Environmental Quality Incentives Program Final Rule

[Federal Register: May 22, 1997 (Volume 62, Number 99)
Rules and Regulations, Page 28257-28292]

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1466, RIN 0578-AA19

Environmental Quality Incentives Program

AGENCY: Commodity Credit Corporation, United States Department of Agriculture.

ACTION: Final rule.

SUMMARY: The Commodity Credit Corporation (CCC) is issuing a final rule for the Environmental Quality Incentives Program (EQIP). CCC published a proposed rule for EQIP in the Federal Register on October 11, 1996 (61 FR 53574) and solicited comments from the public. This final rule establishes the process by which CCC will administer EQIP, responds to comments received from the public during the 45-day comment period, and incorporates clarifications to improve implementation of the program.

EFFECTIVE DATE: May 22, 1997.

ADDRESSES: This final rule may be accessed via Internet. Users can access the Natural Resources Conservation Service (NRCS) homepage at http://www.ftw.nrcs.usda.gov; select the 1996 Farm Bill Conservation Programs from the menu.

FOR FURTHER INFORMATION CONTACT: Jeffrey R. Loser, Conservation Operations Division, Natural Resources Conservation Service, P.O. Box 2890, Washington, D.C. 20013-2890. Phone: 202-720-1845. Fax: 202-720-1838. (E-mail: jeff.loser@usda.gov)

SUPPLEMENTARY INFORMATION:

Executive Order 12866

Pursuant to Executive Order 12866, Regulatory Planning and Review (58 FR 51735, October 4, 1993), the Office of Management and Budget (OMB) has determined that this final rule is an economically significant regulatory action because it may result in an annual effect on the economy of $100 million or more. The administrative record is available for public inspection in Room 6029, South Building, USDA, 14th and Independence Ave, SW, Washington, D.C.

Pursuant to Executive Order 12866, NRCS conducted an economic analysis of the potential impacts associated with this program, and included the analysis as part of a Regulatory Impact Analysis document prepared for this rule. The analysis estimates EQIP will have a beneficial impact on the adoption of conservation practices and, when installed or applied to technical standards, will increase net farm income. In addition, benefits would accrue to society for long-term productivity, maintenance of the resource base, non-point source pollution damage reductions, and wildlife enhancements. As a voluntary program, EQIP will not impose any obligation or burden upon agricultural producers that choose not to participate. The program was authorized at $1.3 billion over the seven-year period of FY 1996 through FY 2002, with annual amounts of $200 million per year after the initial interim year of $130 million. During the interim administration period in FY 1996 authorized by 16 U.S.C. 3839aa-8, the CCC used the $130 million to continue implementation of the terms and conditions of the superseded programs to the extent that such terms and conditions were consistent with the statutory provisions of EQIP.

In considering alternatives for implementing the program, NRCS followed the legislative intent to maximize environmental benefits per dollar expended, address natural resource problems and concerns, establish an open participatory process that emphasizes priority areas, and provide flexible assistance to producers who apply appropriate conservation measures while complying with Federal, State, and tribal environmental laws. The baseline alternative recognizes that the four former conservation programs--the Agricultural Conservation Program (ACP), Water Quality Incentives Program (WQIP), Great Plains Conservation Program (GPCP), and Colorado River Basin Salinity Control Program (CRSCP)--ceased to exist on April 4, 1996, with the passage of the authorized amendments in the Federal Agriculture Improvement and Reform Act of 1996 (the 1996 Act) to the Food Security Act of 1985 (the 1985 Act); an interim program extended until October 4, 1996. The baseline assumes that no new program would replace the former programs, resulting in a substantial decrease in funding for USDA conservation efforts. It is recognized that some conservation adoption by agricultural producers would continue in the absence of these programs (e.g., up to 20 percent of producers according to Cooper and Keim's assessment of WQIP). (Reference: Cooper, J.C., R.W. Keim. ``Incentive Payments to Encourage Farmer Adoption of Water Quality Protection Practices.'' American Journal of Agricultural Economics, Volume 78 (February 1996), pages 54-64.) The baseline alternative further recognizes that several other Federal conservation programs will be implemented which will generate environmental benefits. The Conservation Reserve Program (CRP), Wetland Reserve Program (WRP) and the recently established Wildlife Habitat Incentive Program (WHIP) will be implemented during the same time period as authorized for EQIP. The highly erodible land and wetland conservation compliance requirements will continue to be in effect.

Based on the economic analysis, assuming the level of funding authorized by the 1996 Act, an estimated 35.7 million acres of agricultural land would be treated over the seven years of the program, including 18.5 million acres of cropland, 3.7 million acres of pasture, and 13.5 million acres of rangeland. Of the total agricultural land treated, an estimated 26.8 million acres are expected to be in priority areas. In regards to livestock operations needing assistance with animal waste management facilities, NRCS estimates that over 10,000 small- to medium-sized livestock operations will be assisted with EQIP; 65 percent are expected to be in priority areas.

The off-farm public benefits associated with on-farm conservation efforts are directly dependent upon the on-farm treatment needs and associated benefits. In the case of non-point source pollution from agricultural sources, for instance, public benefits are not achieved until private landuser behavior changes and on-site conservation measures are applied. Some of the off-site benefits are attributable to improvements made to enhance freshwater and marine water quality and fish habitat, improved aquatic recreation opportunities, reduced sedimentation of reservoirs, streams, and drainage channels, and reduced flood damages. Additional benefits are from reduced pollution of surface and groundwater from agrochemical management, improvements in air quality by reducing wind erosion, and enhancements to wildlife habitat. EQIP encourages participants to adopt a comprehensive approach to solving natural resource and environmental concerns. The program is designed to take full advantage of the relationships among and between conservation practices and the natural resources they are designed to protect. Unlike CRP and WRP, EQIP provides for treatment of natural resource concerns while enabling the land to be used for the production of food and fiber. Furthermore, by replacing the four former conservation programs, the single program will reduce the administrative costs for both farmers or ranchers and the Federal government.

In addition to the expected disbursements for cost-share and incentive payments, EQIP costs include staff costs for actual delivery of technical assistance for practice application and educational assistance to agricultural producers on appropriate conservation methods. Technical assistance costs will vary according to the type of expertise required, the complexity and scope of the natural resource concerns being addressed, and the objectives of the landowner. Technical assistance services are also needed to help producers install conservation practices that may be partially supported by EQIP, other Federal programs, and by State or local government, or private financial assistance programs. In terms of public and private investment, USDA experience indicates that private landuser costs per acre for conservation nearly equal Federal costs when analyzed on a consistent basis. Private landuser costs per year for conservation averaged about $10 per acre nationally, according to a 1995-96 evaluation NRCS conducted for its conservation technical assistance and watershed protection program activities.

Total discounted benefits on cropland for EQIP are estimated at $1651 million. This includes on-site production benefits of $544 million, other reduced input benefits (such as irrigation savings) of $181 million, and off-site benefits of $924 million. This compares to estimates of $504 million and $410 million for federal and private costs, respectively.

Total discounted benefits for pasture are estimated at $324 million. These benefits compare to Federal and private costs of $51 million and $63 million, respectively. Total discounted benefits for rangeland are estimated at $438 million, compared to Federal and private costs of $204 million and $83 million, respectively.

The total discounted present value of benefits for EQIP (excluding any benefits from conservation practices for treatment of animal waste) amount to $2.41 billion while the present value of total discounted costs, both public and private, are estimated at $1.65 billion. The net benefits (estimated benefits less all costs) amount to $759 million expressed in discounted present value dollars. Providing for an allowance for the accrual of treated acreage over time and adjusting to an annual basis (at a 3 percent interest rate), the annualized net benefits are estimated to be $76 million, of which 62%, or $47 million, are on-site benefits. Other studies have determined off-site benefits as approximately 2 to 3 times the amount of on-site benefits (Resources Conservation Act, USDA, 1989). Assuming the net off-site benefits are a medium level of 2.5 times that of on-site benefits, then net off-site benefits will be $118.3 million annually, for a total on-and off-site benefits of $165.6 million annually.

The overall benefit to cost ratio is estimated to be 1.46, even though off-site benefits for pasture and rangeland and total benefits for animal waste management were not estimated due to unavailability of data. The benefit to cost ratios for the major land types are: cropland, 1.81; pasture, 2.84; and rangeland, 1.52. Cropland treatment will produce the largest on-site and off-site benefits. The on-site benefit to private cost ratios for cropland, pasture, and range are 1.77, 5.12, and 5.25 respectively.

A copy of this analysis is available upon request from Jeffrey R. Loser, Conservation Operations Division, Natural Resources Conservation Service, P.O. Box 2890, Washington, D.C. 20013-2890.

Regulatory Flexibility Act

The Regulatory Flexibility Act is not applicable to this rule because CCC is not required by 5 U.S.C. 533 or any other provision of law to publish a notice of proposed rulemaking with respect to the subject matter of this rule.

Environmental Analysis

CCC has determined through an amendment to the ``Environment Assessment for the Environmental Quality Incentives Program, August 1, 1996'' that the issuance of this final rule will not have a significant effect on the human environment. Copies of the Environmental Assessment, the amendment, and the finding of no significant impact may be obtained from Jeffrey R. Loser, Conservation Operations Division, Natural Resources Conservation Service, P.O. Box 2890, Washington, D.C. 20013-2890.

Paperwork Reduction Act

No substantive changes have been made in this final rule which affect the recordkeeping requirements and estimated burdens previously reviewed and approved under OMB control number 0560-0174.

Executive Order 12998

This final rule has been reviewed in accordance with Executive Order 12998. The provisions of this final rule are not retroactive. Furthermore, the provisions of this final rule preempt State and local laws to the extent such laws are inconsistent with this final rule. Before an action may be brought in a Federal court of competent jurisdiction, the administrative appeal rights afforded persons at 7 CFR parts 614 and 11 must be exhausted.

Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994

Pursuant to Sec. 304 of the Department of Agriculture Reorganization Act of 1994, Pub. L. 103-354, USDA classified this final rule as major and CCC conducted a risk assessment. Available upon request is an environmental risk assessment including a comparison of the relative risks managed by EQIP and other programs in the Department which address similar risks resulting from comparable activities. One year after the final rule is promulgated, the economic analysis based on a risk management assessment will address the costs associated with implementation and compliance of the regulation and qualitative and quantitative benefits of the regulation. A copy of the risk assessment is available upon request from Jeffrey R. Loser, Conservation Operations Division, Natural Resources Conservation Service, P.O. Box 2890, Washington, D.C., 20013-2890.

Unfunded Mandates Reform Act of 1995

Pursuant to Title II of the Unfunded Mandates Reform Act of 1995, Pub. L. 104-4, CCC assessed the effects of this rulemaking action on State, local, and tribal governments, and the public. This action does not compel the expenditure of $100 million or more by any State, local, or tribal government, or the private sector; therefore a statement under Sec. 202 of the Unfunded Mandates Reform Act of 1995 is not required.

Small Business Regulatory Enforcement Fairness Act of 1996

Pursuant to 5 U.S.C. Sec. 808 of the Small Business Regulatory Enforcement Fairness Act of 1996, it has been determined by CCC that it is impracticable, unnecessary, and contrary to the public interest to delay the effective date of this rule. Making this final rule effective immediately will permit CCC to offer the public timely, reliable information about funding for conservation practices as early before the start of the spring 1997 planting season as possible. Information about the availability of the program for establishing conservation practices may influence planting decisions and should, therefore, be disseminated to producers before planting decisions are made. Failure to provide this information in a timely manner may mean that the realization of important conservation benefits available under EQIP may be delayed for another year before the start of another planting season. Further, since the four former conservation programs ceased to exist on April 4, 1996, and the temporary or interim authority to administer EQIP ended on October 4, 1996, there is no program in operation nationally that provides technical, financial, and educational assistance of this kind to producers for natural resource conservation purposes. Accordingly, this rule is effective upon publication in the Federal Register.

Discussion of Program

The Federal Agriculture Improvement and Reform Act of 1996 (the 1996 Act) (Pub. L. 104-127, April 4, 1996) amended the Food Security Act of 1985 (the 1985 Act) (16 U.S.C. 3801 et seq.) to re-authorize the Environmental Conservation Acreage Reserve Program as the umbrella conservation program encompassing the Conservation Reserve Program (CRP) (16 U.S.C. 3831-3836), the Wetlands Reserve Program (WRP) (16 U.S.C. 3837 et seq.), and the newly created Environmental Quality Incentives Program (EQIP) (16 U.S.C. 3840). Under the Environmental Conservation Acreage Reserve Program, the Secretary of Agriculture may designate areas as conservation priority areas to assist landowners to meet nonpoint source pollution requirements, other Federal and State environmental laws, and to meet other conservation needs.

EQIP combines into one program the functions of several conservation programs administered by the Secretary of Agriculture, including the Agricultural Conservation Program (ACP), the Agricultural Water Quality Incentives Program, the Colorado River Salinity Control Program (CRSCP), and the Great Plains Conservation Program (GPCP), which are rescinded by the 1996 Act. Through EQIP, flexible technical, financial, and educational assistance is provided to farmers and ranchers who face serious threats to soil, water, and related natural resources on their land, including grazing lands, wetlands, forest land, and wildlife habitat. Participation in the program is voluntary. The assistance is provided in a manner that maximizes environmental benefits per dollar expended, helps producers comply with the eligibility provisions of the 1985 Act, and helps farmers and ranchers meet Federal and State environmental requirements. A consolidated and simplified conservation planning process will be used to reduce any administrative burdens that would otherwise be placed on producers.

The 1985 Act provides that funds of the CCC will be used to fund the assistance provided under EQIP. For fiscal year 1996, $130 million was made available to administer an interim program; a minimum of $200 million is to be made available for each of fiscal years 1997 through 2002. Fifty percent of the funding available for the program will be targeted at practices relating to livestock production.

The CCC is a government-owned and operated corporation, chartered in the 1930's to help stabilize and support farm prices and income, and to maintain balanced supplies and orderly distribution of agricultural commodities. The 1996 Act expanded the mission of the CCC to include the power to carry out conservation or environmental programs authorized by law.

The CCC is run by a Board of Directors, and the Secretary of Agriculture serves as the Chairman of the Board. The Administrator of Farm Service Agency (FSA) and the Chief of NRCS serve as officers of the corporation. The CCC does not have its own operating personnel, and all work done on behalf of the CCC is performed by personnel of agencies within USDA. Pursuant to CCC bylaws, the NRCS Chief and the FSA Administrator, as officers of the corporation, may use NRCS and FSA personnel, respectively, to conduct work for CCC.

EQIP is a CCC-funded program, as reflected by the placement of this regulation with other CCC program regulations and the designation of CCC throughout the regulation itself. On behalf of the CCC, the NRCS and FSA share administration of EQIP. Where appropriate, this final regulation describes the CCC responsibilities performed by personnel from the two respective agencies.

On October 11, 1996, CCC published a proposed rule with request for comments. The proposed rule described the program requirements, administrative processes, and eligibility criteria that CCC would use in implementation of EQIP. The proposed rule also described how priority areas and significant statewide natural resource concerns for program funding would be designated and what information would be considered in making those designations. Over 800 separate responses containing about 2500 specific comments were received during the 45-day comment period: 360 responses from farmers, ranchers, and other individuals, 121 from agricultural and rural community organizations, 49 from environmental organizations, 111 from conservation districts and related groups, 66 from business entities, and 109 from State and local agencies.

Additional responses were received from Federal agencies and employees; their comments are not included in the following analysis of public comments. These responses were treated as inter-and intra-agency comments and considered along with the public comments where appropriate.

All comments received are available for review in Room 6032-S, South Building, 14th and Independence Ave., S.W., Washington, D.C., during regular business hours (8 a.m. to 5 p.m.) Monday through Friday.

Analysis of Public Comment

Overall, almost all respondents expressed appreciation for the opportunity to comment on the EQIP proposed rule. Many offered valuable suggestions for improving or clarifying specific sections of the proposed rule. Some of these suggestions were group efforts, where individual responses used similar or identical language to identify and describe their interests, concerns, and recommended modifications to the proposed rule.

The majority of comments centered on six major issues in the proposed rule: definition of large confined livestock operation; focusing the program in priority areas; local work groups; requirement for a conservation plan and long-term contract; roles of agencies; and delayed payments in the first fiscal year of a contract. Several comments either commended or criticized specific statutory requirements. These comments were considered as part of the rulemaking record to the extent that they were relevant to the provisions of the rulemaking. Numerous minor editorial and other changes in the text were suggested; these comments are not included in the following analysis but all were considered and many of the minor technical changes were included in the final rule.

To implement the final rule, NRCS will, with concurrence from FSA, be responsible for establishing and documenting in program guidance the overall policies, priorities, procedures, and guidelines for EQIP. NRCS will seek the review and input by other Federal agencies, as appropriate, when developing the guidance document.

General Comments on 7 CFR Part 1466

Under the proposed rule, CCC would set out EQIP regulations in 7 CFR part 1466. The following summarizes general comments received on the proposed rule and CCC's response to them.

1. The 1996 Act

Support for the introduction of EQIP and the proposed method for implementing its provisions was expressed in 78 comments. An additional 29 comments express general disagreement with the introduction of a new program, its proposed method for implementation, and the elimination of programs such as the ACP that have been in existence for many years. The Department recognizes that EQIP provides a new direction for natural resources conservation programs and, as such, may create concern among those familiar with former programs. However, Congress established EQIP to combine into a single program the functions of the former programs and to carry out the single program in a manner that maximizes environmental benefits per dollar expended, and the Department is required to administer the laws as passed by Congress.

2. Preamble Language in the Proposed Rule

Nineteen comments concern the length of the public comment period. Twelve comments request an extension of the comment period by at least 30 to 45 days. Seven of the comments appreciate the opportunity given for input and the varied mediums by which comments would be accepted. Over 800 responses were received from a range of interested parties from across the Nation. CCC believes that a sufficient length of time was provided and it has received sufficient input to proceed to a final rule.

Five comments concern the benefit cost assessment conducted pursuant to Executive Order 12866. These comments suggest that most environmental benefits occur off-site, recognize the difficulty in quantifying off-site environmental benefits, and support Federal incentives for producers to adopt on-site practices. The comments were considered along with other information and data to finalize the benefit cost assessment.

The preamble to the proposed rule included a discussion of the efforts being made to improve program outreach to all eligible citizens and solicited suggestions regarding how program delivery can be improved on environmentally sensitive land managed by producers who have not participated historically in the Department's conservation programs. There were 25 comments received in response to this request. Five comments express general support for USDA outreach efforts. Nine comments express concern that EQIP will primarily benefit large agricultural operations to the detriment of smaller, family-run operations. One comment states that it appeared the midwestern farmers would benefit to a greater extent than those in the southeast and recommends the program provide equal benefits all over the country. Several other miscellaneous comments were received on outreach.

Seven comments made specific recommendations for increasing USDA's outreach efforts. These recommendations include: permit flexible schedules for applying practices and systems; offer low-cost conservation practice alternatives; consider the value of a producer's labor as the producer's share of the cost; utilize local cooperative extension service agencies in the education efforts; conduct a survey of producers who do not normally participate and ask them the reasons for their non-participation; provide flexibility regarding the control of land for American Indians and others; and, coordinate the various conservation programs such as CRP, WRP, and EQIP. Several comments suggest Amish and Old Order Mennonite producers, Tribes, and Pacific Islanders are groups that have not participated historically and USDA should encourage greater participation. The Department remains dedicated to increasing program availability to all eligible citizens. The recommendations made in the public comments have been incorporated in the final rule where applicable or will be included in program guidance and delivery activities.

Section-by-Section Comments on 7 CFR Part 1466

Section 1466.1 Applicability

The proposed rule indicated that farmers and ranchers could receive program assistance to address soil, water and related natural resources concerns. There were 44 comments expressing support for wildlife habitat concerns receiving program assistance on par with soil and water issues and many of these comments wanted the final rule to reflect the emphasis on wildlife issues to a greater extent. Three comments voice concern that a balance should be attempted among soil conservation, water quality, and other natural resource concerns; one commenter believes EQIP should not be targeted as an environmental program; and seven commenters identify particular natural resource concerns that EQIP should encompass. EQIP shall be implemented in a balanced manner in accordance with the statutory purposes for which EQIP was established, including the statutory admonition to achieve environmental benefits in a cost-effective manner. The proposed rule contained broad language to facilitate the identification of a broad range of natural resource concerns at the local level and the Department still believes that this is the appropriate approach. Therefore, no change is made in this section's language related to natural resource concerns. The final rule now contains, however, a new definition for ``related natural resources'' to help clarify the broad range of natural resource concerns that are intended.

Seven comments support cost-share assistance for the implementation of profitable practices. Several of these comments indicate that a practice may prove profitable for a producer to implement in the long term but the initial cost of installation may limit the extent of its adoption. These commenters suggest that EQIP should provide cost-share to off-set the initial outlay. Three commenters specifically indicate that cost-share assistance should not be provided for practices that are locally accepted as being sound and necessary components of a profitable agricultural operation. EQIP assistance is not to assist producers in the performance of normal or routine farming operations, but to encourage the adoption of practices which address particular natural resource concerns. During program implementation, the Department will scrutinize the profitability of certain practices, ascertain whether such practices would likely be adopted absent program assistance, and direct program assistance accordingly. Even though EQIP assistance may not be available for a practice determined to be a ``profitable practice,'' other Federal, State, tribal, or local programs may provide credit or other types of assistance to producers for initial outlay costs. Producers can obtain information regarding other USDA program assistance from their local USDA service center.

Five comments suggest the rule and the processes for implementation of EQIP should be simplified, but gave no further specific examples of how this could be accomplished. The Department will evaluate on a continuing basis ways to improve program delivery, including making the application process simpler and removing unnecessary administrative steps for the participant.

Section 1466.2 Administration

In this section, the respective roles of the NRCS and FSA were identified, and provided for other agencies to assist NRCS and FSA with implementing EQIP. Five comments express approval of the roles outlined for the two agencies. Three comments express specific disapproval of NRCS and FSA sharing responsibility for program implementation and 3 comments believe that such an arrangement would prove cumbersome. Two comments express the importance that the agencies administer the program in a simple and coordinated manner. Four comments desire further clarification of the respective roles of the agencies. One comment notes that successful program implementation requires the agencies to train their personnel. USDA believes that it is important for both NRCS and FSA to share in administrative responsibilities for the program and that the respective roles of each agency are satisfactorily identified. The proposed arrangement takes advantage of the proven expertise of both NRCS and FSA. USDA established the respective roles for NRCS and FSA and continues to find this shared responsibility for program implementation to be an effective utilization of Department resources. Training of NRCS, FSA, and cooperating agency employees will be conducted to ensure that employees can perform their jobs in a highly skilled, quality manner. Accordingly, no change has been made in the final rule concerning the shared responsibilities of NRCS and FSA.

Fifteen comments concern NRCS leadership of the program. Ten of the comments support the NRCS State conservationist making local program and funding decisions. One comment supports NRCS making funding decisions and allocation determinations with FSA concurrence as proposed in the rule. Two comments urge that FSA should not be involved at all except for administrative purposes. Two comments state that FSA should not be involved in the program because of the different missions between NRCS and FSA.

There were 45 comments regarding the roles of FSA and FSA county committees in the program. Twenty-six comments favor the administration of the program should be fully carried out by FSA county committees. Nine comments state that the program should be fully carried out through the FSA. Eight comments suggest that FSA continue to perform their same duties as in the former ACP, with NRCS providing technical assistance only. Two comments state that FSA and FSA county committees should administer EQIP due to the cost-effectiveness of the CRP and the ACP.

The Department believes that the framework identified for delivery of the program utilizes the proven expertise of NRCS and FSA to the fullest extent possible. This framework identifies the primary role of NRCS to be the Department's primary agency for natural resource conservation on private lands. It also meets a basic intent of the Department to simplify delivery of programs and improve their flexibility and efficiency with both agencies playing a major role in their delivery. EQIP places a much stronger emphasis on long-term natural resource planning and assessment than was emphasized under ACP. The core elements of the program require a higher level of technical expertise on a broader scale than performed under previous conservation programs. NRCS has the technical capability to meet these strengthened technical assistance requirements and FSA can provide efficient administrative expertise to support the program. No change was made in the final rule concerning the roles of the agencies in the program.

Two comments make the suggestion that NRCS attempt to quantitatively evaluate each contract, within the context of its watershed, in order to fulfill its responsibility to evaluate program success. One comment notes that the benefits of the conservation practices may be much greater off-site and NRCS should consider such benefits when evaluating the success of a particular contract. NRCS will evaluate the program's performance at the farm and ranch, priority area, State, regional, and national levels to: ensure that the program purposes are met; evaluate the net benefits of different conservation practices; and, understand ways to improve performance of the program. The program evaluation and assessment process will include, but not be limited to: determination of benchmark or baseline natural resource conditions; establishment of performance indicators; measurement of conservation effects and outcomes; determination of financial investment; and, compilation of program accomplishments. National program assessments will be done by aggregating assessments, data, and information from the farm/ranch, priority area, State, and regional levels.

In regards to funding decisions in paragraph 1466.2(b)(6), 52 comments suggest that FSA county committees should have authority to make all funding and allocation determinations. Twelve comments support NRCS having authority to make funding and allocation decisions. One comment suggests that NRCS and FSA should share responsibility for making funding decisions and allocation determinations. One comment states that site-specific funding decisions and ranking producer applications are the sole responsibility of NRCS and FSA county committees must fund ranked plans. The framework that the Secretary approved for delivery of the program provides for an adequate concurrence mechanism regarding funding and allocation determinations between NRCS and FSA. NRCS, as the lead agency, is in the best position to make initial funding recommendations and then work closely with FSA to obtain necessary concurrence. No change was made in the final rule regarding these comments.

There were 31 comments on paragraph 1466.2(c) regarding the use of the local, county, and State committees established under section 8(b) of the Soil Conservation and Domestic Allotment Act of 1936 in administering subtitle III conservation programs. The commenters suggest the Secretary should provide the FSA committees with the same authorities as under the former conservation programs. The Department believes that the local, county, and State committees are being used in a manner that is consistent with section 8(b) of the Soil Conservation and Domestic Allotment Act of 1936. The committees have specified responsibilities on local work groups or State technical committees, and in administrative processes and procedures for applications, contracting, and financial matters. Additionally, USDA believes that the FSA county committee system will continue to serve a vital role by representing the resource concerns of their production agriculture constituents. FSA county committees have built a foundation of trust over the years with many farmers and ranchers throughout the Nation. As a full partner on the local work groups the FSA county committees will be able to gain the involvement of and acceptance by the farmers and ranchers whom they represent in the locally-led conservation effort. FSA county committees are an integral component of the local work group and their input and judgment is important to the effort. All members of the local work group will need to create working relationships with others so that the collaborative efforts of the group will result in a successful program. No change was made in the final rule concerning the roles of FSA county committees.

In reference to paragraph 1466.2(f), nineteen comments want the State FSA Committees to have approval authority for all applications and cooperative agreements with other entities. Eight comments support the proposed rule language that provides for cooperative agreements with other entities, believing that such arrangements could improve delivery of the program and address natural resource concerns in coordination with others. Four comments express support for the agencies to incorporate local information and to utilize existing state and local coalitions and partnerships. Two comments indicate that CCC should provide funding to partnering agencies. Ten comments express concern that such arrangements would increase the administrative costs of the program and thus result in less conservation on the ground. The Department believes that the opportunity to work with other Federal agencies, local and State partners, including those in the private sector, will improve delivery of the program and is essential to the successful resolution of an area's natural resource concerns. The Department currently uses cooperative agreements and other instruments for activities other than EQIP which involve both financial and in-kind service considerations. Such partnerships have proven to be cost-effective. Both NRCS and FSA may enter into cooperative agreements with others to assist with implementation of the program elements for which the respective agency has principal responsibility. The final rule language has not been changed regarding cooperative agreements.

A general comment recommends the dissemination of information regarding EQIP through regular channels now in existence and via the Internet. The commenter proposes that an Internet homepage be developed and be placed on-line within 3 months of approval of the final rule. The homepage would contain a copy of the final rule, National and regional points of contact, a list of the priority areas, a list of innovative practices and technologies in use and a point of contact for more information, a list of NRCS offices and links to State NRCS web sites. USDA and NRCS currently have home pages where information can be obtained. NRCS currently has the EQIP proposed rule and several EQIP fact sheets available, along with a list of NRCS State offices and links to NRCS State web sites. NRCS plans to use all available avenues of media, including the Internet, to provide the final rule, lists of priority areas, the EQIP guidance documents, and other information to the general public. The USDA homepage can be accessed at http://www.usda.gov. The NRCS homepage can be accessed at http://www.nrcs.usda.gov. No change has been made to the final rule concerning this comment.

Section 1466.3 Definitions

Agricultural Land

Two comments on this definition: one comment suggests that the term should mean an area on which crops or livestock are intensively produced, while the other comment suggests including the examples given in paragraph 1466.4(d). The definition has been modified in the final rule to be consistent with the examples given in paragraph 1466.4(d).

Confined Livestock Operation

Three comments on this definition: one comment supports the definition as proposed; one comment suggests that a size element be included in the definition; the remaining comment suggests that the days of confinement be extended from 45 days to 60 days. A definition of confined livestock operation has been included in the final rule. It includes the parameters regarding ``confinement'' that were included in the proposed rule. The 45 days included in the definition is unchanged so that it is consistent with a definition for confinement used in the Clean Water Act. This definition is commonly understood and accepted. The Department does not desire to create another definition that may cause confusion or unnecessary administrative burdens on producers. Section 1466.7 addresses how the Department intends to administer large confined livestock operations in the program.

Conservation District

One comment suggests the term ``Native American Tribe'' not be used in the definition but be replaced with ``Indian Tribe'' according to the Indian Self-Determination and Education Assistance Act of 1975. The Department agrees with the suggestion on Indian tribes and has incorporated the change in the final rule. A definition of Indian tribe has also been included in the final rule.

Conservation Management System

One comment requests this definition be clarified in order to distinguish a conservation management system from a resource management system. A resource management system is a conservation management system that achieves or exceeds a sustainable treatment level for the natural resources. Conservation management systems include other systems that do not achieve sustainability for one or all the natural resources. The definition has been clarified in the final rule.

Conservation Plan

Six comments on this definition suggest the phrase ``record of a participant's decisions...for treatment of a unit of land or water'' unduly limits the nature and purpose of a conservation plan. Some of these comments state that a conservation plan consists of more than a record of decisions and that the definition should include language such as: identified natural resource problems; a participant's own goals; alternative solutions considered to reach those goals; and, selected solutions to achieve cost-effective environmental management. Additionally, the comments suggest the concept of whole-farm planning be added. The Department believes that these concerns are addressed adequately in Sec. 1466.6 which describes the purposes and requirements of a conservation plan in greater detail and provides for the broader goals expressed in the comments. No change has been made to the definition.

Conservation Practice

One comment suggests this definition be expanded to include integrated pest management (IPM) and that IPM should include integrated weed management. Since the definition for conservation practice includes reference to a land management practice, and the definition of land management practice includes IPM, the definition of conservation practice includes IPM. The Department believes that IPM includes integrated weed management and further definition is unnecessary. The definition is intended to be generic in nature and reference to specific practices was not intended. Therefore, the definition for conservation practice remains as proposed.

Land Management Practice

Fifty-two comments suggest changes to this definition. Thirteen comments request ``irrigation management'' should be included under the definition of land management practice. Efficient irrigation practices are supported in 36 comments and most of these comments suggest the term ``efficient irrigation'' be added to the description of eligible conservation practices. The proposed rule included irrigation management under this definition. The Department has modified this in the final rule by referring to ``irrigation water management'' which better describes the intent of the practices and incorporates the concept of efficient irrigation.

The other comments request additions to the example practices listed under land management practices: two comments suggest adding tree planting and one comment suggests adding wellhead protection, crop rotation, cover crop management, and numerous other practices. One comment suggests adding ``including grazing lands, wetlands, and wildlife habitat'' after ``related natural resource concern.'' The practices listed in the definition are illustrative and not intended to be exhaustive. Tree planting is a vegetative practice and has been included in that definition. A definition of ``related natural resource'' has been included in the final rule. The Department believes that the definition of ``land management practice'', as proposed, encompassed the suggested concepts adequately and does not require changes.

Livestock, Livestock Production, and Livestock-related Natural Resource Concern

One comment suggests the definition of livestock should include honeybees. One comment on livestock production suggests rotational grazing, fencing, and water development practices should be included in the definition. One comment on livestock-related natural resource concern suggests the spread of noxious weeds via animal waste from confined feeding operations should meet the requirements of this definition. The Department believes that honeybees should not be considered as livestock but honey is an agricultural food product, thus honeybee keepers are eligible agricultural producers. The other specific suggestions are best left to the NRCS State conservationist in consultation with the State technical committee. No changes have been made to the subject definitions in the final rule.

Local Work Group

Forty comments concern this definition. Most of the comments request the membership of the local work groups be expanded to others outside of government and provide excellent reasons why certain individuals and organizations could provide information and ideas that would be valuable to the program and the responsibility of the local work groups. Membership of the local work groups is limited to Federal, State, Indian Tribe, and local government representatives because of restrictions applicable to private advisory panels by the Federal Advisory Committee Act (FACA). Given that almost 3500 separate local work groups are estimated to be established to advise on the implementation of the program, the Department felt that it was unfeasible and burdensome to fulfill possible FACA requirements when establishing each local work group. The Department expects and anticipates that these various representatives who serve on the local work group will request and receive ample information and ideas from the public and their respective constituents. Therefore, no changes are made to this definition.

Private Agribusiness Sector

Five comments suggest the term ``agricultural input retail dealers'' should be included in the definition since this term was used in the statute. One comment recommends a very broad interpretation of ``agribusiness.'' The Department intends to have a broad interpretation of this definition so that the largest number of private sector professionals may provide services for the program. The final rule has been changed to include ``agricultural input retail dealers.''

Resource Management System

Two comments request this definition include grazing lands, wetlands, and wildlife habitat. The term ``related natural resources,'' which has been included in the final rule, includes these concerns and further inclusion in the definition of resource management system would be redundant. Therefore, no changes were made to this definition.

State Technical Committee

Six comments concern representation on the State technical committee and guidelines concerning the structure and operation of such committees. NRCS intends to publish a rule on the structure and purpose of the State technical committee in a separate rulemaking, and shall consider these recommendations regarding committee representation and guidelines as it develops that rule.

Structural Practice

Four comments recommend this definition include specific mention of ``irrigation water, conveyance, and application equipment'' as examples of structural practices. The practices listed in the definition are illustrative and not intended to be exhaustive. The Department believes that the definition as proposed encompassed the suggested concepts adequately and does not require changes.

Unit of Concern

Eight comments request clarification of this definition, one of which expresses concern that the definition had no limits, three of which recommend inserting the concept of whole-farm planning, and the remaining four of which recommend limiting the definition to the portion of the property upon which the conservation practice will occur. The Department believes that a unit of concern can vary depending on the natural resource concerns and the objectives of the participant. A unit of concern can be a whole farm or a portion thereof. The conservation plan must address the conditions that cause or influence the natural resource concern for which the plan is being developed. Therefore, information from outside the defined unit of concern may be considered where it is necessary to develop the best strategy for meeting the producer's objectives and resolving the natural resource concern. No changes have been made in the final rule for this definition.

Vegetative Practice

Four comments concern the examples used to describe vegetative practices, one of which recommends deleting permanent wildlife habitat as an example and the remaining three of which recommend including tree planting as an example. The practices listed in the definition are illustrative and not intended to be exhaustive. Tree planting has been added as an example in the final rule. Permanent wildlife habitat was listed as an example in the statute and has been retained in the final rule.

New Definitions

Several commenters suggest new definitions be included in the final rule, including: agricultural producer (2 comments); cost-share and incentive payments (4 comments); environmental benefits index (1 comment); Indian tribe (1 comment); Indian trust lands (2 comments); and liquidated damages (1 comment). The Department will include a procedure in its program guidance for determining an eligible agricultural producer. The term ``environmental benefits index'' is not used in the final rule and, therefore, has not been defined. Definitions for cost-share payments, incentive payments, Indian tribe, Indian trust lands, and liquidated damages have been included in the final rule.

Section 1466.4 Program Requirements

Four comments support the voluntary aspect of the program. No change was made in the final rule concerning the voluntary aspect of the program.

One commenter suggests the wording of the second sentence in paragraph 1466.4(a) should be changed to indicate a participant should develop a conservation plan ``in accordance with'' the local conservation district, instead of ``in cooperation with.'' As provided in 1466.6(a), USDA agrees that the conservation plan should be approved by the local conservation district, but the plan must also meet the purpose of the program and be acceptable to NRCS. The Department believes the phrase ``in cooperation with'' better reflects the role of the local conservation district. No change was made in the final rule regarding this comment.

There were 37 comments regarding the use of EQIP funds for providing technical assistance. Although not included in the proposed rule, 21 comments recommend an unspecified maximum cap be established for the use of program funds for technical assistance, one commenter suggests a 10 percent cap, and eight commenters suggest a 5 percent cap to be consistent with the former ACP. One comment supports funds for technical assistance but recommended that FSA committees should determine the amount. One comment said that no funds should go to technical assistance but it should all go to farmers. Four comments support the use of funds for technical assistance noting that without sufficient technical assistance funding it will be difficult for farmers to satisfactorily perform the conservation work. One commenter suggests the cooperative extension service should receive EQIP technical assistance funding for personnel who are providing assistance to producers. USDA believes that voluntary conservation programs are most successful when sufficient amounts of technical assistance, educational assistance, and financial assistance are provided to producers to aid them in natural resource conservation activities. The 1996 Act amended the 1985 Act to provide that the Secretary of Agriculture is authorized to provide technical, educational, and financial assistance to eligible farmers and ranchers using EQIP. The 1996 Act further stated that the amount of technical assistance provided should be in an amount according to the type of expertise needed, the quantity of time involved, and other factors as determined appropriate by the Secretary. USDA believes that EQIP will require a greater level of technical assistance than the former ACP because EQIP will be dealing with a broader array and more difficult natural resource concerns. Unlike ACP, EQIP will also include conservation plans and long-term contracts for all participants. The 5 percent reimbursement in ACP was not intended to reflect the actual cost for technical assistance. Further, the former GPCP and CRSCP, which were also replaced by EQIP, required technical assistance levels in excess of 5 percent to attain the conservation purposes of the programs. The former conservation programs have shown USDA that a specified rate of technical assistance funding should not be established by rule because natural resource conditions and concerns change over time and the Department needs the ability to adapt to those changing conditions and concerns. USDA believes that NRCS, which will deliver much of the technical assistance in EQIP, should determine the amount of funds needed for this purpose. When making this determination, NRCS will consider its available resources from all programs, and those of other public and private sources of technical assistance. Paragraph 1466.4(b) has not been changed in the final rule.

Two comments were received regarding control of land as provided in paragraph 1466.4(c)(2)(i). One comment suggests a separate paragraph should be added concerning ``Indian trust land'' because the proposed rule does not clearly show that Indian tribes are among the eligible parties. Another commenter suggests ``communal land'' ownership and leasing arrangements in the Pacific Basin should be eligible for EQIP, including those cultural situations where land assignments are given without written leases. Program guidance will identify the type of evidence needed to show that an applicant has an adequate control of land. Written leases may be one of the types of evidence, as will historical use of the land and other evidence. Paragraph 1466.4(d) has been amended to clearly show that tribal, allotted, and Indian trust lands are eligible lands.

One comment states it is burdensome for tribal governments responsible for a vast and complex system of agricultural lands to be required to list all lands under their control, and requests the informational requirements should be lessened for tribes. The Department believes this comment concerned the requirement for listing agricultural lands so that it can determine if an applicant is in compliance with the highly erodible land and wetland conservation provisions. All applicants must comply with these provisions to be eligible for EQIP, including Tribes that receive certain Departmental benefits. However, the Department will work with Tribes to develop processes which minimize the administrative burden while meeting the requirements for eligibility. For example, an authorized representative of the Tribe or Bureau of Indian Affairs may certify compliance with the highly erodible land and wetland conservation provisions on behalf of the entire Tribe.

Five commenters express concern that EQIP does not appear to include forest lands. Two comments state a concern that tree planting will not be eligible for program assistance. The Department believes that forest land, like all other eligible land, must have natural resource problems or pose a threat to natural resources to be eligible for EQIP assistance. Tree planting and other forest land-related conservation practices are eligible for EQIP assistance if they are used to address or resolve the identified natural resource concern. Paragraph 1466.4(d) of the final rule states that forest land may be eligible for enrollment in EQIP; this has not been changed from the proposed rule.

The Department received 13 comments about the targeting of 50 percent of EQIP funds to livestock-related natural resource concerns. Four comments support this targeting level. One comment urges that funding should be targeted to conservation practices other than expensive animal waste management facilities. One comment suggests the funds should not be targeted to livestock but should be targeted toward encouraging new methods of crop production that reduce soil erosion and improve water quality. One comment encourages a minimum level of $50 million annually be targeted to conservation on private grazing land. One comment recommends the 50 percent level be distributed and measured at the state level, not at the national or local level. Six comments note that only the preamble to the proposed rule mentioned the 50 percent target level and the final rule should clarify the targeting of funds toward livestock-related natural resource concerns. The 1996 Act requires that 50 percent of available funds be targeted to conservation practices related to livestock production. The final rule has been clarified by adding paragraph 1466.4(e) which addresses the targeting of available EQIP funds to livestock-related natural resource concerns, including concerns on grazing lands and other lands directly attributable to livestock. The target of 50 percent of the funds will be measured at the national level since livestock-related natural resource concerns are not evenly distributed in States or at the local level. USDA believes that some priority areas may have none or little natural resource concerns related to livestock production, while other priority areas may have significant concerns related to livestock production. For that reason, no further targeting of funds will be made such as the suggestion to target $50 million to grazing land management. Conservation practices that could be eligible to address livestock-related natural resource concerns include, but are not limited to, grazing land management, livestock exclusion, animal waste management facilities, nutrient management, and streambank and riparian area protection. Consistent with the overall goal of maximization of environmental benefits per dollar expended, the Department will place emphasis on low-cost measures which result in the highest benefits; higher cost practices, such as animal waste management facilities, will be eligible if the investment yields substantially high environment benefits.

Four comments concerned paragraph 1466.4(d)(2) which places restrictions on the eligibility of publicly owned land. One commenter supports the provisions in the rule because it would allow ranchers to use EQIP to apply conservation practices on leased public grazing lands. One commenter suggests publicly owned school land should be eligible if leased to farmers. One commenter suggests that sentence 1466.4(d)(2)(ii) of the proposed rule should not restrict practices which will primarily benefit the government landowner but should permit funding of practices that are consistent with management plans of the public landowner. One commenter suggests that sentence 1466.4(d)(2)(iii) should be rewritten to ``conservation practices will contribute to an improvement in the identified natural resource concern.'' The Department believes that the program should be used to benefit the environment, including those instances where producers use publically owned land. The proposed rule sentence stating that government landowners should not be primary beneficiaries of the program has been deleted in the final rule. Paragraph 1466.4(d)(2) allows ranchers who lease public grazing lands and producers who lease public school land to use EQIP on the publicly owned land if the stated criteria are met. Sentence 1466.4(d)(2)(ii) has been rewritten in the final rule to ``conservation practices will contribute to an improvement in the identified natural resource concern.'' USDA believes the provision in sentence 1466.4(d)(2)(iii) requiring written authorization from the government landowner enables the government landowner to ensure the conservation practices are consistent with public land management plans; this sentence has not been changed in the final rule.

Section 1466.5 Priority Areas and Significant Statewide Natural Resource Concerns.

USDA received 27 comments in support of focusing the program in priority areas. One statement that typifies the comments said this focus ``reinforces the concept these are not ``entitlement'' dollars but funds intended to meet Congressional articulated goals of improved water quality and natural resource conservation.'' Thirty-eight comments disagree with the focus of the program in priority areas mostly because it will restrict availability of funds to the specific priority areas. Eighteen comments indicate support to continue ACP or to use the ACP process of allocating funds to all counties to, as one commenter stated, ``ensure that every county gets a piece of the pie.'' USDA believes that primarily offering the program in priority areas throughout the Nation is needed to help assure that the most environmentally sensitive areas are considered and funds are directed to the areas in most need. The use of the priority area concept focuses assistance on those areas that pose the most serious threats to soil, water, and related natural resources, including wildlife habitat and natural resources on grazing land and wetlands, and to make environmental enhancements. The program will also provide the most important natural resource benefits in a cost-effective manner. Implementation of conservation measures will be accelerated in these areas. Past experience has shown that by focusing program assistance, greater environmental benefits are derived. Providing program assistance to significant statewide natural resource concerns outside of funded priority areas will result in widespread eligibility of producer. No change was made in the final rule concerning the focusing of the program in priority areas.

One comment indicates natural resources that are shared by multiple counties and States merit special consideration in the program. USDA agrees with this comment. This was addressed in large by defining priority areas as watersheds, regions, or areas of special environmental sensitivity or having significant soil, water, or related natural resource concerns. Using environmental and natural resource concerns means that political boundaries should be ignored. The NRCS Regional conservationists will coordinate guidance for multi-state areas and regions. No change was made in the final rule concerning natural resources that are shared by multiple counties and states.

Several comments suggest specific natural resource concerns should have higher priority or consideration when determining priority areas. Five comments favor water quality. Six comments favor wildlife habitat with one commenter suggesting that wildlife should be a required concern in all priority areas. Urban-influenced or non-agricultural areas are favored by three comments. Pollution prevention is favored by two comments in lieu of clean-up or corrective measures to existing problems. Three comments favor a balanced, comprehensive approach to natural resource concerns instead of solely addressing water quality. The Department believes that a balanced, comprehensive approach should be used to address natural resource concerns to provide the greatest net benefits to society. Soil, water, air, grazing land, wetland, forest land, wildlife habitat, and other related natural resources are given equal initial consideration for treatment in the program. A definition of ``related natural resources'' has been added in the final rule. The final rule has also been changed in several areas to better clarify this equality of natural resource concerns.

Five comments concern the coordination of priority areas in EQIP, the CRP, WRP, and other programs. Two of these comments recommend a consolidated or uniform selection process for priority areas in these programs. One comment suggests these programs should be leveraged together to ensure successful implementation of priority areas. Two comments said it would be beneficial if each program had its own priority areas. USDA agrees with aspects of each of these comments. Close coordination of priority areas in these various program is very important. The programs can be used collectively, but without duplication, in certain priority areas to successfully achieve the goals of the priority area. Likewise, certain priority areas may only need one of the individual programs. The locally led conservation efforts will advise and assist the Department with identifying how and where the various conservation programs can be utilized best. USDA is working on the development of a single, coordinated, and consistent process for selection of priority areas for each of the USDA conservation programs. Included in this process will be the ability to have specific priority areas for each program. Therefore, no change has been made to the final rule concerning coordination of priority areas in EQIP, CRP, WRP, and other programs.

Two comments suggest the priority area designation process is too encumbered, subject to too many layers and reviews, and should be streamlined. The hallmark of the process for selection of priority areas is the locally led conservation effort which features the involvement of local work groups and State technical committees providing advice and recommendations to the Department. This process may include several layers of review and recommendations, but the Department believes this process will result in the greatest possible involvement of local and State stakeholders and flexible assistance to farmers and ranchers. Further streamlining of the process may result in a less localized decision-making process with most decisions made at the national level. No changes have been made in the final rule concerning the priority area designation process.

USDA received 14 comments suggesting local work groups need to have more involvement by producers, producer organizations, the private agribusiness sector, and other stakeholders at the local level. USDA agrees that involvement of producers, producer organizations, the private agribusiness sector, and other stakeholders at the local level is important for the local work group to effectively provide advice and recommendations concerning the program. USDA believes, however, this involvement and input can be better achieved with local conservation districts leading the groups which include FSA county committees. Local work groups will be able to work efficiently as they consider the public input and provide information to the Department and others. Some members of the local work group already are farmers and ranchers. The public, including producers, producer organizations, the private agribusiness sector, and other stakeholders at the local level, are encouraged to provide input and information to the local work group. The final rule has been changed to encourage the public to provide input and information to the local work group.

One comment asks if priority areas will change each year or if they are established through fiscal year 2002. Another comment states there should be a procedure for refining or terminating a priority area. USDA believes priority areas can have various periods of time that they will be designated and funded. Some priority areas may need only one to three years to accept a sufficient number of contracts that, when fully implemented, will achieve the natural resource goals identified for the area, while other priority areas with extensive or complex concerns may require a longer period to enter into contracts to achieve the natural resource goals. Nevertheless, it is expected that EQIP assistance to a priority area should be limited to a reasonable number of years to enter into contracts to achieve the natural resource goals. This will enable other priority areas to be designated and funded in a more timely manner. The final rule has been changed to clarify that funding may be approved for one or more years. Program guidance will be developed on terminating or ceasing funding to a priority area.

One comment urges the Department to reconsider the maximum area to be included in a priority area. The commenter notes that the North Dakota prairie pothole region is a large area of the state and would not qualify as a priority area under the proposed rule. USDA had not specified a maximum or minimum size constraint for a priority area in the proposed rule. USDA does not believe a rigid size constraint should be incorporated in the rule because natural resource concerns vary significantly in scope and extent. Program guidance will be developed for priority areas concerning size or scope, however, so that natural resource goals of the priority area are measurable and achievable in a reasonable period of time. No addition was made in the final rule concerning maximum or minimum size of priority areas.

One comment suggests the ``shall'' in the second sentence of paragraph 1466.5(a) be changed to ``may.'' This would then indicate that NRCS may give special consideration to applicants in priority areas who have conservation plans that address the natural resource concern(s) for which the priority area was designated. USDA believes that providing special consideration to applicants that address the natural resource concern(s) for which a priority area was designated is consistent with Sec. 1240C of the 1985 Food Security Act, as amended by the 1996 Act, which states ``the Secretary shall accord a higher priority to assistance and payments that (1) Are provided in conservation priority areas.'' Providing special consideration to applicants that address the natural resource concern(s) for which a priority area was designated will enable the natural resource goals in the priority area to be achieved. No change was made in the final rule concerning the suggested comment.

Six comments support the provision in paragraph 1466.5(b) which allows the use of program assistance to address significant statewide natural resource concerns that are outside of priority areas. No change was made to the final rule concerning program assistance to address significant statewide natural resource concerns. The Department received 36 comments that support the use of local work groups and the locally led conservation activities as described in paragraph 1466.5(c). Most comments note that identification of natural resource concerns and priorities is done best at the local, grass-roots level. Two comments suggest the local FSA county committees should be equal partners and have input in determining priority areas. Nine additional comments disagree with the locally-led process. Two of these commenters disagree because they believe the decisions should be made at the state level; two said there are too many players or layers of bureaucracy involved; one said that FSA county committees should make the decisions. The Department believes that locally led conservation efforts, including those which involve local work groups, are very important to the success of program. Local work groups provide information to the Department on EQIP-related items and on other conservation programs and activities. FSA county committees are equal members of the local work group and, as such, will have input in developing and recommending priority area proposals. This process may include several layers of review and recommendations, but the Department believes this process will result in the greatest possible involvement of local and State stakeholders and flexible assistance to farmers and ranchers. Further streamlining of the process may result in a less localized decision-making process with most decisions made at the national level. The roles of the local work group have been retained in the final rule. Three comments concern the designation of the chair of the local work group. One comment favors NRCS chairing the group and two comments disagree with this approach, suggesting the local work group should select the chair. The Department has decided that NRCS should not be required to be the chair of the local work group and the members of the local work group should decide who should be the chair, if one is needed. One comment suggests that because conservation districts will be organizing local stakeholder groups to guide the delivery of Federal conservation programs at the local level, the name of the group which will advise USDA should be called the ``USDA Local Farm Bill Team.'' This would help to differentiate the two groups and should help dispel the perception that the new programs, including EQIP, will not be as locally driven as Congress intended. The Department applauds the efforts of conservation districts to organize local stakeholder groups to provide input into the locally led conservation effort but does not believe the use of the term local work group will create a misunderstanding at the local level. The local work groups may advise the Department on EQIP-related items and on other conservation programs and activities. They may also choose to advise other organizations and government agencies. No change was made in the final rule concerning this comment.

One commenter notes that conservation districts are not organized in all areas of the Nation and that provisions should be made for another agency or group to lead and coordinate the local work group in the absence of a conservation district. Program guidance will include a provision whereby NRCS shall convene the local work group in the absence of a conservation district.

USDA received one comment that recommends that entities other than a Federal, State, or local government agency should be able to make a proposal for a priority area. Paragraph 1466.5(c) in the final rule has been modified to enable private entities to identify a priority area to the local work group.

USDA received three comments suggesting that working procedures for local work groups should be clarified. The Department does not believe that working procedures need to be included in the final rule. Working procedures and other suggestions for effective organization and operation will be provided in guidance documents.

Three comments encourage multi-county local work groups for multi-county priority areas. One commenter supports the designation of a lead NRCS conservationist to coordinate activities between the local work groups in a multi-county priority area. The Department agrees with these comments and will incorporate these recommendations in program guidance.

One comment recommends that conservation districts should provide public notice of intent to organize a local work group. Due to the membership of the local work group, publishing a public notice of intent to organize a local work group is not required by Federal law. Conservation districts, as subdivisions of State governments, may need to consider this recommendation if required by a State law. Also, conservation districts may chose to publish public notices even if not required by law but the district decides this is the best way to proceed.

USDA received one comment suggesting that because Indian tribes are sovereign governments, they should be on local work groups. The definition of local work groups in the proposed rule identified Indian tribes as members and this definition has been retained in the final rule. A definition of Indian tribes has been included in Sec. 1466.3 of the final rule.

Twelve comments concerned the priority area assessment. Two comments said the assessment will be too troublesome and time-consuming. Seven comments suggest the use of existing natural resource assessments, studies, data, and plans to avoid duplication of work and to increase credibility of the priority area assessment. Two commenters ask if demographic information on population meant that EQIP would favor an area with greater population instead of selecting areas because of environmental conditions. One comment suggests the assessment described in paragraph 1466.5(c) should have quantified information ``when and where possible'' and that the ways ``and means'' to measure performance should be included. The final rule refers to priority area ``proposals'' (instead of assessments) to better reflect the nature of the item and to reduce confusion with other natural resource assessments. USDA believes the proposals are needed to adequately and correctly designate an area as a priority area, and agrees that existing natural resource assessments, studies, data, and plans should be incorporated into the proposal. Environmental and natural resource conditions, as described in paragraph 1466.5(d)(1), are the principal factors which will be considered when designating a priority area. The recommended language change concerning use of quantified information and ways and means to measure performance have been included in the final rule.

Six comments suggest NRCS, State technical committees, and local work groups should closely coordinate the process to assess natural resource concerns and identify priority areas with existing efforts at the local and state level. Such efforts may be water resource planning activities, nutrient and manure management programs, or state agricultural conservation programs. The Department agrees with the recommendation and such guidance will be incorporated in guidance documents being developed to assist the local work groups.

One comment suggests paragraph 1466.5(c)(4) be modified to read ``The existing staff and incentive, education, and on-farm research programs available at the Federal, State, and local levels, both public and private, to assist with the areawide activities.'' The suggestion has been included in the final rule.

USDA received 25 comments in support of the State technical committee making recommendations and the decisionmaking role of NRCS State conservationists. Three comments disagree with the roles of the State technical committee and the NRCS State conservationist, suggesting the decisions should be made at the national level. USDA believes the roles of the State technical committee and the NRCS State conservationist are best performed at the state level and not at the national level. No change was made in the final rule concerning these comments.

One comment suggests the State technical committee should develop guidance to local work groups on natural resource information, data, and priorities. State technical committees and State conservationists may develop guidance to assist local work groups. This will be set forth in program guidance.

USDA received two comments suggesting the State technical committee and State conservationist should ``concur as much as possible'' with the input from local work groups on designations of priority areas. Paragraph 1466.5(d) of the final rule identifies how and on what the NRCS State conservationists shall base their decisions to designate priority areas. State conservationists will base decisions on the recommendation of the local work group and State technical committee, among other factors. Only after considering the various criteria and factors identified in this paragraph, and determining that a proposed priority area is worthy of program assistance, will a State conservationist designate a priority area for EQIP assistance.

Several comments address State technical committees issues that are not EQIP-related, including: one comment suggests the ``consensus process'' is unrealistic and that voting should be used instead; one comment states the State technical committee should have Indian tribe representation; and, three comments offer procedural and membership suggestions for State technical committees. The Department will consider these comments in the rulemaking process for State technical committees.

One comment recommends State governments should be allowed to designate their own priority areas. The Department believes that the final rule provides State governments with the ability to make proposals for priority areas and no further change has been made to the final rule.

One comment supports the provision in per paragraph 1466.5(d)(1) that enables NRCS to consider wildlife and wildlife habitat quality and quantity in determining the significance of natural resource concerns in a priority area. No change has been made to the final rule concerning this comment.

Two comments suggest paragraph 1466.5(d) should state ``NRCS will give special consideration to priority areas that contain multiple conservation benefits.'' USDA believes that multiplicity of conservation benefits alone does not justify special treatment. The priority area, whether achieving a single conservation benefit or a range of benefits, must result in significant environmental benefits to justify the expenditure of EQIP funds. The final rule includes a sentence reflecting this consideration.

One comment suggests 1466.5(d)(1)(v) should recognize the importance of saline characteristics of land and water. USDA agrees with the comment and the final rule has been revised to ``(v) Saline characteristics of land or water.''

One comment suggests 1466.5(d)(1)(viii) should state ``Quality and intended use of the receiving waters, including fishery habitat and source of drinking water supply.'' USDA agrees with the comment and the final rule has been revised as suggested.

One comment suggests 1466.5(d)(1)(xi) should indicate that natural hazards may include pest problems which threaten natural resources. USDA agrees with the comment and the final rule has been revised to ``(xi) Other natural hazards or other factors, including the existing agricultural management practices of the producers in the area or pest problems which may threaten natural resources.''

Five comments refer to consideration of the coordination with and level of support from other programs when allocating funds to priority areas. One comment supports the consideration of the level of support from other State or local programs. One suggests better coordination effort between programs is needed so that taxpayer's money is not wasted. One suggests EQIP funds will be most effectively spent in areas that have no other funding sources. Two suggest funding sources such as from private programs should be considered. One comment suggests both direct and in-kind contributions should be considered. The Department believes that Federal program funds can be effectively spent in areas where other sources of funding are also available, thus allowing both the Federal and other funding sources to be stretched and made available in other areas. It also agrees that coordination between Federal, State, and local programs is important, and that private funding sources, direct, and in-kind contributions should be considered. Paragraphs 1466.5(d)(2)(vi) and 1466.5(f)(2)(vi) have been revised in the final rule to reflect these recommendations.

One comment suggests EQIP should be used to assist producers in complying with Tribal environmental laws as well as with Federal and State environmental laws. USDA agrees with the comment and has included the suggestion in 1466.5(d)(2)(vii) and 1466.5(f)(2)(vii) of the final rule.

USDA received several other comments concerning the criteria or factors which should be used to select or fund priority areas, including national conservation priority areas. Two comments suggest that clear, minimum criteria should be established to assist with the selection process. One comment suggests the criteria should include soil quality. One comment recommends that existence of education, research, and demonstration farm plans should be part of the criteria. One comment recommends that existence of monitoring and evaluation plans be included. The Department suggested criteria or factors in the proposed rule language in paragraphs 1466.5(d)(2) and 1466.5(f)(2) to facilitate a broad range of considerations and still believes that this is the appropriate approach. The specific recommendations of the commenters will be included as illustrations of ``other factors'' in the guidance being developed for the program. No change has been made in the final rule to address the comments.

USDA received comments on paragraph 1466.5(e) concerning the approval of significant statewide natural resource concerns. One comment suggests using criteria such as adjacency to a public natural resource, site characteristics that will affect the likelihood of achieving conservation objectives, and cost to achieve the benefits. One comment suggests that wellhead protection and capping abandoned wells would be good examples of significant statewide natural resource concerns. The Department agrees with the concepts suggested in the comments and will include this information in program guidance. Actual determinations of significant statewide natural resource concerns are made by the NRCS State conservationist, in consultation with a State technical committee. No change has been made in the final rule to address the comments. In regards to national conservation priority areas in 1466.5(f), two comments specifically favor the designation process described in the proposed rule. One comment disagrees with the process, preferring that all decisions should be made at the state level. One comment received by USDA said that the process for identifying national priorities is in part only ``lip service'' to certain groups. The commenter finds the proposed rule lacking as to the significance of national conservation priority area designation and suggests that the designation should result in additional funds to the area. The Department believes the process described in the proposed rule is appropriate, has value, and will result in greater emphasis for assistance being placed in the designated area(s). Areas of national significance should be designated at the national level. No change has been made in the final rule to address the comments.

USDA received three comments which suggest use of a national technical committee is needed to ensure participation by national level partners. Eleven comments suggest or nominate specific areas as national conservation priority areas, including: Colorado River basin (5 comments), Great Lakes basin (2), Illinois River basin (2), Chesapeake Bay basin (1), Devil's Lake basin, ND (1), Hudson River basin (1), California pilot recharge program (1). USDA does not believe that a national technical committee is needed to ensure participation of national level partners. The Department has made effective use of interagency teams throughout the development of the EQIP program and other conservation programs and believes that an interagency team consisting of Federal agency partners will ensure national level participation. The Department will consider the suggestions made when designating national conservation priority areas. Paragraph 1466.5(f)(1) has been changed in the final rule to enable nominations for designating national conservation priority areas to be made to the Chief from Federal, State, tribal, or local government agencies, or from private groups or entities.

USDA received two comments recommending that the national conservation priority area designations should be subject to formal rulemaking procedures with public input to assure that the designations have merit. The Department believes the process established in the final rule will assure that the public has the opportunity to provide input into the designation and that the designations have merit. No change has been made in the final rule to address the comments.

Concerning the criteria to be considered when selecting national conservation priority areas, several comments were received. One comment suggests environmental significance and multi-state natural resource concerns should be primary selection criteria. Two comments recommend a greater emphasis on international, interstate, or regional concerns, such as migratory bird habitat, be considered. These comments are consistent with the national program objectives and criteria that the Department intends to use when designating national conservation priority areas. These suggestions will be incorporated in national guidance developed for the program. No change has been made in the final rule to address the comments.

Twenty comments support the educational assistance to be provided in the program. Of these comments, two also note that the proposed rule did not include specific mention of how the education assistance would be provided. Seven of the comments state the Extension system should be the primary delivery mechanism for the educational needs. Three of the comments state the Extension system and other public and private education providers should be involved. One of the comments suggests wellhead protection should be the topic of education and another comment suggests education on control of noxious weeds. USDA's development and delivery of high-quality educational opportunities to farmers, ranchers, and assistance providers should enhance the public's knowledge about the conservation opportunities available through EQIP, will aid in implementing their conservation plans, and enhance the overall benefits that will be realized through the implementation of the program. Appropriate education will maximize public benefits by creating a knowledge base (among producers, agency staff, and private consultants) that will extend direct EQIP benefits beyond the actual acreage and life expectancy of financial and technical assistance programs. The final rule includes specific direction for the delivery of education assistance in paragraph 1466.5(h). The provision specifies that NRCS will develop an education plan for a State or priority area. The plan will include, among other things, a description of who will be the education providers. While USDA expects the Extension system to play a significant role in developing the education plans and delivering educational assistance, other public and private education providers are also expected to have significant roles where appropriate. Thus the need for cooperation and coordination among all education providers. The Department believes there are many important topics that can be the focus of educational efforts, including wellhead protection and control of noxious weeds in an environmentally sound manner, but the specific education topics should be determined at the State and local level.

USDA received numerous comments concerning the funding decisions for EQIP. Two comments support the need for fund decisions at the national level. One comment suggests the NRCS Regional conservationist should make the funding decisions. Eight comments recommend the funding decisions be made at the state level and twelve comments suggest that all funding decisions should be made at the local level. The Department has revised the provisions for funding decisions in paragraph 1466.5(i) to clarify how these decisions will be made to meet the purposes and intents of the program. USDA believes EQIP must be administered differently than the programs it replaces, including the methods for making funding decisions.

The Department is committed to making funding decisions based on: The environmental needs and natural resource concerns; the need to maximize environmental benefits per dollar expended; the capability of the partners involved in the proposal to provide flexible technical, educational, and financial assistance; the conservation needs of farmers and ranchers in complying with the highly erodible land and wetland conservation provisions of part 12 of this title and Federal, State, and tribal environmental laws; the opportunity for encouraging environmental enhancement; the anticipated or proven performance of the partners involved in the proposal in delivering the program; and, other relevant information. Funding proposals for State-level approved priority areas are reviewed and competitively ranked in consultation with the State technical committee.

The State technical committee is comprised of professional natural resource managers who represent a variety of disciplines in soil, water, wetlands, plants, wildlife management, and related natural resource and environmental sciences. Members come from agencies such as: NRCS, FSA, Forest Service, CSREES, U.S. Fish and Wildlife Service, Environmental Protection Agency, and other Federal agencies; State agencies responsible for fish and wildlife, forestry, water resources, agriculture, soil and water conservation, and conservation districts; private groups, organizations, or individuals representing agriculture, commodities, agribusiness, environment, land and water management; and, persons knowledgeable about economic and environmental impacts.

After the NRCS State conservationist approves the priority areas, the regional and National levels review the proposals to verify that they meet program guidance and will meet program goals and objectives. A national-level interagency team representing Federal agencies with appropriate expertise and information assists the Chief by reviewing the submitted proposals and making recommendations on adequacy of proposals. The Chief determines funding levels to be allocated to the States, with the concurrence of the FSA Administrator, considering such information as: the environmental and natural resource conditions across the Nation; the interagency team recommendations; recommendations from NRCS Regional conservationists and staff; the funding proposals; and other information identified above in this response. The Chief will also allocate some funds each year using a performance-based incentive reward for the anticipated or proven performance of the partners involved in a proposal in delivering the program in an exceptional manner, and for issues or concerns determined to be of national importance.

After funds are allocated to the NRCS State conservationist, the State technical committee is again consulted on which State-approved priority areas that meet program guidance should be funded and in what amount. The consultation process with the State technical committee in the proposal-approval stage and the funding decision stage helps to ensure that the best proposals are selected and funded.

Twenty-six comments disagree with priority areas receiving the predominance of funds, but did not recommend a funding level. Five believe priority areas should receive 75 percent of the funds with the remaining 25 percent to significant statewide natural resource concerns outside of priority areas. Three comments suggest a 60 percent priority area to 40 percent outside priority area split. Nine comments favor a 55 percent priority area to 45 percent outside priority area split. Seven comments support a 50 percent priority area to 50 percent outside priority area split. Nine comments favor a 25 percent priority area to 75 percent outside priority area split. Five comments suggest a phase-in approach, starting with more funds to outside priority area and progressively reaching the 75 percent to priority areas in three years. Seven comments suggest no funding percentage should be used to allocate funds but all decisions should be based on environmental need. Two comments suggest each state should receive at least a $2 million base level for work throughout the state. USDA believes that primarily offering the program in priority areas throughout the Nation is needed to help assure that the most environmentally sensitive areas are considered and funds are directed to the areas in most need. The use of the priority area concept focuses assistance on those areas that pose the most serious threats to soil, water, and related natural resources, including wildlife habitat and natural resources on grazing land and wetlands, and to make environmental enhancements.

The Department intends to provide more funds where the natural resource and environmental need is greatest but does not intend on having a prescribed percentage or formula published in the final rule because this will limit the Department's ability to respond to changing conditions and needs. However, for FY 1997, at least 65 percent of the available funds nationally will be used in priority areas. To meet future needs, the Department will move to have more funds, perhaps 75 percent or more, directed to priority areas. Providing program assistance to significant statewide natural resource concerns outside of funded priority areas will result in widespread eligibility of producers on the most important natural resource concerns. No change was made in the final rule concerning the focusing of the program in priority areas.

One comment requests that USDA honor all existing commitments to Indian tribes under the former Great Plains Conservation Program. All contractual commitments to Indian tribes and other contract holders under the former Great Plains Conservation Program, Colorado River Salinity Control Program, Agricultural Conservation Program, and the Water Quality Incentives Program will be honored by USDA. No change was made in the final rule concerning the comment. Four comments request that funds should be provided to conservation districts for the administrative work they perform associated with the local work group and other program aspects. The final rule does not require conservation districts to perform administrative duties in the program. Most of the administrative work will be performed by FSA and the FSA county committees. The final rule enables, but does not require, conservation districts to participate on local work groups and to approve conservation plans which will be used as the basis for EQIP contracts. This is done to meet the spirit of the Congressional Conference Managers who wrote in their Conference Report ``In particular, Congress intends for the Secretary to acknowledge and maintain the historic role of conservation districts in assessing natural resource priorities, approving site-specific conservation plans, and coordinating the delivery of federal conservation programs at the local level.'' The Department does not intend to reimburse conservation districts for their involvement on local work groups or their approval of conservation plans. No change was made in the final rule concerning the comments.

One comment suggests the Chief should reject or not approve funding to any State-approved priority area, statewide concern, or national conservation priority area that fails to target efforts to the most pressing environmental problems. The Department agrees with the comment and intends on providing program funds where the natural resource and environmental need is greatest and where the program can be used most cost-effectively. No change was made in the final rule concerning the comment.

USDA also received six comments on miscellaneous aspects of fund management that were not described in the proposed rule or its preamble. USDA will consider these comments as it develops its program guidance documents.

Section 1466.6 Conservation Plan

USDA received nine comments supporting the development and use of conservation plans as described in the proposed rule. One comment opposes the development of plans as a program requirement. The 1996 Act requires program participants to implement a plan in order to receive program assistance. This provision was incorporated in the proposed rule and no change was made in the final rule concerning the comments.

Two comments suggest the final rule should include more precise criteria and definitions concerning the acceptability of conservation plans. The Department will incorporate criteria concerning acceptability of conservation plans in its program guidance documents. No change was made in the final rule concerning the comments. USDA received one comment requesting NRCS to develop all conservation plans after a producer applies for the program. Another comment states a farmer who must hire someone to write a detailed plan should have some assurance they will be considered for program payments. The 1996 Act requires program participants to submit to the Secretary for approval a plan that incorporates conservation practices and is based on such principles as the Secretary considers necessary to carry out the program. Additionally, the 1996 Act requires the Secretary to ensure that the processes of writing and developing proposals and plans for contracts are open to individuals in the agribusiness sector. These provisions were incorporated in the proposed rule and the Department believes that requiring all conservation plans to be developed by NRCS would be inconsistent with the statute. NRCS will, however, be available to provide an eligibility assessment of the farming or ranching operation of the producer as a basis for developing the plan. Additionally, NRCS will be available to assist producers develop conservation plans if requested. No changes were made in the final rule concerning the comment.

One comment suggests the plans should be called ``EQIP plans.'' The term ``conservation plan'' is used to reinforce the concept of a single plan for all natural resource conservation activities on a farm or ranch unit of concern. In the past, specific program plans have been developed on the same farm or ranch and, occasionally, the specific plans were in conflict or confusing to the producer. A single conservation plan, if requested by a producer, will help to reduce the potential conflicts and confusion, and will reduce the administrative burdens on the producer. No changes were made in the final rule concerning the comment. Two comments suggest the use of the term ``unit of concern'' was confusing. One of these commenters recommended revising the wording in paragraphs 1466.6(a) and 1466.6(e) to read ``for the farm or ranch unit of concern.'' USDA agrees with the comments and have changed paragraphs 1466.6(a) and 1466.6(e) in the final rule.

USDA received one comment recommending a provision be made for a participant to revise a conservation plan (and contract) if necessary to reflect changes in the farm or ranch operation, conservation needs, or schedule of implementation. The recommended provision is commonly provided for in all Departmental conservation program guidance and will be included in the program guidance documents for EQIP. No changes were made in the final rule concerning the comment.

USDA received three comments concerning the role of conservation districts in approving conservation plans. Two comments express appreciation for conservation districts approving all conservation plans used in the program. One comment opposes the conservation district role of approving conservation plans. One comment suggests conservation districts should have a role in approving revisions to conservation plans and should have a role in the event a plan is appealed by a participant at a later date. The Department believes the provision for conservation districts approving conservation plans as a part of the program maintains the historic role of conservation districts approving site-specific conservation plans. Conservation districts will also approve revisions to conservation plans. Roles of agencies during the appeal by a participant of a determination affecting participation are identified in parts 11 and 614 of this title. In its role during appeals, NRCS may consult with the conservation district. No changes were made in the final rule concerning the comments.

USDA received one comment suggesting paragraph 1466.6(a)(1) be revised to indicate that natural resource concerns will include crop pest concerns. Another comment suggests paragraph 1466.6(a)(2) be revised to indicate that that resource management systems will include pest management systems. USDA does not believe the suggested revisions are needed. While EQIP will not fund normal and routine farming practices which simply protect crop production, crop pest concerns may create natural resource concerns which EQIP may appropriately address. Likewise, pest management systems, such as integrated pest management, may be considered a resource management system where the adoption of such system would not likely occur absent program assistance and its implementation could yield significant environment benefits. Therefore, the Department did not make changes to the final rule concerning these comments.

USDA received two comments suggesting paragraph 1466.6(a) should include the words ``including grazing lands, wetlands, or wildlife habitat'' to further describe the related natural resources. USDA added a definition of ``related natural resources'' which incorporates the suggested words and believes this adequately addresses the comments.

USDA received one comment suggesting a provision in paragraph 1466.6(a)(2) to allow conservation plans to vary from the NRCS field office technical guide as needed to foster higher value wildlife habitats. A conservation plan submitted by a participant may foster higher value wildlife habitats or other resource management system, or some portion of that system, than identified in the applicable NRCS field office technical guide. NRCS, as provided in paragraph 1466.6(a)(1), will consider whether the participant will use the most cost-effective conservation practices to maximize the environmental benefits. No change has been made to the final rule concerning this comment.

USDA received numerous comments concerning the level of treatment that should be required in the program. Three comments suggest total resource management systems be required. Three comments oppose a requirement for total resource management systems. Five comments support encouragement to achieve a resource management system and use of a flexible, progressive planning approach. The Department believes that the program should provide flexibility to participants who desire to implement one or more conservation practices which impact a range of natural resource concerns. The program has been designed to encourage, but not require, the voluntarily implementation of a total resource management system. However, the number of natural resource concerns incorporated into a conservation plan will not, in and of itself, justify special priority treatment. The conservation plan, whether addressing a single natural resource concern or several, must result in significant environmental benefits to justify the expenditure of EQIP funds. No change has been made to the final rule concerning these comments.

One comment recommends conservation plans should not focus exclusively on the priorities identified in a priority area or on the significant statewide natural resource concerns, but other concerns should also be addressed. To meet the purpose and intent of the program, the Department believes the conservation plans submitted by participants must address the priority natural resource concern in the priority area or the significant statewide natural resource concern outside a funded priority area if natural resource conservation goals and objectives in a priority area, a State, or the Nation are to be achieved. Directing program funds to address other concerns will divert funds from higher priority natural resource concerns. No change has been made to the final rule concerning this comment.

A tiered, multi-level approach to financial assistance is suggested in two comments. This approach would establish a lesser amount of payments (i.e. up to $5,000 per year) for participants who develop a conservation plan with one or two practices to address a single concern. The second level would allow more payments (i.e. up to $7,500 per year) for participants who develop a whole farm conservation plan with resource management systems to address multiple concerns. The highest level would allow the maximum payments (up to $10,000 per year) for using the second level plan plus incorporating a well-designed, on-farm demonstration or research project. The Department believes the suggestion is a creative manner of providing financial assistance that encourages increased level of treatment to address priority natural resource concerns. The suggestion, however, provides for payment restrictions that are not supported by the 1996 Act, nor do they relate to the actual cost of implementing conservation practices. The Department believes that the proposed rule also provides for voluntary encouragement for increased level of treatment to address priority natural resource concerns without restricting payments arbitrarily. The concept of the suggestion will be incorporated in the program guidance documents. No change has been made to the final rule concerning these comments.

USDA received numerous comments concerning the use of whole farm or ranch plans. Ten comments suggest that whole farm or ranch plans should be required to be eligible for the program. One comment suggests whole farm and ranch planning should be the focus of plans for the program or, at the least, to reward participants who develop whole farm or ranch plans. Eleven comments oppose requiring whole farm or ranch plans. Seven comments suggest the program should be used to encourage, but not to require, the development of whole farm or ranch plans by providing a higher ranking to applications, payments for developing such a plan, or providing higher payments to implement the plan. The 1996 Act enables a participant to implement one conservation practice using EQIP. The Department believes that in order to meet this statutory requirement a whole farm or ranch plan should not be required. However, the program has been designed by the Department to provide for flexibility in carrying out the program. Participants will be encouraged, but not be required, to voluntarily develop a whole farm or ranch plan. The conservation plan will address the conditions that cause or influence the natural resource concern for which the plan is being developed. Therefore, even when a whole farm or ranch plan is not developed, information from outside the defined unit of concern may be considered where it is necessary to develop the best strategy for meeting the producer's objectives and resolving the natural resource concern. Participants who submit a whole farm or ranch plan that maximizes environmental benefits per dollar expended will likely be assigned a higher priority for a contract than would participants who do not submit such a plan. The likelihood of being assigned a higher priority depends on whether the plan will result in significant environmental benefits to justify its priority.

Ten comments concerned who may provide technical assistance to a participant for the purposes of developing a conservation plan. Nine of the comments support the latitude given to participants to select the service provider. Several of these comments also suggest specific service providers, such as professional foresters, certified crop advisors, and other qualified organizations. One comment states no plan should utilize the products or services sold or owned by the private agribusiness developer of the plan to avoid bias in the plan. The Department believes that the provisions in paragraph 1466.6(b) of the proposed rule provide the flexibility that the participant needs to select a service provider that is qualified. The provision refers to cooperating agencies, private agribusinesses, and other organizations, and the Department believes that more specific identification is not required. The Department further believes that the program will have sufficient safeguards and oversight so that any bias that may be created by private agribusinesses or other organizations providing technical assistance services will not cause a misuse of program funds. No change was made in the final rule concerning these comments.

One comment states paragraph 1466.6(b) implies that producers must submit a plan in order to receive technical assistance, and this should be removed. The first sentence of paragraph 1466.6(b) of the proposed rule stated ``Upon a participant's request, the NRCS may provide technical assistance to a participant.'' The Department does not intend to imply that a producer must first submit a plan to receive technical assistance. A participant must request NRCS to provide the technical assistance, including the development of a conservation plan, if that is the desire of the participant. No change was made in the final rule concerning this comment.

One comment suggests the final rule provide more clarity on the procedures NRCS will use to address private sector requirements and approval of assistance. Due to the varying complexities of the technical assistance services that may be provided by non-NRCS personnel, the Department does not believe that program regulations are the most appropriate way to establish these procedures. The program guidance document being developed by the Department will include guidance concerning acceptance of conservation plans, requirements of the private sector and other service providers, and approval of the technical adequacy of work done by non-NRCS personnel. No change was made in the final rule concerning this comment.

USDA received several comments concerning the use of NRCS field office technical guides (FOTG) for conservation practices. Four comments support the use of the FOTG for conservation practices and methods. Nine comments state the FOTG's are either too narrow in scope or require updating and revising in a timely manner to reflect current conservation practices and technologies, and one of these commenters suggest NRCS should use other documents or references which provide more up-to-date information. Two comments suggest NRCS should assure that FOTG information is shared and consistent across state lines and the NRCS Regional conservationists could be used to assure this happens. Two comments promote involvement of private industry, State, and Federal agencies in the development of FOTG information. One comment asks what standards are used to determine if a natural resource has been protected or improved. The NRCS FOTG is a dynamic technical document. The FOTG contains the standards for the conservation practices which may be funded in the program. It also includes a section containing many references and documents published by non-NRCS sources, including private agribusinesses and research institutions. NRCS intends to review, on a regular basis, the content of the FOTG to assure that they include the most current elements of conservation practices, including innovations and new technologies. To assist with maintaining the most current elements of conservation practices, including innovations and new technologies, NRCS welcomes the information and input from producers, natural resource conservation professionals, scientists, and the private agribusiness sector. This review, update, and revision is a part of the overall conservation technical assistance activities of NRCS and is not specific to EQIP. In recognition of the rapid change of technology, paragraph 1466.7(a)(3) of the rule provides for pilot work using new technologies or conservation practices. No changes were made to the final rule concerning these comments.

Ten comments concern the contents of a conservation plan. Two of the comments support the list of conservation plan contents. Two comments suggest the landowner's primary and secondary objectives should be included. One comment states forest types should be included in the plan. Five comments suggest monitoring and evaluation mechanisms must be components of each plan so that outputs can be measured. The Department believes that an evaluation mechanism is needed so that the outputs and outcomes of each conservation plan, each priority area and natural resource concern, and the entire program can be measured. Each conservation plan will contain information which can be used in the evaluation mechanism. NRCS and FSA will each be using automated data collection systems to assist in the evaluation of the program at all levels. The natural resources identified in sentence 1466.6(e)(2) are intended to be illustrative and are not all-inclusive. Sentences 1466.6(e) (3) and (4) have been amended in the final rule to identify the objectives as those of the participant.

On the subject of a simplified conservation planning process, seven comments support the proposed rule provision for a single conservation plan. One comment suggest the single plan could include government regulatory requirements. Another comment suggest that the process should assure participants that the single plan will be recognized by other Federal regulatory agencies. One comment encourages the use of broad-scale planning efforts so that a separate individual plan development and approval process would not be needed when the individual plan is consistent with the broad-scale plan. The Department will work with Federal regulatory agencies to provide a mechanism for a single conservation plan which they will recognize for their purposes. USDA agrees that the conservation plan development and approval process can be further simplified where broad-scale plans have been developed and is using its conservation programs to encourage the development of such plans. The final rule has been amended to indicate that a single conservation plan could contain government regulatory requirements, to the extent possible.

One comment suggests paragraph 1466.6(f) be amended to indicate that a single conservation plan could incorporate tribal program requirements. The Department agrees and has incorporated the suggestion in the final rule.

Twelve comments state the conservation plan and supporting documentation must be considered as confidential information. Without confidentiality of the records producers will be reluctant to participate in the program. CCC has determined that conservation plans and certain supporting documentation developed or submitted for EQIP purposes are Federal records and, as such, are subject to the Freedom of Information Act, 5 U.S.C. 552, and the Privacy Act of 1974, 5 U.S.C. 552a. Requests for records will be reviewed under normal rules that apply to such information, with all due concern given to the desire for confidentiality. No amendment was made to the final rule concerning these comments.

Section 1466.7 Conservation Practices

USDA received 13 comments in support of providing financial assistance for needed conservation practices. Another comment supports financial assistance for upgrading or enhancing existing practices used by participants. A participant may receive financial assistance for enhancing an existing practice if the existing practice has exceeded its useful life span or if the enhancement provides for substantive improvement in the practice so that it provides a greater impact on the natural resource concern and maximizes environmental benefits per dollar expended. The program guidance document will incorporate this provision and no change has been made to the final rule concerning these comments.

One comment opposes providing financial assistance for vegetative practices. The 1996 Act provides for cost-share assistance for ``structural'' practices which includes vegetative practices. The Department believed it was confusing to describe vegetative practices as ``structural'' and incorporated a definition of both structural practice and vegetative practice in the proposed rule. The Department believes the 1996 Act intended to authorize financial assistance for vegetative practices and, therefore, included this provision in the proposed rule. Vegetative practices often provide the most cost-effective conservation alternative to address certain environmental concerns and many structural practices, such as grassed waterways and terraces, incorporate vegetative treatment in the practice. No change has been made in the final rule concerning this comment.

Seventeen comments express support for financial assistance for various conservation practices, including: water storage pits, pipeline installation, cross-fencing in pastures, vegetative buffers, conservation tillage, livestock watering facilities, pest management, noxious weed management, riparian area protection, wellhead protection and sealing, terraces, controlled drainage, agricultural chemical mixing and storage facilities, oil recycling, tile set-backs, precision far