Rule2025-15191
Additional Payment II Program
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 11, 2025
Effective
August 11, 2025
Issuing agencies
Agriculture DepartmentFederal Crop Insurance Corporation
Abstract
The Risk Management Agency (RMA), on behalf of the Federal Crop Insurance Corporation (FCIC), is issuing this rule to announce the availability of funding under the Additional Payment II Program (ADD PAY II). ADD PAY II is a one-time additional payment to Approved Insurance Providers (AIPs) administering eligible crop insurance contracts for 2022 and 2023 reinsurance year specialty crops. The total funding available for ADD PAY II is $30 million. Funding for ADD PAY II will be distributed to AIPs proportionally based on their respective liabilities for eligible crop insurance contracts for 2022 and 2023 reinsurance year specialty crops.
Full Text
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<title>Federal Register, Volume 90 Issue 152 (Monday, August 11, 2025)</title>
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[Federal Register Volume 90, Number 152 (Monday, August 11, 2025)]
[Rules and Regulations]
[Pages 38607-38610]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-15191]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 460
[Docket ID FCIC-25-0002]
RIN 0563-AC88
Additional Payment II Program
AGENCY: Federal Crop Insurance Corporation, U.S. Department of
Agriculture (USDA).
ACTION: Final rule.
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SUMMARY: The Risk Management Agency (RMA), on behalf of the Federal
Crop Insurance Corporation (FCIC), is issuing this rule to announce the
availability of funding under the Additional Payment II Program (ADD
PAY II). ADD PAY II is a one-time additional payment to Approved
Insurance Providers (AIPs) administering eligible crop insurance
contracts for 2022 and 2023 reinsurance year specialty crops. The total
funding available for ADD PAY II is $30 million. Funding for ADD PAY II
will be distributed to AIPs proportionally based on their respective
liabilities for eligible crop insurance contracts for 2022 and 2023
reinsurance year specialty crops.
DATES: This rule is effective on August 11, 2025.
FOR FURTHER INFORMATION CONTACT: David Zanoni; telephone: (816) 926-
6142; email: <a href="/cdn-cgi/l/email-protection#224643544b460c58434c4d4c4b62575146430c454d54"><span class="__cf_email__" data-cfemail="4a2e2b3c232e64302b242524230a3f392e2b642d253c">[email protected]</span></a>. Individuals with disabilities who
require alternative means for communication should contact the USDA
Target Center at (202) 720-2600 (voice and text telephone (TTY mode))
or dial 711 for Telecommunications Relay Service (both voice and text
telephone users can initiate this call from any telephone).
SUPPLEMENTARY INFORMATION:
Background
FCIC serves America's agricultural producers through effective,
market-based risk management tools to strengthen the economic stability
of agricultural producers and rural communities. FCIC is committed to
increasing the availability and effectiveness of Federal crop insurance
as a risk management tool. AIPs sell and service Federal crop insurance
policies in every state through a public-private partnership. FCIC
reinsures the AIPs who share the risks associated with catastrophic
losses due to major weather events. FCIC's vision is to secure the
future of agriculture by providing world class risk management tools to
rural America.
Title I of the Disaster Relief Supplemental Appropriations Act,
2025 (Division B of the American Relief Act, 2025, (Pub. L. 118-158))
provides funding for an additional payment to AIPs administering
eligible crop insurance contracts for specialty crops for the 2022 and
2023 reinsurance years. To administer the funding as mandated by
Congress, FCIC is establishing ADD PAY II, similar to the previous
Additional Payment Program (ADD PAY). The total funding available for
ADD PAY II is $30 million.
The original implementation of ADD PAY was through a Notice of
Funding Availability published on May 2, 2023. Section 771 of the
Consolidated Appropriations Act, 2023, (Pub. L. 117-328) provided
funding for an additional payment to AIPs administering eligible crop
insurance contracts for specialty crops for the 2021 reinsurance year.
Funding for ADD PAY was distributed to AIPs proportionally based on
their respective liabilities for eligible crop insurance contracts for
2021 reinsurance year specialty crops.
ADD PAY II
The Risk Management Agency (RMA), on behalf of FCIC, will
administer ADD PAY II. ADD PAY II will distribute funding to AIPs
proportionally based on their respective liabilities for eligible crop
insurance contracts for 2022 and 2023 reinsurance year specialty crops.
The total funding available for ADD PAY II is $30 million.
Currently, all payments to AIPs are governed by the Standard
Reinsurance Agreement (SRA), which is a contract between an AIP and
FCIC. The SRA outlines the terms under which FCIC provides reinsurance
and subsidies for eligible crop insurance contracts sold by the AIP.
The additional funding from ADD PAY II will be allocated based on terms
available under the SRA.
Under ADD PAY II, AIPs who administered one or more eligible crop
insurance contracts for specialty crops for the 2022 or 2023
reinsurance years will be eligible for a one-time additional payment.
Each AIP will receive a payment that is equal to a rate of 17.5 percent
of the net book premium, less any administrative and operating (A&O)
subsidy \1\ already paid to the AIP as outlined in the SRA, on those
specialty crop contracts that were subject to the A&O cap.\2\ Contracts
that were not subject to the reduction will not receive a payment.
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\1\ ``A&O subsidy'' means the subsidy for the administrative and
operating expenses (A&O) paid by FCIC on behalf of the policyholder
to the AIP (also referred to as ``the Company'') for eligible crop
insurance contracts.
\2\ ``A&O cap'' refers to the common name of a reduction
described in section III(a)(2)(G) of the SRA.
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Payment Calculation
ADD PAY II will be administered based on records maintained by RMA
that were used for the settlement of accounts between the AIP and RMA
at the time of the October 2024 transaction cutoff date based on the
2022 and 2023 reinsurance year annual settlements. The payment will be
final upon receipt by the AIP and will not be altered based on any
subsequent updates to premium or liability of qualifying crop insurance
contracts made after that date. For example, if an AIP modifies a 2023
reinsurance year policy to decrease the amount of premium and liability
after the ADD PAY II payment has been
[[Page 38608]]
received, it will not affect any ADD PAY II payments.
If the total eligible payments under ADD PAY II reach, or may
reach, $30 million, the RMA Administrator will prorate the payments so
that a total of $30 million is paid. If the payments are prorated,
funding for ADD PAY II will be distributed to AIPs proportionally based
on their respective liability, which is the total value of insurance
provided by AIPs to producers, for qualifying crop insurance contracts.
Notice and Comment and Effective Date
The Administrative Procedure Act (APA, 5 U.S.C. 553) provides that
the notice and comment and 30-day delay in the effective date
provisions do not apply when the rule involves specified actions,
including matters relating to contracts. This rule governs contracts
(the reinsurance agreements) between FCIC and AIPs and therefore falls
within that exemption.
This rule is exempt from the regulatory analysis requirements of
the Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by the
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)
because it involves matters relating to benefits. The requirements for
the regulatory flexibility analysis in 5 U.S.C. 603 and 604 are
specifically tied to the requirement for a proposed rule by section 553
or any other law; in addition, the definition of rule in 5 U.S.C. 601
is tied to the publication of a proposed rule.
The Office of Management and Budget (OMB) found this rule meets the
criteria in 5 U.S.C. 804(2) of the Congressional Review Act (CRA). The
CRA, at 5 U.S.C. 808(2) allows an agency to make such regulations
effective immediately if the agency finds there is good cause to do so.
USDA finds that notice and public procedure are contrary to the public
interest because the rule is being implemented as directed by Congress.
Therefore, USDA is not required to delay the effective date for 60 days
from the date of publication to allow for Congressional review.
Accordingly, this rule is effective upon publication in the Federal
Register.
Executive Orders 12866, 13563, and 14192
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 14192
``Unleashing Prosperity Through Deregulation'' announced the
Administration policy to significantly reduce the private expenditures
required to comply with Federal regulations to secure America's
economic prosperity and national security and the highest possible
quality of life for each citizen and to alleviate unnecessary
regulatory burdens placed on the American people. In line with the
Executive Order requirements, the Agency chose this regulatory approach
to maximize benefits and minimize burden on American producers. The
requirements in Executive Orders 12866 and 13563 for the analysis of
costs and benefits apply to rules that are determined to be significant
or economically significant. This rule has been designated as not
significant and therefore, OMB has not reviewed this rule and analysis
of the costs and benefits is not required.
Environmental Review
The environmental impacts of this final rule have been considered
in a manner consistent with the provisions of the National
Environmental Policy Act (NEPA, 42 U.S.C. 4321-4347), and because USDA
will be making the payments to producers, the USDA regulation for
compliance with NEPA (7 CFR part 1b). As specified in 7 CFR 1b.4(b)(4),
FCIC is categorically excluded from the preparation of an Environmental
Analysis or Environmental Impact Statement unless the FCIC Manager
(agency head) determines that an action may have a significant
environmental effect. The FCIC Manager has determined this rule will
not have a significant environmental effect. Therefore, FCIC will not
prepare an environmental assessment or environmental impact statement
for this action and this rule serves as documentation of the
programmatic environmental compliance decision.
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 government-to-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.
USDA 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 at this time. If a Tribe
requests consultation, the USDA Risk Management Agency will work with
the Office of Tribal Relations to ensure meaningful consultation is
provided.
The Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L.
104-4) requires Federal agencies to assess the effects of their
regulatory actions of State, local, and Tribal governments or the
private sector. Agencies generally must prepare a written statement,
including cost benefits analysis, for proposed and final rules with
Federal mandates that may result in expenditures of $100 million or
more in any 1 year for State, local or Tribal governments, in the
aggregate, or to the private sector. UMRA generally requires agencies
to consider alternatives and adopt the more cost effective or least
burdensome alternative that achieves the objectives of the rule. This
rule contains no Federal mandates, as defined in Title II of 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.
Paperwork Reduction Act of 1995
In accordance with the provisions of the Paperwork Reduction Act of
1995 (44 U.S.C. chapter 35, subchapter I), the rule does not change the
information collection approved by OMB under control numbers 0563-0053;
Expiration Date: 3/31/2026 and 0563-0083; Expiration Date: 11/30/2026.
No new information will be collected through this rule. All information
has already been collected.
E-Government Act Compliance
FSA 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.
[[Page 38609]]
Federal Assistance Program
The title and number of the Assistance Listing, to which this rule
applies is No. 10.450--Crop Insurance.
List of Subjects in 7 CFR Part 460
Crop insurance, Disaster assistance.
For the reasons discussed above, FCIC amends 7 CFR part 460 as
follows:
PART 460--DISASTER AND OTHER ADDITIONAL PAYMENTS
0
1. The authority citation for part 460 is revised to read as follows:
Authority: 7 U.S.C. 1506(i), 1506(l), and 1506(o); Division N,
Pub. L. 116-260, 134 Stat. 1182; and Title I, Division B, Pub. L.
118-158, 138 Stat. 1722.
0
2. Revise the heading for part 460 to read as set forth above.
0
3. Add subpart C, consisting of Sec. Sec. 460.14 through 460.18, to
read as follows:
Subpart C--Additional Payment II Program
Sec.
460.14 Applicability.
460.15 Definitions.
460.16 Eligibility.
460.17 Funding available for ADD PAY II.
460.18 Calculating and accounting ADD PAY II amounts.
Sec. 460.14 Applicability.
(a) This subpart specifies the terms and conditions of ADD PAY II.
(b) ADD PAY II is a one-time additional payment to Approved
Insurance Providers (AIPs) administering eligible crop insurance
contracts for 2022 and 2023 reinsurance year specialty crops.
Sec. 460.15 Definitions.
ADD PAY II means Additional Payment II Program.
Annual settlement means the settlement of accounts between the
Company and FCIC for the reinsurance year, beginning with the October
monthly transaction cutoff date following the end of the subsequent
reinsurance year and continuing monthly thereafter, as necessary.
A&O Subsidy means the subsidy for the administrative and operating
expenses. The subsidy is paid by FCIC on behalf of the policyholder to
the Company for additional coverage level crop insurance contracts in
accordance with section 508(k)(4) of the Federal Crop Insurance Act (7
U.S.C. 1508(k)(4)).
Approved Insurance Provider (AIP) means a legal entity (also
referred to as ``the Company'') which has entered into a Standard
Reinsurance Agreement (SRA) with FCIC for the applicable reinsurance
year.
Crop Provisions means the part of the policy that contains the
specific provisions of insurance for each insured crop.
Eligible crop insurance contract means an insurance contract with
an eligible producer:
(1) Covering an agricultural commodity authorized to be insured
under the Federal Crop Insurance Act and approved for sale by FCIC;
(2) With terms and conditions in effect as of the applicable
contract change date;
(3) That is sold and serviced in accordance with the Federal Crop
Insurance Act, FCIC regulations, FCIC procedures, and the SRA; and
(4) That has a sales closing date within the reinsurance year.
FCIC means the Federal Crop Insurance Corporation, a wholly owned
Government Corporation of USDA that administers the Federal Crop
Insurance Program.
Liability means total amount of insurance, value of production
guarantee, or revenue protection guarantee for the unit determined in
accordance with the Settlement of Claim provisions of the applicable
Crop Provisions.
Net book premium means the premium amount established by FCIC for
eligible crop insurance contracts in accordance with section 508(d)(2)
of the Federal Crop Insurance Act (7 U.S.C. 1508(d)(2)), less any
amount for A&O subsidy.
Qualifying crop insurance contract means an eligible crop insurance
contract for a 2022 or 2023 reinsurance year specialty crop.
Reinsurance year means the term of the SRA beginning July 1 and
ending on June 30 of the following year and, for reference purposes,
identified by the year containing June.
RMA means the Risk Management Agency, USDA.
Specialty crop means agricultural commodities described in section
101 of Title I of the Specialty Crops Competitiveness Act of 2004 (7
U.S.C. 1621 note), including fruits and vegetables, tree nuts, dried
fruits, horticulture nursery crops, and other crops listed on the RMA
specialty crops website at <a href="https://www.rma.usda.gov/about-crop-insurance/highlighted-initiatives-plans/specialty-crops">https://www.rma.usda.gov/about-crop-insurance/highlighted-initiatives-plans/specialty-crops</a>, or a successor
website.
Standard Reinsurance Agreement (SRA) means the agreement between an
AIP and FCIC by which the insurer transfers to FCIC certain liabilities
arising from the insurer's sales of insurance policies in return for a
portion of premium monies and administrative expense reimbursements.
USDA means United States Department of Agriculture.
Sec. 460.16 Eligibility.
To be eligible for additional payment under ADD PAY II, the
participant must be an AIP who administered one or more eligible crop
insurance contracts for specialty crops for the 2022 or 2023
reinsurance years.
Sec. 460.17 Funding available for ADD PAY II.
(a) The total funding available for ADD PAY II is $30 million.
(b) Funds from Title I of Division B of the American Relief Act,
2025 (Pub. L. 118-158) will be used for ADD PAY II.
Sec. 460.18 Calculating and accounting ADD PAY II amounts.
(a) Under ADD PAY II, AIPs who administered one or more eligible
crop insurance contracts for specialty crops for the 2022 or 2023
reinsurance years will be eligible for a one-time additional payment.
Each AIP will receive a payment that is equal to a rate of 17.5 percent
of the net book premium on those specialty crop contracts that were
subject to the reduction described in section III(a)(2)(G) of the SRA
known as the A&O cap, less any A&O subsidy already paid to the AIP per
the SRA. Contracts that were not subject to the reduction will not
receive a payment.
(b) If the total additional payment sum of $30 million for ADD PAY
II is reached or may be reached, the RMA Administrator will prorate ADD
PAY II amounts due so that a total of $30 million is paid. If the
payments are prorated, funding for ADD PAY II will be distributed to
AIPs proportionally based on their respective liability for qualifying
crop insurance contracts.
(c) ADD PAY II will be administered based on records maintained by
RMA that were used for the settlement of accounts between the AIP and
RMA at the time of the October 2024 transaction cutoff date based on
the 2022 and 2023 reinsurance year annual settlements. The payment will
be final upon receipt and will not be altered based on any subsequent
updates to premium or liability of qualifying crop insurance contracts
made after that date.
(d) Specifically, RMA will calculate the additional payment amounts
under ADD PAY II as follows:
(1) For each qualifying crop insurance contract subject to a
reduction described in section III(a)(2)(G) of the SRA, calculate 17.5
percent of net book premium;
[[Page 38610]]
(2) If the result of paragraph (d)(1) of this section is greater
than the actual A&O subsidy paid for the qualifying crop insurance
contract:
(i) Subtract the actual A&O subsidy paid from the result of
paragraph (d)(1) of this section; and
(ii) Calculate total liability for the contract;
(3) Sum the results of paragraph (d)(2)(i) of this section by AIP;
(4) Sum the results of paragraph (d)(3) of this section across all
AIPs;
(5) If the result of paragraph (d)(4) of this section is less than
or equal to $30 million, then pay each AIP their respective amount from
paragraph (d)(3) of this section; and
(6) If the result of paragraph (d)(4) of this section is greater
than $30 million, then:
(i) Sum the results of paragraph (d)(2)(ii) of this section by AIP;
(ii) Sum the results of paragraph (d)(6)(i) of this section across
all AIPs;
(iii) Divide paragraph (d)(6)(i) of this section by paragraph
(d)(6)(ii) of this section to establish each AIP's proportion of total
liability;
(iv) Multiply $30 million by the result of paragraph (d)(6)(iii) of
this section for each AIP; and
(v) Pay each AIP their respective amount from paragraph (d)(6)(iv)
of this section.
Patricia Swanson,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2025-15191 Filed 8-8-25; 8:45 am]
BILLING CODE 3410-08-P
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