[Federal Register Volume 75, Number 25 (Monday, February 8, 2010)]
[Proposed Rules]
[Pages 6264-6288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-2556]
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Part II
Department of Agriculture
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Commodity Credit Corporation
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7 CFR Part 1450
Biomass Crop Assistance Program; Proposed Rule
Federal Register / Vol. 75, No. 25 / Monday, February 8, 2010 /
Proposed Rules
[[Page 6264]]
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1450
RIN 0560-AH92
Biomass Crop Assistance Program
AGENCY: Commodity Credit Corporation and Farm Service Agency, USDA.
ACTION: Proposed rule.
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SUMMARY: The Commodity Credit Corporation (CCC) proposes regulations to
implement the new Biomass Crop Assistance Program (BCAP) authorized by
the Food, Conservation, and Energy Act of 2008 (the 2008 Farm Bill).
BCAP is intended to assist agricultural and forest land owners and
operators with the establishment and production of eligible crops
including woody biomass in selected project areas for conversion to
bioenergy, and the collection, harvest, storage, and transportation of
eligible material for use in a biomass conversion facility. This rule
specifies the requirements for eligible participants, biomass
conversion facilities, and biomass crops and materials. It also
provides notice of final termination of the existing Notice of Funds
Availability.
DATES: We will consider comments that we receive by April 9, 2010.
ADDRESSES: We invite you to submit comments on this proposed rule. In
your comment, include the volume, date, and page number of this issue
of the Federal Register. You may submit comments by any of the
following methods:
E-Mail: [email protected].
Fax: 202-720-4619.
Mail: Director of CEPD, USDA FSA CEPD, Stop 0513, 1400
Independence Ave., SW., Washington, DC 20250-0513.
Hand Delivery or Courier: Deliver comments to Director of
CEPD, Room 4709-S, 1400 Independence Ave., SW., Washington, DC.
Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
Comments may be inspected at the mail address listed above between
8 a.m. and 4:30 p.m., Monday through Friday, except holidays. A copy of
this rule is available through the Farm Service Agency (FSA) home page
at http://www.fsa.usda.gov/.
FOR FURTHER INFORMATION CONTACT: Robert Stephenson at USDA, FSA, CEPD,
STOP 0513, 1400 Independence Ave., SW., Washington, DC 20250-0513;
telephone 202-720-6221; e-mail: [email protected]. Persons with
disabilities who require alternative means for communication (Braille,
large print, audiotape, etc.) should contact the USDA Target Center at
202-720-2600 (voice and TDD).
SUPPLEMENTARY INFORMATION:
Background
Section 9001 of the 2008 Farm Bill authorizes the Biomass Crop
Assistance Program (BCAP) to assist agricultural and forest land owners
and operators with the collection, harvest, storage, and transportation
of eligible material for use in a biomass conversion facility and to
support the establishment and production of eligible crops for
conversion to bioenergy in selected project areas. The 2008 Farm Bill
also authorizes such sums as are necessary to carry out BCAP.
On May 5, 2009, the President issued a Presidential directive
establishing a Biofuels Interagency Working Group (chaired by the
Secretaries of Agriculture and Energy and the Administrator of the
Environmental Protection Agency). Among other programmatic specific
goals, the Presidential directive laid the groundwork for a policy
development process that would aggressively accelerate the development
of advanced biofuels (published in the Federal Register on May 7, 2009
(74 FR 21531-21532)). One aspect of the larger effort outlined in the
memorandum is the issuance of guidance and support related to the
collection, harvest, storage, and transportation of eligible materials
for use in biomass conversion facilities--a component of the BCAP.
On June 11, 2009 (74 FR 27767-27772), we published in the Federal
Register a BCAP notice of funds availability (NOFA) for the collection,
harvest, storage, and transportation of materials (CHST). This proposed
rule terminates the NOFA effective on the date the proposed rule is on
public display at the Office of the Federal Register. On that date,
USDA will notify the public that the NOFA is terminated and that FSA
will no longer accept applications for matching payments under the
NOFA.
We also held a series of public meetings, as described in a
different notice published on May 13, 2009 (74 FR 22510-22511), to
collect public input needed to prepare an environmental impact
statement (EIS) for BCAP. As outlined in the NOFA, comments from the
public meetings, other public comments previously submitted in response
to the NOFA, the full EIS and all comments and lessons learned from the
three BCAP notices will be incorporated into the rulemaking for the
entire BCAP program, which will include CHST. As such, this proposed
rule covers the whole BCAP program, including both the provisions that
provide matching payments for collection, harvest, storage, and
transportation of materials and the provisions that provide payment for
the establishment and production of biomass crops in selected project
areas. It reflects comments received on the NOFA. CCC believes that the
full BCAP should be viewed in a broader policy context which promotes
the Administration's priorities for increasing the production of
advanced biofuels, renewable energy and biobased products. Within this
context, this proposed rule, which would implement the full BCAP,
terminates the NOFA and makes necessary changes to the program in a
manner that is consistent with the 2008 Farm Bill and encourages the
development of bioenergy, including advanced biofuels, renewable
energy, and biobased products.
As defined in this rule, ``advanced biofuel'' means fuel derived
from renewable biomass other than corn kernel starch, including
biofuels derived from cellulose, hemicellulose, or lignin; biofuels
derived from sugar and starch (other than ethanol derived from corn
kernel starch); biofuel derived from waste material, including crop
residue, other vegetative waste material, animal waste, food waste, and
yard waste; diesel-equivalent fuel derived from renewable biomass
including vegetable oil and animal fat; biogas (including landfill gas
and sewage waste treatment gas) produced through the conversion of
organic matter from renewable biomass; and butanol or other alcohols
produced through the conversion of organic matter from renewable
biomass and other fuel derived from cellulosic biomass.
Discussion of Comments on NOFA
Forty-seven comments were received in response to the NOFA.
Commenters included a Tribe, State government agencies, an Embassy,
individuals, non-profits, corporations, small businesses,
entrepreneurs, public interest groups, Federal agencies and
departments, academics, trade and industry associations, and
cooperatives. Comments were received from all regions within the U.S.
and from Canada and the United Kingdom.
Forty-six percent of the respondents were either a biomass
conversion facility or represented biomass conversion facilities, the
largest majority being from the wood pellet manufacturing industry.
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Twenty-one percent of the respondents commented on the constraints
that resulted from requiring an ``arm's-length transaction.'' Most of
those comments requested that the arm's-length transaction requirement
either be removed or be reconstituted to enhance program flexibility
and allow for a greater diversity of eligible material owner
participation. CCC acknowledges the importance of ensuring a broad
range of eligible materials in pursuing program goals, and is mindful
of the constraints raised by the commenters. In order to provide
appropriate safeguards to ensure transactions among disinterested
parties, CCC proposes to replace the arm's length transaction language
in the proposed rule with related-party transaction language.
Related-party transaction restrictions will not make ineligible
stockholders of a privately or publicly held company who deliver
eligible material to that company, nor make members of a cooperative
who deliver eligible material to that cooperative ineligible. CCC
requests additional comments on related-party transactions.
None of the parties in a related-party transaction for the purchase
of eligible material are eligible for CHST matching payments as an
eligible material owner.
Twenty percent of respondents opposed the requirement to measure
biomass deliveries with real-time equipment that accurately records
moisture levels to meet the dry-ton measurement standard. Most
indicated that common industry practice is to measure in terms of
green-tons with the general assumption of a moisture level of 45 to 50
percent. Based on these comments, CCC proposes to modify its
requirement for moisture testing and adopt the industry-wide standard
for measuring moisture. However, in all cases, the dry-ton equivalent
remains.
Seventy-six percent of the comments concerned eligible materials,
with 13 percent of those comments focused on conservation and forest
stewardship plans related to eligible materials. These comments
included commentary for and against the 20 percent cap on Title I crop
agricultural residue. Most of those in favor of the cap remarked that
it ought to be a complete ban to protect soils from wind and water
erosion and that no agricultural residue should be removed without a
conservation plan. Many of those in opposition to the cap stated that
the cap of 20 percent only would drive up market prices on forest
residue and allow forest residue to become the central supply for
biomass conversion facilities. In this proposed rule, there is no 20-
percent cap because it is inconsistent with the 2008 Farm Bill.
Regarding protecting land from wind and water, CCC proposes in this
rule that BCAP contract participants will implement conservation plans,
forest stewardship plans or equivalent plans that take into account
site-level conservation needs. With regard to matching payment
eligibility for agricultural and forest landowners and operators
removing eligible material for use in a biomass conversion facility,
such removal to receive matching payments must be done in compliance
with any new, updated or existing conservation plans, forest
stewardship plans or equivalent plans, as well as any existing
environmental laws and regulations.
Other comments concerning the conservation plans included a desire
to expand the requirement for conservation plans. Suggestions for
elements of conservation plans included: target erosion rates far below
``T'' (soil loss tolerance) and compliance with new State ordinances on
items such as buffers. This standard exceeds the level for highly
erodible land, which is defined in 7 CFR part 12. Therefore, CCC did
not adopt this comment and requests public comment on appropriate
conservation standards for land enrolled in BCAP.
Comments concerning Forest Stewardship Plans offered alternative
``equivalent plans'' prescribed in the 2008 Farm Bill, such as plans
under the American Tree Farm Program, the Sustainable Forestry
Initiatives Program or State Best Management Programs. This comment is
consistent with the 2008 Farm Bill and was accepted and reflected in
this proposed rule.
Less than 10 percent of the comments urged FSA and CCC to consider
miscanthus as an eligible material. Miscanthus is an eligible material;
however, because some States may consider miscanthus a noxious weed, it
may not be considered an eligible crop in those States.
Nearly 50 percent of the comments expressed a need for the
eligibility time period for matching payments to be extended beyond two
years. Rationale for these requests included the fact that certain
contracts, such as a timber sale contract, have task orders and options
that are not necessarily executed within a two-year time period and the
need for equipment acquisitions or repairs sometimes interrupt
harvesting. Two suggestions were given to tie the two-year limit to
land tract instead of the eligible material owner.
The 2008 Farm Bill specified the two-year period for matching
payments. However, CCC modified the beginning of the time period from
the date of pre-delivery approval to the date the first payment is
issued. From that first date, matching payment obligations may occur
for two years to an eligible material owner. CCC did not adopt the
comment to change the two-year period from ``eligible material owner''
to ``tract'' because to do so would have been an extraordinary
administrative burden on FSA that would have required extensive
geographic-information-system-based software to monitor and control
payments.
Nearly 20 percent of the commenting respondents were concerned with
the economic market impact of BCAP. Comments included concerns that the
introduction of the matching payment could impact the supply of
commercial timber. Commenters did not agree on the impact; concerns
were expressed that the impact would be negative, reducing supply, and
positive, increasing supply. Similarly, commenters expressed concern
that supply impacts would result in both favorable and unfavorable
pricing impacts. Several respondents noted that the drop in the housing
market has depressed the current supply of biomass and the matching
payment, from their perspective, might help improve waste wood supply
levels. Because these comments are of a general nature, CCC took no
action on these comments.
Nearly 25 percent of the comments opposed the requirement to
present scale tickets or a check to qualify the delivery and validate
eligibility for a matching payment. The commenting parties indicated
that the burden and cost of recording on each scale ticket was too
high. CCC generally agrees with the comment and modified the
requirement in Sec. 1450.104(f) so the required information that must
be submitted includes total actual tonnage delivered, total dry-weight
tonnage-equivalent using standard moisture determinations, total
payment including per ton payment rate(s) matched with actual tonnage,
and the qualified biomass conversion facility's certification as to the
authenticity of the information.
Comments on wildlife and plant life came from 15 percent of the
respondents. Several comments indicated concern about ensuring
standards for invasive and noxious species where eligible material was
concerned. These comments suggested that CCC consult with USDA's Animal
and Plant Health Inspection Service and the National Council for
Invasive Species to address geographic-specific issues. ``Eligible
material'' is a subset of renewable biomass and is specifically defined
in the 2008 Farm Bill as the
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material that is eligible for a matching payment. The 2008 Farm Bill
does not restrict invasive and noxious species from eligibility,
however, as discussed below, CCC will require that existing measures be
taken and standing guidelines followed for any harvesting, collecting,
storing or transporting of such material from such species.
``Eligible crops,'' however, are another subset of renewable
biomass that refers to the kind and types of crops that may qualify for
establishment and annual payments on land enrolled in BCAP. According
to the 2008 Farm Bill, invasive and noxious species are not ``eligible
crops'' and CCC will collaborate with other appropriate agencies and
entities to ensure current listings are available.
Finally, in issuing the NOFA, we pledged to consider all public
comments and incorporate relevant evidence from the full EIS as well as
all lessons learned into the proposed rule that sets forth requirements
for the overall BCAP. Based upon the Department's experience in
implementing the component of the program authorized by the NOFA,
certain changes are necessary to implement the program in a manner that
is consistent with the 2008 Farm Bill, while also supporting the
Administration's overall policy objective to encourage the development
of advanced biofuels, renewable energy, and biobased products within
the 2008 Farm Bill authority. The proposed rule will specifically seek
public comment on how to best incentivize the development of advanced
biofuels, renewable energy and biobased products from renewable
biomass.
BCAP Overview
BCAP supports two main types of activities. First, it provides
funding for agricultural and forest land owners and operators to
receive matching payments for eligible material that is sold to
qualified biomass conversion facilities for the production of heat,
power, biobased products, or advanced biofuels. In this rule, these
payments are referred to as ``matching payments.'' The matching payment
is intended to assist producers with the cost of collection, harvest,
storage, and transportation of eligible material to the facility. Such
payments to a particular participant may continue for up to two years
after the first payment is issued. Second, BCAP provides funding for
producers of eligible crops of renewable biomass within specified
project areas to receive establishment payments of not more than 75
percent of the cost of establishment of eligible woody and non-woody
perennial crops, and annual payments for up to 15 years for the
production of those crops. In this rule, these are referred to as
``establishment and annual payments.'' To be eligible for payment, the
establishment and production activities must take place in designated
project areas, which may be proposed to CCC by biomass conversion
facilities or by groups of producers. Production activities may
include, but are not limited to, annual payments for producers who are
unable to sell crop due to a reduction in the size or scope of a
biomass conversion facility's operation or if a producer experiences
crop failure caused by no fault of the producer but by a natural event
such as drought, flooding or hail, as determined by CCC. Producers in
project areas can be eligible for both types of payments; producers
outside the project areas can be eligible for matching payments only. A
table summarizing the major eligibility requirements for both types of
payments is provided later in this rule.
Terms Used in This Rule
This rule uses the term ``eligible material'' for the renewable
biomass that is eligible for the matching payment component of BCAP and
``eligible crop'' for renewable biomass that may be eligible for the
establishment and annual payments component of BCAP. The 2008 Farm Bill
uses these two terms in this way and defines them as including
different kinds of renewable biomass. The use of the terms in this rule
is consistent with the way the terms are used in the 2008 Farm Bill.
With this rule, CCC intends to achieve better consistency between the
requirements for eligible materials collected and harvested from public
and private lands. In addition, CCC seeks to avoid diverting any
materials potentially eligible for BCAP matching payments from existing
value added production processes already occurring in the marketplace.
Therefore, CCC proposes that vegetative wastes, such as wood waste and
wood residues, collected or harvested from both public and private
lands should be limited to only those that would not otherwise be used
for a higher-value product. More specifically, for materials collected
from both public and private lands, CCC is proposing to exclude from
matching payment eligibility wood wastes and residues derived from mill
residues (i.e. tailings, etc.) or other production processes that
create residual byproducts that are typically used as inputs for higher
value-added production (i.e. particle board, fiberboard, plywood, or
other wood product markets). However, CCC is proposing to allow as
eligible for matching payments wood waste and residue derived from
slash, pre-commercial operations, wet cordwood etc.) that is altered to
chipped or similar form solely for the purposes of transport and
delivery to eligible biomass conversion facilities. As specified in the
2008 Farm Bill and the regulations in 7 CFR part 1450, the eligible
material owner may be a person or legal entity who is (1) a producer of
an eligible crop or (2) has the right to collect or harvest eligible
material and (3) a qualified biomass conversion facility that meets
those requirements and the definition. As discussed in this rule, the
matching payments will be made for the delivery of the eligible
material.
The term ``conservation district'' is used as defined in 7 CFR part
1410.
This proposed rule uses the term ``participant'' for the matching
payments component of BCAP and the terms ``producer'' and
``participant'' for the establishment and annual payments component of
BCAP. The distinction is, an eligible participant for matching payments
is not necessarily the person or legal entity who produced the
material, but may be the person who owns it or has the authority to
sell it to the biomass conversion facility. In other words, all BCAP
producers are participants, but not all BCAP participants are
producers. Participants are those individuals or entities who have been
approved and are bound to perform under a contract for matching
payments, establishment, or annual payments.
This proposed rule uses the term ``contract'' and ``agreement.'' A
contract is between CCC and the participant for BCAP payments. The
contract is legally binding and specifies what the producer must do and
the resulting payments that CCC will make to the producer. An agreement
is with a qualified biomass conversion facility or a project area
sponsor. As fully described later in this proposed rule, the agreement
specifies what the qualified biomass conversion facility or the project
area sponsor plans to do and how it will support the establishment and
production of eligible crops for conversion to bioenergy in the BCAP
project areas, for example, the type of renewable biomass that will be
used, the planned use of renewable biomass, and the new uses for the
renewable biomass. In addition, there may be agreements between CCC and
a qualified biomass conversion facility for the matching payments,
which include items such as obligations of the facility to provide a
purchase list, receipts and scale tickets for the eligible material
owners and agreement to provide
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facility address and contact information to the general public.
Matching Payments
As proposed in this rule, matching payments would be available for
the delivery of eligible material to qualified biomass conversion
facilities to a producer of an eligible crop or a person with the right
to collect or harvest eligible material.
The 2008 Farm Bill provides for matching payments at a rate of $1
for each $1 per dry ton paid by the qualified biomass conversion
facility, in an amount up to $45 per dry ton, for a period of two
years. The 2008 Farm Bill also provides that biomass conversion
facilities are those that convert, or propose to convert renewable
biomass into heat, power biobased products, or advanced biofuels.
For the matching payments to eligible material owners delivering to
a biomass conversion facility, CCC seeks comments on the following
three options.
One option is to provide the matching payments as provided in the
Notice of Funds Availability. Under this option, CCC would provide
matching payments at the rate of $1 for each $1 per dry ton paid by the
CHST-qualified biomass conversion facility to the owner for delivery of
eligible material to the facility in an amount not to exceed $45 per
dry ton. Under this option, a limit would be placed on those biomass
facilities that convert wood wastes or wood residues into heat or power
for the facility. In those cases, a historical baseline of heat or
power the facility produces from these materials will be established by
the Deputy Administrator and payments will be made only for materials
delivered to those facilities for conversion to heat or power above
that baseline.
A second option is to tailor the matching payments through a
``tiered approach'' designed to encourage advanced biofuels production.
In this option, CCC would provide matching payments at the rate of $1
for each $1 per dry ton paid by the CHST-qualified biomass conversion
facility; however, biomass conversion facilities converting eligible
material to advanced biofuels would be able to receive matching
payments at the maximum rate of $45 per ton. Biomass conversion
facilities converting eligible material to any use other than advanced
biofuel--such as heat, power, renewable energy or biobased products--
would be able to receive payments at some point below the maximum rate.
USDA requests comments on how to assess a tiered approach and how such
an approach might be structured.
One possible approach would be based on USDA's tentative finding,
in Regulatory Impact Analysis, that a $9 per green ton subsidy would
render biomass feedstock broadly appealing to farm operators and
competitive as an input to the energy sector. This $9 per green ton
rate equates to approximately $15 to $16 per dry ton. If so, a $16 per
dry ton payment rate would be sufficient to incentivize the production
of new biofuel feedstock development and associated production
processes that would not otherwise occur absent this financial support.
Another approach would be to develop a payment rate based directly
on the value of lowering carbon emissions. Such an approach would take
account of the greenhouse gas benefits associated with the substitution
of biofuels for other more carbon intensive fuel sources, such as coal.
USDA has proposed a particular minimum subsidy of $16 per dry ton, and
it believes that value may ``internalize'' some of the societal benefit
of the use of biofuel feedstock as an energy sector input, leading to
significant environmental improvements. USDA specifically requests
comment on how to better capture this concept and whether a higher or
lower minimum payment may best reflect the greenhouse gas and other
environmental benefits of biofuel feedstock energy use.
USDA specifically requests comment on whether this or another
similar payment structure might be best, and on how USDA may reflect
the economic and environmental goals that can be achieved through this
kind of tiered payment structure.
Finally, a third option is to vary the matching payments to
encourage additional biomass production beyond a historical baseline.
Under this option, CCC would calculate the matching payment at the rate
of $1 for each $1 per dry ton paid by the CHST-qualified biomass
conversion facility and then reduce the actual amount paid based on the
difference from the baseline. For example, full payment could be
provided for delivery of eligible material to new facilities, certain
public buildings, facilities, or property (such as schools,
universities, military facilities or Federal and State buildings) that
convert from fossil fuel consumption to renewable biomass feedstocks;
for eligible material showing exceptional promise for producing
innovative advanced biofuels, renewable energy, or biobased products;
or for every ton of renewable biomass consumption above a facility's
established baseline. Payments would be reduced for those facilities
that do not increase renewable biomass consumption over a historical
baseline.
While CCC has not formally considered all of these options, CCC
seeks comments and suggestions on all three of these options for the
final rule so as to achieve an expansion and strengthening of the
production of advanced biofuels, renewable energy, and biobased
products from non-feed renewable biomass.
Qualified Biomass Conversion Facility
CCC proposes that in order for a delivery of eligible materials to
a biomass conversion facility to be eligible for payment, the receiving
biomass conversion facility would first have to become qualified for
BCAP. To become qualified, the eligible biomass conversion facility
would enter into an agreement with CCC, through the FSA State office in
the State where the facility is physically located.
A biomass conversion facility, as specified in the 2008 Farm Bill
and in this proposed rule, would be a facility that converts or
proposes to convert renewable biomass into heat, power, biobased
products, advanced biodiesel, or advanced biofuels such as wood
pellets, grass pellets, wood chips, or briquettes. For the purposes of
BCAP, advanced biofuels do not include ethanol derived from corn kernel
starch, because the 2008 Farm Bill specifically excludes it in the
definition.
A biomass conversion facility would not have to be a project
sponsor for the establishment and annual payments component of BCAP or
be in operation to submit a successful application for qualification.
If the facility is not yet in operation, CCC proposes that the person
requesting that a facility become qualified must provide proof of all
applicable Federal, State, local, and Tribal permits and licenses
required for operation or proof of application completions or letters
of renewal submissions from the applicable governmental entity.
Applicable permits and licenses may include, but are not limited to,
business licenses, air quality permits, water discharge permits, storm
water permits, or Bureau of Alcohol, Tobacco, Firearms and Explosives
registrations.
CCC proposes that each biomass conversion facility enter into a
separate agreement with CCC regardless of whether a single owner has
multiple facilities. CCC would issue unique facility identification
numbers to each qualifying biomass conversion facility.
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The proposed agreement between CCC and a qualified facility would
require the biomass conversion facility to make information about the
facility available to CCC and institutions of higher education. The
2008 Farm Bill requires that the information be made available to the
Secretary or to institutions of higher education so that the
information can be used to promote the production of biomass crops and
the development of biomass conversion technology. The 2008 Farm Bill
also requires a report to Congress on best practice data and other
information no later than four years after the enactment of the 2008
Farm Bill, so the agreement would require that such information be
disclosed, with the understanding that such information would be used
in the report to Congress. In addition, when a biomass conversion
facility agrees to become ``qualified'' it will be helpful for CCC to
make information available to the public that a particular facility has
become qualified because it is a precursor to being eligible for a
matching payment.
Eligible Material Owners, Application for Matching Payments
To be eligible for matching payments, the eligible material owners
need to visit a county FSA office to sign up for payment approval as an
eligible material owner. The qualified biomass conversion facility
would issue a receipt or invoice upon the date of delivery to eligible
material owners.
The material owner would be eligible for the payment if the owner
had the legal title to the material for collection or harvest, such as
the operator or producer conducting farming operations on private land,
or any other person designated by the owner of the private land.
Consistent with the 2008 Farm Bill, the eligible material owner could
be a person(s) with the right to harvest or collect eligible material
on certain Federal lands pursuant to a contract or permit with the
United States Forest Service or Bureau of Land Management, such as a
timber sale contract.
Eligible material owners would take the receipts from the qualified
biomass conversion facility and submit them to the county FSA office
for matching payments. In accordance with the 2008 Farm Bill, CCC
proposes that the measure for the eligible material weight would be a
``dry ton,'' the weight at zero percent moisture content. The facility
would be required to have the necessary equipment (such as a moisture
meter) to calculate the equivalent dry ton weight of the delivered
material.
In addition to weight scaling for roundwood and forest residues
that have not been chipped, CCC proposes in consultation with the U.S.
Forest Service to require qualified biomass conversion facilities to
use a random sampling methodology and historical statistical data to
determine conversion factors for eligible material. Conversion factors
would need to be developed quarterly and be based on type of material
such as hardwood and softwood.
For wood chips, chipped forest residuals, shavings, sawdust, bark
or any other eligible intermediate forestry residuals, CCC in
consultation with the U.S. Forest Service proposes the requirement of
sampling for individual loads or using rapid electronic meters.
Quarterly correction factors would be required and be based on monthly
random samples of the eligible materials.
CCC proposes that woody biomass sampling methodologies follow
standard probability sampling of materials and proposes that moisture
analysis follow standard test methods for wood fuels.
An eligible owner is able to receive matching payments for a period
of two years. The two-year period for matching payment eligibility
would begin on the date of issue of the first matching payment. This
provision differs from what was provided in the NOFA, which indicated
that the 2-year time period would begin immediately after initial
approval by the FSA county office for the CHST matching payment and
would end 24 months later. Having the ``start date'' coincide with the
payment date, rather than the approval date, ensures that participants
would not be unnecessarily penalized if, through no fault of their own,
for example, adverse weather or other conditions could delay delivery
of eligible material to a qualified biomass conversion facility.
Eligible material owners may also be eligible to participate under
the ``Establishment and Annual Payments'' component of BCAP; however,
the annual payment that is received by a participant in that component
would be reduced when a matching payment was issued. The
``Establishment and Annual Payments'' component is discussed later in
this rule. If an eligible material owner or producer wishes to avoid
the reduction in annual payment(s), CCC proposes that the owner or
producer do so by declining the matching payment(s).
The NOFA imposed an ``arm's length transaction'' requirement to be
eligible for a matching payment. CCC acknowledges the importance of
maintaining flexibility in this new program, as well as ensuring a
broad range of eligible materials in pursuing program goals, and is
mindful of the constraints raised by the comments. In order to provide
appropriate safeguards to ensure transactions among disinterested
parties, CCC proposes to replace the ``arm's length transaction''
language with related-party transaction language. Related-party
transaction restrictions will not render stockholders of a privately or
publicly held company who deliver eligible material to that company
ineligible; nor will members of a cooperative who deliver eligible
material to that cooperative be considered ineligible. CCC proposes
that related-party transaction be defined as a transaction between two
or more ready, willing, and able organizations, trades, or business
(whether or not incorporated, whether or not organized in the United
States, and whether or not affiliated) substantially owned or
controlled, directly or indirectly by the same interests, as determined
by the Deputy Administrator.
As otherwise explained throughout this proposed rule, CCC proposes
that an eligible material owner needs to meet the following to be
eligible for a matching payment:
An eligible material owner may be:
A producer within a project area;
A biomass conversion facility;
A person or entity with the legal title to an intermediate
ingredient or feedstock; or
A person or a non-Federal entity that has legal title to
an eligible material, including Indian Tribes and Tribal members.
An eligible material owner may apply for a matching payment at the
FSA county office after delivery of eligible material to a qualified
biomass conversion facility.
The eligible material must be harvested or collected from certain:
U.S. National Forest System and BLM lands,
Non-Federal lands, including State- and locally-held
government lands, or
Tribal land held in trust by the Federal government.
The eligible material must be harvested or collected from certain:
Materials, pre-commercial thinnings, or invasive species
from National Forest System land and U.S. Bureau of Land Management
System land that:
Are byproducts of preventive treatments that are removed
to reduce hazardous fuels, to reduce or contain disease or insect
infestation, or to restore ecosystem health;
Would not otherwise be used for higher-value products; and
Are harvested in accordance with applicable law and land
management
[[Page 6269]]
plans and the requirements for old-growth maintenance, restoration, and
management direction of section 102 (e)(2), (3), and (4) of the Healthy
Forests Restoration Act of 2003 (16 U.S.C. 6512) and large-tree
retention of subsection (f).
Any organic matter that is available on a renewable or
recurring basis from non-Federal land or land belonging to an Indian or
Indian Tribe that is held in trust by the United States or subject to a
restriction against alienation imposed by the United States, including:
Renewable plant materials such as feed grains, other
agricultural commodities, and other plants and trees; and
Waste materials including vegetative waste comprised of
crop residues such as corn stover or wood wastes and wood residues that
would not otherwise be used as inputs for existing value-added
production.
CCC also proposes that eligible material owner(s) would not be
eligible for a matching payment if:
Payment is received before the biomass conversion facility
is qualified by CCC;
The eligible material owner did not receive approval for
matching payment from the county FSA office before receiving payment;
The delivery did not consist of eligible material (For
deliveries of comingled eligible and ineligible material, only the
eligible material will be eligible for payment);
The eligible material owner knowingly supplied false
information;
The eligible material owner violated the associated
conservation or forestry plan related to the land that produced the
eligible material for which a matching payment is requested; or
The formerly qualified biomass conversion facility failed
to comply with the agreement it entered into with CCC and, accordingly,
the agreement was terminated by CCC prior to delivery.
Comments received on the CHST NOFA encourage CCC to ensure that
conservation or forest stewardship plans appropriately address soil,
water, wildlife and other natural resource concerns, so that biomass
production is balanced with natural resource conservation. For matching
payments, CCC intends to apply existing conservation plan requirements
as required by Title XII of the Food Security Act of 1985 and is
requesting additional comments in this proposed rule to ensure that
adequate guidance is received to determine the scope of these
requirements. CCC invites further comment on specific, additional
conservation and stewardship measures that could be included or that
could be contained within the matching payment options discussed
previously.
Eligible Materials
For guidance to potential eligible material owners and biomass
conversion facilities, CCC proposes to provide a list of eligible
materials deemed acceptable to receive a matching payment in accordance
with the 2008 Farm Bill's definitions of renewable biomass and eligible
material. The list of eligible material would be provided to the public
via the FSA Web site at http://www.fsa.usda.gov/energy. CCC proposes
the list of materials be utilized for guidance with the understanding
that the list is not exhaustive and would be amendable and periodically
updated by the CCC--in accordance with the parameters established by
the 2008 Farm Bill--as biomass energy technology evolves. When there is
recommendation for an addition to the list of eligible material, CCC
will review the material to make determinations--the review could
include a site visit and comparison to related materials or uses. CCC
will review the recommendation to ensure that the new material meets
the requirements of the 2008 Farm Bill and the regulations. CCC
requests comments for additional suggestions on considerations in the
process to amend the list of eligible materials. As described later in
this rule, a list of eligible crops for the establishment and annual
payment provisions would include some additional crops not eligible for
matching payments.
Renewable biomass, as specified in the 2008 Farm Bill and in this
rule, includes materials, pre-commercial thinnings, or invasive species
from U.S. National Forest System land and U.S. Bureau of Land
Management (BLM) land that:
Are byproducts of preventive treatments that are removed
to reduce hazardous fuels, to reduce or contain disease or insect
infestation, or to restore ecosystem health;
Would not otherwise be used for higher-value products; and
Are harvested in accordance with applicable law and land
management plans and the requirements for old-growth maintenance,
restoration, and management direction of subsections 102(e)(2), (3),
and (4) of the Healthy Forests Restoration Act of 2003 (16 U.S.C. 6512)
and large-tree retention provisions of subsection (f).
In other words, renewable biomass harvested on National Forest
System and BLM land would typically be trees and brush removed for fire
prevention purposes, trees unsuitable for commercial timber harvest,
invasive plant removal for treatment and control purposes, and
diseased, damaged, or immature trees culled in accordance with
appropriate forest management practices. Additionally, CCC seeks
comment on additional conservation or stewardship measures that should
be considered for inclusion in the final rule for the eligible
materials described above.
As specified in the 2008 Farm Bill, renewable biomass also includes
any organic matter that is available on a renewable or recurring basis
from non-Federal land or land belonging to an Indian or Indian Tribe
that is held in trust by the United States including:
Renewable plant materials such as feed grains, other
agricultural commodities, other plants and trees, and algae;
Waste materials including vegetative waste comprised of
crop residues such as corn stover, wood wastes, and wood residues;
Animal waste and byproducts; and
Food waste and yard waste.
However, that definition of renewable biomass from the 2008 Farm
Bill applies to more than one program in Title IX. For BCAP
specifically, the 2008 Farm Bill defines ``eligible material'' more
narrowly, so that renewable biomass excludes the whole grain derived
from any crop that is eligible to receive payments under Title I of the
2008 Farm Bill.
Those crops that are subject to the provisions of Title I of the
2008 Farm Bill would therefore not be included as eligible materials or
crops for either component of BCAP. These crops include the whole grain
derived from a crop of barley, corn, grain sorghum, oats, rice, and
wheat; oilseeds such as canola, crambe, flaxseed, mustard seed,
rapeseed, safflower seed, soybeans, sesame seed, and sunflower seeds;
peanuts, pulse crops such as small chickpeas, lentils, and dry peas;
dairy products; sugar; wool; and, cotton boll fiber.
In accordance with the 2008 Farm Bill, CCC proposes that crop
residue or other similar byproducts of crop production and harvesting,
such as corn stover, corn silage, straw, hulls, or sugar bagasse,
remain eligible materials for matching payments without further
limitation or restriction. CCC proposes that for such eligible material
conservation plans should be updated or initiated to address the
removal of the material as needed. Additionally, CCC invites comments
and suggestions with regard to specific, additional conservation and
stewardship measures
[[Page 6270]]
that should be considered for the collection, harvest, transportation
or storage of these eligible materials.
The 2008 Farm Bill is silent as to whether, for the purposes of
BCAP matching payment eligible material requirements, vegetative waste
materials, such as wood waste and wood residue, available from non-
Federal land should be limited only to those that would not otherwise
be used for higher-value products. Based on its experience with the
NOFA, CCC proposes in this rule to apply that limitation to vegetative
waste materials such as wood wastes and residues so that those
materials are excluded if they would otherwise be used for higher-value
products. CCC invites comments and suggestions with regard to the
addition of this provision.
The 2008 Farm Bill does not specifically exclude invasive or
noxious species in the definition of ``eligible material.'' Renewable
biomass derived from invasive or noxious species must be handled in
accordance with Executive Order (E.O.) 13112 of February 3, 1999. E.O.
13122 requires that Federal agencies ``not authorize, fund, or carry
out actions that it believes are likely to cause or promote the
introduction or spread of invasive species in the United States or
elsewhere unless, pursuant to guidelines that it has prescribed, the
agency has determined and made public its determination that the
benefits of such actions clearly outweigh the potential harm caused by
invasive species; and that all feasible and prudent measures to
minimize risk of harm will be taken in conjunction with the actions.''
CCC consulted with APHIS and the National Invasive Species Council
experts to determine the feasible and prudent measures necessary to
minimize the risk of harm related to the inclusion of invasive or
noxious species for the purposes of BCAP matching payments. Based on
the consultation, CCC proposes to include invasive and noxious species
as eligible materials for BCAP matching payment purposes; however, such
eligible materials must not be collected, harvested, or transported
during reproductive or other phases that may propagate the spread or
establishment of those species. Eligible material owners should contact
State and local weed boards or authorities and their local USDA Service
Center staff about collecting, harvesting, or transporting invasive or
noxious species to ensure compliance with E.O. 13112, USDA guidelines,
and other requirements.
The likely benefits of including invasive and noxious species as
eligible materials, which would incentivize their removal,
significantly outweighs the potential negative impacts that may result
from not including them as eligible materials, specifically scenarios
where removing native species from a tract of land would occur and not
removing the invasive or noxious species would encourage invasive and
noxious species propagation.
CCC requests comment on whether or not eligible material owners
violating E.O. 13112 should be financially responsible for any or all
removal costs associated with the spread or establishment of invasive
or noxious species if it determined that an eligible material owner
contributed to the spread or establishment of an invasive or noxious
species while carrying out activities related to receiving a matching
payment.
As required by the 2008 Farm Bill, the following renewable biomass
materials would also be excluded from BCAP matching payments, although
they would be eligible crops for BCAP establishment and annual
payments:
Animal waste and byproducts (including fats, oils,
greases, and manure);
Food waste such as food processing scraps and yard waste
such as debris removal originating from municipal or commercial yard,
lawns, landscaped areas or related sites; and
Algae.
Additionally, CCC proposes that materials that are wastes or by-
products of industrial or similar processes that contain inorganic
materials, such as black or pulp liquor that is a by-product of the
pulp and kraft paper manufacturing process, remain excluded from the
definition eligible materials. While such products may have
historically been used to generate heat, power, steam and electricity
to operate facilities, these products are not within the parameters set
by the 2008 Farm Bill because they are, among other things, not organic
materials collected or harvested from land. As such, these materials,
as well as otherwise eligible materials delivered and used for the
generation or production of these materials, would continue to not be
eligible for matching payments under this program.
Consistent with the 2008 Farm Bill, CCC proposes that eligible
materials, for a matching payment, would be collected and harvested
from eligible lands that would include:
(1) U.S. National Forest System lands;
(2) BLM lands;
(3) All Non-Federal lands in the United States; and
(4) Land belonging to an Indian or Indian Tribe that is held in
trust by the United States or subject to a restriction against
alienation imposed by the United States. In other words, most publicly-
and privately-held land is eligible for the BCAP matching payments
program, except for some Federal lands.
In accordance with the 2008 Farm Bill, CCC proposes that matching
payments would be made for all eligible materials, including those
derived outside BCAP project areas. CCC invites comments pertaining to
the previously discussed options for structuring matching payments to
provide incentives for the collection, harvest, storage and
transportation of eligible materials near project areas.
Eligible materials that are considered an advanced biofuel or an
intermediate ingredient or feedstock of a biobased product must be
derived from an otherwise eligible material.
CCC recognizes that the production of some advanced biofuels and
biobased products requires intermediate ingredients and intermediate
feedstocks, such as chopped grasses or wood chips. CCC proposes that
the source material and the intermediate ingredient or feedstock be
considered separate eligible materials; however, only one matching
payment will be issued for either the source material or the
intermediate ingredient or feedstock, but not both.
Eligibility for Establishment and Annual Payments
Establishment and annual payments are proposed to be available for
persons and legal entities with eligible land that is located within a
project area designated by CCC. CCC proposes to accept project area
proposals from a project sponsor on a continuous basis. Unlike the
matching payments component of BCAP, where any owner of eligible
materials can be eligible for the program, for the establishment and
annual payments component, only producers in a designated project area
will be eligible for payment. The payments will cover not more than 75
percent of costs of eligible practices to establish non-woody and woody
perennial biomass crops, and annual payments to support up to 15 years
of crop production. By designating project areas, the BCAP program can
support the development of renewable biomass production near biomass
production facilities.
[[Page 6271]]
Proposing Project Areas
Project areas would be proposed by project sponsors, which could be
either groups of producers or biomass conversion facilities.
There is no restriction in this proposed rule on who can own or
operate an eligible facility, or sponsor a project area. Various
parties could own a biomass conversion facility such as Federal
entities, private entities, State or local government agencies,
schools, or non-government organizations, provided that these parties
have legal title to the facility.
CCC proposes to accept project area proposals on a continuous
basis. In accordance with the 2008 Farm Bill, a complete proposal would
include, at a minimum:
(1) A description of the eligible land and eligible crops of each
producer that will participate in the proposed project area;
(2) A letter of commitment from a biomass conversion facility
stating that the facility will use eligible crops intended to be
produced in the proposed project area; and
(3) Evidence that the biomass conversion facility has sufficient
equity available to operate in the future if the facility is not
operational at the time the project area proposal is submitted.
While the 2008 Farm Bill does not require conservation plans or
forest stewardship plans to be an acceptable proposal, it does require
that all contracts within a project area provide for the implementation
of a conservation plan, forest stewardship plan or equivalent plan. As
such, project area proposals will also include a description of the
general conservation and forest stewardship measures that will be
implemented in plans under contracts within the area. CCC seeks
specific comment as to further conservation or stewardship requirements
that should be included in a proposal for a project area.
For item 1 above, the project sponsor would submit a narrative of
the proposed project and submit maps of the project area delineating
the location of the current or proposed biomass conversion facility.
The maps would show: (1) Current land use, (2) roads, (3) railroad, (4)
rivers and barge access, (5) proposed land use change, and (6) resource
inventory maps including soils and vegetation.
For item 3 above, evidence of sufficient equity will document the
projected construction, start-up, operation, and maintenance costs over
the projected life-span of the project. The project sponsors would
document the estimated cash-flow of the project during its life-span
(including assumptions on the production outputs and expected market
prices for the products produced). In addition, the project sponsor
would document its existing resources and short term and long term
financing. The information provided to CCC will be confidential and CCC
will use it to determine if sufficient equity is available for the
facility and the project.
The project sponsor will also submit the economic impacts of the
proposed project area. At a minimum the proposal will address the
anticipated timing and number for job creation and retention and
likelihood of attracting additional private sector investment.
At a minimum, projects must demonstrate the ability to support the
development and production of heat, power, biobased product, or
advanced biofuels from renewable biomass production. The facility must
demonstrate long-term economic viability and ability to comply with all
environmental and regulatory requirements for the production of heat,
power, biobased product, or advanced biofuels from renewable biomass.
In addition, the project must demonstrate that sufficient quantity of
eligible crops will be grown within an economically viable distance
from the facility and that the crops can be grown in an environmentally
acceptable manner as determined by CCC.
CCC requests comments on other types of information that should be
required from project sponsors, including, but not limited, to a draft
proposal. Proposed project area information that a sponsor considers
appropriate or sufficient, may be included in a comment to this rule.
We will review the information and use the analysis to make any
required changes in the final rule. Information submitted as a proposal
for a project area cannot be approved until implementation of the final
rule. As with any comment, proposed project area information will
become part of the public record and the public will be able to review
it and comment on it. Because BCAP is a new program, information based
on specific examples, projects, and situations will help improve the
implementation and effectiveness of the program.
CCC proposes that a project area have specific geographic
boundaries and be described in definite terms such as acres, watershed
boundaries, mapped longitude and latitude coordinates, or counties. The
project area would be physically located near a biomass conversion
facility or facilities. Whether a project area is within an
economically viable distance from a biomass conversion facility will
depend upon the eligible crops being established and produced, as well
as other transportation and logistics matters, and thus must
necessarily be determined on a case-by-case basis. The biomass
conversion facility can be within the geographic boundary of the
project area, or near it. The project area must also include potential
or established producers that would supply either a portion or all of
the renewable biomass needed by the biomass conversion facility.
Project Area Selection Criteria
Consistent with the 2008 Farm Bill, CCC proposes to evaluate
project area proposals that are submitted, according to these criteria:
(1) The volume of the eligible crops proposed to be produced in the
proposed project area and the probability that such crops will be used
for BCAP purposes;
(2) The volume of renewable biomass projected to be available from
sources other than the eligible crops grown on contract acres;
(3) The anticipated economic impact in the proposed project area,
such as the number of jobs created and retained;
(4) The opportunity for producers and local investors to
participate in the ownership of the biomass conversion facility in the
proposed project area;
(5) The participation rate by beginning or socially disadvantaged
farmers or ranchers;
(6) The impact on soil, water, and related resources, such as
effect on nutrient loads, or soil erosion;
(7) The variety in biomass production approaches within a project
area, including agronomic conditions, harvest and postharvest
practices; and monoculture and polyculture crop mixes; and
(8) The range of eligible crops among project areas.
CCC proposes that all project proposals meeting these criteria
would be considered acceptable for BCAP. The 2008 Farm Bill provides
discretion for the Secretary to consider other information in
evaluating project proposals. Given this discretion, CCC proposes that,
in addition to the above criteria, proposals will also be evaluated
based upon their ability to promote the cultivation of perennial
bioenergy crops and annual bioenergy crops that show exceptional
promise for producing highly energy-efficient renewable energy,
advanced biofuels or biobased products, that preserve natural
resources, and that are not primarily grown for food or animal feed.
CCC
[[Page 6272]]
requests comments on whether additional criteria should be included for
evaluating the capacity of the land in a project area to sustainably
produce the proposed quantity of biomass. CCC requests comments on what
other criteria or information we should use to evaluate project
proposals.
Project sponsors that are biomass conversion facilities could be
any size of operation including pilot facilities, research units,
experimental or demonstration operations, or commercial operations. As
proposed in this rule, a biomass conversion facility not yet in
operation could be a project sponsor. In that case, the biomass
conversion facility would have to provide evidence that it has
sufficient equity available.
Project Area Eligible Crops
As proposed in this rule, after CCC approves a project area,
persons and legal entities within the specific geographic boundaries of
that area could be eligible for payment for the establishment and
production of eligible crops. To be eligible for payment, participants
would need to enroll the land under BCAP contracts.
The 2008 Farm Bill defines an eligible crop as a crop of renewable
biomass. The 2008 Farm Bill also includes a list of certain types of
renewable biomass that are ineligible. Animal wastes, food and yard
wastes, and algae are included in the definition of eligible crop in
the 2008 Farm Bill and are therefore included in the definition in this
proposed rule.
CCC proposes that biomass conversion facilities may suggest the
exact species and varieties of eligible crops allowable in a BCAP
project area, provided that the crops are included in the BCAP
definition of eligible crop. Project area proposals may limit the
nature and types of eligible crops to be planted within a project area.
The 2008 Farm Bill specifically excludes Title 1 crops and noxious
or invasive plants as eligible crops. FSA State Committees will consult
with the State Technical Committees for recommendations concerning the
invasive and noxious status for otherwise eligible crops for the
purposes of BCAP.
As specified in the 2008 Farm Bill, Federal or State-owned lands
are not considered to be eligible lands for establishment and annual
payments; therefore, CCC proposes to exclude all Federal and State-
owned land from the establishment and annual payments component of
BCAP.
Project Area Eligible Producers
CCC proposes that within the project area, producers would enter
into BCAP contracts and be eligible to receive establishment payments,
as a form of cost-share, to convert agricultural lands or nonindustrial
private forest lands to the production of eligible crops. In addition,
producers could also be eligible for annual payments for the production
of eligible crops used for conversion to renewable energy, advanced
biofuels or biobased products. The details for what is required to
qualify for the annual payments would be specified in the individual
contract between CCC and a producer, as discussed further below, and
would include provisions for the implementation of a conservation plan,
forest stewardship plan, or equivalent plan, where required. The
producer will demonstrate compliance with the conservation or forest
stewardship plan through required self certification and FSA will
ensure that normal spot check rules and methods are followed to ensure
compliance with the plans. Producers that already have established BCAP
eligible crops when this program starts may enter into a contract for
annual payments to continue growing those crops; however, establishment
payments would not be authorized.
CCC also proposes that project sponsors, regardless of whether they
are a biomass conversion facility or a group of producers, could also
be considered as a producer and be eligible to receive establishment
and annual payments. However, the sponsor would have to own or operate
eligible land to be eligible to enroll as a producer under a BCAP
contract and be eligible to receive establishment and annual payments.
State-owned biomass conversion facilities would not be eligible to be
considered a producer for a BCAP contract because the 2008 Farm Bill
specifies that State-owned land is ineligible for establishment and
annual payments.
The agreement between the project sponsor and CCC is not a
contract. A successful project sponsor is not paid by CCC for being a
sponsor; the producers in the project area, who may also be the
sponsor, are eligible for payment for the establishment and production
of eligible crops. Therefore, biomass conversion facilities that act as
project sponsors would not be subject to general Federal contracting
requirements as a condition of a project area approval.
Project Area Contract Acreage and Terms
CCC proposes that a producer within the project area would enter
into a contract with CCC to commit acres, which would then be called
contract acreage, to establish or produce eligible crops.
In accordance with the 2008 Farm Bill, CCC proposes that contract
terms include:
(1) Compliance with highly erodible and wetland conservation
requirements contained in the 2008 Farm Bill and in 7 CFR part 12;
(2) The implementation of conservation plan as defined in 7 CFR
1410.2, a forest stewardship plan as defined in 16 U.S.C. 2103(a), or
an equivalent plan as determined by the Deputy Administrator;
(3) A commitment to provide information to promote the production
of eligible crops and the development of biomass conversion technology;
and
(4) Other information deemed appropriate by CCC, such as the
preservation of cropland bases and yield history.
CCC invites comments on additional conservation or stewardship
measures that could be included in a contract to provide incentives or
otherwise encourage conservation, stewardship wildlife habitat or
sustainability practices above the statutory requirements.
Contract durations may be up to 5 years for annual and non-woody
perennial crops, and up to 15 years for woody perennial crops. CCC
proposes flexibility to adjust the terms of the contract length on a
per project basis in order to ensure the most efficient use of
government funding. The establishment time period may vary due to: type
of crop, agronomic conditions (establishment time frame, winter
hardiness, etc), and other factors. CCC would establish the time frame
based on the recommendations received from the State Technical
Committee.
CCC proposes that the contracts would take into account an
establishment period appropriate for an existing crop's harvest or for
the planting of a planned crop. BCAP contracts and conservation plans
would be designed in an effort to promote the production of a long-term
source of biomass feedstock that can be harvested and collected in a
reasonable period of time. The expectation, which will be reflected in
the contract, is that eligible crops funded under BCAP will produce at
least one harvest for biomass within the period of the contract.
Contracts would be subject to modification and payment reductions
if
[[Page 6273]]
any of the contract terms are violated. Participants that choose to
voluntarily withdraw from BCAP before the duration of their contract
has ended would be subject to early contract termination penalties and
payment refunds.
In exchange for signing BCAP contracts, CCC will share not more
than 75 percent of the cost with participants of establishing non-woody
and woody perennial crops, pay an annual payment for enrolled land, and
provide for the preservation of cropland base and yield history
applicable to the land enrolled in the BCAP contract.
Eligible and Ineligible Land
The contract acreage would consist of only the eligible lands that
are covered under the producer's contract with the CCC. The 2008 Farm
Bill defines eligible land for project areas as agricultural land and
nonindustrial private forest land, subject to certain exclusions.
CCC proposes, in accordance with exclusions in the 2008 Farm Bill,
that land considered ineligible to be enrolled under a BCAP contract
includes:
(1) Federal lands;
(2) State-owned, municipal, or other locally-owned lands;
(3) Native sod; and
(4) Land that is already enrolled in CCC's Conservation Reserve
Program, Wetlands Reserve Program, or Grassland Reserve Program.
CCC proposes that eligible agricultural land includes:
(1) Cropland;
(2) Grassland;
(3) Pastureland;
(4) Rangeland;
(5) Hayland; and
(6) Other lands on which food, fiber, or other agricultural
products are produced or capable of being produced for which a valid
conservation plan exists or is implemented.
CCC proposes that agricultural lands with already established
energy crops or already contracted for energy crops or planned energy
crops would be eligible lands for contract acreage. In other words, as
noted earlier, producers who started growing renewable biomass before
BCAP was implemented may enter into a contract with CCC for annual
payments. We do not intend to exclude ``early adopters'' of biomass
crops.
Nonindustrial private forest land is defined in this rule, in
accordance with the 2008 Farm Bill, as rural land with existing tree
cover, or suitable for growing trees, owned by any private individual,
group, association, corporation, Indian Tribe, or other private legal
entity. CCC proposes that this definition allows for the inclusion of
properties such as a privately held tree farm or a private forest
landowners' cooperative. This is consistent with the definitions of
``landowner'' and ``nonindustrial private forest land'' in 36 CFR 230.2
(the relevant Forest Service regulation), which includes private legal
entities as landowners of such forest land but excludes corporations
whose stocks are publicly traded or legal entities principally engaged
in the production of wood products. CCC proposes that existing
nonindustrial private forest land with existing tree cover can enter
into contract acreage with an approved biomass conversion facility and
be eligible for annual payments, subject to a forest stewardship plan.
Establishment payments will only be made for woody perennial crops with
a projected initial harvest time occurring within the length of the
contract period.
As discussed earlier, contract acreage will be subject to minimum
contract terms which include, but are not limited to, the
implementation of a required conservation plan or forest stewardship
plan (or the equivalent); and compliance with highly erodible and
wetland conservation requirements of 7 CFR part 12. While land enrolled
in other USDA programs could be eligible lands for contract acreage,
the contracting producer could not receive multiple program benefits
for purposes that are the same or substantially similar to the purposes
of BCAP. A contracting producer must choose whether to receive BCAP
payments or other USDA or Federal program benefits where those benefits
are designed to achieve the same purposes as BCAP.
Land use restrictions would not apply to contract acreage provided
that CCC determines that the land uses would be consistent with the
conservation plans or forest stewardship plans (or the equivalent) and
any other BCAP conservation requirements. CCC requests comments on
other applicable contract terms concerning conservation requirements
along with a justification for the contract term. For example,
contracts may also contain biomass delivery or sale expectations or
requirements to ensure the crops are not sold off into hay markets, or
other non-BCAP uses.
Making Establishment Payments
Consistent with the 2008 Farm Bill, establishment payments of not
more than 75 percent of the cost for establishing a perennial crop,
which could include woody biomass, would include:
(1) The costs of seed and stock for perennials;
(2) The cost of planting the perennial crop;
(3) For non-industrial forest land, the costs of site preparation
and tree planting;
(4) Other proposed establishment activities that could include, but
would not be limited to, site preparation for non-tree planting and
supplemental or temporary irrigation.
In addition, partial payments could be authorized when identifiable
components of the contract are completed; and supplemental
establishment payments may be authorized if necessary.
Consistent with the 2008 Farm Bill, CCC proposes that establishment
payments would not be authorized for annual crops. In addition, prior
to receiving establishment payments, producers must have planted their
crops and must provide their FSA county office with copies of receipts
and invoices related to the cost of establishing their crops.
Making Annual Payments
CCC proposes to calculate annual payments on a per acre basis and
would use market-based rental rates, as determined by CCC. The payments
are intended to support production of eligible crops. Annual payment
rates will be established at levels required to ensure sufficient
participation in a project area.
As specified in the regulations in 7 CFR 1410.42 and as determined
by CCC, annual payments will include a payment based on:
(1) A weighted average soil rental rate for cropland;
(2) The applicable marginal pastureland rental rate for all other
land except for non-industrial private forest land; and
(3) For forest land, the average county rental rate for cropland as
adjusted for forestland productivity for non-industrial private forest
land.
This rate information is being posted at FSA county offices (as FSA
posts information for CRP). There are site-specific factors including
type of soil and land use. There is too much information to post it all
on the Web. FSA can provide general information about rates.
CCC will post in FSA county offices the county specific base-line
rental rates for cropland, marginal pastureland and forestland. In
addition, the applicable additional incentive rates (premiums) will be
posted for specific project area or specific crop mixes within the
project area.
[[Page 6274]]
In determining the applicability of incentive payments (premiums)
to the annual base-line soil rental rates the Deputy Administrator will
consider the costs of establishing the crop, and the potential to
establish perennial biomass crops that show exceptional promise to
produce highly energy efficient bioenergy or biofuels, that preserve
natural resources and are not primarily grown for food or animal feed
or that also address specific resource conservation needs.
Annual payments would be reduced if:
(1) An eligible crop is used for purposes other than the production
of energy, then a dollar-for-dollar reduction would apply, not to
exceed the total payment amount;
(2) An eligible crop is delivered to the biomass conversion
facility that is not within the project area;
(3) The producer receives a matching payment;
(4) The producer violates a term of the contract; or
(5) Other circumstances as determined by CCC.
We must reduce payments to avoid duplicate benefits, but as
described below, the annual payment reduction for delivery to a biomass
facility or for matching payments will likely be less than a full,
dollar-for-dollar reduction, because the purpose of BCAP is to
encourage biomass energy production.
The 2008 Farm Bill authorizes agricultural land and non-industrial
private forest land for annual payments. Agricultural land consists of
cropland, pastureland, rangeland, and grassland. CCC proposes to
calculate market-based rental rates for cropland, consistent with the
CRP regulations in 7 CFR part 1410; and for all other agricultural land
at the rate that would be paid for pastureland, consistent with CRP.
CCC proposes to calculate the market-based payment rate for non-
industrial forest land using the average county rental rate for
cropland developed for CRP and adjusting that rate by comparing the
average productivity of cropland compared to the average productivity
of forestland.
If the crop is delivered to a biomass conversion facility, payment
reductions would be applied in an amount equal to at least 25 percent
of the authorized annual payment, but not a full dollar-for-dollar
reduction, for each contract acre. If the harvested production is sold
for any other reason, a dollar-for-dollar reduction would apply, not to
exceed the total annual payment.
CCC proposes that half of the first year's annual payment would be
made within 30 days of the date of contract approval and the balance
paid on the annual contract enrollment anniversary. Subsequent annual
payments would be made every year within 30 days after the contract
anniversary date. Under the proposed rule, payments may cease and
producers may be subject to contract termination for failure to plant
eligible crops.
To be considered a biomass conversion facility, one of the criteria
that may be met is whether the facility converts or proposes to convert
a biobased product. The 2008 Farm Bill defined biobased products as a
product determined by the Secretary to be a commercial or industrial
product (other than food or feed) that is--``(A) composed, in whole or
in significant part, of biological products, including renewable
domestic agricultural materials and forestry materials; or (B) an
intermediate ingredient or feedstock.'' The NOFA excluded commercially-
produced timber, lumber, wood pulp, or other finished wood products
that otherwise could be used for higher-value products. CCC proposes to
continue the exclusion of commercially-produced timber, lumber, wood or
other finished products that otherwise would be used for higher value
products. Additionally, CCC proposes to clarify that industrial or
other process wastes or by-products, such as black liquor or pulp
liquor that is a waste by-product of the pulp and kraft paper
manufacturing process, are not included within the definition of
biobased products because they are not significantly composed of
organic or biological products collected or harvested from land.
Key Provisions Comparison
This table compares key provisions of matching payments versus
establishment and annual payments:
------------------------------------------------------------------------
Establishment and
Matching payments annual payments
------------------------------------------------------------------------
Geographic Eligibility...... Not limited Limited to
geographically. designated project
area.
Project Sponsor............. Not applicable...... A project sponsor
proposes project
areas and may be a:
Biomass
conversion
facility,
including
facilities owned
by Federal
entities, State
entities, local
government
entities, or
privately or
publicly held
entities; or
Group of
producers.
------------------------------------------------------------------------
Eligible Material Owner or An eligible material An eligible producer
Eligible Producer. owner may be:. may be a:
A producer Biomass
within a project conversion facility
area;. that owns or
A biomass operates eligible
conversion land or
facility;. Person or
A person or entity with the
entity with the legal title to
legal title to an privately held
intermediate lands or land held
ingredient or in trust by the
feedstock; or. Federal government.
A person or An eligible producer
a non-Federal cannot be a:
entity that has Federal
legal title to an government entity,
eligible material, or
including Indian
Tribes and Tribal
members.
An Eligible Material State or
Owner cannot be a local government
Federal government entity.
entity.
------------------------------------------------------------------------
[[Page 6275]]
Land Limitations or Eligible Eligible material Eligible land is
Land. must be harvested certain:
or collected from
certain: Agricultural land,
U.S. such as cropland,
National Forest pastureland,
System and BLM rangeland,
lands,. grassland, or other
Non-Federal lands on which
lands, including food, fiber, or
State- and locally- other agricultural
held government products are
lands, or. produced or capable
Tribal land of being produced;
held in trust by or
the Federal
government. Nonindustrial
private forest
lands that are:
[cir] Rural lands
with existing tree
cover, or are
suitable for
growing trees; and
[cir] Owned by any
private individual,
group, or
association.
Eligible land cannot
be:
Federal- or
State-owned land;
Land that
is native sod; or
Land
enrolled in the:
[cir] CRP;
[cir] Wetlands
Reserve Program; or
[cir] Grassland
Reserve Program.
------------------------------------------------------------------------
Eligible Crop or Material... Eligible material is Eligible crop is:
certain:
Materials, Renewable
pre-commercial plant materials
thinnings, or such as feed
invasive species grains, other
from National agricultural
Forest System land commodities, other
and U.S. Bureau plants and trees,
System land that: and algae;
[cir] Are byproducts Waste
of preventive materials including
treatments that are vegetative waste
removed to reduce comprised of crop
hazardous fuels, to residues such as
reduce or contain corn stover, woods
disease or insect wastes, and wood
infestation, or to residues;
restore ecosystem Animal
health;. waste and
[cir] Would not byproducts,
otherwise be used Food Waste;
for higher-value and
products; and. Yard waste.
[cir] Are harvested Ineligible crops
in accordance with include:
applicable law and Any crops
land management that is eligible to
plans and the receive payments
requirements for under Title I of
old-growth the 2008 Farm Bill.
maintenance, Any plant
restoration, and that is invasive or
management noxious or has the
direction of potential to become
section 102 (e)(2), invasive or
(3), and (4) of the noxious.
Healthy Forests
Restoration Act of
2003 (16 U.S.C.
6512) and large-
tree retention of
subsection (f).
Any organic
matter that is
available on a
renewable or
recurring basis
from non-Federal
land or land
belonging to an
Indian or Indian
Tribe that is held
in trust by the
United States or
subject to a
restriction against
alienation imposed
by the United
States, including:
[cir] Renewable
plant materials
such as feed
grains, other
agricultural
commodities, and
other plants and
trees; and
[cir] Waste
materials including
vegetative waste
comprised of crop
residues such as
corn stover or wood
wastes and wood
residues that would
not otherwise be
used for higher-
value products
Eligible material
does not include:
Whole grain
derived from any
crop that is
eligible to receive
payments under
Title I of the 2008
Farm Bill
Animal
waste and
byproducts
(including fats,
oils, greases, and
manure);
Food waste
and yard waste;
Algae.
------------------------------------------------------------------------
Authorized Payments......... A matching Payment Establishment
at a rate of $1 for payments at a rate
each $1 per dry ton of not more than 75
equivalent paid by percent of
the qualified establishment costs
biomass conversion based on:
facility: The costs
In an of seed and stock
amount up to $45 for perennials;
per dry ton but The cost of
only for on-site planting the
heat or power perennial crop; and
production from For non-
wood wastes and industrial forest
residues above an land, the costs of
historical site preparation
baseline;. and tree
In an planting(s).
amount up to $45 Annual payments
per dry ton for equal to the market
materials used to rate plus any
produce advanced incentive as
biofuels and in an provided for in a
amount up to $16 specific project
per dry ton for area.
material used for
renewable energy or
biobased products;
or.
In an
amount to be
reduced in relation
to increases in
biofuel, renewable
energy or biobased
product production
above a historical
baseline
------------------------------------------------------------------------
[[Page 6276]]
Payment Reductions.......... There are no Annual payments will
comparable payment be reduced if:
reductions. An eligible
If eligible and crop is used for a
ineligible purpose other than
materials are the production of
comingled in the energy at the
load, payment will biomass conversion
only be made for facility;
eligible materials.
An
eligible crop is
delivered to the
biomass
conversion
facility outside
of the project
area;
The
producer
receives a
payment for
collection,
harvest,
storage, or
transportation;
or
The
producer
violates a term
of the contract.
Under
the proposed
rule, payments
may cease and
producers may be
subject to
contract
terminations for
failure to
establish
eligible crops.
------------------------------------------------------------------------
Payment Timing.............. Matching payments Establishment
are paid within 30 payments are paid
days after when the perennial
submission of sales or tree crop
invoice(s) from the practice or
qualified biomass identifiable
conversion facility portion of the
and completion of practice has been
application for completed according
payment. to the BCAP
conservation or
forestry plan.
Annual payments are
paid:
As an
advance payment
in an amount
equal to 50
percent within
30 days of
contract
approval with
the remaining 50
percent within
30 days of the
first-year
contract
anniversary
date, and
Within
30 days of the
contract
anniversary
beginning with
the second-year
contract
anniversary.
------------------------------------------------------------------------
Duration.................... Payment duration is Contract duration is
two years from the up to:
date on which the Five years
first matching for annual and non-
payment is issued woody perennial
to an eligible crops, and
person or entity. 15 years
for woody perennial
crops.
------------------------------------------------------------------------
Project Area Proposals or An eligible material Project area
Matching Payment owner must apply proposals may be
Applications. for a matching submitted under a
payment at the FSA continuous signup.
county office after After a project area
delivery of has been approved,
eligible material eligible persons
to a qualified and legal entities
biomass conversion within that project
facility. area may enroll in
a BCAP contract on
a continuous basis
at the FSA county
office.
------------------------------------------------------------------------
Discussion of Transition From BCAP NOFA to BCAP Final Rule
Under the NOFA, FSA is making CHST matching payments for eligible
material delivered to qualified biomass conversion facilities.
When the final rule is published, conforming changes will be made
to the matching payment component based on the proposed rule, public
comments received, and input from the Programmatic Environmental Impact
Statement and other sources. FSA will also implement the establishment
and annual payments component by receiving project area proposals and
entering into BCAP contracts with producers for the production of
appropriate renewable biomass.
Final Determination
The Notice of Funds Notice of Funds Availability (NOFA) for the
Collection, Harvest, Storage, and Transportation of Eligible Material
published on June 11, 2009 (74 FR 27767-27772), is hereby terminated
and rescinded, effective February 8, 2010. No additional payments will
be made pursuant to the NOFA except as specifically approved by the
Executive Vice President, Commodity Credit Corporation.
Notice and Comment
The Administrative Procedures Act (5 U.S.C. 553) provides generally
that before rules are issued by Government agencies, a proposed rule
must be published in the Federal Register, and interested persons must
be given an opportunity to participate in the rulemaking through
submission of data, views, or arguments. The law exempts from this
requirement rules, such as this one, relating to public property,
loans, grants, benefits, and contracts. However, the Secretary of
Agriculture published in the Federal Register on July 24, 1971 (36 FR
13804), a Statement of Policy that USDA would publish a notice of
proposed rulemaking for such rules. USDA is committed to providing the
public reasonable opportunity to participate in rulemaking. Therefore,
this rule has a 60-day comment period.
Executive Order 12866
This rule has been determined to be economically significant and
was reviewed by the Office of Management and Budget (OMB) under
Executive Order 12866. The Cost Benefit Analysis is summarized below
and is available from the contact information listed above.
Cost Benefit Analysis Summary
BCAP is intended to assist agricultural and forest land owners and
operators with the collection, harvest, storage, and transportation
(CHST) of eligible material for use in a biomass conversion facility
and to support the establishment and production of eligible crops
including woody biomass for conversion to bioenergy in selected project
areas.
Establishment and Annual Payments are provided for eligible crops
on eligible land within project areas that satisfy selection criteria.
The strongest project proposals will be those associated with biomass
conversion facilities already in operation or that are economically
viable before the creation of BCAP. While early projects are not
dependent solely on BCAP support, certainly BCAP may hasten early
projects.
Matching payments will tend to go to eligible material owners
experienced in the collection, harvest, storage and delivery of biomass
feedstock. While matching payments are provided for
[[Page 6277]]
eligible materials delivered to qualifying biomass conversion
facilities, opportunities to stimulate additional demand in this Farm
Bill cycle, either in terms of increasing the construction of
qualifying biomass conversion facilities or increasing the planting of
biomass feedstock that qualifying biomass conversion facilities demand.
Qualifying biomass conversion facilities are expected to be those in
operation by 2012 because it would be difficult for a biomass
conversion facility to get on line by 2012 that is not already in the
pipeline. Given the substantial capital costs associated with energy
generation and fuel production, qualifying biomass conversion
facilities in operation by 2012 are assumed to operate at capacity with
or without BCAP.
Annual costs for the two parts of the program are presented in the
following table. Establishment and annual payments total $536 million,
including technical assistance (TA),\1\ and matching payments amount to
$2.1 billion.
---------------------------------------------------------------------------
\1\ All NPV calculations assume a 3% discount rate.
Table 1--BCAP Costs by Year
[2009 $ millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Establishment Technical Matching
Year cost share Annual payments assistance payments Annual total
--------------------------------------------------------------------------------------------------------------------------------------------------------
2010..................................................... 78 4 3 392 435
2011..................................................... 107 11 4 783 822
2012..................................................... 121 17 5 783 844
2013..................................................... ................. 17 ................. 392 367
2014..................................................... ................. 17 ................. ................. .................
2015..................................................... ................. 16 ................. ................. .................
2016..................................................... ................. 16 ................. ................. .................
2017..................................................... ................. 15 ................. ................. .................
2018..................................................... ................. 14 ................. ................. .................
2019..................................................... ................. 13 ................. ................. .................
2020..................................................... ................. 13 ................. ................. .................
2021..................................................... ................. 12 ................. ................. .................
2022..................................................... ................. 13 ................. ................. .................
2023..................................................... ................. 13 ................. ................. .................
2024..................................................... ................. 13 ................. ................. .................
2025..................................................... ................. 9 ................. ................. .................
2026..................................................... ................. 5 ................. ................. .................
----------------------------------------------------------------------------------------------
Subtotals................................................ 306 219 11 ................. .................
----------------------------------------------------------------------------------------------
................. ................. 536 2,100 .................
----------------------------------------------------------------------------------------------
Total................................................ ................. ................. ................. 2,636 .................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Due to rounding, the subtotals may not exactly match
calculated estimates shown later in the CBA.
As explained in the analysis, the majority of BCAP matching
payments are expected to go those eligible material owners who are
delivering material predominantly to existing biomass conversion
facilities that use woody biomass.
Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601,
CCC has determined that there will not be a significant economic impact
on a substantial number of small entities. Entities affected by this
rule are producers of eligible crops, eligible biomass material owners,
and biomass conversion facilities. The small business size standards
for them are no more than:
$750,000 per year gross revenue for crop production
(producers of eligible crops);
$7 million per year gross revenue for post harvest crop
activities (eligible material owners); and
4 million megawatt hours per year for other electric power
generation (biomass conversion facilities).
Given these size standards, it is reasonable to assume that many of
businesses involved in BCAP will be small businesses.
We expect that approximately 7,500 producers of eligible crops and
50 biomass conversion facilities may receive establishment and annual
payments and approximately 9,936 eligible material owners (that are not
affiliated with a biomass conversion facility) and 701 biomass
conversion facilities may be affected (which includes the 50, above)
may receive matching payments.
However, in light of the ability of biomass conversion facilities
to determine prices and receive program payments, producers of eligible
crops and eligible biomass material owners are not expected to be
significantly impacted. And given the scale of BCF output, as well as
the limited duration of the BCAP, biomass conversion facilities are
also not expected to be significantly impacted by the program.
Environmental Review
Under the National Environmental Policy Act (NEPA), the
Environmental Impact Statement (EIS) process provides a means for the
public to provide input on program implementation, alternatives, and
environmental concerns. CCC provided an amended notice of intent to
prepare a programmatic EIS on BCAP in the Federal Register on May 13,
2009 (74 FR 22510-22511) and solicited public comment on the proposed
alternatives to be examined in the programmatic EIS for BCAP. Six
public scoping meetings were held in May and June 2009 to solicit
comments for the development of alternatives and identify possible
environmental concerns.
On August 10, 2009, a Notice of Availability was published in the
[[Page 6278]]
Federal Register (74 FR 39915) announcing the availability of a Draft
Programmatic EIS (PEIS) for the administration and implementation of
the BCAP. Comments on the Draft Programmatic EIS may be submitted until
September 24, 2009.
The Draft PEIS has taken into consideration comments gathered
during the scoping meetings to develop the alternatives proposed for
the administration and implementation of BCAP. The Draft PEIS assesses
the potential environmental impacts associated with the following three
alternatives:
(1) No Action Alternative--Addresses the potential effects from not
implementing BCAP. (This is considered the environmental baseline by
which to compare the other alternatives against and is required by
law.)
(2) Action Alternative 1--Addresses a targeted implementation of
BCAP to specific areas or regions of the United States.
(3) Action Alternative 2--Addresses a broad national implementation
of BCAP.
Executive Order 12372
This program is not subject to Executive Order 12372, which
requires consultation with State and local officials. See the notice
related to 7 CFR part 3015, subpart V, published in the Federal
Register on June 24, 1983 (48 FR 29115).
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This final rule is not retroactive and it does
not preempt State or local laws, regulations, or policies unless they
present an irreconcilable conflict with this rule. Before any judicial
action may be brought regarding the provisions of this rule the
administrative appeal provisions of 7 CFR parts 11 and 780 must be
exhausted.
Executive Order 13132
The policies contained in this rule do not have any substantial
direct effect on States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
rule impose substantial direct compliance costs on State and local
governments. Therefore, consultation with the States is not required.
Executive Order 13175
The policies contained in this rule do not impose substantial
unreimbursed direct compliance costs on Indian Tribal governments or
have Tribal implications that preempt Tribal law.
Unfunded Mandates
Title II of the Unfunded Mandate Reform Act of 1995 (UMRA) (Pub. L.
104-4) establishes requirements for Federal agencies to assess the
effects of their regulatory actions that impose ``Federal Mandates''
that may result in expenditures to State, local, or Tribal governments,
in the aggregate, or the private sector, of $100 million or more in any
one year. This rule contains no Federal mandates as defined by Title II
of UMRA for State, local, or Tribal governments or for the private
sector. Therefore, this rule is not subject to the requirements of
sections 202 and 205 of UMRA.
Federal Assistance Programs
The title and number of the Federal assistance program in the
Catalog of Federal Domestic Assistance to which this proposed rule
would apply is 10.087--Biomass Crop Assistance Program.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995, FSA is
requesting comments from all interested individuals and organizations
on a revision of new information collection activities associated with
BCAP. FSA also included additional burden for the Emergency
Conservation Program (ECP) in this proposed rule as described further
below.
The approved burden hours will be eventually incorporated into the
existing approval under OMB control number 0560-0082, which includes
much of the same information for other conservation programs.
BCAP continues to provide financial assistance for collection,
harvest, storage, and transportation of eligible material nationwide.
BCAP also provides financial assistance establishment payments for
perennial crops and annual production payments for perennial and annual
crops in approved BCAP project areas. Support for both eligible
material and eligible crops are intended to establish a long term
feedstock for use in a biomass conversion facility in accordance with
the 2008 Farm Bill.
Copies of all forms, regulations, and instructions referenced in
this rule may be obtained from FSA. Data furnished by the applicants
will be used to determine eligibility for program benefits. Furnishing
the data is voluntary; however, the failure to provide data could
result in program benefits being withheld or denied.
Additionally, the information collection request for the matching
payment funds available for the collection, harvest, storage, and
transportation of eligible material was approved under the OMB control
number 0560-0263 under the emergency procedure in accordance with the
Paperwork Reduction Act of 1995. That information collection was
incorporated into the existing OMB control number 0560-0082. The 60-day
comment period was also published in the NOFA Federal Register on June
11, 2009 (74 FR 27767-27772) to solicit public comments. The comment
period ended on August 10, 2009. One comment was received on requesting
to extend comment period on the information collection to implement
BCAP. This proposed rule provides a 60-day comment period.
Title: BCAP.
OMB Control Number: 0560-NEW.
Type of Request: New.
Abstract: This information collection is needed to comply with
section 9011 (b)(2) of Title IX of the Farm Security and Rural
Investment Act of 2002 (U.S.C. 8101-8113), which was added by the 2008
Farm Bill.
For the administration of matching payments to be continued and
expanded to more respondents in this information collection, FSA
employees will enter the application information from completed paper
forms into a Web based system that collects information categories
similar to the electronic AD-245 application for cost-share form, which
is currently approved under OMB control number 0560-0082 for other
conservation programs. The Web based matching payment form, BCAP-5
form, will collect information about the owners of eligible material
and estimated and actual biomass material sold and delivered to a
qualified biomass conversion facility in order to approve applications
for BCAP matching payments and to calculate matching payments after
sale and delivery. BCAP will also have eligible material owners
complete the CCC-901 form concerning members' information or ownership.
This form will enable the adherence to the arm's length transaction
requirement and the two year limit for eligibility to receive matching
payments. BCAP will also use the existing AD-1047 certification
regarding debarment, suspension, and other responsibility matters
(primary covered transactions form). The AD-1047 form will help ensure
that only
[[Page 6279]]
those owners and managers of qualified biomass conversion facilities
and those owners of eligible material who have not been disbarred,
suspended, or otherwise made ineligible for Federal transactions are
qualified or determined eligible for BCAP. The AD-1047 form will
require the owners to certify that they are in compliance and not
subject to disbarment or suspension. The information collection
activities for matching payments will include the following:
(1) Applicants will request to become a qualified biomass
conversion facility or
(2) Applicants will register as an eligible material owner and
then, after delivery of eligible material, request matching payments
for the collection, harvest, storage, and transportation of eligible
material for use in a biomass conversion facility.
Specific descriptions of the information requirements were
discussed in the NOFA under the application sections. Matching payments
applicants submit estimates to register as eligible material owners and
actual delivery information to request matching payments and biomass
conversion facilities enter into an agreement giving a conversion
facility overview. If the Deputy Administrator determines that
additional information is necessary from an eligible material owner or
a biomass conversion facility, it will be related information required
to determine eligibility, ensure the ability to make proper payments,
or to otherwise legally provide benefits to an eligible material owner,
such as the FSA-211 form which provides power of attorney assignment.
For the administration of project areas, FSA employees will enter
proposal information from project sponsors into an electronic format.
The BCAP-4 form will be used to provide a summary of the project area
proposal. The BCAP-4 form will provide project sponsors the ability to
provide information overview for a variety of application factors which
include: Documentation of sufficient equity for start-up biomass
conversion facilities committed to the project area, land description
in GIS shape file coordinates, transportation modes, distance of the
biomass conversion facility in relation to eligible lands, job
development and retention factors, and biomass conversion facility's
production potentials or history. The information collection will be
used to review project area criteria outlined by the 2008 Farm Bill.
Categories expected on the proposals, consistent with the 2008 Farm
Bill will include, but not be limited to, volume of eligible crops,
volume of renewable biomass, job creation projections, number of
producers, number of biomass conversion facilities, projected
participation rates for beginning and socially disadvantaged farmers or
ranchers, projected environmental impacts, agronomic conditions, and
range of crops. A BCAP worksheet will be required for environmental
screening, similar to the existing FSA-850 form. This information will
help facilitate the selection of BCAP project areas and allow producers
in those BCAP project areas the opportunity to apply for establishment
and annual production payments.
For the administration of BCAP project area establishment and
annual production payments, FSA employees will first enter producer
information into a Web based BCAP-2 producer worksheet and then, if
eligible, may enter into a contract for annual production payments
using the BCAP-3 form with appendix and continuation sheet for annual
production payments. The BCAP producer forms and worksheets will be
used for sign up, determining the offer soil rental rate, and
contracting. The BCAP producer forms will capture the terms and
conditions of the contract into electronic form, as well as be used to
determine eligibility of the producer and the producer's contract
acreage. The BCAP producer contract will also use the existing AD-1026
and BCAP-817U form. The AD-1026 form ensures that before producers
clear, plow, or otherwise prepare areas not presently under crop
production for planting, they certify that production will not violate
either Highly Erodible Land Compliance (HELC) or wetland conservation
provisions. Most producers will already have existing AD-1026 forms. In
addition we will also require producers to complete and submit the
BCAP-817U form annually for the certification of compliance with BCAP.
Annual payments to producers will be administered using a BCAP-3
contract, which is Web based and provides a payment calculation method
that is similar to the existing AD-245 form. Other forms will be used
as needed to facilitate payments for special circumstances, such as
assignment of payment (CCC-36 form), joint payment authority (CCC-37
form), applicant's agreement to complete an uncompleted practice (FSA-
18 form), application for payment of amounts due to persons who have
died or disappeared (FSA-325 form), power of attorney (FSA-211);
member's information (CCC-901); report of acreage (FSA-578); and
voluntary permanent direct and counter-cyclical program base reduction
(CCC-505 form).
For establishment payments, FSA employees in addition to the BCAP
producer form and worksheet and AD-1026 form, will use the new Web
based conservation cost share forms (FSA-848, FSA-848A, FSA-848B, FSA-
848-1, FSA-848A-1, and FSA-848B-1 forms). The FSA-848 form is a cost-
share application used to document the producer's request for
conservation cost share and the needs determination, which is completed
to determine the actual amount of cost share that is needed, and to
estimate and calculate the establishment costs for agricultural and
nonindustrial private forest landowners that enter into BCAP and
propose to convert land to renewable crops or establish renewable
crops. The FSA-848A form is used to record the approval of a
conservation cost share agreement (which when approved is a contract),
the amount of cost share approved, and the producer's acknowledgement
of the approval. FSA-848B form is used to record performance of
conservation practices agreed to in the conservation cost share
contract and cost share payments associated with that performance. The
FSA-848, FSA-848A, and FSA-848B forms each include a continuation form
(FSA-848-1, FSA-848A-1, and FSA-848B-1, respectively). Producers will
be required to provide an annual report of acreage using the existing
Web based FSA-578 form.
FSA is also adding burden for the use of some of the same forms for
ECP into this proposed rule for public comment. ECP is one of the other
conservation programs covered under OMB control number 0560-0082. ECP
provides cost-share assistance to farmers and ranchers to rehabilitate
farmland damaged by wind erosion, floods, hurricanes, or other natural
disasters, and for carrying out emergency water conservation measures
during periods of severe drought. ECP will use the FSA-848, FSA-848A,
FSA-848B, FSA-848-1, FSA-848A-1 and FSA-848B-1 forms. These forms will
be used to more efficiently collect information when Web-based
conservation cost share software is fully implemented. The ECP burden
in this proposed rule will also be rolled into the existing approval
under the OMB control number 0560-0082.
Estimate of Burden: Public reporting burden for the collection of
information is estimated to average 1 hour. The average travel time,
which is included
[[Page 6280]]
below in the total burden, is estimated to be 1 hour per respondent.
Respondents: Individuals, Indian Tribes, units of State or local
government, partnerships, corporations, farm cooperatives, farmer
cooperative organizations, associations of agricultural producers,
national laboratories, institutions of higher education, rural electric
cooperatives, public power entities, consortia of any of these
entities, biomass conversion facilities that own or operate eligible
land, and any other legal entities.
Estimated Number of Respondents: 336,900.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Responses: 681,900.
Estimated Total Annual Burden on Respondents: 265,233.
We are requesting comments on all aspects of the information
collection to help us to:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden,
including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology.
E-Government Act Compliance
CCC is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
List of Subjects in 7 CFR Part 1450
Administrative practice and procedure, Agriculture, Energy,
Environmental protection, Grant programs--agriculture, Natural
resources, Reporting and recordkeeping requirements, Technical
assistance.
For the reasons discussed in the preamble, the Commodity Credit
Corporation (USDA) proposes to add 7 CFR part 1450 to read as follows:
PART 1450--BIOMASS CROP ASSISTANCE PROGRAM (BCAP)
Subpart A--Common Provisions
Sec.
1450.1 Administration.
1450.2 Definitions.
1450.3 General description.
1450.4 Violations.
1450.5 Performance based on advice or action of USDA.
1450.6 Access to land.
1450.7 Division of payments and provisions about tenants and
sharecroppers.
1450.8 Payments not subject to claims.
1450.9 Assignments.
1450.10 Appeals.
1450.11 Scheme or device.
1450.12 Filing of false claims.
1450.13 Miscellaneous.
Subpart B--Matching Payments
1450.101 Qualified biomass conversion facility.
1450.102 Eligible material owner.
1450.103 Eligible material.
1450.104 Signup.
1450.105 Obligations of participant.
1450.106 Payments.
1450.107-1450.199 [Reserved]
Subpart C--Establishment and Annual Payments
1450.200 General description.
1450.201 Project area submission requirements.
1450.202 Project area selection criteria.
1450.203 Eligible persons and legal entities.
1450.204 Eligible land.
1450.205 Duration of contracts.
1450.206 Obligations of participant.
1450.207 Conservation plans and forest stewardship plans.
1450.208 Eligible practices.
1450.209 Signup.
1450.210 Acceptability of offers.
1450.211 BCAP contract.
1450.212 Establishment payments.
1450.213 Levels and rates for cost-share payments.
1450.214 Annual payments.
1450.215 Transfer of land.
Authority: 7 U.S.C. 8111; 15 U.S.C. 714b and 714c.
Subpart A--Common Provisions
Sec. 1450.1 Administration.
(a) The regulations in this part are administered under the general
supervision and direction of the Executive Vice President, Commodity
Credit Corporation (CCC), or a designee, or the Deputy Administrator,
Farm Programs, Farm Service Agency (FSA), (Deputy Administrator). In
the field, the regulations in this part will be implemented by the FSA
State and county committees (``State committees'' and ``county
committees,'' respectively).
(b) State executive directors, county executive directors, and
State and county committees do not have the authority to modify or
waive any of the provisions in this part unless specifically authorized
by the Deputy Administrator.
(c) The State committee may take any action authorized or required
by this part to be taken by the county committee, but which has not
been taken by such committee, such as:
(1) Correct or require a county committee to correct any action
taken by such county committee that is not in accordance with this
part; or
(2) Require a county committee to withhold taking any action that
is not in accordance with this part.
(d) No delegation of authority herein to a State or county
committee will preclude the Executive Vice President, CCC, or a
designee, or the Deputy Administrator from determining any question
arising under this part or from reversing or modifying any
determination made by a State or county committee.
(e) Data furnished by participants will be used to determine
eligibility for program benefits. Furnishing the data is voluntary;
however, the failure to provide data could result in program benefits
being withheld or denied.
Sec. 1450.2 Definitions.
(a) The definitions in part 718 of this chapter apply to this part
and all documents issued in accordance with this part, except as
otherwise provided in this section.
(b) The following definitions will apply to this part:
Advanced biofuel means fuel derived from renewable biomass other
than corn kernel starch, including biofuels derived from cellulose,
hemicellulose, or lignin; biofuels derived from sugar and starch (other
than ethanol derived from corn kernel starch); biofuel derived from
waste material, including crop residue, other vegetative waste
material, animal waste, food waste, and yard waste; diesel-equivalent
fuel derived from renewable biomass including vegetable oil and animal
fat; biogas (including landfill gas and sewage waste treatment gas)
produced through the conversion of organic matter from renewable
biomass; and butanol or other alcohols produced through the conversion
of organic matter from renewable biomass and other fuel derived from
cellulosic biomass.
Agricultural land means cropland, grassland, pastureland,
rangeland, hayland, and other land on which food, fiber, or other
agricultural products are produced or capable of being produced.
Animal waste means waste associated with animal operations such as
confined beef or dairy, poultry, or swine operations including manure,
[[Page 6281]]
contaminated runoff, milking house waste, dead poultry, bedding, and
spilled feed. Depending on the poultry system, animal waste can also
include litter, wash-flush water, and waste feed.
Annual payment means the annual payment specified in the BCAP
contract that is made to a participant to compensate a participant for
placing eligible land in BCAP.
Beginning farmer or rancher means, as determined by CCC, an
individual or entity who:
(1) Has not operated a farm or ranch for more than 10 years,
(2) Materially and substantially participates in the operation of
the farm or ranch, and
(3) If an entity, is an entity in which all members or stockholders
of the entity meet the provisions in paragraphs (1) and (2) of this
definition.
Biobased product means a product determined by CCC to be a
commercial or industrial product (other than food or feed) that is:
(1) Composed, in whole or in significant part, of biological
products, including renewable domestic agricultural materials and
forestry materials; or
(2) An intermediate ingredient or feedstock.
Bioenergy means renewable energy produced from organic matter.
Organic matter may be used directly as a fuel, be processed into
liquids and gases, or be a residual of processing and conversion.
Biomass conversion facility means a facility that converts or
proposes to convert eligible material into heat, power, biobased
products, or advanced biofuels.
Conservation district is as defined in part 1410 of this chapter.
Conservation plan means a record of the participant's decisions and
supporting information for treatment of a unit of land or water, and
includes a schedule of operations, activities, and estimated
expenditures needed to solve identified natural resource problems by
devoting eligible land to permanent vegetative cover, trees, water, or
other comparable measures.
Contract acreage means eligible land that is covered by a BCAP
contract between the producer and CCC.
Deputy Administrator means the Deputy Administrator for Farm
Programs, FSA, or a designee.
Dry ton means one U.S. ton measuring 2,000 pounds. One dry ton
(ODT, sometimes termed as oven- or bone-dry ton) is the amount of
renewable biomass that would weigh one U.S. ton at zero percent
moisture content.
Eligible crop means a crop of renewable biomass as defined in this
section excluding:
(1) Whole grain derived from a crop of barley, corn, grain sorghum,
oats, rice, or wheat; honey; mohair; oilseeds such as canola, crambe,
flaxseed, mustard seed, rapeseed, safflower seed, soybeans, sesame
seed, and sunflower seeds; peanuts; pulse crops such as small
chickpeas, lentils, and dry peas; dairy products; sugar; wool; and
cotton boll fiber; and
(2) Any plant that CCC has determined to be either a noxious weed
or an invasive species. With respect to noxious weeds and invasive
species, a list of such plants will be available in the FSA county
office.
Eligible material is renewable biomass as defined in this section
excluding:
(1) Whole grain derived from a crop of barley, corn, grain sorghum,
oats, rice, and wheat; oilseeds such as canola, crambe, flaxseed,
mustard seed, rapeseed, safflower seed, soybeans, sesame seed, and
sunflower seeds; peanuts, pulse crops such as small chickpeas, lentils,
and dry peas; dairy products; sugar; wool; and, cotton boll fiber;
(2) Animal waste and byproducts of animal waste including fats,
oils, greases, and manure;
(3) Food waste and yard waste; and
(4) Algae.
Eligible material owner, for purposes of the matching payment,
means a person or entity having the right to collect or harvest
eligible material and who has delivered or intends to deliver the
eligible material to a qualified biomass conversion facility,
including:
(1) For eligible material harvested or collected from private
lands, including cropland, the owner of the land, the operator or
producer conducting farming operations on the land, or any other person
designated by the owner of the land; and
(2) For eligible material harvested or collected from public lands,
a person having the right to harvest or collect eligible material
pursuant to a contract or permit with the Forest Service or other
appropriate Federal agency, such as a timber sale contract, stewardship
contract or agreement, service contract or permit, or related
applicable Federal land permit or contract, and who has submitted a
copy of the permit or contract authorizing such collection to CCC.
Establishment payment means the payment made by CCC to assist
program participants in establishing the practices required for non-
woody perennial crops and woody perennial crops, as specified in a
producer contract.
Food waste means a material composed primarily of food items, or
originating from food items, or compounds from domestic, municipal,
food service operations, or commercial sources, including food
processing wastes, residues, or scraps.
Forest stewardship plan means a long-term, comprehensive, multi-
resource forest management plan that is prepared by a professional
resource manager and approved by the State Forester or equivalent State
official. Forest Stewardship Plans address the following resource
elements wherever present, in a manner that is compatible with
landowner objectives concerning:
(1) Soil and water;
(2) Biological diversity;
(3) Range;
(4) Aesthetic quality;
(5) Recreation;
(6) Timber;
(7) Fish and wildlife;
(8) Threatened and endangered species;
(9) Forest health;
(10) Archeological, cultural and historic sites;
(11) Wetlands;
(12) Fire; and
(13) Carbon cycle.
Highly erodible land means land determined as specified in part 12
of this title.
Indian Tribe has the same meaning as in 25 U.S.C. 450b (section 4
of the Indian Self-Determination and Education Assistance Act).
Intermediate ingredient or feedstock means an ingredient or
compound made in whole or in significant part from biological products,
including renewable agricultural material (including plant, animal, and
marine material), or forestry material that is subsequently used to
make a more complex compound or product.
Institution of higher education has the same meaning as in section
102(a) of the Higher Education Act of 1965 (20 U.S.C. 1002(a)).
Matching payments means those CCC payments provided to the owner of
eligible material delivered to a qualified biomass conversion facility.
Native sod means land:
(1) On which the plant cover is composed principally of native
grasses, grasslike plants, forbs, or shrubs suitable for grazing and
browsing; and
(2) That has never been tilled for the production of an annual crop
as of [DATE OF PUBLICATION OF THE FINAL RULE IN THE FEDERAL REGISTER].
Nonindustrial private forest land means rural lands with existing
tree cover, or that are suitable for growing trees, which are owned by
any private individual, group, association, corporation, Indian Tribe,
or other
[[Page 6282]]
private legal entity, consistent with the definitions of nonindustrial
private forest land and landowner in 36 CFR 230.2, and the regulations
in 36 CFR 230. 31.
Offer means, unless otherwise indicated, the per-acre rental
payment requested by the owner or operator in such owner's or
operator's request to participate in the establishment and annual
payment component of BCAP.
Operator means a person who is in general control of the land
enrolled in BCAP, as determined by CCC.
Payment period means a contract period of either up to 5-years for
annual and non-woody perennial crops, or up to 15 years for woody
perennial crops during which the participant receives an annual payment
under the establishment and annual payment component of BCAP.
Producer means an owner or operator of contract acreage that is
physically located within a project area under the establishment and
annual payment component of BCAP.
Project area means a geographic area with specified boundaries
submitted by a project sponsor and approved by CCC under the
establishment and annual payment component of BCAP.
Project sponsor means a group of producers or a biomass conversion
facility who proposes a project area.
Qualified biomass conversion facility means a biomass conversion
facility that meets all the requirements for BCAP qualification, and
whose facility representatives enter into a BCAP agreement with CCC.
Related-party transaction means a transaction between two or more
ready, willing, and able organizations, trades, or business (whether or
not incorporated, whether or not organized in the United States, and
whether or not affiliated) substantially owned or controlled directly
or indirectly by the same interests, as determined by the Deputy
Administrator.
Renewable biomass means the following:
(1) Materials, pre-commercial thinnings, or invasive species from
National Forest System land and U.S. Department of the Interior Bureau
of Land Management land that:
(i) Are byproducts of preventive treatments that are removed to
reduce hazardous fuels, to reduce or contain disease or insect
infestation, or to restore ecosystem health;
(ii) Would not otherwise be used for higher-value products; and
(iii) Are harvested in accordance with applicable law and land
management plans and the requirements for old-growth maintenance,
restoration, and management direction of sections 102(e)(2), (3), and
(4) of the Healthy Forests Restoration Act of 2003 (16 U.S.C. 6512) and
large-tree retention provisions of subsection (f); or
(2) Any organic matter that is available on a renewable or
recurring basis from non-Federal land or land belonging to an Indian or
Indian Tribe that is held in trust by the United States or subject to a
restriction against alienation imposed by the United States, including:
(i) Renewable plant material (including feed grains, other
agricultural commodities, other plants and trees, or algae);
(ii) Waste material, including
(A) Crop residue;
(B) Other vegetative waste material (including wood waste and wood
residues that would not otherwise be used for higher-value products);
(C) Animal waste and byproducts (including fats, oils, greases, and
manure); and
(D) Food waste and yard waste.
Socially disadvantaged farmer or rancher means, unless other
classes of persons are approved by the Deputy Administrator in writing,
persons who are:
(1) American Indians or Alaska Natives (that is, persons who are
members of that class of persons who originally settled Alaska);
(2) Asian-Americans;
(3) African-Americans; or
(4) Hispanic-Americans.
Technical assistance means assistance in determining the
eligibility of land and practices for BCAP, implementing and certifying
practices, ensuring contract performance, and providing annual rental
rate surveys. The technical assistance provided in connection with BCAP
to owners or operators, as approved by CCC, includes, but is not
limited to: Technical expertise, information, and tools necessary for
the conservation of natural resources on land; technical services
provided directly to farmers, ranchers, and other eligible entities,
such as conservation planning, technical consultation, and assistance
with design and implementation of conservation practices; and technical
infrastructure, including activities, processes, tools, and functions
needed to support delivery of technical services, such as technical
standards, resource inventories, training, data, technology,
monitoring, and effects analyses.
Tribal government means any Indian Tribe, band, nation, or other
organized group, or community, including pueblos, rancherias, colonies
and any Alaska Native Village, or regional or village corporation as
defined in or established pursuant to the Alaska Native Claims
Settlement Act (43 U.S.C. 1601-1629h), which is recognized as eligible
for the special programs and services provided by the United States to
Indians because of their status as Indians.
United States means all fifty States of the United States, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and the District
of Columbia.
Violation means an act by the participant, either intentional or
unintentional, that would cause the participant to no longer be
eligible to receive or retain all or a portion of BCAP payments.
Yard waste means a waste material derived from the urban
environment including construction and demolition debris and municipal
solid waste.
Sec. 1450.3 General description.
(a) The objectives of BCAP are to:
(1) Support the establishment and production of eligible crops for
conversion to bioenergy in selected project areas; and
(2) Assist agricultural and forest landowners and operators with
matching payments to support the collection, harvest, storage, and
transportation costs of eligible material for use in a biomass
conversion facility.
(b) A participant must implement and adhere to a conservation plan
prepared in accordance with BCAP guidelines, as established and
determined by CCC. A conservation plan for contract acreage must be
implemented by a participant and must be approved by the conservation
district in which the lands are located. If the conservation district
declines to review the plan, the provider of technical assistance may
take such further action as is needed to account for lack of such
review.
(c) Agricultural and forest landowners and operators must comply
with any existing conservation plans, forest stewardship plans and any
other applicable laws for any removal of eligible material for use in a
biomass conversion facility to receive matching payments.
(d) Except as otherwise provided, a participant may receive, in
addition to any payments under this part, cost-share assistance, rental
or easement payments, tax benefits, or other payments from a State or a
private organization in return for enrolling lands in BCAP, without any
commensurate reduction in BCAP payments.
Sec. 1450.4 Violations.
(a)(1) If a participant fails to carry out the terms and conditions
of a BCAP
[[Page 6283]]
contract, CCC may terminate the BCAP contract.
(2) If the BCAP contract is terminated by CCC in accordance with
this paragraph:
(i) The participant will forfeit all rights to further payments
under such contract and must refund all payments previously received,
plus interest; and
(ii) The participant must pay liquidated damages to CCC in an
amount as specified in the contract.
(b) CCC may reduce a demand for a refund under this section to the
extent CCC determines that such relief would be appropriate and would
not deter the accomplishment of the goals of the program.
Sec. 1450.5 Performance based on advice or action of USDA.
(a) The provisions of Sec. 718.303 of this title relating to
performance based on the action or advice of an authorized
representative of USDA applies to this part, and may be considered as a
basis to provide relief to persons subject to sanctions under this part
to the extent that relief is otherwise required by this part.
(b) [Reserved]
Sec. 1450.6 Access to land.
(a) For purposes related to this program, any representative of the
U.S. Department of Agriculture, or designee thereof, must be provided
with access to land that is:
(1) The subject of an application for a contract under this part;
or
(2) Under contract or otherwise subject to this part.
(b) For land identified in paragraph (a) of this section, the
participant must provide such representatives or designees with access
to examine records for the land to determine land classification,
eligibility, or for other purposes, and to determine whether the
participant is in compliance with the terms and conditions of the BCAP
contract.
Sec. 1450.7 Division of payments and provisions about tenants and
sharecroppers.
(a) Payments received under this part will be divided as specified
in the applicable contract. CCC may refuse to enter into a contract
when there is a disagreement among persons or legal entities seeking
enrollment as to a person's or legal entity's eligibility to
participate in the contract as a tenant or sharecropper, and there is
insufficient evidence, as determined by CCC, to indicate whether the
person or legal entity seeking participation as a tenant or
sharecropper has an interest in the acreage offered for enrollment in
the BCAP.
(b) CCC may remove an operator or tenant from a BCAP contract when:
(1) The operator or tenant requests in writing to be removed from
the BCAP contract;
(2) The operator or tenant files for bankruptcy and the trustee or
debtor in possession fails to affirm the contract, to the extent
permitted by applicable bankruptcy laws;
(3) The operator or tenant dies during the contract period and the
administrator of the estate fails to succeed to the contract within a
period of time determined appropriate by the Deputy Administrator; or
(4) A court of competent jurisdiction orders the removal of the
operator or tenant from the BCAP contract and such order is received by
CCC.
(c) Tenants who fail to maintain tenancy on the acreage under
contract for any reason may be removed from a contract by CCC.
Sec. 1450.8 Payments not subject to claims.
(a) Subject to part 1403 of this chapter, any cost-share or annual
payment or portion of the payment due any person or legal entity under
this part will be allowed without regard to questions of title under
State law, and without regard to any claim or lien in favor of any
creditor, except agencies of the U.S. Government.
(b) [Reserved]
Sec. 1450.9 Assignments.
(a) Participants may assign the right to receive such cash
payments, in whole or in part, as provided in part 1404 of this
chapter.
(b) [Reserved]
Sec. 1450.10 Appeals.
(a) Except as provided in paragraph (b) of this section, a person
or legal entity applying for participation may appeal or request
reconsideration of an adverse determination in accordance with the
administrative appeal regulations at parts 11 and 780 of this title.
(b) Determinations by the Natural Resources Conservation Service
may be appealed in accordance with procedures established under part
614 of this title or otherwise established by the Natural Resources
Conservation Service.
Sec. 1450.11 Scheme or device.
(a) If CCC determines that a person or legal entity has employed a
scheme or device to defeat the purposes of this part, or any part, of
any USDA program, payment otherwise due or paid such person or legal
entity during the applicable period may be required to be refunded with
interest, as determined appropriate by CCC.
(b) A scheme or device includes, but is not limited to, coercion,
fraud, misrepresentation, depriving any other person or legal entity of
cost-share assistance or annual payments, or obtaining a payment that
otherwise would not be payable.
(c) A new owner or operator or tenant of land subject to this part
who succeeds to the contract responsibilities must report in writing to
CCC any interest of any kind in the land subject to this part that is
retained by a previous participant. Such interest may include a
present, future, or conditional interest, reversionary interest, or any
option, future or present, on such land, and any interest of any lender
in such land where the lender has, will, or can legally obtain, a right
of occupancy to such land or an interest in the equity in such land
other than an interest in the appreciation in the value of such land
occurring after the loan was made. Failure to fully disclose such
interest will be considered a scheme or device under this section.
Sec. 1450.12 Filing of false claims.
(a) If CCC determines that any participant has knowingly supplied
false information or has knowingly filed a false claim, such
participant will be ineligible for payments under this part with
respect to the fiscal year in which the false information or claim was
filed and the contract may be terminated, in which case CCC may demand
a full refund of all prior payments.
(b) False information or false claims include, but are not limited
to, claims for payment for practices that do not comply with the
conservation plan. Any amounts paid under these circumstances must be
refunded to CCC, together with interest as determined by CCC, and any
amounts otherwise due the participant will be withheld.
(c) The remedies provided for in this section will be in addition
to any other remedy available to CCC and in addition to any criminal
penalty.
Sec. 1450.13 Miscellaneous.
(a) Except as otherwise provided in this part, in the case of
death, incompetency, or disappearance of any participant, any payments
due under this part will be paid to the participant's successor(s) in
accordance with part 707 of this title.
(b) Unless otherwise specified in this part, payments under this
part will be subject to the compliance requirements of part 12 of this
title concerning highly
[[Page 6284]]
erodible land and wetland conservation and payments.
(c) Any remedies permitted CCC under this part will be in addition
to any other remedy, including, but not limited to, criminal remedies
or actions for damages in favor of CCC, or the United States, as may be
permitted by law. The Deputy Administrator may add to the contract such
additional terms as are needed to enforce these regulations, which will
be binding on the parties and may be enforced to the same degree as the
other provisions of these regulations.
(d) Absent a scheme or device to defeat the purposes of the
program, when an owner loses control of BCAP acreage enrolled under
Subpart C of this part due to foreclosure and the new owner chooses not
to continue the contract in accordance with Sec. 1450.215 refunds will
not be required from any participant on the contract to the extent that
the Deputy Administrator determines that forgiving such repayment is
appropriate in order to provide fair and equitable treatment.
Subpart B--Matching Payments
Sec. 1450.101 Qualified biomass conversion facility.
(a) To be considered a qualified biomass conversion facility, a
biomass conversion facility must enter into an agreement with CCC and
must:
(1) Meet all applicable regulatory and permitting requirements by
applicable Federal, State, or local authorities;
(2) Agree in writing to:
(i) Maintain accurate records of all eligible material purchases
and related documents regardless of whether matching payments will be
sought; and
(ii) Make available at one place and at all reasonable times for
examination by representatives of USDA, all books, papers, records,
contracts, scale tickets, settlement sheets, invoices, written price
quotations, or other documents related to the program for not less than
3 years from the date of application as a qualified biomass conversion
facility;
(iii) Make information available to USDA and institutes of higher
education and to allow general information about the facility and its
eligible material to be made public by USDA and other entities after
qualification is determined;
(iv) Clearly indicate on the scale ticket or equivalent the actual
tonnage delivered, provide a copy of the scale ticket(s) or equivalent,
and provide it to the eligible material owner;
(v) Calculate a total dry ton weight equivalent to the actual
tonnage delivered and provide that measurement to the eligible material
owner;
(vi) Use commercial weight scales that are certified for accuracy
by applicable State or local authorities and accurate moisture
measurement equipment to determine the dry ton weight equivalent of
actual tonnage delivered; and
(vii) For those facilities that convert vegetative waste materials
such as wood wastes and wood residues into heat or power for
consumption at the facility, provide the Deputy Administrator with such
information as needed to establish the historical baseline for heat or
power production from wood wastes or residues.
(b) For a qualified biomass conversion facility, CCC will
periodically inform the public that matching payments may be available
for deliveries of eligible material to such qualified biomass
conversion facility. CCC will maintain a listing of qualified biomass
conversion facilities for general public access and distribution that
may include general information about the facility and its eligible
material needs.
Sec. 1450.102 Eligible material owner.
(a) In order to be eligible for a BCAP matching payment, a person
or legal entity must:
(1) Be a producer of an eligible crop that is produced on BCAP
contract acreage authorized by this subpart.
(2) Have the right to collect or harvest eligible material.
(3) Not be a party to a related-party transaction.
(b) A qualified biomass conversion facility that meets the
requirements of paragraph (a) of this section may be considered an
eligible material owner if it otherwise meets the definition in this
part.
Sec. 1450.103 Eligible material.
(a) In order to be eligible for a matching payment, an eligible
material owner must have harvested or collected eligible material that
was delivered to a qualified biomass conversion facility.
(b) Eligible material must be a renewable biomass that, at a
minimum, meets the definition in Sec. 1450.3 or is listed as an
eligible material on http://www.fsa.usda.gov/energy.
(c) Matching payments are not authorized for:
(1) Any eligible material delivered before [DATE OF PUBLICATION OF
THE FINAL RULE IN THE FEDERAL REGISTER].
(2) Any eligible material for which payment is received before the
application for payment is received and approved by the county FSA
office, in accordance with Sec. 1450.104 of this part.
(3) Eligible material delivered to a qualified Biomass Conversion
facility used to produce black liquor, an industrial waste by-product
of the pulp and kraft paper manufacturing process which consists
primarily of inorganic chemicals used in the pulping process, lignin,
hemicellulose, and cellulose. In addition, black liquor is not an
eligible material.
Sec. 1450.104 Signup.
(a) Applications for matching payments will be accepted on a
continuous basis.
(b) An eligible material owner must apply for matching payments at
the FSA county office before payment for the eligible material from a
qualified biomass conversion facility is received. ``The request must
be submitted and approved by CCC before any payment is made by the
facility for the eligible material.''
(c) Applications must include the following estimates based on
information obtained from contracts, agreements, or letters of intent:
(1) An estimate of the total dry tons of eligible material expected
to be sold to a qualified biomass conversion facility;
(2) The type(s) of eligible material that is expected to be sold;
(3) The name of the qualified biomass conversion facility that will
purchase the eligible material;
(4) The expected per dry ton price the owner plans to receive for
the delivery of the eligible material; and
(5) The date or dates the eligible material is expected to be
delivered to the facility.
(d) Eligible material owners who deliver eligible material to more
than one qualified biomass conversion facility must submit separate
applications for each facility to which eligible material will be
delivered.
(e) After delivery, eligible material owners must notify CCC and
request the matching payment. Matching payments will be disbursed only
after delivery is verified by FSA.
(f) Other information that must be submitted to FSA in order to
receive matching payments includes settlement, summary, or other
acceptable data that provide the:
(1) Total actual tonnage delivered and a total dry weight tonnage
equivalent amount determined by the qualified biomass conversion
facility using standard moisture determinations applicable to the
eligible material;
(2) Total payment received, including the per-ton payment rate(s)
matched with actual and dry weight tonnage delivered; and
(3) Qualified biomass conversion facility's certification as to the
authenticity of the information.
[[Page 6285]]
Sec. 1450.105 Obligations of participant.
(a) All participants whose BCAP matching payment application was
approved must agree to:
(1) Carry out the terms and conditions of such BCAP matching
payment application; and
(2) Be jointly and severally responsible, if the participant has a
share of the payment greater than zero, with the other contract
participants for compliance with the provisions of such contract and
the provisions of this part, and for any refunds or payment adjustments
that may be required for violations of any of the terms and conditions
of the BCAP contract and this part.
(b) [Reserved]
Sec. 1450.106 Payments.
Option 1 for Sec. 1450.106
(a) Payments under this subpart will be for a term not to exceed
two years beginning the date that the first matching payment to a
person or entity is issued by CCC.
(b) Payments under this subpart will be paid at a rate of $1 for
each $1 per ton received from a qualified biomass conversion facility
for the commercial sale of eligible materials used to produce anything
other than cellulosic ethanol (heat, power, or biobased products) in an
amount up to $16 per ton.
(c) Payments under this subpart will be paid at a rate of $1 for
each $1 per ton received from a qualified biomass conversion facility
for the commercial sale of materials used to produce cellulosic ethanol
in an amount up to $45 per ton.
Option 2 for Sec. 1450.106
(a) Payments under this subpart will be for a term not to exceed
two years beginning the date that the first matching payment to a
person or entity is issued by CCC.
(b) Payments under this subpart will be paid at a rate of $1 for
each $1 per ton received from a qualified biomass conversion facility
for the commercial sale of eligible material in an amount up to $45 per
ton.
(c) For those biomass conversion facilities converting vegetative
waste materials, such as wood waste and wood residues, to heat or power
consumed by the facility, no payments may be made under this subpart
for material unless the material is converted to heat or power above
that facility's historical baseline for heat or power production from
renewable biomass as established by the Deputy Administrator.
Option 3 for Sec. 1450.106
(a) Payments under this subpart will be for a term not to exceed
two years beginning the date that the first matching payment to a
person or entity is issued by CCC.
(b) Payments under this subpart will be paid at a rate of $1 for
each $1 per ton received from a qualified biomass conversion facility
for the commercial sale of eligible material in an amount up to $45 per
ton to facilities that:
(1) Fully convert from fossil fuel consumption to renewable biomass
feedstocks;
(2) For eligible material showing exceptional promise for producing
innovative advanced biofuels, renewable energy, or biobased products;
or
(3) For every ton of renewable biomass consumption above a
facility's established historical baseline.
(c) Payments under this subpart will be paid at a rate of $1 for
each $1 per ton received from a qualified biomass conversion facility
for the commercial sale of eligible material in an amount up to $16 per
ton for those facilities that do not increase renewable biomass
consumption over a historical baseline.
Sec. Sec. 1450.107-1450.199 [Reserved]
Subpart C--Establishment and Annual Payments
Sec. 1450.200 General description.
As provided in this subpart, ``establishment and annual payments''
may be provided by CCC to producers of eligible crops in a project
area.
Sec. 1450.201 Project area submission requirements.
(a) To be considered for selection as a project area, a project
sponsor must submit a proposal to CCC that includes, at a minimum:
(1) A description of the eligible land and eligible crops of each
producer that will participate in the proposed project area;
(2) A letter of commitment from a biomass conversion facility
stating that the facility will use, for BCAP purposes, eligible crops
intended to be produced in the proposed project area;
(3) Evidence that the biomass conversion facility has sufficient
equity available to operate if the facility is not operational at the
time the project area proposal is submitted; and
(4) Other information that gives CCC a reasonable assurance that
the biomass conversion facility will be in operation by the time that
the eligible crops are ready for harvest.
(b) The project area description required in paragraph (a) of this
section needs to specify geographic boundaries and be described in
definite terms such as acres, watershed boundaries, mapped longitude
and latitude coordinates, or counties.
(c) The project area needs to be physically located near a biomass
conversion facility or facilities.
(d) Project area proposals may limit the nature and types of
eligible crops to be planted within a project area.
Sec. 1450.202 Project area selection criteria.
In selecting project areas, CCC will consider:
(a) The dry tons of the eligible crops proposed to be produced in
the proposed project area and the probability that such crops will be
used for BCAP purposes;
(b) The dry tons of renewable biomass projected to be available
from sources other than the eligible crops grown on contract acres;
(c) The anticipated economic impact in the proposed project area;
(d) The opportunity for producers and local investors to
participate in the ownership of the biomass conversion facility in the
proposed project area;
(e) The participation rate by beginning or socially disadvantaged
farmers or ranchers;
(f) The impact on soil, water, and related resources;
(g) The variety in biomass production approaches within a project
area, including agronomic conditions, harvest and postharvest
practices, and monoculture and polyculture crop mixes;
(h) The range of eligible crops among project areas; and
(i) Any other additional criteria, as determined by CCC.
Sec. 1450.203 Eligible persons and legal entities.
(a) In order to be eligible to enter into a BCAP contract in
accordance with this subpart, a person or legal entity must be an
owner, operator, or tenant of eligible land, as defined in Sec.
1450.204.
(b) [Reserved]
Sec. 1450.204 Eligible land.
(a) For the purposes of this subpart, eligible land means
agricultural land including cropland, grassland, pastureland,
rangeland, hayland, or other lands on which food, fiber, or other
agricultural products are produced or capable of being produced, or
nonindustrial private forest lands.
(b) For the purposes of this subpart, eligible land is not:
(1) Federal- or State-owned land;
(2) Land that is native sod as of [DATE OF PUBLICATION OF THE
[[Page 6286]]
FINAL RULE IN THE FEDERAL REGISTER];
(3) Land enrolled in the conservation reserve program authorized
under the regulations at part 1410 of this chapter;
(4) Land enrolled in the wetlands reserve program authorized under
the regulations at part 1467 of this chapter; or
(5) Land enrolled in the grassland reserve program authorized under
the regulations at part 1415 of this chapter.
Sec. 1450.205 Duration of contracts.
(a) Contracts under this subpart will be for a term of up to:
(1) 5 years for annual and non-woody perennial crops; and
(2) 15 years for woody perennial crops.
(b) The establishment time period may vary due to: Type of crop,
agronomic conditions (establishment time frame, winter hardiness, etc),
and other factors.
Sec. 1450.206 Obligations of participant.
(a) All participants subject to a BCAP contract must:
(1) Carry out the terms and conditions of such BCAP contract;
(2) Make available to CCC or to an institution of higher education
or other entity designated by CCC, such information as CCC determines
to be appropriate to promote the production of eligible crops and the
development of biomass conversion technology;
(3) Comply with the highly erodible land and wetland conservation
requirements of part 12 of this chapter;
(4) Implement a:
(i) Conservation plan or
(ii) Forest stewardship plan or an equivalent plan.
(5) Implement the conservation plan, which is part of such
contract, in accordance with the schedule of dates included in such
conservation plan, unless both:
(i) The Deputy Administrator determines that the participant cannot
fully implement the conservation plan for reasons beyond the producer's
control, and
(ii) CCC agrees to a modified plan.
(6) The producer will demonstrate compliance with the conservation
or forest stewardship plan through required self certification and FSA
will spot check compliance with the plans.
(7) Establish temporary vegetative cover either within the
timeframes required by the conservation plan or as determined by the
Deputy Administrator, if the permanent vegetative cover cannot be
timely established; and
(8) If the participant has a share of the payment greater than
zero, be jointly and severally responsible with the other contract
participants for compliance with the provisions of such contract and
the provisions of this part, and for any refunds or payment adjustments
that may be required for violations of any of the terms and conditions
of the BCAP contract and this part.
(b) Under the proposed rule, payments may cease and producers may
be subject to contract termination for failure to plant eligible crops.
(c) A contract will not be terminated for failure by the
participant to establish an approved cover on the land if, as
determined by the Deputy Administrator:
(1) The failure to plant or establish such cover was due to
excessive rainfall, flooding, or drought; and
(2) The land on which the participant was unable to plant or
establish such cover is planted or established to such cover as soon as
practicable after the wet or drought conditions that prevented the
planting or establishment subside.
Sec. 1450.207 Conservation plans and forest stewardship plans.
(a) The producer must implement a conservation plan, forest
stewardship plan or equivalent plan that complies with CCC guidelines
and is approved by the appropriate conservation district for the land
to be entered in BCAP. If the conservation district declines to review
the conservation plan, or disapproves the conservation plan, such
approval may be waived by CCC.
(b) The practices and management activities included in a
conservation plan, forest stewardship plan or equivalent plan, and
agreed to by the producer, must be implemented in a cost-effective
manner that meets BCAP goals and purposes.
(c) If applicable, a tree planting plan must be developed and
included in the conservation plan, forest stewardship plan or
equivalent plan. Such tree planting plan may allow a reasonable time to
complete plantings, as determined by CCC.
(d) All conservation plans, forest stewardship plans or equivalent
plans, and revisions of such plans, will be subject to approval by CCC.
Sec. 1450.208 Eligible practices.
Eligible practices are those practices specified in the
conservation or forestry plan that meet all standards needed to cost-
effectively establish:
(a) Annual crops;
(b) Non-woody perennial crops; and
(c) Woody perennial crops.
Sec. 1450.209 Signup.
(a) Offers for contracts may be submitted on a continuous basis to
FSA as determined by the Deputy Administrator.
(b) [Reserved]
Sec. 1450.210 Acceptability of offers.
(a) Acceptance or rejection of any contract offered will be at the
sole discretion of CCC, and offers may be rejected for any reason as
determined to accomplish the goals of the program.
(b) An offer to enroll land in BCAP will be irrevocable for such
period as is determined and announced by CCC. The producer will be
liable to CCC for liquidated damages if the applicant revokes an offer
during the period in which the offer is irrevocable as determined by
the Deputy Administrator. CCC may waive payment of such liquidated
damages if CCC determines that the assessment of such damages, in a
particular case, is not in the best interest of CCC and the program.
Sec. 1450.211 BCAP contract.
(a) In order to enroll land in BCAP, the participant must enter
into a contract with CCC.
(b) The BCAP contract is comprised of:
(1) The terms and conditions for participation in BCAP;
(2) The conservation plan, forest stewardship plan or equivalent
plan; and
(3) Any other materials or agreements determined necessary by CCC.
(c) In order to enter into a BCAP contract, the producer must
submit an offer to participate as specified in Sec. 1450.209;
(d) The BCAP contract must, within the dates established by CCC, be
signed by:
(1) The producer; and
(2) The owners of the eligible land to be placed in the BCAP and
other eligible participants, if applicable.
(e) The Deputy Administrator is authorized to approve BCAP
contracts on behalf of CCC.
(f) CCC will honor BCAP contracts even in the event that a project
area biomass conversion facility does not become fully or partially
operational.
(g) BCAP contracts may be terminated by CCC before the full term of
the contract has expired if:
(1) The owner loses control of or transfers all or part of the
acreage under contract and the new owner does not wish to continue the
contract;
(2) The participant voluntarily requests in writing to terminate
the contract and obtains the approval of
[[Page 6287]]
CCC according to terms and conditions as determined by CCC;
(3) The participant is not in compliance with the terms and
conditions of the contract;
(4) The BCAP practice fails or is not established after a certain
time period, as determined by the Deputy Administrator, and the cost of
restoring the practice outweighs the benefits received from the
restoration;
(5) The BCAP contract was approved based on erroneous eligibility
determinations; or
(6) CCC determines that such a termination is needed in the public
interest.
(h) Except as allowed and approved by CCC where the new owner of
land enrolled in BCAP is a Federal agency that agrees to abide by the
terms and conditions of the terminated contract, the participant in a
contract that has been terminated must refund all or part of the
payments made with respect to the contract plus interest, as determined
by CCC, and must pay liquidated damages as provided for in the contract
and this part. CCC may permit the amount(s) to be repaid to be reduced
to the extent that such a reduction will not impair the purposes of the
program. Further, a refund of all payments need not be required from a
participant who is otherwise in full compliance with the BCAP contract
when the land is purchased by or for the United States, as determined
appropriate by CCC.
Sec. 1450.212 Establishment payments.
(a) Establishment payments will be made available upon a
determination by CCC that an eligible practice, or an identifiable
portion of a practice, has been established in compliance with the
appropriate standards and specifications.
(b) Except as otherwise provided for in this part, such payments
will be made only for the cost-effective establishment or installation
of an eligible practice, as determined by CCC.
(c) Except as provided in paragraph (d) of this section, such
payments will not be made to the same owner or operator on the same
acreage for any eligible practices that have been previously
established, or for which such owner or operator has received cost-
share assistance from any Federal agency.
(d) Establishment payments may be authorized for the replacement or
restoration of practices on land for which assistance has been
previously allowed under BCAP, only if:
(1) Replacement or restoration of the practice is needed to achieve
adequate erosion control, enhance water quality, wildlife habitat, or
increase protection of public wellheads; and
(2) The failure of the original practice was due to reasons beyond
the control of the participant, as determined by the CCC.
(e) In addition, CCC may make partial payments when the producer
completes identifiable components of the contract. CCC may make
supplemental establishment payments, if necessary.
Sec. 1450.213 Levels and rates for cost-share payments.
(a) CCC will pay not more than 75 percent of the actual or average
cost (whichever is lower) of establishing non-woody perennial crops and
woody perennial crops specified in the BCAP conservation or forestry
plan.
(b) The average cost of performing a practice may be determined by
CCC based on recommendations from the State Technical Committee. Such
cost may be the average cost in a State, a county, or a part of a State
or county, as determined by the Deputy Administrator. The calculated 75
percent of the average cost may represent less than 75 percent of the
actual cost for an individual participant.
(c) Except as otherwise provided for in this part, a participant
may receive, in addition to any payment under this part, cost-share
assistance, rental payments, or tax benefits from a State or a private
organization in return for enrolling lands in BCAP without a
commensurate reduction in BCAP payments.
Sec. 1450.214 Annual payments.
(a) Annual payments will be made in such amount and in accordance
with such time schedule as may be agreed upon and specified in the BCAP
contract.
(b) Based on the regulations at Sec. 1410.42 of this chapter and
as determined by CCC, annual payments include a payment based on:
(i) A weighted average soil rental rate for cropland;
(ii) The applicable marginal pastureland rental rate for all other
land except for non-industrial private forest land; and
(iii) For forest land, the average county rental rate for cropland
as adjusted for forestland productivity for non-industrial private
forest land.
(c) The annual payment will be divided among the participants on a
single contract as agreed to in such contract, as determined by CCC.
(d) A participant that has an established eligible crop and is
therefore not eligible for establishment payments under Sec. 1450.213
may be eligible for annual payments under the provisions of this
section.
(e) In the case of a contract succession, annual payments will be
divided between the predecessor and the successor participants as
agreed to among the participants and approved by CCC. If there is no
agreement among the participants, annual payments will be divided in
such manner deemed appropriate by the Deputy Administrator and such
distribution may be prorated based on the actual days of ownership of
the property by each party.
(f) Annual payments will be reduced:
(1) By 25 percent if an eligible crop is delivered to the biomass
conversion facility; or
(2) On a dollar-for-dollar basis if:
(i) An eligible crop is used for a purpose other than the
production of energy at the biomass conversion facility;
(ii) The producer receives a matching payment under subpart B of
this part;
(iii) The producer violates a term of the contract; or
(iv) Other circumstances necessary to carry out BCAP, as determined
by CCC.
Sec. 1450.215 Transfer of land.
(a)(1) If a new owner or operator purchases or obtains the right
and interest in, or right to occupancy of, the land subject to a BCAP
contract, such new owner or operator, upon the approval of CCC, may
become a participant to a new BCAP contract with CCC for the
transferred land.
(2) For the transferred land, if the new owner or operator becomes
a successor to the existing BCAP contract, the new owner or operator
will assume all obligations of the BCAP contract of the previous
participant.
(3) If the new owner or operator is approved as a successor to a
BCAP contract with CCC, then, except as otherwise determined by the
Deputy Administrator:
(i) Cost-share payments will be made to the past or present
participant who established the practice; and
(ii) Annual payments to be paid during the fiscal year when the
land was transferred will be divided between the new participant and
the previous participant in the manner specified in Sec. 1450.214(c).
(b) If a participant transfers all or part of the right and
interest in, or right to occupancy of, land subject to a BCAP contract
and the new owner or operator does not become a successor to such
contract within 60 days of such transfer, or such other time as the
Deputy Administrator determines to be appropriate, such contract will
be
[[Page 6288]]
terminated with respect to the affected portion of such land, and the
original participant:
(1) Forfeits all rights to any future payments for that acreage;
(2) Must refund all previous payments received under the contract
by the participant or prior participants, plus interest, except as
otherwise specified by the Deputy Administrator. The provisions of
Sec. 1450.211(g) will apply.
(c) Federal agencies acquiring property, by foreclosure or
otherwise, that contains BCAP contract acreage cannot be a party to the
contract by succession. However, through an addendum to the BCAP
contract, if the current operator of the property is one of the
contract participants, the contract may remain in effect and, as
permitted by CCC, such operator may continue to receive payments under
such contract if:
(1) The property is maintained in accordance with the terms of the
contract;
(2) Such operator continues to be the operator of the property; and
(3) Ownership of the property remains with such Federal agency.
Signed at Washington, DC, on February 2, 2010.
Jonathan W. Coppess,
Executive Vice President, Commodity Credit Corporation, and
Administrator, Farm Service Agency.
[FR Doc. 2010-2556 Filed 2-3-10; 4:15 pm]
BILLING CODE 3410-05-P