E7-4333. Common Crop Insurance Regulations; Walnut Crop Insurance Provisions; Almond Crop Insurance Provisions

AGENCY:

Federal Crop Insurance Corporation, USDA.

ACTION:

Final rule.

SUMMARY:

The Federal Crop Insurance Corporation (FCIC) finalizes the Common Crop Insurance Regulations; Walnut Crop Insurance Provisions and Almond Crop Insurance Provisions. The intended effect of this action is to change the insurable age requirements for almonds and walnuts.

EFFECTIVE DATE:

April 11, 2007.

FOR FURTHER INFORMATION CONTACT:

John McDonald, Risk Management Specialist, Deputy Administrator for Product Management, Product Administrator and Standards Division, Risk Management Agency, at the Kansas City, MO, address listed above; telephone [phone].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

The Office of Management and Budget (OMB) has determined that this rule is non-significant for the purposes 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 November 30, 2007.

Government Paperwork Elimination Act (GPEA) Compliance

FCIC is committed to compliance with the GPEA, which requires Government agencies, in general, to provide the public with the option of submitting information or transacting business electronically to the maximum extent possible. FCIC requires that all reinsured companies be in compliance with the Freedom to E-File Act and section 508 of the Rehabilitation Act.

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. Written agreement requirements for the Federal crop insurance program are the same for all producers regardless of the size of their operations. For instance, all producers requesting this type of written agreement must submit actual yields for at least the most recent three crop years in which the crop was planted during the base period. Any producer who did not produce the crop for at least three years, for which the written agreement is requested, must submit actual yields for a similar crop, or a combination of actual yields for the crop and a similar crop in the county for which the written agreement is being requested. Whether a producer has 10 acres or 100 acres there is no difference in the kind of information required for requesting a written agreement. 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 proposed 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 Tuesday, March 21, 2006, FCIC published a notice of proposed rulemaking in the Federal Register at 71 FR 6016-6021 to amend 7 CFR 457.122 Walnut crop insurance provisions and 7 CFR 457.123 Almond crop insurance provisions effective for the 2008 and succeeding crop years.

The public was afforded 60 days to submit written comments and opinions. The commenters were an insurance services organization and an insurance provider. The comments received and FCIC's response is as follows:

Comment: Two commenters recommended changing the language in section 6(d) of the Walnut Crop Provisions and section 6(e) of the Almond Crop Provisions from “unless otherwise provided in the Special Provisions or by written agreement” to read; “unless otherwise provided in the Special Provisions or we agree in writing”.

The commenters concerns with issuing written agreements to insure production from underage trees would require approved insurance providers to submit all policies to the Regional Office for written agreement consideration. Currently, insureds have the ability to insure production from underage almond and walnut trees at all coverage levels by “we agree in writing” under the current Crop Provisions.

The commenters state that approved insurance providers would be faced with a difficult and costly task to abide by all documentation requirements for written agreement submissions within the standard 15 business days after the sales closing date and thus result in the insured potentially not getting insurance coverage timely. As a result, the use of the written agreements as a means to provide coverage for production from underage almond and walnut trees would be burdensome to the producer.

The commenters also state that producers now have the ability to insure production from underage almond and walnut trees at the catastrophic risk protection (CAT) level. They claim the current proposal would make CAT policies ineligible for this insurance coverage under the written agreement criteria, since written agreements are not available under CAT coverage.

The commenters state that the use of “we agree in writing” language allows the approved insurance providers and RO's to efficiently process the request to insure production from underage almond and walnut trees. Any deviation from this process would be resisted by the AIPs, Regional Office, agents and insureds.

Response: FCIC realized that the proposed language would have needlessly imposed a heavy burden on producers, agents, AIPs and ROs. However, the preamble of the policy only allows deviation from the policy terms if allowed by written agreement. Therefore, use of the term “agree in writing” is not a viable solution. Instead, FCIC has amended the language to state coverage on production from under-aged trees is allowed if provided for in the Special Provisions. This change will provide insurance coverage for production from under-aged trees without the need to have a written agreement. This will also allow coverage to be available at all buy-up coverage levels and at the CAT level of coverage.

List of Subjects in 7 CFR Part 457

• Crop insurance
• Walnut and Almond
• Reporting and record keeping requirements

Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation amends 7 CFR part 457, Common Crop Insurance Regulations, for the 2008 and succeeding crop years as follows:

PART 457—COMMON CROP INSURANCE REGULATIONS

1. The authority citation for 7 CFR part 457 continues to read as follows:

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

2. Amend § 457.122 as follows:

A. Revise the first sentence of the introductory text.

B. Revise paragraph 6(d).

The revisions to § 457.122 read as follows:

§ 457.122

Walnut crop insurance provisions.

The Walnut Crop Insurance Provisions for the 2008 and succeeding crop years are as follows:

* * * * *

6. Insured Crop

* * * * *

(d) On acreage where at least 90 percent of the trees have reached at least the seventh growing season after being set out, unless otherwise provided in the Special Provisions.

* * * * *

3. Amend § 457.123 as follows:

A. Revise the first sentence of the introductory text.

B. Revise paragraph 6(e).

The revisions to § 457.123 read as follows:

§ 457.123

Almond crop insurance provisions.

The Almond Crop Insurance Provisions for the 2008 and succeeding crop years are as follows:

* * * * *

6. Insured Crop

* * * * *

(e) On acreage where at least 90 percent of the trees have reached at least the sixth growing season after being set out, unless otherwise provided in the Special Provisions.

* * * * *

Signed in Washington, DC, on March 6, 2007.

Eldon Gould,

Manager, Federal Crop Insurance Corporation.