Common Crop Insurance Regulations, Basic Provisions, 71749-71751 [05-23509]

Agencies

• DEPARTMENT OF AGRICULTURE
• Federal Crop Insurance Corporation

[Federal Register Volume 70, Number 229 (Wednesday, November 30, 2005)]
[Rules and Regulations]
[Pages 71749-71751]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-23509]


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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