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Final Agency Determination: FAD-121

Subject: Request dated May 18, 2010, requesting a Final Agency Determination for the 2010 crop year regarding the interpretation of section 400.765(b) published at 7 C.F.R. part 400, subpart X. This request is pursuant to 7 C.F.R. part 400, subpart X.

Background

Section 17 of the Basic Provisions states, as here pertinent:

17. Prevented Planting

(a) If you and we fail to agree on any determination made by us except those specified in section 20(d) or (e), the disagreement may be resolved through mediation in accordance with section 20(g). If resolution cannot be reached through mediation, or you and we do not agree to mediation, the disagreement must be resolved through arbitration in accordance with the rules of the American Arbitration Association (AAA), except as provided in sections 20(c) and (f), and unless rules are established by FCIC for this purpose. Any mediator or arbitrator with a familial, financial or other business relationship to you or us, or our agent or loss adjuster, is disqualified from hearing the dispute.

(1) All disputes involving determinations made by us, except those specified in section 20(d) or (e), are subject to mediation or arbitration. However, if the dispute in any way involves a policy or procedure interpretation, regarding whether a specific policy provision or procedure is applicable to the situation, how it is applicable, or the meaning of any policy provision or procedure, either you or we must obtain an interpretation from FCIC in accordance with 7 CFR part 400, subpart X or such other procedures as established by FCIC.

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Subpart X-Interpretations of Statutory and Regulatory Provisions

7 C.F.R. § 400.765(b) states, in relevant part:

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(b) Requesters may seek interpretations of those provisions of the Act and the regulations promulgated thereunder that are in effect for the crop year in which the request under this subpart is being made and the three previous crop years.

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The Risk Management Agency (RMA) is requested to provide an interpretation of the years in which an insured or insurer may seek or obtain an interpretation from FCIC.

Interpretation Submitted

The requester interprets the foregoing policy provisions as allowing requesters to seek an interpretation, if required under section 20(a)(1) of the Basic Provisions, for the crop year in which the request is being made (e.g., 2010) and the three previous crop years (e.g., 2009, 2008, and 2007). Conversely, the foregoing provisions do not allow requesters to seek an interpretation for crop years preceding the crop year in which the request is being made and the three previous crop years (e.g., 2006, 2005, etc.).

The requester believes their interpretation is consistent with the following statement on RMA's website (http://www.rma.usda.gov/regs/533/section533.html):

RMA provides final agency determinations for regulations in effect for the current crop year and the three previous crop years.

Final Agency Determination

The Federal Crop Insurance Corporation (FCIC) agrees with the requester's interpretation that section 400.765(b) limits requests for Final Agency Determinations to the current crop year in effect on the date the request is submitted and the three previous crop years. However, this interpretation does not mean that requests submitted today would be limited to the 2007 through 2010 crop years. This is because crop years can be different by crop. For requests for Final Agency Determinations that reference a specific crop, FCIC will use the crop year for the crop for which the interpretation is submitted and the three previous crop years. Since it is currently the 2010 crop year for most crops, FCIC will provide interpretations for the 2007 through 2010 crop years for such crops. For those crops that are in the 2011 crop year (for example, macadamia nut policies), section 400.765(b) limits review to the applicable statutory and regulatory provisions that were in effect for the 2008 through 2011 crop years.

For requests for Final Agency Determinations that do not reference a specific crop (for example, requests for interpretations of a provision contained in the Basic Provisions, administrative regulations contained in 7 C.F.R. part 400, or a provision contained in the Federal Crop Insurance Act), such requests will be limited to the current crop years in effect for all crops on the date of the request and the three previous crop years. For example, for a request submitted today that is not crop specific, the current crop year can be either the 2010 or 2011 crop year; therefore, three previous crop years must be considered for both crop years. This means that requests submitted in the current crop year can seek interpretations for the 2011, 2010, 2009, and 2008 crop years or the 2010, 2009, 2008, and 2007 crop years. If FCIC determines a request for a Final Agency Determination is outside the scope of crop years authorized in section 400.765(b), the requester will be notified within 30 days of the day the request was received of the reasons FCIC is unable to provide an interpretation.

However, to the extent the language in the provisions interpreted is identical to the language applicable for any other crop year, the same interpretation can be applied to such other crop year. It is the responsibility of the person seeking to use the published interpretation for a different crop year to ensure that the language of the provisions is identical. Even minor language changes can have an effect on the interpretation.

In accordance with 7 C.F.R. 400.765(c), this Final Agency Determination is binding on all participants in the Federal crop insurance program for the 2010 crop year. Any appeal of this decision must be in accordance with 7 C.F.R. 400.768(g).

Date of Issue: Aug 5, 2010