[Federal Register Volume 60, Number 139 (Thursday, July 20, 1995)]
[Rules and Regulations]
[Pages 37323-37324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17813]



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 Rules and Regulations
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  Federal Register / Vol. 60, No. 139 / Thursday July 20, 1995 / Rules 
and Regulations  


[[Page 37323]]


DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 400


General Administrative Regulations; Sanctions

RIN 0563-AB10
AGENCY: Federal Crop Insurance Corporation.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (``FCIC'') hereby 
amends its general administrative regulations relating to sanctions. 
The intended effect of this amendment is to set out the sanctions made 
available under the Federal Crop Insurance Act (the ``Act''), as 
amended by the Federal Crop Insurance Reform Act of 1994, with respect 
to civil fines and disqualification for willfully and intentionally 
providing false or inaccurate information and ineligibility to 
participate in any program administered under the Act as a result of 
the adoption of a material scheme or device to obtain benefits or 
indebtedness to FCIC or an insurance company.

EFFECTIVE DATE: July 20, 1995.

FOR FURTHER INFORMATION CONTACT: Diana Moslak, Federal Crop Insurance 
Corporation, Regulatory and Procedural Development Staff, U.S. 
Department of Agriculture, Washington, DC 20250. Telephone (202) 254-
8314.

SUPPLEMENTARY INFORMATION: This action has been reviewed under United 
States Department of Agriculture (``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 December 1, 1999.
    This rule has been determined to be ``not significant'' for the 
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.), no information collection or record-keeping requirements 
are found in this rule.
    It has been determined under section 6(a) of Executive Order 12612, 
Federalism, that this rule does not have sufficient federalism 
implication to warrant the preparation of a Federalism Assessment. The 
requirements and procedures 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.
    This regulation will not have a significant impact on a substantial 
number of small entities. This action does not increase the paperwork 
burden on the insured producer or the reinsured company. 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.
    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 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.
    The Office of the 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. This rule does not have retroactive effect 
and administrative appeals as established under 7 CFR part 400 subpart 
J or under regulations established under subtitle H of the Department 
of Agriculture Reorganization Act of 1994 (Pub. L. 103-354) 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 nor an Environmental Impact 
Statement is needed.
    On Friday, January 13, 1995, FCIC published a proposed rule in the 
Federal Register at 60 FR 3106 to amend, in accordance with the Federal 
Crop Insurance Reform Act of 1994, the General Administrative 
Regulations (7 CFR part 400). The proposed rule revised the penalty for 
giving false or inaccurate information and added a new section to 
provide that any participant in the program who knowingly adopts a 
material scheme or device should lose all benefits under the program.
    Following publication of the proposed rule, the public was afforded 
60 days to submit written comments, data and opinions, but none were 
received. Therefore, the proposed rule as published on January 13, 
1995, at 60 FR 3106 is hereby adopted as a final rule with minor 
change.

List of Subjects in 7 CFR Part 400

    Administrative practice and procedure, Claims, Crop insurance, 
Reporting and recordkeeping requirements.
Final Rule

    For the reasons set out in the preamble, subpart R, part 400 of 
chapter IV of title 7 of the Code of Federal Regulations is amended as 
follows:

PART 400--GENERAL ADMINISTRATIVE REGULATIONS

Subpart R--Sanctions

    1. The authority citation for 7 CFR part 400, subpart R, is revised 
to read as follows:

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

    2. Paragraph (a) of Sec. 400.454 is revised to read as follows:


Sec. 400.454  Civil penalties.

    (a) Any person who willfully and intentionally provides any 
materially false or inaccurate information to FCIC or to any approved 
insurance provider reinsured by FCIC with respect to an insurance plan 
or policy issued under the authority of the Federal Crop Insurance Act, 
as amended, (7 U.S.C. 1501 et seq.) may be subject to a civil fine of 
up to $10,000 and disqualification from participation in: 

[[Page 37324]]

    (1) The catastrophic risk protection plan of insurance and the 
noninsured crop disaster assistance program for a period not to exceed 
two (2) years; or
    (2) Any plan of insurance providing protection in excess of that 
provided under the catastrophic risk protection plan of insurance for a 
period not to exceed ten (10) years.
* * * * *
    3. A new Sec. 400.458 is added to read as follows:


Sec. 400.458  Scheme or device.

    (a) In addition to the penalties specified in this part, if a 
person has knowingly adopted a material scheme or device to obtain 
catastrophic risk protection, other plans of insurance coverage, or 
noninsured assistance benefits to which the person is not entitled, has 
evaded the provisions of the Federal Crop Insurance Act, or has acted 
with the purpose of evading the provisions of the Federal Crop 
Insurance Act, the person shall be ineligible to receive any and all 
benefits applicable to any crop year for which the scheme or device was 
adopted.
    (b) A scheme or device may include, but is not limited to, creating 
or using another entity, or concealing or providing false information 
with respect to your interest in the policyholder, to evade:
    (1) Suspension, debarment, or disqualification from participation 
in the program;
    (2) The assignment of the nonstandard classification system; or
    (3) Ineligibility for a delinquent debt owed to FCIC or the 
insurance company.
    4. A new Sec. 400.459 is added to read as follows:


Sec. 400.459  Indebtedness.

    Any person who has provided materially false information or 
misrepresented any material fact in connection with any program 
administered under the Act, and is indebted to FCIC or an insurance 
company arising from such conduct, is ineligible to participate in any 
program administered under the Act until the debt has been paid in 
full.

    Done in Washington, DC on July 12, 1995.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 95-17813 Filed 7-19-95; 8:45 am]
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