Conservation Stewardship Program (CSP) Interim Rule, 60883-60900 [2019-24367]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation

[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 https://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