[Federal Register Volume 76, Number 107 (Friday, June 3, 2011)]
[Rules and Regulations]
[Pages 32067-32069]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-13354]
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Rules and Regulations
Federal Register
________________________________________________________________________
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having general applicability and legal effect, most of which are keyed
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Federal Register / Vol. 76, No. 107 / Friday, June 3, 2011 / Rules
and Regulations
[[Page 32067]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
[Docket No. FCIC-10-0002]
RIN 0563-AC27
Common Crop Insurance Regulations; Extra Long Staple Cotton Crop
Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes
amendments made to the Common Crop Insurance Regulations, Extra Long
Staple Cotton Crop Insurance Provisions to remove all references to the
Daily Spot Cotton Quotation and replace the references with the
National Average Loan Rate published by the Farm Service Agency (FSA),
to incorporate a current Special Provisions statement into the Crop
Provisions, and to make the Extra Long Staple Cotton Crop Insurance
Provisions consistent with the Upland Cotton Crop Insurance Provisions.
The intended effect of this action is to provide policy changes, to
clarify existing policy provisions to better meet the needs of the
producers, and to reduce vulnerability to program fraud, waste, and
abuse. The changes will be effective for the 2012 and succeeding crop
years.
DATES: Effective Date: This rule is effective July 5, 2011.
FOR FURTHER INFORMATION CONTACT: 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 non-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 through March
31, 2012.
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 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 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
[[Page 32068]]
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
On November 19, 2010, FCIC published a notice of proposed
rulemaking in the Federal Register at 75 FR 70850-70852 to revise 7 CFR
part 457, Common Crop Insurance Regulations, by revising Sec. 457.105
(Extra Long Staple Cotton Crop Insurance Provisions). Requests have
been made for changes to improve the coverage offered, address program
integrity issues, and simplify program administration. The provisions
will be effective for the 2012 and succeeding crop years.
A total of six comments were received from one commenter. The
commenter was an insurance service organization. The comments received
and FCIC's responses are as follows:
General Comments
Comment: A commenter suggests FCIC remove the Basic Provisions
section titles which are set off by parenthesis throughout the Crop
Provisions, as has been done when other Crop Provisions that have been
revised recently. For example, section 2 could read ``In addition to
the requirements of section 3 of the Basic Provisions * * *'' [deleting
the parenthetical ``* * * (Insurance Guarantees, Coverage Levels, and
Prices for Determining Indemnities) * * *'' following ``section 3''].
Affected sections are 2, 3, 4, 5, 6, 7(b), 8, and 9(a).
Response: Although this section was not included in the proposed
rule, FCIC agrees and has revised the provisions accordingly since it
is a technical correction and does not change the meaning or intent of
the provision.
Comment: A commenter recommends changing ``The total production
(pounds) to count * * *'' in section 10(c) to ``The total production to
count (in pounds) * * *'' so as to keep the phrase ``production to
count'' intact.
Response: Although this section was not included in the proposed
rule, FCIC agrees and has revised the provisions accordingly since it
is a technical correction and does not change the meaning or intent of
the provision.
Section 10--Settlement of Claim
Comment: A commenter supports the proposed changes of the prices
used in section 10(d) and (f) and the change of the Price B percentage
used from 75 percent to 85 percent since equivalent changes have
already been made in the 2011 Cotton Crop Provisions.
Response: FCIC thanks the commenter for their support regarding the
changes of the prices used in section 10 and the change of the Price B
percentage.
Comment: A commenter points out the Background section of the
Proposed Rule states the following: ``FCIC also proposes to change the
percentage of Price B from 75 percent to 85 percent in sections 10(d)
and 10(d)(3). This does not change the existing terms of the policy
because the change was already implemented in the Special Provisions.
FCIC is proposing to move the provision to the Crop Provisions because
the change is being implemented in all areas where ELS cotton is
available.''
If the summary of this Proposed Rule accurately describes
the actions taken, and represents clarification or standardization to
conform to the 2011 Basic Provisions, the only comment would concern
whether FCIC has conducted whatever necessary rate impact evaluations
and made any necessary adjustments. Whether or not the rate analysis
has been done is a little unclear based on two phrases in the third
paragraph of item 2 in the Background section of the Proposed Rule.
The second sentence of the paragraph in the Background
section suggests the change to 85 percent ``was'' already implemented
(in the past), while the third sentence indicates the change ``is
being'' implemented (currently) everywhere ELS Cotton is insurable. The
difference between ``was'' and ``is being'' might be explained in the
context that the change to 85 percent ``was'' already added in a
previous year's Special Provisions, and now ``is being'' added in the
Crop Provisions instead (with a Special Provisions statement no longer
being necessary), but it could be clarified. Was the 85 percent change
previously in the Special Provisions for ALL counties where ELS Cotton
was insurable, or only in some?
Response: The change from 75 percent to 85 percent was put into
place in crop year 2000 with a Special Provisions statement. At the
time the change was implemented, a rate adjustment was made. There has
been nothing in the performance of the policy to suggest that this rate
change was not appropriate or was inadequate. Therefore, no additional
rate analysis is necessary.
The Special Provisions statement that says the production to count
will be reduced if price quotation ``A'' is less than 85 percent of
price quotation ``B'' will be removed from the Special Provisions and
incorporated into the Crop Provisions. The change was made years ago
and this Special Provisions statement existed in all counties where ELS
Cotton is insurable. As incorporated into the Crop Provisions, no new
Special Provisions statements will be required if ELS cotton is
expanded to additional counties.
Section 12--Prevented Planting
Comment: A commenter recommends eliminating the option to increase
prevented planting coverage levels.
Response: This section was not included in the proposed rule and
would be considered a substantive change to the policy. Since the
public was not provided an opportunity to comment, FCIC cannot consider
the recommended change.
In addition to the changes described above, FCIC has revised
section 10(f) by removing the phrase ``Any AUP cotton'' and replacing
it with the phrase ``Mature AUP cotton'' to clarify the AUP cotton must
be mature in order to calculate a conversion factor between AUP cotton
and ELS cotton.
List of Subjects in 7 CFR Part 457
Crop insurance, Extra long staple cotton, Reporting and
recordkeeping requirements.
Final Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation amends 7 CFR part 457 effective for the 2012 and
succeeding crop years for the Extra Long Staple Cotton Crop Insurance
Provisions.
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. 457.105 as follows:
0
a. Amend the introductory text by removing ``1998'' and adding ``2012''
in its place;
0
b. Remove the undesignated paragraph immediately preceding section 1.
0
c. Amend section 2 by removing the phrase ``(Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities)'';
[[Page 32069]]
0
d. Amend section 3 by removing the phrase ``(Contract Changes)'';
0
e. Amend section 4 by removing the phrase ``(Life of Policy,
Cancellation, and Termination)'';
0
f. Amend the introductory text of section 5 by removing the phrase
``(Insured Crop)'';
0
g. Amend the introductory text of section 6 by removing the phrase
``(Insurable Acreage)'';
0
h. Amend section 7(b) by removing the phrase ``(Insurance Period)'';
0
i. Amend the introductory text of section 8 by removing the phrase
``(Causes of Loss)'';
0
j. Amend section 9(a) by removing the phrase ``(Duties in the Event of
Damage or Loss)'';
0
k. Amend the introductory text of section 10(c) by removing the phrase
``The total production (pounds) to count'' and replacing it with the
phrase ``The total production to count (in pounds)'';
0
l. Revise section 10(d); and
0
m. Revise section 10(f).
The revisions read as follows:
Sec. 457.105 Extra long staple cotton crop insurance provisions.
* * * * *
10. Settlement of Claim.
* * * * *
(d) Mature ELS cotton production may be adjusted for quality when
production has been damaged by insured causes. Such production to count
will be reduced if Price A is less than 85 percent of Price B.
(1) Price B is defined as the Extra Long Staple Cotton National
Average Loan Rate determined by FSA, or as specified in the Special
Provisions.
(2) Price A is defined as the loan value per pound for the bale
determined in accordance with the FSA Schedule of Premiums and
Discounts for the applicable crop year, or as specified in the Special
Provisions.
(3) If eligible for quality adjustment, the amount of production to
be counted will be determined by multiplying the number of pounds of
such production by the factor derived from dividing Price A by 85
percent of Price B.
* * * * *
(f) Mature AUP cotton harvested or appraised from acreage
originally planted to ELS cotton in the same growing season will be
reduced by the factor obtained by dividing the price per pound for AUP
cotton by the price per pound for ELS cotton. The prices used for AUP
and ELS cotton will be calculated using the Upland Cotton National
Average Loan Rate determined by FSA and the Extra Long Staple Cotton
National Average Loan Rate determined by FSA, or as specified in the
Special Provisions.
* * * * *
Signed in Washington, DC, on May 23, 2011.
William J. Murphy,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2011-13354 Filed 6-2-11; 8:45 am]
BILLING CODE 3410-08-P