Annual payments. Subject to the availability of funds, NRCS will provide, as appropriate, annual payments under the program to compensate a participant for installing and adopting additional conservation activities, and improving, maintaining, and managing existing conservation activities across the entire agricultural operation in a manner that increases or extends the conservation benefits in place at the time the contract offer is accepted by NRCS. A split-rate annual payment structure is used to provide separate payments for additional and existing conservation activities in order to place emphasis on implementing additional conservation.

To receive annual payments, a participant must:

Install and adopt additional conservation activities as scheduled in the conservation stewardship plan. At least one additional conservation activity must be scheduled, installed, and adopted within the first 12 months of the contract. All enhancements must be scheduled, installed, and adopted by the end of the third fiscal year of the contract, unless the Chief approves a different schedule to meet specific conservation stewardship goals. Installed enhancements must be maintained for the remainder of the contract period and adopted enhancements must recur for the remainder of the contract period.

At a minimum, maintain activities to the level of existing conservation performance identified at the time of enrollment for the conservation stewardship contract period, and

To earn annual payments for an eligible land use, a participant must schedule, install, and adopt at least one additional conservation activity on that land-use type. Eligible land-use types that fail to have at least one additional conservation activity scheduled, installed, and adopted will not receive annual payments;

Annual payments will be prorated over the contract term so as to accommodate, to the extent practicable, participants earning equal annual payments in each fiscal year;

The annual payment rates will be based to the maximum extent practicable, on the following factors:

Costs incurred by the participant associated with planning, design, materials, installation, labor, management, maintenance, or training,

Income foregone by the participant,

Expected conservation benefits,

The extent to which priority resource concerns will be addressed through the installation and adoption of conservation activities on the agricultural operation,

The level of stewardship in place at the time of application and maintained over the term of the contract,

The degree to which the conservation activities will be integrated across the entire agricultural operation for all applicable priority resource concerns over the term of the contract, and

Such other factors as determined by the Chief.

The annual payment will accommodate some participant operational adjustments.

Enhancements may be replaced with similar enhancements without adjustment of annual payment as long as the conservation performance is determined by NRCS to be equal to or better than the conservation performance of the additional enhancements offered at enrollment. An enhancement replacement that results in a decline below that conservation performance level will be considered a violation of the contract, and

Adjustments to existing activities may occur consistent with conservation performance requirements from § 1470.23; and

Conservation activities may be applied on other land included in an agricultural operation, as determined by NRCS.

Supplemental payments. Subject to the availability of funds, NRCS will provide a supplemental payment to a participant receiving annual payments, who also agrees to adopt or improve a resource-conserving crop rotation as defined by NRCS to achieve beneficial crop rotations as appropriate for the eligible land of the participant.

NRCS will determine whether a resource-conserving crop rotation is eligible for supplemental payments based on whether the resource-conserving crop rotation is designed to provide natural resource conservation and production benefits;

A participant must adopt or improve the resource-conserving crop rotation during the term of the contract to be eligible to receive a supplemental payment. Unless the Chief approves a different schedule to meet the conservation stewardship goals of particular crop rotation sequences, a resource-conserving crop rotation:

Is considered adopted when the resource-conserving crop is planted on at least one-third of the rotation acres; and

Must be adopted by the third fiscal year of the contract and planted on all rotation acres by the fifth fiscal year of the contract; and

The supplemental payment is to encourage a producer to adopt or improve a resource-conserving crop rotation and will be based, to the maximum extent practicable, on the factors from § 1470.24(a)(4).

Minimum contract payment. NRCS may make a minimum contract payment to a participant in any fiscal year in which the contract's payment amount total is less than a rate determined equitable by the Chief based upon the effort required by a participant to comply with the terms of the contract.

Timing of payments. NRCS will make payments as soon as practicable after October 1 of each fiscal year for activities carried out in the previous fiscal year. For newly enrolled contracts, payments will be made as soon as practicable after October 1 following the fiscal year of enrollment.

Noncompensatory matters. A CSP payment to a participant will not be provided for:

New conservation activities applied with financial assistance through other USDA conservation programs;

The design, construction, or maintenance of animal waste storage or treatment facilities, or associated waste transport or transfer devices for animal feeding operations; or

Conservation activities for which there is no cost incurred or income foregone by the participant.

Payment limits. A person or legal entity may not receive, directly or indirectly, payments that, in the aggregate, exceed $40,000 during any fiscal year for all CSP contracts entered into, and $200,000 under all CSP contracts entered into during fiscal years 2014 through 2018, excluding funding arrangements with Indian tribes, regardless of the number of contracts entered into under the CSP by the person or legal entity. NRCS may waive the annual payment limitations in this section where NRCS determines that due to circumstances beyond the participant's control, payment for implementation for a fiscal year's activities cannot be made as scheduled under the CSP contract.

Contract limits. Each conservation stewardship contract will be limited to $200,000 over the term of the initial contract period, except that conservation stewardship contracts with joint operations will be limited to $80,000 per fiscal year and $400,000 over the term of the initial contract period.

Payment and contract limitation provisions for individual Indians and Indian Tribes. Payment limitations apply to individual tribal member(s) when applying and subsequently being granted a contract as an individual(s). Contracts with Indian Tribes are not subject to payment or contract limitations. Indian Tribes and BIA will certify in writing that no one individual, directly or indirectly, will receive more than the payment limitation. Certification provided at the time of enrollment will cover the entire contract period. The Tribal entity must also provide, upon request from NRCS, a listing of individuals and payment made, by Social Security number or other unique identification number, during the previous year for calculation of overall payment limitations.

Tax Identification Number. To be eligible to receive a CSP payment, all legal entities or persons applying, either alone or as part of a joint operation, must provide a tax identification number and percentage interest in the legal entity. In accordance with 7 CFR part 1400, an applicant applying as a joint operation or legal entity must provide a list of all members of the legal entity and joint operation and associated embedded entities, along with the members' Social Security numbers and percentage of interest in the joint operation or legal entity. Payments will be directly attributed to legal entity members for the purpose of complying with § 1470.24(f). Applicant applying as a joint operation must provide an EIN for the joint operation to qualify for the contract limit available under § 1470.24(g).

Unique tax identification numbers. American Indians, Alaska Natives, and Pacific Islanders may use another unique identification number for each individual eligible for payment. Any participant that utilizes a unique identification number as an alternative to a tax identification number will utilize only that identifier for all CSP contracts to which the participant is a party.