[Federal Register Volume 75, Number 223 (Friday, November 19, 2010)]
[Proposed Rules]
[Pages 70850-70852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-29250]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AC27


Common Crop Insurance Regulations; Extra Long Staple Cotton Crop 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to 
amend the Common Crop Insurance Regulations, Extra Long Staple Cotton 
Crop Insurance Provisions to remove all references to the Daily Spot 
Cotton Quotation and replace the reference with the National Average 
Loan Rate published by the Farm Service Agency (FSA), to incorporate a 
current Special Provisions statement into the Crop Provisions, and to 
make the Extra Long Staple Cotton Crop Insurance Provisions consistent 
with the Upland Cotton Crop Insurance Provisions. The intended effect 
of this action is to provide policy changes, to clarify existing policy

[[Page 70851]]

provisions to better meet the needs of the producers, and to reduce 
vulnerability to program fraud, waste, and abuse. The changes will 
apply for the 2012 and succeeding crop years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business January 18, 2011 and will be 
considered when the rule is to be made final.

ADDRESSES: Interested persons are invited to submit written comments, 
titled ``Extra Long Staple Cotton Crop Provisions,'' by any of the 
following methods:
    <bullet> By Mail to: Director, Product Administration and Standards 
Division, Risk Management Agency, United States Department of 
Agriculture, Beacon Facility, Stop 0812, Room 421, P.O. Box 419205, 
Kansas City, MO 64141-6205.
    <bullet> By Express Mail to: Director, Product Administration and 
Standards Division, Risk Management Agency, United States Department of 
Agriculture, Beacon Facility, Stop 0812, 9240 Troost Avenue, Kansas 
City, MO 64131-3055.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#14507d667177607b66445050546679753a616770753a737b62"><span class="__cf_email__" data-cfemail="3c78554e595f48534e6c78787c4e515d12494f585d125b534a">[email protected]</span></a>.
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.

A copy of each response will be available for public inspection and 
copying from 7 a.m. to 4:30 p.m., CST, Monday through Friday, except 
holidays, at the above address.

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

SUPPLEMENTARY INFORMATION:

Executive Order 12866

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

Paperwork Reduction Act of 1995

    Pursuant to the provisions of the Paperwork Reduction Act of 1995 
(44 U.S.C. chapter 35), the collections of information in this rule 
have been approved by OMB under control number 0563-0053 through March 
31, 2012.

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.

Regulatory Flexibility Act

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

Federal Assistance Program

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.

Executive Order 12988

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

Environmental Evaluation

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

Background

    FCIC proposes to revise 7 CFR part 457, Common Crop Insurance 
Regulations, by revising Sec.  457.105 (Extra Long Staple Cotton Crop 
Insurance Provisions). Requests have been made for changes to improve 
the coverage offered, address program integrity issues, and simplify 
program administration. The provisions will be effective for the 2012 
and succeeding crop years.
    The proposed changes to Sec.  457.105 are as follows:
    1. FCIC proposes to remove the paragraph immediately preceding 
section 1 which refers to the order of priority in the event of a 
conflict. This same information is contained in the Basic Provisions. 
Therefore, it is duplicative and should be removed in the Crop 
Provisions.
    2. Section 10--FCIC proposes to revise the format of section 10(d) 
to make the provisions easier to read.
    FCIC proposes to remove in section 10(d) all references to the 
Daily Spot Cotton Quotation and related language

[[Page 70852]]

and replace it with a reference to the Extra Long Staple Cotton 
National Average Loan Rate determined by FSA. The Daily Spot Cotton 
Quotation is a price published daily, whereas the Extra Long Staple 
Cotton National Average Loan Rate is a price published annually. 
Because the Daily Spot Cotton Quotation values change daily, this 
method was time-consuming, cumbersome, and burdensome for cotton 
producers and loss adjusters. For this reason, FCIC is proposing to 
utilize the Extra Long Staple Cotton National Average Loan Rate for 
quality adjustment purposes. This same change was made to the Upland 
Cotton Crop Insurance Provisions beginning with the 2011 crop year. 
This change makes the Extra Long Staple and Upland Cotton Crop 
Provisions consistent.
    FCIC also proposes to change the percentage of Price B from 75 
percent to 85 percent in sections 10(d) and 10(d)(3). This does not 
change the existing terms of the policy because the change was already 
implemented in the Special Provisions. FCIC is proposing to move the 
provision to the Crop Provisions because the change is being 
implemented in all areas where ELS cotton is available.
    FCIC proposes to remove in section 10(f) all references to the 
Daily Spot Cotton Quotation and replace it with a reference to the 
Upland Cotton National Average Loan Rate and the Extra Long Staple 
Cotton National Average Loan Rate determined by FSA. FCIC also proposes 
to remove the language regarding the price quotations contained in the 
Daily Spot Cotton Quotations published on the date the last bale from 
the unit is classed and the language regarding price quotations being 
unavailable. The Daily Spot Cotton Quotation is a price published 
daily, whereas the Extra Long Staple Cotton National Average Loan Rate 
is a price published annually. Therefore, it is not necessary to 
include information regarding specific dates upon which it will be 
based.

List of Subjects in 7 CFR Part 457

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

Proposed Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation proposes to amend 7 CFR part 457 effective for 
the 2012 and succeeding crop years to read as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

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

    Authority: 7 U.S.C. 1506(1), 1506(o).
    2. Amend Sec.  457.105 as follows:
    a. Amend the introductory text by removing ``1998'' and adding 
``2012'' in its place;
    b. Remove the undesignated paragraph immediately preceding section 
1.
    c. Amend section 10 by:
    i. Revising section 10(d); and
    ii. Revising section 10(f).
    The revisions read as follows:


Sec.  457.105  Extra long staple cotton crop insurance provisions.

* * * * *
    10. Settlement of Claim.
* * * * *
    (d) Mature ELS cotton production may be adjusted for quality when 
production has been damaged by insured causes. Such production to count 
will be reduced if Price A is less than 85 percent of Price B.
    (1) Price B is defined as the Extra Long Staple Cotton National 
Average Loan Rate determined by FSA, or as specified in the Special 
Provisions.
    (2) Price A is defined as the loan value per pound for the bale 
determined in accordance with the FSA Schedule of Premiums and 
Discounts for the applicable crop year, or as specified in the Special 
Provisions.
    (3) If eligible for quality adjustment, the amount of production to 
be counted will be determined by multiplying the number of pounds of 
such production by the factor derived from dividing Price A by 85 
percent of Price B.
* * * * *
    (f) Any AUP cotton harvested or appraised from acreage originally 
planted to ELS cotton in the same growing season will be reduced by the 
factor obtained by dividing the price per pound for AUP cotton by the 
price per pound for ELS cotton. The prices used for AUP and ELS cotton 
will be calculated using the Upland Cotton National Average Loan Rate 
and the Extra Long Staple Cotton National Average Loan Rate determined 
by FSA, or as specified in the Special Provisions.
* * * * *

    Signed in Washington, DC, on November 15, 2010.
William J. Murphy,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2010-29250 Filed 11-18-10; 8:45 am]
BILLING CODE 3410-08-P


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