Conservation Provisions in S. 1541 and H.R. 2854: A Comparison

Jeffrey Zinn
Senior Analyst in Natural Resources Policy
Environment and Natural Resources Policy Division
March 6, 1996

96-165 ENR

SUMMARY

Pressure has been growing for Congress to pass farm legislation since President Clinton vetoed the omnibus reconciliation proposal (H.R. 2491), which included an agricultural title, on December 6, 1995. Farmers want to know their federal commodity program options as they start to make planting decisions. Farm programs supporters fear the negative budgetary and political consequences if farm programs revert to permanent legislation and program costs grow.

Responding, the Senate passed omnibus farm legislation on February 7, 1996 that contain numerous conservation provisions (S. 1541). Some of these provisions were the subject of extensive discussions in the first session, while others surfaced for the first time during Senate floor action. Several of these provisions were proposals in the Clinton Administration's farm bill guidance, issued in May, 1995. Because S. 1541 went directly to the floor, there is no committee report and no official budget analysis by CBO. Without these documents, it is difficult to determine the bill sponsors' intent and the bill's fiscal impacts.

The House passed omnibus farm legislation on February 29, 1996 (H.R. 2854). Conservation provisions reported by the Agriculture Committee were replaced by two floor amendments. The House-passed conservation provisions are less extensive than those in the Senate. (One reason they are less extensive is that Chairman Roberts introduced "Farm Bill II" (H.R. 2973) on February 27, 1996, which contains numerous non-commodity program provisions, including the conservation provisions that had been reported in H.R. 2542 by the House Agriculture Committee's Subcommittee on Resource Conservation, Research and Forestry on November 8, 1995. Chairmen Roberts has stated that he intends to push for passage after action is completed on the pending farm bill; Senate agricultural leaders have said that they plan to enact only one farm bill this year.)

This report briefly describes the major conservation provisions in the bills passed by both Chambers. For an overall comparison of provisions in H.R. 2854 and S. 1541 as passed, see CRS Report 96-206 ENR, Farm Bill Provisions Compared: H.R. 2854 and S. 1641 as Passed. For information on conservation provisions in H.R. 2542, see CRS Report 95-1106 ENR, Conservation Titles in the 1995 Farm Bill: A Comparison.

CONSERVATION PROVISIONS IN BOTH BILLS

Section 311 (S.1541)/Section 304 (H.R.2854): Environmental Conservation Acreage Reserve Program (ECARP). In S. 1541, two programs are added to the ECARP, which currently encompasses the Conservation Reserve (CRP) and Wetlands Reserve (WRP) Programs. The two new programs are the Environmental Quality Incentive Program (EQIP, described in section 314) and a farmland protection program. Priority areas can be designated for enhanced assistance. Priority areas are identified both generically (e.g., watersheds) and specifically (e.g., Chesapeake Bay region). Priority designations must be reviewed and renewed every 5 years.

The farmland protection program purchases easements to protect soil resources on between 170,000 acres and 340,000 acres of prime or unique farmland. The program is permitted to use up to $35 million from the Commodity Credit Corporation (CCC). These funds assist states with farmland preservation programs.

In H. R. 2854, authorization for ECARP is extended to 2002, and protection of wildlife habitat is added to the purposes of the program.

Section 312 (S.1541)/Section 305 (H.R.2854): Conservation Reserve Program (CRP). S. 1541 makes CRP an entitlement program and authorizes it through 2002. The program enrollment cap is reduced to 36.52 million acres.

H.R. 2854 makes the same changes, although the enrollment cap is 36.4 million acres. In addition, it allows producers to terminate contracts after participating for at least 5 years, with 60 days notice. Lands with high environmental values or high erosion rates are not eligible. Terminated land that is returned to production can not be subjected to more stringent compliance requirements than are imposed on similar lands. These lands can be reenrolled into the CRP. Rental payments, for new CRP contracts only, can not exceed average market rates for comparable lands. Provisions in the FY1996 Agriculture Appropriations bill that required new enrollments of almost 1.7 million acres after January 1, 1997, are repealed.

Section 313 (S.1541)/Section 302 and 303 (H.R.2854): Wetlands Reserve Program (WRP). S. 1541 makes WRP an entitlement program and extends its authorization through 2002. The statement of purpose is amended to recognize property rights and wildlife benefits. Program enrollment is capped at 975,000 acres. Future enrollment is to be 1/3 in permanent easements, 1/3 in 30 year easements, and 1/3 in restoration cost-share agreements. Eligibility requirements are amended to add both maximizing wildlife benefits and wetland functions and values. Permanent easements offer a higher percentage cost share (75% to 100%; other forms of participation receive 50% to 75% cost share. The coordination role of the U.S. Fish and Wildlife Service, specified in the 1990 farm bill, is eliminated.

H.R. 2854 is generally similar, but it requires that the three categories of enrollment be equal for the entire program, rather than future enrollments only. Eligibility requirements are not amended.

Section 314 (S. 1541)/Section 301 (H.R. 2854): Environmental Quality Incentives Program (EQIP). Under S. 1541, the new EQIP replaces four smaller cost share programs -- Great Plains Conservation Program, Agriculture Conservation Program, Water Quality Incentive Program, and Colorado River Basin Salinity Control Program -- with a single new $200 million per year entitlement. EQIP is to be administered so as to maximize the environmental benefits. Program priorities are specified to include the significance of resources in an area. The Secretary coordinates priority setting through State Technical Committees. Higher priority is given to places where state or local government provides assistance for the same purposes, and to places where agriculture has interfered with the ability to meet environmental objectives in federal or state law. Types of eligible lands are specified.

EQIP funds are used to implement structural and land management practices. The contents of the plans that participants must develop as the basis for receiving these funds are specified. Participants installing structural practices are eligible to receive cost share payments and technical assistance, while participants implementing land management practices are eligible for technical assistance and incentive payments. Large livestock operations, defined for each category of livestock in the bill, are not permitted to receive cost share payments to construct animal waste management facilities.

Contracts to participate in this program are 5 to 10 years in length. For each contract, annual payments are not to exceed $10,000 and total payments are limited to $50,000. Cost share payments can not exceed 75% of anticipated cost.

H.R. 2854 does not include any findings or purpose statements. The four cost-share programs that are terminated in S. 1541 are not terminated in this bill. The large livestock operations exclusion is not included. A new structural practice, capping abandoned wells, is added. No specific language about determining priorities, specifying eligible lands, or planning is included. A provision specifies that private sources can help implement this program. The Secretary is given flexibility to exceed the $10,000 annual payment limit under specified circumstances. Implementing regulations must be issued within 180 days.

Section 321 (S. 1541)/ Section 301 (H.R. 2854): Conservation Funding. CCC funding is authorized for CRP, WRP, and EQIP. In EQIP, 50% of the funding is targeted to livestock producers. This subtitle also requires that an environmental easement program, enacted in the 1990 farm bill but not implemented, be funded through the CCC, but only if funds have been appropriated to cover expenditures. The Secretary is to minimize duplicating plans required to implement these programs. Several acreage limitations are specified; the main one is that no more than 25% of the cropland in a county can be enrolled in the CRP and WRP unless the Secretary determines that it will not have an adverse effect on the local economy and producers are having difficulties meeting compliance requirements. CRP and WRP regulations are required to be issued within 90 days of enactment.

CCC funding is authorized for CRP, WRP, and EQIP. In EQIP, at least 50% of the funding is to go to livestock.

Section 506 (S. 1541)/Section 507 (H.R. 2854): Everglades Agricultural Area. Nearly identical provisions authorize appropriations of $200 million (in the Senate bill) or $210 million (in the House bill) to the Secretary of the Interior to restore the Everglades ecosystem. These funds can be used to acquire lands, and acquisition of a 52,000 acre tract is specified. These funds can also be transferred to three other governmental organizations; the U.S. Army Corps of Engineers, the state of Florida, and the South Florida Water Management District. All funds must be spent by December 31, 1999.

CONSERVATION PROVISIONS IN ONLY S. 1541

Section 103: Conservation Program Option. This commodity program option allows producers who participate in the new market transition program (which would replace current commodity programs) and have land enrolled in the CRP to enter a 10 year conservation contract in place of their 7 year market transition contract. Producers who choose this option would receive an annual payment combining estimated payments that the producer would have received under CRP, conservation cost-sharing, market transition payments, and marketing loans. Participants would have to comply with a conservation plan to protect wildlife habitat, improve water quality, and reduce erosion.

Sections 331-339: National Natural Resources Conservation Foundation (NNRCF). The NNRCF is established as a non-profit corporation to promote resource conservation, and its organizational structure and operating procedures are described. It can accept gifts and raise money to sustain its efforts. (Similar foundations have been created to promote and assist protection efforts for other natural resources, such as wildlife.) Appropriations of up to $1 million per year are authorized for FY1997 through FY1999 to serve as "seed money."

Section 351: Flood Risk Reduction. The Secretary can contract with market transition program participants to retire frequently flooded cropland. These producers receive up to 95% of their projected market transition and crop insurance payments through 2002. Participants agree to several requirements, including terminating contract acreage, meeting compliance requirements, and not applying for disaster assistance or conservation program payments.

Section 353: State Technical Committees. State technical committees are permitted to expand their membership beyond representatives of government entities, to include agricultural producers, non-profit organizations with demonstrated expertise, agribusiness, and individuals knowledgeable about the economic and environmental impacts of conservation efforts.

Section 354: Conservation of Private Grazing Lands. A new program is established to coordinate technical and educational assistance to improve resource conditions on private grazing lands. Authorized appropriations are $20 million in FY1996, $40 million in FY1997, and $60 million annually thereafter. The Secretary may establish two grazing management demonstration districts, based on the recommendations of a steering committee. This committee would be required to base these recommendations on a review of requests from farmers and ranchers. Grazing management demonstrations will be supported by technical advisory committees.

Section 355: Conforming Amendments. Conforming amendments include repealing the four programs that are encompassed in EQIP (see section 314, above); repealing the Rural Environmental Conservation Program; repealing several programs enacted in the 1981 farm bill including the Natural Resources Conservation Service's (NRCS) volunteer program and the Reservoir Sediment Reduction Program; repealing several programs enacted in the 1985 farm bill including certain amendments to the 1981 federal farmland protection program and the authority for NRCS to conduct river basin studies; repealing the Agricultural Water Quality Incentives Program; and reauthorizing the Resource Conservation and Development and the Environmental Easement Programs through 2002.

Section 356: Water Bank Program. Lands enrolled in the Water Bank Program -- which has used 10 year contracts to protect wetlands, primarily in the upper midwest, and had almost 70,000 acres enrolled in 1994 -- are considered to be enrolled in the CRP. Current rental rates would remain.

Section 357: Flood Water Retention Pilot Projects. The Secretary is required to carry out up to 2 pilot projects to create or restore water retention areas in closed drainage systems. Each project is funded by up to $10 million from the CCC. Projects include wetland improvements, agricultural tillage, and other non-structural practices. Pilot projects would be evaluated after two years, and if they have reduced or may reduce federal outlays, the Secretary could initiate other projects. (A likely candidate as a project area is Devil's Lake, North Dakota.)

Section 358: Wetland Conservation Exemption. "Abandonment" of wetlands is considered to end if a landowner voluntarily restores, improves, or creates a wetland, and these activities are documented and approved by the NRCS. (Under current law, land is considered to be abandoned if it is not actively used for agriculture for 5 consecutive years. If it is abandoned, it can be reclassified as a wetland if it meets those qualifications.)

Section 359: Floodplain Easements. Purchase of floodplain easements is authorized under the 1978 Agricultural Credit Act.

Section 360: Resource Conservation and Development Program (RCD) Reauthorization. The Resource Conservation and Development Program is authorized through 2001.

Section 361: Conservation Reserve New Acreage. The Secretary is given the authority to replace land in the CRP, on an acre-for-acre basis, for all contracts terminated after the date of enactment.

Section 363: Watershed Protection and Flood Prevention Act Amendments. The PL-566 small watershed program purposes are expanded from flood prevention to broader resource protection and improvement language, and giving greater emphasis to nonstructural solutions. Six purposes are added: restoring waterway diversity and function, restoring wetland and riparian areas, restoring stream channels, protecting water quality, providing water to rural communities smaller than 55,000 people, and training project volunteers. The nonstructural solutions include land management and restoration of important components of watersheds. Easements can be acquired to meet multiple watershed needs. The current requirement that 20% of the project must benefit agriculture is repealed. Local project sponsors eligibility is expanded to include non-profit organizations with the authority to carry out and maintain the project.

Cost share for nonstructural practices can be up to 75%; for structural practices, cost share is limited to 50%. Funds can be transferred from other departments and agencies. Social and environmental, as well as monetary benefits, must be analyzed. Criteria for funding priorities include projects that: improve ecological functions and values, enhance long-term economic opportunities, protect health and property, benefit economically disadvantaged communities, restore or enhance fish and wildlife species, or can be planned and implemented within two years.

Section 364: Abandonment of Converted Wetlands. As long as land is used only for agricultural purposes, it can not be determined to be "abandoned." (As noted above in the discussion of section 358, abandoned lands are subject to possible reclassification as a wetland.)

Section 501: Fund for Dairy Producers to Pay for Nutrient Management. The bill establishes a "Safe Harbor Fund" to fund conservation practices that control migration of nutrients off the farm. Funding is derived from a $.10 per hundredweight assessment of the highest classification of milk. The fund is administered by the Market Administrator. Decisions on how the fund is used are made by a committee of 7 milk producers who meet specified qualifications. The committee is required to consider state water quality priorities in its decisions.

Section 561: Advisory Board on Agricultural Air Quality. An Advisory Board on Agricultural Air Quality is established, to be chaired by the Chief of NRCS. The Board assists the Secretary on issues related to airborne particulates that affect agricultural production yields, and particulates smaller than 10 microns that become lodged in human lungs. This Board is funded from the Conservation Operations program. It has at least 17 members and meets at least twice a year.

Section 554: Wildlife Habitat Incentives Program (WHIP). WHIP provides cost-share assistance to develop habitat for wildlife and fish. The program is funded by dedicating $10 million each year from the CRP.

Section 557: Clarification of Effect of Resource Planning on Allocation or Use of Water. This provision amends the Forest and Rangeland Renewable Resources Planning Act of 1974 and the Federal Land Policy Management Act of 1976 to insure that state's rights to allocate water are not impaired by the presence of, and management of federal lands.

Section 825: Rangeland Research. The authorization for appropriations for rangeland research is extended to 2002.

Section 849: Global Climate Change. The technical advisory committee established to provide advice on global climate change is terminated. Authorization to fund activities implementing the provisions of title XXIV of the 1990 farm bill (global climate change) is extended to 2002.