[Federal Register: November 30, 2005 (Volume 70, Number 229)]
[Rules and Regulations]
[Page 71749-71751]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30no05-2]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
RIN 0563-AC07
Common Crop Insurance Regulations, Basic Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Interim rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) amends the
Common Crop Insurance Regulations, Basic Provisions (Basic Provisions)
to conform to the requirements of section 780 of the Agriculture, Rural
Development, Food and Drug Administration, and Related Agencies
Appropriations Act, 2006 (2006 Appropriations Act) regarding written
agreements and the use of similar agricultural commodities.
EFFECTIVE DATES: This rule is effective November 25, 2005. Written
comments and opinions on this rule will be accepted until the close of
business January 30, 2006 and will be considered when the rule is to be
made final.
ADDRESSES: Interested persons are invited to submit written comments to
the Director, Product Development Division, Risk Management Agency,
United States Department of Agriculture, 6501 Beacon Drive, Stop 0812,
Room 421, Kansas City, MO 64133-4676. Comments titled ``Basic
Provisions Interim Rule'' may be sent via the Internet to
DirectorPDD@rm.fcic.usda.gov
or the Federal eRulemaking Portal:
http://www.regulations.gov/. Follow the online instructions for submitting
comments. A copy of each response will be available for public
inspection and copying from 7 a.m. to 4:30 p.m., c.s.t., Monday through
Friday, except holidays, at the above address.
[[Page 71750]]
FOR FURTHER INFORMATION CONTACT: For further information contact Erin
Reid, Risk Management Specialist, Research and Development, Product
Development Division, Risk Management Agency, at the Kansas City, MO,
address listed above, telephone (816) 926-6321.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be nonsignificant for the purposes
of Executive Order 12866 and, therefore, it has not been reviewed by
the Office of Management and Budget (OMB).
Paperwork Reduction Act of 1995
Pursuant to the provisions of the Paperwork Reduction Act of 1995
(44 U.S.C. chapter 35), the collections of information in this rule
have been approved by OMB under control number 0563-0053 through
November 30, 2007.
Government Paperwork Elimination Act (GPEA) Compliance
FCIC is committed to compliance with the GPEA, which requires
Government agencies, in general, to provide the public with the option
of submitting information or transacting business electronically to the
maximum extent possible. FCIC requires that all reinsured companies be
in compliance with the Freedom to E-File Act and section 508 of the
Rehabilitation Act.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
establishes requirements for Federal agencies to assess the effects of
their regulatory actions on State, local, and tribal governments and
the private sector. This rule contains no Federal mandates (under the
regulatory provisions of title II of the UMRA) for State, local, and
tribal governments or the private sector. Therefore, this rule is not
subject to the requirements of sections 202 and 205 of UMRA.
Executive Order 13132
It has been determined under section 1(a) of Executive Order 13132,
Federalism, that this rule does not have sufficient implications to
warrant consultation with the States. The provisions contained in this
rule will not have a substantial direct effect on States, or on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.
Regulatory Flexibility Act
FCIC certifies that this regulation will not have a significant
economic impact on a substantial number of small entities. Written
agreement requirements for the Federal crop insurance program are the
same for all producers regardless of the size of their operations. For
instance, all producers requesting this type of written agreement must
submit actual yields for at least the most recent three crops years in
which the crop was planted during the base period. Any producer who did
not produce the crop for at least three years, for which the written
agreement is requested, must submit actual yields for a similar crop,
or a combination of actual yields for the crop and a similar crop in
the county for which the written agreement is being requested. Whether
a producer has 10 acres or 100 acres there is no difference in the kind
of information required for requesting a written agreement. To ensure
crop insurance is available to small entities, the Federal Crop
Insurance Act authorizes FCIC to waive collection of administrative
fees from limited resource farmers. FCIC believes this change helps
ensure that small entities are given the same opportunities as large
entities to manage their risks through the use of crop insurance. A
Regulatory Flexibility Analysis has not been prepared since this
regulation does not have an impact on small entities, and, therefore,
this regulation is exempt from the provisions of the Regulatory
Flexibility Act (5 U.S.C. 605).
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order 12372
This program is not subject to the provisions of Executive Order
12372, which require intergovernmental consultation with State and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order 12988
This interim rule has been reviewed in accordance with Executive
Order 12988 on civil justice reform. The provisions of this rule will
not have a retroactive effect. The provisions of this rule will preempt
State and local laws to the extent such State and local laws are
inconsistent herewith. With respect to any direct action taken by FCIC
or to require the insurance provider to take specific action under the
terms of the crop insurance policy, the administrative appeal
provisions published at 7 CFR part 11 must be exhausted before any
action against FCIC for judicial review may be brought.
Environmental Evaluation
This action is not expected to have a significant economic impact
on the quality of the human environment, health, or safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
Background
Section 508(a)(4)(B) of the Federal Crop Insurance Act (Act)
involves areas in the United States where crop insurance is not
available for a particular commodity and authorizes FCIC to offer to
enter into a written agreement with producers in such areas if the
producer has actuarially sound data relating to the production by the
producer of the commodity and the data is acceptable to FCIC. FCIC
interpreted this provision to mean producers would have to provide
verifiable records of actual yields of the crop to be insured for the
last three years the crop was grown and incorporated this requirement
into the Basic Provisions.
Section 780 of the 2006 Appropriations Act amended section
508(a)(4)(B) to allow FCIC to offer to enter into a written agreement
with producers in such areas if the producer has actuarially sound data
relating to the production by the producer of a similar commodity and
the data is acceptable to FCIC. To incorporate this change into the
policy, FCIC must revise those provisions of the Basic Provisions that
limit records of actual yields to the commodity to be insured to allow
records of yields for similar commodities to be used in underwriting
written agreements.
Specifically, FCIC is amending section 18(f)(2)(i) of the Basic
Provisions to differentiate between when the producer has records of
production for the crop to be insured under the written agreement and
when the producer has records of a similar crop or a combination of
records for a similar crop and records of the same crop that will be
insured. FCIC is adding provisions that specify that to be considered a
crop that is similar to the crop for which a written agreement is being
requested, it must fit into one of a broad grouping of crops the
producer has grown in the past (e.g. row crops, tree crops, vine crops,
bush crops, etc.) and the agronomic and risk factors must be
sufficiently similar to allow FCIC to properly determine whether there
is a risk that program integrity may be impaired by the use of the
records of the
[[Page 71751]]
other commodity (for example, could it lead to over insurance of the
crop for which a written agreement is sought) and whether an
actuarially sound premium rate can be determined that will cover the
anticipated losses and a reasonable reserve for the crop for which a
written agreement is being sought.
Good cause is shown to make this rule effective upon filing for
public inspection at the Office of the Federal Register. Good cause to
make the rule effective upon filing at the Office of the Federal
Register exists when the 30 day delay in the effective date is
impracticable, unnecessary, or contrary to the public interest. The
changes in this rule are statutorily mandated.
With respect to the provisions of this rule, it would be contrary
to the public interest to delay its implementation. Further, such
changes regarding written agreements for producers in areas of the
United States where crop insurance is not available for a particular
commodity are in the public interest. This is because the changes will
allow a producer to submit records of a crop that is similar to the
crop for which insurance is being requested, and expand the
availability of insurance for a producer who may not have previously
qualified.
If FCIC is required to delay the implementation of this rule 30
days after the date it is published, the provisions of this rule could
not be implemented until the next crop year for those crops having a
contract change date prior to the effective date of this publication.
This would mean that the affected producers would be without the
benefits described above for an additional year.
For the reasons stated above, good cause exists to make these
policy changes effective upon filing with the Office of the Federal
Register.
List of Subjects in 7 CFR Part 457
Crop insurance, Reporting and recordkeeping requirements.
Interim Rule
0
Accordingly, as set forth in the preamble, the Federal Crop Insurance
Corporation amends 7 CFR part 457 effective for the 2006 and succeeding
crop years for all crops with a contract change date on or after the
effective date of this rule and for the 2007 and succeeding crop years
for all crops with a contract change date prior to the effective date
of this rule, as follows:
PART 457--COMMON CROP INSURANCE REGULATIONS
0
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
0
2. Amend Sec. 457.8, as follows:
0
(a) Revise section 18(f)(2)(i); and
0
(b) Revise section 18(f)(2)(ii).
The revised sections read as follows:
18. Written Agreements
* * * * *
(f) * * *
* * * * *
(2) * * *
(i) A completed APH form (except for policies that do not require
APH) based on verifiable records of actual yields for:
(A) The crop and county for which the written agreement is being
requested (the actual yields do not necessarily have to be from the
same physical acreage for which you are requesting a written agreement)
for at least the most recent three crop years in which the crop was
planted during the base period; or
(B) A similar crop in the county, or a combination of actual yields
for a similar crop in the county and the crop in the county for which
the written agreement is being requested if you have not produced the
crop for which the written agreement is being requested for at least
three crop years.
(1) To be considered a similar crop to the crop for which a written
agreement is being requested, such crop must:
(i) Be included in the same category of crops, e.g., row crops
(including, but not limited to, small grains, coarse grains, and oil
seed crops), vegetable crops grown in rows, tree crops, vine crops,
bush crops, etc., as defined by FCIC;
(ii) Have substantially the same growing season (i.e., normally
planted around the same dates and harvested around the same dates);
(iii) Require comparable agronomic conditions (e.g., comparable
water, soil, etc. needs); and
(iv) Be subject to substantially the same risks (frequency and
severity of loss would be expected to be comparable from the same cause
of loss);
(2) The actual yields for the similar crop do not necessarily have
to be from the same physical acreage for which you are requesting a
written agreement;
(ii) Acceptable production records for at least the most recent
three crop years in which the crop or a similar crop was planted;
* * * * *
Signed in Washington, DC, on November 22, 2005.
Eldon Gould,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 05-23509 Filed 11-25-05; 4:21 pm]
BILLING CODE 3410-08-P