Seed Cotton Changes to Agriculture Risk Coverage (ARC), Price Loss Coverage (PLC) Programs, 40653-40659 [2018-17681]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation

[Federal Register Volume 83, Number 159 (Thursday, August 16, 2018)]
[Rules and Regulations]
[Pages 40653-40659]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17681]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 83, No. 159 / Thursday, August 16, 2018 / 
Rules and Regulations

[[Page 40653]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1412

RIN 0560-AI40


Seed Cotton Changes to Agriculture Risk Coverage (ARC), Price 
Loss Coverage (PLC) Programs

AGENCY: Farm Service Agency and Commodity Credit Corporation, USDA.

ACTION: Final rule.

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

SUMMARY: This rule revises the eligibility requirements, enrollment 
procedures, and payment calculation for ARC and PLC required to conform 
with the Bipartisan Budget Act of 2018 (BBA). BBA amends the 
Agricultural Act of 2014 (the 2014 Farm Bill) to add seed cotton as a 
covered commodity and remove generic base acres from ARC and PLC. This 
rule also amends provisions to include seed cotton yields, allocation 
of generic base acres, election of ARC-County Option (ARC-CO) or PLC 
for seed cotton base acres, and enrollment for 2018. This rule also 
makes some minor, clarifying changes to the administration section.

DATES: 
    Effective Date: August 16, 2018.
    2018 ARC and PLC signup deadline: September 28, 2018.

FOR FURTHER INFORMATION CONTACT: Brent Orr; telephone, (202) 720-7641. 
Persons with disabilities who require alternative means for 
communication should contact the USDA Target Center at (202) 720-2600 
(voice).

SUPPLEMENTARY INFORMATION: 

Background

    The ARC Program is an income support program which provides 
payments on historical base acres when actual crop revenue for a 
covered commodity declines below a specified guarantee level. The PLC 
Program provides payments on historical base acres when the price for a 
covered commodity declines below its ``reference price.'' Eligible 
producers were required to make a decision to participate in either ARC 
or PLC, but not both, for the 2014 through 2018 crop years. ARC and PLC 
are Commodity Credit Corporation (CCC) programs administered by the 
Farm Service Agency (FSA).
    The regulation in 7 CFR part 1412 as implemented in 2014 for the 
ARC and PLC Programs specified covered commodities authorized by the 
2014 Farm Bill (Pub L. 113-79; 7 U.S.C. 9011-9019). BBA amends the 2014 
Farm Bill by adding seed cotton as a ``covered commodity'' for the 2018 
crop year. Since seed cotton will be included in the existing ARC or 
PLC programs, FSA must establish certain program values including 
yields and prices to implement the changes.
    Upland cotton, which had previously been a covered commodity under 
prior FSA administered CCC commodity programs, was no longer a covered 
commodity beginning with the 2014 Farm Bill; therefore, producers with 
historical upland cotton base acres were ineligible for assistance 
under ARC and PLC. Base acres of upland cotton under the Food, 
Conservation, and Energy Act of 2008 (2008 Farm Bill) in effect as of 
September 30, 2013, subject to any adjustment or reduction, became 
``generic base acres'' beginning with the 2014 crop year. Under terms 
of BBA, if a covered commodity, including seed cotton, was not planted 
or prevented from being planted on the farm during the 2009 through 
2016 years, the generic base acres become unassigned base acres, which 
are not eligible for any ARC or PLC benefits. Generic base acres no 
longer exist beginning with the 2018 crop year.

Seed Cotton Changes; PLC Yield; Generic Base Acres Allocation

    In order for an owner to take advantage of the BBA provisions for 
seed cotton, BBA specifies that a covered commodity, including seed 
cotton, must have been planted or prevented from being planted on the 
farm during the 2009 through 2016 years. If the farm had land enrolled 
under a Conservation Reserve Program contract and base acres were 
reduced as a result of that enrollment during the 2009 through 2016 
years, the owner of that farm may allocate generic base acres to seed 
cotton base acres or other base acres based on the provisions of BBA.
    PLC requires a reference price for all covered commodities; BBA has 
established a reference price for seed cotton of $0.367 per pound.
    Determining a covered commodity yield is a necessary component to 
PLC. As amended, the 2014 Farm Bill and 7 CFR 1412.31 provide that the 
farm PLC yield for seed cotton will be initially set at 2.4 times the 
payment yield for upland cotton established under the 2008 Farm Bill (7 
U.S.C. 8714(e)(3)). As amended, the 2014 Farm Bill and 7 CFR 1412.33, 
specify that any current owner of the farm has a one-time option to 
update the PLC yield. Any current owner of a farm may update the PLC 
yield, which was the counter-cyclical payment yield under the former 
Direct and Counter-cyclical Program, by certifying pounds of upland 
cotton lint in years in which upland cotton was planted on base acres 
from 2008 through 2012, which will then be averaged. Years in which the 
producer had no planted acres are not included in the simple average 
computation. The average yield for 2008 through 2012, excluding years 
in which no upland cotton was grown, will be multiplied by 90 percent, 
and the result will be multiplied by 2.4 to obtain a new PLC payment 
yield of pounds of seed cotton.
    In addition to updating the payment yield, current owners of a farm 
with generic base acres will be allowed to determine how those generic 
base acres are allocated as base acres of other covered commodities on 
the farm. As specified in BBA and in Sec.  1412.25, there are three 
options as follows; the producers may choose only one for allocating 
generic base acres on the farm:
    1. Multiply the number of generic base acres in crop year 2018 by 
80 percent to determine a total for seed cotton base acres. The 
remaining 20 percent will become unassigned base acres.
    2. If a farm has history of planting upland cotton from 2009 
through 2012 and the simple average of planted and prevented from being 
planted upland cotton during that time period is greater than 80 
percent of the generic base acre total in crop year 2018, generic base 
acres may be allocated to seed cotton

[[Page 40654]]

base acres based on that simple average, not to exceed 100 percent of 
the generic base acres on the farm. If the simple average is less than 
100 percent of the number of generic base acres, the residual generic 
base acres will become unassigned base acres.
    3. Allocate the generic base acres on the farm to the 4-year simple 
average of the planted and prevented from planted covered commodities 
on the farm during the 2009 through 2012 crop years. The allocation is 
based on the share of each covered commodity in the total of covered 
commodities planted on the farm multiplied by the number of generic 
base acres on the farm. Years in which there were no covered 
commodities planted on generic acres will be used in the calculation of 
the simple average. Using this option eliminates unassigned base acres 
on the farm. For example:
    a. A farm has 100 cropland acres, 100 generic base acres, and had 
the following planted acres:
    [cir] For 2009, 25 acres of upland cotton and 75 acres of corn;
    [cir] For 2010, 75 acres of upland cotton and 25 acres of corn;
    [cir] For 2011, no acres of covered commodities; and
    [cir] For 2012, 100 acres of upland cotton.
    b. The simple average of the two planted covered commodities is 25 
acres of corn and 50 acres of upland cotton.
    c. Corn, from b. above, is 33.33 percent of the total covered 
commodities planted on the farm (25 divided by 75 equals 33.33 
percent), leaving 66.67 percent planted to upland cotton.
    d. Completing the calculation, 33.33 percent times 100 generic base 
acres equals 33.33 base acres of corn and 66.67 percent multiplied by 
100 generic base acres equals 66.67 base acres of seed cotton.
    If an owner fails to make an allocation of generic base acres and 
has a covered commodity, including seed cotton, that was planted or 
prevented from being planted during the 2009 through 2016 crop years, 
seed cotton base acres will be determined by FSA using the first option 
listed above, as is required by BBA.

PLC and ARC-CO Election, Allocation by FSA and Enrollment

    After the yield update and base acre allocation is completed, all 
current producers on a farm with seed cotton base acres, except for 
farms having a valid ARC-Individual Farm Option (ARC-IC) election, must 
affirmatively and unanimously elect PLC or ARC-CO for seed cotton base 
acres during the single election period following a similar method to 
the previous election process in 2015. As required by BBA, if a 
unanimous election is not made, the producers on the farm will be 
deemed to have elected PLC for the seed cotton base acres for the 2018 
crop year as specified in 7 CFR 1412.74; if the farm is enrolled for 
2018, it will be deemed to have PLC or ARC-CO benefits, as may be 
applicable for any covered commodity (including seed cotton), based on 
any valid or default election on the farm. This provision is specified 
in the 2014 Farm Bill and is not changed by BBA; neither FSA nor CCC 
has any discretion to specify a different policy for farms that do not 
have a valid election made during the election period. During the 
previous election period under the 2014 Farm Bill, the producers on 
farms with generic base acres had the opportunity to make an election 
on all 21 covered commodities or have a default election of PLC apply; 
those elections remain in place and therefore, for the 2018 crop year 
it will only be necessary for all current producers on the farm to make 
an election of PLC or ARC-CO for seed cotton base acres. New elections 
for ARC-IC or for other covered commodities will not be permitted. 
Farms having a valid election of ARC-IC will continue to have ARC-IC as 
the election for the entire farm and for all covered commodities 
including seed cotton that was added as a covered commodity effective 
with the 2018 crop year for the life of the 2014 Farm Bill.
    Implementing these changes is a multi-step process and all steps 
must be completed in order by the appropriate person or legal entity as 
follows:
    1. FSA will make a determination that a covered commodity was 
planted or prevented planted on the farm from 2009 through 2016;
    2. FSA will make a determination of the planting history of covered 
commodities on the farm from 2008 through 2012;
     2008 through 2012 is for calculating a seed cotton PLC 
yield, and
     2009 through 2012 is for determining how generic base 
acres on a farm may be allocated;
    3. A current owner will make an allocation of generic base acres 
according to Sec.  1412.25;
    4. A current owner will make a determination of the PLC yield and 
update of that yield according to 7 CFR 1412.31;
    5. The current producer(s) will make an election of either PLC or 
ARC-CO for seed cotton base acres according to Sec.  1412.71; and
    6. The current producer(s) will enroll the applicable farm for the 
2018 crop year according to Sec.  1412.41.
    As indicated above, the last step in the multi-step process is to 
enroll the farm for 2018. To participate in 2018, all eligible 
producers on farms must enroll following allocation and election to be 
potentially eligible for PLC and ARC benefits. BBA was enacted on 
February 9, 2018, and 2018 PLC and ARC enrollment had already begun. 
However, because BBA changed the conditions of contract participation 
for any farms having generic base acres, all farms having generic base 
acres that previously enrolled for 2018 must go through the process 
outlined above and, after that process is completed, reenroll the farm 
for 2018. Previous 2018 enrollments of farms having generic base acres 
will not be recognized as valid, as the provisions of BBA eliminate 
generic base acres. CCC has no authority to enter into 2018 contracts 
having generic base acres. As was the case with previous crop year 
enrollments, enrollments of portions of a farm are not allowed.

General Eligibility Requirements

    The general eligibility requirements are explained in the ARC or 
PLC contract appendix and in 7 CFR part 1412, except for adding seed 
cotton to the list of covered commodities.

Sharing Payments

    Each eligible producer on a farm will be given the opportunity to 
enroll in ARC or PLC for a payment share determined to be fair and 
equitable as agreed to by all the producers on the farm and approved by 
the county committee. As specified in Sec.  1412.54(b), each producer 
leasing a farm must provide the FSA county committee with a copy of 
their written lease or, in the absence of a written lease, must provide 
a complete written description of the terms and conditions of any oral 
agreement or lease. The general eligibility requirements are explained 
in the ARC or PLC contract appendix and on 7 CFR part 1412, except for 
adding seed cotton to the list of a covered commodity. An owner's or 
landlord's signature, as applicable, affirming a zero share on a 
contract may be accepted as evidence of a cash lease between the owner 
or landlord and tenant, as applicable, as determined by FSA. For farms 
with seed cotton base acres, such signature or signatures, if entered 
on the contract to satisfy the requirement of furnishing a written 
lease, must be entered on the application by September 30, 2018.

[[Page 40655]]

Signup Deadline

    The signup deadline is September 28, 2018 for 2018 ARC and PLC.

Notice and Comment

    In general, the Administrative Procedure Act (5 U.S.C. 553) 
requires that a notice of proposed rulemaking be published in the 
Federal Register and interested persons be given an opportunity to 
participate in the rulemaking through submission of written data, 
views, or arguments with or without opportunity for oral presentation, 
except when the rule involves a matter relating to public property, 
loans, grants, benefits, or contracts. This rule involved matters 
relating to benefits and is therefore being published as a final rule 
without the prior opportunity for comments. In addition, the 
regulations to implement the provisions of Title I and the 
administration of Title I of the 2014 Farm Bill are exempt from the 
notice and comment provisions of 5 U.S.C. 553 and the Paperwork 
Reduction Act (44 U.S.C. chapter 35), as specified in section 
1601(c)(2) of the 2014 Farm Bill.

Executive Orders 12866, 13563, 13771 and 13777

    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasized the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility. Executive Order 13777, 
``Enforcing the Regulatory Reform Agenda,'' established a federal 
policy to alleviate unnecessary regulatory burdens on the American 
people.
    The Office of Management and Budget (OMB) designated this rule as 
economically significant under Executive Order 12866, ``Regulatory 
Planning and Review,'' and therefore, OMB has reviewed this rule. The 
costs and benefits of this rule are summarized below. The full cost 
benefit analysis is available on regulations.gov.
    Executive Order 13771, ``Reducing Regulation and Controlling 
Regulatory Costs,'' requires that in order to manage the private costs 
required to comply with Federal regulations that for every new 
significant or economically significant regulation issued, the new 
costs must be offset by the elimination of at least two prior 
regulations. The OMB guidance in M-17-21, dated April 5, 2017, 
specifies that ``transfer rules'' are not covered by Executive Order 
13771. Transfer rules are Federal spending regulatory actions that 
cause only income transfers between taxpayers and program 
beneficiaries. Therefore, this is considered a transfer rule by OMB and 
is not covered by Executive Order 13771.

Cost Benefit Analysis Summary

    Estimates of transfer payments from these ARC and PLC programs are 
based on supply, demand and price conditions and FSA projections for 
the 2018 crop. Based on the projections, the net increase in 2018-crop 
ARC and PLC payments is expected to be around $743 million. Allocation 
of generic base is expected to increase ARC and PLC payments by $1,067 
million ($917 million for seed cotton and $150 million for other 
covered commodities) with offsets of $324 million from eliminating ARC 
and PLC payments on attributed generic base.
    The changes are expected to have marginal impacts on supply, 
demand, and prices because the impacts are spread across the covered 
commodities and acreage shifts are expected to represent a small 
percentage of the respective covered commodity planted acreage. Peanut 
planted acreage is expected to decrease by approximately 15 percent, 
but peanut prices are not expected to change significantly because of 
ample peanut supplies. Peanut acres are expected to shift to other 
commodities such as corn and soybeans with greater market returns 
because eliminating generic base decouples ARC and PLC payments from 
planting decisions. Most seed cotton base acres are expected to elect 
and enroll in PLC.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA, 
Pub. L. 104-121), generally requires an agency to prepare a regulatory 
flexibility analysis of any rule whenever an agency is required by the 
Administrative Procedure Act or any other law to publish a proposed 
rule, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
This rule is not subject to the Regulatory Flexibility Act because 
neither CCC nor FSA are not required by Administrative Procedure Act or 
any law to publish a proposed rule for this rulemaking.

Environmental Review

    The environmental impacts of this final rule have been considered 
in a manner consistent with the provisions of the National 
Environmental Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations 
of the Council on Environmental Quality (40 CFR parts 1500-1508), and 
the FSA regulations for compliance with NEPA (7 CFR part 799). This 
final rule will revise ARC and PLC, as mandated by BBA, to add a single 
commodity, seed cotton. The legislative intent for revising ARC and PLC 
programs is to provide income support to the same group of producers 
that were previously eligible for the earlier and now-discontinued 
programs, direct and counter-cyclical payment program and average crop 
revenue election program. On February 22, 2017, FSA completed an 
environmental review of ARC and PLC. FSA has determined that the 
addition of the commodity to the programs does not alter the 
environmental impacts, as assessed, or the related decisions. 
Therefore, FSA will not prepare a new environmental evaluation, 
assessment, or impact statement for this regulatory action.

Executive Order 12372

    Executive Order 12372, ``Intergovernmental Review of Federal 
Programs,'' requires consultation with State and local officials that 
would be directly affect by proposed Federal financial assistance. The 
objectives of the Executive Order are to foster an intergovernmental 
partnership and a strengthened Federalism, by relying on State and 
local processes for State and local government coordination and review 
of proposed Federal Financial assistance and direct Federal 
development. For reasons specified in the final rule related notice to 
7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983), the programs 
and activities within this rule are excluded from the scope of 
Executive Order 12372 which requires intergovernmental consultation 
with State and local officials.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, ``Civil 
Justice Reform.'' This rule will not preempt State or local laws, 
regulations, or policies unless they represent an irreconcilable 
conflict with this rule. The rule will not have retroactive effect. 
Before any judicial action may be brought regarding the provisions of 
this rule, the administrative appeal provisions of 7 CFR parts 11 and 
780 must be exhausted.

[[Page 40656]]

Executive Order 13132

    This rule has been reviewed under Executive Order 13132, 
``Federalism.'' The policies contained in this rule do not have any 
substantial direct effect on States, on the relationship between the 
Federal government and the States, or on the distribution of power and 
responsibilities among the various levels of government, except as 
required by law. Nor does this rule impose substantial direct 
compliance costs on State and local governments. Therefore, 
consultation with the States is not required.

Executive Order 13175

    This rule has been reviewed for compliance with Executive Order 
13175, ``Consultation and Coordination with Indian Tribal 
Governments.'' The Executive Order 13175 requires to consult and 
coordinate with tribes on a government-to-government basis on policies 
that have tribal implications, including regulations, legislative 
comments proposed legislation, and other policy statements or actions 
that have substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal Government and Indian tribes or on 
the distribution of power and responsibilities between the Federal 
government and Indian tribes.
    FSA has assessed the impact of this rule on Indian tribes and 
determined that this rule does not, to our knowledge, have tribal 
implications that required tribal consultation under Executive Order 
13175. If a tribe requests consultation, FSA will work with USDA Office 
of Tribal Relations to ensure meaningful consultation is provided.

The Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L. 
104-4) requires Federal agencies to assess the effects of their 
regulatory actions on State local, and Tribal governments or the 
private sector. Agencies generally must prepare a written statement, 
including a cost benefit analysis, for proposed and final rules with 
Federal mandates that may result in expenditures of $100 million or 
more in any 1 year for State, local, or Tribal governments, in the 
aggregate, or to the private sector. UMRA generally requires agencies 
to consider alternatives and adopt the more cost effective or least 
burdensome alternative that achieves the objectives of the rule. This 
rule contains no Federal mandates, as defined in Title II of 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.

SBREFA

    This rule is a major rule under the SBREFA (Pub. L. 104-121). 
SBREFA normally requires that an agency delay the effective date of a 
major rule for 60 days from the date of publication to allow for 
Congressional review. Section 808 of SBREFA allows an agency to make a 
major regulation effective immediately if the agency finds there is 
good cause to do so. Section 1601(c)(3) of the 2014 Farm Bill provides 
that the authority in Section 808 of SBREFA be used in implementing the 
changes required by Title I of the 2014 Farm Bill, as amended, such as 
for the changes being made by this rule. Consistent with section 
1601(c)(3) of the 2014 Farm Bill, FSA therefore finds that it would be 
contrary to the public interest to delay the effective date of this 
rule because it would delay implementation of seed cotton as a covered 
commodity for ARC and PLC as required by the 2014 Farm Bill, as 
amended. The regulation needs to be effective to provide adequate time 
for producers to update base acres and yields in preparation for 
enrollment for 2018. Therefore, this rule is effective on the September 
30, 2018.

Federal Assistance Programs

    The title and number of the Federal Domestic Assistance Program 
found in the Catalog of Federal Domestic Assistance to which this rule 
applies are:

10.112--Price Loss Coverage
10.113--Agriculture Risk Coverage

Paperwork Reduction Act of 1995

    The regulations in this rule are exempt from the requirements of 
the Paperwork Reduction Act (44 U.S.C. Chapter 35), as specified in 
section 1601(c) of the 2014 Farm Bill, which provides that these 
regulations be promulgated and administered without regard to the 
Paperwork Reduction Act.

E-Government Act Compliance

    FSA and CCC are committed to complying with the E-Government Act, 
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.

List of Subjects in 7 CFR Part 1412

    Cotton, Feed grains, Oilseeds, Peanuts, Price support programs, 
Reporting and recordkeeping requirements, Rice, Soil conservation, 
Wheat.

    For the reasons discussed above, CCC amends 7 CFR part 1412 as 
follows:

PART 1412--AGRICULTURE RISK COVERAGE, PRICE LOSS COVERAGE, AND 
COTTON TRANSITION ASSISTANCE PROGRAMS

0
1. The authority citation for part 1412 continues to read as follows:

    Authority: 7 U.S.C. 1508b, 7911-7912, 7916, 8702, 8711-8712, 
8751-8752, and 15 U.S.C. 714b and 714c.

Subpart A--General Provisions

0
 2. Amend Sec.  1412.1 as follows:
0
a. In paragraph (a), remove the words and punctuation ``, generic base 
acres,'' and add the words and punctuation ``seed cotton;'' immediately 
before the words ``pulse crops''.
0
b. Revise paragraph (b).
0
c. In paragraph (c), remove the words ``CTAP application or the'';
0
d. In paragraph (d), remove the words ``CTAP application or''; and
0
e. In paragraph (e), remove the words and punctuation ``and for CTAP, 
assistance under this part will be based on the physical location of 
the farm, as specified in part 718 of this title''.
    The revision reads as follows:


Sec.  1412.1   Applicability, changes in law, interest, application, 
and contract provisions.

* * * * *
    (b) For crop year 2018, this part specifies how:
    (1) Generic base acres are allocated to seed cotton base acres and 
unassigned base acres (generic base acres are not in effect for crop 
year 2018);
    (2) A payment yield for seed cotton base acres is established;
    (3) An election is made on seed cotton base acres; and
    (4) Contracts are enrolled with seed cotton base acres.
* * * * *

0
3. Amend Sec.  1412.2 as follows:
0
a. In paragraph (a), remove the words and punctuation ``, PLC, and 
CTAP'' and add the words ``and PLC'' in their place; and
0
b. Revise paragraphs (e) and (f).
    The revisions read as follows:


Sec.  1412.2   Administration.

* * * * *
    (e) The Deputy Administrator has the authority to permit State and 
county committees to waive or modify any non-statutory deadline 
specified in this part.
    (f) Items of general applicability to program participants, 
including, but not

[[Page 40657]]

limited to, application periods, application deadlines, internal 
operating guidelines issued to State and county offices, prices, 
yields, and payment factors established for ARC or PLC, are not subject 
to appeal in accordance with part 780 of this title.

0
4. Amend Sec.  1412.3 as follows:
0
a. Remove the definitions of ``2014 farm structure'' and 
``Application'';
0
b. In the definition of ``Base acres'', revise the last sentence;
0
c. In the definition of ``Contract period'', remove the words ``or 
application'' and words and punctuation ``or ``application'' '', and 
remove the word ``the'' immediately before the words ``each program 
year'';
0
d. Add the definition of ``Counter-cyclical payment yield'' in 
alphabetical order;
0
e. In the definition of ``Covered commodity'', add the words and 
punctuation ``seed cotton,'' immediately before the words ``pulse 
crops'';
0
f. Remove the definition of ``Eligible subsequently planted crop 
acreage'';
0
g. In the definition of ``Generic base acres'', remove the last two 
sentences and add in their place one new sentence;
0
h. In the definition of ``Initial crop'', remove the words ``or 
cotton'';
0
i. In paragraph (3) of the definition of ``Marketing year'', add the 
words and punctuation ``, seed cotton,'' immediately after the word 
``Peanuts'';
0
j. In the definition of ``Payment acres'', remove paragraph (3);
0
k. Revise the definition of ``Payment yield'';
0
l. Amend the definition of ``Reference price'' as follows:
0
i. In paragraph (13) remove the word ``and'';
0
ii. In paragraph (14) remove the punctuation ``.'' and add in its place 
the words and punctuation ``; and''; and
0
iii. Add new paragraph (15);
0
m. Add the definition of ``Seed cotton'' in alphabetical order;
0
n. In the definition of ``Supportive and necessary contractual 
documents'', remove the words ``or CTAP application''; and
0
o. Add the definition of ``Unassigned base acres'' in alphabetical 
order.
    The revisions and additions read as follows:


Sec.  1412.3   Definitions.

* * * * *
    Base acres * * * The term ``base acres'' includes any unassigned 
base acres.
* * * * *
    Counter-cyclical payment yield means the farm's upland cotton yield 
as specified in the regulations for 7 CFR part 1412 that were in effect 
as of September 30, 2013.
* * * * *
    Generic base acres * * * For 2018, generic base acres are subject 
to allocation according to Sec.  1412.25.
* * * * *
    Payment yield means for a farm for a covered commodity, the yield 
established under subpart C of this part.
* * * * *
    Reference price * * *
    (15) Seed cotton, $0.367 per pound.
* * * * *
    Seed cotton means unginned upland cotton that includes both lint 
and seed.
* * * * *
    Unassigned base acres means the number of acres derived from 
generic base acres where no ARC or PLC payments are generated or 
earned.
* * * * *

Subpart B--Establishment of Base Acres for a Farm for Covered 
Commodities

0
5. Amend Sec.  1412.23 as follows:
0
a. Revise the section heading; and
0
b. In paragraphs (a), (b), and (c), remove the words ``and generic base 
acres'' in each place they appear.
    The revision reads as follows:


Sec.  1412.23   Base acres, and Conservation Reserve Program.

* * * * *

0
6. Amend Sec.  1412.24 as follows:
0
a. Revise the section heading;
0
b. In paragraph (a)(1), remove the words and punctuation ``and generic 
base acres (which are equal to upland cotton base acres used for 
CTAP)'';
0
c. Revise paragraph (b);
0
d. In paragraph (d)(1), remove the words and punctuation ``, including 
generic base acres (and the equal amount of upland cotton base 
acres),''; and
0
e. In paragraph (f), remove the words and punctuation ``and generic 
base acres (resulting in an equal amount of upland cotton base 
acres)''.
    The revisions read as follows:


Sec.  1412.24   Limitation of total base acres on a farm.

* * * * *
    (b) The Deputy Administrator will give the owner of the farm the 
opportunity to select the base acres against which any reduction 
required in this section will be made. Absent the owner selecting the 
base acres for reduction, CCC will apply a pro-rata reduction against 
the base acres before computing and issuing any payments for the 
program year when a reduction becomes necessary.
* * * * *

0
7. Revise Sec.  1412.25 to read as follows:


Sec.  1412.25   Allocation of generic base acres on a farm and updating 
of records.

    (a) Any or all of the current owner(s) of a farm with generic base 
acres adjusted as of February 9, 2018, will have a one-time opportunity 
in an allocation period as announced by FSA, if a covered commodity 
including upland cotton was planted or prevented from being planted 
during the 2009 through 2016 crop years, to:
    (1) Allocate the farm's generic base acres to seed cotton base 
acres in a quantity equal to the greater of:
    (i) 80 percent of the generic base acres on the farm; or
    (ii) The average number of upland cotton acres planted and 
prevented from being planted on the farm during the 2009 through 2012 
crop years, not to exceed the total generic base acres on the farm; or
    (2) Allocate base acres for covered commodities, including seed 
cotton, by applying paragraph (e) of this section.
    (b) Under no circumstances will the allocation of generic base 
acres on a farm as specified in paragraph (a) of this section result in 
any increase in total base acres on a farm. Additionally, if any 
current owner submits a written statement that conflicts with the 
allocation request or expresses written disagreement with the 
allocation filed according to paragraph (a) of this section, no 
allocation will be approved for the farm unless all the current owners 
of the farm provide FSA with written evidence of the dispute resolution 
during the allocation period.
    (c) FSA will provide the farm operator and owners of record with a 
summary of all covered commodities P&CP acres and subsequently planted 
crop acreage for the 2008 through 2012 crop years (as reported to FSA 
on acreage reports filed with FSA in each of those years). Acreage not 
reported to FSA by producers will not be included in the summary. The 
summary of records specified in paragraph (c) of this section is 
intended to assist current owners of farms with the one-time 
opportunity for generic base acre allocation as provided in this 
section. Any current owner of a farm may also at any time visit the FSA 
county office and request to obtain a copy of the summary referenced in 
paragraph (c) of this section.
    (d) Current owners will be provided a one-time opportunity to 
update the records identified in paragraph (c) of this section during 
the allocation period, provided that there are crop

[[Page 40658]]

insurance records (or other verifiable documentation available to 
support those requested updates). In the event that an update to a 
farm's P&CP acres of a covered commodity for 2009 through 2012 causes 
any payment under another FSA or CCC program to become unearned, the 
overpayment must be refunded to FSA or CCC in accordance with the rules 
for that program and the FSA or CCC regulations governing overpayment 
(7 CFR parts 718 and 1403).
    (e) After an update as specified in paragraph (d) of this section, 
the owner may allocate the farm's generic base acres during the 
allocation period based on a proration of each covered commodity's P&CP 
acres or subsequently planted crop acreage in crop years 2009 through 
2012 to the total P&CP acres or subsequently planted crop acreage of 
all covered commodities during that time.
    (f) Current owners can allocate generic base acres at any time 
during the allocation period without receiving or requesting the 
summary records, and, therefore, failure to receive a summary record 
from FSA is not grounds for appeal or extension of the allocation 
period.
    (g) The option to allocate generic base acres is an ``all or 
nothing'' decision for the farm. Generic base acres will not be 
retained, partially or in whole. A decision by any current owner to 
allocate generic base acres on a farm in accordance with this section 
is final and binding if made according to this section during the 
allocation period unless that allocation is withdrawn in writing by 
that current owner or another current owner. If another current owner 
subsequently files a different allocation request in whatever time 
remains in the stated allocation period or if there are conflicting 
allocation requests of current owners in the allocation period, FSA 
will not make the allocation unless the conflict is resolved via 
written agreement between the current owners who filed the conflicting 
requests. In the event that a resolution is not presented, the 
provisions of paragraph (h) of this section will take effect. In the 
case of submitting evidence of resolution, the written agreement must 
be filed with FSA in the allocation period. Any and all updates and 
allocation requests mentioned in this section are subject to review and 
approval or disapproval by FSA for CCC.
    (h) In the event that an owner fails to make an allocation 
according to this part and the farm has met the planting requirement in 
paragraph (a) of this section, the farm will receive an allocation of 
seed cotton base acres in accordance with paragraph (a)(1)(i) of this 
section.

Subpart C--Establishment of Price Loss Coverage Yields and 
Submitting Production

0
8. Amend Sec.  1412.31 as follows:
0
a. In paragraph (a), remove the word ``The'' and add the words ``Except 
for seed cotton'' in its place and remove ``Sec.  1412.33 or Sec.  
1412.34, whichever is applicable'' and add ``Sec.  1412.34'' in their 
place.
0
b. Redesignate paragraph (b) as paragraph (c) and add new paragraph 
(b).
0
c. In newly redesignated paragraph (c), remove the words and 
punctuation ``or for which a covered commodity is planted on generic 
base acres,''.


Sec.  1412.31   PLC yields for covered commodities.

* * * * *
    (b) The PLC yield for seed cotton on the farm is equal to the 
counter-cyclical payment yield established for upland cotton on the 
farm as in effect September 30, 2013, times 2.4, unless the PLC yield 
is updated as specified in Sec.  1421.33.
* * * * *

0
9. Amend Sec.  1412.32 as follows:
0
a. Revise the section heading;
0
b. In paragraph (a), remove the words and punctuation ``(except generic 
base acres),''; and
0
c. In paragraph (e), remove the reference to ``Sec.  1412.35'' and add 
``Sec.  1412.36'' in its place.
    The revision reads as follows:


Sec.  1412.32   Updating PLC yield for all covered commodities except 
seed cotton.

* * * * *


Sec.  Sec.  1412.33 through 1412.35  [Redesignated as Sec. Sec.  
1412.34 through 1412.36]

0
10. Redesignate Sec. Sec.  1412.33 through 1412.35 as Sec. Sec.  
1412.34 through 1412.36.

0
11. Add new Sec.  1412.33 to read as follows:


Sec.  1412.33   Updating PLC yield for seed cotton.

    (a) For a farm that has seed cotton base acres as adjusted, in 
excess of zero acres, a current owner of the farm has a one-time 
opportunity in a specified period, as announced by FSA, to update the 
PLC yield equal to 90 percent of the upland cotton's 2008 through 2012 
average yield per planted acre, excluding from the average any year 
that no acreage was planted to upland cotton, times 2.4. If the yield 
per planted acre in any of the years 2008 through 2012 is less than 75 
percent of the average of the county yield, then 75 percent of the 
average of the 2008 through 2012 county yields will be substituted for 
that year.
    (b) The current owner of the farm may retain the PLC yield or 
update the PLC yield.
    (c) PLC yields are exclusively used for PLC. However, any owner of 
a farm can update the seed cotton PLC yield as specified in paragraph 
(a) of this section, regardless of program election, enrollment, or 
participation.
    (d) A decision by any current owner of a farm to update the seed 
cotton PLC yield as specified in this section is final and binding 
unless that decision to update the yield is withdrawn by that current 
owner or a different yield update is made by that current owner or 
another current owner. If that current owner or another current owner 
requests a different PLC yield update for the covered commodity during 
the yield update period specified in paragraph (a) of this section, 
that update will become final.
    (e) All PLC yield updates are subject to review and approval by FSA 
as specified in Sec.  1412.36. FSA's decision to issue payments based 
on the PLC yield updated by an owner is subject to verification and 
spot check by FSA at any time.
    (f) Yield updates in this section will be permitted using the 
current owner's certification of yield. The certification is subject to 
spot check or verification by FSA at any time. If selected for spot 
check or verification, the owner must submit evidence specified in 
Sec.  1412.35 to support the certified yield.


Sec.  1412.34   [Amended]

0
12. In newly redesignated Sec.  1412.34(b)(2)(i) and (c), remove each 
cross reference to ``Sec.  1412.34'' and add ``Sec.  1412.35'' in their 
place.

Subpart D--ARC and PLC Contract Terms and Enrollment Provisions for 
Covered Commodities

0
13. Amend Sec.  1412.41 as follows:
0
a. Revise paragraph (a)(2);
0
b. In paragraph (b), remove the words and punctuation ``June 1 of the 
applicable contract year,'' and add in their place ``September 30, 
2018,'';
0
c. In paragraph (e), remove ``2015 or subsequent'' and add ``2018'' in 
its place, and remove ``2015 and subsequent crop year''; and
0
d. Add paragraph (f).
    The revision and addition read as follows:


Sec.  1412.41   ARC or PLC program contract.

    (a) * * *

[[Page 40659]]

    (2) For program year 2018, the enrollment period will end on 
September 30, 2018.
    (i) Eligible producers must execute and submit an ARC or PLC 
program contract not later than September 30, 2018, for fiscal year 
2018 contracts.
    (ii) Except as stated in this section, enrollment is not allowed 
after September 30 of the fiscal year in which the ARC or PLC payments 
are requested. FSA will not process offers of enrollment for a contract 
period after the contract period has ended. This is not a compliance 
provision but a rule of general applicability and will apply to every 
offer to contract in each contract year.
* * * * *
    (f) Any 2018 contract for a farm that includes generic base acres, 
whether or not that contract was approved on behalf of CCC, is invalid 
and withdrawn. Eligible producers on farms that had generic base acres 
must enroll in accordance with paragraph (a) of this section after 
allocation has been completed. Any contract executed before allocation 
in Sec.  1412.25 will not be recognized by CCC for any purpose.


Sec.  Sec.  1412.44 and 1412.45   [Removed and Reserved]

0
14. Remove and reserve Sec. Sec.  1412.44 and 1412.45.


Sec.  1412.46   [Amended]

0
15. In Sec.  1412.46 (f), remove the last sentence.

Subpart E--Financial Considerations Including Sharing Payments


Sec.  1412.51   [Amended]

0
16. Amend Sec.  1412.51 as follows:
0
a. Remove paragraph (b);
0
b. Redesignate paragraphs (c) through (e) as (b) through (d), and;
0
c. In newly redesignated paragraph (d), remove the words ``including 
any generic base acres''.


Sec.  1412.52   [Amended]

0
17. In Sec.  1412.52(a), remove the words ``each of the 2014 through'' 
and add the word ``the'' in their place.

0
18. Amend Sec.  1412.53 as follows:
0
a. In paragraph (a) introductory text, remove ``each of the 2014 
through'' and add ``the'' in their place;
0
b. In paragraph (b) introductory text, remove ``each of the 2014 
through'' and add ``the'' in their place; and
0
c. Revise paragraph (e).
    The revision reads as follows:


Sec.  1412.53   ARC payment provisions.

* * * * *
    (e) FSA has determined the irrigated and non-irrigated counties and 
crops for the 2018 program year.
* * * * *


Sec.  1412.54   [Amended]

0
19. Amend Sec.  1412.54 as follows;
0
a. In paragraph (a), remove the words ``apply for CTAP as specified in 
subpart H of this part and annually'';
0
b. In paragraph (b), remove the words ``applies for CTAP or elects 
and'';
0
c. In paragraph (c), remove the words ``CTAP payment or'';
0
d. In paragraph (d)(4), remove the words ``ARC, PLC, or CTAP'' and add 
the words ``ARC or PLC'' in their place both times they appear;
0
e. In paragraph (f) introductory text, remove the first sentence;
0
f. In paragraph (f)(2), remove the words ``of this part''; and
0
f. In paragraph (h), remove the words ``a CTAP application or'' and add 
the word ``an'' in their place, and remove the words and punctuation 
``CTAP application, or'' in both places.


Sec.  1412.55   [Amended]

0
20. In Sec.  1412.55(a)(1), remove the words and punctuations ``ARC, 
PLC, or CTAP'', and add ``ARC or PLC'' in their place.

Subpart F--Violations and Compliance Provisions


Sec.  1412.61   [Amended]

0
21. In Sec.  1412.61, remove ``or CTAP application, as applicable'' and 
remove ``or CTAP application''.


Sec.  1412.63   [Amended]

0
22. In Sec.  1412.63, remove the words ``or CTAP application''.


Sec.  1412.64   [Amended]

0
23. Amend Sec.  1412.64 as follows:
0
a. In paragraph (a), remove ``ARC, PLC, and CTAP'' and add ``ARC or 
PLC'' in its place, and remove the words ``or application'';
0
b. In paragraph (b) introductory text, remove ``ARC, PLC, or CTAP'' and 
add ``ARC or PLC'' in its place; and
0
c. In paragraph (b)(3), remove the words and punctuation ``, CTAP 
application,''.


Sec.  1412.66   [Amended]

0
24. In Sec.  1412.66(a), remove ``ARC, PLC, and CTAP'' and add ``ARC or 
PLC'' in their place.


Sec.  1412.69   [Amended]

0
25. In Sec.  1412.69, remove ``CTAP participants and enrolled'' and add 
``Enrolled'' in its place.

Subpart G--ARC and PLC Election

0
26. Amend Sec.  1412.71 as follows:
0
a. Remove paragraph (c);
0
b. Redesignate paragraph (d) as paragraph (c);
0
c. In newly redesignated paragraph (c), remove the first sentence, 
remove ``The'' and add ``In general, a'' in its place; and
0
d. Add new paragraph (d).
    The addition reads as follows:


Sec.  1412.71   Election of ARC or PLC.

* * * * *
    (d) Beginning with the 2018 crop year, a valid election for seed 
cotton is required for all current producers on a farm where seed 
cotton is added as a covered commodity, as specified in Sec.  1412.25, 
unless the farm contains a valid ARC-IC election. A valid ARC-IC 
election on a farm is for all covered commodities and will include the 
added covered commodity of seed cotton. This election is for seed 
cotton only. All other covered commodities on a farm with seed cotton 
base acres have an election on file and will be bound by that prior 
election. The election by all current producers is to obtain:
    (1) PLC for seed cotton base acres, or
    (2) ARC-CO for seed cotton base acres.
* * * * *

0
27. In Sec.  1412.74, add paragraph (c) to read as follows:


Sec.  1412.74   Failure to make election.

* * * * *
    (c) If a valid election is not made for seed cotton base acres on a 
farm, the producers of seed cotton base acres on the farm are deemed to 
have elected PLC for acres allocated on the farm to seed cotton for the 
2018 crop year.

Steven Peterson,
Acting Administrator, Farm Service Agency.
Robert Stephenson,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 2018-17681 Filed 8-15-18; 8:45 am]
 BILLING CODE 3410-05-P