This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

40653 

Vol. 83, No. 159 

Thursday, August 16, 2018 

DEPARTMENT OF AGRICULTURE 

Commodity Credit Corporation 

7 CFR Part 1412 

RIN 0560–AI40 

Seed Cotton Changes to Agriculture 

Risk Coverage (ARC), Price Loss 

Coverage (PLC) Programs 

AGENCY: Farm Service Agency and 

Commodity Credit Corporation, USDA. 

ACTION: Final rule. 

SUMMARY: This rule revises the 

eligibility requirements, enrollment 

procedures, and payment calculation for 

ARC and PLC required to conform with 

the Bipartisan Budget Act of 2018 

(BBA). BBA amends the Agricultural 

Act of 2014 (the 2014 Farm Bill) to add 

seed cotton as a covered commodity and 

remove generic base acres from ARC 

and PLC. This rule also amends 

provisions to include seed cotton yields, 

allocation of generic base acres, election 

of ARC-County Option (ARC–CO) or 

PLC for seed cotton base acres, and 

enrollment for 2018. This rule also 

makes some minor, clarifying changes to 

the administration section. 

DATES: 

Effective Date: August 16, 2018. 

2018 ARC and PLC signup deadline: 

September 28, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Brent Orr; telephone, (202) 720–7641. 

Persons with disabilities who require 

alternative means for communication 

should contact the USDA Target Center 

at (202) 720–2600 (voice). 

SUPPLEMENTARY INFORMATION: 

Background 

The ARC Program is an income 

support program which provides 

payments on historical base acres when 

actual crop revenue for a covered 

commodity declines below a specified 

guarantee level. The PLC Program 

provides payments on historical base 

acres when the price for a covered 

commodity declines below its 

‘‘reference price.’’ Eligible producers 

were required to make a decision to 

participate in either ARC or PLC, but 

not both, for the 2014 through 2018 crop 

years. ARC and PLC are Commodity 

Credit Corporation (CCC) programs 

administered by the Farm Service 

Agency (FSA). 

The regulation in 7 CFR part 1412 as 

implemented in 2014 for the ARC and 

PLC Programs specified covered 

commodities authorized by the 2014 

Farm Bill (Pub L. 113–79; 7 U.S.C. 

9011–9019). BBA amends the 2014 

Farm Bill by adding seed cotton as a 

‘‘covered commodity’’ for the 2018 crop 

year. Since seed cotton will be included 

in the existing ARC or PLC programs, 

FSA must establish certain program 

values including yields and prices to 

implement the changes. 

Upland cotton, which had previously 

been a covered commodity under prior 

FSA administered CCC commodity 

programs, was no longer a covered 

commodity beginning with the 2014 

Farm Bill; therefore, producers with 

historical upland cotton base acres were 

ineligible for assistance under ARC and 

PLC. Base acres of upland cotton under 

the Food, Conservation, and Energy Act 

of 2008 (2008 Farm Bill) in effect as of 

September 30, 2013, subject to any 

adjustment or reduction, became 

‘‘generic base acres’’ beginning with the 

2014 crop year. Under terms of BBA, if 

a covered commodity, including seed 

cotton, was not planted or prevented 

from being planted on the farm during 

the 2009 through 2016 years, the generic 

base acres become unassigned base 

acres, which are not eligible for any 

ARC or PLC benefits. Generic base acres 

no longer exist beginning with the 2018 

crop year. 

Seed Cotton Changes; PLC Yield; 

Generic Base Acres Allocation 

In order for an owner to take 

advantage of the BBA provisions for 

seed cotton, BBA specifies that a 

covered commodity, including seed 

cotton, must have been planted or 

prevented from being planted on the 

farm during the 2009 through 2016 

years. If the farm had land enrolled 

under a Conservation Reserve Program 

contract and base acres were reduced as 

a result of that enrollment during the 

2009 through 2016 years, the owner of 

that farm may allocate generic base 

acres to seed cotton base acres or other 

base acres based on the provisions of 

BBA. 

PLC requires a reference price for all 

covered commodities; BBA has 

established a reference price for seed 

cotton of $0.367 per pound. 

Determining a covered commodity 

yield is a necessary component to PLC. 

As amended, the 2014 Farm Bill and 7 

CFR 1412.31 provide that the farm PLC 

yield for seed cotton will be initially set 

at 2.4 times the payment yield for 

upland cotton established under the 

2008 Farm Bill (7 U.S.C. 8714(e)(3)). As 

amended, the 2014 Farm Bill and 7 CFR 

1412.33, specify that any current owner 

of the farm has a one-time option to 

update the PLC yield. Any current 

owner of a farm may update the PLC 

yield, which was the counter-cyclical 

payment yield under the former Direct 

and Counter-cyclical Program, by 

certifying pounds of upland cotton lint 

in years in which upland cotton was 

planted on base acres from 2008 through 

2012, which will then be averaged. 

Years in which the producer had no 

planted acres are not included in the 

simple average computation. The 

average yield for 2008 through 2012, 

excluding years in which no upland 

cotton was grown, will be multiplied by 

90 percent, and the result will be 

multiplied by 2.4 to obtain a new PLC 

payment yield of pounds of seed cotton. 

In addition to updating the payment 

yield, current owners of a farm with 

generic base acres will be allowed to 

determine how those generic base acres 

are allocated as base acres of other 

covered commodities on the farm. As 

specified in BBA and in § 1412.25, there 

are three options as follows; the 

producers may choose only one for 

allocating generic base acres on the 

farm: 

1. Multiply the number of generic 

base acres in crop year 2018 by 80 

percent to determine a total for seed 

cotton base acres. The remaining 20 

percent will become unassigned base 

acres. 

2. If a farm has history of planting 

upland cotton from 2009 through 2012 

and the simple average of planted and 

prevented from being planted upland 

cotton during that time period is greater 

than 80 percent of the generic base acre 

total in crop year 2018, generic base 

acres may be allocated to seed cotton 


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40654 Federal Register / Vol. 83, No. 159 / Thursday, August 16, 2018 / Rules and Regulations 

base acres based on that simple average, 

not to exceed 100 percent of the generic 

base acres on the farm. If the simple 

average is less than 100 percent of the 

number of generic base acres, the 

residual generic base acres will become 

unassigned base acres. 

3. Allocate the generic base acres on 

the farm to the 4-year simple average of 

the planted and prevented from planted 

covered commodities on the farm 

during the 2009 through 2012 crop 

years. The allocation is based on the 

share of each covered commodity in the 

total of covered commodities planted on 

the farm multiplied by the number of 

generic base acres on the farm. Years in 

which there were no covered 

commodities planted on generic acres 

will be used in the calculation of the 

simple average. Using this option 

eliminates unassigned base acres on the 

farm. For example: 

a. A farm has 100 cropland acres, 100 

generic base acres, and had the 

following planted acres: 

Æ For 2009, 25 acres of upland cotton 

and 75 acres of corn; 

Æ For 2010, 75 acres of upland cotton 

and 25 acres of corn; 

Æ For 2011, no acres of covered 

commodities; and 

Æ For 2012, 100 acres of upland 

cotton. 

b. The simple average of the two 

planted covered commodities is 25 acres 

of corn and 50 acres of upland cotton. 

c. Corn, from b. above, is 33.33 

percent of the total covered 

commodities planted on the farm (25 

divided by 75 equals 33.33 percent), 

leaving 66.67 percent planted to upland 

cotton. 

d. Completing the calculation, 33.33 

percent times 100 generic base acres 

equals 33.33 base acres of corn and 

66.67 percent multiplied by 100 generic 

base acres equals 66.67 base acres of 

seed cotton. 

If an owner fails to make an allocation 

of generic base acres and has a covered 

commodity, including seed cotton, that 

was planted or prevented from being 

planted during the 2009 through 2016 

crop years, seed cotton base acres will 

be determined by FSA using the first 

option listed above, as is required by 

BBA. 

PLC and ARC–CO Election, Allocation 

by FSA and Enrollment 

After the yield update and base acre 

allocation is completed, all current 

producers on a farm with seed cotton 

base acres, except for farms having a 

valid ARC-Individual Farm Option 

(ARC–IC) election, must affirmatively 

and unanimously elect PLC or ARC–CO 

for seed cotton base acres during the 

single election period following a 

similar method to the previous election 

process in 2015. As required by BBA, if 

a unanimous election is not made, the 

producers on the farm will be deemed 

to have elected PLC for the seed cotton 

base acres for the 2018 crop year as 

specified in 7 CFR 1412.74; if the farm 

is enrolled for 2018, it will be deemed 

to have PLC or ARC–CO benefits, as 

may be applicable for any covered 

commodity (including seed cotton), 

based on any valid or default election 

on the farm. This provision is specified 

in the 2014 Farm Bill and is not 

changed by BBA; neither FSA nor CCC 

has any discretion to specify a different 

policy for farms that do not have a valid 

election made during the election 

period. During the previous election 

period under the 2014 Farm Bill, the 

producers on farms with generic base 

acres had the opportunity to make an 

election on all 21 covered commodities 

or have a default election of PLC apply; 

those elections remain in place and 

therefore, for the 2018 crop year it will 

only be necessary for all current 

producers on the farm to make an 

election of PLC or ARC–CO for seed 

cotton base acres. New elections for 

ARC–IC or for other covered 

commodities will not be permitted. 

Farms having a valid election of ARC– 

IC will continue to have ARC–IC as the 

election for the entire farm and for all 

covered commodities including seed 

cotton that was added as a covered 

commodity effective with the 2018 crop 

year for the life of the 2014 Farm Bill. 

Implementing these changes is a 

multi-step process and all steps must be 

completed in order by the appropriate 

person or legal entity as follows: 

1. FSA will make a determination that 

a covered commodity was planted or 

prevented planted on the farm from 

2009 through 2016; 

2. FSA will make a determination of 

the planting history of covered 

commodities on the farm from 2008 

through 2012; 

• 2008 through 2012 is for calculating 

a seed cotton PLC yield, and 

• 2009 through 2012 is for 

determining how generic base acres on 

a farm may be allocated; 

3. A current owner will make an 

allocation of generic base acres 

according to § 1412.25; 

4. A current owner will make a 

determination of the PLC yield and 

update of that yield according to 7 CFR 

1412.31; 

5. The current producer(s) will make 

an election of either PLC or ARC–CO for 

seed cotton base acres according to 

§ 1412.71; and 

6. The current producer(s) will enroll 

the applicable farm for the 2018 crop 

year according to § 1412.41. 

As indicated above, the last step in 

the multi-step process is to enroll the 

farm for 2018. To participate in 2018, all 

eligible producers on farms must enroll 

following allocation and election to be 

potentially eligible for PLC and ARC 

benefits. BBA was enacted on February 

9, 2018, and 2018 PLC and ARC 

enrollment had already begun. 

However, because BBA changed the 

conditions of contract participation for 

any farms having generic base acres, all 

farms having generic base acres that 

previously enrolled for 2018 must go 

through the process outlined above and, 

after that process is completed, reenroll 

the farm for 2018. Previous 2018 

enrollments of farms having generic 

base acres will not be recognized as 

valid, as the provisions of BBA 

eliminate generic base acres. CCC has no 

authority to enter into 2018 contracts 

having generic base acres. As was the 

case with previous crop year 

enrollments, enrollments of portions of 

a farm are not allowed. 

General Eligibility Requirements 

The general eligibility requirements 

are explained in the ARC or PLC 

contract appendix and in 7 CFR part 

1412, except for adding seed cotton to 

the list of covered commodities. 

Sharing Payments 

Each eligible producer on a farm will 

be given the opportunity to enroll in 

ARC or PLC for a payment share 

determined to be fair and equitable as 

agreed to by all the producers on the 

farm and approved by the county 

committee. As specified in § 1412.54(b), 

each producer leasing a farm must 

provide the FSA county committee with 

a copy of their written lease or, in the 

absence of a written lease, must provide 

a complete written description of the 

terms and conditions of any oral 

agreement or lease. The general 

eligibility requirements are explained in 

the ARC or PLC contract appendix and 

on 7 CFR part 1412, except for adding 

seed cotton to the list of a covered 

commodity. An owner’s or landlord’s 

signature, as applicable, affirming a zero 

share on a contract may be accepted as 

evidence of a cash lease between the 

owner or landlord and tenant, as 

applicable, as determined by FSA. For 

farms with seed cotton base acres, such 

signature or signatures, if entered on the 

contract to satisfy the requirement of 

furnishing a written lease, must be 

entered on the application by September 

30, 2018. 


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Federal Register / Vol. 83, No. 159 / Thursday, August 16, 2018 / Rules and Regulations 40655 

Signup Deadline 

The signup deadline is September 28, 

2018 for 2018 ARC and PLC. 

Notice and Comment 

In general, the Administrative 

Procedure Act (5 U.S.C. 553) requires 

that a notice of proposed rulemaking be 

published in the Federal Register and 

interested persons be given an 

opportunity to participate in the 

rulemaking through submission of 

written data, views, or arguments with 

or without opportunity for oral 

presentation, except when the rule 

involves a matter relating to public 

property, loans, grants, benefits, or 

contracts. This rule involved matters 

relating to benefits and is therefore 

being published as a final rule without 

the prior opportunity for comments. In 

addition, the regulations to implement 

the provisions of Title I and the 

administration of Title I of the 2014 

Farm Bill are exempt from the notice 

and comment provisions of 5 U.S.C. 553 

and the Paperwork Reduction Act (44 

U.S.C. chapter 35), as specified in 

section 1601(c)(2) of the 2014 Farm Bill. 

Executive Orders 12866, 13563, 13771 

and 13777 

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. Executive 

Order 13777, ‘‘Enforcing the Regulatory 

Reform Agenda,’’ established a federal 

policy to alleviate unnecessary 

regulatory burdens on the American 

people. 

The Office of Management and Budget 

(OMB) designated this rule as 

economically significant under 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ and therefore, 

OMB has reviewed this rule. The costs 

and benefits of this rule are summarized 

below. The full cost benefit analysis is 

available on regulations.gov. 

Executive Order 13771, ‘‘Reducing 

Regulation and Controlling Regulatory 

Costs,’’ requires that in order to manage 

the private costs required to comply 

with Federal regulations that for every 

new significant or economically 

significant regulation issued, the new 

costs must be offset by the elimination 

of at least two prior regulations. The 

OMB guidance in M–17–21, dated April 

5, 2017, specifies that ‘‘transfer rules’’ 

are not covered by Executive Order 

13771. Transfer rules are Federal 

spending regulatory actions that cause 

only income transfers between 

taxpayers and program beneficiaries. 

Therefore, this is considered a transfer 

rule by OMB and is not covered by 

Executive Order 13771. 

Cost Benefit Analysis Summary 

Estimates of transfer payments from 

these ARC and PLC programs are based 

on supply, demand and price conditions 

and FSA projections for the 2018 crop. 

Based on the projections, the net 

increase in 2018-crop ARC and PLC 

payments is expected to be around $743 

million. Allocation of generic base is 

expected to increase ARC and PLC 

payments by $1,067 million ($917 

million for seed cotton and $150 million 

for other covered commodities) with 

offsets of $324 million from eliminating 

ARC and PLC payments on attributed 

generic base. 

The changes are expected to have 

marginal impacts on supply, demand, 

and prices because the impacts are 

spread across the covered commodities 

and acreage shifts are expected to 

represent a small percentage of the 

respective covered commodity planted 

acreage. Peanut planted acreage is 

expected to decrease by approximately 

15 percent, but peanut prices are not 

expected to change significantly because 

of ample peanut supplies. Peanut acres 

are expected to shift to other 

commodities such as corn and soybeans 

with greater market returns because 

eliminating generic base decouples ARC 

and PLC payments from planting 

decisions. Most seed cotton base acres 

are expected to elect and enroll in PLC. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601–612), as amended by the 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA, Pub. L. 

104–121), generally requires an agency 

to prepare a regulatory flexibility 

analysis of any rule whenever an agency 

is required by the Administrative 

Procedure Act or any other law to 

publish a proposed rule, unless the 

agency certifies that the rule will not 

have a significant economic impact on 

a substantial number of small entities. 

This rule is not subject to the Regulatory 

Flexibility Act because neither CCC nor 

FSA are not required by Administrative 

Procedure Act or any law to publish a 

proposed rule for this rulemaking. 

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 the FSA regulations for 

compliance with NEPA (7 CFR part 

799). This final rule will revise ARC and 

PLC, as mandated by BBA, to add a 

single commodity, seed cotton. The 

legislative intent for revising ARC and 

PLC programs is to provide income 

support to the same group of producers 

that were previously eligible for the 

earlier and now-discontinued programs, 

direct and counter-cyclical payment 

program and average crop revenue 

election program. On February 22, 2017, 

FSA completed an environmental 

review of ARC and PLC. FSA has 

determined that the addition of the 

commodity to the programs does not 

alter the environmental impacts, as 

assessed, or the related decisions. 

Therefore, FSA will not prepare a new 

environmental evaluation, assessment, 

or impact statement for this regulatory 

action. 

Executive Order 12372 

Executive Order 12372, 

‘‘Intergovernmental Review of Federal 

Programs,’’ requires consultation with 

State and local officials that would be 

directly affect by proposed Federal 

financial assistance. The objectives of 

the Executive Order are to foster an 

intergovernmental partnership and a 

strengthened Federalism, by relying on 

State and local processes for State and 

local government coordination and 

review of proposed Federal Financial 

assistance and direct Federal 

development. For reasons specified in 

the final rule related notice to 7 CFR 

part 3015, subpart V (48 FR 29115, June 

24, 1983), the programs and activities 

within this rule are excluded from the 

scope of Executive Order 12372 which 

requires intergovernmental consultation 

with State and local officials. 

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. 

The rule will not have retroactive effect. 

Before any judicial action may be 

brought regarding the provisions of this 

rule, the administrative appeal 

provisions of 7 CFR parts 11 and 780 

must be exhausted. 


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40656 Federal Register / Vol. 83, No. 159 / Thursday, August 16, 2018 / Rules and Regulations 

Executive Order 13132 

This rule has been reviewed under 

Executive Order 13132, ‘‘Federalism.’’ 

The policies contained in this rule do 

not have any substantial direct effect on 

States, on the relationship between the 

Federal government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government, except as required 

by law. Nor does this rule impose 

substantial direct compliance costs on 

State and local governments. Therefore, 

consultation with the States is not 

required. 

Executive Order 13175 

This rule has been reviewed for 

compliance with Executive Order 

13175, ‘‘Consultation and Coordination 

with Indian Tribal Governments.’’ The 

Executive Order 13175 requires to 

consult and coordinate with tribes on a 

government-to-government basis on 

policies that have tribal implications, 

including regulations, legislative 

comments 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. 

FSA has assessed the impact of this 

rule on Indian tribes and determined 

that this rule does not, to our 

knowledge, have tribal implications that 

required tribal consultation under 

Executive Order 13175. If a tribe 

requests consultation, FSA will work 

with USDA Office of Tribal Relations to 

ensure meaningful consultation is 

provided. 

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 on State local, and Tribal 

governments or the private sector. 

Agencies generally must prepare a 

written statement, including a cost 

benefit 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. 

SBREFA 

This rule is a major rule under the 

SBREFA (Pub. L. 104–121). SBREFA 

normally requires that an agency delay 

the effective date of a major rule for 60 

days from the date of publication to 

allow for Congressional review. Section 

808 of SBREFA allows an agency to 

make a major regulation effective 

immediately if the agency finds there is 

good cause to do so. Section 1601(c)(3) 

of the 2014 Farm Bill provides that the 

authority in Section 808 of SBREFA be 

used in implementing the changes 

required by Title I of the 2014 Farm Bill, 

as amended, such as for the changes 

being made by this rule. Consistent with 

section 1601(c)(3) of the 2014 Farm Bill, 

FSA therefore finds that it would be 

contrary to the public interest to delay 

the effective date of this rule because it 

would delay implementation of seed 

cotton as a covered commodity for ARC 

and PLC as required by the 2014 Farm 

Bill, as amended. The regulation needs 

to be effective to provide adequate time 

for producers to update base acres and 

yields in preparation for enrollment for 

2018. Therefore, this rule is effective on 

the September 30, 2018. 

Federal Assistance Programs 

The title and number of the Federal 

Domestic Assistance Program found in 

the Catalog of Federal Domestic 

Assistance to which this rule applies 

are: 

10.112—Price Loss Coverage 

10.113—Agriculture Risk Coverage 

Paperwork Reduction Act of 1995 

The regulations in this rule are 

exempt from the requirements of the 

Paperwork Reduction Act (44 U.S.C. 

Chapter 35), as specified in section 

1601(c) of the 2014 Farm Bill, which 

provides that these regulations be 

promulgated and administered without 

regard to the Paperwork Reduction Act. 

E-Government Act Compliance 

FSA and CCC are committed to 

complying with the E-Government Act, 

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. 

List of Subjects in 7 CFR Part 1412 

Cotton, Feed grains, Oilseeds, 

Peanuts, Price support programs, 

Reporting and recordkeeping 

requirements, Rice, Soil conservation, 

Wheat. 

For the reasons discussed above, CCC 

amends 7 CFR part 1412 as follows: 

PART 1412—AGRICULTURE RISK 

COVERAGE, PRICE LOSS COVERAGE, 

AND COTTON TRANSITION 

ASSISTANCE PROGRAMS 

■ 1. The authority citation for part 1412 

continues to read as follows: 

Authority: 7 U.S.C. 1508b, 7911–7912, 

7916, 8702, 8711–8712, 8751–8752, and 15 

U.S.C. 714b and 714c. 

Subpart A—General Provisions 

■ 2. Amend § 1412.1 as follows: 

■ a. In paragraph (a), remove the words 

and punctuation ‘‘, generic base acres,’’ 

and add the words and punctuation 

‘‘seed cotton;’’ immediately before the 

words ‘‘pulse crops’’. 

■ b. Revise paragraph (b). 

■ c. In paragraph (c), remove the words 

‘‘CTAP application or the’’; 

■ d. In paragraph (d), remove the words 

‘‘CTAP application or’’; and 

■ e. In paragraph (e), remove the words 

and punctuation ‘‘and for CTAP, 

assistance under this part will be based 

on the physical location of the farm, as 

specified in part 718 of this title’’. 

The revision reads as follows: 

§ 1412.1 Applicability, changes in law, 

interest, application, and contract 

provisions. 

* * * * * 

(b) For crop year 2018, this part 

specifies how: 

(1) Generic base acres are allocated to 

seed cotton base acres and unassigned 

base acres (generic base acres are not in 

effect for crop year 2018); 

(2) A payment yield for seed cotton 

base acres is established; 

(3) An election is made on seed cotton 

base acres; and 

(4) Contracts are enrolled with seed 

cotton base acres. 

* * * * * 

■ 3. Amend § 1412.2 as follows: 

■ a. In paragraph (a), remove the words 

and punctuation ‘‘, PLC, and CTAP’’ 

and add the words ‘‘and PLC’’ in their 

place; and 

■ b. Revise paragraphs (e) and (f). 

The revisions read as follows: 

§ 1412.2 Administration. 

* * * * * 

(e) The Deputy Administrator has the 

authority to permit State and county 

committees to waive or modify any nonstatutory deadline specified in this part. 

(f) Items of general applicability to 

program participants, including, but not 


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Federal Register / Vol. 83, No. 159 / Thursday, August 16, 2018 / Rules and Regulations 40657 

limited to, application periods, 

application deadlines, internal 

operating guidelines issued to State and 

county offices, prices, yields, and 

payment factors established for ARC or 

PLC, are not subject to appeal in 

accordance with part 780 of this title. 

■ 4. Amend § 1412.3 as follows: 

■ a. Remove the definitions of ‘‘2014 

farm structure’’ and ‘‘Application’’; 

■ b. In the definition of ‘‘Base acres’’, 

revise the last sentence; 

■ c. In the definition of ‘‘Contract 

period’’, remove the words ‘‘or 

application’’ and words and 

punctuation ‘‘or ‘‘application’’ ’’, and 

remove the word ‘‘the’’ immediately 

before the words ‘‘each program year’’; 

■ d. Add the definition of ‘‘Countercyclical payment yield’’ in alphabetical 

order; 

■ e. In the definition of ‘‘Covered 

commodity’’, add the words and 

punctuation ‘‘seed cotton,’’ immediately 

before the words ‘‘pulse crops’’; 

■ f. Remove the definition of ‘‘Eligible 

subsequently planted crop acreage’’; 

■ g. In the definition of ‘‘Generic base 

acres’’, remove the last two sentences 

and add in their place one new 

sentence; 

■ h. In the definition of ‘‘Initial crop’’, 

remove the words ‘‘or cotton’’; 

■ i. In paragraph (3) of the definition of 

‘‘Marketing year’’, add the words and 

punctuation ‘‘, seed cotton,’’ 

immediately after the word ‘‘Peanuts’’; 

■ j. In the definition of ‘‘Payment 

acres’’, remove paragraph (3); 

■ k. Revise the definition of ‘‘Payment 

yield’’; 

■ l. Amend the definition of ‘‘Reference 

price’’ as follows: 

■ i. In paragraph (13) remove the word 

‘‘and’’; 

■ ii. In paragraph (14) remove the 

punctuation ‘‘.’’ and add in its place the 

words and punctuation ‘‘; and’’; and 

■ iii. Add new paragraph (15); 

■ m. Add the definition of ‘‘Seed 

cotton’’ in alphabetical order; 

■ n. In the definition of ‘‘Supportive and 

necessary contractual documents’’, 

remove the words ‘‘or CTAP 

application’’; and 

■ o. Add the definition of ‘‘Unassigned 

base acres’’ in alphabetical order. 

The revisions and additions read as 

follows: 

§ 1412.3 Definitions. 

* * * * * 

Base acres * * * The term ‘‘base 

acres’’ includes any unassigned base 

acres. 

* * * * * 

Counter-cyclical payment yield means 

the farm’s upland cotton yield as 

specified in the regulations for 7 CFR 

part 1412 that were in effect as of 

September 30, 2013. 

* * * * * 

Generic base acres * * * For 2018, 

generic base acres are subject to 

allocation according to § 1412.25. 

* * * * * 

Payment yield means for a farm for a 

covered commodity, the yield 

established under subpart C of this part. 

* * * * * 

Reference price * * * 

(15) Seed cotton, $0.367 per pound. 

* * * * * 

Seed cotton means unginned upland 

cotton that includes both lint and seed. 

* * * * * 

Unassigned base acres means the 

number of acres derived from generic 

base acres where no ARC or PLC 

payments are generated or earned. 

* * * * * 

Subpart B—Establishment of Base 

Acres for a Farm for Covered 

Commodities 

■ 5. Amend § 1412.23 as follows: 

■ a. Revise the section heading; and 

■ b. In paragraphs (a), (b), and (c), 

remove the words ‘‘and generic base 

acres’’ in each place they appear. 

The revision reads as follows: 

§ 1412.23 Base acres, and Conservation 

Reserve Program. 

* * * * * 

■ 6. Amend § 1412.24 as follows: 

■ a. Revise the section heading; 

■ b. In paragraph (a)(1), remove the 

words and punctuation ‘‘and generic 

base acres (which are equal to upland 

cotton base acres used for CTAP)’’; 

■ c. Revise paragraph (b); 

■ d. In paragraph (d)(1), remove the 

words and punctuation ‘‘, including 

generic base acres (and the equal 

amount of upland cotton base acres),’’; 

and 

■ e. In paragraph (f), remove the words 

and punctuation ‘‘and generic base acres 

(resulting in an equal amount of upland 

cotton base acres)’’. 

The revisions read as follows: 

§ 1412.24 Limitation of total base acres on 

a farm. 

* * * * * 

(b) The Deputy Administrator will 

give the owner of the farm the 

opportunity to select the base acres 

against which any reduction required in 

this section will be made. Absent the 

owner selecting the base acres for 

reduction, CCC will apply a pro-rata 

reduction against the base acres before 

computing and issuing any payments 

for the program year when a reduction 

becomes necessary. 

* * * * * 

■ 7. Revise § 1412.25 to read as follows: 

§ 1412.25 Allocation of generic base acres 

on a farm and updating of records. 

(a) Any or all of the current owner(s) 

of a farm with generic base acres 

adjusted as of February 9, 2018, will 

have a one-time opportunity in an 

allocation period as announced by FSA, 

if a covered commodity including 

upland cotton was planted or prevented 

from being planted during the 2009 

through 2016 crop years, to: 

(1) Allocate the farm’s generic base 

acres to seed cotton base acres in a 

quantity equal to the greater of: 

(i) 80 percent of the generic base acres 

on the farm; or 

(ii) The average number of upland 

cotton acres planted and prevented from 

being planted on the farm during the 

2009 through 2012 crop years, not to 

exceed the total generic base acres on 

the farm; or 

(2) Allocate base acres for covered 

commodities, including seed cotton, by 

applying paragraph (e) of this section. 

(b) Under no circumstances will the 

allocation of generic base acres on a 

farm as specified in paragraph (a) of this 

section result in any increase in total 

base acres on a farm. Additionally, if 

any current owner submits a written 

statement that conflicts with the 

allocation request or expresses written 

disagreement with the allocation filed 

according to paragraph (a) of this 

section, no allocation will be approved 

for the farm unless all the current 

owners of the farm provide FSA with 

written evidence of the dispute 

resolution during the allocation period. 

(c) FSA will provide the farm operator 

and owners of record with a summary 

of all covered commodities P&CP acres 

and subsequently planted crop acreage 

for the 2008 through 2012 crop years (as 

reported to FSA on acreage reports filed 

with FSA in each of those years). 

Acreage not reported to FSA by 

producers will not be included in the 

summary. The summary of records 

specified in paragraph (c) of this section 

is intended to assist current owners of 

farms with the one-time opportunity for 

generic base acre allocation as provided 

in this section. Any current owner of a 

farm may also at any time visit the FSA 

county office and request to obtain a 

copy of the summary referenced in 

paragraph (c) of this section. 

(d) Current owners will be provided a 

one-time opportunity to update the 

records identified in paragraph (c) of 

this section during the allocation 

period, provided that there are crop 


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40658 Federal Register / Vol. 83, No. 159 / Thursday, August 16, 2018 / Rules and Regulations 

insurance records (or other verifiable 

documentation available to support 

those requested updates). In the event 

that an update to a farm’s P&CP acres of 

a covered commodity for 2009 through 

2012 causes any payment under another 

FSA or CCC program to become 

unearned, the overpayment must be 

refunded to FSA or CCC in accordance 

with the rules for that program and the 

FSA or CCC regulations governing 

overpayment (7 CFR parts 718 and 

1403). 

(e) After an update as specified in 

paragraph (d) of this section, the owner 

may allocate the farm’s generic base 

acres during the allocation period based 

on a proration of each covered 

commodity’s P&CP acres or 

subsequently planted crop acreage in 

crop years 2009 through 2012 to the 

total P&CP acres or subsequently 

planted crop acreage of all covered 

commodities during that time. 

(f) Current owners can allocate 

generic base acres at any time during the 

allocation period without receiving or 

requesting the summary records, and, 

therefore, failure to receive a summary 

record from FSA is not grounds for 

appeal or extension of the allocation 

period. 

(g) The option to allocate generic base 

acres is an ‘‘all or nothing’’ decision for 

the farm. Generic base acres will not be 

retained, partially or in whole. A 

decision by any current owner to 

allocate generic base acres on a farm in 

accordance with this section is final and 

binding if made according to this 

section during the allocation period 

unless that allocation is withdrawn in 

writing by that current owner or another 

current owner. If another current owner 

subsequently files a different allocation 

request in whatever time remains in the 

stated allocation period or if there are 

conflicting allocation requests of current 

owners in the allocation period, FSA 

will not make the allocation unless the 

conflict is resolved via written 

agreement between the current owners 

who filed the conflicting requests. In the 

event that a resolution is not presented, 

the provisions of paragraph (h) of this 

section will take effect. In the case of 

submitting evidence of resolution, the 

written agreement must be filed with 

FSA in the allocation period. Any and 

all updates and allocation requests 

mentioned in this section are subject to 

review and approval or disapproval by 

FSA for CCC. 

(h) In the event that an owner fails to 

make an allocation according to this 

part and the farm has met the planting 

requirement in paragraph (a) of this 

section, the farm will receive an 

allocation of seed cotton base acres in 

accordance with paragraph (a)(1)(i) of 

this section. 

Subpart C—Establishment of Price 

Loss Coverage Yields and Submitting 

Production 

■ 8. Amend § 1412.31 as follows: 

■ a. In paragraph (a), remove the word 

‘‘The’’ and add the words ‘‘Except for 

seed cotton’’ in its place and remove 

‘‘§ 1412.33 or § 1412.34, whichever is 

applicable’’ and add ‘‘§ 1412.34’’ in 

their place. 

■ b. Redesignate paragraph (b) as 

paragraph (c) and add new paragraph 

(b). 

■ c. In newly redesignated paragraph 

(c), remove the words and punctuation 

‘‘or for which a covered commodity is 

planted on generic base acres,’’. 

§ 1412.31 PLC yields for covered 

commodities. 

* * * * * 

(b) The PLC yield for seed cotton on 

the farm is equal to the counter-cyclical 

payment yield established for upland 

cotton on the farm as in effect 

September 30, 2013, times 2.4, unless 

the PLC yield is updated as specified in 

§ 1421.33. 

* * * * * 

■ 9. Amend § 1412.32 as follows: 

■ a. Revise the section heading; 

■ b. In paragraph (a), remove the words 

and punctuation ‘‘(except generic base 

acres),’’; and 

■ c. In paragraph (e), remove the 

reference to ‘‘§ 1412.35’’ and add 

‘‘§ 1412.36’’ in its place. 

The revision reads as follows: 

§ 1412.32 Updating PLC yield for all 

covered commodities except seed cotton. 

* * * * * 

§ § 1412.33 through 1412.35 [Redesignated 

as §§ 1412.34 through 1412.36] 

■ 10. Redesignate §§ 1412.33 through 

1412.35 as §§ 1412.34 through 1412.36. 

■ 11. Add new § 1412.33 to read as 

follows: 

§ 1412.33 Updating PLC yield for seed 

cotton. 

(a) For a farm that has seed cotton 

base acres as adjusted, in excess of zero 

acres, a current owner of the farm has 

a one-time opportunity in a specified 

period, as announced by FSA, to update 

the PLC yield equal to 90 percent of the 

upland cotton’s 2008 through 2012 

average yield per planted acre, 

excluding from the average any year that 

no acreage was planted to upland 

cotton, times 2.4. If the yield per 

planted acre in any of the years 2008 

through 2012 is less than 75 percent of 

the average of the county yield, then 75 

percent of the average of the 2008 

through 2012 county yields will be 

substituted for that year. 

(b) The current owner of the farm may 

retain the PLC yield or update the PLC 

yield. 

(c) PLC yields are exclusively used for 

PLC. However, any owner of a farm can 

update the seed cotton PLC yield as 

specified in paragraph (a) of this 

section, regardless of program election, 

enrollment, or participation. 

(d) A decision by any current owner 

of a farm to update the seed cotton PLC 

yield as specified in this section is final 

and binding unless that decision to 

update the yield is withdrawn by that 

current owner or a different yield 

update is made by that current owner or 

another current owner. If that current 

owner or another current owner 

requests a different PLC yield update for 

the covered commodity during the yield 

update period specified in paragraph (a) 

of this section, that update will become 

final. 

(e) All PLC yield updates are subject 

to review and approval by FSA as 

specified in § 1412.36. FSA’s decision to 

issue payments based on the PLC yield 

updated by an owner is subject to 

verification and spot check by FSA at 

any time. 

(f) Yield updates in this section will 

be permitted using the current owner’s 

certification of yield. The certification is 

subject to spot check or verification by 

FSA at any time. If selected for spot 

check or verification, the owner must 

submit evidence specified in § 1412.35 

to support the certified yield. 

§ 1412.34 [Amended] 

■ 12. In newly redesignated 

§ 1412.34(b)(2)(i) and (c), remove each 

cross reference to ‘‘§ 1412.34’’ and add 

‘‘§ 1412.35’’ in their place. 

Subpart D—ARC and PLC Contract 

Terms and Enrollment Provisions for 

Covered Commodities 

■ 13. Amend § 1412.41 as follows: 

■ a. Revise paragraph (a)(2); 

■ b. In paragraph (b), remove the words 

and punctuation ‘‘June 1 of the 

applicable contract year,’’ and add in 

their place ‘‘September 30, 2018,’’; 

■ c. In paragraph (e), remove ‘‘2015 or 

subsequent’’ and add ‘‘2018’’ in its 

place, and remove ‘‘2015 and 

subsequent crop year’’; and 

■ d. Add paragraph (f). 

The revision and addition read as 

follows: 

§ 1412.41 ARC or PLC program contract. 

(a) * * * 


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Federal Register / Vol. 83, No. 159 / Thursday, August 16, 2018 / Rules and Regulations 40659 

(2) For program year 2018, the 

enrollment period will end on 

September 30, 2018. 

(i) Eligible producers must execute 

and submit an ARC or PLC program 

contract not later than September 30, 

2018, for fiscal year 2018 contracts. 

(ii) Except as stated in this section, 

enrollment is not allowed after 

September 30 of the fiscal year in which 

the ARC or PLC payments are requested. 

FSA will not process offers of 

enrollment for a contract period after 

the contract period has ended. This is 

not a compliance provision but a rule of 

general applicability and will apply to 

every offer to contract in each contract 

year. 

* * * * * 

(f) Any 2018 contract for a farm that 

includes generic base acres, whether or 

not that contract was approved on 

behalf of CCC, is invalid and 

withdrawn. Eligible producers on farms 

that had generic base acres must enroll 

in accordance with paragraph (a) of this 

section after allocation has been 

completed. Any contract executed 

before allocation in § 1412.25 will not 

be recognized by CCC for any purpose. 

§ § 1412.44 and 1412.45 [Removed and 

Reserved] 

■ 14. Remove and reserve §§ 1412.44 

and 1412.45. 

§ 1412.46 [Amended] 

■ 15. In § 1412.46 (f), remove the last 

sentence. 

Subpart E—Financial Considerations 

Including Sharing Payments 

§ 1412.51 [Amended] 

■ 16. Amend § 1412.51 as follows: 

■ a. Remove paragraph (b); 

■ b. Redesignate paragraphs (c) through 

(e) as (b) through (d), and; 

■ c. In newly redesignated paragraph 

(d), remove the words ‘‘including any 

generic base acres’’. 

§ 1412.52 [Amended] 

■ 17. In § 1412.52(a), remove the words 

‘‘each of the 2014 through’’ and add the 

word ‘‘the’’ in their place. 

■ 18. Amend § 1412.53 as follows: 

■ a. In paragraph (a) introductory text, 

remove ‘‘each of the 2014 through’’ and 

add ‘‘the’’ in their place; 

■ b. In paragraph (b) introductory text, 

remove ‘‘each of the 2014 through’’ and 

add ‘‘the’’ in their place; and 

■ c. Revise paragraph (e). 

The revision reads as follows: 

§ 1412.53 ARC payment provisions. 

* * * * * 

(e) FSA has determined the irrigated 

and non-irrigated counties and crops for 

the 2018 program year. 

* * * * * 

§ 1412.54 [Amended] 

■ 19. Amend § 1412.54 as follows; 

■ a. In paragraph (a), remove the words 

‘‘apply for CTAP as specified in subpart 

H of this part and annually’’; 

■ b. In paragraph (b), remove the words 

‘‘applies for CTAP or elects and’’; 

■ c. In paragraph (c), remove the words 

‘‘CTAP payment or’’; 

■ d. In paragraph (d)(4), remove the 

words ‘‘ARC, PLC, or CTAP’’ and add 

the words ‘‘ARC or PLC’’ in their place 

both times they appear; 

■ e. In paragraph (f) introductory text, 

remove the first sentence; 

■ f. In paragraph (f)(2), remove the 

words ‘‘of this part’’; and 

■ f. In paragraph (h), remove the words 

‘‘a CTAP application or’’ and add the 

word ‘‘an’’ in their place, and remove 

the words and punctuation ‘‘CTAP 

application, or’’ in both places. 

§ 1412.55 [Amended] 

■ 20. In § 1412.55(a)(1), remove the 

words and punctuations ‘‘ARC, PLC, or 

CTAP’’, and add ‘‘ARC or PLC’’ in their 

place. 

Subpart F—Violations and Compliance 

Provisions 

§ 1412.61 [Amended] 

■ 21. In § 1412.61, remove ‘‘or CTAP 

application, as applicable’’ and remove 

‘‘or CTAP application’’. 

§ 1412.63 [Amended] 

■ 22. In § 1412.63, remove the words 

‘‘or CTAP application’’. 

§ 1412.64 [Amended] 

■ 23. Amend § 1412.64 as follows: 

■ a. In paragraph (a), remove ‘‘ARC, 

PLC, and CTAP’’ and add ‘‘ARC or PLC’’ 

in its place, and remove the words ‘‘or 

application’’; 

■ b. In paragraph (b) introductory text, 

remove ‘‘ARC, PLC, or CTAP’’ and add 

‘‘ARC or PLC’’ in its place; and 

■ c. In paragraph (b)(3), remove the 

words and punctuation ‘‘, CTAP 

application,’’. 

§ 1412.66 [Amended] 

■ 24. In § 1412.66(a), remove ‘‘ARC, 

PLC, and CTAP’’ and add ‘‘ARC or PLC’’ 

in their place. 

§ 1412.69 [Amended] 

■ 25. In § 1412.69, remove ‘‘CTAP 

participants and enrolled’’ and add 

‘‘Enrolled’’ in its place. 

Subpart G—ARC and PLC Election 

■ 26. Amend § 1412.71 as follows: 

■ a. Remove paragraph (c); 

■ b. Redesignate paragraph (d) as 

paragraph (c); 

■ c. In newly redesignated paragraph 

(c), remove the first sentence, remove 

‘‘The’’ and add ‘‘In general, a’’ in its 

place; and 

■ d. Add new paragraph (d). 

The addition reads as follows: 

§ 1412.71 Election of ARC or PLC. 

* * * * * 

(d) Beginning with the 2018 crop year, 

a valid election for seed cotton is 

required for all current producers on a 

farm where seed cotton is added as a 

covered commodity, as specified in 

§ 1412.25, unless the farm contains a 

valid ARC–IC election. A valid ARC–IC 

election on a farm is for all covered 

commodities and will include the added 

covered commodity of seed cotton. This 

election is for seed cotton only. All 

other covered commodities on a farm 

with seed cotton base acres have an 

election on file and will be bound by 

that prior election. The election by all 

current producers is to obtain: 

(1) PLC for seed cotton base acres, or 

(2) ARC–CO for seed cotton base 

acres. 

* * * * * 

■ 27. In § 1412.74, add paragraph (c) to 

read as follows: 

§ 1412.74 Failure to make election. 

* * * * * 

(c) If a valid election is not made for 

seed cotton base acres on a farm, the 

producers of seed cotton base acres on 

the farm are deemed to have elected 

PLC for acres allocated on the farm to 

seed cotton for the 2018 crop year. 

Steven Peterson, 

Acting Administrator, Farm Service Agency. 

Robert Stephenson, 

Executive Vice President, Commodity Credit 

Corporation. 

[FR Doc. 2018–17681 Filed 8–15–18; 8:45 am] 

BILLING CODE 3410–05–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 226 

Truth in Lending (Regulation Z) 

CFR Correction 

■ In Title 12 of the Code of Federal 

Regulations, Parts 220 to 229, revised as 

of January 1, 2018, on page 414, in 

§ 226.43, paragraph (1) after paragraph 

(b)(2) and before paragraph (b)(3) is 

removed. 

[FR Doc. 2018–17793 Filed 8–15–18; 8:45 am] 

BILLING CODE 1301–00–D 


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