(a) Purpose. The purpose of cost-share funding is to
provide an incentive to landowners or operators to install soil and
water conservation land improvement measures consistent with the purpose
of controlling erosion, conserving water, and/or protecting water
quality in accordance with a water quality management plan certified
by the State Board.
(b) Definitions. For the purposes of this section the
following definitions shall apply.
  (1) Allocated funds--Funds budgeted through the State
Board either allocated directly to a specific soil and water conservation
district or to a cost-share incentive priority for utilization by
multiple soil and water conservation districts. For the purposes of
the chapter, funds directly allocated to a specific soil and water
conservation district shall be referred to as a direct allocation.
  (2) Applicant--A person who applies for cost-share
incentive funding from the soil and water conservation district.
  (3) Available funds--Monies budgeted, unobligated and
approved by the State Board for cost-share incentive funding.
  (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) Cost-share incentive funding--An award of money
made to an eligible person for conservation land improvement measures
pursuant to the terms of Agriculture Code §201.301.
  (6) Cost-share incentive priority--A geographic location
such as a watershed, a soil and water conservation district or other
political subdivision boundary, or a specific agricultural or silvicultural
activity, or a combination thereof, that is adopted by the State Board
as a specified priority for receiving an allocation of cost-share
incentive funding. Cost-share incentive priorities must be consistent
with the purpose of controlling erosion, conserving water, and/or
protecting water quality.
  (7) District director--A member of the governing board
of a soil and water conservation district.
  (8) Eligible land--Those lands that are eligible for
application of conservation land improvement measures using cost-share
incentive funding.
  (9) Eligible person--Any of the land holders eligible
to apply for cost-share incentive funding or any person designated
to represent the applicant as provided by a durable power of attorney,
court order or other valid legal document.
  (10) Eligible practices--Those conservation land improvement
measures that have been approved by the State Board.
  (11) Landowner--Any person, firm or corporation holding
title to land lying within a soil and water conservation district.
  (12) Maintenance agreement--A written agreement between
the eligible person and the soil and water conservation district wherein
the eligible person(s) agrees to implement and maintain all conservation
practices included in the water quality management plan in accordance
with the implementation schedule, all technical requirements of the
applicable practice standards, and specified life expectancies of
practices until such time that the certification of the State Board
is withdrawn. The maintenance agreement shall specify that any practices
installed through the payment of cost-share incentive funding, to
any extent, must be maintained in accordance with the applicable practice
standards and specified life expectancies regardless of whether or
not the water quality management plan continues to be certified or
not. Failure to maintain cost-shared practices may result in the requirement
for all or a prorated portion of the cost-share funding to be returned
to the State Board. 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.
  (13) Obligated funds--Monies from a soil and water
conservation district's allocated funds or from a cost-share incentive
priority which have been committed to an applicant after final approval
of the application.
  (14) 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.
    (A) Contiguous lands under the same ownership and/or
operational control must be considered one operating unit.
    (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.
    (C) An operating unit, when devised 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.
    (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 the ownership of the lands being separated into a new operating
unit has changed.
    (E) Where mutual agreement regarding an operating unit's
consistency with this section 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.
  (15) 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.
  (16) 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).
  (17) 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.
  (18) Program year--The period from September 1 to August
31.
  (19) 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.
  (20) State Board--The Texas State Soil and Water Conservation
Board organized pursuant to Chapter 201 of the Agriculture Code.
(c) Stakeholder Process. The State Board shall use
a stakeholder process to develop cost-share incentive priorities,
goals and performance measures for cost-share incentive priorities,
and routinely share the results of program activities with stakeholders
to gather input for program improvement actions.
(d) Responsibilities.
  (1) The State Board shall:
    (A) Establish a procedure to allocate funds to a specific
SWCD or to cost-share incentive funding priorities for utilization
by multiple soil and water conservation districts.
    (B) Establish conservation practices eligible for cost-share
incentive funding and their standards, specifications, maintenance
and expected life.
    (C) Establish maximum cost-share rate for each conservation
practice approved for cost-share incentive funding.
    (D) Establish, prior to September 1 of each year, the
minimum cost-share incentive funding amount that may be made under
the program and the maximum cost-share incentive funding amount that
an eligible person may be obligated from in any one program year.
    (E) Provide verification to a SWCD that an application
qualifies for cost-share incentive funding from a selected cost-share
incentive priority prior to SWCD obligation of funds.
    (F) Perform clerical, administrative and record-keeping
responsibilities required for carrying out cost-share incentive funding
activities.
    (G) Receive and maintain monthly reports from SWCDs
which have been directly allocated an amount of cost-share incentive
funding showing the unobligated balance of allocated funds as shown
on each ledger at the close of the last day of each month.
    (H) Receive requests for reallocated funds and funds
reverted from participating SWCDs that received a direct allocation.
    (I) Act on appeals filed by applicants.
    (J) Process vouchers and issue warrants for cost-share
to eligible recipients.
  (2) The SWCDs shall:
    (A) Designate, from State Board approved list, those
conservation practices that will be eligible for cost-share incentive
funding in their SWCD.
    (B) Administer cost-share incentive funding with funds
allocated by the State Board if the SWCD received a direct allocation.
    (C) Establish, under guidelines of the State Board,
the priority system to be used for evaluation of applications for
incentive funding through a direct allocation to the SWCD, and to
be used for evaluation of applications for cost-share incentive priorities.

    (D) Establish the period(s) of time, under the guidelines
of the State Board, for accepting applications and announce the availability
of cost-share incentive funding locally.
    (E) Accept and process cost-share incentive funding
applications.
    (F) Determine eligibility of lands and persons for
cost-share incentive funding under guidelines established by the State
Board.
    (G) Notify applicants of the SWCD's decisions on approval
of applications.
    (H) File approved applications in the SWCD's copy of
the applicant's water quality management plan.
    (I) Obligate allocated funds for applications receiving
final approval.
    (J) Provide or arrange for technical assistance to
applicants, or approve applicant and provide for an alternate source
of technical assistance.
    (K) Certify completed conservation practices to the
State Board prior to payment.
    (L) Submit required reports on the unobligated balance
of directly allocated funds and on accomplishments to the State Board.
(e) Administration of Funds.
  (1) Allocation of Funds. The State Board may allocate
funds appropriated from general revenue fund and other sources for
cost-share incentive funding among particular soil and water conservation
land improvement measures, specific SWCDs, among areas of the state
through cost-share incentive priorities, or a combination thereof,
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 or to cost-share incentive priorities
to reimburse SWCDs for obligations incurred in administering cost-share
incentive activities.
  (2) Approval of Cost-share Incentive Priority Allocations.
The State Board may allocate cost-share incentive funding to priorities
identified by the State Board, local SWCDs through the stakeholder
process described at subsection (c) of this section, and other entities.
Higher consideration will be given to priorities recommended through
the stakeholder process. Priorities will be approved consistent with
the purpose of cost-share incentives specified at subsection (a) of
this section. A cost-share incentive priority shall exist for no more
than two program years without re-approval by the State Board.
  (3) Requests for Direct Allocations. SWCDs within areas
designated for cost-share program may submit requests for a direct
cost-share incentive fund allocation to the State Board. Such requests
must be submitted by September 1st of each program year, and must
include a description of how the allocation will control soil erosion,
conserve water, and/or protect water quality. Allocations requested
to address documented problems with water quality will be considered
before other requests, and any request will be subject to the availability
of funds after allocations are made to approved cost-share incentive
priorities as described in paragraph (2) of this subsection.
  (4) Approval of Direct Allocations to SWCDs. The State
Board shall consider and approve, reject or adjust SWCD requests for
direct allocations giving consideration to the amount of available
funding not already allocated to cost-share incentive priorities,
relative need for funding and 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 directly claim cost-share incentive funds.
Cont'd...