegation in the administration of this part to lower
organizational levels will preclude the Chief from making any
determinations under this part, redelegating to other organizational
levels, or from reversing or modifying any determination made under
this part. The Chief may modify or waive a nonstatutory, discretionary
provision of this part if the Chief determines the application of that
provision to a particular limited situation is inappropriate and
inconsistent with the purposes of the program.
    (c) To achieve the conservation goals of CSP, NRCS will--
    (1) Make the program available nationwide to eligible applicants on
a continuous application basis with one or more ranking periods to
determine enrollments. One of the ranking periods will occur in the
first quarter of each fiscal year to the extent practicable.
    (2) Establish a science-based stewardship threshold for each
priority resource concern at the level of management required to
conserve and improve the quality and condition of a natural resource.
To the extent practicable, NRCS will use scientifically developed
assessment tools and guides including, but not limited to, soil erosion
prediction tools, wildlife habitat assessment tools, rangeland health
assessments, and soil health assessments, to establish the stewardship
threshold and measure the level of improvement once the participant
applies additional conservation activities to meet or exceed a resource
concern.
    (d) NRCS will develop State-level technical, outreach, and program
materials, with the advice of the State technical committee and local
working groups, including:
    (1) Establishment of ranking pools appropriate for the conduct of
CSP within the State to ensure program availability and better
distribution of the funds. Ranking pools may be based on watersheds,
geographic areas, or other appropriate regions within a State and may
consider high-priority regional and State-level priority resource
concern areas;
    (2) Identification of not less than five priority resource concerns
in particular geographic areas or other appropriate regions within a
State;
    (3) Identification of resource-conserving crops that will be part
of resource-conserving crop rotations; and
    (4) Identification of combinations of grazing conservation
activities that will be part of an advanced grazing management system.
    (e) NRCS may enter into agreements with Federal, State, and local
agencies, conservation districts, Indian Tribes, private entities, and
individuals to assist NRCS with program implementation including, but
not limited to, planning activities, outreach, and providing other
forms of technical assistance.
Sec.  1470.3  Definitions.
    The following definitions will apply to this part and all documents
issued in accordance with this part, unless specified otherwise:
    Advanced grazing management means the use of a combination of
grazing conservation activities, as determined by NRCS, which may
include management-intensive rotational grazing, that provide for--
    (1) Improved soil health and carbon sequestration;
    (2) Drought resilience;
    (3) Wildlife habitat;
    (4) Wildfire mitigation;
    (5) Control of invasive plants; and
    (6) Water quality improvement.
    Agricultural operation means all eligible land, as determined by
NRCS, whether contiguous or noncontiguous that is--
    (1) Under the effective control of a producer at the time of
enrollment in the program; and
    (2) Operated by the producer with equipment, labor, management, and
production or cultivation practices that are substantially separate
from other agricultural operations.
    Applicant means a producer who has requested in writing to
participate in CSP.
    Beginning farmer or rancher means a person or legal entity who--
    (1) Has not operated a farm, ranch, or nonindustrial private forest
land (NIPF); or who has operated a farm, ranch, or NIPF for not more
than 10 consecutive years. The requirement in this paragraph (1)
applies to all members of a legal entity who will materially and
substantially participate in the operation of the farm or ranch.
    (2) In the case of a contract with an individual, individually, or
with the immediate family, material and substantial participation
requires that the individual provide substantial day- to-day labor and
management of the farm or ranch, consistent with the practices in the
county or State where the farm is located.
    (3) In the case of a contract with a legal entity or joint
operation, all members must materially and substantially participate in
the operation of the farm or ranch. Material and substantial
participation requires that each of the members provide some amount of
the management or labor and management necessary for day-to-day
activities, such that if each of the members did not provide these
inputs, operation of the farm or ranch would be seriously impaired.
    Chief means the Chief of NRCS, United States Department of
Agriculture (USDA), or designee.
    Comprehensive conservation plan means a conservation plan that
meets or exceeds the stewardship threshold for each priority resource
concern identified by NRCS across all land uses included in the
operation.
    Conservation activities mean conservation systems, practices,
enhancements, or management measures, as determined by NRCS, and may
include--
    (1) Structural measures, vegetative measures, and land management
measures, including agricultural drainage management systems as
determined by NRCS;
    (2) Planning needed to address a priority resource concern;
    (3) Development of a comprehensive conservation plan;
    (4) Soil health planning, including planning to increase soil
organic matter; and
    (5) Activities that will assist a producer to adapt to, or mitigate
against, increasing weather volatility.
    Conservation district means any district or unit of State, Tribal,
or local government formed under State, Tribal, or territorial law for
the express purpose of developing and carrying out a local soil and
water conservation program. Such district or unit of government may be
referred to as a ``conservation district,'' ``soil conservation
district,'' ``soil and water conservation district,'' ``resource
conservation district,'' ``land conservation committee,'' ``natural
resource district,'' or similar name.
    Conservation practice means a specified treatment, such as a
structural, vegetative, or management technique commonly used to meet a
specific need in planning and carrying out
[[Page 60893]]
conservation programs for which standards and specifications have been
developed. Conservation practices are in the Field Office Technical
Guide (FOTG).
    Conservation stewardship plan means a plan developed in accordance
with the requirements of Sec.  1470.22.
    Conservation system means a combination of conservation practices,
management measures, and enhancements used to address natural resource
and environmental concerns in a comprehensive, holistic, and integrated
manner.
    Contract means a legal document that specifies the rights and
obligations of any participant who has been accepted into the program.
A CSP contract is a binding agreement under this part for the transfer
of assistance from NRCS to the participant for installing, adopting,
improving, managing, and maintaining conservation activities.
    Effective control means possession of the land by ownership,
written lease, or other legal agreement and authority to act as
decision maker for the day-to-day management of the operation both at
the time the applicant enters into a stewardship contract and for the
duration of the contract.
    Eligible land means:
    (1) Private and Tribal land upon which:
    (i) Agricultural commodities, livestock, or forest-related products
are produced; and
    (ii) Priority resource concerns could be addressed through a
contract under the program. Eligible land includes cropland, grassland,
rangeland, pastureland, nonindustrial private forest land, and other
agricultural lands including cropped woodland, marshes, and
agricultural land used or capable of being used for the production of
livestock as determined by the Chief; and
    (2) Publicly owned land where the--
    (i) Land is associated with the land described in paragraph (1) of
this definition and is a working component of the producer's
agricultural or forestry operation;
    (ii) Producer has control of the land for the term of the contract;
and
    (iii) Conservation activities the producer will implement on the
public land are necessary and will address an identified priority
resource concern.
    Enhancement means a type of conservation activity used to treat
natural resources and improve conservation performance. Enhancements
are equal to or greater than the performance level for the planning
criteria identified for a given resource concern. Planning criteria are
defined for each resource concern in Section III--Conservation
Management Systems, Field Office Technical Guide.
    Field Office Technical Guide (FOTG) means the official local NRCS
source of resource information and interpretations of guidelines,
planning criteria, and standards for planning and implementation of
conservation practices. The FOTG contains detailed information on the
planning standard to achieve conservation of soil, water, air, plant,
energy, and animal resources applicable to the local area for which it
is prepared. (See https://www.nrcs.usda.gov/wps/portal/nrcs/main/national/technical/fotg/ to access your State FOTG.)
    Historically underserved producer means a person, joint operation,
legal entity, or Indian Tribe who is a beginning farmer or rancher,
socially disadvantaged farmer or rancher, limited resource farmer or
rancher, or veteran farmer or rancher.
    Indian lands mean land held in trust by the United States for
individual Indians or Indian Tribes, or all land titles held by
individual Indians or Tribes, subject to Federal restrictions against
alienation or encumbrance, or land which is subject to the rights of
use, occupancy, and/or benefit of certain Indian Tribes. This term also
includes lands for which the title is held in fee status by an Indian,
Indian family, or Indian Tribe.
    Indian Tribe means any Indian Tribe, band, nation, pueblo, or other
organized group or community, including any Alaska Native village or
regional or village corporation as defined in or established pursuant
to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.),
which is recognized as eligible for the special programs and services
provided by the United States to Indians because of their status as
Indians.
    Joint operation means, as defined in 7 CFR part 1400, a general
partnership, joint venture, or other similar business organization in
which the members are jointly and severally liable for the obligations
of the organization.
    Legal entity means, as defined in 7 CFR part 1400, an entity
created under Federal or State law that owns land or an agricultural
commodity, product, or livestock; or produces an agricultural
commodity, product, or livestock.
    Limited resource farmer or rancher means:
    (1) A person with direct or indirect gross farm sales not more than
the current indexed value in each of the previous 2 fiscal years
(adjusted for inflation using Prices Paid by Farmer Index as compiled
by the National Agricultural Statistical Service); and
    (2) Has a total household income at or below the national poverty
level for a family of four, or less than 50 percent of county median
household income in each of the previous 2 years (to be determined
annually using Department of Commerce Data).
    (3) A limited resource farmer or rancher also includes a legal
entity or joint operation if all individual members independently
qualify under paragraphs (1) and (2) of this definition.
    Liquidated damages means a sum of money stipulated in the CSP
contract that the participant agrees to pay NRCS if the participant
fails to fulfill the terms of the contract. The sum represents an
estimate of the technical assistance expenses incurred to service the
contract and reflects the difficulties of proof of loss and the
inconvenience or nonfeasibility of otherwise obtaining an adequate
remedy.
    Management-intensive rotational grazing means a strategic,
adaptively managed multipasture grazing system in which animals are
regularly and systematically moved to a fresh pasture in a manner that,
as determined by NRCS:
    (1) Maximizes the quantity and quality of forage growth;
    (2) Improves manure distribution and nutrient cycling;
    (3) Increases carbon sequestration from greater forage harvest;
    (4) Improves the quality and quantity of cover for wildlife;
    (5) Provides permanent cover to protect the soil from erosion; and
    (6) Improves water quality.
    Management measure means one or more specific actions that is not a
conservation practice, but which has the effect of alleviating problems
or improving the treatment of the natural resources.
    National Organic Program means the program established under the
Organic Foods Production Act of 1990 (7 U.S.C. 6501 et seq.),
administered by the Agricultural Marketing Service, which regulates the
standards for any farm, wild crop harvesting, or handling operation
that wants to market an agricultural product as organically produced.
    Natural Resources Conservation Service means an agency of USDA
which has responsibility for administering CSP using the funds,
facilities, and authorities of the Commodity Credit Corporation.
    Nonindustrial private forest land means rural land, as determined
by NRCS, that has existing tree cover or is suitable for growing trees,
and is owned
[[Page 60894]]
by any nonindustrial private individual, group, association,
corporation, Indian Tribe, or other private legal entity that has
definitive decision-making authority over the land.
    Operation and maintenance means work performed by the participant
to maintain existing conservation activities to at least the level of
conservation performance identified at the time of enrollment, and
maintain additional conservation activities installed and adopted over
the contract period. Operation includes the administration, management,
and performance of nonmaintenance actions needed to keep the completed
activity functioning as intended. Maintenance includes work to prevent
deterioration of the activity, repairing damage, and replacement or
restoration of the activity to its original condition if one or more
components fail.
    Participant means a producer that has applied for participation and
has entered into a CSP contract and is receiving payment or is
responsible for implementing the terms and conditions of a CSP
contract.
    Payment means financial assistance provided to the participant
under the terms of the CSP contract.
    Person means, as defined in 7 CFR part 1400, an individual, natural
person and does not include a legal entity.
    Priority resource concern means a natural resource concern or
problem, as determined by NRCS, that is likely to be addressed
successfully through implementation of conservation activities under
this program.
    Producer means a person, legal entity, joint operation, or Indian
Tribe who either has an interest in the agricultural operation or who
NRCS determines is engaged in agricultural production or forestry
management on the agricultural operation.
    Resource-conserving crop means a crop that is one of the following,
as determined by NRCS:
    (1) A perennial grass;
    (2) A legume grown for use as forage, seed for planting, or green
manure;
    (3) A legume-grass mixture; or
    (4) A small grain or other resource-demanding crop grown in
combination with a grass, legume, forbs, grass-forbs mixture, whether
interseeded or planted in rotation.
    Resource-conserving crop rotation means a crop rotation that--
    (1) Includes at least one resource-conserving crop as determined by
NRCS;
    (2) Reduces erosion;
    (3) Improves soil fertility and tilth;
    (4) Interrupts pest cycles;
    (5) Builds soil organic matter; and
    (6) In applicable areas, reduces depletion of soil moisture or
otherwise reduces the need for irrigation.
    Secretary means the Secretary of the USDA.
    Socially disadvantaged farmer or rancher means a producer who is a
member of a group whose members have been subjected to racial or ethnic
prejudices without regard to its members' individual qualities.
    State technical committee means a committee established by the NRCS
in a State pursuant to 7 CFR part 610, subpart C.
    Stewardship threshold means the level of management required, as
determined by NRCS, to conserve and improve the quality and condition
of a natural resource through the use of--
    (1) Planning criteria under a resource management system;
    (2) Predictive analytics tools or models developed or approved by
NRCS;
    (3) Data from past and current enrollment in the program; and
    (4) Other methods that measure conservation and improvement in
priority resource concerns, as determined by the Chief.
    Technical assistance means technical expertise, information, and
tools necessary for the conservation of natural resources on land
active in agricultural, forestry, or related uses. The term includes
the following:
    (1) Technical services provided directly to farmers, ranchers,
Indian Tribes, forest producers, and other eligible entities, such as
conservation planning, technical consultation, and assistance with the
design and implementation of conservation activities; and
    (2) Technical infrastructure, including processes, tools, and
agency functions needed to support delivery of technical services; such
as technical standards, resource inventories, training, data,
technology, monitoring, and effects analyses.
    Technical service provider (TSP) means an individual, private-
sector entity, Indian Tribe, or public agency certified pursuant to 7
CFR part 652 and placed on the approved list to provide technical
services to participants; or selected by USDA to assist USDA in the
implementation of conservation programs covered by this part through a
procurement contract, contribution agreement, or cooperative agreement
with USDA.
    Veteran farmer or rancher means a producer who meets the definition
in section 2501(a)(7) of the Food, Agriculture, Conservation, and Trade
Act of 1990, as amended (7 U.S.C. 2279).
Sec.  1470.4   Allocation and management.
    (a) The Chief will allocate funds to States, and may adjust the
weighting of the following allocation factors to provide for equitable
geographic distribution and meet enrollment goals, based on the
consideration of--
    (1) Each State's proportion of eligible land to the total acreage
of eligible land in all States;
    (2) The extent and magnitude of the conservation needs associated
with agricultural production in each State;
    (3) The degree to which implementation of the program in the State
is, or will be, effective in helping producers address those needs; and
    (4) Other considerations determined by the Chief to achieve
equitable geographic distribution of program funds.
    (b) The Chief will allocate funding to the States to support
organic production and transition to organic production based on--
    (1) The number of certified and transitioning organic operations
within the State; and
    (2) The number of acres of certified and transitioning organic
production within the State.
    (c) Of the funds made available for each of fiscal years 2019
through 2023 to carry out CSP, NRCS will use, as a minimum:
    (1) Five percent to assist beginning farmers or ranchers; and
    (2) Five percent to assist socially disadvantaged farmers or
ranchers.
    (d) NRCS may adjust State allocations or reallocate funds in any
fiscal year if a State cannot use their full allocation.
Sec.  1470.5  Outreach activities.
    (a) NRCS will establish program outreach activities at the
national, State, and local levels to inform potential applicants who
control eligible land that they may be eligible to apply for program
assistance.
    (b) NRCS will specifically conduct outreach to historically
underserved producers.
    (c) NRCS will provide outreach so as not to limit producer
participation because of size or type of operation or production
system, including specialty crop and organic production.
Sec.  1470.6   Eligibility requirements.
    (a) Eligible applicant. To apply for CSP, a producer must--
    (1) Be the operator, owner, or other tenant of an agricultural
operation in the Farm Service Agency (FSA) farm records management
system. Applicants
[[Page 60895]]
must establish or update records with FSA before NRCS will consider an
applicant as eligible;
    (2) Share in the risk of producing a crop; share in the crop
available for marketing from the farm (or would have shared had the
crop been produced); and participate in the daily management,
administration, and performance of the operation for the land included
in the contract;
    (3) Have effective control of the land unless an exception is made
by the Chief in the case of land administered by the Bureau of Indian
Affairs, Indian lands, or other instances in which NRCS determines that
there is sufficient assurance of control;
    (4) Be in compliance with the highly erodible land and wetland
conservation provisions found at 7 CFR part 12;
    (5) Be in compliance with adjusted gross income provisions found at
7 CFR part 1400;
    (6) Supply information, as required by NRCS, to determine
eligibility for the program, including but not limited to, information
related to eligibility requirements and ranking factors; conservation
activity and production system records; information to verify the
applicant's status as an historically underserved producer, if
applicable; and payment eligibility as established by 7 CFR part 1400;
and
    (7) Provide a list of all members of the legal entity or joint
operation, as applicable, and embedded entities along with members' tax
identification numbers and percentage interest in the legal entity or
joint operation. Where applicable, American Indians, Alaska Natives,
and Pacific Islanders may use another unique identification number for
each individual eligible for payments.
    (b) Eligible land. A contract application must include all of the
eligible land on an applicant's agricultural operation. A participant
may submit an application(s) to enter into an additional contract(s)
for newly acquired or newly eligible land, which would then compete
with other applications in a subsequent ranking period.
    (c) Ineligible land. The following lands (even if covered by the
definition of eligible land in Sec.  1470.3) are part of the
agricultural operation, but are not eligible for enrollment in CSP:
    (1) Land enrolled in the Conservation Reserve Program (CRP), 7 CFR
part 1410, unless--
    (i) The conservation reserve contract will expire at the end of the
fiscal year in which the land is to be enrolled in the program; and
    (ii) Conservation reserve program payments for land enrolled in the
program cease before the first program payment is made to the applicant
under this subchapter;
    (2) Land enrolled in a wetland reserve easement through the
Agricultural Conservation Easement Program, 7 CFR part 1468; and
    (3) Land used for crop production after December 20, 2018, that had
not been planted, considered to be planted, or devoted to crop
production for at least 4 of the 6 years preceding that date, unless
the land does not meet such requirements because that land--
    (i) Had previously been enrolled in CRP;
    (ii) Has been maintained using long-term crop rotation practices as
determined by the NRCS; or
    (iii) Is incidental land needed for efficient operation of the farm
or ranch as determined by NRCS.
Sec.  1470.7   Conservation activities.
    (a) NRCS will record in the conservation stewardship plan the
additional conservation activities the participant agrees to implement
under the conservation stewardship contract.
    (b) NRCS will make available to the public the list of conservation
activities an applicant may choose to implement and manage through the
CSP.
    (c) NRCS may make available bundles of conservation activities that
when implemented together address resource concerns in a more
comprehensive and cost-effective manner.
Sec.  1470.8  Technical and other assistance.
    (a) NRCS may provide technical assistance to an eligible applicant
or participant either directly or through a TSP as set forth in 7 CFR
part 652.
    (b) NRCS retains approval authority over certification of work done
by non-NRCS personnel for the purpose of approving CSP payments.
    (c) NRCS will ensure that technical assistance is available and
program specifications are appropriate so as not to limit producer
participation because of size or type of operation or production
system, including specialty crop and organic production.
    (d) NRCS will assist potential applicants dealing with the
requirements of certification under the National Organic Program and
CSP requirements concerning how to coordinate and simultaneously meet
eligibility standards under each program.
    (e) NRCS may utilize the services of State foresters and existing
technical assistance programs such as the Forest Stewardship Program of
the U.S. Forest Service, in coordinating assistance to NIPF owners.
Subpart B--Contracts and Payments
Sec.  1470.20  Application for contracts and selecting offers from
applicants.
    (a) Submission of contract applications. Applicants may submit an
application for CSP at any time to enroll all of the eligible land
included in their agricultural operation.
    (b) Stewardship threshold requirement. To be eligible to
participate in CSP, an applicant must submit to NRCS for approval, a
contract offer for the agricultural operation that--
    (1) Demonstrates that the applicant's conservation activities, at
the time of contract offer, meet or exceed the stewardship threshold
for at least two priority resource concerns; and
    (2) Would, at a minimum, meet or exceed the stewardship threshold
for at least one additional priority resource concern by the end of the
conservation stewardship contract by:
    (i) Installing and adopting additional conservation activities; and
    (ii) Improving, maintaining, and managing existing conservation
activities across the entire agricultural operation in a manner that
increases or extends the conservation benefits in place at the time the
contract application is accepted by NRCS; and
    (3) Provides a map, aerial photograph, or overlay that--
    (i) Identifies the applicant's agricultural operation; and
    (ii) Delineates eligible land with associated acreage amounts.
    (c) Evaluation of contract applications. NRCS will conduct one or
more ranking periods each fiscal year.
    (1) To the extent practicable, one ranking period will occur in the
last quarter of the previous fiscal year or the first quarter of the
current fiscal year.
    (2) In evaluating CSP applications for new enrollment or for
renewal, NRCS will rank applications based on the following factors:
    (i) The natural resource conservation and environmental benefits
that result from the conservation treatment on all State identified
priority resource concerns at the time of submission of the
application;
    (ii) The degree to which the proposed conservation activities
increase natural resource conservation and environmental benefits; and
    (iii) Other consistent criteria, as determined by NRCS, including
criteria the Chief determines are necessary to ensure that national,
State, and local priority resource concerns are effectively addressed.
[[Page 60896]]
    (3) In the event that two or more applications receive the same
ranking under paragraph (c)(2) of this section, NRCS shall rank those
contracts based on the extent to which the actual and anticipated
conservation benefits from each contract are provided at the lowest
cost relative to other similarly beneficial contract offers.
    (4) NRCS may not assign a higher priority to any application
because the applicant is willing to accept a lower payment than the
applicant would otherwise be eligible to receive.
    (d) Ranking pools. States will establish ranking pools in
accordance with Sec.  1470.2(d)(1).
    (1) Nonindustrial private forest land (NIPF) applications will
compete in separate ranking pools. An applicant with both NIPF and
other eligible land may submit one application for NIPF and one
application for all other eligible land.
    (2) Within each State or established ranking pool, NRCS will
address conservation access for certain farmers or ranchers,
including--
    (i) Socially disadvantaged farmers or ranchers;
    (ii) Beginning farmers or ranchers;
    (iii) Producers who are veteran farmers or ranchers; and
    (iv) Organic producers or producers who are transitioning to
organic.
    (e) Application preapproval. NRCS will make application preapproval
determinations throughout the fiscal year based on eligibility and
ranking score.
    (f) Field verification. NRCS will conduct onsite field verification
prior to entering into a conservation stewardship contract to
substantiate the accuracy of the information provided by applicants
during the application process and to verify applicability of planned
conservation activities.
Sec.  1470.21  Contract requirements.
    (a) After NRCS approves the application and develops the
conservation stewardship plan in accordance with Sec.  1470.22, NRCS
will enter into a conservation stewardship contract with the
participant to enroll the participant's agricultural operation in the
program.
    (b) The conservation stewardship contract will--
    (1) Be for a period of 5 years;
    (2) Incorporate by reference the conservation stewardship plan;
    (3) State the payment amount NRCS agrees to make to the participant
annually, subject to the availability of funds;
    (4) Incorporate all provisions as required by law or statute,
including requirements that the participant will--
    (i) Implement the conservation stewardship plan as described in
Sec.  1470.22;
    (ii) Operate and maintain conservation activities on the
agricultural operation consistent with Sec.  1470.23;
    (iii) Comply with the terms of the contract or documents
incorporated by reference into the contract;
    (iv) Refund as determined by NRCS, any program payments received
with interest, and forfeit any future payments under the program, upon
the violation of a term or condition of the contract, consistent with
Sec.  1470.27;
    (v) Refund as determined by NRCS, all program payments received
with interest, upon the transfer of the right and interest of the
participant, in land subject to the contract, unless the transferee of
the right and interest agrees to assume all obligations of the
contract, consistent with Sec.  1470.25;
    (vi) Maintain and supply information as requested by NRCS, to
determine compliance with the conservation stewardship plan and any
other requirements of the program; and
    (vii) Not conduct any activities on the agricultural operation that
would tend to defeat the purposes of the program, as determined by
NRCS;
    (5) Permit all economic uses of the eligible land that--
    (i) Maintain the agricultural or forestry nature of the land; and
    (ii) Are consistent with the conservation purposes of the contract;
    (6) Include a provision to ensure that NRCS will not consider a
participant in violation of the contract for failure to comply with the
contract due to circumstances beyond the control of the participant,
including a disaster or related condition, as determined by NRCS; and
    (7) Include such other provisions as NRCS determines necessary to
ensure the purposes of the program are achieved.
Sec.  1470.22  Conservation stewardship plan.
    (a) NRCS will use the conservation planning process as outlined in
the NRCS ``National Planning Procedures Handbook'' to encourage
participants to address resource concerns in a comprehensive manner.
    (b) The conservation stewardship plan will contain a record of the
participant's objectives and decisions to meet or exceed stewardship
thresholds for identified resource concerns through implementation or
adoption of one or more conservation activities. The plan will document
the schedule of conservation activities to be implemented, managed, or
improved under the conservation stewardship contract.
    (c) Supporting documentation for the participant's plan will
include--
    (1) Identification and inventory of priority resource concerns;
    (2) Establishing benchmark data on the condition of existing
conservation activities at the time of enrollment;
    (3) A plan map delineating the agricultural operation included in
the program contract with associated acreage amounts;
    (4) For organic producers or producers transitioning to organic
production, documentation that supports the participant's transition to
or participation in the National Organic Program; and
    (5) Other information as determined appropriate by NRCS.
Sec.  1470.23  Conservation activity operation and maintenance.
    Throughout the conservation stewardship contract period, the
participant will maintain and manage existing conservation activities
across the entire agricultural operation to at least the benchmark
level of conservation performance identified at the time of enrollment
for the conservation stewardship contract period. The participant will
also maintain and manage additional activities installed and adopted
under the conservation stewardship contract.
Sec.  1470.24  Payments.
    (a) Annual payments. Subject to the availability of funds, NRCS
will provide, as appropriate, annual payments under the program to
compensate a participant for installing and adopting additional
conservation activities, and for improving, maintaining, and managing
existing conservation activities across the entire agricultural
operation in a manner that increases or extends the conservation
benefits in place at the time NRCS accepts the contract offer. A split-
rate annual payment structure is used to provide separate payments for
additional and existing conservation activities in order to place
emphasis on implementing additional conservation.
    (1) NRCS will make equal annual payments for the existing activity
portion of the payment, specific to the operation, based on the land
uses and NRCS assessment of existing stewardship. NRCS will make
payments for the additional conservation activities based on the
complexity and extent of the individual activities completed by the
participant during the previous fiscal year. Additional activities
implemented may vary from year to
[[Page 60897]]
year, so the total annual payment may fluctuate;
    (2) In order to receive an annual payment for a land use,
participants must schedule, install, and adopt at least one additional
conservation activity on the land use type;
    (3) At least one additional conservation activity must be
implemented on one land use type within the first 12 months of the
contract. NRCS may extend this timeframe if NRCS determines that the
participant is unable to complete the conservation activity for reasons
beyond their control;
    (4) NRCS will base the annual payment rates, to the maximum extent
practicable, on the following factors:
    (i) Costs incurred by the participant associated with planning,
design, materials, installation, labor, management, maintenance, or
training;
    (ii) Income foregone by the participant;
    (iii) Expected conservation benefits;
    (iv) The extent to which priority resource concerns will be
addressed through the installation and adoption of conservation
activities on the agricultural operation;
    (v) The level of stewardship in place at the time of application
and maintained over the term of the contract;
    (vi) The degree to which the conservation activities will be
integrated across the entire agricultural operation for all State
identified priority resource concerns over the term of the contract;
and
    (vii) Such other factors as determined by the Chief; and
    (5) Participants will receive payments for cover crop activities at
not less than 125 percent of the annual payment amount, as determined
by NRCS.
    (b) Supplemental payments. Subject to the availability of funds,
NRCS will provide a supplemental payment to a participant receiving
annual payments, who also agrees to adopt or improve a resource-
conserving crop rotation or adopt advanced grazing management, as
defined by NRCS, to achieve beneficial crop or grazing rotations as
appropriate for the eligible land of the participant.
    (1) NRCS will determine whether a resource-conserving crop rotation
or advanced grazing management is eligible for supplemental payments
based on whether the resource-conserving crop rotation or advanced
grazing management is designed to provide natural resource conservation
and production benefits;
    (2) A participant must adopt or improve the resource-conserving
crop rotation or adopt advanced grazing management during the term of
the contract to be eligible to receive a supplemental payment;
    (3) Supplemental payments will be based, to the maximum extent
practicable, on the factors from paragraph (a)(4) of this section; and
    (4) Supplemental payments will be not less than 150 percent of the
annual payment amount, as determined by NRCS.
    (c) Comprehensive conservation plan. Participants choosing to
develop a comprehensive conservation plan through their conservation
stewardship contract will receive a one-time payment for this activity.
NRCS will determine the payment based on the number of priority
resource concerns addressed in the comprehensive conservation plan and
the number of types of land uses included in the plan. Participants
will not be eligible to receive payment for plans developed prior to
their enrollment in a conservation stewardship contract.
    (d) Minimum contract payment. NRCS may make a minimum contract
payment to a participant in any fiscal year in which the contract's
payment amount total is less than a rate determined equitable by the
Chief based upon the effort required by a participant to comply with
the terms of the contract.
    (e) Timing of payments. NRCS will make payments as soon as
practicable after October 1 of each fiscal year for activities carried
out in the previous fiscal year. For newly enrolled contracts, NRCS
will make payments as soon as practicable after October 1 following the
fiscal year of enrollment.
    (f) Noncompensatory matters. NRCS will not provide a CSP payment to
a participant for--
    (1) New conservation activities applied with financial assistance
through other USDA conservation programs;
    (2) The design, construction, or maintenance of animal waste
storage or treatment facilities, or associated waste transport or
transfer devices for animal feeding operations;
    (3) Conservation activities for which there is no cost incurred or
income foregone by the participant; or
    (4) Conservation activities initiated or implemented prior to
contract approval, unless NRCS granted a waiver prior to the
participant starting the activity.
    (g) Payment limits. A person or legal entity may not receive,
directly or indirectly, payments that, in the aggregate, exceed
$200,000 under all CSP contracts entered into during fiscal years 2019
through 2023, excluding funding arrangements with Indian Tribes,
regardless of the number of contracts entered into under the CSP by the
person or legal entity.
    (h) Contract limits. Each conservation stewardship contract will be
limited to $200,000 over the term of the contract period, except that
conservation stewardship contracts with any joint operation will be
limited to $400,000 over the term of the contract period.
    (i) Scope of payment and contract limitations for Indian Tribes and
individual Tribal members. Contracts with Indian Tribes are not subject
to payment or contract limitations but payment limitations in paragraph
(f) of this section apply to individual Tribal member(s). Indian Tribes
and the Bureau of Indian Affairs will certify in writing that no one
individual, directly or indirectly, will receive more than the payment
limitation. Certification provided at the time of enrollment will cover
the entire contract period. The Tribal entity must also provide, upon
request from NRCS, a listing of individuals and payment made, by Social
Security number or other unique identification number, during the
previous year for calculation of overall payment limitations.
    (j) Tax Identification Number. To be eligible to receive a CSP
payment, all applicants must provide a tax identification number. In
accordance with 7 CFR part 1400, applicants who participate as a legal
entity or joint operation must provide a list of all members of the
legal entity or joint operation and associated embedded entities, along
with the members' Social Security numbers and percentage interest in
the legal entity or joint operation. NRCS attributes payments directly
to legal entity members for the purpose of complying with paragraph (f)
of this section.
    (k) Unique identification numbers. American Indians, Alaska
Natives, and Pacific Islanders may use another unique identification
number for each individual eligible for payment. Any participant that
uses a unique identification number as an alternative to a tax
identification number will use that identifier for all CSP contracts in
which they participate.
Sec.  1470.25  Contract modifications and transfers of land.
    (a) NRCS may modify a conservation stewardship contract, if--
    (1) The participant agrees to the modification; and
    (2) NRCS determines the modification is in the public interest.
    (b) NRCS may allow modification to a conservation stewardship
contract to
[[Page 60898]]
accommodate certain changes in the agricultural operation, including--
    (1) Removing contract acres the participant will enroll in CRP,
protect with a wetland reserve easement through the Agricultural
Conservation Easement Program (ACEP), or enroll in other Federal or
State programs that offer greater natural resource protection through
an easement, long-term contract, land use restrictions, or similar
authority as determined by NRCS. NRCS may reduce payments for such
modified contracts to reflect the modified acreage and performance.
Participants will not be subject to liquidated damages or refund of
payments received for enrolling land in these programs.
    (2) Accommodating other limited changes, in response to a
participant's request made prior to implementing the change, that would
take land out of production or convert an area under contract to a
different land use. These situations apply only to land for which the
participant has and will retain effective control, and not for
situations of involuntary loss of land.
    (3) Allowing a participant to substitute a conservation activity as
long as the level of conservation performance agreed to at the time of
enrollment remains the same or is improved with implementation of the
substitute activity.
    (i) Adjustments to existing activities may occur consistent with
conservation performance requirements from Sec.  1470.23.
    (ii) [Reserved]
    (4) Prior to approval, NRCS must determine that any modification
under this section is authorized by the provisions of 16 U.S.C. 3838d-
3838g.
    (c) A contract modification under this section will not increase
the scheduled annual payments under the program, except to make minor
adjustments to a conservation activity, as determined by NRCS;
implement an appeal determination; correct an administrative error as
approved by NRCS; or to adjust payment limitations. Contracts
transferred from an individual or entity to a joint operation will
retain the original contract limit outlined in Sec.  1470.24(g).
    (d) Within the time specified in the contract, a participant must
provide NRCS with written notice regarding any voluntary or involuntary
loss of control of any acreage under the CSP contract, which includes
changes in a participant's ownership structure or corporate form.
Failure to provide timely notice may result in termination of the
entire contract.
    (e) Unless NRCS approves a transfer of contract rights under this
paragraph (e), a participant losing control of any acreage may
constitute a violation of the CSP contract and NRCS may terminate the
contract and require a participant to refund all or a portion of any
financial assistance provided. NRCS may approve a transfer of the
contract if--
    (1) NRCS receives written notice that identifies the new producer
who will take control of the acreage, as required in paragraph (d) of
this section;
    (2) The new producer meets program eligibility requirements within
a reasonable time frame, as specified in the CSP contract;
    (3) The new producer agrees to assume the rights and
responsibilities for the acreage under the contract; and
    (4) NRCS determines that the purposes of the program will continue
to be met despite the original participant's losing control of all or a
portion of the land under contract.
    (f) Until NRCS approves the transfer of contract rights, the new
producer is not a participant in the program and may not receive
payment for conservation activities commenced prior to approval of the
contract transfer.
    (g) NRCS may not approve a contract transfer and may terminate the
contract in its entirety if NRCS determines that the loss of control of
the land was voluntary, the new producer is not eligible or willing to
assume responsibilities under the contract, or the purposes of the
program cannot be met.
    (h) In the case of death, incompetency, or disappearance of any
participant, NRCS may, as identified in the CSP contract--
    (i) Terminate the contract;
    (ii) Make any payments due under this part pursuant to guidance
under applicable provisions of 7 CFR parts 707 and 1400 (including
payment to successor(s)); or
    (iii) Take any further action that the Chief determines is fair and
reasonable in light of all of the circumstances.
Sec.  1470.26  Contract renewal.
    (a) During the first half of the fifth year of the initial contract
period, NRCS may allow a participant to apply and compete for the
opportunity under Sec.  1470.20 to renew the contract to receive
payments for one additional 5-year period, subject to the availability
of funds, if the participant meets criteria from paragraph (b) of this
section.
    (b) To be considered for contract renewal, the participant must--
    (1) Be in compliance with the terms of their existing contract as
determined by NRCS;
    (2) Add any newly acquired eligible land that is part of the
agricultural operation that NRCS determines must be included in the
renewal contract;
    (3) Agree to adopt and continue to integrate new or improved
conservation activities across the entire agricultural operation,
demonstrating continued improvement during the additional 5-year
period, as determined by NRCS; and
    (4) By the end of the renewal contract period, agree to meet or
exceed the stewardship threshold of at least two additional priority
resource concerns on the agricultural operation; or to adopt or improve
conservation activities, as determined by NRCS, to achieve higher
levels of conservation performance with respect to not less than two
existing priority resource concerns that are specified by the Chief in
the initial contract.
    (c) Participants eligible for renewal who choose not to renew will
be ineligible for a new contract on land previously enrolled under a
conservation stewardship contract for 2 years following expiration of
their initial contract.
Sec.  1470.27  Contract violations and termination.
    (a) NRCS may terminate a contract:
    (1) Without the consent of the participant where NRCS determines
that the participant--
    (i) Violated the contract; or
    (ii) Is unable to comply with the terms of the contract as the
result of conditions beyond their control.
    (2) With the consent of the participant if NRCS determines that the
termination is in the public interest. NRCS will not assess liquidated
damages for contracts terminated under this basis.
    (b) When NRCS terminates a contract in accordance with paragraph
(a) of this section, NRCS may allow a participant to retain payments
already received based on--
    (1) The level of effort the participant has made to comply with the
contract. NRCS may require a participant to provide only a partial
refund of the payments received if a previously installed conservation
activity has achieved the expected conservation performance
improvement, is not adversely affected by any contract violation or the
absence of other conservation activities that would have been installed
under the contract, and has met the associated operation and
maintenance requirement of the activity; or
    (2) Hardship situations where circumstances beyond the
participant's control prevented the participant from complying with the
contract. Any hardship affecting the participant's
[[Page 60899]]
ability to comply with the contract must not have existed at the time
the contract was executed by the participant. Participants may submit a
written request to NRCS, along with additional supporting
documentation, for NRCS to consider granting a waiver of any requested
repayment and/or assessment of liquidated damages.
    (c) If NRCS determines that a participant is out of compliance with
the contract terms or incorporated documents, NRCS will notify the
participant to explain what the participant must do to regain
compliance and the consequences for not correcting the violation. NRCS
will give the participant reasonable time to complete all necessary
corrective actions, not to exceed one year. NRCS may authorize
additional time for the participant to complete the corrective actions
if, during the initial period, the participant was unable to complete
the corrective actions due to circumstances beyond their control. If a
participant's contract continues in violation, NRCS may:
    (1) Terminate the contract in accordance with paragraph (e) of this
section; or
    (2) Where NRCS determines the violation does not warrant
termination, NRCS may require the participant to:
    (i) Refund all or a portion of the payments provided; or
    (ii) Agree to such adjustments to the contact terms as determined
appropriate by NRCS.
    (d) Notwithstanding the provisions of paragraph (c) of this
section, NRCS will terminate a contract, effective immediately, upon a
determination by NRCS that the participant:
    (1) Has submitted false information or filed a false claim;
    (2) Engaged in any act, scheme, or device for which NRCS found the
participant ineligible for payments as provided in Sec.  1470.36; or
    (3) Incurred a contract violation that the participant cannot
correct in a timeframe established by NRCS.
    (e) If NRCS terminates a contract, the participant will forfeit all
rights to future payments under the contract, pay liquidated damages,
and refund all or part of the payments received, plus interest, except
as otherwise noted in paragraph (b) of this section.
Sec.  1470.28  Grassland conservation initiative contracts.
    (a) The purpose of the grassland conservation initiative (GCI) is
to assist producers in protecting grazing uses, conserving and
improving soil, water, and wildlife resources, and achieving related
conservation values by conserving eligible land through grassland
conservation contracts.
    (b) The GCI is applicable on eligible cropland for which base acres
have been maintained by the FSA under section 1112(d)(3) of the
Agricultural Act of 2014 (7 U.S.C. 9012(d)(3)).
    (c) Producers with eligible land will have one-time election to
enroll in the GCI during fiscal years 2019 through 2023. A producer may
elect to enroll eligible acres in the GCI or under a general CSP
contract. A producer with land eligible for the GCI may not have the
same land enrolled under both a GCI and general CSP contract at the
same time.
    (d) Participants enrolled in the GCI must agree to meet or exceed
the stewardship threshold for at least one priority resource concern
before the end of the contract.
    (e) A GCI plan shall:
    (1) Encompass all enrolled land;
    (2) Require adoption of conservation activities to address
grassland resource concerns; and
    (3) If crops are grown, require adoption of conservation activities
that achieve conservation stewardship levels analogous to the land
being planted or maintained in grass.
    (f) The GCI contract will be for one 5-year term and will not be
subject to renewal.
    (g) GCI annual payments will be $18 per acre, not to exceed the
acres enrolled in the GCI contract.
    (1) GCI contracts are not subject to the payment limitations or
contract limits provided in Sec.  1470.24(f) and (g).
    (2) GCI contracts are not eligible for supplemental payments as
provided in Sec.  1470.24(b).
    (h) The participant may request to terminate their GCI contract at
any time and retain payments already received under the contract.
Subpart C--General Administration
Sec.  1470.30  Fair treatment of tenants and sharecroppers.
    Participants must divide payments received under this part in the
manner specified in the applicable contract. NRCS will ensure that
tenants and sharecroppers who have an interest in acreage being
enrolled receive equitable treatment, as determined by NRCS. NRCS may
refuse to enter into a contract when joint applicants seeking
enrollment disagree on an applicant's eligibility to participate in the
contract as a tenant.
Sec.  1470.31  Appeals.
    A participant may obtain administrative review of an adverse
decision under this part in accordance with 7 CFR parts 11 and 614.
Determinations in matters of general applicability, such as payment
rates, payment limits, the designation of identified priority resource
concerns, and eligible conservation activities are not subject to
appeal.
Sec.  1470.32  Compliance with regulatory measures.
    Participants will be responsible for obtaining the authorities,
rights, easements, permits, or other approvals or legal compliance
necessary for the implementation, operation, and maintenance associated
with the conservation stewardship plan. Participants will be
responsible for compliance with all laws and for all effects or actions
resulting from the implementation of the contract.
Sec.  1470.33  Access to agricultural operation.
    NRCS, or its authorized representative, will have the right to
enter an agricultural operation to ascertain the accuracy of any
representations, including natural resource information provided by an
applicant to evaluate a contract application. Access will include the
right to provide technical assistance, determine eligibility, assess
natural resource conditions, inspect any work undertaken under the
contract, and collect information necessary to evaluate the
implementation of conservation activities in the contract. NRCS, or its
authorized representative, will try to contact the participant prior to
the exercise of the provision in this section.
Sec.  1470.34  Equitable relief.
    (a) If a participant relied upon the advice or action of NRCS and
did not know, or have reason to know, that the action or advice was
improper or erroneous, the participant may be eligible for equitable
relief under 7 CFR part 635. NRCS will not assume the financial or
technical liability for any action by a participant that was taken
based on the advice of a TSP. This liability will remain with the TSP.
    (b) If NRCS finds that a participant is in violation of a provision
of the conservation stewardship contract or any incorporated document
through failure to comply fully with that provision, the participant
may be eligible for equitable relief under 7 CFR part 635.
Sec.  1470.35  Offsets and assignments.
    (a) Any payment or portion thereof due to any participant under
this part will be allowed without regard to any claim or lien in favor
of any creditor,
[[Page 60900]]
except agencies of the United States Government. The regulations
governing offsets and withholdings found at 7 CFR part 1403 will be
applicable to contract payments.
    (b) Any participant entitled to any payment may assign such
payments in accordance with regulations governing assignment of payment
found at 7 CFR part 1404.
Sec.  1470.36  Misrepresentation and scheme or device.
    (a) If NRCS determines that an applicant intentionally
misrepresented any fact affecting a CSP determination, the application
will be determined ineligible immediately.
    (b) A participant who is determined to have erroneously represented
any fact affecting a program determination made in accordance with this
part will not be entitled to contract payments and must refund to NRCS
all payments, plus interest determined in accordance with 7 CFR part
1403.
    (c) A participant will refund to NRCS all payments, plus interest
determined in accordance with 7 CFR part 1403, received by such
participant with respect to all CSP contracts if they are determined to
have--
    (1) Adopted any scheme or device that tends to defeat the purpose
of the program;
    (2) Made any fraudulent representation;
    (3) Adopted any scheme or device for the purpose of depriving any
tenant or sharecropper of the payments to which such person would
otherwise be entitled under the program; or
    (4) Misrepresented any fact affecting a program determination.
    (d) Participants determined to have committed actions identified in
paragraph (c) of this section will have their interest in all CSP
contracts terminated.
Sec.  1470.37  Environmental credits for conservation improvements.
    (a) NRCS will not prohibit a participant under this part from
participating in, and receiving compensation from, an environmental
services market if one of the purposes of the market is the
facilitation of additional conservation benefits that are consistent
with CSP purposes, as determined by NRCS. CSP participation may create
environmental benefits that qualify for environmental credits under an
environmental credit-trading program. NRCS will not prohibit a
participant under this part from participating in, or receiving
compensation from, an environmental credit-trading program, and NRCS
asserts no direct or indirect interest in these credits. However, in
addition, any requirements or standards of an environmental market
program in which a CSP participant simultaneously enrolls to receive
environmental credits must be compatible with the purposes and
requirements of the CSP contract and with this part. NRCS retains the
authority to ensure that CSP purposes are met and that one of the
purposes of the market is the facilitation of additional conservation
benefits that are consistent with CSP purposes.
    (b) The participant must meet all operation and maintenance
requirements for CSP-funded activities, consistent with Sec. Sec.
1470.21 and 1470.23. Where activities required under an environmental
credit agreement may affect the land and conservation activities under
a CSP contract, NRCS recommends that CSP participants request
assistance with the development of a compatibility assessment prior to
entering into any credit agreement. The CSP contract may be modified in
accordance with policies outlined in Sec.  1470.25 provided the
modifications meet CSP purposes and is in compliance with this part.
    (c) CSP participants may not use CSP funds to implement
conservation practices and activities that the participant is required
to establish because of a court order.
Kevin Norton,
Associate Chief, Natural Resources Conservation Service.
Robert Stephenson,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 2019-24367 Filed 11-8-19; 8:45 am]
BILLING CODE 3410-16-P