[Federal Register Volume 63, Number 57 (Wednesday, March 25, 1998)]
[Rules and Regulations]
[Pages 14333-14334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-7735]



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 Rules and Regulations
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  Federal Register / Vol. 63, No. 57 / Wednesday, March 25, 1998 / 
Rules and Regulations  

[[Page 14333]]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401, 454, and 457


General Crop Insurance Regulations, Various Endorsements; Fresh 
Market Tomato (Guaranteed Production Plan) Crop Insurance Regulations; 
and Common Crop Insurance Regulations, Various Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) adopts 
regulations for the General Crop Insurance Regulations; Canning and 
Processing Tomato and Rice Endorsements; Fresh Market Tomato 
(Guaranteed Production Plan) Crop Insurance Regulations; and the Common 
Crop Insurance Regulations, Cotton, Coarse Grains (Corn, Grain Sorghum, 
and Soybeans), Dry Bean, ELS Cotton, Sugar Beet, and Sunflower Seed 
Crop Insurance Provisions, effective for the 1998 crop year only, for 
counties and states with a November 30 contract change date. The 
intended effect of this action is to extend the contract change date to 
December 17, 1997.

EFFECTIVE DATE: This rule was effective November 26, 1997.

FOR FURTHER INFORMATION CONTACT: Louise Narber, Insurance Management 
Specialist, Research and Development, Product Development Division, 
Federal Crop Insurance Corporation, United States Department of 
Agriculture, 9435 Holmes Road, Kansas City, MO 64131, telephone (816) 
926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget (OMB) determined this rule to 
be not significant for the purposes of Executive Order 12866 and, 
therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    Under the provisions of the Paperwork Reduction Act of 1995 (44 
U.S.C. chapter 35), there are no information collection requirements 
contained in this rule.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. 
L.104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments or 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 
the UMRA.

Executive Order 12612

    It has been determined under section 6(a) of Executive Order 12612, 
Federalism, that this rule does not have sufficient federalism 
implications 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 economic impact on a 
substantial number of small entities. The extended contract change date 
included in this rule will not impact small entities to a greater 
extent than large entities. Under the current regulations, FCIC is 
required to have changes in policy provisions at the agent's office by 
November 30. If this date is not met, then the changes will not be 
applicable until the next crop year. The administrative process has 
delayed the implementation of the 1998 prevented planting and other 
policy changes intended to simplify and streamline the process. This 
regulation merely extended that date so that insurance companies and 
producers can receive the benefit of these changes in the 1998 crop 
year. The amount of work required of insurance companies 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 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. This rule was published as an interim 
rule effective November 26, 1997. The rule was in the agents office by 
November 30, 1997, so as to be effective for the 1998 crop year. The 
provisions of this rule will not have retroactive effect prior to 
November 26, 1997. 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 published at 7 CFR part 
11 must be exhausted before action against FCIC 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.

National Performance Review

    This regulatory action is being taken as part of the National 
Performance Review Initiative to eliminate unnecessary or duplicative 
regulations and improve those that remain in force.

Background

    On Tuesday, December 2, 1997, FCIC published an interim rule in the 
Federal Register at 62 FR 63631 to amend the General Crop Insurance 
Regulations,

[[Page 14334]]

Various Endorsements; Fresh Market Tomato (Guaranteed Production Plan) 
Crop Insurance Regulations; and Common Crop Insurance Regulations, 
Various Crop Insurance Provisions by extending the contract change date 
for certain 1998 spring crop counties and States. Since this rule 
benefited the insured and insurance companies by improving coverage and 
simplifying and streamlining the policies, good cause was found to make 
the interim rule effective November 26, 1997, the date the interim rule 
was placed on file for public inspection at the office at the Federal 
Register.
    Following publication of the interim rule, the public was afforded 
27 days to submit written comments and opinions. Comments were received 
from a reinsured company and legal counsel for a reinsured company. The 
comments and FCIC's responses are as follows:
    Comment: A reinsured company and legal counsel for a reinsured 
company stated that FCIC's inability to propose and promulgate timely 
changes in its regulations will adversely affect the reinsured 
companies and their policyholders. Since the first crops affected by 
the rule have a sales closing date of January 15, 1998, the commenters 
state that there is not sufficient time for the companies to understand 
the changes in the twelve policies FCIC has proposed to change, train 
the trainers, have the trainers train the agents, have the agents 
explain these changes to their insureds, and then to permit the 
insureds to complete the reports required of them in a timely and 
accurate manner. Also, when the insureds are late receiving the crop 
insurance changes, it interrupts and delays their planning and 
decisions. Receiving these changes late contributes to more obstacles 
to be overcome by program providers and agents as opposed to the 
mandate and goal of simplification. One of the commenters expects FCIC 
to hold the reinsured company harmless for the consequences of FCIC's 
errors and omissions. This commenter also stated that the reinsured 
company reserves the right to accept, without penalty, late filed 
applications, written agreements, acreage reports and any other 
document that requires a belated amendment as a result of the FCIC's 
delay regardless of whether the sales closing date is extended. The 
commenter also stated that the reinsured company reserves the right to 
challenge the legality of the FCIC's interim rule and final rule.
    Response: It was crucial that better late and prevented planting 
coverage be developed and implemented for the 1998 crop year. FCIC 
spent months working with producers, farm organizations, commodity 
groups, reinsured companies, an insurance service organization, and 
agents to develop simplified prevented planting provisions that: (1) 
Would protect producers when crops were prevented from being planted by 
an insurable cause of loss, (2) would be actuarially sound, (3) 
reinsured companies could quickly develop training plans to present to 
employees and agents, and (4) would be simple enough for agents to 
explain to the producers in a limited time frame. FCIC determined that 
its efforts were successful and that neither insureds nor reinsured 
companies would be adversely affected by extension of the contract 
change date. The sales closing date of January 15, 1998, which is the 
first sales closing date for the 1998 crop year, is only applicable to 
a few counties and crops and few insureds were affected by the contract 
change date extension. With respect to the sales closing date, neither 
the Manager or any reinsured company has the authority to extend the 
sales closing date. Further, nothing in the rule or the time of its 
implementation should require any sales closing date extensions. Late 
filed documents may only be accepted in accordance with applicable 
regulations and FCIC approved procedures. If FCIC extends the contract 
change date and the reinsured company does not feel prepared to sell a 
policy prior to the sales closing date, then the company should not 
sell the policy and the applicant should be advised to find another 
agent. Therefore, no change has been made and the interim rule as 
published on December 2, 1997, at 62 FR 63631 is adopted as a final 
rule.

List of Subjects

7 CFR Part 401

    Crop insurance, Canning and processing tomato, Rice.

7 CFR Part 454

    Crop insurance, Fresh market tomato (guaranteed production plan).

7 CFR Part 457

    Crop insurance, Cotton, Coarse grains (corn, grain sorghum, and 
soybeans), Dry bean, ELS cotton, Sugar beet, Sunflower seed.

PART 457--[AMENDED]

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

    Authority: 7 USC 1506(1), 1506(p).

Final Rule

    Accordingly, for the reasons set forth in the preamble, the Federal 
Crop Insurance Corporation adopts as a final rule, the interim rule as 
published at 62 FR 63631 on December 2, 1997.

    Signed in Washington, D.C., on March 18, 1998.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 98-7735 Filed 3-24-98; 8:45 am]
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