[Federal Register Volume 78, Number 228 (Tuesday, November 26, 2013)]
[Rules and Regulations]
[Pages 70485-70487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-28319]



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 Rules and Regulations
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  Federal Register / Vol. 78, No. 228 / Tuesday, November 26, 2013 / 
Rules and Regulations  

[[Page 70485]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket No. FCIC-13-0002]
RIN 0563-AC41


Common Crop Insurance Regulations; Extra Long Staple Cotton Crop 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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

SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes 
amendments made to the Common Crop Insurance Regulations, Extra Long 
Staple Cotton Crop Insurance Provisions to make the Extra Long Staple 
(ELS) Cotton Crop Insurance Provisions consistent with the Upland 
Cotton Crop Insurance Provisions and to allow a late planting period. 
The intended effect of this action is to provide policy changes to 
better meet the needs of the producers. The changes will be effective 
for the 2014 and succeeding crop years.

DATES: This rule is effective November 26, 2013.

FOR FURTHER INFORMATION CONTACT: Tim Hoffmann, Director, Product 
Administration and Standards Division, Risk Management Agency, United 
States Department of Agriculture, Beacon Facility, Stop 0812, Room 421, 
P.O. Box 419205, Kansas City, MO 64141-6205, 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.

E-Government Act Compliance

    FCIC is committed to complying with the E-Government Act of 2002, 
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.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments. The review reveals that this regulation will not have 
substantial and direct effects on Tribal governments and will not have 
significant Tribal implications.

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 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 action by FCIC 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 70486]]

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

    This rule finalizes changes to the Common Crop Insurance 
Regulations (7 CFR part 457), Extra Long Staple Cotton Crop Insurance 
Provisions (7 CFR 457.105) that were published by FCIC on July 05, 
2013, as a notice of proposed rulemaking in the Federal Register 78 FR 
47214. The public was afforded 30 days to submit comments after the 
regulation was published in the Federal Register.
    A total of 18 comments were received from 4 commenters. The 
commenters were two insurance providers, an insurance service 
organization, and a producer organization.
    The public comments received regarding the proposed rule and FCIC's 
responses to the comments are as follows:

General

    Comment: A commenter stated they support the proposed regulation.
    Response: FCIC thanks the commenter for their review of the 
proposed rule and their support.

Section 9--Duties in the Event of Loss or Damage

    Comment: Several commenters asked if it was intentional to reverse 
the heading from ``. . . Damage or Loss'', to ``. . . Loss or Damage'', 
and if so, why, since section 9(a) retains the phrase ``damage or 
loss''.
    Response: The change was unintentional. FCIC agrees and has changed 
the heading to ``Duties in the Event of Damage or Loss''.
    Comment: Several commenters questioned the need for the provision 
which requires stalks to be left to allow for a visual inspection. 
Commenters realized that the proposed language in this section is 
identical to the language in the Cotton Crop Provisions with regard to 
leaving the stalks so a stalk inspection can be made. However, 
commenters requested whether consideration should be given that with 
modern harvesting equipment, the requirement to visually inspect the 
crop to make sure the stalk was cleanly harvested is not much of an 
issue anymore. Commenters stated that various university extension 
agencies recommend cotton stalks be destroyed as soon as possible after 
the crop has been harvested. Commenters believe the provision is 
unnecessary and difficult to administer. If the ELS Cotton Crop 
Provisions does change, they request the Cotton Crop Provisions make 
the same change.
    Response: FCIC believes the ability to do a stalk inspection is 
important for purposes of program integrity. During large claim 
reviews, FCIC found multiple units with no discernible break between 
the irrigated and non-irrigated units, and sometimes found planting and 
harvesting continuing across unit lines, which results the acreage not 
qualifying for optional units. Without a stalk inspection, it may not 
have been possible to identify these discrepancies. Also, if a stalk 
inspection shows the insured did not completely harvest the field, then 
the production left in the field is considered production from an 
uninsurable cause of loss. FCIC has reviewed the stock inspection 
procedure and found stalk inspections are still an important part of 
the cotton crop insurance program to reduce possible abuse in the 
program. Loss adjusters are given flexibility to give written consent 
to the insured to destroy stalks without a stalk inspection on a case-
by-case basis. No change has been made in the final rule.
    Comment: Several commenters suggested deleting the phrase ``. . . 
and required samples must not be harvested, . . .'' in section 9(a)(2) 
because that is covered in the Basic Provisions. One commenter agreed 
with the phrase.
    Response: FCIC disagrees with removing the phrase. The provision 
applies to both stalk inspections and samples, which are two separate 
issues because the stalk inspection is post-harvest and the samples 
left for quality adjustment are pre-harvest. Removing the language 
pertaining to samples will likely increase confusion because it will be 
unclear if the policy provisions pertain to stalk inspections or 
samples. This cotton provision applies to stalks and samples, where the 
section in the Basic Provisions only applies to samples. Leaving the 
language for both stalk inspections and samples in the same provision 
as proposed makes loss procedures easier to understand. No change has 
been made in the final rule.

Section 11--Late Planting

    Comment: Several commenters are concerned with placing the late 
planting period in the Special Provisions. Commenters are unsure where 
this provision will apply, what the reduction will be and how long the 
late planting period will be. They requested FCIC publish this type of 
information in the proposed and final rule.
    Response: The determination of where and how late planting will be 
applied is meant to be tailored regionally, as it may not be 
appropriate to include a late planting period in all areas where ELS 
cotton crop insurance is available. Placing the late planting period 
availability in the Special Provisions provides FCIC the flexibility to 
add a late planting period in areas where it may be deemed appropriate. 
FCIC will use the Cooperative Extension System or other industry 
experts to determine if a late planting period may be deemed 
appropriate and actuarially sound. No change has been made in the final 
rule.
    Comment: Several commenters asked how they will know if the late 
planting period is different than shown in the table for crops in the 
Crop Insurance Handbook (CIH).
    Response: The option for providing a late planting period will be 
specified in the Special Provisions, which are a part of the insurance 
contract and provided to insureds annually. The CIH also includes a 
footnote saying ``Crop Provisions may indicate a different percentage 
coverage reduction and/or the Crop Provisions or Special Provisions may 
modify the number of days contained in the late planting period.'' 
Other crops already alter late planting periods and coverage through 
the Special Provisions. No change has been made in the final rule.

Section 12--Prevented Planting

    Comment: Several commenters requested changes to the prevented 
planting language, but understood it could not be changed until another 
proposed rule.
    Response: FCIC agrees this was not proposed and a change cannot be 
made at this time.
    Good cause is shown to make this rule effective less than 30 days 
after publication in the Federal Register. Good cause to make a rule 
effective less than 30 days after publication in the Federal Register 
exists when the 30-day delay in the effective date is impracticable, 
unnecessary, or contrary to the public interest.
    With respect to the provisions of this final rule, it would be 
contrary to the public interest to delay its implementation because 
public interest is served by implementing the ELS Cotton Provisions 
because it enhances coverage and increases program integrity because 
it: (1) Adds a late planting period, for areas determined to be 
applicable, for ELS cotton by Special Provision; and (2) clarifies 
stalk inspection and claims to make it the same as Cotton Crop 
Provisions.

[[Page 70487]]

Delaying the implementation of these provisions, which make a sounder, 
more stable program, would be contrary to the public interest.
    If FCIC is required to delay the implementation of this rule until 
30 days after the date of publication, the provisions of this rule 
could not be implemented until the 2015 crop year for those crops 
having a contract change date prior to the effective date of this 
publication.
    For the reasons stated above, good cause exists to make these 
policy changes effective upon publication in the Federal Register.

List of Subjects in 7 CFR Part 457

    Crop insurance, Extra long staple cotton, Reporting and 
recordkeeping requirements.

Final Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation amends 7 CFR part 457 effective for the 2014 and 
succeeding crop years as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

0
1. The authority citation for 7 CFR part 457 continues to read as 
follows:

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


0
2. Amend Sec.  457.105 as follows:
0
a. Amend the introductory text by removing ``2012'' and adding ``2014'' 
in its place;
0
b. Revise section 9; and
0
c. Revise section 11.
    The revisions read as follows:


Sec.  457.105  Extra long staple cotton crop insurance provisions.

* * * * *
    9. Duties in the Event of Damage or Loss.
    (a) In addition to your duties under section 14 of the Basic 
Provisions, in the event of damage or loss:
    (1) You must give us notice if you intend to replant any acreage 
originally planted to ELS cotton to AUP cotton.
    (2) The cotton stalks must remain intact for our inspection. The 
stalks must not be destroyed, and required samples must not be 
harvested, until the earlier of our inspection or 15 days after harvest 
of the balance of the unit is completed and written notice of probable 
loss is given to us.
    (b) Representative samples are required in accordance with section 
14 of the Basic Provisions.
* * * * *
    11. Late Planting.
    (a) A late planting period is applicable to ELS cotton, if allowed 
by the Special Provisions.
    (b) If the Special Provisions do not provide for a late planting 
period, any ELS cotton that is planted after the final planting date 
will not be insured unless you were prevented from planting it by the 
final planting date. Such acreage will be insurable, and the production 
guarantee and premium for the acreage will be determined in accordance 
with section 16 of the Basic Provisions.
* * * * *

    Signed in Washington, DC, on November 21, 2013.
Brandon Willis,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2013-28319 Filed 11-25-13; 8:45 am]
BILLING CODE 3410-08-P