(2) by adding at the end the following new 
paragraph: 
‘‘(3) RATES FOR COMPONENT PRACTICES.—The 
Secretary shall develop additional incentive payment 
rates for components of a practice that promotes 
residue, nutrient, pest, invasive species, or air qual-
ity management. The amount and rate of incentive 
payments for a component practice shall be scaled 
according to the anticipated level of impact of that 
practice on the priority resource concerns, such that 
more advanced management practices that yield 
greater environmental benefit will receive higher 
payments.’’. 
(e) ALLOCATION OF FUNDING.—Section 1240B(g) of 
the Food Security Act of 1985 (16 U.S.C. 3839aa–2(g)) 
is amended by adding at the end the following new sen-
tence: ‘‘When making initial allocations of funds to States 
to make cost-share and incentive payments under this 
chapter, the Secretary shall consider to what degree pro-
ducers in each State are under pressure to comply with 
existing local, State, or Federal environmental regulations, 
or may have to comply with such regulations in the fu-
ture.’’. 
(f) EVALUATION OF APPLICATIONS FOR COST-SHARE 
PAYMENTS AND INCENTIVE PAYMENTS.—Section 1240C 
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of the Food Security Act of 1985 (16 U.S.C. 3839aa–3) 
is amended to read as follows: 
‘‘SEC. 1240C. EVALUATION OF APPLICATIONS FOR COST- 
SHARE 
PAYMENTS 
AND 
INCENTIVE 
PAY-
MENTS. 
‘‘In evaluating applications for cost-share payments 
and incentive payments, the Secretary shall— 
‘‘(1) prioritize applications based on how effec-
tively and comprehensively designated resource con-
cerns are addressed; 
‘‘(2) prioritize applications based on their over-
all level of cost-effectiveness to ensure that the con-
servation practices, systems, and approaches pro-
posed are the most efficient means of producing the 
proposed project’s anticipated environmental bene-
fits; 
‘‘(3) reward higher levels of environmental per-
formance, such as advanced levels of management 
within management practices; and 
‘‘(4) develop criteria for evaluating applications 
that will ensure that national, State, and local con-
servation priorities are effectively addressed.’’. 
(g) SUPPORT FOR PROGRAM PLANS.—Section 1240F 
of the Food Security Act of 1985 (16 U.S.C. 3839aa–6) 
is amended— 
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(1) by striking ‘‘and’’ at the end of paragraph 
(1); 
(2) by striking the period at the end of para-
graph (2) and inserting ‘‘; and’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(3) developing partnerships with other agen-
cies and contracting with technical assistance pro-
viders to supplement Department expertise and 
staffing capacity as necessary.’’. 
(h) CONSERVATION INNOVATION GRANTS.—Section 
1240H of the Food Security Act of 1985 (16 U.S.C. 
3839aa–8) is amended— 
(1) in subsection (a), by striking ‘‘may’’ and in-
serting ‘‘shall’’; 
(2) in subsection (b)— 
(A) by striking ‘‘USE’’ and inserting ‘‘INI-
TIAL GRANTS’’; 
(B) by striking ‘‘may’’ and inserting 
‘‘shall’’; 
(C) in paragraph (2)— 
(i) by striking ‘‘and’’ at the end of 
subparagraph (A); and 
(ii) by adding at the end the following 
new subparagraph: 
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‘‘(C) alternative energy projects, such as 
solar and wind power energy systems and con-
version of equipment to run on bio-fuels, to re-
duce greenhouse gas emissions and reliance on 
fossil fuels in farm operations;’’. 
(D) by striking the period at the end of 
paragraph (3) and inserting ‘‘; and’’; and 
(E) by adding at the end the following new 
paragraph: 
‘‘(4) include a plan for technology transfer.’’; 
(3) by adding at the end the following new sub-
sections: 
‘‘(d) TECHNOLOGY TRANSFER.—To the maximum 
extent practicable, the Secretary shall ensure efficient, ef-
fective transfer of innovative technologies and approaches 
demonstrated through projects that receive funding under 
this section. 
‘‘(e) FUNDING.—Of the amounts made available 
under section 1241(a)(6) to carry out this chapter, the 
Secretary shall use to carry out this section— 
‘‘(1) 40,000,000 for fiscal year 2008; 
‘‘(2) 50,000,000 for fiscal year 2009; 
‘‘(3) 60,000,000 for fiscal year 2010; and 
‘‘(4) 75,000,000 for each of fiscal years 2011 
and 2012.’’. 
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(i) SAVINGS AND FUNDING UNDER GROUND AND 
SURFACE WATER CONSERVATION PROGRAM.—Section 
1240I of the Food Security Act of 1985 (16 U.S.C. 
3839aa–9) is amended by striking subsection (c) and in-
serting the following new subsection: 
‘‘(b) 
FUNDING.—The 
Secretary 
shall 
use 
$100,000,000 of the funds of the Commodity Credit Cor-
poration to carry out this section for each of fiscal years 
2008 through 2012. These funds are in addition to 
amounts made available under section 1241(a)(6) to carry 
out this chapter.’’. 
(j) AIR QUALITY IMPROVEMENT AND PERFORMANCE 
INCENTIVES FOR STATES.—Chapter 4 of subtitle D of 
title XII of such Act is amended by adding at the end 
the following new sections: 
‘‘SEC. 1240J. AIR QUALITY IMPROVEMENT. 
‘‘(a) AVAILABILITY COST-SHARE PAYMENTS AND IN-
CENTIVE PAYMENTS.—In carrying out this chapter, the 
Secretary shall promote air quality by providing cost-share 
payments and incentive payments to individual producers 
to address air quality concerns associated with agriculture. 
‘‘(b) LOCATIONS.—In order for producers to receive 
payments under this section, a project must be located in 
a county— 
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