1. (a) Purpose. The purpose of this program is to provide the needed incentive to landowners or operators for the installation of soil and water conservation land improvement measures consistent with the purpose of controlling erosion, conserving water, and/or protecting water quality.

2. (b) Definitions. For the purposes of this section the following definitions shall apply.

   1. (1) Allocated funds--Funds budgeted through the State Board to a soil and water conservation district for cost-share assistance.
   2. (2) Applicant--A person who applies for cost-share assistance from the soil and water conservation district.
   3. (3) Available funds--Monies budgeted, unobligated and approved by the State Board for cost-share assistance.
   4. (4) Conservation practice(s)--The conservation land improvement measure(s) approved by the State Board and applied to the land to control soil erosion or improve the quality and/or quantity of water.
   5. (5) Cost-share assistance--An award of money made to an eligible person for conservation land improvement measures pursuant to the terms of Agriculture Code §201.301.
   6. (6) District director--A member of the governing board of a soil and water conservation district.
   7. (7) Eligible land--Those lands that are eligible for application of conservation land improvement measures using cost-share assistance.
   8. (8) Eligible person--Any of the land holders eligible to apply for cost-share assistance or any person designated to represent the applicant as provided by a durable power of attorney, court order or other valid legal document.
   9. (9) Eligible practices--Those conservation land improvement measures that have been approved by the State Board.
   10. (10) Landowner--Any person, firm or corporation holding title to land lying within a soil and water conservation district.
   11. (11) Maintenance agreement--A written agreement between the eligible person and the soil and water conservation district wherein the eligible person(s) agrees, as a condition of the receipt of State cost-share funds, to implement and maintain all measures in the certified water quality management plan consistent with its implementation schedule. The maintenance agreement shall remain in effect for a minimum period of two years after the certified water quality management plan is completely implemented for all practices except those cost-shared. The maintenance agreement shall remain in effect on cost-shared practices for the expected life of the practice as established by the State Board or for a period of two years after the certified water quality management plan is completely implemented, whichever period of time is longer. It is the expectation of the State Board that a water quality management plan be maintained by the landowner for an indefinite period of time. The maintenance agreement is only intended to ensure a minimum period of time during which the State of Texas can realize the conservation and water quality benefits of its investment of technical and financial assistance to a landowner.
   12. (12) Obligated funds--Monies from a soil and water conservation district's allocated funds which have been committed to an applicant after final approval of the application.

   13. (13) Operating Unit--Land or lands, whether contiguous or non-contiguous, owned and/or operated in a manner that contributes or has the potential to contribute agricultural or silvicultural nonpoint source pollution to water in the state. An operating unit must be determined through mutual agreement by the holder of the water quality management plan, the soil and water conservation district, and the State Board.

       1. (A) Contiguous lands under the same ownership and/or operational control must be considered one operating unit.
       2. (B) Non-contiguous lands under the same ownership and/or operational control may be considered as more than one operating unit when there is mutual agreement by the soil and water conservation district and the potential holder of the water quality management plan unless the lands are associated with an animal feeding operation.
       3. (C) An operating unit, when designated for an animal feeding operation, must at a minimum encompass all land or lands owned and/or operated by the holder of the water quality management plan that are used to produce feed that is consumed by the animals, as well as all land or lands owned and/or operated by the potential holder of the water quality management plan where manures or other agricultural by-products are beneficially used as a source of nutrients to produce food or fiber for any use.
       4. (D) Land or lands within the scope of an existing operating unit for certified water quality management plan may not be separated from the existing operating unit to establish another operating unit unless a change of ownership has occurred.
       5. (E) Where mutual agreement regarding an operating unit's consistency with these rules is not achieved by the potential holder of the water quality management plan, the soil and water conservation district, and the State Board, the State Board will make a final determination whether or not to certify the water quality management plan.
   14. (14) Performance agreement--A written agreement between the eligible person and the soil and water conservation district wherein the eligible person agrees to perform conservation land improvement measures for which allocated funds are being paid.
   15. (15) Practice standard--A technical specification for a conservation practice within the NRCS FOTG that contains information on why and where the practice should be applied, and sets forth the minimum quality criteria that must be met during the application of that practice in order for it to achieve its intended purpose(s).
   16. (16) Priority system--The system devised by the soil and water conservation district, under guidelines of the State Board, for ranking approved conservation practices and for facilitating the disbursement of allocated funds in line with the soil and water conservation district's priorities.
   17. (17) Program year--The period from September 1 to August 31.
   18. (18) Soil and water conservation district (SWCD)--A governmental subdivision of this state and a public body corporate and politic, organized pursuant to Chapter 201 of the Agriculture Code.
   19. (19) State Board--The Texas State Soil and Water Conservation Board organized pursuant to Chapter 201 of the Agriculture Code.

3. (c) Responsibilities.

   1. (1) The State Board shall:

      1. (A) Establish a procedure to allocate funds to designated SWCDs for their use in cost-share assistance.
      2. (B) Establish conservation practices eligible for cost-share and their standards, specifications, maintenance and expected life.
      3. (C) Establish maximum cost-share rate for each conservation practice approved for cost-share.
      4. (D) Establish the minimum cost-share assistance prior to September 1 each year that may be made under the program and the maximum cost-share assistance that an eligible person may receive under the program in any one year.
      5. (E) Perform clerical, administrative and record-keeping responsibilities required for carrying out the cost-share program.
      6. (F) Receive and maintain monthly reports from SWCDs showing the unobligated balance of allocated funds as shown on each ledger at the close of the last day of each month.
      7. (G) Receive requests for reallocated funds and funds reverted from participating SWCDs.
      8. (H) Act on appeals filed by applicants.
      9. (I) Process vouchers and issue warrants for cost-share to eligible recipients.

   2. (2) The SWCDs shall:

      1. (A) Designate, from State Board approved list, those conservation practices that will be eligible for cost-share in their SWCD.
      2. (B) Administer the cost-share program within the funds allocated by the State Board.
      3. (C) Establish, under guidelines of the State Board, the priority system to be used for evaluation of applications.
      4. (D) Establish the period(s) of time for accepting applications and announce the cost-share program locally.
      5. (E) Accept and process cost-share applications.
      6. (F) Determine eligibility of lands and persons for cost-share assistance under guidelines established by the State Board.
      7. (G) Notify applicants of the SWCD's decisions on approval of applications.
      8. (H) File approved applications in the SWCD's copy of the applicant's water quality management plan.
      9. (I) Obligate allocated funds for applications receiving final approval.
      10. (J) Provide or arrange for technical assistance to applicants, or approve applicant and provide for an alternate source of technical assistance.
      11. (K) Certify completed conservation practices to the State Board prior to payment.
      12. (L) Submit required reports on the unobligated balance of allocated funds and on accomplishments to the State Board.

4. (d) Administration of Funds.

   1. (1) Allocation of Funds. The State Board may allocate funds appropriated from general revenue fund and other sources for cost-share assistance among particular soil and water conservation land improvement measures or among areas of the state and may adjust such allocations throughout the year as available funds and SWCD needs and priorities change in order to achieve the most efficient use of state funds. The State Board may designate a portion of the funds allocated to a SWCD to reimburse the SWCD for obligations incurred in administering the cost-share program.
   2. (2) Requests for Allocations. SWCDs within areas designated for cost-share program must submit requests for a cost-share fund allocation to the State Board by September 1st each year.
   3. (3) Approval of Allocations. The State Board shall consider and approve, reject or adjust SWCD requests for allocations giving consideration to relative need for funding, SWCD workload and fund balances, as well as other information deemed necessary by the State Board. Only SWCDs for which the State Board has established an allocation are eligible to claim cost-share funds.
   4. (4) Maximum Allowable Amount of Cost-Share Funds per Operating Unit. The maximum allowable amount of cost-share funds that may be applied to any single operating unit is $15,000. This provision applies only to general revenue funds appropriated by the Texas Legislature to assist program participants with the implementation of soil and water conservation land improvement measures as allowed by Agriculture Code §201.301.

5. (e) Eligibility for Cost-Share Assistance.

   1. (1) Eligible person. Any individual, partnership, administrator for a trust or estate, family-owned corporation, or other legal entity who as an owner, lessee, tenant, or sharecropper, participates in an agricultural or silvicultural operation and has a certified water quality management plan on an operating unit within the SWCD shall be eligible for cost-share assistance.

   2. (2) In accordance with the terms of the maintenance agreement an eligible person may receive cost-share only once for an operating unit. The State Board on a case by case, project or watershed basis in consultation with the SWCD may grant a waiver to this requirement in situations where:

      1. (A) Research and/or advanced technology indicate(s) a plan modification to include additional measures to meet Texas surface water quality standards is needed
      2. (B) the operating unit is significantly increased in size by the addition of new land areas that require conservation practices in order to meet Texas surface water quality standards;
      3. (C) more stringent measures become necessary to meet Texas surface water quality standards;
      4. (D) a landowner has assumed the responsibility of a maintenance agreement in cases where the landowner was not the applicant;
      5. (E) the life expectancy of a conservation practice or practices that was/were previously cost-shared through this program has/have expired and the practice or practices is/are mandated by state law or the laws, rules, or regulations of a political subdivision. This waiver is only applicable to the mandated practice or practices; or
      6. (F) a landowner has previously received cost-share through this program but an additional practice or practices has/have been subsequently mandated by state law or the laws, rules, or regulations of a political subdivision. This waiver is only applicable to the mandated practice or practices.

   3. (3) Eligible land. Any of the following categories of land shall be eligible for cost-share assistance:

      1. (A) Land within the State that is privately owned by an eligible person.
      2. (B) Land leased by an eligible person over which he/she has adequate control and which land is utilized as a part of his/her operating unit.
      3. (C) Land owned by the State, a political subdivision of the State, or a nonprofit organization that holds land in trust for the state.

   4. (4) Ineligible lands. Allocated funds shall not be used:

      1. (A) To reimburse other units of government for implementing conservation practices.
      2. (B) On privately owned land not used for agricultural or silvicultural production.

   5. (5) Eligible purposes. Cost-share assistance shall be available only for those eligible practice measures included in an approved water quality management plan and determined to be needed by the SWCD to:

      1. (A) Reduce erosion, and/or
      2. (B) Improve water quality and/or quantity.
   6. (6) Eligible practices. Conservation practices which the State Board has approved and which are included in the applicant's approved water quality management plan shall be eligible for cost-share assistance. The list of eligible practices will be approved as needed by the State Board. The SWCDs shall designate their list of eligible practices from those practices approved by the State Board. SWCDs may request the State Board's approval to offer cost-share assistance for conservation practices not included in the State Board's list of approved practices. The use of special conservation practices is limited to those measures that can solve unique problems in a SWCD and which conform with one or more of the purposes of the cost-share program. Requests for special conservation practices will be filed in writing with the State Board in time to obtain action and notification in writing from the State Board of its decision(s) prior to announcing the cost-share program locally for the program year. Conservation practices may be included in a SWCD's list of eligible practices offered for cost-share assistance only as approved by the State Board.
   7. (7) Requirement to file an application. In order to qualify for cost-share assistance, an eligible person shall file an application with the local SWCD.

   8. (8) Persons required to sign applications and agreements. All applications and agreements shall be signed by:

      1. (A) The eligible person and;
      2. (B) the landowner in cases where the eligible person does not hold title to the land constituting the operating unit.

6. (f) Cost-Share Assistance Processing Procedures.

   1. (1) Responsibility of applicants. Applicants for cost-share assistance for conservation practices shall:

      1. (A) Complete and submit an application to the SWCD.
      2. (B) Where an applicant does not have an approved water quality management plan and has not determined the anticipated total cost of the requested measure(s), he/she, as part of the application, may request assistance from the SWCD in developing such plan and determining costs.
      3. (C) After being notified of approval and obligation of funds by the SWCD, request technical assistance through the SWCD to design and layout the approved practices or request approval of alternate sources of technical assistance.
      4. (D) Secure any approved contractor(s) needed and all contractual or other agreements necessary to construct or perform the approved practice(s). Cost-share will not be allowed for work begun before the application is approved.
      5. (E) Complete and sign performance and maintenance agreements and any amendments to those agreements.
      6. (F) Supply the documents necessary to verify completion of the approved practice(s) along with a completed and signed certification of cost.

   2. (2) Responsibilities of SWCDs. SWCDs shall:

      1. (A) Establish the period(s) of time for accepting applications and announce the cost-share program locally.
      2. (B) Accept cost-share applications at the SWCD's office.
      3. (C) Determine eligibility of lands and persons for cost-share assistance. If an applicant's land is in more than one SWCD, the respective SWCD boards of directors will review the application and agree to oversee all works, administrate all contracts and obligate all funds from one SWCD or prorate the funding between SWCDs.
      4. (D) Give initial approval to those applications that meet the eligibility requirements.
      5. (E) Evaluate the initially approved applications under the SWCD's priority system and give final approval to the high priority applications that can be funded by the SWCD's allocated funds.
      6. (F) Obligate funds for the approved conservation practices that can be funded and notify the applicant(s) that his/her conservation practice(s) has/have been approved for cost-share and to proceed with installation. Allocated funds must be obligated by the last day of April of the fiscal year allocated. All unobligated allocations shall revert back as of May 1st of that fiscal year.
      7. (G) Determine compliance with standards and specifications and certify completed conservation land treatment measure(s) that meet standards.

   3. (3) Amended Applications for Allocated Funds.

      1. (A) In the event that an adjustment to the estimated cost of conservation practice(s) is necessitated by the final design, the applicant shall either agree to assume the additional cost or complete and submit an amendment to his/her application for allocated funds to the SWCD for approval or denial by the SWCD.
      2. (B) The SWCD may elect to adjust the amount of funds obligated for the conservation practices, provided funds are available, or to request additional funds from the State Board.
      3. (C) In the event additional funds are not available, the conservation practice(s) may be redesigned, if possible, to a level commensurate with available funds, provided the redesign still meets practice standards established by the State Board; or the applicant can agree to assume full financial responsibility for the portion of the cost of conservation practice(s) in excess of the amount authorized.
   4. (4) Performance Agreement. As a condition for receipt of cost-share assistance for conservation practices, the eligible person receiving the benefit of such assistance shall agree to perform those measures in accordance with standards established by the State Board. Completion of the performance agreement and the signature of the eligible person are required prior to payment.
   5. (5) Maintenance Agreement. As a condition for receipt of cost-share assistance, the person(s) receiving the assistance shall agree to implement and maintain all measures in the certified water quality management plan consistent with its implementation schedule. The maintenance agreement shall remain in effect for a minimum period of two years after the certified water quality management plan is completely implemented for all practices except those cost-shared. The maintenance agreement shall remain in effect on cost-shared practices for the expected life of the cost-shared practice(s) as established by the State Board or for a period of two years after the certified water quality management plan is completely implemented, whichever period of time is longer. The landowner must sign the application for cost-share pursuant to subsection (e)(8) of this section and assumes the responsibility of the maintenance agreement. Completion of the maintenance agreement and all appropriate signatures are required prior to payment.

   6. (6) Payment to Recipients.

      1. (A) The SWCD shall determine eligibility of the applicant to receive payment of cost-share assistance, and provide certification to the State Board that measure(s) have been installed consistent with established standards.
      2. (B) The State Board shall issue warrants for payment of cost share assistance.
   7. (7) Applications Held in Abeyance Because of Lack of Funds. In those cases where funds are not available, the applications will be held by the SWCD until allocated funds become available or until the end of the program year. When additional funds are received, the SWCD will obligate those funds. The SWCD may shift all unfunded applications held in abeyance because of lack of funds that are on hand at the end of a program year to the new program year or require all new applications as it deems appropriate.
   8. (8) Applications Denied for Reasons Other Than Lack of Funds. Applications for funds which are denied by the SWCD directors for other than lack of funds shall be retained in the records of the SWCD in accordance with the SWCD's established record retention policy. Written notification of the denial shall be provided to the applicant along with the reason(s) that the application was denied.
   9. (9) Applications Withdrawn. An application may be withdrawn by the applicant at any time prior to receipt of cost-share assistance by notifying the SWCD in writing that withdrawal is desired. Applications withdrawn by the applicant shall be retained in the records of the SWCD in accordance with the SWCD's established record retention policy.

   10. (10) Appeals.

       1. (A) An applicant may appeal the SWCD decisions relative to his/her application for allocated funds.
       2. (B) The applicant shall make any appeal in writing to the SWCD which received his/her application for allocated funds and shall set forth the basis for the appeal.
       3. (C) The SWCD shall have 60 days in which to make a decision and notify the applicant in writing.
       4. (D) The decision of the SWCD may be appealed by the applicant to the State Board.
       5. (E) All appeals made to the State Board shall be made in writing and shall set forth the basis for the appeal.
       6. (F) All State Board decisions shall be final.

7. (g) Maintenance of Practices.

   1. (1) Requirements for maintenance of practices applied using cost-share funds will be outlined in the eligible person's water quality management plan and reviewed with the eligible person at the time of application for cost-share.
   2. (2) A properly executed maintenance agreement shall be signed by the successful applicant prior to receipt of payment of cost-share assistance from the SWCD for a conservation practice(s) installed.
   3. (3) The SWCD will require refund of any or all of the cost-share paid to an eligible person when the applied conservation practice(s) has not been maintained in compliance with applicable design standards and specifications for the practice during its expected life as agreed to by the eligible person. The State Board may grant a waiver to this requirement on a case-by-case basis in consultation with the SWCD.

   4. (4) Failed Practice Restoration.

      1. (A) When conservation practices that have been successfully completed and which later fail as the result of floods, drought, or other natural disasters, and not the fault of the applicant; the applicant may apply for and SWCD may allocate additional cost-share funds to restore them to their original design standards and specifications. These funds cannot exceed the amount of the original cost-share practice and must come from the SWCD's current program year allocation.
      2. (B) When conservation practices that have been successfully completed and which later fail as the result of error or omission on the part of the State Board staff, the SWCD staff, or the Natural Resources Conservation Service staff while assisting the SWCD, land not the fault of the applicant; the State Board may approve additional cost-share funds to restore the measure(s) to the correct design standards and specifications, where an investigation approved by the Executive Director or his designee shows good cause. These funds cannot exceed the amount of the original cost-share practice and must come from the SWCD's current program year allocation.
   5. (5) In cases of hardship, death of the participant, or at the time of transfer of ownership of land where a conservation practice(s) has been applied using cost-share assistance and the expected life assigned the practice has not expired, the participant, heir(s), or buyer(s) respectively, must agree to maintain the practice(s) or the participant, heir(s) or the buyer by agreement with seller must refund all or a portion of the cost-share funds received for the practice as determined by the SWCD. The State Board on a case by case basis in consultation with the SWCD may grant a waiver to this requirement.

8. (h) Determining Status of Practices During Transfer of Land Ownership

   1. (1) A seller of agricultural land with respect to which a maintenance agreement is in effect may request the SWCD to inspect the practices. If the practices have not been removed, altered, or modified, the SWCD shall issue a written statement that the seller has satisfactorily maintained the permanent practice as of the date of the statement.
   2. (2) The buyer of lands covered by a maintenance agreement may also request that the SWCD inspect the lands to determine whether any practice has been removed, altered, or modified as of the date of the inspection. If so, the SWCD will provide the buyer with a statement specifying the extent of noncompliance as of the date of the statement.
   3. (3) The seller and the buyer, if known, shall be given notice of the time of inspection so that they may be present during the inspection to express their views as to compliance.
9. (i) Reporting and Accounting. The State Board shall receive and maintain required reports from SWCDs showing the unobligated balance of allocated funds as shown on each ledger at the close of the last day of each month.
10. (j) Pursuant to Agriculture Code §201.311, one or more SWCDs may be designated to administer portions of this section as determined by the State Board.

Source Note:The provisions of this §523.6 adopted to be effective May 23, 1994, 19 TexReg 3496; amended to be effective June 22, 1995, 20 TexReg 4270; amended to be effective June 20, 2000, 25 TexReg 5913; amended to be effective November 13, 2000, 25 TexReg 11291; amended to be effective March 11, 2004, 29 TexReg 2367; amended to be effective April 26, 2005, 30 TexReg 2400; amended to be effective June 21, 2006, 31 TexReg 4867; amended to be effective December 23, 2008, 33 TexReg 10325.