(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...