[Federal Register Volume 74, Number 11 (Friday, January 16, 2009)]
[Rules and Regulations]
[Pages 2786-2800]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-827]


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DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service

7 CFR Part 636

RIN 0578-AA49


Wildlife Habitat Incentive Program

AGENCY: Natural Resources Conservation Service, United States 
Department of Agriculture.

ACTION: Interim final rule with request for comment.

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SUMMARY: Section 2602 of the Food, Conservation, and Energy Act of 2008 
(2008 Act) amended the Wildlife Habitat Incentive Program (WHIP) by: 
Narrowing the program's applicability to private agricultural lands, 
nonindustrial private forestland, and Indian land; identifying habitat 
on pivot corners and irregular areas as ``other types of wildlife 
habitat'' eligible for cost-share; increasing, from 15 to 25, the 
percentage of funds that may be used for agreements that have a term of 
at least 15 years; providing the Secretary of the United States 
Department of Agriculture (USDA) authority to give priority to projects 
that would address issues raised by State, regional, and national 
conservation initiatives; and instituting an annual $50,000 in direct 
or indirect aggregate payment limitations per person or legal entity. 
The Natural Resources Conservation Service (NRCS), an agency of USDA, 
issues this interim final rule with request for comment to incorporate 
statutory changes resulting from the 2008 Act authorization. The Agency 
is also using this rule to simplify the regulation and make 
administrative changes to improve program efficiency. Cost-share 
agreements entered into on or following January 16, 2009 will be 
administered according to this interim final rule.

DATES: Effective date: The rule is effective January 16, 2009. Comment 
date: Submit comments on or before March 17, 2009.

[[Page 2787]]


ADDRESSES: You may send comments, which will be published in their 
entirety, using any of the following methods:
    Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending comments 
electronically.
    Mail: Financial Assistance Programs Division, Natural Resources 
Conservation Service, Wildlife Habitat Incentive Program Comments, P.O. 
Box 2890, Room 5237-S, Washington, DC 20013.
    Fax: 1-202-720-4265.
    Hand Delivery: Room 5237-S of the USDA South Agriculture Building, 
1400 Independence Avenue, SW., Washington, DC 20250, between 9 a.m. and 
4 p.m., Monday through Friday, except Federal holidays. Please ask the 
guard at the entrance to the South Agriculture Building to call 202-
720-4527 in order to be escorted into the building.

FOR FURTHER INFORMATION CONTACT: Director, Financial Assistance 
Programs Division, Natural Resources Conservation Service, P.O. Box 
2890, Washington, DC 20013-2890. Phone: 202-720-1844. Fax: 202-720-
4265. Persons with disabilities who require alternative means for 
communicating (Braille, large print, audiotape, etc.) should contact 
the USDA Target Center at 202-720-2600 (voice and TDD).

SUPPLEMENTARY INFORMATION: 

Regulatory Certifications

Executive Order 12866

    Pursuant to Executive Order 12866, this interim final rule with 
request for comment is a significant regulatory action. The 
administrative record is available for public inspection in Room 5831 
South Building, USDA, 14th and Independence Avenue, SW., Washington, 
DC. NRCS conducted an economic analysis of the potential impacts 
associated with this program. A summary of the economic analysis can be 
found at the end of this preamble and a copy of the analysis is 
available upon request from the Director, Financial Assistance Programs 
Division, Natural Resources Conservation Service, Room 5237S, 
Washington, DC 20250-2890.

Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)

    Section 2904(c) of the Food, Conservation, and Energy Act of 2008 
requires that the Secretary use the authority in section 808(2) of 
title 5, United States Code, which allows an agency to forego SBREFA's 
usual 60-day Congressional Review delay of the effective date of a 
major regulation if the agency finds that there is a good cause to do 
so. NRCS hereby determines that it has good cause to do so in order to 
meet the Congressional intent to have the conservation programs, 
authorized or amended by Title II, in effect as soon as possible. 
Accordingly, this rule is effective upon filing for public inspection 
by the Office of the Federal Register.

Executive Order 13175

    Executive Order 13175 requires agencies to consult and collaborate 
with tribes, if policies or actions have substantial direct effects on 
tribes. NRCS has determined that this regulation does not have a 
substantial direct effect on tribes, since these regulatory provisions 
are required by statute, and these provisions do not impose 
unreimbursed compliance costs or preempt Tribal law. As a result, 
consultation is not required.

Executive Order 13084

    Executive Order 13084 requires agencies to consult with Indian 
Tribal governments, if the policies uniquely impact tribes. NRCS has 
determined that the policies set forth in this regulation are required 
by statute and do not uniquely impact tribes and Tribal governments; 
therefore, consultation is not required.

Regulatory Flexibility Act

    NRCS has determined that the Regulatory Flexibility Act is not 
applicable to this final rule because the Natural Resources 
Conservation Service is not required by 5 U.S.C. 553,ww. or any other 
provision of law, to publish a notice of proposed rulemaking with 
respect to the subject matter of this rule.

Environmental Analysis

    Availability of the Environmental Assessment (EA) and Finding of No 
Significant Impact (FONSI). A programmatic environmental assessment has 
been prepared in association with this rulemaking. The analysis has 
determined that there will not be a significant impact to the human 
environment and as a result an Environmental Impact Statement is not 
required to be prepared (40 CFR 1508.13). The EA and FONSI are 
available for review and comment for 60 days from the date of 
publication of this interim final rule in the Federal Register. A copy 
of the EA and FONSI may be obtained from the following Web site: http://www.nrcs.usda.gov/programs/Env_Assess/. A hard copy may also be 
requested from the following address and contact: National 
Environmental Coordinator, Natural Resources Conservation Service, 
Ecological Sciences Division, 1400 Independence Ave., SW., Washington 
DC 20250. Comments from the public should be specific and reference 
that comments provided are on the EA and FONSI. Public comment may be 
submitted by any of the following means: (1) e-mail comments to 
NEPA2008@wdc.usda.gov, (2) e-mail to egov Web site--
www.regulations.gov, or (3) written comments to: National Environmental 
Coordinator, Natural Resources Conservation Service, Ecological 
Sciences Division, 1400 Independence Ave., SW., Washington DC 20250.

Civil Rights Impact Analysis

    NRCS has determined through a Civil Rights Impact Analysis that the 
interim final rule discloses no disproportionately adverse impacts for 
minorities, women, or persons with disabilities. An increased cost-
share payment rate for historically underserved producers, as defined 
in Sec.  636.3, is expected to increase participation among these 
groups. The data presented indicates producers who are members of the 
historically underserved groups have participated in NRCS conservation 
programs at parity with other producers. Extrapolating from historical 
participation data, it is reasonable to conclude that NRCS programs, 
including WHIP, will continue to be administered in a non-
discriminatory manner. Outreach and communication strategies are in 
place to ensure all producers will be provided the same information to 
allow them to make informed compliance decisions regarding the use of 
their lands that will affect their participation in USDA programs. WHIP 
applies to all persons equally regardless of their race, color, 
national origin, gender, sex, or disability status. Therefore, the WHIP 
rule portends no adverse civil rights implications for women, 
minorities and persons with disabilities.

Paperwork Reduction Act

    Section 2904 of the 2008 Act requires that implementation of 
programs under Title II of the Act be made without regard to the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Therefore, 
NRCS is not reporting recordkeeping or estimated paperwork burden 
associated with this interim final rule.

Government Paperwork Elimination Act

    NRCS is committed to compliance with the Government Paperwork 
Elimination Act, which requires Government agencies, in general, to

[[Page 2788]]

provide the public the option of submitting information or transacting 
business electronically to the maximum extent possible. To better 
accommodate public access, NRCS has developed an online application and 
information system for public use.

Executive Order 12988

    This interim final rule has been reviewed in accordance with 
Executive Order 12988. The provisions of this interim final rule are 
not retroactive. Furthermore, the provisions of this interim final rule 
preempt State and local laws to the extent such laws are inconsistent 
with this interim final rule. Before an action may be brought in a 
Federal court of competent jurisdiction, the administrative appeal 
rights afforded persons at 7 CFR Part 614 must be exhausted.

Unfunded Mandates Reform Act of 1995

    NRCS assessed the affects 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 governments, or anyone in the private sector, and therefore, a 
statement under section 202 of the Unfunded Mandates Reform Act of 1995 
is not required.

Economic Analysis--Executive Summary

    The Wildlife Habitat Incentives Program (WHIP) provides direct 
technical and financial assistance to improve fish and wildlife habitat 
on eligible agricultural and nonindustrial private forest lands. The 
focus of the program is on national, regional, and State-directed fish 
and wildlife priorities, including rare and declining species. These 
priorities are established with input from the regional, State, and 
local stakeholders. Because these efforts involve both on-site and off-
site-specific impacts and these impacts affect a host of non-market 
valued attributes ecosystem services, performing a traditional benefit-
cost analysis (BCA) is challenging. Even with these limitations, a BCA 
offers a means to identify the main costs and benefits and explore 
policy and program alternatives.
    The primary costs associated with WHIP include the cost-share 
outlays by NRCS and the matching funds of the producer to fully pay for 
the restoration and improvements in fish and wildlife habitat within 
the agricultural or forestry operation. These primary costs must then 
be compared with the benefits of the habitat improvement realized 
through these efforts, mainly the improvements of the flow of 
ecological goods and services (EGS) and provision of non-market valued 
amenities, such as more scenic views, as well as providing fish and 
wildlife habitat.
    The results of this BCA suggest that the WHIP assistance to 
participants will result in positive net benefits, especially in areas 
where fish and wildlife habitat is deteriorating or being lost. The 
changes to WHIP made by the 2008 Act do not change this conclusion. 
Copies of the Economic Analysis may be obtained from the Director, 
Financial Assistance Programs Division, Natural Resources Conservation 
Service, P.O. Box 2890, Washington, DC 20013-2890.

Section 2904 of the Food, Conservation, and Energy Act of 2008

    The Commodity Credit Corporation (CCC) is not required by 5 U.S.C. 
553 or by any other provision of law, to publish a notice of proposed 
rulemaking with respect to the subject matter of this rule. Section 
2904 of the 2008 Act requires regulations to be published within 90 
days after the date of enactment and authorizes the CCC to promulgate 
an interim final rule effective upon publication with an opportunity 
for notice and comment. CCC has determined that an interim final rule 
is necessary to expedite the effective date of rulemaking in order to 
meet the intent of Section 2904.

Discussion of Program

    The Wildlife Habitat Incentive Program (WHIP) is a voluntary 
program administered by NRCS, using the funds and authorities of the 
Commodity Credit Corporation (CCC). WHIP is available in all 50 states, 
Puerto Rico, Guam, the Virgin Islands of the United States, American 
Samoa, and the Commonwealth of the Northern Mariana Islands. Through 
WHIP, NRCS provides technical and financial assistance to participants 
to develop upland, wetland and aquatic wildlife habitat, as well as 
fish and wildlife habitat on other areas, and to develop habitat for 
threatened and endangered species. NRCS first allocated funds for WHIP 
in 1997. Over the life of the program, NRCS has entered into over 
25,600 cost-share agreements that cover over 4 million acres.
    WHIP was originally authorized under section 387 of the Federal 
Agriculture Improvement and Reform Act of 1996 (the 1996 Act), Public 
Law 104-127. In 1997, NRCS published regulations to implement WHIP at 7 
CFR 636. Section 2502 of the Farm Security and Rural Investment Act of 
2002 (the 2002 Act), Public Law 107-171, repealed the original WHIP 
statute and established a new WHIP under Section 1240N of the Food 
Security Act of 1985, as amended (the 1985 Act). Section 2602 of the 
Food, Conservation, and Energy Act of 2008 (2008 Act) made further 
changes to WHIP.
    In 1997, NRCS published regulations to implement WHIP at 7 CFR Part 
636. The 2002 Act authorized WHIP agreements with a duration of at 
least 15 years, and NRCS amended the 1997 regulation, by incorporating 
this change in a final rule published on July 24, 2002. NRCS publishes 
this interim final rule to incorporate the changes in the 2008 Act. In 
addition, NRCS is using this rulemaking opportunity to implement 
program improvements based upon NRCS's experience in administering WHIP 
and other conservation programs, as well as input from program 
participants and stakeholders.
    In addition, the United States Department of Agriculture (USDA) 
held Farm Bill forums throughout the country in 2005 to solicit input 
from producers and other stakeholders about future farm policy. USDA 
received more than 4,000 comments through this process, including 
recommendations related to WHIP. In summary, NRCS makes changes to the 
WHIP regulation through this interim final rule, described more fully 
below, to reflect changes made by the 2008 Act, consideration of public 
input from the Farm Bill forums, and opportunities identified by NRCS 
to improve program administration.

Summary of Statutory Changes

Section 2602(a)--Program Focus

    The original WHIP legislation, published in 1996, contained broad 
language to promote implementation of wildlife habitat development 
practices by providing participants cost-share assistance for 
developing a wildlife management plan and implementing eligible 
activities under the plan. Prior to the 2008 Act, WHIP was available to 
develop habitat on private and public lands, and available to 
landowners and operators, provided that operators gave NRCS evidence 
they had control of the land for the duration of the WHIP agreement.
    NRCS focused the majority of WHIP funds on private lands. However, 
the NRCS State Conservationist, in consultation with the State 
Technical Committee, could allow exceptions to the private land focus 
when significant wildlife habitat gains could only be achieved by 
installing practices on non-Federal public land. In addition, Indian 
land, formerly known as Tribal lands,

[[Page 2789]]

regardless of their status in terms of Federal trust lands, and Federal 
lands were eligible in those very limited circumstances where the 
benefit is primarily on the private lands, but must include some 
Federal land to meet the WHIP objective.
    Section 2602(a) of the 2008 Act amends Section 1240N(a) of the 1985 
Act to restrict eligible land to private agricultural land, 
nonindustrial private forest land, and Indian land. This restriction 
requires NRCS to make changes to the applicability, definitions, and 
program requirement sections of the WHIP regulation. In particular, 
this rulemaking adds definitions for ``agricultural lands,'' ``Indian 
land,'' and ``nonindustrial private forest land.'' These terms are 
defined in Sec.  636.3 of this regulation.
    NRCS also amends Sec.  636.1(a) to reflect the changes made to land 
eligibility by the 2008 Act. In Sec.  636.4, NRCS redesignates the 
existing Sec.  636.4(b) as Sec.  636.4(c), and adds a new Sec.  
636.4(b) to identify eligible land as private agricultural land, 
nonindustrial private forest land, and Indian land.

Section 2602(b) of the 2008 Act--Other Types of Wildlife Habitat

    Section 2602(b) of the 2008 Act amends Section 1240N(b) of the 1985 
Act to clarify ``other types of habitat'' includes habitat developed on 
pivot corners and irregular areas. The current regulation encompasses 
these types of habitats, and therefore, NRCS determined that it did not 
need to amend the WHIP rule to reflect this statutory clarification. 
NRCS will ensure that its policy guidance identifies such habitat as 
eligible for enrollment.

2008 Act Section 2602(c)--Cost-Share Rates

    The original WHIP legislation, published in 1996, did not specify 
either a cost-share rate or an agreement length for WHIP cost-share 
agreements. However, NRCS, in its 1997 final rule, specified that NRCS 
would not pay more than 75 percent of the cost of establishing wildlife 
habitat development practices, except in the case of long-term 
agreements. Further, NRCS reduced the cost-share payment to a 
participant proportionately below 75 percent to the extent that direct 
Federal financial assistance was provided to the participant from other 
sources. The 1997 WHIP rule also specified that WHIP cost-share 
agreements would be for a period of 5 to 10 years, unless a shorter 
period was recommended to address situations where wildlife was 
threatened as a result of a disaster.
    The 2002 Act authorized the Secretary to use up to 15 percent of 
program funds to provide additional cost-share payments to participants 
to protect and restore essential plant and animal habitat under long-
term agreements with durations of at least 15 years. The 2002 final 
rule reflected the new authority for entering into long-term agreements 
while the percentage of funds to be made available for such agreements 
was addressed in Agency policy. Section 2602(c) of the 2008 Act 
increases the proportion of annual funds available for long-term 
agreements to not more than 25 percent but makes no other changes to 
long-term agreements. In response to Section 2602(c), NRCS adds the 
provision to allow up to 25 percent of WHIP funds to be used to carry 
out cost-share agreements that extend 15 years or more.

Section 2602(d) of the 2008 Act--Priority Initiatives

    Section 2602(d) provides the Secretary discretionary authority to 
give priority to projects that would address issues raised by State, 
regional, and national conservation initiatives. These State, regional, 
and national initiatives include, for example: the North American 
Waterfowl Management Plan, the National Fish Habitat Action Plan, the 
Greater Sage Grouse Conservation Society, the State Comprehensive 
Wildlife Conservation Strategies (also referred to as the State 
Wildlife Action Plans), the Northern Bobwhite Conservation Initiative, 
the Gulf of Hypoxia Action Plan 2008 (and associated annual operating 
plans), and State forest resource strategies. This change clarifies 
discretionary authority provided in the program's original statutory 
language. Section 636.5(c)(1) of the 1997 WHIP rule identified criteria 
that NRCS used to evaluate applications and make enrollment decisions, 
including ``Contribution to resolving an identified habitat problem of 
national, regional, or state importance.'' Section 636.5 is 
redesignated as Sec.  636.6 and in response to the 2008 Act, NRCS 
revises Sec.  636.6(c)(1) to read as follows: ``Contribution to 
resolving an identified habitat concern of national, regional, or state 
importance.'' In particular, NRCS replaces the word ``problem'' with 
the word ``concern'' to reflect a broader spectrum of wildlife issues. 
Further, in Sec.  636.6(a), NRCS replaces the term ``national and 
regional needs'' with ``national, regional, and State wildlife habitat 
concerns.'' Finally, in Sec.  636.8(a)(2), NRCS states that ``wildlife 
habitat concerns identified in State, regional, and national 
conservation initiatives'' are one of the possible items required to be 
addressed in the WHIP plan of operations (WPO).

Section 2602(e) of the 2008 Act--Payment Limitations

    Section 2602(e) of the 2008 Act establishes the following payment 
limitation: ``Payments made to a person or legal entity, directly or 
indirectly, under [WHIP] may not exceed, in the aggregate, $50,000 per 
year.'' NRCS incorporates this change in Sec.  636.7(f).

Summary of Changes to the Regulation

    In addition to the amendments being made to address 2008 Act 
changes, NRCS amends the WHIP regulations at 7 CFR Part 636 through 
this interim final rule to incorporate administrative changes to 
simplify the regulatory language, align WHIP policies with other NRCS 
conservation programs, and improve the efficiency of program 
administration. NRCS describes these changes below in the section-by-
section analysis.

Section 636.1, Applicability

    NRCS amends Sec.  636.1(a) by making several changes. In 
particular, NRCS replaces the phrase ``for upland wildlife, wetland 
wildlife, threatened and endangered species, fish, and other types of 
wildlife'' with the phrase ``develop fish and wildlife habitat on 
private agricultural land, nonindustrial private forest land, and 
Indian land.'' NRCS determined that the simplified language provides 
the appropriate broad interpretation for the types of habitat to be 
developed on eligible lands, including a new statutory requirement to 
encourage the development of habitat for native and managed 
pollinators.

Section 636.2, Administration

    NRCS makes several adjustments to Sec.  636.2 to help clarify 
program administration. In particular, NRCS adds the following 
statement to Sec.  636.2(a) to clarify the relationship between NRCS 
and the Commodity Credit Corporation (CCC): ``The funds, facilities, 
and authorities of the Commodity Credit Corporation (CCC) are available 
to NRCS to carry out WHIP. Accordingly, where NRCS is mentioned in this 
part, it also refers to CCC's funds, facilities, and authorities, where 
applicable.'' NRCS has had legal authority to use CCC funds to 
implement WHIP since the 2002 Act. By adding this language to the WHIP 
rule, NRCS identifies that it may use CCC funds to deliver WHIP.
    NRCS makes several changes to Sec.  636.2(c) to align WHIP 
terminology with the terms used by other NRCS financial assistance 
programs. In

[[Page 2790]]

particular, NRCS replaces the term ``cooperative agreements'' with the 
term ``agreements'' to reflect the full scope of funding arrangements 
into which NRCS may enter. The change does not alter the authority or 
opportunities for entering into agreements.
    NRCS also adds ``Indian tribes,'' ``private organizations,'' and 
``individuals'' to the list of entities with which NRCS may enter into 
agreements. NRCS merges Sec.  636.2(d) with Sec.  636.2(c) to simplify 
and clarify the WHIP regulation, eliminating redundant language. 
Therefore, NRCS redesignates Sec. Sec.  636.2(e) and (f) as Sec. Sec.  
636.2(d) and (e), respectively. NRCS removes the subjective term 
``reasonable'' in the redesignated Sec.  636.2(d), and revises 
redesignated paragraph Sec.  636.2(e) to clarify that the Chief can 
override decisions made by his delegates if necessary to uphold WHIP 
purposes.

Section 636.3, Definitions

    NRCS changes many of the definitions in the WHIP rule to be 
consistent with other NRCS conservation programs and to avoid confusion 
among NRCS field personnel and customers. Specifically, NRCS revises 
the following existing definitions for ``Chief,'' ``Conservation 
district,'' ``Cost share agreement,'' ``Participant,'' ``Person,'' 
``State Conservationist,'' and ``Wildlife.''
    NRCS adds the following terms and definitions to the WHIP 
regulation to be consistent with related NRCS conservation programs. In 
particular, NRCS adds definitions for ``Agricultural lands,'' 
``Applicant,'' ``At-risk species,'' ``Beginning farmer or rancher,'' 
``Conservation practice,'' ``Designated conservationist,'' ``Field 
office technical guide (FOTG),'' ``Historically underserved producer,'' 
``Indian tribe,'' ``Indian land,'' ``Joint operation,'' ``Legal 
entity,'' ``Lifespan,'' ``Limited resource farmer or rancher,'' 
``Liquidated damages,'' ``Livestock,'' ``Natural Resources Conservation 
Service (NRCS),'' ``Nonindustrial private forestland,'' ``Operation and 
maintenance,'' ``Operation and maintenance (O&M) agreement,'' 
``Producer,'' ``Resource concern,'' ``Secretary,'' ``Socially 
disadvantaged farmer or rancher,'' ``Technical assistance,'' and 
``Technical service provider (TSP).'' Specifically, NRCS requests 
public comment on how to tailor the current definition of ``at-risk 
species'' to assist species in greatest need. As currently defined, 
``at risk species means any plant or animal species as determined by 
the State Conservationist, with advice from the State Technical 
Committee, to need direct intervention to halt its population 
decline.'' NRCS removes the terms ``Conservation Plan'' and ``Recurring 
Practice'' since these terms are not used in the WHIP regulation.
    NRCS revises several existing terms to clarify WHIP program 
purposes. In particular, NRCS revises the definition of ``Cost-share 
payment'' to be more comprehensive by including the language ``other 
goals consistent with the program.'' NRCS revises the definition of 
``Habitat development'' to clarify that ``conservation practices'' are 
undertaken to establish, improve, protect, enhance, or restore land to 
improve conditions for wildlife. NRCS replaces the term ``Practice'' 
with ``Conservation practice'' and defines the term consistent with the 
definition used in related NRCS conservation programs. NRCS adds the 
definitions of ``Historically underserved producer'' to reference 
applicants who may be eligible for additional cost-share assistance as 
described in Sec.  636.7(a)(2) as a beginning farmer or rancher, a 
limited resource farmer or rancher, or a socially disadvantaged farmer 
or rancher. Correspondingly, definitions are added for ``Beginning 
farmer or rancher,'' ``Limited resource farmer or rancher,'' and 
``Socially disadvantaged farmer or rancher.'' The gross farm sales 
criterion in the ``Limited resource farmer or rancher'' definition is 
updated to reflect the adjustment for inflation. These definitions for 
are consistent with the changes to definitions in other NRCS 
conservation programs.
    Finally, NRCS replaces the term ``Wildlife habitat development 
plan'' with the term ``WHIP plan of operations (WPO)'' in Sec.  636.7, 
and consequently adds ``WPO'' to Sec.  636.3. This change further 
aligns Sec.  636.3 with the definitions in related NRCS conservation 
programs that identify a plan of operations rather than a development 
plan. NRCS replaces the terms ``wildlife habitat development plan'' and 
``WHDP'' to ``WHIP plan of operations'' and ``WPO,'' respectively 
throughout the entire regulation.

Section 636.4, Program Requirements

    NRCS amends Sec.  636.4 to clarify some of the existing program 
requirements that have not been identified in the WHIP regulation 
because they apply through other statutory requirements. However, NRCS 
finds that reference to these requirements in the WHIP regulation is 
important so that prospective participants are aware of them. In 
particular, NRCS revises Sec.  636.4(a) to clarify that WHIP 
participants are subject to the highly erodible and wetland 
conservation provisions found at 7 CFR Part 12. Additionally, NRCS 
includes reference to the Adjusted Gross Income (AGI) limitations, 7 
CFR Part 1400, that apply to WHIP participants since WHIP has become a 
Title XII conservation program. In order to comply with AGI 
requirements, legal entities must provide to NRCS a list of members, 
including members in embedded entities, along with their social 
security numbers and percent interest in the legal entity.
    NRCS adds new program requirements through this interim final rule 
to improve program administration and to ensure that WHIP program goals 
are met. In particular, NRCS adds paragraph (a)(2) to require WHIP 
participants to be in compliance with terms of all other USDA-
administered conservation program contracts to which they are a party. 
In this manner, NRCS ensures that a participant who receives NRCS 
conservation benefits is meeting their existing responsibilities prior 
to receiving additional assistance.
    NRCS also adds paragraph (a)(3) related to the implementation of 
the WHIP plan of operations and the associated operations and 
management (O & M) agreement to ensure consistency between Sec.  636.4 
and changes made to Sec.  636.3 and Sec.  636.8.
    NRCS also adds several provisions related to payment matters. In 
particular, one paragraph (a)(9) clarifies that payments made to Tribal 
groups may exceed the payment limitation if the Bureau of Indian 
Affairs or a Tribal official certifies that no one individual will 
receive more than the established payment limitation.
    Additionally, NRCS adds paragraph (a)(10) to clarify that 
participants must supply NRCS with information needed to determine 
program eligibility, including information required to determine an 
applicant's status as a limited resource or beginning farmer or 
rancher. Finally, NRCS adds paragraph (a)(11) that requires 
participants that use an alternative identifier, rather than a tax 
identification number, to continue to use that same identifier in all 
WHIP cost-share agreements.
    NRCS makes several adjustments to Sec.  636.4(b) to incorporate the 
2008 Act changes to land eligibility and to conform the language to the 
new definitions described in Sec.  636.3. In particular, NRCS 
identifies in Sec.  636.4(b) that eligible lands include agricultural 
land, nonindustrial private forest land, and Indian land, as defined in 
Sec.  636.3.
    NRCS also revises Sec.  636.4(c) to incorporate changes to clarify 
land ineligibility. In particular, NRCS deletes the phrase ``through 
other forms of assistance or without assistance,'' since

[[Page 2791]]

the manner in which an applicant achieved habitat objectives is 
immaterial to the determination that such lands are ineligible for 
participation in the program. NRCS also deletes reference to the 
attainability of wildlife habitat on offered lands since that 
consideration is more appropriately addressed in ranking criteria. In 
accordance with Section 1240N(a) of the 1985 Act, as amended by Section 
2602 of the 2008 Act, public land is ineligible for WHIP assistance.

Section 636.5, National Priorities

    NRCS inserts a new Sec.  636.5, and redesignates the subsequent 
sections accordingly. The new Sec.  636.5 provides that NRCS will 
establish National Priorities to guide funding to the State offices, 
selection of WHIP cost-share agreements, and implementation priority 
for WHIP conservation practices. This new section also states that the 
national priorities will be reviewed annually by NRCS to ensure that 
the program is addressing priority wildlife habitat concerns. This 
addition makes WHIP consistent with other NRCS conservation programs.

Section 636.6, Establishing Priority for Enrollment in WHIP

    NRCS amends Sec.  636.6(a) by replacing ``needs'' with ``wildlife 
habitat concerns.'' NRCS also amends Sec.  636.6(a) by adding the 
following sentence, ``NRCS, in consultation with Federal and state 
agencies and conservation partners, may identify priorities for 
enrollment in WHIP that will complement the goals and objectives of 
relevant fish and wildlife conservation initiatives at the State, 
regional, and national levels.'' These changes clarify that NRCS may 
focus program implementation in any given year to respond to national, 
regional, state wildlife habitat concerns, identified by NRCS in 
partnership with other Federal and State agencies. Local wildlife 
habitat concerns issues may be elevated to the appropriate State 
Conservationist in an effort to address specific habitat development 
needs.
    NRCS amends Sec.  636.6(b) by striking the term ``species,'' 
consistent with the program purpose of development of wildlife habitat. 
While the intent of such development is to benefit wildlife species, 
the program focus is on the land and water resources covered by cost-
share agreements entered into under the program.
    NRCS adds a new ranking criteria to Sec.  636.6(c) to allow NRCS to 
consider a participants' willingness to complete habitat development 
within two years of the cost-share agreement. This criterion is 
intended to encourage quicker implementation of wildlife habitat 
improvements and reduce the number of modifications and cancellations. 
NRCS deletes Sec.  636.6(d) since the function of denying applications 
is better addressed in the application ranking process.

Section 636.7, Cost-Share Payments

    NRCS replaces the term ``WHDP'' with ``WPO,'' to correspond with 
the changes NRCS makes to Sec. Sec.  636.3 and 636.8. Like the WHDP, 
WPO is the document that identifies the location and timing of 
conservation practices that the participant agrees to implement on 
eligible land in order to address the priority resource concerns. NRCS 
has chosen to change this terminology to make it consistent with other 
financial assistance programs administered by NRCS.
    NRCS revises Sec.  636.7(a)(1) to reflect that ``NRCS shall offer 
to pay no more than 75 percent of the costs of establishing 
conservation practices,'' consistent with changes made in Sec.  636.3. 
NRCS also adds a new provision under Sec.  636.7(a) to allow NRCS to 
provide additional cost-share incentives to ``historically underserved 
producers'' and Indian tribes. ``Historically underserved producers'' 
include limited resource, beginning farmers or ranchers, and socially 
disadvantaged farmers or ranchers. This addition is consistent with the 
authority provided under Section 1244 of the 1985 Act, as amended by 
Section 2708 of the 2008 Act, to provide additional incentives for 
certain farmers, ranchers, and Indian tribes, which reads as follows:

    (a) Incentives for Certain Farms and Ranchers and Indian tribes:
    (1) Incentives Authorized. In carry out any conservation program 
administered by the Secretary, the Secretary may provide to a person 
or entity specified in paragraph (2) incentives to participate in 
the conservation program--
    (i) To foster new farming and ranching opportunities; and
    (ii) To enhance long-term environmental goals.
    (2) Covered Persons. Incentives authorized by paragraph (1) may 
be provided to the following:
    (i) Beginning farmers or ranchers;
    (ii) Socially disadvantaged farmers or ranchers;
    (iii) Limited resource farmers or ranchers; and
    (iv) Indian tribes.

    Under this authority, which applies to all conservation programs 
implemented by the Secretary, NRCS proposes in this rulemaking to 
increase WHIP cost-share rates to the participants identified under 
Section 1244(a)(2) of the 1985 Act, as amended. Since WHIP's 
legislative authority does not establish a definitive payment rate, 
NRCS is adopting in Sec.  636.7 the Environmental Quality Incentives 
Program's cost-share rate policies for historically underserved 
producers. The payment rate for historically underserved producers is 
the applicable payment rate and an additional payment rate that is no 
less than 25 percent above the applicable payment rate, provided this 
increase does not exceed 90 percent of the estimated incurred costs 
associated with the conservation practice. This proposal not only 
enables those who are less capable of matching Federal assistance to 
receive additional program support, but also supports the NRCS effort 
to streamline program policies where possible.
    NRCS revises Sec.  636.7(b) by relocating to Sec.  636.8(e) the 
requirement that the participant or designee is responsible for the 
implementation of the WPO. The reference to the source of 
implementation is more appropriately in the section related to the WPO.
    NRCS also adds new paragraphs (c) and (d) to Sec.  636.7, and 
redesignates the former Sec.  636.7(c) as (e). NRCS clarifies in the 
new Sec.  636.7(c) that conservation practices implemented prior to an 
applicant submitting an application to the program are ineligible for 
payments. Additionally, NRCS clarifies in Sec.  636.7(c) that 
conservation practices implemented or initiated prior to the approval 
of a cost-share agreement are ineligible for payment, unless NRCS 
grants a waiver in advance. Section 636.7(d) clarifies existing policy 
that NRCS will identify and provide public notification of the 
conservation practices eligible for cost-share payments under the 
program.
    NRCS also adds new paragraphs (f) through (j) to Sec.  636.7 to be 
consistent with related NRCS conservation programs. More particularly, 
Sec.  636.7(f) incorporates the payment limitation as established by 
the 2008 Act. Section 636.7(g) states that adjusted gross income (AGI) 
eligibility will be determined prior to cost-share agreement approval. 
Section 636.7(h) allows for current year cost-adjustment for 
conservation practices, subject to the availability of funds. NRCS 
clarifies in Sec.  636.7(i) that NRCS will not make a payment for a 
conservation practices under WHIP if the participant has already 
received a payment for the same practice on the same land under another 
USDA conservation program. Section 636.7(j) requires that the 
participant and NRCS, or an approved TSP, certify that the conservation 
practices have been

[[Page 2792]]

carried out in accordance with the cost-share agreement and agency 
standards prior to issuing final cost-share payments.
    Lastly, NRCS adds paragraph (k) in accordance with Section 
1240N(b)(2)(B) that specifies the NRCS may use up to 25 percent of WHIP 
funds to carry out cost-share agreements that extend 15 years or more. 
Prior to the 2008, NRCS had the legislative authority to use up to 15 
percent of WHIP funds to carry out these longer term agreements.

Section 636.8, WHIP Plan of Operations (WPO)

    NRCS changes the caption, ``Wildlife Habitat Development Plan,'' to 
``WHIP plan of operations (WPO),'' consistent with how related NRCS 
conservation programs identify the document that contains the 
information related to practices and activities to be implemented under 
the program.
    NRCS makes several revisions to Sec.  636.8(a) to reduce the 
administrative burden upon participants. In particular, NRCS removes 
the language ``and the WHDP is approved by participant, NRCS, and the 
local conservation district'' as a result of the need to protect 
personally identifiable information in accordance with Section 1619 of 
the 2008 Act. This change also was recommended by comments received by 
USDA through the Farm Bill forums.
    NRCS revises Sec.  636.8(b) to clarify the NRCS expectation that 
the program participant will maintain WHIP-funded conservation 
practices as specified in the O&M agreement that is consistent with 
other NRCS conservation programs. NRCS also removes the requirement 
that a program participant has to sign both the cost-share agreement 
and the WPO by adding the following language: ``the WPO * * * shall be 
attached and included as part of the cost-share agreement.''
    NRCS revises Sec.  6363.8(d) to clarify that all conservation 
practices planned in the WPO are in accordance with the NRCS field 
office technical guide (FOTG), consistent with related NRCS 
conservation programs.
    Finally, as indicated above, NRCS incorporates into Sec.  636.8(e) 
the requirement contained previously in Sec.  636.7(b) that a 
participant is responsible for the implementation of the WPO.

Section 636.9, Cost-Share Agreements

    NRCS amends Sec.  636.9(a) to update the locations available for 
submitting an application to participate in WHIP. This change serves to 
notify the public of all the avenues available for submitting 
applications.
    Under Sec.  636.9(b)(2), NRCS revises the duration of the cost-
share agreement from the former 5- to 10-year duration to a minimum 
duration of one year and a maximum of 10 years, with the exception of 
long-term agreements as established under Sec.  636.9(c). This new 
language provides the flexibility needed for establishing agreement 
lengths based on wildlife habitat needs and other factors.
    NRCS removes Sec.  636.9(b)(4) because the operation and 
maintenance requirements are included in the O&M agreement. 
Correspondingly, paragraphs (b)(5) and (6) of this section are 
redesignated as (b)(4) and (5), respectively. NRCS adds a new Sec.  
636.9(b)(6) to clarify that payment limits will be specified in the 
cost-share agreement, consistent with related NRCS conservation 
programs. NRCS also adds a new Sec.  636.9(b)(7) that states that the 
O&M agreement expresses the NRCS expectation that participants will 
operate and maintain conservation practices installed with program 
assistance for the lifespan of the installed practices. NRCS has 
developed this O&M agreement for two reasons: (1) To increase the 
transparency of a participant's contract responsibilities; and (2) to 
ensure these conservation practices are maintained for the length of 
time for which they were designed and created. The previous Sec.  
636.9(b)(7) has been redesignated as Sec.  636.9(b)(8).
    NRCS removes Sec.  636.9(c) pursuant to modifications in the cost-
share agreement terms made in Sec.  636.8(b)(2). NRCS redesignates 
Sec.  636.9(d) as Sec.  636.9(c), and revises Sec.  636.9(c)(3), to 
establish a maximum cost-share rate of 90 percent for conservation 
practices installed under long-term cost-share agreements where the 
duration of the agreement is for 15 years or longer.

Section 636.10, Modifications

    NRCS simplifies the language in Sec.  636.10(a) to reduce the 
number of steps required to modify a cost-share agreement and protect 
personally identifiable information. This change also ensures that the 
WPO and O&M agreement are also modified along with the cost-share 
agreement. NRCS deletes Sec.  636.10(b) as redundant to Sec.  
636.10(a), and redesignates existing Sec.  636.10(c) as Sec.  
636.10(b). Section 636.10(c) is added to ensure that in the event a 
conservation practice fails through no fault of the participant, the 
State Conservationist may issue payments to re-establish the 
conservation practice, in accordance with established payment rates and 
limitations.

Section 636.11, Transfer of Interest in a Cost-Share Agreement

    NRCS makes several formatting changes in this section to improve 
its structure. In particular, Sec. Sec.  636.11(a)(2), (b)(1), and 
(b)(2) have been redesignated as Sec. Sec.  636.11(c), (d), and (e), 
respectively. NRCS makes these changes to simplify the original 
formatting.
    NRCS revises Sec.  636.11(a) to simplify and clarify that 
participants must notify NRCS if they anticipate loss of control over 
the land covered by a cost-share agreement, consistent with related 
NRCS conservation programs. NRCS adds a new Sec.  636.11(b) to address 
the transfer of responsibilities under WHIP cost-share agreements, 
consistent with other NRCS conservation programs.

Section 636.12, Termination of Cost-Share Agreements

    NRCS revises Sec.  636.12(a) to clarify that NRCS may unilaterally 
terminate a cost-share agreement under certain circumstances. NRCS 
deletes Sec.  636.12(a)(2) because the circumstances identified in that 
provision are already addressed by Sec.  636.12(a)(1). Accordingly, 
NRCS redesignates Sec.  636.12(a)(3) as Sec.  636.12(a)(2) and adds a 
new Sec.  636.12(a)(3) that specifies that a participant's failure to 
correct a violation within the allowed time period also is cause for 
termination.
    NRCS revises Sec.  636.12(b) related to cost-share agreement 
termination to clarify that participants also may forfeit rights to 
future payments, be assessed liquidated damages, or be determined 
ineligible for further conservation program funding. NRCS also adds 
Sec.  636.12(c) to specify that NRCS may reduce costs recovered after a 
termination decision based on a participant's good faith effort. These 
revisions align WHIP administration with other NRCS conservation 
program administration policies concerning cost-share agreement 
termination and the resulting financial consequences and requirements.

Section 636.13, Violations and Remedies

    NRCS reformats some of the provisions in this section to improve 
the overall structure. Additionally, NRCS deletes the original Sec.  
636.13(b), which is identified in the existing regulation as 
``reserved.''
    In Sec.  636.13(a), NRCS removes the word ``reasonable'' in 
reference to participant violation notification. The term 
``reasonable'' is unnecessary since a 60-day time frame is already 
provided in which a participant has the opportunity to initiate actions 
needed to

[[Page 2793]]

correct a violation. Section 636.13(a) now provides that ``NRCS shall 
give the parties to the cost-share agreement notice of the violation 
and a minimum of 60 days to correct the violation and comply with the 
terms of the cost-share agreement and attachments thereto.''
    NRCS revises Sec.  636.13(b) to include, consistent with other NRCS 
conservation programs, the assessment of liquidated damages as a 
possible consequence to a violation of a cost-share agreement. 
Liquidated damages are not a penalty, but a recognition that some of 
the damages incurred upon the breach of a party's agreement may not be 
easily calculated, but are known to occur, such as expenses incurred by 
NRCS to service the cost-share agreement

Section 636.14, Misrepresentation and Scheme or Device

    NRCS amends Sec.  636.14 to be in accordance with the other 
financial assistance programs administered by NRCS. Specifically, NRCS 
inserts language concerning the collection of liquidated damages and 
possible cancellation of all other NRCS contracts if a person is a 
participant and knowingly misrepresented any fact that affected program 
determination of their WHIP cost-share agreement.

Section 636.15, Offsets and Assignments

    No changes have been made in this section.

Section 636.16, Appeals

    No changes have been made in this section.

Section 636.17, Compliance With Regulatory Measures

    NRCS adds Sec.  636.17 to identify clearly a participant's 
responsibilities associated with other regulatory measures. This change 
reflects standard NRCS language applicable to multiple programs.

Section 636.18, Technical Services Provided by Qualified, Non-USDA 
Personnel

    NRCS adds Sec.  636.18 to incorporate the Technical Service 
Provider provisions in place since 2002, but not included in the 
regulation. This section is consistent with related NRCS conservation 
programs.

Section 636.19, Access to Operating Unit

    NRCS adds Sec.  636.19 to be consistent with related NRCS 
conservation programs. This section provides NRCS personnel authorized 
physical access to projects undertaken by participants in order to 
review project progress and give further assistance to participants 
where it is needed.

Section 636.20, Equitable Relief

    NRCS adds Sec.  636.20 to be consistent with other NRCS 
conservation programs. This section clarifies that WHIP participants 
who acted in good faith based on erroneous information provided by NRCS 
or its representatives are entitled to equitable relief if such action 
resulted in a violation of the cost-share agreement.

Section 636.21, Environmental Services Credits for Conservation 
Improvements

    NRCS adds Sec.  636.21, which states that NRCS recognizes that 
environmental benefits will be achieved by implementing conservation 
practices funded through WHIP, and that environmental credits may be 
gained as a result of implementing these activities. NRCS asserts no 
direct or indirect interest in these credits. However, NRCS retains the 
authority to ensure that the requirements for WHIP-funded improvements 
are met and maintained consistent with the terms of the cost-share 
agreement. Where activities may affect the land covered by a WHIP cost-
share agreement, participants are highly encouraged to request a 
compatibility assessment from NRCS prior to entering into any 
environmental credit agreements. This section is consistent with the 
policy that is being adopted in multiple NRCS programs.
    Section 2708, ``Compliance and Performance,'' of the 2008 Act added 
a paragraph to Section 1244(g) of the 1985 Act entitled, 
``Administrative Requirements for Conservation Programs,'' which states 
the following:

    ``(g) Compliance and performance.--For each conservation program 
under Subtitle D, the Secretary shall develop procedures--
    (1) To monitor compliance with program requirements;
    (2) To measure program performance;
    (3) To demonstrate whether long-term conservation benefits of 
the program are being achieved;
    (4) To track participation by crop and livestock type; and
    (5) To coordinate activities described in this subsection with 
the national conservation program authorized under section 5 of the 
Soil and Water Resources Conservation Act of 1977 (16 U.S.C. 
2004).''

    This new provision presents in one place the accountability 
requirements placed on the Agency as it implements conservation 
programs and reports on program results. The requirements apply to all 
programs under Subtitle D, including the Wetlands Reserve program, the 
Conservation Security Program, the Conservation Stewardship Program, 
The Farm and Ranch Lands Protection Program, the Grassland Reserve 
Program, the Environmental Quality Incentives Program (including the 
Agricultural Water Enhancement Program), the Wildlife Habitat Incentive 
Program, and the Chesapeake Bay Watershed initiative. These 
requirements are not directly incorporated into these regulations, 
which set out requirements for program participants. However, certain 
provisions within these regulations relate to elements of Section 
1244(g) of the 1985 Act and the Agency's accountability 
responsibilities regarding program performance. NRCS is taking this 
opportunity to describe existing procedures that relate to meeting the 
requirements of Section 1244(g) of the 1985 Act, and Agency 
expectations for improving its ability to report on each program's 
performance and achievement of long-term conservation benefits. Also 
included is reference to the sections of these regulations that apply 
to program participants and that relate to the Agency accountability 
requirements as outlined in Section 1244(g) of the 1985 Act.
    Monitor compliance with program requirements. NRCS has established 
application procedures to ensure that participants meet eligibility 
requirements, and follow-up procedures to ensure that participants are 
complying with the terms and conditions of their contractual 
arrangement with the government and that the installed conservation 
measures are operating as intended. These and related program 
compliance evaluation policies are set forth in Agency guidance (M--
440--512 and M--440--517 (http://directives.sc.egov.usda.gov/).
    The program requirements applicable to participants that relate to 
compliance are set forth in these regulations in Sec.  636.4, ``Program 
Requirements,'' Sec.  636.8, ``WHIP Plan of Operations'', and Sec.  
636.9, ``Cost-share agreements.'' These sections make clear the general 
program eligibility requirements, participant obligations for 
implementing a WHIP plan of operations, participant cost-share 
agreement obligations, and requirements for operating and maintaining 
WHIP-funded conservation improvements.
    Measure program performance. Pursuant to the requirements of the 
Government Performance and Results Act of 1993 (Pub. L. 103-62, Sec. 
1116) and guidance provided by OMB Circular A-11, NRCS has established 
performance measures for its conservation programs. Program-funded 
conservation activity is captured through automated field-level 
business

[[Page 2794]]

tools and the information is made publicly available at: http://ias.sc.egov.usda.gov/PRSHOME/. Program performance also is reported 
annually to Congress and the public through the annual performance 
budget, annual accomplishments report and the USDA Performance 
Accountability Report. Related performance measurement and reporting 
policies are set forth in Agency guidance (GM--340--401 and GM--340--
403 (http://directives.sc.egov.usda.gov/).)
    The conservation actions undertaken by participants are the basis 
for measuring program performance--specific actions are tracked and 
reported annually, while the effects of those actions relate to whether 
the long-term benefits of the program are being achieved. The program 
requirements applicable to participants that relate to undertaking 
conservation actions are set forth in these regulations in Sec.  636.8, 
``WHIP Plan of Operations'' and Sec.  636.9, ``Cost-share agreements.'' 
These sections make clear participant obligations for implementing, 
operating, and maintaining WHIP-funded conservation improvements, which 
in aggregate result in the program performance that is reflected in 
Agency performance reports.
    Demonstrate whether long-term conservation benefits of the program 
are being achieved. Demonstrating the long-term natural resource 
benefits achieved through conservation programs is subject to the 
availability of needed data, the capacity and capability of modeling 
approaches, and the external influences that affect actual natural 
resource condition. While NRCS captures many measures of ``output'' 
data, such as acres of conservation practices, it is still in the 
process of developing methods to quantify the contribution of those 
outputs to environmental outcomes.
    NRCS currently uses a mix of approaches to evaluate whether long-
term conservation benefits are being achieved through its programs. 
Since 1982, NRCS has reported on certain natural resource status and 
trends through the National Resources Inventory (NRI), which provides 
statistically reliable, nationally consistent land cover/use and 
related natural resource data. However, lacking has been a connection 
between these data and specific conservation programs.\1\ In the 
future, the interagency Conservation Effects Assessment Project (CEAP), 
which has been underway since 2003, will provide nationally consistent 
estimates of environmental effects resulting from conservation 
practices and systems applied. CEAP results will be used in conjunction 
with performance data gathered through Agency field-level business 
tools to help produce estimates of environmental effects accomplished 
through Agency programs, such as WHIP. In 2006 a Blue Ribbon panel 
evaluation of CEAP \2\ strongly endorsed the project's purpose, but 
concluded ``CEAP must change direction'' to achieve its purposes. In 
response, CEAP has focused on priorities identified by the Panel and 
clarified that its purpose is to quantify the effects of conservation 
practices applied on the landscape. Information regarding CEAP, 
including reviews and current status is available at (http://www.nrcs.usda.gov/technical/NRI/ceap/ ceap/. Since 2004 and the initial 
establishment of long-term performance measures by program, NRCS has 
been estimating and reporting progress toward long-term program goals. 
Natural resource inventory and assessment, and performance measurement 
and reporting policies set forth in Agency guidance (GM--290--400; GM--
340--401; GM--340--403)) (http://directives.sc.egov.usda.gov/).)
---------------------------------------------------------------------------

    \1\ The exception to this is the Conservation Reserve Program; 
since 1987 the NRI has reported acreage enrolled in CRP.
    \2\ Soil and Water Conservation Society. 2006. Final Report from 
the Blue Ribbon Panel Conducting an External Review of the U.S. 
Department of Agriculture Conservation Effects Assessment Project. 
Ankeny, IA: Soil and Water Conservation Society. This review is 
available at (http://www.nrcs.usda.gov/technical/NRI/ceap/).
---------------------------------------------------------------------------

    Demonstrating the long-term conservation benefits of conservation 
programs is an Agency responsibility. Through CEAP, NRCS is in the 
process of evaluating how these long-term benefits can be achieved 
through the conservation practices and systems applied by participants 
under the program. The program requirements applicable to participants 
that relate to producing long-term conservation benefits are described 
previously under ``measuring program performance,'' i.e., Sec.  636.8, 
``The WHIP Plan of Operations'' and Sec.  636.9, ``Cost-share 
agreements.'' These and related program management procedures 
supporting program implementation are set forth in Agency guidance (M--
440--512 and M--440--515).
    Coordinate these actions with the national conservation program 
authorized under the Soil and Water Resources Conservation Act (RCA). 
The 2008 Act reauthorized and expanded on a number of elements of the 
RCA related to evaluating program performance and conservation 
benefits. Specifically, the 2008 Farm Bill added a provision stating,

    ``Appraisal and inventory of resources, assessment and inventory 
of conservation needs, evaluation of the effects of conservation 
practices, and analyses of alternative approaches to existing 
conservation programs are basic to effective soil, water, and 
related natural resources conservation.''

    The program, performance, and natural resource and effects data 
described previously will serve as a foundation for the next RCA, which 
will also identify and fill, to the extent possible, data and 
information gaps. Policy and procedures related to the RCA are set 
forth in Agency guidance (GM--290--400; M--440--525; GM--130--402) 
(http://directives.sc.egov.usda.gov/).
    The coordination of the previously described components with the 
RCA is an Agency responsibility and is not reflected in these 
regulations. However, it is likely that results from the RCA process 
will result in modifications to the program and performance data 
collected, to the systems used to acquire data and information, and 
potentially to the program itself. Thus, as the Secretary proceeds to 
implement the RCA in accordance with the statute, the approaches and 
processes developed will improve existing program performance 
measurement and outcome reporting capability and provide the foundation 
for improved implementation of the program performance requirements of 
Section 1244(g) of the 1985 Act.
    NRCS is amending this rule, 7 CFR part 636, WHIP, republishing it 
in its entirety and accepting comments until March 17, 2009, on the 
aforementioned subjects.

List of Subjects in 7 CFR Part 636

    Administrative practice and procedure, Agriculture, Conservation, 
Endangered and threatened species, Natural resources, Soil 
conservation, Wildlife.

0
For reasons set out in the preamble, NRCS is revising 7 CFR part 636 to 
read as follows:

PART 636--WILDLIFE HABITAT INCENTIVES PROGRAM

Sec.
636.1 Applicability.
636.2 Administration.
636.3 Definitions.
636.4 Program requirements.
636.5 National priorities.
636.6 Establishing priority for enrollment in WHIP.
636.7 Cost-share payments.
636.8 The WHIP Plan of Operation (WPO).
636.9 Cost-share agreements.
636.10 Modifications.

[[Page 2795]]

636.11 Transfer of interest in a cost-share agreement.
636.12 Termination of cost-share agreements.
636.13 Violations and remedies.
636.14 Misrepresentation and scheme or device.
636.15 Offsets and assignments.
636.16 Appeals.
636.17 Compliance with regulatory measures.
636.18 Technical services provided by qualified, non-USDA personnel.
636.19 Access to operating unit.
636.20 Equitable relief.
636.21 Environmental Services Credits for Conservation Improvements.

    Authority: 16 U.S.C. 3839bb-1.


Sec.  636.1  Applicability.

    (a) The purpose of the Wildlife Habitat Incentives Program (WHIP) 
is to help participants develop fish and wildlife habitat on private 
agricultural land, nonindustrial private forest land, and Indian land.
    (b) The regulations in this Part set forth the requirements for the 
WHIP.
    (c) The Chief, Natural Resources Conservation Service (NRCS) may 
implement WHIP in any of the 50 states, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United 
States, American Samoa, and the Commonwealth of the Northern Mariana 
Islands.


Sec.  636.2  Administration.

    (a) The regulations in this Part will be administered under the 
general supervision and direction of the Chief, NRCS. The funds, 
facilities, and authorities of the Commodity Credit Corporation (CCC) 
are available to NRCS to carry out WHIP. Accordingly, where NRCS is 
mentioned in this Part, it also refers to the CCC's funds, facilities, 
and authorities, where applicable.
    (b) The State Conservationist will consult with the State Technical 
Committee in the implementation of the program and in establishing 
program direction for WHIP in the applicable State. The State 
Conservationist has the authority to accept or reject the State 
Technical Committee recommendation; however, the State Conservationist 
will give strong consideration to the State Technical Committee's 
recommendation.
    (c) NRCS may enter into agreements with Federal and State agencies, 
Indian tribes, conservation districts, local units of government, 
public and private organizations, and individuals to assist with 
program implementation, including the provision of technical 
assistance. NRCS may make payments pursuant to said agreements for 
program implementation and for other goals consistent with the program 
provided for in this Part.
    (d) NRCS will provide the public with notice of opportunities to 
apply for participation in the program.
    (e) No delegation in this Part to lower organizational levels shall 
preclude the Chief of NRCS, or a designee, from determining any issues 
arising under this Part or from reversing or modifying any 
determination made under this Part.


Sec.  636.3  Definitions.

    The following definitions will apply to this part and all documents 
issued in accordance with this part, unless specified otherwise:
    Agricultural lands means cropland, grassland, rangeland, pasture, 
and other land determined by NRCS to be suitable for fish and wildlife 
habitat development, on which agricultural and forest-related products 
or livestock are produced. Agricultural lands may include cropped 
woodland, marshes, incidental areas included in the agricultural 
operation, and other types of land used for production of livestock.
    Applicant means a person, legal entity or joint operation that has 
an interest in an agricultural operation, as defined in 7 CFR part 
1400, who has requested in writing to participate in WHIP.
    At-risk species means any plant or animal species as determined by 
the State Conservationist, with advice from the State Technical 
Committee, to need direct intervention to halt its population decline.
    Beginning Farmer or Rancher means an individual or entity who:
    (1) Has not operated a farm or ranch, or who has operated a farm or 
ranch for not more than 10 consecutive years. This requirement applies 
to all members of an entity, and will materially and substantially 
participate in the operation of the farm or ranch.
    (2) In the case of a cost-share agreement with an individual, 
individually or with the immediate family, material and substantial 
participation requires that the individual provide substantial day-to-
day labor and management of the farm or ranch, consistent with the 
practices in the county or State where the farm is located.
    (3) In the case of a cost-share agreement with an entity or joint 
operation, all members must materially and substantially participate in 
the operation of the farm or ranch. Material and substantial 
participation requires that each of the members provide some amount of 
the management, or labor and management necessary for day-to-day 
activities, such that if each of the members did not provide these 
inputs, operation of the farm or ranch would be seriously impaired.
    Chief means the Chief of NRCS, United States Department of 
Agriculture (USDA), or a designee.
    Conservation district means any district or unit of State, Tribal, 
or local government formed under State, Tribal, or territorial law for 
the express purpose of developing and carrying out a local soil and 
water conservation program. Such district or unit of government may be 
referred to as a ``conservation district,'' ``soil conservation 
district,'' ``soil and water conservation district,'' ``resource 
conservation district,'' ``natural resource district,'' ``land 
conservation committee,'' or similar name.
    Conservation practice means one or more conservation improvements 
and activities, including structural practices, land management 
practices, vegetative practices, forest management, and other 
improvements that benefit the eligible land and achieve program 
purposes.
    Cost-share agreement means a legal document that specifies the 
rights and obligations of any participant accepted into the program. A 
WHIP cost-share agreement is a binding agreement for the transfer of 
assistance from USDA to the participant to share in the costs of 
applying conservation.
    Cost-share payment means the payments under the WHIP cost-share 
agreement to develop fish and wildlife habitat or accomplish other 
goals consistent with the program provided for in this Part.
    Designated conservationist means an NRCS employee whom the State 
Conservationist has designated as responsible for WHIP administration 
in a specific area.
    Field office technical guide (FOTG) means the official local NRCS 
source of resource information and interpretations of guidelines, 
criteria, and requirements for planning and applying conservation 
practices and conservation management systems. It contains detailed 
information on the conservation of soil, water, air, plant, and animal 
resources applicable to the local area for which it is prepared.
    Habitat development means the conservation practices implemented to 
establish, improve, protect, enhance, or restore the conditions of the 
land for the specific purpose of improving conditions for fish and 
wildlife.
    Historically Underserved Producer means an eligible person, joint 
operation, or legal entity that is a beginning farmer or rancher, 
socially disadvantaged farmer or rancher, or limited resource farmer or 
rancher.

[[Page 2796]]

    Indian land means:
    (1) Land held in trust by the United States for individual Indians 
or Indian tribes, or
    (2) Land, the title to which is held by individual Indians or 
Indian tribes subject to Federal restrictions against alienation or 
encumbrance, or
    (3) Land which is subject to rights of use, occupancy and/or 
benefit of certain Indian tribes, or
    (4) Land held in fee title by an Indian, Indian family or Indian 
tribe.
    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.) 
that is eligible for the special programs and services provided by the 
United States to Indians because of their status as Indians.
    Joint operation means, as defined in 7 CFR part 1400, a general 
partnership, joint venture, or other similar business organization in 
which the members are jointly or severally liable for the obligations 
of the organization.
    Legal entity means, as defined in 7 CFR 1400, an entity created 
under Federal or State law that:
    (1) Owns land or an agricultural commodity, product, or livestock; 
or
    (2) Produces an agricultural commodity, product, or livestock.
    Lifespan means the period of time during which a conservation 
practice is to be operated and maintained for the intended purpose.
    Limited Resource Farmer or Rancher means:
    (1) A person with direct or indirect gross farm sales not more than 
$155,200 in each of the previous two years (adjusted for inflation 
using Prices Paid by Farmer Index as compiled by National Agricultural 
Statistical Service), and
    (2) Has a total household income at or below the national poverty 
level for a family of four, or less than 50 percent of county median 
household income in each of the previous two years (to be determined 
annually using Commerce Department Data).
    Liquidated damages means a sum of money stipulated in the WHIP 
cost-share agreement that the participant agrees to pay NRCS if the 
participant fails to adequately complete the terms of the cost-share 
agreement. The sum represents an estimate of the technical assistance 
expenses incurred to service the agreement, and reflects the 
difficulties of proof of loss and the inconvenience or non-feasibility 
of otherwise obtaining an adequate remedy.
    Livestock means all animals produced on farms and ranches, as 
determined by the Chief.
    Natural Resources Conservation Service (NRCS) is an agency of the 
USDA, which has the responsibility for administering WHIP using the 
funds, facilities, and authorities of the CCC.
    Nonindustrial private forestland means rural land, as determined by 
the Secretary, that has existing tree cover or is suitable for growing 
trees; and is owned by any nonindustrial private individual, group, 
association, corporation, Indian tribe, or other private legal entity 
that has definitive decision-making authority over the land.
    Operation and maintenance means work performed by the participant 
to keep the applied conservation practice functioning for the intended 
purpose during the conservation practice lifespan. Operation includes 
the administration, management, and performance of non-maintenance 
actions needed to keep the completed practice functioning as intended. 
Maintenance includes work to prevent deterioration of the practice, 
repairing damage, or replacement of the practice to its original 
condition if one or more components fail.
    Operation and maintenance (O&M) agreement means the document that, 
in conjunction with the WHIP plan of operations, specifies the 
operation and maintenance responsibilities of the participants for 
conservation practices installed with WHIP assistance.
    Participant means a person, legal entity, or joint operation, or 
tribe that is receiving payment or is responsible for implementing the 
terms and conditions of a WHIP cost-share agreement.
    Person means, as defined in 7 CFR part 1400, an individual, natural 
person and does not include a legal entity.
    Producer means, as defined in 7 CFR part 1400, a person, legal 
entity, or joint operation who has an interest in the agricultural 
operation or who is engaged in agricultural production or forestry 
management.
    Resource concern means a specific natural resource problem that 
represents a significant concern in a State or region and is likely to 
be addressed successfully through the implementation of the 
conservation practices by producers.
    Secretary means the Secretary of the USDA.
    Socially disadvantaged farmer or rancher means a farmer or rancher 
who has been subjected to racial or ethnic prejudices because of their 
identity as a member of a group without regard to their individual 
qualities.
    State Conservationist means the NRCS employee authorized to 
implement WHIP and direct and supervise NRCS activities in a State, the 
Caribbean Area, or the Pacific Islands Area.
    State Technical Committee means a committee established by the 
Secretary of the United States Department of Agriculture in a State 
pursuant to 16 U.S.C. 3861.
    Technical assistance means technical expertise, information, and 
tools necessary for the conservation of natural resources on land 
active in agricultural, forestry, or related uses. The term includes 
the following:
    (1) Technical services provided directly to farmers, ranchers, and 
other eligible entities, such as conservation planning, technical 
consultation, and assistance with design and implementation of 
conservation practices; and
    (2) Technical infrastructure, including activities, processes, 
tools, and agency functions needed to support delivery of technical 
services, such as technical standards, resource inventories, training, 
data, technology, monitoring, and effects analyses.
    Technical Service Provider (TSP) means an individual, private-
sector entity, or public agency certified by NRCS to provide technical 
services to program participants in lieu of or on behalf of NRCS.
    WHIP plan of operations (WPO) means the document that identifies 
the location and timing of conservation practices that the participant 
agrees to implement on eligible land in order to develop fish and 
wildlife habitat and provide environmental benefits. The WPO is a part 
of the WHIP cost-share agreement.
    Wildlife means non-domesticated birds, fishes, reptiles, 
amphibians, invertebrates, and mammals.
    Wildlife habitat means the aquatic and terrestrial environments 
required for fish and wildlife to complete their life cycles, providing 
air, food, cover, water, and spatial requirements.


Sec.  636.4  Program requirements.

    (a) To participate in WHIP, an applicant must:
    (1) Be in compliance with the highly erodible and wetland 
conservation provisions found in 7 CFR part 12;
    (2) Be in compliance with the terms of all other USDA-administered 
conservation program contracts to which the participant is a party;
    (3) Develop and agree to comply with a WPO and O&M agreement, as 
described in Sec.  636.8;

[[Page 2797]]

    (4) Enter into a cost-share agreement for the development of fish 
and wildlife habitat as described in Sec.  636.9;
    (5) Provide NRCS with written evidence of ownership or legal 
control for the term of the proposed cost-share agreement, including 
the O&M agreement. An exception may be made by the Chief in the case of 
land allotted by the Bureau of Indian Affairs or Indian land where 
there is sufficient assurance of control.
    (6) Agree to provide all information to NRCS determined to be 
necessary to assess the merits of a proposed project and to monitor 
cost-share agreement compliance;
    (7) Agree to grant to NRCS or its representatives access to the 
land for purposes related to application, assessment, monitoring, 
enforcement, verification of certifications, or other actions required 
to implement this Part;
    (8) Provide a list of all members of the legal entity and embedded 
entities along with members' tax identification numbers and percentage 
interest in the entity. Where applicable, American Indians, Alaska 
Natives, and Pacific Islanders may use another unique identification 
number for each individual eligible for payment;
    (9) With regard to cost-share agreements with individual Indians or 
Indians represented by BIA, payments exceeding the payment limitation 
may be made to the Tribal participant if a BIA or Tribal official 
certifies in writing that no one individual, directly or indirectly, 
will receive more than the payment limitation. The Tribal entity must 
also provide, annually, a listing of individuals and payments made, by 
tax identification number or other unique identification number, during 
the previous year for calculation of overall payment limitations. The 
Tribal entity must also produce, at the request of NRCS, proof of 
payments made to the person or legal entity that incurred costs or 
sacrificed income related to conservation practice implementation.
    (10) Supply information, as required by NRCS, to determine 
eligibility for the program, including but not limited to, information 
to verify the applicant's status as a limited resource farmer or 
rancher or beginning farmer or rancher and payment eligibility as 
established by 7 CFR part 1400, Adjusted Gross Income; and
    (11) With regard to any participant that utilizes a unique 
identification number as an alternative to a tax identification number, 
the participant will utilize only that identifier for any and all other 
WHIP cost-share agreements to which the participant is a party. 
Violators will be considered to have provided fraudulent representation 
and be subject to full penalties of Sec.  636.13 of this part.
    (b) Eligible land includes:
    (1) Private agricultural land;
    (2) Nonindustrial private forest land; and
    (3) Indian land.
    (c) Ineligible land. NRCS shall not provide cost-share assistance 
with respect to conservation practices on land:
    (1) Enrolled in a program where fish and wildlife habitat 
objectives have been sufficiently achieved, as determined by NRCS;
    (2) With on-site or off-site conditions which NRCS determines would 
undermine the benefits of the habitat development or otherwise reduce 
its value;
    (3) On which habitat for threatened or endangered species, as 
defined in Section 3 of the Endangered Species Act (ESA), 16 U.S.C. 
1532, would be adversely affected;
    (4) That is public land.


Sec.  636.5  National priorities.

    (a) The following national priorities will be used in WHIP 
implementation:
    (1) Promote the restoration of declining or important native fish 
and wildlife habitats;
    (2) Protect, restore, develop, or enhance fish and wildlife habitat 
to benefit at-risk species;
    (3) Reduce the impacts of invasive species on fish and wildlife 
habitats; and
    (4) Protect, restore, develop, or enhance declining or important 
aquatic wildlife species' habitats.
    (b) NRCS, with advice of other Federal agencies, will undertake 
periodic reviews of the national priorities and the effects of program 
delivery at the State and local level to adapt the program to address 
emerging resource issues. NRCS will:
    (1) Use the national priorities to guide the allocation of WHIP 
funds to the State NRCS offices,
    (2) Use the national priorities in conjunction with State and local 
priorities to assist with prioritization and selection of WHIP 
applications, and
    (3) Periodically review and update the national priorities 
utilizing input from the public and affected stakeholders to ensure 
that the program continues to address priority resource concerns.


Sec.  636.6  Establishing priority for enrollment in WHIP.

    (a) NRCS, in consultation with Federal and state agencies and 
conservation partners, may identify priorities for enrollment in WHIP 
that will complement the goals and objectives of relevant fish and 
wildlife conservation initiatives at the state, regional, and national 
levels. In response to national, regional, and state fish and wildlife 
habitat concerns, the Chief may limit program implementation in any 
given year to specific geographic areas or to address specific habitat 
development needs.
    (b) The State Conservationist, in consultation with the State 
Technical Committee, may give priority to WHIP projects that will 
address unique habitats, or special geographic areas identified in the 
State. Subsequent cost-share agreement offers that would complement 
previous cost-share agreements due to geographic proximity of the lands 
involved or other relationships may receive priority consideration for 
participation.
    (c) NRCS will evaluate the applications and make enrollment 
decisions based on the fish and wildlife habitat need using some or all 
of the following criteria:
    (1) Contribution to resolving an identified habitat concern of 
national, regional, or state importance;
    (2) Relationship to any established wildlife or conservation 
priority areas;
    (3) Duration of benefits to be obtained from the habitat 
development practices;
    (4) Self-sustaining nature of the habitat development practices;
    (5) Availability of other partnership matching funds or reduced 
funding request by the person applying for participation;
    (6) Estimated costs of fish and wildlife habitat development 
activities;
    (7) Other factors determined appropriate by NRCS to meet the 
objectives of the program; and
    (8) Willingness of the applicant to complete all conservation 
improvements during the first two years of the WHIP cost-share 
agreement.


Sec.  636.7  Cost-share payments.

    (a) NRCS may share the cost with a participant for implementing the 
conservation practices as provided in the WPO that is a component of 
the WHIP cost-share agreement:
    (1) Except as provided in paragraph (a)(2) of this section and 
Sec.  636.9(c), NRCS shall offer to pay no more than 75 percent of the 
costs of establishing conservation practices to develop fish and 
wildlife habitat. The cost-share payment to a participant shall be 
reduced proportionately below 75 percent to the extent that direct 
Federal financial assistance is provided to the participant from 
sources other than NRCS, except for certain cases that merit additional 
cost-share assistance to

[[Page 2798]]

achieve the intended goals of the program, as determined by the State 
Conservationist.
    (2) Historically underserved producers, as defined in Sec.  636.3, 
and Indian tribes may receive the applicable payment rate and an 
additional rate that is not less than 25 percent above the applicable 
rate, provided that this increase does not exceed 90 percent of the 
estimated incurred costs associated with the conservation practice.
    (b) Cost-share payments may be made only upon a determination by 
the NRCS that a conservation practice or an identifiable component of a 
conservation practice has been established in compliance with 
appropriate standards and specifications.
    (c) Payments will not be made for a conservation practice that was:
    (1) Applied prior to application for the program, or
    (2) Initiated or implemented prior to cost-share agreement 
approval, unless a waiver was granted by the State Conservationist or 
designated conservationist prior to practice implementation.
    (d) NRCS will identify and provide public notice of the 
conservation practices eligible for payment under the program.
    (e) Cost-share payments may be made for the establishment and 
installation of additional eligible conservation practices, or the 
maintenance or replacement of an eligible conservation practice, but 
only if NRCS determines the conservation practice is needed to meet the 
objectives of the program, or that the failure of the original project 
was due to reasons beyond the control of the participant.
    (f) Payments made or attributed to a participant, directly or 
indirectly, may not exceed, in the aggregate, $50,000 per year.
    (g) Eligibility for payment in accordance with 7 CFR part 1400, 
subpart G, average adjusted gross income limitation, will be determined 
prior to cost-share agreement approval.
    (h) Subject to fund availability, the payment rates for 
conservation practices scheduled after the year of contract obligation 
may be adjusted to reflect increased costs.
    (i) A participant will not be eligible for payments for 
conservation practices on eligible land if the participant receives 
payments or other benefits for the same practice on the same land under 
any other conservation program administered by USDA.
    (j) Before NRCS will approve and issue final payment, the 
participant must certify that the conservation practice has been 
completed in accordance with the cost-share agreement, and NRCS or an 
approved TSP must certify that the practice has been carried out in 
accordance with the applicable NRCS field office technical guide.
    (k) NRCS, for a fiscal year, may use up to 25 percent of WHIP funds 
to carry out cost-share agreements described in Sec.  636.9(c).


Sec.  636.8  The WHIP plan of operations (WPO).

    (a) The participant develops a WPO with the assistance of NRCS or 
other public or private natural resource professionals, who are 
approved by NRCS. A WPO encompasses the parcel of land where habitat 
will be established, improved, protected, enhanced, or restored. The 
WPO shall be approved by NRCS and address at least one of the 
following:
    (1) Fish and wildlife habitat conditions that are of concern to the 
participant;
    (2) Fish and wildlife habitat concerns identified in State, 
regional, and national conservation initiatives; or
    (3) Fish and wildlife habitat concerns identified in an approved 
area-wide plan that addresses the wildlife resource habitat concern.
    (b) The WPO forms the basis for the WHIP cost-share agreement and 
shall be attached and included as part of the cost-share agreement, 
along with the O&M agreement. The WPO includes a schedule for 
installation and maintenance of the conservation practices, as 
determined by NRCS.
    (c) The WPO may be modified in accordance with Sec.  636.10.
    (d) All conservation practices in the WPO must be approved by NRCS 
and developed and carried out in accordance with the applicable NRCS 
FOTG.
    (e) The participant is responsible for the implementation of the 
WPO.


Sec.  636.9  Cost-share agreements.

    (a) To apply for WHIP cost-share assistance, a person or legal 
entity must submit an application for participation at a USDA service 
center to an NRCS representative.
    (b) A WHIP cost-share agreement shall:
    (1) Incorporate the WPO;
    (2) Be for a time period agreed to by the participant and NRCS, 
with a minimum duration of one year after the completion of 
conservation practices identified in the WPO and a maximum of 10 years, 
except for agreements entered into under paragraph (c) of this section;
    (3) Include all provisions as required by law or statute;
    (4) Include any participant reporting and recordkeeping 
requirements to determine compliance with the cost-share agreement and 
program;
    (5) Be signed by the participant;
    (6) Specify payment limits described in Sec.  636.7(f) including 
any additional payment limitation associated with determinations made 
under Sec.  636.7(g);
    (7) Include an O&M agreement that describes operation and 
maintenance for each conservation practice and the Agency expectation 
that WHIP-funded conservation practices will be operated and maintained 
for their expected lifespan; and
    (8) Include any other provision determined necessary or appropriate 
by the NRCS representative.
    (c) Notwithstanding any limitation of this part, NRCS may enter 
into a long-term cost-share agreement that:
    (1) Is for a term of at least 15 years;
    (2) Protects and restores critical plant or animal habitat, as 
determined by NRCS; and
    (3) Provides cost-share payments of no more than 90 percent of the 
cost of establishing conservation practices to develop fish and 
wildlife habitat.


Sec.  636.10  Modifications.

    (a) The participant and NRCS may modify a cost-share agreement if 
both parties agree to the modification, the WPO is revised in 
accordance with NRCS requirements, and the agreement is approved by the 
designated conservationist.
    (b) Any modifications made under this section must meet WHIP 
program objectives and must be in compliance with this Part.
    (c) In the event a conservation practice fails through no fault of 
the participant, the State Conservationist may issue payments to re-
establish the practice, at the rates established in accordance with 
Sec.  636.7, provided such payments do not exceed the payment 
limitation requirements as set forth in Sec.  636.7.


Sec.  636.11  Transfer of interest in a cost-share agreement.

    (a) A participant is responsible for notifying NRCS when he/she 
anticipates the voluntary or involuntary loss of control of the land 
covered by a WHIP cost-share agreement.
    (b) The participant and NRCS may agree to transfer a cost-share 
agreement to another producer. The transferee must be determined by 
NRCS to be eligible to participate in WHIP and must assume full 
responsibility under the cost-share agreement.

[[Page 2799]]

    (c) With respect to any and all payments owed to participants who 
wish to transfer ownership or control of land subject to a cost-share 
agreement, the division of payment shall be determined by the original 
party and that party's successor. In the event of a dispute or claim on 
the distribution of cost-share payments, NRCS may withhold payments 
without the accrual of interest pending a settlement or adjudication on 
the rights to the funds.
    (d) If such new participants are not willing or not eligible to 
assume the responsibilities of an existing WHIP cost-share agreement 
including the O&M agreement, NRCS shall terminate the cost-share 
agreement and may require that all cost-share payments may be 
forfeited, refunded, or both.
    (e) The participants to the cost-share agreement shall be jointly 
and severally responsible for refunding the cost-share payments with 
applicable interest pursuant to paragraph (d) of this section.


Sec.  636.12  Termination of cost-share agreements.

    (a) The State Conservationist may, independently or by mutual 
agreement with the parties to the cost-share agreement, terminate the 
cost-share agreement where:
    (1) The parties to the cost-share agreement are unable to comply 
with the terms of the cost-share agreement as the result of conditions 
beyond their control;
    (2) Termination of the cost-share agreement would, as determined by 
the State Conservationist, be in the public interest; or
    (3) A participant fails to correct a violation of a cost-share 
agreement within the period provided by NRCS in accordance with Sec.  
636.13.
    (b) If NRCS terminates a cost-share agreement, the participant will 
forfeit all rights to future payments under the agreement, shall pay 
liquidated damages, in an amount determined by the State 
Conservationist in accordance with the terms of the agreement, and 
shall refund all or part of the payments received, plus interest. 
Participants violating WHIP cost-share agreements may be determined 
ineligible for future NRCS-administered conservation program funding.
    (1) NRCS may require a participant to provide only a partial refund 
of the payments received if a previously installed conservation 
practice can function independently, and is not adversely affected by 
the violation or the absence of other conservation practices that would 
have been installed under the cost-share agreement.
    (2) The State Conservationist will have the option to waive all or 
part of the liquidated damages assessed, depending upon the 
circumstances of the case.
    (c) When making termination decisions, the NRCS may reduce the 
amount of money owed by the participant by a proportion that reflects:
    (1) The good faith effort of the participant to comply with the 
cost-share agreement, or
    (2) The existence of hardships beyond the participant's control 
that have prevented compliance. If a participant claims hardship, that 
claim must be documented and cannot have existed when the applicant 
applied for participation in the program.


Sec.  636.13  Violations and remedies.

    (a) If NRCS determines that a participant is in violation of a 
cost-share agreement, NRCS shall give the parties to the cost-share 
agreement notice of the violation and a minimum of 60 days to correct 
the violation and comply with the terms of the cost-share agreement and 
attachments thereto.
    (b) If the participant fails to correct the violation of a cost-
share agreement within the period provided by NRCS under paragraph (a) 
of this section, NRCS may terminate the agreement and require the 
participant to refund all or part of any of the funds issued under that 
cost-share agreement, plus interest, and assess liquidated damages, as 
well as require the participant to forfeit all rights to any future 
payment under the agreement.


Sec.  636.14  Misrepresentation and scheme or device.

    (a) A participant who is determined to have erroneously represented 
any fact affecting a program determination made in accordance with this 
Part shall not be entitled to cost-share agreement payments and must 
refund to NRCS all payments and pay liquidated damages, plus interest 
as determined by NRCS.
    (b) A participant shall refund to NRCS all payments, plus interest 
as determined by NRCS, with respect to all NRCS cost-share agreements 
to which they are a party if they are determined to have knowingly:
    (1) Adopted any scheme or device that tends to defeat the purpose 
of the program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a program determination.
    (c) Other NRCS cost-share agreements, where this person is a 
participant, may be terminated.


Sec.  636.15  Offsets and assignments.

    (a) Except as provided in paragraph (b) of this section, any 
payment or portion thereof to any person or legal entity shall be made 
without regard to questions of title under State law and without regard 
to any claim or lien against the land, or proceeds thereof, in favor of 
the owner or any other creditor except agencies of the U.S. Government. 
The regulations governing offsets and withholdings found at 7 CFR part 
1403 of this title shall be applicable to cost-share agreement 
payments.
    (b) WHIP participants may assign any payments in accordance with 7 
CFR part 1404.


Sec.  636.16  Appeals.

    (a) Any participant may obtain reconsideration and review of 
determinations affecting participation in this program in accordance 
with 7 CFR parts 11 and 614, except as provided in paragraph (b) of 
this section.
    (b) In accordance with the provisions of the Department of 
Agriculture Reorganization Act of 1994, Public Law 103-354 (7 U.S.C. 
6901), the following decisions are not appealable:
    (1) Payment rates, payment limits, and cost-share percentages;
    (2) The designation of approved fish and wildlife priority areas, 
habitats, or practices;
    (3) NRCS program funding decisions;
    (4) Eligible conservation practices; and
    (5) Other matters of general applicability.
    (c) Before a participant may seek judicial review of any action 
taken under this part, the participant must exhaust all administrative 
appeal procedures set forth in paragraph (a) of this section.


Sec.  636.17  Compliance with regulatory measures.

    (a) Participants who carry out conservation practices shall be 
responsible for obtaining the authorities, rights, easements, permits, 
or other approvals necessary for the implementation, operation, and 
maintenance of the conservation practices in keeping with applicable 
laws and regulations.
    (b) Participants shall be responsible for compliance with all laws 
and for all effects or actions resulting from the participant's 
performance under the cost-share agreement.


Sec.  636.18  Technical services provided by qualified personnel not 
affiliated with USDA.

    (a) NRCS may use the services of qualified TSPs in performing its 
responsibilities for technical assistance.

[[Page 2800]]

    (b) Participants may use technical services from qualified 
personnel of other Federal, State, and local agencies, Indian tribes, 
or individuals who are certified as TSPs by NRCS.
    (c) Technical services provided by qualified personnel not 
affiliated with USDA may include, but is not limited to: Conservation 
planning; conservation practice survey, layout, design, installation, 
and certification; and information; education; and training for 
producers.
    (d) NRCS retains approval authority over certification of work done 
by non-NRCS personnel for the purpose of approving WHIP payments.


Sec.  636.19  Access to operating unit.

    As a condition of program participation, any authorized NRCS 
representative shall have the right to enter an agricultural operation 
or tract for the purposes of determining eligibility and for 
ascertaining the accuracy of any representations related to cost-share 
agreements, and performance. Access shall include the right to provide 
technical assistance; determine eligibility; inspect any work 
undertaken under the cost-share agreements, including the WPO and O&M 
agreement; and collect information necessary to evaluate the 
conservation practice performance specified in the cost-share 
agreements. The NRCS representative shall make a reasonable effort to 
contact the participant prior to the exercising of this provision.


Sec.  636.20  Equitable relief.

    (a) If a participant relied upon the advice or action of any 
authorized NRCS representative and did not know, or have reason to 
know, that the advice or action was improper or erroneous, NRCS may 
accept the advice or action as meeting program requirements and grant 
relief because of the good-faith reliance on the part of the 
participant. The financial or technical liability for any action by a 
participant that was taken based on the advice of a NRCS certified non-
USDA TSP is the responsibility of the certified TSP and will not be 
assumed by NRCS when NRCS authorizes payment. Where a participant 
believes that detrimental reliance on the advice or action of a NRCS 
representative resulted in an ineligibility or program violation, the 
participant may request equitable relief under 7 CFR 635.3.
    (b) If, during the term of a WHIP cost-share agreement, a 
participant has been found in violation of a provision of the cost-
share agreement, the O&M agreement, or any document incorporated by 
reference through failure to fully comply with that provision, the 
participant may be eligible for equitable relief under 7 CFR 635.4.


Sec.  636.21  Environmental services credits for conservation 
improvements.

    USDA recognizes that environmental benefits will be achieved by 
implementing conservation practices funded through WHIP, and that 
environmental credits may be gained as a result of implementing 
activities compatible with the purposes of a WHIP cost-share agreement. 
NRCS asserts no direct or indirect interest on any such credits. 
However, NRCS retains the authority to ensure that the requirements for 
WHIP funded improvements are met and maintained consistent with 
Sec. Sec.  636.8 and 636.9. Where activities required under an 
environmental credit agreement may affect land covered under a WHIP 
cost-share agreement, participants are highly encouraged to request a 
compatibility assessment from NRCS prior to entering into such 
agreements.

    Signed in Washington, DC, on January 9, 2009.
Arlen Lancaster,
Vice President, Commodity Credit Corporation and Chief, Natural 
Resources Conservation Service.
[FR Doc. E9-827 Filed 1-15-09; 8:45 am]
BILLING CODE 3410-16-P