General Administrative Regulations; Sanctions

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

to amend its regulations by setting out the additional sanctions made

available under the Federal Crop Insurance Act as amended by the

Federal Crop Insurance Reform Act of 1994 with respect to fines and

disqualification for willfully and intentionally providing false or

inaccurate information and ineligibility for the adoption of a material

scheme or device to obtain benefits.

DATES: Written comments, data, and opinions on this rule must be

submitted no later than March 14, 1995 to be sure of consideration.

ADDRESSES: Written comments, data, and opinion on this proposed rule

should be sent to Diana Moslak, Regulatory and Procedural Development

Staff, Federal Crop Insurance Corporation, USDA, Washington, D.C.

20250. Hand or messenger delivery should be made to Suite 500, 2101 L

Street NW., Washington D.C. Written comments will be available for

public inspection and copying in the Office of the Manager, 2101 L

Street NW., 5th Floor, Washington, DC, during regular business hours,

Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Diana Moslak, Federal Crop Insurance

Corporation, U.S. Department of Agriculture, Washington, D.C. 20250.

Telephone (202) 254-8314.

SUPPLEMENTARY INFORMATION: This action has been reviewed under United

States Department of Agriculture (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 December 1, 1999.

This rule has been determined to be ``not significant'' for the

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.), no information collection or record-keeping requirements

are found in this rule.

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

Federalism, that this rule does not have sufficient federalism

implication to warrant the preparation of a Federalism Assessment. The

requirements and procedures 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.

Under section 605 of the Regulatory Flexibility Act (5 U.S.C. 601-

612), this regulation will not have a significant impact on a

substantial number of small entities. This action does not increase the

paperwork burden on the insured producer or the reinsured company.

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 require intergovernmental consultation with state and local

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

published at 48 FR 29115, June 24, 1983.

The Office of the 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. This rule does not have retroactive effect

and administrative appeals as established under 7 CFR part 400 subpart

J or under regulations established under subtitle H of the Department

of Agriculture Reorganization Act of 1994 (Pub. L. 103-354) 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 nor an Environmental Impact

Statement is needed.

The Federal Crop Insurance Act (FCI Act) was amended by the Federal

Crop Insurance Reform Act of 1994 (``Reform Act'') on October 13, 1994.

The Reform Act added a provision to the FCI Act providing that any

participant in the program who knowingly adopts a material scheme or

device should lose all benefits under the program for that crop year.

This provision roughly parallels similar provisions found in USDA

commodity programs. Eligibility for those programs are now linked to

the crop insurance program. The Reform Act also amended the FCI Act to

revise the penalty for giving false or inaccurate information. The

penalty for those acts previously was administrative debarment from

participation in the program for a period of up to ten years. However,

administrative ineligibility for participation in the disaster

assistance and other commodity programs had previously been two years.

The Reform Act substituted Catastrophic Risk Protection for Disaster

Assistance for insurable crops and reduced the maximum administrative

debarment for Catastrophic Risk Protection to two years so as to

conform to previous practice. The term for administrative debarment

when the insured purchases other than catastrophic risk protection

coverage remains at a maximum of ten years.

List of Subjects in 7 CFR Part 400

Administrative practice and procedure, Claims, Crop insurance,

Reporting and recordkeeping requirements.

Proposed Rule

For the reasons set out in the preamble, subpart R, part 400 of

chapter IV of title 7 of the Code of Federal Regulations is proposed to

be amended as follows:

[[Page 3107]]

PART 400--GENERAL ADMINISTRATIVE REGULATIONS

Subpart R--Sanctions

l. The authority citation for 7 CFR part 400, subpart R, is revised

to read as follows:

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

2. Paragraph (a) of Sec. 400.454 is revised to read as follows:

Sec. 400.454 Civil Penalties.

(a) Any person who willfully and intentionally provides any false

or inaccurate information to FCIC or to any approved insurance provider

reinsured by FCIC with respect to an insurance plan or policy issued

under the authority of the Federal Crop Insurance Act, as amended, (7

U.S.C. 1501 et seq.) may be subject to a civil fine of up to $10,000

for each violation and disqualification from participation in:

(1) The catastrophic risk protection plan of insurance for a period

not to exceed two (2) years; or

(2) Any plan of insurance providing protection in excess of that

provided under the catastrophic risk protection plan of insurance for a

period not to exceed ten (10) years.

* * * * *

3. A new Sec. 400.458 is added to read as follows:

Sec. 400.458 Scheme or device.

In addition to the penalties specified in this part, if a person

has knowingly adopted a material scheme or device to obtain

catastrophic risk protection, other plans of insurance coverage, or

non-insured assistance benefits to which the person is not entitled,

has evaded the Federal Crop Insurance Act, or has acted with the

purpose of evading the Federal Crop Insurance Act, the person shall be

ineligible to receive any and all benefits applicable to any crop year

for which the scheme or device was adopted.

Done in Washington, D.C. on January 5, 1995.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 95-617 Filed 1-12-95; 8:45 am]

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