Common Crop Insurance Regulations; Macadamia Tree Crop Insurance Provisions and Macadamia Nut Crop Insurance Provisions, 44719-44722 [2014-17997]

Download as PDF 44719 Proposed Rules Federal Register Vol. 79, No. 148 Friday, August 1, 2014 This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules. DEPARTMENT OF AGRICULTURE Federal Crop Insurance Corporation 7 CFR Part 457 [Docket No. FCIC–14–0004] RIN 0563–AC44 Common Crop Insurance Regulations; Macadamia Tree Crop Insurance Provisions and Macadamia Nut Crop Insurance Provisions Federal Crop Insurance Corporation, USDA. ACTION: Proposed rule. AGENCY: The Federal Crop Insurance Corporation (FCIC) proposes to amend the Common Crop Insurance Regulations, Macadamia Tree Crop Insurance Provisions and the Macadamia Nut Crop Insurance Provisions to remove the provision requiring an optional unit to contain at least 80 acres. The intended effect of this action is to provide policy changes and to better meet the needs of the producers. The changes will apply for the 2016 and succeeding crop years for macadamia trees and the 2017 and succeeding crop years for macadamia nuts. SUMMARY: Written comments and opinions on this proposed rule will be accepted until close of business September 30, 2014 and will be considered when the rule is to be made final. ADDRESSES: FCIC prefers that comments be submitted electronically through the Federal eRulemaking Portal. You may submit comments, identified by Docket ID No. FCIC–14–0004 by any of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. • Mail: Director, Product Administration and Standards Division, Risk Management Agency, United States Department of Agriculture, P.O. Box 419205, Kansas City, MO 64133–6205. All comments received, including those emcdonald on DSK67QTVN1PROD with PROPOSALS DATES: VerDate Mar<15>2010 18:40 Jul 31, 2014 Jkt 232001 received by mail, will be posted without change to http://www.regulations.gov, including any personal information provided, and can be accessed by the public. All comments must include the agency name and docket number or Regulatory Information Number (RIN) for this rule. For detailed instructions on submitting comments and additional information, see http://www.regulations.gov. If you are submitting comments electronically through the Federal eRulemaking Portal and want to attach a document, we ask that it be in a text-based format. If you want to attach a document that is a scanned Adobe PDF file, it must be scanned as text and not as an image, thus allowing FCIC to search and copy certain portions of your submissions. For questions regarding attaching a document that is a scanned Adobe PDF file, please contact the RMA Web Content Team at (816) 823–4694 or by email at rmaweb.content@rma.usda.gov. Privacy Act: Anyone is able to search the electronic form of all comments received for any dockets by the name of the person submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review the complete User Notice and Privacy Notice for Regulations.gov at http:// www.regulations.gov/#!privacyNotice. Tim Hoffmann, Director, Product Administration and Standards Division, Risk Management Agency, United States Department of Agriculture, Beacon Facility, Stop 0812, Room 421, P.O. Box 419205, Kansas City, MO 64141–6205, telephone (816) 926–7730. FOR FURTHER INFORMATION CONTACT: SUPPLEMENTARY INFORMATION: Executive Order 12866 The Office of Management and Budget (OMB) has determined that this rule is not-significant for the purpose of Executive Order 12866 and, therefore, it has not been reviewed by 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. PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 E-Government Act Compliance FCIC is committed to complying with the E-Government Act of 2002, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. 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. Executive Order 13175 This rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination With Indian Tribal Governments. The review reveals that this regulation will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications. Regulatory Flexibility Act FCIC certifies that this regulation will not have a significant economic impact on a substantial number of small entities. Program requirements for the Federal crop insurance program are the same for all producers regardless of the size of their farming operation. For instance, all producers are required to submit an application and acreage report to establish their insurance E:\FR\FM\01AUP1.SGM 01AUP1 44720 Federal Register / Vol. 79, No. 148 / Friday, August 1, 2014 / Proposed Rules guarantees and compute premium amounts, and all producers are required to submit a notice of loss and production information to determine the amount of an indemnity payment in the event of an insured cause of crop loss. Whether a producer has 10 acres or 1000 acres, there is no difference in the kind of information collected. 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 waiver helps to 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. emcdonald on DSK67QTVN1PROD with PROPOSALS Executive Order 12988 This proposed 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 action by FCIC 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 FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR part VerDate Mar<15>2010 18:40 Jul 31, 2014 Jkt 232001 457) by revising § 457.130 Macadamia Tree Crop Insurance Provisions and § 457.131 Macadamia Nut Crop Insurance Provisions to be effective for the 2016 and succeeding crop years for macadamia trees and the 2017 and succeeding crop years for macadamia nuts. The proposed changes to § 457.130 are as follows: 1. Section 1—FCIC proposes to add a definition of ‘‘damaged.’’ The terms ‘‘damaged’’ and ‘‘destroyed’’ are used throughout the Crop Provisions. The term ‘‘damaged’’ is not defined, but the term ‘‘destroyed’’ is. FCIC is proposing to add a definition of ‘‘damaged’’ to clarify that there is a distinction between ‘‘damaged’’ and ‘‘destroyed.’’ FCIC’s proposed definition of ‘‘damaged’’ is injury to the main trunk, scaffold limb(s), and any other subordinate limbs that reduces the productivity of the tree due to an insured cause of loss occurring during the insurance period. FCIC also proposes to add a definition of ‘‘scaffold limb’’ since it is used in the proposed definition of ‘‘damaged.’’ It is given the same meaning as the term in other tree crop policies for consistency. 2. Section 2—FCIC proposes to revise section 2 by removing paragraph (a) which states sections 34(b)(1), (3) and (4) of the Basic Provisions are not applicable. These sections of the Basic Provisions state that the crop must be planted in a manner such that there is a clear and discernible break between optional units, the insured must have records for at least the previous crop year for each optional unit, and the insured must have records of marketed or stored production from each optional unit maintained in such a manner that permits the insurance provider to verify the production from each optional unit. Under the current policy, insureds who utilize optional units can manipulate their unit boundaries to maximize indemnities because there is no current requirement for discernible breaks between units. By removing paragraph (a), sections 34(b)(1), (3) and (4) of the Basic Provisions become applicable and, therefore, minimize program abuse as it relates to unit division. FCIC also proposes to revise section 2 by removing the provision that requires an optional unit to contain at least 80 acres. Most macadamia tree orchards contain less than 80 acres so very few insureds are eligible for this provision. Removing this provision provides an equitable opportunity for insureds who farm large operations and those who farm small operations to qualify for optional units. The changes made above PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 will mitigate any potential abuse from this change. 3. Section 10—FCIC proposes to revise section 10 to include information regarding destroyed trees and allowing for the insurance provider to conduct an inspection before the insured removes any destroyed trees. The current provisions require insureds, if they intend to claim an indemnity on any unit, to allow the insurance provider to inspect all insured acreage before pruning or removing any damaged trees. However, the provisions are silent on regarding the removal of damaged trees. In order to conduct a proper appraisal, the insurance provider must identify damaged and destroyed trees before they are removed. Therefore, the insured must allow the insurance provider to conduct an inspection before the insured removes any damaged or destroyed trees. 4. Section 11—FCIC proposes to revise paragraph (c)(1). The current provisions specify that any orchard with over 80 percent actual damage due to an insured cause of loss will be considered to be 100 percent damaged. The proposed provisions are revised to clarify that over 80 percent of trees damaged and trees destroyed due to an insured cause of loss will be considered to be 100 percent damaged. FCIC also proposes to add a settlement of claim example in section 11. The proposed changes to § 457.131 are as follows: 1. Section 1—FCIC proposes to add definitions of ‘‘floaters’’ and ‘‘peewees’’ since they are proposed to be incorporated into the definition of ‘‘wet in-shell.’’ These terms are commonly used in the macadamia nut and tree industry. FCIC’s proposed definition of ‘‘floaters’’ is inedible, husked ‘‘field run’’ nuts identified by water floatation. FCIC’s proposed definition of ‘‘peewees’’ is mature and immature wet in-shell nuts that are smaller than 16mm (5⁄8 inch) in diameter. FCIC proposes to revise the definition of ‘‘wet in-shell’’ to incorporate a statement contained in the Special Provisions, which states wet in-shell excludes immature and unsound nuts (floaters and peewees). By incorporating this information into the Crop Provisions, FCIC can eliminate the Special Provisions statement. 2. Section 2—FCIC proposes to revise section 2 by removing paragraph (a) which states section 34(b)(1) of the Basic Provisions is not applicable. This section of the Basic Provisions states that the crop must be planted in a manner such that there is a clear and discernible break between optional units. Under the current provisions, E:\FR\FM\01AUP1.SGM 01AUP1 Federal Register / Vol. 79, No. 148 / Friday, August 1, 2014 / Proposed Rules insureds who utilize optional units can manipulate their unit boundaries to maximize indemnities because there is no current requirement for discernible breaks between units. By removing paragraph (a), section 34(b)(1) of the Basic Provisions becomes applicable, and, therefore, minimizes program abuse as it relates to unit division. FCIC also proposes to revise section 2 by removing the provision that requires an optional unit to contain at least 80 acres. Most macadamia nut orchards contain less than 80 acres so, very few insureds are eligible for this provision. Removing this provision provides an equitable opportunity for insureds who farm large operations and those who farm small operations to qualify for optional units. These changes are consistent with the changes that are proposed to the Macadamia Tree Crop Insurance Provisions. The changes made above will mitigate any potential abuse from this change. 3. Section 3—FCIC proposes to revise the paragraph (d) to update the crop years used in the example. 4. Section 8—FCIC proposes to revise paragraph (a)(2) to allow the calendar date for the end of the insurance period to be changed by the Special Provisions. This will provide flexibility to update this date if the need arises. 5. Section 11—FCIC proposes to add a settlement of claim example. List of Subjects in 7 CFR Part 457 Crop insurance, Macadamia tree and Macadamia nut, Reporting and recordkeeping requirements. Proposed Rule Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation proposes to amend 7 CFR part 457 effective for the 2016 and succeeding crop years for macadamia trees and for the 2017 and succeeding crop years for macadamia nuts to read as follows: PART 457—COMMON CROP INSURANCE REGULATIONS 1. The authority citation for 7 CFR part 457 continues to read as follows: ■ emcdonald on DSK67QTVN1PROD with PROPOSALS Authority: 7 U.S.C. 1506(1), 1506(o). 2. Amend § 457.130 as follows: a. Amend the introductory text by removing ‘‘2011’’ and adding ‘‘2016’’ in its place; ■ b. Amend section 1 by adding in alphabetical order definitions of ‘‘damaged’’ and ‘‘scaffold limb’’; ■ c. Revise section 2; ■ d. Amend section 3 by removing the phrase ‘‘(Insurance Guarantees, Coverage Levels, and Prices for ■ ■ VerDate Mar<15>2010 18:40 Jul 31, 2014 Jkt 232001 Determining Indemnities)’’ in paragraphs (a) introductory text and (b); ■ e. Amend section 4 by removing the phrase ‘‘(Contract Changes)’’; ■ f. Amend section 5 by removing the phrase ‘‘(Life of Policy, Cancellation, and Termination)’’; ■ g. Amend section 6 introductory text by removing the phrase ‘‘(Insured Crop)’’; ■ h. Amend section 7 by removing the phrase ‘‘(Insurable Acreage)’’; ■ i. Amend section 8 by removing the phrase ‘‘(Insurance Period)’’ paragraphs (a) introductory text and (b) introductory text; ■ j. Amend section 9 by removing the phrase ‘‘(Causes of Loss)’’ in paragraphs (a) introductory text and (b) introductory text; ■ k. Revise section 10; and ■ l. In section 11, revise paragraphs (b)(4), (c) introductory text, and (c)(1). The revisions read as follows: § 457.130 Macadamia tree crop insurance provisions. * * * * * 1. Definitions * * * * * Damaged. Injury to the main trunk, scaffold limb(s), and any other subordinate limbs that reduces the productivity of the macadamia tree due to an insured cause of loss that occurs during the insurance period. * * * * * Scaffold limb. A major limb attached directly to the trunk. 2. Unit Division (a) Provisions in the Basic Provisions that allow optional units by section, section equivalent, or FSA farm serial number and by irrigated and nonirrigated practices are not applicable. Optional units may be established only if each optional unit is located on noncontiguous land, unless otherwise allowed by written agreement. (b) You must have provided records, which can be independently verified, of acreage and age of trees for each unit for at least the last crop year. * * * * * 10. Duties in the Event of Damage or Loss In addition to the requirements of section 14 of the Basic Provisions, in case of damage or probable loss, if you intend to claim an indemnity on any unit, you must allow us to inspect all insured acreage before pruning any damaged trees, removing any damaged trees, or removing any destroyed trees. 11. Settlement of Claim * PO 00000 * Frm 00003 * * Fmt 4702 * Sfmt 4702 44721 (b) * * * * * * * (4) Multiply the result in section 11(b)(3) by your share. For example: You select 65 percent coverage level and 100 percent of the price election on 10 acres of 9-year-old macadamia trees in the unit. Your share is 100 percent. The amount of insurance per acre is $5,850. There are 90 trees per unit. Thirty five trees are destroyed. Your indemnity would be calculated as follows: (1) 10 acres × $5,850 = $58,500; (3)(i) 100 percent¥65 percent = 35 percent deductible; (ii) 35 destroyed trees ÷ 90 total unit trees = 38.9 percent loss; 38.9 percent loss¥35 percent deductible = 3.9 percent; (iii) 3.9 percent ÷ 65 percent coverage level = 6.0 percent loss; and $58,500 total amount of insurance × 6.0 percent loss = $3,510 loss; and (4) $3,510 loss × 100 percent share = $3,510 indemnity payment. (c) The total amount of loss will include both damaged trees and destroyed trees as follows: (1) Any orchard with over 80 percent of the actual trees damaged or destroyed due to an insured cause of loss will be considered to be 100 percent damaged; and * * * * * ■ 3. Amend § 457.131 as follows: ■ a. Amend the introductory text by removing ‘‘2012’’ and adding ‘‘2017’’ in its place; ■ b. In section 1: ■ i. By adding definitions of in alphabetical order ‘‘floaters’’ and ‘‘peewees’’; and ■ ii. By revising the definition of ‘‘wet in-shell’’; ■ c. Revise section 2; ■ d. In section 3: ■ i. By removing the phrase ‘‘(Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities)’’ in the introductory text and paragraph (b) introductory text; ■ ii. In paragraph (b)(4) introductory text by removing the word ‘‘anytime’’ and replacing it with the phrase ‘‘any time’’; and ■ iii. By revising paragraph (d); ■ e. Amend section 4 by removing the phrase ‘‘(Contract Changes)’’; ■ f. Amend section 5 by removing the phrase ‘‘(Life of Policy, Cancellation, and Termination)’’; ■ g. In section 6: ■ i. By removing the phrase ‘‘(Insured Crop)’’ in the introductory text; and ■ ii. In paragraph (d) by removing the phrase ‘‘agree in writing’’ and adding in * E:\FR\FM\01AUP1.SGM 01AUP1 44722 Federal Register / Vol. 79, No. 148 / Friday, August 1, 2014 / Proposed Rules its place the phrase ‘‘give our approval in writing’’; and ■ iii. In paragraph (d) by removing the phrase ‘‘wet, in-shell’’ and adding in its place the phrase ‘‘wet in-shell’’; ■ h. In section 7: ■ i. By removing the phrase ‘‘(Insurable Acreage)’’; and ■ ii. By removing the comma after the phrase ‘‘Basic Provisions (§ 457.8)’’; ■ i. In section 8: ■ i. By removing the phrase ‘‘(Insurance Period)’’ in paragraphs (a) introductory text and (b) introductory text; and ■ ii. By revising paragraph (a)(2); ■ j. Amend section 9 by removing the phrase ‘‘(Causes of Loss)’’ in paragraphs (a) introductory text and (b) introductory text; ■ k. Amend section 10 introductory text by removing the phrase ‘‘(Duties in the Event of Damage or Loss)’’; ■ l. In section 11: ■ i. In paragraph (b)(4) by removing the phrase ‘‘if applicable, (see section 11(c))’’ and adding in its place the phrase ‘‘if applicable (see section 11(c)),’’; ■ ii. Adding a settlement of claim example after paragraph (b)(7); and ■ iii. In paragraph (c) by removing the phrase ‘‘(wet, in-shell pounds)’’ and adding in its place the phrase ‘‘(we inshell pounds)’’. The revisions and additions read as follows: § 457.131 Macadamia nut crop insurance provisions. * * * * * 1. Definitions * * * * * Floaters. Inedible, husked ‘‘field run’’ nuts identified by water floatation. * * * * * Peewees. Mature and immature wet in-shell nuts that are smaller than 16 mm (5/8 inch) in diameter, or as otherwise specified in the Special Provisions. * * * * * Wet in-shell. The weight of the macadamia nuts as they are removed from the orchard with the nut meats in the shells after removal of the husk and excluding floaters and peewees but prior to being dried. emcdonald on DSK67QTVN1PROD with PROPOSALS 2. Unit Division Provisions in the Basic Provisions that allow optional units by section, section equivalent, or FSA farm serial number and by irrigated and non-irrigated practices are not applicable. Optional units may be established only if each optional unit is located on noncontiguous land, unless otherwise allowed by written agreement. VerDate Mar<15>2010 18:40 Jul 31, 2014 Jkt 232001 3. Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities DEPARTMENT OF TRANSPORTATION * 14 CFR Part 39 * * * * (d) Instead of reporting your macadamia nut production for the previous crop year, as required by section 3 of the Basic Provisions, there is a one-year lag period. Each crop year you must report your production from two crop years ago, e.g., on the 2016 crop year production report, you will provide your 2014 crop year production. * * * * * 8. Insurance Period (a) * * * (2) The calendar date for the end of the insurance period for each crop year is the second June 30th after insurance attaches, or as specified in the Special Provisions. * * * * * 11. Settlement of Claim * * * * * (b) * * * (7) * * * For example: You select 65 percent coverage level and 100 percent of the price election on 10 acres of macadamia nuts in the unit. Your share is 100 percent. Your production guarantee (per acre) is 4,000 pounds. The price election is $0.78. You are able to harvest 25,000 pounds. Your indemnity would be calculated as follows: (1) 10 acres × 4,000 pounds = 40,000 pounds guarantee; (2) 40,000 pounds × $0.78 price election = $31,200 total value of guarantee; (4) 25,000 pounds production to count × $0.78 price election = $19,500 value of production to count; (6) $31,200 total value of guarantee ¥ $19,500 value of production to count = $11,700 loss; and (7) $11,700 loss × 100 percent share = $11,700 indemnity payment. * * * * * Signed in Washington, DC, on July 23, 2014. Brandon Willis, Manager, Federal Crop Insurance Corporation. [FR Doc. 2014–17997 Filed 7–31–14; 8:45 am] BILLING CODE 3410–08–P PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 Federal Aviation Administration [Docket No. FAA–2014–0516; Directorate Identifier 2014–CE–021–AD] RIN 2120–AA64 Airworthiness Directives; Pacific Aerospace Limited Airplanes Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). AGENCY: We propose to adopt a new airworthiness directive (AD) for all Pacific Aerospace Limited Model 750XL airplanes that would supersede AD 2014–04–03. This proposed AD results from mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as broken control column attachment bolts failing in service. We are issuing this proposed AD to require actions to address the unsafe condition on these products. DATES: We must receive comments on this proposed AD by September 15, 2014. SUMMARY: You may send comments by any of the following methods: • Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments. • Fax: (202) 493–2251. • Mail: U.S. Department of Transportation, Docket Operations, M– 30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590. • Hand Delivery: U.S. Department of Transportation, Docket Operations, M– 30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. For service information identified in this proposed AD, contact Pacific Aerospace Limited, Hamilton Airport, Private Bag 3027 Hamilton 3240, New Zealand; telephone: +64 7 843 6144; fax: +64 7 843 6134; email: pacific@ aerospace.co.nz; Internet: http:// www.aerospace.co.nz/. You may review copies of the referenced service information at the FAA, Small Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For information on the ADDRESSES: E:\FR\FM\01AUP1.SGM 01AUP1

Agencies

[Federal Register Volume 79, Number 148 (Friday, August 1, 2014)]
[Proposed Rules]
[Pages 44719-44722]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-17997]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 79, No. 148 / Friday, August 1, 2014 / 
Proposed Rules

[[Page 44719]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket No. FCIC-14-0004]
RIN 0563-AC44


Common Crop Insurance Regulations; Macadamia Tree Crop Insurance 
Provisions and Macadamia Nut Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to 
amend the Common Crop Insurance Regulations, Macadamia Tree Crop 
Insurance Provisions and the Macadamia Nut Crop Insurance Provisions to 
remove the provision requiring an optional unit to contain at least 80 
acres. The intended effect of this action is to provide policy changes 
and to better meet the needs of the producers. The changes will apply 
for the 2016 and succeeding crop years for macadamia trees and the 2017 
and succeeding crop years for macadamia nuts.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business September 30, 2014 and will be 
considered when the rule is to be made final.

ADDRESSES: FCIC prefers that comments be submitted electronically 
through the Federal eRulemaking Portal. You may submit comments, 
identified by Docket ID No. FCIC-14-0004 by any of the following 
methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Director, Product Administration and Standards 
Division, Risk Management Agency, United States Department of 
Agriculture, P.O. Box 419205, Kansas City, MO 64133-6205. All comments 
received, including those received by mail, will be posted without 
change to http://www.regulations.gov, including any personal 
information provided, and can be accessed by the public.

All comments must include the agency name and docket number or 
Regulatory Information Number (RIN) for this rule. For detailed 
instructions on submitting comments and additional information, see 
http://www.regulations.gov. If you are submitting comments 
electronically through the Federal eRulemaking Portal and want to 
attach a document, we ask that it be in a text-based format. If you 
want to attach a document that is a scanned Adobe PDF file, it must be 
scanned as text and not as an image, thus allowing FCIC to search and 
copy certain portions of your submissions. For questions regarding 
attaching a document that is a scanned Adobe PDF file, please contact 
the RMA Web Content Team at (816) 823-4694 or by email at 
rmaweb.content@rma.usda.gov.
    Privacy Act: Anyone is able to search the electronic form of all 
comments received for any dockets by the name of the person submitting 
the comment (or signing the comment, if submitted on behalf of an 
association, business, labor union, etc.). You may review the complete 
User Notice and Privacy Notice for Regulations.gov at http://www.regulations.gov/#!privacyNotice.

FOR FURTHER INFORMATION CONTACT: Tim Hoffmann, Director, Product 
Administration and Standards Division, Risk Management Agency, United 
States Department of Agriculture, Beacon Facility, Stop 0812, Room 421, 
P.O. Box 419205, Kansas City, MO 64141-6205, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
rule is not-significant for the purpose of Executive Order 12866 and, 
therefore, it has not been reviewed by 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.

E-Government Act Compliance

    FCIC is committed to complying with the E-Government Act of 2002, 
to promote the use of the Internet and other information technologies 
to provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

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.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments. The review reveals that this regulation will not have 
substantial and direct effects on Tribal governments and will not have 
significant Tribal implications.

Regulatory Flexibility Act

    FCIC certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities. Program 
requirements for the Federal crop insurance program are the same for 
all producers regardless of the size of their farming operation. For 
instance, all producers are required to submit an application and 
acreage report to establish their insurance

[[Page 44720]]

guarantees and compute premium amounts, and all producers are required 
to submit a notice of loss and production information to determine the 
amount of an indemnity payment in the event of an insured cause of crop 
loss. Whether a producer has 10 acres or 1000 acres, there is no 
difference in the kind of information collected. 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 waiver helps to 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 proposed 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 action by FCIC 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

    FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR 
part 457) by revising Sec.  457.130 Macadamia Tree Crop Insurance 
Provisions and Sec.  457.131 Macadamia Nut Crop Insurance Provisions to 
be effective for the 2016 and succeeding crop years for macadamia trees 
and the 2017 and succeeding crop years for macadamia nuts.
    The proposed changes to Sec.  457.130 are as follows:
    1. Section 1--FCIC proposes to add a definition of ``damaged.'' The 
terms ``damaged'' and ``destroyed'' are used throughout the Crop 
Provisions. The term ``damaged'' is not defined, but the term 
``destroyed'' is. FCIC is proposing to add a definition of ``damaged'' 
to clarify that there is a distinction between ``damaged'' and 
``destroyed.'' FCIC's proposed definition of ``damaged'' is injury to 
the main trunk, scaffold limb(s), and any other subordinate limbs that 
reduces the productivity of the tree due to an insured cause of loss 
occurring during the insurance period.
    FCIC also proposes to add a definition of ``scaffold limb'' since 
it is used in the proposed definition of ``damaged.'' It is given the 
same meaning as the term in other tree crop policies for consistency.
    2. Section 2--FCIC proposes to revise section 2 by removing 
paragraph (a) which states sections 34(b)(1), (3) and (4) of the Basic 
Provisions are not applicable. These sections of the Basic Provisions 
state that the crop must be planted in a manner such that there is a 
clear and discernible break between optional units, the insured must 
have records for at least the previous crop year for each optional 
unit, and the insured must have records of marketed or stored 
production from each optional unit maintained in such a manner that 
permits the insurance provider to verify the production from each 
optional unit. Under the current policy, insureds who utilize optional 
units can manipulate their unit boundaries to maximize indemnities 
because there is no current requirement for discernible breaks between 
units. By removing paragraph (a), sections 34(b)(1), (3) and (4) of the 
Basic Provisions become applicable and, therefore, minimize program 
abuse as it relates to unit division.
    FCIC also proposes to revise section 2 by removing the provision 
that requires an optional unit to contain at least 80 acres. Most 
macadamia tree orchards contain less than 80 acres so very few insureds 
are eligible for this provision. Removing this provision provides an 
equitable opportunity for insureds who farm large operations and those 
who farm small operations to qualify for optional units. The changes 
made above will mitigate any potential abuse from this change.
    3. Section 10--FCIC proposes to revise section 10 to include 
information regarding destroyed trees and allowing for the insurance 
provider to conduct an inspection before the insured removes any 
destroyed trees. The current provisions require insureds, if they 
intend to claim an indemnity on any unit, to allow the insurance 
provider to inspect all insured acreage before pruning or removing any 
damaged trees. However, the provisions are silent on regarding the 
removal of damaged trees. In order to conduct a proper appraisal, the 
insurance provider must identify damaged and destroyed trees before 
they are removed. Therefore, the insured must allow the insurance 
provider to conduct an inspection before the insured removes any 
damaged or destroyed trees.
    4. Section 11--FCIC proposes to revise paragraph (c)(1). The 
current provisions specify that any orchard with over 80 percent actual 
damage due to an insured cause of loss will be considered to be 100 
percent damaged. The proposed provisions are revised to clarify that 
over 80 percent of trees damaged and trees destroyed due to an insured 
cause of loss will be considered to be 100 percent damaged. FCIC also 
proposes to add a settlement of claim example in section 11.
    The proposed changes to Sec.  457.131 are as follows:
    1. Section 1--FCIC proposes to add definitions of ``floaters'' and 
``peewees'' since they are proposed to be incorporated into the 
definition of ``wet in-shell.'' These terms are commonly used in the 
macadamia nut and tree industry. FCIC's proposed definition of 
``floaters'' is inedible, husked ``field run'' nuts identified by water 
floatation. FCIC's proposed definition of ``peewees'' is mature and 
immature wet in-shell nuts that are smaller than 16mm (\5/8\ inch) in 
diameter.
    FCIC proposes to revise the definition of ``wet in-shell'' to 
incorporate a statement contained in the Special Provisions, which 
states wet in-shell excludes immature and unsound nuts (floaters and 
peewees). By incorporating this information into the Crop Provisions, 
FCIC can eliminate the Special Provisions statement.
    2. Section 2--FCIC proposes to revise section 2 by removing 
paragraph (a) which states section 34(b)(1) of the Basic Provisions is 
not applicable. This section of the Basic Provisions states that the 
crop must be planted in a manner such that there is a clear and 
discernible break between optional units. Under the current provisions,

[[Page 44721]]

insureds who utilize optional units can manipulate their unit 
boundaries to maximize indemnities because there is no current 
requirement for discernible breaks between units. By removing paragraph 
(a), section 34(b)(1) of the Basic Provisions becomes applicable, and, 
therefore, minimizes program abuse as it relates to unit division.
    FCIC also proposes to revise section 2 by removing the provision 
that requires an optional unit to contain at least 80 acres. Most 
macadamia nut orchards contain less than 80 acres so, very few insureds 
are eligible for this provision. Removing this provision provides an 
equitable opportunity for insureds who farm large operations and those 
who farm small operations to qualify for optional units. These changes 
are consistent with the changes that are proposed to the Macadamia Tree 
Crop Insurance Provisions. The changes made above will mitigate any 
potential abuse from this change.
    3. Section 3--FCIC proposes to revise the paragraph (d) to update 
the crop years used in the example.
    4. Section 8--FCIC proposes to revise paragraph (a)(2) to allow the 
calendar date for the end of the insurance period to be changed by the 
Special Provisions. This will provide flexibility to update this date 
if the need arises.
    5. Section 11--FCIC proposes to add a settlement of claim example.

List of Subjects in 7 CFR Part 457

    Crop insurance, Macadamia tree and Macadamia nut, Reporting and 
recordkeeping requirements.

Proposed Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation proposes to amend 7 CFR part 457 effective for 
the 2016 and succeeding crop years for macadamia trees and for the 2017 
and succeeding crop years for macadamia nuts to read 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(1), 1506(o).

0
2. Amend Sec.  457.130 as follows:
0
a. Amend the introductory text by removing ``2011'' and adding ``2016'' 
in its place;
0
b. Amend section 1 by adding in alphabetical order definitions of 
``damaged'' and ``scaffold limb'';
0
c. Revise section 2;
0
d. Amend section 3 by removing the phrase ``(Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities)'' in 
paragraphs (a) introductory text and (b);
0
e. Amend section 4 by removing the phrase ``(Contract Changes)'';
0
f. Amend section 5 by removing the phrase ``(Life of Policy, 
Cancellation, and Termination)'';
0
g. Amend section 6 introductory text by removing the phrase ``(Insured 
Crop)'';
0
h. Amend section 7 by removing the phrase ``(Insurable Acreage)'';
0
i. Amend section 8 by removing the phrase ``(Insurance Period)'' 
paragraphs (a) introductory text and (b) introductory text;
0
j. Amend section 9 by removing the phrase ``(Causes of Loss)'' in 
paragraphs (a) introductory text and (b) introductory text;
0
k. Revise section 10; and
0
l. In section 11, revise paragraphs (b)(4), (c) introductory text, and 
(c)(1).
    The revisions read as follows:


Sec.  457.130  Macadamia tree crop insurance provisions.

* * * * *
1. Definitions
* * * * *
    Damaged. Injury to the main trunk, scaffold limb(s), and any other 
subordinate limbs that reduces the productivity of the macadamia tree 
due to an insured cause of loss that occurs during the insurance 
period.
* * * * *
    Scaffold limb. A major limb attached directly to the trunk.
2. Unit Division
    (a) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.
    (b) You must have provided records, which can be independently 
verified, of acreage and age of trees for each unit for at least the 
last crop year.
* * * * *
10. Duties in the Event of Damage or Loss
    In addition to the requirements of section 14 of the Basic 
Provisions, in case of damage or probable loss, if you intend to claim 
an indemnity on any unit, you must allow us to inspect all insured 
acreage before pruning any damaged trees, removing any damaged trees, 
or removing any destroyed trees.
11. Settlement of Claim
* * * * *
    (b) * * *
* * * * *
    (4) Multiply the result in section 11(b)(3) by your share.
    For example:
    You select 65 percent coverage level and 100 percent of the price 
election on 10 acres of 9-year-old macadamia trees in the unit. Your 
share is 100 percent. The amount of insurance per acre is $5,850. There 
are 90 trees per unit. Thirty five trees are destroyed. Your indemnity 
would be calculated as follows:
    (1) 10 acres x $5,850 = $58,500;
    (3)(i) 100 percent-65 percent = 35 percent deductible;
    (ii) 35 destroyed trees / 90 total unit trees = 38.9 percent loss; 
38.9 percent loss-35 percent deductible = 3.9 percent;
    (iii) 3.9 percent / 65 percent coverage level = 6.0 percent loss; 
and $58,500 total amount of insurance x 6.0 percent loss = $3,510 loss; 
and
    (4) $3,510 loss x 100 percent share = $3,510 indemnity payment.
    (c) The total amount of loss will include both damaged trees and 
destroyed trees as follows:
    (1) Any orchard with over 80 percent of the actual trees damaged or 
destroyed due to an insured cause of loss will be considered to be 100 
percent damaged; and
* * * * *
0
3. Amend Sec.  457.131 as follows:
0
a. Amend the introductory text by removing ``2012'' and adding ``2017'' 
in its place;
0
b. In section 1:
0
i. By adding definitions of in alphabetical order ``floaters'' and 
``peewees''; and
0
ii. By revising the definition of ``wet in-shell'';
0
c. Revise section 2;
0
d. In section 3:
0
i. By removing the phrase ``(Insurance Guarantees, Coverage Levels, and 
Prices for Determining Indemnities)'' in the introductory text and 
paragraph (b) introductory text;
0
ii. In paragraph (b)(4) introductory text by removing the word 
``anytime'' and replacing it with the phrase ``any time''; and
0
iii. By revising paragraph (d);
0
e. Amend section 4 by removing the phrase ``(Contract Changes)'';
0
f. Amend section 5 by removing the phrase ``(Life of Policy, 
Cancellation, and Termination)'';
0
g. In section 6:
0
i. By removing the phrase ``(Insured Crop)'' in the introductory text; 
and
0
ii. In paragraph (d) by removing the phrase ``agree in writing'' and 
adding in

[[Page 44722]]

its place the phrase ``give our approval in writing''; and
0
iii. In paragraph (d) by removing the phrase ``wet, in-shell'' and 
adding in its place the phrase ``wet in-shell'';
0
h. In section 7:
0
i. By removing the phrase ``(Insurable Acreage)''; and
0
ii. By removing the comma after the phrase ``Basic Provisions (Sec.  
457.8)'';
0
i. In section 8:
0
i. By removing the phrase ``(Insurance Period)'' in paragraphs (a) 
introductory text and (b) introductory text; and
0
ii. By revising paragraph (a)(2);
0
j. Amend section 9 by removing the phrase ``(Causes of Loss)'' in 
paragraphs (a) introductory text and (b) introductory text;
0
k. Amend section 10 introductory text by removing the phrase ``(Duties 
in the Event of Damage or Loss)'';
0
l. In section 11:
0
i. In paragraph (b)(4) by removing the phrase ``if applicable, (see 
section 11(c))'' and adding in its place the phrase ``if applicable 
(see section 11(c)),'';
0
ii. Adding a settlement of claim example after paragraph (b)(7); and
0
iii. In paragraph (c) by removing the phrase ``(wet, in-shell pounds)'' 
and adding in its place the phrase ``(we in-shell pounds)''.
    The revisions and additions read as follows:


Sec.  457.131  Macadamia nut crop insurance provisions.

* * * * *
1. Definitions
* * * * *
    Floaters. Inedible, husked ``field run'' nuts identified by water 
floatation.
* * * * *
    Peewees. Mature and immature wet in-shell nuts that are smaller 
than 16 mm (5/8 inch) in diameter, or as otherwise specified in the 
Special Provisions.
* * * * *
    Wet in-shell. The weight of the macadamia nuts as they are removed 
from the orchard with the nut meats in the shells after removal of the 
husk and excluding floaters and peewees but prior to being dried.
2. Unit Division
    Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities
* * * * *
    (d) Instead of reporting your macadamia nut production for the 
previous crop year, as required by section 3 of the Basic Provisions, 
there is a one-year lag period. Each crop year you must report your 
production from two crop years ago, e.g., on the 2016 crop year 
production report, you will provide your 2014 crop year production.
* * * * *
8. Insurance Period
    (a) * * *
    (2) The calendar date for the end of the insurance period for each 
crop year is the second June 30th after insurance attaches, or as 
specified in the Special Provisions.
* * * * *
11. Settlement of Claim
* * * * *
    (b) * * *
    (7) * * *
    For example:
    You select 65 percent coverage level and 100 percent of the price 
election on 10 acres of macadamia nuts in the unit. Your share is 100 
percent. Your production guarantee (per acre) is 4,000 pounds. The 
price election is $0.78. You are able to harvest 25,000 pounds. Your 
indemnity would be calculated as follows:
    (1) 10 acres x 4,000 pounds = 40,000 pounds guarantee;
    (2) 40,000 pounds x $0.78 price election = $31,200 total value of 
guarantee;
    (4) 25,000 pounds production to count x $0.78 price election = 
$19,500 value of production to count;
    (6) $31,200 total value of guarantee - $19,500 value of production 
to count = $11,700 loss; and
    (7) $11,700 loss x 100 percent share = $11,700 indemnity payment.
* * * * *

    Signed in Washington, DC, on July 23, 2014.
Brandon Willis,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2014-17997 Filed 7-31-14; 8:45 am]
BILLING CODE 3410-08-P