61134 Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Rules and Regulations 

DEPARTMENT OF AGRICULTURE 

Federal Crop Insurance Corporation 

7 CFR Part 457 

[Docket No. FCIC–17–0003] 

RIN 0563–AC59 

Common Crop Insurance Regulations; 

Cultivated Clam Crop Insurance 

Provisions 

AGENCY: Federal Crop Insurance 

Corporation, USDA. 

ACTION: Final rule with request for 

comments. 

SUMMARY: The Federal Crop Insurance 

Corporation (FCIC) amends the 

Common Crop Insurance Regulations to 

provide Cultivated Clam insurance. The 

provisions will be used in conjunction 

with the Common Crop Insurance 

Policy Basic Provisions (Basic 

Provisions), which contain standard 

terms and conditions common to most 

crop programs. The intended effect of 

this action is to convert the Cultivated 

Clam pilot crop insurance program to a 

regulatory insurance program for the 

2019 and succeeding crop years. 

DATES: Effective date: This final rule is 

effective December 27, 2017. 

Applicability date: The changes are 

applicable for the 2019 and succeeding 

crop years. 

Comment due date: FCIC will accept 

written comments on this final rule 

until close of business January 26, 2018. 

FCIC may consider the comments 

received and may conduct additional 

rulemaking based on the comments. 

ADDRESSES: FCIC prefers that comments 

be submitted electronically through the 

Federal eRulemaking Portal. You may 

submit comments, identified by Docket 

ID No. FCIC–17–0003, by any of the 

following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Director, Actuarial and 

Product Design Division, Risk 

Management Agency, United States 

Department of Agriculture, P.O. Box 

419205, Kansas City, MO 64141–6205. 

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 

website, the public can access all 

comments at its convenience from this 

website. 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 rmaweb.content@rma.usda.gov. 

Privacy Act: Anyone is able to search 

the electronic form of all comments 

received for any dockets by the name of 

the individual submitting the comment 

(or signing the comment, if submitted 

on behalf of an association, business, 

labor union, etc.). You may review the 

complete User Notice and Privacy 

Notice for Regulations.gov at http://

www.regulations.gov/#!privacyNotice. 

FOR FURTHER INFORMATION CONTACT: Ron 

Lundine, Director, Product 

Management, Actuarial and Product 

Design Division, Risk Management 

Agency, United States Department of 

Agriculture, Beacon Facility, Stop 0812, 

Room 421, P.O. Box 419205, Kansas 

City, MO 64141–6205, telephone (816) 

926–3854. 

SUPPLEMENTARY INFORMATION: 

Background 

FCIC offered a pilot crop insurance 

program for cultivated clams beginning 

with the 1999 crop year. The program is 

offered in nine counties in 

Massachusetts, South Carolina, and 

Virginia. After a program evaluation, in 

2014 the FCIC’s Board of Directors 

authorized the Cultivated Clam Pilot 

Crop Insurance Program to be converted 

from a pilot to a permanent program in 

Massachusetts, South Carolina, and 

Virginia. For the 2016 crop year, 42 

policies were sold and 352,563,049 

clams were insured in Massachusetts, 

South Carolina, and Virginia. This rule 

will add the Cultivated Clam Program to 

the Code of Federal Regulations. 

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-andcomment 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-andcomment 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, 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 

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, 


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Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Rules and Regulations 61135 

‘‘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 

requires Federal agencies to consult and 

coordinate with tribes on a governmentto-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 

E.O. 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 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 Part 457 

Crop insurance, Cultivated clam, 

Reporting and recordkeeping 

requirements. 

Final Rule 

Accordingly, as set forth in the 

preamble, the Federal Crop Insurance 

Corporation amends 7 CFR part 457, 

applicable for the 2019 and succeeding 

crop years, 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(l), 1506(o). 

■ 2. Section 457.176 is added to read as 

follows: 

§ 457.176 Cultivated clam crop insurance 

provisions. 

The cultivated clam crop provisions 

for the 2019 and succeeding crop years 

are as follows: 

FCIC policies: 

United States Department of 

Agriculture 

Federal Crop Insurance Corporation 

Cultivated Clam Crop Provisions 

1. Definitions. 

Amount of insurance. For each basic 

unit, your inventory value multiplied by 

the coverage level percentage you elect, 

and multiplied by your share. However, 

for catastrophic risk protection policies, 

amount of insurance is your inventory 

value multiplied by the coverage level 

percentage you elect (for CAT coverage 

the level is limited to 50 percent), 

multiplied by your share, and 

multiplied by 55 percent. Your 

accumulated paid indemnities during 

the crop year for each basic or optional 


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61136 Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Rules and Regulations 

unit may not exceed your amount of 

insurance. 

Basic unit value before loss. The stage 

value of all undamaged insurable clams, 

in the basic unit or, if elected, all 

optional units combined, immediately 

prior to the occurrence of any loss as 

determined by our appraisal. This 

allows the amount of insurance under 

the policy to be prorated among the 

individual units based on the actual 

value of the clams in the unit at the time 

of loss. It is also the basis for 

determining whether or not an 

indemnity is due. This value is used to 

ensure that you have not under-reported 

your clam inventory value. 

Clam. A cultivated Mercenaria 

mercenaria (quahog). 

Crop year. The twelve-month period 

beginning December 1 and extending 

through November 30 of the next 

calendar year, designated by the 

calendar year in which insurance ends. 

Crop year deductible. The deductible 

percentage multiplied by the sum of the 

inventory values within each basic unit. 

The crop year deductible will be 

increased for any increases in the 

inventory value on the inventory value 

report. The crop year deductible will be 

reduced by any previously incurred 

deductible if you timely report each loss 

to us. 

Deductible percentage. An amount 

equal to 100 percent minus the percent 

of coverage you select. The percentage 

is 50 percent for catastrophic risk 

protection coverage. 

Disease. Any pathogen or group of 

pathogens, parasitic infestation or 

plague verified by an aquaculture 

pathologist and shown to be a primary 

cause to the death of the insured clams. 

Freeze. The formation of ice in the 

cells of the animal caused by low air 

temperatures. 

Global Positioning System (GPS). A 

space based radio position, navigation, 

and time transfer system involving 

satellites and computers to determine 

the latitude and longitude of a receiver 

on Earth by computing the time 

difference for signals from different 

satellites to reach the receiver and 

referenced in the Special Provisions. 

Growing location. A lease parcel, 

permit or licensed area, whose 

boundaries are readily discernable 

above the water, and identified on a 

map that shows enough detail to 

distinguish seeded areas within the site. 

Growout bag. A mesh bag used 

throughout the growing season to 

contain clams when placed in the 

appropriate growing medium and as 

further defined by the Special 

Provisions. 

Harvest. Removal of marketable clams 

from the unit. Clams that are removed 

from the growing location but not of 

sufficient size to be marketable are not 

considered harvested if returned to the 

growing location. 

Ice floe. Floating ice formed in sheets 

on the sea surface. 

Inventory value. The total of the stage 

values from the inventory value report. 

Inventory value report. Your report 

that declares the stage values of 

insurable clams in accordance with 

section 6. See the Cultivated Clam 

Insurance Standards Handbook, Exhibit 

5 for the inventory value report 

completion instructions and form. 

Land. The land under a body of water 

suitable for planting clams and the 

column of water above the land if 

designated and controlled by state law. 

Lease. A contract that grants use of 

land in or assigned to a county for a 

specified term and for a specified 

payment and provides the lessee with 

the exclusive use of the land to plant 

clams. 

Lease parcel. A legally identifiable 

tract or plot of land covered by a lease, 

permit, or license. 

License. Official or legal permission 

that grants use of land in or assigned to 

a county for a specified term and 

provides the licensee with the exclusive 

use of the land to plant clams. 

Non-contiguous. In lieu of the 

definition in the Basic Provisions, 

separately-named, high-density 

aquaculture lease sites or shellfish sites 

are considered non-contiguous, unless 

limited by the Special Provisions. 

Individual land parcels within such 

sites are not considered non-contiguous. 

Occurrence deductible. 

(a) This deductible allows a smaller 

deductible than the crop year deductible 

to be used when: 

(1) Inventory values are less than the 

reported basic unit value; or 

(2) You have elected optional units, if 

applicable. 

(b) The occurrence deductible is the 

lesser of: 

(1) The deductible percentage 

multiplied by the unit value before loss 

multiplied by the under-report factor; or 

(2) The crop year deductible. 

Permit. A document giving official or 

legal permission to use land in or 

assigned to a county for a specified term 

and provides the permittee with the 

exclusive use of the land to plant clams. 

Planting. The placing of seed clams 

into the appropriate growing medium 

for the practice specified. 

Pollution. The presence in the water 

of a substance that directly causes death 

of the clams. The substance shall not be 

parasitical, bacterial, fungal or viral, or 

any substance used by you for 

medicinal purposes. Pollution will also 

include any increase or decrease in the 

content of any normal soluble or 

insoluble constituent of water including 

mud and silt, feed residues, solid or 

liquid fish wastes, dissolved gases and 

any other substance normally present in 

the water of the lease parcel. 

Practical to replant. In lieu of the 

definition of ‘‘Practical to replant’’ 

contained in section 1 of the Basic 

Provisions, unless limited by the 

Special Provisions, practical to replant 

is defined as our determination, after 

loss or damage to the insured crop, 

based on factors including, but not 

limited to the causes of loss listed in 

section 10 of these provisions, that 

replanting the insured crop will allow 

the crop to develop normally during the 

remainder of the crop year. 

Unavailability of seed clams will not be 

considered a valid reason for failure to 

replant. 

Practice. The cultural methods of 

producing clams such as trays, mesh 

bags, round pens, lantern nets or bottom 

planting. 

Replant. Unless limited by the Special 

Provisions, performing the cultural 

practices necessary to prepare for 

replacement of insurable clams that 

were destroyed by an insurable cause of 

loss and then placing living insurable 

clams into mesh bags or pens, or 

seeding them into prepared growout 

beds, bottom culture, bottom trays, or 

floating trays on insurable acreage. 

Salinity. The dissolved solids 

(typically salts such as chloride, 

sodium, and potassium) in ocean water 

expressed as parts per thousand. 

Seed clam. 

(a) For clams placed in a field nursery 

or a nursery bag—a clam that is a 

minimum of 5 millimeters, measured at 

the longest shell distance that is parallel 

to the hinge. 

(b) For all others—a clam which is a 

minimum of 10 millimeters, measured 

at the longest shell distance that is 

parallel to the hinge. 

Separately named high-density 

aquaculture lease site. The submerged 

subdivided land under a body of water 

suitable for the cultivation of clams and 

identified and named separately by the 

Division of Marine Resources or similar 

regulatory agency. 

Shellfish harvest ban. A State or 

Federal order that prohibits harvesting 

clams for human food in areas where 

monitoring program data indicates that 

fecal material, pathogenic 

microorganisms, poisonous or 

deleterious substances, marine toxins, 

or radio nuclides have reached 

excessive concentrations. 


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Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Rules and Regulations 61137 

Stage. Clams that have attained the 

size or age specified for stage 1, 2, 3, or 

4 as defined in the Special Provisions. 

Stage value. The dollar value of the 

inventory of all insurable clams at each 

stage based on the survival factors and 

the prices shown in the actuarial 

documents for such stages, in each unit 

on your inventory value report, 

including any revision that increases the 

value of your insurable inventory. 

Storm surge. A significant increase or 

decrease in water depth relative to 

normal tides that is caused by a strong, 

continuous and prolonged strong flow 

of onshore or offshore winds. 

Survival factor. A factor shown on the 

actuarial documents that represents the 

expected percentage of clams that will 

normally survive. If you provide 

production records for three consecutive 

years, your records will be used in lieu 

of the factor contained in the actuarial 

document to determine the survival 

factor. The survival factor is applied at 

the time of inventory and is not applied 

a second time to the same inventory 

when a loss occurs. Clams that are 

seeded subsequent to the annual 

inventory value report must be adjusted 

by the survival factor. 

Tidal wave. A large water wave, wave 

train, or a series of waves, generated in 

a body of water by an impulsive 

disturbance that vertically displaces the 

water column or a destructive type of 

wave motion in seas and oceans, 

associated with either strong winds or 

underwater earthquakes. 

Under-report factor. The factor that 

adjusts your indemnity for underreporting of inventory values. The factor 

is always used in determining any 

indemnities. The under-report factor is 

the lesser of: (a) 1.000; or (b) the sum of 

all stage values reported on all the 

inventory value reports, minus the total 

of all previous losses, as adjusted by any 

previous under-reporting factors, 

divided by the basic unit value before 

loss. 

Unit value after loss. The value of the 

remaining insurable clams in each basic 

or optional unit based on the percentage 

of the reference maximum dollar 

amount contained in the actuarial 

documents, immediately following the 

occurrence of a loss as determined by 

our appraisal, plus any reduction in 

value due to uninsured causes. This is 

used to determine the loss of value for 

each individual unit so that losses can 

be paid on an individual unit basis, 

optional or basic, as applicable. 

Unit value before loss. The stage value 

of undamaged insurable clams in the 

basic or optional unit, as applicable, 

immediately prior to the loss 

occurrence. The determined value will 

include the number of seeded and 

harvested clams and stages that existed 

on the date of the inventory value 

report, adjusted for changes in 

accordance with subparagraph 22A(2) of 

the Insurance Standards Handbook, 

including but not limited to; the 

reference maximum dollar amount 

contained in the actuarial documents; 

and the applicable survival factors. This 

allows the amount of insurance under 

the policy to be divided among the 

individual units in accordance with the 

value of the clams in the unit at the time 

of loss for determining whether you are 

entitled to an indemnity for insured 

losses in the unit, optional or basic, as 

applicable. Clams that are seeded 

subsequent to the annual inventory 

value report being submitted must be 

adjusted by the survival factor before 

they are added to the beginning 

inventory during the process of 

establishing the ‘‘Unit value before 

loss.’’ 

2. Unit Division 

(a) In addition to the definition of 

basic unit contained in section 1 of the 

Basic 

Provisions, a basic unit may be 

divided into optional units in 

accordance with section 2(b). Note that 

even if you elect optional unit coverage, 

amount of insurance, crop year 

deductible, under-report factor, 

premium, and the total amount of 

indemnity payable under this policy 

will be controlled by the basic unit 

value before loss. 

(b) If you elect the additional level of 

coverage, for an additional premium, 

inventory that would otherwise be a 

basic unit may, unless limited by the 

Special Provisions, be divided into 

optional units by non-contiguous lease 

parcels. Additional optional units may 

also be authorized in the Special 

Provisions. If you elect optional units, 

you must provide separate inventory 

reports for each unit and keep all 

records of seeding, harvest, and 

uninsured losses separately by unit. 

(c) Failure to keep or report separate 

records will result in all optional unit 

inventories under a basic unit being 

combined in a basic unit at loss time. 

(d) If you elect optional units, your 

amount of insurance will be divided 

among optional units in relation to unit 

value before loss of clams in each 

optional unit. If, at the time of loss, the 

aggregate value of the clams in your 

optional units exceeds your basic unit 

inventory value, you will be subject to 

the under-report factor provisions. 

3. Amount of Insurance 

(a) In addition to the requirements of 

section 3 of the Basic Provisions, you 

may only select one coverage level 

percentage for all clams, regardless of 

their stage, insured under this policy. 

(b) Your amount of insurance will be 

reduced by the amount of any 

indemnity paid under this policy. 

(c) For an additional premium, you 

may increase your amount of insurance 

in accordance with section 6(d). 

(d) The production reporting 

requirements contained in section 3 of 

the Basic Provisions are not applicable. 

(e) For seeded clams, the amount of 

insurance is the product of the reference 

maximum dollar amount of insurance 

and the fraction of the maximum value 

associated with the applicable stage 

multiplied by the coverage level 

selected multiplied by your share. 

4. Contract Changes 

In accordance with section 4 of the 

Basic Provisions, the contract change 

date is August 31 of each year, or as 

specified in the actuarial documents. 

5. Cancellation and Termination Dates 

In accordance with section 2 of the 

Basic Provisions, the cancellation and 

termination dates are November 30, or 

as specified in the actuarial documents. 

6. Clam Inventory Value Report 

In lieu of section 6 of the Basic 

Provisions: 

(a) For insurance to attach for the crop 

year, you must submit an inventory 

value report to us with your application 

and for each subsequent crop year, not 

later than November 30 preceding the 

crop year, or by the date specified in the 

Special Provisions. 

(b) The inventory value report must 

be submitted yearly and include, for 

each basic or optional unit all growing 

locations, the stages of the clams and 

the stage values, and your share by 

growing location. 

(1) The inventory value must also 

reflect the stages as shown in the 

Special Provisions. 

(2) At our option and at any time, you 

may be required to provide 

documentation in support of any of your 

reports, including, but not limited to, a 

detailed listing of growing locations, 

unit values, the numbers and the sizes 

of clams seeded or placed for grow-out; 

your share, sales of clams and purchases 

of seed clams for the 3 previous crop 

years, and of your ability to properly 

obtain and maintain clams. 

(3) For catastrophic level policies 

only, you must report your clam sales 

for the previous crop year on the clam 

inventory value report. You may be 


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61138 Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Rules and Regulations 

required to provide documentation to 

support such sales. 

(c) Your inventory value report, 

including any revised report, will be 

used to determine your premium and 

amount of insurance. 

(d) If allowed for in the Special 

Provisions you may revise your 

inventory value report to increase the 

reported inventory value. We may 

inspect the inventory. Your revised 

inventory value report, if allowed by the 

Special Provisions, will be considered 

accepted by us and coverage will begin 

on any proposed increase in inventory 

value at the later of December 1, the 

date shown in the Special Provisions, or 

30 days after your written request is 

received by us, unless we reject the 

proposed increase in your inventory 

value in writing. We will reject any 

requested increase if a loss occurs before 

the later of December 1, the date shown 

in the Special Provisions, or within 30 

days of the date the request is made. 

(e) Failure to report the full value of 

your stage value will result in the 

reduction of any claim in accordance 

with section 14(d). 

(f) For catastrophic insurance 

coverage only: Your inventory value 

report for all clams cannot exceed the 

lesser of the value from section 6(b) or 

the percent shown on the actuarial 

documents of your previous year’s sales 

of clams unless you provide acceptable 

records to prove your actual inventory 

value. 

(g) Your inventory value report must 

reflect your insurable clam inventory 

according to the prices contained in the 

actuarial documents. In no instance will 

we be liable for values greater than 

those contained in the actuarial 

documents. 

(h) You must report all clams on the 

unit including any clams owned or 

subleased by other individuals or 

entities. 

(i) No application or inventory value 

reports, except revisions, will be 

accepted after November 30, unless 

otherwise provided in the Special 

Provisions. 

7. Premium 

(a) In lieu of section 7(c) of the Basic 

Provisions, we will determine your 

premium by multiplying the amount of 

insurance by the appropriate premium 

rate and by the premium adjustment 

factors listed on the actuarial 

documents. 

(b) Additional premium from an 

increase in the inventory value report is 

due and payable when we accept the 

revised inventory value report. 

(c) In addition to the provisions in 

section 7 of the Basic Provisions, the 

premium will be adjusted for partial 

crop years for the year of seeding and 

for clam leases you acquire. Premium 

will be charged for the entire month, as 

shown in the actuarial documents, for 

any month during which any amount of 

coverage is provided. 

8. Insured Crop 

In lieu of the provisions of section 8 

and section 9 of the Basic Provisions, 

the insured crop is all the clams in the 

county that: 

(a) Meet all the requirements for 

insurability and for which prices are 

provided in the actuarial documents; 

(b) Are acceptable to us; 

(c) Are grown by a person, who in at 

least three of the five previous crop 

years: 

(1) Grew clams for commercial sale; 

and 

(2) Participated in the management of 

a clam farming operation by at least 

exercising decision-making authority 

over all operational aspects of the farm. 

(d) Are grown in a county for which 

a premium rate is provided in the 

actuarial documents; 

(e) Are in a growing location 

acceptable to us and for which you 

provided GPS coordinates with your 

clam inventory value report in 

accordance with the Special Provisions; 

and 

(f) Use a practice that fixes the 

insurable clams to the land within the 

growing location. 

9. Insurance Period 

(a) In accordance with section 11 of 

the Basic Provisions, coverage begins 

the later of: 

(1) The date the pre-acceptance 

inspection, if applicable, is complete 

unless we notify you that your 

inventory is not insurable; or 

(2) If your inventory is insurable: 

(i) On December 1 for new 

applications, when the application and 

the inventory value report are submitted 

by October 30; 

(ii) On the 31st day following the date 

of submission for new applications, 

when the application and the inventory 

value report are submitted between 

November 1 and 30; 

(iii) On December 1 for policies 

continued from the prior year if the 

inventory value report is submitted by 

October 30; 

(iv) On the 31st day following the date 

of submission of the inventory value 

report for policies continued from the 

prior year when the inventory value 

report is submitted between November 

1 and 30; and 

(v) However, you acquire a financial 

interest in any insurable clams after 

coverage begins, but after December 1 of 

the crop year, and our inspection 

determines that the clams are 

acceptable, insurance will be considered 

to have attached to such clams 30 days 

after a revised inventory report is 

accepted by us indicating the stage 

value of the acquired clams; or 

(vi) On the date contained in the 

Special Provisions. 

(b) Insurance ends at the earliest of: 

(1) The date of final adjustment of a 

loss when the total indemnities due 

equal the amount of insurance; 

(2) November 30; or 

(3) A date specified in the Special 

Provisions. (c) Insurance ceases 

immediately on any clams removed 

from the unit. 

10. Causes of Loss 

(a) In accordance with the provisions 

of section 12 of the Basic Provisions, 

insurance is provided for the death of 

clams caused only by the following 

causes of loss that occur within the 

insurance period unless otherwise 

limited by the Special Provisions: 

(1) Oxygen depletion due to 

vegetation, microbial activity, harmful 

algae bloom, or high water temperature 

unless otherwise limited by the Special 

Provisions; 

(2) Disease, if medication does not 

exist for control of the disease; 

(3) Freeze; 

(4) Hurricane; 

(5) Decrease in salinity associated 

with a weather event verified by 

National Oceanic & Atmospheric 

Administration (NOAA) or United 

States Geologic Survey (USGS) or as 

otherwise defined in the Special 

Provisions; 

(6) Tidal wave; 

(7) Storm surge that is associated with 

a local weather event and verified by 

NOAA or USGS; or 

(8) Ice floe. 

(b) In addition to the causes of loss 

excluded in section 12 of the Basic 

Provisions, we do not insure against any 

loss caused by: 

(1) Your inability to market clams as 

a direct result of quarantine, shellfish 

harvest ban, boycott, or refusal of a 

buyer to accept production; 

(2) Collapse or failure of buildings or 

structures; 

(3) Loss of market value; 

(4) Vandalism; 

(5) Theft; 

(6) Pollution; 

(7) Predation (unless allowed by the 

Special Provisions); 

(8) Dredging; 

(9) Any cause of loss that occurred 

prior to or after the insurance period; 

(10) Any unexplained shortages or 

disappearance of inventory; or 


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Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Rules and Regulations 61139 

(11) Failure of the clam to grow to a 

marketable size. 

11. Replanting Payments 

Unless otherwise stated in the Special 

Provisions: 

(a) In accordance with the provisions 

contained in section 13 of the Basic 

Provisions, a replanting payment is 

allowed for insurable clams if death of 

the clams was due to an insurable cause 

of loss. 

(b) The maximum amount of the 

replanting payment will be the lesser of 

your actual cost of replanting or the 

result obtained by multiplying the 

replanting payment amount contained 

in the Special Provisions by your 

insured share. 

(c) Notwithstanding the provisions of 

section 13 of the Basic Provisions, only 

one replanting payment will be made 

per lease parcel planted within the crop 

year. 

(d) You may not collect a replant 

payment and an indemnity for the same 

loss. 

12. Duties in the Event of Damage or 

Loss 

In addition to your duties contained 

in section 14 of the Basic Provisions, 

(a) You must obtain our written 

consent prior to changing or 

discontinuing your normal practices 

with respect to care and maintenance of 

the insured clams. Failure to obtain our 

written consent will result in the denial 

of your claim. 

(b) If you are claiming disease as the 

cause of loss, you must prove at your 

own expense that the death of the clams 

was due to disease by isolating a sample 

of the clams and identifying the disease 

following histological or pathological 

examination conducted by a 

veterinarian who is a certified fish 

pathologist or a person approved by us. 

13. Access to Insured Crop and Records, 

and Records Retention 

In addition to the requirements of 

section 21 of the Basic Provisions, you 

must permit us to inspect the insurable 

clams at any time and take samples of 

damaged and undamaged clams for 

inspection, testing, and analysis, and 

examine and make copies of your 

records. 

14. Settlement of Claim 

We will determine indemnities for 

any unit as follows: 

(a) Determine the under-report factor 

for the basic unit; 

(b) Determine the occurrence 

deductible; 

(c) Subtract unit value after loss from 

unit value before loss; 

(d) Multiply the result of 14(c) by the 

under-report factor; 

(e) Subtract the occurrence deductible 

from the result in section 14(d); and 

(f) If the result of section 14(e) is 

greater than zero, and subject to the 

limit of section 14(g); 

(1) For other than catastrophic risk 

protection coverage, your indemnity 

equals the result of section 14(e), 

multiplied by your share. 

(2) For catastrophic risk protection 

coverage, your indemnity equals the 

result of section 14(e) multiplied by 55 

percent, multiplied by your share. 

(g) The total of all indemnities for the 

crop year will not exceed the amount of 

insurance. 

15. Written Agreements 

The written agreement provisions in 

the Basic Provisions do not apply. 

16. Late Planting 

Provisions of section 16 of the Basic 

Provisions do not apply. 

17. Prevented Planting 

Provisions of section 17 of the Basic 

Provisions do not apply. 

18. Loss Examples 

Single Unit Loss Example 

Assume you have a 100 percent share, 

the inventory value reported by you is 

$100,000, and your coverage level is 75 

percent. Your amount of insurance is 

$75,000 ($100,000 × .75). At the time of 

loss, unit value before loss is $95,000, 

unit value after loss is $30,000 and basic 

unit value before loss is $100,000. The 

deductible percentage is 25 percent 

(100¥75), the crop year deductible is 

$25,000 (.25 × $100,000). Your 

indemnity would be calculated as 

follows: 

Step (1) Determine the under-report 

factor; $100,000 ÷ $95,000 = 1.000; 

Step (2) Determine the occurrence 

deductible; .25 × $95,000 × 1.000 = 

$23,750; 

Step (3) Calculate the difference 

between unit value before loss and unit 

value after loss; $95,000¥$30,000 = 

$65,000; 

Step (4) Result of step 3 multiplied by 

the underreport factor (step 1); $65,000 

× 1.000 = $65,000; 

Step (5) Result of step 4 minus the 

occurrence deductible; 

$65,000¥$23,750 = $41,250; 

Step (6) Result of step 5 multiplied by 

your share; $41,250 × 1.000 = $41,250 

indemnity payment. 

Multiple Unit Multiple Loss Example 

Assume you have a 100 percent share, 

the inventory value reported by you is 

$100,000, and your coverage level is 75 

percent. You have two optional units, 

unit 1 and unit 2. Your amount of 

insurance is $75,000 ($100,000 × .75). 

You have a loss on unit 1 and no loss 

on unit 2. At the time of loss, unit value 

before loss on unit 1 is $60,000, unit 

value after loss on unit 1 is $18,000 and 

basic unit value before loss is $125,000. 

The deductible percentage is 25 percent 

(100¥75), the crop year deductible is 

$25,000 (.25 × $100,000). Your 

indemnity would be calculated as 

follows: 

Step (1) Determine the under-report 

factor; $100,000 ÷ $125,000 = .80; 

Step (2) Determine the occurrence 

deductible; .25 × $60,000 × .80 = 

$12,000; 

Step (3) Calculate the difference 

between unit value before loss and unit 

value after loss; $60,000¥$18,000 = 

$42,000; 

Step (4) Result of step 3 multiplied by 

the underreport factor (step 1); $42,000 

× .80 = $33,600; 

Step (5) Result of step 4 minus the 

occurrence deductible; 

$33,600¥$12,000 = $21,600; 

Step (6) Result of step 5 multiplied by 

your share; $21,600 × 1.000 = $21,600 

indemnity payment. 

Your crop year deductible is reduced 

to $13,000 ($25,000¥$12,000). Your 

amount of insurance is reduced to 

$53,400 ($75,000¥$21,600). You do not 

restock unit 1 after the first loss. Values 

on unit 2 do not change from those 

measured at the time of the loss on unit 

1. Assume you have a loss later in the 

crop year on unit 2. Unit value before 

loss on unit 2 is $65,000, unit value 

after loss on unit 2 is $0.00 and basic 

unit value before loss on the basic unit 

is $83,000. Your loss would be 

determined as follows: 

Step (1) Determine the remaining 

amount of insurance; 

$100,000¥$33,600 = $66,400; 

Step (2) Determine the under-report 

factor; $66,400 ÷ $83,000 = .800; 

Step (3) Determine the occurrence 

deductible; $25,000¥$12,000 = 

$13,000; 

Step (4) Calculate the difference 

between unit value before loss and unit 

value after loss; $65,000¥$0.00 = 

$65,000; 

Step (5) Result of step 4 multiplied by 

the underreport factor (step 2); $65,000 

× .800 = $52,000; 

Step (6) Result of step 5 minus the 

occurrence deductible; 

$52,000¥$13,000 = $39,000; 

Step (7) Result of step 6 multiplied by 

your share; $39,000 × 1.000 = $39,000 

indemnity payment. 


daltland on DSKBBV9HB2PROD with RULES
61140 Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Rules and Regulations 

1Public Law 101–410, 104 Stat. 890 (codified at 

28 U.S.C. 2461 note), amended by Debt Collection 

Improvement Act of 1996, Public Law 104–134, sec. 

31001(s)(1), 110 Stat. 1321, 1321–373; Federal 

Reports Elimination Act of 1998, Public Law 105– 

362, sec. 1301, 112 Stat. 3280. 

2Public Law 114–74, 701, 129 Stat. 584, 599. 

3 Inflation Adjustment Act § 3(2). 

4 Inflation Adjustment Act § 4(a). 

5See Inflation Adjustment Act § 7(a) (requiring 

OMB to ‘‘issue guidance to agencies on 

implementing the inflation adjustments required 

under this Act’’); see also Memorandum from Mick 

Mulvaney, Director, Office of Management and 

Budget, to Heads of Executive Departments and 

Agencies, M–18–03 (Dec. 15, 2017), https://

www.whitehouse.gov/wp-content/uploads/2017/11/ 

M-18-03.pdf (‘‘OMB Memorandum’’). 

6 Inflation Adjustment Act § 5. 

7 Inflation Adjustment Act § 4(b)(2). 

8See, e.g., Asiana Airlines v. FAA, 134 F.3d 393, 

396–99 (D.C. Cir. 1998) (finding APA ‘‘notice and 

comment’’ requirement not applicable where 

Congress clearly expressed intent to depart from 

normal APA procedures). 

9 Inflation Adjustment Act § 6. 

10The COLA ratio must be applied to the most 

recent civil monetary penalties. Inflation 

Adjustment Act, § 4(a); see also OMB Memorandum 

at 2. 

11The Inflation Adjustment Act, sec. 3, uses the 

CPI ‘‘for all-urban consumers published by the 

Department of Labor.’’ 

12 Inflation Adjustment Act, § 5(b)(1). 

13 Inflation Adjustment Act, § 5(a), (b)(1). 

14OMB Memorandum at 1. 

Signed in Washington, DC, on December 

19, 2017. 

Heather Manzano, 

Acting Manager, Federal Crop Insurance 

Corporation. 

[FR Doc. 2017–27894 Filed 12–26–17; 8:45 am] 

BILLING CODE 3410–08–P 

FEDERAL ELECTION COMMISSION 

11 CFR Part 111 

[Notice 2017–18] 

Civil Monetary Penalties Annual 

Inflation Adjustments 

AGENCY: Federal Election Commission. 

ACTION: Final rule. 

SUMMARY: As required by the Federal 

Civil Penalties Inflation Adjustment Act 

of 1990, the Federal Election 

Commission is adjusting for inflation 

the civil monetary penalties established 

under the Federal Election Campaign 

Act, the Presidential Election Campaign 

Fund Act, and the Presidential Primary 

Matching Payment Account Act. The 

civil monetary penalties being adjusted 

are those negotiated by the Commission 

or imposed by a court for certain 

statutory violations, and those imposed 

by the Commission for late filing of or 

failure to file certain reports required by 

the Federal Election Campaign Act. The 

adjusted civil monetary penalties are 

calculated according to a statutory 

formula and the adjusted amounts will 

apply to penalties assessed after the 

effective date of these rules. 

DATES: This final rule is effective on 

December 27, 2017. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Neven F. Stipanovic, Acting Assistant 

General Counsel, or Mr. Eugene J. 

Lynch, Paralegal, Office of General 

Counsel, (202) 694–1650 or (800) 424– 

9530. 

SUPPLEMENTARY INFORMATION: The 

Federal Civil Penalties Inflation 

Adjustment Act of 1990 (the ‘‘Inflation 

Adjustment Act’’),1 as amended by the 

Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 

2015 (the ‘‘2015 Act’’),2 requires federal 

agencies, including the Commission, to 

adjust for inflation the civil monetary 

penalties within their jurisdiction 

according to prescribed formulas. A 

civil monetary penalty is ‘‘any penalty, 

fine, or other sanction’’ that (1) ‘‘is for 

a specific monetary amount’’ or ‘‘has a 

maximum amount’’ under federal law; 

and (2) that a federal agency assesses or 

enforces ‘‘pursuant to an administrative 

proceeding or a civil action’’ in federal 

court.3 Under the Federal Election 

Campaign Act, 52 U.S.C. 30101–46 

(‘‘FECA’’), the Commission may seek 

and assess civil monetary penalties for 

violations of FECA, the Presidential 

Election Campaign Fund Act, 26 U.S.C. 

9001–13, and the Presidential Primary 

Matching Payment Account Act, 26 

U.S.C. 9031–42. 

The Inflation Adjustment Act requires 

federal agencies to adjust their civil 

penalties annually, and the adjustments 

must take effect no later than January 15 

of every year.4 Pursuant to guidance 

issued by the Office of Management and 

Budget,5 the Commission is now 

adjusting its civil monetary penalties for 

2018.6

The Commission must adjust for 

inflation its civil monetary penalties 

‘‘notwithstanding Section 553’’ of the 

Administrative Procedures Act 

(‘‘APA’’).7 Thus, the APA’s notice-andcomment and delayed effective date 

requirements in 5 U.S.C. 553(b)–(d) do 

not apply because Congress has 

specifically exempted agencies from 

these requirements.8

Furthermore, because the inflation 

adjustments made through these final 

rules are required by Congress and 

involve no Commission discretion or 

policy judgments, these rules do not 

need to be submitted to the Speaker of 

the House of Representatives or the 

President of the Senate under the 

Congressional Review Act, 5 U.S.C. 801 

et seq. Moreover, because the APA’s 

notice-and-comment procedures do not 

apply to these final rules, the 

Commission is not required to conduct 

a regulatory flexibility analysis under 5 

U.S.C. 603 or 604. See 5 U.S.C. 601(2), 

604(a). Nor is the Commission required 

to submit these revisions for 

congressional review under FECA. See 5 

U.S.C. 30111(d)(1), (4) (providing for 

congressional review when Commission 

‘‘prescribe[s]’’ a ‘‘rule of law’’). 

The new penalty amounts will apply 

to civil monetary penalties that are 

assessed after the date the increase takes 

effect, even if the associated violation 

predated the increase.9

Explanation and Justification 

The Inflation Adjustment Act requires 

the Commission to annually adjust its 

civil monetary penalties for inflation by 

applying a cost-of-living-adjustment 

(‘‘COLA’’) ratio.10 The COLA ratio is the 

percentage that the Consumer Price 

Index (‘‘CPI’’) 11 ‘‘for the month of 

October preceding the date of the 

adjustment’’ exceeds the CPI for October 

of the previous year.12 To calculate the 

adjusted penalty, the Commission must 

increase the most recent civil monetary 

penalty amount by the COLA ratio.13

According to the Office of Management 

and Budget, the COLA ratio for 2018 is 

0.02041, or 2.041%; thus, to calculate 

the new penalties, the Commission must 

multiply the most recent civil monetary 

penalties in force by 1.02041.14

The Commission assesses two types of 

civil monetary penalties that must be 

adjusted for inflation. First are penalties 

that are either negotiated by the 

Commission or imposed by a court for 

violations of FECA, the Presidential 

Election Campaign Fund Act, or the 

Presidential Primary Matching Payment 

Account Act. These civil monetary 

penalties are set forth at 11 CFR 111.24. 

Second are the civil monetary penalties 

assessed through the Commission’s 

Administrative Fines Program for late 

filing or non-filing of certain reports 

required by FECA. See 52 U.S.C. 

30109(a)(4)(C) (authorizing 

Administrative Fines Program), 30104(a) 

(requiring political committee treasurers 

to report receipts and disbursements 

within certain time periods). The 

penalty schedules for these civil 

monetary penalties are set out at 11 CFR 

111.43 and 111.44. 

1. 11 CFR 111.24—Civil Penalties 

FECA establishes the civil monetary 

penalties for violations of FECA and the 

other statutes within the Commission’s 

jurisdiction. See 52 U.S.C. 30109(a)(5), 

(6), (12). Commission regulations in 11 


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