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Disqualification for Crop Insurance Fraud

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 [Federal Register: July 2, 2003 (Volume 68, Number 127)]
[Rules and Regulations]
[Page 39447-39448]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jy03-1]

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Rules and Regulations
                                                Federal Register
________________________________________________________________________

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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.

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DEPARTMENT OF AGRICULTURE
Farm Service Agency
Commodity Credit Corporation
7 CFR Parts 718 and 1405
RIN 0560-AG70
 
Disqualification for Crop Insurance Fraud

AGENCY: Farm Service Agency, Commodity Credit Corporation, USDA.
ACTION: Final rule.

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SUMMARY: This rule implements statutory provisions which render a 
producer ineligible for certain programs administered by the Farm 
Service Agency (FSA), or Commodity Credit Corporation (CCC), of the 
United States Department of Agriculture (USDA) if that person is found 
to have engaged in crop insurance fraud.

DATES: Effective: July 2, 2003.

FOR FURTHER INFORMATION CONTACT: Sandy Bryant, Branch Chief, 
Production, Emergencies, and Compliance Division, FSA, USDA, STOP 0517, 
1400 Independence Avenue, SW., Washington, DC 20250-0517, telephone 
(202) 720-4380.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule was reviewed in conformance with Executive Order 
12866, has been determined to be not significant, and therefore has not 
been reviewed by the Office of Management and Budget.

Federal Assistance Programs

    This rule has a potential impact on all programs listed in the 
Catalog of Federal Domestic Assistance in the Agency Program Index 
under the Department of Agriculture, Farm Service Agency and Natural 
Resources Conservation Service. Other assistance programs are also 
impacted.

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this rule.

Environmental Evaluation

    The environmental impacts of this proposed rule have been 
considered in accordance with the provisions of the National 
Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq., the 
regulations of the Council on Environmental Quality (40 CFR parts 1500-
1508), and the FSA and CCC regulations for compliance with NEPA, 7 CFR 
part 799. After evaluating the effects of the proposed action it was 
determined that no extraordinary circumstances or other unforeseeable 
factors exist which would require preparation of an environmental 
assessment or environmental impact statement.

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988. This final rule preempts any State law that is inconsistent with 
its provisions. Before any legal action may be brought concerning this 
rule, all administrative remedies provided must be exhausted.

Executive Order 12372

    Executive Order 12372 requires consultation by Federal Agencies 
with State and local officials when providing funds or assistance that 
may require non-Federal input. The programs affected by this rule were 
excluded from the scope of this Executive Order in the Notice related 
to 7 CFR part 3015 published at 48 FR 29115 on June 24, 1983.

Unfunded Mandates Reform Act of 1995

    This rule contains no Federal mandates as defined in Title II of 
the Unfunded Mandates Reform Act of 1995 (UMRA). Thus, this rule is not 
subject to the requirements of sections 202 and 205 of UMRA.

Paperwork Reduction Act

    This rule has no effect on the information collection requirements 
of the Agency.

Executive Order 12612

    This rule does not have sufficient Federalism implications to 
warrant the preparation of a Federalism Assessment. The provisions 
contained in this rule will not have a substantial direct effect on 
States or their political subdivisions, or on the distribution of power 
and responsibilities among the various levels of government.

Discussion of Final Rule

    This rule implements section 121(a) of the Agricultural Risk 
Protection Act of 2000 (ARPA) (Pub. L. 106-224), enacted June 20, 2000. 
ARPA amended the Federal Crop Insurance Act (7 U.S.C. 1514) to provide 
that a producer may be disqualified for a period of up to 5 years from 
receiving certain benefits under a number of programs administered by 
the Department of Agriculture. A proposed rule, proposing to apply the 
disqualification to programs administered by FSA or conducted using 
funds of CCC, was published on September 12, 2002 (67 FR 57759). 
Comments were accepted for 60 days and no comments were received. Since 
this rule affects programs of CCC and FSA, it has been determined that 
its changes should be set forth in both FSA and CCC regulations. 
Accordingly, the final rule is changed from the proposed to reflect 
that it will appear in two places in the Code of Federal Regulations. 
Also, the final rule adds section 1405.8 instead of section 1405.7 as 
indicated in the proposed rule. Section 1405.7 was added by a final 
rule October 21, 2002 to implement requirements of the Uruguay Round 
Agreements Act.

List of Subjects

7 CFR Part 718

    Acreage allotments, Agricultural commodities, Marketing quotas.

7 CFR Part 1405

    Loan programs--agricultural, Price support programs.

? Accordingly, Title 7 of the Code of Federal Regulations is to be 
amended as follows:

PART 718--PROVISIONS APPLICABLE TO MULTIPLE PROGRAMS

? 1. The authority for part 718 continues to read as follows:

[[Page 39448]]

    Authority: 7 U.S.C. 1311 et seq.; 7 U.S.C. 1501 et seq; 7 U.S.C. 
1921 et seq.; 7 U.S.C. 7201 et seq.; 15 U.S.C. 714b.

Subpart A--General Provisions

? 2. Section 718.11 is added to read as follows:

Sec.  718.11  Disqualification due to federal crop insurance fraud.

    (a) Section 515(h) of the Federal Crop Insurance Act (FCIA) 
provides that a person who willfully and intentionally provides any 
false or inaccurate information to the Federal Crop Insurance 
Corporation (FCIC) or to an approved insurance provider with respect to 
a policy or plan of FCIC insurance after notice and an opportunity for 
a hearing on the record, will be subject to one or more of the 
sanctions described in section 515(h)(3). In section 515(h)(3), the 
FCIA specifies that in the case of a violation committed by a producer, 
the producer may be disqualified for a period of up to 5 years from 
receiving any monetary or non-monetary benefit under a number of 
programs. The list includes, but is not limited to, benefits under:
    (1) Title V of the FCIA.
    (2) The Agricultural Market Transition Act (7 U.S.C. 7201 et seq.), 
including the Noninsured Crop Disaster Assistance Program under section 
196 of that Act (7 U.S.C. 7333).
    (3) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.).
    (4) The Commodity Credit Corporation Charter Act (15 U.S.C. 714 et 
seq).
    (5) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et 
seq.).
    (6) Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et 
seq.).
    (7) Any law that provides assistance to a producer of an 
agricultural commodity affected by a crop loss or a decline in prices 
of agricultural commodities.
    (b) Violation determinations are made by FCIC. However, upon notice 
from FCIC to FSA that a producer has been found to have committed a 
violation to which paragraph (a) of this section applies, that person 
shall be considered ineligible for payments under the programs 
specified in paragraph (a) of this section that are funded by FSA for 
the same period of time for which, as determined by FCIC, the producer 
will be ineligible for crop insurance benefits of the kind referred to 
in paragraph (a)(1) of this section. Appeals of the determination of 
ineligibility will be administered under the rules set by FCIC.
    (c) Other sanctions may also apply.

PART 1405--LOANS, PURCHASES AND OTHER OPERATIONS

? 3. The authority citation for part 1405 is revised to read as follows:

    Authority: 7 U.S.C. 1515; 7 U.S.C. 7991(e); 15 U.S.C. 714b and 
714c.

? 4. Section 1405.8 is added to read as follows:

Sec.  1405.8  Disqualification due to Federal crop insurance fraud.

    (a) Section 515(h) of the Federal Crop Insurance Act (FCIA) 
provides that a person who willfully and intentionally provides any 
false or inaccurate information to the Federal Crop Insurance 
Corporation (FCIC) or to an approved insurance provider with respect to 
a policy or plan of FCIC insurance after notice and an opportunity for 
a hearing on the record, will be subject to one or more of the 
sanctions described in section 515(h)(3). In section 515(h)(3), the 
FCIA specifies that in the case of a violation committed by a producer, 
the producer may be disqualified for a period of up to 5 years from 
receiving any monetary or non-monetary benefit under a number of 
programs. The list includes, but is not limited to, benefits under:
    (1) Title V of the FCIA.
    (2) The Agricultural Market Transition Act (7 U.S.C. 7201 et seq.), 
including the Noninsured Crop Disaster Assistance Program under section 
196 of that Act (7 U.S.C. 7333).
    (3) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.).
    (4) The Commodity Credit Corporation Charter Act (15 U.S.C. 714 et 
seq).
    (5) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et 
seq.).
    (6) Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et 
seq.).
    (7) Any law that provides assistance to a producer of an 
agricultural commodity affected by a crop loss or a decline in prices 
of agricultural commodities.
    (b) Violation determinations are made by FCIC. However, upon notice 
from FCIC to CCC that a producer has been found to have committed a 
violation to which paragraph (a) of this section applies, that person 
shall be considered ineligible for payments under the programs 
specified in paragraph (a) of this section that are funded by CCC for 
the same period of time for which, as determined by FCIC, the producer 
will be ineligible for crop insurance benefits of the kind referred to 
in paragraph (a)(1) of this section. Appeals of the determination of 
ineligibility will be administered under the rules set by FCIC.
    (c) Other sanctions may also apply.

    Signed in Washington, DC, on June 17, 2003.
James R. Little,
Administrator, Farm Service Agency, Executive Vice President, Commodity 
Credit Corporation.
[FR Doc. 03-16663 Filed 7-1-03; 8:45 am]
BILLING CODE 0341-05-P

 
 

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