[Federal Register Volume 67, Number 177 (Thursday, September 12, 2002)]
[Proposed Rules]
[Pages 57759-57760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-23234]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 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.
 
 ========================================================================
 

  Federal Register / Vol. 67, No. 177 / Thursday, September 12, 2002 / 
Proposed Rules  

[[Page 57759]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1405

RIN 0560-AG69


Disqualification for Crop Insurance Fraud

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This rule implements statutory provisions which render a 
producer ineligible for certain benefits if that person is found to be 
engaged in crop insurance fraud.

DATES: Comments must be received on or before November 12, 2002 to be 
assured of consideration.

ADDRESS: Comments should be directed to, Sandy Bryant, Branch Chief, 
Production, Emergencies, and Compliance Division, Farm Service Agency 
(FSA), United States Department of Agriculture, STOP 0517, 1400 
Independence Avenue, SW., Washington, DC 20250-0517, telephone (202) 
720-4380.

FOR FURTHER INFORMATION CONTACT: Sandy Bryant, (202) 720-4380.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed rule was reviewed in conformance with Executive Order 
12866, has been determined to be not significant, and therefore has not 
been reviewed by the Office of Management and Budget.

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this rule.

Environmental Evaluation

    An environmental evaluation was performed and determined that this 
rule will not impact the quality of the human environment. Thus, the 
Agency is not required to prepare an environmental assessment or 
Environmental Impact Statement.

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988. This final rule preempts any State law that is inconsistent with 
its provisions. Before any legal action may be brought concerning this 
rule, all administrative remedies provided must be exhausted.

Executive Order 12372

    Executive Order 12372 requires consultation by Federal Agencies 
with State and local officials when providing funds or assistance that 
may require non-Federal input. The programs affected by this rule were 
excluded from the scope of this Executive Order in the Notice related 
to 7 CFR part 3015 published at 48 FR 29115 on June 24, 1983.

Unfunded Mandates Reform Act of 1995

    This rule contains no Federal mandates as defined in Title II of 
the Unfunded Mandates Reform Act of 1995 (UMRA). Thus, this rule is not 
subject to the requirements of sections 202 and 205 of UMRA.

Paperwork Reduction Act

    This rule has no effect on the information collection requirements 
of the Agency.

Executive Order 12612

    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.

Background

Producer Disqualification

    This proposed rule implements section 121(a) of the Agricultural 
Risk Protection Act of 2000 (ARPA) (Pub. L. 106-224), signed June 20, 
2000. ARPA amended section 515(h)(3)(B) of the Federal Crop Insurance 
Act (7 U.S.C. 1514) to provide that a producer may be disqualified for 
a period of up to 5 years from receiving any monetary or non-monetary 
benefit produced under each of the following:
    [sbull] ARPA (Pub. L. 106-224).
    [sbull] The Agricultural Market Transition Act (7 U.S.C. 7201 et 
seq.), including Noninsured Crop Disaster Assistance Program under 
section 196 of that act (7 U.S.C. 7333).
    [sbull] The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.).
    [sbull] The Commodity Credit Corporation Charter Act (15 U.S.C. 714 
et seq.).
    [sbull] The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et 
seq.).
    [sbull] Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 
et seq.).
    [sbull] The Consolidated Farm and Rural Development Act (7 U.S.C. 
1921 et seq.).
    [sbull] Any law that provides assistance to a producer of an 
agricultural commodity affected by a crop loss or a decline in the 
prices of agricultural commodities.
    ARPA provided that the disqualification of the program participant 
was at the discretion of the Secretary of Agriculture based on the 
gravity of the violation, the type and amount of the sanction to be 
imposed.
    Covered benefits under the statute include crop insurance benefits 
administered by the Federal Crop Insurance Corporation (FCIC). FCIC 
will make the basic finding of violation and thus the basic 
disqualification decision. This rule simply provides for applying the 
disqualification to programs either administered by the Department of 
Agriculture's Farm Service Agency or conducted using funds of the 
Commodity Credit Corporation. The period of disqualification would 
automatically be that found right by FCIC for its own program. This 
will allow for consistent results between agencies and allowed for one 
hearing process to resolve all issues.

List of Subjects in 7 CFR Part 1405

    Loan Programs-agricultural, Price support programs.

    Accordingly, it is proposed that 7 CFR part 1405 be amended as 
follows:

PART 1405--LOANS, PURCHASES AND OTHER OPERATIONS

    1. The authority citation for part 1405 continues to read as 
follows:

    Authority: 15 U.S.C. 714b and 714c.

    2. Part 1405 is amended by adding Sec.  1405.7 to read as follows:


Sec.  1405.7  Disqualification due to Federal Crop Insurance fraud.

    (a) Section 1515(h) of the Federal Crop Insurance Act (FCIA) 
provides that

[[Page 57760]]

a person who willfully and intentionally provides any false or 
inaccurate information to the Federal Crop Insurance Corporation (FCIC) 
or to an approved insurance provider with respect to a policy or plan 
of FCIC insurance after notice and an opportunity for a hearing on the 
record, will be subject to one or more of the sanctions described in 
section 1515 (h)(3). In section 1515(h)(3), the FCIA specifies that in 
the case of a violation committed by a producer, the producer may be 
disqualified for a period of up to 5 years from receiving any monetary 
or non-monetary benefit under a number of programs. The list includes, 
but is not limited to, benefits under:
    (1) Title V of the FCIA.
    (2) The Agricultural Market Transition Act (7 U.S.C. 7201 et seq.), 
including the noninsured crop disaster assistance producer under 
section 196 of that Act (7 U.S.C. 7333).
    (3) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.).
    (4) The Commodity Credit Corporation Charter Act ( 15 U.S.C. 714 et 
seq).
    (5) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et 
seq.).
    (6) Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et 
seq.).
    (7) Any law that provides assistance to a producer of an 
agricultural commodity affected by a crop loss or a decline in prices 
of agricultural commodities.
    (b) Violation determinations in this connection are made by FCIC. 
However, upon notice from FCIC to the Commodity Credit Corporation 
(CCC) that a producer has been found to have committed a violation to 
which paragraph (a) of this section applies, that person shall be 
considered ineligible for payments administered by the Farm Service 
Agency (FSA) or made using Commodity Credit Corporation funds for the 
same period of time for which, as determined by FCIC, the producer will 
be ineligible for crop insurance benefits of the kind referred to in 
paragraph (a)(1) of this section. Appeals of the determination of 
ineligibility will be administered under the rules set by FCIC.
    (c) Other sanctions may also apply.

    Signed in Washington, DC, on September 3, 2002.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 02-23234 Filed 9-11-02; 8:45 am]
BILLING CODE 3410-05-P