General Administrative Regulations; Collection and Storage of Social Security Account Numbers and Employer Identification Numbers

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 400

General Administrative Regulations; Collection and Storage of

Social Security Account Numbers and Employer Identification Numbers

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Direct final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) hereby amends

the substantial beneficial interest requirements set for any individual

who has an interest in the policyholder. Current provisions require an

individual who has a five percent or more interest in the policyholder

to submit a social security or employer identification number. FCIC

amends this provision by redefining and liberalizing substantial

beneficial interest as ten percent or more interest in the

policyholder. In addition, FCIC reduces, from five years to three

years, the record retention requirements imposed by this regulation.

DATES: This rule will be effective on November 17, 1994 unless FCIC

receives written adverse comments or written notice of intent to submit

adverse comments on or before November 7, 1994. If FCIC receives

written adverse comments or written notice of intent to submit adverse

comments, FCIC will publish a notice in the Federal Register

withdrawing this rule before the effective date.

ADDRESSES: Please send any adverse comments or notice of intent to

submit adverse comments to Mari L. Dunleavy, Regulatory and Procedural

Development Staff, Federal Crop Insurance Corporation, USDA,

Washington, DC 20250. Hand or messenger delivery may be made to Suite

500, 2101 L St. NW, Washington, DC 20037.

FOR FURTHER INFORMATION CONTACT:

Mari L. Dunleavy, Regulatory and Procedural Development Staff, Federal

Crop Insurance Corporation, USDA, Washington, DC 20250. Telephone (202)

254-8314.

SUPPLEMENTARY INFORMATION:

Effective Date

FCIC is publishing this rule without a prior proposal because FCIC

views this action as noncontroversial and anticipates no adverse public

comment. This rule will be effective, as published in this document, 30

days after the date of publication in the Federal Register unless FCIC

receives written adverse comments or written notice of intent to submit

adverse comments within 20 days of the date of publication of this rule

in the Federal Register.

Adverse comments are comments that suggest the rule should not be

adopted or that suggest the rule should be changed.

If FCIC receives written adverse comments or written notice of

intent to submit adverse comments, FCIC will publish a notice in the

Federal Register withdrawing this rule before the effective date. FCIC

will then publish a proposed rule for public comment. Following the

close of that comment period, the comments will be considered, and a

final rule addressing the comments will be published.

As discussed above, if FCIC receives no written adverse comments

nor written notice of intent to submit adverse comments within 20 days

of publication of this direct final rule, this direct final rule will

become effective 30 days following its publication. FCIC will publish a

notice to this effect in the Federal Register, before the effective

date of this direct final rule, confirming that it is effective on the

date indicated in this document.

Executive Orders, Regulatory Flexibility Act, and Paperwork Reduction

Act

This action has been reviewed under USDA procedures established by

Executive Order 12866 and Departmental Regulation 1512-1. This action

constitutes a review as to the need, currency, clarity, and

effectiveness of these regulations under those procedures. The sunset

review date established for these regulations is March 1, 1999.

This rule has been determined to be not significant for purposes of

Executive Order 12866 and therefore, has not been reviewed by the

Office of Management and Budget (OMB).

In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.

3501 et seq.), the information collection or recordkeeping requirements

included in this proposed rule can be found in 7 CFR 400 subpart H.

It has been determined under section 6(a) of Executive Order 12612,

Federalism, that this proposal does not have sufficient federalism

implications to warrant the preparation of a Federalism assessment. The

provisions contained in this rule will not have substantial direct

effects on states or their political subdivisions, or on the

distribution of power and responsibilities among the various levels of

government.

This rule has been reviewed in accordance with Executive Order

12778. The provisions of this proposed rule will preempt state and

local laws to the extent such state and local laws are inconsistent

herewith. The administrative appeal provisions located at 7 CFR part

400, subpart J must be exhausted before judicial action may be brought.

This action would not have a significant economic impact on a

substantial number of small businesses. This amendment liberalizes

paperwork requirements for the insureds and the companies delivering

Federal crop insurance. The current FCIC approved Privacy Act statement

on Company forms that includes reference to Substantial Beneficial

interest of five percent or more will not need to be revised by

companies as a result of this rule until such time as current stocks

are depleted and forms are reprinted. Therefore, this action is

determined to be exempt from the provisions of the Regulatory

Flexibility Act and no Regulatory Flexibility Analysis was prepared.

This program is listed in the Catalog of Federal Domestic

Assistance under No. 10.450.

This program is not subject to the provisions of Executive Order

12372 which requires intergovernmental consultation with state and

local officials. See the Notice related to 7 CFR part 3015, subpart V,

published at 48 FR 29115, June 24, 1983.

The Office of General Counsel has determined that these regulations

meet the applicable standards provided in subsections 2(a) and 2(b)(2)

of Executive Order 12778. The provisions of this rule will preempt

state and local laws to the extent such state and local laws are

inconsistent herewith. The administrative appeal provisions located at

7 CFR part 400, subpart J must be exhausted before judicial action may

be brought.

This action is not expected to have any significant impact on the

quality of the human environment, health, and safety. Therefore,

neither an Environmental Assessment or an Environmental Impact

Statement is needed.

Background

FCIC is changing its requirement that individuals or entities who

hold or acquire a five percent or greater substantial beneficial

interest in the policyholder must submit social security or employer

identification numbers to individuals or entities who hold or acquire a

ten percent or greater interest in the policyholder. FCIC is changing

its requirement from five to ten percent because the number of crop

insurance policyholders with share interests ranging from five to ten

percent are relatively insignificant. In addition, by raising the

requirement for when the amount of substantial beneficial interest is

applicable, FCIC eliminates the burden of additional paperwork by

eliminating collection of social security or employer identification

data in order to secure agricultural program benefits on beneficial

interest relationships falling in the five to ten percent category.

FCIC is also changing its record keeping requirements from five to

three years. By eliminating two years, FCIC will reduce the paperwork

burden and storage of records beyond three years, which is consistent

with other policy and program requirements. FCIC does not believe that

a two-year reduction of insureds' record storage will jeopardize the

integrity of the crop insurance program.

List of Subjects in 7 CFR Part 400

Crop insurance, Social Security numbers, Reporting and

recordkeeping requirements.

Accordingly, the Federal Crop Insurance Corporation amends 7 CFR

part 400, subpart Q as follows:

PART 400--GENERAL ADMINISTRATIVE REGULATIONS

1. The authority citation for part 400 continues to read as

follows:

Authority: 7 U.S.C. 1506, 1508.

2. Section 400.402 is amended by revising paragraph (v) to read as

follows:

Sec. 400.402 Definitions.

* * * * *

(v) Substantial beneficial interest--an interest of ten percent

(10%) or more in an application or policyholder.

* * * * *

3. Section 400.411 is revised to read as follows:

Sec. 400.411 Record retention.

The reinsured insurance company, either direct or reinsured, will

retain all records of policyholders for a period of not less than three

(3) years from the date of a final action on a policy for the crop year

unless maintenance of specific records is requested by the Corporation.

Final actions on insurance policies include conclusion of such

insurance events such as renewal or termination of policy, completion

of loss adjustment, or satisfaction of claim. Companies are reminded

that the Statute of Limitation for FCIC contract claims requires that

litigation be instituted within six years of a breach of contract.

Destruction of records will not provide a defense to any action by the

Corporation against any Company.

Done in Washington, DC, on October 3, 1994.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 94-25713 Filed 10-17-94; 8:45 am]

BILLING CODE 3410-08-M