[Federal Register Volume 71, Number 248 (Wednesday, December 27, 2006)]
[Proposed Rules]
[Pages 77628-77629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-22002]


 ========================================================================
 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.
 
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 

  Federal Register / Vol. 71, No. 248 / Wednesday, December 27, 2006 / 
Proposed Rules  

[[Page 77628]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AC12


Common Crop Insurance Regulations, Millet Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to 
amend the Common Crop Insurance Regulations, Millet Crop Insurance 
Provisions to remove the reduction in indemnity for any unharvested 
millet acreage to better meet the needs of insured producers. The 
changes will apply for the 2008 and succeeding crop years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business February 26, 2007, and will be 
considered when the rule is to be made final.

ADDRESSES: Interested persons are invited to submit comments, titled 
``Millet Crop Provisions'', by any of the following methods:
     By Mail to: Director, Product Administration and Standards 
Division, Risk Management Agency, United States Department of 
Agriculture, 6501 Beacon Drive, Stop 0812, Room 421, Kansas City, MO 
64133-4676.
     E-mail: [email protected].
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    A copy of each response will be available for public inspection and 
copying from 7 a.m. to 4:30 p.m., c.s.t., Monday through Friday, except 
holidays, at the above address.

FOR FURTHER INFORMATION CONTACT: Erin Reid, Risk Management Specialist, 
Product Management, Product Administration and Standards Division, Risk 
Management Agency, at the Kansas City, MO, address listed above, 
telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
rule is not significant for the purpose of Executive Order 12866 and, 
therefore, it has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    Pursuant to the provisions of the Paperwork Reduction Act of 1995 
(44 U.S.C. chapter 35), the collections of information in this rule 
have been approved by OMB under control number 0563-0053 through 
November 30, 2007.

E-Government Act Compliance

    FCIC is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

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 UMRA.

Executive Order 13132

    It has been determined under section 1(a) of Executive Order 13132, 
Federalism, that this rule does not have sufficient implications to 
warrant consultation with the States. The provisions contained in this 
rule will not have a substantial direct effect on States, or on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.

Regulatory Flexibility Act

    FCIC certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities. Program 
requirements for the Federal crop insurance program are the same for 
all producers regardless of the size of their farming operation. For 
instance, all producers are required to submit an application and 
acreage report to establish their insurance guarantees and compute 
premium amounts, and all producers are required to submit a notice of 
loss and production information to determine the amount of an indemnity 
payment in the event of an insured cause of crop loss. Whether a 
producer has 10 acres or 1000 acres, there is no difference in the kind 
of information collected. To ensure crop insurance is available to 
small entities, the Federal Crop Insurance Act authorizes FCIC to waive 
collection of administrative fees from limited resource farmers. FCIC 
believes this waiver helps to ensure that small entities are given the 
same opportunities as large entities to manage their risks through the 
use of crop insurance. A Regulatory Flexibility Analysis has not been 
prepared since this regulation does not have an impact on small 
entities, and, therefore, this regulation is exempt from the provisions 
of the Regulatory Flexibility Act (5 U.S.C. 605).

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 in accordance with Executive 
Order 12988 on civil justice reform. The provisions of this rule will 
not have a retroactive effect. The provisions of this rule will preempt 
State and local laws to the extent such State and local laws are 
inconsistent herewith. With respect to any direct action taken by FCIC 
or to require the insurance provider to take specific action under the 
terms of the crop insurance policy, the administrative appeal 
provisions published at 7 CFR part 11 must be exhausted before any 
action against FCIC for judicial review may be brought.

[[Page 77629]]

Environmental Evaluation

    This action is not expected to have a significant economic impact 
on the quality of the human environment, health, or safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

Background

    FCIC proposes to amend 7 CFR part 457 Common Crop Insurance 
Regulations by amending Sec.  457.165 Millet crop insurance provisions, 
to be effective for the 2008 and succeeding crop years.
    Currently, the Millet Crop Provisions specify if the millet crop is 
not swathed and not harvested, the amount of the indemnity payable is 
reduced 30 percent to reflect those costs not incurred by the producer. 
In addition, if the millet crop is swathed but not harvested the amount 
of the indemnity payable is reduced by 15 percent to reflect those 
costs not incurred by the producer. Historically, millet prices have 
been very volatile throughout the growing season. The reduction in 
indemnity payment was designed to provide an incentive for producers to 
harvest the millet crop regardless of the millet price and avoid the 
potential for producers to shift losses to the crop insurance policy 
because the value of the crop insurance exceeded the value of the crop.
    The indemnity reduction for unharvested millet acreage has resulted 
in some insured millet producers choosing to harvest the millet crop 
when little or no potential production to count exists to avoid the 
reduced indemnity payment. FCIC has reviewed the situation and has 
determined that the disadvantage to producers who suffer legitimate 
losses from the reduction of the indemnity outweighs the potential for 
the shifting of losses to crop insurance. Accurate appraisals should 
ensure that producers are only paid for legitimate losses and receive 
the appropriate amount of indemnity.
    As a result of this change, premium rates will have to be increased 
because the amount of indemnity actually paid will increase and the 
premium is based on these anticipated losses. These premium rate 
increases were discussed with millet producers, who indicated a 
willingness to pay the projected 8-10 percent premium rate increase to 
remove the unharvested acreage indemnity reduction. The projected 
premium rate increase may be revised depending upon the experience of 
the proposed change.
    The proposed changes are as follows:
    Section 7--FCIC proposes to revise the end of the insurance period 
dates and to use only one date rather than dual dates. Only one date is 
necessary for the end of the insurance period for each group of states 
because of the removal of the unharvested acreage indemnity reduction.
    Section 8--In section 8(h), FCIC is proposing to clarify failure of 
the irrigation water supply that occurs during the insurance period is 
a covered cause of loss if such failure is due to a cause of loss 
specified in the Crop Provisions. This makes the Millet Crop Provisions 
consistent with other Crop Provisions and ensures that only named 
perils are covered under the policy.
    Section 10--FCIC proposes to remove section 10(f) to eliminate the 
reduction in indemnity for unharvested millet acreage and remove any 
references to that subsection. FCIC is also proposing to amend the 
example to correct plural terms to singular and singular terms to 
plural where necessary.
    Section 11--FCIC proposes to amend sections 11(a) and (b) to change 
the references from ``percent'' to ``percent per day''. Previously the 
provisions could have been interpreted that the guarantee would be 
reduced one percent total for the first ten days and three percent 
total for the following ten days. This makes the provisions consistent 
with other Crop Provisions.
    Section 12--FCIC proposes to amend the second sentence to refer to 
additional levels of coverage to be consistent with other Crop 
Provisions.

List of Subjects in 7 CFR Part 457

    Crop insurance, Millet, Reporting and recordkeeping requirements.

Proposed Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation proposes to amend 7 CFR part 457 to read as 
follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

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

    Authority: 7 U.S.C. 1506(1), 1506(p).

    2. Amend Sec.  457.165 as follows:
    A. Revise the introductory text.
    B. Revise section 7.
    C. Revise section 8(h).
    D. Amend section 10(b)(4) by removing the phrase ``and any 
adjustment from section 10(f)''.
    E. Amend paragraph (2) of the example in section 10(b) by removing 
the phrase ``1,500 bushels'' and adding the phrase ``1,500 bushel'' in 
its place.
    F. Amend paragraph (3) of the example in section 10(b) by removing 
the phrase ``700 bushel'' and adding the phrase ``700 bushels'' in its 
place.
    G. Amend section 10(d)(4)(iii) by removing the semicolon at the end 
of the current text and adding a period in its place.
    H. Remove section 10(f).
    I. Amend section 11(a) by adding the phrase ``per day'' after the 
phrase ``One percent''.
    J. Amend section 11(b) by adding the phrase ``per day'' after the 
phrase ``Three percent''.
    K. Amend section 12 by removing the phrase ``an additional coverage 
level'' and adding the phrase ``additional levels of coverage'' in its 
place.
    The revised text reads as follows:


Sec.  457.165  Millet crop insurance provisions.

    The millet crop insurance provisions for the 2008 and succeeding 
crop years are as follows:
* * * * *
    7. Insurance Period
    In accordance with section 11 of the Basic Provisions, the calendar 
date for the end of insurance period is the date immediately following 
planting (unless otherwise specified in the Special Provisions) as 
follows:
    (a) October 10 for North Dakota, South Dakota, and Wyoming; and
    (b) October 31 for all other states.
    8. Causes of Loss
* * * * *
    (h) Failure of the irrigation water supply due to a cause of loss 
specified in sections 8(a) through (g) that also occurs during the 
insurance period.
* * * * *

    Signed in Washington, DC, on December 14, 2006.
Eldon Gould,
Manager, Federal Crop Insurance Corporation.
 [FR Doc. E6-22002 Filed 12-26-06; 8:45 am]
BILLING CODE 3410-08-P