[Federal Register Volume 59, Number 200 (Tuesday, October 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25713]


[[Page Unknown]]

[Federal Register: October 18, 1994]


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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation

7 CFR Part 400

 

General Administrative Regulations; Collection and Storage of 
Social Security Account Numbers and Employer Identification Numbers

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Direct final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) hereby amends 
the substantial beneficial interest requirements set for any individual 
who has an interest in the policyholder. Current provisions require an 
individual who has a five percent or more interest in the policyholder 
to submit a social security or employer identification number. FCIC 
amends this provision by redefining and liberalizing substantial 
beneficial interest as ten percent or more interest in the 
policyholder. In addition, FCIC reduces, from five years to three 
years, the record retention requirements imposed by this regulation.

DATES: This rule will be effective on November 17, 1994 unless FCIC 
receives written adverse comments or written notice of intent to submit 
adverse comments on or before November 7, 1994. If FCIC receives 
written adverse comments or written notice of intent to submit adverse 
comments, FCIC will publish a notice in the Federal Register 
withdrawing this rule before the effective date.

ADDRESSES: Please send any adverse comments or notice of intent to 
submit adverse comments to Mari L. Dunleavy, Regulatory and Procedural 
Development Staff, Federal Crop Insurance Corporation, USDA, 
Washington, DC 20250. Hand or messenger delivery may be made to Suite 
500, 2101 L St. NW, Washington, DC 20037.

FOR FURTHER INFORMATION CONTACT:
Mari L. Dunleavy, Regulatory and Procedural Development Staff, Federal 
Crop Insurance Corporation, USDA, Washington, DC 20250. Telephone (202) 
254-8314.

SUPPLEMENTARY INFORMATION:

Effective Date

    FCIC is publishing this rule without a prior proposal because FCIC 
views this action as noncontroversial and anticipates no adverse public 
comment. This rule will be effective, as published in this document, 30 
days after the date of publication in the Federal Register unless FCIC 
receives written adverse comments or written notice of intent to submit 
adverse comments within 20 days of the date of publication of this rule 
in the Federal Register.
    Adverse comments are comments that suggest the rule should not be 
adopted or that suggest the rule should be changed.
    If FCIC receives written adverse comments or written notice of 
intent to submit adverse comments, FCIC will publish a notice in the 
Federal Register withdrawing this rule before the effective date. FCIC 
will then publish a proposed rule for public comment. Following the 
close of that comment period, the comments will be considered, and a 
final rule addressing the comments will be published.
    As discussed above, if FCIC receives no written adverse comments 
nor written notice of intent to submit adverse comments within 20 days 
of publication of this direct final rule, this direct final rule will 
become effective 30 days following its publication. FCIC will publish a 
notice to this effect in the Federal Register, before the effective 
date of this direct final rule, confirming that it is effective on the 
date indicated in this document.

Executive Orders, Regulatory Flexibility Act, and Paperwork Reduction 
Act

    This action has been reviewed under USDA procedures established by 
Executive Order 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 March 1, 1999.
    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and therefore, has not been reviewed by the 
Office of Management and Budget (OMB).
    In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 
3501 et seq.), the information collection or recordkeeping requirements 
included in this proposed rule can be found in 7 CFR 400 subpart H.
    It has been determined under section 6(a) of Executive Order 12612, 
Federalism, that this proposal does not have sufficient federalism 
implications to warrant the preparation of a Federalism assessment. The 
provisions contained in this rule will not have substantial direct 
effects on states or their political subdivisions, or on the 
distribution of power and responsibilities among the various levels of 
government.
    This rule has been reviewed in accordance with Executive Order 
12778. The provisions of this proposed rule will preempt state and 
local laws to the extent such state and local laws are inconsistent 
herewith. The administrative appeal provisions located at 7 CFR part 
400, subpart J must be exhausted before judicial action may be brought.
    This action would not have a significant economic impact on a 
substantial number of small businesses. This amendment liberalizes 
paperwork requirements for the insureds and the companies delivering 
Federal crop insurance. The current FCIC approved Privacy Act statement 
on Company forms that includes reference to Substantial Beneficial 
interest of five percent or more will not need to be revised by 
companies as a result of this rule until such time as current stocks 
are depleted and forms are reprinted. Therefore, this action is 
determined to be exempt from the provisions of the Regulatory 
Flexibility Act and no Regulatory Flexibility Analysis was prepared.
    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.
    This program is not subject to the provisions of Executive Order 
12372 which requires 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.
    The Office of General Counsel has determined that these regulations 
meet the applicable standards provided in subsections 2(a) and 2(b)(2) 
of Executive Order 12778. 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 located at 
7 CFR part 400, subpart J must be exhausted before judicial action may 
be brought.
    This action is not expected to have any significant impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment or an Environmental Impact 
Statement is needed.

Background

    FCIC is changing its requirement that individuals or entities who 
hold or acquire a five percent or greater substantial beneficial 
interest in the policyholder must submit social security or employer 
identification numbers to individuals or entities who hold or acquire a 
ten percent or greater interest in the policyholder. FCIC is changing 
its requirement from five to ten percent because the number of crop 
insurance policyholders with share interests ranging from five to ten 
percent are relatively insignificant. In addition, by raising the 
requirement for when the amount of substantial beneficial interest is 
applicable, FCIC eliminates the burden of additional paperwork by 
eliminating collection of social security or employer identification 
data in order to secure agricultural program benefits on beneficial 
interest relationships falling in the five to ten percent category.
    FCIC is also changing its record keeping requirements from five to 
three years. By eliminating two years, FCIC will reduce the paperwork 
burden and storage of records beyond three years, which is consistent 
with other policy and program requirements. FCIC does not believe that 
a two-year reduction of insureds' record storage will jeopardize the 
integrity of the crop insurance program.

List of Subjects in 7 CFR Part 400

    Crop insurance, Social Security numbers, Reporting and 
recordkeeping requirements.

    Accordingly, the Federal Crop Insurance Corporation amends 7 CFR 
part 400, subpart Q as follows:

PART 400--GENERAL ADMINISTRATIVE REGULATIONS

    1. The authority citation for part 400 continues to read as 
follows:

    Authority: 7 U.S.C. 1506, 1508.

    2. Section 400.402 is amended by revising paragraph (v) to read as 
follows:


Sec. 400.402  Definitions.

* * * * *
    (v) Substantial beneficial interest--an interest of ten percent 
(10%) or more in an application or policyholder.
* * * * *
    3. Section 400.411 is revised to read as follows:


Sec. 400.411  Record retention.

    The reinsured insurance company, either direct or reinsured, will 
retain all records of policyholders for a period of not less than three 
(3) years from the date of a final action on a policy for the crop year 
unless maintenance of specific records is requested by the Corporation. 
Final actions on insurance policies include conclusion of such 
insurance events such as renewal or termination of policy, completion 
of loss adjustment, or satisfaction of claim. Companies are reminded 
that the Statute of Limitation for FCIC contract claims requires that 
litigation be instituted within six years of a breach of contract. 
Destruction of records will not provide a defense to any action by the 
Corporation against any Company.

    Done in Washington, DC, on October 3, 1994.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 94-25713 Filed 10-17-94; 8:45 am]
BILLING CODE 3410-08-M