[Federal Register Volume 87, Number 205 (Tuesday, October 25, 2022)]
[Rules and Regulations]
[Pages 64365-64368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23111]



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 Rules and Regulations
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 This section of the FEDERAL REGISTER contains regulatory documents 
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  Federal Register / Vol. 87, No. 205 / Tuesday, October 25, 2022 / 
Rules and Regulations  

[[Page 64365]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket ID FCIC-22-0007]
RIN 0563-AC80


Walnut Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, U.S. Department of 
Agriculture (USDA).

ACTION: Final rule with request for comments.

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

SUMMARY: The Federal Crop Insurance Corporation (FCIC) is amending its 
walnut crop insurance regulations to remove the minimum acreage 
insurability requirement. This change will align the insurability 
requirements for walnut crop insurance with other tree nut insurance 
policies. Many walnut producers also grow other tree nut crops. Having 
different insurability requirements for crop insurance for similar 
crops has created additional work and confusion for producers and their 
Approved Insurance Providers (AIP). Much like other tree nut policies, 
the Walnut Crop Provisions will continue to require that the producer 
has a share in the orchard, the trees be adapted to the area, grown in 
an orchard acceptable to the AIP if inspected, and meet a minimum age 
requirement. The remaining insurability requirements have proven to be 
effective underwriting controls in the other tree nut policies to 
ensure the walnut crop insurance program remains actuarially sound with 
this change. In aligning the insurability requirements for walnuts and 
similar crops, this change is expected to make it easier for producers 
to obtain walnut crop insurance.

DATES: Effective date: This final rule is effective October 31, 2022.
    Comment date: We will consider comments that we receive by the 
close of business December 27, 2022. FCIC may consider the comments 
received and may conduct additional rulemaking based on the comments.

ADDRESSES: We invite you to submit comments on this rule. You may 
submit comments by going through the Federal eRulemaking Portal as 
follows:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and search for Docket ID FCIC-22-0007. Follow the 
instructions for submitting comments.
    All comments will be posted without change and will be publicly 
available on www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Francie Tolle; telephone (816) 926-
7829; or email [email protected]. Persons with disabilities who 
require alternative means for communication should contact the USDA 
Target Center at (202) 720-2600 (voice) or (844) 433-2774 (toll-free 
nationwide).

SUPPLEMENTARY INFORMATION:

Background

    FCIC serves America's agricultural producers through effective, 
market-based risk management tools to strengthen the economic stability 
of agricultural producers and rural communities. FCIC is committed to 
increasing the availability and effectiveness of Federal crop insurance 
as a risk management tool. Approved Insurance Providers (AIPs) sell and 
service Federal crop insurance policies in every state through a 
public-private partnership. FCIC reinsures the AIPs who share the risks 
associated with catastrophic losses due to major weather events. FCIC's 
vision is to secure the future of agriculture by providing world class 
risk management tools to rural America.
    Federal crop insurance policies typically consist of the Basic 
Provisions, the Crop Provisions, the Special Provisions, the Commodity 
Exchange Price Provisions, if applicable, other applicable endorsements 
or options, the actuarial documents for the insured agricultural 
commodity, the Catastrophic Risk Protection Endorsement, if applicable, 
and the applicable regulations published in 7 CFR chapter IV. 
Throughout this rule, the terms ``Crop Provisions,'' ``Special 
Provisions,'' and ``policy'' are used as defined in the Common Crop 
Insurance Policy (CCIP) Basic Provisions in 7 CFR 457.8. Additional 
information and definitions related to Federal crop insurance policies 
are in 7 CFR 457.8.
    The changes to the Walnut Crop Insurance Provisions (7 CFR 457.122) 
resulting from the amendments in this rule are applicable for the 2023 
and succeeding crop years for crops with a contract change date on or 
after October 31, 2022.
    Through this rule, FCIC amends the Walnut Crop Insurance Provisions 
(7 CFR 457.122) as follows:
    FCIC is removing the minimum acreage requirement to align the 
insurability requirements with other tree nut policies. The minimum 
acreage requirement was originally established to prevent producers 
from insuring their backyard trees. The change in this rule will reduce 
the additional work and confusion that it causes producers, many of 
whom also farm other tree nuts and must annually request a waiver of 
the minimum acreage requirement to insure their walnuts.
    FCIC is also making a number of clarifications, corrections, and 
updates as follows:
    FCIC is removing the introductory sentence explaining the order of 
priority of policy provisions because the CCIP Basic Provisions 
includes the priority order of policy provisions. Therefore, in the 
Walnut Crop Provisions, FCIC is removing the introductory sentence 
explaining the order of priority of policy provisions because it is 
duplicative of the same order of priority included in the CCIP Basic 
Provisions.
    FCIC is clarifying that the definition of harvest is the removal of 
mature walnuts from the orchard, by adding the word ``mature.''
    FCIC is clarifying that the definition for ``interplanted'' 
overrides the definition in the CCIP Basic Provisions, by adding the 
statement, ``In lieu of the definition contained in section 1 of the 
Basic Provisions'' prior to the description. It will provide clear use 
of the definition and its application to the Crop Provisions.
    FCIC is clarifying the definition for ``net delivered weight'' is 
dry, hulled, whole in-shell walnuts, by adding the word ``whole'' to 
match the description of walnuts in the definition for ``production 
guarantee (per acre).''
    FCIC is clarifying that the definition for ``production guarantee 
(per acre)'' is additional to the definition contained in section 1 of 
the Basic Provisions and

[[Page 64366]]

that the number of pounds is dry, hulled, whole in-shell walnuts. It 
will provide clarity that the number of pounds is whole in-shell 
walnuts and will match the description of walnuts in the definition for 
``net delivered weight.''
    FCIC is replacing the term ``FSA farm serial number'' with ``FSA 
farm number'' because the term ``FSA farm serial number'' is obsolete. 
A similar change was already implemented in the CCIP Basic Provisions 
in 2017 when the definition was changed to remove the word ``serial.''
    FCIC is revising the heading for section 3 to ``Insurance 
Guarantees, Coverage Levels, and Prices'' by removing the phrase at the 
end ``for Determining Indemnities.'' Removing this phrase will align 
the heading to match the corresponding section in the CCIP Basic 
Provisions. It also helps clarify that price is not exclusively used to 
determine indemnities; it is also used to establish the guarantee and 
determine the premium due for the producer.
    FCIC is correcting the location of certain information (e.g., price 
elections) from ``Special Provisions'' to ``actuarial documents.''
    FCIC is clarifying the timing and method of yield adjustments, if 
circumstances occur that may reduce the yield potential, based on when 
the circumstance occurred. The current provision states that the AIP 
will reduce the yield used to establish the production guarantee but 
does not state when or how the adjustments may apply. These changes 
provide three scenarios that contain specific instructions for 
adjustments based on the timing of when the circumstance occurred that 
may reduce the yield potential and whether the producer notifies the 
AIP by the production reporting date.
    If the circumstance occurs before the beginning of the insurance 
period and the producer notifies the AIP by the production reporting 
date, the provisions require the yield used to establish the production 
guarantee to be reduced for the current crop year regardless of whether 
the circumstance was due to an insured or an uninsured cause of loss.
    If the circumstance occurs after the beginning of the insurance 
period and the producer notifies the AIP of the circumstance by the 
production reporting date, the provisions require the yield used to 
establish the production guarantee to be reduced for the current crop 
year only if the potential reduction in the yield used to establish the 
production guarantee is due to an uninsured cause of loss.
    If the producer fails to notify the AIP of the circumstance by the 
production reporting date, regardless of whether the circumstance 
occurs before or after the beginning of the insurance period, the 
provisions require an amount equal to the reduction in the yield to be 
added to the production to count due to uninsured causes. In addition, 
the provisions require reduction of the yield used to establish the 
production guarantee for the subsequent crop year to reflect any 
reduction in the productive capacity of the trees or the yield 
potential of the insured acreage.
    These provisions are similar to provisions that FCIC has added to 
other perennial crop insurance policies, such as the Texas Citrus Fruit 
Crop Insurance Provisions, published in the Federal Register on June 
13, 2016, (81 FR 38061-38067). Adding these provisions is intended to 
remove potential ambiguity regarding the consequences when 
circumstances occur that will reduce the yield potential and to promote 
consistency with administration of similar policies such as the Texas 
Citrus Crop Insurance Provisions.
    FCIC is correcting punctuation in bulleted lists by adding a semi 
colon or adding ``and'' after the semi-colon.
    FCIC is replacing the phrase ``growing season after being set out'' 
with ``leaf year.'' This changes the wording to be consistent with how 
the information is shown in the Special Provisions.
    FCIC is simplifying the reference to the Special Provisions for 
exceptions to the end of insurance period by revising the phrase 
``(Exceptions, if any, for specific counties or varieties or varietal 
group are contained in the Special Provisions)'' to ``unless otherwise 
specified in the Special Provisions.'' The shorter phrase is more 
consistent with similar exceptions throughout other Crop Provisions.
    FCIC is removing repetitive statements to ``the provisions of'' and 
parenthetical titles that reference the CCIP Basic Provisions for 
consistency. For example, this change deletes the reference to 
provisions and the parenthetical title (Insurance Period) in the 
sentence ``In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions.'' In other Crop Provisions, the 
reference to provisions and parenthetical titles do not appear. This 
change will make the Crop Provisions more consistent.
    FCIC is updating prices and yields in settlement of claim examples, 
so they are more reflective of current values and potential 
indemnities.
    FCIC is simplifying a statement about walnut production exceeding 
30 percent mold damage, by revising the phrase ``walnut production that 
exceeds'' to ``if walnut production exceeds.'' The remainder of the 
statement is unchanged and provides that the unsold walnuts will have 
zero production to count.

Effective Date, Notice and Comment, and Exemptions

    The Administrative Procedure Act (APA, 5 U.S.C. 553) provides that 
the notice and comment and 30-day delay in the effective date 
provisions do not apply when the rule involves specified actions, 
including matters relating to contracts. This rule governs contracts 
for crop insurance policies and therefore, falls within that exemption. 
Although not required by APA or any other law, FCIC has chosen to 
request comments on this rule.
    This rule is exempt from the regulatory analysis requirements of 
the Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by the 
Small Business Regulatory Enforcement Fairness Act of 1996. The 
requirements for the regulatory flexibility analysis in 5 U.S.C. 603 
and 604 are specifically tied to the requirement for a proposed rule 
under 5 U.S.C. 553 or any other law; in addition, the definition of 
rule in 5 U.S.C. 601 is tied to the publication of a proposed rule.
    For major rules, the Congressional Review Act requires a delay of 
the effective date of 60 days after publication to allow for 
Congressional review. This rule is not a major rule under the 
Congressional Review Act, as defined by 5 U.S.C. 804(2). Therefore, 
this final rule is effective on October 31, 2022.

Executive Orders 12866 and 13563

    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 emphasizes the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility. The requirements in 
Executive Orders 12866 and 13563 for the analysis of costs and benefits 
apply to rules that are determined to be significant or economically 
significant.
    The Office of Management and Budget (OMB) has designated this rule 
as not

[[Page 64367]]

significant under Executive Order 12866. Therefore, OMB has not 
reviewed this rule and analysis of the costs and benefits is not 
required under either Executive Order 12866 or Executive Order 13563.

Clarity of the Regulation

    Executive Order 12866, as supplemented by Executive Order 13563, 
requires each agency to write all rules in plain language. In addition 
to your substantive comments on this rule, we invite your comments on 
how to make the rule easier to understand. For example:
     Are the requirements in the rule clearly stated? Are the 
scope and intent of the rule clear?
     Does the rule contain technical language or jargon that is 
not clear?
     Is the material logically organized?
     Would changing the grouping or order of sections or adding 
headings make the rule easier to understand?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     Would more, but shorter, sections be better? Are there 
specific sections that are too long or confusing?
     What else could we do to make the rule easier to 
understand?

Environmental Review

    The environmental impacts of this final rule have been considered 
in a manner consistent with the provisions of the National 
Environmental Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations 
of the Council on Environmental Quality (40 CFR parts 1500-1508), and 
because USDA will be making the payments to producers, the USDA 
regulation for compliance with NEPA (7 CFR part 1b). As specified in 7 
CFR 1b.4(b)(4), FCIC is categorically excluded from the preparation of 
an Environmental Analysis or Environmental Impact Statement unless the 
FCIC Manager (agency head) determines that an action may have a 
significant environmental effect. The FCIC Manager has determined this 
rule will not have a significant environmental effect. Therefore, FCIC 
will not prepare an environmental assessment or environmental impact 
statement for this action and this rule serves as documentation of the 
programmatic environmental compliance decision.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, ``Civil 
Justice Reform.'' This rule will not preempt State or local laws, 
regulations, or policies unless they represent an irreconcilable 
conflict with this rule. Before any judicial actions may be brought 
regarding the provisions of this rule, the administrative appeal 
provisions of 7 CFR part 11 are to be exhausted.

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 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 Risk Management Agency (RMA) 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 E.O. 13175. The regulation changes do not have Tribal 
implications that preempt Tribal law and are not expected have a 
substantial direct effect on one or more Indian Tribes. If a Tribe 
requests consultation, RMA will work with the USDA Office of Tribal 
Relations to ensure meaningful consultation is provided where changes, 
additions and modifications identified in this rule are not expressly 
mandated by Congress.

The Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L. 
104-4) requires Federal agencies to assess the effects of their 
regulatory actions of State, local, and Tribal governments, or the 
private sector. Agencies generally must prepare a written statement, 
including cost benefits analysis, for proposed and final rules with 
Federal mandates that may result in expenditures of $100 million or 
more in any 1 year for State, local or Tribal governments, in the 
aggregate, or to the private sector. UMRA generally requires agencies 
to consider alternatives and adopt the more cost effective or least 
burdensome alternative that achieves the objectives of the rule. This 
rule contains no Federal mandates, as defined in Title II of 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.

Federal Assistance Program

    The title and number of the Assistance Listing,\1\ to which this 
rule applies is No. 10.450--Crop Insurance.
---------------------------------------------------------------------------

    \1\ See https://sam.gov/content/assistance-listings.
---------------------------------------------------------------------------

Paperwork Reduction Act of 1995

    In accordance with the provisions of the Paperwork Reduction Act of 
1995 (44 U.S.C. chapter 35, subchapter I), the rule does not change the 
information collection approved by OMB under control number 0563-0053.

USDA Non-Discrimination Policy

    In accordance with Federal civil rights law and USDA civil rights 
regulations and policies, USDA, its Agencies, offices, and employees, 
and institutions participating in or administering USDA programs are 
prohibited from discriminating based on race, color, national origin, 
religion, sex, gender identity (including gender expression), sexual 
orientation, disability, age, marital status, family or parental 
status, income derived from a public assistance program, political 
beliefs, or reprisal or retaliation for prior civil rights activity, in 
any program or activity conducted or funded by USDA (not all bases 
apply to all programs). Remedies and complaint filing deadlines vary by 
program or incident.
    Persons with disabilities who require alternative means of 
communication for program information (for example, braille, large 
print, audiotape, American Sign Language, etc.) should contact the 
responsible Agency or USDA TARGET Center at (202) 720-2600 or 844-433-
2774 (toll-free nationwide). Additionally, program information may be 
made available in languages other than English. To file a program 
discrimination complaint, complete the USDA Program Discrimination 
Complaint Form, AD-3027, found online at https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint and at any USDA office 
or write a letter addressed to USDA and provide in the letter all the 
information requested in the form. To request a copy of the complaint 
form, call (866) 632-9992. Submit your completed form or letter to USDA 
by mail to: U.S. Department of Agriculture, Office of the Assistant 
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 
20250-9410 or email: [email protected].
    USDA is an equal opportunity provider, employer, and lender.

[[Page 64368]]

List of Subjects in 7 CFR Part 457

    Acreage allotments, Crop insurance, Reporting and recordkeeping 
requirements.

    For the reasons discussed in the preamble, FCIC amends 7 CFR part 
457, effective for the 2023 and succeeding crop years for crops with a 
contract change date on or after October 31, 2022, as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

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

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


0
2. Amend Sec.  457.122:
0
a. In the undesignated introductory paragraph, by removing the year 
``2008'' and adding ``2023'' in its place;
0
b. By removing the text between ``Walnut Crop Provisions'' and section 
1 (Definitions);
0
c. In section 1:
0
i. In the definition of ``harvest,'' by removing the words, ``the 
walnuts'' and adding ``mature walnuts'' in their place;
0
ii. By revising the definition of ``Interplanted'';
0
iii. In the definition of ``net delivered weight'', by removing the 
words, ``hulled, in-shell'' and adding ``hulled, whole in-shell'' in 
their place; and
0
iv. By revising the definition of ``Production guarantee (per acre)'';
0
d. In section 2, by removing the word ``serial'' in the first sentence;
0
e. In section 3:
0
i. By revising the section heading;
0
ii. In paragraph (a), by removing the words, ``unless the Special 
Provisions provide'' and adding ``unless the actuarial documents 
provide'' in their place in the first sentence;
0
iii. In paragraph (b)(4), by removing the word, ``anytime'' and adding 
the words, ``any time'' in their place;
0
iv. By redesignating paragraph (c) as (d);
0
v. By designating the undesignated paragraph following paragraph (b)(5) 
as paragraph (c); and
0
vi. By revising newly designated paragraph (c);
0
f. In section 6:
0
i. In paragraph (c), by adding the word ``and'' at the end;
0
ii. In paragraph (d), by removing the words ``growing season after 
being set out'' and adding ``leaf year'' in their place; and
0
iii. By removing paragraph (e);
0
g. In section 7, by removing the words, ``Provisions (Sec.  457.8), 
that'' and adding ``Provisions (Sec.  457.8) that'' in their place;
0
h. In section 8:
0
i. In paragraph (a) introductory text, by removing the words ``the 
provisions of'';
0
ii. In paragraph (a)(1), by removing the words ``year, except that 
for'' and adding ``year except for'' in their place and by removing the 
words ``the 10 day period'' and adding ``the 10-day period'' in their 
place;
0
iii. By revising paragraph (a)(2);
0
iv. In paragraph (a)(4), by removing the words ``termination dates'' 
and adding ``termination dates,'' in their place; and
0
v. In paragraph (b) introductory text, by removing the words ``the 
provisions of section 11 (Insurance Period)'' and adding ``section 11'' 
in their place;
0
i. In section 9:
0
i. In paragraph (a) introductory text, by removing the words ``the 
provisions of''; and
0
ii. In paragraph (b), by removing the parenthetical phrase, ``(Causes 
of Loss)'';
0
j. In section 11:
0
i. By revising paragraph (b)(7); and
0
ii. In paragraph (d), by removing the words ``Walnut production that'' 
and adding ``If walnut production'' in their place.
    The revisions read as follows:


Sec.  457.122  Walnut Crop Insurance Provisions.

* * * * *
1. Definitions
* * * * *
    Interplanted. In lieu of the definition contained in section 1 of 
the Basic Provisions, acreage on which two or more crops are planted in 
any form of alternating or mixed pattern.
* * * * *
    Production guarantee (per acre). In addition to the definition 
contained in section 1 of the Basic Provisions, the number of pounds is 
dry, hulled, whole in-shell walnuts.
* * * * *
3. Insurance Guarantees, Coverage Levels, and Prices
* * * * *
    (c) We will reduce the yield used to establish your production 
guarantee, as necessary, based on our estimate of the effect of any 
circumstance that may reduce your yields from previous levels. Examples 
of these circumstances that may reduce yield may include but are not 
limited to: interplanted perennial crop; removal of trees; damage; and 
change in practices. If the circumstance occurred:
    (1) Before the beginning of the insurance period and you notify us 
by the production reporting date, the yield used to establish your 
production guarantee will be reduced for the current crop year 
regardless of whether the circumstance was due to an insured or 
uninsured cause of loss;
    (2) After the beginning of the insurance period and you notify us 
by the production reporting date, the yield used to establish your 
production guarantee will be reduced for the current crop year only if 
the potential reduction in the yield used to establish your production 
guarantee is due to an uninsured cause of loss; or
    (3) Before or after the beginning of the insurance period and you 
fail to notify us by the production reporting date, an amount equal to 
the reduction in the yield will be added to the production to count 
calculated in section 11(c) of these Crop Provisions due to uninsured 
causes. We will reduce the yield used to establish your production 
guarantee for the subsequent crop year to reflect any reduction in the 
productive capacity of the trees or in the yield potential of the 
insured acreage.
* * * * *
8. Insurance Period
    (a) * * *
    (2) The calendar date for the end of the insurance period for each 
crop year is November 15, unless otherwise specified in the Special 
Provisions.
* * * * *
11. Settlement of Claim
* * * * *
    (b) * * *
    (7) Multiplying the result in section 11(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 acres of walnuts in the unit, 
with a guarantee of 2,500 pounds per acre and a price election of $0.90 
per pound. You are only able to harvest 200,000 pounds. Your indemnity 
would be calculated as follows:
    (1) 100 acres x 2,500 pounds = 250,000 pound insurance guarantee;
    (2 & 3) 250,000 pounds x $0.90 price election = $225,000 total 
value of insurance guarantee;
    (4 & 5) 200,000 pounds production to count x $0.90 price election = 
$180,000 total value of production to count;
    (6) $225,000 total value guarantee--$180,000 total value of 
production to count = $45,000 loss; and
    (7) $45,000 x 100 percent share = $45,000 indemnity payment.
* * * * *

Marcia Bunger,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2022-23111 Filed 10-24-22; 8:45 am]
BILLING CODE 3410-08-P