[Federal Register Volume 61, Number 145 (Friday, July 26, 1996)]
[Rules and Regulations]
[Pages 39048-39050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18616]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation.
7 CFR Part 401
RIN 0563-AB60
General Crop Insurance Regulations, General Crop Insurance Policy
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Interim rule and request for comments.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) amends the
General Crop Insurance Regulations, General Crop Insurance Policy
located at 7 CFR part 401. The intended effect of this interim rule is
to remove restrictions mandated by the Food Security Act of
[[Page 39049]]
1985 that preclude eligibility for crop insurance for any person who in
any crop year produces an agricultural commodity on a field which is
classified as predominantly highly erodible land (sodbuster provision)
or converted wetland (swampbuster provision). The Federal Agriculture
Improvement and Reform Act of 1996 (the 1996 Act) amends the crop
insurance restrictions, so producers who are in violation of the
sodbuster/swampbuster provisions will be eligible for crop insurance
coverage on or after July 3, 1996.
DATES: Effective date: July 3, 1996.
Comment date. Written comments, data, and opinions on this rule
will be accepted until close of business September 23, 1996.
ADDRESSES: Interested persons are invited to submit written comments to
the Chief, Product Development Branch, Federal Crop Insurance
Corporation, United States Department of Agriculture (USDA), 9435
Holmes Road, Kansas City, MO 64131. Written comments will be available
for public inspection and copying in room 0324, South Building, USDA,
14th and Independence Avenue, SW., Washington, DC, 8:15 a.m.-4:45 p.m.,
Monday through Friday, except holidays.
FOR FURTHER INFORMATION CONTACT: Stephen Hoy, Program Analyst, Research
and Development Division, Product Development Branch, FCIC, at the
Kansas City, MO, address listed above, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No. 12866 and Departmental Regulation 1512-1
This action has been reviewed under USDA procedures established by
Executive Order No. 12866 and Departmental Regulation 1512-1. This
action constitutes a review as to the need, currency, clarity, and
effectiveness of these regulations under those procedures. The sunset
review date established for these regulations is June 30, 2001.
This rule has been determined to be significant for the purposes of
Executive Order No. 12866 and therefore has been reviewed by the Office
of Management and Budget (OMB).
Cost-Benefit Analysis
A Cost-Benefit Analysis has been completed and is available to
interested persons at the address listed above. In summary, the
analysis finds that the removal of sanctions affecting a producer's
eligibility for Federal crop insurance as specified in the sodbuster
and swampbuster provisions will result in two types of costs. First,
environmental costs, in some cases, will be incurred as the elimination
of crop insurance from the list of denied benefits reduces the
sanctions associated with violating sodbuster/swampbuster provisions.
Second, if acres affected by the sodbuster/swampbuster provisions are
increasingly planted and insured, the costs to the Federal Crop
Insurance Corporation will rise. The environmental and Federal costs
associated with elimination of crop insurance as a sodbuster/
swampbuster sanction are, however, largely unknown.
Environmental costs will depend on the extent farmers produce
insurable crops (or alter practices or structures) on sodbuster/
swampbuster acreage when such activity would not otherwise occur. Many
variables will affect a producer's decision, including the amount of
land affected by sodbuster/swampbuster relative to the producer's total
acreage receiving benefits, expected prices and yields, the loss of
USDA benefits (other than crop insurance), expected crop insurance
benefits, and the expected environmental impact.
Federal costs associated with the elimination of crop insurance as
a sodbuster/swampbuster sanction are unknown because the number of
producers who will violate sodbuster/swampbuster provisions, and insure
crops produced on their farms, is impossible to judge. The actual
realized cost will depend to a large extent on FCIC's appropriately
rating sodbuster and swampbuster acreage that is planted and insured.
Between $500,000 and $1 million in crop insurance benefits were denied
annually due to sodbuster/swampbuster violations in recent years.
Benefits of a similar magnitude to the recent denials will probably be
paid in future years.
Paperwork Reduction Act of 1995
In accordance with the Paperwork Reduction Act of 1995, the
information collection requirements contained in these regulations have
been previously approved by OMB control numbers 0563-0003, 0563-0016
and 0560-0004. Copies of the information collections may be obtained
from Bonnie Hart, USDA, FSA, Advisory and Corporate Operations Staff,
Regulatory Review Group, P.O. Box 2415, Ag Box 0572, Washington, D.C.
20013-2415, 8:15 a.m.-4:45 p.m., Monday through Friday, except
holidays, telephone (202) 690-2857.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, FCIC
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 State, local, or tribal governments, in the
aggregate, or to the private sector, of $100 million or more in any
year. When such a statement is needed for a rule, section 205 of the
UMRA generally requires FCIC to identify and consider a reasonable
number of regulatory alternatives and adopt the least costly, more
cost-effective or least burdensome alternative that achieves the
objectives of the rule.
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. Thus, this rule is not subject to
the requirements of sections 202 and 205 of the UMRA.
Executive Order No. 12612
It has been determined under section 6(a) of Executive Order No.
12612, Federalism, that this rule does not have sufficient Federalism
implication to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on States or their political subdivisions, or on the
distribution of power and responsibilities among the various levels of
Government.
Regulatory Flexibility Act
This regulation will not have a significant impact on a substantial
number of small entities. Under the current regulations, a producer is
required to complete a crop insurance acreage report, an insurance
application and a continuous contract. If the crop is damaged or
destroyed, the insured is required to give notice of loss and provide
the necessary information to complete a claim for indemnity. The
insured may use actual records of production or receive a transitional
yield which does not require the maintenance of production records. If
the insured elects to use actual records of acreage and production as
the basis for the production guarantee, the insured must report this
information on a yearly basis. This regulation does not alter those
requirements. Therefore, the amount of work required of the
[[Page 39050]]
insurance companies and Farm Service Agency (FSA) offices delivering
and servicing these policies will not increase from the amount of work
currently required. This rule does not have any greater or lesser
impact on the producer. Therefore, this action is determined to be
exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C.
605), and no Regulatory Flexibility Analysis was prepared.
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order No. 12372
This program is not subject to the provisions of Executive Order
No. 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 No. 12778
The Office of the General Counsel has determined that these
regulations meet the applicable standards provided in sections 2(a) and
2(b)(2) of Executive Order No. 12778. The provisions of this rule will
not have a retroactive effect prior to the effective date. The
provisions of this rule will preempt State and local laws to the extent
such State and local laws are inconsistent herewith. The administrative
appeal provisions in 7 CFR parts 11 and 780 must be exhausted before
any action for judicial review may be brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
Background
This final rule amends section 2(j) in the General Crop Insurance
Policy (7 CFR 401.8) as mandated by the Federal Agriculture Improvement
and Reform Act of 1996. The 1996 Act removes the sodbuster/swampbuster
restrictions of Title XII of the Food Security Act of 1985 (Public Law
99-198) which preclude eligibility for crop insurance under the Federal
Crop Insurance Act (7 U.S.C. 1501 et seq.), to any person who in any
crop year produces an agricultural commodity on highly erodible land or
converted wetland. On or after of July 3, 1996, a person who produces
an agricultural commodity on a field which is classified as
predominantly highly erodible land or a converted wetland may apply for
crop insurance if the sales closing date for the crop has not passed.
Until the effective date, crop insurance policyholders must remain in
compliance with the sodbuster/swampbuster provisions. Since these
provisions are mandated by statute and planting decisions for the 1996
crop year have been or will shortly be made, it is impracticle and
contrary to the public interest to publish this rule for notice and
comment prior to making the rule effective. However, comments are
solicited for 60 days after the date of filing with the Federal
Register and will be considered by FCIC before this rule is made final.
List of Subjects in 7 CFR Part 401
Crop insurance, General crop insurance policy.
Final Rule
Pursuant to the authority contained in the Federal Crop Insurance
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance
Corporation hereby amends the General Crop Insurance Policy in 7 CFR
part 401, effective July 3, 1996, to read as follows:
PART 401--[AMENDED]
1. The authority citation for 7 CFR part 401 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. 7 CFR part 401.8 is amended by revising section 2j. of the
General Crop Insurance Policy to read as follows:
Sec. 401.8 The application and policy.
* * * * *
General Crop Insurance Policy
* * * * *
2. Crop, Acreage, and Share Insured
* * * * *
j. Although your violation of a number of federal statutes
including the Federal Crop Insurance Act may cause cancellation,
termination, or voidance of your insurance contract, you are
specifically directed to the provisions of Title XII of the Food
Security Act of 1985 (Public Law 99-198) and the regulations
promulgated thereunder, generally referred to as the controlled
substance provisions. Your insurance policy will be cancelled if you
are determined to be in violation of these provisions. We will
recover any and all monies paid to you or received by you and your
premium will be refunded.
* * * * * * *
Signed in Washington, DC, on July 16, 1996.
Suzette M. Dittrich,
Deputy Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-18616 Filed 7-25-96; 8:45 am]
BILLING CODE 3410-FA-P
