6264 Federal Register / Vol. 75, No. 25 / Monday, February 8, 2010 / Proposed Rules 

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. 

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: cepdmail@wdc.usda.gov. 

• 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: 

cepdmail@wdc.usda.gov. 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, nonprofits, 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 twoyear limit to land tract instead of the 

eligible material owner. 

The 2008 Farm Bill specified the twoyear period for matching payments. 

However, CCC modified the beginning 

of the time period from the date of predelivery 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 § 1450.104(f) so the 

required information that must be 

submitted includes total actual tonnage 

delivered, total dry-weight tonnageequivalent 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, precommercial 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 Stateand 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 

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plans and the requirements for oldgrowth 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 oldgrowth 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 nonFederal 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 

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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 nonFederal 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 highervalue 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. 

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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 

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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 

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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 nonBCAP 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 nonindustrial private forest land. 

This rate information is being posted 

at FSA county offices (as FSA posts 

information for CRP). There are sitespecific 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. 

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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 marketbased 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 dollarfor-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: 

Matching payments Establishment and annual payments 

Geographic Eligibility ........... Not limited geographically ............................................... Limited to 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 

Eligible Producer.

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 producer may be a: 

• Biomass conversion facility that owns or operates eligible land or 

• Person or entity with the legal title to privately 

held lands or land held in trust by the Federal 

government. 

An eligible producer cannot be a: 

• Federal government entity, or 

An Eligible Material Owner cannot be a Federal government entity.• State or local government entity. 

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Matching payments Establishment and annual payments 

Land Limitations or Eligible 

Land.

Eligible material must be harvested or collected from 

certain: 

• U.S. National Forest System and BLM lands, 

• Non-Federal lands, including State- and locallyheld government lands, or 

• Tribal land held in trust by the Federal government 

Eligible land is certain: 

• Agricultural land, such as cropland, pastureland, 

rangeland, grassland, or other lands on which 

food, fiber, or other agricultural products are produced or capable of being produced; or 

• Nonindustrial private forest lands that are: 

Æ Rural lands with existing tree cover, or are suitable for growing trees; and 

Æ 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: 

Æ CRP; 

Æ Wetlands Reserve Program; or 

Æ Grassland Reserve Program. 

Eligible Crop or Material ...... Eligible material is certain: Eligible crop is: 

• Materials, pre-commercial thinnings, or invasive 

species from National Forest System land and 

U.S. Bureau System land that: 

Æ 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; 

Æ Would not otherwise be used for higher-value 

products; and 

Æ Are harvested in accordance with applicable law 

and land management 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) 

• 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, 

woods wastes, and wood residues; 

• Animal waste and byproducts, 

• Food Waste; and 

• Yard waste. 

Ineligible crops include: 

• Any crops that is eligible to receive payments 

under Title I of the 2008 Farm Bill. 

• Any plant that is invasive or noxious or has the 

potential to become invasive or noxious. 

• 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: 

Æ Renewable plant materials such as feed grains, 

other agricultural commodities, and other plants 

and trees; and 

Æ 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 at a rate of $1 for each $1 per dry 

ton equivalent paid by the qualified biomass conversion facility: 

• In an amount up to $45 per dry ton but only for 

on-site heat or power production from wood 

wastes and residues above an historical baseline; 

• In an amount up to $45 per dry ton for materials 

used to produce advanced biofuels and in an 

amount up to $16 per dry ton for material used 

for renewable energy or biobased products; or 

Establishment payments at a rate of not more than 75 

percent of establishment costs based on: 

• The costs of seed and stock for perennials; 

• The cost of planting the perennial crop; and 

• For non-industrial forest land, the costs of site 

preparation and tree planting(s). 

Annual payments equal to the market rate plus any incentive as provided for in a specific project area. 

• In an amount to be reduced in relation to increases in biofuel, renewable energy or 

biobased product production above a historical 

baseline 

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Matching payments Establishment and annual payments 

Payment Reductions ............ There are no comparable payment reductions ...............

If eligible and ineligible materials are comingled in the 

load, payment will only be made for eligible materials 

Annual payments will be reduced if: 

• An eligible crop is used for a purpose other than 

the production of energy at the biomass conversion facility; 

• 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 are paid within 30 days after submission of sales invoice(s) from the qualified biomass 

conversion facility and completion of application for 

payment.

Establishment payments are paid when the perennial or 

tree crop practice or identifiable portion of the practice has been completed according 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 two years from the date on which 

the first matching payment is issued to an eligible 

person or entity.

Contract duration is up to: 

• Five years for annual and non-woody perennial 

crops, and 

• 15 years for woody perennial crops. 

Project Area Proposals or 

Matching Payment Applications.

An eligible material owner must apply for a matching 

payment at the FSA county office after delivery of eligible material to a qualified biomass conversion facility.

Project area proposals may be submitted under a continuous signup. 

After a project area has been approved, eligible persons and legal entities within that project 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 

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1All NPV calculations assume a 3% discount 

rate. 

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. 

TABLE 1—BCAP COSTS BY YEAR

[2009 $ millions] 

Year Establishment 

cost share Annual payments Technical assistance 

Matching 

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 

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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 

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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 costshare 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 costshare 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 

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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 

§ 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. 

§ 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, 

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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 longterm, 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 

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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 oldgrowth 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. 

§ 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. 

§ 1450.4 Violations. 

(a)(1) If a participant fails to carry out 

the terms and conditions of a BCAP 

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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. 

§ 1450.5 Performance based on advice or 

action of USDA. 

(a) The provisions of § 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] 

§ 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. 

§ 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. 

§ 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] 

§ 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] 

§ 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. 

§ 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. 

§ 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. 

§ 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 

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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 § 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 

§ 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. 

§ 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. 

§ 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 § 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 § 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. 

§ 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. 

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§ 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] 

§ 1450.106 Payments. 

Option 1 for § 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 § 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 § 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. 

§§ 1450.107–1450.199 [Reserved] 

Subpart C—Establishment and Annual 

Payments 

§ 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. 

§ 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. 

§ 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. 

§ 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 § 1450.204. 

(b) [Reserved] 

§ 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 

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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. 

§ 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. 

§ 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. 

§ 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. 

§ 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. 

§ 1450.209 Signup. 

(a) Offers for contracts may be 

submitted on a continuous basis to FSA 

as determined by the Deputy 

Administrator. 

(b) [Reserved] 

§ 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. 

§ 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 

§ 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 

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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. 

§ 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. 

§ 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. 

§ 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 

§ 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 § 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. 

§ 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 

§ 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 

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6288 Federal Register / Vol. 75, No. 25 / Monday, February 8, 2010 / Proposed Rules 

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 § 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 

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