Highly Erodible Land Conservation and Wetland Conservation (7 CFR 12.1-12.33)

373 Office of the Secretary, USDA § 12.1 denials, and the amount of fees associ ated with the request or appeal. § 11.33 Appeals. Any person whose initial FOIA re quest is denied in whole or in part may appeal that denial to the Director, Na tional Appeals Division, U.S. Depart ment of Agriculture, 3101 Park Center Drive, Suite 1113, Alexandria, Virginia 22302. The Director will make the final determination on the appeal. APPENDIX A TO SUBPART C OF PART 11— LIST OF ADDRESSES This list provides the titles and mailing addresses of officials who have custody of NAD records. This list also identifies the normal working hours, Monday through Fri day, excluding holidays, during which public inspection and copying of certain kinds of records is permitted. Director, National Appeals Division, U.S. De partment of Agriculture, 3101 Park Center Drive, Suite 1113, Alexandria, Virginia 22302, Hours: 8 a.m.–5 p.m. Regional Assistant Director, Eastern Region, National Appeals Division, U.S. Depart ment of Agriculture, 3500 DePauw Boule vard, Suite 2052, Indianapolis, Indiana 46268, Hours: 8 a.m.–5 p.m. Regional Assistant Director, Southern Re gion, National Appeals Division, U.S. De partment of Agriculture, 7777 Walnut Grove Road, LLB–1, Memphis, Tennessee 38120, Hours: 8 a.m.–5 p.m. Regional Assistant Director, Western Re gion, National Appeals Division, U.S. De partment of Agriculture, 755 Parfet Street, Suite 494, Lakewood, Colorado 80215–5506, Hours: 8 a.m.–5 p.m. PART 12—HIGHLY ERODIBLE LAND CONSERVATION AND WETLAND CONSERVATION Subpart A—General Provisions Sec. 12.1 General. 12.2 Definitions. 12.3 Applicability. 12.4 Determination of ineligibility. 12.5 Exemption. 12.6 Administration. 12.7 Certification of compliance. 12.8 Affiliated persons. 12.9 Landlords and tenants. 12.10 Scheme or device. 12.11 Action based upon advice or action of USDA. 12.12 Appeals. 12.13 Special Federal crop insurance pre mium subsidy provisions. Subpart B—Highly Erodible Land Conservation 12.20 NRCS responsibilities regarding high ly erodible land. 12.21 Identification of highly erodible lands criteria. 12.22 Highly erodible field determination criteria. 12.23 Conservation plans and conservation systems. Subpart C—Wetland Conservation 12.30 NRCS responsibilities regarding wet lands. 12.31 On-site wetland identification criteria. 12.32 Converted wetland identification cri teria. 12.33 Use of wetland and converted wetland. AUTHORITY: 16 U.S.C. 3801, 3811–12, 3812a, 3813–3814, and 3821–3824. SOURCE: 61 FR 47025, Sept. 6, 1996, unless otherwise noted. Subpart A—General Provisions § 12.1 General. (a) Scope. This part sets forth the terms and conditions under which a person who produces an agricultural commodity on highly erodible land or designates such land for conservation use, plants an agricultural commodity on a converted wetland, or converts a wetland shall be determined to be in eligible for certain benefits provided by the United States Department of Agri culture (USDA) and agencies and in strumentalities of USDA. (b) Purpose. The purpose of the provi sions of this part are to remove certain incentives for persons to produce agri cultural commodities on highly erod ible land or converted wetland and to thereby— (1) Reduce soil loss due to wind and water erosion; (2) Protect the Nation’s long-term ca pability to produce food and fiber; (3) Reduce sedimentation and im prove water quality; and (4) Assist in preserving the values, acreage, and functions of the Nation’s wetlands. [61 FR 47025, Sept. 6, 1996, as amended at 76 FR 82077, Dec. 30, 2011] VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00383 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 374 7 CFR Subtitle A (1–1–17 Edition) § 12.2 § 12.2 Definitions. (a) General. The following definitions shall be applicable for the purposes of this part: Agricultural commodity means any crop planted and produced by annual tilling of the soil, including tilling by one-trip planters, or sugarcane. Approved insurance provider means a private insurance company that has been approved and reinsured by FCIC to provide insurance coverage to per sons participating in programs author ized by the Federal Crop Insurance Act, as amended (7 U.S.C. 1501–1524). CCC means the Commodity Credit Corporation, a wholly-owned govern ment corporation within USDA orga nized under the provisions of 15 U.S.C. 714 et seq. Conservation District (CD) means a subdivision of a State or local govern ment organized pursuant to the appli cable law to develop and implement soil and water conservation activities or programs. Conservation plan means the docu ment that— (1) Applies to highly erodible crop land; (2) Describes the conservation system applicable to the highly erodible crop land and describes the decisions of the person with respect to location, land use, tillage systems, and conservation treatment measures and schedules; and (3) Is approved by the local soil con servation district in consultation with the local committees established under section 8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)(5)) and the Natural Resources Conservation Service (NRCS) for pur poses of compliance with this part. Conservation system means a combina tion of one or more conservation meas ures or management practices that are— (1) Based on local resource condi tions, available conservation tech nology, and the standards and guide lines contained in the NRCS field office technical guides (available from NRCS State offices); and (2) Designed for purposes of this part to achieve, in a cost-effective and tech nically practicable manner, a substan tial reduction in soil erosion or a sub stantial improvement in soil condi tions on a field or group of fields con taining highly erodible cropland when compared to the level of erosion or soil conditions that existed before the ap plication of the conservation measures and management practices. Conservation use or set aside means cropland that is designated as con servation-use acreage, set aside, or other similar designation for the pur pose of fulfilling provisions under any acreage-limitation or land-diversion program administered by the Secretary of Agriculture requiring that the pro ducer devote a specified acreage to con servation or other non-crop production uses. Creation of a wetland means the devel opment of the hydrologic, geochemical, and biological components necessary to support and maintain a wetland where a wetland did not previously exist. Any wetland established on a non-hydric soil will be considered a created wetland. Department means the United States Department of Agriculture (USDA). Enhancement of a wetland means the alteration of an existing wetland to in crease its specific functions and values. Enhancement actions include new ca pabilities, management options, struc tures, or other actions to influence one or several functions and values. Erodibility index means a numerical value that expresses the potential erodibility of a soil in relation to its soil loss tolerance value without con sideration of applied conservation practices or management. FCIC means the Federal Crop Insur ance Corporation, a wholly owned cor poration within USDA whose programs are administered by RMA. FSA means the Farm Service Agency, an agency of USDA which is generally responsible for administering com modity production adjustment and cer tain conservation programs of USDA. Field means a part of a farm that is separated from the balance of the farm by permanent boundaries such as fences, roads, permanent waterways, or other similar features. At the option of the owner or operator of the farm, croplines may also be used to delineate a field if farming practices make it probable that the croplines are not sub ject to change. Any highly erodible VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00384 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 375 Office of the Secretary, USDA § 12.2 land on which an agricultural com modity is produced after December 23, 1985, and is not exempt under § 12.5(a), shall be considered part of the field in which the land was included on Decem ber 23, 1985, unless, to carry out this title, the owner and FSA agree to mod ify the boundaries of the field. Highly erodible land means land that has an erodibility index of 8 or more. Hydric soils means soils that, in an undrained condition, are saturated, flooded, or ponded long enough during a growing season to develop an anaer obic condition that supports the growth and regeneration of hydrophytic vegetation. Hydrophytic vegetation means plants growing in water or in a substrate that is at least periodically deficient in oxy gen during a growing season as a result of excessive water content. Landlord means a person who rents or leases farmland to another person. Local FSA office means the county of fice of the Farm Service Agency serv ing the county or a combination of counties in the area in which a person’s land is located for administrative pur poses. NIFA means the National Institute of Food and Agriculture, an agency of USDA which is generally responsible for coordinating the information and educational programs of USDA. NRCS means the Natural Resources Conservation Service, an agency within USDA which is generally responsible for providing technical assistance in matters of natural resources conserva tion and for administering certain con servation programs of USDA. Operator means the person who is in general control of the farming oper ations on the farm during the crop year. Owner means a person who is deter mined to have legal ownership of farm land and shall include a person who is purchasing farmland under contract. Person means an individual, partner ship, association, corporation, coopera tive, estate, trust, joint venture, joint operation, or other business enterprise or other legal entity and, whenever ap plicable, a State, a political subdivi sion of a State, or any agency thereof, and such person’s affiliates as provided in § 12.8 of this part. Reinsurance year means a 1-year pe riod beginning July 1 and ending on June 30 of the following year, identified by reference to the year containing June. Restoration of a wetland means the re establishment of wetland conditions, including hydrologic condition or na tive hydrophytic vegetation, to an area where a wetland had previously ex isted. RMA means the Risk Management Agency, an agency within USDA that administers the programs of the FCIC through which Federally reinsured crop insurance is provided to American farmers and ranchers. Secretary means the Secretary of USDA. Sharecropper means a person who per forms work in connection with the pro duction of a crop under the supervision of the operator and who receives a share of such crop for such labor. Soil map unit means an area of the landscape shown on a soil map which consists of one or more soils. State means each of the 50 states, the District of Columbia, the Common wealth of Puerto Rico, Guam, the Vir gin Islands of the United States, Amer ican Samoa, the Commonwealth of the Northern Mariana Islands, or the Trust Territory of the Pacific Islands. Tenant means a person usually called a ‘‘cash tenant’’, ‘‘fixed-rent tenant’’, or ‘‘standing rent tenant’’ who rents land from another for a fixed amount of cash or a fixed amount of a com modity to be paid as rent; or a person (other than a sharecropper) usually called a ‘‘share tenant’’ who rents land from another person and pays as rent a share of the crops or proceeds there from. A tenant shall not be considered the farm operator unless the tenant is determined to be the operator pursuant to this part and 7 CFR part 718. Wetland, except when such term is a part of the term ‘‘converted wetland’’, means land that— (1) Has predominance of hydric soils; (2) Is inundated or saturated by sur face or groundwater at a frequency and duration sufficient to support a preva lence of hydrophytic vegetation typi cally adapted for life in saturated soil conditions; and VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00385 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 376 7 CFR Subtitle A (1–1–17 Edition) § 12.2 (3) Under normal circumstances does support a prevalence of such vegeta tion, except that this term does not in clude lands in Alaska identified as hav ing a high potential for agricultural de velopment and a predominance of per mafrost soils. Wetland determination means a deci sion regarding whether or not an area is a wetland, including identification of wetland type and size. A wetland deter mination may include identification of an area as one of the following types of wetland— (1) Artificial wetland is an area that was formerly non-wetland, but now meets wetland criteria due to human activities, such as: (i) An artificial lake or pond created by excavating or diking land that is not a wetland to collect and retain water that is used primarily for live stock, fish production, irrigation, wild life, fire control, flood control, cran berry growing, or rice production, or as a settling pond; or (ii) A wetland that is temporarily or incidentally created as a result of adja cent development activity; (2) Commenced-conversion wetland is a wetland, farmed wetland, farmed-wet land pasture, or a converted wetland on which conversion began, but was not completed, prior to December 23, 1985. (3) Converted wetland is a wetland that has been drained, dredged, filled, leveled, or otherwise manipulated (in cluding the removal of woody vegeta tion or any activity that results in im pairing or reducing the flow and cir culation of water) for the purpose of or to have the effect of making possible the production of an agricultural com modity without further application of the manipulations described herein if: (i) Such production would not have been possible but for such action, and (ii) Before such action such land was wetland, farmed wetland, or farmed wetland pasture and was neither highly erodible land nor highly erodible crop land; (4) Farmed wetland is a wetland that prior to December 23, 1985, was manipu lated and used to produce an agricul tural commodity, and on December 23, 1985, did not support woody vegetation and met the following hydrologic cri teria: (i) Is inundated for 15 consecutive days or more during the growing sea son or 10 percent of the growing season, whichever is less, in most years (50 per cent chance or more), or (ii) If a pothole, playa, or pocosion, is ponded for 7 or more consecutive days during the growing season in most years (50 percent chance of more) or is saturated for 14 or more consecutive days during the growing season in most years (50 percent chance or more); (5) Farmed-wetland pasture is wetland that was manipulated and managed for pasture or hayland prior to December 23, 1985, and on December 23, 1985, met the following hydrologic criteria: (i) Inundated or ponded for 7 or more consecutive days during the growing season in most years (50) percent chance or more), or (ii) Saturated for 14 or more consecu tive days during the growing season in most years (50 percent chance or more); (6) Not-inventoried land, is an area for which no evaluation of soils, vegeta tion, or hydrology has been conducted to determine if wetland criteria are met; (7) Non-wetland is; (i) Land that under natural condi tions does not meet wetland criteria, or (ii) Is converted wetland the conver sion of which occurred prior to Decem ber 23, 1985, and on that date, the land did not meet wetland criteria but an agricultural commodity was not pro duced and the area was not managed for pasture or hay; (8) Prior-converted cropland is a con verted wetland where the conversion occurred prior to December 23, 1985, an agricultural commodity had been pro duced at least once before December 23, 1985, and as of December 23, 1985, the converted wetland did not support woody vegetation and met the fol lowing hydrologic criteria: (i) Inundation was less than 15 con secutive days during the growing sea son or 10 percent of the growing season, whichever is less, in most years (50 per cent chance or more); and (ii) If a pothole, playa or pocosin, ponding was less than 7 consecutive days during the growing season in most years (50 percent chance or more) and saturation was less than 14 consecutive VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00386 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 377 Office of the Secretary, USDA § 12.4 days during the growing season most years (50 percent chance or more); or (9) Wetland, as defined above in this section. Wetland delineation means outlining the boundaries of a wetland determina tion on aerial photography, digital im agery, other graphic representation of the area, or on the land. (b) Terms for FSA operations. In the regulations in this part, and in all in structions, forms, and documents in connection therewith, all other words and phrases specifically relating to FSA operations shall, unless required by the subject matter or the specific provisions of this part, have the mean ings assigned to them in the regula tions at part 718 of this title that gov ern reconstitutions of farms, allot ments, and bases and any subsequent amendment thereto. [61 FR 47025, Sept. 6, 1996; 61 FR 53491, Oct. 11, 1996; 76 FR 4803, Jan. 27, 2011; 80 FR 22879, Apr. 24, 2015] § 12.3 Applicability. (a) The provisions of this part apply to all land, including Indian tribal land, in the 50 States, the District of Columbia, the Commonwealth of Puer to Rico, Guam, the Virgin Islands of the United States, American Samoa, and the Commonwealth of the North ern Mariana Islands. (b) The rules in this part are applica ble to all current and future deter minations on matters within the scope of this part. Nothing in these rules re lieves any person of any liability under previous versions of these rules. (c) Notwithstanding paragraph (b) of this section, for the purpose of eligi bility for Federal crop insurance pre mium subsidy for a policy or plan of in surance under the Federal Crop Insur ance Act (7 U.S.C. 1501–1524), the provi sions of this part apply to final HEL and wetland conservation determina tions, including all administrative ap peals, after February 7, 2014, on mat ters within the scope of this part. (1) For acts or situations of non-com pliance or failure to certify compliance according to this part, ineligibility for Federal crop insurance premium sub sidies will be applied beginning with the 2016 reinsurance year for any Fed erally reinsured policy or plan of insur ance with a sales closing date on or after July 1, 2015. (2) [Reserved] [80 FR 22879, Apr. 24, 2015] § 12.4 Determination of ineligibility. (a) Actions. Except as provided in §§ 12.5 or 12.13, a person shall be ineli gible for all or a portion of USDA pro gram benefits listed in this section if: (1) The person produces an agricul tural commodity on a field in which highly erodible land is predominant, or designates such a field for conservation use; (2) The person produces an agricul tural commodity on a wetland that was converted after December 23, 1985; or (3) After November 28, 1990, the per son converts a wetland by draining, dredging, filling, leveling, removing woody vegetation, or other means for the purpose, or to have the effect, of making the production of an agricul tural commodity possible. (b) Highly erodible land. A person de termined to be ineligible under para graph (a)(1) of this section may be in eligible for all program benefits listed in (d) and (e) of this section. (c) Wetland conservation. Except as provided in § 12.13, a person determined to be ineligible under paragraph (a)(2) of this section is ineligible for all or a portion of the USDA program benefits listed in paragraph (d) of this section for which the person otherwise would have been eligible during the crop year of the commodity that was planted on the converted wetland. Except as pro vided in § 12.13, a person determined to be ineligible under paragraph (a)(3) of this section for the conversion of a wetland is ineligible for all or a portion of the USDA program benefits listed in paragraph (d) of this section for which the person otherwise would have been eligible during the crop year which is equal to the calendar year during which the violation occurred and each subsequent crop year until the con verted wetland is restored or the loss of wetland values, acreage, and functions have been mitigated prior to the begin ning of such calendar year in accord ance with § 12.5(b)(4)(i) (A) and (C) through (F) of this part. Ineligibility under paragraph (a)(2) of this section may be reduced, in lieu of the loss of VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00387 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 378 7 CFR Subtitle A (1–1–17 Edition) § 12.4 all benefits specified under paragraph (d) of this section for such crop year, based on the seriousness of the viola tion, as determined by the FSA Deputy Administrator for Farm Programs or designee upon recommendation by the FSA County Committee. Factors such as the information that was available to the affected person prior to the vio lation, previous land use patterns, the existence of previous wetland viola tions under this part or under other Federal, State, or local wetland provi sions, the wetland values, acreage, and functions affected, the recovery time for full mitigation of the wetland val ues, acreage, and functions, and the impact that a reduction in payments would have on the person’s ability to repay a USDA farm loan will be consid ered in making this determination. (d) Programs subject to either highly erodible land or wetland conservation. USDA program benefits covered by a determination of ineligibility under this rule are: (1) Contract payments, marketing as sistance loans, and any type of price support or payment made available under the Agricultural Act of 2014, the Commodity Credit Corporation Charter Act (15 U.S.C. 714b and 714c), or suc cessor Acts. (2) A farm credit program loan made or guaranteed under the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) or any other provi sion of law administered by FSA if the Secretary determines that the proceeds of such loan will be used for a purpose that contributes to the conversion of wetlands that would make production of an agricultural commodity possible or for a purpose that contributes to ex cessive erosion of highly erodible land (i.e., production of an agricultural com modity on highly erodible land without a conservation plan or conservation system as required by this part); (3) A payment made pursuant to a contract entered into under the Envi ronmental Quality Incentives Program under chapter 4 of subtitle D of the Food Security Act of 1985, as amended; or a payment under any other provi sion of Subtitle D of that Act; (4) A payment made under section 401 or 402 of the Agricultural Credit Act of 1978 (16 U.S.C. 2201 or 2202); (5) A payment, loan, or other assist ance under section 3 or 8 of the Water shed Protection and Flood Prevention Act (16 U.S.C. 1003 or 1006a) and; (6) Federal crop insurance premium subsidies for a policy or plan of insur ance offered under the Federal Crop In surance Act (7 U.S.C. 1501–1524). (e) Programs subject to highly erodible land only. In addition to programs list ed in paragraph (d) of this section, a person determined to be ineligible under paragraph (a)(1) of this section shall be ineligible as determined by FSA for the following USDA program benefits for which the person otherwise would have been eligible during the crop year for which the determination applies: (1) A farm storage facility loan made under section 4(h) of the Commodity Credit Corporation Charter Act (15 U.S.C. 714b(h)); (2) A disaster payment made under the Federal Agricultural Improvement and Reform Act, Pub. L. 104–127, or any other act; and (3) A payment made under section 4 or 5 of the Commodity Credit Corpora tion Charter Act (15 U.S.C. 714b or 714c) for the storage of an agricultural com modity acquired by the Commodity Credit Corporation. (f) Determination of ineligibility. For the purpose of paragraph (a) of this sec tion, a person shall be determined to have produced an agricultural com modity on a field in which highly erod ible land is predominant or to have des ignated such a field for conservation use, to have produced an agricultural commodity on converted wetland, or to have converted a wetland if: (1) NRCS has determined that— (i) Highly erodible land is predomi nant in such field, or (ii) All or a portion of the field is converted wetland; and (2) FSA has determined that the per son is or was the owner or operator of the land, or entitled to share in the crops available from the land, or in the proceeds thereof; and (3) With regard to the provisions of paragraph (a)(1) and (a)(2) of this sec tion, FSA has determined that the land is or was planted to an agricultural VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00388 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 379 Office of the Secretary, USDA § 12.5 commodity or was designated as con servation use during the year for which the person is requesting benefits. (g) Intent to participate in USDA pro grams. Persons who wish to participate in any of the USDA programs described in paragraph (d) or (e) of this section are responsible for contacting the ap propriate agency of USDA well in ad vance of the intended participated date so that Form AD–1026 can be com pleted. This contact will help assure that the appropriate determinations regarding highly erodible land or wet land, and conservation plans or con servation systems are scheduled in a timely manner. A late contact may not allow sufficient time for USDA to serv ice the request and could result in a substantial delay in receiving a USDA determination of eligibility or ineligi bility. [61 FR 47025, Sept. 6, 1996; 61 FR 53491, Oct. 11, 1996; 76 FR 82077, Dec. 30, 2011; 80 FR 22880, Apr. 24, 2015] § 12.5 Exemption. (a) Exemptions regarding highly erod ible land—(1) Highly erodible cropland in production or in USDA programs during 1981 through 1985 crop years. During the period beginning on December 23, 1985, and ending on the later of January 1, 1990, or the date that is two years after the date the cropland on which an agri cultural commodity is produced was surveyed by NRCS to determine if such land is highly erodible, no person shall be determined to be ineligible for bene fits as provided in § 12.4 as the result of the production of an agricultural com modity on any highly erodible land: (i) That was planted to an agricul tural commodity in any year 1981 through 1985; or (ii) That was set aside, diverted, or otherwise not cultivated in any such crop years under a program adminis tered by the Secretary for any such crops to reduce production of an agri cultural commodity. (2) Compliance with a conservation plan or conservation system. As further speci fied in this part, no person shall be in eligible for the program benefits de scribed in § 12.4 as the result of produc tion of an agricultural commodity on highly erodible land or the designation of such land for conservation use if such production or designation is in compliance with a conservation plan or conservation system approved under paragraph (a)(2)(i) or (a)(2)(ii) of this section. A person shall not be ineligible for program benefits under § 12.4 as the result of the production of an agricul tural commodity on highly erodible land or as the result of designation of such land as conservation use if the production or designation is: (i) In an area within a CD, under a conservation system that has been ap proved by the CD after the CD deter mines that the conservation system is in conformity with technical standards set forth in the NRCS field office tech nical guide for such district; or (ii) In an area not within a CD, under a conservation system that has been approved by NRCS to be adequate for the production of such agricultural commodity on highly erodible land or for the designation of such land as con servation use. (3) Reliance upon NRCS determination for highly erodible land. A person may be relieved from ineligibility for pro gram benefits as the result of the pro duction of an agricultural commodity which was produced on highly erodible land or for the designation of such land as conservation use in reliance on a de termination by NRCS that such land was not highly erodible land, except that this paragraph shall not apply to any agricultural commodity that was planted on highly erodible land, or for the designation of highly erodible land as conservation use after NRCS deter mines that such land is highly erodible land, and the person is notified of such determinations. (4) Areas of 2 acres or less. No person shall be determined to be ineligible under § 12.4 for noncommercial produc tion of agricultural commodities on highly erodible land on an area of 2 acres or less if it is determined by FSA that such production is not intended to circumvent the conservation require ments otherwise applicable under this part. (5) Good faith. (i) No person will be come ineligible under § 12.4 as a result of the failure of such person to apply a conservation system on highly erodible land if all of the following apply: VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00389 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 380 7 CFR Subtitle A (1–1–17 Edition) § 12.5 (A) FSA determines such person has acted in good faith and without the in tent to violate the provisions of this part; (B) NRCS determines that the person complies with paragraph (a)(5)(ii) of this section; and (C) The good faith determination of the FSA county or State committee has been reviewed and approved by the applicable State Executive Director, with the technical concurrence of the State Conservationist; or district di rector, with the technical concurrence of the area conservationist. (ii) A person who otherwise meets the requirements of paragraphs (a)(5)(i)(A) and (a)(5)(i)(C) of this section will be allowed a reasonable period of time, as determined by NRCS, but not to exceed one year, during which to implement the measures and practices necessary to be considered actively applying the person’s conservation plan, as deter mined by USDA. If a person does not take the required corrective actions, the person may be determined to be in eligible for the crop year during which such actions were to be taken, as well as any subsequent crop year. (iii) Notwithstanding the good-faith requirements of paragraph (a)(5)(i) of this section, if NRCS observes a pos sible compliance deficiency while pro viding on-site technical assistance, NRCS will provide to the responsible person, not later than 45 days after ob serving the possible violation, informa tion regarding actions needed to com ply with the plan and this subtitle. NRCS will provide this information in lieu of reporting the observation as a violation, if the responsible person at tempts to correct the deficiencies as soon as practicable, as determined by NRCS, after receiving the information, but not later than one year after re ceiving the information. If a person does not take the required corrective actions, the person may be determined to be ineligible for the crop year during which the compliance deficiencies oc curred, as well as any subsequent crop year. (iv) A person who meets the require ments of paragraphs (a)(5)(i) and (a)(5)(ii) of this section will, in lieu of the loss of all benefits specified under § 12.4(d) and (e) for such crop year, be subject to a reduction in benefits by an amount commensurate with the seri ousness of the violation, as determined by FSA. The dollar amount of the re duction will be determined by FSA and may be based on the number of acres and the degree of erosion hazard for the area in violation, as determined by NRCS, or upon such other factors as FSA determines appropriate. (v) Any person whose benefits are re duced in a crop year under paragraph (a)(5) of this section may be eligible for all of the benefits specified under § 12.4(d) and (e) for any subsequent crop year if, prior to the beginning of the subsequent crop year, NRCS deter mines that such person is actively ap plying a conservation plan according to the schedule specified in the plan on all highly erodible land planted to an agri cultural commodity or designated as conservation use. (6) Allowable variances. (i) Notwith standing any other provisions of this part, no person shall be determined to be ineligible for benefits as a result of the failure of such person to apply a conservation system if NRCS deter mines that— (A) The failure is technical and minor in nature and that such viola tion has little effect on the erosion control purposes of the conservation plan applicable to the land on which the violation has occurred; or (B) The failure is due to cir cumstances beyond the control of the person; or (C) NRCS grants a temporary vari ance from the practices specified in the plan for the purpose of handling a spe cific problem, including weather, pest, and disease problems, which NRCS de termines cannot reasonably be ad dressed except through such variance. (ii) If the person’s request for a tem porary variance involves the use of practices or measures to address weather, pest, or disease problems, NRCS shall make a decision on wheth er to grant the variance during the 30 day period beginning on the date of re ceipt of the request. If NRCS fails to render a decision during the period, the temporary variance shall be considered granted unless the person seeking the variance had reason to know that the VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00390 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 381 Office of the Secretary, USDA § 12.5 variance would not be granted. In de termining whether to grant a variance for natural disasters such as weather, pest, or disease problems, NRCS will consider such factors as: (A) The percent of a stand damaged or destroyed by the event; (B) The percent of expected crop pro duction compared to normal produc tion for that crop; (C) The documented invasion of non native insects, weeds, or diseases for which no recognized treatment exists; (D) Whether an event is severe or un usual based on historical weather records; and (E) Other specific circumstances caused by a natural event that pre vented the implementation of con servation practices or systems, instal lation of structures, or planting of cover crops. (7) Technical and minor violations. Notwithstanding any other provisions of this part, a reduction in benefits in an amount commensurate with the se riousness of the violation, as deter mined by FSA, and consistent with paragraph (a)(5)(iv) of this section, will be applied if NRCS determines that a violation involving highly erodible land that would otherwise lead to a loss of benefits is both of the following: (i) Technical and minor in nature; and (ii) Has a minimal effect on the ero sion control purposes of the conserva tion plan applicable to the land on which the violation occurred. (b) Exemptions for wetlands and con verted wetlands—(1) General exemptions. A person shall not be determined to be ineligible for program benefits under § 12.4 as the result of the production of an agricultural commodity on con verted wetland or the conversion of wetland if: (i) The land is a prior-converted crop land and meets the definition of a prior-converted cropland as of the date of a wetland determination by NRCS; (ii) The land has been determined by NRCS to be a prior-converted cropland and such determination has been cer tified, and NRCS determines that the wetland characteristics returned after the date of the wetland certification as a result of— (A) The lack of maintenance of drain age, dikes, levees, or similar struc tures, (B) The lack of management of the lands containing the wetland, or (C) Circumstances beyond the control of the person; (iii) The land was determined by NRCS to be a farmed wetland or a farmed-wetland pasture and— (A) Such land meets wetland criteria through a voluntary restoration, en hancement, or creation action after that determination, (B) The technical determinations re garding the baseline site conditions and the restoration, enhancement, or creation action have been adequately documented by NRCS, (C) The proposed conversion action is documented by the NRCS prior to im plementation, and (D) The extent of the proposed con version is limited so that the condi tions will be at least equivalent to the wetland values, acreage, and functions that existed at the time of implemen tation of the voluntary wetland res toration, enhancement, or creation ac tion; (iv) NRCS has determined that the conversion if for a purpose that does not make the production of an agricul tural commodity possible, such as con versions for fish production, trees, vineyards, shrubs, cranberries, agricul tural waste management structures, livestock ponds, fire control, or build ing and road construction and no agri cultural commodity is produced on such land; (v) NRCS has determined that the ac tions of the person with respect to the conversion of the wetland or the com bined effect of the production of an ag ricultural commodity on a wetland converted by the person or by someone else, individually and in connection with all other similar actions author ized by NRCS in the area, would have only a minimal effect on the wetland functions and values of wetlands in the area; (vi)(A) After December 23, 1985, the Army Corps of Engineers issued an in dividual permit pursuant to section 404 of the Clean Water Act, 33 U.S.C. 1344, authorizing such action and the permit required mitigation that adequately VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00391 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 382 7 CFR Subtitle A (1–1–17 Edition) § 12.5 replaced the values, acreage, and func tions of the wetlands converted, as de termined by NRCS, or (B) After December 23, 1985, the ac tion is encompassed under section 404 of the Clean Water Act, 33 U.S.C. 1344, by an Army Corps of Engineers nation wide or regional general permit and the wetland values, acreage, and functions were adequately mitigated, as deter mined by NRCS; or (vii) The land is determined by NRCS to be— (A) An artificial wetland, (B) A wet area created by a water de livery system, irrigation, irrigation system, or application of water for irri gation, (C) A nontidal drainage or irrigation ditch excavated in non-wetland, or (D) A wetland converted by actions of persons other than the person applying for USDA program benefits or any of the person’s predecessors in interest after December 23, 1985, if such conver sion was not the result of a scheme or device to avoid compliance with this part. Further drainage improvement on such land is not permitted without loss of eligibility for USDA program bene fits, unless NRCS determines under paragraph (b)(1)(v) of this section that further drainage activities applied to such land would have minimal effect on the wetland functions and values in the area. In applying this paragraph, a converted wetland shall be presumed to have been converted by the person ap plying for USDA program benefits un less the person can show that the con version was caused by a third party with whom the person was not associ ated through a scheme or device as de scribed under § 12.10 of this part. In this regard, activities of a water resource district, drainage district, or similar entity will be attributed to all persons within the jurisdiction of the district or other entity who are assessed for the activities of the district or entity. Ac cordingly, where a person’s wetland is converted due to the actions of the dis trict or entity, the person shall be con sidered to have caused or permitted the drainage. Notwithstanding the provi sions of the preceding sentences and as determined by FSA to be consistent with the purposes of this part, the ac tivities of a drainage district or other similar entity will not be attributed to a person to the extent that the activi ties of the district or entity were be yond the control of the person and the wetland converted is not used by the person for the production of an agricul tural commodity or a forage crop for harvest by mechanical means or miti gation for the converted wetland oc curs in accordance with this part. (2) Commenced conversion wetlands. (i) The purpose of a determination of a commenced conversion made under this paragraph is to implement the leg islative intent that those persons who had actually started conversion of a wetland or obligated funds for conver sion prior to December 23, 1985, would be allowed to complete the conversion so as to avoid unnecessary economic hardship. (ii) All persons who believed they had a wetland or converted wetland for which conversion began but was not completed prior to December 23, 1985, must have requested by September 19, 1988, FSA to make a determination of commencement in order to be consid ered exempt under this section. (iii) Any conversion activity consid ered by FSA to be commenced under this section lost its exempt status if such activity as not completed on or before January 1, 1995. For purposes of this part, land on which such conver sion activities were completed by Jan uary 1, 1995, shall be evaluated by the same standards and qualify for the same exemptions as prior-converted croplands. For purposes of this part, land on which such conversion activi ties were not completed by January 1, 1995, shall be evaluated by the same standards and qualify for the same ex emptions as wetlands or farmed wet lands, as applicable. (iv) Only those wetlands for which the construction had begun, or to which the contract or purchased sup plies and materials related, qualified for a determination of commencement. However, in those circumstances where the conversion of wetland did not meet the specific requirements of this para graph, the person could have requested a commencement of conversion deter mination from the FSA Deputy Admin istrator for Farm Programs, upon a showing that undue economic hardship VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00392 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 383 Office of the Secretary, USDA § 12.5 would have resulted because of sub stantial financial obligations incurred prior to December 23, 1985, for the pri mary and direct purpose of converting the wetland. (3) Wetlands farmed under natural con ditions. A person shall not be deter mined to be ineligible for program ben efits under § 12.4 of this part as a result of the production of an agricultural commodity on a wetland on which the owner or operator of a farm or ranch uses normal cropping or ranching prac tices to produce agricultural commod ities in a manner that is consistent for the area, where such production is pos sible as a result of natural conditions, such as drought, and is without action by the producer that alters the hydrol ogy or removes woody vegetation. (4) Mitigation. (i) No person shall be determined to be ineligible under § 12.4 for any action associated with the con version of a wetland if the wetland val ues, acreage, and functions are ade quately mitigated, as determined by NRCS, through the restoration of a converted wetland, the enhancement of an existing wetland, or the creation of a new wetland, if the mitigation— (A) Is in accordance with a mitiga tion plan approved by NRCS; (B) Is in advance of, or concurrent with, the wetland conversion or the production of an agricultural com modity, as applicable; (C) Is not at the expense of the fed eral government in either supporting the direct or indirect costs of the res toration activity or costs associated with acquiring or securing mitigation sites, except if conducted under a miti gation banking program established by USDA; (D) Occurs on lands in the same gen eral area of the local watershed as the converted wetlands, provided that for purposes of this paragraph, lands in the same general area of the local water shed may include regional mitigation banks; (E) Is on lands for which the owner has granted an easement to USDA or in the case of a mitigation bank operated under a USDA program, an entity ap proved by USDA, recorded the ease ment on public land records, and has agreed to the maintenance of the re stored, created, or enhanced wetland for as long as the converted wetland for which the mitigation occurred remains in agricultural use or is not returned to its original wetland classification with equivalent values, acreage, and functions; and (F) Provides the equivalent values, acreage, and functions that will be lost as a result of the wetland conversion. (ii) A mitigation plan is a record of decisions that document the actions necessary to compensate for the loss of wetland values, acreage, and functions that result from converting a wetland. The mitigation plan may be a compo nent of a larger natural resources con servation plan. (iii) The State Conservationist, in consultation with the State Technical Committee, may name certain types or classes of wetland not eligible for ex emption under paragraph (b)(4)(i) of this section where the State Conserva tionist determines that mitigation will not achieve equivalent replacement of wetland values, acreage, and functions within a reasonable time frame or for other reasons identified by the State Conservationist. Any type or class of wetland that a State Conservationist identifies as not eligible for exemption under paragraph (b)(4)(i) of this section will be published in the FEDERAL REG ISTER for inclusion in this part. (5) Good faith violations. (i) A person who is determined under § 12.4 of this part to be ineligible for benefits as the result of the production of an agricul tural commodity on a wetland con verted after December 23, 1985, or as the result of the conversion of a wet land after November 28, 1990, may re gain eligibility for benefits if all of the following apply: (A) FSA determines that such person acted in good faith and without the in tent to violate the wetland provisions of this part; and (B) NRCS determines that the person is implementing all practices in a miti gation plan within an agreed-to period, not to exceed one year; and (C) The good faith determination of the FSA county or State committee has been reviewed and approved by the applicable State Executive Director, with the technical concurrence of the VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00393 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 384 7 CFR Subtitle A (1–1–17 Edition) § 12.6 State Conservationist; or district di rector, with the technical concurrence of the area conservationist. (ii) In determining whether a person acted in good faith under paragraph (b)(5)(i)(A) of this section, the FSA shall consider such factors as wheth er— (A) The characteristics of the site were such that the person should have been aware that a wetland existed on the subject land, (B) NRCS had informed the person about the existence of a wetland on the subject land, (C) The person did not convert the wetland, but planted an agricultural commodity on converted wetland when the person should have known that a wetland previously existed on the sub ject land, (D) The person has a record of vio lating the wetland provisions of this part or other Federal, State, or local wetland provisions, or (E) There exists other information that demonstrates that the person acted with the intent to violate the wetland provisions of this part. (iii) After the requirements of para graph (b)(5)(i) of this section are met, USDA may waive applying the ineligi bility provisions of § 12.4. (6) Reliance upon NRCS wetland deter mination. (i) A person shall not be ineli gible for program benefits as a result of taking an action in reliance on a pre vious certified wetland determination by NRCS. (ii) A person who may be ineligible for program benefits as the result of the production of an agricultural com modity on converted wetland or for the conversion of a wetland may seek relief under § 12.11 of this part if such action was taken in reliance on an incorrect technical determination by NRCS as to the status of such land. If the error caused the person to make a substan tial financial investment, as deter mined by the NRCS, for the conversion of a wetland, the person may be re lieved of ineligibility for actions re lated to that portion of the converted wetland for which the substantial fi nancial investment was expended in conversion activities. The relief avail able under this paragraph shall not apply to situations in which the person knew or reasonably should have known that the determination was in error be cause the characteristics of the site were such that the person should have been aware that a wetland existed on the subject land, or for other reasons. (7) Responsibility to provide evidence. It is the responsibility of the person seek ing an exemption related to converted wetlands under this section to provide evidence, such as receipts, crop-history data, drawings, plans or similar infor mation, for purposes of determining whether the conversion or other action is exempt in accordance with this sec tion. [61 FR 47025, Sept. 6, 1996; 61 FR 53491, Oct. 11, 1996; 76 FR 82077, Dec. 30, 2011; 80 FR 22880, Apr. 24, 2015] § 12.6 Administration. (a) General. In general determina tions will be made as follows: (1) Except as provided in paragraph (a)(2) of this section, a determination of ineligibility for benefits in accord ance with the provisions of this part will be made by the agency of USDA to which the person has applied for bene fits. All determinations required to be made under the provisions of this part will be made by the agency responsible for making such determinations, as provided in this section. (2) Eligibility for Federal crop insur ance premium subsidies will be based on final determinations, including all administrative appeals, made by NRCS and FSA. Neither RMA, FCIC, ap proved insurance providers, or any em ployee, agent, or contractors thereof, will make any determination regarding compliance with the highly erodible land or wetland provisions of this part, unless specifically provided for in § 12.13. (b) Administration by FSA. (1) The pro visions of this part which are applica ble to FSA will be administered under the general supervision of the Adminis trator, FSA, and shall be carried out in the field in part by State FSA commit tees and county FSA committees (COC). (2) The FSA Deputy Administrator for Farm Programs may determine any question arising under the provisions of this part which are applicable to VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00394 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 385 Office of the Secretary, USDA § 12.6 FSA and may reverse or modify any de termination of eligibility with respect to programs administered by FSA made by a State FSA committee or COC or any other FSA office or FSA of ficial (except the Administrator) in connection with the provisions of this part. (3) FSA shall make the following de terminations which are required to be made in accordance with this part: (i) Whether a person produced an ag ricultural commodity on a particular field as determined under § 12.5(a)(1); (ii) The establishment of field bound aries; (iii) Whether land was planted to an agricultural commodity in any of the years, 1981 through 1985, for the pur poses of § 12.5(a)(1); (iv) Whether land was set aside, di verted, or otherwise not cultivated under a program administered by the Secretary for any crop to reduce pro duction of an agricultural commodity under §§ 12.4(g) and 12.5(a)(1); (v) Whether for the purposes of § 12.9, the production of an agricultural com modity on highly erodible land or con verted wetland by a landlord’s tenant or sharecropper is required under the terms and conditions of the agreement between the landlord and such tenant or sharecropper; (vi) Whether the conversion of a par ticular wetland was commenced before December 23, 1985, for the purposes of § 12.5(b)(3); (vii) Whether the conversion of a wet land was caused by a third party under § 12.5(b)(1)(vii)(D); (viii) Whether certain violations were made in good faith under §§ 12.5(a)(5) or 12.5(b)(5); (ix) The determination of the amount of reduction in benefits based on the seriousness of the violation, based on technical information provided by NRCS; (x) The determination of whether the application of the producer’s conserva tion plan or system would impose an undue economic hardship on the pro ducer; and (xi) Whether the proceeds of a farm loan made, insured, or guaranteed by FSA will be used for a purpose that will contribute to excessive erosion of highly erodible land or to the conver sion of wetland. (4) A representative number of farms selected in accordance with instruc tions issued by the Deputy Adminis trator shall be inspected by an author ized representative of FSA to deter mine compliance with any requirement specified in this part as a prerequisite for obtaining program benefits. (5) FSA may consult with U.S. Fish and Wildlife Service on third-party de terminations. (c) Administration by NRCS. (1) The provisions of this part that are applica ble to NRCS shall be administered under the general supervision of the Associate Chief for Conservation, and shall be carried out in the field by the regional conservationist, state con servationist, area conservationist, and district conservationist or other NRCS representative. (2) An NRCS representative shall make the following determinations which are required to be made in ac cordance with this part: (i) Whether land is highly erodible or has a wetland type or a converted wet land identified in accordance with the provisions of this part; (ii) Whether highly erodible land is predominant on a particular field under § 12.22; (iii) Whether the conservation plan that a person is applying is based on the local NRCS field office technical guide and is approved by— (A) The CD and NRCS, or (B) NRCS; (iv) Whether the conservation system that a person is using has been ap proved by the CD under § 12.5(a)(2) or, in an area not within a CD, a conserva tion system approved by NRCS to be adequate for the production of an agri cultural commodity on highly erodible land; (v) Whether the actions of a person(s) with respect to the conversion of a wet land or production of an agricultural commodity on converted wetland would have only a minimal effect on the functions and values of wetlands in the area; (vi) Whether an approved conserva tion plan is being applied on highly erodible fields in accordance with the schedule specified therein or whether a VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00395 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 386 7 CFR Subtitle A (1–1–17 Edition) § 12.6 failure to apply the plan is technical and minor in nature, due to cir cumstances beyond the control of the person, or whether a temporary vari ance form the requirements of the plan should be granted; (vii) Whether an approved conserva tion system is being used on a highly erodible field; (viii) Whether the conversion of a wetland is for the purpose or has the effect of making the production of an agricultural commodity possible; (ix) Whether a farmed wetland or farmed-wetland pasture is abandoned; (x) Whether the planting of an agri cultural commodity on a wetland is possible under natural conditions; (xi) Whether maintenance of existing drainage of a wetland described in § 12.33 exceeds the scope and effect of the original drainage; (xii) Whether a plan for the mitiga tion of a converted wetland will be ap proved and whether the mitigation of a converted wetland is accomplished ac cording to the approved mitigation plan; (xiii) Whether all technical informa tion relating to the determination of a violation and severity of a violation has been provided to FSA for making payment-reduction determinations; and (xiv) Whether or not a commenced conversion activity was completed by January 1, 1995. (3) NRCS may provide such other technical assistance for implementa tion of the provisions of this part as is determined to be necessary. (4) A person may obtain a highly erodible land or a wetland scope-and effect determination by making a writ ten request on Form AD–1026. The de termination will be made in writing, and a copy will be provided to the per son. (5) A determination of whether or not an area meets the highly erodible land criteria or whether wetland criteria, identified in accordance with the cur rent Federal wetland delineation meth odology in use at the time of the deter mination and that are consistent with current mapping conventions, may be made by the NRCS representative based upon existing records or other in formation and without the need for an on-site determination. This determina tion will be made by the NRCS rep resentative as soon as possible fol lowing a request for such a determina tion. (6) An on-site determination as to whether an area meets the applicable criteria shall be made by an NRCS rep resentative if the person has disagreed with the determination made under paragraph (c)(5) of this section, or if adequate information is not otherwise available to an NRCS representative on which to make an off-site determina tion. (7) An on-site determination, where applicable, will be made by the NRCS representative as soon as possible fol lowing a request for such a determina tion, but only when site conditions are favorable for the evaluation of soils, hydrology, or vegetation. (8) With regard to wetland deter minations, if an area is continuously inundated or saturated for long periods of time during the growing season to such an extent that access by foot to make a determination of predominance of hydric soils or prevalence of hydrophytic vegetation is not feasible, the area will be determined to be a wetland. (9) Persons who are adversely af fected by a determination made under this section and believe that the re quirements of this part were improp erly applied may appeal, under § 12.12 of this part, any determination by NRCS. (10) NRCS will operate a program or work with third parties to establish mitigation banks to assist persons in complying with §§ 12.4(c) and 12.5(b)(4). Persons will be able to access mitiga tion banks established or approved through this program without requir ing the Secretary to hold an easement in a mitigation bank. (d) Administration by NIFA. The NIFA shall coordinate the related informa tion and education program for USDA concerning implementation of this rule. (e) Assistance of other Federal agencies. If NRCS determines, through agree ment or otherwise, that the purposes of this part would be furthered by the as sistance of other Federal agencies with wetland responsibilities, NRCS may ac cept such assistance and adopt any or VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00396 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 387 Office of the Secretary, USDA § 12.7 all such actions by these agencies as an action by an NRCS representative under this part. (f) Administration by RMA. The provi sions of this part that are applicable to RMA will be administered under the general supervision of the Adminis trator, RMA. (1) Eligibility for Federal crop insur ance premium subsidies will be based on the person’s: (i) Accurate and timely filing of a certification of compliance (Form AD– 1026 or successor form) with the con servation compliance provisions; and (ii) Compliance with the conserva tion compliance provisions. (2) Ineligibility for Federal crop in surance premium subsidies due to vio lations of the conservation compliance provisions will be based on final deter minations, including all administrative appeals, made by NRCS and FSA as provided in this part. (3) Neither RMA nor FCIC will make any determination of eligibility re garding compliance with the highly erodible land or wetland provisions in this part, unless specifically provided for in § 12.13. (4) RMA will provide the applicable information regarding determinations made by NRCS and FSA to the appro priate approved insurance providers to ensure those determinations affecting Federal crop insurance premium sub sidy eligibility are implemented ac cording to this part. (g) Approved insurance providers. No approved insurance provider or any em ployee, agent, or contractor of an ap proved insurance provider will: (1) Make any determination of eligi bility regarding compliance with the highly erodible land or wetland provi sions of this part; or (2) Be responsible or liable for a per son’s eligibility for Federal crop insur ance premium subsidy under this part, except in cases of fraud, misrepresenta tion, or scheme and device by the ap proved insurance provider or any em ployee, agent, or contractor thereof. [61 FR 47025, Sept. 6, 1996; 61 FR 53491, Oct. 11, 1996; 76 FR 4804, Jan. 27, 2011; 80 FR 22880, Apr. 24, 2015] § 12.7 Certification of compliance. (a) Self-certification. In order for a person to be determined to be eligible for any of the benefits specified in § 12.4: (1) It must be determined by USDA whether any field in which the person applying for the benefits has an inter est and intends to produce an agricul tural commodity contains highly erod ible land; (2) The person applying for or receiv ing the benefits must certify in writing on Form AD–1026 that such person will not produce an agricultural commodity on highly erodible land, or designate such land for conservation use; or plant an agricultural commodity on a con verted wetland; or convert a wetland to make possible the production of an ag ricultural commodity during the crop year in which the person is seeking such benefits, unless such actions are exempt, under §§ 12.5 or 12.13 from the provisions of § 12.4 of this part; (3) A person may certify application of practices required by the person’s conservation plan. NRCS shall permit a person who makes such a certification with respect to a conservation plan to revise the conservation plan in any manner, if the same level of conserva tion treatment provided for by the con servation system under the person’s conservation plan is maintained. NRCS may not revise the person’s conserva tion plan without the concurrence of the person; (4) The person applying for a FSA di rect or guaranteed farm credit program loan must certify that such person shall not use the proceeds of the loan for a purpose that will contribute to excessive erosion on highly erodible land or to conversion of wetlands for the purpose, or to have the effect, of making the production of an agricul tural commodity possible; and (5) The person applying for the bene fits must authorize and provide rep resentatives of USDA access to all land in which such person has an interest for the purpose of verifying any such certification. (b) Availability to other agencies. Each agency of USDA shall make all certifi cations of compliance received by such VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00397 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 388 7 CFR Subtitle A (1–1–17 Edition) § 12.8 agency and the results of investiga tions concerning such certifications of compliance available to other agencies. (c) Compliance. A certification made in accordance with this section does not relieve any person from compliance with provisions of this part. (d) Timely filing. In order for a person to be determined eligible for Federal crop insurance premium subsidies for a policy or plan of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524), the person must have Form AD–1026 or successor form on file with FSA, as specified in § 12.13. [61 FR 47025, Sept. 6, 1996, as amended at 80 FR 22880, Apr. 24, 2015] § 12.8 Affiliated persons. (a) Ineligibility of affiliated persons. In eligibility of an individual or entity under this part for benefits shall also be an ineligibility for benefits for ‘‘af filiated persons’’ as defined in this sec tion. (b) Affiliated persons of an individual. If the person requesting benefits is an individual, the affiliated persons are: (1) The spouse and minor child of such person or guardian of such child; except that spouses who establish to the satisfaction of the COC that oper ations of the husband and wife are maintained separately and independ ently shall not be considered affiliates; (2) Any partnership, joint venture, or other enterprise in which the person or any person listed in paragraphs (b)(1) has an ownership interest or financial interest; unless such interest is held in directly through another business en terprise; or (3) Any trust in which the individual, business enterprise, or any person list ed in paragraph (b)(1) is a beneficiary or has a financial interest, unless such interest is held indirectly through an other business enterprise. (c) Affiliated persons of an entity. If the person who has requested benefits from USDA is a corporation, partner ship, or other joint venture, the affili ated persons are any participant or stockholder therein of the corporation, partnership, or other joint venture, ex cept for persons who have an indirect interest through another business en terprise in such corporation, partner ship, or other joint venture or persons with a 20 percent or less share in a cor poration. (d) Limitation. Any reduction in pay ments which results only from the ap plication of the affiliation provisions of this section to a partnership, joint ven ture, trust, or other enterprise shall be limited to the extent of interest held in such partnership, joint venture, trust, or other enterprise by the person or business enterprise that committed the violation. However, for violations for which the business enterprise is consid ered directly responsible under the pro visions of this part, the business enter prise shall be subject to a full loss of benefits, including those instances in which the business enterprise has an interest in the land where the violation occurred or where the business enter prise had an interest in the crops pro duced on the land. (e) Avoidance of this part. Limitations on affiliation shall not apply as needed to correct for any action that would otherwise tend to defeat the purposes of this part. § 12.9 Landlords and tenants. (a) Landlord eligibility. Landlord eligi bility will include the following: (1) Except as provided in paragraph (a)(2) of this section, the ineligibility of a tenant or sharecropper for: (i) Program benefits (as specified in § 12.4) except as provided in paragraph (a)(1)(ii) of this section will not cause a landlord to be ineligible for USDA pro gram benefits accruing with respect to land other than those in which the ten ant or sharecropper has an interest; and (ii) Federal crop insurance premium subsidies for a policy or plan of insur ance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524) will, in lieu of ineligibility for premium subsidy, re sult in a reduction in the amount of premium subsidy paid by FCIC on all policies and plans of insurance for the landlord. (A) The percentage reduction will be determined by comparing the total number of cropland acres on the farm on which the violation occurred to the total number of cropland acres on all farms in which landlord has an inter est, as determined by FSA. VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00398 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 389 Office of the Secretary, USDA § 12.10 (B) The farms and cropland acres used to determine the premium subsidy reduction percentage will be the farms and cropland acres of the landlord for the reinsurance year in which the ten ant or sharecropper is determined in eligible. (C) The percentage reduction will be applied to all policies and plans of in surance of the landlord in the reinsur ance year subsequent to the reinsur ance year in which the tenant or share cropper is determined ineligible. (D) If the landlord and tenant or sharecropper are insured under the same policy, the landlord will be ineli gible for premium subsidy on that pol icy in lieu of a percentage reduction on that policy. (2) If the production of an agricul tural commodity on highly erodible land or converted wetland by the land lord’s tenant or sharecropper is re quired under the terms and conditions of the agreement between the landlord and such tenant or sharecropper and such agreement was entered into after December 23, 1985, or if the landlord has acquiesced in such activities by the tenant or sharecropper: (i) The provisions of paragraph (a)(1)(i) of this section will not be ap plicable to a landlord; and (ii) A landlord will be ineligible for premium subsidy on all policies and plans of insurance in the reinsurance year subsequent to the reinsurance year in which the tenant or share cropper is determined ineligible. (b) Tenant or sharecropper eligibility. Tenant or sharecropper eligibility will include the following: (1) If all of the requirements in para graph (b)(2) of this section are met: (i) The ineligibility of a tenant or sharecropper, except as provided in paragraph (b)(1)(ii) of this section, may be limited to the program benefits list ed in § 12.4(b) accruing with respect to only the farm on which the violation occurred; and (ii) In lieu of ineligibility for Federal crop insurance premium subsidies for all policies or plans of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524), the premium subsidy on all policies and plans of insurance of the ineligible tenant or sharecropper will be reduced. (A) The percentage reduction will be determined by comparing the total number of cropland acres on the farm on which the violation occurred to the total number of cropland acres on all farms in which tenant or sharecropper has an interest, as determined by FSA. (B) The farms and cropland acres used to determine the premium subsidy reduction percentage will be the farms and cropland acres of the tenant or sharecropper for the reinsurance year in which the tenant or sharecropper is determined ineligible. (C) The percentage reduction will be applied to all policies and plans of in surance of the tenant or sharecropper in the reinsurance year subsequent to the reinsurance year in which the ten ant or sharecropper is determined in eligible. (D) If the landlord and tenant or sharecropper are insured under the same policy, the tenant or share cropper will be ineligible for premium subsidy on that policy in lieu of a per centage reduction on that policy. (2) The provisions of paragraph (b)(1) of this section will not apply unless all the following are met: (i) The tenant or sharecropper shows that a good-faith effort was made to comply by developing an approved con servation plan for the highly erodible land in a timely manner and prior to any violation of the provisions of this part; (ii) The owner of such farm refuses to apply such a plan and prevents the ten ant or sharecropper from implementing certain practices that are a part of the approved conservation plan; and (iii) FSA determines that the lack of compliance is not a part of a scheme or device as described in § 12.10. (3) If relief is granted under para graph (b)(1) of this section, the tenant or sharecropper must actively apply those conservation treatment measures that are determined to be within the control of the tenant or sharecropper. [61 FR 47025, Sept. 6, 1996, as amended at 80 FR 22881, Apr. 24, 2015] § 12.10 Scheme or device. All or any part of the benefits listed in § 12.4 otherwise due a person from USDA may be withheld or required to VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00399 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 390 7 CFR Subtitle A (1–1–17 Edition) § 12.11 be refunded if the person adopts or par ticipates in adopting any scheme or de vice designed to evade, or which has the effect of evading, the provisions of this part. Such acts shall include, but are not limited to, concealing from USDA any information having a bear ing on the application of the provisions of this part or submitting false infor mation to USDA or creating entities for the purpose of concealing the inter est of a person in a farming operation or to otherwise avoid compliance with the provisions of this part. Such acts shall also include acquiescence in, ap proval of, or assistance to acts which have the effect of, or the purpose of, circumventing these regulations. § 12.11 Action based upon advice or ac tion of USDA. The provisions of part 718 of this Title, as amended, relating to perform ance based upon the action or advice of a County Committee (COC) or State FSA Committee shall be applicable to the provisions of this part. In addition, if it is determined by the appropriate USDA agency that the action of a per son which would form the basis of any ineligibility under this part was taken by such person in good-faith reliance on erroneous advice, information, or action of any other authorized rep resentative of USDA, the appropriate agency may make such benefits avail able to the extent that similar relief would be allowed under 7 CFR part 718. § 12.12 Appeals. Any person who has been or who would be denied program benefits in accordance with § 12.4 as the result of any determination made in accordance with the provisions of this part may obtain a review of such determination in accordance with the administrative appeals procedures of the agency which rendered such determination. Agency appeal procedures are contained in the Code of Federal Regulations as follows: FSA, part 780 of this title; NRCS, part 614 of this title; Rural Utilities Service, part 1900, subpart B of this title. § 12.13 Special Federal crop insurance premium subsidy provisions. (a) General. The provisions and ex emptions in this section are only appli cable to Federal crop insurance pre mium subsidies for a policy or plan of insurance under the Federal Crop In surance Act (7 U.S.C. 1501–1524). The ex emptions in this section are in addition to any that apply under § 12.5. Any con flict between this section and another will be resolved by applying this sec tion, but only for Federal crop insur ance premium subsidies. Any exemp tions or relief under this section apply to Federal crop insurance premium subsidies and do not apply to other benefits even for the same person for the same crop year or reinsurance year. Unless otherwise specified in this section, the provisions in this section apply to both highly erodible land and wetlands. (b) Ineligibility for failing to certify compliance. Subject to paragraphs (b)(2) and (3) of this section, failing to certify compliance as specified in § 12.7 will re sult in ineligibility as follows: (1) A Form AD–1026, or successor form, for the person must be on file with FSA on or before June 1 prior to the beginning of the reinsurance year (July 1) in order for the person to be el igible for any Federal crop insurance premium subsidies for the reinsurance year. Failure to file Form AD–1026, or successor form, with FSA on or before June 1 prior to the beginning of the re insurance year (July 1) will result in ineligibility for premium subsidies for the entirety of that reinsurance year. (2) A person will have until the first applicable crop insurance sales closing date to provide information necessary for the person’s filing of a Form AD– 1026 if the person: (i) Is unable to file a Form AD–1026 by June 1 due to circumstances beyond the person’s control, as determined by FSA; or (ii) Files a Form AD–1026 by June 1 in good faith and FSA subsequently deter mines that additional information is needed, but the person is unable to comply by July 1 due to circumstances beyond the control of the person. (3) A person who does not have Form AD–1026, or successor form, on file with FSA on or before June 1 prior to the beginning of the reinsurance year may be eligible for Federal crop insurance VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00400 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 391 Office of the Secretary, USDA § 12.13 premium subsidy for the subsequent re insurance year if the person can dem onstrate they began farming for the first time after June 1 but prior to the beginning of the reinsurance year (July 1). For example, a person who started farming for the first time on June 15, 2015, will be eligible for Federal crop insurance premium subsidies for the 2016 reinsurance year without a Form AD–1026 on file with FSA. However, in that case, the person must file Form AD–1026 with FSA on or before June 1, 2016 to be eligible for premium subsidy for the 2017 reinsurance year. (c) Ineligibility for violations. If a per son is ineligible due to a violation of the provisions of this part, the timing and results will be as follows: (1) Unless an exemption in this sec tion or § 12.5 applies, ineligibility for Federal crop insurance premium sub sidy for a policy or plan of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524) due to a violation of the provisions of this part will: (i) Not apply to the reinsurance year in which the violation occurred or any reinsurance year prior to the date of the final determination of a violation, including all administrative appeals of the determination, as determined by NRCS or FSA as applicable; and (ii) Only apply to reinsurance years subsequent to the date of a final deter mination of a violation, including all administrative appeals of the deter mination, as determined by NRCS or FSA as applicable. A person who is in violation of the provisions of this part, as determined by FSA or NRCS, in a reinsurance year, will, unless otherwise exempted, be ineligible for any Federal crop insurance premium subsidy begin ning with the subsequent reinsurance year. For example, a person who is de termined to be in violation of the pro visions of this part and has exhausted all administrative appeals on June 1, 2015, (2015 reinsurance year) will, unless otherwise exempted, be ineligible for Federal crop insurance premium sub sidy effective July 1, 2015, the start of the 2016 reinsurance year, and will not be eligible for any Federal crop insur ance premium subsidy for any policy or plan of insurance during the 2016 rein surance year. Even if the person be comes compliant during the 2016 rein surance year, the person will not be eli gible for Federal crop insurance pre mium subsidy until the 2017 reinsur ance year starting on July 1, 2016. (2) Eligibility for Federal crop insur ance premium subsidy for a policy or plan of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524) due to a violation of the provisions of this part will be based on FSA and NRCS final determinations, including all administrative appeals, regarding compliance with the provisions of this part. (3) The amount of premium subsidy for an insured person will be reduced when any person with a substantial beneficial interest in the insured per son is ineligible for premium subsidy under this part. The amount of reduc tion will be commensurate with the in eligible person’s substantial beneficial interest in the insured person. The in eligible person’s substantial beneficial interest in the insured person will be determined according to the policy provisions of the insured person. (4) Administrative appeals include appeals made in accordance with § 12.12 and part 11 of this title, but do not in clude any judicial review or appeal, or any other legal action. (d) Exemption to develop and comply with an approved HEL conservation plan. The following exemptions provide a delay in the requirement to develop and comply with an NRCS approved HEL conservation plan for certain per sons. (1) Persons subject to the provisions of this part regarding highly erodible land, specifically those related to sec tion 1211(a) of the Food Security Act of 1985, as amended, for the first time solely due to amendments to that sec tion by section 2611(a) of the Agricul tural Act of 2014 (16 U.S.C. 3811(a)(1)), will have 5 reinsurance years after the date the person is determined to have HEL and has exhausted all administra tive appeals, if applicable, to develop and comply with a conservation plan approved by NRCS before being ineli gible for Federal crop insurance pre mium subsidies. The additional time to develop and comply with a conserva tion plan approved by NRCS applies VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00401 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 392 7 CFR Subtitle A (1–1–17 Edition) § 12.13 only to persons who have not pre viously been subject to the highly erod ible land conservation provisions of this part. The additional time provided in this paragraph does not apply to any person who had any interest in any land or crop, including an affiliated person, that was subject to the provi sions of this part before February 7, 2014. The 5 reinsurance years to develop and comply with a conservation plan approved by NRCS starts: (i) For persons who have no land with an NRCS HEL determination, the 5 re insurance years begins the start of the reinsurance year (July 1) following the date NRCS makes a HEL determina tion and the person exhausts all their administrative appeals; or (ii) For persons who have any land for which an NRCS HEL determination has been made and all administrative appeals have been exhausted, the 5 re insurance years begins the start of the reinsurance year (July 1) following the date the person certifies compliance with FSA to be eligible for USDA bene fits subject to the conservation compli ance provisions. (2) Persons who meet all the fol lowing criteria will have 2 reinsurance years from the start of the reinsurance year (July 1) following the date the person certifies compliance with FSA to be eligible for USDA benefits subject to the conservation compliance provi sions to develop and comply with a conservation plan approved by NRCS before being ineligible for Federal crop insurance premium subsidies: (i) Were subject to the provisions of this part regarding highly erodible land, specifically those related to sec tion 1211(a) of the Food Security Act of 1985 (16 U.S.C. 3811(a)(1)), as amended, any time before February 7, 2014; (ii) Before February 7, 2014, stopped participating in all USDA programs subject to the provisions of this part regarding highly erodible land; (iii) Would have been in violation of the provisions of this part regarding highly erodible land had they contin ued to participate in those programs after February 7, 2014; and (iv) Are currently in violation of the provisions of this part regarding highly erodible land. (e) Exemption for prior wetland conver sions completed prior to February 7, 2014. No person will be ineligible for Federal crop insurance premium subsidies for a policy or plan of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524) for: (1) Converting a wetland if the wet land conversion was completed, as de termined by NRCS, before February 7, 2014; or (2) Planting or producing an agricul tural commodity on a converted wet land if the wetland conversion was completed, as determined by NRCS, be fore February 7, 2014. (f) Exemption for wetland conversion that impacts less than 5 acres. The fol lowing exemption is for wetland con version that impacts less than 5 acres of an entire farm: (1) In lieu of ineligibility for Federal crop insurance premium subsidies for a policy or plan of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524) due to a wetland conversion violation or concurrent with a planned wetland conversion occurring after February 7, 2014, a person may, if ap proved by NRCS, pay a contribution to NRCS in an amount equal to 150 per cent of the cost of mitigating the con verted wetland, as determined by NRCS. (2) A person is limited to only one ex emption, as determined by NRCS, de scribed in paragraph (f)(1) of this sec tion per farm. (3) NRCS will not refund this pay ment even if the person later conducts actions which will mitigate the earlier conversion. (g) Exemption for wetland conversion when a policy or plan of insurance is available to a person for the first time. The following exemption is for wetland conversion when a policy or plan of in surance is available to the person for the first time. (1) When a policy or plan of insurance that provides coverage for an agricul tural commodity is available to the person, including as a person who is a substantial beneficial interest holder, for the first time after February 7, 2014, as determined by RMA, ineligibility for VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00402 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 393 Office of the Secretary, USDA § 12.13 Federal crop insurance premium sub sidies for such policy or plan of insur ance due to a wetland conversion viola tion will only apply to wetland conver sions that are completed, as deter mined by NRCS, after the date the pol icy or plan of insurance first becomes available to the person. (2) The exemption described in para graph (g)(1) of this section: (i) Applies only to the policy or plan of insurance that becomes available to the person for the first time after Feb ruary 7, 2014, as determined by RMA; (ii) Does not exempt or otherwise ne gate the person’s ineligibility for Fed eral crop insurance premium subsidies on any other policy or plan of insur ance; and (iii) Applies only if the person takes steps necessary, as determined by NRCS, to mitigate all wetlands con verted after February 7, 2014, in a time ly manner, as determined by NRCS, but not to exceed 2 reinsurance years. (3) For the purposes of the paragraph (g)(1) of this section: (i) A policy or plan of insurance is considered to have been available to the person after February 7, 2014, if, after February 7, 2014, in any county in which the person had any interest in any acreage, including as a person who is a substantial beneficial interest holder: (A) There was a policy or plan of in surance available on the county actu arial documents that provided coverage for the agricultural commodity; or (B) The person obtained a written agreement to insure the agricultural commodity in any county; and (ii) Changing, adding, or removing options, endorsements, or coverage to an existing policy or plan of insurance will not be considered as a policy or plan of insurance being available for the first time to a person. (h) Wetland conversion mitigation ex emption. Unless another exemption ap plies, the following exemption provides additional time to mitigate wetland conversions. (1) A person determined to be in vio lation of the provisions of this part due to a wetland conversion occurring after February 7, 2014, will have 1 reinsur ance year after the final determination of violation, including all administra tive appeals, as determined by NRCS, to initiate a mitigation plan to remedy the violation, as determined by NRCS, before becoming ineligible for Federal crop insurance premium subsidies for a policy or plan of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524.). For example, if in May 2017, after NRCS has determined that a per son is in violation for converting a wet land and the person has exhausted all administrative appeals, the person will have until June 30, 2018, to initiate a mitigation plan to remedy the viola tion before becoming ineligible for Fed eral crop insurance premium subsidies starting with the 2019 reinsurance year. (2) Notwithstanding paragraph (h)(1) of this section, if a person determined to be in violation of the provisions of this part due to a wetland conversion occurring after February 7, 2014, as de termined by NRCS, and is subject to the provisions of this part for the first time solely due to section 2611(b) of the Agricultural Act of 2014, such person will have 2 reinsurance years after the final determination of violation, in cluding all administrative appeals, as determined by NRCS, to be imple menting all practices in a mitigation plan to remedy the violation, as deter mined by NRCS, before becoming ineli gible for Federal crop insurance pre mium subsidies for a policy or plan of insurance under the Federal Crop In surance Act (7 U.S.C. 1501–1524). (3) Administrative appeals include appeals made in accordance with § 12.12 and part 11 of this title, but do not in clude any judicial review or appeal, or any other legal action. (i) Good faith exemption. The fol lowing is a good faith exemption for wetland conservation: (1) A person determined by FSA or NRCS to be in violation, including all administrative appeals, of the provi sions of this part due to converting a wetland after February 7, 2014, or pro ducing an agricultural commodity on a wetland that was converted after Feb ruary 7, 2014, may regain eligibility for Federal crop insurance premium sub sidies for a policy or plan of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524) if all of the fol lowing criteria are met: VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00403 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 394 7 CFR Subtitle A (1–1–17 Edition) § 12.13 (i) FSA determines that such person acted in good faith and without the in tent to violate the wetland conserva tion provisions of this part; (ii) NRCS determines that the person is implementing all practices in a miti gation plan to remedy or mitigate the violation within an agreed-to period, not to exceed 2 reinsurance years; and (iii) The good faith determination of the FSA county or State committee has been reviewed and approved by the applicable State Executive Director, with the technical concurrence of the State Conservationist; or District Di rector, with the technical concurrence of the area conservationist. (2) In determining whether a person acted in good faith under paragraph (i)(1)(i) of this section, FSA will con sider such factors as whether: (i) The characteristics of the site were such that the person should have been aware that a wetland existed on the subject land; (ii) NRCS had informed the person about the existence of a wetland on the subject land; (iii) The person has a record of vio lating the wetland provisions of this part or other Federal, State, or local wetland provisions; or (iv) There exists other information that demonstrates the person acted with the intent to violate the wetland conservation provisions of this part. (3) After the requirements of para graph (i)(1) of this section are met, FSA may waive applying the ineligi bility provisions of this section to allow the person to implement the mitigation plan approved by NRCS. The waiver will apply for up to two re insurance years. (j) Landlord and Tenant wetland viola tions relief. The following provides land lord and tenant relief for wetland vio lations: (1) Except as provided in (j)(2) of this section, the ineligibility of a tenant or sharecropper for Federal crop insur ance premium subsidies for a policy or plan of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524) will, in lieu of ineligibility for pre mium subsidy, result in a reduction in the amount of premium subsidy paid by FCIC on all policies and plans of in surance for the landlord. (i) The percentage reduction will be determined by comparing the total number of cropland acres on the farm on which the violation occurred to the total number of cropland acres on all farms in which landlord has an inter est, as determined by FSA. (ii) The farms and cropland acres used to determine the premium subsidy reduction percentage will be the farms and cropland acres of the landlord for the reinsurance year in which the ten ant or sharecropper is determined in eligible. (iii) The percentage reduction will be applied to all policies and plans of in surance of the landlord in the reinsur ance year subsequent to the reinsur ance year in which the tenant or share cropper is determined ineligible. (iv) If the landlord and tenant or sharecropper are insured under the same policy, the landlord will be ineli gible for premium subsidy on that pol icy in lieu of a percentage reduction on that policy. (2) A landlord will be ineligible for the premium subsidy on all policies and plans of insurance in the reinsur ance year subsequent to the reinsur ance year in which the tenant or share cropper is determined ineligible if the production of an agricultural com modity on a converted wetland by the landlord’s tenant or sharecropper is re quired under the terms and conditions of the agreement between the landlord and such tenant or sharecropper and such agreement was entered into after February 7, 2014, or if the landlord has acquiesced in such activities by the tenant or sharecropper. (3) If all the requirements in para graph (j)(4) of this section are met, in lieu of ineligibility for Federal crop in surance premium subsidies for all poli cies or plans of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524) for producing or planting an agricultural commodity on a wetland converted after February 7, 2014, the premium subsidy on all policies and plans of insurance of the ineligible ten ant or sharecropper will be reduced. (i) The percentage reduction will be determined by comparing the total number of cropland acres on the farm on which the violation occurred to the total number of cropland acres on all VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00404 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 395 Office of the Secretary, USDA § 12.13 farms in which tenant or sharecropper has an interest, as determined by FSA. (ii) The farms and cropland acres used to determine the premium subsidy reduction percentage will be the farms and cropland acres of the tenant or sharecropper for the reinsurance year in which the tenant or sharecropper is determined ineligible. (iii) The percentage reduction will be applied to all policies and plans of in surance of the tenant or sharecropper in the reinsurance year subsequent to the reinsurance year in which the ten ant or sharecropper is determined in eligible. (iv) If the landlord and tenant or sharecropper are insured under the same policy, the tenant or share cropper will be ineligible for premium subsidy on that policy in lieu of a per centage reduction on that policy. (4) The provisions of paragraph (j)(3) of this section will not apply unless all the following are met: (i) The tenant or sharecropper shows that a good-faith effort was made to comply by developing a plan, approved by NRCS, for the restoration or mitiga tion of the converted wetland in a timely manner and prior to any viola tion; (ii) The owner of such farm refuses to apply such a plan and prevents the ten ant or sharecropper from implementing the approved plan; (iii) FSA determines the lack of com pliance is not a part of a scheme or de vice as described in § 12.10; and (iv) The tenant or sharecropper ac tively applies the practices and meas ures of the approved plan that are within their control. (k) Evaluation of certification. NRCS will evaluate the certification in a timely manner. (1) A person who properly completes, signs, and files Form AD–1026, or suc cessor form, with FSA certifying com pliance with the provisions of this part will be eligible for Federal crop insur ance premium subsidies for a policy or plan of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524) during the period of time such certifi cation is being evaluated by NRCS, if an evaluation is required. (2) A person will not be ineligible for Federal crop insurance premium sub sidies for a policy or plan of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501–1524) if: (i) NRCS fails to complete a required evaluation of the person’s Form AD– 1026, or successor form in a timely manner after all documentation has been provided to NRCS; and (ii) The person is subsequently deter mined to have been in violation of the provisions of this part during the time NRCS was completing the evaluation. (3) The relief from ineligibility pro vided in paragraph (k)(2) of this sec tion: (i) Applies only to violations that oc curred prior to or during the time NRCS is completing the required eval uation; (ii) Does not apply to any violations that occur subsequent to NRCS com pleting the evaluation; (iii) Does not apply if FSA or NRCS determines the person employed, adopted, or participated in employing or adopting a scheme or device, as pro vided in § 12.10, to evade the provisions of this part or to become eligible for the relief provided in paragraph (k)(2) of this section; and (iv) Does not apply if the required evaluation is delayed due to unfavor able site conditions for the evaluation of soils, hydrology, or vegetation. (l) Failing to notify FSA of a change. Requirements to pay equitable con tribution for failing to notify FSA of a change are as follows. (1) A person who fails to notify FSA of any change that could alter their status as compliant with the provisions of this part and is subsequently deter mined, by FSA or NRCS, to have com mitted a violation of the wetland con servation provisions of this part after February 7, 2014, will be required to pay to NRCS an equitable contribu tion. (2) The amount of equitable contribu tion will be determined by NRCS, but will not exceed the total amount of Federal crop insurance premium sub sidy paid by FCIC on behalf of the per son for all policies and plans of insur ance for all years in which the person is determined to have been in viola tion. (3) A person who fails to pay the full equitable contribution amount by the VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00405 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 396 7 CFR Subtitle A (1–1–17 Edition) § 12.20 due date determined by NRCS will be ineligible for Federal crop insurance premium subsidy on any policy or plan of insurance beginning with the subse quent reinsurance year. The person will be ineligible for Federal crop in surance premium subsidy for the entire reinsurance year even if full payment of the equitable contribution amount is received by NRCS during the reinsur ance year. [80 FR 22881, Apr. 24, 2015] Subpart B—Highly Erodible Land Conservation § 12.20 NRCS responsibilities regard ing highly erodible land. In implementing the provisions of this part, NRCS shall, to the extent practicable: (a) Develop and maintain criteria for identifying highly erodible lands; (b) Prepare and make available to the public lists of highly erodible soil map units; (c) Make soil surveys for purposes of identifying highly erodible land; and (d) Provide technical guidance to conservation districts which approve conservation plans and systems, in consultation with local county FSA committees, for the purposes of this part. § 12.21 Identification of highly erod ible lands criteria. (a) Basis for identification as highly erodible. Soil map units and an erodibility index will be used as the basis for identifying highly erodible land. The erodibility index for a soil is determined by dividing the potential average annual rate of erosion for each soil by its predetermined soil loss tol erance (T) value. The T value rep resents the maximum annual rate of soil erosion that could occur without causing a decline in long-term produc tivity. The equation for measuring ero sion is described below. (1) The potential average annual rate of sheet and rill erosion is estimated by multiplying the following factors of the Universal Soil Loss Equation (USLE): (i) Rainfall and runoff (R); (ii) The degree to which the soil re sists water erosion (K); and (iii) The function (LS), which in cludes the effects of slope length (L) and steepness (S). (2) The potential average annual rate of wind erosion is estimated by multi plying the following factors of the Wind Erosion Equation (WEQ): Cli matic characterization of windspeed and surface soil moisture (C) and the degree to which soil resists wind ero sion (I). (3) The USLE is explained in the U.S. Department of Agriculture Handbook 537, ‘‘Predicting Rainfall Erosion Losses.’’ The WEQ is explained in the paper by Woodruff, N.P., and F. H. Siddaway, 1965, ‘‘A Wind Erosion Equa tion,’’ Soil Science Society of America Proceedings, Vol. 29. No. 5, pages 602– 608. Values for all the factors used in these equations are contained in the NRCS field office technical guide and the references which are a part of the guide. The Universal Soil Loss Equa tion, the Revised Universal Soil Loss Equation, and the Wind Erosion Equa tion and the rules under which NRCS uses the equations are published at §§ 610.11 through 610.15 of this title. (b) Highly erodible. A soil map unit shall be determined to be highly erod ible if either the RKLS/T or the CI/T value for the map unit equals or ex ceeds 8. (c) Potentially highly erodible. When ever a soil map unit description con tains a range of a slope length and steepness characteristics that produce a range of LS values which result in RKLS/T quotients both above and below 8, the soil map unit will be en tered on the list of highly erodible soil map units as ‘‘potentially highly erod ible.’’ The final determination of erodibility for an individual field con taining these soil map unit delinea tions will be made by an on-site inves tigation. [61 FR 47025, Sept. 6, 1996; 61 FR 53491, Oct. 11, 1996] § 12.22 Highly erodible field deter mination criteria. (a) Predominance. Highly erodible land shall be considered to be predomi nant on a field if either: VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00406 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 397 Office of the Secretary, USDA § 12.23 (1) 33.33 percent or more of the total field acreage is identified as soil map units which are highly erodible; or (2) 50 or more acres in such field are identified as soil map units which are highly erodible. (b) Modification of field boundaries. A person may request the modification of field boundaries for the purpose of ex cluding highly erodible land from a field. Such a request must be sub mitted to, and is subject to the ap proval of, FSA. FSA shall use the tech nical determination of NRCS in ap proving this request. (c) Impact of changing field boundaries. When field boundaries are changed to include areas of land that were in cluded in a field that was previously determined to be predominately highly erodible according to paragraph (a) of this section, such areas shall continue to be subject to the requirements for predominately highly erodible fields, except as provided in paragraph (b) of this section. (d) Small area of noncropland. Small areas of noncropland within or adja cent to the boundaries of existing high ly erodible crop fields such as aban doned farmsteads, areas around filled or capped wells, rock piles, trees, or brush which are converted to cropland are considered to meet the requirement of § 12.5(a)(2) if they are included in an approved conservation plan for the en tire highly erodible field. [61 FR 47025, Sept. 6, 1996; 61 FR 53491, Oct. 11, 1996] § 12.23 Conservation plans and con servation systems. (a) Use of field office technical guide. A conservation plan or conservation sys tem developed for the purposes of § 12.5(a) must be based on, and to the extent practicable conform with, the NRCS field office technical guide in use at the time the plan is developed or re vised. For highly erodible croplands which were used to produce agricul tural commodities prior to December 23, 1985, the applicable conservation systems in the field office technical guide are designed to achieve substan tial reductions in soil erosion. Con servation systems shall be technically and economically feasible; based on local resource conditions and available conservation technology; cost-effec tive; and shall not cause undue eco nomic hardship on the person applying the conservation system. Any con servation plans or systems that were approved prior to July 3, 1996, are deemed to be in compliance with this paragraph. (b) Substantial reduction in soil erosion. For the purpose of determining wheth er there is a substantial reduction in soil erosion on a field containing high ly erodible cropland which was used to produce an agricultural commodity prior to December 23, 1985, the meas urement of erosion reduction achieved by applying a conservation plan or sys tem shall be based on a comparison of the estimated annual level of erosion that is expected to occur on that por tion of the field for which a conserva tion plan or system was developed and is being applied, to the estimated an nual level of erosion that existed on that same portion of the field before the application of a conservation plan or system. On a field that is converted from native vegetation after July 3, 1996, and where any crop production will result in increased erosion, in no case will the required conservation plan or system permit a substantial in crease in erosion. (c) Field trials. NRCS may allow a person to include in the person’s con servation plan or a conservation sys tem under the plan, on a field-trial basis, practices that are not currently approved but that NRCS considers have a reasonable likelihood of success. These trials must have prior approval by NRCS, and must be documented in the person’s conservation plan speci fying the limited time period during which the field trial is in effect. If, at the end of the conservation field trial period, NRCS finds that the practice does not meet conservation compliance requirements, the person will not be in eligible for USDA program benefits during the period of the field trial. (d) Highly erodible land previously under a Conservation Reserve Program contract. Any person who owns or oper ates highly erodible land that was under a Conservation Reserve Program contract as authorized by section 1231 of the Food Security Act of 1985, as amended, shall have 2 years after the VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00407 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 398 7 CFR Subtitle A (1–1–17 Edition) § 12.30 expiration of termination of the con tract to fully apply a conservation sys tem if the conservation plan for such land requires the installation of struc tural measures for the production of an agricultural commodity. NRCS offi cials may extend this period one addi tional year for circumstances beyond the control of the person. The person shall not be required to meet a higher conservation standard than the stand ard applied to other highly erodible cropland located within the area served by the field office technical guide for the area in which the field is located. (e) Information regarding conservation options. NRCS, in providing assistance to a person for the preparation or revi sion of a conservation plan under this part, will provide such person with in formation concerning cost-effective and applicable erosion control alter natives, crop flexibility, or other con servation assistance options that may be available. (f) Timely request for assistance. Per sons who require NRCS assistance for the development of a conservation plan or the installation of a conservation system are encouraged to request this assistance well in advance of deadline dates for compliance; otherwise the person may not be able to comply with these provisions and maintain eligi bility for USDA program benefits. (g) Action by conservation districts. Conservation districts approve or dis approve conservation plans or con servation systems after NRCS deter mines that the plans or systems con form to the NRCS field office technical guide. If a conservation district fails, without due cause, to act on a request for conservation plan or conservation system approval within 45 days, or if no conservation district exists, NRCS will approve or disapprove, as appro priate, the conservation plan or system in question. (h) Application of a conservation plan or system. A person is considered to be applying a conservation plan for pur poses of § 12.5(a) if the conservation system or plan being applied achieves or exceeds the substantial reduction in soil erosion as described in paragraph (b) which the conservation system or plan was designed to achieve. It is the responsibility of the person to: (1) Certify that the conservation plan or system is being applied; and (2) Arrange for a revision of the con servation plan with NRCS, if changes are made in land use, crop rotation or management, conservation practices, or in the original schedule of practice installation that would affect the achievement of substantial reduction in soil erosion in a given crop year. (i) Appeal to FSA. Persons who are ad versely affected by the determinations made under this subpart and believe that the requirements of this subpart were improperly applied may appeal the decision to FSA under § 12.12. (j) Undue economic hardship. After a technical determination has been made, the FSA county committee shall, if a person asserts that the appli cation of the person’s conservation sys tem would impose an undue economic hardship on the person, make a rec ommendation to the State FSA Com mittee as to whether or not the appli cation of the conservation system would impose an undue economic hard ship. The State FSA Committee may provide the person with a variance on the basis of the hardship. Under this variance, and any conditions that may be required in the variance, the person will be considered to be in compliance with the applicable provisions of this part. The State FSA Committee will consider relevant factors, such as the cost of installation of required con servation practices and benefits earned through programs subject to compli ance with this part, and the person’s general economic situation. Subpart C—Wetland Conservation § 12.30 NRCS responsibilities regard ing wetlands. (a) Technical and coordination respon sibilities. In carrying out the provisions of this part, NRCS shall: (1) Oversee the development and ap plication of criteria to identify hydric soils in consultation with the National Technical Committee for Hydric Soils and make available to the public an ap proved county list of hydric soil map units, which is based upon the National List of Hydric Soils; (2) Coordinate with the U.S. Fish and Wildlife Service and others in updating VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00408 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 399 Office of the Secretary, USDA § 12.30 the National List of Plant Species that Occur in Wetlands; (3) Make or approve wetland deter minations, delineations and certifi cations, functional assessments, miti gation plans, categorical minimal ef fects, and other technical determina tions relative to the implementation of the wetland conservation provisions of this part; (4) Develop and utilize off-site and on-site wetland identification proce dures; (5) Assure quality of service and de terminations through procedures devel oped by NRCS in consultation with other Federal agencies that have wet land responsibilities; (6) Investigate complaints and make technical determinations regarding po tential violations; (7) Develop a process at the state level, in coordination with the U.S. Fish and Wildlife Service, to ensure that these provisions are carried out in a technically defensible and timely manner, seek assistance as appro priate, and annually review the progress being made on implementa tion; and (b) Technical assistance from others In carrying out the provisions of this part, NRCS may request technical as sistance from the U.S. Fish and Wild life Service, State or local agencies, conservation districts, or qualified pri vate entities when NRCS determines that additional staff resources or tech nical expertise are needed to address adequately the requirements of this part or to enhance the quality of im plementation of this part. (c) Certification of wetland determina tions and wetland delineations. (1) Cer tification of a wetland determination means that the wetland determination is of sufficient quality to make a deter mination of ineligibility for program benefits under § 12.4 of this part. NRCS may certify a wetland determination without making a field investigation. NRCS will notify the person affected by the certification and provide an op portunity to appeal the certification prior to the certification becoming final. All wetland determinations made after July 3, 1996, will be done on a tract basis and will be considered cer tified wetland determinations. A not inventoried designation within a cer tified wetland is subject to change when the soil, hydrology, and vegeta tion evaluation is completed and iden tified as to type of wetland or as a non wetland. This change from a not-inven toried designation to an approved wet land designation will be done at the re quest of the landowner or during a for mal investigation of a potential viola tion. (2) The wetland determination and wetland delineation shall be certified as final by the NRCS official 30 days after providing the person notice of certification or, if an appeal is filed with USDA, after the administrative appeal procedures are exhausted. (3) In the case of an appeal, NRCS will review and certify the accuracy of the determination of all lands subject to the appeal to ensure that the subject lands have been accurately delineated. Prior to a decision being rendered on the appeal, NRCS will conduct an on site investigation of the subject land. (4) Before any benefits are withheld, an on-site investigation of a potential wetland violation will be made by NRCS. The affected person will be pro vided an opportunity to appeal the on site determination to USDA if the on site determination differs from the original determination. Such action by NRCS shall be considered a review of the prior determination and certifi cation of the delineation. If the prior determination was a certified wetland determination, an appeal of the NRCS on-site determination shall be limited to the determination that the wetland was converted in violation of this part. (5) A copy of the information from the final certified wetland determina tion and the wetland delineation shall be recorded on official USDA aerial photography, digital imagery, or other graphic representation of the area. (6) As long as the affected person is in compliance with the wetland con servation provision of this part, and as long as the area is devoted to the use and management of the land for pro duction of food, fiber, or horticultural crops, a certification made under this section will remain valid and in effect until such time as the person affected by the certification requests review of the certification by NRCS. A person VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00409 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 400 7 CFR Subtitle A (1–1–17 Edition) § 12.31 may request review of a certification only if a natural event alters the to pography or hydrology of the subject land to the extent that the final cer tification is no longer a reliable indica tion of site conditions, or if NRCS con curs with an affected person that an error exists in the current wetland de termination [61 FR 47025, Sept. 6, 1996; 61 FR 53491, Oct. 11, 1996; 76 FR 22785, Apr. 25, 2011] § 12.31 On-site wetland identification criteria. (a) Hydric soils. (1) NRCS shall iden tify hydric soils through the use of published soil maps which reflect soil surveys completed by NRCS or through the use of on-site reviews. If a pub lished soil map is unavailable for a given area, NRCS may use unpublished soil maps which were made according to the specifications of the National Cooperative Soil Survey or may con duct an on-site evaluation of the land. (2) NRCS shall determine whether an area of a field or other parcel of land has a predominance of hydric soils that are inundated or saturated as follows: (i) If a soil map unit has hydric soil as all or part of its name, that soil map unit or portion of the map unit related to the hydric soil shall be determined to have a predominance of hydric soils; (ii) If a soil map unit is named for a miscellaneous area that meets the cri teria for hydric soils (i.e., riverwash, playas, beaches, or water) the soil map unit shall be determined to have a pre dominance of hydric soils; or (iii) If a soil map unit contains inclu sions of hydric soils, that portion of the soil map unit identified as hydric soil shall be determined to have a pre dominance of hydric soils. (3) List of hydric soils. (i) Hydric soils are those soils which meet criteria set forth in the publication ‘‘Hydric Soils of the United States 1985’’ which was developed by the National Technical Committee for Hydric Soils and which is incorporated by reference. This pub lication may be obtained upon request by writing NRCS at U.S. Department of Agriculture, P.O. Box 2890, Wash ington, DC 20013, and is available for inspection at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741– 6030, or go to: http://www.archives.gov/ federallregister/ codeloflfederallregulations/ ibrllocations.html. Incorporation of this publication by reference was ap proved by the Director of the Federal Register on June 24, 1986. The mate rials are incorporated as they exist on the date of the approval and a notice of any change in these materials will be published in the FEDERAL REGISTER. (ii) An official list of hydric soil map units shall be maintained at the local NRCS office and shall include— (A) All soils from the National List of Hydric Soils that can be found in that field office area, and (B) Any soil map units or areas which the state conservationist determines to meet such hydric soil criteria. (iii) Any deletions of a hydric soil unit from the hydric soil map unit list must be made according to the estab lished procedure contained in the pub lication ‘‘Hydric Soils of the United States 1985’’ for adding or deleting soils from the National List of Hydric Soils. (b) Hydrophytic vegetation. Hydrophytic vegetation consists of plants growing in water or in a sub strate that is at least periodically defi cient in oxygen during a growing sea son as a result of excessive water con tent. (1) A plant shall be considered to be a plant species that occurs in wetland if such plant is listed in the National Wetland Plant List, or (as determined by NRCS) successor publication. The publication may be accessed at: http:// rsgisias.crrel.usace.army.mil/NWPL/. (2) For the purposes of the definition of ‘‘wetland’’ in § 12.2 of this part, land shall be determined to have a preva lence of hydrophytic vegetation if: (i) NRCS determines through the cri teria specified in paragraph (b)(3) of this section that under normal cir cumstances such land supports a preva lence of hydrophytic vegetation. The term ‘‘normal circumstances’’ refers to the soil and hydrologic conditions that are normally present, without regard to whether the vegetation has been re moved; or (ii) In the event the vegetation on such land has been altered or removed, NRCS will determine if a prevalence of VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00410 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 401 Office of the Secretary, USDA § 12.31 hydrophytic vegetation typically exists in the local area on the same hydric soil map unit under non-altered hydro logic conditions. (3) The determination of prevalence of hydrophytic vegetation will be made in accordance with the current Federal wetland delineation methodology in use by NRCS at the time of the deter mination. (c) Mitigation wetlands. Notwith standing the provisions of this section, wetlands which are created in order to mitigate the loss of other wetlands as a result of irrigation, recreation, munic ipal water, flood control, or other simi lar projects shall not be considered to be artificial wetland for the purposes of § 12.5(b)(1)(vii)(A) of this part. (d) Minimal effect determination. For the purposes of § 12.5(b)(1)(v) of this part, NRCS shall determine whether the effect of any action of a person as sociated with the conversion of a wet land, the conversion of wetland and the production of an agricultural com modity on converted wetland, or the combined effect of the production of an agricultural commodity on a wetland converted by someone else has a mini mal effect on the functions and values of wetlands in the area. Such deter mination shall be based upon a func tional assessment of functions and val ues of the wetland under consideration and other related wetlands in the area, and will be made through an on-site evaluation. A request for such deter mination will be made prior to the be ginning of activities that would con vert the wetland. If a person has con verted a wetland and then seeks a de termination that the effect of such conversion on wetland was minimal, the burden will be upon the person to demonstrate to the satisfaction of NRCS that the effect was minimal. The production of an agricultural com modity on any portion of a converted wetland in conformance with a mini mal-effect determination by NRCS is exempt under § 12.5(b)(1)(v) of this part. However, any additional action of a person that will change the functions and values of a wetland for which a minimal-effect determination has been made shall be reported to NRCS for a determination of whether the effect continues to be minimal. The loss of a minimal effect determination will cause a person who produces an agri cultural commodity on the converted wetland after such change in status to be ineligible, under § 12.4, for certain program benefits. In situations where the wetland values, acreage, and func tions are replaced by the restoration, enhancement or creation of a wetland in accordance with a mitigation plan approved by NRCS, the exemption pro vided by the determination will be ef fective after NRCS determines that all practices in a mitigation plan are being implemented. (e) Categorical Minimal Effect Exemp tions. (1) The state conservationist, in consultation with the state technical committee established under 16 U.S.C. 3861, shall identify any categories of conversion activities and conditions which are routinely determined by NRCS to have minimal effect on wet land functions and values, as described in paragraph (d) of this section, and recommend to the Chief, NRCS, or a designee, inclusion on a list of categor ical minimal effect exemptions. (2) The Chief, or designee, shall evaluate the conversion practices rec ommended by the state conservation ists in the region to ensure consistency across State and regional lines, and to determine whether any categories of conversion activities identified pursu ant to paragraph (e)(1) of this section, if such activities were exempt from the ineligibility provisions of § 12.4, would only have a minimal effect on wetland functions and values in a wetland sys tem within the region. (3) Any categories of conversion ac tivities which meet the criteria of paragraph (e)(2) of this section will be published in the FEDERAL REGISTER for inclusion in this part and shall be ex empt under § 12.5(b)(1)(v) of this part. (4) The NRCS local field office shall maintain a list of any activities and conditions which are determined by the Chief, or designee, exempt pursuant to this section and will provide the list to a person upon request. [61 FR 47025, Sept. 6, 1996, as amended at 69 FR 18803, Apr. 9, 2004; 76 FR 82077, Dec. 30, 2011; 80 FR 22885, Apr. 24, 2015] VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00411 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 402 7 CFR Subtitle A (1–1–17 Edition) § 12.32 § 12.32 Converted wetland identifica tion criteria. (a) Converted wetland shall be identi fied by determining whether the wet land was altered so as to meet the defi nition of converted wetland. In making this determination, the following fac tors are to be considered: (1) Where hydric soils have been used for production of an agricultural com modity and the effect of the drainage or other altering activity is not clearly discernible, NRCS will compare the site with other sites containing the same hydric soils in a natural condi tion to determine if the hydric soils can or cannot be used to produce an ag ricultural commodity under natural conditions. If the soil on the compari son site could not produce an agricul tural commodity under natural condi tions, the subject wetland will be con sidered to be converted wetland. (2) Where woody hydrophytic vegeta tion has been removed from hydric soils for the purpose of or permitting the production of an agricultural com modity, the area will be considered to be converted wetland. (b) A wetland shall not be considered to be converted if: (1) Production of an agricultural commodity on such land is possible as a result of a natural condition, such as drought, and it is determined that the actions of the person producing such agricultural commodity does not per manently alter or destroy natural wet land characteristics. Destruction of herbaceous hydrophytic vegetation (i.e., plants other than woody shrubs or trees) as a result of the production of an agricultural commodity shall not be considered as altering or destroying natural wetland characteristic if such vegetation could return following ces sation of the natural condition which made production of the agricultural commodity possible; or (2) Such land is correctly identified as farmed wetland or farmed-wetland pasture. § 12.33 Use of wetland and converted wetland. (a) The provisions of § 12.32(b)(2) are intended to protect remaining values, acreage, and functions of the wetlands described therein. Persons may con tinue to farm such wetlands under nat ural conditions or as they did prior to December 23, 1985. However, no action can be taken to increase effects on the water regime beyond that which ex isted on such lands on or before Decem ber 23, 1985, unless NRCS determines the effect on losing remaining wetland values would be minimal under § 12.5(b)(1)(v). If, after December 23, 1985, changes due to human activity oc curred in the watershed and resulted in an increase in the water regime on a person’s land, the person may be al lowed to adjust the existing drainage system to accommodate the increased water regime on the condition that the person affected by this additional water provides NRCS with appropriate documentation of the increased water regime, the causes thereof, and the planned changes in the existing drain age system. In order to maintain pro gram eligibility, a person must provide sufficient documentation and receive approval from NRCS prior to making any changes that will have the effect of increasing the capacity of the existing drainage systems. (b) Unless otherwise provided in this part, the production of an agricultural commodity on land determined by NRCS to be prior-converted cropland is exempted by law from these regula tions for the area which was converted. Maintenance or improvement of drain age systems on prior-converted crop lands are not subject to this rule so long as the prior-converted croplands are used for the production of food, for age, or fiber and as long as such ac tions do not alter the hydrology of nearby wetlands or do not make pos sible the production of an agricultural commodity on these other wetlands. Other wetlands under this section means any natural wetland, farmed wetland, farmed-wetland pasture, or any converted wetland that is not ex empt under § 12.5 of this part. (c) Abandonment is the cessation for five consecutive years of management or maintenance operations related to the use of a farmed wetland or a farmed-wetland pasture. Unless the cri teria for receiving an exemption under § 12.5(b)(1)(iii) are met, such land is considered to be abandoned when the land meets the wetland criteria of VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00412 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R 403 Office of the Secretary, USDA § 14.2 § 12.31. In order for documentation of site conditions to be considered ade quate under § 12.5(b)(1)(iii), the affected person must provide to NRCS available information concerning the extent of hydrological manipulation, the extent of woody vegetation, and the history of use. In accordance with § 12.5(b)(1)(iii), participation in a USDA approved wet land restoration, set-aside, diverted acres, or similar programs shall not be deemed to constitute abandonment. (d) The maintenance of the drainage capacity or any alteration or manipu lation, including the maintenance of a natural waterway operated and main tained as a drainage outlet, that af fects the circulation and flow of water made to a farmed wetland or farmed wetland pasture would not cause a per son to be determined to be ineligible under this part, provided that the maintenance does not exceed the scope and effect of the original alteration or manipulation, as determined by NRCS, and provided that the area is not aban doned. Any resultant conversion of wetlands is to be at the minimum ex tent practicable, as determined by NRCS. [61 FR 47025, Sept. 6, 1996, as amended at 76 FR 82077, Dec. 30, 2011] PART 13 [RESERVED] PART 14—DETERMINING THE PRI MARY PURPOSE OF CERTAIN PAYMENTS FOR FEDERAL TAX PURPOSES Sec. 14.1 Purpose. 14.2 Applicability. 14.3 Objective. 14.4 Policy. 14.5 Procedure. 14.6 Criteria for determining the primary purpose of payments with respect to po tential exclusion from gross income. 14.7 Non-Federal programs and payments. AUTHORITY: Sec. 543, Pub. L. 95–600; as amended by sec. 105, Pub. L. 96–222; 26 U.S.C. 126, 1255 and 5 U.S.C. 301. SOURCE: 45 FR 58507, Sept. 4, 1980, unless otherwise noted. § 14.1 Purpose. (a) Part 14 sets forth criteria to be used by the Secretary of Agriculture in determining the primary purpose of certain payments received by persons under applicable programs. Deter mining the primary purpose for which applicable payments are made is one step toward the exclusion of all or part of the payments from gross income for Federal income tax purposes. (b) The criteria set forth in part 14 apply only to the determinations to be made by the Secretary of Agriculture. § 14.2 Applicability. (a) Part 14 applies only to payments received under the programs listed in paragraphs (a)(1) through (10) of this section. Payments received under pro grams not listed in paragraphs (a)(1) through (10) of this section, are not considered eligible for exclusion from gross income under this part. (1) The rural clean water program au thorized by section 208(j) of the Federal Water Pollution Control Act (33 U.S.C. 1288(j)). (2) The rural abandoned mine pro gram authorized by section 406 of the Surface Mining Control and Reclama tion Act of 1977 (30 U.S.C. 1236). (3) The water bank program author ized by the Water Bank Act (16 U.S.C. 1301 et seq.). (4) The emergency conservation measures program authorized by title IV of the Agricultural Credit Act of 1978 (16 U.S.C. 2201 et seq.). (5) The agricultural conservation pro gram authorized by the Soil Conserva tion and Domestic Allotment Act (16 U.S.C. 590a). (6) The Great Plains conservation program authorized by section 16 of the Soil Conservation and Domestic Allot ment Act (16 U.S.C. 590p(b)). (7) The resource conservation and de velopment program authorized by the Bankhead-Jones Farm Tenant Act and by the Soil Conservation and Domestic Allotment Act (7 U.S.C. 1010; 16 U.S.C. 590a et seq.). (8) The forestry incentives program authorized by section 4 of the Coopera tive Forestry Assistance Act of 1978 (16 U.S.C. 2103). (9) Any small watershed program ad ministered by the Secretary of Agri culture that is determined by the Sec retary of the Treasury or his delegate to be substantially similar to the type VerDate Sep<11>2014 07:47 Mar 21, 2017 Jkt 241012 PO 00000 Frm 00413 Fmt 8010 Sfmt 8010 Y:\SGML\241012.XXX 241012pm a n g ru m o n D S K 3 G D R 0 8 2 P R O D w ith C F R