**May 12, 2005**

Crossroads Hotel and Convention Center

Huron, South Dakota

Eric Nelson, of Senator Johnson's Sioux Falls Office, informed the group
that in early April a joint bipartisan group of senators met regarding
the agriculture initiative, asked them to fully fund the RC&D program in
Fiscal Year (FY) 2006, currently it is suppose to be cut by 50 percent.

Pete Jahrus, South Dakota Department of Agriculture, announced that the
Conservation Reserve Enhancement Committee (CREP) will be meeting for 30
minutes after we adjourn today.

**Program Update** -- Mike Kuck, Natural Resources Conservation Service
(NRCS,) stated that we will be discussing the status of where we are in
FY2005 before we move into where we plan to go in 2006.

**Wetlands Reserve Program (WRP) summary** - Brad Podoll, NRCS, reported
that in WRP, we received 2.45 million dollars in FY2005. The call for
ranking for funding was due by April 15, 2005. To date, 35 applications
have been received, totaling 3,157 acres, equaling 3.42 million dollars.
The roll over funding from previous years coming back to us, therefore,
funding may be available for all of the applications that have been
received.

April 15, 2005, was the call for ranking (cut-off date for accepting
applications,) by April 29^th^ all applications were to be forwarded to
the state office for review. By May 6, 2005, offers were to be made and
field offices notified of funded easements. There were 35 applicants
from the last call for ranking which were spread across the state, with
emphasis on the eastern part of the state.

**Grasslands Reserve Program (GRP) FY-2005 Summary** -- South Dakota's
allocation was \$2,090,174, this amount is similar to what we received
in FY2004. In consultation with the State Technical Committee (STC), the
geographic priority area was established for FY2005, it will be the same
as FY2004. Only applications from Haakon, Stanley, Jones, and Lyman
Counties will be evaluated and ranked for funding in FY2005. Prior year
applications not funded were deferred to this year. FY2005 GRP timeline:

-   **Friday, May 27, 2005** - Call for Ranking. The cut-off date for
    accepting applications to be evaluated for FY2005 ranking.

-   **Friday, July 1, 2005** - All applications submitted to the
    appropriate field support office for review.

-   **Friday, July 15, 2005** - Field support offices forward all
    applications for statewide funding consideration to the state
    office.

-   **Friday, July 22, 2005** - List of funded applications to field
    offices.

-   **Friday, September 9, 2005** - All contracts completed, reviewed,
    and signed.

Applications that were deferred last year will be considered during this
call for ranking. On an average, five to six new producers per county
have come in to sign-up. Field offices are predicting approximately 30
million dollars being requested during this cycle. The same ranking
process as last time will be used with one small change relating to
species. This program has an acre limit; therefore, this is the last
year for this program. If we opened it up across the state we would
literally have thousands of applications.

Whenever we have a backlog of applications pending, our National
Headquarters (NHQ) in hopes to acquire surplus funds from other states.

**2005 Environmental Quality Incentives Program (EQIP) Ground and
Surface Water Conservation Program** -- FY2005 funding allocation is
\$394,204. We received 29 applications, which were all approved. We have
\$135,983 of the allocation remaining. A second ranking was called for
on April 1, 2005. Funding decision will be sent out this week.

**Wildlife Habitat Incentives Program (WHIP)** -- Original allocation
was \$381,385, in January, an additional allocation of \$191,380 was
received totaling \$572,765. The allocation was split, 25 percent went
to Pilot Project Proposals. Thresholds were set for WHIP, which we have
not done before. In all, 80 applications were received. Forty-one
applications have been funded, of which 6 were canceled by the
participant. The Elk Habitat application, which is the Pilot Project,
was reviewed last Friday, we will fund the project at \$95,345, but
additional funding could be used. Those involved in the Elk Habitat
project agreed to submit a report to the STC after one year in
operation.

The committee reviews and makes recommendations on the pilot projects.
Last year, two special project applications were received and both were
approved; however, one of them backed out, due to not being ready to
move forward with the project.

Nationally, the agency has set-aside five million dollars (EQIP, WHIP,
and GRP funds) for the sage grouse initiative. We submitted a proposal
for the sage grouse initiative in three counties (Butte Harding, and
Fall River) in South Dakota. If funding is approved for this initiative,
it will require a collaborative partnership effort.

**FY2005 EQIP** -- Mike Kuck gave an update on the FY2005 program.
Seventeen percent of the funding went to the American Indian Earmark;
animal waste management systems received 3 million dollars; 4 million
dollars were allocated to address statewide resource concerns; each
South Dakota Association of Conservation District (SDACD) area received
\$777,355 totaling over 5 million dollars. We reserved \$100,000 for
modifications.

Preliminary sign-up results show 566 applications were received,
totaling \$20,990,430, requested for cost-share. Seventy applications
have been funded by the American Indian Earmark Allocation, totaling
\$2,581,936. All of the American Indian Earmark eligible applications
were funded. SDACD area allocation funded 170 applications, totaling
\$4,263,791. To date, a total of 320 applications have been funded with
all funding allocations.

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There was discussion regarding the amount of funding set aside for
technical assistance for animal waste system designs, as there appears
to be problems with getting timely designs. The funding came from four
different sources: Commission Funds, Clean Water State Revolving Funds,
NRCS Contribution Agreement, and the Pollution Prevention Funds,
totaling around one million dollars. There is a bottleneck in this
process, as there are not enough private sector or agency employees to
perform this function. Once we get through the Confined Animal Feeding
Operations (CAFO) workload, more staff should be available. EQIP dollars
actually go to construction; technical assistance (TA) funds pay for
staff. Other states are having the same problems that we are in securing
contractors to assist in this area, as conservation work is less of a
priority than highway and other types of construction.

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**FY2006 EQIP** -- Mike Kuck briefed the committee on the major changes
being proposed for the FY2006 EQIP program. We reviewed the national
template.

The National Template for the EQIP program will be implemented through
ProTracts (computer) program. The details of the program are being
developed at this time. We will need the STC assistance in rolling out
this new process. The focus of the national template will be to have
more consistency across the nation. Local work groups still have the
ability to set priorities. A separate ranking template will need to be
developed for each sub-account (earmarks, watersheds, statewide).

There will be four parts to the ranking process scoring: efficiency
score, local issues, state issues, and national priorities. We will use
ProTracts automated process for applications, ranking, contracting, and
payments. Everything will be done through this one system.

Some things that will be developed at the local level, requiring input
from the watershed area and Tribal workgroups:

-   List of land uses to be used in ranking (Crop, Range, Pasture,
    Headquarters, Wildlife, etc.)

-   List of all resource concerns/sub-account, we would have 10 ranking
    sheets for the State of South Dakota (SD) -- we will need to
    determine whether we want to continue the same breakdown for
    sub-accounts statewide, SDACD area, etc.

-   List of conservation practices/resource concerns.

-   Conservation Practice Physical Effects (CPPE) - compare to each
    conservation practice and put a numerical factor to it.

-   Local issues.

-   State issues.

-   Average annual cost for practices -- not used for cost-share. Annual
    cost identifying the average cost for practices -- will not be used
    for funding, but for estimating costs for application.

Timeline for EQIP 2006:

-   Training economist to determine average annual costs - June 2005.

-   National training on ranking tool -- August 2005.

-   States populate ranking tool data by October 1, 2005.

-   State training for field offices - October 2005.

-   Ranking tool implemented by November 1, 2005.

-   Call for Ranking in SD is yet to be determined.

Select the resource concern(s) to be addressed for each land use. Then
select the conservation practices that will be used to treat each
resource concern. Then apply the Efficiency Score:

-   The degree of cost-effectiveness of the proposed conservation
    practices.

-   Treatment of multiple resource concerns.

-   Use of conservation practices that provide environmental
    enhancements for a longer period of time.

-   The magnitude of the environmental benefits resulting from the
    treatment of national priorities and the priority natural resource
    concerns reflecting the level of performance of a conservation
    practice.

-   Narrative CPPE impacts converted to quantitative values.

-   We have to convert to a numerical value -5 (represents the most
    negative impact a practice can have on a resource concern) to a +5
    (represents the most positive impact a practice can have on a
    resource concern).

Using the practices installed to develop net value, divide it by the
total dollars for implementing practices and multiply by 10,000 to get
the efficiency score. The local work groups will have to select resource
concerns, land uses, and practices associated with the resource
concerns.

**Local Issues**

-   Established by local working group/Tribal working group -- there is
    a multiplier that is set by state conservationist based on feedback
    from the working groups. The workgroup will determine local issues
    and then the multiplier will be used to weight the local issues in
    perspective to the ranking.

-   The local issues part for the earmark dollars would be similar to
    the SDACD watershed and Tribal ranking sheets we used this year.

**State Issues**

-   State Issues identified by the STC.

-   Identifies specific practices to address specific issues such as
    Total Maximum Daily Loads, CAFO's, etc.

-   Same concept is applied as in the local process and the multiplier
    is set by the state conservationist based on feedback from the STC.
    The STC will develop the state issues and then the multiplier will
    be used to weight the state issues in perspective to the ranking.

**National Issues**

-   Set at NHQ and cannot be changed.

-   State conservationist establishes multiplier thus weighting the
    national priorities within the ranking process.

-   There are support pages for each of these ranking processes:

    -   Support page for efficiency, local, state, and national issues.

    -   Each support page will explain how and why an applicant received
        their score in each area.

    -   Planners will use this information to explain the process to the
        applicant and help with conservation planning.

A lot of input is needed from the local and Tribal subcommittees
regarding local issues, and the EQIP subcommittee to be involved in the
development of state issues. This will be a time-consuming process and
will probably require more than one meeting to get through the entire
process.

It is our understanding that SD will still receive a state allocation
for EQIP and that the national ranking process is intended to apply a
consistent approach on dispersing the funding. Mike indicated that he
feels the new process will produce similar results in SD, as long as we
keep our local work groups and the STC involved the results should be
very similar.

**Conservation Security Program (CSP)** - A weekly report is sent to NHQ
regarding our status on CSP. As of April 28, 2005, we had received 10
applications for the Vermillion Watershed and 25 applications for the
North Big Sioux Coteau Watershed. The application process is lengthier
than most producers are familiar with. There is a self-assessment
workbook to help the producers determine their eligibility and document
stewardship practices. The workbook is submitted during the sign-up, and
then NRCS schedules an appointment with the producer to determine tier
and enrollment category. CSP is intended to recognize the best and
motivate the rest.

For CSP tier 1 or 2, the producer must meet the soil quality criteria
and the second issue is water quality: nutrients, sediments, pesticides,
etc. From the nutrients standpoint, they need to be applied based on
South Dakota State University recommendations. Program eligibility
requires two years of farm management records.

Through a collaborative effort of the partnership, CSP informational
meetings will be held across the state to inform producers of the CSP
and its requirements. These workshops are intended to ensure producers
are aware of the management and paperwork requirements, which should
allow producers to get their business affairs in order, to be prepared
when their watershed is eligible for CSP.

We are in the process of identifying watersheds for the next CSP
sign-up. States make recommendations and NHQ has the final say as to
which watersheds are approved. Several things are taken into
consideration in selecting watersheds to ensure a successful sign-up:
trained staff and producers that are knowledgeable of the program. We
are also looking West River and will take into consideration what
adjoining states are proposing. In instances where we have shared
watersheds, the state with the greatest land mass is the lead state.
Whenever, we have watersheds that cross state-line, our criteria needs
to be similar. Technical specialists from the various states need to
work together to iron out any differences, i.e., Iowa only requires only
six inch deep soil tests where SD requires two feet.

**Technical Service Provider (TSP) update** -- We have 61 individual
contracts (most are agricultural waste systems) which equal \$337,745.
We also have contribution agreements with SDACD, Department of
Agriculture, and Pheasants Forever along with five federal contracts.

We feel there will be some fall out on the individual contracts,
allowing us to fund all of the initiatives. This is single year funding;
funds not used will not be returned.

When someone goes into Tech Reg. and registers for TSP, the state has to
review their application to ensure that they meet the requirements for
the certification areas designated. The home state (residence of the
TSP) must check with states designated, to ensure they are properly
certified. We have 60 days to complete this process.

We also have to conduct a quality assurance review, and spot check five
percent of the TSP's work. Recertification is required every three
years. We are in need of more TSP; we need people certified in
Comprehensive Nutrient Management Planning. We will be having a forum
May 26, 2005, inviting all TSP in the state, and others, to attend and
discuss what we can do to improve the program and increase
certifications.

**Conservation Reserve Program** (CRP) -- Daryl Campbell, Farm Service
Agency, had a handout which showed a breakdown of acres and dollars as
of March 31, 2005. Note - the national average rental rate for CRP is
\$41 dollars per acre. The second chart, on the first page, reflects
Continuous CRP practices that have acreage limitations -- the figures
reflect acres that have been allocated to the county office and not
acres that have received final approval. Based on the decision of the
last STC meeting, we have enrolled 101.3 acres to the Bobwhite Quail
Buffers. Second page breaks down the acres by practice; also reflects
continuous and general sign-up information by practice.

The NRCS has been receiving emergency requests. Meade County has been
approved for the Emergency Conservation Program for livestock water
development. Hopefully, the last few days has eased the drought issue in
SD; however, several other counties are expected to apply for
assistance.

There was discussion regarding the excessive costs associated with
distributing minutes and handouts from the STC meetings as the
distribution list contains 375 names. Various options were discussed,
i.e., establish a Web page for the STC linked from the SD NRCS Home Page
and post the meetings schedule and specifics regarding the meeting
location, the agenda for the meeting, and post minutes and handouts. It
was also discussed about distributing the minutes with the notice
announcing the next meeting rather than having two separate mailings,
another possibility was to make the minutes (without attachments)
available at the next meeting. After discussion, it was decided to:

-   Establish a Web page for the STC and post associated information on
    that site.

-   Distribute the minutes from this meeting with the notice announcing
    the next meeting; include the Web site for future reference.

-   Include a document with the next distribution asking the recipient
    if they want to remain on the distribution list (make it as a form
    -- yes, I want to remain on the STC distribution list; no, I don't
    want to remain on the STC distribution list.) Indicate that the form
    must be returned indicating their interest or their name will be
    removed from the list.

-   Include a place for the recipient to indicate that they do not have
    computer access readily available and that they would like to
    continue to receive a hard copy of the minutes (without
    attachments).

The next State Technical Committee Meeting will be held on July 28,
2005, in Pierre, SD, at the Ramkota Convention Center, 920 West Sioux
Avenue, Pierre, SD, and phone (605) 224-6877.