[Federal Register Volume 64, Number 189 (Thursday, September 30, 1999)]
[Proposed Rules]
[Pages 52678-52680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24819]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 64, No. 189 / Thursday, September 30, 1999 / 
Proposed Rules  

[[Page 52678]]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 400

Farm Service Agency

7 CFR Part 780


Appeal Procedure Regulation

AGENCIES: Federal Crop Insurance Corporation and Farm Service Agency, 
USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) and the Farm 
Service Agency (FSA) propose to amend general administrative 
regulations and appeal procedure regulations. The intended effect of 
the rule is to establish procedures for program participant appeals of 
adverse decisions made by the Risk Management Agency (RMA).

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business November 29, 1999, and will be 
considered when the rule is to be made final.

ADDRESSES: Interested persons are invited to submit written comments to 
Nancy Kreitzer, Appeals, Litigation and Legal Liaison Staff, Federal 
Crop Insurance Corporation, United States Department of Agriculture, 
1400 Independence Avenue, S.W., Stop 0807, Washington, D.C. 20250-0807.

FOR FURTHER INFORMATION CONTACT: Nancy Kreitzer, Director, Appeals, 
Litigation and Legal Liaison Staff, Federal Crop Insurance Corporation, 
at the address listed above, telephone (202) 690-1683.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

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

Paperwork Reduction Act of 1995

    This proposed rule does not constitute a collection of information 
under the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35).

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 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. This action does not increase the 
burden on any entity because this action merely clarifies and 
establishes provisions for producers to use in filing appeals of 
adverse decisions. The effect on small entities is the same as that for 
large entities. 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 proposed rule has been reviewed under the provisions of 
Executive Order 12988 on civil justice reform. 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 published at 7 CFR part 11 must be 
exhausted before any action for judicial review may be brought against 
FCIC.

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

    The Federal Agriculture Improvement and Reform Act of 1996 (1996 
Act) amended the Department of Agriculture Reorganization Act of 1994 
(Reorganization Act) by creating an Office of Risk Management. The 
Secretary implemented this provision with Secretary's Memorandum 1010-2 
issued on May 3, 1996, which established the Risk Management Agency 
(RMA). Among the functions of RMA is the administration of the crop 
insurance programs for FCIC, a function formerly assigned to the Farm 
Service Agency (FSA).
    This proposed rule would amend FCIC and FSA informal appeal 
regulations to reflect the establishment of RMA and the reorganization 
of crop insurance functions. It does not reflect any response to 
comments received on the prior interim final rule for 7 CFR part 400, 
subpart J, or 7 CFR part 780 promulgated on December 29, 1995 (60 FR 
67298).

[[Page 52679]]

List of Subjects in 7 CFR Parts 400 and 780

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

Proposed Rule

    For the reasons stated in the preamble, the Federal Crop Insurance 
Corporation proposes to amend 7 CFR part 400, subpart J, and the Farm 
Service Agency proposes to amend 7 CFR part 780 as follows:

PART 400--GENERAL ADMINISTRATIVE REGULATIONS

    1. Revise 7 CFR part 400, subpart J, to read as follows:

Subpart J--Appeal Procedure

Sec.
400.90  Definitions.
400.91  Applicability.
400.92  Appeals.
400.93  Administrative review.
400.94  Mediation.
400.95  Time limitations for filing and responding to requests for 
administrative review.
400.96  Judicial review.
400.97  Reservations of authority.

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


Sec. 400.90  Definitions.

    Act. The Federal Crop Insurance Act (7 U.S.C. 1501-1521).
    Administrative review. A subsequent consideration of a prior 
decision by the same reviewing authority. A participant cannot request 
an administrative review of an adverse decision that resulted from a 
previous request for administrative review.
    Adverse decision. See the definition in 7 CFR part 11.
    Agency. RMA or FCIC, including the RSO, FOSD or any other division 
within the Agency with decision making authority.
    Appellant. Any participant who appeals or requests mediation of an 
adverse decision of the Agency in accordance with this subpart. Unless 
otherwise specified in this subpart, the term ``appellant'' includes an 
authorized representative.
    Authorized representative. Any person, whether or not an attorney, 
who has obtained a Privacy Act waiver and is authorized in writing by a 
participant to act for the participant in the appeal process.
    Certified State. A State with a mediation program, approved by the 
Secretary of Agriculture, that meets the requirements of 7 CFR part 
1946, subpart A, or a successor regulation.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
Government corporation within USDA.
    FSA. The Farm Service Agency, an agency of USDA, or a successor 
agency.
    FOSD. The Fiscal Operations and Systems Division established by the 
Agency for the purpose of making determinations of indebtedness of 
persons who are insured under contracts of insurance issued under the 
Act.
    Mediation. A process in which a trained, impartial, neutral third 
party (the mediator), meets with the disputing parties, facilitates 
discussions, and works with the parties to resolve their disputes, 
narrow areas of disagreement, and improve communication.
    NAD. The USDA National Appeals Division.
    Non-certified State. A State that has either not applied for or has 
not been approved by the Secretary of Agriculture to participate in the 
USDA Mediation Program under 7 CFR part 1946, subpart A, or a successor 
regulation.
    Participant. See the definition in 7 CFR part 11.
    RSO. The Regional Service Offices established by the Agency for the 
purpose of providing program and underwriting services for private 
insurance companies reinsured by FCIC under the Act and for FCIC 
insurance contracts delivered through FSA offices.
    Reinsured company. A private insurance company, including its 
agents, that has been approved and reinsured by FCIC to provide 
insurance to participants.
    Reviewing authority. A person assigned the responsibility by the 
Agency of making a decision on a request for administrative review 
requested by the participant in accordance with this subpart.
    RMA. The Risk Management Agency, an agency of USDA, or a successor 
agency.
    Secretary. The Secretary of Agriculture.
    USDA. United States Department of Agriculture.


Sec. 400.91  Applicability.

    (a) This subpart applies to adverse decisions made by personnel of 
the Agency with respect to:
    (1) Contracts of insurance insured by FCIC; and
    (2) Contracts of insurance of private insurance companies and 
reinsured by FCIC under the provisions of the Act.
    (b) This subpart is not applicable to any decision:
    (1) Made by the Agency with respect to any matter arising under the 
terms of the Standard Reinsurance Agreement with the reinsured company; 
or
    (2) Made by any private insurance company with respect to any 
contract of insurance issued to any producer by the private insurance 
company and reinsured by FCIC under the provisions of the Act.
    (c) With respect to matters identified in Sec. 400.91(a), 
participants may request an administrative review, mediation or appeal 
of adverse decisions by the Agency made with respect to:
    (1) Denial of participation in a program;
    (2) Compliance with program requirements;
    (3) Issuance of payments or other program benefits to a participant 
in a program; and
    (4) Issuance of payments or other benefits to an individual or 
entity who is not a participant in a program.
    (d) Only a participant may seek an administrative review or 
mediation under this subpart.


Sec. 400.92  Appeals.

    Nothing in this subpart prohibits a participant from filing an 
appeal of an adverse decision directly with NAD in accordance with the 
provisions of part 11 of this title without requesting administrative 
review or mediation under this subpart. However, if the participant has 
timely requested administrative review or mediation, the participant 
may not appeal to NAD until the adverse decision on such administrative 
review or mediation. The time for appeal to NAD is suspended from the 
date of receipt of a request for administrative review or mediation 
until the conclusion of the administrative review or mediation.


Sec. 400.93  Administrative review.

    (a) An appellant may seek one administrative review of an adverse 
decision or seek mediation under Sec. 400.94, but not both. If the 
appellant elects to seek administrative review, appellant must file a 
written request for administrative review with the reviewing authority 
that issued the adverse decision in accordance with Sec. 400.95. The 
written request must state the basis upon which the appellant relies to 
show that:
    (1) The decision was not proper and not made in accordance with 
applicable program regulations and procedures; or
    (2) All material facts were not properly considered in such 
decision.
    (b) The reviewing authority will issue a written decision that will 
not be subject to further reconsideration by the Agency.

[[Page 52680]]

Sec. 400.94  Mediation.

    (a) Appellants have the right to seek mediation, instead of a 
administrative review under Sec. 400.93, involving any adverse 
decision.
    (b) All requests for mediation under this subpart must be made 
after issuance of the adverse decision and before the appellant has a 
hearing before a NAD hearing officer on the adverse decision.
    (c) An appellant who chooses mediation must request mediation not 
later than 30 calendar days after the date written notice of the 
adverse decision is mailed or otherwise made known to the appellant.
    (d) An appellant will have the balance of days remaining in the 30-
day period to appeal to NAD if mediation is concluded without 
resolution unless a new adverse decision is issued as a result of 
mediation. Such new adverse decisions results in a new 30-day period 
for appeals to NAD.
    (e) An appellant is responsible for contacting the Certified State 
Mediation Program in States where such mediation program exists. The 
State mediation program will make all arrangements for the mediation 
process.
    (f) An appellant is responsible for making all necessary contacts 
to arrange for mediation in non-certified States or in certified States 
that are not currently offering mediation on specific Agency issues.
    (g) An appellant needing mediation in States without a certified 
mediation program can request mediation by contacting the RSO, which 
will provide the participant with a list of acceptable mediators.
    (h) An appellant may only mediate an adverse decision once.
    (i) If the dispute is not resolved in mediation,
    (1) The adverse decision that was the subject of the mediation 
remains in effect and becomes the adverse decision that is appealable 
to NAD or
    (2) The adverse decision which may be modified as a result of the 
mediation process becomes the new adverse decision for appeals to NAD.


Sec. 400.95  Time limitations for filing and responding to requests for 
administrative review.

    (a) A request for administrative review of a adverse decision must 
be filed within 30 days after the date written notice of the decision 
that is the subject of the request is mailed or otherwise made 
available to the appellant. A request for an administrative review will 
be considered to have been ``filed'' when personally delivered in 
writing to the appropriate decision maker or when the properly 
addressed request, postage paid, is postmarked. An adverse decision 
will become non-reviewable by the Agency unless a request for 
administrative review is timely filed.
    (b) A request for administrative review may be accepted and acted 
upon even though it is not filed within the time prescribed in 
Sec. 400.95(a) if, in the judgment of the appropriate reviewing 
authority, the circumstances warrant such action.


Sec. 400.96  Judicial Review.

    (a) A participant must exhaust administrative remedies before 
seeking judicial review of an adverse decision. This requires the 
participant to appeal an Agency adverse decision to NAD in accordance 
with 7 CFR part 11.
    (b) If the adverse decision involves a matter determined by the 
Agency to be not appealable, the appellant must request a determination 
of non-appealability from the Director of NAD prior to seeking judicial 
review.
    (c) A participant with a contract of insurance reinsured by the 
Agency may bring suit against the Agency in a Federal district court 
after exhaustion of administrative remedies as provided in paragraphs 
(a) and (b) of this section. Nothing in this section can be construed 
to create privity of contract between the Agency and a participant.


Sec. 400.97  Reservations of authority.

    (a) Representatives of the Agency may correct all errors in 
entering data on program contracts and other program documents, and the 
results of computations or calculations made pursuant to the contract.
    (b) Nothing contained in this subpart precludes the Secretary, the 
Manager of FCIC, or the Administrator of RMA, or a designee, from 
determining at any time any question arising under the programs within 
their respective authority or from reversing or modifying any adverse 
decision.

PART 780--APPEAL REGULATIONS

    2. The authority citation for 7 CFR part 780 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 15 U.S.C. 714b and 714c; 16 U.S.C. 
590h.

    3. Amend Sec. 780.1 to remove the definition of ``Regional Service 
Office'' and the terms ``FCIC'' and ``the FCIC Regional Service 
Office'' in the definitions of ``agency'' and ``final decision.''
    4. In Sec. 780.2:
    a. Revise paragraphs (a)(1)(iii) and (iv) to read as set forth 
below:
    b. Amend paragraph (a)(2) to remove the initials ``FCIC'' wherever 
they appear.
    c. Remove paragraph (a)(3).


Sec. 780.2  Applicability.

    (a) * * *
    (1) * * *
    (iii) Decisions made by personnel of FSA with respect to contracts 
of insurance insured by FCIC and the noninsured crop disaster 
assistance program;
    (iv) Decisions made by personnel of FSA with respect to contracts 
of insurance provided by private insurance carriers and reinsured by 
FCIC under the provisions of the Federal Crop Insurance Act; and
* * * * *
    5. Amend Sec. 780.7(b), (c) and (e), to remove the phrase ``or the 
Regional Service Office'' wherever it may appear.
    6. Amend Sec. 780.11 to remove the words ``FCIC'' and ``the Manager 
of FCIC'' wherever they may appear.

    Signed in Washington, D.C., September 11, 1999.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
Keith Kelly,
Administrator, Farm Service Agency.
[FR Doc. 99-24819 Filed 9-29-99; 8:45 am]
BILLING CODE 3410-08-P