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Environmental Quality Incentives Program; Conservation Innovation Grants
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: January 11, 2005 (Volume 70, Number 7)]
[Rules and Regulations]
[Page 1789-1792]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11ja05-1]
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Rules and Regulations
Federal Register
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1466
Environmental Quality Incentives Program; Conservation Innovation Grants
AGENCY: Natural Resources Conservation Service, Commodity Credit
Corporation, U.S. Department of Agriculture (USDA).
ACTION: Final rule.
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SUMMARY: In this document, the Natural Resources Conservation Service
(NRCS) affirms, with changes, the provisions of an interim final rule
that added provisions regarding Conservation Innovation Grants (CIG) to
the Environmental Quality Incentives Program (EQIP). The regulations
implement statutory provisions designed to provide competitive grants
to eligible Indian Tribes; State or local units of government; non-
governmental organizations; and individuals. The purpose of CIG is to
stimulate the development and adoption of innovative conservation
approaches and technologies while leveraging the Federal investment in
environmental enhancement and protection, in conjunction with
agricultural production.
DATES: Effective date: January 11, 2005.
FOR FURTHER INFORMATION CONTACT: Kari Cohen, Natural Resources
Conservation Service, 14th and Independence Avenue SW., Room 5239-S,
Washington, DC 20250. Phone: (202) 720-2335; facsimile: (202) 720-4265.
Send e-mail to: kari.cohen@usda.gov. Persons with disabilities who
require alternative means for communication (Braille, large print,
audio tape, etc.) should contact the USDA TARGET Center at (202) 720-2600.
SUPPLEMENTARY INFORMATION: In this document, the Natural Resources
Conservation Service (NRCS) affirms, with changes, the provisions of an
interim final rule that was published in the Federal Register on March
29, 2004 (69 FR 16392). The interim final rule added provisions
regarding Conservation Innovation Grants (CIG) to the regulations for
the administration of the Environmental Quality Incentives Program
(EQIP). The added regulations implement statutory provisions designed
to provide competitive grants to eligible Indian Tribes; State or local
units of government; non-governmental organizations; and individuals to
stimulate the development and adoption of innovative conservation
approaches and technologies while leveraging the Federal investment in
environmental enhancement and protection, in conjunction with
agricultural production.
The interim final rule provided a 60-day public comment period that
closed on May 28, 2004. NRCS received seven submissions that raised
issues discussed below. Based on the rationale set forth in the interim
final rule and this document, NRCS adopts as a final rule the
provisions of the interim final rule that appeared in the Federal
Register on March 29, 2004, except the NRCS makes a few modifications
to those provisions and describes those changes below. You may access
this final rule via the Internet through the NRCS home page at
http://www.nrcs.usda.gov. 
Select ``Farm Bill.''
CIG Program
Of the nearly 1.4 billion acres of private land in the United
States, 931 million acres, or roughly 70 percent, are in agricultural
use. The activities on these lands have a direct effect on soil, water,
air, plant, and animal resources, as well as the social, cultural, and
economic condition of U.S. communities, towns, and counties. Regional
and local differences in farm structure, farm practices, and farm
products make delivering innovative agricultural conservation technical
assistance a challenge. National agricultural research and development
may not always have the capacity to develop, test, and transfer new or
innovative conservation technologies and approaches rapidly or
effectively to account for regional variances in the agricultural
industry. Consequently, there is a need to develop, test, implement,
and transfer innovative farm and ranch conservation technologies and
approaches for adoption in the largest applicable market.
To address this need, Section 1240H of the Food Security Act of
1985, 16 U.S.C. 3839aa-8, was added by section 2301 of the Farm
Security and Rural Investment Act of 2002 (Pub. L. 107-171), and
established CIG as part of EQIP. Through CIG, the Secretary of
Agriculture may pay the costs of competitive grants to carry out
projects that stimulate innovative approaches to leveraging the Federal
investment in environmental enhancement and protection in conjunction
with agricultural production.
The Secretary of Agriculture delegated the authority for the
administration of EQIP, including CIG, to the Chief of NRCS, who is a
vice president of the Commodity Credit Corporation (CCC). EQIP is
administered using the funds, facilities, and authorities of the CCC.
CIG is administered using a two-tiered approach. Grants may be
awarded through both National and State-level competitions. Funding
availability for the CIG National component will be announced in the
Federal Register through a Request for Proposals (RFP). In addition,
the Chief may provide each NRCS State Conservationist with the
discretion to implement a separate State-level component of CIG.
The Chief will determine the funding level for the National
component on an annual basis. CIG funds for the National component will
be designated from the National EQIP allocation. Funding availability
for State-level competitions will be announced through public notices,
separately from the National program. Applications will be solicited
from eligible governmental and non-governmental organizations and
individuals for single or multi-year projects.
Comments
Project Eligibility
The provisions of Sec. 1466.27(b)(4) state that ``Technologies and
approaches that are eligible for funding in the project's geographic
area through EQIP are not eligible for CIG funding.'' Commenters expressed
concern that this sentence would be broadly interpreted to exclude
[[Page 1790]]
innovation associated with established technologies and approaches.
This was not intended. Therefore, NRCS changed paragraph (b)(4) to
clarify that the quoted provisions do not prohibit funding of
technologies and approaches that are similar to established
technologies and approaches as long as the project includes significant
innovative differences.
With respect to project eligibility, the interim final rule stated
that all agricultural producers participating in a CIG project must
meet the basic eligibility requirements for EQIP. This was not intended
to impose the eligibility requirements on individuals or entities not
receiving direct or indirect payments, such as an organization locating
an innovative technology on a producer's property without providing a
payment. Accordingly, we clarified the regulations to state that all
agricultural producers receiving a direct or indirect payment through
participation in a CIG project must meet the eligibility requirements.
One commenter urged NRCS to ensure that CIG-funded projects would
include a broad spectrum of agricultural operations, large and small,
crop and livestock, etc. One commenter expressed concern that the
language in the interim final rule favored grant applications from
individuals over applications from non-profit organizations and units
of government. NRCS made no changes based on these comments. Consistent
with the statutory authority at 16 U.S.C. 3844, the CIG rule contains
special provisions for limited resource farmers or ranchers that would
constitute a small portion of CIG grant awards. Otherwise, the National
and State-level competitions under CIG are designed to minimize any
bias in favor of a class of applicants.
One commenter urged NRCS to set aside CIG funds for Latina women
farmers and ranchers. NRCS made no changes based on this comment. NRCS
has no authority to make awards based on gender or race.
Identification of Natural Resource Concerns
Under the provisions of Sec. 1466.27(d), CIG applications must
address natural resource conservation concerns that are identified by
the Chief of NRCS and published in the RFP. Also, under the provisions
of Sec. 1466.27(d), the natural resource concerns may change each
year. The RFP for FY 2004 identified five resource concerns with more
specific subtopics. One commenter asserted that this listing of natural
resource concerns is too broad, and that only two or three natural
resource priorities should be identified each year. Additionally, a
number of commenters made suggestions as to what natural resource
concerns should be identified in the RFP. NRCS made no changes based on
these comments. As explained in the preamble to the interim final rule,
NRCS has designed a protocol for soliciting input on which natural
resource concerns should be identified in an RFP. NRCS will consider
the suggestions of commenters when compiling the natural resource
concerns to be listed in the next RFP. The number and scope of the
natural resource concerns will be based on the funding available to
meet the needs identified by interested stakeholders.
Funding
For CIG, NRCS established two types of grants for funding projects,
one awarded at the National level and one awarded at the State level.
For FY 2004, the Chief established a maximum funding limit of $1
million per project for the National competition. Also, under Sec.
1466.27(h)(3), the maximum funding limit per project awarded at the
State-level competition may not exceed $75,000.
The provisions of Sec. 1466.27(c) state that the Chief of NRCS (or
his or her designee) will determine the funding level for the National
component of CIG on an annual basis from the total funding available
for EQIP. One commenter recommended that these provisions be changed to
provide that National CIG funding be a set percentage of EQIP, such
as10 percent. One commenter recommended that NRCS State
Conservationists be allowed to designate up to 10 percent of their EQIP
allocation for the State component of CIG. Another commenter
recommended that the funding for CIG be a minimum of $50 million
annually. NRCS made no changes based on these comments. As stated in
the preamble to the interim final rule, provisions regarding the
funding level for CIG provide the decision maker ``with maximum
flexibility to adjust to changing levels of available funds and program
conditions'' (69 FR 16394).
With respect to the National competition, one commenter asserted
that the $1 million project cap was adequate and another commenter
asserted the $1 million project cap would be insufficient for large
trading programs. NRCS made no changes based on these comments. Funding
limits for the National competition will be announced in each RFP based
on overall EQIP funding.
With respect to the State-level competition, one commenter
recommended that NRCS raise the cap from $75,000 to $450,000. NRCS made
no changes based on this comment. The State-level competition was
designed to target CIG funds to individual producers and smaller
organizations that would have difficulty generating the 50 percent
required match for large awards. NRCS also believes that there should
be some distinction between the National and State competitions.
Proposals larger in scope and funding should be submitted to the
National competition. Smaller proposals should be submitted at the
State level.
One commenter suggested that instead of utilizing all available CIG
funds on natural resource concerns identified in the RFP, NRCS should
reserve a portion of the funds for exceptional applications that
address natural resource concerns not identified in the RFP. NRCS made
no changes based on this comment. The adoption of this suggestion would
place undue emphasis on funding approaches or technologies that would
not address the most critical natural resource concerns.
Ranking
The interim final rule provides for applications to be evaluated
and ranked by a peer review panel. The interim final rule then provides
for the proposal rankings to be forwarded to the Grant Review Board to
make funding recommendations to the Chief. The interim final rule
further provides that the peer review panel will consist of Federal and
non-Federal technical advisers who posses specified qualifications and
that the Grant Review Board will consist of five NRCS officials. One
commenter recommended that NRCS expand the Grant Review Board to
include at least two members outside of government agencies. NRCS made
no changes based on this comment. NRCS has been delegated authority to
administer the CIG program and believes that the members of the Grant
Review Board have sufficient expertise to make funding recommendations
to the Chief.
One respondent recommended that NRCS provide greater weight to
projects that address multiple natural resource concerns. NRCS made no
changes based on this comment. Grants for CIG should be awarded based
on the quality of the proposal and not on the number of natural
resources concerns addressed.
Evaluating Performance
One commenter asserted that for grants exceeding $250,000, the
grantee should be required to establish a
[[Page 1791]]
monitoring plan with up to 5% or the total grant amount reserved for
evaluating performance. The commenter also asserted that for grants of
lower amounts, NRCS should provide simple on-line tools for evaluating
performance. We made no changes based on these comments. The CIG
program already has provisions for evaluating performance. As stated in
the ``Notice of request for proposals,'' an application for CIG must
``Describe the methodology or procedures to be followed to evaluate the
project, determine the technical feasibility, and quantify the results
of the project for the final report (69 FR 16403).'' The notice further
states that ``Grant recipients will be required to provide a quarterly
report of progress and a final project report to NRCS (69 FR 16403).''
These provisions do not require the grantee to set aside a specific
percentage of the grant award, but do require the grantee to allocate
sufficient resources to evaluate project results.
Effective Date
This document makes non-substantive changes and makes changes that
lessen restrictions. Accordingly, this document is made effective on
publication in the Federal Register.
Executive Order 12866
The CIG program was authorized as part of EQIP, with an unspecified
annual funding level from FY2003 through FY2007. This rule has been
reviewed under USDA procedures and Executive Order 12866 on Regulatory
Planning and Review. The Office of Management and Budget (OMB) has
determined that this interim final rule is not a significant rulemaking
action. Therefore, completion of a benefit-cost assessment of potential
impacts is not necessary. An economic evaluation was completed,
however, because of the aid that such an evaluation provides to the
rulemaking process. A copy of this document is available upon request
from: Kari Cohen, Natural Resources Conservation Service, 14th and
Independence Avenue SW., Room 5239-S, Washington, DC 20250. Phone:
(202) 720-2335; facsimile: (202) 720-4265.
Regulatory Flexibility Act
The Regulatory Flexibility Act is not applicable to this rule
because NRCS is not required by 5 U.S.C. 533, or any other provision of
law, to publish a notice of proposed rulemaking with respect to the
subject matter of this rule.
Environmental Evaluation
Promulgation of this rule does not authorize any activities that
will affect the human environment. This rule establishes the policies
and procedures that will be used to award Conservation Innovation
Grants. The grants awarded under this rule are for innovative projects;
therefore, NRCS has a limited ability to predict the types of actions
that may be carried out during a CIG project. Any attempt to analyze
the effects of proposed actions would be speculative. Accordingly,
neither an Environmental Assessment (EA) nor an Environmental Impact
Statement (EIS) has been prepared at this time. Instead, the
environmental effects of each CIG proposal will be evaluated on a case-
by-case. As a part of the evaluation, CIG applicants are required to
submit an environmental profile as part of their application. These
profiles will be used to determine whether an EA or EIS is needed for
any given project, prior to the awarding of grant funds.
Paperwork Reduction Act
Section 2702(b)(1)(A) of the 2002 Act provides that the
promulgation of rules and the administration of title II of the Act
shall be made without regard to chapter 35 of title 44 of the United
States Code, the Paperwork Reduction Act. Accordingly, these rules and
the forms, and other information collection activities needed to
administer the program authorized by this rule, are not subject to
provisions of the Paperwork Reduction Act, including review by the
Office of Management and Budget.
Government Paperwork Elimination Act
NRCS is committed to compliance with the Government Paperwork
Elimination Act (GPEA) and with the Freedom to E-File Act, which
require Government agencies in general, and NRCS in particular, to
provide the public the option of submitting information or transacting
business electronically to the maximum extent possible.
Executive Order 12998
This rule has been reviewed in accordance with Executive Order
12988, Civil Justice Reform. The provisions of this rule are not
retroactive. The provisions of this rule preempt State and local laws
to the extent that such laws are inconsistent with this rule. Before an
action may be brought in a Federal court of competent jurisdiction, the
administrative appeal rights afforded persons at 7 CFR parts 614, 780,
and 11 must be exhausted.
Federal Crop Insurance Reform and Department of Agriculture
Reorganization Act of 1994
Pursuant to Section 304 of the Federal Crop Insurance Reform and
Department of Agriculture Reorganization Act of 1994 (Pub. L. 104-354),
NRCS did not classify this rule as major and, therefore, NRCS did not
conduct a risk analysis. A risk analysis was completed on the EQIP
program, establishing that EQIP will produce benefits and reduce risks
to human health, human safety, and the environment in a cost-effective
manner. A copy of the EQIP risk analysis is available on request from
Harry Slawter, Environmental Improvement Programs Branch Chief, Natural
Resources Conservation Service, 14th and Independence Avenue, SW., Room
5239-S, Washington, DC 20250, and electronically at
http://www.nrcs.usda.gov/programs/Env_Assess/EQIP/EQIP_RA_121002.pdf.
Unfunded Mandates Reform Act of 1995
NRCS assessed the effects of this rulemaking action on local,
State, and Tribal governments, and the public. This action does not
compel the expenditure of $100 million or more by any local, State, or
tribal governments, or anyone in the private sector; therefore, a
statement under section 202 of the Unfunded Mandates Reform Act of 1995
is not required.
List of Subjects in 7 CFR Part 1466
Conservation, Grant Review Board, Grants, Innovation, Natural
Resources, Peer Review Panel.
? For the reasons stated in the preamble, the Commodity Credit
Corporation adopts as final the interim rule published at 69 FR 16392
on March 29, 2004, with the following changes:
PART 1466--ENVIRONMENTAL QUALITY INCENTIVES PROGRAM
? 1. The authority citation for part 1466 continues to read as follows:
Authority: 15 U.S.C. 714b and 714c; 16 U.S.C. 3839aa-3839aa-8.
? 2. In Sec. 1466.27, paragraphs (b)(4) and (e)(2) are revised to read
as follows:
Sec. 1466.27 Conservation Innovation Grants (CIG).
* * * * *
(b) * * *
(4) Program focus. Applications for CIG should demonstrate the use
of innovative approaches and technologies to leverage Federal
investment in environmental enhancement and protection, in conjunction
with agricultural production. CIG will fund
[[Page 1792]]
projects that promote innovative on-the-ground conservation, including
pilot projects and field demonstrations of promising approaches or
technologies. CIG projects are expected to lead to the transfer of
conservation technologies, management systems, and innovative
approaches (such as market-based systems) into NRCS technical manuals
and guides, or to the private sector. Technologies and approaches
eligible for funding in a project's geographic area through EQIP are
not eligible for CIG funding except where the use of those technologies
and approaches demonstrates clear innovation. The burden falls on the
applicant to sufficiently describe the innovative features of the
proposed technology or approach.
* * * * *
(e) * * *
(2) Project eligibility. To be eligible, projects must involve
landowners who meet the eligibility requirements of Sec. 1466.8(b)(1)
through (3) of this part. Further, all agricultural producers receiving
a direct or indirect payment through participation in a CIG project
must meet those eligibility requirements.
* * * * *
Signed in Washington, DC, on January 3, 2005.
Bruce I. Knight,
Vice President, Commodity Credit Corporation, Chief, Natural Resources
Conservation Service.
[FR Doc. 05-511 Filed 1-10-05; 8:45 am]
BILLING CODE 3410-16-P