[Federal Register Volume 82, Number 225 (Friday, November 24, 2017)]
[Rules and Regulations]
[Pages 55723-55734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-25330]



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 Rules and Regulations
                                                 Federal Register
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  Federal Register / Vol. 82, No. 225 / Friday, November 24, 2017 / 
Rules and Regulations  

[[Page 55723]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 402, 407, and 457

[Docket No. FCIC-17-0004]
RIN 0563-AC56


Catastrophic Risk Protection Endorsement; Area Risk Protection 
Insurance Regulations; and the Common Crop Insurance Regulations, Basic 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule with request for comments.

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

SUMMARY: The Federal Crop Insurance Corporation (FCIC) amends the 
Catastrophic Risk Protection Endorsement, the Area Risk Protection 
Insurance Basic Provisions, and the Common Crop Insurance Policy Basic 
Provisions to revise and clarify policy provisions and reduce burden on 
producers choosing to insure their crops. The changes to the policy 
made in this rule are applicable for the 2018 and succeeding crop years 
for all crops with a 2018 contract change date on or after the 
effective date of the rule, and for the 2019 and succeeding crop years 
for all crops with a 2018 contract change date prior to the effective 
date of the rule.

DATES: This final rule is effective November 24, 2017. However, FCIC 
will accept written comments on this final rule until close of business 
January 23, 2018. FCIC may consider the comments received and may 
conduct additional rulemaking based on the comments.

ADDRESSES: FCIC prefers interested persons submit their comments 
electronically through the Federal eRulemaking Portal. Interested 
persons may submit comments, identified by Docket ID No. FCIC-17-0004, 
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.
    FCIC will post all comments received, including those received by 
mail, without change to http://www.regulations.gov, including any 
personal information provided. Once these comments are posted to this 
Web site, the public can access all comments at its convenience from 
this Web site. 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 interested persons are 
submitting comments electronically through the Federal eRulemaking 
Portal and want to attach a document, FCIC requests that the document 
attachment be in a text-based format. If interested persons 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 the submissions. For questions regarding attaching 
a document that is a scanned Adobe PDF file, please contact the Risk 
Management Agency (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 
entity, such as an association, business, labor union, etc.). 
Interested persons may review the complete User Notice and Privacy 
Notice for Regulations.gov at http://www.regulations.gov/#!privacyNotice.

For Further Information Contact: Tim Hoffmann, Product Management, 
Product Administration and Standards Division, Risk Management Agency, 
United States Department of Agriculture, Beacon Facility, Stop 0812, 
Room 421, PO Box 419205, Kansas City, MO 64141-6205, telephone (816) 
926-7730.

SUPPLEMENTARY INFORMATION: 

Background

    1. FCIC is revising section 6(f) to the CAT Endorsement (7 CFR part 
402) to remove the date of June 1 from the conservation compliance 
provisions and instead refer to the premium billing date. This will 
provide more flexibility to policyholders and allow the conservation 
compliance certification process for crop insurance to be administered 
more consistently with the way it is administered for other USDA 
programs. Under the new provisions, policyholders must still have a 
valid AD-1026 on file with the Farm Service Agency (FSA) for the 
reinsurance year to be eligible for premium subsidy; however, the AD-
1026 does not have to be completed by June 1 of the preceding 
reinsurance year. While June 1 was believed to be an appropriate 
timeframe in which the AD-1026 needed to be signed, after two years 
since initial implementation a more streamlined approach is warranted 
to provide administrative efficiencies for both producers and FCIC/FSA 
without impacting the appropriate determinations of compliance. 
Insurance providers can confirm whether a policyholder has a valid AD-
1026 on file, via data received from FCIC, as of the premium billing 
date, and any policyholder without an AD-1026 on file will be billed 
the full unsubsidized premium. To effectuate these changes, FCIC has 
revised section 6(f)(2) to clarify the date by which producers must be 
determined to be eligible for premium subsidy. FCIC has also added 
section 6(f)(2)(i)(A) to remove the June 1 deadline from the FCIC 
language providing exceptions from the requirement to file an AD-1026 
for producers who are new to farming, new to crop insurance, a new 
entity, or have not previously been required to file form AD-1026 and 
to specify that policyholders must certify to the exception by the 
premium billing date. The FCIC exceptions allow new producers 
certifying they meet the exception criteria by the premium billing date 
to receive premium subsidy for the initial reinsurance year while 
providing the flexibility to file form AD-1026 with FSA by the premium 
billing date of the subsequent reinsurance year to maintain premium 
subsidy eligibility. Subparagraph (B) was added to section 6(f)(2)(i) 
to reference FSA relief provisions

[[Page 55724]]

contained in 7 CFR part 12 that provide additional time to file an AD-
1026 if producers are unable to file due to circumstances beyond their 
control and provides additional time to provide required information if 
the AD-1026 is timely filed but the producer is unable to timely 
provide the information due to circumstances beyond their control. FCIC 
has determined these changes will have no impact on the proper 
determinations of conservation compliance regarding Highly Erodible 
Land/Wetland Compliance violations under 7 CFR part 12. These changes 
are intended to increase the opportunity for producers to comply with 
the form AD-1026 conservation compliance certification requirement and 
decrease the likelihood of producers who have not committed a violation 
from becoming ineligible for premium subsidy.
    2. The specific changes to the Area Risk Protection Insurance Basic 
Provisions (7 CFR part 407) are as follows:
    (a) Section 1--FCIC is revising the definition of ``good farming 
practices'' for clarification by removing the reference to an organic 
plan, because an organic plan and good farming practice determinations 
serve two different purposes. An organic plan is a written plan that 
describes organic farming practices, but does not necessarily provide a 
comprehensive list of good farming practices. FCIC is also reorganizing 
the definition to improve readability.
    FCIC is revising the definition of ``limited resource farmer'' by 
updating the Web site for the USDA definition because the Web site 
address had become out of date.
    FCIC is revising the name of the definition of ``RMA's Web site'' 
to ``RMA's Web site'' because the uncapitalized, one-word term is more 
commonly used. FCIC is also correcting references to this term 
throughout the policy.
    (b) Section 2--FCIC is revising section 2(j) to add a new paragraph 
(2) that clarifies that with the policyholder's consent the premium and 
administrative fees can be offset from any indemnity due the 
policyholder even if the offset occurs before the fees are billed. This 
change clarifies the issues raised in Final Agency Determination-147 
and allows insurance providers the latitude to contact the policyholder 
and inquire as to whether the policyholder would agree to have the 
``unbilled'' administrative fees and premium offset from the remaining 
amount of the loss. FCIC is redesignating paragraph 2(j)(2) as 2(j)(3).
    FCIC is revising section 2(k)(2)(i)(D) to update the years used in 
the example so that it reflects more recent crop years.
    FCIC is revising section 2(k)(3)(ii) to reference subpart U 
regarding written payment agreements and deleting the parenthetical 
from this provision. FCIC is removing the prohibition on a policyholder 
entering into a written payment agreement if they previously failed to 
make a scheduled payment under any payment agreement to give insurance 
providers the flexibility to enter into these agreements. Subpart U 
provides information regarding written payment agreements. Subpart U 
provides that only one written payment agreement is permitted per 
termination date. Subpart U also provides other requirements for 
written payment agreements such as a written payment agreement cannot 
exceed two years in duration and a written payment agreement cannot be 
modified after it has been executed. Subpart U does not restrict a 
policyholder from entering into a written payment agreement if they 
previously failed to make a payment under an agreement. By referring to 
subpart U, FCIC will not need to make updates to the Basic Provisions 
when changes are made to subpart U.
    FCIC is revising section 2(p)(2) to update the years used in the 
example so that it reflects more recent crop years.
    (c) Section 7--FCIC is revising section 7(i) to remove the date of 
June 1 from the conservation compliance provisions and instead refer to 
the premium billing date. This will provide more flexibility to 
policyholders and allow the conservation compliance certification 
process for crop insurance to be administered more consistently with 
the way it is administered for other USDA programs. Under the new 
provisions, policyholders must still have a valid AD-1026 on file with 
FSA for the reinsurance year to be eligible for premium subsidy; 
however, the AD-1026 does not have to be completed by June 1 of the 
preceding reinsurance year. While June 1 was believed to be an 
appropriate timeframe in which the AD-1026 needed to be signed, after 
two years since initial implementation a more streamlined approach is 
warranted to provide administrative efficiencies for both producers and 
FCIC/FSA without impacting the appropriate determinations of 
compliance. Insurance providers can confirm whether a policyholder has 
a valid AD-1026 on file, via data received from FCIC, as of the premium 
billing date, and a policyholder without an AD-1026 on file will be 
billed the full unsubsidized premium. To effectuate these changes FCIC 
has revised section 7(i)(2) to clarify the date by which producers must 
be determined to be eligible for premium subsidy. FCIC has also added 
section 7(i)(2)(i)(A) to remove the June 1 deadline from the FCIC 
language providing exceptions from the requirement to file an AD-1026 
for producers who are new to farming, new to crop insurance, a new 
entity, or have not previously been required to file form AD-1026 and 
to specify that policyholders must certify to the exception by the 
premium billing date. The FCIC exceptions allow new producers 
certifying they meet the exception criteria by the premium billing date 
to receive premium subsidy for the initial reinsurance year while 
providing the flexibility to file form AD-1026 with FSA by the premium 
billing date of the subsequent reinsurance year to maintain premium 
subsidy eligibility. Subparagraph (B) was added to section 7(i)(2)(i) 
to reference FSA relief provisions contained in 7 CFR part 12 that 
provide additional time to file an AD-1026 if producers are unable to 
file due to circumstances beyond their control and provides additional 
time to provide required information if the AD-1026 is timely filed but 
the producer is unable to timely provide the information due to 
circumstances beyond their control. FCIC has determined these changes 
will have no impact on the proper determinations of conservation 
compliance regarding Highly Erodible Land/Wetland Compliance 
violations. These changes are intended to increase the opportunity for 
producers to comply with the form AD-1026 conservation compliance 
certification requirement and decrease the likelihood of producers who 
have not committed a violation from becoming ineligible for premium 
subsidy.
    3. The changes to the Common Crop Insurance Regulations, Basic 
Provisions (7 CFR part 457) are as follows:
    (a) Preamble--FCIC is revising the order of priority in the 
preamble to include the actuarial documents. By definition, the 
actuarial documents are a part of the policy and should be included in 
the order of priority. The actuarial documents will follow the Special 
Provisions in the order of priority.
    (b) Section 1--FCIC is revising the definition of ``Cooperative 
Extension System'' by replacing the reference to the ``Cooperative 
State Research, Education, and Extension Service'' to the ``National 
Institute of Food and Agriculture.'' This change is being made to 
reference the correct entity.

[[Page 55725]]

    FCIC is revising the name of the definition of ``FSA farm serial 
number'' to ``FSA farm number'' because the term ``FSA farm serial 
number'' is no longer used. FCIC is also correcting references to this 
term throughout the policy.
    FCIC is revising the definition of ``good farming practices'' for 
clarification by removing the reference to an organic plan, because an 
organic plan and good farming practice determinations serve two 
different purposes. An organic plan is a written plan that describes 
organic farming practices, but does not necessarily provide a 
comprehensive list of good farming practices. FCIC is also reorganizing 
the definition to improve readability.
    FCIC is revising the definition of ``price election'' by replacing 
the phrase ``Special Provisions, or in an addendum thereto'' with the 
phrase ``actuarial documents'' because price elections are contained in 
the actuarial documents.
    FCIC is revising the definition of ``replanted crop'' to address 
how to calculate production to count in the event of a claim if the 
insurance provider determines it is not practical to replant and the 
policyholder plants the acreage to the same insured crop.
    The rules surrounding ``practical to replant'' are designed for a 
failed crop to be replanted with the replant expenses covered by the 
insurance policy. In most cases, if there is a reasonable chance 
harvesting some production from the replanted crop and thereby provides 
assistance for impacted policyholders to grow the crop they intended. 
This assists policyholders while potentially reducing costs for the 
taxpayer, potentially lowers premium rates, and provides the potential 
for growers to have higher insurance guarantees in subsequent years 
than would otherwise be the case. If there is not a reasonable chance 
of at least some production, then the policyholder should not replant 
the crop.
    If, later, the policyholder decides to replant the crop for the 
same intended use, then the policyholder is indicating that there is a 
reasonable chance of some production. Any production from the replanted 
crop is applied against the losses from the initial crop.
    In relation to ``replanted crops,'' concerns have been raised that 
if an insurance provider determines that it is not practical to replant 
a crop and the policyholder plants the acreage to the same insured 
crop, it is possible the replanted crop could have less production to 
count than the appraised production on the initially planted crop. 
Allowing the policyholder to receive the larger claim, creates a moral 
hazard situation, where the policyholders could receive a larger 
indemnity from replanting a crop when it may not be practical to do so. 
It is not the intent of FCIC to pay producers a full indemnity for a 
crop and then they successfully plant and harvest the same crop for the 
same intended use after the late planting period. Therefore, FCIC has 
determined the indemnity should be based on the greater of: (1) The 
appraised production on the initially planted crop; (2) the subsequent 
appraisal of the replanted crop if the replanted crop is not harvested; 
or (3) the harvested production from the replanted crop.
    FCIC is also revising the definition of ``replanted crop'' to 
accommodate growing practices of producers. The rationale behind 
``replanted crop'' rules is to ensure that producers are not paid a 
full indemnity and subsequently plant the same crop for the same 
purpose to harvest. If a producer plants the same crop, then a full 
indemnity should not be paid on the initially planted crop and FCIC 
should ensure that taxpayer losses are lessened if the second attempt 
to plant the crop results in a better yield than the initially planted 
crop.
    Specifically, FCIC is revising the definition of ``replanted crop'' 
to state unless otherwise specified in the Special Provisions, the crop 
will be considered an insured replanted crop and no replanting payment 
will be paid if the insurance provider has determined: (1) It is not 
practical to replant the insured crop, and (2) the policyholder chooses 
to plant the acreage to the same insured crop within or prior to the 
late planting period, or after the final planting date if no late 
planting period is applicable.
    FCIC is making this change to clarify that anytime the acreage is 
replanted to the same crop within or prior to the late planting period, 
it will be considered a replanted crop. However, FCIC also recognizes 
that in some situations a producer replants the same crop much later 
and for a different purpose. For example, a crop is damaged and it is 
determined not practical to replant. However, after the late planting 
period, conditions allow a policyholder to plant a crop with no 
intention of harvesting for grain but rather the chance of harvesting 
for livestock feed. This revision will allow a claim to be paid for the 
initially seeded crop and not be impacted by the late planted crop 
which was never intended to be harvested as grain.
    Additionally, the revisions provides FCIC flexibility to clarify by 
Special Provisions certain situations where a crop is replanted to the 
same crop and when it will or will not be considered a replanted crop. 
This flexibility addressed those crops that have no late planting 
period or late planting periods that are a few days.
    FCIC is revising the name of the definition of ``RMA's Web site'' 
to ``RMA's Web site'' because the uncapitalized, one-word term is more 
commonly used. FCIC is also correcting references to this term 
throughout the policy.
    (c) Section 2--FCIC is revising section 2(e) to add a new paragraph 
(2) that clarifies that with the policyholder's consent the premium and 
administrative fees can be offset from any prevented planting or 
indemnity due the policyholder even if the offset occurs before the 
fees are billed. This change clarifies the issues raised in Final 
Agency Determination-147 and allows insurance providers the latitude to 
contact the policyholder and inquire as to whether the policyholder 
would agree to have the ``unbilled'' administrative fees and premium 
offset from the remaining amount of the loss.
    FCIC is revising section 2(f)(2)(i)(D) to update the years used in 
the example to reflect more recent crop years.
    FCIC is revising section 2(f)(3)(ii) to reference subpart U 
regarding written payment agreements and deleting the parenthetical 
from this provision. FCIC is removing the prohibition that does not 
allow a policyholder to enter into a written payment agreement if they 
previously failed to make a payment under an agreement to give 
insurance providers the flexibility to enter into these agreements. 
Subpart U provides information regarding written payment agreements. 
Subpart U provides that only one written payment agreement is permitted 
per termination date. It also provides other requirements for written 
payment agreements such as a written payment agreement cannot exceed 
two years in duration and a written payment agreement cannot be 
modified after it has been executed. Subpart U does not restrict a 
policyholder from entering into a written payment agreement if they 
previously failed to make a payment under an agreement. By referring to 
subpart U, FCIC will not need to make updates to the Basic Provisions 
when changes are made to subpart U.
    FCIC is revising section 2(f)(5) to update the years used in the 
example to reflect more recent crop years.
    FCIC is removing section 2(j) because this provision is unnecessary 
since there are no longer maximum allowable amounts of administrative 
fees. Previously, when there were caps, there needed to be a way to 
inform insurance

[[Page 55726]]

providers when the cap had been met in those situations where the 
policyholder insured with more than one insurance provider. FCIC is 
redesignating paragraph 2(k) as 2(j).
    (d) Section 3--FCIC is revising section 3(f)(3) to allow these 
provisions to be changed in the Special Provisions. This change 
provides flexibility to amend the production reporting dates and the 
manner in which production reports are submitted if it is determined 
appropriate to better meet the needs of the program and policyholders.
    FCIC is revising section 3(h)(1) by changing the reference of 
``valid basis'' to ``valid agronomic basis'' to be consistent with 
section 3(h)(2). This will allow FCIC to require the same basis for 
supporting both the excessive yields and inconsistent yields and will 
clarify that factors related to the soil and crop productivity will be 
considered when determining whether yields should be considered 
acceptable.
    (e) Section 6--FCIC is revising section 6(a)(3) to add a new 
paragraph (iii) that provides if the policyholder planted the insured 
crop on or within five days prior to the final planting date and the 
final planting date is five or fewer days prior to the acreage 
reporting date, the policyholder must submit an acreage report no later 
than five days after the acreage reporting date. This allows 
policyholders adequate time to submit their acreage reports if the 
insured crop's acreage reporting date is the same as or closely follows 
the final planting date.
    (f) Section 7--FCIC is revising section 7(h) to remove the date of 
June 1 from the conservation compliance provisions and instead refer to 
the premium billing date. This will provide more flexibility to 
policyholders and allows the conservation compliance certification 
process for crop insurance to be administered more consistently with 
the way it is administered for other USDA programs. Under the new 
provisions, policyholders must still have a valid AD-1026 on file with 
FSA for the reinsurance year to be eligible for premium subsidy; 
however, the AD-1026 does not have to be completed by June 1 of the 
preceding reinsurance year. While June 1 was believed to be an 
appropriate timeframe in which the AD-1026 needed to be signed, after 
two years since initial implementation a more streamlined approach is 
warranted to provide administrative efficiencies for both producers and 
FCIC/FSA without impacting the appropriate determinations of 
compliance. Insurance providers can confirm whether a policyholder has 
a valid AD-1026 on file, via data received from FCIC, as of the premium 
billing date, and any policyholder without an AD-1026 on file will be 
billed the full unsubsidized premium. To effectuate these changes, FCIC 
has revised section 7(h)(2) to clarify the date by which producers must 
be determined to be eligible for premium subsidy. FCIC has also added 
section 7(h)(2)(i)(A) to remove the June 1 deadline from the FCIC 
language providing exceptions from the requirement to file an AD-1026 
for producers who are new to farming, new to crop insurance, a new 
entity, or have not previously been required to file form AD-1026 and 
to specify that policyholders must certify to the exception by the 
premium billing date. The FCIC exceptions allow new producers 
certifying they meet the exception criteria by the premium billing date 
to receive premium subsidy for the initial reinsurance year while 
providing the flexibility to file form AD-1026 with FSA by the premium 
billing date of the subsequent reinsurance year to maintain premium 
subsidy eligibility. Subparagraph (B) was added to section 7(h)(2)(i) 
to reference FSA relief provisions contained in 7 CFR part 12 that 
provide additional time to file an AD-1026 if producers are unable to 
file due to circumstances beyond their control and provides additional 
time to provide required information if the AD-1026 is timely filed but 
the producer is unable to timely provide the information due to 
circumstances beyond their control. FCIC has determined these changes 
will have no impact on the proper determinations of conservation 
compliance regarding Highly Erodible Land/Wetland Compliance 
violations. These changes are intended to increase the opportunity for 
producers to comply with the form AD-1026 conservation compliance 
certification requirement and decrease the likelihood of producers who 
have not committed a violation from becoming ineligible for premium 
subsidy.
    (g) Section 9--FCIC is revising section 9(a)(2)(viii)(A) by 
changing the reference to the ``Group Risk Protection Plan of 
Insurance'' to ``Area Risk Protection Insurance'' because the Group 
Risk Protection Plan of Insurance was replaced with Area Risk 
Protection Insurance for the 2014 and succeeding crop years.
    (h) Section 17--FCIC is revising section 17(f)(9) by changing the 
reference to ``manpower'' to ``labor'' to update the term to be gender 
neutral.
    (i) Section 18--FCIC is revising sections 18(c)(1) and (2) by 
replacing the phrase ``Special Provisions, or in an addendum thereto'' 
with the phrase ``actuarial documents'' as price elections are 
contained in the actuarial documents.
    FCIC is revising section 18(e)(2)(i)(B) to remove the requirement 
that a written agreement to insure acreage that is greater than five 
percent of the planted acreage in the unit where the acreage has not 
been planted and harvested or insured in any of the three previous crop 
years (commonly referred to as new breaking acreage) must be requested 
by the acreage reporting date. The Special Provisions have previously 
been utilized to require a written agreement on such acreage be 
requested by the sales closing date. By removing this language from 
this section, the deadline to request this type of written agreement 
will revert to section 18(a), making the deadline the sales closing 
date and allowing the Special Provisions statement to be removed.
    FCIC is removing section 18(e)(3) because any additional land or 
additional crop must meet the request deadlines of section 18(a) or 
18(e) regardless of whether the additional land or additional crop will 
be added to an existing written agreement or a request for a written 
agreement. Therefore, this language is not needed.
    FCIC is revising section 18(f)(1)(ii) to remove language regarding 
the information needed to determine the approved yield. By specifying 
that the completed actual production history (APH) must be based on 
verifiable records of actual yields for the crop and county, the APH 
already contains the information needed to determine the approved 
yield. The revision is made because the language is redundant.
    FCIC is also revising section 18(f)(1)(ii) to remove the 
requirement of the policyholder's signature on the completed APH 
submitted with the written agreement request. The policyholder 
certifies to the insurance provider each year the yields on the APH for 
the year the crop is produced and any required signatures are obtained 
by the insurance provider from the policyholder at that time. Requiring 
a policyholder's signature on the APH for a written agreement request 
is redundant.
    FCIC is revising section 18(f)(1)(iii) to add ``the crop'' as an 
option for evidence of adaptability. Making this change clarifies that 
for situations when the crop is not insurable, evidence of adaptability 
can only be required for the crop itself, and is not required to be 
broken down by practice, type, or variety. The current practice, type, 
or variety language is intended for when the crop may be insurable, but 
the

[[Page 55727]]

requested practice, type, or variety is not.
    FCIC is removing section 18(f)(1)(vi) to clarify that ``all other 
information'' is not a requirement to obtain a written agreement. The 
policyholder may still provide any other information they wish to 
support their request for written agreement, but the policyholder is 
only required to submit the information identified in sections 18(f).
    FCIC is revising section 18(f)(2)(i) to clarify this section is not 
only applicable to crops previously planted, it is also applicable to 
perennial crops that have previously produced a crop. Due to the nature 
of how long some perennial crops take to produce after planting the 
crop, specifying ``perennial crops that have previously produced a 
crop'' instead of ``planted'' clarifies the language for how perennial 
crops are affected.
    FCIC is also revising section 18(f)(2)(i) to allow an entity to use 
the production history from a substantial beneficial interest in the 
entity that has a history of growing the crop to qualify for a written 
agreement. This revision will allow a newly formed entity a pathway to 
qualify for a written agreement, whereas previously the newly formed 
entity was required to grow the crop, or a similar crop, for a minimum 
of three years before the new entity could qualify, even if substantial 
beneficial interests of the entity had previously grown the crop.
    FCIC is revising section 18(f)(2)(i)(A) to remove the requirement 
of the policyholder's signature on the completed APH submitted with the 
written agreement request. If the policyholder has insured the crop in 
the county or area, then the yields used on the APH have already been 
certified by the policyholder each year the production report was 
provided, and any required signatures are obtained by the insurance 
provider from the policyholder at that time. If the crop was not 
insured, then verifiable records must be submitted with the written 
agreement request. In both cases, requiring a policyholder's signature 
on the APH for a written agreement request is redundant. Therefore, 
removing the APH signature requirement increases efficiency for written 
agreement requests and is less burdensome to the policyholder.
    FCIC is also revising section 18(f)(2)(i)(A) of the Basic 
Provisions to state the completed APH is based on verifiable production 
records of actual yields for the crop to be consistent with the APH 
requirement for other written agreement request types.
    FCIC is revising section 18(f)(2)(i)(B) to clarify this section is 
also applicable to perennial crops that have previously produced a 
crop. As stated above, due to the nature of how long some perennial 
crops take to produce after planting the crop, specifying ``perennial 
crops that have previously produced a crop'' instead of ``planted'' 
clarifies the language for how perennial crops are affected.
    FCIC is revising section 18(f)(2)(i)(B)(2) to remove the 
requirement that the policyholder must insure the crop for the three 
previous crop years before they can substitute a year of insurance 
experience for a year of verifiable records. This change will allow the 
policyholder to use their insured crop's information for any year that 
the policyholder has insured the crop instead of providing verifiable 
records. For example, if the policyholder has produced the requested 
crop for three years and insured the requested crop for one year, 
verifiable records only have to be submitted for the two years the 
requested crop was not insured. For the year that the crop was insured 
the policyholder does not have to provide verifiable records.
    FCIC is also revising section 18(f)(2)(i)(B)(2) to allow an entity 
to use the production history from a substantial beneficial interest in 
the entity that has a history of growing the crop to qualify for a 
written agreement. As stated above, this revision will allow a newly 
formed entity a pathway to qualify for a written agreement, whereas 
previously the newly formed entity was required to grow the crop, or a 
similar crop, for a minimum of three years before the new entity could 
qualify, even if substantial beneficial interests of the entity had 
previously grown the crop.
    FCIC is adding a new section 18(f)(2)(i)(B)(3) to state that FCIC 
will not consider any crop year in which the crop was planted outside 
of the most recent ten crop years as a year of previously planting the 
crop, or produced a crop if the crop is a perennial crop, unless 
verifiable production records are provided, or the crop was insured for 
that crop year. This change reduces the burden on policyholders by not 
requiring them to bring in the requested crop verifiable records from 
over ten years ago, which would allow the use of similar crop 
provisions in section 18(f)(2)(ii) to fulfill the requirement if the 
policyholder has not grown the requested crop for three crop years in 
the last ten years, even if the policyholder produced the requested 
crop more than ten years ago.
    FCIC is revising section 18(f)(2)(ii) to clarify this section is 
not only applicable to crops previously planted, it is also applicable 
to perennial crops that have previously produced a crop. As stated 
above, due to the nature of how long some perennial crops take to 
produce after the crop is planted, specifying ``perennial crops that 
have previously produced a crop'' instead of ``planted'' clarifies the 
language for how perennial crops are affected.
    FCIC is also revising section 18(f)(2)(ii) to allow an entity to 
use the production history from a substantial beneficial interest in 
the entity that has a history of growing the crop to qualify for a 
written agreement. As stated above, this revision will allow a newly 
formed entity a pathway to qualify for a written agreement, whereas 
previously the newly formed entity was required to grow the crop, or a 
similar crop, for a minimum of three years before the new entity could 
qualify, even if substantial beneficial interests of the entity had 
previously grown the crop.
    FCIC is revising section 18(f)(2)(ii)(A) to remove the requirement 
of the policyholder's signature on the completed APH submitted with the 
written agreement request. As stated above, if the policyholder has 
insured the crop in the county or area, then the yields used on the APH 
have already been certified to the insurance provider each year the 
production report was provided, and any required signatures are 
obtained by the insurance provider from the policyholder at that time. 
If the crop was not insured, then verifiable records must be submitted 
with the written agreement request. In both cases, requiring a 
policyholder's signature on the APH for a written agreement request is 
redundant.
    FCIC is removing sections 18(f)(2)(ii)(A)(1) and (2) from section 
18(f)(2)(ii)(A). This change makes the similar crop language consistent 
with the requested crop language in section 18(f)(2)(i). A policyholder 
will now be able to provide a completed APH for a similar crop that was 
grown in the area even if the similar crop was also grown in the 
county, the same as is allowed for the requested crop.
    FCIC is revising section 18(f)(2)(ii)(B) to clarify this section is 
not only applicable to crops previously planted, it is also applicable 
to perennial crops that have previously produced a crop. As stated 
above, due to the nature of how long some perennial crops take to 
produce after planting the crop, specifying ``produced for perennial 
crops'' instead of ``planted'' clarifies the language for how perennial 
crops are affected.

[[Page 55728]]

    FCIC is revising section 18(f)(2)(ii)(B)(2) to be consistent with 
the changes made in section 18(f)(2)(i)(B)(2) above, which is removing 
the requirement that the policyholder must insure the crop for the 
three previous crop years before they can substitute a year of 
insurance experience for a year of verifiable records. Revising this 
section to be consistent with section 18(f)(2)(i)(B)(2) makes this 
change apply to the similar crop language the same as the requested 
crop language. This change will allow the policyholder to use their 
insured similar crop's information for any year that the policyholder 
has insured the similar crop instead of providing verifiable records.
    FCIC is also revising section 18(f)(2)(ii)(B)(2) to allow an entity 
to use the production history from a substantial beneficial interest in 
the entity that has a history of growing the similar crop to qualify 
for a written agreement. As stated above, this revision will allow a 
newly formed entity a pathway to qualify for a written agreement, 
whereas previously the newly formed entity was required to grow the 
crop, or a similar crop, for a minimum of three years before the new 
entity could qualify, even if substantial beneficial interests of the 
entity had previously grown the crop.
    FCIC is adding a new section 18(f)(2)(ii)(B)(3) to be consistent 
with the changes made in section 18(f)(2)(i)(B)(3), which is to state 
that FCIC will not consider any crop year in which the crop was planted 
outside of the most recent ten crop years as a year of previously 
planting the crop, or having produced a crop if the crop is a perennial 
crop, unless verifiable production records are provided, or the crop 
was insured for that crop year. Revising this section to be consistent 
with section 18(f)(2)(i)(B)(3) makes this change apply to the similar 
crop language the same as the requested crop language.
    FCIC is revising section 18(f)(2)(ii)(C) to allow an entity to use 
the production history from a substantial beneficial interest in the 
entity that has a history of growing the crop to qualify for a written 
agreement. As stated above, this revision will allow a newly formed 
entity a pathway to qualify for a written agreement, whereas previously 
the newly formed entity was required to grow the crop, or a similar 
crop, for a minimum of three years before the new entity could qualify, 
even if substantial beneficial interests of the entity had previously 
grown the crop.
    FCIC is also revising section 18(f)(2)(ii)(C) to clarify this 
section is not only applicable to crops previously planted, it is also 
applicable to perennial crops that have previously produced a crop. As 
stated above, due to the nature of how long some perennial crops take 
to produce after planting the crop, specifying ``perennial crops that 
have previously produced a crop'' instead of ``planted'' clarifies the 
language for how perennial crops are affected.
    FCIC is removing section 18(f)(2)(vi) to be consistent with the 
changes made in section 18(f)(1)(vi) above. This will clarify that 
``all other information'' is not a requirement to obtain a written 
agreement. The policyholder may still provide any other information 
they wish to support their request for written agreement but the 
policyholder is only required to submit the information identified in 
sections 18(f).
    FCIC is removing section 18(g)(3) because any additional land or 
additional crop must meet the request deadlines of section 18(a) or 
18(e) whether or not the additional land or additional crop will be 
added to an existing written agreement or a request for a written 
agreement. Therefore, this language is not needed.
    FCIC is revising section 18(h)(2) to clarify the APH history used 
to determine 50 percent of the transitional yield for the crop, type, 
and practice can be from either the county or a similar county. 
Currently this provision only looks at similar counties. This will 
allow a broader review of the policyholder's APH history to determine 
whether at least 50 percent of the transitional yield for the crop, 
type, and practice has been produced.
    FCIC is also revising section 18(h)(2) to clarify that this 
provision only applies when the crop has been previously grown. The 
provision appeared to deny a written agreement if the policyholder had 
not previously grown the requested crop, type or practice, because if 
the requested crop, type or practice had not previously been grown it 
could not have made 50 percent of the transitional yield. These changes 
now clearly state that a policyholder will not be denied a written 
agreement under this provision if they have not grown the crop, type, 
and practice.
    FCIC is revising section 18(h)(4) to clarify this provision is also 
applicable if a similar crop was not previously grown in the area. As 
previously written, it appeared like a written agreement would 
automatically be denied when the actual crop was not grown. This 
conflicted with the similar crop provisions in section 18(f)(2)(ii) 
where a similar crop can be used to qualify a written agreement request 
for counties without actuarial documents for the crop when the 
requested crop had not been grown, or had not been grown long enough to 
complete the required three years of records. This change now clarifies 
that a denial will take place when the crop, or a similar crop, has not 
been grown, which removes any conflict with the similar crop 
provisions.
    FCIC is also revising section 18(h)(4) to allow the crop or similar 
crop to be grown in the area, as growing the crop or similar crop in 
the area can qualify a policyholder in the county even if they have not 
grown the crop in the requested county.
    FCIC is removing from section 18(h)(4) the phrase ``based on sales 
receipts, contemporaneous feeding records or a contract for the crop.'' 
By listing these options out it limits what can be shown as evidence of 
a market. If the policyholder is new to the area or is growing a new 
crop and qualifying based on a similar crop, they would not have sales 
receipts, contemporaneous feeding records, and unlikely to have a 
contract for the requested crop as most crops do not require a 
contract. Section 18(f)(2)(iv) already requires the name, location of, 
and approximate distance to the place the crop will be sold, which 
identifies the market for the crop.
    FCIC is revising section 18(h)(5) to allow a written agreement 
request to be denied for a particular practice or type if that practice 
or type is not adapted to the county. The current language only 
specified crop, thus if the crop was adapted to the county it could be 
assumed that all practices or types are automatically considered 
adapted. This change allows the ability to deny a written agreement 
request if a particular practice or type of a crop is not adapted to 
the county, even if other practices or types of the crop are adapted to 
the county.
    (j) Section 21--FCIC is revising section 21(b)(2) to update the 
years used in the example to reflect more recent crop years.
    (k) Section 34--FCIC is revising sections 34(a)(4)(viii), 
(viii)(A), and (viii)(B) to allow a policyholder to select an 
enterprise unit for either irrigated or non-irrigated practice and 
choose the most appropriate unit structure on the other practice, be it 
a separate enterprise unit or optional or basic units. Previously, FCIC 
only allowed an enterprise unit for all acreage of the crop in the 
county. In the Agricultural Act of 2014, Congress mandated that FCIC 
allow separate enterprise units by irrigated and non-irrigated 
practices. Currently, FCIC requires that all acreage

[[Page 55729]]

of the crop in the county be insured as an enterprise unit, one for all 
the irrigated acreage in the county and one for all the non-irrigated 
acreage in the county. Policyholders have made it clear to FCIC that, 
requiring all irrigated and non-irrigated acreage to separately qualify 
as enterprise units and to be eligible for separate enterprise units by 
practice both must be insured as enterprise units is not affording 
policyholders the flexibility to tailor their insurance coverage to 
meet their risk management needs. Policyholders have identified 
situations where both the irrigated and non-irrigated acreage do not 
qualify as enterprise units and they are left with a single enterprise 
unit for all the acreage and situations where having separate 
enterprise units for irrigated and non-irrigated acreage simply does 
not meet their risk management needs. Policyholders argue that to meet 
their risk management needs they need to be allowed to qualify for an 
enterprise unit for the practice that they determine best meets their 
risk management needs and another type unit for the other practice. 
FCIC agrees that irrigated and non-irrigated practices have inherently 
different risks, and some perils such as drought that can impact a non-
irrigated crop may be distinctly different from those that may impact 
an irrigated crop such that an enterprise unit structure may only be an 
appropriate risk management alternative for one of the practices, but 
not both. In the best interest of policyholders and to allow the 
flexibility to match as closely as possible the inherently different 
risks for irrigated and non-irrigated practices, FCIC is revising the 
provisions to allow a policyholder to elect the most appropriate unit 
structure for each practice.
    FCIC is revising section 34(a)(4)(viii)(C) to make this section 
applicable only if the policyholder elected separate enterprise units 
for irrigated and non-irrigated practices and it is discovered the 
policyholder does not qualify for an enterprise unit for the irrigated 
or non-irrigated practices.
    FCIC is adding a new section 34(a)(4)(viii)(D) to state what 
happens when a policyholder elected an enterprise unit on one practice 
(irrigated or non-irrigated) and a different unit structure on the 
other practice and it is discovered the policyholder does not qualify 
for an enterprise unit for the irrigated or non-irrigated practice. If 
it is discovered the policyholder does not qualify for an enterprise 
unit on or before the acreage reporting date, the policyholder's unit 
division will be based on basic or optional units, whichever they 
report on their acreage report and qualify for. If it is discovered the 
policyholder does not qualify for an enterprise unit at any time after 
the acreage reporting date, the insurance provider will assign the 
basic unit structure.

Effective Date

    The FCIC is issuing this final rule without opportunity for prior 
notice and comment. The Administrative Procedure Act (APA) exempts 
rules ``relating to agency management or personnel or to public 
property, loans, grants, benefits, or contracts'' from the statutory 
requirement for prior notice and opportunity for public comment (5 
U.S.C. 553(a)(2)). A Federal crop insurance policy is a contract and is 
thus exempt from APA notice-and-comment procedures. Previously, changes 
made to the Federal crop insurance policies codified in the Code of 
Federal Regulations were required to be implemented through the notice-
and-comment rulemaking process. Such action was not required by the 
APA, which exempts contracts. Rather, the requirement originated with a 
notice USDA published in the Federal Register on July 24, 1971 (36 FR 
13804), stating that the Department of Agriculture would, to the 
maximum extent practicable, use the notice-and-comment rulemaking 
process when making program changes, including those involving 
contracts. FCIC complied with this notice over the subsequent years. On 
October 28, 2013, USDA published a notice in the Federal Register (78 
FR 64194) rescinding the prior notice, thereby making contracts again 
exempt from the notice-and-comment rulemaking process. This exemption 
applies to the 30-day notice prior to implementation of a rule. 
Therefore, the policy changes made by this final rule are effective 
upon publication in the Federal Register.
    However, FCIC is providing a 30-day comment period and invites 
interested persons to participate in this rulemaking by submitting 
written comments. FCIC may consider the comments received and may 
conduct additional rulemaking based on the comments.

Executive Orders 12866, 13563, and 13771

    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasized the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility. The Office of 
Management and Budget (OMB) designated this rule as not significant 
under Executive Order 12866, ``Regulatory Planning and Review,'' and 
therefore, OMB has not reviewed this rule. The rule is not subject to 
Executive Order 13771, ``Reducing Regulation and Controlling Regulatory 
Costs.''

Paperwork Reduction Act of 1995

    Pursuant to the provisions of the Paperwork Reduction Act of 1995 
(44 U.S.C. chapter 35, subchapter I), 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.'' Executive Order 13175

[[Page 55730]]

requires Federal agencies to consult and coordinate with tribes on a 
government-to-government basis on policies that have tribal 
implications, including regulations, legislative comments or proposed 
legislation, and other policy statements or actions that have 
substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes or on the 
distribution of power and responsibilities between the Federal 
Government and Indian tribes.
    The Federal Crop Insurance Corporation has assessed the impact of 
this rule on Indian tribes and determined that this rule does not, to 
our knowledge, have tribal implications that require tribal 
consultation under EO 13175. If a Tribe requests consultation, the 
Federal Crop Insurance Corporation will work with the Office of Tribal 
Relations to ensure meaningful consultation is provided where changes, 
additions and modifications identified herein are not expressly 
mandated by Congress.

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 indemnity amount for 
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 (FCIA) 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 a significant impact on a 
substantial number of 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 2 CFR part 415, subpart C.

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 directing 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.

List of Subjects in 7 CFR Parts 402, 407, and 457

    Crop insurance, Reporting and recordkeeping requirements.

Final Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation amends 7 CFR parts 402, 407, and 457 as follows:

PART 402--CATASTROPHIC RISK PROTECTION ENDORSEMENT

0
1. The authority citation for 7 CFR part 402 continues to read as 
follows:

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


0
2. Amend Sec.  402.4 by revising section 6(f) to read as follows:


Sec.  402.4  Catastrophic Risk Protection Endorsement Provisions.

* * * * *
    6. Annual Premium and Administrative Fees
* * * * *
    (f) You will be responsible for payment of the premium established 
for the coverage provided under this endorsement if:
    (1) USDA determines you have committed a violation of the highly 
erodible land conservation or wetland conservation provisions of 7 CFR 
part 12 as amended by the Agricultural Act of 2014; or
    (2) You have not filed form AD-1026 with FSA for the reinsurance 
year by the premium billing date.
    (i) Notwithstanding section 6(f)(2), you may be eligible for 
premium subsidy without having a timely filed form AD-1026:
    (A) For the initial reinsurance year if you certify by the premium 
billing date for your policy that you meet the qualifications as 
outlined in FCIC approved procedures for producers who are new to 
farming, new to crop insurance, a new entity, or have not previously 
been required to file form AD-1026; or
    (B) If FSA approves relief for failure to timely file due to 
circumstances beyond your control or failure to timely provide adequate 
information to complete form AD-1026 in accordance with the provisions 
contained in 7 CFR part 12.
    (ii) To be eligible for premium subsidy paid on your behalf by 
FCIC, it is your responsibility to assure you meet all the requirements 
for:
    (A) Compliance with the conservation provisions specified in 
section 6(f)(1) of this section; and
    (B) Filing form AD-1026 to be properly identified as in compliance 
with the conservation provisions specified in section 6(f)(1) of this 
section.
* * * * *

PART 407--AREA RISK PROTECTION INSURANCE REGULATIONS

0
3. The authority citation for 7 CFR part 407 continues to read as 
follows:

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


0
4. Amend Sec.  407.9 as follows:
0
a. Remove the phrase ``website'' wherever it appears and add the word 
``Web site'' in its place;
0
b. In section 1:
0
i. Revise the definition of ``Good farming practices''; and
0
ii. In the definition of ``Limited resource farmer'', remove ``http://www.lrftool.sc.egov.usda.gov or a successor Web site'' and add ``http:/
/lrftool.sc.egov.usda.gov/LRP_Definition.aspx'' in its place;
0
c. In section 2:
0
i. Redesignate paragraph (j)(2) as paragraph (j)(3);
0
ii. Add a new paragraph (j)(2);
0
iii. In paragraph (k)(2)(i)(D), remove the date of ``2011'' and add the 
date ``2019'' in its place and remove the date of ``2010'' and add the 
date of ``2018'' in its place in each instance these dates appear in 
the paragraph;

[[Page 55731]]

0
iv. Revise paragraph (k)(3)(ii); and
0
v. In paragraph (p)(2), remove the date of ``2012'' and add the date 
``2018'' in its place and remove the date of ``2013'' and add the date 
of ``2019'' in its place in each instance these dates appear in the 
paragraph;
0
d. Revise section 7(i).
    The revisions and additions reads as follows:


Sec.  407.9  Area risk protection insurance policy.

* * * * *
    1. Definitions
* * * * *
    Good farming practices. The production methods utilized to produce 
the insured crop, type, and practice and allow it to make normal 
progress toward maturity, which are those generally recognized by 
agricultural experts or organic agricultural experts, depending on the 
practice, for the area. We may, or you may request us to, contact FCIC 
to determine if production methods will be considered ``good farming 
practices.''
* * * * *
    2. Life of Policy, Cancellation, and Termination
* * * * *
    (j) * * *
    (2) If you and we agree, your premium and administrative fees can 
be offset from any indemnity due you even if it is prior to the billing 
date of the premium and administrative fees.
* * * * *
    (k) * * *
    (3) * * *
    (ii) Execute a written payment agreement in accordance with 7 CFR 
part 400, subpart U, and make payments in accordance with the 
agreement; or
* * * * *
    7. Annual Premium and Administrative Fees
* * * * *
    (i) You will be ineligible for any premium subsidy paid on your 
behalf by FCIC for any policy issued by us if:
    (1) USDA determines you have committed a violation of the highly 
erodible land conservation or wetland conservation provisions of 7 CFR 
part 12 as amended by the Agricultural Act of 2014; or
    (2) You have not filed form AD-1026 with FSA for the reinsurance 
year by the premium billing date.
    (i) Notwithstanding section 7(i)(2), you may be eligible for 
premium subsidy without having a timely filed form AD-1026:
    (A) For the initial reinsurance year if you certify by the premium 
billing date for your policy that you meet the qualifications as 
outlined in FCIC approved procedures for producers who are new to 
farming, new to crop insurance, a new entity, or have not previously 
been required to file form AD-1026; or
    (B) If FSA approves relief for failure to timely file due to 
circumstances beyond your control or failure to timely provide adequate 
information to complete form AD-1026 in accordance with the provisions 
contained in 7 CFR part 12.
    (ii) To be eligible for premium subsidy paid on your behalf by 
FCIC, it is your responsibility to assure you meet all the requirements 
for:
    (A) Compliance with the conservation provisions specified in 
section 7(i)(1) of this section; and
    (B) Filing form AD-1026 to be properly identified as in compliance 
with the conservation provisions specified in section 7(i)(1) of this 
section.
* * * * *

PART 457--COMMON CROP INSURANCE REGULATIONS

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

    Authority:  7 U.S.C. 1506(l) and 1506(o).


0
6. Amend Sec.  457.8, in the Common Crop Insurance Policy, as follows:
0
a. Remove the phrase ``Web site'' wherever it appears and add the word 
``Web site'' in its place;
0
b. Remove the phrase ``replant payment'' wherever it appears and add 
the phrase ``replanting payment'' in its place;
0
c. Under the heading ``Reinsured Policies,'' revise the third 
paragraph;
0
d. In section 1:
0
i. In the definition of ``Actual Production History (APH),'' remove 
``(G)'' and add ``G'' in its place;
0
ii. In the definition of ``Cooperative Extension System,'' remove the 
phrase ``Cooperative State Research, Education and Extension Service'' 
and add the phrase ``National Institute of Food and Agriculture'' in 
its place;
0
iii. Remove the definition for ``FSA farm serial number'';
    iv. Add the definition for ``FSA farm number''; and
0
v. Revise the definitions of ``Good farming practices,'' ``Price 
election,'' and ``Replanted crop'';
0
e. In section 2:
0
i. Redesignate paragraph (e)(2) as paragraph (e)(3);
0
ii. Add a new paragraph (e)(2);
0
iii. In paragraph (f)(2)(i)(D), remove the date of ``2011'' and add the 
date ``2019'' in its place in both places and remove the date of 
``2010'' and add the date ``2018'' in its place;
0
iv. Revise paragraph (f)(3)(ii);
0
v. In paragraph (f)(5), remove the date of ``2010'' and add the date 
``2018'' in its place, remove the date of ``2011'' and add the date of 
``2019'' in its place, and remove the date of ``2012'' and add the date 
of ``2020'' in its place, in each instance these dates appear in the 
paragraph;
0
vii. Remove paragraph (j); and
0
viii. Redesignate paragraph (k) as paragraph (j);
0
f. In section 3:
0
i. In paragraph (f)(3), add the phrase ``, unless otherwise specified 
in the Special Provisions'' following the phrase ``by the production 
reporting date''; and
0
ii. In paragraph (h)(1), add the term ``agronomic'' following the 
phrase ``you cannot prove there is a valid'';
0
g. In section 6:
0
i. In paragraph (a)(3)(i), remove the term ``and'' following the 
semicolon at the end of the paragraph;
0
ii. In paragraph (a)(3)(ii)(C), remove ``(5)'' and remove the period at 
the end of the paragraph and add ``; and'' in its place;
0
iii. Add paragraph (a)(3)(iii); and
0
iv. In paragraph (c)(5), remove the term ``serial'' following the 
phrase ``FSA farm'';
0
h. Revise section 7(h);
0
i. In section 9(a)(2)(viii)(A), remove the phrase ``the Group Risk 
Protection Plan of Insurance or successor provisions'' and add the 
phrase ``Area Risk Protection Insurance'' in its place;
0
j. In section 17(f)(9) introductory text, remove the term ``manpower'' 
and add the term ``labor'' in its place;
0
k. In section 18:
0
i. In paragraphs (c)(1) and (2), remove the phrase ``Special 
Provisions, or an addendum thereto,'' and add the phrase ``actuarial 
documents'' in its place wherever it appears;
0
ii. In paragraph (e)(1), add the term ``or'' to the end of the 
paragraph following the semicolon;
0
iii. Revise paragraph (e)(2)(i)(B);
0
iv. In paragraph (e)(2)(iii), remove the term ``or'' following the 
semicolon;
0
v. Remove paragraph (e)(3);
0
vi. Revise paragraph (f)(1)(ii);
0
vii. In paragraph (f)(1)(iii), add the phrase ``the crop,'' following 
the phrase ``to provide insurance for'';
0
viii. In paragraph (f)(1)(iv), remove the term ``serial'' following the 
phrase ``FSA farm'' and add the term ``and'' at the end of the 
paragraph following the semicolon;
0
ix. In paragraph (f)(1)(v), remove the term ``and'' following the 
semicolon at the end of the paragraph;
0
x. Remove paragraph (f)(1)(vi);

[[Page 55732]]

0
xi. Revise paragraphs (f)(2)(i), (f)(2)(ii) introductory text, and 
(f)(2)(ii)(A) through (C);
0
xii. In paragraph (f)(1)(iv), add the term ``and'' at the end of the 
paragraph following the semicolon;
0
xiii. Remove paragraph (f)(2)(vi);
0
xiv. In paragraph (g)(2), add the term ``or'' at the end of the 
paragraph following the semicolon;
0
xv. Remove paragraph (g)(3);
0
xvi. Redesignate paragraph (g)(4) as (g)(3);
0
xvii. Revise paragraphs (h)(2) and (4); and
0
xviii. In paragraph (h)(5), add the phrase ``, practice, or type'' 
following the phrase ``experts determine the crop'';
0
l. Revise section 21(b)(2); and
0
m. In section 34:
0
i. In paragraphs (a)(4)(i)(C), (D), and (E) and (a)(4)(ii), remove the 
term ``serial'' following the phrase ``FSA farm'' wherever it appears;
0
ii. Revise paragraph (a)(4)(viii); and
0
iii. In paragraphs (c)(1)(ii) and (c)(2) and (3), remove the term 
``serial'' following the phrase ``FSA farm'' wherever it appears.
    The revisions and additions reads as follows:


Sec.  457.8  The application and policy.

* * * * *
    Common Crop Insurance Policy
* * * * *
    Reinsured Policies
* * * * *
    AGREEMENT TO INSURE: In return for the payment of the premium, and 
subject to all of the provisions of this policy, we agree with you to 
provide the insurance as stated in this policy. If there is a conflict 
between the Act, the regulations published at 7 CFR chapter IV, and the 
procedures as issued by FCIC, the order of priority is: (1) The Act; 
(2) the regulations; and (3) the procedures as issued by FCIC, with (1) 
controlling (2), etc. If there is a conflict between the policy 
provisions published at 7 CFR part 457 and the administrative 
regulations published at 7 CFR part 400, the policy provisions 
published at 7 CFR part 457 control. If a conflict exists among the 
policy, the order of priority is: (1) The Catastrophic Risk Protection 
Endorsement, as applicable; (2) the Special Provisions; (3) the 
actuarial documents; (4) the Commodity Exchange Price Provisions, as 
applicable; (5) the Crop Provisions; and (6) these Basic Provisions, 
with (1) controlling (2), etc.
* * * * *
    1. Definitions
* * * * *
    FSA farm number. The number assigned to the farm by the local FSA 
office.
* * * * *
    Good farming practices. The production methods utilized to produce 
the insured crop and allow it to make normal progress toward maturity 
and produce at least the yield used to determine the production 
guarantee or amount of insurance, including any adjustments for late 
planted acreage, which are those generally recognized by agricultural 
experts or organic agricultural experts, depending on the practice, for 
the area. We may, or you may request us to, contact FCIC to determine 
if production methods will be considered ``good farming practices.''
* * * * *
    Price election. The amount contained in the actuarial documents 
that is the value per pound, bushel, ton, carton, or other applicable 
unit of measure for the purposes of determining premium and indemnity 
under the policy. A price election is not applicable for crops for 
which revenue protection is available.
* * * * *
    Replanted crop. (1) The same agricultural commodity replanted on 
the same acreage as the insured crop for harvest in the same crop year 
if:
    (i) The replanting is specifically made optional by the policy and 
you elect to replant the crop and insure it under the policy covering 
the first insured crop; or
    (ii) Replanting is required by the policy.
    (2) Unless otherwise specified in the Special Provisions, the crop 
will be considered an insured replanted crop and no replanting payment 
will be paid if we have determined it is not practical to replant the 
insured crop and you choose to plant the acreage to the same insured 
crop within or prior to the late planting period or after the final 
planting date if no late planting period is applicable. If we determine 
it is not practical to replant and you plant the acreage to the same 
insured crop, any indemnity will be based on the greater of:
    (i) Our appraised production on the initially planted crop;
    (ii) Our subsequent appraisal of the replanted crop if the 
replanted crop is not harvested; or
    (iii) The harvested production from the replanted crop.
* * * * *
    2. Life of Policy, Cancellation, and Termination
* * * * *
    (e) * * *
    (2) If you and we agree, your premium and administrative fees can 
be offset from any indemnity or prevented planting payment due you even 
if it is prior to the billing date of the premium and administrative 
fees.
* * * * *
    (f) * * *
    (3) * * *
    (ii) Execute a written payment agreement, in accordance with 7 CFR 
part 400, subpart U, and make payments in accordance with the 
agreement; or
* * * * *
    6. Report of Acreage
    (a) * * *
    (3) * * *
    (iii) If you plant the insured crop on or within five days prior to 
the final planting date and the final planting date is five or fewer 
days prior to the acreage reporting date, you must submit an acreage 
report no later than five days after the acreage reporting date (for 
example, if the final planting date contained in the Special Provisions 
is July 10, the acreage reporting date contained in the Special 
Provisions is July 15 and you plant the insured crop on July 9, you 
have until July 20 to submit an acreage report for the insured crop).
* * * * *
    7. Annual Premium and Administrative Fees
* * * * *
    (h) You will be ineligible for any premium subsidy paid on your 
behalf by FCIC for any policy issued by us if:
    (1) USDA determines you have committed a violation of the highly 
erodible land conservation or wetland conservation provisions of 7 CFR 
part 12 as amended by the Agricultural Act of 2014; or
    (2) You have not filed form AD-1026 with FSA for the reinsurance 
year by the premium billing date.
    (i) Notwithstanding section 7(h)(2), you may be eligible for 
premium subsidy without having a timely filed form AD-1026:
    (A) For the initial reinsurance year if you certify by the premium 
billing date for your policy that you meet the qualifications as 
outlined in FCIC approved procedures for producers who are new to 
farming, new to crop insurance, a new entity, or have not previously 
been required to file form AD-1026; or
    (B) If FSA approves relief for failure to timely file due to 
circumstances beyond your control or failure to timely provide adequate 
information to complete form AD-1026 in accordance with the provisions 
contained in 7 CFR part 12.
    (ii) To be eligible for premium subsidy paid on your behalf by 
FCIC, it

[[Page 55733]]

is your responsibility to assure you meet all the requirements for:
    (A) Compliance with the conservation provisions specified in 
section 7(h)(1) of this section; and
    (B) Filing form AD-1026 to be properly identified as in compliance 
with the conservation provisions specified in section 7(h)(1) of this 
section.
* * * * *
    18. Written Agreements
* * * * *
    (e) * * *
    (2) * * *
    (i) * * *
    (B) Establish optional units in accordance with FCIC procedures 
that otherwise would not be allowed or change the premium rate or 
transitional yield for designated high-risk land;
* * * * *
    (f) * * *
    (1) * * *
    (ii) A completed APH (only for crop policies that require APH) 
based on verifiable records of actual yields for the crop and county 
for which the written agreement is being requested (the actual yields 
do not necessarily have to be from the same physical acreage for which 
you are requesting a written agreement), and verifiable records of 
actual yields if required by FCIC;
* * * * *
    (2) * * *
    (i) For a crop you (or anyone with a substantial beneficial 
interest in you) have previously planted (or produced a crop if the 
crop is a perennial crop) in the county or area for at least three 
years:
    (A) A completed APH (only for crop policies that require APH) based 
on verifiable production records of actual yields for the crop; and
    (B) Verifiable production records for at least the three most 
recent crop years in which the crop was planted (or produced a crop if 
the crop is a perennial crop):
    (1) The verifiable production records do not necessarily have to be 
from the same physical acreage for which you are requesting a written 
agreement;
    (2) Verifiable production records do not have to be submitted for 
any year you (or anyone with a substantial beneficial interest in you) 
have insured the crop in the county or area and have certified the 
yields on the applicable production reports or the yields are based on 
your insurance claim (although you are not required to submit 
production records, you still must maintain production records in 
accordance with section 21); and
    (3) FCIC will not consider any crop year in which the crop was 
planted (or produced a crop if the crop is a perennial crop) outside of 
the most recent ten crop years as a year of previously planting the 
crop (or having produced a crop if the crop is a perennial crop), 
unless verifiable production records are provided, or the crop was 
insured for that crop year;
    (ii) For a crop you (or anyone with a substantial beneficial 
interest in you) have not previously planted (or produced a crop if the 
crop is a perennial crop) in the county or area for at least three 
years:
    (A) A completed APH (only for crop policies that require APH) based 
on verifiable production records of actual yields for the similar crop;
    (B) Verifiable production records for at least the three most 
recent crop years in which the similar crop was planted (or produced a 
crop if the crop is a perennial crop) in the county or area:
    (1) The verifiable production records for the similar crop do not 
necessarily have to be from the same physical acreage for which you are 
requesting a written agreement;
    (2) Verifiable production records do not have to be submitted for 
any crop year you (or anyone with a substantial beneficial interest in 
you) have insured the similar crop in the county or area and have 
certified the yields on the applicable production reports or the yields 
are based on your insurance claim (although you are not required to 
submit production records, you still must maintain production records 
in accordance with section 21); and
    (3) FCIC will not consider any crop year in which the similar crop 
was planted (or produced a crop if the crop is a perennial crop) 
outside of the most recent ten crop years as a year of previously 
planting the similar crop (or having produced a crop if the crop is a 
perennial crop), unless verifiable production records are provided, or 
the similar crop was insured, for that crop year;
    (C) If you (or anyone with a substantial beneficial interest in 
you) have at least one year of production records, but less than three 
years of production records, for the crop in the county or area but 
have production records for a similar crop in the county or area such 
that the combination of both sets of records results in at least three 
years of production records, you must provide the information required 
in sections 18(f)(2)(i)(A) and (B) for the years you (or anyone with a 
substantial beneficial interest in you) planted the crop (or produced a 
crop if the crop is a perennial crop) in the county or area and the 
information required in sections 18(f)(2)(ii)(A) and (B) regarding the 
similar crop for the remaining years; and
* * * * *
    (h) * * *
    (2) Your APH history demonstrates you have not produced at least 50 
percent of the transitional yield for the crop, type, and practice 
obtained from the county, or a county with similar agronomic conditions 
and risk exposure, when previously grown;
* * * * *
    (4) The crop, or a similar crop, was not previously grown in the 
county or area, or there is no evidence of a market for the crop 
(applicable only for counties without actuarial documents); or
* * * * *
    21. Access to Insured Crop and Records, and Record Retention
* * * * *
    (b) * * *
    (2) All records used to establish the amount of production you 
certified on your production reports used to compute your approved 
yield for three years after the calendar date for the end of the 
insurance period for the crop year for which you initially certified 
such records, unless such records have already been provided to us 
(e.g., if you are a new insured and you certify 2015 through 2018 crop 
year production records in 2019 to determine your approved yield for 
the 2019 crop year, you must retain all records from the 2015 through 
2018 crop years through the 2022 crop year. If you subsequently certify 
records of the 2019 crop year in 2020 to determine your approved yield 
for the 2020 crop year, you must retain the 2019 crop year records 
through the 2023 crop year and so forth for each subsequent year of 
production records certified); and
* * * * *
    34. Units.
    (a) * * *
    (4) * * *
    (viii) If allowed by the actuarial documents, you may elect 
separate enterprise units for irrigated or non-irrigated practices.
    (A) You may elect one enterprise unit for all irrigated practices 
or one enterprise unit for all non-irrigated practices or enterprise 
units for both.
    (B) You must separately meet the requirements in section 34(a)(4) 
for each enterprise unit.
    (C) If you elected separate enterprise units for both irrigated and 
non-irrigated practices and we discover you do not qualify for an 
enterprise unit for the irrigated or non-irrigated practice and such 
discovery is made:

[[Page 55734]]

    (1) On or before the acreage reporting date, you may elect to 
insure all acreage of the crop in the county in one enterprise unit 
provided you meet the requirements in section 34(a)(4), or your unit 
division will be based on basic or optional units, whichever you report 
on your acreage report and qualify for; or
    (2) At any time after the acreage reporting date, your unit 
structure will be one enterprise unit provided you meet the 
requirements in section 34(a)(4). Otherwise, we will assign the basic 
unit structure.
    (D) If you elected an enterprise unit on one practice (irrigated or 
non-irrigated) and a different unit structure on the other practice and 
we discover you do not qualify for an enterprise unit for the irrigated 
or non-irrigated practice and such discovery is made:
    (1) On or before the acreage reporting date, your unit division 
will be based on basic or optional units, whichever you report on your 
acreage report and qualify for; or
    (2) At any time after the acreage reporting date, we will assign 
the basic unit structure.
* * * * *

    Signed in Washington, DC, on November 16, 2017.
Heather Manzano,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. 2017-25330 Filed 11-22-17; 8:45 am]
 BILLING CODE 3410-08-P