08-1395. Catastrophic Risk Protection Endorsement and the Group Risk Plan of Insurance Regulations

AGENCY:

Federal Crop Insurance Corporation, USDA.

ACTION:

Final rule.

SUMMARY:

The Federal Crop Insurance Corporation (FCIC) amends the Catastrophic Risk Protection Endorsement (7 CFR 402.4) (CAT Endorsement), and the Group Risk Plan Common Policy (7 CFR 407.9) (GRP policy) to incorporate changes in the administrative fees for catastrophic risk protection mandated by the Food, Conservation, and Energy Act of 2008 (Farm Bill 2008).

DATES:

Effective Date: This rule is effective June 25, 2008.

FOR FURTHER INFORMATION CONTACT:

Erin Albright, Risk Management Specialist, Product Management, Product Administration and Standards Division, Risk Management Agency, United States Department of Agriculture, Beacon Facility—Mail Stop 0812, PO Box 419205, Kansas City, MO 64141-6205, telephone [phone].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be non-significant for the purposes of Executive Order 12866 and, therefore, it has not been reviewed by the Office of Management and Budget (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 June 30, 2008.

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.

Regulatory Flexibility Act

FCIC certifies that this regulation will not have a significant economic impact on a substantial number of small entities. Administrative fee requirements for the Federal crop insurance program are the same for all producers regardless of the size of their operations. Whether a producer has 10 acres or 100 acres there is no difference in the administrative fee requirements. 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 change helps 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 any direct action taken by FCIC or 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 May 22, 2008, the 2008 Farm Bill was enacted. Section 12006 of the 2008 Farm Bill requires that each producer pay an administrative fee for catastrophic risk protection (CAT) in the amount of $300 per crop per county. The provisions are very specific and mandate certain terms that do not allow FCIC any discretion in the provisions or their implementation. Currently, the administrative fee for catastrophic risk protection is $100 per crop per county. Further, that section expressly authorizes cooperative and trade associations to pay the administrative fee for CAT coverage under certain circumstances. Provisions have been modified to allow such associations to pay the CAT administrative fee.

To effectuate this mandated change, FCIC is revising the CAT Endorsement and the GRP policy.

Good cause is shown to make this rule effective upon filing for public inspection at the Office of the Federal Register. Good cause exists when notice and comment and the 30 day delay in the effective date is impracticable, unnecessary, or contrary to the public interest.

FCIC is merely making ministerial changes to the policy that are mandated by the 2008 Farm Bill. There is no discretion given to FCIC in the terms contained in this rule or their implementation. Further, the next applicable contract change date, the date by which changes to the policy must be made to have them effective for the next crop year, is June 30, 2008. Therefore, there is no time to conduct a notice and comment rulemaking.

For the reasons stated above, good cause exists to make these policy changes effective upon filing for public inspection at the Office of the Federal Register.

List of Subjects in 7 CFR Parts 402 and 407

• Crop insurance
• Reporting and recordkeeping requirements

Final Rule

Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation amends 7 CFR parts 402 and 407 effective for the 2009 and succeeding crop years for all crops with a 2009 crop year contract change date on or after the effective date of this rule, and for the 2010 and succeeding crop years for all crops with a 2009 crop year contract change date prior to the effective date of this rule, as follows:

PART 402—CATASTROPHIC RISK PROTECTION ENDORSEMENT

1. The authority citation for 7 CFR Part 402 continues to read as follows:

Authority: 7 U.S.C. 1506(l), 1506(p).

2. Amend § 402.4:

a. By removing the introductory text; and

b. In section 6, by revising the introductory text of paragraph (b) and paragraph (b)(1) to read as follows:

§ 402.4

Catastrophic Risk Protection Endorsement Provisions.

* * * * *

6. Annual Premium and Administrative Fees.

* * * * *

(b) In return for catastrophic risk protection coverage, you must pay an administrative fee to us within 30 days after you have been billed, unless otherwise authorized in the Federal Crop Insurance Act (You will be billed by the date stated in the Special Provisions);

(1) The administrative fee owed is $300 for each crop in the county unless otherwise specified in the Special Provisions.

* * * * *

PART 407—GROUP RISK PLAN OF INSURANCE REGULATIONS

1. The authority citation for 7 CFR Part 407 continues to read as follows:

Authority: 7 U.S.C. 1506(l), 1506(p).

2. Revise the part heading as set forth above.

3. Amend § 407.9:

a. By removing the introductory text; and

b. In section 8 by revising the introductory text of paragraph (a) and paragraph (a)(1) to read as follows:

§ 407.9

Group risk plan common policy.

* * * * *

8. Administrative Fees and Annual Premium.

(a) If you obtain a catastrophic risk protection GRP policy, you will pay an administrative fee, unless otherwise authorized in the Act:

(1) Of $300 per crop per county unless otherwise specified in the Special Provisions;

* * * * *

Signed in Washington, DC, on June 24, 2008.

Eldon Gould,

Manager, Federal Crop Insurance Corporation.