[Federal Register Volume 63, Number 146 (Thursday, July 30, 1998)]
[Rules and Regulations]
[Pages 40630-40632]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20352]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 400 and 402
RIN 0563-AB68
General Administrative Regulations, Subpart U; and Catastrophic
Risk Protection Endorsement; Regulations for the 1999 and Subsequent
Reinsurance Years
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Interim rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) amends the
General Administrative Regulations, Subpart U--Ineligibility for
Programs Under the Federal Crop Insurance Act and the Catastrophic Risk
Protection Endorsement to conform with the statutory mandates of the
Agricultural Research, Extension, and Education Reform Act of 1998
(1998 Research Act).
EFFECTIVE DATE: This rule is effective July 1, 1998. Written comments
and opinions on this rule will be accepted until the close of business
September 28, 1998, and will be considered when the rule is to be made
final.
ADDRESSES: Interested persons are invited to submit written comments to
the Director, Product Development Division, Federal Crop Insurance
Corporation, United States Department of Agriculture, 9435 Holmes Road,
Kansas City, MO 64131. A copy of each response will be available for
public inspection and copying from 7:00 a.m. to 4:30 p.m., CDT, Monday
through Friday, except holidays, at the above address.
FOR FURTHER INFORMATION CONTACT: Louise Narber, Insurance Management
Specialist, Research and Development, Product Development Division,
Federal Crop Insurance Corporation, United States Department of
Agriculture, 9435 Holmes Road, Kansas City, MO 64131, telephone (816)
926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be economically significant for
the purposes of Executive Order 12866 and, therefore, has been reviewed
by the Office of Management and Budget (OMB).
This action amends FCIC's regulations in accordance with the 1998
Research Act. This rule is being published on an emergency basis so
that affected producers have the opportunity to make timely decisions
regarding their insurance plans for the 1999 crop year for crops with
sales closing dates subsequent to the enactment of the 1998 Research
Act. The 1998 Research Act was signed by the President on June 23,
1998. The first sales closing date subsequent to the date of signing is
July 31, 1998, for raisins in California. This emergency situation
makes timely compliance with sections 6 (3)(B)(ii) and (3)(C) of
Executive Order 12866 impractical due to the short time to make this
rule effective prior to that sales closing date. FCIC will complete the
required cost-benefit analysis within 90 days of the publication of
this rule in the Federal Register and will make such analysis available
to the public.
Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L.
104-121, 5 U.S.C. Secs. 801-808)
This rule has been designated by the Office of Information and
Regulatory Affairs, OMB, as a major rule under the Small Business
Regulatory Enforcement Fairness Act of 1996 (Small Business Act).
However, section 808 of the Small Business Act exempts a rule from the
60 day delay in effectiveness of a rule where an agency for good cause
finds that notice and public procedure are impracticable, unnecessary,
or contrary to the public interest. The Administrator of the Risk
Management Agency (RMA) has determined that there is good cause for
making this rule effective less than 60 days after submission of the
rule to each House of Congress and to the Comptroller General because a
delay would be contrary to the public interest.
There are producers affected by this rule that must make critical
risk management decisions and the deadline for the first 1999 crop year
decisions is less than 60 days from the July 1, 1998, effective date of
the 1998 Research Act. A delay in the effective date of this rule will
create instability and inequity within the program as producers attempt
to determine whether they are affected and it will create separate
classes of producers who are subjected to the increased administrative
fees and those who are not.
Further, RMA was required to revise the Standard Reinsurance
Agreement before the July 1, 1998, start of the 1999 reinsurance year
to implement the provisions of the 1998 Research Act. If this rule is
delayed, it will create administrative problems for the 1999
reinsurance year because the reinsured companies will be subject to the
provisions of the 1998 Research Act but some of their insureds will
not.
Paperwork Reduction Act of 1995
Under the provisions of the Paperwork Reduction Act of 1995 (44
U.S.C. chapter 35), the collections of information for this rule have
been previously approved by the Office of Management and Budget (OMB)
under control number 0563-0053 through October 31, 2000. The amendments
set forth in this rule do not revise the content or alter the frequency
of reporting for any of the forms or information collections cleared
under the above-referenced docket.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates 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. This rule contains no Federal
mandates (under the regulatory provisions of title II of UMRA) for
State, local, and tribal governments or the
[[Page 40631]]
private sector. Therefore, this rule is not subject to the requirements
of sections 202 and 205 of UMRA.
Executive Order 12612
It has been determined under section 6(a) of Executive Order 12612,
Federalism, that this rule does not have sufficient federalism
implications 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 economic impact on a
substantial number of small entities. The regulation does not require
any more action on the part of the small entities than is required on
the part of large entities. 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 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. The administrative appeal provisions published
at 7 CFR part 11 must be exhausted before any action for judicial
review of any determination made by FCIC may be brought.
Environmental Evaluation
This action is not expected to have a significant economic 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 interim rule implements revisions to this part mandated by the
Federal Crop Insurance Act, as amended by the 1998 Research Act,
enacted June 23, 1998. The 1998 Research Act requires the provisions be
implemented for the 1999 and subsequent reinsurance years. Crop
insurance policies with a sales closing date prior to the effective
date of this rule will not be affected by these provisions until the
2000 reinsurance year. Crop insurance policies with a sales closing
date on or after the effective date of this rule will have revised
administrative fees. Since the changes to the policy made by this rule
are required by statute, it is impractical 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 publication in the Federal Register and will be considered
by FCIC before this rule is made final.
FCIC amends subpart U by revising the definition of ``debt'' to
remove the provision that states that a debt does not include the
nonpayment of catastrophic risk protection coverage administrative
fees.
FCIC amends the Catastrophic Risk Protection Endorsement as
follows:
1. Section 1--Revise the definition of ``administrative fee'' for
clarity.
2. Section 2--Delete the provisions regarding the termination of
the policy for failure to pay catastrophic risk protection (CAT)
administrative fees since those provisions have now been incorporated
into the Basic Provisions.
3. Section 6--Revise this section to specify that the
administrative fee for CAT coverage for each crop in the county will be
$10 plus the greater of either $50 or 10 percent of the premium under
your CAT policy. Also revise the date CAT fees will be due to coincide
with when the premium is due for additional coverage. This rule
eliminates all references to refunding administrative fees in the event
that the producer decided to change coverage levels prior to the sales
closing date since fees would not have been paid. Also, this rule makes
the provisions concerning the payment of administrative fees in the
year of application consistent with the payment of administrative fees
for limited coverage. This rule also eliminates the termination
provisions since they have been incorporated into the Basic Provisions.
List of Subjects in 7 CFR Parts 400 and 402
Administrative practice and procedure, Claims, Crop insurance;
Fraud, Reporting and record keeping requirements; Catastrophic risk
protection endorsement, Insurance provisions.
Interim Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation amends 7 CFR parts 400 and 402 as follows:
PART 400--GENERAL ADMINISTRATIVE REGULATIONS--SUBPART U--
INELIGIBILITY FOR PROGRAMS UNDER THE FEDERAL CROP INSURANCE ACT
1. The authority citation for 7 CFR part 400 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. In Sec. 400.677, revise the definition of ``debt'' to read as
follows:
Sec. 400.677 Definitions.
* * * * *
Debt. An amount of money which has been determined by an
appropriate agency official to be owed, by any person, to FCIC or an
insurance provider under any program administered under the Act based
on evidence submitted by the insurance provider. The debt may have
arisen from an overpayment, premium or administrative fee nonpayment,
interest, penalties, or other causes.
* * * * *
PART 402--CATASTROPHIC RISK PROTECTION ENDORSEMENT; REGULATIONS FOR
THE 1999 AND SUBSEQUENT REINSURANCE YEARS
3. The authority citation for 7 CFR part 402 continues to read as
follows:
Authority: 7 U.S.C. 1506(1), 1506(p).
4. The part heading is revised as set forth above.
5. Revise the introductory text of Sec. 402.4 to read as follows:
Sec. 402.4 Catastrophic Risk Protection Endorsement Provisions
The Catastrophic Risk Protection Endorsement Provisions for the
1999 and succeeding reinsurance years are as follows:
* * * * *
6. In Sec. 402.4, amend the endorsement provisions as follows:
A. In section 1, revise the definition of ``administrative fee'' to
read as follows:
[[Page 40632]]
Sec. 402.4 Catastrophic Risk Protection Endorsement Provisions.
* * * * *
Catastrophic Risk Protection Endorsement
* * * * *
1. Definitions.
* * * * *
Administrative fee. An amount the producer must pay for
catastrophic coverage each crop year on a per crop and county basis
as specified in section 6.
B. Remove section 2(d).
C. Revise section 6(b) to read as follows:
* * * * *
6. Annual Premium and Administrative Fees
* * * * *
(b) In return for catastrophic risk protection coverage, you
must pay an administrative fee to the insurance provider within 30
days after you have been billed (You will be billed by the billing
date stated in the Special Provisions);
(1) The administrative fee owed for each crop in the county is
equal to $10 plus the greater of either $50 or 10 percent of the
premium subsidy provided for the catastrophic risk protection
coverage.
(2) Payment of an administrative fee will not be required if you
file a bona fide zero acreage report on or before the acreage
reporting date for the crop (if you falsely file a zero acreage
report you may be subject to criminal and administrative sanctions).
* * * * *
D. Remove section 6(e).
E. Redesignate section 6(f) as section 6(e) and revise to read as
follows:
* * * * *
(e) If the administrative fee is not paid when due, you, and all
persons with an insurable interest in the crop under the same
contract, may be ineligible for certain other USDA program benefits
as set out in section 12, and all such benefits already received for
the crop year must be refunded.
* * * * *
Signed in Washington, D.C., on July 24, 1998.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 98-20352 Filed 7-27-98; 5:10 pm]
BILLING CODE 3410-08-P
