[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Rules and Regulations]
[Pages 38057-38058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18615]



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 Rules and Regulations
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  Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Rules 
and Regulations  

[[Page 38057]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 400

RIN 0563-AB59


General Administrative Regulations; Food Security Act of 1985, 
Implementation; Denial of Benefits

AGENCY: Federal Crop Insurance Corporation.

ACTION: Interim rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) amends the 
General Administrative Regulations located at 7 CFR part 400. The 
intended effect of this interim rule is to remove restrictions mandated 
by the Food Security Act of 1985 that preclude eligibility for crop 
insurance for any person who in any crop year produces an agricultural 
commodity on a field which is classified as predominantly highly 
erodible land (sodbuster provision) or converted wetland (swampbuster 
provision). The Federal Agriculture Improvement and Reform Act of 1996 
(the 1996 Act) amends the crop insurance restriction, so producers who 
are in violation of the sodbuster/swampbuster provisions will be 
eligible for crop insurance coverage on or after July 3, 1996.

DATES: Effective July 3, 1996. Written comments, data, and opinions on 
this rule will be accepted until close of business September 20, 1996.

ADDRESSES: Interested persons are invited to submit written comments to 
the Chief, Product Development Branch, Federal Crop Insurance 
Corporation, United States Department of Agriculture (USDA), 9435 
Holmes Road, Kansas City, MO 64131. Written comments will be available 
for public inspection and copying in room 0324, South Building, USDA, 
14th and Independence Avenue, SW., Washington, DC., 8:15 a.m.-4:45 
p.m., Monday through Friday, except holidays.

FOR FURTHER INFORMATION CONTACT: Stephen Hoy, Program Analyst, Research 
and Development Division, Product Development Branch, FCIC, at the 
Kansas City, MO, address listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866 and Departmental Regulation 1512-1

    This action has been reviewed under USDA procedures established by 
Executive Order No. 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 June 30, 2001.
    This rule has been determined to be significant for the purposes of 
Executive Order No. 12866 and therefore has been reviewed by the Office 
of Management and Budget (OMB).

Cost-Benefit Analysis

    A Cost-Benefit Analysis has been completed and is available to 
interested persons at the address listed above. In summary, the 
analysis finds that the removal of sanctions affecting a producer's 
eligibility for Federal crop insurance as specified in the sodbuster 
and swampbuster provisions will result in two types of costs. First, 
environmental costs, in some cases, will be incurred as the elimination 
of crop insurance from the list of denied benefits reduces the 
sanctions associated with violating sodbuster/swampbuster provisions. 
Second, if acres affected by the sodbuster/swampbuster provisions are 
increasingly planted and insured, the costs to the Federal Crop 
Insurance Corporation will rise. The environmental and Federal costs 
associated with elimination of crop insurance as a sodbuster/
swampbuster sanction are, however, largely unknown.
    Environmental costs will depend on the extent farmers produce 
insurable crops (or alter practices or structures) on sodbuster/
swampbuster acreage when such activity would not otherwise occur. Many 
variables will affect a producer's decision, including the amount of 
land affected by sodbuster/swampbuster relative to the producer's total 
acreage receiving benefits, expected prices and yields, the loss of 
USDA benefits (other than crop insurance), expected crop insurance 
benefits, and the expected environmental impact.
    Federal costs associated with the elimination of crop insurance as 
a sodbuster/swampbuster sanction are unknown because the number of 
producers who will violate sodbuster/swampbuster provisions, and insure 
crops produced on their farms, is impossible to judge. The actual 
realized cost will depend to a large extent on FCIC's appropriately 
rating sodbuster and swampbuster acreage that is planted and insured. 
Between $500,000 and $1 million in crop insurance benefits were denied 
annually due to sodbuster/swampbuster violations in recent years. 
Benefits of a similar magnitude to the recent denials will probably be 
paid in future years.

Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995, the 
information collection requirements contained in these regulations have 
been previously approved by OMB and assigned OMB control numbers 0563-
0003, 0563-0016 and 0560-0004. Copies of the information collections 
may be obtained from Bonnie Hart, USDA, FSA, Advisory and Corporate 
Operations Staff, Regulatory Review Group, PO Box 2415, Ag Box 0572, 
Washington, DC 20013-2415, 8:15 a.m.-4:45 p.m., Monday through Friday, 
except holidays, telephone (202) 690-2857.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandate 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. Under section 202 of the UMRA, FCIC 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with Federal mandates that may 
result in expenditures of State, local, or tribal governments, in the 
aggregate, or to the private sector, of $100 million or more in any one 
year. When such a statement is needed for a rule, section 205 of the 
UMRA generally requires FCIC to identify and consider a reasonable 
number of regulatory alternatives and

[[Page 38058]]

adopt the least costly, more cost-effective or least burdensome 
alternative that achieves the objectives of the rule.
    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. Thus, this rule is not subject to 
the requirements of sections 202 and 205 of the UMRA.

Executive Order No. 12612

    It has been determined under section 6(a) of Executive Order No. 
12612, Federalism, that this rule does not have sufficient Federalism 
implication 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 impact on a substantial 
number of small entities. Under the current regulations, a producer is 
required to complete a crop insurance acreage report, an insurance 
application and a continuous contract. If the crop is damaged or 
destroyed, the insured is required to give notice of loss and provide 
the necessary information to complete a claim for indemnity. The 
insured may use actual records of production or receive a transitional 
yield which does not require the maintenance of production records. If 
the insured elects to use actual records of acreage and production as 
the basis for the production guarantee, the insured must report this 
information on a yearly basis. This regulation does not alter those 
requirements. Therefore, the amount of work required of the insurance 
companies and Farm Service agency (FSA) offices delivering and 
servicing these policies will not increase significantly from the 
amount of work currently required. This rule does not have any greater 
or lesser impact on the producer. 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 No. 12372

    This program is not subject to the provisions of Executive Order 
No. 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 No. 12778

    The Office of the General Counsel has determined that these 
regulations meet the applicable standards provided in sections 2(a) and 
2(b)(2) of Executive Order No. 12778. The provisions of this rule will 
not have a retroactive effect prior to the effective date. 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 in 7 CFR parts 11 and 780 must be exhausted before 
any action for judicial review may be brought.

Environmental Evaluation

    This action is not expected to have a significant 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 final rule amends the General Administrative Regulations (7 
CFR part 400) as mandated by the Federal Agriculture Improvement and 
Reform Act of 1996. The 1996 Act removes the sodbuster/swampbuster 
restrictions of Title XII of the Food Security Act of 1985 (Pub. L. 99-
198) which preclude eligibility for crop insurance under the Federal 
Crop Insurance Act (7 U.S.C. 1501 et seq.), to any person who in any 
crop year produces an agricultural commodity on highly erodible land or 
converted wetland. On or after the effective date of July 3, 1996, a 
person who produces an agricultural commodity on a field which is 
classified as predominantly highly erodible land or a converted wetland 
may apply for crop insurance if the sales closing date has not passed. 
Until the effective date, crop insurance policyholders must remain in 
compliance with the sodbuster/swampbuster provisions. Since these 
provisions are mandated by statute and planting decisions for the 1996 
crop year have been or will shortly be made, it is impracticle 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.

List of Subjects in 7 CFR Part 400

    Crop insurance.

Final Rule

    Pursuant to the authority contained in the Federal Crop Insurance 
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance 
Corporation hereby amends the General Administrative Regulations, (7 
CFR part 400), effective July 3, 1996, to read as follows:

PART400--[AMENDED]

    1. The authority citation for 7 CFR part 400, subpart F, continues 
to read as follows:
    Authority: Secs, 1506, 1516, Pub. L. 75-430, 52 Stat. 73, 77, as 
amended (7 U.S.C. 1501 et seq.); sec. 1244, Pub. L. 99-198.


Sec. 400.47  [Amended]

    2. Section 400.47, Denial of crop insurance, is amended by removing 
paragraphs (b), (c), and (e) and redesignating paragraph (d) as 
paragraph (b), paragraph (f) as paragraph (c), and paragraph (g) as 
paragraph (d);


Sec. 400.48  [Amended]

    3. Section 400.48, Protection of interests of tenants landlords, or 
producers, is amended by removing paragraph (b) and redesignating 
paragraph (c) as paragraph (b);


Sec. 400.49  [Removed and Reserved]

    4. Section 400.49, Certification, is removed and reserved; and


Sec. 400.50  [Removed and Reserved]

    5. Section 400.50, Graduated sanctions, is removed and reserved.

    Signed in Washington, DC, on July 16, 1996.
Suzette M. Dittrick,
Deputy Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-18615 Filed 7-22-96; 8:45 am]
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