Conservation activity costs were adjusted to account for economies of scale on the part of large operations. Without such adjustments, larger farms tended not to enter into CSP contracts because their per acre costs would remain constant as their peracre payments were effectively lowered (as their payment cap was ``hit'' as explained above). Thus without such adjustments, their large size increased their farmlevel costs while at the same time restricted their ability to accrue additional CSP payments beyond the payment cap. This finding shows the importance that farm size will play in an applicants' decision to participate in CSP. It also shows how sensitive actual enrollment and program costs are to the types and sizes of farms expected to enroll in CSP.

The ability to place different weights on ranking factors in a predictive model provides insights into expected changes in program and conservation performance outcomes. Program design is critical in satisfying the statutory requirements of this program. In comparing several alternative policy options, model results showed that the cost based conservation performance point payment levels used in this analysis were not capable of achieving the legislated national $18 average per acre program cost in all options. This is due to the changing landuse compositions and conservation performance outcomes which resulted under each alternative policy option. They also highlight the tradeoffs that exist between alternative policy options with respect to attaining as close an acreage goal as is mandated; program costs; costeffectiveness; and conservation performance. [[Page 37502]]

Comparisons of alternative policy options (see Table 1) indicate that enrolled program acreage is maximized by adopting policy option 4 (PO4). However, PO4 violates the national program per acre cost constraint. All other alternative policy options produced lower program acreage totals as compared with PO1.

Comparisons showed that program costs were lowest in PO2, which also showed good costeffectiveness, but whose program acreage, as compared to PO1 and all other alternative policy options, was the lowest. Total program costs were highest with PO4, which provided strong evidence of luring strong participation and production of conservation performance points from new enhancements, but violated the national program per acre cost constraint.

Costeffectiveness estimates suggest that all alternative policy options and the baseline produce about the same costeffectiveness (about $0.37 to $0.39 per point on a total point basis). PO2 and PO5 produced the most favorable costeffectiveness estimates on a total point basis, but results are different when benchmark conservation performance points are adjusted. Making these adjustments puts PO3 and PO4 in strong contention for policy consideration.

Both PO2 and PO5 satisfied the national program per acre cost constraint. However, both options produced much lower totals of conservation performance points than other policy alternatives. In addition PO5 produced a more equitable distribution of program acreage across landuse types than any other policy option.

These comparisons showed that the total conservation performance points generated would be maximized in PO4 and at the least cost effectiveness rate on an adjusted point basis. However, PO4 violates the $18 average per acre program cost constraint. In its favor, PO4 produces the highest level of conservation performance points emanating from new conservation activities. PO3 attained the next highest conservation performance point total, but PO3 violated the $18 average per acre program cost constraint to a greater extent than did PO4.

The analysis assumes full participation each year that the program is made available. Only Government costs are included in this cost estimate given the wide set of possible initial resource conditions and enhancement practices likely to be adopted. Because of this diversity in initial resource conditions, it was not possible to ascertain whether (or to what extent) CSP payments offset expected costs to adopt enhancement and other conservation stewardship activities by producers or past costs incurred to attain stewardship thresholds. Given this caveat, cumulative program costs for four program signups are estimated to be $3.27 billion in constant 2007 dollars, discounted at 7 percent. At a 3 percent discount rate, this estimation increases to $3.86 billion. These costs assume that the duration of each contract is five years and the program duration is offered for four years (FY 2009 to FY 2012). In the case where program duration is offered for nine years (FY 2009 to FY 2017), cumulative program costs for nine program signups are estimated to be $6.3 billion using constant 2007 dollars discounted at 7 percent. At a 3 percent discount rate, this estimate increases to $8.1 billion.
Table 1Summary of Simulation Results of Program Acreage and Associated Program Costs, by LandUse Type for CSP Policy Options Acres funded in program (in millions of Total program cost (in millions of acres) dollars) Cost per acre Policy option \1\ Cropland Pasture Rangeland Total \2\ Cropland Pasture Rangeland Total N/A................................... No Program \3\.......... 0 0 0 0 $0 $0 $0 $0 17.78................................. PO1.................... 8.3 2.2 1.1 11.6 182.7 18.3 4.5 205.5 15.74................................. PO2.................... 8.6 1.9 0.9 11.3 160.0 14.6 3.8 178.3 19.25................................. PO3.................... 9.0 1.6 0.8 11.5 204.2 13.8 3.3 221.3 18.96................................. PO4.................... 9.0 1.8 0.9 11.8 203.4 15.8 3.7 222.9 16.93................................. PO5.................... 8.0 2.4 1.2 11.5 170.6 19.5 4.9 195.0 \1\ PO1 assumes an equal weight on each ranking factor.
PO2 assumes a 62.5 percent weight on RF1 and a 12.5 percent weight on RF2, RF3, and RF4. PO3 assumes a 62.5 percent weight on RF2 and a 12.5 percent weight on RF1, RF3, and RF4. PO4 assumes a 62.5 percent weight on RF3 and a 12.5 percent weight on RF1, RF2, and RF4. PO5 assumes a 62.5 percent weight on RF4 and a 12.5 percent weight on RF1, RF2, and RF3. \2\ Annual CSP acreage cap is 12.769 million acres with 10 percent allocated to nonindustrial private forestland (NIPF) leaving roughly 11.5 million acres for cropland, pasture, and rangeland acreage.
\3\ No program scenario assumes that CSP is not available to landowners. As discussed in the text, some level of benchmark conservation performance points are assumed to be generated in the absence of CSP. The exact amount is difficult to determine because maintenance of existing conservation measures vary due to several factors, such as fluctuations in personal economic conditions and preferences, advancing age, and changing resource priorities. In addition, the applicant pool in each alternative policy scenario is made up of different farm types and landuse types. These conditions preclude the estimation of a ``generic'' baseline applied to all alternative policy options. As a result, maintenance on existing conservation measures is assumed to generate 90 percent of the benchmark conservation performance points estimated in each scenario. Table 2Summary of Simulation Results of the Conservation Performance Points and Cost Effectiveness Indicators for CSP Policy Options Benchmark (in millions of conservation performance points) Dollars per point Policy Option \1\ Total points Incremental Baseline \2\ Incremental Enhancement plus Total points enhancement No Program \2\............................ Indeterminate............... None N/A N/A N/A N/A PO1...................................... 124.47...................... 13.83 329.8 468.1 $0.51 $0.38 [[Page 37503]]
PO2...................................... 135.36...................... 15.04 251.8 402.2 0.56 0.37 PO3...................................... 106.2....................... 11.8 377.2 495.2 0.50 0.39 PO4...................................... 107.46...................... 11.94 385.6 505.0 0.49 0.38 PO5...................................... 126.99...................... 14.11 309.0 450.0 0.51 0.37 \1\ PO1 assumes an equal weight on each ranking factor.
PO2 assumes a 62.5 percent weight on RF1 and a 12.5 percent weight on RF2, RF3, and RF4. PO3 assumes a 62.5 percent weight on RF2 and a 12.5 percent weight on RF1, RF3, and RF4. PO4 assumes a 62.5 percent weight on RF3 and a 12.5 percent weight on RF1, RF2, and RF4. PO5 assumes a 62.5 percent weight on RF4 and a 12.5 percent weight on RF1, RF2, and RF3. \2\ Baseline (prestatute) assumes that CSP is not offered.
\3\ No program scenario assumes that CSP is not available to landowners. As discussed in the text, some level of benchmark conservation performance points are assumed to be generated in the absence of CSP. The exact amount is difficult to determine because maintenance of existing conservation measures vary due to several factors, such as fluctuations in personal economic conditions and preferences, advancing age, and changing resource priorities. In addition, the applicant pool in each alternative policy scenario is made up of different farm types and landuse types. These conditions preclude the estimation of a ``generic'' baseline applied to all alternative policy options. As a result, maintenance on existing conservation measures is assumed to generate 90 percent of the benchmark conservation performance points estimated in each scenario.

NRCS analysis indicates that policy options PO3 and PO4 demonstrated the highest degree of costeffectiveness and environmental performance improvement. As a result, NRCS is giving strong consideration to policy options PO3 and PO4 for subsequent signup periods.

For the initial signup period, NRCS recommends that the CSP program design place equal weight on the considered program ranking factors until program performance is established. Given that program performance has not been established, NRCS seeks public comment on which option best enables NRCS to meet program objectives. In addition, NRCS is requesting public comment on the appropriate weighting of the five ranking factors to maximize costeffectively environmental benefits while maintaining consistency with the statutory purposes of the program. NRCS will consider these public comments when revising the weighting of these ranking factors prior to the next subsequent ranking period. The CSP rule will be finalized in FY 2010.

Section 2708 of the 2008 Act

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 longterm 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 longterm 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 followup 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 (Conservation Programs Manual440Part 512 and Conservation Programs Manual 440Part 508) (http://directives.sc.egov.usda.gov/). The program requirements applicable to participants that relate to compliance are set forth in these regulations in Sec. 1470.6, ``Eligibility requirements,'' Sec. 1470.21, ``Contract requirements,'' Sec. 1470.22 ``Conservation stewardship plan,'' and Sec. 1470.23, ``Conservation activity operation and maintenance.'' These sections make clear the general program eligibility requirements, participant obligations for implementing a conservation stewardship plan, contract obligations, and requirements for operating and maintaining CSPfunded conservation activities.

Measure program performance. Pursuant to the requirements of the Government Performance and Results Act of 1993 (Pub. L. 10362, Sec. 1116) and guidance provided by OMB Circular A11, NRCS has established performance measures for its
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conservation programs. Programfunded conservation activity is captured through automated fieldlevel business 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 (GM340401 and GM340403 (http:// directives.sc.egov.usda.gov/)).

The conservation actions undertaken by participants are the basis for measuring program performancespecific actions are tracked and reported annually, while the effects of those actions relate to whether the longterm 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. 1470.21, ``Contract requirements,'' Sec. 1470.22 ``Conservation stewardship plan,'' and Sec. 1470.23, ``Conservation activity operation and maintenance.'' These sections make clear participant obligations for implementing, operating, and maintaining conservation stewardship activities, which in aggregate result in the program performance that is reflected in Agency performance reports.

Demonstrating the longterm 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.\3\ 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 fieldlevel business tools to help produce estimates of environmental effects accomplished through Agency programs, such as CSP. In 2006 a Blue Ribbon panel evaluation of CEAP \4\ 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/. Since 2004 and the initial establishment of longterm performance measures by program, NRCS has been estimating and reporting progress toward longterm program goals. Natural resource inventory and assessment, and performance measurement and reporting policies are set forth in Agency guidance (GM290400; GM340401; GM340403) (http://directives.sc.egov.usda.gov/). \3\ The exception to this is the Conservation Reserve Program; since 1987 the NRI has reported acreage enrolled in CRP.
\4\ Soil and Water Conservation Society. 2006. Final Report from the Blue Ribbon Panel Conducting an External Review of the US 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 longterm conservation benefits of conservation programs is an Agency responsibility. Through CEAP, NRCS is in the process of evaluating how these longterm benefits can be achieved through the conservation practices and systems applied by participants under each of its programs. The CSP program requirements applicable to participants that relate to producing longterm conservation benefits are located in Sec. 1470.21, ``Contract requirements,'' Sec. 1470.22 ``Conservation stewardship plan,'' and Sec. 1470.23, ``Conservation activity operation and maintenance.'' These requirements and related program management procedures supporting program implementation are set forth in Agency guidance (Conservation Programs Manual 440Part 512 and Conservation Programs Manual 440Part 508).

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 Act 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 (GM290400 and GM130402) (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.

Discussion of Program

The Food, Conservation, and Energy Act of 2008 (2008 Act) amended the Food Security Act of 1985 (1985 Act) to establish the Conservation Stewardship Program (CSP) and authorize the program in fiscal years 2009 through 2012. The purpose of CSP is to encourage producers to address resource concerns in a comprehensive manner by: (1) Undertaking additional conservation activities; and (2) improving, maintaining, and managing existing conservation activities. The Secretary of the United States Department of Agriculture (USDA) has delegated authority to the Natural Resources Conservation Service (NRCS) to administer CSP.

Through CSP, NRCS will provide financial and technical assistance to eligible producers to conserve and enhance soil, water, air, and related natural resources on their land. Eligible lands include cropland, grassland,
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prairie land, improved pastureland, rangeland, nonindustrial private forest lands, agricultural land under the jurisdiction of an Indian tribe, and other private agricultural land (including cropped woodland, marshes, and agricultural land used for the production of livestock) on which resource concerns related to agricultural production could be addressed. Participation in the program is voluntary.

CSP encourages land stewards to improve their conservation performance by installing and adopting additional activities, and improving, maintaining, and managing existing activities on agricultural land and nonindustrial private forest land. NRCS will make funding for CSP available nationwide on a continuous application basis.

The State Conservationist, in consultation with the State Technical Committee and local work groups, will focus program impacts on natural resources that are of specific concern for a State, or the specific geographic areas within a State. Applications will be evaluated relative to other applications addressing similar priority resource concerns to facilitate a competitive ranking process among applicants who face similar resource challenges.

The 2008 Act requires NRCS to manage CSP to achieve a national average rate of $18 per acre, which includes the costs of all financial and technical assistance, and any other expenses associated with program enrollment and participation. NRCS will use a producer self screening checklist to help potential applicants decide for themselves whether CSP is the right program for them and their operation. The process focuses on basic information about CSP eligibility requirements and contract obligations.

When examining applicant eligibility, CSP bases determinations on how applicants delineate their operation for other USDA programs. Specifically, any potential participant must be the operator in the Farm Service Agency (FSA) farm records management system. This requirement is needed because the FSA record system provides applicant eligibility information for Adjusted Gross Income and highly erodible land and wetland conservation provisions. Potential applicants who are not in the FSA farm records management system, or whose records are not current, must establish or update their records prior to making a CSP application. The 2008 Act also requires that the agricultural operation must include all agricultural land under the effective control of the applicant for the term of the proposed contract that is operated substantially separate from other operations.

The 2008 Act directed the development of the conservation measurement tool (CMT) to estimate the level of environmental benefit to be achieved by a producer in implementing conservation activities. The term ``environmental benefit'' used in the context of the CMT is misleading. The CMT considers the relative physical effects of existing and proposed conservation activities to estimate improvements in conservation performance. It does not measure true environmental benefits, e.g., tons of carbon sequestered, or tons of soil saved.

The CMT combines functions of existing NRCS tools for soil and water, grazing lands, and wildlife habitat; considers the physical effects of conservation activities, such as establishing permanent vegetative cover, across natural resource concerns and energy; and integrates and supports the processes of inventorying resources, determining eligibility, and ranking applications.

NRCS will assist applicants with completing the inventory of resource conditions in the CMT. The inventory will enable the CMT to calculate a conservation performance score that will assist in ranking applications within Stateidentified geographic area ranking pools. For approved applicants, NRCS will request records of the applicants' conservation activity and production system information and conduct on site field verification to substantiate, prior to contract approval, that the resource inventory information provided for the CMT was accurate.

CSP provides participants with two possible types of payments: (1) Annual payment for installing and adopting additional activities, and improving, maintaining, and managing existing activities. Compensation for onfarm research and demonstration activities, or pilot testing will be made through the annual payment. (2) Supplemental payment for the adoption of resourceconserving crop rotations.

Setting the annual payment rates will be a significant challenge for NRCS. In addition to managing the program within the national average rate of $18 per acre, the 2008 Act also provides an acreage enrollment limit of 12,769,000 acres for each fiscal year. To address these constraints, NRCS intends to use the first ranking period as a payment discovery period to arrive at a uniform payment rate per conservation performance point by eligible land use type. NRCS requests public comment on ways to address program acreage and payment constraints, refine their payment approach, and make annual payments more consistent and predictable.

Additionally NRCS seeks public comment on the proper distribution of CSP annual payment between payment for additional activities and payment for existing activities.

Section 1470.26 of this interim final rule provides that NRCS will permit contract renewals to foster participant commitment to increased conservation performance. NRCS seeks public comment on the contract renewal criteria in the interim final rule.

NRCS can broaden CSP's impact by offering participants the opportunity to install innovative conservation activities that appeal to all levels of land stewards, and increase conservation performance across all land uses, operation sizes and types, and production systems, including specialty crops and organic production. NRCS specifically requests through the comment process information on innovative enhancements NRCS should offer under CSP to improve participant's conservation performance.

A stepbystep explanation of how CSP works from signup to fulfillment of the conservation stewardship contract is as follows: (1) CSP is available nationwide and signup will be continuous with announced ranking period cutoff dates.
(2) A producer selfscreening checklist will be available at local NRCS field offices and on the NRCS Web site. Producers will complete the checklist independently to help them decide if they meet CSP eligibility requirements.
(3) Potential applicants who decide to apply for CSP complete a Contract Program Application Form, NRCSCPA1200, and submit information on their operation. The extent of an applicant's agricultural operation will be based on how the applicant represents their operation for other USDA programs.
(4) Once applicant and land eligibility are determined, the NRCS field office will assist the producer with completing the CMT resource inventory.
(5) CMT will estimate the level of environmental benefit to be achieved by the applicant. The CMT conservation performance scoring will enable NRCS to determine if the stewardship threshold requirement is met, rank applications, and establish payments.
(6) Applicants will be ranked relative to other applicants who face similar resource challenges in Stateestablished ranking pools using conservation performance ranking scores.
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(7) For approved applicants, NRCS will conduct onsite field verification to substantiate that conservation activity and production system information represented by the applicant was accurate. (8) After the conservation system information is verified, NRCS and the applicant proceed to develop the conservation stewardship plan and contract.
(9) Upon approval, the contract will obligate the participant to achieve a higher level of conservation performance by installing additional activities scheduled in their conservation stewardship plan and to maintain the level of existing conservation performance identified at the time of application. For the initial signup, NRCS will consider a participant ``enrolled'' based on the fiscal year the application is submitted, once NRCS approves an applicant's contract. For subsequent ranking cutoff periods, NRCS will consider a participant enrolled in CSP based on the fiscal year the contract is approved.
(10) NRCS will make payments as soon as practical after October 1 of each fiscal year for activities carried out in the previous fiscal year. A participant's annual payment is determined using the conservation performance estimated by the CMT, and computed by landuse type for enrolled eligible land. A supplemental payment is also available to a participant receiving annual payments who also agrees to adopt a resourceconserving crop rotation.

Summary of Provisions

The regulation is organized into three subparts: Subpart AGeneral Provisions; Subpart BContracts; and Subpart CGeneral
Administration. Below is a summary of each section.
Subpart AGeneral Provisions

Section 1470.1 Applicability

Section 1470.1, ``Applicability,'' sets forth the purpose, procedures, and requirements of CSP. In paragraph (b), NRCS defines that the program's purpose is to encourage producers to address resource concerns in a comprehensive manner by undertaking additional conservation activities; and improving, maintaining, and managing existing conservation activities.

NRCS included paragraph (c) to specify where CSP assistance is available. CSP is available to eligible persons, legal entities, or Indian tribes in all 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.

Paragraph (d) identifies that NRCS will provide CSP participants financial and technical assistance for the conservation, protection, and improvement of soil, water, and other related natural resources. Section 1470.2 Administration

Section 1470.2, ``Administration,'' describes the roles of NRCS at the National and State levels. NRCS will make CSP available nationwide on a continuous application basis. NRCS will operate the program to achieve a national average rate of $18 per acre, which includes the costs of all financial and technical assistance, and any other expenses associated with program enrollment and participation. As directed by the 2008 Act, NRCS will establish a national target to set aside five percent of CSP acres for socially disadvantaged farmers or ranchers and an additional five percent of CSP acres for beginning farmers or ranchers. State conservationists will obtain advice from State Technical Committees and local working groups on State program technical policies, outreach efforts, and program issues.

Section 1470.3 Definitions

Section 1470.3, ``Definitions,'' sets forth definitions for terms used throughout this regulation. These definitions include: ``agricultural land,'' ``animal waste storage or treatment facility,'' ``applicant,'' ``beginning farmer or rancher,'' ``Chief,'' ``conservation district,'' ``conservation practice,'' ``Designated Conservationist,'' ``enrollment,'' ``field office technical guide,'' ``Indian tribe,'' ``Indian lands,'' ``joint operation,'' ``legal entity,'' ``liquidated damages,'' ``local working group,'' ``National Organic Program,'' ``Natural Resources Conservation Service,'' ``nonindustrial private forest land,'' ``operation and maintenance,'' ``participant,'' ``person,'' ``producer,'' ``Secretary,'' ``socially disadvantaged farmer or rancher,'' ``State Conservationist,'' ``State Technical Committee,'' ``technical assistance,'' and ``Technical Service Provider (TSP).'' Other definitions, such as: ``agricultural operation,'' ``conservation activities,'' ``conservation measurement tool,'' ``conservation stewardship plan,'' ``contract,''
``enhancement,'' ``management measure,'' ``payment,'' ``priority resource concern,'' ``resource concern,'' ``resourceconserving crop rotation,'' and ``stewardship threshold'' are definitions established to implement CSP's authorizing legislation.

A number of these definitions are shared with other conservation programs administered by NRCS. The following definitions are unique or have special relevance to CSP implementation, or have been modified from how the term is defined in other NRCS conservation program rules:

The definition of ``agricultural land'' describes those areas identified by CSP's authorizing legislationworking agricultural land being actively managed for agricultural production purposes upon which CSP will be focused, including cropland, grassland, improved prairieland, and land used for agroforestry. NRCS does not intend to exclude working lands such as cropped woodlands and marshes, but will consider those as cropland.

NRCS includes the definition of ``agricultural operation'' to specify an agricultural operation's parameters. An ``agricultural operation'' is defined as ``all agricultural land and other land as determined by NRCS, whether contiguous or noncontiguous: (1) Which is under the effective control of the applicant for the term of the proposed contract; and (2) which is operated by the applicant with equipment, labor, management, and production or cultivation practices that are substantially separate from other operations.'' The term ``other land'' in this definition includes ineligible land identified in Sec. 1470.6, incidental areas that are not in agricultural production, and developed areas on the farm or ranch such as farm headquarters, ranch sites, barnyards, feedlots, manure storage facilities, machinery storage areas, and material handling facilities.

The term ``applicant'' is defined as ``a person, legal entity, joint operation, or Indian tribe that has an interest in an agricultural operation, as defined in 7 CFR part 1400, who has requested in writing to participate in CSP.'' All applicants must establish records in the Farm Service Agency (FSA) farm records management system prior to submitting an application.

The term, ``beginning farmer and rancher,'' is the same as the definition used by other NRCS conservation programs, which adopt the definition established by 7 U.S.C. 1991(a), except that the definition incorporates the term nonindustrial private forest land to ensure policies pertaining to beginning farmers and ranchers include those producers having nonindustrial private forest land.

A definition for ``conservation activity'' is included to describe in a more comprehensive fashion the conservation systems, practices, or management measures needed to
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address a resource concern or improve conservation performance.

A definition for ``conservation measurement tool'' refers to the procedures that NRCS will use to estimate the level of environmental benefit to be achieved by a producer using the proxy of conservation performance improvement.

The term ``conservation stewardship plan'' is defined as a record of the participant's decisions that describes the schedule of conservation activities to be implemented, managed, or improved by the participant. The definition clarifies that associated supporting information inventories the agricultural operation's resource concerns and existing conservation activities, establishes benchmark data, and identifies the participant's conservation objectives and will be maintained with the plan.

The term ``enhancement'' means a type of activity installed and adopted to treat natural resources and improve conservation performance. Enhancements are installed at a level of management intensity that exceeds the sustainable level for a given resource concern, and those directly related to a practice standard are applied in a manner that exceeds the minimum treatment requirements of the standard. An example of an enhancement includes a grasstype cover crop used to scavenge nitrogen left in the soil after the harvest of a previous crop.

The term ``enrollment'' means for the initial signup for FY 2009, NRCS will consider a participant ``enrolled'' in CSP based on the fiscal year the application is submitted, once NRCS approves the participant's contract. For subsequent ranking cutoff periods, NRCS will consider a participant enrolled in CSP based on the fiscal year the contract is approved. The acres enrolled for each fiscal year count against each year's annual 12.8 million acre enrollment limit.

The terms, ``Indian Tribe'' and ``Indian lands'' reflect the terms used by other NRCS conservation programs. An Indian Tribe is any ``Indian Tribe, band, nation, pueblo, or other organized group or community, including any Alaska Native village or regional corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.), which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.'' NRCS adopts terminology ``Indian lands'' in an effort to be more inclusive of all lands held in trust by the United States for individual Indians or Indian Tribes, all land, the title to which is held by an individual Indian, Indian family, or Indian Tribe.

The term, ``management measure,'' is defined as one or more specific actions that is not a conservation practice, but has the effect of alleviating problems or the treatment of natural resources.

The term ``National Organic Program'' has been inserted to refer to a program administered by the Agricultural Marketing Service. The rule contains provisions related to conservation activities associated with organic production. The National Organic Program is a national program which regulates the standards for any farm, wild crop harvesting, or handling operation that wants to sell an agricultural product as organically grown.

The term, ``nonindustrial private forest land'' is based on the definition in the 2008 Act. Nonindustrial private forest land is rural land that has existing tree cover or is suitable for growing trees; and is owned by an individual, group, association, corporation, Indian Tribe, or other private legal entity that has definitive decision making authority over the land.

NRCS includes the definition of ``operation and maintenance'' to identify that participants are expected to maintain existing conservation activities and additional conservation activities installed and adopted over the contract period.

The definition of ``participant'' reflects the 2008 Act's definition of ``person'' and ``legal entity'' and the definition used by other NRCS conservation programs. A participant is a ``person, legal entity, joint operation, or Indian Tribe that is receiving payment or is responsible for implementing the terms and conditions of a CSP contract.''

NRCS defines the term ``payment'' to mean the financial assistance provided under the terms of the CSP contract.

NRCS includes the term, ``person'' to reflect the requirements of 7 CFR part 1400, the regulation which details CCC's payment limitation policies.

NRCS includes the term ``priority resource concern,'' which reflects the definition in the 2008 Act. A priority resource concern is a resource concern that is identified by the State Conservationist, in consultation with the State Technical Committee and local work groups, as a priority for a State, or the specific geographic areas within a State.

The term ``producer'' means a person or legal entity or joint operation who has an interest in the agricultural operation, according to part 1400 of this chapter, or is engaged in agricultural production or forest management.

The term ``resource concern,'' reflects the 2008 Act's ``resource concern'' definition. A resource concern ``means a specific natural resource problem that is likely to be addressed successfully through the implementation of conservation activities by producers.''

The term, ``resourceconserving crop rotation'' means a crop rotation that includes at least one resourceconserving crop that reduces soil erosion, improves soil fertility and tilth, interrupts pest cycles, retains soil moisture, and reduces the need for irrigation in applicable areas.

NRCS includes the term ``socially disadvantaged farmer or rancher'' that is based on the definition used by other NRCS conservation programs.

The term ``stewardship threshold'' means the level of natural resource conservation and environmental management required, as determined by NRCS using conservation measurement tools, to conserve and improve the quality and condition of a natural resource. The stewardship threshold is used to determine if an applicant meets the minimum treatment requirements to be eligible for CSP. NRCS guided its efforts to set stewardship thresholds by sustainable levels of natural resource treatment. For example, for the soil erosion resource concern, this criterion is met when the erosion rate from wind and water does not exceed the Soil Loss Tolerance (T).

NRCS includes the definition, ``technical service provider (TSP),'' to clarify that TSPs are used to provide technical services to program participants, in lieu of or on behalf of NRCS. A TSP is ``an individual, privatesector entity, or public agency certified by NRCS to provide technical services to program participants, in lieu of or on behalf of NRCS.'' The regulations governing TSPs are found in 7 CFR part 652.

Section 1470.4 Allocation and Management

Section 1470.4, ``Allocation and management,'' addresses national allocations and how the proportion of eligible land will be used as the primary means to distribute CSP acres and associated funds among States. The Chief will also consider the extent and magnitude of conservation needs associated with agricultural production in each State, the degree to which CSP can help producers address these needs; and other considerations determined by the Chief to achieve equitable geographic distribution of program participation. NRCS is in the process of
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developing State allocations according to the provisions in this section. After allocations are finalized NRCS will make information related to the allocation decisions available to the public. NRCS also seeks public comment on the use of these factors to distribute allocations among States.

Section 1470.5 Outreach Activities

Section 1470.5, ``Outreach activities,'' describes how NRCS will establish special program outreach activities at the National, State, and local levels. NRCS will undertake special outreach effort to the historically underserved producers which includes socially disadvantaged, beginning and limited resource farmers or ranchers. In addition, NRCS will continue to ensure that producers are not disadvantaged based on the size or type of their operation or production system. Special outreach efforts will be made to smallscale farms, specialty crop operations, and organic farms.

Section 1470.6 Eligibility Requirements

Section 1470.6, ``Eligibility requirements,'' sets forth the criteria for determining applicant and land eligibility.

Paragraph (a) details applicant eligibility criteria. To be eligible, at the time of application, an applicant must: Be the operator in the FSA farm records management system for the agricultural operation; have documented control of the land for the term of the proposed contract; and be in compliance with highly erodible land and wetland conservation provisions, and the Adjusted Gross Income provisions. It is the applicant's responsibility to supply needed information to assist NRCS in determining program eligibility and in ranking the application. NRCS may request from the applicant: conservation and production system records, tax documentation, evidence documenting control of the land, and information to verify an applicant's status as a

FOR FURTHER INFORMATION CONTACT

Gregory Johnson, Director, Financial Assistance Programs Division, U.S. Department of Agriculture, Natural Resources Conservation Service, 1400 Independence Avenue, SW., Room 5237S, Washington, DC 20250; Phone: (202) 7201845; Fax: (202) 720 4265; or email CSP2008@wdc.usda.gov.