[Federal Register Volume 79, Number 148 (Friday, August 1, 2014)]
[Proposed Rules]
[Pages 44719-44722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-17997]
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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. 79, No. 148 / Friday, August 1, 2014 /
Proposed Rules
[[Page 44719]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
[Docket No. FCIC-14-0004]
RIN 0563-AC44
Common Crop Insurance Regulations; Macadamia Tree Crop Insurance
Provisions and Macadamia Nut Crop Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Proposed rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to
amend the Common Crop Insurance Regulations, Macadamia Tree Crop
Insurance Provisions and the Macadamia Nut Crop Insurance Provisions to
remove the provision requiring an optional unit to contain at least 80
acres. The intended effect of this action is to provide policy changes
and to better meet the needs of the producers. The changes will apply
for the 2016 and succeeding crop years for macadamia trees and the 2017
and succeeding crop years for macadamia nuts.
DATES: Written comments and opinions on this proposed rule will be
accepted until close of business September 30, 2014 and will be
considered when the rule is to be made final.
ADDRESSES: FCIC prefers that comments be submitted electronically
through the Federal eRulemaking Portal. You may submit comments,
identified by Docket ID No. FCIC-14-0004 by any of the following
methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Director, Product Administration and Standards
Division, Risk Management Agency, United States Department of
Agriculture, P.O. Box 419205, Kansas City, MO 64133-6205. All comments
received, including those received by mail, will be posted without
change to http://www.regulations.gov, including any personal
information provided, and can be accessed by the public.
All comments must include the agency name and docket number or
Regulatory Information Number (RIN) for this rule. For detailed
instructions on submitting comments and additional information, see
http://www.regulations.gov. If you are submitting comments
electronically through the Federal eRulemaking Portal and want to
attach a document, we ask that it be in a text-based format. If you
want to attach a document that is a scanned Adobe PDF file, it must be
scanned as text and not as an image, thus allowing FCIC to search and
copy certain portions of your submissions. For questions regarding
attaching a document that is a scanned Adobe PDF file, please contact
the RMA Web Content Team at (816) 823-4694 or by email at
[email protected].
Privacy Act: Anyone is able to search the electronic form of all
comments received for any dockets by the name of the person submitting
the comment (or signing the comment, if submitted on behalf of an
association, business, labor union, etc.). You may review the complete
User Notice and Privacy Notice for Regulations.gov at http://www.regulations.gov/#!privacyNotice.
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
[[Page 44720]]
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 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.
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 the Common Crop Insurance Regulations (7 CFR
part 457) by revising Sec. 457.130 Macadamia Tree Crop Insurance
Provisions and Sec. 457.131 Macadamia Nut Crop Insurance Provisions to
be effective for the 2016 and succeeding crop years for macadamia trees
and the 2017 and succeeding crop years for macadamia nuts.
The proposed changes to Sec. 457.130 are as follows:
1. Section 1--FCIC proposes to add a definition of ``damaged.'' The
terms ``damaged'' and ``destroyed'' are used throughout the Crop
Provisions. The term ``damaged'' is not defined, but the term
``destroyed'' is. FCIC is proposing to add a definition of ``damaged''
to clarify that there is a distinction between ``damaged'' and
``destroyed.'' FCIC's proposed definition of ``damaged'' is injury to
the main trunk, scaffold limb(s), and any other subordinate limbs that
reduces the productivity of the tree due to an insured cause of loss
occurring during the insurance period.
FCIC also proposes to add a definition of ``scaffold limb'' since
it is used in the proposed definition of ``damaged.'' It is given the
same meaning as the term in other tree crop policies for consistency.
2. Section 2--FCIC proposes to revise section 2 by removing
paragraph (a) which states sections 34(b)(1), (3) and (4) of the Basic
Provisions are not applicable. These sections of the Basic Provisions
state that the crop must be planted in a manner such that there is a
clear and discernible break between optional units, the insured must
have records for at least the previous crop year for each optional
unit, and the insured must have records of marketed or stored
production from each optional unit maintained in such a manner that
permits the insurance provider to verify the production from each
optional unit. Under the current policy, insureds who utilize optional
units can manipulate their unit boundaries to maximize indemnities
because there is no current requirement for discernible breaks between
units. By removing paragraph (a), sections 34(b)(1), (3) and (4) of the
Basic Provisions become applicable and, therefore, minimize program
abuse as it relates to unit division.
FCIC also proposes to revise section 2 by removing the provision
that requires an optional unit to contain at least 80 acres. Most
macadamia tree orchards contain less than 80 acres so very few insureds
are eligible for this provision. Removing this provision provides an
equitable opportunity for insureds who farm large operations and those
who farm small operations to qualify for optional units. The changes
made above will mitigate any potential abuse from this change.
3. Section 10--FCIC proposes to revise section 10 to include
information regarding destroyed trees and allowing for the insurance
provider to conduct an inspection before the insured removes any
destroyed trees. The current provisions require insureds, if they
intend to claim an indemnity on any unit, to allow the insurance
provider to inspect all insured acreage before pruning or removing any
damaged trees. However, the provisions are silent on regarding the
removal of damaged trees. In order to conduct a proper appraisal, the
insurance provider must identify damaged and destroyed trees before
they are removed. Therefore, the insured must allow the insurance
provider to conduct an inspection before the insured removes any
damaged or destroyed trees.
4. Section 11--FCIC proposes to revise paragraph (c)(1). The
current provisions specify that any orchard with over 80 percent actual
damage due to an insured cause of loss will be considered to be 100
percent damaged. The proposed provisions are revised to clarify that
over 80 percent of trees damaged and trees destroyed due to an insured
cause of loss will be considered to be 100 percent damaged. FCIC also
proposes to add a settlement of claim example in section 11.
The proposed changes to Sec. 457.131 are as follows:
1. Section 1--FCIC proposes to add definitions of ``floaters'' and
``peewees'' since they are proposed to be incorporated into the
definition of ``wet in-shell.'' These terms are commonly used in the
macadamia nut and tree industry. FCIC's proposed definition of
``floaters'' is inedible, husked ``field run'' nuts identified by water
floatation. FCIC's proposed definition of ``peewees'' is mature and
immature wet in-shell nuts that are smaller than 16mm (\5/8\ inch) in
diameter.
FCIC proposes to revise the definition of ``wet in-shell'' to
incorporate a statement contained in the Special Provisions, which
states wet in-shell excludes immature and unsound nuts (floaters and
peewees). By incorporating this information into the Crop Provisions,
FCIC can eliminate the Special Provisions statement.
2. Section 2--FCIC proposes to revise section 2 by removing
paragraph (a) which states section 34(b)(1) of the Basic Provisions is
not applicable. This section of the Basic Provisions states that the
crop must be planted in a manner such that there is a clear and
discernible break between optional units. Under the current provisions,
[[Page 44721]]
insureds who utilize optional units can manipulate their unit
boundaries to maximize indemnities because there is no current
requirement for discernible breaks between units. By removing paragraph
(a), section 34(b)(1) of the Basic Provisions becomes applicable, and,
therefore, minimizes program abuse as it relates to unit division.
FCIC also proposes to revise section 2 by removing the provision
that requires an optional unit to contain at least 80 acres. Most
macadamia nut orchards contain less than 80 acres so, very few insureds
are eligible for this provision. Removing this provision provides an
equitable opportunity for insureds who farm large operations and those
who farm small operations to qualify for optional units. These changes
are consistent with the changes that are proposed to the Macadamia Tree
Crop Insurance Provisions. The changes made above will mitigate any
potential abuse from this change.
3. Section 3--FCIC proposes to revise the paragraph (d) to update
the crop years used in the example.
4. Section 8--FCIC proposes to revise paragraph (a)(2) to allow the
calendar date for the end of the insurance period to be changed by the
Special Provisions. This will provide flexibility to update this date
if the need arises.
5. Section 11--FCIC proposes to add a settlement of claim example.
List of Subjects in 7 CFR Part 457
Crop insurance, Macadamia tree and Macadamia nut, 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 effective for
the 2016 and succeeding crop years for macadamia trees and for the 2017
and succeeding crop years for macadamia nuts to read 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. 457.130 as follows:
0
a. Amend the introductory text by removing ``2011'' and adding ``2016''
in its place;
0
b. Amend section 1 by adding in alphabetical order definitions of
``damaged'' and ``scaffold limb'';
0
c. Revise section 2;
0
d. Amend section 3 by removing the phrase ``(Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities)'' in
paragraphs (a) introductory text and (b);
0
e. Amend section 4 by removing the phrase ``(Contract Changes)'';
0
f. Amend section 5 by removing the phrase ``(Life of Policy,
Cancellation, and Termination)'';
0
g. Amend section 6 introductory text by removing the phrase ``(Insured
Crop)'';
0
h. Amend section 7 by removing the phrase ``(Insurable Acreage)'';
0
i. Amend section 8 by removing the phrase ``(Insurance Period)''
paragraphs (a) introductory text and (b) introductory text;
0
j. Amend section 9 by removing the phrase ``(Causes of Loss)'' in
paragraphs (a) introductory text and (b) introductory text;
0
k. Revise section 10; and
0
l. In section 11, revise paragraphs (b)(4), (c) introductory text, and
(c)(1).
The revisions read as follows:
Sec. 457.130 Macadamia tree crop insurance provisions.
* * * * *
1. Definitions
* * * * *
Damaged. Injury to the main trunk, scaffold limb(s), and any other
subordinate limbs that reduces the productivity of the macadamia tree
due to an insured cause of loss that occurs during the insurance
period.
* * * * *
Scaffold limb. A major limb attached directly to the trunk.
2. Unit Division
(a) Provisions in the Basic Provisions that allow optional units by
section, section equivalent, or FSA farm serial number and by irrigated
and non-irrigated practices are not applicable. Optional units may be
established only if each optional unit is located on non-contiguous
land, unless otherwise allowed by written agreement.
(b) You must have provided records, which can be independently
verified, of acreage and age of trees for each unit for at least the
last crop year.
* * * * *
10. Duties in the Event of Damage or Loss
In addition to the requirements of section 14 of the Basic
Provisions, in case of damage or probable loss, if you intend to claim
an indemnity on any unit, you must allow us to inspect all insured
acreage before pruning any damaged trees, removing any damaged trees,
or removing any destroyed trees.
11. Settlement of Claim
* * * * *
(b) * * *
* * * * *
(4) Multiply the result in section 11(b)(3) by your share.
For example:
You select 65 percent coverage level and 100 percent of the price
election on 10 acres of 9-year-old macadamia trees in the unit. Your
share is 100 percent. The amount of insurance per acre is $5,850. There
are 90 trees per unit. Thirty five trees are destroyed. Your indemnity
would be calculated as follows:
(1) 10 acres x $5,850 = $58,500;
(3)(i) 100 percent-65 percent = 35 percent deductible;
(ii) 35 destroyed trees / 90 total unit trees = 38.9 percent loss;
38.9 percent loss-35 percent deductible = 3.9 percent;
(iii) 3.9 percent / 65 percent coverage level = 6.0 percent loss;
and $58,500 total amount of insurance x 6.0 percent loss = $3,510 loss;
and
(4) $3,510 loss x 100 percent share = $3,510 indemnity payment.
(c) The total amount of loss will include both damaged trees and
destroyed trees as follows:
(1) Any orchard with over 80 percent of the actual trees damaged or
destroyed due to an insured cause of loss will be considered to be 100
percent damaged; and
* * * * *
0
3. Amend Sec. 457.131 as follows:
0
a. Amend the introductory text by removing ``2012'' and adding ``2017''
in its place;
0
b. In section 1:
0
i. By adding definitions of in alphabetical order ``floaters'' and
``peewees''; and
0
ii. By revising the definition of ``wet in-shell'';
0
c. Revise section 2;
0
d. In section 3:
0
i. By removing the phrase ``(Insurance Guarantees, Coverage Levels, and
Prices for Determining Indemnities)'' in the introductory text and
paragraph (b) introductory text;
0
ii. In paragraph (b)(4) introductory text by removing the word
``anytime'' and replacing it with the phrase ``any time''; and
0
iii. By revising paragraph (d);
0
e. Amend section 4 by removing the phrase ``(Contract Changes)'';
0
f. Amend section 5 by removing the phrase ``(Life of Policy,
Cancellation, and Termination)'';
0
g. In section 6:
0
i. By removing the phrase ``(Insured Crop)'' in the introductory text;
and
0
ii. In paragraph (d) by removing the phrase ``agree in writing'' and
adding in
[[Page 44722]]
its place the phrase ``give our approval in writing''; and
0
iii. In paragraph (d) by removing the phrase ``wet, in-shell'' and
adding in its place the phrase ``wet in-shell'';
0
h. In section 7:
0
i. By removing the phrase ``(Insurable Acreage)''; and
0
ii. By removing the comma after the phrase ``Basic Provisions (Sec.
457.8)'';
0
i. In section 8:
0
i. By removing the phrase ``(Insurance Period)'' in paragraphs (a)
introductory text and (b) introductory text; and
0
ii. By revising paragraph (a)(2);
0
j. Amend section 9 by removing the phrase ``(Causes of Loss)'' in
paragraphs (a) introductory text and (b) introductory text;
0
k. Amend section 10 introductory text by removing the phrase ``(Duties
in the Event of Damage or Loss)'';
0
l. In section 11:
0
i. In paragraph (b)(4) by removing the phrase ``if applicable, (see
section 11(c))'' and adding in its place the phrase ``if applicable
(see section 11(c)),'';
0
ii. Adding a settlement of claim example after paragraph (b)(7); and
0
iii. In paragraph (c) by removing the phrase ``(wet, in-shell pounds)''
and adding in its place the phrase ``(we in-shell pounds)''.
The revisions and additions read as follows:
Sec. 457.131 Macadamia nut crop insurance provisions.
* * * * *
1. Definitions
* * * * *
Floaters. Inedible, husked ``field run'' nuts identified by water
floatation.
* * * * *
Peewees. Mature and immature wet in-shell nuts that are smaller
than 16 mm (5/8 inch) in diameter, or as otherwise specified in the
Special Provisions.
* * * * *
Wet in-shell. The weight of the macadamia nuts as they are removed
from the orchard with the nut meats in the shells after removal of the
husk and excluding floaters and peewees but prior to being dried.
2. Unit Division
Provisions in the Basic Provisions that allow optional units by
section, section equivalent, or FSA farm serial number and by irrigated
and non-irrigated practices are not applicable. Optional units may be
established only if each optional unit is located on non-contiguous
land, unless otherwise allowed by written agreement.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
* * * * *
(d) Instead of reporting your macadamia nut production for the
previous crop year, as required by section 3 of the Basic Provisions,
there is a one-year lag period. Each crop year you must report your
production from two crop years ago, e.g., on the 2016 crop year
production report, you will provide your 2014 crop year production.
* * * * *
8. Insurance Period
(a) * * *
(2) The calendar date for the end of the insurance period for each
crop year is the second June 30th after insurance attaches, or as
specified in the Special Provisions.
* * * * *
11. Settlement of Claim
* * * * *
(b) * * *
(7) * * *
For example:
You select 65 percent coverage level and 100 percent of the price
election on 10 acres of macadamia nuts in the unit. Your share is 100
percent. Your production guarantee (per acre) is 4,000 pounds. The
price election is $0.78. You are able to harvest 25,000 pounds. Your
indemnity would be calculated as follows:
(1) 10 acres x 4,000 pounds = 40,000 pounds guarantee;
(2) 40,000 pounds x $0.78 price election = $31,200 total value of
guarantee;
(4) 25,000 pounds production to count x $0.78 price election =
$19,500 value of production to count;
(6) $31,200 total value of guarantee - $19,500 value of production
to count = $11,700 loss; and
(7) $11,700 loss x 100 percent share = $11,700 indemnity payment.
* * * * *
Signed in Washington, DC, on July 23, 2014.
Brandon Willis,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2014-17997 Filed 7-31-14; 8:45 am]
BILLING CODE 3410-08-P