[Federal Register: October 1, 2002 (Volume 67, Number 190)]
[Page 61640-61648]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



Fish and Wildlife Service

RIN 1018-AI55

Fiscal Year (FY) 2002 Landowner Incentive Program (Non Tribal 
Portion) for States, Territories and the District of Columbia; Final 
Policy With Implementation Guidelines, and Request for Proposals

AGENCY: Fish and Wildlife Service, Interior.

ACTION: Final policy with implementation guidelines; notice of request 
for proposals.


SUMMARY: The Department of the Interior and Related Agencies 
Appropriations Act 2002 allocated $40 million from the Land and Water 
Conservation Fund for conservation grants to States, the District of 
Columbia, Puerto Rico, Guam, the United States Virgin Islands, the 
Northern Mariana Islands, and American Samoa (hereafter referred to 
collectively as States), and Tribes under a Landowner Incentive Program 

[[Page 61641]]

This notice provides the final guidelines for how the U.S. Fish and 
Wildlife Service (Service) will implement LIP with the States and 
serves as the Request for Proposals for the FY 2002 LIP funds. The 
Service will address the Tribal component of LIP under a separate 
Federal Register notice.

DATES: This Policy and these Implementation Guidelines are effective 
October 1, 2002. We must receive your grant proposal no later than 
December 2, 2002. We will not accept facsimile grant proposals.

ADDRESSES: Submit grant proposals to the Division of Federal Aid, 4401 
North Fairfax Drive, Suite 140, Arlington, VA 22203-1610. The 
administrative record for this notice, including copies of comments 
received, is available for viewing at this location Monday through 
Friday, 8 a.m. to 4 p.m.

FOR FURTHER INFORMATION CONTACT: Tim Hess, Biologist, U.S. Fish and 
Wildlife Service, Division of Federal Aid, 4401 North Fairfax Drive, 
Suite 140, Arlington, VA 22203-1610; telephone (703) 358-2156; fax 
(703) 358-1837; e-mail tim--hess@fws.gov, or the Regional Office 
contact persons identified in the answer to Question 25 in the 
Implementation Guidelines.



    In recent years, natural resource managers have increasingly 
recognized that private lands play a pivotal role in linking or 
providing important habitats for fish, wildlife, and plant species. To 
protect and enhance these habitats through incentives for private 
landowners, the President's Budget for Fiscal Year 2002 requested 
funding to address this need and Congress responded by appropriating 
$40 million from the Land and Water Conservation Fund for the Service 
to establish and administer a new Landowner Incentive Program (LIP). 
The Service will award grants to States for programs that enhance, 
protect, or restore habitats that benefit federally listed, proposed, 
or candidate species, or other at-risk species on private lands. A 
primary objective of LIP is to establish, or supplement existing, State 
landowner incentive programs that provide technical and financial 
assistance, including habitat protection and restoration, to private 
landowners for the protection and management of habitat to benefit 
federally listed, proposed, or candidate species, or other at-risk 
species on private lands as stated in the appropriations language. LIP 
complements other Federal private lands conservation programs that 
focus on the conservation of habitat.


    The Federal (Service) role in implementation of LIP is to provide 
policy, guidance, funds, and oversight to States who seek to develop 
and implement a qualifying landowner incentive program. The State role 
in implementation of LIP is to provide technical and financial 
assistance to private landowners for projects for the protection and 
management of habitat for species-at-risk. The private landowners' role 
is to provide the habitat necessary to accomplish the objectives of LIP 
and assist in project implementation.
    The Service is soliciting grant proposals for Federal funding under 
LIP through the publishing of this policy and guidelines. The remainder 
of this document is divided into three sections: (1) our Final LIP 
Implementation Guidelines that contain direction on grant proposal 
submission; (2) the comments received concerning the Proposed LIP 
Policy and Implementation Guidelines published in the Federal Register 
on June 7, 2002 (67 FR 39414), and our responses; and (3) a description 
of the regulatory requirements associated with issuing the Final LIP 
Policy with Implementation Guidelines.

LIP Final Implementation Guidelines

Definitions of Terms Used in These Guidelines

    ``Species-at-risk'' is defined as any Federally listed, proposed, 
or candidate animal or plant species or other species of concern as 
determined and documented by a State. Species classified by the State 
as a ``species-at-risk'' must be identified as such in its grant 
    ``Private land'' is considered any nongovernment-owned land.
    A ``project'' is a discrete task to be undertaken by or with 
private landowners for the accomplishment of the defined LIP 

Program Requirements

    1. What is the objective of this program? The primary objective of 
this program is to establish or supplement State landowner incentive 
programs that protect and restore habitats on private lands, to benefit 
Federally listed, proposed, or candidate species or other species 
determined to be at-risk, and provide technical and financial 
assistance to private landowners for habitat protection and 
    2. How will the Tribes participate in LIP? The Service is 
allocating $4 million of the total funds appropriated under LIP to 
Tribes for a competitive grant program that we will describe in a 
separate Federal Register notice. For Tribal LIP grant information 
contact Pat Durham, U.S. Fish and Wildlife Service, Office of Native 
American Liaison, 1849 C Street NW., Mail Stop 3251, Washington, DC 
20240 or call (202) 208-4133.
    3. Does LIP require plans to be developed like the State Wildlife 
Grant Program (FY 2002) and the Wildlife Conservation and Restoration 
Program? No.
    4. Who can apply for an LIP grant? The State agency with primary 
responsibility for fish and wildlife will be responsible for submitting 
all proposals to the U.S. Fish and Wildlife Service, Division of 
Federal Aid (FA). All other governmental entities, individuals, and 
organizations, including Tribes, may partner with or serve as a 
subgrantee to that fish and wildlife agency.

Fiscal Issues

    5. How will the Service distribute the available $40 million? The 
Service will allocate $34.8 million for competitive grants to States, 
$4.0 million for Tribes, and $1.2 million for program administration by 
the Service.
    6. What is the non-Federal match requirement for LIP grants? The 
Service requires a minimum of 25% non-Federal match for LIP grants 
(i.e. at least 25 percent of the total costs must come from sources 
other than LIP or other federal funds). The U.S. Virgin Islands, Guam, 
American Samoa, and the Northern Mariana Islands are exempt from 
matching requirements for this program (based on 48 U.S.C. 1469a. (d)).
    7. May the required non-Federal match be in-kind contributions? 
Yes. Allowable in-kind contributions are defined in Title 43 of the 
Code of Federal Regulations (43 CFR) part 12.64. The following Web site 
provides additional information http://www.nctc.fws.gov/fedaid/toolkit/

Grant Administration

    8. How will the Service award grants to States? The Service will 
use a two-tiered award system. We will assess Tier-1 grant proposals to 
see that they meet minimum eligibility requirements. The Service will 
rank Tier-2 grants based on criteria described in this notice and award 
grants after a national competition.
    9. What are the intended objectives of Tier-1 grants? The Service 
intends that Tier-1 grants fund staff and associated support necessary 
to develop or

[[Page 61642]]

enhance an existing landowner program. Through the development of 
plans, outreach, and associated activities that assist in the 
accomplishment of projects on private lands, these programs should 
benefit private landowners and other partners to help manage and 
protect habitats that benefit species-at-risk.
    10. What are the eligibility requirements for Tier-1 grants? To 
receive a Tier-1 grant a State program must demonstrate in its proposal 
that it can meet all of the following:
    (a) Deliver technical and financial assistance to landowners;
    (b) Provide for appropriate administrative functions such as fiscal 
and contractual accountability;
    (c) Use LIP grants to supplement and not replace existing funds;
    (d) Distribute funds to landowners through a fair and equitable 
    (e) Provide outreach and coordination that assist in administering 
the program; and
    (f) Describe a process for the identification of species-at-risk, 
and a process for the identification of clear, obtainable and 
quantified goals and performance measures that will help achieve the 
management goals and objectives of LIP. Through this program, the 
States' efforts and leadership will help the Service meet its Long-Term 
and Annual Performance Goals.\1\

    \1\ The two relevant Service goals are the Sustainability of 
Fish and Wildlife Populations (Goal 1.2) and Habitat Conservation 
(Goal 2.3), which can be found in the Service's Long Term Strategic 
Plan for 2000 to 2005 at http://planning.fws.gov/
usfwstrategicplanv3.pdf. Related Service planning and results 
reports can be found at http://planning.fws.gov.

    11. What are the intended objectives of Tier-2 grants? The 
objective of a Tier-2 grant should place a priority on the 
implementation of State programs that provide technical and financial 
assistance to the private landowner. Programs should emphasize the 
protection and restoration of habitats that benefit Federally listed, 
proposed, or candidate species, or other species-at-risk on private 
lands. The Service generally intends a Tier-2 grant to fund the 
expansion of existing State landowner incentive programs or those 
created under Tier-1 grants.
    12. What criteria will the Service use to rank Tier-2 grants? The 
Service proposes to use the following criteria to rank Tier-2 
    (a) Proposal provides clear and sufficient detail to describe the 
program. States are encouraged to describe any projects that are part 
of a broader scale conservation planning effort at the State or 
regional level. (0-10 points)
    (b) Proposal describes adequate management systems for fiscal, 
contractual and performance accountability (State), including annual 
monitoring and evaluation of progress toward desired program objectives 
and performance measures and goals identified in the ``expected results 
or benefits'' section of the grant application (landowner and State). 
(0-10 points)
    (c) Proposal describes the State's fair and equitable system for 
fund distribution. For example, States develop their own process to 
evaluate and prioritize their project proposals based on criteria such 
as species needs, priority habitats, compliance with State and Federal 
requirements, and feasibility of success and select projects for grant 
proposal funding based on their highest priority standing. (0-10 
    (d) Proposal describes outreach efforts used to effect broad public 
awareness, support, and participation. (0-10 points)
    (e) Proposal identifies by name the species-at-risk to benefit from 
the proposal. Points increase from zero to 10 as the State identifies 
more species.
    (f) Proposal describes the percentage of the State's total LIP 
Tier-2 program funds identified for use on private land projects as 
opposed to staff and related administrative support costs. Points 
increase from zero to five as the percentage of funds identified for 
staff and related administrative costs decreases in comparison to the 
total program costs.
    (g) Proposal identifies the percentage of total nonfederal fund 
cost sharing. Points increase from zero to five as the percentage of 
nonfederal cost sharing on the grant increases above the minimum cost 
    (h) Proposal demonstrates the urgency of the projects or actions 
that are to benefit the species targeted, and the short-term and long-
term benefits anticipated to be gained. (0-5 points)
    13. Are there funding limits (caps) for LIP? Yes.
    (a) The Service will cap Tier-1 grants at $180,000 for State fish 
and wildlife agencies, and $75,000 for Territories and the District of 
    (b) In addition, no State may receive more than $1.74 million Tier-
1 and Tier-2 funds combined from the FY 2002 appropriation.
    14. May a State submit more than one proposal? States may submit 
one proposal each for Tier-1 and Tier-2 grants under this notice. 
However, funding limits still apply, as described in the answer to 
Question 13.
    15. If some FY 2002 funds remain after awarding Tier-1 and Tier-2 
grants, how will the Service make them available to the States? We will 
announce subsequent requests for proposals until all LIP funds are 
obligated. States that have not reached the cap may submit an 
additional proposal during future requests for proposals.
    16. Will interest accrue to the account holding LIP funds and if so 
how will it be used? No. LIP funds were not approved for investing, and 
as a result no interest will accrue to the account.
    17. What administrative requirements must States comply with in 
regard to LIP? States must comply with 43 CFR part 12 that provides the 
administrative regulations (http://www.nctc.fws.gov/fedaid/toolkit/
4312c.pdf) and OMB Circular A-87 that provides cost principles (http://
    18. What information must a State include in a grant proposal? An 
LIP grant proposal must include an Application for Federal Assistance 
(SF-424) and must identify whether it is a Tier-1 or Tier-2 proposal. 
The proposal must also include statements describing the need, 
objectives, expected results or benefits, approach or procedures, 
location, and estimated cost for the proposed work (OMB Circular A-
102). The expected results or benefits section must identify the 
State's discrete, obtainable and quantified performance measures to be 
accomplished (for example, the anticipated number of acres of wetlands 
or stream miles to be restored, or the number of at-risk species with 
improved status) that will address the goals of LIP and, at the same 
time, the Service's Long-Term Goals of Sustainability of Fish and 
Wildlife Population \2\ (Goal 1.2) and Habitat Conservation \3\ (Goal 

    \2\ By the end of 2005, 404 species listed under the Endangered 
Species Act as threatened or endangered for a decade or more will be 
stable or improving, 15 species will be delisted due to recovery, 
and a listing of 12 species at risk is made unnecessary due to 
    \3\ By 2005, trust fish and wildlife populations, threatened and 
endangered species, and species of special concern will be improved 
by enhancing and/or restoring or creating 550,000 acres of wetlands 
habitat, restoring 1,000,000 acres of upland habitats, and enhancing 
and/or restoring 9,800 riparian or stream miles of habitat off 
Service land through partnerships and other conservation strategies.

    The grant proposal should also clearly identify how each of the 
minimum eligibility requirements (Tier-1) and ranking criteria (Tier-2) 
are addressed. The SF-424 is available from FA at any Service Regional 
Office or at http://www.nctc.fws.gov/fedaid/toolkit/formsfil.pdf.
    19. Where should a State send grant proposals? States should submit 
all LIP

[[Page 61643]]

proposals to the U.S. Fish and Wildlife Service, Division of Federal 
Aid, 4401 North Fairfax Drive, Suite 140, Arlington, VA 22203-1610.
    20. When are proposals due to the Service? The Service will accept 
proposals between October 1, 2002 and December 2, 2002.
    21. What process will the Service use to evaluate and select 
proposals for funding? The Service will evaluate all proposals that are 
received by the end of the period set forth in the answer to Question 
20, above. Successful proposals will then be selected based on the 
final eligibility and selection criteria in the Implementation 
Guidelines, and will be subject to the final approval of the Assistant 
Secretary for Fish and Wildlife and Parks. The Service will notify all 
applicants of the results as soon as practicable but within 60 days of 
the deadline for submission of proposals.
    22. Once a proposal is selected for funding, what additional grant 
documents must the applicant submit and to whom? In addition to the 
Application for Federal Assistance submitted with the original 
proposal, the Service requires the following documents: a Grant 
Agreement (Form 3-1552) and a schedule of work the State proposes to 
fund through this grant. Additionally, the Service, in cooperation with 
the applicants, must address Federal compliance issues, such as the 
National Environmental Policy Act, the National Historic Preservation 
Act, and the Endangered Species Act. Regional Office FA staff can 
assist in explaining the procedures and documentation necessary for 
meeting these Federal requirements. The States must send this 
additional documentation to the appropriate Regional Office where FA 
staff will approve the grant agreement to obligate funds. See the 
answer to Question 25 for Regional Office locations and http://
www.nctc.fws.gov/fedaid/toolkit/fagabins.pdf for additional 
    23. What reporting requirements must States meet once funds are 
obligated under an LIP grant agreement? The Service requires an annual 
progress report and Financial Status Report (FSR) for grants longer 
than one year. In addition, a final performance report and FSR (SF-269) 
are due to the Regional Office within 90 days of the grant agreement 
ending date.
    In its annual report, the State must include a list of project 
accomplishments in relation to those which were planned in the grant 
agreement. The number of upland and wetland acres and the number of 
riparian/stream miles restored or improved (performance measures), and 
the species benefitted should be provided. This information will help 
demonstrate the States' efforts and leadership in helping the LIP meet 
the Service's national goals for Fish and Wildlife Sustainability (1.2) 
and Habitat Conservation (2.3). The effectiveness of each State's 
program, as reported in its annual progress reports, will be an 
important factor considered during the grant award selection process in 
subsequent years.
    24. Will landowners who have LIP projects implemented on their 
property be required to leave project improvements in place for a 
specific period? States should address this issue in their grant 
proposals, landowner incentive programs, and agreements with individual 
landowners. Habitat improvements should remain in place to realize the 
desired benefits for species-at-risk.
    25. Whom can I contact in the Service about the LIP program in my 
local or regional area? Correspondence and telephone contacts for the 
Service are listed by Region below.

    Region 1. Hawaii, Idaho, Oregon, Washington, California, Nevada, 
American Samoa, Guam, and Commonwealth of the Northern Mariana Islands.

Regional Director, Division of Federal Aid, U.S. Fish and Wildlife 
Service, 911 NE 11th Avenue, Portland, Oregon 97232-4181, LIP Contact: 
Jim Greer, (503) 231-6128

    Region 2. Arizona, New Mexico, Oklahoma, and Texas.

Regional Director, Division of Federal Aid, U.S. Fish and Wildlife 
Service, 500 Gold Avenue SW, Room 4012, Albuquerque, New Mexico 87102, 
LIP Contact: Bob Anderson, (505) 248-7459

    Region 3. Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, 
Ohio, and Wisconsin.

Regional Director, Division of Federal Aid, U.S. Fish and Wildlife 
Service, Bishop Henry Whipple Federal Building, One Federal Drive, Fort 
Snelling, Minnesota 55111-4056, LIP Contact: Lucinda Corcoran, (612) 

    Region 4. Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, 
Mississippi, North Carolina, South Carolina, Tennessee, Puerto Rico, 
and the U.S. Virgin Islands.

Regional Director, Division of Federal Aid, U.S. Fish and Wildlife 
Service, 1875 Century Boulevard, Suite 200, Atlanta, Georgia 30345, LIP 
Contact: Marilyn Lawal, (404) 679-7277
    Region 5. Connecticut, Delaware, District of Columbia, Maine, 
Maryland, Massachusetts, New Hampshire, New Jersey, New York, 
Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia.

Regional Director, Division of Federal Aid, U.S. Fish and Wildlife 
Service, 300 Westgate Center Drive, Hadley, MA 01035-9589, LIP Contact: 
Vaughn Douglas, (413) 253-8502

    Region 6. Colorado, Kansas, Montana, Nebraska, North Dakota, South 
Dakota, Utah, and Wyoming.

Regional Director, Division of Federal Aid, U.S. Fish and Wildlife 
Service, P.O. Box 25486, Denver Federal Center, Denver, Colorado 80225-
0486, LIP Contact: Jacque Richy, (303) 236-8155 ext. 236

    Region 7. Alaska.

Regional Director, Division of Federal Aid, U.S. Fish and Wildlife 
Service, 1011 East Tudor Road, Anchorage, Alaska 99503-6199, LIP 
Contact: Al Havens (907) 786-3435

Analysis of Public Comment and Changes Made to the Proposed LIP 
Implementation Guidelines

    On June 7, 2002, the Service published a notice in the Federal 
Register (67 FR 39414) and requested comments on the proposed 
implementation guidelines for the FY 2002 Landowner Incentive Program 
(Non Tribal Portion) for States, Territories, and the District of 
Columbia. The Service received 25 written responses by the close of the 
comment period on July 8, 2002. The responses came from the following: 
Arizona Game and Fish Department; Delaware Department of Natural 
Resources and Environmental Control; Ducks Unlimited; Georgia 
Department of Natural Resources; Hawaii Department of Land and Natural 
Resources; International Association of Fish and Wildlife Agencies; 
Louisiana Forestry Association; Michigan Department of Natural 
Resources; Montana Fish, Wildlife and Parks; National Association of 
Conservation Districts; Nebraska Game and Parks Commission; Ocean 
Nature and Conservation Society; Ohio Department of Natural Resources; 
Oregon Department of Fish and Wildlife; Red Lake Band of Chippewa 
Indians; Texas Farm Bureau; Texas Parks and Wildlife Department; The 
Nature Conservancy; Turner Endangered Species Fund; U.S. National Park 
Service; Vermont Agency of Natural Resources; Walla Walla County 
Conservation District; Wapiti Ridge Coordinated Resource Management; 
Wildlife Management Institute; and

[[Page 61644]]

Wisconsin Department of Natural Resources.
    We received a total of 50 substantive comments from the 25 written 
responses covering a wide range of topics. Of these, 26 comments dealt 
with the ranking criteria and scoring process. Six organizations or 
agencies wrote letters that indicated their overall support for LIP 
with no additional comments that required a response. The following is 
a list of substantive comments received and our responses to those 

Comments Not Directly Related to the Scoring Process and Ranking 

    Comment 1. We recommend that the final guidelines for LIP clearly 
indicate that projects that advance imperiled species recovery through 
means other than habitat management are considered appropriate for LIP.
    Response: The Interior Appropriations bill language states that the 
grants are to be used to provide technical and financial assistance to 
private landowners for the protection and management of habitat to 
benefit federally listed, proposed, or candidate species, or other at-
risk species on private lands. The projects therefore must have a clear 
relationship to habitat, and this relationship must be spelled out in a 
State's grant proposal.
    Comment 2. ``Species-at-risk'' needs to be better defined.
    Response: We believe the intent of Congress was to address species 
such as those found on Federal and State protected species lists, while 
at the same time allowing the States to determine if additional species 
should also be considered at-risk (that have similar biological 
concerns as those already listed) and covered by their LIP program. 
States should include their current LIP list of species-at-risk in 
their grant proposal.
    Comment 3. We encourage the Service to take a flexible, progressive 
perspective in working with the States to define ``at-risk'' species.
    Response: Each State wildlife agency has full authority in 
determining its species-at-risk, and in justifying their focus on those 
species identified in the grant proposal. (Also see response to Comment 
    Comment 4. It should be made clearer in the guidelines that LIP 
programs can also be applied to riparian and shoreline private lands 
that provide habitat for aquatic species-at-risk found in adjoining 
public waters.
    Response: Riparian and shoreline protection and restoration 
activities, and also fish migration barrier removal activities, on 
private lands qualify if the habitat benefits for the species-at-risk 
are clearly identified no matter the ownership where the species 
    Comment 5. Private land initiatives should promote a holistic view 
of the habitat needs of species * * * we feel that practices and 
actions taken on private lands should consider an array of species.
    Response: The program's objective is to benefit species-at-risk, so 
the grant proposal must identify those species. One criterion used to 
rank proposals ((e) in the answer to Question 12) involves the number 
(array) of species-at-risk benefitted, with a greater number of species 
benefitted leading to a higher score.
    Comment 6. The Service should encourage and make it possible for 
the States to approach assistance to landowners with administrative 
    Response: The Service is requiring compliance with only those 
administrative rules mandated for this program by existing Federal 
Regulations in 43 CFR part 12. State agencies will determine 
administrative procedures involving private landowners and other 
    Comment 7. We encourage the Service to give preference to 
applications for projects that are part of a broad-scale conservation 
planning effort.
    Response: We have added to our description of the first proposed 
ranking criterion ((a) in the answer to Question 12) to address this 
    Comment 8. It would make sense to allow the ``lead entities'' 
designated by the Salmon Recovery Fund Board [in Washington] to submit 
grant proposals directly to the Service and compete for this funding.
    Response: Congress stipulated that LIP grants were available for 
States and Territories only. The Service will utilize the State fish 
and wildlife agencies as the eligible grantees due to their primary 
responsibility for wildlife conservation among State agencies. All 
other agencies, organizations, and individuals working with private 
landowners on species-at-risk habitat issues are encouraged to 
establish partnerships with the State fish and wildlife agencies.
    Comment 9. In cases where a State wildlife agency does not apply 
for funding under this initiative, we believe that other State agencies 
involved in wildlife management should be permitted to apply.
    Response: At this time, we are not aware of any State fish and 
wildlife agencies that are not considering the submission of an LIP 
grant proposal. If notified, the Service would consider another State 
agency designated by the Governor.
    Comment 10. Are nongovernmental (nonprofit) individuals and 
organizations allowed to partner with or serve as a subgrantee to the 
fish and wildlife agency?
    Response: Yes, both governmental and nongovernmental organizations 
and individuals may partner with or serve as a subgrantee of a State 
fish and wildlife agency.
    Comment 11. We suggest that LIP implementation guidelines use the 
same regional allocation formula as has been proposed in the Service's 
Private Stewardship Grant Program.
    Response: The Congressional language for LIP requires the program 
to be competitive, which we interpret to be competitive at the national 
level. We believe the disbursement of FY 2002 LIP funds can be done 
efficiently and achieve a broad geographic distribution through a 
national review and selection process rather than a regional allocation 
    Comment 12. A requirement for State agencies to provide in excess 
of a 25 percent match for grants may prove so costly as to discourage 
    Response: LIP grants require only a 25% nonfederal match (see the 
answer to Question 6 in the Implementation Guidelines). Increased 
nonfederal matching shares beyond 25% are scored more favorably under 
one of the ranking criteria (see (g) in the answer to Question 12), but 
a match greater than 25% is not required.
    Comment 13. Accounting requirements and processes for in-kind and 
matching contributions that are too cumbersome and costly may cause 
motivated State agencies to decline to participate in this initiative.
    Response: Matching contribution (including in-kind) administrative 
and audit requirements are provided in Title 43 of the Code of Federal 
Regulations, Part 12 for all Department of the Interior assistance 
programs, including LIP. Based on our experience working with the 
States in other Federal Aid grant programs, we believe the partnership 
and accountability benefits outweigh the administrative burdens 
associated with the use of in-kind match.
    Comment 14. We recommend that you establish a Tier 3 program * * * 
that would address a multi-state concern with respect to at-risk 
species * * * and we recommend a fund match of 90%/10% (Federal/State).
    Response: Rather than creating a third tier for LIP to address 
multistate projects, the Service will retain a two-tiered program 
during this program implementation period and consider

[[Page 61645]]

evaluating other options in future years based on identified State 
    Comment 15. We received two comments that encouraged the Service to 
focus proposal review and funding at the ``program'' level and not at 
the activity or project level.
    Response: Service review of grant proposals will be primarily at 
the program level to determine how well the States address the 
eligibility requirements for Tier-1 and the criteria for the 
competitive scoring process in Tier-2. In addition, we will evaluate 
and score the State Tier-2 grant proposals based upon the level of 
detail provided, which may focus on projects. Once funds are awarded to 
a State, however, the Service will need to evaluate projects to see 
that they meet Federal environmental compliance requirements.
    Comment 16. We suggest that the proposal selection process make use 
of the ``diverse panel of interested and affected parties'' proposed 
for the Private Stewardship Grant Program.
    Response: The Service intends to create a diverse panel of 
professional Service staff to review, rank, and recommend funding to 
the Director. They will be knowledgeable about the LIP program, its 
objectives, and implementation requirements as well as how other 
Federal grant programs are implemented. The Service's expectation is 
that the panel will perform in a fair, efficient, and effective manner.
    Comment 17. We wish that the program had chosen to allocate funds 
based on need and opportunity, rather than a set finite limit of $1.74 
million [5% maximum for each State] regardless of opportunity.
    Response: The Service proposed limits to ensure opportunities to 
all States during this important initial phase of program building. 
Since needs and opportunities vary from State to State based upon many 
factors, the Service believes that it is important this first year to 
encourage national program development and acceptance in as many States 
as practical. We believe the 5% maximum per State will lead to a 
greater number of species and habitats positively impacted, but will 
revisit the cap issue in subsequent years should it appear to be 
    Comment 18. At the very least, the outreach and fund distribution 
system are likely to be the same for every Tier-2 grant submitted by 
each State, so it would be better to have these aspects described in a 
cover letter to the Tier-2 grant package that each State submits.
    Response: It is difficult to determine at this time what the States 
will submit regarding their plans for outreach and fund distribution. 
We believe these are important factors involved with the development of 
a strong program. The States will need to describe clearly how they 
intend to meet this eligibility requirement for Tier-1 and scoring 
criterion for Tier-2 grants in their grant proposal document.
    Comment 19. It is unclear whether a State's proposal can include 
more than one discrete project, each with its own requested funding 
    Response: The purpose of the LIP is to help establish or support 
State programs that provide, enhance or conserve habitats for at risk 
species. States may submit one or more projects within their grant 
proposal. Additionally, one or more grant agreement segments may be 
used to implement and obligate funds for projects within a grant 
proposal. See also the Response to Comment 15.
    Comment 20. We are concerned that it will be difficult to submit 
proposals, receive funding, and initiate projects in the short time 
remaining this Federal fiscal year.
    Response: No relationship exists between LIP fund initiation and 
expenditure and the Federal fiscal year. The only initial deadline to 
meet is the deadline for submission of proposals. Once proposals are 
received, approved, and ranked, the Director will announce grant awards 
to the States. The obligation of funds for States awarded grants takes 
place when the Service approves a grant agreement. One or more projects 
may then be initiated, but there is no specific deadline by which work 
must begin or end other than that described in the grant agreement.
    Comment 21. We believe it is too late in the fiscal year to solicit 
proposals and allocate funds. We believe that efficiency and 
effectiveness would be greatly enhanced * * * if the FY 02 funds were 
rolled over and combined with FY 03 funds, with a single proposal 
solicitation used for the combined funds.
    Response: Many program commenters and supporters have expressed 
their desire to see the program implemented quickly. In addition, it is 
possible that no funds will be appropriated by Congress in FY 2003 or 
funds may be appropriated with additional or differing requirements. 
For these reasons, it is important to proceed with implementation of 
LIP for FY 2002 at this time.
    Comment 22. The short timeframe for this program will require a 
simplified application procedure to allow State agencies time to 
develop a timely and complete application.
    Response: The application procedure is limited to filling out a 
one-page Application for Federal Assistance form and a narrative 
describing the key components of the proposal as outlined in these LIP 
Final Implementation Guidelines. The proposed 60-day period we are 
allowing for submission of grants seems acceptable to most States.
    Comment 23. The Federal Register notice states that the Service 
will ensure that the funded State projects will comply with the NEPA. 
This compliance should be addressed through a categorical exclusion or 
the development of a generic environmental analysis finding that 
precludes the need for a detailed Environmental Assessment (EA) or 
Environmental Impact Statement (EIS).
    Response: A generic nationwide EA or EIS is not possible at this 
time due to the anticipated variability in the grant proposals 
submitted by each State. The Service must review each grant agreement 
developed by the States for NEPA compliance. We would apply categorical 
exclusions where warranted.
    Comment 24. We strongly recommend that the Service monitor this 
program and ensure that it does not become bogged down in bureaucratic 
red tape and overhead.
    Response: The Service will administer the LIP program in a manner 
that will move grants quickly through the administrative process and 
provide efficient reimbursement processing and project monitoring. 
Regional Service contacts will work closely with the States, and their 
partner landowners and organizations as needed, to achieve on-the-
ground results.

Comments Related to the Scoring Process and Ranking Criteria

    Comment 25. Tier-2 ranking criterion 12(a) regarding detail and 
clarity * * * likely will not contribute significantly to 
discriminating the value of competing proposals.
    Response: The Service believes it is important for proposals to be 
well written and clearly describe what the State or territory intends 
to accomplish with a grant. This is an important part of the evaluation 
    Comment 26. Question 24 [of the first LIP notice] addresses the 
issue of length of time during which the project improvements are to be 
left in place in order to realize the desired benefits. We recommend 
adding this to the Tier-2 grant proposal ranking criteria in answer to 
Question 12.
    Response: We have added an additional ranking criterion (h) (in the 
answer to Question 12), that focuses on the anticipated length of 

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benefits, as well as the urgency of the proposed projects.
    Comment 27. In regard to Tier-2 ranking criterion 12(b) on fiscal 
management systems, we do not believe that ranking proposals using this 
criterion will enhance the program or help insure that the proposals 
that contribute most to conservation of at-risk species will be 
    Response: Fiscal management and related systems used by agencies 
receiving Federal funds and the required accounting for their use are 
critical to meeting accountability expectations and implementing an 
effective program administratively.
    Comment 28. Question 12(b) includes as a Tier-2 grant proposal 
ranking criterion ``* * * annual monitoring and evaluation of progress 
toward desired project and program objectives (landowner and State).'' 
We suggest alternate wording, ``* * * desired project objectives 
[deleting ``and program''].'' Particularly when funding for the program 
must be authorized annually, it seems that LIP objectives would be met 
if project objectives are monitored and evaluated.
    Response: We disagree. Since LIP is really focused primarily on 
establishing and funding programs, the proper barometer is at the 
programmatic level which synthesizes project level results. States will 
undoubtedly need to conduct monitoring and evaluation at the project 
level to determine progress toward program goals and objectives. 
Therefore, we have changes in the LIP Final Implementation Guidelines 
to reflect the emphasis on program level focus.
    Comment 29. I believe that these two criteria (public awareness/
outreach 12(d) and fund distribution 12(c)) are more valuable for a 
Tier-1, LIP setup grant than for each individual Tier-2 grant that you 
will be evaluating. At the very least they are likely to be the same 
for every Tier-2 grant submitted by each State so it would be better to 
have these aspects described in the cover letter to the Tier-2 grant 
package that each State submits.
    Response: The Service believes there could be a high degree of 
variability in what States propose for their outreach efforts ((d) in 
answer to Question 12). We also recognize the importance public 
outreach can have in developing an effective program with good 
landowner participation. The Service believes outreach provides a 
legitimate area of focus for Tier-1 and as a ranking criterion for 
Tier-2. We also believe that fund distribution is an important aspect 
of the program and should be a ranking criterion.
    Comment 30. It's unclear if a state wildlife agency will be 
required to describe cost/benefit components or if this reference is 
used merely as an example. The benefits of habitat conservation are 
many, but often extremely difficult to quantify. We suggest the portion 
of 12(c) * * * cost/benefit components including duration of costs and 
benefits be removed from the list of scoring criteria for Tier-2 
    Response: Cost/benefit analysis is only one of many ways that a 
State may wish to establish, singly or in combination with other 
criteria, a fair and equitable system for fund distribution. The 
Service will retain this suggested criteria as a potential option to 
the States in the answer to Question 12(c).
    Comment 31. Two comments suggested that the Tier-2 ranking 
criterion 12(g) regarding matching nonfederal funds was rarely an 
important factor in program success and had built-in bias against 
States not capable of increasing their nonfederal matching funds. They 
suggest that it should either be eliminated or reduced in its 
allocation of scoring points. Another comment was made suggesting an 
alternate [to using matching funds as a ranking criterion] would be to 
award more points to those proposals with a higher number of State, 
Federal, or private partners.
    Response: The Service grant programs serve as vehicles for States 
and other entities to accomplish conservation and management activities 
that would otherwise not have funding. Encouraging the leveraging of 
Federal dollars has served as an important tool in bringing partners 
together and developing support for these activities. We believe those 
States maximizing this effort should be recognized to some degree in 
the ranking process. Nonetheless we have reduced the total number of 
points that can be scored in this category to acknowledge the challenge 
confronted by some agencies.
    Comment 32. We recommend Tier-2 ranking criterion 12(e) be modified 
to consider the proportion of at-risk species within the State, 
territory, or district [that is to be addressed by the grant proposal].
    Response: To consider this modification, it would require each 
State to develop a complete list of all species they deem to be at-risk 
within their jurisdiction prior to applying for any grant. We believe 
that this requirement would likely result in a long deliberative 
process, with large variability among States, with minimal benefit to 
the program.
    Comment 33. A [new] ranking criterion for Tier-2 grants should 
consider the urgency of the project to the target species. We encourage 
scoring criterion 12(e) for Tier-2 grants be modified to represent more 
a measure of the overall contributions of the project to conservation 
of the species benefitted.
    Response: We have created an additional ranking criterion 12(h) to 
address the urgency and duration of benefits for species identified in 
the proposed projects.
    Comment 34. Individual projects in Hawaii and California are very 
likely to benefit over a dozen listed species * * * [thus restructuring 
the scoring for Tier-2 criterion (e)] would be more useful if it was 1-
4 species (1 point), 5-10 species (2 points), and 10 species 
(3 points). And, reduce the total points possible for all criteria.
    Response: We believe a large number of total points possible will 
enable reviewers to more accurately discern true differences between 
grossly similar grant proposals. We also believe the number of species 
benefitted is a valid scoring criterion. We have, however, added 
another species-related ranking criterion (h) that will expand the 
scoring to also include the urgency of the project to the species 
    Comment 35. Tier-2 ranking criterion 12(e) should be expanded to 
include the relative conservation risk of the species identified in the 
    Response: As stated previously in the response to Comment 34, we 
have created an additional ranking criterion 12(h) to address the 
urgency and duration of benefits for species identified in the proposed 
    Comment 36. More qualitative flexibility to allow consideration of 
this broader State context (relative to administration) needs to be 
incorporated into ranking criterion 12(f) for Tier-2.
    Response: We have reduced the weighting of this criterion due to 
this comment and others that indicate a need to consider the variation 
in current capabilities of some State agencies to address their 
administrative needs.
    Comment 37. We suggest that this criterion (12(f)) be amended to 
consider the percentage of the State's total Tier-2 program funds 
rather than the percentage of the State's total LIP program funds 
(which we assume would include the combined funds from Tier-1 and Tier-
2 grants).
    Response: We agree this is not clear and have made the suggested 
changes to ranking criterion 12(f) in this final notice.

[[Page 61647]]

    Comment 38. We feel the scoring criterion 12 (f) (for Tier-2 
grants) unfairly benefits those State wildlife agencies with the 
greatest capacity to deliver private lands programs. We recommend it be 
removed or its scoring weight reduced by at least 50%.
    Response: Based on this and related comments we have reduced the 
weighting of this criterion from 10 possible points to five.
    Comment 39. Comments on Tier-2 scoring criterion 12 (h) [of the 
first LIP notice], regarding proposals identifying performance measures 
that support the Service performance goals, ranged from replacing this 
scoring criterion with one that focuses on specific species 
reproductive improvements, to deleting the criterion entirely.
    Response: President Bush has launched a new strategy for improving 
the management and performance of the Federal Government. The 
quantified measures to be included with each proposal to be eligible 
under LIP will help achieve the overall program goal to conserve 
habitat for endangered, threatened or other at risk species on private 
lands. Through LIP, State programs to assist private, voluntary 
conservation efforts will help the Service meet its Long-Term and 
Annual Performance Goals as expressed in the Service's Annual 
Performance Plan. The LIP furthers the Service's goals for conserving 
imperiled species (Goal 1.2) and habitat conservation (Goal 2.3). 
Further information on the Service's strategic plans and performance 
reports is available at http://planning.fws.gov.
    The Service believes that there is merit in evaluating LIP projects 
and how grants assist meeting LIP and Service goals. Rather than 
including performance measures in the ranking criteria, however, we are 
requiring the State to:
    (a) for Tier-1 grant proposals--Describe the process by which the 
State will develop clear, obtainable, and quantified performance 
measures to help it meet LIP program goals and objectives; and
    (b) for Tier-2 grant proposals--Identify clear, obtainable, and 
quantified performance measures related to the Habitat Conservation and 
Sustainability of Fish and Wildlife Populations goals in the expected 
results or benefits section of the grant proposal narrative.
    Additionally, we have modified selection criteria 12(b) to require 
States to identify how their management systems will adequately monitor 
and evaluate progress in achieving its goals through these performance 
    Comment 40. The only comments concerning the Tier-1 eligibility 
requirements recommended eliminating criterion (g) that would identify 
performance measures that support Service performance goals.
    Response: See the response to Comment 39.
    Comment 41. One commenter preferred reducing the total points for 
all scoring criteria.
    Response: We have reduced total points for some ranking criteria 
where comments supported that reduction.
    Comment 42. One commenter suggested a general or ``other proposal 
merits'' scoring criterion that would include how the project might 
complement other projects in the area, its unique qualities, enhanced 
nonfederal cost sharing, or other extraordinary benefits.
    Response: We found it difficult to create a multifaceted ranking 
criterion, unlike those that have more specific and measurable 
components, and therefore have not included one in the Implementation 
    Comment 43. A criterion for Tier-2 ranking should include the 
magnitude and duration of benefits.
    Response: Ranking criteria (a) and (h) (see answer to Question 12) 
should adequately capture the magnitude and duration of benefits of the 

Required Determinations

Regulatory Planning and Review

    This policy document identifies eligibility and selection criteria 
the Service will use to award grants under LIP. The Service developed 
these guidelines to ensure consistent and adequate evaluation of grant 
proposals that are voluntarily submitted and to help perspective 
applicants understand how the Service will award grants. According to 
Executive Order (E.O.) 12866, these policy guidelines are significant 
and the Office of Management and Budget has reviewed them in accordance 
with the four criteria discussed below.
    (a) LIP will not have an annual effect on the economy of $100 
million or more or adversely affect in a material way the economy, a 
sector of the economy, productivity, jobs, the environment, public 
health or safety, or State or local communities. A total of $34,800,000 
will be awarded in grants to State and Territorial wildlife agencies to 
provide financial and technical assistance to private landowners to 
carry out voluntary conservation actions. These funds will be used to 
pay for the administration and execution of actions such as restoring 
natural hydrology to streams or wetlands that support species of 
concern, fencing to exclude livestock from sensitive habitats, or 
planting native vegetation to restore degraded habitat. In addition, 
grants that are funded will generate other, secondary benefits, 
including benefits to natural systems (e.g., air, water) and local 
economies. All of these benefits are widely distributed and are not 
likely to be economically significant in any single location. It is 
likely that some residents where projects are initiated will experience 
some level of benefit, but quantifying these effects at this time is 
not possible. We do not expect the sum of all the benefits from this 
program, however, to have an annual effect on the economy of $100 
million or more.
    (b) We do not believe LIP would create inconsistencies with other 
agencies' actions. Congress has given the Service the responsibility to 
administer the program.
    (c) As a new grant program, LIP would not materially alter the 
budgetary impact of entitlements, user fees, loan programs, or the 
rights and obligations of their recipients. This policy establishes a 
new grant program that Public Law 107-63 authorizes, which should make 
greater resources available to applicants. The submission of grant 
proposals is completely voluntary, but necessary to receive benefits. 
When an applicant decides to submit a grant proposal, the eligibility 
and selection criteria identified in this policy can be construed as 
requirements placed on the awarding of the grants. Additionally, we 
will place further requirements on grantees that are selected to 
receive funding under LIP in order to obtain and retain the benefit 
they are seeking. These requirements include specific Federal financial 
management and reporting requirements and time commitments for 
maintaining habitat improvements or other activities described in the 
applicant's grant proposal.
    (d) OMB had determined that these guidelines raise novel legal or 
policy issues, and, as a result, this document has undergone OMB 

Regulatory Flexibility Act (5 U.S.C. 601 et seq.)

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq., as 
amended by the Small Business Regulatory Enforcement Fairness Act 
(SBREFA) of 1996), whenever an agency is required to publish a notice 
of rulemaking for any proposed or final rule, it must prepare and make 
available for public comment a regulatory flexibility analysis that 
describes the effects of the rule on small

[[Page 61648]]

entities (i.e., small businesses, small organizations, and small 
government jurisdictions). No regulatory flexibility analysis is 
required, however, if the head of the agency certifies the rule will 
not have a significant economic impact on a substantial number of small 
entities. SBREFA amended the Regulatory Flexibility Act to require 
Federal agencies to provide a statement of the factual basis for 
certifying that a rule will not have a significant economic impact on a 
substantial number of small entities. SBREFA also amended the RFA to 
require a certification statement. In this notice, we are certifying 
that LIP will not have a significant economic impact on a substantial 
number of small entities for the reasons described below.
    Small entities include organizations, such as independent nonprofit 
organizations and local governmental jurisdictions, including school 
boards and city and town governments that serve fewer than 50,000 
residents, as well as small businesses. Small businesses include 
manufacturing and mining concerns with fewer than 500 employees, 
wholesale trade entities with fewer than 100 employees, retail and 
service businesses with less than $5 million in annual sales, general 
and heavy construction businesses with less than $27.5 million in 
annual business, special trade contractors doing less than $11.5 
million in annual business, and agricultural businesses with annual 
sales less than $750,000. To determine if potential economic impacts to 
these small entities are significant, we consider the types of 
activities that might trigger impacts as a result of this program. In 
general, the term significant economic impact is meant to apply to a 
typical small business firm's business operations.
    The types of effects this program could have on small entities 
include economic benefits resulting from the purchasing of supplies or 
labor to implement the grant proposals in relation to habitat 
improvements on private lands. By law, only State and Territorial 
wildlife agencies are eligible grant recipients. Since this program 
will be awarding a total of only $34,800,000 for grants throughout the 
United States to benefit wildlife habitat on private lands, a 
substantial number of small entities are unlikely to be affected. The 
benefits from this program will be spread over such a large area that 
it is unlikely that any significant benefits will accrue to a 
significant number of entities in any area. In total, the distribution 
of the $34,800,000 will not create a significant economic benefit for 
small entities but, clearly a number of entities will receive some 

Unfunded Mandates Reform Act

    In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 
et seq.):
    (a) This policy will not ``significantly or uniquely'' affect small 
government entities.
    (b) This policy will not produce a Federal mandate of $100 million 
or greater in any year; that is, it is not a ``significant regulatory 
action'' under the Unfunded Mandates Reform Act. LIP establishes a 
grant program that States may participate in voluntarily.


    In accordance with Executive Order 12630 (``Government Actions and 
Interference with Constitutionally Protected Private Property 
Rights''), LIP does not have significant takings implications. State 
and Territorial agencies will work with private landowners who 
voluntarily request technical and financial assistance for species 
conservation on their lands.

Executive Order 13211

    On May 18, 2001, the President issued an Executive Order (E.O. 
13211) on regulations that significantly affect energy supply, 
distribution, and use. Executive Order 13211 requires agencies to 
prepare Statements of Energy Effects when undertaking certain actions. 
This policy is not expected to significantly affect energy supplies, 
distribution, or use. Therefore, this action is not a significant 
energy action and no Statement of Energy Effects is required.


    In accordance with Executive Order 13132, this policy does not have 
any Federalism effects. A Federalism assessment is not required. 
Congress has directed that we administer grants under LIP directly to 
the States and Territories. The States have the authority to decide 
which private landowner projects to forward to the Service for 
consideration as their LIP.

Civil Justice Reform

    In accordance with Executive Order 12988, LIP does not unduly 
burden the judicial system and does meet the requirements of sections 
3(a) and 3(b)(2) of the Order. With the guidance in this policy and 
these guidelines, the Service will clarify the requirements of LIP to 
applicants that voluntarily submit grant proposals.

National Environmental Policy Act

    The issuance of this policy and implementation guidelines does not 
constitute a major Federal action significantly affecting the quality 
of the human environment. The Service has determined that the issuance 
of the policy and guidelines is categorically excluded under the 
Department of the Interior's NEPA procedures in 516 DM 2, Appendix 1 
and 516 DM 6, Appendix 1. The Service will ensure that grants that are 
funded through LIP are in compliance with NEPA.

Government-to-Government Relationship With Tribes

    In accordance with the President's memorandum of April 29, 1994, 
``Government-to-Government Relations With Native American Tribal 
Governments'' (59 FR 22951), E.O. 13175, and the Department of the 
Interior's manual at 512 DM 2, we readily acknowledge our 
responsibility to communicate meaningfully with federally recognized 
Tribes on a government-to-government basis.
    This policy document deals only with the LIP program as it relates 
to States and Territories. Under Public Law 107-63, Title I, Tribes are 
also eligible grantees. The Service is preparing a separate policy 
document which will be applicable to the tribal component of the LIP 

Paperwork Reduction Act

    We made application to OMB for approval of the information 
collection requirements for this program in conjunction with the above 
Federal Register notice published June 7, 2002. That application seeks 
to revise the Federal Grants Application Booklet (1018-0109) to include 
additional hours for this new burden. OMB approved this request August 
12, 2002. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid OMB control number.


    This notice is published under the authority of the Department of 
the Interior and Related Agencies Appropriations Act, 2002, H.R. 2217/
Pub. L. 107-63.

    Dated: August 15, 2002.
David P. Smith,
Acting Assistant Secretary for Fish and Wildlife and Parks.
[FR Doc. 02-24859 Filed 9-30-02; 8:45 am]