[Federal Register Volume 71, Number 246 (Friday, December 22, 2006)]
[Notices]
[Pages 76965-76966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-9813]


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DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service


The Secretary of Agriculture's determination of the Primary 
Purpose of Specified State of Florida Conservation Programs

AGENCY: Natural Resources Service (NRCS), USDA.

ACTION:  Notice of determination.

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SUMMARY: The Natural Resources Conservation Service (NRCS) is providing 
public notice that the Secretary of Agriculture has determined the 
cost-share payments made under specific State of Florida conservation 
programs are primarily for the purposes of conserving soil and water 
resources, or protecting and restoring the environment. NRCS was 
assigned technical and administrative responsibility for reviewing the 
State of Florida's conservation programs and making appropriate 
recommendations for the Secretary's determination of primary purpose. 
The programs are:
    <bullet> Program for Citrus, Cow/Calf, Dairies and Other 
Agriculture in the Lake Okeechobee Priority Basins;
    <bullet> Program for Indian River Area Citrus Groves;
    <bullet> Program for Interim Measures for Tri-County Agricultural 
Area Farms;
    <bullet> Program for Interim Measures for Florida Producers of 
Container-Grown Plants;
    <bullet> Program for Best Management Practices for Shadehouse Grown 
Leatherleaf Ferns;
    <bullet> Nitrogen Best Management Practices Program for Florida 
Ridge Citrus;
    <bullet> Nitrogen Interim Measure for Florida Citrus;
    <bullet> Nitrogen Interim Measure for Bahiagrass and Bermuda Grass; 
and
    <bullet> Florida Conservation Reserve Enhancement Program.
    This determination is in accordance with Section 126 of the 
Internal Revenue Code of 1954, as amended (26 U.S.C. 126), and permits 
recipients of cost-share payments to exclude from gross income to the 
extent allowed by the Internal Revenue Service.

FOR FURTHER INFORMATION CONTACT: Mr. Charles H. Bronson, Commissioner 
of Agriculture, Florida 32399, or Branch Chief, Environmental 
Improvement Programs, Natural Resources Conservation Service, 1400 
Independence Avenue SW., Washington, DC 20250.

SUPPLEMENTARY INFORMATION: Under section 126(a)(10) of the Internal

[[Page 76966]]

Revenue Code, gross income does not include the ``excludable portion'' 
of payments received under any program of a State under which payments 
are made to individuals primarily for the purpose of protecting or 
restoring the environment. In general, a cost-share payment for 
selected conservation practices is exempt from Federal taxation if it 
meets three tests: (1) It was a capital expense, (2) it does not 
substantially increase the operator's annual income from the property 
for which it is made, and (3) the Secretary of Agriculture certified 
that the payment was made primarily for conserving soil and water 
resources, protecting or restoring the environment, improving forests, 
or providing habitat for wildlife.
    The Secretary of Agriculture evaluates a conservation program on 
the basis of criteria set forth in 7 CFR Part 14, and makes a ``primary 
purpose'' determination for the payments made under the program. The 
objective of the determinations made under Part 14 is to provide 
maximum conservation, environmental, forestry improvement, and wildlife 
benefits to the general public from the operation of applicable 
programs. Final determinations are made on the basis of program, 
category of practices, or individual practices. Following a primary 
purpose determination by the Secretary of Agriculture, the Secretary of 
the Treasury determines if the payments made under the conservation 
program substantially increase the annual income derived from the 
property benefited by the payments.

Determination

    As provided for by Section 126 of the Internal Revenue Code, the 
Secretary examined the authorizing legislation, regulations, and 
operating procedures regarding the identified programs. In accordance 
with the criteria setout in 7 CFR Part 14, the Secretary has determined 
the primary purpose of cost-share payments made under the State of 
Florida's conservation programs (listed below) is conserving soil and 
water resources, or protecting and restoring the environment.
    <bullet> Program for Citrus, Cow/Calf, Dairies and Other 
Agriculture in the Lake Okeechobee Priority Basins;
    <bullet> Program for Indian River Area Citrus Groves;
    <bullet> Program for Interim Measures for Tri-County Agricultural 
Area Farms;
    <bullet> Program for Interim Measures for Florida Producers of 
Container-Grown Plants;
    <bullet> Program for Best Management Practices for Shadehouse Grown 
Leatherleaf Ferns;
    <bullet> Nitrogen Best Management Practices Program for Florida 
Ridge Citrus;
    <bullet> Nitrogen Interim Measure for Florida Citrus;
    <bullet> Nitrogen Interim Measure for Bahiagrass and Bermuda Grass; 
and
    <bullet> Florida Conservation Reserve Enhancement Program.
    The State of Florida uses the identified programs to provide an 
overall water resource benefit and to protect the environment. The 
Florida Department of Agriculture and Consumer Services provides 
reimbursement for select Best Management Practices that have potential 
water conservation, sediment control, and water quality benefits. The 
objectives of the programs are met through cost-shared construction of 
specific engineered structures, land treatment, management practices, 
and/or acquisition of specific equipment to meet environmental needs on 
private farmland.
    A ``Record of Decision'' for each identified program has been 
prepared and is available upon request from the Branch Chief, 
Environmental Improvement Programs, Natural Resources Conservation 
Service, 1400 Independence Avenue, SW., Washington, DC 20250.

Arlen L. Lancaster,
Chief
[FR Doc. 06-9813 Filed 12-21-06; 8:45 am]
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