Biomass Crop Assistance Program, 66202-66243 [2010-26871]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation

[Federal Register Volume 75, Number 207 (Wednesday, October 27, 2010)]
[Rules and Regulations]
[Pages 66202-66243]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-26871]



[[Page 66201]]

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

Part III





Department of Agriculture





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



Commodity Credit Corporation



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



7 CFR Part 1450



Biomass Crop Assistance Program; Final Rule

Federal Register / Vol. 75 , No. 207 / Wednesday, October 27, 2010 / 
Rules and Regulations

[[Page 66202]]


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

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1450

RIN 0560-AH92


Biomass Crop Assistance Program

AGENCY: Commodity Credit Corporation and Farm Service Agency, USDA.

ACTION: Final rule.

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

SUMMARY: This rule implements the new Biomass Crop Assistance Program 
(BCAP) authorized by the Food, Conservation, and Energy Act of 2008 
(the 2008 Farm Bill). BCAP is intended to assist agricultural and 
forest land owners and operators with the establishment and production 
of eligible crops in selected project areas for conversion to 
bioenergy, and the collection, harvest, storage, and transportation of 
eligible material for use in a biomass conversion facility. This rule 
specifies the requirements for eligible producers and participants, 
biomass conversion facilities, and eligible renewable biomass crops and 
materials.

DATES: Effective Date: October 27, 2010.

FOR FURTHER INFORMATION CONTACT: Martin Lowenfish, U.S. Department of 
Agriculture (USDA), Farm Service Agency (FSA), Conservation and 
Environmental Programs Division, Mail Stop 0513, 1400 Independence 
Ave., SW., Washington, DC 20250-0513; telephone 202-205-9804; Persons 
with disabilities who require alternative means for communication 
(Braille, large print, audiotape, etc.) should contact the USDA Target 
Center at 202-720-2600 (voice and TDD).

SUPPLEMENTARY INFORMATION: 

Background

    In 2005, Congress enacted the Renewable Fuel Standard that requires 
7.5 billion gallons of corn starch ethanol in the national fuel supply 
by 2012. In 2008, Congress revised these goals by requiring 36 billion 
gallons of advanced biofuels in our national fuel pool by the year 
2022. At present, stakeholders have far exceeded the earlier 
Congressional goals, producing approximately 10 billion gallons of corn 
starch ethanol at present, but the affordable production of next-
generation advanced biofuels has not yet kept pace with the revised 
targets. These next-generation fuels require next-generation crops, and 
these unconventional crops typically require several years to become 
established. This is the principal goal of BCAP.
    BCAP is a primary component of the domestic agriculture, energy, 
and environmental strategy to reduce U.S. reliance on foreign oil, 
improve domestic energy security, reduce carbon pollution, and spur 
rural economic development and job creation. While there are many 
complexities in the development of a national strategy for biofuels--
the pursuit of more economical conversion technologies, transportation 
infrastructure upgrades, expanded and affordable consumer access, 
financial risk mitigation tools--the success of all of these efforts 
ultimately must rest upon a foundation of a strong biomass feedstock 
source.
    The creation of that source, however, faces the classic chicken-
and-egg challenge. An established, large-scale energy crop source must 
exist if commercial-scale biomass facilities are to have sufficient 
feedstock supplies. Conversely, a strong consumer base to purchase the 
crop must exist if profitable feedstock production is to occur. Also 
just as many such crop types need several years to become established, 
many promising biomass conversion technologies require similar time 
before proceeding to commercial scale. BCAP is designed to serve as 
catalyst to unite these multiple dynamics. By providing risk mitigation 
and production incentives, BCAP will encourage landowners to consider 
switching from familiar, revenue-generating crops to new, 
unconventional, non-food, non-feed crops that must be ready for a 
nascent marketplace.
    Because BCAP is a voluntary program, its enrollment requirements 
cannot have such hurdles beyond standard practice so that interested 
participants would not instead choose to remain in conventional crop 
production. While BCAP is fundamentally a crop cultivation program, 
other considerations such as wildlife and conservation protection are 
nevertheless important parts of BCAP.
    As BCAP is implemented, the public debate will continue on what may 
be the best approach for meeting our national energy strategy. There 
are no perfect solutions in the pursuit of these goals, no single 
feedstock that offers the affordability, reliability, regionality, and 
sensitivity to the environment, and transportability, in equal ways. It 
is not the feedstock, nor the technology, but the ability of both to 
meet the standards of our national strategy that is paramount. And as 
we pursue the best course of action for energy independence and 
environmental improvement, actions must begin today to forge a new path 
forward, accompanied by concurrent preparations for second and third 
generation choices built upon the experiences of the first-generation 
achievements in the cultivation of biomass crops.
    Section 9001 of the 2008 Farm Bill (Pub. L. 110-246) authorizes 
BCAP to assist agricultural and forest land owners and operators with 
the collection, harvest, storage, and transportation of eligible 
material for use in a biomass conversion facility and to support the 
establishment and production of eligible crops for conversion to 
bioenergy in selected project areas. The 2008 Farm Bill authorizes such 
sums as are necessary to carry out BCAP. However, the 2010 Supplemental 
Appropriations Act (Pub. L. 111-212) limited BCAP funding to $552 
million in fiscal year 2010 and $432 million in fiscal year 2011. This 
final rule, which implements BCAP, reflects comments received on 
previous notices and on a proposed rule, as described below. FSA will 
administer this program on behalf of the Commodity Credit Corporation 
(CCC).
    On May 5, 2009, President Barack Obama issued a Presidential 
directive establishing a Biofuels Interagency Working Group, chaired by 
the Secretaries of Agriculture and Energy and the Administrator of the 
Environmental Protection Agency. Among other goals, the Presidential 
directive laid the groundwork for a policy development process that 
would aggressively accelerate the development of advanced biofuels 
(published in the Federal Register on May 7, 2009 (74 FR 21531-21532)). 
One aspect of the larger effort outlined in the directive was the 
issuance of guidance and support related to the collection, harvest, 
storage, and transportation of eligible materials for use in biomass 
conversion facilities--a component of BCAP.
    On June 11, 2009 (74 FR 27767-27772), CCC published a BCAP notice 
of funds availability (NOFA) in the Federal Register for the 
collection, harvest, storage, and transportation of eligible materials. 
On February 8, 2010, (75 FR 6264-6288), CCC published the BCAP proposed 
rule. The proposed rule terminated the BCAP NOFA.
    FSA also held a series of public meetings, as described in the 
notice published on May 13, 2009 (74 FR 22510-22511) and solicited 
comments, to collect public input needed to prepare an environmental 
impact statement (EIS) for BCAP. Specifically, CCC published four 
specific National Environmental Policy Act (NEPA)-related notices on 
BCAP in the Federal Register. A notice of intent (NOI) to prepare a 
programmatic EIS (PEIS) was published on October 1, 2008 (73 FR

[[Page 66203]]

57047-57048) to solicit public input on program implementation 
alternatives to be analyzed in the document; approximately 100 comments 
were received. CCC published an amended NOI on May 13, 2009 that 
identified the alternatives to be analyzed in the PEIS based on the 
input received on the previous NOI and announced six public scoping 
meetings around the country that began on May 29, 2009, and ended on 
June 11, 2009. CCC published a notice of availability of the draft PEIS 
on August 10, 2009 (74 FR 39915) or a 30-day public comment period; 
over 600 comments were received from environmental groups, Federal 
agencies, organizations, and the general public. The Environmental 
Protection Agency announced the availability of the final EIS on June 
25, 2010 (75 FR 36386-36387) for public comment.
    Comments from the public meetings and BCAP environmental notices 
were reflected in the BCAP proposed rule and in this final rule.
    The BCAP proposed rule and this final rule cover the whole BCAP, 
including both the provisions that provide matching payments for 
collection, harvest, storage, and transportation of materials and the 
provisions that provide payment for the establishment and production of 
biomass crops in selected project areas.
    The core structure and purposes of BCAP in this final rule are 
largely unchanged from those stated in the proposed rule. In response 
to comments received on the proposed rule, this final rule makes minor 
amendments to BCAP, as it was described in the proposed rule. This rule 
clarifies definitions and eligibility requirements and adds new 
provisions to enhance program integrity. Specific changes include:
     Biomass conversion facilities will be required to certify 
that eligible materials that are not crop residues are byproducts of 
preventative treatments that are removed to reduce hazardous fuels, to 
reduce or contain disease or insect infestation, or to restore 
ecosystem health.
     Related party transactions may be eligible for matching 
payments.
     Biomass conversion facilities will be required to treat 
all parties equally and pay fair market rates; this is intended to 
prevent biomass conversion facilities from paying different prices 
based on whether a person is receiving BCAP payments or not.
     BCAP requires a conservation plan, forest stewardship 
plan, or equivalent plan as an eligibility requirement to receive 
matching payments. Equivalent plans were previously included in some 
but not all references to plans in the proposed rule. In the proposed 
rule, compliance with existing plans was required for matching 
payments; however, a plan was not required if one did not already 
exist. Now conservation plan, forest stewardship plan, or equivalent 
plans are required for all BCAP payments.
     As specified in the 2008 Farm Bill, BCAP participants may 
receive matching payments for a maximum of 2 years; this rule specifies 
that CCC will take into account the NOFA period in an equitable manner 
consistent with the 2008 Farm Bill.
     Although, the proposed rule provided alternatives for 
different payment rates based on type of material, BCAP will provide a 
single rate of $1 for each $1 per dry ton provided by the biomass 
conversion facility, up to $45 per dry ton, with no ``tiered'' payments 
for different types of biomass. Similarly, provisions in the proposed 
rule for payments for wood wastes and wood residues converted to heat 
or power only above historical usage baselines cannot be implemented.
     This rule clarifies that to qualify for payment, that 
eligible materials and renewable biomass must be organic materials that 
are harvested or collected from the land, which was in the proposed 
rule. Specific references to vegetative and woody waste products that 
would not meet those requirements are not included. This rule clarifies 
the section on eligible materials to include specific requirements that 
are also clearly defined in the definitions section.
     Reductions to annual payments for sale of eligible crops 
and materials will be tiered based on the use for which the material or 
crops from the contract acres was sold and matching payments were paid. 
Conversion to advanced biofuels will result in the smallest reduction, 
while uses for purposes other than conversion to heat, power, biobased 
products, or advanced biofuels will result in the highest reduction.
     This rule also makes technical corrections and editorial 
changes that reflect both comments received and FSA's review of the 
rule.
    This document describes BCAP in detail, then provides a detailed 
discussion of comments received on the proposed rule and FSA's response 
to those comments, and then a list of specific section-by-section 
changes made to the regulatory provisions in response to the comments 
received.

BCAP Overview

    BCAP supports two main types of activities. First, it provides 
funding for agricultural and forest land owners and operators to 
receive matching payments for certain eligible material sold to 
qualified biomass conversion facilities for conversion to heat, power, 
biobased products, or advanced biofuels. These payments are referred to 
as ``matching payments.'' Matching payments will assist producers with 
the cost of collection, harvest, storage, and transportation of certain 
eligible material to a qualified biomass conversion facility. Such 
payments to a particular participant can continue for up to 2 years 
after the first payment is issued. Second, BCAP provides funding for 
producers of eligible crops of renewable biomass within specified 
project areas to receive establishment payments of not more than 75 
percent of the cost of establishment of eligible woody and non-woody 
perennial crops, and annual payments for up to 5 years for the 
production of eligible annual and non-woody perennial renewable biomass 
crops and for up to 15 years for the production of eligible woody 
perennial renewable biomass crops. These are referred to as 
``establishment payments and annual payments,'' respectively. To be 
eligible for payment, the establishment and production activities must 
take place in designated project areas, which may be proposed to CCC by 
biomass conversion facilities or by groups of producers. Producers in 
project areas may be eligible for both types of payments; producers 
outside the project areas are only eligible for matching payments. A 
table is provided later in this document summarizing the major 
eligibility requirements for both types of payments.

Definitions and Terms Used in This Rule

    As defined in this rule, ``advanced biofuel'' means fuel derived 
from renewable biomass other than corn kernel starch, including 
biofuels derived from cellulose, hemicellulose, or lignin; biofuels 
derived from sugar and starch (other than ethanol derived from corn 
kernel starch); biofuel derived from waste material, including crop 
residue, other vegetative waste material, animal waste, food waste, and 
yard waste; diesel-equivalent fuel derived from renewable biomass 
including vegetable oil and animal fat; biogas (including landfill gas 
and sewage waste treatment gas) produced through the conversion of 
organic matter from renewable biomass; and butanol or other alcohols 
produced through the conversion of organic matter from renewable 
biomass and other fuel derived from cellulosic biomass. That 
definition, which is specified in the 2008 Farm Bill, did not change 
from the proposed rule.

[[Page 66204]]

    To be considered a qualified biomass conversion facility, one of 
the activities that meets the criteria for qualification is converting 
eligible renewable biomass material to a biobased product. The 2008 
Farm Bill defined biobased products as a product determined by the 
Secretary to be a commercial or industrial product (other than food or 
feed) that is--``(A) composed, in whole or in significant part, of 
biological products, including renewable domestic agricultural 
materials and forestry materials; or (B) an intermediate ingredient or 
feedstock.'' CCC will administer BCAP consistent with USDA's standards 
for biobased products specified in the BioPreferred Procurement 
Program, which establishes a minimum biobased content for specific 
items and generic groupings of biobased products and excludes certain 
biobased products including (1) motor vehicle fuels (biofuels) and 
electricity (heat and power); and (2) products with significant 
national market penetration as of 1972 (7 CFR 2902.5(c)).
    This final rule also adds a definition of ``biofuel'' to mean ``a 
fuel derived from renewable biomass.'' Corn ethanol would be included 
in the definition of biofuel, but not the definition of advanced 
biofuel.
    This rule uses the terms ``contract acreage'' and ``contract 
acres'' to mean land that is eligible for establishment payments and 
annual payments under Subpart C of the regulation. Some eligible 
materials only qualify for matching payments under Subpart B if they 
are grown on contract acres.
    This rule uses the term ``eligible material'' for renewable biomass 
that may qualify for the matching payment component of BCAP and 
``eligible crop'' for renewable biomass that may be eligible for the 
establishment payments and annual payments component of BCAP. The 2008 
Farm Bill uses these two terms in this way and defines them as 
including different kinds of renewable biomass.
    The purpose of this regulation is to provide incentives for the 
cultivation of new biomass for new markets rather than divert biomass 
from existing markets. This rule clarifies the definition of ``higher-
value product'' as an existing market product that is comprised 
principally of an eligible material or materials and, in some distinct 
local regions outside of project areas, as determined by CCC, has an 
existing market as of the date of publication of this rule in the 
Federal Register. Higher-value products may include, but are not 
limited to, products such as mulch, fiberboard, nursery media, lumber, 
or paper, or a product manufactured from eligible materials from which 
eligible materials must be separated in order to be used for heat, 
power, biobased products, or advanced biofuels. Eligible materials that 
are considered to be used for a higher value product may differ 
according to region and may qualify for matching payments if no higher 
value product market exists in that region. Higher-value products may 
include products such as mulch, fiberboard, nursery media, lumber, 
paper, or other materials.
    As specified in the 2008 Farm Bill and in this rule, the eligible 
material owner may be a person or legal entity who is (1) a producer of 
an eligible crop or (2) has the right to collect or harvest eligible 
material. A qualified biomass conversion facility that meets those 
requirements may be an eligible material owner and receive BCAP 
payments under subpart B of the regulation.
    The term ``conservation district'' is used as defined in 7 CFR part 
1410, the regulations for the Conservation Reserve Program (CRP).
    This rule uses the term ``participant'' for the matching payments 
component of BCAP and the terms ``producer'' and ``participant'' for 
the establishment payments and annual payments component of BCAP. The 
distinction is an eligible participant for matching payments is not 
necessarily the person or legal entity who produced the material but 
may be the person who owns it or has the authority to collect or 
harvest and sell it to the biomass conversion facility. However, in all 
cases there may only be one BCAP payment made for any base material and 
the person claiming the BCAP payment must be the person who was 
entitled to receive and negotiate the payment being matched. In other 
words, all BCAP producers are participants, but not all BCAP 
participants are producers. Participants are those individuals or 
entities who have been approved and are bound to perform under a 
contract for matching payments, establishment payments, or annual 
payments. The term ``producer'' means either an owner or operator of 
BCAP project acreage that is physically located in a BCAP project area, 
or a producer of an eligible crop produced on that acreage.
    This rule uses the term ``contract'' and ``agreement.'' A contract 
is between CCC and the participant for BCAP payments. The contract is 
legally binding on the participants in BCAP and specifies what the 
producer must do and the resulting payments that CCC will make to the 
producer or other BCAP participant entitled to receive a payment. An 
``agreement'' is between CCC and a qualified biomass conversion 
facility or a project area sponsor. The agreement specifies what the 
qualified biomass conversion facility or the project area sponsor plans 
to do and how it will support the establishment and production of 
eligible crops for conversion to bioenergy in the BCAP project areas 
including the type of renewable biomass that will be used and the 
planned conversion methods of renewable biomass. In addition, there may 
be agreements between CCC and a qualified biomass conversion facility 
for the matching payments, which include items such as obligations of 
the facility to provide a purchase list, receipts and scale tickets for 
the eligible material owners and agreement to provide facility address 
and contact information to the general public.

Matching Payments

    Matching payments will be available for the delivery of certain 
eligible material to qualified biomass conversion facilities to a 
producer of an eligible crop or a person with the right to collect or 
harvest eligible material.
    The 2008 Farm Bill provides for matching payments at a rate of $1 
for each $1 per dry ton paid by the qualified biomass conversion 
facility, in an amount up to $45 per dry ton, for a period of 2 years. 
The 2008 Farm Bill also provides that biomass conversion facilities are 
those that convert, or propose to convert, renewable biomass into heat, 
power biobased products, or advanced biofuels.
    For the matching payment calculations, CCC proposed three options. 
As discussed in the Summary of Comments section below, after 
consideration of comments received, an amended version of the first 
option was selected, and is the one specified in this final rule.
    CCC will provide matching payments at the rate of $1 for each $1 
per dry ton paid by the qualified biomass conversion facility to the 
eligible material owner for delivery of eligible material that qualify 
for payment to the facility in an amount not to exceed $45 per dry ton. 
Participants will be eligible for payments for a period of 2 years 
beginning from the date of their first matching payment is made after 
the effective date of this rule. CCC will determine how to take into 
account participation in the NOFA period. At the least, the 2-year 
period will be considered stopped during the period between the end of 
matching payments received during the operation of the NOFA and the 
beginning of CCC matching payments for new deliveries

[[Page 66205]]

by the participant. If title to the material from a particular farm or 
locale is transferred to another party, the rule provides that the 
successor is subject to the 2-year requirement applicable to the 
previous participation at that locale. Otherwise, the 2-year 
requirement could be easily avoided contrary to the 2008 Farm Bill. 
Generally, however, the 2-year period is producer specific. If, for 
example, the producer changes delivery points after a year, the time 
period does not start anew.

Qualified Biomass Conversion Facility

    In order for a delivery of eligible materials to a biomass 
conversion facility to qualify for a BCAP payment, the receiving 
biomass conversion facility must be qualified for BCAP. To become 
qualified, the biomass conversion facility must enter into an agreement 
with CCC, through the FSA State office in the State where the facility 
is physically located.
    For BCAP, a biomass conversion facility is a facility that converts 
or proposes to convert renewable biomass into heat, power, biobased 
products, or advanced biofuels. For the purposes of BCAP, advanced 
biofuels do not include ethanol derived from corn kernel starch, 
because the 2008 Farm Bill specifically excludes it.
    A biomass conversion facility does not have to be a project sponsor 
for the establishment payment and annual payment component of BCAP or 
be in operation to submit a successful application for qualification. 
For any facility, whether or not yet in operation, the entity 
requesting that a facility become qualified must provide proof of all 
applicable Federal, State, local, and Tribal permits and licenses 
required for operation or proof of application completions or letters 
of renewal submissions from the applicable governmental entity. 
Applicable permits and licenses may include, but are not limited to, 
business licenses, air quality permits, water discharge permits, storm 
water permits, or Bureau of Alcohol, Tobacco, Firearms and Explosives 
registrations.
    Each biomass conversion facility must enter into a separate 
agreement with CCC regardless of whether a single owner has multiple 
facilities. CCC will issue a unique facility identification number to 
each qualifying biomass conversion facility. In addition, when a 
biomass conversion facility agrees to become ``qualified,'' CCC will 
make general contact information available to the public through FSA 
county offices and on the FSA Web site.

Eligible Material Owners, Application for Matching Payments

    To be eligible for matching payments, the eligible material owner 
must apply at an FSA county office and receive approval for that 
application before delivering the eligible material to the qualified 
biomass conversion facility. The qualified biomass conversion facility 
must issue a receipt or invoice on the date of delivery to the eligible 
material owner. The receipt will be the basis for the matching payment 
calculation.
    The material owner will be eligible for the payment if the owner 
had the legal title to the material for collection or harvest, such as 
the operator or producer conducting farming operations on private land, 
or any other person designated by the owner of the private land. 
Consistent with the 2008 Farm Bill, the eligible material owner does 
not have to own the land where the eligible material was collected or 
harvested as a condition of eligibility. The eligible material owner 
may be a person with the right to collect or harvest eligible material, 
and who has the risk of loss with respect to that material, on certain 
Federal lands pursuant to a contract or permit with the U.S. Forest 
Service or Bureau of Land Management, such as a timber sale contract.
    Eligible material owners must submit the documentation from the 
qualified biomass conversion facility to the FSA county office to be 
eligible for matching payments. The measure for the eligible material 
weight is a ``dry ton,'' the weight at zero percent moisture content. 
The facility is required to have the necessary equipment (such as a 
moisture meter) to calculate the equivalent dry ton weight of the 
delivered material.
    Eligible material owners may also be eligible to participate under 
the ``establishment payments and annual payments'' component of BCAP; 
however, eligible materials may differ from eligible crops and the 
annual payment that is received by a participant in that component will 
be reduced when a matching payment is issued. The ``establishment 
payments and annual payments'' component of BCAP is discussed later in 
this rule. If an eligible material owner or producer wishes to avoid 
the reduction in annual payment(s), the owner or producer must decline 
the matching payment(s).
    The NOFA imposed an ``arm's length transaction'' requirement to be 
eligible for a matching payment. As discussed below in the Summary of 
Comments section, based on comments received, those provisions have 
been removed from this final rule. To achieve a fair price for all 
participants, provisions have been added requiring biomass conversion 
facilities to pay a fair market value to all participants, regardless 
of whether the participant is receiving BCAP payments or is a related 
party.
    An eligible material owner needs to meet the following requirements 
to be eligible for a matching payment:
    An eligible material owner must be one or more of the following:
     A producer within a project area; or
     A person or a non-Federal entity that has legal title to 
an eligible material, including Indian tribes and tribal members.
    An eligible material owner may request a matching payment at the 
FSA county office after being approved to participate in the program 
and after delivery of eligible material to a qualified biomass 
conversion facility and receiving payment for that delivery.
    However, eligible material owner(s) who meet the requirements 
listed above are not eligible for a matching payment if:
     Delivery is made or payment received for delivery before 
the biomass conversion facility is qualified by CCC;
     The eligible material owner did not receive approval from 
CCC to be considered an eligible material owner for matching payment 
from the FSA county office before delivery to the biomass conversion 
facility;
     The delivery contained ineligible material (for deliveries 
of otherwise eligible material, none of the eligible material will 
qualify for payment if it must be separated from other material which 
may be the higher-value product after delivery to the biomass 
conversion facility);
     The eligible material owner that collects or harvests the 
eligible material directly from the land sells the eligible material to 
any other entity other than the qualified biomass conversion facility;
     The eligible material owner does not present proof of 
payment and proof of delivery date for delivery of the eligible 
material;
     The eligible material was collected or harvested from the 
land not in accordance with the conservation plan, forest stewardship 
plan, or equivalent plan;
     The eligible material produced outside a project area may 
be used to produce higher-value products;
     The eligible material owner violates Executive Order 
13112, ``Invasive Species;''
     The eligible material owner knowingly supplied false 
information;

[[Page 66206]]

     The eligible material owner violated the associated 
conservation, forestry, or equivalent plan related to the land that 
produced the eligible material for which a matching payment is 
requested; or
     The formerly qualified biomass conversion facility failed 
to comply with the agreement it entered into with CCC and, accordingly, 
the agreement was terminated by CCC prior to delivery.

Eligible Materials

    In general, eligible material is renewable biomass that qualifies 
for the matching payment component of BCAP. For guidance to potential 
eligible material owners and biomass conversion facilities, CCC will 
provide a chart of eligible materials that qualify for matching 
payments. The chart of eligible materials that qualify for matching 
payments will be provided to the public via the FSA Web site at https://www.fsa.usda.gov/energy; an example of the chart is included below. The 
chart is not exhaustive and will be periodically updated on the FSA Web 
site by CCC--in accordance with the parameters established by the 2008 
Farm Bill. Because the contents of the eligible material list that 
qualify for payments are expected to change periodically, the list is 
not included in the BCAP regulations. When there is recommendation for 
an addition to the list of eligible materials that qualify for 
payments, CCC will review the material to make determinations. The 
review may include a site visit and comparison to related materials or 
uses. CCC will review the recommendation to ensure that the new 
material meets the requirements of the 2008 Farm Bill and the 
provisions in this final rule. As described later in this rule, 
eligible crops for the establishment payments and annual payment 
provisions will include some additional crops not eligible for matching 
payments and therefore not considered to be eligible materials.

                     Conditions Where Eligible Materials Will Qualify for Matching Payments
----------------------------------------------------------------------------------------------------------------
                                                                Qualifies for matching payment?
                                              ------------------------------------------------------------------
                                                                                   If collected or harvested by
                                                                                  separation from a higher-value
                                                                                  product collected or harvested
                                                                                      directly from the land
              Eligible material                    If collected or harvested     -------------------------------
                                                 directly from the land before        before           after
                                                 transport and delivery to the     transport and   transport and
                                                  biomass conversion facility       delivery to     delivery to
                                                                                    the biomass     the biomass
                                                                                    conversion      conversion
                                                                                     facility        facility
----------------------------------------------------------------------------------------------------------------
Forest thinnings.............................  Y*...............................              Y*               N
Post-disaster debris.........................  Y*...............................              Y*               N
Hardwood chips...............................  Y*...............................              Y*               N
Softwood chips...............................  Y*...............................              Y*               N
Cutoffs......................................  Y*...............................              Y*               N
Bark.........................................  Y*...............................              Y*               N
Trees and shrubs without timber, lumber or     Y*...............................              Y*               N
 wood pulp value.
Trees and shrubs with timber, lumber or wood   Y* non-Federal land (N Federal                  N               N
 pulp value.                                    land).
Forbs such as sunflower and clover...........  Y*...............................              Y*               N
Legumes......................................  Y*...............................              Y*               N
Non yard waste grasses.......................  Y*...............................              Y*               N
Non yard waste vines.........................  Y*...............................              Y*               N
Mosses.......................................  Y*...............................              Y*               N
Crop residues, including Title I crop          Y*...............................              Y*               N
 residues.
Corn cobs....................................  Y*...............................              Y*               N
Corn stover..................................  Y*...............................              Y*               N
Sugarcane bagasse............................  Y*...............................              Y*               N
Rice hulls...................................  Y*...............................              Y*               N
Nut hulls....................................  Y*...............................              Y*               N
Rice straw...................................  Y*...............................              Y*               N
Wheat straw..................................  Y*...............................              Y*               N
 
Orchard waste and vineyard waste.............  Y*...............................              Y*               N
 
Excluded from eligibility:
    Title I crops............................
    Algae....................................
    Animal waste and byproducts (including
     fats, oils, greases, and manure).
    Food waste...............................
    Yard waste...............................
----------------------------------------------------------------------------------------------------------------
``Yes'' means material has been collected or harvested directly from the land in compliance with an approved
  conservation plan, forest stewardship plan, or equivalent plan, and in compliance with that plan, and, that
  eligible materials that are not crop residues are byproducts of preventative treatments that are removed to
  reduce hazardous fuels, to reduce or contain disease or insect infestation, or to restore ecosystem health.
* ``Yes'' becomes ``no'' if CCC rules that, within that distinct local market, the product is being diverted
  from higher-value (existing) markets.

    There has been interest in and discussion about various materials 
and whether or not they are considered to be eligible materials and 
specifically whether they qualify to receive matching payments for 
BCAP. For

[[Page 66207]]

example bagasse, rice hulls, nut hulls, corn cobs, whole trees, bark, 
wood chips, sawdust, and black liquor. For some materials there is an 
important distinction as to whether they meet the basic definition of 
eligible material or whether they are a product versus a feedstock. A 
determination about whether a material qualifies for matching payments 
requires the item to be an eligible material and to meet the other 
requirements of the BCAP regulations, for example the collection, 
harvest, storage, transportation, and delivery requirements. Each of 
the example materials listed in this paragraph are discussed below.
    Bagasse has been discussed above. It is the fibrous residue that 
remains after sugarcane stalks are crushed, is an eligible material, 
but cannot qualify for matching payments because it is not collected 
directly from the land, but rather it is separated from a higher-value 
product, such as a Title I crop (sugar extraction) after delivery to 
the facility, cannot qualify for a matching payment.
    Hulls are eligible materials, but qualify for matching payments 
only if it is collected or harvested directly from the land, or 
separated from a higher-value product, in accordance with an approved 
conservation or equivalent plan, before delivery to a biomass 
conversion facility. Hulls separated from whole grain or nuts after 
delivery to the processing facility cannot qualify for a matching 
payment. Where they have not been separated by the farmer, the delivery 
of the hulls is merely incidental to the normal marketing of the crop. 
It is not a new collection or harvesting of the biomass at all. 
Changing practices to merely separate the hulls, for example, early (at 
the farm) will not, however lead to payment as that could itself be a 
scheme or device in violation of BCAP if the only purpose was to 
generate a BCAP payment.
    Corn cobs are crop residues, and are eligible materials, but 
qualify for matching payments only if they are collected or harvested 
directly from the land, or separated from a higher-value product, in 
accordance with an approved conservation plan or equivalent plan, 
before delivery to a biomass conversion facility. Cobs collected not 
directly from the land, but rather separated from a higher-value 
product, such as a Title I crop (corn kernels) after delivery to a 
biomass conversion facility, cannot qualify for a matching payment for 
the reason we give above.
    The same concerns apply with respect to forest matters. Under this 
rule, whole trees or logs are eligible materials that qualify for 
matching payments only if collected or harvested directly from the 
land, in accordance with an approved conservation plan, forest 
stewardship plan, or equivalent plan; are diseased, such as trees 
infested by the bark beetle; are byproducts of preventative treatments 
that are removed to reduce hazardous fuels; are removed to restore 
ecosystem health; and have not been determined by the CCC as a higher-
value product in that market. The provisions of the 2008 Farm Bill 
provided for the preventative treatment qualification with respect to 
government land. However, that qualification is extended to trees or 
logs on private land in this rule so as, consistent with the 2008 Farm 
Bill, to avoid undue disturbance of forest lands consistent with the 
positive environmental intent of BCAP and consistent with other 
determinations specified in this final rule. This also reflects the 
concept that BCAP is for the use of materials that would otherwise be 
waste materials and that would go uncollected or unharvested. It is not 
intended to upset existing market relationship. It is for these 
reasons, on consideration of the comments, and further consideration of 
the operation of the portion of BCAP under the NOFA, that CCC 
determined that it is appropriate to apply this qualification to trees 
or logs on private lands as well.
    Whole trees that CCC has determined have a higher value, such as 
for lumber or wood pulp, or have been removed without an approved 
forest stewardship plan or equivalent plan, cannot qualify for matching 
payments even if part of the tree is separated from the bulk of the 
tree and burned or otherwise used for biofuel--see the explanation 
given with respect to bagasse.
    Accordingly, under this rule, bark is an eligible material that 
qualifies for matching payments only if it is (1) collected or 
harvested directly from the land, in accordance with an approved 
conservation plan, forest stewardship plan, or equivalent plan, before 
delivery to a biomass conversion facility, (2) separated from a higher-
value product, and (3) has not been determined by CCC as having a 
higher-value product in that local market. The applicable provisions of 
the 2008 Farm Bill relative to the third of these qualifications are 
designed to generate new activities that will create biomass and not 
disturb existing markets that rely on biomass and may have beneficial 
effects of their own--such as the use of bark for mulch. This follows 
that view to assure a genuine biomass oriented collection and 
harvesting (one that would otherwise not occur) and also serves to 
assure that BCAP stays within the dollar limits set by Congress. If CCC 
determines that in a distinct local market, the bark is used for mulch, 
or nursery media, the bark will not qualify for matching payments in 
that market. Bark collected from processed trees after the trees are 
delivered to pulp and paper facilities cannot qualify for matching 
payments.
    Wood chips are eligible materials that qualify for matching 
payments only if collected or harvested directly from the land, or 
separated from a higher-value product, in accordance with an approved 
conservation plan, forest stewardship plan, or equivalent plan, before 
delivery to a biomass conversion facility, and have not been determined 
by CCC as a higher-value product in that local market. If CCC 
determines that in distinct local markets, the wood chips are used for 
products such as particle board, the chips cannot qualify for matching 
payments in that market. Chips collected from delivered and processed 
trees after the trees are delivered to pulp and paper facilities cannot 
qualify for matching payments. Chips created in the field from diseased 
trees for ease of transport of that biomass to a conversion facility 
qualify for matching payments.
    Sawdust is an eligible material that qualifies for matching 
payments only if it is (1) collected or harvested directly from the 
land, in accordance with an approved conservation plan, forest 
stewardship plan, or equivalent plan, before delivery to a biomass 
conversion facility, (2) separated from a higher-value product, and (3) 
has not been determined by CCC as having a higher-value product in that 
local market. Sawdust collected from processed trees after the trees 
are delivered to a wood products facility cannot qualify for matching 
payments under this rule. Sawdust collected directly from the 
forestland before delivery to a facility may qualify for matching 
payments. If CCC determines that in distinct local markets, the sawdust 
can be used for higher-value products such as particle board, the 
sawdust cannot qualify for matching payments in that market.
    Black liquor, or pulp liquor, is an aqueous waste by-product of the 
kraft process of pulp manufacturing that is comprised of lignin, 
hemicellulose, and inorganic chemicals and used as fuel at these 
facilities. Any eligible material used in the manufacturing process 
that can be attributed to the creation of black liquor cannot qualify 
for matching payment because the eligible materials (non-Federal 
pulpwood trees) immediate, principal higher-value purpose is wood pulp 
for paper manufacturing and the creation of the

[[Page 66208]]

black liquor is a byproduct of the production process.
    Renewable biomass, as specified in the 2008 Farm Bill and in this 
rule, includes materials, pre-commercial thinnings, or invasive species 
from U.S. National Forest System land and U.S. Bureau of Land 
Management (BLM) land that:
     Are byproducts of preventive treatments that are removed 
to reduce hazardous fuels, to reduce or contain disease or insect 
infestation, or to restore ecosystem health;
     Would not otherwise be used for higher-value products; and
     Are harvested in accordance with applicable law and land 
management plans and the requirements for old-growth maintenance, 
restoration, and management direction of subsections 102(e)(2), (3), 
and (4) of the Healthy Forests Restoration Act of 2003 (16 U.S.C. 6512) 
and large-tree retention provisions of subsection (f).
    In other words, renewable biomass harvested on National Forest 
System and BLM land would be biomass removed for fire prevention 
purposes, biomass unsuitable for commercial timber harvest, invasive 
plant removal for treatment and control purposes, and diseased, 
damaged, or immature biomass culled in accordance with appropriate 
forest management practices. As discussed below in the Summary of 
Comments section, in response to the comments, this rule requires a 
conservation plan, forest stewardship plan, or equivalent plan for all 
eligible materials that qualify for payment.
    As specified in the 2008 Farm Bill, renewable biomass also includes 
organic matter that is available on a renewable or recurring basis from 
non-Federal land or land belonging to an Indian or Indian Tribe that is 
held in trust by the United States including:
     Renewable plant materials such as feed grains, other 
agricultural commodities, other plants and trees, and algae; and
     Waste material, including crop residue, other vegetative 
waste material, including wood waste and wood residues, animal waste 
and byproducts, including fats, oils, greases, and manure, food waste, 
and yard waste.
    However, that definition of renewable biomass from the 2008 Farm 
Bill applies to more than one program in Title IX of the 2008 Farm 
Bill. For BCAP specifically, the 2008 Farm Bill defines ``eligible 
material'' more narrowly, excluding any crop that is eligible to 
receive payments under Title I of the 2008 Farm Bill.
    Crops that are eligible to receive payments under Title I of the 
2008 Farm Bill would therefore not be included as eligible materials or 
crops for BCAP. Any crop that is eligible to receive payments under 
Title I of the 2008 Farm Bill or an amendment made by that Title 
includes a crop of barley, corn, grain sorghum, oats, rice, or wheat; 
honey; mohair; certain oilseeds such as canola, crambe, flaxseed, 
mustard seed, rapeseed, safflower seed, soybeans, sesame seed, and 
sunflower seeds; peanuts, pulse crops such as small chickpeas, lentils, 
and dry peas; dairy products; sugar; wool; and cotton boll fiber.
    In accordance with the 2008 Farm Bill, crop residue or other 
similar byproducts of crop production and harvesting, such as stover, 
straw, or hulls, are considered eligible materials that qualify for 
payments under subpart B of the regulation provided that they are 
collected, harvested, transported, and delivered as required by the 
regulation. For such eligible material to qualify for payment, 
conservation plans must be updated or created to address the removal of 
the material.
    The 2008 Farm Bill specifies that material removed from Federal 
land is not eligible if it would otherwise be used for higher-value 
products. Because the intent of BCAP is to spur new biomass for new 
markets rather than divert biomass from existing markets, and in 
response to comments, this rule extends the higher-value qualification 
to material from all land not under a BCAP contract (including non-
Federal lands). The exemption for the BCAP contracts reflects that 
market displacement issues should be taken into account in the BCAP 
approval process.
    The 2008 Farm Bill does not specifically exclude invasive or 
noxious species in the definition of ``eligible material'' which is the 
key term for the matching payment part of BCAP. After consideration of 
this issue, those materials are eligible materials that qualify for 
payment if collected, harvested, stored, transported, and delivered as 
specified in all applicable local, State, and Federal requirements on 
invasive and noxious species.
    Accordingly, this rule includes invasive and noxious species as 
eligible materials that qualify for BCAP matching payment purposes; 
however, such eligible materials must be collected or harvested 
according to a new or amended conservation plan, forest stewardship 
plan, or equivalent plan and must not be collected, harvested, or 
transported during reproductive or other phases that may propagate the 
spread or establishment of those species. Eligible material owners must 
contact State and local weed boards or authorities and their local USDA 
Service Center staff about collecting, harvesting, storing, or 
transporting invasive or noxious species to ensure compliance with 
Executive Order 13112 (which addresses noxious weeds), USDA guidelines, 
and other requirements. Eligible material owners that violate Executive 
Order 13112 while carrying out activities related to receiving a 
matching payment will be in violation of the BCAP regulations and will 
be required to return all matching payments, as determined by the 
Deputy Administrator.
    As required by the 2008 Farm Bill, the following materials are 
excluded from being considered eligible materials for BCAP, although 
they are eligible crops for BCAP establishment payments and annual 
payments:
     Animal waste and byproducts (including fats, oils, 
greases, and manure);
     Food waste such as food processing scraps and yard waste 
such as debris removal originating from municipal or commercial yard, 
lawns, landscaped areas or related sites; and
     Algae.
    Consistent with the 2008 Farm Bill, this rule specifies that for 
eligible materials to qualify for a matching payment, they must be 
collected and harvested directly from lands including:
    (1) U.S. National Forest System lands;
    (2) BLM lands;
    (3) All Non-Federal lands in the United States; and
    (4) Land belonging to an Indian or Indian Tribe that is held in 
trust by the United States or subject to a restriction against 
alienation imposed by the United States. In other words, most publicly- 
and privately-held land is eligible to produce material for the BCAP 
matching payments program, except for certain Federal lands.
    In accordance with the 2008 Farm Bill, matching payments may be 
made for all eligible materials, including those derived outside BCAP 
project areas. Advanced biofuels and intermediate ingredients or 
feedstock are not collected or harvested directly from the land, 
therefore, they do not qualify to receive matching payments. CCC 
recognizes that the production of some advanced biofuels and biobased 
products requires intermediate ingredients and intermediate feedstocks, 
such as chopped grasses or wood chips. As specified in this rule, the 
source material and the intermediate ingredient or feedstock are 
considered separate eligible materials; however, only the source 
material qualifies for a matching payment because intermediate

[[Page 66209]]

ingredients or feedstock are not collected or harvested directly from 
the land. Advanced biofuels and intermediate ingredients or feedstock 
are not collected or harvested directly from the land, therefore, they 
do not qualify to receive matching payments. The intent of BCAP is to 
provide matching payments for actual collections and harvestings not 
incidences to normal industrial processes.

Eligibility for Establishment Payments and Annual Payments

    BCAP establishment payments and annual payments will be available 
for persons and legal entities with eligible land that is located 
within a project area designated by CCC. CCC will consider project area 
proposals from project sponsors on a continuous basis. Unlike the 
matching payments component of BCAP, where any owner of eligible 
materials can be eligible for BCAP, under the establishment payments 
and annual payments component, only producers in a designated project 
area may be eligible for payment. The establishment payments will cover 
not more than 75 percent of the cost of establishment of eligible woody 
and non-woody perennial crops, and annual payments for up to 5 years 
for the production of eligible annual and non-woody perennial renewable 
biomass crops and for up to 15 years for the production of eligible 
woody perennial renewable biomass crops. In response to comments 
received, this rule includes algae specifically as a non-woody 
perennial crop. By designating project areas, BCAP will support the 
development of renewable biomass production near biomass conversion 
facilities.

Proposing Project Areas

    Project areas must be proposed by project sponsors, which could be 
groups of producers or biomass conversion facilities. There is no 
restriction in this rule on who can own or operate a biomass conversion 
facility, or sponsor a project area. Various parties may own a biomass 
conversion facility such as Federal entities, private entities, State 
or local government agencies, schools, or non-government organizations, 
provided that these parties have legal title to the facility.
    CCC will accept project area proposals on a continuous basis. A 
complete proposal must include, at a minimum:
    (1) A description of the eligible land and eligible crops of each 
producer that will participate in the proposed project area;
    (2) A letter of commitment from a biomass conversion facility 
stating that the facility will use eligible crops intended to be 
produced in the proposed project area; and
    (3) Information demonstrating that the biomass conversion facility 
has sufficient equity available to operate by the harvest of a crop in 
the project area if the facility is not operational at the time the 
project area proposal is submitted.
    While the 2008 Farm Bill does not require conservation plans or 
forest stewardship plans as part of an acceptable proposal, it does 
require that all contracts within a project area provide for the 
implementation of a conservation plan, forest stewardship plan, or 
equivalent plan. As such, project area proposals must also include a 
description of the general conservation and forest stewardship measures 
that will be implemented in plans under contracts within the area.
    For item 1 above, the project sponsor must submit a narrative of 
the proposed project and submit maps of the project area delineating 
the location of the current or proposed biomass conversion facility. 
The maps must show: (1) Current land use, (2) roads, (3) railroads, (4) 
rivers and barge access, (5) proposed land use change, and (6) resource 
inventory maps including soils and vegetation.
    For item 3 above, evidence of sufficient equity must include 
documentation of the projected construction, start-up, operation, and 
maintenance costs.
    The project sponsors must document the estimated cash-flow of the 
project (including assumptions on the production outputs and expected 
market prices for the products produced). In addition, the project 
sponsor must document its existing resources and short term and long 
term financing. The information provided to CCC as proof of sufficient 
equity will be confidential to the extent allowed by law and CCC will 
only use it to determine if sufficient equity is available for the 
facility and the project.
    The project sponsor must also submit an analysis of the economic 
impacts of the proposed project area. At a minimum the analysis must 
address the anticipated timing and number for job creation and 
retention and likelihood of attracting additional private sector 
investment.
    At a minimum, projects must demonstrate the ability to support the 
development and production of heat, power, biobased products, or 
advanced biofuels from renewable biomass production. The facility must 
demonstrate long-term economic viability and ability to comply with all 
environmental and regulatory requirements for the production of heat, 
power, biobased products, or advanced biofuels from renewable biomass. 
In addition, the project must demonstrate that sufficient quantity of 
eligible crops will be grown within an economically viable distance 
from the facility.
    A project area must have specific geographic boundaries that are 
described in specific terms such as acres, watershed boundaries, mapped 
longitude and latitude coordinates, or counties. The project area must 
be physically located near a biomass conversion facility or multiple 
biomass conversion facilities. What constitutes an appropriate location 
will be determined on a case-by-case basis. Whether a project area is 
within an economically viable distance from a biomass conversion 
facility depends on the eligible crops being established and produced, 
as well as other transportation and logistics matters, and therefore 
these determinations will be made on a case-by-case basis. The biomass 
conversion facility or facilities may be within the geographic boundary 
of the project area, or near it. The project area must also include 
potential or established producers that would supply a portion or all 
of the renewable biomass needed by the biomass conversion facility or 
facilities.

Project Area Selection Criteria

    CCC will evaluate project area proposals using these criteria:
    (1) The volume of the eligible crops proposed to be produced in the 
proposed project area and the probability that such crops will be used 
for BCAP purposes;
    (2) The volume of renewable biomass projected to be available from 
sources other than the eligible crops grown on contract acres;
    (3) The anticipated economic impact in the proposed project area, 
such as the number of jobs created and retained;
    (4) The opportunity for producers and local investors to 
participate in the ownership of the biomass conversion facility in the 
proposed project area;
    (5) The participation rate by beginning or socially disadvantaged 
farmers or ranchers;
    (6) The impact on soil, water, and related resources, such as 
effect on nutrient loads, or soil erosion;
    (7) The variety in biomass production approaches within a project 
area, including agronomic conditions, harvest and postharvest 
practices; and monoculture and polyculture crop mixes; and

[[Page 66210]]

    (8) The range of eligible crops among project areas.
    Project sponsors that are biomass conversion facilities may be any 
size of operation including pilot facilities, research units, 
experimental or demonstration operations, or commercial operations. A 
biomass conversion facility not yet in operation can be a project 
sponsor. In that case, the biomass conversion facility must provide 
evidence that it has sufficient equity available.

Project Area Eligible Crops

    After CCC approves a project area, persons and legal entities 
within the specific geographic boundaries of that area may be eligible 
for payment for the establishment and production of eligible crops.
    An eligible crop is a crop of renewable biomass. Animal wastes, 
food and yard wastes, and algae are not excluded from the definition of 
eligible crop unlike the definition of eligible material; therefore, 
those categories of renewable biomass will be considered eligible 
crops. The 2008 Farm Bill specifies certain types of eligible crops 
that are excluded, including any crop that is eligible to receive 
payments under Title I of the 2008 Farm Bill, noxious weeds, and 
invasive species. For the invasive species or noxious weeds exclusion, 
the determination of whether a species is either invasive or noxious 
varies by State; therefore, if the crop is neither invasive nor noxious 
in a State, it would be eligible in that State for BCAP establishment 
payments and annual payments. FSA State committees will consult with 
the State technical committees for recommendations concerning the 
invasive and noxious status for otherwise eligible crops for the 
purposes of BCAP. Information on ineligible species will be available 
in FSA county offices.
    Project sponsors may suggest the exact species and varieties of 
eligible crops allowable in a BCAP project area, provided that the 
crops are included in the BCAP definition of eligible crop. Project 
area proposals may limit the nature and types of eligible crops to be 
established within a project area.
    Federal- and State-owned land, including land owned by local 
governments or municipalities, is excluded from the definition of 
eligible land in the 2008 Farm Bill and therefore is not eligible for 
the establishment payments and annual payments component of BCAP. The 
specification about the exclusion for land owned by local governments 
or municipalities is for consistency with other CCC programs; the terms 
``State'' and ``State government'' mean any State or local government, 
including, but not limited to State, city, town, or county government, 
State Universities, and other units of State government.

Project Area Eligible Producers

    Within the project area, to be eligible to receive establishment 
payments to convert agricultural lands or nonindustrial private forest 
lands to the production of eligible crops producers must enter into 
BCAP contracts enrolling their land as contract acreage. In addition, 
producers may also be eligible for annual payments for the production 
of eligible crops used for conversion to renewable energy, including 
advanced biofuels, or biobased products. The details for what is 
required to qualify for the annual payments will be specified in the 
individual contract between CCC and a producer, as discussed further 
below, and will include provisions for the implementation of a 
conservation plan, forest stewardship plan, or equivalent plan. The 
producer must demonstrate compliance with the plan through required 
self-certification and FSA will ensure that normal spot check rules and 
methods are followed to ensure compliance with the plan. Producers with 
previously established eligible crops as of the date this rule is 
effective may enter into a contract for annual payments to continue 
growing those crops; however, establishment payments will not be 
authorized in that case.
    Project sponsors, regardless of whether they are a biomass 
conversion facility or a group of producers, may also be considered as 
a producer and be eligible to receive establishment payments and annual 
payments. The sponsor must own or operate eligible land to be eligible 
to enroll as a producer under a BCAP contract and be eligible to 
receive establishment payments an