[Title 7 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2006 Edition]
[From the U.S. Government Printing Office]



[[Page i]]



          7


          Parts 400 to 699

                         Revised as of January 1, 2006


          Agriculture
          
          


________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of January 1, 2006
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

[[Page ii]]

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 7:
    Subtitle B--Regulations of the Department of Agriculture 
      (Continued)
          Chapter IV--Federal Crop Insurance Corporation, 
          Department of Agriculture                                  5
          Chapter V--Agricultural Research Service, Department 
          of Agriculture                                           363
          Chapter VI--Natural Resources Conservation Service, 
          Department of Agriculture                                383
  Finding Aids:
      Table of CFR Titles and Chapters........................     535
      Alphabetical List of Agencies Appearing in the CFR......     553
      List of CFR Sections Affected...........................     563

[[Page iv]]





                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 7 CFR 400.27 refers 
                       to title 7, part 400, 
                       section 1.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

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noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

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    To determine whether a Code volume has been amended since its 
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List of Parts Affected,'' which appears in the Reader Aids section of 
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Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

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inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 2001, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, 1973-1985, or 1986-2000, published in 11 separate 
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CFR INDEXES AND TABULAR GUIDES

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and Finding Aids. This volume contains the Parallel Table of Statutory 
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the revision dates of the 50 CFR titles.

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[[Page vii]]

    The Office of the Federal Register also offers a free service on the 
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                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

January 1, 2006.

[[Page ix]]



                               THIS TITLE

    Title 7--Agriculture is composed of fifteen volumes. The parts in 
these volumes are arranged in the following order: parts 1-26, 27-52, 
53-209, 210-299, 300-399, 400-699, 700-899, 900-999, 1000-1199, 1200-
1599, 1600-1899, 1900-1939, 1940-1949, 1950-1999, and part 2000 to end. 
The contents of these volumes represent all current regulations codified 
under this title of the CFR as of January 1, 2006.

    The Food and Nutrition Service current regulations in the volume 
containing parts 210-299, include the Child Nutrition Programs and the 
Food Stamp Program. The regulations of the Federal Crop Insurance 
Corporation are found in the volume containing parts 400-699.

    All marketing agreements and orders for fruits, vegetables and nuts 
appear in the one volume containing parts 900-999. All marketing 
agreements and orders for milk appear in the volume containing parts 
1000-1199.

    For this volume, Robert J. Sheehan was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Alomha S. Morris.

[[Page 1]]



                          TITLE 7--AGRICULTURE




                  (This book contains parts 400 to 699)

  --------------------------------------------------------------------
                                                                    Part

  SUBTITLE B--Regulations of the Department of Agriculture (Continued)

chapter iv--Federal Crop Insurance Corporation, Department 
  of Agriculture............................................         400

chapter v--Agricultural Research Service, Department of 
  Agriculture...............................................         500

chapter vi--Natural Resources Conservation Service, 
  Department of Agriculture.................................         600

[[Page 3]]

  Subtitle B--Regulations of the Department of Agriculture (Continued)

[[Page 5]]



     CHAPTER IV--FEDERAL CROP INSURANCE CORPORATION, DEPARTMENT OF 
                               AGRICULTURE




  --------------------------------------------------------------------
Part                                                                Page
400             General administrative regulations..........           7
401             [Reserved]
402             Catastrophic Risk Protection Endorsement....          81
403-406         [Reserved]
407             Group risk plan of insurance regulations for 
                    the 2005 and succeeding crop years......          85
408-411         [Reserved]
412             Public information--Freedom of information..         109
413-456         [Reserved]
457             Common crop insurance regulations...........         110
458             [Reserved]

[[Page 7]]



PART 400_GENERAL ADMINISTRATIVE REGULATIONS--Table of Contents




Subparts A-B [Reserved]

      Subpart C_General Administrative Regulations; Mutual Consent 
                              Cancellation

Sec.
400.27 Applicability.
400.28 Mutual consent criteria.
400.29-400.36 [Reserved]

Subparts D-E [Reserved]

 Subpart F_Food Security Act of 1985, Implementation; Denial of Benefits

400.45 Applicability.
400.46 Definitions.
400.47 Denial of crop insurance.
400.48 Protection of interests of tenants, landlords or producers.
400.49-400.50 [Reserved]

                   Subpart G_Actual Production History

400.51 Availability of actual production history program.
400.52 Definitions.
400.53 Yield certification and acceptability.
400.54 Submission and accuracy of production reports.
400.55 Qualifications for actual production history coverage program.
400.56 Administrative appeal exhaustion.
400.57 [Reserved]

   Subpart H_Information Collection Requirements Under the Paperwork 
                   Reduction Act; OMB Control Numbers

400.65-400.66 [Reserved]

Subpart I [Reserved]

                       Subpart J_Appeal Procedure

400.90 Definitions.
400.91 Applicability.
400.92 Appeals.
400.93 Administrative review.
400.94 Mediation.
400.95 Time limitations for filing and responding to requests for 
          administrative review.
400.96 Judicial review.
400.97 Reservations of authority.
400.98 Reconsideration process.

 Subpart K_Debt Management_Regulations for the 1986 and Succeeding Crop 
                                  Years

400.115 Purpose.
400.116 Definitions.
400.117 Determination of delinquency.
400.118 Demand for payment.
400.119 Notice to debtor; credit reporting agency.
400.120 Subsequent disclosure and verification.
400.121 Information disclosure limitations.
400.122 Attempts to locate debtor.
400.123 Request for review of the indebtedness.
400.124 Disclosure to credit reporting agencies.
400.125 Notice to debtor, collection agency.
400.126 Referral of delinquent debts to contract collection agencies.
400.127 [Reserved]
400.128 Definitions.
400.129 Salary offset.
400.130 Notice requirements before offset.
400.131 Request for a hearing and result if an employee fails to meet 
          deadlines.
400.132 Hearings.
400.133 Written decision following a hearing.
400.134 Review of FCIC record related to the debt.
400.135 Written agreement to repay debt as an alternative to salary 
          offset.
400.136 Procedures for salary offset; when deductions may begin.
400.137 Procedures for salary offset; types of collection.
400.138 Procedures for salary offset; methods of collection.
400.139 Nonwaiver of rights.
400.140 Refunds.
400.141 Internal Revenue Service (IRS) Tax Refund Offset.
400.142 Past-due legally enforceable debt eligible for refund offset.

Subpart L_Reinsurance Agreement_Standards for Approval; Regulations for 
                the 1997 and Subsequent Reinsurance Years

400.161 Definitions.
400.162 Qualification ratios.
400.163 Applicability.
400.164 Availability of the Standard Reinsurance Agreement.
400.165 Eligibility for Standard Reinsurance Agreements.
400.166 Obligations of the Corporation.
400.167 Limitations on Corporation's obligations.
400.168 Obligations of participating insurance company.
400.169 Disputes.
400.170 General qualifications.
400.171 Qualifying when a state does not require that an Annual 
          Statutory Financial Statement be filed.
400.172 Qualifying with less than two of the required ratios or ten of 
          the analytical ratios meeting the specified requirements.
400.173 [Reserved]

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400.174 Notification of deviation from financial standards.
400.175 Revocation and non-acceptance.
400.176 State action preemptions.
400.177 [Reserved]

   Subpart M_Agency Sales and Service Contract_Standards for Approval

400.201 Applicability of standards.
400.202 Definitions.
400.203 Financial statement and certification.
400.204 Notification of deviation from standards.
400.205 Denial or termination of contract and administrative 
          reassignment of business.
400.206 Financial qualifications for acceptability.
400.207 Representative licensing and certification.
400.208 Term of the contract.
400.209 Electronic transmission and receiving system.
400.210 [Reserved]

Subpart N [Reserved]

 Subpart O_Non-Standard Underwriting Classification System Regulations 
                 for the 1991 and Succeeding Crop Years

400.301 Basic, purpose, and applicability.
400.302 Definitions.
400.303 Initial selection criteria.
400.304 Nonstandard Classification determinations.
400.305 Assignment of Nonstandard Classifications.
400.306 Spouses and minor children.
400.307 Discontinuance of participation.
400.308 Notice of Nonstandard Classification.
400.309 Requests for reconsideration.

           Subpart P_Preemption of State Laws and Regulations

400.351 Basis and applicability.
400.352 State and local laws and regulations preempted.

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

400.401 Basis and purpose and applicability.
400.402 Definitions.
400.403 Required system of records.
400.404 Policyholder responsibilities.
400.405 Agent and loss adjuster responsibilities.
400.406 Insurance provider responsibilities.
400.407 Restricted access.
400.408 Safeguards and storage.
400.409 Unauthorized disclosure.
400.410 Penalties.
400.411 Obtaining personal records.
400.412 Record retention.
400.413 [Reserved]

                           Subpart R_Sanctions

400.451 General.
400.452 Definitions.
400.453 Exhaustion of administrative remedies.
400.454 Civil penalties.
400.455 Governmentwide debarment and suspension (procurement).
400.456 Governmentwide debarment and suspension (nonprocurement).
400.457 Program Fraud Civil Remedies Act.
400.458 Scheme or device.
400.459 Indebtedness.
400.460-400.500 [Reserved]

Subpart S [Reserved]

    Subpart T_Federal Crop Insurance Reform, Insurance Implementation

400.650 Purpose.
400.651 Definitions.
400.652 Insurance availability.
400.653 Determining crops of economic significance.
400.654 Application and acreage report.
400.655 Eligibility for other program benefits.
400.656-400.657 [Reserved]

 Subpart U_Ineligibility for Programs Under the Federal Crop Insurance 
                                   Act

400.675 Purpose.
400.676 [Reserved]
400.677 Definitions.
400.678 Applicability.
400.679 Criteria for ineligibility.
400.680 Determination and notification of ineligibility.
400.681 Effect of ineligibility.
400.682 Criteria for reinstatement of eligibility.
400.683 Administration and maintenance.

   Subpart V_Submission of Policies, Provisions of Policies, Rates of 
                  Premium, and Premium Reduction Plans

400.700 Basis, purpose, and applicability.
400.701 Definitions.
400.702 Confidentiality of submission and duration of confidentiality.
400.703 Timing of submission.
400.704 Type of submission.
400.705 Contents required for a new submission or changes to a 
          previously approved submission.
400.706 Review of submission.
400.707 Presentation to the Board for approval or disapproval.

[[Page 9]]

400.708 Approved submission.
400.709 Roles and responsibilities.
400.710 Preemption and premium taxation.
400.711 Right of review, modification, and the withdrawal of 
          reinsurance.
400.712 Research and development reimbursement, maintenance 
          reimbursement, and user fees.
400.713 Non-reinsured supplemental (NRS) policy.
400.714 Requests for the opportunity to offer a premium discount.
400.715 Limitations and prohibitions.
400.716 Contents of the request for the opportunity to offer a premium 
          discount.
400.717 New approved insurance providers.
400.718 RMA Review
400.719 Terms and conditions for the Premium Reduction Plan.
400.720 Standards for approval of a premium discount.
400.721 Determinations and reconsiderations.
400.722 Consumer complaints.

Subpart W [Reserved]

    Subpart X_Interpretations of Statutory and Regulatory Provisions

400.765 Basis and applicability.
400.766 Definitions.
400.767 Requester obligations.
400.768 FCIC obligations.

Subparts A-B [Reserved]



      Subpart C_General Administrative Regulations; Mutual Consent 
                              Cancellation

    Authority: 7 U.S.C. 1501 et seq.

    Source: 57 FR 56438, Nov. 30, 1992, unless otherwise noted.



Sec. 400.27  Applicability.

    Notwithstanding any provisions of the crop insurance policy to the 
contrary, the mutual consent provision contained herein shall be 
applicable to all new crop insurance policies issued by the Federal Crop 
Insurance Corporation (7 CFR part 401 et seq.), or by a company 
reinsured by the Federal Crop Insurance Corporation, effective for the 
applicable crop year only if those policies meet the requirements of 
Sec. 400.28 of this subpart and if the crop insured is the same as the 
crop for which a disaster payment application (CCC 441) was filed for 
the previous crop year.

[58 FR 67304, Dec. 21, 1993]



Sec. 400.28  Mutual consent criteria.

    (a) An insured may request policy cancellation for the crop year for 
which the insured filed a CCC 441 for the applicable crop year if 
written documentation is provided, signed by an authorized Agricultural 
Stabilization and Conservation Service official, certifying the 
cancellation is based on one of the following conditions:
    (1) Insurance was not a condition of eligibility for disaster 
payment, based on one or more of the statutory criteria; or
    (2) the producer withdrew his application for disaster payments with 
prejudice or it was rejected by Commodity Credit Corporation;
    (b) Cancellation requests must be received in writing no later than 
three weeks after the date:
    (1) The disaster payment check is issued; or
    (2) The producer is notified that an application for disaster 
payment has been rejected; or
    (3) The producer withdraws from the disaster payment program.
    (c) Carryover policies are not available for mutual consent 
cancellation. Crop insurance applications dated before the disaster 
cancellation date (available in the insureds' service office) are not 
eligible for mutual consent cancellations.

[57 FR 56438, Nov. 30, 1992, as amended at 58 FR 67304, Dec. 21, 1993]



Sec. Sec. 400.29-400.36  [Reserved]

Subparts D-E [Reserved]



 Subpart F_Food Security Act of 1985, Implementation; Denial of Benefits

    Authority: Secs. 1506, 1516, Pub. L. 75-430, 52 Stat. 73, 77, as 
amended (7 U.S.C. 1501 et seq.); sec. 1244, Pub. L. 99-198.

    Source: 52 FR 19128, May 21, 1987, unless otherwise noted.

[[Page 10]]



Sec. 400.45  Applicability.

    (a) The regulations in this subpart implement Chapter XII and 
section 1764 of the Food Security Act of 1985 (Pub. L. 99-198) (the Act) 
requiring the denial of crop insurance to persons who are determined to 
have performed certain practices prohibited by the Act or who have 
violated certain federal or State statutes or the regulations 
implementing the Act. The provisions of this subpart are applicable to 
all crop insurance policies written by the Federal Crop Insurance 
Corporation (the Corporation) or reinsured by the Corporation.
    (b) The provisions of this subpart will be effective for the crop 
and crop year immediately following the first crop cancellation date 
occurring after the effective date of the Act for all crop policies 
reinsured by FCIC, and for all policies and regulations for crop 
insurance issued by FCIC.



Sec. 400.46  Definitions.

    For the purpose of this regulation and in addition to the 
definitions included at 7 CFR 12.2, the following definitions are 
applicable:
    (a) Controlled substance means any prohibited drug-producing plants 
including, but not limited to, cacti of the genus lophophora, coca 
bushes (erythroxylum coca), marijuana (cannabis satiua), opium poppies 
(papauer somniferum), and other drug-producing plants, the planting and 
harvesting of which is prohibited by Federal or State law.
    (b) Person means any producer, tenant, or landlord, insured under a 
policy of crop insurance issued by FCIC, or by a multi-peril insurance 
company whose crop insurance policy is reinsured by FCIC.
    (c) State means each of the fifty States, the District of Columbia, 
the Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United 
States, American Samoa, the Commonwealth of the Northern Mariana 
Islands, or the Trust Territory of the Pacific.
    (d) The Act means the Food Security Act of 1985 (Pub. L. 99-198).



Sec. 400.47  Denial of crop insurance.

    (a) Any person convicted under Federal or State law of planting, 
cultivating, growing, producing, harvesting or storing a controlled 
substance in any crop year will be ineligible for crop insurance during 
that crop year and the four succeeding crop years.
    (1) The insurance of such person insured by FCIC who found to be 
ineligible under paragraph (a) of this section will be null and void, 
and any indemnity paid on such insurance must be returned in full to 
FCIC. Any premium paid for insurance coverage declared null and void 
will be returned, less a reasonable amount for expenses and handling not 
to exceed 20 percent of the premium paid.
    (2) The application and policy of insurance will be voided, or the 
person will be removed from the policy and the policyholder share 
reduced in accordance with 7 CFR 400.681(b), when any person becomes 
ineligible for crop insurance under the provisions of paragraph (a) of 
this section. To obtain crop insurance coverage following the period of 
ineligibility, the person must submit a new application for crop 
insurance.
    (b) Any insurance written by a multi-peril crop insurance company to 
any person who is ineligible under the provisions of this subpart is not 
eligible for reinsurance under the Corporation's standard reinsurance 
agreement. Any premium subsidy and expense allowance or loss paid by the 
Corporation because of such agreement will be immediately refunded to 
the Corporation. Notwithstanding any other provision of law, policies 
written by multi-peril crop insurance companies to any person ineligible 
under the provisions of this subpart are null and void. Premium paid for 
such policies will be refunded to the person applying for insurance, 
less a reasonable amount for expenses and handling not to exceed 20 
percent of the premium paid, and no indemnity will be paid unless the 
multi-peril company expressly agrees to continue such policy in effect 
without FCIC reinsurance. However, if the reinsured company follows the 
procedure of the Corporation and the requirements of the regulations, 
reinsurance will continue to be provided under the reinsurance agreement 
on the policy unless it is shown that the agent or company

[[Page 11]]

had knowledge of facts which would indicate ineligibility on the part of 
the insured and failed to act on that knowledge.
    (c) FCIC employees or contractors are required to report all 
suspected cases of violation of the Act or the regulations to the 
appropriate agency for a determination of violation. Benefits shall not 
be paid in such cases pending a determination from the appropriate 
agency.
    (d) Notwithstanding any other provision of this subpart, any crop 
insurance policy where insurance attached to a crop prior to August 15, 
1986, will continue in effect for that crop until the next termination 
date following August 15, 1986.

[52 FR 19128, May 21, 1987, as amended at 58 FR 17945, Apr. 7, 1993; 61 
FR 38058, July 23, 1996; 65 FR 29942, May 10, 2000]



Sec. 400.48  Protection of interests of tenants, landlords or producers.

    Any tenant, landlord or producer on the farm separate from the 
person declared ineligible for crop insurance under the provisions of 
Sec. 400.47 of this part, will remain eligible for crop insurance on 
their insurable share in the crop, unless such tenant, landlord, or 
producer on the farm is:
    (a) Also convicted of planting, cultivating, growing, producing, or 
storing a controlled substance;
    (b) Otherwise determined by FCIC to be ineligible for crop 
insurance.

[52 FR 19128, May 21, 1987, as amended at 61 FR 38058, July 23, 1996]



Sec. Sec. 400.49-400.50  [Reserved]



                   Subpart G_Actual Production History

    Authority: 7 U.S.C. 1506, 1516.

    Source: 59 FR 47787, Sept. 19, 1994, unless otherwise noted.



Sec. 400.51  Availability of actual production history program.

    An Actual Production History (APH) Coverage Program is offered under 
the provisions contained in the following regulations:

7 CFR part 457--Common Crop Insurance Regulations; and all special 
provisions thereto unless specifically excluded by the special 
provisions.

    The APH program operates within limits prescribed by, and in 
accordance with, the provisions of the Federal Crop Insurance Act, as 
amended (7 U.S.C. 1501 et seq.), only on those crops identified in this 
section in those areas where the Actuarial Table provides coverage. 
Except when in conflict with this subpart, all provisions of the 
applicable crop insurance contract for these crops apply.

[59 FR 47787, Sept. 19, 1994, as amended at 69 FR 9520, Mar. 1, 2004]



Sec. 400.52  Definitions.

    In addition to the definitions contained in the crop insurance 
contract, the following definitions apply for the purposes of the APH 
Coverage Program:
    (a) APH--Actual Production History.
    (b) Actual yield--The yield per acre for a crop year calculated from 
the production records or claims for indemnities. The actual yield is 
determined by dividing total production (which includes harvested and 
appraised production) by planted acres for annual crops or by insurable 
acres for perennial crops.
    (c) Adjusted yield--The transitional or determined yield reduced by 
the applicable percentage for lack of records. The adjusted yield will 
equal 65 percent of the transitional or determined yield, if no producer 
records are submitted; 80 percent, if records for one year are 
submitted; and 90 percent, if two years of records are submitted.
    (d) Appraised production--Production determined by the Agricultural 
Stabilization and Conservation Service (ASCS), the FCIC, or a company 
reinsured by the FCIC, that was unharvested but which reflected the 
crop's yield potential at the time of the appraisal. For the purpose of 
APH ``appraised production'' specifically excludes production lost due 
to uninsurable causes.
    (e) Approved APH yield--A yield, calculated and approved by the 
verifier, used to determine the production guarantee and determined by 
the sum of the yearly actual, assigned, and adjusted or unadjusted 
transitional or determined yields divided by the number

[[Page 12]]

of yields contained in the database. The database may contain up to 10 
consecutive crop years of actual and or assigned yields. At least four 
yields will always exist in the database.
    (f) Assigned yield--A yield assigned by FCIC in accordance with the 
crop insurance contract, if the insured does not file production reports 
as required by the crop insurance contract. Assigned yields are used in 
the same manner as actual yields when calculating APH yields except for 
purposes of the Nonstandard Classification System (NCS).
    (g) Base period--Ten consecutive crop years (except peaches, which 
have a five-year base period) immediately preceding the crop year 
defined in the insurance contract for which the approved APH yield is 
being established (except for sugarcane, which begins the calendar year 
preceding the immediate previous crop year defined in the insurance 
contract).
    (h) Continuous production reports--Reports submitted by a producer 
for each crop year that the unit was planted to the crop and for the 
most recent crop year in the base period.
    (i) Crop year--Defined in the crop insurance contract, however, for 
APH purposes the term does not include any year when the crop was not 
planted or when the crop was prevented from being planted by an 
insurable cause. For example, if an insured plants acreage in a county 
to wheat one year, that year is a crop year in accordance with the 
policy definition. If the land is summerfallowed the next calendar year, 
that calendar year is not a crop year for the purpose of APH.
    (j) Database--A minimum of four years up to a maximum of ten crop 
years of production data used to calculate the approved APH yield.
    (k) Determined yield (D-yield)--An estimated year for certain crops, 
which can be determined by multiplying an average yield for the crop 
(attained by using data available from The National Agricultural 
Statistics Service (NASS) or comparable sources) by a percentage 
established by the FCIC for each county.
    (l) Master yields--Approved APH yields, for certain crops and 
counties as initially designated by the FCIC, based on a minimum of four 
crop years of production records for a crop within a county.
    (m) New producer--A person who has not been actively engaged in 
farming for a share of the production of the insured crop for more than 
two crop years.
    (n) Production report--A written record showing the insured crop's 
annual production and used to determine the insured's yield for 
insurance purposes. The report contains yield history by unit, if 
applicable, including planted acreage for annual crops, insurable 
acreage for perennial crops, and harvested and appraised production for 
the previous crop years. This report must be supported by written 
verifiable records, measurement of farm stored production, or by other 
records of production approved by FCIC on an individual basis. 
Information contained in a claim for indemnity is considered a 
production report for the crop year for which the claim was filed.
    (o) Production Reporting Date (PRD)--The PRD is contained in the 
crop insurance contract and is the last date production reports will be 
accepted for inclusion in the database for the current crop year.
    (p) Transitional yield (T-Yield)--An estimated yield, for certain 
crops, generally determined by multiplying the ASCS program yield by a 
percentage determined by the FCIC for each county and provided on the 
actuarial table to be used in the APH yield calculation process when 
less than four consecutive crop years of actual or assigned yields are 
available.
    (q) Verifiable records--Contemporaneous records of acreage and 
production provided by the insured, which may be verified by FCIC 
through an independent source, and which are used to substantiate the 
acreage and production that have been reported on the production report.
    (r) Verifier--A person authorized by the FCIC to calculate approved 
APH yields.
    (s) Yield variance tables--Tables for certain crops that indicate 
unacceptable yield variations and yield trends which will require 
determination of the APH yield by the FCIC.

[[Page 13]]



Sec. 400.53  Yield certification and acceptability.

    (a) Production reports must be provided to the crop insurance agent 
no later than the production reporting date for the crop insured.
    (1) Production reports must provide an accurate account of planted 
acreage for annual crops or insurable acres for perennial crops, as well 
as harvested and appraised production by unit.
    (2) The insured must certify the accuracy of the information.
    (3) Production reported for more than one crop year must be 
continuous. A year in which no acreage was planted to the crop on a unit 
or no acreage was planted to a practice, type, or variety requiring an 
APH yield will not be considered a break in continuity. Assigned yields, 
at the discretion of the FCIC, may be used to maintain continuity of 
yield data of file. Production on uninsured (for those years a crop 
insurance policy under the Federal Crop Insurance Act is in effect) or 
uninsurable acreage (for other years of the period) will not be used to 
determine APH yield unless production from such acreage is commingled 
with production from insured or insurable acreage.
    (b) Production reports and supporting records are subject to audit 
or review to verify the accuracy of the information certified. 
Production and supporting records may be reviewed and verified if a 
claim for indemnity is submitted on the insured crop. The reported yield 
is subject to revision, if needed, so that the claim conforms to the 
records submitted at that time.
    (1) Inaccurate production reports or failure to retain acceptable 
records shall result in the verifier combining optional farm units and 
recomputing the approved APH yield. These actions shall be taken at any 
time after reporting or record discrepancies are identified and may 
result in reduction of the approved APH yield for any calendar year.
    (2) Records must be provided by the insured at the time of an audit, 
review, or as otherwise requested, to verify that the acreage and 
production certified are accurate. Records of any other person having 
shares in the insured crop, which are used by the insured to establish 
the approved APH yield, must also be provided upon request.
    (3) In the event acreage or production data certified by two or more 
persons sharing in the crop on the same acreage is different, the 
verifier shall, at the verifier's discretion, determine which acreage 
and production data, if any, will be used to determine the approved APH 
yield. If the correct acreage and production cannot be determined, the 
data submitted will be considered unacceptable by the verifier for APH 
purposes.
    (4) Failure of the producer to report acreage and production 
completely and accurately may result in voidance of the crop insurance 
contract, as well as criminal or civil false claims penalties pursuant 
to applicable Federal criminal or civil statutes.



Sec. 400.54  Submission and accuracy of production reports.

    (a) The insured is solely responsible for the timely submission and 
certification of accurate, complete production reports to the agent. 
Production reports must be provided for all planted units.
    (b) Records may be requested by the FCIC, or an insurance company 
reinsured by the FCIC, or by anyone acting on behalf of the FCIC or the 
insurance company. The insured must provide such records upon request.
    (c) The agent will explain the APH Program to insureds and 
prospective insureds. When necessary, the agent will assist the insured 
in preparation of production reports. The agent will determine the 
adjusted or unadjusted transitional or determined yields in accordance 
with Sec. 400.54(b). The agent will review the production reports and 
forward them to the verifier, along with any requested and required 
supporting records for determination of an approved APH yield.
    (d) The verifier will determine if the certified production reports 
are acceptable and calculate the approved APH yield.



Sec. 400.55  Qualification for actual production history coverage program.

    (a) The approved APH yield is calculated from a database containing 
a

[[Page 14]]

minimum of four yields and will be updated each subsequent crop year. 
The database may contain a maximum of the 10 most recent crop years and 
may include actual, assigned, and adjusted or unadjusted T or D-Yields. 
T or D-Yields, adjusted or unadjusted, will only occur in the database 
when there are less than four years of actual and/or assigned yields.
    (b) The insured may be required to provide production records to 
determine the approved APH yield, if production records for the most 
recent crop year are available. If acceptable records of actual 
production are provided, the records must be continuous and contain at 
least the most recent crop year's actual yield.
    (1) If no acceptable production records are available, the approved 
APH yield is the adjusted T or D-Yield (65 percent of T or D-Yield).
    (2) If acceptable production records containing information for only 
the most recent crop year are provided, the three T or D-Yields adjusted 
by 80 percent will be used to complete the minimum database and 
calculate the approved APH yield.
    (3) If acceptable production records containing information for only 
the two most recent crop years are provided, the two T or D-Yields 
adjusted by 90 percent and the two actual yields will be used to 
complete the database and calculate the approved APH yield.
    (4) If acceptable production records containing information for only 
the three most recent crop years are provided, the three actual yields 
and one unadjusted T or D-Yield are used to complete the database and 
calculate the approved APH yield.
    (5) When the database contains four or more (up to ten) continuous 
actual yields, the approved APH yield is a simple average of the actual 
yields.
    (6) New producers may have their approved APH yields based on 
unadjusted T or D-Yields or a combination of actual and unadjusted T or 
D-Yields.
    (7) Producers who add land or new practice, types and varieties to 
their farming operations and who do not have available records for the 
added land, practice, types or varieties may have approved APH yields 
for the added land, practice, types or varieties that are based on 
adjusted or unadjusted T or D-Yields as determined by FCIC.
    (8) If the producer's crop is destroyed or if it produces a low 
actual yield due to insured causes of loss, the resulting average yield 
may qualify for catastrophic yield adjustment according to FCIC 
guidelines. APH yields qualifying for catastrophic yield adjustment may 
be adjusted to mitigate the effect of catastrophic years. Premium rates 
for approved APH yields, which are adjusted for catastrophic years, may 
be based on the producer's APH average yield prior to the catastrophic 
adjustment or such other basis as determined appropriate by FCIC.
    (c) If no insurable acreage of the insured crop is planted for a 
year, a production report indicating zero planted acreage will maintain 
the continuity of production reports for APH record purposes and that 
calendar year will not be included in the APH yield calculations.
    (d) Actual yields calculated from the claim for indemnity will be 
entered in the database. The resulting average yield will be used to 
determine the premium rate and approved APH yield, at the discretion of 
FCIC.
    (e) Optional units are not available to an insured who does not 
provide acceptable production reports for at least the most recent crop 
year with which to calculate an approved APH yield.
    (f) FCIC may determine approved APH yields for designated crops in 
the following situations:
    (1) If less than four years of yield history is certified and T or 
D-Yields are not provided in the actuarial documents,
    (2) If actual yield exceed tolerances specified in yield variance 
tables, and
    (3) For perennial crops:
    (i) If significant upward or downward yield trends are indicated;
    (ii) If tree or vine damage, or cultural practices will reduce the 
production level;
    (iii) if more than two percent of the trees or vines have been 
removed within the last two years; or
    (iv) If yield trends are evident and yields greater than the average 
yield are requested by the insured.

[[Page 15]]

    (g) APH yields will not be approved the first insurance year on 
perennial crops until an inspection acceptable to FCIC has been 
performed and the acreage is accepted for insurance purposes in 
accordance with the crop insurance contract.
    (h) APH Master Yields may be established whenever crop rotation 
requirements and land leasing practices limit the yield history 
available. FCIC will establish crops and locations for which Master 
Yields are available. To qualify, the producer must have at least four 
recent continuous crop years' annual production reports and must certify 
the authenticity of the production reports of the insured crop. Master 
Yields are based on acreage and production history from all acreage of 
the insured crop in the county in which the operator has shared in the 
crop's production.
    (i) FCIC may use any production report available under the 
provisions of any crop insurance contract, whether continuous or not, 
involving the interests of the person's insured crops in determining the 
approved APH yield.



Sec. 400.56  Administrative appeal exhaustion.

    The insured may appeal the approved APH yield in accordance with the 
procedures contained in 7 CFR part 400, subpart J. Administrative 
remedies through the appeal process must be exhausted prior to any 
action for judicial review. The approved APH yield determined as a 
result of the appeal process will be the yield applicable to the crop 
year.



Sec. 400.57  [Reserved]



   Subpart H_Information Collection Requirements Under the Paperwork 
                   Reduction Act; OMB Control Numbers

    Authority: 5 U.S.C. 1320, Pub. L. 96-511 (44 U.S.C., chapter 35).

    Source: 56 FR 49390, Sept. 30, 1991, unless otherwise noted.



Sec. 400.65-400.66  [Reserved]

Subpart I [Reserved]



                       Subpart J_Appeal Procedure

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

    Source: 67 FR 13251, Mar. 22, 2002, unless otherwise noted.



Sec. 400.90  Definitions.

    Act. The Federal Crop Insurance Act (7 U.S.C. 1501-1524).
    Administrative review. A review within the Department of Agriculture 
of an adverse decision.
    Adverse decision. A decision by an employee or Director of the 
Agency that is adverse to the participant. The term includes the denial 
of program benefits, written agreements, eligibility, etc. that results 
in the participant receiving less funds than the participant believes 
should have been paid or not receiving a benefit to which the 
participant believes he or she was entitled.
    Agency. RMA or FCIC, including the RSO, FOSD or any other division 
within the Agency with decision making authority.
    Appellant. Any participant who appeals or requests mediation of an 
adverse decision of the Agency in accordance with this subpart. Unless 
otherwise specified in this subpart, the term ``appellant'' includes an 
authorized representative.
    Authorized representative. Any person, whether or not an attorney, 
who has obtained a Privacy Act waiver and is authorized in writing by a 
participant to act for the participant in the administrative review, 
mediation, or appeal process.
    Certified State. A State with a mediation program, approved by the 
Secretary, that meets the requirements of 7 CFR part 1946, subpart A, or 
a successor regulation.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
Government corporation within USDA.
    FOSD. The Fiscal Operations and Systems Division established by the 
Agency for the purpose of making determinations of indebtedness for 
policies insured by FCIC and for determining ineligibility for policies 
both insured and reinsured by FCIC.
    FSA. The Farm Service Agency, an agency within USDA, or its 
successor agency.

[[Page 16]]

    Good farming practices. For agricultural commodities insured under 
the terms contained in 7 CFR part 457 and all other crop insurance 
policies authorized under the Act, except as provided herein, means the 
good farming practices as defined at 7 CFR 457.8. For agricultural 
commodities insured under the terms contained in 7 CFR part 407, means 
the good farming practices as defined at 7 CFR 407.9.
    Insured. An individual or entity that has applied for crop insurance 
or who holds a crop insurance policy that was in effect for the previous 
crop year and continues to be in effect for the current crop year.
    Mediation. A process in which a trained, impartial, neutral third 
party (the mediator), meets with the disputing parties, facilitates 
discussions, and works with the parties to mutually resolve their 
disputes, narrow areas of disagreement, and improve communication.
    NAD. The USDA National Appeals Division. See 7 CFR part 11.
    Non-certified State. A State that is not approved by the Secretary 
of Agriculture to participate in the USDA Mediation Program under 7 CFR 
part 1946, subpart A, or its successor regulation.
    Participant. An individual or entity that has applied for crop 
insurance or who holds a valid crop insurance policy that was in effect 
for the previous crop year and continues to be in effect for the current 
crop year. The term does not include individuals or entities whose 
claims arise under the programs excluded in the definition of 
participant published at 7 CFR 11.1.
    Reinsured company. A private insurance company, including its 
agents, that has been approved and reinsured by FCIC to provide 
insurance to participants.
    Reviewing authority. A person assigned the responsibility by the 
Agency of making a decision on a request for administrative review by 
the participant in accordance with this subpart.
    RMA. The Risk Management Agency, an agency within USDA, or its 
successor agency.
    RSO. The Regional Service Office established by the Agency for the 
purpose of providing program and underwriting services for private 
insurance companies reinsured by FCIC under the Act and for FCIC 
insurance contracts delivered through FSA offices.
    Secretary. The Secretary of Agriculture.
    USDA. United States Department of Agriculture.

[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]



Sec. 400.91  Applicability.

    (a) This subpart applies to:
    (1) Adverse decisions made by personnel of the Agency with respect 
to:
    (i) Contracts of insurance insured by FCIC; and
    (ii) Contracts of insurance of private insurance companies and 
reinsured by FCIC under the provisions of the Act.
    (2) Determinations of good farming practices made by personnel of 
the Agency or the reinsured company (see Sec. 400.98).
    (b) This subpart is not applicable to any decision:
    (1) Made by the Agency with respect to any matter arising under the 
terms of the Standard Reinsurance Agreement with the reinsured company; 
or
    (2) Made by any private insurance company with respect to any 
contract of insurance issued to any producer by the private insurance 
company and reinsured by FCIC under the provisions of the Act, except 
for determinations of good farming practices specified in Sec. 
400.91(a)(2).
    (c) With respect to matters identified in Sec. 400.91(a)(1), 
participants may request an administrative review, mediation, or appeal 
of adverse decisions by the Agency made with respect to:
    (1) Denial of participation in the crop insurance program;
    (2) Compliance with terms and conditions of insurance;
    (3) Issuance of payments or other program benefits to a participant 
in the crop insurance program; and
    (4) Issuance of payments or other benefits to an individual or 
entity who is not a participant in the crop insurance program.
    (d) Only a participant may seek an administrative review or 
mediation under this subpart, as applicable.

[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]

[[Page 17]]



Sec. 400.92  Appeals.

    (a) Except for determinations of good farming practices, nothing in 
this subpart prohibits a participant from filing an appeal of an adverse 
decision directly with NAD in accordance with part 11 of this title 
without first requesting administrative review or mediation under this 
subpart.
    (b) If the participant has timely requested administrative review or 
mediation, the participant may not participate in a NAD hearing until 
such administrative review or mediation is concluded. The time for 
appeal to NAD is suspended from the date of receipt of a request for 
administrative review or mediation until the conclusion of the 
administrative review or mediation. The participant will have only the 
remaining time to appeal to NAD after the conclusion of the 
administrative review or mediation.

[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]



Sec. 400.93  Administrative review.

    (a) With respect to adverse decisions, an appellant may seek one 
administrative review or seek mediation under Sec. 400.94, but not 
both.
    (b) If the appellant seeks an administrative review, the appellant 
must file a written request for administrative review with the reviewing 
authority in accordance with Sec. 400.95. The written request must 
state the basis upon which the appellant relies to show that:
    (1) The decision was not proper and not made in accordance with 
applicable program regulations and procedures; or
    (2) All material facts were not properly considered in such 
decision.
    (c) The reviewing authority will issue a written decision that will 
not be subject to further administrative review by the Agency.

[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]



Sec. 400.94  Mediation.

    For adverse decisions only:
    (a) Appellants have the right to seek mediation or other forms of 
alternative dispute resolution instead of an administrative review under 
Sec. 400.93.
    (b) All requests for mediation under this subpart must be made after 
issuance of the adverse decision by the Agency and before the appellant 
has a NAD hearing on the adverse decision.
    (c) An appellant who chooses mediation must request mediation not 
later than 30 calendar days from receipt of the written notice of the 
adverse decision. A request for mediation will be considered to have 
been ``filed'' when personally delivered in writing to the appropriate 
decision maker or when the properly addressed request, postage paid, is 
postmarked.
    (d) An appellant will have any balance of the days remaining in the 
30-day period to appeal to NAD if mediation is concluded without 
resolution. If a new adverse decision that raises new matters or relies 
on different grounds is issued as a result of mediation, the participant 
will have a new 30-day period for appeals to NAD.
    (e) An appellant is responsible for contacting the Certified State 
Mediation Program in States where such mediation program exists. The 
State mediation program will make all arrangements for the mediation 
process. A list of Certified State Mediation Programs is available at 
http://www.act.fcic.usda.gov.
    (f) An appellant is responsible for making all necessary contacts to 
arrange for mediation in non-certified States or in certified States 
that are not currently offering mediation on the subject in dispute. An 
appellant needing mediation in States without a certified mediation 
program may request mediation by contacting the RSO, which will provide 
the participant with a list of acceptable mediators.
    (g) An appellant may only mediate an adverse decision once.
    (h) If the dispute is not completely resolved in mediation, the 
adverse decision that was the subject of the mediation remains in effect 
and becomes the adverse decision that is appealable to NAD.
    (i) If the adverse decision is modified as a result of the mediation 
process, the modified decision becomes the new adverse decision for 
appeal to NAD.

[[Page 18]]



Sec. 400.95  Time limitations for filing and responding to requests 
for administrative review.

    (a) A request for administrative review must be filed within 30 days 
of receipt of written notice of the adverse decision. A request for an 
administrative review will be considered to have been ``filed'' when 
personally delivered in writing to the appropriate decision maker or 
when the properly addressed request, postage paid, is postmarked.
    (b) Notwithstanding paragraph (a) of this section, an untimely 
request for administrative review may be accepted and acted upon if the 
participant can demonstrate a physical inability to timely file the 
request for administrative review.

[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]



Sec. 400.96  Judicial review.

    Except as provided in Sec. 400.98, with respect to adverse 
determinations:
    (a) A participant must exhaust administrative remedies before 
seeking judicial review of an adverse decision. This requires the 
participant to appeal an Agency adverse decision to NAD in accordance 
with 7 CFR part 11 prior to seeking judicial review of the adverse 
decision.
    (b) If the adverse decision involves a matter determined by the 
Agency to be not appealable, the appellant must request a determination 
of non-appealability from the Director of NAD, and appeal the adverse 
decision to NAD if the Director determines that it is appealable, prior 
to seeking judicial review.
    (c) A participant with a contract of insurance reinsured by the 
Agency may bring suit against the Agency if the suit involves an adverse 
action in a United States district court after exhaustion of 
administrative remedies as provided in this section. Nothing in this 
section can be construed to create privity of contract between the 
Agency and a participant.

[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]



Sec. 400.97  Reservations of authority.

    (a) Representatives of the Agency may correct all errors in entering 
data on program contracts and other program documents, and the results 
of computations or calculations made pursuant to the contract.
    (b) Nothing contained in this subpart precludes the Secretary, the 
Manager of FCIC, or the Administrator of RMA, or a designee, from 
determining at any time any question arising under the programs within 
their respective authority or from reversing or modifying any adverse 
decision.



Sec. 400.98  Reconsideration process.

    (a) This reconsideration process only applies to determinations of 
good farming practices under Sec. 400.91(a)(2).
    (b) There is no appeal to NAD of determinations or reconsideration 
decisions regarding good farming practices.
    (c) Only reconsideration is available for determinations of good 
farming practices. Mediation is not available for determinations of good 
farming practices.
    (d) If the insured seeks reconsideration, the insured must file a 
written request for reconsideration to the following: USDA/RMA/Deputy 
Administrator for Insurance Services/Stop 0805, 1400 Independence Avenue 
SW., Washington, DC 20250-0801.
    (1) A request for reconsideration must be filed within 30 days of 
receipt of written notice of the determination regarding good farming 
practices. A request for reconsideration will be considered to have been 
``filed'' when personally delivered in writing to FCIC or when the 
properly addressed request, postage paid, is postmarked.
    (2) Notwithstanding paragraph (d)(1) of this section, an untimely 
request for reconsideration may be accepted and acted upon if the 
insured can demonstrate a physical inability to timely file the request 
for reconsideration.
    (3) The written request must state the basis upon which the insured 
relies to show that:
    (i) The decision was not proper and not made in accordance with 
applicable program regulations and procedures; or
    (ii) All material facts were not properly considered in such 
decision.
    (e) With respect to determinations of good farming practices, the 
insured is

[[Page 19]]

not required to exhaust the administrative remedies in 7 CFR part 11 
before bringing suit against FCIC in a United States district court. 
However, regardless of whether the Agency or the reinsured company makes 
the determination, the insured must seek reconsideration under Sec. 
400.98 before bringing suit against FCIC in a United States District 
Court. The insured cannot file suit against the reinsured company for 
determinations of good farming practices.
    (f) Any reconsideration decision by the Agency regarding good 
farming practices shall not be reversed or modified as a result of 
judicial review unless the reconsideration decision is found to be 
arbitrary or capricious.

[68 FR 37720, June 25, 2003]



 Subpart K_Debt Management_Regulations for the 1986 and Succeeding Crop 
                                  Years

    Authority: Secs. 506, 516, Pub. L. 75-430, 52 Stat. 73, 77, as 
amended (7 U.S.C. 1506, 1516).

    Source: 51 FR 17316, May 12, 1986, unless otherwise noted.



Sec. 400.115  Purpose.

    This subpart sets forth procedures that will be followed, and the 
rights afforded to debtors, in connection with the reporting by the 
Federal Crop Insurance Corporation (FCIC) to credit reporting agencies 
of information with respect to current and delinquent debts owed to 
FCIC, and in connection with referral of delinquent debts to contract 
collection agencies.



Sec. 400.116  Definitions.

    (a) Credit reporting agency means (1) a reporting agency as defined 
at 4 CFR 102.5(a), or (2) any entity which has entered into an agreement 
with USDA concerning the referral of credit information.
    (b) Collection agency means a private debt collection contractor 
under Federal Supply Schedule contract with the General Services 
Administration (GSA) for professional debt collection services.
    (c) Comptroller means the employee of FCIC filling that position or 
the person designated by the Comptroller to perform that function.
    (d) Debt and claim are deemed synonymous and are used 
interchangeably herein. The debt or claim is an amount of money which 
has been determined by an appropriate agency official to be owed to FCIC 
by any individual, organization or entity, except another Federal 
agency; State, local or foreign government or agencies thereof; Indian 
tribal governments; or other public institutions.


The debt or claim may have arisen from overpayment, premium non-payment, 
interest, penalties, reclamations resulting from payments under good 
faith reliance provisions, or other causes.
    (e) Delinquent debt means (1) any debt owed to FCIC that has not 
been paid by the termination date specified in the applicable contract 
of insurance, or other due date for payment contained in any other 
agreement, or notification of indebtedness, and (2) any overdue amount 
owed to FCIC by a debtor which is the subject of an installment payment 
agreement which the debtor has failed to satisfy under the terms of such 
agreement.
    (f) System of records means a group of any records under the control 
of FCIC from which information is retrieved by the name of the 
individual by some identifying number, symbol, or other identification 
assigned to the individual.
    (g) Request for review means that request submitted to FCIC by a 
debtor for a review of the facts resulting in the determination of 
indebtedness to FCIC. FCIC allows 45 days for such request and any 
request submitted within that period is considered a timely request.



Sec. 400.117  Determination of delinquency.

    Prior to disclosing information about a debt to a credit reporting 
agency in accordance with this subpart, the FCIC claims official, 
designated as the Comptroller, FCIC, or the designee of the Comptroller 
who has jurisdiction over the claim, shall review the claim and 
determine that the claim is valid and overdue.

[[Page 20]]



Sec. 400.118  Demand for payment.

    The Comptroller who is responsible for carrying out the provisions 
of this subpart with respect to the debt shall send to the debtor 
appropriate written demands for payment in terms which inform the debtor 
of the consequences of failure to make payment, in accordance with 
guidelines established by the Manager, FCIC, the Federal Claims 
Collection Standards at 4 CFR 102.2, or the contract between the General 
Services Administration (GSA) and the collection agency.



Sec. 400.119  Notice to debtor; credit reporting agency.

    (a) In accordance with guidelines established by the Manager, FCIC, 
the Comptroller who is responsible for disclosure of information with 
respect to delinquent debts to a credit reporting agency shall send 
written notice to the delinquent debtors that FCIC intends to disclose 
credit information to a credit reporting agency on a regular basis. In 
addition, delinquent debtors are to be informed:
    (1) Of the basis for the indebtedness;
    (2) That the payment is overdue;
    (3) That FCIC intends to disclose to a credit reporting agency that 
the debtor is responsible for the debt and with respect to an 
individual, that such disclosure shall be made not less than 60 days 
after notification to such debtor;
    (4) Of the specific information intended to be disclosed to the 
credit reporting agency;
    (5) Of the rights of such debtor to a full explanation of the claim 
and to dispute any information in the system of records of FCIC 
concerning the claim;
    (6) Of the debtor's right to administrative appeal or review with 
respect to the claim and how such review shall be obtained; and
    (7) Of the date after which the information will be reported to the 
credit reporting agency.
    (b) The content and standards for demand letters and notices sent 
under this section shall be consistent with the Federal Claims 
Collection Standards at 4 CFR 102.2.



Sec. 400.120  Subsequent disclosure and verification.

    (a) FCIC shall promptly notify each credit reporting agency to which 
the original disclosure of debt information was made of any substantial 
change in the condition or amount of the claim. A substantial change in 
condition may include, but is not limited to, notice of death, cessation 
of business, or relocation of the debtor. A substantial change in the 
amount may include, but is not limited to, payments received, additional 
amounts due, or offsets made with respect to the debt.
    (b) FCIC shall promptly verify or correct, as appropriate, 
information about the claim or request of such credit reporting agency 
for verification of any or all information so disclosed. The records of 
the debtor shall reflect any correction resulting from such request.
    (c) FCIC shall obtain satisfactory assurances from each reporting 
agency to which information will be provided that the agency is in 
compliance with the provisions of all laws and regulations of the United 
States relating to providing credit information.



Sec. 400.121  Information disclosure limitations.

    FCIC shall limit delinquent debt information disclosed to credit 
reporting agencies to:
    (a) The name, address, taxpayer identification number, and other 
information necessary to establish the identity of the debtor;
    (b) The amount, status, and history of the claim; and
    (c) The FCIC program under which the claim arose.



Sec. 400.122  Attempts to locate debtor.

    Before disclosing delinquent debt information to a credit reporting 
agency, FCIC shall take reasonable action to locate a debtor for whom 
FCIC does not have a current address in order to send the notification 
in accordance with Sec. 400.119 of this subpart.



Sec. 400.123  Request for review of the indebtedness.

    (a) Before disclosing delinquent debt information to a credit 
reporting agency, FCIC shall, upon request of the debtor, provide for a 
review of the

[[Page 21]]

claim, including an opportunity for reconsideration of the initial 
decision concerning the existence or amount of the claim, in accordance 
with applicable administrative appeal procedures.
    (b) Upon receipt of a timely request for review, FCIC shall suspend 
its schedule for disclosure of delinquent debt information to a credit 
reporting agency until such time as a final decision is made on the 
request.
    (c) Upon completion of the review, the reviewing office shall 
transmit to the debtor a written notification of the decision. If 
appropriate, notification shall inform the debtor of the scheduled date 
on or after which information concerning the debt will be provided to 
the credit reporting agency. The notification shall, if appropriate, 
also indicate any changes in the information to be disclosed to the 
extent such information differs from that provided in the initial 
notification.



Sec. 400.124  Disclosure to credit reporting agencies.

    (a) In accordance with guidelines established by the Manager, FCIC, 
the Comptroller or designated manager of the systems of records shall 
disclose to credit reporting agencies the information specified in Sec. 
400.121.
    (b) Disclosure of information to credit reporting agencies shall be 
made on or after the date specified in Sec. Sec. 400.119(a)(3) and 
400.125 and shall be comprised of the information set forth in the 
initial determination or any modification thereof.
    (c) This section shall not apply to disclosure of delinquent debts 
when:
    (1) The debtor has agreed to a repayment agreement for such debt and 
such agreement is still valid; or
    (2) The debtor has filed for review of the debt and the reviewing 
official or designee has not issued a decision on the review.



Sec. 400.125  Notice to debtor, collection agency.

    FCIC shall provide 30 days written notice to the debtor, mailed to 
the debtor's last known address, of FCIC's intent to forward the debt to 
a collection agency for further collection action.



Sec. 400.126  Referral of delinquent debts to contract collection 
agencies.

    (a) FCIC shall use the services of a contract collection agency 
which has entered into a contract with the General Services 
Administration to recover debts owed to FCIC.
    (b) If FCIC's collection efforts have been unsuccessful on a 
delinquent debt, and the delinquent debt remains unpaid, FCIC may refer 
the debt to a contract collection agency for collection.
    (c) FCIC shall retain the authority to resolve disputes, compromise 
claims, suspend or terminate collection action, and refer the matter for 
litigation.



Sec. 400.127  [Reserved]



Sec. 400.128  Definitions.

    (a) Agency means (1) An Executive Agency as defined by 5 U.S.C. 105, 
the United States Postal Service, and the United States Postal Rate 
Commission, or (2) A Military Department, as defined by section 102 of 
Title 5 U.S.C.
    (b) Debt means:
    (1) An amount owed to the United States from sources including, but 
not limited to, insured or guaranteed loans, fees, leases, insurance 
premiums, interest (except where prohibited by law), rents, royalties, 
services, sale of real or personal property, overpayments, penalties, 
damages, fines and forfeitures (except those arising under the Uniform 
Code of Military Justice).
    (2) An amount owed to the United States by an employee for pecuniary 
losses where the employee has been determined to be liable because of 
such employee's negligent, willful, unauthorized or illegal acts, 
including but not limited to:
    (i) Theft, misuse, or loss of Government funds;
    (ii) False claims for services and travel reimbursement;
    (iii) Illegal, unauthorized obligations and expenditures of 
Government appropriations;
    (iv) Using or authorizing the use of Government owned or leased 
equipment, facilities, supplies and services for other than official or 
approved purposes;
    (v) Lost, stolen, damaged, or destroyed Government property;

[[Page 22]]

    (vi) Erroneous entries on accounting records or reports; and
    (vii) Deliberate failure to provide physical security and control 
procedures for accountable officers, if such failure is determined to be 
the proximate cause for a loss of Government funds.
    (c) Department or USDA means the United States Department of 
Agriculture.
    (d) Disposable salary (pay) means any pay due an employee which 
remains after required deductions for Federal, State and local income 
taxes; Social Security taxes, including Medicare taxes; Federal 
retirement programs; premiums for life and health insurance benefits; 
and such other deductions as may be required by law to be withheld.
    (e) Employee means a current employee of an agency, including a 
current member of the Armed Forces or a Reserve of the Armed Forces.
    (f) FCIC Official means the Manager, or the Manager's designee.
    (g) Hearing Officer means an Administrative Law Judge of the 
Department of Agriculture or another person not under the control of the 
USDA, designated by the FCIC Official to review the determination of the 
alleged debt.
    (h) Salary Offset means a deduction of a debt due the U.S. by 
deduction from the disposable salary of an employee without the 
employee's consent.
    (i) Waiver means the cancellation, remission, forgiveness, or non-
recovery of a debt owed by an employee as permitted or required by 5 
U.S.C. 5584, 10 U.S.C. 2774, 32 U.S.C. 716, 5 U.S.C. 8346(b), or any 
other law.

[53 FR 3, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.129  Salary offset.

    (a) Debt collection by salary offset is feasible if: the cost to the 
Government of collection by salary offset does not exceed the amount of 
the debt; there are no legal restrictions to the debt, such as the 
debtor being under the jurisdiction of a bankruptcy court or the 
expiration of a statute of limitations; or, other such legal 
restrictions. The Debt Collection Act permits collections of debts by 
offset for claims that have not been outstanding for more than 10 years.
    (b) The salary offset provisions contained herein provide procedures 
which must be followed before FCIC may request another Federal agency to 
offset any amount from the debtor's salary. Decisions made under the 
provisions of this section are not appealable under the provisions of 
the Appeal Regulations in part 400, subpart J of this title.
    (c) These regulations will not apply to any case where collection of 
a debt by salary offset is explicitly provided for by another statue as 
noted by the Comptroller General in 64 Comp. Gen. 142 (1984), including 
5 U.S.C. 5512(a), 5 U.S.C. 5513, 5 U.S.C. 5522(a) (1), 5 U.S.C. 5705 (1) 
and (2), and 5 U.S.C. 5724(f).
    (d) Salary offset may be used by FCIC to collect debts which arise 
from delinquent FCIC premium payments or delinquent repayment plans and 
other debts arising from, but not limited to, such sources as program 
theft, embezzlement, fraud, salary overpayments, underwithholding of any 
amounts due and payable for life and health insurance, advance travel 
payments, overpaid indemnities, and any amount owed by present or former 
employees from loss of federal funds through negligence and other 
matters. The debt does not have to be reduced to judgment and does not 
have to be covered by a security instrument.
    (e) FCIC may use salary offset against one of its employees who is 
indebted to another agency if requested to do so by that agency. Salary 
offset will not be initiated until after other servicing options 
available to the requesting agency have been utilized, and due process 
has been afforded to the FCIC employee. When salary offset is utilized, 
payment for the debt will be deducted from the employee's salary and 
sent directly to the creditor agency. Not more than fifteen percent 
(15%) of the employee's disposable salary can be offset in any one pay 
period, unless the employee agrees in writing to the deduction of a 
larger amount.
    (f) When FCIC is owed a debt by an employee of another agency, the 
other agency shall not initiate the requested offset until FCIC provides 
the agency with a written certification that the debtor owes FCIC a debt 
(including the amount and basis of the debt and the due date of the 
payment), and that

[[Page 23]]

FCIC has complied with Department regulations. If a repayment schedule 
is elected by the employee, interest will be charged in accordance with 
Departmental Regulation 2520-1, Interest Rate on Delinquent Debts; USDA 
Debt Collection Regulations in 7 CFR part 3; and 4 CFR 102.13.
    (g) For the purposes of this section, the Manager, FCIC, or the 
Manager's designee, is delegated authority to:
    (1) Certify to the debtor's employing agency that the debt exists 
and the amount of the debt or delinquent balance;
    (2) Certify that, with respect to debt collection, the procedures 
and regulations of FCIC and the Department have been complied with; and
    (3) Request that salary offset be initiated by the debtor's 
employing agency.

[53 FR 3, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.130  Notice requirements before offset.

    Salary offset will not be made unless the employee receives 30 
calendar days written notice. The notice of intent to offset salary 
(notice of intent) will state:
    (a) That FCIC has reviewed the records relating to the debt and has 
determined that the debt is owed, and has verified the amount of the 
debt, and the facts giving rise to the debt;
    (b) That FCIC intends to deduct an amount not to exceed 15% of the 
employees current disposable salary until the debt and all accumulated 
interest are paid in full;
    (c) The amount, frequency, approximate beginning date, and duration 
of the intended deductions;
    (d) An explanation of the requirements concerning interest, 
penalties, and administrative costs, including a statement that these 
assessments will be made unless waived in accordance with 31 U.S.C. 3717 
and 7 CFR 3.34;
    (e) That FCIC's records concerning the debt are available to the 
employee for inspection and that the employee may request a copy of such 
records;
    (f) That the employee has a right to voluntarily enter into a 
written agreement with FCIC for a repayment schedule with FCIC, which 
may be different from that proposed by FCIC, if the terms of the 
repayment agreement are agreed to by FCIC;
    (g) That the employee has the right to a hearing conducted by an 
Administrative Law Judge of USDA, or a hearing official not under the 
control of USDA, concerning the determination of the debt, the amount of 
the debt, or the percentage of disposable salary to be deducted each pay 
period, if the petition for a hearing is filed by the employee as 
prescribed by FCIC;
    (h) The method and time period allowable for a petition for a 
hearing;
    (i) That the timely filing of a hearing petition will stay the 
offset collection proceedings;
    (j) That a final decision on the hearing will be issued at the 
earliest practical date, but not later than 60 calendar days after the 
filing of the petition, unless the employee requests, and the hearing 
officer grants, a delay in the proceedings;
    (k) That any knowingly false or frivolous statement, representation, 
or evidence may subject the employee to:
    (1) Disciplinary procedures appropriate under 5 U.S.C. Chapter 75, 5 
CFR part 752, or any other applicable Statutes or regulations;
    (2) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or 
any other applicable statutory authority: or
    (3) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002, or 
any other applicable statutory authority;
    (l) Any other rights or remedies available to the employee under any 
statute or regulations governing the program for which collection is 
being made;
    (m) That the employee may request waiver of salary overpayment under 
applicable statutory authority (5 U.S.C. 5584, 10 U.S.C. 2774, 32 U.S.C 
716, or 5 U.S.C 8346(b)), or may request waiver in the case of general 
debts and if waiver is available under any statutory provision 
pertaining to the particular debt being collected. The employee may 
question the amount or validity of the salary overpayment or general 
debt by submitting a claim to the Comptroller General in accordance with 
General Accounting Officer procedure.
    (n) That amounts paid on or deducted for the debt which are later 
waived or

[[Page 24]]

found not to be owed to the United States will be promptly refunded to 
the employee, unless there are applicable contractual or statutory 
provisions to the contrary; and
    (o) The name and address of an official of FCIC to whom the employee 
should direct any communication with respect to the debt.

[53 FR 4, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.131  Request for a hearing and result if an employee fails 
to meet deadlines.

    (a) Except as provided in paragraph (c) of this section, an employee 
must file a petition for hearing that is received by the FCIC Official 
not later than 30 calendar days from the date of the notice of intent to 
collect a debt by salary offset, if the employee wants a hearing 
concerning:
    (1) The existence or amount of the debt; or
    (2) The FCIC Official's proposed offset schedule, including the 
percentage of deduction.
    (b) The petition must be signed by the employee and should clearly 
identify and explain with reasonable specificity and brevity the facts, 
evidence and witnesses which the employee believes support the his or 
her position. If the employee objects to the percentage of disposable 
salary to be deducted from each check, the petition should state the 
objection and the reasons for it.
    (c) If the employee files a petition for hearing later than the 30 
days provided in paragraph (a) of this section, the FCIC Official may 
accept the petition if the employee is able to show that the delay 
caused by conditions beyond his or her control, or because the employee 
failed to received the notice of the filing deadline (unless the 
employee has actual notice of the deadline).
    (d) An employee will not be granted a hearing and will have his or 
her disposable salary offset in accordance with the FCIC Official's 
announced schedule if the employee:
    (1) Fails to file a petition for hearing as set forth in this 
subsection; or
    (2) Is scheduled to appear and fails to appear at the hearing.

[53 FR 4, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.132  Hearings.

    (a) If an employee timely files a petition for a hearing, the FCIC 
Official will select the date, time, and location for the hearing.
    (b) The hearing shall be conducted by an appropriately designated 
Hearing Official.
    (c) Rules of evidence shall not be observed, but the hearing officer 
will consider all evidence that he or she determines to be relevant to 
the debt that is the subject of the hearing, and weigh all such evidence 
accordingly, given all the facts and circumstances surrounding the debt.
    (d) The burden of proof with respect to the existence of the debt 
rests with FCIC.
    (e) The employee requesting the hearing shall bear the ultimate 
burden of proof.
    (f) The evidence presented by the employee must prove that no debt 
exists, or cast sufficient doubt such that reasonable minds could differ 
as to the existence of the debt.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.133  Written decision following a hearing.

    (a) At the conclusion of the hearing, a written decision will be 
provided which will include:
    (1) A statement of the facts presented at the hearing supporting the 
nature and origin of the alleged debt and those presented to refute the 
debt;
    (2) The hearing officer's analysis, findings, and conclusions, 
considering all the evidence presented and the respective burdens of the 
parties, in light of the hearing;
    (3) The amount and validity of the alleged debt determined as a 
result of the hearing;
    (4) The payment schedule (including the percentage of disposable 
salary), if applicable; and

[[Page 25]]

    (5) The determination of the amount of the debt at this hearing is 
the final agency action on this matter.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.134  Review of FCIC record related to the debt.

    An employee who intends to inspect or copy FCIC records related to 
the debt must send a letter to the FCIC official (designated in the 
notice of intent) stating his or her intentions. The letter must be 
received by the FCIC official within 30 calender days of the date of the 
notice of intent. In response to the timely notice submitted by the 
debtor, the FCIC official will notify the employee of the location and 
time when the employee may inspect and copy FCIC records related to the 
debt.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.135  Written agreement to repay debt as an alternative to 
salary offset.

    The employee may propose, in response to a notice of intent, a 
written agreement to repay the debt as an alternative to salary offset. 
The proposed written agreement to repay the debt must be received by the 
FCIC official within 30 calendar days of the date of the notice of 
intent. The FCIC official will notify the employee whether the 
employee's proposed written agreement for repayment is acceptable. The 
FCIC official may accept a repayment agreement instead of proceeding by 
offset. In making this determination, the FCIC official will balance the 
FCIC interest in collecting the debt against hardship to the employee. 
If the debt is delinquent and the employee has not disputed its 
existence or amount, the FCIC official will accept a repayment 
agreement, instead of offset, for good cause such as, if the employee 
establishes that offset would result in undue financial hardship, or 
would be against equity and good conscience.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.136  Procedures for salary offset; when deductions may begin.

    (a) Deductions to liquidate an employee's debt will be made by the 
method and in the amount outlined in the Notice of Intent to collect 
from the employee's salary, as provided for in Sec. 400.130.
    (b) If the employee files a petition for a hearing before the 
expiration of the period provided for in Sec. 400.130, then deductions 
will begin after the hearing officer has provided the employee with a 
final written decision in favor of FCIC.
    (c) If an employee retires or resigns before collection of the 
amount of the indebtedness is completed, the remaining indebtedness will 
be collected in accordance with procedures for administrative offset.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.137  Procedures for salary offset; types of collection.

    A debt will be collected in a lump-sum or in installments. 
Collection will be by lump-sum collection unless the employee is 
financially unable to pay in one lump-sum, or if the amount of the debt 
exceeds 15 percent of the disposable pay for an ordinary pay period. In 
these cases, deduction will be by installments as set forth in Sec. 
400.138.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.138  Procedures for salary offset; methods of collection.

    (a) General. A debt will be collected by deductions at officially-
established pay intervals from an employee's current pay account, unless 
the employee and the hearing official agree to alternative arrangements 
for repayment under Sec. 400.135.
    (b) Installment deductions. Installment deductions will be made over 
a period not greater than the anticipated period of employment. The size 
and frequency of the installment deductions will bear a reasonable 
relation to the size of the debt and the employee's ability to pay. If 
possible, the installment payment will be sufficient in size and 
frequency to liquidate the debt in no more than three years. Installment 
payments of

[[Page 26]]

less than $25.00 per pay period, or $50.00 per month, will be accepted 
only in the most unusual circumstances.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.139  Nonwaiver of rights.

    So long as there are no statutory or contractual provisions to the 
contrary, no employee payment (or all or portion of a debt) collected 
under these regulations will be interpreted as a waiver of any rights 
that the employee may have under the provisions of 5 U.S.C. 5514.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.140  Refunds.

    FCIC will promptly refund to the appropriate individual amounts 
offset under these regulations when:
    (a) A debt is waived or otherwise found not owing to the United 
States (unless expressly prohibited by statute or regulation); or
    (b) FCIC is directed by an administrative or judicial order to 
refund amounts deducted from an employee's current pay.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.141  Internal Revenue Service (IRS) Tax Refund Offset.

    Under the provisions of 31 U.S.C. 3720A, the (IRS) may be requested 
to collect a legally enforceable debt owing to any Federal agency by 
offset against a taxpayer's Federal income tax refund. This section 
provides policies and procedures to implement IRS tax refund offsets in 
accordance with the provisions set forth in Sec. 301.6402-6T of 26 CFR 
chapter I.
    (a) Any person who is indebted to the Federal Crop Insurance 
Corporation (FCIC) is entitled to the extent of FCIC's administrative 
due process including review and appeal of the debt under the Appeal 
Regulations in 7 CFR part 400, subpart J.
    (b) If, after such administrative due process is exhausted, the debt 
is still outstanding with no other means of collection, the debtor will 
be notified by letter of FCIC's intention to refer such debt to the IRS 
for collection by tax refund offset. The notification letter will inform 
the debtor that their account is delinquent and that IRS will be 
requested to reduce the amount of any tax refund check due the debtor by 
the amount of the deliquency. The debtor will be given 60 days in which 
to write to the Manager, FCIC, providing written evidence that the debt 
is not legally enforceable. FCIC will refer the debt to IRS for 
collection by offset after the 60-day period if no response is received 
from the debtor. Decisions made under the provisions of this section are 
not appealable under the provisions of the Appeal Regulations in 7 CFR 
part 400, subpart J.
    (c) If the debtor has requested a review, and has provided written 
evidence that the debt is not legally enforceable, the Manager, with the 
assistance of the Office of General Counsel, USDA, will review the 
debtor's reasons for believing that the debt is not legally enforceable. 
The debtor will then be notified of the results of the review.
    (d) FCIC will notify IRS of those accounts against which offset 
action is to be taken.
    (e) If, during the period of review, the debtor pays the debt in 
full, the collection of the debt by tax refund offset procedure will be 
halted. Changes in debtor status that eliminate the debtor from IRS 
offset will be reported to IRS by FCIC and the debtor's refund will not 
be offset.
    (f) Amounts offset for delinquent debt which are later found to be 
not owed to FCIC, will be promptly refunded.
    (g) Debtors will not be subject to IRS offset for any of the 
following reasons:
    (1) Debtors who are discharged in bankruptcy or who are under the 
jurisdiction of a bankruptcy court;
    (2) Debtors who are employed by the Federal Government;
    (3) Debtors whose cases are in suspense because of actions pending 
by or taken by FCIC;
    (4) Debtors who have not provided a Social Security Number (SSN) and 
no SSN can be obtained;
    (5) Debtors whose indebtedness is less than $25;
    (6) Debtors whose account is more than ten (10) years delinquent; 
except in the case of a judgment debt; or

[[Page 27]]

    (7) Debtors whose account has not been first reported to a consumer 
credit reporting agency.

[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Sec. 400.142  Past-due legally enforceable debt eligible for refund 
offset.

    For purposes of this section, a past-due, legally enforceable debt 
which may be referred by FCIC to IRS for offset is a debt which:
    (a) Except in the case of a judgement debt, has been delinquent for 
at least three months but has not been delinquent for more than 10 years 
at the time the offset is made;
    (b) Cannot be currently collected pursuant to the salary offset 
provisions of 5 U.S.C. 5514(a)(1);
    (c) Is ineligible for administrative offset under 31 U.S.C. 3716(a) 
by reason of 31 U.S.C. 3716(c)(2), or cannot be collected by 
administrative offset under 31 U.S.C. 3716(a) by the referring agency 
against amounts payable to the debtor by the referring agency;
    (d) With respect to which the agency has given the employee at least 
60 days to present evidence that all or part of the debt is not past-due 
or legally enforceable, has considered evidence presented by such 
employee, and has determined that an amount of such debt is past-due and 
legally enforceable;
    (e) Has been disclosed by FCIC to a consumer reporting agency as 
authorized by 31 U.S.C. 3711(f), in the case of a debt to be referred to 
IRS after June 30, 1986;
    (f) With respect to which that FCIC has notified, or has made a 
reasonable attempt to notify, the employee that:
    (1) The debt is past due; and
    (2) Unless repaid within 60 days thereafter, will be referred to IRS 
for offset against any overpayment of tax; and
    (3) Which is at least $25.00.

[53 FR 6, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]



Subpart L_Reinsurance Agreement_Standards for Approval; Regulations for 
                the 1997 and Subsequent Reinsurance Years

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

    Source: 52 FR 17543, May 11, 1987, unless otherwise noted. 
Redesignated at 53 FR 3, Jan. 4, 1988, and further redesignated at 53 FR 
10527, Apr. 1, 1988.



Sec. 400.161  Definitions.

    In addition to the terms defined in the Standard Reinsurance 
Agreement, the following terms as used in this rule are defined to mean:
    (a) Annual Statutory Financial Statement means the annual financial 
statement of an insurer prepared in accordance with Statutory Accounting 
Principles and submitted to the state insurance department if required 
by any state in which the insurer is licensed.
    (b) Company means the company reinsured by FCIC or apply to FCIC for 
a Standard Reinsurance Agreement.
    (c) Corporation means the Federal Crop Insurance Corporation.
    (d) FCIC means the Federal crop Insurance Corporation.
    (e) Financial statement means any documentation submitted by a 
company as required by this subpart.
    (f) Guaranty fund assessments means the state administered program 
utilized by some state insurance regulatory agencies to obtain funds 
with which to discharge unfunded obligations of insurance companies 
licensed to do business in that state.
    (g) Insurer means an insurance company that is licensed or admitted 
as such in any State, Territory, or Possession of the United States.
    (h) MPUL means the maximum possible underwriting loss that an 
insurer can sustain on policies it intends to reinsure with FCIC, after 
adjusting for the effect of any reinsurance agreement with FCIC, and any 
outside reinsurance agreements, as evaluated by FCIC.
    (i) Obligations mean crop or indemnity for crop loss on policies 
reinsured under the Standard Reinsurance Agreement.

[[Page 28]]

    (j) Plan of operation means a statment submitted to FCIC each year 
in which a reinsured or a prospective reinsured specifies the 
reinsurance options it wishes to use, its marketing plan, and similar 
information as required by the Corporation.
    (k) Quarterly Statutory Financial Statement means the quarterly 
financial statement of an insurer prepared in accordance with Statutory 
Accounting Principles and submitted to the state insurance department if 
required by any state in which the insurer is licensed.
    (l) Reinsurance agreement means an agreement between two parties by 
which an insurer cedes to a reinsurer certain liabilities arising from 
the insurer's sale of insurance policies.
    (m) Reinsured means the insurer which is a party to the Standard 
Reinsurance Agreement with FCIC.
    (n) Standard Reinsurance Agreement (Agreement) means the reinsurance 
agreement between the reinsured and FCIC.

[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and 
53 FR 10527, Apr. 1, 1988, as amended at 57 FR 34666, Aug. 6, 1992; 60 
FR 57903, Nov. 24, 1995]



Sec. 400.162  Qualification ratios.

    The sixteen qualification ratios include:
    (a) Eleven National Association of Insurance Commissioner's (NAIC's) 
Insurance Regulatory Information System (IRIS) ratios found in 
Sec. Sec. 400.170(d)(1)(ii) and 400.170(d)(2) (i), (ii), (iii), (vi), 
(vii), (ix), (xi), (xii), (xiii), and (xiv) and referenced in ``Using 
the NAIC Insurance Regulatory Information System'' distributed by NAIC, 
120 West 12th St., Kansas City, MO 64105-1925;
    (b) Three ratios used by A.M. Best Company found in Sec. 
400.170(d)(2) (v), (viii), and (x) and referenced in Best's Key Rating 
Guide, A.M. Best, Ambest Road, Oldwick, N.J. 08858-0700;
    (c) One ratio found in Sec. 400.170(d)(1)(i) is calculated the same 
as the Gross Premium to Surplus IRIS ratio, with Gross Premium adjusted 
to exclude the MPCI premium assumed by FCIC; and
    (d) One ratio found in Sec. 400.170(d)(2)(iv) which is formulated 
by FCIC and is calculated the same as the One-Year Change to Surplus 
IRIS ratio but for a two-year period.

[60 FR 57903, Nov. 24, 1995]



Sec. 400.163  Applicability.

    The standards contained herein shall be applicable to insurers who 
apply for or enter into a Standard Reinsurance Agreement effective for 
the 1997 and subsequent reinsurance years or who continue with a prior 
years Standard Reinsurance Agreement into the 1997 and subsequent 
reinsurance years.

[60 FR 57903, Nov. 24, 1995]



Sec. 400.164  Availability of the Standard Reinsurance Agreement.

    Federal Crop Insurance Corporation will offer Standard Reinsurance 
Agreements to eligible Companies under which the Corporation will 
reinsure policies which the Companies issue to producers of agricultural 
commodities. The Standard Reinsurance Agreement will be consistent with 
the requirements of the Federal Crop Insurance Act, as amended, and 
provisions of the regulations of the Corporation found at chapter IV of 
title 7 of the Code of Federal Regulations.



Sec. 400.165  Eligibility for Standard Reinsurance Agreements.

    A Company will be eligible to participate in an Agreement if the 
Corporation determines the Company meets the standards and reporting 
requirements of this subpart.



Sec. 400.166  Obligations of the Corporation.

    The Agreement will include the following among the obligations of 
the Corporation.
    (a) The Corporation will reinsure policies written on terms, 
including premium rates, approved by the Corporation, on crops and in 
areas approved by the Corporation, and in accordance with the provisions 
of the Federal Crop Insurance Act, as amended, and the provisions of 
these regulations.
    (b) The Corporation will pay a portion of each producer's premium on 
the policies reinsured under the Agreement, as authorized by the Federal 
Crop Insurance Act, as amended.

[[Page 29]]

    (c) The Corporation will assume all obligations for unpaid losses on 
policies reinsured under the Agreement in the event any company 
reinsured under the Agreement is unable to fulfill its obligations to 
any holder of a Multiple Peril Crop Insurance Policy reinsured by the 
Corporation by reason of a directive or order issued by any State 
Department of Insurance, State Commissioner of Insurance, any court of 
law having competent jurisdiction or any other similar authority of any 
jurisdiction to which the Company is subject.
    (d) Each policy reinsured by the Corporation must be clearly 
identified by including in bold face or large type the following 
statement as item number 1 in its General Provisions:
This insurance policy is reinsured by the Federal Crop Insurance 
Corporation under the provisions of the Federal Crop Insurance Act, as 
amended (the Act) (7 U.S.C. 1501 et seq.), and all terms of the policy 
and rights and responsibilities of the parties are specifically subject 
to the Act and the regulations under the Act published in chapter IV of 
7 CFR.



Sec. 400.167  Limitations on Corporation's obligations.

    The Agreement will include the following among the limitations on 
the obligations of the Corporation.
    (a) The Corporation may, at any time, suspend its obligation to 
accept additional liability from the Company by providing written notice 
to that effect.
    (b) The obligations of the Corporation under the Agreement are 
contingent upon the availability of appropriations.
    (c) The Corporation will not reinsure any policy sold by the Company 
to a producer after the date Company receives notice that the 
Corporation has determined that the producer is ineligible to receive 
Federal Crop Insurance.



Sec. 400.168  Obligations of participating insurance company.

    The Agreement will include the following among the obligations of 
the Company.
    (a) The Company shall follow all applicable Corporation procedures 
in its administration of the crop insurance policies reinsured.
    (b) The Company shall make available to all eligible producers in 
the areas designated in its plan of operations as approved by the 
Corporation:
    (1) The crop insurance plans for the crops designated in its plan of 
operation in those counties within a State, or a portion of a State, 
where the Secretary of Agriculture has determined that insurance is 
available through local offices of the United States Department of 
Agriculture; and
    (2) Catastrophic risk protection, limited, and additional coverage 
plans of insurance for all crops, for which such insurance is made 
available by the Corporation, in all counties within a state, or a 
portion of State, where the Secretary of Agriculture has determined that 
insurance is no longer available through local offices of the United 
States Department of Agriculture.
    (c) The Company shall provide the Corporation, on forms approved by 
the Corporation all information that the Corporation may deem relevant 
in the administration of the Agreement, including a list of all 
applicants determined to be ineligible for crop insurance coverage and 
all insured producers cancelled or terminated from insurance, along with 
the reason for such action, the crop program, and the amount of coverage 
for each.
    (d) The Company shall utilize only loss adjustment procedures and 
methods that are approved by the Corporation.
    (e) The Company shall sell the policies covered under the Agreement 
through licensed agents or brokers who have successfully completed a 
training course approved by the Corporation.
    (f) The Company shall not discriminate against any employee, 
applicant for employment, insured or applicant for insurance because of 
race, color, religion, sex age, handicap, or national origin.

[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and 
53 FR 10527, Apr. 1, 1988, as amended at 61 FR 34368, July 2, 1996; 61 
FR 65153, Dec. 11, 1996]



Sec. 400.169  Disputes.

    (a) If the company believes that the Corporation has taken an action 
that

[[Page 30]]

is not in accordance with the provisions of the Standard Reinsurance 
Agreement or any reinsurance agreement with FCIC, except compliance 
issues, it may request the Deputy Administrator of Insurance Services to 
make a final administrative determination addressing the disputed 
action. The Deputy Administrator of Insurance Services will render the 
final administrative determination of the Corporation with respect to 
the applicable actions. All requests for a final administrative 
determination must be in writing and submitted within 45 days after 
receipt after the disputed action.
    (b) With respect to compliance matters, the Compliance Field Office 
renders an initial finding, permits the company to respond, and then 
issues a final finding. If the company believes that the Compliance 
Field Office's final finding is not in accordance with the applicable 
laws, regulations, custom or practice of the insurance industry, or FCIC 
approved policy and procedure, it may request, the Deputy Administrator 
of Compliance to make a final administrative determination addressing 
the disputed final finding. The Deputy Administrator of Compliance will 
render the final administrative determination of the Corporation with 
respect to these issues. All requests for a final administrative 
determination must be in writing and submitted within 45 days after 
receipt of the final finding.
    (c) A company may also request reconsideration by the Deputy 
Administrator of Insurance Services of a decision of the Corporation 
rendered under any Corporation bulletin or directive which bulletin or 
directive does not interpret, explain, or restrict the terms of the 
reinsurance agreement. The company, if it disputes the Corporation's 
determination, must request a reconsideration of that determination in 
writing, within 45 days of the receipt of the determination. The 
determinations of the Deputy Administrator will be final and binding on 
the company. Such determinations will not be appealable to the Board of 
Contract Appeals.
    (d) Appealable final administrative determinations of the 
Corporation under paragraph (a) or (b) of this section may be appealed 
to the Board of Contract Appeals in accordance with the provisions of 
subtitle A, part 24 of title 7 of the Code of Federal Regulations.

[65 FR 3782, Jan. 25, 2000]



Sec. 400.170  General qualifications.

    To qualify initially or thereafter for a Standard Reinsurance 
Agreement with FCIC, an insurer must:
    (a) Be licensed or admitted in any state, territory, or possession 
of the United States;
    (b) Be licensed or admitted, or use as a policy-issuing Company an 
insurer that is licensed or admitted, in each state from which the 
insurer will cede policies to FCIC for reinsurance;
    (c) Have surplus, as reported in its most recent Annual or Quarterly 
Statutory Financial Statement, that is at least equal to the MPUL for 
the company's estimated retained premium proposed to be reinsured, 
multiplied by the appropriate Minimum Surplus Factor found in the 
Minimum Surplus Table. For the purposes of the Minimum Surplus Table, an 
insurer is considered to issue policies in a state if at least two and 
one-half percent (2.5%) of all its reinsured retained premium is written 
in that state;

                          Minimum Surplus Table
------------------------------------------------------------------------
                                                               Minimum
                                                               surplus
 Number of states in which a company issues FCIC-reinsured      factor
                          policies                           (multiplied
                                                               by MPUL)
------------------------------------------------------------------------
1 through 10...............................................          2.5
11 or more.................................................          2.0
------------------------------------------------------------------------

    (d) Have and meet the ratio requirements of the Gross Premium to 
Surplus and Net Premium to Surplus required ratios and at least ten of 
the fourteen analytical ratios in this section based on the most recent 
Annual Statutory Financial Statement, or comply with Sec. 400.172:

------------------------------------------------------------------------
                   Ratio                          Ratio requirement
------------------------------------------------------------------------
(1) Required:
    (i) Gross Premium to Surplus..........  Less than 900%.
    (ii) Net Premium to Surplus...........  Less than 300%.

[[Page 31]]

 
(2) Analytical:
    (i) Two-Year Overall Operating Ratio..  Less than 100%.
    (ii) Agents' Balances to Surplus......  Less than 40%.
    (iii) One-Year Change in Surplus......  Greater than -10% and less
                                             than 50%.
    (iv) Two-Year Change in Surplus.......  Greater than -10%.
    (v) Combined Ratio After Policyholder   Less than 115%.
     Dividends.
    (vi) Change in Writing................  Greater than -33% and less
                                             than 33%.
    (vii) Surplus Aid to Surplus..........  Less than 15%.
    (viii) Quick Liquidity................  Greater than 20%.
    (ix) Liabilities to Liquid Asset......  Less than 105%.
    (x) Return on Surplus.................  Greater than -5%.
    (xi) Investment Yield.................  Greater than 4.5% and less
                                             than 10%.
    (xii) One-Year Reserve Development to   Less than 20%.
     Surplus.
    (xiii) Two-Year Reserve Development to  Less than 20%.
     Surplus.
    (xiv) Estimated Current Reserve         Less than 25%.
     Deficiency to Surplus.
------------------------------------------------------------------------

    (e) Submit to FCIC all of the following statements:
    (1) Annual and Quarterly Statutory Financial Statements;
    (2) Statutory Management Discussion & Analysis;
    (3) Most recent State Insurance Department Examination Report;
    (4) Actuarial Opinion of Reserves;
    (5) Annual Audited Financial Report; and
    (6) Any other appropriate financial information or explanation of 
IRIS ratio discrepancies as determined by the company or as requested by 
FCIC.

[60 FR 57903, Nov. 24, 1995]



Sec. 400.171  Qualifying when a state does not require that an Annual 
Statutory Financial Statement be filed.

    An insurer exempt by the insurance department of the states where 
they are licensed from filing an Annual Statutory Financial Statement 
must, in addition to the requirements of Sec. 400.170 (a), (b), (c) and 
(d), submit an Annual Statutory Financial Statement audited by a 
Certified Public Accountant in accordance with generally accepted 
auditing standards, which if not exempted, would have been filed with 
the insurance department of any state in which it is licensed.

[60 FR 57904, Nov. 24, 1995]



Sec. 400.172  Qualifying with less than two of the required ratios 
or ten of the analytical ratios meeting the specified requirements.

    An insurer with less than two of the required ratios or ten of the 
analytical ratios meeting the specified requirements in Sec. 400.170(d) 
may qualify if, in addition to the requirements of Sec. 400.170 (a), 
(b), (c) and (e), the insurer:
    (a) Submits a financial management plan acceptable to FCIC to 
eliminate each deficiency indicated by the ratios, or an acceptable 
explanation why a failed ratio does not accurately represent the 
insurer's insurance operations; or
    (b) Has a binding agreement with another insurer that qualifies such 
insurer under this subpart to assume financial responsibility in the 
event of the reinsured company's failure to meet its obligations on FCIC 
reinsured policies.

[60 FR 57904, Nov. 24, 1995]



Sec. 400.173  [Reserved]



Sec. 400.174  Notification of deviation from financial standards.

    An insurer must immediately advise FCIC if it deviates from 
compliance with any of the requirements of this chapter. FCIC may 
require the insurer to update its financial statements during the year. 
FCIC may terminate the reinsurance agreement if the Company is out of 
compliance with the requirements of this chapter.

[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and 
53 FR 10527, Apr. 1, 1988, as amended at 60 FR 57904, Nov. 24, 1995]



Sec. 400.175  Revocation and non-acceptance.

    (a) FCIC will deny reinsurance to any insurer or will terminate any 
existing reinsurance agreement if any false or misleading statement is 
made in the financial statements or any other document submitted by the 
insurer in connection with its qualification for FCIC reinsurance.

[[Page 32]]

    (b) No policy issued by an insurer subsequent to revocation of a 
reinsurance agreement will be reinsured by FCIC. Policies in effect at 
the time of revocation will continue to be reinsured by FCIC for the 
balance of the crop year then in effect for the applicable crop. 
However, if materially false information is made to the Corporation and 
that information directly affects the ability of the Company to perform 
under the Agreement, or if the Company commits any fraudulent or 
criminal act in relation to the Standard Reinsurance Agreement or any 
policy reinsured under the Agreement, FCIC may require that the Company 
transfer the servicing and contractual right to all business in effect 
and reinsured by the Corporation to the Corporation.

[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and 
53 FR 10527, Apr. 1, 1988, as amended at 60 FR 57904, Nov. 24, 1995]



Sec. 400.176  State action preemptions.

    (a) No policyholder shall have recourse to any state guaranty fund 
or similar state administered program for crop or premium losses 
reinsured under such Standard Reinsurance Agreement. No assessments for 
such State funds or programs shall be computed or levied on companies 
for or on account of any premiums payable on policies of Multiple Peril 
Crop Insurance reinsured by the Corporation.
    (b) No policy of insurance reinsured by the Corporation and no 
claim, settlement, or adjustment action with respect to any such policy 
shall provide a basis for a claim of punitive or compensatory damages or 
an award of attorney fees or other costs against the Company issuing 
such policy, unless a determination is obtained from the Corporation 
that the Company, its employee, agent or loss adjuster failed to comply 
with the terms of the policy or procedures issued by the Corporation and 
such failure resulted in the insured receiving a payment in an amount 
that is less than the amount to which the insured was entitled.

[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and 
53 FR 10527, Apr. 1, 1988, as amended at 69 FR 48730, Aug. 10, 2004]



Sec. 400.177  [Reserved]



   Subpart M_Agency Sales and Service Contract_Standards for Approval

    Authority: 7 U.S.C. 1506, 1516.

    Source: 53 FR 24015, June 27, 1988, unless otherwise noted.



Sec. 400.201  Applicability of standards.

    Federal Crop Insurance Corporation will offer an Agency Sales and 
Service Contract (the Contract) to private entities meeting the 
requirements set forth in this subpart under which the Corporation will 
insure producers of agricultural commodities. The Contract will be 
consistent with the requirements of the Federal Crop Insurance Act, as 
amended, and the provisions of the regulations of the Corporation found 
at chapter IV of title 7 of the Code of Federal Regulations. The 
Standards contained herein are required for an entity to be a contractor 
under the Contract.



Sec. 400.202  Definitions.

    For the purpose of these Standards:
    (a) Agency Sales and Service Contract or the Contract means the 
written agreement between the Federal Crop Insurance Corporation 
(Corporation) and a private entity (Contractor) for the purpose of 
selling and servicing Federal Crop Insurance policies and includes, but 
is not limited to, the following:
    (1) The Agency Sales and Service Contract;
    (2) Any Appendix to the Agency Sales and Service Contract issued by 
the Corporation;
    (3) The annual approved Plan or Operation; and
    (4) Any amendment adopted by the parties.
    (b) BELL 208B (or compatible) modem--means a modem meeting the 
standards developed by BELL Laboratories for dial-up, half-duplex, 4800 
or 9600 bits per second (bps) transmission of data utilizing 3780 (or 
2780) protocol.
    (c) Contract, the see Agency Sales and Service Contract.

[[Page 33]]

    (d) Contractor's electronic system (system) means the data 
processing hardware and software, data communications hardware and 
software, and printers utilized with the system.
    (e) CPA means a Certified Public Accountant who is licensed as such 
by the State in which the CPA practices.
    (f) CPA Audit means a professional examination conducted by a CPA in 
accordance with generally accepted auditing standards of a Financial 
Statement on the basis of which the CPA expresses an independent 
professional opinion respecting the fairness of presentation of the 
Financial Statement.
    (g) Current Assets means cash and other assets that are reasonably 
expected to be realized in cash or sold or consumed during the normal 
operation cycle of the business or within one year if the operation 
cycle is shorter than one year.
    (h) Current Liabilities means those liabilities expected to be 
satisfied by either the use of assets classified as current in the same 
balance sheet, or the creation of other current liabilities, or those 
expected to be satisfied within a relatively short period of time, 
usually one year.
    (i) Financial Statement means the documents submitted to the 
Corporation by a private entity which portray the financial information 
of the entity. The financial statement must be prepared in accordance 
with Generally Accepted Accounting Principles (GAAP) and reflect the 
financial position in the Statement of Financial Condition or Balance 
Sheet; and the result of operations in the Statement of Profit and Loss 
or Income Statement.
    (j) Processing representative means a person or organization 
designated by the Contractor to be responsible for data entry and 
electronic transmission of data contained on crop insurance documents.
    (k) Sales means new applications and renewals of FCIC policies.
    (l) Suspended Data Notice means a notification of a temporary stop 
or delay in the processing of data transmitted to the Corporation by the 
Contractor because the same is incomplete, non-processable, obsolete, or 
erroneous.
    (m) 3780 protocol--means the data communications protocol (standard) 
that is a binary synchronous communications (BSC), International 
Business Systems (IBM)-defined, byte controlled communications protocol, 
using control characters and synchronized transmission of binary coded 
data.



Sec. 400.203  Financial statement and certification.

    (a) An entity desiring to become or continue as a contractor shall 
submit to the Corporation a financial statement which is as of a date 
not more than eighteen (18) months prior to the date of submission.
    (b) The financial statement submitted shall be audited by a CPA (CPA 
Audit); or if a CPA audited financial statement is not available, the 
statement submitted to the Corporation must be accompanied by a 
certification of:
    (1) The owner, if the business entity is a sole proprietorship; or
    (2) At least one of the general partners, if the business entity is 
a partnership; or
    (3) The Chief Executive Officer and Treasurer, if the business 
entity is a Corporation, that said statement fairly represents the 
financial condition of the entity on the date of such certification to 
the Corporation. If the financial statement as certified by the Chief 
Executive Officer and Treasurer, partner, or owner is submitted, a CPA 
audited financial statement must be submitted if subsequently available.



Sec. 400.204  Notification of deviation from standards.

    A Contractor shall advise the Corporation immediately if the 
Contractor deviates from the requirements of these standards. The 
Corporation may require the Contractor to show compliance with these 
standards during the contract year if the Corporation determines that 
such submission is necessary. If the Corporation determines that the 
deviation is temporary, the Corporation may grant a temporary waiver 
pending compliance within a specified period of time. A waiver of any 
provision of these standards will not be granted to an applicant for a 
contract.

[[Page 34]]



Sec. 400.205  Denial or termination of contract and administrative 
reassignment of business.

    Non-compliance with these standards will result in:
    (a) The denial of a Contract; or
    (b) Termination of an existing Contract.
    In the event of denial or termination of the Contract, all crop 
insurance policies of the Corporation sold by the Contractor and all 
business pertaining thereto may be assumed by the Corporation and may be 
administratively reassigned by the Corporation to another Contractor.



Sec. 400.206  Financial qualifications for acceptability.

    The financial statement of an entity must show total allowable 
assets in excess of liabilities and the ability of the entity to meet 
current liabilities by the use of current assets.



Sec. 400.207  Representative licensing and certification.

    (a) A Contractor must maintain twenty-five (25) licensed and 
certified Contractor Representatives.
    (b) A Contractor's Representative who solicits, sells and services 
FCIC policies or represents the Contractor in solicitation, sales or 
service of such policies must hold a license as issued by the State or 
States in which the policies are issued, which license authorizes the 
sales of insurance in any one or more of the following lines:
    (1) Multiple peril crop insurance;
    (2) Crop hail insurance;
    (3) Casualty insurance;
    (4) Property insurance;
    (5) Liability insurance; or
    (6) Fire insurance and allied lines.
    The Contractor must submit evidence, satisfactory to the 
Corporation, verifying the type of State license held by each 
Representative and the date of expiration of each license.
    (c) A Contractor's Representative must have achieved certification 
by the Corporation for each crop upon which the Representative sells and 
services insurance.



Sec. 400.208  Term of the contract.

    (a) The term of the Contract shall commence on July 1 or when 
signed. The contract will continue from year to year with an annual 
renewal date of July 1 for each succeeding year unless the Corporation 
or the Contractor gives at least ninety (90) days advance notice in 
writing to the other party that the contract is not to be renewed. Any 
breach of the contract, or failure to comply with these Standards, by 
the Contractor, may result in termination of the contract by the 
Corporation upon written notice of termination to the Contractor. That 
termination will be effective thirty (30) days after mailing of the 
notice and termination to the Contractor.
    (b) A Contractor who elects to continue under the Contract for a 
subsequent year must, prior to the month of June, submit a completed 
Plan of Operation which includes the Certifications as required by Sec. 
400.203 of this subpart. The Contractor may not perform under the 
contract until the Plan of Operation is approved by the Corporation.



Sec. 400.209  Electronic transmission and receiving system.

    Any Contractor under the Contract is required to:
    (a) Adopt a plan for the purpose of transmitting and receiving 
electronically, information to and from the Corporation concerning the 
original executed crop insurance documents;
    (b) Maintain an electronic system which must be tested and approved 
by the Corporation;
    (c) Maintain Corporation approval of the electronic system as a 
condition to the electronic transmission and reception of data by the 
Contractor;
    (d) Utilize the Corporation approved automated data processing and 
electronic data transmission capabilities to process crop insurance 
documents as required herein; and
    (e) Establish and maintain the electronic equipment and computer 
software program capability to:
    (1) Receive and store actuarial data electronically via 
telecommunications utilizing 3780 protocol and utilizing a BELL 208B or 
compatible modem at 4800 bits per second (bps);
    (2) Enter and store information from original crop insurance 
documents into electronic format;

[[Page 35]]

    (3) Verify electronically stored information recorded from crop 
insurance documents with electronically stored actuarial information;
    (4) Compute and print the data elements in the Summary of 
Protection;
    (5) Transmit crop insurance data electronically, via 3780 protocol 
utilizing a BELL 208B or compatible modem at 4800 bps;
    (6) Receive electronic acknowledgements, error messages, and other 
data via 3780 protocol utilizing a BELL 208B or compatible modem at 4800 
bps, and relate error messages to original crop insurance documents; and
    (7) Store backup data and physical documents.

    (The Corporation may approve other compatible specifications if 
accepted by the Corporation and if requested by the Contractor)



Sec. 400.210  [Reserved]

Subpart N [Reserved]



 Subpart O_Non-Standard Underwriting Classification System Regulations 
                 for the 1991 and Succeeding Crop Years

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

    Source: 55 FR 32595, Aug. 10, 1990, unless otherwise noted.



Sec. 400.301  Basis, purpose, and applicability.

    The regulations contained in this subpart are issued pursuant to the 
Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq.), to 
prescribe the procedures for nonstandard determinations and the 
assignment of assigned yields or premium rates in conformance with the 
intent of section 508 of the Act (7 U.S.C. 1508). These regulations are 
applicable to all policies of insurance insured or reinsured by the 
Corporation under the Act and on those policies where the insurance 
coverage or indemnities are based on determinations applicable to the 
individual insured. These regulations will not be applicable to any 
policy where the amount of coverage or indemnities are based on the 
experience of the area.

[62 FR 22876, Apr. 28, 1997]



Sec. 400.302  Definitions.

    Act--means Federal Crop Insurance Act as amended (7 U.S.C. 1501 et 
seq.).
    Actively engaged in farming means a person who, in return for a 
share of profits and losses, makes a contribution to the production of 
an insurable crop in the form of capital, equipment, land, personal 
labor, or personal management.
    Actual Yield--means total harvested production of a crop divided by 
the number of acres on which the crop was planted. For insured acres, 
actual yield is the total production to count as defined in the 
insurance policy, divided by insured acres.
    Assigned yield--means units of crop production per acre 
administratively assigned by the Corporation for the purpose of 
determining insurance coverage.
    Corporation--means the Federal Crop Insurance Corporation.
    Cumulative earned premium rate--is the total premium earned for all 
years in the base period, divided by the total liability for all years 
in the base period with the result expressed as a percentage.
    Cumulative loss ratio--means the ratio of total indemnities to total 
earned premiums during the base period expressed as a decimal.
    Earned premium means premium earned (both the amount subsidized and 
the amount paid by the producer, but excluding any amount of the subsidy 
attributed to the operating and administrative expenses of the insurance 
provider) for a crop under a policy insured or reinsured by the 
Corporation.
    Earned premium rate--means premium earned divided by liability and 
expressed as a percentage.
    Entity--means a person as defined in this subpart other than an 
individual.
    Indemnified loss means a loss applicable for the policy for any year 
during the NCS base period for which the total indemnity exceeds the 
total earned premium. If the person has insurance for the crop in more 
than one county for any crop year, indemnities and premiums will be 
accumulated for all counties for each crop year to determine an 
indemnified loss.

[[Page 36]]

    Insurance experience means earned premiums, indemnities paid (but 
not including replant payments), and other data for the crop (after 
applicable adjustments), resulting from all of the insured's crop 
insurance policies insured or reinsured by the Corporation for one or 
more crop years and will include all information from all counties in 
which the person was insured.
    Loss ratio--means the ratio of indemnity to earned premium expressed 
as a decimal.
    NCS means nonstandard classification system.
    NCS base period means the 10 consecutive crop years (as defined in 
the crop policy) ending 2 crop years prior to the crop year in which the 
NCS classification becomes effective for all crops, except those 
specified on the Special Provisions. For these excepted crops, the NCS 
base period means the 10 consecutive crop years ending 3 crop years 
prior to the crop year in which the NCS classification becomes 
effective. For example: An NCS classification effective for the 1996 
crop year against a producer of citrus production in Arizona, 
California, and Texas, or sugarcane would have a NCS base period that 
includes the 1984 through 1993 crop years. An NCS classification 
effective for the 1996 crop year against a producer of all other crops 
would have a NCS base period that includes the 1985 through 1994 crop 
years.
    Person--means an individual, partnership, association, corporation, 
estate, trust, or other legal entity, and whenever applicable, a State 
or a political subdivision, or agency of a state.
    Substantial beneficial interest--means an interest of 10 percent or 
more. In determining whether such an interest equals at least 10 
percent, all interests which are owned directly or indirectly through 
such means as ownership of shares in a corporation which owns the 
interest will be taken into consideration.

[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22876, Apr. 28, 1997]



Sec. 400.303  Initial selection criteria.

    (a) Nonstandard classification procedures in this subpart initially 
apply when all of the following insurance experience criteria (including 
any applicable adjustment in Sec. 400.303(d)) for the crop have been 
met:
    (1) Three (3) or more indemnified losses during the NCS base period;
    (2) Cumulative indemnities in the NCS base period that exceed 
cumulative premiums during the same period by at least $500;
    (3) The result of dividing the number of indemnified losses during 
the NCS base period by the number of years premium is earned for that 
period equals .30 or greater; and
    (4) Either of the following apply:
    (i) The natural logarithm of the cumulative earned premium rate 
multiplied by the square root of the cumulative loss ratio equals 2.00 
or greater; or
    (ii) Five (5) or more indemnified losses have occurred during the 
NCS base period and the cumulative loss ratio equals or exceeds 1.50.
    (b) The minimum standards provided in paragraphs (a) (2), (3), and 
(4) of this section may be increased in a specific county if that 
county's overall insurance experience for the crop is substantially 
different from the insurance experience for which the criteria was 
determined. The increased standard will apply until the conditions 
requiring the increase no longer apply. Any change in the standards will 
be contained in the Special Provisions for the crop.
    (c) Selection criteria may be applied on the basis of insurance 
experience of a person, insured acreage, or the combination of both.
    (1) Insurance experience of a person will include:
    (i) Insurance experience of the person;
    (ii) Insurance experience of other insured entitites in which the 
person had substantial beneficial interest if the person was actively 
engaged in farming of the insured crop by virtue of the person's 
interest in those insured entities;
    (iii) Insurance experience of a spouse and minor children if the 
person is an individual and the spouse and minor children are considered 
the same as the individual under Sec. 400.306.
    (2) Insurance experience of insured acreage includes all insurance 
experience during the base period resulting

[[Page 37]]

from the production of the insured crop on the acreage.
    (3) Where insurance experience is based on a combination of person 
and insured acreage, the insurance experience will include the 
experience of the person as defined in paragraph (b) of this section (1) 
only on the specific insured acreage during the base period.
    (d) Insurance experience for the crop will be adjusted, by county 
and crop year, to discount the effect of indemnities caused by 
widespread adverse growing conditions. Adjustments are determined as 
follows:
    (1) Determine the average yield for the county using the annual 
county crop yields for the previous 20 crop years, unless such data is 
not available;
    (2) Determine the normal variability in the average yield for the 
county, expressed as the standard deviation;
    (3) Subtract the result of Sec. 400.303(d)(2) from Sec. 
400.303(d)(1);
    (4) Divide the annual crop yield for the county for each crop year 
in the NCS base period by the result of Sec. 400.303(d)(3), the result 
of which may not exceed 1.0;
    (5) Subtract the result of Sec. 400.303(d)(4) for each crop year 
from 1.0;
    (6) Multiply the result of Sec. 400.303(d)(5) by the liability for 
the crop year; and
    (7) Subtract the result of Sec. 400.303(d)(6) from any indemnity 
for that crop year.
    (e) FCIC may substitute the crop yields of a comparable crop in 
determining Sec. 400.303(d) (1) and (2), or may adjust the average 
yield or the measurement of normal variability for the county crop, or 
any combination thereof, to account for trends or unusual variations in 
production of the county crop or if the availability of yield and loss 
data for the county crop is limited. Information about how these 
determinations are made is available by submitting a request to the FCIC 
Regional Service Office for the producer's area. Alternate methods of 
determining the effects of adverse growing conditions on insurance 
experience may be implemented by FCIC if allowed in the Special 
Provisions.

[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22876, Apr. 28, 1997]



Sec. 400.304  Nonstandard Classification determinations.

    (a) Nonstandard Classification determinations can affect a change in 
assigned yields, premium rates, or both from those otherwise prescribed 
by the insurance actuarial tables.
    (b) Changes of assigned yields based on insurance experience of 
insured acreage (or of a person on specific insured acreage) will be 
based on the simple average of available actual yields from the insured 
acreage during the base period.
    (c) Changes of assigned yields based on insurance experience of a 
person without regard to any specific insured acreage will be determined 
by an assigned yield factor calculated by multiplying excess loss cost 
ratio by loss frequency and subtracting that product from 1.00 where:
    (1) Excess loss cost ratio is total indemnities divided by total 
liabilities for all years of insurance experience in the base period and 
the result of which is then reduced by the cumulative earned premium 
rate, expressed as a decimal, and
    (2) Loss frequency is the number of crop years in which an indemnity 
was paid divided by the number of crop years in which premiums were 
earned during the base period.
    (d) Changes of premium rates will be made to reflect premium rates 
that would have resulted in insurance experience during the base period 
with a loss ratio of 1.00 but:
    (1) A higher loss ratio than 1.00 may be used for premium rate 
determinations provided that the higher loss ratio is applied uniformly 
in a county; and
    (2) If a Nonstandard Classification change has been made to current 
assigned yields, insurance experience during the base period will be 
adjusted to reflect the affects of changed assigned yields before 
changes of premium rates are calculated based on that experience.

[[Page 38]]

    (e) Once selection criteria have been met in any year, Nonstandard 
Classification adjustments will be made from year to year until no 
further changes are necessary in assigned yields or premium rates under 
the conditions set forth in Sec. 400.304(f). In determining whether 
further changes are necessary, the eligibility criteria will be 
recomputed each subsequent year using the premium rates and yields which 
would have been applicable had this part not been in effect.
    (f) Nonstandard Classification changes will not be made that:
    (1) Increase assigned yields or decrease premium rates from those 
otherwise assigned by the actuarial tables, or
    (2) Result in less than a 10 percent decrease in assigned yields or 
less than a 10 percent increase in premium rates from those otherwise 
assigned by the actuarial tables.



Sec. 400.305  Assignment of Nonstandard Classifications.

    (a) Assignment of a Nonstandard Classification of assigned yields, 
assigned yield factors, or premium rates shall be made on forms approved 
by the Corporation and included in the actuarial tables for the county.
    (b) Nonstandard classification assignment will be made each year, 
for the year identified on the assignment forms, and are not subject to 
change under the provisions of this subpart by the Corporation for that 
year when included in the actuarial tables for the county, except as a 
result of a request for reconsideration as provided in section 400.309, 
or as the result of appeals under 7 CFR part 11.
    (c) A nonstandard classification may be assigned to identified 
insurable acreage; a person; or to a combination of person and 
identified acreage for a crop or crop practice, type, variety, or crop 
option or amendment whereby:
    (1) Classifications assigned to identified insurable acreage apply 
to all acres of the insured crop grown on the identified acreage;
    (2) Classifications assigned to a person apply to all insurable 
acres of the insured crop on which the person and any entity in which 
the person has substantial beneficial interest is actively engaged in 
farming; and
    (3) Classifications assigned to a combination of a person and 
identified insurable acreage will only apply to those acres of the 
insured crop grown on the identified acreage on which the named person 
is actively engaged in producing such crop.

[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22877, Apr. 28, 1997]



Sec. 400.306  Spouses and minor children.

    (a) The spouse and minor children of an individual are considered to 
be the same as the individual for purposes of this subpart except that:
    (1) The spouse who was actively engaged in farming in a separate 
farming operation prior to their marriage will be a separate person with 
respect to that separate farming operation so long as that operation 
remains separate and distinct from any farming operation conducted by 
the other spouse;
    (2) A minor child who is actively engaged in farming in a separate 
farming operation will be a separate person with respect to that 
separate farming operation if:
    (i) The parent or other entity in which the parent has a substantial 
beneficial interest does not have any interest in the minor's separate 
farming operation or in any production from such operation;
    (ii) The minor has established and maintains a separate household 
from the parent;
    (iii) The minor personally carries out the farming activities with 
respect to the minor's farming operation; and
    (iv) The minor establishes separate accounting and recordkeeping for 
the minor's farming operation.
    (b) An individual shall be considered to be a minor until the age of 
18 is reached. Court proceedings conferring majority on an individual 
under 18 years of age will not change such individual's status as a 
minor.



Sec. 400.307  Discontinuance of participation.

    If the person has discontinued participation in the crop insurance 
program, the person will still be included on the NCS list in the county 
until the person has discontinued participation

[[Page 39]]

as a policyholder or a person with a substantial beneficial interest in 
a policyholder for at least 10 consecutive crop years. The most recent 
nonstandard classification assigned will be continued from year to year 
until participation has been renewed for at least one crop year and at 
least three years of insurance experience have occurred in the current 
base period. A nonstandard classification will no longer be applicable 
to the person or the person on identified acreage if the Corporation 
determines the person is deceased.

[62 FR 22877, Apr. 28, 1997]



Sec. 400.308  Notice of Nonstandard Classification.

    (a) The Corporation will give written notice to all persons to whom 
a Nonstandard Classification will be assigned. The notice will give the 
Nonstandard Classification and the person's rights and responsibilities 
according to this subpart.
    (b) The person, upon receiving notice from the Corporation, will be 
responsible for giving notice of the Nonstandard Classification to any 
other person with an insurable interest affected by the classification. 
The person will give notice to any other affected person:
    (1) Prior to the sales closing date if the other affected person has 
an established insurable interest at the time the classified person is 
notified by the Corporation; or
    (2) Prior to the Classified person's establishing an insurable 
interest of another person that will be affected by the classification.



Sec. 400.309  Requests for reconsideration.

    (a) Any person to be assigned a nonstandard classification under 
this subpart will be notified of and allowed not less that 30 days from 
the date notice is received to request reconsideration before the 
nonstandard classification becomes effective. The request will be 
considered to have been made when received, in writing, by the 
Corporation.
    (b) Upon receipt of a timely request for reconsideration from the 
person to whom the classification will be assigned, the Corporation 
will:
    (1) Review all information supplied by, and respond to all questions 
raised by the individual, or
    (2) In the absence of information and questions, review insurance 
experience and determinations for compliance with this subpart and 
report review results to the individual requesting reconsideration.
    (c) Upon review of a request for reconsideration, the classification 
to be assigned will be corrected for:
    (1) Errors and omissions in insurance experience;
    (2) Incorrect calculations under procedures in this subpart, and
    (3) Typographical errors.
    (d) If the review finds no cause for change, the classification will 
be assigned and placed on file in the actuarial tables for the county.
    (e) Any person not satisfied by a determination of the Corporation 
upon reconsideration may further appeal under the provisions of 7 CFR 
part 11.

[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22877, Apr. 28, 1997]



           Subpart P_Preemption of State Laws and Regulations

    Authority: 7 U.S.C. 1506, 1516.

    Source: 55 FR 23069, June 6, 1990, unless otherwise noted.



Sec. 400.351  Basis and applicability.

    The regulations contained in this subpart are issued pursuant to the 
Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq.) (the 
Act), to prescribe the procedures for Federal preemption of State laws 
and regulations not consistent with the purpose, intent, or authority of 
the Act. These regulations are applicable to all policies of insurance, 
insured or reinsured by the Corporation, contracts, agreements, or 
actions authorized by the Act and entered into or issued by FCIC.



Sec. 400.352  State and local laws and regulations preempted.

    (a) No State or local governmental body or non-governmental body 
shall have the authority to promulgate rules or regulations, pass laws, 
or issue policies or decisions that directly or indirectly affect or 
govern agreements,

[[Page 40]]

contracts, or actions authorized by this part unless such authority is 
specifically authorized by this part or by the Corporation.
    (b) The following is a non-inclusive list of examples of actions 
that State or local governmental entities or non-governmental entities 
are specifically prohibited from taking against the Corporation or any 
party that is acting pursuant to this part. Such entities may not:
    (1) Impose or enforce liens, garnishments, or other similar actions 
against proceeds obtained, or payments issued in accordance with the 
Federal Crop Insurance Act, these regulations, or contracts or 
agreements entered into pursuant to these regulations;
    (2) Tax premiums associated with policies issued hereunder;
    (3) Exercise approval authority over policies issued;
    (4) Levy fines, judgments, punitive damages, compensatory damages, 
or judgments for attorney fees or other costs against companies, 
employees of companies including agents and loss adjustors, or Federal 
employees arising out of actions or inactions on the part of such 
individuals and entities authorized or required under the Federal Crop 
Insurance Act, the regulations, any contract or agreement authorized by 
the Federal Crop Insurance Act or by regulations, or procedures issued 
by the Corporation (Nothing herein precludes such damages being imposed 
against the company if a determination is obtained from FCIC that the 
company, its employee, agent or loss adjuster failed to comply with the 
terms of the policy or procedures issued by FCIC and such failure 
resulted in the insured receiving a payment in an amount that is less 
than the amount to which the insured was entitled); or
    (5) Assess any tax, fee, or amount for the funding or maintenance of 
any State or local insolvency pool or other similar fund.
    The preceding list does not limit the scope or meaning of paragraph 
(a) of this section.

[55 FR 23069, June 6, 1990, as amended at 69 FR 48730, Aug. 10, 2004]



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

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

    Source: 57 FR 46297, Oct. 8, 1992, unless otherwise noted.



Sec. 400.401  Basis and purpose and applicability.

    (a) The regulations contained in this subpart are issued pursuant to 
the Act to prescribe procedures for the collection, use, and 
confidentiality of Social Security Numbers (SSN) and Employer 
Identification Numbers (EIN) and related records.
    (b) These regulations are applicable to:
    (1) All holders of crop insurance policies issued by FCIC under the 
Act and sold and serviced by local FSA offices.
    (2) All holders of crop insurance policies sold by insurance 
providers and all insurance providers, their contractors and 
subcontractors, including past and present officers and employees of 
such companies, their contractors and subcontractors.
    (3) Any agent, general agent, or company, or any past or present 
officer, employee, contractor or subcontractor of such agent, general 
agent, or company under contract to FCIC or an insurance provider for 
loss adjustment or any other purpose related to the crop insurance 
programs insured or reinsured by FCIC; and
    (4) All past and present officers, employees, elected officials, 
contractors, and subcontractors of FCIC and FSA.

[57 FR 46297, Oct. 8, 1992, as amended at 62 FR 28608, May 27, 1997]



Sec. 400.402  Definitions.

    Act--The Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et 
seq.).
    Applicant--A person who has submitted an application for crop 
insurance coverage under the Act.
    Authorized person--Any current or past officer, employee, elected 
official, general agent, contractor, or loss adjuster of FCIC, the 
insurance provider, or any other government agency whose

[[Page 41]]

duties require access to administer the Act.
    Disposition of records--The act of removing and disposing of records 
containing a participant's SSN or EIN by FCIC, or the insurance 
provider.
    FCIC--The Federal Crop Insurance Corporation of the United States 
Department of Agriculture or any successor agency.
    FSA--The Farm Service Agency of the United States Department of 
Agriculture, or a successor agency.
    Insurance provider--A private insurance company approved by FCIC, or 
a local FSA office providing crop insurance coverage to producers 
participating in any program administered under the Act.
    Past officers and employees--Any officer or employee of FCIC or the 
insurance provider who leaves the employ of FCIC or the insurance 
provider subsequent to the effective date of this rule.
    Person--An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and whenever applicable, a state, 
political subdivision, or an agency of a state.
    Policyholder--An applicant whose application for insurance under the 
crop insurance program has been accepted by FCIC or the insurance 
provider.
    Retrieval of records--Retrieval of a person's records by that 
person's SSN or EIN, or name.
    Safeguards--Methods of security to be employed by FCIC or the 
insurance provider to protect a participant's SSN or EIN from unlawful 
disclosure and access.
    Storage--The secured storing of records kept by FCIC or the 
insurance provider on computer disks or drives, computer printouts, 
magnetic tape, index cards, microfiche, microfilm, etc.
    Substantial beneficial interest--Any person having an interest of at 
least 10 percent in the applicant or policyholder.
    System of records--Records established and maintained by FCIC or the 
insurance provider containing SSN or EIN data, name, address, city and 
State, applicable policy numbers, and other information related to 
multiple peril crop insurance policies as required by FCIC, from which 
information is retrieved by a personal identifier including, but not 
limited to the SSN, EIN, or name.

[62 FR 28608, May 27, 1997]



Sec. 400.403  Required system of records.

    Insurance providers are required to implement a system of records 
for obtaining, using, and storing documents containing SSN or EIN data 
before they accept or receive any applications for insurance. This data 
should include: name; address; city and state; SSN or EIN; and policy 
numbers which have been used by FCIC or the insurance provider.

[62 FR 28608, May 27, 1997]



Sec. 400.404  Policyholder responsibilities.

    (a) The policyholder or applicant for crop insurance must provide a 
correct SSN or EIN to FCIC or the insurance provider to be eligible for 
insurance. The SSN or EIN will be used by FCIC and the insurance 
provider in:
    (1) Determining the correct parties to the agreement or contract;
    (2) Collecting premiums or other amounts due FCIC or the insurance 
provider;
    (3) Determining the amount of indemnities;
    (4) Establishing actuarial data on an individual policyholder basis; 
and
    (5) Determining eligibility for crop insurance program participation 
or other United States Department of Agriculture benefits.
    (b) If the policyholder or applicant for crop insurance does not 
provide the correct SSN or EIN on the application and other forms where 
such SSN or EIN is required, FCIC or the reinsured company shall reject 
the application.
    (c) The policyholder or applicant is required to provide to FCIC or 
the insurance provider, the name and SSN or EIN of any individual or 
other entity:
    (1) holding or acquiring a substantial beneficial interest in such 
policyholder or applicant; or
    (2) having any interest in the policyholder or applicant and 
receiving separate benefits under another United States Department of 
Agriculture program as a direct result of such interest.
    (d) If a policyholder or applicant is using an EIN for a policy in 
an individual person's name, the SSN of the

[[Page 42]]

policyholder or applicant must also be provided.

[62 FR 28608, May 27, 1997]



Sec. 400.405  Agent and loss adjuster responsibilities.

    (a) The agent or loss adjuster shall provide his or her correct SSN 
to FCIC or the insurance provider, whichever is applicable, to be 
eligible to participate in the crop insurance program. The SSN will be 
used by FCIC and the insurance provider in establishing a database for 
the purposes of:
    (1) Identifying agents and loss adjusters on an individual basis;
    (2) Evaluating agents and loss adjusters to determine level of 
performance;
    (3) Determining eligibility for program participation; and
    (4) Collection of any amount which may be owed by the agent and loss 
adjuster to the United States.
    (b) If the loss adjuster contracting with FCIC to participate in the 
crop insurance program does not provide his or her correct SSN on forms 
or contracts where such SSN is required, the loss adjuster's contract 
will be cancelled effective on the date of refusal and the loss adjuster 
will be subject to suspension and debarment in accordance with the 
suspension and debarment regulations of the United States Department of 
Agriculture.
    (c) If the agent or loss adjuster contracting with an insurance 
provider, who is also a private insurance company, to participate in the 
crop insurance program does not provide his or her correct SSN on forms 
or contracts where such SSN is required, the premium subsidy payable for 
administrative and operating expenses under the Standard Reinsurance 
Agreement, or any other reinsurance agreement, will not be paid on those 
policies lacking the correct SSN.

[62 FR 28609, May 27, 1997]



Sec. 400.406  Insurance provider responsibilities.

    The insurance provider is required to collect and record the SSN or 
EIN on each application or on any other form required by FCIC.

[62 FR 28609, May 27, 1997]



Sec. 400.407  Restricted access.

    The Manager, other officer, or employee of FCIC or an authorized 
person may have access to the SSNs and EINs obtained pursuant to this 
subpart, only for the purpose of establishing and maintaining a system 
of records necessary for the effective administration of the Act.

[62 FR 28609, May 27, 1997]



Sec. 400.408  Safeguards and storage.

    Records must be maintained in secured storage with proper safeguards 
sufficient to enforce the restricted access provisions of this subpart.

[62 FR 28609, May 27, 1997]



Sec. 400.409  Unauthorized disclosure.

    Anyone having access to the records identifying a participant's SSN 
or EIN will abide by the provisions of section 205(c)(2)(C) of the 
Social Security Act (42 U.S.C. 405(c)(2)(C), and section 6109(f), 
Internal Revenue Code of 1986 (26 U.S.C. 6109(f) and the Privacy Act of 
1974 (5 U.S.C. 552a). All records are confidential, and are not to be 
disclosed to unauthorized personnel.

[57 FR 46297, Oct. 8, 1992. Redesignated at 62 FR 28608, May 27, 1997]



Sec. 400.410  Penalties.

    Unauthorized disclosure of SSN's or EIN's by any person may subject 
that person, and the person soliciting the unauthorized disclosure, to 
civil or criminal sanctions imposed under various Federal statutes, 
including 26 U.S.C. 7613, 5 U.S.C. 552a, and 42 U.S.C. 408.

[57 FR 46297, Oct. 8, 1992. Redesignated at 62 FR 28608, May 27, 1997]



Sec. 400.411  Obtaining personal records.

    Policyholders, agents, and loss adjusters in the crop insurance 
program will be able to review and correct their records as provided by 
the Privacy Act. Records may be requested by:
    (a) Mailing a signed written request to the headquarters office of 
FCIC; the FCIC Regional Service Office, or the insurance provider; or

[[Page 43]]

    (b) Making a personal visit to the above mentioned establishments 
and showing valid identification.

[57 FR 46297, Oct. 8, 1992. Redesignated and amended at 62 FR 28608, 
28609, May 27, 1997]



Sec. 400.412  Record retention.

    (a) FCIC or the insurance provider will retain all records of 
policyholders for a period of not less than 3 years from the date of 
final action on a policy for the crop year, unless further maintenance 
of specific records is requested by FCIC. Final actions on insurance 
policies include conclusion of insurance events, such as the latest of 
termination of the policy, completion of loss adjustment, or 
satisfaction of claim.
    (b) The statute of limitations for FCIC contract claims may permit 
litigation to be instituted after the period of record retention. 
Destruction of records prior to the expiration of the statute of 
limitations will not provide a defense to any action by FCIC against any 
private insurance company.

[62 FR 28609, May 27, 1997]



Sec. 400.413  [Reserved]



                           Subpart R_Sanctions

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

    Source: 58 FR 53110, Oct. 14, 1993, unless otherwise noted.



Sec. 400.451  General.

    (a) The Federal Crop Insurance Corporation (FCIC) has implemented a 
system of sanctions to prevent waste, fraud, and abuse within its 
programs and insurance delivery systems. Such sanctions include civil 
penalties and disqualification from the crop insurance program under the 
Federal Crop Insurance Act, 7 U.S.C. 1506(m); government wide debarment 
and suspension; and civil penalties and assessments under the Program 
Fraud Civil Remedies Act, 31 U.S.C. 3801--31 U.S.C. 3812.
    (b) The provisions of this subpart apply to all contracts and 
agreements to which FCIC is a party unless otherwise specifically 
provided for in this subpart, including those in which FCIC provides 
administrative expense reimbursement, premium subsidy, or reinsurance 
benefits.
    (c) The provisions of this subpart are in addition to any other 
sanctions specifically provided in applicable contracts and agreements.
    (d) This subpart is applicable to any act or omission by any 
affected party after October 14, 1993.



Sec. 400.452  Definitions.

    For purposes of this subpart, a person means an individual, 
partnership, association, corporation, estate, trust, or other business 
enterprise or legal entity, and wherever applicable, a state, a 
political subdivision of a state, or any agency thereof.



Sec. 400.453  Exhaustion of administrative remedies.

    All administrative remedies contained herein or incorporated herein 
by reference must be exhausted before Judicial Review in the United 
States Courts may be sought, unless review is specifically required by 
statute.



Sec. 400.454  Civil penalties.

    (a) Any person who willfully and intentionally provides any 
materially 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 an amount specified in Sec. 3.91(b)(7) of this title and 
disqualification from participation in:
    (1) The catastrophic risk protection plan of insurance and the 
noninsured crop disaster assistance program 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.
    (b) FCIC may make the payment of a civil penalty under this section 
a prior condition for the issuance, renewal, restoration, or continuing 
validity of any crop insurance policy or other approval.
    (c) FCIC may compromise, modify, settle, collect, or remit with or 
without conditions, any civil penalty which

[[Page 44]]

is subject to imposition or which has been imposed under this section 
whenever it considers it to be appropriate or advisable.
    (d) If a director, officer, or agent of a corporation provides false 
or inaccurate information, they may be separately subject to the fine 
specified in paragraph (a) of this section without regard to any 
penalties to which the corporation may be subject.
    (e) The liability of any person for any penalty under this subpart 
or any related charges arising in connection therewith shall be in 
addition to any other liability of such person under any civil or 
criminal fraud statute or any other statute or provision of law.
    (f) Proceedings under this Sec. 400.454 will be in accordance with 
subpart H of 7 CFR part 1, ``Rules of Practice Governing Formal 
Adjudicatory Proceedings Instituted by the Secretary under Various 
Statutes,'' by which the Manager, FCIC, shall initiate proceedings by 
filing a complaint with the Hearing Clerk, United States Department of 
Agriculture.

[58 FR 53110, Oct. 14, 1993, as amended at 60 FR 37323, July 20, 1995; 
62 FR 40928, July 31, 1997]



Sec. 400.455  Governmentwide debarment and suspension (procurement).

    (a) This section prescribes the terms and conditions under which 
persons or business entities may be debarred or suspended by FCIC from 
contracting with the Federal government.
    (b) This section is in accordance with 48 CFR part 9, subpart 9.4 
and 48 CFR part 409, subpart 409.4 and shall be applicable to all FCIC 
debarment and suspension proceedings undertaken pursuant to the Federal 
Acquisition Regulations, except that the authority to debar or suspend 
is reserved to the Manager, FCIC, or the Manager's designee.
    (c) Any individual or entity suspended or debarred under the 
provisions of 48 CFR part 9, subpart 9.4 will not be eligible to 
contract with FCIC or be employed by or contract with any insurance 
company that sells or adjusts FCIC's crop insurance contracts or which 
company's crop insurance contracts are reinsured by FCIC. FCIC may waive 
this provision if it is satisfied that the insurance company has taken 
sufficient action to insure that the suspended or debarred entity or 
individual will not be involved, in any way, with FCIC or FCIC reinsured 
crop insurance contracts.



Sec. 400.456  Governmentwide debarment and suspension (nonprocurement).

    (a) This section prescribes the terms and conditions under which 
individuals or entities may be debarred or suspended by FCIC from 
participation in Federal assistance and benefits under Federal programs 
and activities.
    (b) This section, in accordance with 7 CFR part 3017, shall be 
applicable to all FCIC debarment and suspension proceedings other than 
those undertaken pursuant to the Federal Acquisition Regulations.
    (c) Proceedings under this section are not applicable to 
determinations of eligibility under the provisions of the crop insurance 
contracts or determinations to be made under 7 CFR 400.454.
    (d) The Manager, FCIC, shall be the debarring and suspending 
official for all debarment or suspension proceedings undertaken by FCIC 
under the provisions of 7 CFR part 3017.



Sec. 400.457  Program Fraud Civil Remedies Act.

    (a) This section is in accordance with the Program Fraud Civil 
Remedies Act of 1986 (31 U.S.C. 3801-U.S.C. 3831) which provides for 
civil penalties and assessments against persons who make, submit, or 
present, or cause to be made, submitted, or presented, false, 
fictitious, or fraudulent claims or written statements to Federal 
authorities or to their agents.
    (b) Proceedings under this section will be in accordance with 
subpart L of 7 CFR part 1, ``Procedures Related to Administrative 
Hearings Under the Program Fraud Civil Remedies Act of 1986.''
    (c) The Director, Appeals and Litigation Staff, FCIC, or the 
Director's designee, is authorized to serve as Agency Fraud Claims 
Officer for the purpose of implementing the requirements of this 
section.

[[Page 45]]



Sec. 400.458  Scheme or device.

    (a) 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 noninsured 
assistance benefits to which the person is not entitled, has evaded the 
provisions of the Federal Crop Insurance Act, or has acted with the 
purpose of evading the provisions of 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.
    (b) A scheme or device may include, but is not limited to, creating 
or using another entity, or concealing or providing false information 
with respect to your interest in the policyholder, to evade:
    (1) Suspension, debarment, or disqualification from participation in 
the program;
    (2) The assignment of the nonstandard classification system; or
    (3) Ineligibility for a delinquent debt owed to FCIC or the 
insurance company.

[60 FR 37324, July 20, 1995]



Sec. 400.459  Indebtedness.

    Any person who owes a debt to FCIC, or an approved insurance 
provider, arising from any program administered under the Act, and that 
debt is delinquent, will be ineligible to participate in all such 
programs until the debt is paid in full or the person enters into an 
agreement, acceptable to FCIC or the approved insurance provider, to 
repay the debt. If the person provides adequate evidence to demonstrate 
that the amount of debt is in dispute, the person's application will be 
accepted or their insurance will remain in effect, but no indemnity 
payment will be made, until the disputed issue is resolved between that 
person and FCIC or the approved insurance provider through the available 
appeal process.

[60 FR 51321, Oct. 2, 1995]



Sec. Sec. 400.460-400.500  [Reserved]

Subpart S [Reserved]



    Subpart T_Federal Crop Insurance Reform, Insurance Implementation

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

    Source: 61 FR 42975, Aug. 20, 1996, unless otherwise noted.



Sec. 400.650  Purpose.

    The Reform Act requires FCIC to implement a crop insurance program 
that offers several levels of insurance coverage for producers. These 
levels of protection include catastrophic risk protection, and 
additional coverage insurance. This subpart provides notice of the 
availability of these crop insurance options and establishes provisions 
and requirements for implementation of the insurance provisions of the 
Reform Act.

[61 FR 42975, Aug. 20, 1996, as amended at 68 FR 37721, June 25, 2003]



Sec. 400.651  Definitions.

    Act. The Federal Crop Insurance Act, as amended (7 U.S.C. Sec. Sec. 
1501 et seq.).
    Additional coverage. A level of coverage greater than catastrophic 
risk protection.
    Administrative fee. An amount the producer must pay for 
catastrophic, and additional coverage each crop year on a per crop and 
county basis as specified in the Basic Provisions or the Catastrophic 
Risk Protection Endorsement.
    Approved insurance provider. A private insurance company, including 
its agents, that has been approved and reinsured by FCIC to provide 
insurance coverage to producers participating in the Federal crop 
insurance program.
    Approved yield. The actual production history (APH) yield, 
calculated and approved by the verifier, used to determine the 
production guarantee by summing the yearly actual, assigned, adjusted or 
unadjusted transitional yields and dividing the sum by the number of 
yields contained in the database, which will always contain at least 
four yields. The database may contain up to 10 consecutive crop years of 
actual or assigned yields. The approved yield may have yield adjustments 
elected under applicable policy provisions, or other

[[Page 46]]

limitations according to FCIC approved procedures applied when 
calculating the approved yield.
    Catastrophic risk protection. The minimum level of coverage offered 
by FCIC which is required before a person may qualify for certain other 
USDA program benefits unless the producer executes a waiver of any 
eligibility for emergency crop loss assistance in connection with the 
crop. For the 1995 through 1998 crop years, such coverage will offer 
protection equal to fifty percent (50%) of the approved yield 
indemnified at sixty percent (60%) of the expected market price, or a 
comparable coverage as established by FCIC. For the 1999 and subsequent 
crop years, such coverage will offer protection equal to fifty percent 
(50%) of the approved yield indemnified at fifty-five percent (55%) of 
the expected market price, or a comparable coverage as established by 
FCIC.
    Catastrophic Risk Protection Endorsement. The part of the crop 
insurance policy that contains provisions of insurance that are specific 
to catastrophic risk protection.
    Crop of economic significance. A crop that has either contributed in 
the previous crop year, or is expected to contribute in the current crop 
year, ten percent (10%) or more of the total expected value of the 
producer's share of all crops grown in the county. However, a crop will 
not be considered a crop of economic significance if the expected 
liability under the Catastrophic Risk Protection Endorsement is equal to 
or less than the administrative fee required for the crop.
    Expected market price. (price election) The price per unit of 
production (or other basis as determined by FCIC) anticipated during the 
period the insured crop normally is marketed by producers. This price 
will be set by FCIC before the sales closing date for the crop. The 
expected market price may be less than the actual price paid by buyers 
if such price typically includes remuneration for significant amounts of 
post-production expenses such as conditioning, culling, sorting, 
packing, etc.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
Government Corporation within USDA.
    FSA. The Farm Service Agency, an agency of the United States 
Department of Agriculture or any successor agency.
    Insurable interest. The value of the producer's interest in the crop 
that is at risk from an insurable cause of loss during the insurance 
period. The maximum indemnity payable to the producer may not exceed the 
indemnity due on the producer's insurable interest at the time of loss.
    Intended crop. A crop stated on the application as submitted on or 
before the sales closing date for the crop which the producer intended 
to plant in the crop year for which application is made.
    Linkage requirement. The legal requirement that a producer must 
obtain at least catastrophic risk protection coverage for any crop of 
economic significance as a condition of receiving benefits for such crop 
from certain other USDA programs in accordance with Sec. 400.655, 
unless the producer executes a waiver of any eligibility for emergency 
crop loss assistance in connection with the crop.
    Person. An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and wherever applicable, a state 
or a political subdivision or agency of a state.
    Reform Act. The Federal Crop Insurance Reform Act of 1994, Public 
Law 103-354.
    Secretary. The Secretary of the United States Department of 
Agriculture.
    Substitute crop. An alternative crop whose sales closing date has 
passed and that is planted on acreage that is prevented from being 
planted to an intended crop or where an intended crop is planted and 
fails.
    Zero acreage report. An acreage report filed by the producer that 
certifies that the producer does not have a share in the crop for that 
crop year.

[61 FR 42975, Aug. 20, 1996, as amended at 63 FR 40634, July 30, 1998; 
64 FR 40742, July 28, 1999; 68 FR 37721, June 25, 2003]



Sec. 400.652  Insurance availability.

    (a) If sufficient actuarial data are available, FCIC will offer 
catastrophic risk protection, and additional coverage plans of insurance 
to indemnify

[[Page 47]]

persons for FCIC insured or reinsured crop loss due to loss of yield or 
prevented planting, if the crop loss or prevented planting is due to an 
insured cause of loss specified in the applicable crop insurance policy.
    (b) Catastrophic risk protection coverage may be offered through 
approved insurance providers and through local offices of the Farm 
Service Agency specified by the Secretary. Additional coverage will only 
be offered through approved insurance providers unless there is not a 
sufficient number of approved insurance providers that offer such 
insurance within a service area.
    (c) A person must obtain at least catastrophic risk protection for 
the crop on all insurable acreage in the county in which the person has 
a share on or before the sales closing date designated by FCIC for the 
crop in the county in order to satisfy the linkage requirements unless 
the producer executes a waiver of any eligibility for emergency crop 
loss assistance in connection with the crop.
    (d) For additional coverage, in areas where insurance is not 
available for a particular agricultural commodity that is insurable 
elsewhere, FCIC may enter into a written agreement with a person to 
insure the commodity, provided that the person has actuarially sound 
data relating to the production of the commodity that is acceptable to 
FCIC and that such written agreement is specifically allowed by the crop 
insurance regulations applicable to the crop.
    (e) Failure to comply with all provisions of the policy constitutes 
a breach of contract and may result in ineligibility for certain other 
farm program benefits for that crop year and any benefit already 
received must be refunded. If a producer breaches the insurance 
contract, the execution of a waiver of eligibility for emergency crop 
loss assistance will not be effective for the crop year in which the 
breech occurred.

[61 FR 42975, Aug. 20, 1996, as amended at 68 FR 37721, June 25, 2003]



Sec. 400.653  Determining crops of economic significance.

    To be eligible for certain other program benefits under Sec. 
400.655 the following conditions will apply with respect to crops of 
economic significance if the producer does not execute a waiver of any 
eligibility for emergency crop loss assistance in connection with the 
crop.
    (a) If a producer planted a crop of economic significance in the 
preceding crop year, and does not intend to plant the same crop in the 
present crop year, the producer does not have to obtain insurance 
coverage or execute a waiver of any eligibility for emergency crop loss 
assistance in connection with the crop in the present crop year to 
comply with the linkage requirements. However, if the producer later 
decides to plant that crop, the producer will be unable to obtain 
insurance after the sales closing date and must execute a waiver of any 
eligibility for emergency crop loss assistance in connection with the 
crop to be eligible for benefits as specified in Sec. 400.655. Failure 
to execute such a waiver will require the producer to refund any 
benefits already received under a program specified in Sec. 400.655.
    (b) The producer is initially responsible to determine the crops of 
economic significance in the county. The insurance provider may assist 
the producer in making these initial determinations. However, these 
determinations will not be binding on the insurance provider. To 
determine the percentage value of each crop:
    (1) Multiply the acres planted to the crop times the producer's 
share, times the approved yield, and times the price;
    (2) Add the values of all crops grown by the producer (in the 
county); and
    (3) Divide the value of the specific crop by the result of paragraph 
(b)(2).
    (c) The producer may use the type of price, such as the current 
local market price, futures price, established price, highest amount of 
insurance, etc., for the price when calculating the value of each crop, 
provided that the producer uses the same type of price for all crops in 
the county.
    (d) The producer may be required to justify the calculation and 
provide adequate records to enable the insurance provider to verify 
whether a crop is of economic significance.

[61 FR 42975, Aug. 20, 1996, as amended at 64 FR 40742, July 28, 1999]

[[Page 48]]



Sec. 400.654  Application and acreage report.

    (a) To participate in catastrophic risk protection, or additional 
coverage plans of insurance, a producer must submit an application for 
insurance on or before the applicable sales closing date.
    (b) In order to remain eligible for certain farm programs, as 
specified in Sec. 400.655, a producer must obtain at least catastrophic 
risk protection on all crops of economic significance, if catastrophic 
risk protection is available in the county, unless the producer executes 
a waiver of any eligibility for emergency crop loss assistance in 
connection with the crop.
    (c) Notwithstanding the requirements of Sec. 400.654(a) that 
applications for insurance be submitted on or before the applicable 
sales closing date, FCIC may permit a producer to insure crops other 
than those specified on the application under the following conditions:
    (1) The producer must be unable to plant the intended crop or it is 
not practical to replant a failed crop before the final planting date. 
FCIC will take into consideration marketing windows when determining 
whether it was not practical to replant.
    (2) Conditions must exist to warrant allowing a producer to insure 
crops other than the intended crop.
    (3) The producer must submit an application for the substitute crop 
on or before the acreage reporting date for the substitute crop and pay 
any applicable administrative fee. A producer may not substitute a crop 
that the producer planted in the preceding crop year unless that crop 
was listed on a timely filed application for the current crop year.
    (4) If the producer plants a substitute crop that is a crop of 
economic significance, the producer must obtain CAT coverage, if 
available, to comply with the linkage requirements specified in Sec. 
400.655. The producer may not substitute a crop under this provision if 
the producer has signed or intends to sign a waiver for emergency crop 
loss assistance for the crop year.
    (5) The substitute crop must be planted on or before the final 
planting date or within the late planting period, if applicable, for the 
substitute crop.
    (6) Under no circumstances may a producer submit an application for 
additional coverage after the sales closing date for the substitute 
crop.
    (d) For all coverages, including catastrophic risk protection, and 
additional coverages, the producer must file a signed acreage report on 
or before the acreage reporting date. Any person may sign any document 
relative to crop insurance coverage on behalf of any other person 
covered by such a policy, provided that the person has a properly 
executed power of attorney or other legally sufficient document 
authorizing such person to sign.
    (e) Under catastrophic risk protection, unless the other person with 
an insurable interest in the crop objects in writing prior to the 
acreage reporting date and provides a signed acreage report on their own 
behalf an operator may sign the acreage report for all other persons 
with an insurable interest in the crop without a power of attorney. All 
persons with an insurable interest in the crop, and for whom the 
operator purports to sign and represent, are bound by the information 
contained in that acreage report.

[61 FR 42975, Aug. 20, 1996, as amended at 64 FR 40742, July 28, 1999; 
68 FR 37721, June 25, 2003]



Sec. 400.655  Eligibility for other program benefits.

    The producer must obtain at least catastrophic coverage for each 
crop of economic significance in the county in which the producer has an 
insurable share, if insurance is available in the county for the crop, 
unless the producer executes a waiver of any eligibility for emergency 
crop loss assistance in connection with the crop, to be eligible for:
    (a) Benefits under the Agricultural Market Transition Act;
    (b) Loans or any other USDA provided farm credit, including: 
guaranteed and direct farm ownership loans, operating loans, and 
emergency loans under the Consolidated Farm and Rural Development Act 
provided after October 13, 1994; and
    (c) Benefits under the Conservation Reserve Program derived from any 
new

[[Page 49]]

or amended application or contract executed after October 13, 1994.

[61 FR 42975, Aug. 20, 1996. Redesignated at 63 FR 40634, July 30, 1998]



Sec. Sec. 400.656-400.657  [Reserved]



 Subpart U_Ineligibility for Programs Under the Federal Crop Insurance 
                                   Act

    Authority: 7 U.S.C. 1506(1), 1506(p).

    Source: 62 FR 42042, Aug. 5, 1997, unless otherwise noted.



Sec. 400.675  Purpose.

    This rule prescribes conditions under which a person may be 
determined to be ineligible to participate in any program administered 
by FCIC under the Federal Crop Insurance Act, as amended. This rule also 
establishes the criteria for reinstatement of eligibility.



Sec. 400.676  [Reserved]



Sec. 400.677  Definitions.

    Act. The Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et 
seq.).
    Actively engaged in farming. Means a person who, in return for a 
share of profits and losses, makes a contribution to the production of 
an insurable crop in the form of capital, equipment, land, personal 
labor, or personal management.
    Applicant. A person who has submitted an application for crop 
insurance coverage under the Act.
    Authorized person. Any current or past officer, employee, elected 
official, general agent, agent, contractor, or loss adjuster of FCIC, 
the insurance provider, or any other government agency whose duties 
require access to the Ineligible Tracking System to administer the Act.
    CAT. The catastrophic risk protection plan of insurance.
    Controlled substance. Any prohibited drug-producing plants 
including, but not limited to, cacti of the genus (lophophora), coca 
bushes (erythroxylum coca), marijuana (cannabis sativa), opium poppies 
(papaver somniferum), and other drug-producing plants, the planting and 
harvesting of which is prohibited by Federal or state law.
    Debt. An amount of money which has been determined by an appropriate 
agency official to be owed, by any person, to FCIC or an insurance 
provider under any program administered under the Act based on evidence 
submitted by the insurance provider. The debt may have arisen from an 
overpayment, premium or administrative fee nonpayment, interest, 
penalties, or other causes.
    Debtor. A person who owes a debt and that debt is delinquent.
    Delinquent debt. Any debt owed to FCIC or the insurance provider, 
that arises under any program administered under the authority of the 
Act, that has not been paid by the termination date specified in the 
applicable contract of insurance, or other due date for payment 
contained in any other agreement or notification of indebtedness, or any 
overdue debt owed to FCIC or the insurance provider which is the subject 
of a scheduled installment payment agreement which the debtor has failed 
to satisfy under the terms of such agreement. Such debt may include any 
accrued interest, penalty, and administrative charges for which demand 
for repayment has been made, or unpaid premium including any accrued 
interest, penalty and administrative charges (7 CFR 400.116). A 
delinquent debt does not include debts discharged in bankruptcy and 
other debts which are legally barred from collection.
    EIN. An Employer Identification Number as required under section 
6109 of the Internal Revenue Code of 1986.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
government corporation within the United States Department of 
Agriculture.
    FSA. The Farm Service Agency or a successor agency.
    Ineligible person. A person who is denied participation in any 
program administered by FCIC under the Act.
    Insurance provider. A reinsured company or FSA providing crop 
insurance coverage to producers participating in any Federal crop 
insurance program administered under the Act.

[[Page 50]]

    Minor. Any person under 18 years of age. Court proceedings 
conferring majority on an individual under 18 years of age will result 
in such persons no longer being considered as a minor.
    Person. An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and wherever applicable, a State, 
political subdivision, or an agency of a State.
    Policyholder. An applicant whose properly completed application for 
insurance under the crop insurance program has been accepted by FCIC or 
an insurance provider.
    Reinsurance agreement. An agreement between two parties by which an 
insurer cedes to a reinsurer certain liabilities arising from the 
insurer's sale of insurance policies.
    Reinsured company. A private insurance company having a Standard 
Reinsurance Agreement, or other reinsurance agreement, with FCIC, whose 
crop insurance policies are approved and reinsured by FCIC.
    Scheduled installment payment agreement. An agreement between a 
person and FCIC or the insurance provider to satisfy financial 
obligations of the person under conditions which modify the terms of the 
original debt.
    Settlement. An agreement between a person and FCIC or the insurance 
provider to resolve a dispute arising from a debt or other 
administrative determination.
    SSN. An individual's Social Security Number as required under 
section 6109 of the Internal Revenue Code of 1986.
    Standard Reinsurance Agreement (SRA). The primary reinsurance 
agreement between the reinsured company and FCIC.
    Substantial beneficial interest. An interest held by any person of 
at least 10 percent or more in the applicant or policyholder.
    System of records. Records established and maintained by FCIC and 
FSA containing SSN or EIN data, name, address, city and State, 
applicable policy numbers, and other information related to Federal crop 
programs as required by FCIC, from which information is retrieved by a 
personal identifier including the SSN, EIN, name, or other unique 
identifier of a person.

[62 FR 42042, Aug. 5, 1997, as amended at 63 FR 40631, July 30, 1998]



Sec. 400.678  Applicability.

    This subpart applies to any program administered by FCIC under the 
Act, including:
    (a) The catastrophic risk protection plan of insurance;
    (b) The limited and additional coverage plans of insurance as 
authorized under sections 508(c) and 508(m) of the Act; and
    (c) Private insurance products authorized under section 508(h) of 
the Act and reinsured by FCIC.



Sec. 400.679  Criteria for ineligibility.

    Any person may be determined to be ineligible to participate in any 
program administered by FCIC under the authority of the Act, if the 
person meets one or more of the following criteria:
    (a) Has a delinquent debt on a crop insurance policy, issued or 
reinsured by FCIC, or any delinquent debt due FCIC under the Act. Any 
person with a delinquent debt owed to FCIC or to the insurance provider 
shall be ineligible to participate in any program administered under the 
authority of the Act. Such determinations will be in accordance with 7 
CFR 400.459. The existence and delinquency of the debt must be 
verifiable.
    (b) Has violated the controlled substance (7 CFR part 718) 
provisions of the Food Security Act of 1985, as amended. Any person who 
violates the controlled substance provisions of the Food Security Act of 
1985, as amended, shall be ineligible to participate in any program 
administered under the Act.
    (c) Has been disqualified under section 506(n) of the Act and 7 CFR 
part 400, subpart R. Any person who is disqualified in any 
administrative proceeding shall be ineligible to participate in any 
program administered under the Act. Ineligibility determinations 
resulting from administrative proceedings will not be stayed pending 
review. However, reversal of the determination will date back to the 
time of determination.

[[Page 51]]



Sec. 400.680  Determination and notification of ineligibility.

    (a) The insurance provider must send a written notice of the debt to 
the person, including the time frame in which the debt must be paid, and 
provide the person with a meaningful opportunity to contest the amount 
or existence of the debt. After the insurance provider has evaluated the 
person's response, if any, and determined that the debt is owed and 
delinquent, the insurance provider should submit the documentation 
establishing the existence and amount of the debt to FCIC, including any 
response by the person.
    (b) If an insurance provider or any other authorized person has 
evidence that a person meets any other criteria set forth in Sec. 
400.679, they must submit the evidence to FCIC.
    (c) After FCIC verifies that the person has met one or more of the 
criteria stated in Sec. 400.679, FCIC will issue a Notice of 
Ineligibility and mail such notice to the person's last known address 
and to the insurance provider.
    (d) The Notice of Ineligibility will state the criteria upon which 
the determination of ineligibility has been based, a brief statement of 
the facts to support the determination, the time period of 
ineligibility, and the persons right to an appeal of the ineligibility 
determination.
    (e) Within 30 days of receiving the Notice of Ineligibility, any 
person receiving such a notice may appeal the determination of 
ineligibility to the National Appeals Division in accordance with 7 CFR 
part 11.
    (f) If the person appeals the determination of ineligibility to the 
National Appeals Division, the insurance provider will be notified and 
provided with an opportunity to participate in the proceeding if 
permitted by 7 CFR part 11.



Sec. 400.681  Effect of ineligibility.

    (a) The period of ineligibility will be effective:
    (1) For ineligibility as a result of a delinquent debt, the date the 
debt has been determined to be delinquent until the debt has been paid 
in full, discharged in bankruptcy, or the person has executed a 
scheduled installment payment agreement;
    (2) For ineligibility as a result of a violation of the controlled 
substance provisions of the Food Security Act of 1985, at the beginning 
of the crop year in which the producer was convicted and the four 
subsequent consecutive crop years; and
    (3) For ineligibility as a result of a disqualification under 
section 506(n) of the Act, the date that the Administrative Law Judge 
signs the order disqualifying the person until the period specified in 
the order of disqualification has expired.
    (b) Once the person has been determined to be ineligible:
    (1) All policies in which the ineligible person is the sole insured 
will be void for the period specified in Sec. 400.681(a);
    (2) If the ineligible person is a general partnership, all partners 
will be individually ineligible and any policy in which a partner has a 
100 percent interest will be void for the period specified in Sec. 
400.681(a). The partnership and all partners will be removed from any 
policy in which they have a substantial beneficial interest, and the 
policyholder share under the policies will be reduced commensurate with 
the ineligible person's share;
    (3) If the applicant or policyholder is a corporation, partnership, 
or other business entity, and an ineligible person has a substantial 
beneficial interest in the applicant or policyholder, the application 
may be accepted or existing policies remain in effect, although the 
ineligible person will be removed from the policies and the policyholder 
share under the policies will be reduced commensurate with the 
ineligible person's share;
    (4) If the applicant or policyholder is a corporation, partnership, 
or other business entity that was created to conceal the interest of a 
person in the farming operation or to evade the ineligibility 
determination of a person with a substantial beneficial interest in the 
applicant or policyholder, the corporation, partnership or other 
business entity will be disregarded, the individual shareholders or 
partners will be personally responsible, and any shareholder or partner 
that is ineligible will be removed from the policy and the policyholder 
share under the

[[Page 52]]

policies will be reduced commensurate with the ineligible person's 
share;
    (5) Any indemnities or payments made on a voided policy, or on the 
portion of the policy reduced because of ineligibility, will be declared 
overpayments and must be repaid; and
    (6) If the policy is voided, all producer paid premiums may be 
refunded, or if an ineligible person is removed from a policy, the 
portion of the producer paid premium commensurate with the ineligible 
person's share may be refunded, less a reasonable amount for expense and 
handling in accordance with 7 CFR 400.47.
    (c) The spouse and minor children of an individual are considered to 
be the same as the individual for purposes of this subpart except that:
    (1) The spouse who was actively engaged in farming in a separate 
farming operation will be a separate person with respect to that 
separate farming operation so long as that operation remains separate 
and distinct from any farming operation conducted by the other spouse 
(Transfers of interest in a farming operation from one spouse to another 
will not be considered as a separate farming operation.);
    (2) A minor child who is actively engaged in farming in a separate 
farming operation will be a separate person with respect to that 
separate farming operation if:
    (i) The parent or other entity in which the parent has a substantial 
beneficial interest does not have any interest in the minor's separate 
farming operation or in any production from such operation;
    (ii) The minor has established and maintains a separate household 
from the parent;
    (iii) The minor personally carries out the farming activities with 
respect to the minor's farming operation; and
    (iv) The minor establishes separate accounting and record keeping 
for the minor's farming operation.



Sec. 400.682  Criteria for reinstatement of eligibility.

    A person who has been determined ineligible may have eligibility 
reinstated as follows:
    (a) A delinquent debt owed on a crop insurance policy insured or 
reinsured by FCIC or any delinquent debt due FCIC. Eligibility may be 
reinstated after the debt is paid in full or discharged in bankruptcy, 
or the person has executed a scheduled installment payment agreement 
accepted by FCIC or the insurance provider. Eligibility may be 
reinstated as of the date the debt is paid, the date the agreement is 
accepted, or the date the debt is discharged in bankruptcy.
    (b) Violations of the controlled substance provisions of the Food 
Security Act of 1985, as amended. Eligibility may be reinstated after 
the period of ineligibility stated in Sec. 400.681 has expired.
    (c) Disqualification under section 506(n) of the Act. Eligibility 
may be reinstated when the period of disqualification determined in the 
administrative proceedings has expired and payment of all penalties and 
overpayments have been completed.
    (d) Timing of reinstatement of eligibility. After eligibility has 
been reinstated, the person must complete a new application for crop 
insurance coverage on or before the applicable sales closing date. If 
the date of reinstatement of eligibility occurs after the applicable 
sales closing date for the crop year, the person may not participate 
until the following crop year. If the National Appeals Division 
determines that the person should not have been placed on the Ineligible 
Tracking System, reinstatement will be effective at the beginning of the 
crop year for which the producer was listed on the Ineligible Tracking 
System and the person will be entitled to all applicable benefits under 
the policy.



Sec. 400.683  Administration and maintenance.

    (a) Ineligible producer data will be maintained in a system of 
records in accordance with the Privacy Act, 5 U.S.C. 552a.
    (1) The Ineligible Tracking System is a record of all persons who 
have been determined to be ineligible for participation in any program 
pursuant to this subpart. This system contains identifying information 
of the ineligible person including, but not limited to, name, address, 
telephone number, SSN

[[Page 53]]

or EIN, reason for ineligibility, and time period for ineligibility.
    (2) Information in the Ineligible Tracking System may be used by 
Federal agencies, FCIC employees, contractors, and reinsured companies 
and their personnel who require such information in the performance of 
their duties in connection with any program administered under the Act. 
The information may be furnished to other users including, but not 
limited to, FCIC contracted agencies; credit reporting agencies and 
collection agencies; in response to judicial orders in the course of 
litigation; and other users as may be appropriate or required by law or 
regulation. The individual information will be made available in the 
form of various reports and notices produced from the Ineligible 
Tracking System, based on valid requests.
    (3) Supporting documentation regarding the determination of 
ineligibility and reinstatement of eligibility will be maintained by 
FCIC and FSA, or its contractors, reinsured companies, and Federal and 
State agencies. This documentation will be maintained consistent with 
the electronic information contained within the Ineligible Tracking 
System.
    (b) Information may be entered into the Ineligible Tracking System 
by FCIC or FSA personnel.
    (c) All persons applying for or renewing crop insurance contracts 
issued or reinsured by FCIC will be subject to validation of their 
eligibility status against the Ineligible Tracking System. Applications 
or benefits approved and accepted are considered approved or accepted 
subject to review of eligibility status in accordance with this subpart.



   Subpart V_Submission of Policies, Provisions of Policies, Rates of 
                  Premium, and Premium Reduction Plans

    Authority: 7 U.S.C. 1506(1), 1506(p).

    Source: 66 FR 47951, Sept. 17, 2001, unless otherwise noted.



Sec. 400.700  Basis, purpose, and applicability.

    (a) This subpart establishes guidelines for the submission of 
policies, plans of insurance, and rates of premium to the Board as 
authorized under section 508(h) of the Act and for nonreinsured 
supplemental policies in accordance with the SRA, and the roles and 
responsibilities of FCIC and the applicant. It also specifies the 
procedures for requesting reimbursement for research and development 
costs, and maintenance costs for products and the approval process.
    (b) The purpose of the premium reduction plan is to foster 
competition in the crop insurance program, thereby providing producers 
with an opportunity to receive a premium discount, as authorized in 
section 508(e)(3) of the Act. RMA has sought to accomplish this purpose, 
while still maintaining the financial stability of the delivery system 
and the integrity of the crop insurance program, by implementing a 
premium reduction plan where approved insurance providers participate in 
the premium reduction plan by requesting the opportunity to offer a 
premium discount and later requesting approval from RMA to pay a premium 
discount if the insurance provider has achieved an efficiency based on 
the actual savings it has attained through the reinsurance year.
    (1) Since the payment of any premium discount is determined based on 
actual reported cost information for the reinsurance year, and must be 
approved by RMA, the disclosure to policyholders of the amount of the 
premium discount and the payment of the premium discount will not occur 
until after the close of any given reinsurance year.
    (2) This premium reduction plan substantially limits the burden on 
approved insurance providers and RMA and provides for flexibility for 
approved insurance providers to choose the States in which they will 
offer premium discounts and vary the amount of premium discount between 
States.
    (3) Under the premium reduction plan, the payment and amount of 
premium discounts cannot be guaranteed, or identified as to amount or 
certainty of payment, in advance of the sale of

[[Page 54]]

an eligible crop insurance contract. However, producers will have the 
potential to receive monetary assistance in defraying the costs of their 
future premium.

[66 FR 47951, Sept. 17, 2001, as amended at 70 FR 41918, July 20, 2005; 
70 FR 44235, Aug. 2, 2005]



Sec. 400.701  Definitions.

    Act. The Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et 
seq.)
    Actuarial documents. The material for the crop or insurance year 
which is available for public inspection in your agent's office and 
published on RMA's website at http://www.rma.usda.gov/, or a successor 
website, and which shows available coverage levels, information needed 
to determine premium rates, premium adjustment percentages, practices, 
particular types or varieties of the insurable crop or agricultural 
commodity, insurable acreage or commodities, and other related 
information regarding crop insurance or other risk management plans of 
insurance in the county or state.
    Actuarially appropriate. Premium rates expected to cover anticipated 
losses and a reasonable reserve based on valid reasoning, an examination 
of available risk data, which for new products may be scarce but must 
still be of sufficient quality and quantity to reasonably determine the 
anticipated losses, or thorough knowledge or experience of the expected 
value of future costs associated with the risk to be transferred.
    Administrative and Operating (A&O) costs. The costs of the approved 
insurance provider, and any MGA and TPA, which are directly related to 
the delivery, loss adjustment and administration of the Federal crop 
insurance program. Costs associated with the sale or service of 
catastrophic risk protection (CAT) eligible crop insurance contracts in 
an amount equal to the loss adjustment expense subsidy for CAT eligible 
crop insurance contracts, ceding commission received for ceding any 
portion of the risk associated with any eligible crop insurance contract 
authorized under the authority of the Act with a reinsurer, and payments 
for the purchase of reinsurance and related credits are not considered 
as A&O costs.
    Administrative and Operating (A&O) subsidy. The subsidy for the 
administrative and operating expenses authorized by the Act and paid by 
FCIC on behalf of the producer to the approved insurance provider. Loss 
adjustment expense reimbursement paid by FCIC for CAT eligible crop 
insurance contracts, and any ceding commission received for ceding any 
portion of the risk associated with any eligible crop insurance contract 
authorized under the authority of the Act with a reinsurer are not 
considered as A&O subsidy.
    Agent. An individual licensed by the State in which an eligible crop 
insurance contract is sold and serviced for the reinsurance year, and 
who is employed by, or under contract with, the approved insurance 
provider, or its designee, to sell and service such eligible crop 
insurance contracts.
    Applicant. Any person or entity that submits a policy, plan of 
insurance, provisions of a policy or plan of insurance, or rates of 
premium to the Board for approval under section 508(h) of the Act.
    Approved insurance provider. A private insurance company that has 
been approved by FCIC to provide insurance coverage to producers 
participating in programs authorized by the Act.
    Approved procedures. The applicable handbooks, manuals, memoranda, 
bulletins or other directives issued by RMA or the Board. For purposes 
of Sec. Sec. 400.714 through 400.722 only, approved procedures include 
all provisions of the SRA.
    Board. The Board of Directors of FCIC.
    Compensation. The total amount of any guaranteed salary or payment, 
commission, or anything that has a quantifiable value or benefit that is 
not contingent on the existence of an underwriting gain of the approved 
insurance provider, including, but not limited to, the payment of health 
or life insurance, deferred compensation (including qualified and 
unqualified), finders fees, retainers, trip or travel expenses, dues or 
other membership fees, the use of vehicles, office space, equipment, 
staff or administrative support paid by the approved insurance provider 
or its contractor either directly or indirectly through a third party.

[[Page 55]]

Payments conditioned upon something other than the underwriting gains of 
the approved insurance provider are considered as compensation, such as 
bonuses or other conditional payments or commission based upon whether 
an agent timely turns in applications, production reports or acreage 
reports, etc. A profit sharing arrangement will be considered 
compensation unless and only to the extent that:
    (1) Such profit sharing arrangement contains a provision that would 
require a pro rata reduction in the amount or percentage of profit 
contained in such arrangement if the total amount of underwriting gain 
paid by FCIC for the applicable reinsurance year is not sufficient to 
cover the amount or percentage of profit; or
    (2) At least one of the required triggers for the payment under the 
profit sharing arrangement is that the approved insurance provider 
receives from FCIC an underwriting gain for its whole book of Federally 
reinsured crop insurance business for the applicable reinsurance year.
    Complete submission. A submission determined by the Board to contain 
all necessary and appropriate documentation in accordance with Sec. 
400.705 and is of sufficient quality to conduct a meaningful review.
    Complexity. Complexity takes into consideration such factors as 
originality, the number and type of factual determinations necessary to 
establish insurable interest, evaluate risk, and determine whether an 
indemnity is payable, the number of commodities and areas to which the 
product is applicable, the rating methodology, the number of risks 
covered, unique policy provisions or endorsements, the delivery process 
of the submission, and the process of creating rules, policy terms and 
conditions, underwriting procedures, rating methodologies, 
administrative and operating procedures, and supporting materials.
    Development. The process of drafting rules, new policy provisions, 
pricing and rating methodologies, administrative and operating 
procedures, systems and software, supporting materials, and 
documentation necessary to create and implement a proposed policy or 
coverage.
    Disinterested third party. A person who does not have any familial 
relationship (parents, brothers, sisters, children, spouse, 
grandchildren, aunts, uncles, nieces, nephews, first cousins, or 
grandparents, related by blood, adoption or marriage, are considered to 
have a familial relationship) with anyone employed or contracted by the 
applicant or who will not benefit financially from the approval of the 
submission.
    Efficiency. Monetary savings realized when the approved insurance 
provider's A&O costs are less than the amount of the A&O subsidy paid by 
FCIC. If the approved insurance provider is reducing agent compensation 
as a means to achieve an efficiency, not all of the efficiency can come 
from such reduction in agent compensation. Efficiency does not include 
any actual or projected underwriting gain earned from the SRA, private 
reinsurance revenues or expenses, or any investment returns on the 
approved insurance provider's reserves.
    Eligible crop insurance contract. An insurance contract for an 
agricultural commodity authorized by the Act and approved by FCIC, with 
terms and conditions in effect as of the applicable contract change 
date, which is sold and serviced consistent with the Act, FCIC 
regulations, and approved procedures having a sales closing date within 
the reinsurance year, and with an eligible producer.
    Eligible producer. A person who has an insurable interest in an 
agricultural commodity, who has not been determined ineligible to 
participate in the Federal crop insurance program, and who possesses a 
United States issued social security number (SSN), employer 
identification number (EIN), or such other identification as required by 
RMA.
    Endorsement. A document that amends a policy reinsured under the Act 
in a manner that supplements or amends the insurance coverage provided 
by that policy.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
government corporation within USDA.
    Maintenance. For the purposes of this subpart only, the process of 
continual support and improvement, as needed,

[[Page 56]]

for a policy or plan of insurance, including the periodic review of 
setting prices, updating premium rates or the rating methodology, 
updating or modifying policy terms and conditions, and any other actions 
necessary to provide adequate and meaningful protection for producers, 
ensure actuarial soundness, or to respond to statutory or regulatory 
changes.
    Maintenance costs. Specific expenses associated with the maintenance 
of a policy during the maintenance period.
    Maintenance period. A period of time that begins on the date the 
Board approves the submission for maintenance and ends on the date that 
is not more than four reinsurance years after such approval.
    Manager. The Manager of FCIC.
    Managing General Agent (MGA). An entity that meets the definition of 
managing general agent under the laws of the State in which such entity 
is incorporated and in every other State in which it operates, or in the 
absence of such State law or regulation, meets the definition of a 
managing general agent or agency in the National Association of 
Insurance Commissioners Managing General Agents Act, or successor Act.
    Marketable. A determination by the Board that a sufficient number of 
producers will purchase the product and approved insurance providers 
will sell the product to make it economical, based on credible evidence 
provided by the applicant and any other relevant information.
    Marketing plan. A detailed, written plan that identifies, at a 
minimum, the expected number of potential buyers, premium, liability, a 
prescribed insurance year cycle, the data upon which such information is 
based, such data may include, but is not limited to, focus group 
results, market research studies, qualitative market estimates, effects 
upon the delivery system or ancillary participants, correspondence from 
producers expressing the need for such policy or plan of insurance, 
responses from a reasonable representative cross-section of producers to 
be effected by the policy or plan of insurance demonstrating the number 
of producers likely interested in purchasing the product, and a 
commitment from at least one approved insurance provider to sell and 
support such a policy or plan of insurance.
    Multiple peril crop insurance (MPCI). All insurance policies 
reinsured by FCIC that offers coverage for loss of production, loss of 
revenue, or both.
    National Agricultural Statistics Service (NASS). An agency of the 
United States Department of Agriculture, or a successor agency.
    Nonreinsured supplemental policy (NRS). A policy, endorsement or 
other risk management tool that is not reinsured under the Act, or has 
not been submitted to FCIC under section 508(h) of the Act, that offers 
additional coverage, other than loss related to hail, to a policy or 
plan of insurance that is reinsured by FCIC.
    Non-significant changes. Minor changes to the policy or plan of 
insurance, such as technical corrections, that do not affect the rating 
or pricing methodologies, the amount of subsidy owed, the amount or type 
of coverage, the interests of producers, FCIC's reinsurance risk, or any 
condition that does not affect liability or the amount of loss to be 
paid under the policy. Statutory or regulatory requirements are included 
in this category regardless of impact.
    Plan of insurance. A class of policies, such as MPCI or Group Risk 
Plan of Insurance, that offers a specific type of coverage to one or 
more agricultural commodities.
    Plan of Operations. The documents and information the approved 
insurance provider must submit in accordance with section IV.F.2. and 
Appendix II of the SRA and applicable approved procedures.
    Policy. A contract for insurance that includes an accepted 
application, Basic Provisions, applicable Commodity Provisions, other 
applicable options and endorsements, the Special Provisions, related 
materials, and the applicable regulations published in 7 CFR chapter IV.
    Premium discount. A payment made by the approved insurance provider 
to the policyholder to help defray the cost of premium, in an amount 
equal to the dollar amount or corresponding percentage of net book 
premium approved by RMA, as authorized by section 508(e)(3) of the Act.

[[Page 57]]

    Profit sharing arrangement. An arrangement to make a payment to an 
employee, agent, loss adjuster or other contractor conditioned upon 
whether the approved insurance provider receives an underwriting gain on 
the crop insurance business. Payments made to commercial reinsurers or 
ceding commissions paid to the approved insurance provider for the 
reinsurance year for the crop insurance book of business are not 
considered as profit sharing arrangements for the purposes of 
determining A&O costs or A&O subsidy.
    Reduction in service. When the approved insurance provider, agent 
and loss adjuster, or any other contractor or employee of the approved 
insurance provider that assists in or provides any service for a 
Federally reinsured eligible crop insurance contract, sells, services or 
administers such eligible crop insurance contracts at a level of service 
less than that required under all applicable regulations and approved 
procedures. A violation of a provision in an approved procedure will be 
considered to be a reduction in service.
    Rate of premium. The dollar amount per insured unit or percentage 
rate per dollar of liability that is needed to pay anticipated losses 
and provide a reasonable reserve.
    Related material. The actuarial documents for the insured 
agricultural commodity and any underwriting or loss adjustment manual, 
handbook, form or other information needed to administer the policy.
    Research. For the purposes of development, the gathering of 
information related to: Producer needs and interests; the marketability 
of the policy or plan of insurance; the appropriate policy terms, 
premium rates, price elections, administrative and operating procedures, 
supporting materials, and the documentation, systems and software 
necessary to implement a policy or plan of insurance. Gathering of 
information to determine whether it is feasible to expand a policy or 
plan of insurance to a new area or to cover a new commodity under the 
same policy terms and conditions, price, and premium rates is not 
considered research.
    Research and development costs. Specific expenses incurred and 
directly related to the research and development of a submission, as 
initially approved by the Board.
    Risk Management Agency (RMA). An agency of USDA responsible for the 
administration of all programs authorized under the Act and other 
authorities.
    Risk subsidy. The portion of the approved premium paid by FCIC on 
behalf of the insured person.
    Sales closing date. The final calendar date on which an approved 
insurance provider may accept an application by a producer for 
insurance.
    Secretary. The Secretary of the United States Department of 
Agriculture.
    Significant change. Any change to the policy or plan of insurance 
that may affect the rating and pricing methodologies, the amount of 
subsidy owed, the amount of coverage, the interests of producers, FCIC's 
reinsurance risk, or any condition that may affect liability or the 
amount of loss to be paid under the policy.
    Special Provisions. The part of the policy that contains specific 
provisions of insurance for each insured commodity that may vary by 
geographic area.
    Standard Reinsurance Agreement (SRA). The reinsurance agreement 
between FCIC and the approved insurance provider, under which the 
approved insurance provider is authorized to sell and service the 
eligible crop insurance contracts for which the premium discount is 
proposed. All references to the SRA will also include any other 
reinsurance agreements entered into with FCIC, including the Livestock 
Price Reinsurance Agreement, unless otherwise stated in such reinsurance 
agreement.
    Submission. A policy, plan of insurance, provision of a policy or 
plan of insurance, or rates of premium provided by an applicant to FCIC 
in accordance with the requirements of this subpart.
    Third Party Administrator (TPA). A person or organization that 
processes claims or performs other administrative services and holds 
licenses, as applicable, in States in which services are provided with 
respect to the Federal crop insurance business in accordance with a 
service contract or an affiliate or any other type of relationship.

[[Page 58]]

    Underwriting gain. For the purposes of the premium reduction plan, 
the amount of gains paid under section II.B.10. of the SRA less any 
amounts paid from such gains, including but not limited to payments to 
commercial reinsurers, taxes, licensing fees, payments to parent 
companies or subsidiaries, etc., and any costs incurred by the approved 
insurance provider in excess of the A&O subsidy related to the delivery, 
service, loss adjustment and administration of the Federal crop 
insurance program.
    Unfair discrimination. An approved insurance provider's 
implementation of the premium reduction plan will be considered unfairly 
discriminatory to a producer if the availability of eligible crop 
insurance contracts sold under the premium reduction plan, or the 
percentage of net book premium upon which the premium discount is paid, 
is based on the loss history of the producer, the amount of premium 
earned under the eligible crop insurance contract, the producer's size 
of the operation or number of acres to be insured, or precludes in any 
manner producers from participating in the premium reduction plan in a 
State where an approved insurance provider is eligible for the 
opportunity to offer a premium reduction plan.
    USDA. The United States Department of Agriculture.
    User fees. Fees, approved by the Board, that can be charged to 
approved insurance providers for use of a policy or plan of insurance.

[66 FR 47951, Sept. 17, 2001, as amended at 70 FR 41918, July 20, 2005; 
70 FR 44235, Aug. 2, 2005]



Sec. 400.702  Confidentiality of submission and duration of 
confidentiality.

    (a) Prior to approval by the Board, any submission made to the Board 
under section 508(h) of the Act, including any information generated 
from the submission, will be considered confidential commercial or 
financial information for purposes of 5 U.S.C. 552(b)(4) and will not be 
released by FCIC to the public, unless the applicant authorizes such 
release in writing.
    (b) Once the Board approves a submission, all information provided 
with the submission, or generated in the approval process, may be 
released to the public, including any mathematical modeling and data, 
unless it remains confidential business information under 5 U.S.C. 
552(b).
    (c) Any submission disapproved by the Board will remain confidential 
commercial or financial information in accordance with 5 U.S.C. 552(b) 
and no information related to such submission will be released by FCIC 
unless authorized in writing by the applicant.
    (d) In the submission, the applicant must state if the name of the 
submission may be used in Board documents including but not limited to 
the agenda, minutes, and Board memoranda. The applicant cannot use false 
names to mislead the public regarding the nature of the submission. If 
permission is not given to use the name of the submission, the 
submission will simply be referred to as a ``Section 508(h) 
submission.''

[66 FR 47951, Sept. 17, 2001, as amended at 70 FR 44236, Aug. 2, 2005]



Sec. 400.703  Timing of submission.

    (a) A submission may only be provided to FCIC, in either a hard copy 
or electronic format, during the first 5 business days of January, 
April, July, and October.
    (b) Any submission not provided within the first 5 business days of 
a month stated in paragraph (a) of this section, will be considered to 
have been provided the next month stated in paragraph (a). For example, 
if an applicant provides a submission on January 10, it will be 
considered to have been received on April 1.
    (c) Any submission must be provided to the Deputy Administrator, 
Research and Development (or any successor), Risk Management Agency, 
6501 Beacon Drive, Stop 0812, Kansas City, MO 64133-4676, not later than 
240 days prior to the earliest proposed sales closing date to be 
considered for sale in the requested crop year.
    (d) The Board, or RMA if authorized by the Board, shall determine 
when sales can begin for a submission approved by the Board.

[70 FR 44236, Aug. 2, 2005]

[[Page 59]]



Sec. 400.704  Type of submission.

    (a) An applicant may submit to the Board in accordance with Sec. 
400.705:
    (1) A policy or plan of insurance not currently reinsured by FCIC;
    (2) One or more proposed revisions to a policy or plan of insurance 
authorized under the Act; or
    (3) Rates of premium for any policy or plan of insurance authorized 
under the Act.
    (b) An applicant must submit to the Board any significant change to 
a previously approved submission prior to making the change.



Sec. 400.705  Contents required for a new submission or changes to a 
previously approved submission.

    (a) A complete submission must contain the following material, as 
applicable, in the order given, in a three ring binder, with a table of 
contents, page numbers, and section dividers clearly labeling each 
section or in an electronic format that when printed will be an exact 
duplicate of the information that would have been found in the three-
ring binder with the exception of section dividers.
    (1) If a hard copy of the submission is provided, it must include 
six identical copies provided to the Deputy Administrator, Research and 
Development (or successor), Risk Management Agency, 6501 Beacon Drive, 
Stop 0812, Kansas City, MO 64133-4676, and one identical copy of the 
submission provided to the Administrator, Risk Management Agency, 1400 
Independence Ave., Stop 0801, Room 3053 South Building, Washington, DC 
20250-0801.
    (2) Electronic submissions must be sent to the Deputy Administrator, 
Research and Development (or successor) at 
[email protected] and the Administrator at 
[email protected].
    (b) The first section will contain general information, including, 
as applicable:
    (1) The applicant's name, address or primary business location, 
phone number, and e-mail address;
    (2) The type of submission (see Sec. 400.704);
    (3) A statement of whether the applicant is requesting:
    (i) Reinsurance, which includes risk subsidy and A&O subsidy;
    (ii) Reimbursement for research and development costs, as 
applicable; or
    (iii) Reimbursement for maintenance costs, as applicable;
    (4) The proposed agricultural commodities, including types, 
varieties, and practices covered by the submission;
    (5) The crop and reinsurance years in which the submission is 
proposed to be available for purchase by producers;
    (6) The proposed sales closing date, if applicable, or if not 
applicable, the earliest date the applicant expects to release the 
product to the public;
    (7) The proposed duration and scope of the plan of insurance;
    (8) A marketing plan;
    (9) Any known or anticipated future expansion plans;
    (10) Identification, including names, addresses, telephone numbers, 
and e-mail addresses, of the persons responsible for:
    (i) Addressing questions regarding the policy, underwriting rules, 
loss adjustment procedures, rate and price methodologies, data 
processing and record-keeping requirements, and any other questions that 
may arise in administering the program after it is approved; and
    (ii) Annual reviews to ensure compliance with all requirements of 
the Act, this subpart, and any agreements executed between the applicant 
and FCIC; and
    (11) A statement of whether the submission will be filed with the 
applicable office responsible for regulating insurance in each state 
proposed for insurance coverage, and if not, reasons why the submission 
will not be filed for review.
    (c) The second section must contain the benefits of the plan, 
including, as applicable, a statement about the plan that demonstrates:
    (1) How the submission offers coverage or other benefits not 
currently available from existing public and private programs;
    (2) The projected demand for the submission, which must be supported 
by information from market research, producers or producer groups, 
agents,

[[Page 60]]

lending institutions, and other interested parties that provide 
verifiable evidence of demand; and
    (3) How the submission meets public policy goals and objectives 
consistent with the Act and other laws, as well as policy goals 
supported by USDA and the Federal Government.
    (d) Except as provided in this section, the third section must 
contain the policy, including, as applicable:
    (1) If the submission involves a new insurance policy or plan of 
insurance:
    (i) All applicable policy provisions; and
    (ii) A list and description of any additional coverage that may be 
elected by the insured, including how such coverage may be obtained; and
    (2) If the submission involves a change to a previously approved 
policy, plan of insurance, or rates of premium, the proposed revisions, 
rationale for each change, data and analysis supporting each change, the 
impact of each change, and the impact of all changes in aggregate.
    (e) The fourth section must contain the information related to the 
marketing of the policy or plan of insurance, including, as applicable:
    (1) A list of counties and states where the submission is proposed 
to be offered;
    (2) The amount of commodity (acres, head, board feet, etc.), the 
amount of production, and the value of each agricultural commodity 
proposed to be covered in each proposed county and state;
    (3) The expected liability and premium for each proposed county and 
state;
    (4) If available, any insurance experience for each year and in each 
proposed county and state in which the policy has been previously 
offered for sale including an evaluation of the policy's performance 
and, if data are available, a comparison with other similar insurance 
policies reinsured under the Act;
    (5) Focus group results;
    (6) Market research studies;
    (7) Qualitative market estimates;
    (8) Affects upon the delivery system or ancillary participants;
    (9) Correspondence from producers expressing the need for such 
policy or plan of insurance;
    (10) Responses from a reasonable representative cross-section of 
producers to be affected by the policy or plan of insurance; and
    (11) Commitment in writing from at least one approved insurance 
provider to sell and support the policy or plan of insurance.
    (f) The fifth section must contain the information related to the 
underwriting and loss adjustment of the submission, including as 
applicable:
    (1) Detailed rules for determining insurance eligibility, including 
all producer reporting requirements;
    (2) Relevant dates, if not included in the proposed policy;
    (3) Detailed examples of the data and calculations needed to 
establish the insurance guarantee, liability, and premium per acre or 
other unit of measure, including worksheets that provide the 
calculations in sufficient detail and in the same order as presented in 
the policy to allow verification that the premiums charged for the 
coverage are consistent with policy provisions;
    (4) Detailed examples of calculations used to determine indemnity 
payments for all probable situations where a partial or total loss may 
occur;
    (5) A detailed description of the causes of loss covered by the 
policy or plan of insurance and any causes of loss excluded;
    (6) Any statements to be included in the actuarial documents; and
    (7) The loss adjustment standards handbook for the policy or plan of 
insurance that includes:
    (i) A table of contents and introduction;
    (ii) A section containing abbreviations, acronyms, and definitions;
    (iii) A section containing insurance contract information 
(insurability requirements; crop provisions not applicable to 
catastrophic risk protection; specific unit division guidelines, if 
applicable; notice of damage or loss provisions; quality adjustment 
provisions; etc);
    (iv) A section that thoroughly explains appraisal methods, if 
applicable;
    (v) Illustrative samples of all the applicable forms needed for 
insuring and adjusting losses in regards to the product plus detailed 
instructions for their use and completion;

[[Page 61]]

    (vi) Instructions, examples of calculations, and loss adjustment 
procedures that are necessary to establish the amounts of coverage and 
loss;
    (vii) A section containing any special coverage information (i.e., 
replanting, tree replacement or rehabilitation, prevented planting, 
etc.), as applicable; and
    (viii) A section containing all applicable reference material (i.e., 
minimum sample requirements, row width factors, etc.).
    (g) The sixth section must contain information related to prices and 
rates of premium, including, as applicable:
    (1) A list of all assumptions made in the premium rating and 
commodity pricing methodologies, and the basis for these assumptions;
    (2) A detailed description of the pricing and rating methodologies, 
including supporting documentation, all mathematical formulas, 
equations, and data sources used in determining rates and prices and an 
explanation of premium components that detail how rates were determined 
for each component, that demonstrate the rate is appropriate;
    (3) An example of both a rate calculation and a price calculation;
    (4) A discussion of the applicant's objective evaluation of the 
reliability of the data;
    (5) An analysis of the results of simulations or modeling showing 
the performance of proposed rates and commodity prices, as applicable, 
based on one or more of the following (Such simulations must use all 
years of experience available to the applicant);
    (i) A recalculation of total premium and losses compared to a 
similar or comparable insurance plan offered under the authority of the 
Act with modifications, as needed, to represent the components of the 
submission;
    (ii) A simulation based on the probability distributions used to 
develop the rates and commodity prices, as applicable, including 
sensitivity tests that demonstrate price or yield extremes, and the 
impact of inappropriate assumptions; or
    (iii) Any other comparable simulation that provides results 
indicating both aggregate and individual performance of the submission 
under various scenarios depicting good and poor actuarial experience; 
and
    (6) A simulation of expected losses capturing both a probable loss 
and a total loss.
    (h) The seventh section must contain an evaluation and certification 
from a disinterested third party who is an accredited associate or 
fellow of the Casualty Actuarial Society, or other similarly qualified 
professional, who certifies the submission is actuarially appropriate 
and consistent with appropriate insurance principles and practices.
    (i) The eighth section must contain all forms applicable to the 
submission, including:
    (1) An application for insurance and procedures for accepting the 
application; and
    (2) All applicable policy forms, instructions and procedures that 
are necessary to establish the amounts of coverage or loss.
    (j) The ninth section must contain the following:
    (1) A statement specifying sales will not commence for any new or 
revised submission until at least 60 days after all policy provisions 
and related material are released to the public by RMA, unless otherwise 
specified by the Board;
    (2) An explanation of any provision of the policy not authorized 
under the Act and identification of the portion of the rate of premium 
due to these provisions;
    (3) Agent and loss adjuster training plans; and
    (4) A certification from the applicant's legal counsel that the 
submission meets and complies with all requirements of the Act, 
applicable regulations, and any reinsurance agreement.
    (k) The tenth section must contain a written plan, including 
specifications and details for the systems and software development 
necessary for the implementation of the submission, if applicable, and 
the documents that demonstrate the submitter has the capability and 
resources to develop systems that comply in all respects with the 
standards established for processing and acceptance of data by the

[[Page 62]]

FCIC Data Acceptance System, or successor system, unless otherwise 
authorized by FCIC. Unless otherwise determined by FCIC, the applicant 
must consult with FCIC to determine whether their submission can be 
implemented and administered through the current system;
    (1) If FCIC approves the submission and determines that its system 
has the capacity to implement and administer the submission, the 
applicant must provide acceptable computer requirements, code and 
software, consistent with that used by FCIC, to facilitate the 
acceptance of producer applications and all related data;
    (2) If FCIC approves the submission and determines that its system 
lacks the capacity to implement and administer the submission, the 
applicant must provide acceptable computer systems, requirements, code 
and software necessary to implement and administer the policy or plan of 
insurance;
    (3) Any computer systems, requirements, code and software must be 
consistent with that used by FCIC and comply with the standards 
established in Appendix III, or any successor document, of the Standard 
Reinsurance Agreement or other reinsurance agreement as specified by 
FCIC; and
    (4) These requirements are available from the Risk Management 
Agency, 6501 Beacon Drive, Stop 0812, Kansas City, MO, 64133-4676 or on 
RMA's Web site at http://www.rma.usda.gov/data/#m13, or a successor 
website.
    (l) The eleventh section must contain a training package. The 
training package must include a thorough discussion, explanations, 
written exercises, and examples covering the following topics:
    (1) Basic and catastrophic risk protection policy provisions;
    (2) The commodity provisions and any endorsements;
    (3) Underwriting under the underwriting guide;
    (4) Eligibility requirements;
    (5) Guarantee, indemnity, and premium calculations;
    (6) Special Provisions of Insurance;
    (7) Actuarial documents;
    (8) Loss adjustment under the loss adjustment standards handbook;
    (9) Applicable additions to the Crop Insurance Handbook (CIH); and
    (10) Applicable additions to the Loss Adjustment Manual (LAM).
    (m) The twelfth section submitted on separate pages and in 
accordance with Sec. 400.712 must specify:
    (1) On one page, the total estimated amount that will be requested 
for reimbursement of research and development costs (for new products 
only) or the estimated amount for maintenance costs for the year for 
which the submission will be effective (for products that are within the 
maintenance period); and
    (2) On another page, a comprehensive estimate of maintenance costs 
for each future year of the maintenance period and the basis for which 
such maintenance costs will be incurred, including, but not limited to:
    (i) Any anticipated expansion;
    (ii) The generation of rates, Special Provisions, underwriting 
rules, etc;
    (iii) The determination of prices; and
    (iv) Any other costs that the applicant anticipates will be 
requested for reimbursement.
    (n) The thirteenth section must contain executed certification 
statements in accordance with the following:
    (1) ``{Applicant's Name{time}  hereby claim that the amounts set 
forth in this section and Sec. 400.712 are correct and due and owing to 
{Applicant's Name{time}  by FCIC under the Federal Crop Insurance Act''; 
and
    (2) ``{Applicant's Name{time}  understands that, in addition to 
criminal fines and imprisonment, the submission of false or fraudulent 
statements or claims may result in civil and administrative sanctions.''

[70 FR 44236, Aug. 2, 2005]



Sec. 400.706  Review of submission.

    (a) Prior to providing the submission to the Board to determine 
whether it is a complete submission, RMA will:
    (1) Review the submission to determine if all necessary and 
appropriate documentation is included in accordance with Sec. 400.705;
    (2) Review the submission to determine whether the submission is of 
sufficient quality to conduct a meaningful review;
    (3) Inform the applicant of the information RMA deems necessary for 
the

[[Page 63]]

submission to comply with paragraphs (a)(1) and (2) of this section; and
    (4) Forward the submission and the results of RMA's initial review 
to the Board.
    (b) Upon the Board's receipt of the submission, the Board will:
    (1) Determine if the submission is a complete submission (The date 
the Board votes to contract with independent reviewers is the date the 
submission is deemed to be a complete submission for the start of the 
120 day time-period for approval);
    (2) Forward the complete submission to at least five independent 
persons with underwriting or actuarial experience to review the 
submission:
    (i) Of the five reviewers, no more than one will be employed by the 
Federal Government, and none may be employed by any approved insurance 
provider or their representative; and
    (ii) The reviewers will each provide their assessment of whether the 
submission protects the interest of agricultural producers and 
taxpayers, is actuarially appropriate, follows appropriate insurance 
principles, meets the requirements of the Act, does not contain 
excessive risks, follows sound, reasonable, and appropriate underwriting 
principles, as well as other items the Board may deem necessary;
    (3) Return to the applicant any submission the Board determines is 
not a complete submission, and provide documentation to the applicant 
explaining such. If the submission is resubmitted at a later date, it 
will be considered a new submission;
    (4) For all complete submissions:
    (i) Request review of the submission by RMA to provide its 
assessment of whether:
    (A) The submission protects the interests of agricultural producers 
and taxpayers, is actuarially appropriate, follows appropriate insurance 
principles, meets the requirements of the Act, does not contain 
excessive risks, is consistent with USDA's public policy goals, does not 
increase or shift risk to any other FCIC reinsured policy, offers 
coverage that is similar to another policy or plan of insurance and if 
the producer would further benefit from the submission and can be 
administered and delivered efficiently and effectively;
    (B) The marketing plan is reasonable;
    (C) RMA has the resources to consider, implement, and administer the 
submission; and
    (D) The requested amount of government reinsurance, risk subsidy, 
and administrative and operating subsidies is reasonable and appropriate 
for the type of coverage provided by the policy submission; and
    (ii) Seek review from the Office of the General Counsel (OGC) to 
determine if the submission conforms to the requirements of the Act and 
all applicable Federal regulations.
    (c) All comments and evaluations will be provided to the Board by a 
date determined by the Board to allow the Board adequate time for 
review.
    (d) The Board will consider all comments, evaluations, and 
recommendations in its review process. Prior to making a decision, the 
Board may request additional information from RMA, OGC, the independent 
reviewers, or the applicant.
    (e) An applicant may request, at any time, a time delay before the 
Board provides a notice of intent to disapprove the submission. The 
Board is not required to agree to such an extension.
    (1) Any requested time delay will not be limited in the length of 
time or the number of delays. However, delays may make implementation of 
the submission for the targeted crop year impractical or impossible.
    (2) The time period during which the Board must make a decision to 
approve or disapprove shall be extended commensurately with any time 
delay requested by the applicant.
    (3) If the Board agrees to an extension of time, the Board and the 
applicant must agree to a time period in which the Board must make its 
decision to approve or disapprove after the expiration of any requested 
time delay.
    (f) The applicant may withdraw a submission or a portion of a 
submission at any time by written request to the Board. A withdrawn 
submission that is resubmitted will result in the submission being 
deemed a new submission for the purpose of determining the amount

[[Page 64]]

of time that the Board must act on such submission.
    (g) The Board will render a decision to approve the submission with 
or without revision or give notice of intent to disapprove within 90 
days after the date the submission is considered complete by the Board 
in accordance with paragraph (b)(1) of this section, unless the 
applicant and Board agree to a time delay in accordance with paragraph 
(e) of this section.
    (h) The Board may disapprove a submission if it determines that:
    (1) The interests of producers and taxpayers are not protected, 
including but not limited to:
    (i) The submission does not provide adequate coverage or treats 
producers disparately;
    (ii) The applicant has not presented sufficient documentation that 
the submission is marketable;
    (iii) Coverage would be similar to another policy or plan of 
insurance and the producer would not further benefit from the 
submission; or
    (iv) The resources of FCIC or RMA are not sufficient to support the 
review and implementation of the product;
    (2) The premium rates are not actuarially appropriate;
    (3) The submission does not conform to sound insurance and 
underwriting principles;
    (4) The risks associated with the submission are excessive or it 
increases or shifts risk to any other FCIC reinsured policy;
    (5) The submission does not meet the requirements of the Act or is 
not in accordance with USDA's public policy goals; or
    (6) There is insufficient time before the submission would become 
effective under section 508(h) of the Act for the Board to make an 
informed decision with respect to whether the interests of producers are 
protected, the premium rates are actuarially appropriate, or the risks 
associated with the submission are excessive;
    (i) If the Board intends to disapprove the submission, the applicant 
will be notified in writing at least 30 days prior to the Board taking 
such action. The Board will provide the applicant with a written 
explanation for the intent to disapprove the submission.
    (j) After written notice of intent to disapprove all or part of a 
submission has been provided by the Board, the applicant must provide 
written notice to the Board not later than 30 days after the Board 
provided such notice, if the submission will be modified. Except as 
provided in paragraph (j)(3) of this section, the applicant must also 
include an anticipated date that the modification will be provided to 
the Board. If the applicant does not respond within the 30-day period, 
the Board will send the applicant a letter stating the submission is 
disapproved.
    (1) If the modification is in direct response to reviewer comments, 
the Board may act on the modification immediately or seek further review 
within the 30-day time period allowed.
    (2) The Board will approve or disapprove a modified submission not 
later than 30 days after receiving a modified submission from the 
applicant, unless the applicant and the Board agree to a time delay. If 
a time delay is agreed upon, the time period during which the Board must 
act on the modified submission will not be in effect during the delay.
    (3) The Board will disapprove a modified submission if:
    (i) All causes for disapproval stated by the Board in its 
notification of intent to disapprove the submission are not 
satisfactorily addressed;
    (ii) Insufficient time is available for review of the modified 
submission to determine whether all causes for disapproval have been 
satisfactorily addressed; or
    (iii) Modification is so substantial that the Board determines that 
additional independent review is required and a time delay can not be 
agreed upon to allow for such review.
    (k) A submission will be disapproved if the applicant does not 
present a modification of the submission to the Board on the date the 
applicant anticipated presenting the modification or does not request an 
additional time delay.
    (l) If the Board fails to take action on a new submission within the 
prescribed 90-day period in paragraph (g) of this section, or within the 
time period in accordance with paragraph (e)(3) of this

[[Page 65]]

section after receiving the revised submission, such submission will be 
deemed approved by the Board for the initial reinsurance year designated 
for the submission. The Board must approve the submission for it to be 
available for any subsequent reinsurance year.

[70 FR 44238, Aug. 2, 2005]



Sec. 400.707  Presentation to the Board for approval or disapproval.

    (a) The Board will inform the applicant of the date, time, and place 
of the Board meeting.
    (b) The applicant will be given the opportunity and is encouraged to 
present the submission to the Board in person. The applicant must 
confirm, in writing, whether the applicant will present the submission 
to the Board.
    (c) If the applicant elects, at any time, not to present the 
submission to the Board, the Board will make its decision based on the 
submission and the reviews provided in accordance with Sec. 400.706(b).

[66 FR 47951, Sept. 17, 2001, as amended at 70 FR 44239, Aug. 2, 2005]



Sec. 400.708  Approved submission.

    (a) After a submission is approved by the Board, and prior to it 
being made available for sale to producers, the following items, as 
applicable, must be completed:
    (1) If FCIC requires, an agreement between the applicant and FCIC 
that specifies:
    (i) The responsibilities of each with respect to the implementation, 
delivery and oversight of the submission; and
    (ii) That the property rights to the submission automatically 
transfers to FCIC if the applicant elects not to maintain the submission 
and FCIC has paid any amounts under Sec. 400.712.
    (2) A reinsurance agreement if terms and conditions differ from the 
available existing reinsurance agreements.
    (b) A submission approved by the Board under this subpart will be 
made available to all approved insurance providers under the same 
reinsurance and subsidy terms and conditions as received by the 
applicant.
    (c) Any solicitation, sales, marketing, or advertising of the 
approved submission by the applicant before FCIC has made the submission 
and related materials available to all interested parties through its 
official issuance system will result in the denial of reinsurance, risk 
subsidy, and A&O subsidy for those policies affected.

[66 FR 47951, Sept. 17, 2001, as amended at 70 FR 44239, Aug. 2, 2005]



Sec. 400.709  Roles and responsibilities.

    (a) With respect to the applicant:
    (1) The applicant is responsible for:
    (i) Preparing and ensuring that all policy documents, rates of 
premium, and supporting materials, including actuarial documents, are 
submitted to FCIC in the form approved by the Board;
    (ii) Annually updating and providing maintenance changes no later 
than 180 days prior to the earliest contract change date for the 
commodity in all counties or states in which the policy or plan of 
insurance is sold, unless FCIC assumes maintenance of the product;
    (iii) Addressing responses to procedural issues, questions, problems 
or clarifications in regard to a policy or plan of insurance (all such 
resolutions will be communicated to all approved insurance providers 
through FCIC's official issuance system); and
    (iv) Annually reviewing the policy's performance and providing a 
report on the policy's performance to the Board by each anniversary date 
of when the product was first available to be purchased by the public;
    (2) Only the applicant may make changes to the policy, plan of 
insurance, or rates of premium approved by the Board (Any changes, both 
non-significant and significant, must be submitted to FCIC no later than 
180 days prior to the earliest contract change date for the commodity in 
all counties or states in which the policy of plan of insurance is sold. 
Significant changes must be submitted to the Board for review in 
accordance with this subpart and will be considered as a new 
submission);
    (3) Except as provided in paragraph (a)(4) of this section, the 
applicant is solely liable for any mistakes, errors,

[[Page 66]]

or flaws in the submitted policy, plan of insurance, their related 
materials, or the rates of premium that have been approved by the Board 
unless the policy or plan of insurance is transferred to FCIC. The 
applicant remains liable for any mistakes, errors, or flaws that 
occurred prior to transfer of the policy or plan of insurance to FCIC;
    (4) If the mistake, error, or flaw in the policy, plan of insurance, 
their related materials, or the rates of premium is discovered not less 
than 45 days prior to the cancellation or termination date for the 
policy or plan of insurance, the applicant may request in writing that 
FCIC withdraw the approved policy, plan of insurance, or rates of 
premium:
    (i) Such request must state the discovered mistake, error, or flaw 
in the policy, plan of insurance, or rates of premium, and the expected 
impact on the program; and
    (ii) For all timely received requests for withdrawal, no liability 
will attach to such policies, plans of insurance, or rates of premium 
that have been withdrawn and no producer, approved insurance provider or 
any other person will have a right of action against the applicant; and
    (5) Notwithstanding the policy provisions regarding cancellation, 
any policy, plan of insurance, or rates of premium that have been 
withdrawn by the applicant in accordance with paragraph (a)(4) of this 
section is deemed canceled and applications deemed not accepted as of 
the date that FCIC publishes the notice of withdrawal on its website at 
www.rma.usda.gov; and
    (i) Approved insurance providers will be notified in writing by FCIC 
that the policy, plan of insurance, or premium rates have been 
withdrawn; and
    (ii) Producers will have the option of selecting any other policy or 
plan of insurance authorized under the Act that is available in the area 
by the sales closing date for such policy or plan of insurance; and
    (6) Failure of the applicant to perform the applicant's 
responsibilities may result in the denial of reinsurance for the policy 
or plan of insurance.
    (b) With respect to FCIC:
    (1) FCIC is responsible for:
    (i) Conducting the best review of the submission possible in the 
time allowed;
    (ii) Ensuring that all approved insurance providers receive the 
approved policy or plan of insurance, and related material, for sale to 
producers in a timely manner (All such information shall be communicated 
to all approved insurance providers through FCIC's official issuance 
system);
    (iii) Ensuring that all approved insurance providers receive 
reinsurance under the same terms and conditions as the applicant 
(approved insurance providers should contact FCIC to obtain and execute 
a copy of the reinsurance agreement) if required; and
    (iv) Reviewing the activities of approved insurance providers, 
agents, loss adjusters, and producers to ensure that they are in 
accordance with the terms of the policy or plan of insurance, the 
reinsurance agreement, and all applicable procedures;
    (2) The Board may limit the availability of coverage, for any 
product developed under the authority of the Act and this regulation, on 
any farm or in any county or area;
    (3) FCIC will not be liable for any mistakes, errors, or flaws in 
the policy, plan of insurance, their related materials, or the rates of 
premium and no cause of action will exist against FCIC as a result of 
such mistake, error, or flaw in a submission submitted under this 
subpart;
    (4) If at any time prior to the cancellation date, FCIC discovers 
there is a mistake, error, or flaw in the policy, plan of insurance, 
their related materials, or the rates of premium, or any other reason 
for denial of reinsurance contained in Sec. 400.706(h) exists, FCIC 
will deny reinsurance to such policy or plan of insurance. If 
reinsurance is denied, a written notice of the denial of reinsurance 
will be provided to the approved insurance providers;
    (5) If reinsurance is denied under paragraph (b)(4) of this section, 
the approved insurance provider will have the option of:
    (i) Selling and servicing the policy or plan of insurance at its own 
risk and without any subsidy; or

[[Page 67]]

    (ii) Canceling the policy or plan of insurance in accordance with 
its terms; and
    (6) After maintenance of the policy or plan of insurance is 
transferred to FCIC, FCIC will be liable for any mistakes, errors, or 
flaws that occur after the date the policy or plan of insurance was 
transferred.

[70 FR 44239, Aug. 2, 2005]



Sec. 400.710  Preemption and premium taxation.

    A policy or plan of insurance that is approved by the Board for FCIC 
reinsurance is preempted from state and local taxation.



Sec. 400.711  Right of review, modification, and the withdrawal of 
reinsurance.

    At any time after approval, the Board may review any policy, plan of 
insurance, related material, and rates of premium approved under this 
subpart and request additional information to determine whether the 
policy, plan of insurance, related material, and rates of premium comply 
with statutory or regulatory changes or court orders, are still 
actuarially appropriate, and protect program integrity and the interests 
of producers. The Board will notify the applicant of any problem or 
issue that may arise and allow the applicant an opportunity to make any 
needed change. The Board may deny reinsurance for the applicable policy, 
plan of insurance or rate of premium if the applicant:
    (a) Fails to perform the responsibilities stated under Sec. 
400.709(a); or
    (b) Does not satisfactorily provide materials or resolve any issue 
so that necessary changes can be made prior to the earliest contract 
change date.

[70 FR 44240, Aug. 2, 2005]



Sec. 400.712  Research and development reimbursement, maintenance 
reimbursement, and user fees.

    (a) For submissions approved by the Board for reinsurance under 
section 508(h) of the Act:
    (1) If it is determined to be marketable by the Board, the 
submission may be eligible for a one-time payment of research and 
development costs and reimbursement of maintenance costs for up to four 
reinsurance years, as determined by the Board, after the date such costs 
have been approved by the Board.
    (2) Reimbursement of research and development costs or maintenance 
costs will be considered as payment in full by FCIC for the submission.
    (3) If the applicant elects at any time not to continue to maintain 
the submission, it will automatically become the property of FCIC and 
the applicant will no longer have any property rights to the submission.
    (b) For submissions submitted to the Board for reinsurance after 
publication of the interim rule on September 17, 2001, an estimated 
amount of the total cost for reimbursement of research and development 
costs and maintenance costs must be included with the original 
submission to the Board in accordance with this section. These estimates 
will be used by FCIC to evaluate if the interests of producers are 
protected and to track potential expenditures and will not provide a 
basis for making any reimbursements under this section. Documentation of 
actual costs allowed under this section will be used to determine any 
reimbursement.
    (c) To be eligible for any reimbursement under this section, FCIC 
must determine that a submission is marketable.
    (d) To be considered for reimbursement of:
    (1) Research and development costs, the total of the amount 
requested, and all supporting documentation, must be submitted to FCIC 
by electronic method or by hard copy and received by FCIC by August 1 
immediately following the date the submission was first available to be 
purchased by producers;
    (2) Maintenance costs, the total of the amount requested, and all 
supporting documentation, must be submitted to FCIC by electronic method 
or by hard copy and received by FCIC by August 1 of each year of the 
maintenance period;
    (3) The procedure and time-frame in paragraphs (d)(1) or (2) of this 
section, as applicable, must be followed or research and development 
costs and maintenance costs may not be reimbursed; and

[[Page 68]]

    (4) Given the limitation on funds, regardless of when the request is 
received, no payment will be made prior to September 15 of the 
applicable fiscal year.
    (e) There are limited funds available on an annual fiscal year basis 
as contained in the Act. Therefore, requests for reimbursement will not 
be considered in the order in which they are received. Consistent with 
paragraphs (f), (g), (h), and (k) of this section, if all applicants' 
requests for reimbursement of research and development costs and 
maintenance costs in any fiscal year:
    (1) Do not exceed the maximum amount authorized by law, the 
applicants may receive the full amount of reimbursement authorized under 
these paragraphs; and
    (2) Exceed the amount authorized by law, each applicant's 
reimbursement will be determined by dividing the total amount of each 
individual applicants' reimbursable costs authorized in paragraphs (f), 
(g), (h), and (k) of this section by the total amount of the aggregate 
of all applicants' reimbursable costs authorized in paragraphs (f), (g), 
(h), and (k) of this section for that year and multiplying the result by 
the amount of reimbursement authorized under the Act.
    (f) The amount of reimbursement for research and development costs, 
will be determined based on the amount of reimbursement authorized under 
paragraph (e) of this section, adjusted for the complexity of the 
policy, plan of insurance, or rates of premium, as determined by FCIC, 
and the size of the area in which the policy, plan of insurance, or 
rates of premium may be offered.
    (1) Policies or plans of insurance that offer new and innovative 
coverages that are not currently available will be eligible for a higher 
reimbursement than policies or plans of insurance that are, or have 
components that are, based on existing policies or plans of insurance.
    (2) Policies or plans of insurance that offer new premium rating or 
market price methodologies will be eligible for a higher reimbursement 
than policies or plans of insurance that use existing premium rating or 
market price methodologies.
    (3) Policies or plans of insurance that cover new commodities that 
are not otherwise covered by crop insurance or that offer innovative 
coverage and original policy language will be eligible for a higher 
reimbursement than policies or plans of insurance for commodities for 
which insurance is currently available.
    (4) Policies or plans of insurance that may be offered for sale 
nationwide or in large geographical regions will be eligible for higher 
reimbursement than those that are applicable to only a few counties or 
states or a small geographical region.
    (5) Any reimbursement under this subpart will be scored as follows:
    (i) Complexity scores:
    (A) Basic or Common Provisions:
    (1) Uses existing policies or plans of insurance: 0.05
    (2) Contains modifications to existing policies or plans of 
insurance: 0.10
    (3) Original (See paragraph (f)(3) of this section): 0.20
    (B) Commodity Provisions and Special Provisions:
    (1) Uses existing policies or plans of insurance: 0.05
    (2) Contains modifications to existing policies or plans of 
insurance: 0.10
    (3) Original (See paragraph (f)(3) of this section): 0.20
    (C) Market prices:
    (1) Uses existing policies or plans of insurance: 0.05
    (2) Contains modifications to existing policies or plans of 
insurance: 0.10
    (3) Original (See paragraph (f)(3) of this section): 0.20
    (D) Rates of Premium:
    (1) Uses existing policies or plans of insurance: 0.05
    (2) Contains modifications to existing policies or plans of 
insurance: 0.10
    (3) Original (See paragraph (f)(3) of this section): 0.20
    (E) Underwriting:
    (1) Uses existing policies or plans of insurance: 0.05
    (2) Contains modifications to existing policies or plans of 
insurance: 0.10
    (3) Original (See paragraph (f)(3) of this section): 0.20
    (ii) Geographic scope scores:
    (A) Potential national availability: 0.10

[[Page 69]]

    (B) Potential county, state or regional availability: 0.05
    (6) Policies or plans of insurance that receive a summed total score 
for both complexity and geographic scope that is:
    (i) Equal to or greater than 0.6 may receive the full amount of 
reimbursement approved by the Board under paragraph (g) of this section;
    (ii) Greater than 0.25 but lower than 0.60 will receive a 
reimbursement that is not greater than 75 percent of the full amount of 
reimbursement approved by the Board under paragraph (g) of this section; 
and
    (iii) Equal to or less than 0.25 will receive a reimbursement that 
is not greater than 50 percent of the full amount of reimbursement 
approved by the Board under paragraph (g) of this section.
    (g) For those submissions submitted to the Board for approval after 
September 17, 2001, research and development costs must be supported by 
itemized statements and supporting documentation (copies of contracts, 
billing statements, time sheets, travel vouchers, accounting ledgers, 
etc.). Actual costs submitted will be examined for reasonableness and 
may be adjusted at the sole discretion of the Board.
    (1) Allowable research and development expense items (directly 
related to research and development of the submission only) may include 
the following:
    (i) Straight-time hourly wage, exclusive of bonuses, overtime pay, 
or shift differentials (One line per employee, include job title, total 
hours, and total dollars. Compensation amounts will be compared with the 
Occupational Employment Statistics Survey (published each January by the 
U.S. Department of Labor, Bureau of Labor Statistics) or other 
substantial wage information as deemed appropriate by the Board);
    (ii) Benefit cost per employee (Benefit costs are considered 
overhead and will be compared with the Employment Cost Index Annual 
Employer Cost Survey published each March by the U.S. Department of 
Labor, Bureau of Labor Statistics); and
    (iii) Contracted expenses if fully disclosed, documented, and:
    (A) The applicant provides a copy of the contract, billing 
statements, accounting records, etc;
    (B) The applicant provides the relationship, if any, between the 
applicant and the contractor, such as parent company, subsidiary, etc. 
(Reimbursement may be limited or denied if the contractor is closely 
associated to the applicant so that they could be considered as one and 
the same, such as a separate entity being created by the applicant to 
conduct research and development);
    (C) The applicant provides any and all other involvement of the 
contractor with the applicant, such as being a director, officer, 
employee, etc., or having common directors, officers, employers, 
employees, etc. (Reimbursement may be reduced or denied if the 
contractor is paid a salary or other compensation from the applicant 
based on this other involvement); and
    (D) The contracted expenses are broken out by line item (including 
all persons who make up the contracted party who had a substantive 
involvement in the development of the submission), such as:
    (1) Individual names;
    (2) Rate of pay;
    (3) Hours allocated to the submission;
    (4) Benefit rate; and
    (5) Overhead;
    (iv) Professional fees if fully disclosed, documented, and:
    (A) The applicant provides the job title, straight-time hourly wage, 
total hours, and total dollars;
    (B) The applicant provides the relationship, if any, between the 
applicant and the professional, such as parent company, subsidiary, etc. 
(Reimbursement may be limited or denied if the contractor is closely 
associated to the applicant so that they could be considered as one and 
the same, such as a separate entity being created by the applicant to 
conduct research and development);
    (C) The applicant provides any other involvement of the professional 
with the applicant, such as being a director, officer, employee, etc., 
or having common directors, officers, employers, employees, etc. 
(Reimbursement may be reduced or denied if the contractor is paid a 
salary or other compensation

[[Page 70]]

from the applicant based on this other involvement); and
    (D) The professional fees are broken out by line item (including all 
persons who make up the professional party who had a substantive 
involvement in the development of the submission), such as;
    (1) Individual names;
    (2) Rate of pay;
    (3) Hours allocated to the submission;
    (4) Benefit rate; and
    (5) Overhead;
    (v) Travel and transportation (One line per event, include the job 
title, destination, purpose of travel, lodging cost, mileage, air or 
other identified transportation costs, food and miscellaneous expenses, 
other costs, and the total cost);
    (vi) Software and computer programming developed specifically to 
determine appropriate rates, prices, or coverage amounts (Identify the 
item, include the purpose, and provide receipts or contract or straight-
time hourly wage, hours, and total cost.) Software developed to send or 
receive data between the producer, agent, approved insurance provider or 
RMA or such other similar software may not be included as an allowable 
cost); and
    (vii) Miscellaneous expenses such as postage, telephone, express 
mail, and printing (Identify the item, cost per unit, number of items, 
and total dollars); and
    (2) The following expenses are specifically not eligible for 
research and development and maintenance cost reimbursement:
    (i) Copyright or patent fees;
    (ii) Training costs;
    (iii) State filing fees and expenses;
    (iv) Normal ongoing administrative expenses;
    (v) Paid or incurred losses;
    (vi) Loss adjustment expenses;
    (vii) Sales commission;
    (viii) Marketing costs;
    (ix) Indirect overhead costs;
    (x) Lobbying costs;
    (xi) Product or applicant liability resulting from the research, 
development, preparation or marketing of the policy;
    (xii) Copyright infringement claims resulting from the research, 
development, preparation or marketing of the policy;
    (xiii) Costs of making program changes as a result of any mistakes, 
errors or flaws in the policy or plan of insurance; and
    (xiv) Costs associated with building rents or space allocation.
    (h) Requests for reimbursement of maintenance costs for submissions 
approved after September 17, 2001, must be supported by itemized 
statements and supporting documentary evidence for each reinsurance year 
in the maintenance period. Actual costs submitted will be examined for 
reasonableness and may be adjusted at the sole discretion of the Board. 
Maintenance costs for the following activities may be reimbursed:
    (1) Expansion of the original submission into additional counties or 
states;
    (2) Non-significant changes to the policy and any related material;
    (3) Non-significant or significant changes to the policy as 
necessary to protect program integrity or as required by Congress; and
    (4) Any other activity that qualifies as maintenance.
    (i) If the applicant does not reasonably demonstrate that the 
submission meets the marketing plan or does not follow the criteria set 
forth in this regulation, the product may be withdrawn at the discretion 
of the Board and no further maintenance reimbursement will be paid.
    (j) Not later than six months prior to the end of the last 
reinsurance year in which a maintenance reimbursement will be paid, as 
approved by the Board, the applicant must notify FCIC regarding its 
election of the treatment of the policy or plan of insurance for 
subsequent reinsurance years.
    (1) The applicant must notify FCIC whether it intends to:
    (i) Continue to maintain the policy or plan of insurance and charge 
approved insurance providers a user fee to cover maintenance expenses 
for all policies earning premium. It is the sole responsibility of the 
applicant to collect such fees from the approved insurance providers and 
any indebtedness for such fees must be resolved by the applicant and 
approved insurance provider. Applicants may request that

[[Page 71]]

FCIC provide the number of policies sold by each approved insurance 
provider. Such information will be provided not later than 90 days after 
such request is made or not later than 90 days after the requisite 
information has been provided to FCIC by the approved insurance 
provider, whichever is later; or
    (ii) Transfer responsibility for maintenance to FCIC.
    (2) If the applicant elects to:
    (i) Continue to maintain the policy or plan of insurance, the 
applicant must submit a request for approval of the user fee by the 
Board at the time of the election; or
    (ii) Transfer the policy or plan of insurance to FCIC, FCIC may at 
its sole discretion, continue to maintain the policy or plan or 
insurance or elect to withdraw the availability of the policy or plan of 
insurance.
    (3) Requests for approval of the user fee must be accompanied by 
written documentation to support that the amount requested will only 
cover maintenance costs.
    (4) The Board will approve the amount of user fee that is payable to 
the applicant by approved insurance providers unless the Board 
determines that the user fee charged:
    (i) Is unreasonable in relation to the maintenance costs associated 
with the policy or plan of insurance; or
    (ii) Unnecessarily inhibits the use of the policy or plan of 
insurance by other approved insurance providers.
    (5) Reasonableness of the user fees will be determined by the Board 
based on a comparison with the amount of reimbursement for maintenance 
previously received, the number of policies, the number of approved 
insurance providers, and the expected total amount of user fees to be 
received in any reinsurance year.
    (6) A user fee unnecessarily inhibits the use of a policy or plan of 
insurance if it is so high that other approved insurance providers are 
unable to pay such fees because of the volume of business currently 
underwritten by the approved insurance provider.
    (7) The user fee charged to each approved insurance provider will be 
considered payment in full for the use of such policy, plan of insurance 
or rate of premium for the reinsurance year in which payment is made.
    (8) If the applicant does not notify FCIC at least six months prior 
to the last day of the last reinsurance year in which a maintenance 
reimbursement will be paid, as approved by the Board, ownership of the 
policy or plan of insurance will be automatically transferred to FCIC 
beginning with the next reinsurance year.
    (k) The Board may consider information from the Equal Access to 
Justice Act, 5 U.S.C. 504, the Bureau of Labor Statistic's Occupational 
Employment Statistics Survey, the Bureau of Labor Statistic's Employment 
Cost Index, and any other information determined applicable by the 
Board, in making a determination whether to approve a submission for 
reimbursement of research and development costs, or maintenance costs 
under this section or the amount of reimbursement.
    (l) For the purposes of this section, rights to, or obligations of, 
research and development cost reimbursement, maintenance cost 
reimbursement, or user fees cannot be transferred from any individual or 
entity unless specifically approved in writing by the Board.
    (m) Notwithstanding the definition in Sec. 400.701, the maintenance 
period ends for an approved submission once the applicant no longer 
performs the maintenance responsibilities, as determined by FCIC, or the 
applicant gives FCIC notice they no longer wish to maintain the 
submission.
    (n) Applicants requesting reimbursement for research and development 
costs, maintenance costs, or user fees, may present their request in 
person to the Board prior to consideration for approval.

[66 FR 47951, Sept. 17, 2001, as amended at 70 FR 44241, Aug. 2, 2005]



Sec. 400.713  Nonreinsured supplemental (NRS) policy.

    (a) Unless notified by FCIC, three hard copies, or an electronic 
copy in a format approved by RMA, of the new or revised NRS policy and 
related materials must be submitted to the Deputy Administrator, 
Research and Development (or successor), Risk Management Agency, 6501 
Beacon Drive, Stop 0812, Kansas City, MO 64133-4676, at least 120

[[Page 72]]

days prior to the first sales closing date applicable to the policy.
    (b) FCIC will review the NRS policy to determine that it does not 
materially increase or shift risk to the underlying policy or plan of 
insurance reinsured by FCIC, reduce or limit the rights of the insured 
with respect to the underlying policy or plan of insurance, or cause 
disruption in the marketplace for products reinsured by FCIC.
    (1) An NRS policy will be considered to disrupt the marketplace if 
it adversely affects the sales or administration of reinsured policies, 
undermines producers' confidence in the Federal crop insurance program, 
decreases the producer's willingness or ability to use Federally 
reinsured risk management products, or harms public perception of the 
Federal crop insurance program.
    (2) The applicant, at a minimum, must provide worksheets and 
examples that establish liability and determine indemnities that 
demonstrate the performance of the NRS policy under differing scenarios. 
When the review is complete, FCIC will forward their findings to the 
applicant.
    (c) If the approved insurance provider sells an NRS policy that RMA 
determines materially increases or shifts risk to the underlying FCIC 
reinsured policy, reduces or limits the rights of the insured with 
respect to the underlying policy, or causes disruption in themarketplace 
for products reinsured by FCIC, reinsurance, A&O subsidy and risk 
subsidy will be denied on the underlying FCIC reinsured policy for which 
such NRS policy was sold.
    (d) FCIC will respond to the submitter not less than 60 days before 
the first sales closing date or provide notice why FCIC is unable to 
respond within the time frame allotted.

[70 FR 44242, Aug. 2, 2005]



Sec. 400.714  Requests for the opportunity to offer a premium discount.

    (a) To participate in the premium reduction plan, approved insurance 
providers must make a request to RMA for the opportunity to offer a 
premium discount for the reinsurance year in accordance with Sec. 
400.716.
    (b) If RMA determines that the approved insurance provider is 
eligible for the opportunity to offer a premium discount under the 
premium reduction plan for the reinsurance year, the approved insurance 
provider will only be allowed to pay a premium discount if:
    (1) The approved insurance provider has submitted the required 
information applicable for that reinsurance year in accordance with 
Sec. 400.720;
    (2) The approved insurance provider has demonstrated to RMA that it 
has operated sufficiently below its A & O subsidy to support the payment 
of such discount; and
    (3) RMA has approved the dollar amount, and the corresponding 
percentage of net book premium, for the premium discount.
    (c) For the 2006 reinsurance year:
    (1) For an approved insurance provider with an approved SRA for the 
2005 reinsurance year, requests for the opportunity to offer a premium 
discount must be received by RMA not later than August 4, 2005; and
    (2) For an approved insurance provider that did not have an approved 
SRA for the 2005 reinsurance year and did not request such agreement 
until after the deadline contained in paragraph (c)(1) of this section, 
requests for the opportunity to offer a premium discount must be 
provided with the application for approval of a SRA.
    (d) For all subsequent reinsurance years:
    (1) For an approved insurance provider with an approved SRA for the 
previous reinsurance year, requests for the opportunity to offer a 
premium discount must be received by RMA not later than April 1 before 
the reinsurance year, or the date RMA otherwise determines the Plan of 
Operations is due; and
    (2) For an approved insurance provider that did not have an approved 
SRA for the previous reinsurance year and did not request such agreement 
until after the deadline contained in paragraph (d)(1) of this section, 
requests for the opportunity to offer a premium discount under the 
premium reduction plan must be provided with the application for 
approval of a SRA.
    (e) Any request for the opportunity to offer a premium discount 
under the premium reduction plan that is not submitted by the applicable 
deadlines

[[Page 73]]

contained in paragraphs (c) and (d) will not be considered until the 
next reinsurance year.
    (f) The request for the opportunity to offer a premium discount 
under the premium reduction plan must be sent to the Director, 
Reinsurance Services Division (or designee).

[70 FR 41919, July 20, 2005]



Sec. 400.715  Limitations and prohibitions.

    (a) For the first two reinsurance years that RMA approves the 
payment of a premium discount, the approved insurance provider may not 
pay a premium discount under the premium reduction plan to a producer 
greater than 4.0 percent of the net book premium for the eligible crop 
insurance contract. For subsequent reinsurance years, the 4.0 percent of 
the net book premium for the eligible crop insurance contract will 
remain the maximum amount of premium discount authorized to be approved 
by RMA unless otherwise stated by RMA.
    (b) All premium discounts must be based on an actual accounting of 
efficiencies achieved by the approved insurance provider for the 
reinsurance year and may not be distributed to policyholders until the 
payment and the amount of such discounts have been approved by RMA in 
writing in accordance with Sec. 400.720.
    (c) The approved insurance provider may not impose any term or 
condition upon the distribution or amount of any premium discount (such 
as conditioning the premium discount based upon the renewal of the 
eligible crop insurance contract with the approved insurance provider or 
not having a loss for the crop year), except those included in 
Sec. Sec. 400.714 through 400.722.
    (d) Premium discounts under the premium reduction plan are not 
available for:
    (1) Eligible crop insurance contracts at CAT level of coverage; and
    (2) Ineligible producers.
    (e) No approved insurance provider or its representatives, agents, 
employees or contractors may advertise or otherwise communicate to any 
producer the availability, potential availability, or existence of:
    (1) The opportunity to offer a premium discount under the premium 
reduction plan until the approved insurance provider receives written 
notice from RMA that it is eligible for the opportunity to offer a 
premium discount;
    (2) A specific amount of premium discount prior to such amount being 
approved in writing by RMA in accordance with Sec. 400.720; and
    (3) Past or projected ability of the approved insurance provider to 
operate at less than the approved insurance provider's A&O subsidy.
    (f) After RMA has determined that the approved insurance provider is 
eligible for the opportunity to offer a premium discount in a State, the 
approved insurance provider and its representatives, agents, employees 
or contractors may advertise and communicate to producers that there is 
an opportunity for the approved insurance provider to offer a premium 
discount in that State and:
    (1) If they advertise or otherwise communicate that there is an 
opportunity to offer a premium discount in that State, such 
advertisements or other communications:
    (i) Can only state the dollar amounts or corresponding percentage of 
net book premium of premium discount actually paid to producers in the 
State for each reinsurance year for which the approved insurance 
provider paid a premium discount; and
    (ii) Must contain a prominently displayed disclaimer that:
    (A) States ``The past payments of premium discounts are not a 
guarantee that future payments will be made or an indication of the 
amount of future premium discounts''; or
    (B) States a similar statement that must be approved in writing by 
RMA; and
    (2) RMA may impose a sanction authorized in Sec. 400.719(j) if:
    (i) RMA determines that the approved insurance provider or its 
representative, agent, employee or contractor is not in compliance with 
the provisions of this section; or
    (ii) Any State regulatory authority determines that an approved 
insurance provider or its representatives, agents, employees or 
contractors has violated any State law regarding the advertising, 
marketing or solicitation of customers with respect to a premium

[[Page 74]]

discount under the premium reduction plan.
    (g) The approved insurance provider shall not distribute any premium 
discount payment:
    (1) Until the dollar amount, and corresponding percentage of net 
book premium, for the premium discount have been approved by RMA in 
writing (For example, RMA may approve a dollar amount of premium 
discount in a State of $500,000, which corresponds to a percentage of 
premium discount of 3% of the net book premium for the State); and
    (2) In an amount that is greater than the dollar amount, and 
corresponding percentage of net book premium, for the premium discount 
approved by RMA.
    (h) If RMA approves a dollar amount, and corresponding percentage of 
net book premium, for the premium discount in a State:
    (1) All producers insured by the approved insurance provider in that 
State for the corresponding reinsurance year will automatically receive 
that percentage of net book premium of premium discount (For example, if 
an approved insurance provider is approved to pay a percentage of 
premium discount of 3% of the net book premium for efficiencies attained 
during the 2006 reinsurance year in a State, all producers insured with 
that approved insurance provider during the 2006 reinsurance year in 
that State will receive a premium discount that is 3% of the net book 
premium for their eligible crop insurance contract); and
    (2) That same RMA approved premium discount percentage of net book 
premium must be paid for all crops, coverage levels except the CAT 
coverage level, and plans of insurance written by the approved insurance 
provider in that State.
    (i) The approved insurance provider must be in compliance with all 
requirements of the approved procedures to be able to pay a premium 
discount.

[70 FR 41920, July 20, 2005]



Sec. 400.716  Contents of the request for the opportunity to offer a 
premium discount.

    Each request for the opportunity to offer a premium discount under 
the premium reduction plan must include all of the following:
    (a) The name of the approved insurance provider; the person who may 
be contacted for further information regarding the request for an 
opportunity to offer a premium discount under the premium reduction 
plan; and the person who will be responsible for the administration of 
the premium reduction plan.
    (b) A list of the States where the approved insurance provider wants 
the opportunity to offer a premium discount under the premium reduction 
plan.
    (c) A detailed marketing plan that describes how the approved 
insurance provider will promote the premium reduction plan to all 
producers, especially small producers, limited resource farmers as 
defined in section 1 of the Basic Provisions in 7 CFR 457.8, women and 
minority producers. With respect to the marketing plan, it must:
    (1) Identify and utilize the appropriate media with the capacity to 
reach all producers, especially small producers, limited resource 
farmers as defined in section 1 of the Basic Provisions in 7 CFR 457.8, 
women and minority producers, in the State in which the premium 
reduction plan will be offered, such as advertising through farm 
journals, farm radio, community based organizations, etc.;
    (2) Be in addition to any solicitation or advertising done by agents 
of the approved insurance provider; and
    (3) Contain a certification by the person responsible for signing 
the SRA that any cost saving measures will not result in a reduction in 
service to any producers, especially small producers, limited resource 
farmers as defined in section 1 of the Basic Provisions in 7 CFR 457.8, 
women and minority producers in the State in which the premium reduction 
plan will be offered.
    (d) A report of the total dollar amount of premium discount and the 
corresponding premium discount percentage by State paid for the previous 
reinsurance year (Such report must be provided to RMA not later than 15 
days after making the premium discount payments); and

[[Page 75]]

    (e) Such other information as deemed necessary by RMA.

[70 FR 41921, July 20, 2005]



Sec. 400.717  New approved insurance providers.

    There may be instances where a new approved insurance provider is 
entering the crop insurance program for the first time and such approved 
insurance provider is not affiliated with an MGA, a TPA, another 
approved insurance provider, or any other entity that possesses the 
infrastructure necessary to deliver the crop insurance program, that is 
currently or has previously participated in the crop insurance program.
    (a) In such instances, the one time start-up costs that are 
associated with entering the crop insurance business (e.g., creation of 
a claims system, interface with RMA's data acceptance system, initial 
marketing costs, set up charges) must be included in the Expense 
Exhibits required by the SRA, or the applicable regulations or approved 
procedures, but the costs may be amortized in equal annual amounts for a 
period of up to three years for the purpose of determining the 
efficiency on the documents described in Sec. 400.720, in a manner 
determined by RMA.
    (b) If the approved insurance provider is affiliated with a MGA, a 
TPA, another approved insurance provider that previously participated in 
the crop insurance program but such MGA, TPA, or other approved 
insurance provider can demonstrate that it no longer has the 
infrastructure to operate the program, the FCIC Board of Directors, in 
its sole discretion, can authorize the amortization of start-up costs in 
accordance with paragraph (a) of this section.

[70 FR 41921, July 20, 2005]



Sec. 400.718  RMA Review

    If an insurance provider requests eligibility for the opportunity to 
offer a premium discount under the premium reduction plan:
    (a) For the 2006 reinsurance year, RMA will notify the approved 
insurance provider not later than 30 days after the date the approved 
insurance provider submits its request for eligibility for the 
opportunity to offer a premium discount under a premium reduction plan, 
whether it is eligible.
    (b) For all subsequent reinsurance years, RMA will notify the 
approved insurance provider at the same time it approves the Plan of 
Operations whether it is eligible.
    (c) An approved insurance provider may be determined to be eligible 
for the opportunity to offer a premium discount under the premium 
reduction plan if, in the sole determination of RMA, all of the 
following criteria are met:
    (1) All information required in Sec. 400.716 is included in the 
request for the opportunity to offer a premium discount under the 
premium reduction plan;
    (2) The marketing plan is designed to be effective at reaching all 
producers in the State, especially small producers, limited resource 
farmers as defined in section 1 of the Basic Provisions in 7 CFR 457.8, 
women and minority producers;
    (3) The implementation of any activities to enable the approved 
insurance provider to pay a premium discount does not impede the 
approved insurance provider's ability to comply with all requirements of 
the approved procedures, law, and regulation;
    (4) There must be a reasonable assurance that producers, especially 
small producers, limited resource farmers as defined in section 1 of the 
Basic Provisions in 7 CFR 457.8, women and minority producers, insured 
by the approved insurance provider will not experience a reduction in 
service;
    (5) The insurance provider can demonstrate that it is operationally 
and financially capable and ready to serve, all producers in that State; 
and
    (6) The approved insurance provider's resources, procedures, and 
internal controls are adequate to provide a premium discount under the 
premium reduction plan, make approved premium discount payments in a 
timely manner, prevent unfair discrimination, and comply with all 
applicable laws, regulations and approved procedures.
    (d) If the approved insurance provider is determined by RMA to be 
eligible for the opportunity to provide a premium discount under the 
premium reduction

[[Page 76]]

plan, the approved insurance provider will be notified in writing by the 
Director, Reinsurance Services Division, or a designee or successor.
    (e) Notification that an approved insurance provider is eligible for 
the opportunity to offer a premium discount under the premium reduction 
plan is not a guarantee that a premium discount payment will be approved 
by RMA for the reinsurance year. Approval of a premium discount cannot 
be provided by RMA until the actual A&O costs and A&O subsidy are 
reported for the reinsurance year and RMA determines that all the 
requirements of Sec. Sec. 400.714 through 400.722 have been met.

[70 FR 41921, July 20, 2005]



Sec. 400.719  Terms and conditions for the Premium Reduction Plan.

    The following terms and conditions apply to all approved insurance 
providers that RMA has determined are eligible for the opportunity to 
offer a premium discount under the premium reduction plan:
    (a) RMA's determination that the approved insurance provider is 
eligible for the opportunity to offer a premium discount under the 
premium reduction plan will only be effective for one reinsurance year. 
Approved insurance providers must reapply each reinsurance year in 
accordance with Sec. Sec. 400.714 through 400.716.
    (b) All procedural issues, questions, problems or clarifications 
with respect to implementation of the premium reduction plan must be 
addressed by the approved insurance provider by the deadline determined 
by RMA.
    (c) The agents employed or under contract with an approved insurance 
provider that RMA has determined is eligible for the opportunity to 
offer a premium discount under the premium reduction plan must disclose 
to all producers, insured with the agent or inquiring about insuring 
with the agent, in writing the names of all approved insurance providers 
that the agent represents that RMA has determined are eligible for the 
opportunity to offer a premium discount under the premium reduction 
plan.
    (d) The approved insurance provider must provide to the Director, 
Reinsurance Services Division semi-annual reports, or more frequent 
reports as determined by RMA, that, along with other information 
obtained by RMA, permit RMA to accurately evaluate the effectiveness of 
the approved insurance provider's implementation of the premium 
reduction plan, in the manner specified by RMA. At a minimum, each 
report must contain for each State listed by the approved insurance 
provider under Sec. 400.716(b):
    (1) The number of small producers, limited resource farmers as 
defined in section 1 of the Basic Provisions in 7 CFR 457.8, women and 
minority producers making application; and
    (2) The number, substance, and final or pending resolution of 
complaints from producers regarding the service received under the 
premium reduction plan.
    (e) RMA will monitor the approved insurance provider's efforts to 
market the premium reduction plan to small producers, limited resource 
farmers as defined in section 1 of the Basic Provisions in 7 CFR 457.8, 
women and minority producers.
    (1) RMA may compare the composition of the approved insurance 
provider's book of business in a State with the composition of the books 
of business of other approved insurance providers in that State to 
assist in determining whether the marketing plan has been effective or 
there is credible evidence of unfair discrimination by the approved 
insurance provider or its agents.
    (2) If at any time RMA determines that the marketing activities of 
the approved insurance provider are not effective in reaching small 
producers, limited resource farmers as defined in section 1 of the Basic 
Provisions in 7 CFR 457.8, women and minority producers or there is 
credible evidence of unfair discrimination by the approved insurance 
provider or its agents in any State listed by the approved insurance 
provider under Sec. 400.716(b), RMA will take the appropriate action 
authorized in paragraph (j) of this section (Remedial measures may 
include additional targeted advertising by the approved insurance 
provider or other appropriate

[[Page 77]]

measures to ensure the insurance provider is adequately serving small 
producers, limited resource farmers as defined in section 1 of the Basic 
Provisions in 7 CFR 457.8, women and minority producers or that such 
unfair discrimination has been discontinued and corrective action 
taken).
    (f) In no event shall RMA, FCIC or any other agency of the United 
States Government be liable for any damages caused by any mistakes, 
errors, misrepresentations, or flaws in the premium reduction plan or 
its implementation.
    (g) If RMA approves a dollar amount, and corresponding percentage of 
net book premium, for the premium discount for a State in accordance 
with Sec. 400.720, it will be applicable to the reinsurance year in 
which the efficiencies were attained and the approved insurance provider 
must pay that dollar amount, and corresponding percentage of net book 
premium, for the premium discount to its policyholders in that State for 
that reinsurance year. If the approved insurance provider fails to pay 
this amount, the approved insurance provider:
    (1) Will not be eligible for the opportunity to offer a premium 
discount for the reinsurance year immediately following RMA's approval 
of the payment of a premium discount; and
    (2) Must disclose in all its promotional and advertising material 
that it was approved to pay a premium discount by RMA but elected not to 
pay such discount, unless approval to pay the premium discount was 
withdrawn by RMA, for the next two reinsurance years subsequent to the 
failure to pay the premium discount.
    (h) For policyholders that were insured with the approved insurance 
provider in the reinsurance year from which the approved premium 
discount is applicable but are not currently insured with the approved 
insurance provider, any premium discount payments must be sent to the 
last known address of the policyholder.
    (i) The approved insurance provider and its representatives, agents, 
employees and contractors must fully cooperate with RMA and any State or 
Federal government agencies in any review of the operations or 
activities of the approved insurance provider and its representatives, 
agents, employees and contractors, with respect to the premium reduction 
plan.
    (j) At its sole discretion and upon written notice, RMA may withdraw 
a determination of eligibility for the opportunity to offer a premium 
discount under the premium reduction plan or approval of all or a part 
of a premium discount payment, preclude eligibility for the opportunity 
to offer a premium discount, or otherwise participate, under the premium 
reduction plan for a period determined by RMA commensurate with offense, 
take such other actions as authorized under the SRA, or require 
appropriate remedial measures as determined by RMA, if RMA determines 
that:
    (1) Any approved insurance provider or its representative, agent, 
employee or contractor has failed to comply with any term or condition 
contained in 7 CFR 400.714 through 400.721; or
    (2) The payment of a premium discount could adversely affect the 
financial or operational stability of the approved insurance provider, 
its MGA or TPA as required by applicable regulations or approved 
procedures.
    (k) The insurance provider may be held solely responsible for the 
actions of its representatives, agents, employees or contractors with 
respect to any violation of any term or condition contained in 
Sec. Sec. 400.714 through 400.721 or action under paragraph (j) of this 
section may be taken individually against the insurance provider or its 
representatives, agents, employees or contractors.

[70 FR 41922, July 21, 2005]



Sec. 400.720  Standards for approval of a premium discount.

    For approval of a premium discount:
    (a) If the approved insurance provider intends to offer a premium 
discount in a State listed by the approved insurance provider under 
Sec. 400.716(b) based on efficiencies attained during the reinsurance 
year, the approved insurance provider must, not later than December 31 
after the annual settlement for the reinsurance year, submit to RMA:
    (1) An audit, in a format approved by RMA, of the Expense Exhibits 
provided with the Plan of Operations, and the

[[Page 78]]

estimated A&O costs for the reinsurance year that were not included in 
such Expense Exhibits, certified by an independent certified public 
accountant with experience in insurance accounting, who must certify to 
the accuracy and completeness of the costs stated therein and the 
Expense Exhibits' conformance with the requirements of the SRA (The 
costs associated with such audit and certification will be at the 
approved insurance provider's expense and must be included in the 
approved insurance provider's A&O costs for the purposes of determining 
an efficiency);
    (2) A detailed description of all profit sharing arrangements that 
the approved insurance provider claims are not to be included as 
compensation (RMA reserves the right to request copies of such profit 
sharing contracts or other agreements); and
    (3) The dollar amount, and corresponding percentage of net book 
premium, for the premium discount that the approved insurance provider 
will pay in the State.
    (b) RMA will use the Expense Exhibits required to be submitted as 
part of the Plan of Operations to determine:
    (1) Whether the approved insurance provider's A&O costs were less 
than its A&O subsidy for the reinsurance year for the entire book of 
business; and
    (2) The actual dollar amount of efficiency attained by the approved 
insurance provider for the reinsurance year for each State where the 
approved insurance provider was eligible for the opportunity to offer a 
premium discount under the premium reduction plan. The dollar amount of 
efficiency and the dollar amount, and corresponding percentage of net 
book premium, for the premium discount must be prepared and submitted in 
accordance with approved procedures.
    (i) For the 2006 reinsurance year, such approved procedures will be 
issued within 5 days after July 20, 2005; and
    (ii) For all subsequent reinsurance years, such procedures will 
remain in effect unless revised and if such approved procedures will be 
revised, these approved procedures will be issued not later than January 
1 before the start of the reinsurance year.
    (c) For each State listed by the approved insurance provider under 
Sec. 400.716(b) for which the insurance provider requests approval to 
pay a premium discount, RMA will compare the dollar amount, and 
corresponding percentage of net book premium, for the premium discount 
determined in accordance with applicable approved procedures with the 
dollar amount, and corresponding percentage of net book premium, for the 
premium discount submitted by the approved insurance provider.
    (d) RMA may approve the dollar amount, and corresponding percentage 
of net book premium, for the premium discount submitted by the approved 
insurance provider if and to the extent that:
    (1) The dollar amount, and corresponding percentage of net book 
premium, for the premium discount submitted by the approved insurance 
provider does not exceed the dollar amount, and corresponding percentage 
of net book premium, for the premium discount determined by RMA in 
accordance with paragraph (b) of this section; and
    (2) If all other requirements of Sec. Sec. 400.714 through 400.722 
have been met.
    (e) If the dollar amount, and corresponding percentage of net book 
premium, for the premium discount submitted by the approved insurance 
provider exceeds the dollar amount, and corresponding percentage of net 
book premium, for the premium discount determined by RMA in accordance 
with paragraph (b) of this section, the approved insurance provider will 
be limited to paying the dollar amount, and corresponding percentage of 
net book premium, for the premium discount determined by RMA.

[70 FR 41923, July 20, 2005]



Sec. 400.721  Determinations and reconsiderations.

    (a) If RMA takes any action authorized in Sec. 400.719(j), the 
Director, Reinsurance Services Division, or a designee or successor will 
notify the approved insurance provider or its representatives, agents, 
employees or contractors against whom such action is taken, as 
applicable, in writing:
    (1) Of the action taken;

[[Page 79]]

    (2) The date such action is effective; and
    (3) The basis for such action.
    (b) If eligibility for the opportunity to offer a premium discount, 
or to participate, under the premium reduction plan is withdrawn, the 
approved insurance provider or agent, as applicable, must notify its 
policyholders it is no longer eligible to offer a premium discount, 
cease any advertising or other communication regarding a premium 
discount effective for the next sales closing date, and no premium 
discount may be distributed to any producer of the insurance provider or 
agent, as applicable, for the reinsurance year.
    (c) If notice is provided under paragraph (a) of this section to an 
approved insurance provider or its representatives, agents, employees or 
contractors:
    (1) The approved insurance provider or its representatives, agents, 
employees or contractors, as applicable, may request, in writing, 
reconsideration of the decision with the Deputy Administrator of 
Insurance Services, or a designee or successor, within 30 days of the 
date stated on the notice provided in paragraph (a) of this section;
    (2) Such request must provide a detailed narrative of the basis for 
reconsideration; and
    (3) The Deputy Administrator of Insurance Services, or a designee or 
successor will issue its reconsideration decision not later than 45 days 
after receipt of the request for reconsideration.
    (d) Reconsideration decisions issued in accordance with paragraph 
(c) of this section are considered as final administrative 
determinations rendered under Sec. 400.169(a) and if the approved 
insurance provider or its representatives, agents, employees or 
contractors who received such reconsideration decision disagrees with 
this final administrative determination, it may appeal in accordance 
with Sec. 400.169(d).
    (e) If eligibility to offer a premium discount plan has been 
withdrawn by RMA under Sec. 400.719(j), the approved insurance provider 
may request eligibility for the opportunity to offer a premium discount 
for the next applicable reinsurance year if the condition which was the 
basis for such withdrawal has been remedied.

[70 FR 41923, July 20, 2005]



Sec. 400.722  Consumer complaints.

    Consumer complaints regarding an approved insurance provider's 
violation of the requirements of Sec. Sec. 400.714 through 400.721 
should be sent in confidence to RMA, attention: The Director of the 
Reinsurance Services Division, or a designee or successor.
    (a) Consumer complaints must include:
    (1) A specific citation of the requirement in Sec. Sec. 400.714 
through 400.721 that has allegedly been violated;
    (2) A detailed listing of the actions alleged to have taken place 
that violate the requirement;
    (3) Specific identification of persons involved in the violation, 
and
    (4) The date, place and circumstances under which such violation 
allegedly occurred.
    (b) Any complaint that does not meet the requirements in paragraph 
(a) of this section may be returned to the sender for further details 
before RMA can pursue investigation of the complaint.
    (c) RMA may seek additional information to assist in investigating 
the complaint.
    (d) If RMA's investigation determines there has been a violation of 
a requirement in Sec. Sec. 400.714 through 400.721, it may take the 
appropriate action authorized under Sec. 400.719(j).

[70 FR 41924, July 20, 2005]

Subpart W [Reserved]



    Subpart X_Interpretations of Statutory and Regulatory Provisions

    Source: 63 FR 70313, Dec. 21, 1998, unless otherwise noted.



Sec. 400.765  Basis and applicability.

    (a) The regulations contained in this subpart prescribe the rules 
and criteria for obtaining a final agency determination of the 
interpretation of any provision of the Act or the regulations 
promulgated thereunder.

[[Page 80]]

    (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.
    (c) All final agency determinations issued by FCIC, and published in 
accordance with Sec. 400.768(f ), will be binding on all participants 
in the Federal crop insurance program.

[63 FR 70313, Dec. 21, 1998, as amended at 64 FR 50246, Sept. 16, 1999]



Sec. 400.766  Definitions.

    Act. The Federal Crop Insurance Act, 7 U.S.C. 1501 et seq.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
government corporation within the United States Department of 
Agriculture.
    Participant. Any applicant for crop insurance, a producer with a 
valid crop insurance policy, or a private insurance company with a 
reinsurance agreement with FCIC or their agents, loss adjusters, 
employees or contractors.
    Regulations. All provisions contained in 7 CFR chapter IV.



Sec. 400.767  Requester obligations.

    (a) All requests for a final agency determination under this subpart 
must:
    (1) Be submitted, in writing by certified mail to the Associate 
Administrator, Risk Management Agency, United States Department of 
Agriculture, Stop Code 0801, 1400 Independence Avenue, SW., Washington, 
DC 20250-0801, facsimile at (202) 690-5879 or by electronic mail at 
[email protected];
    (2) State that it is being submitted under section 506(s) of the 
Act;
    (3) Identify and quote the specific provision in the Act or 
regulations for which a final agency determination is requested;
    (4) State the crop year for which the interpretation is sought;
    (5) State the name, address, and telephone number of a contact 
person affiliated with the request; and
    (6) Contain the requester's detailed interpretation of the 
regulation.
    (b) The requestor must advise FCIC if the request for a final agency 
determination will be used in a lawsuit or the settlement of a claim.
    (c) Each request for final agency determination under this subpart 
must contain no more than one request for an agency interpretation.

[63 FR 70313, Dec. 21, 1998, as amended at 64 FR 50246, Sept. 16, 1999]



Sec. 400.768  FCIC obligations.

    (a) FCIC will not interpret any specific factual situation or case, 
such as actions of any participant under the terms of a policy or any 
reinsurance agreement.
    (b) If, in the sole judgement of FCIC, the request is unclear, 
ambiguous, or incomplete, FCIC will not provide an interpretation, but 
will notify the requester that the request is unclear, ambiguous or 
incomplete, within 30 days of such request.
    (c) FCIC will provide a final determination of the interpretation to 
a request that meets all the conditions stated herein to the requester 
in writing, and at FCIC's discretion in the format in which it was 
received, within 90 days of the date of receipt by FCIC.
    (d) If a requestor is notified that a request is unclear, ambiguous 
or incomplete under section 400.768(b), the time to respond will be 
tolled from the date FCIC notifies the requestor until the date that 
FCIC receives a clear, complete, and unambiguous request.
    (e) If a response is not provided within 90 days, the requestor may 
assume the interpretation provided is correct for the applicable crop 
year.
    (f) All agency final determinations will be published by FCIC as 
specially numbered documents on the RMA Internet website.
    (g) All final agency determinations are considered matters of 
general applicability that are not appealable to the National Appeals 
Division. Before obtaining judicial review of any final agency 
determination, the person must obtain an administratively final 
determination from the Director of the National Appeals division on the 
issue of whether the final agency determination is a matter of general 
applicability.

                           PART 401 [RESERVED]

[[Page 81]]



PART 402_CATASTROPHIC RISK PROTECTION ENDORSEMENT--Table of Contents




Sec.
402.1 General statement.
402.2 Applicability.
402.3 OMB control numbers.
402.4 Catastrophic Risk Protection Endorsement Provisions.

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

    Source: 61 FR 42985, Aug. 20, 1996, unless otherwise noted.



Sec. 402.1  General statement.

    The Federal Crop Insurance Act, as amended by the Federal Crop 
Insurance Reform Act of 1994, requires the Federal Crop Insurance 
Corporation to implement a catastrophic risk protection plan of 
insurance that provides a basic level of insurance coverage to protect 
producers in the event of a catastrophic crop loss due to loss of yield 
or prevented planting, if provided by the Corporation, provided the crop 
loss or prevented planting is due to an insured cause of loss specified 
in the crop insurance policy. This Catastrophic Risk Protection 
Endorsement is a continuous endorsement that is effective in conjunction 
with a crop insurance policy for the insured crop. Catastrophic risk 
protection coverage will be offered through approved insurance providers 
if there are a sufficient number available to service the area. If there 
are an insufficient number available, as determined by the Secretary, 
local offices of the Farm Service Agency will provide catastrophic risk 
protection coverage.



Sec. 402.2  Applicability.

    This Catastrophic Risk Protection Endorsement is applicable to each 
crop for which catastrophic risk protection coverage is available and 
for which the producer elects such coverage.



Sec. 402.3  OMB control numbers.

    The information collection activity associated with this rule has 
been approved by the Office of Management and Budget (OMB) pursuant to 
the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB 
control number 0563-0053.

[61 FR 42985, Aug. 20, 1996, as amended at 69 FR 48730, Aug. 10, 2004]



Sec. 402.4  Catastrophic Risk Protection Endorsement Provisions.

    The Catastrophic Risk Protection Endorsement Provisions for the 2005 
and succeeding crop years are as follows:

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                Catastrophic Risk Protection Endorsement

(This is a continuous endorsement)

    If a conflict exists between this Endorsement and any of the 
policies specified in section 2 or the Special Provisions for the 
insured crop, this endorsement will control.

                          Terms and Conditions

                             1. Definitions

    Approved insurance provider. A private insurance company, including 
its agents, that has been approved and reinsured by FCIC to provide 
insurance coverage to producers participating in the Federal Crop 
Insurance program.
    Approved yield. The amount of production per acre computed in 
accordance with FCIC's actual production history program (7 CFR part 
400, subpart G) or for crops not included under 7 CFR part 400, subpart 
G, the yield used to determine the guarantee in accordance with the Crop 
Provisions or the Special Provisions, and any adjustments elected in 
accordance with section 36 of the Basic Provisions.
    County. The political subdivision of a state listed in the actuarial 
table and designated on your accepted application, including land in an 
adjoining county, provided such land is part of a field that extends 
into the adjoining county and the county boundary is not readily 
discernable. For peanuts and tobacco, the county will also include any 
land identified by a FSA farm serial number for the county but 
physically located in another county.
    Crop of economic significance. A crop that has either contributed in 
the previous crop year, or is expected to contribute in the current crop 
year, ten percent (10%) or more of the total expected value of your 
share of all crops grown in the county. However, a crop will not be 
considered a crop of economic significance if the expected liability 
under the Catastrophic Risk Protection Endorsement is equal to or less 
than the administrative fee required for the crop.

[[Page 82]]

    Expected market price. (price election) The price per unit of 
production (or other basis as determined by FCIC) anticipated during the 
period the insured crop normally is marketed by producers. This price 
will be set by FCIC before the sales closing date for the crop. The 
expected market price may be less than the actual price paid by buyers 
if such price typically includes remuneration for significant amounts of 
post-production expenses such as conditioning, culling, sorting, 
packing, etc.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
Government Corporation within USDA.
    FSA. The Farm Service Agency, an agency of the United States 
Department of Agriculture or any successor agency.
    Household. A domestic establishment including the members of a 
family (parents, brothers, sisters, children, spouse, grandchildren, 
aunts, uncles, nieces, nephews, first cousins, or grandparents, related 
by blood, adoption or marriage, are considered to be family members) and 
others who live under the same roof.
    Insurance is available. When crop information is contained in the 
county actuarial documents for a particular crop.
    Limited resource farmer. A person with:
    (1) Direct or indirect gross farm sales not more than $100,000.00 in 
each of the previous two years (to be increased starting in fiscal year 
2004 to adjust for inflation using Prices Paid by Farmer Index as 
compiled by National Agricultural Statistical Service (NASS)); and
    (2) A total household income at or below the national poverty level 
for a family of four, or less than 50 percent of county median household 
income in each of the previous two years (to be determined annually 
using Commerce Department Data).
    Linkage requirement. The legal requirement that a producer must 
obtain at least catastrophic risk protection coverage for any crop of 
economic significance as a condition of receiving benefits for such crop 
from certain other USDA programs in accordance with section 12(e), 
unless the producer executes a waiver of any eligibility for emergency 
crop loss assistance in connection with the crop.
    Secretary. The Secretary of the United States Department of 
Agriculture.
    USDA. The United States Department of Agriculture.
    Zero acreage report. An acreage report filed by you that certifies 
you do not have a share in the crop for that crop year.

      2. Eligibility, Life of Policy, Cancellation, and Termination

    (a) You must have one of the following policies in force to elect 
this Endorsement:
    (1) The General Crop Insurance Policy (7 CFR 401.8) and crop 
endorsement;
    (2) The Common Crop Insurance Policy (7 CFR 457.8) and crop 
provisions;
    (3) The Group Risk Plan Policy, if available for catastrophic risk 
protection; or
    (4) A specific named crop insurance policy.
    (b) You must have made application for catastrophic risk protection 
on or before the sales closing date for the crop in the county.
    (c) You must be a ``person'' as defined in the crop policy to be 
eligible for catastrophic risk protection coverage.

                            3. Unit Division

    (a) This section is in lieu of the unit provisions specified in the 
applicable crop policy.
    (b) For catastrophic risk protection coverage, a unit will be all 
insurable acreage of the insured crop in the county on the date coverage 
begins for the crop year:
    (1) In which you have one hundred percent (100%) crop share; or
    (2) Which is owned by one person and operated by another person on a 
share basis.

(Example: If, in addition to the land you own, you rent land from five 
landlords, three on a crop share basis and two on a cash basis, you 
would be entitled to four units; one for each crop share lease and one 
that combines the two cash leases and the land you own.)

    (c) Further division of the units described in paragraph (b) above 
is not allowed under this Endorsement.

  4. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) Notwithstanding any provision contained in any other policy 
document, for the 1995 through 1998 crop years, catastrophic coverage 
will offer protection equal to fifty percent (50%) of your approved 
yield indemnified at sixty percent (60%) of the expected market price, 
or a comparable coverage as established by FCIC.
    (b) Notwithstanding any provision contained in any other policy 
document, for the 1999 and subsequent crop years, catastrophic coverage 
will offer protection equal to fifty percent (50%) of your approved 
yield indemnified at fifty-five percent (55%) of the expected market 
price, or a comparable coverage as established by FCIC.
    (c) If the crop policy denominates coverage in dollars per acre or 
other measure, or any other alternative method of coverage, such 
coverage will be converted to the amount of coverage that would be 
payable at fifty percent (50%) of your approved yield indemnified at 
sixty percent (60%) of the expected market price for the 1995 through 
1998 crop years and fifty percent (50%) of your approved yield 
indemnified at fifty-five percent (55%) of the expected market price for 
the 1999 and subsequent crop years.
    (d) You may elect catastrophic coverage for any crop insured or 
reinsured by FCIC on

[[Page 83]]

either an individual yield and loss basis or an area yield and loss 
basis, if both options are offered as set out in the Actuarial Table or 
the Special Provisions.
    (e) To be eligible for an indemnity under this endorsement you must 
have suffered at least a 50 percent loss in yield.

                          5. Report of Acreage

    (a) The report of crop acreage that you file in accordance with the 
crop policy must be signed on or before the acreage reporting date. For 
catastrophic risk protection, unless the other person with an insurable 
interest in the crop objects in writing prior to the acreage reporting 
date and provides a signed acreage report on their own behalf, the 
operator may sign the acreage report for all other persons with an 
insurable interest in the crop without a power of attorney. All persons 
with an insurable interest in the crop, and for whom the operator 
purports to sign and represent, are bound by the information contained 
in that acreage report.
    (b) For the purpose of determining the amount of indemnity only, 
your share will not exceed your insurable interest at the earlier of the 
time of loss or the beginning of harvest. Unless the accepted 
application clearly indicates that insurance is requested for a 
partnership or joint venture, insurance will only cover the crop share 
of the person completing the application. The share will not extend to 
any other person having an interest in the crop except as may otherwise 
be specifically allowed in this endorsement. Any acreage or interest 
reported by or for your spouse, child or any member of your household 
may be considered your share. A lease containing provisions for both a 
minimum payment (such as a specified amount of cash, bushels, pounds, 
etc.) and a crop share will be considered a crop share lease. A lease 
containing provisions for either a minimum payment (such as a specified 
amount of cash, bushels, pounds, etc.,) or a crop share will be 
considered a cash lease. Land rented for cash, a fixed commodity 
payment, or any consideration other than a share in the insured crop on 
such land will be considered as owned by the lessee.

                6. Annual Premium and Administrative Fees

    (a) Notwithstanding any provision contained in any other policy 
document, you will not be responsible to pay a premium, nor will the 
policy be terminated because the premium has not been paid. FCIC will 
pay a premium subsidy equal to the premium established for the coverage 
provided under this endorsement.
    (b) In return for catastrophic risk protection coverage, you must 
pay an administrative fee to the insurance provider within 30 days after 
you have been billed by us, unless otherwise specified in 7 CFR part 400 
(You will be billed by the date stated in the Special Provisions);
    (1) The administrative fee owed is $100 for each crop in the county.
    (2) Payment of an administrative fee will not be required if you 
file a bona fide zero acreage report on or before the acreage reporting 
date for the crop (if you falsely file a zero acreage report you may be 
subject to criminal and administrative sanctions).
    (c) The administrative fee provisions of paragraph (b) of this 
section do not apply if you meet the definition of a limited resource 
farmer (see section 1). The administrative fee will be waived if you 
request it and:
    (1) You qualify as a limited resource farmer; or
    (2) You were insured prior to the 2005 crop year or for the 2005 
crop year and your administrative fee was waived for one or more of 
those crop years because you qualified as a limited resource farmer 
under a policy definition previously in effect, and you remain qualified 
as a limited resource farmer under the definition that was in effect at 
the time the administrative fee was waived.
    (d) When a crop policy has provisions to allow you the option to 
separately insure individual crop types or varieties, you must pay a 
separate administrative fee in accordance with paragraph (b) of this 
section for each type or variety you elect to separately insure.
    (e) If the administrative fee is not paid when due, you, and all 
persons with an insurable interest in the crop under the same contract, 
may be ineligible for certain other USDA program benefits as set out in 
section 12, and all such benefits already received for the crop year 
must be refunded.

                             7. Insured Crop

    The crop insured is specified in the applicable crop policy, 
however:
    (a) Notwithstanding any other policy provision requiring the same 
insurance coverage on all insurable acreage of the crop in the county, 
if you purchase additional coverage for a crop, you may separately 
insure acreage under catastrophic coverage that has been designated as 
``high risk'' land by FCIC, provided that you execute a High Risk Land 
Exclusion Option and obtain a catastrophic risk protection policy with 
the same approved insurance provider, if available, on or before the 
applicable sales closing date. If catastrophic coverage is not available 
from the same insurance provider, you may obtain the catastrophic risk 
protection policy for the high risk land from another approved insurance 
provider or FSA, if available. You will be required to pay a separate 
administrative fee for both the additional coverage policy and the 
catastrophic coverage policy.
    (b) A tobacco producer may insure one hundred percent (100%) of the 
tobacco crop that is identified by a tobacco marketing

[[Page 84]]

card issued by FSA for a specific producer and Farm Serial Number under 
one CAT policy, provided the producer and other persons each have a 
share in the crop, all the shareholders agree in writing to such 
arrangement, and none of the persons hold any other interest in another 
tobacco crop for which they are required to obtain at least catastrophic 
coverage. If the tobacco crop is insured under one policy:
    (1) The linkage requirements will be satisfied for each shareholder 
of the crop; and
    (2) The producer insuring the crop will:
    (i) Make application for insurance and provide the name and social 
security number, or employer identification number, of each person with 
a share in the tobacco crop;
    (ii) File the acreage report showing a one-hundred percent (100%) 
share in the crop (all insurable acreage covered by such marketing card 
will be considered as one unit);
    (iii) Be responsible to pay the one administrative fee for all the 
producers within the county;
    (iv) Fulfill all requirements under the crop insurance contract; and
    (v) Receive any indemnity payment under his or her social security 
number or employer identification number and distribute the indemnity 
payments to the other persons sharing in the crop.
    (c) A landowner will be allowed to obtain catastrophic coverage to 
satisfy linkage requirements for all other landowners who hold an 
undivided interest in the insurable acreage, provided:
    (1) All the landowners must agree in writing to such arrangement and 
have their social security number or employer identification number 
listed on the application, without regard to the actual amount of their 
interest in the insured acreage;
    (2) All landowners must have an undivided interest in the insurable 
acreage;
    (3) None of the landowners may hold any share in other acreage for 
which they are required to obtain at least catastrophic coverage;
    (4) The total cumulative liability under the Catastrophic Risk 
Protection Endorsement for all landowners must be $2,500 or less;
    (5) The landowner insuring the crop will:
    (i) Make application for insurance and provide the name and social 
security number or employer identification number of each person with an 
undivided interest in the insurable acreage;
    (ii) Be responsible to pay the one administrative fee for all the 
producers within the county;
    (iii) Fulfill all requirements under the insurance contract; and
    (iv) Receive any indemnity payment under the landowner's social 
security number, or when applicable, employer identification number, and 
distribute the indemnity payments to the other persons sharing in the 
crop.

                          8. Replanting Payment

    Notwithstanding any provision contained in any other crop insurance 
document, no replant payment will be paid whether or not replanting of 
the crop is required under the policy.

                         9. Claim for Indemnity

    (a) If two or more insured crop types, varieties, or classes are 
insured within the same unit, and multiple price elections are 
applicable, the dollar amount of insurance and the dollar amount of 
production to be counted will be determined separately for each type, 
variety, class, etc., that have separate price elections and then 
totaled to determine the total liability or dollar amount of production 
to be counted for the unit.
    (b) If you are eligible to receive an indemnity under this 
endorsement and benefits compensating you for the same loss under any 
other USDA program, you must elect the program from which you wish to 
receive benefits. Only one payment or program benefit is allowed. 
However, if other USDA program benefits are not available until after 
you filed a claim for indemnity, you may refund the total amount of the 
indemnity and receive the other program benefit. Notwithstanding the 
first sentence of this subsection, farm ownership, operating, and 
emergency loans may be obtained from the USDA in addition to an 
indemnity under this endorsement.

                        10. Concealment or Fraud

    Notwithstanding any provision contained in any other crop insurance 
document, your CAT policy may be voided by us on all crops without 
waiving any of our rights, including the right to collect any amounts 
due:
    (a) If at any time you conceal or misrepresent any material fact or 
commit fraud relating to this or any other contract issued under the 
authority of the Federal Crop Insurance Act with any insurance provider; 
and
    (b) The voidance will be effective as of the beginning of the crop 
year during which such act or omission occurred. After the policy has 
been voided, you must make a new application to obtain catastrophic risk 
protection coverage for any subsequent crop year. If your policy is 
voided under this section, any waiver of eligibility for emergency crop 
loss assistance in connection with the crop will not be effective for 
the crop for the year in which the voidance occurred.

                        11. Exclusion of Coverage

    (a) Options or endorsements that extend the coverage available under 
any crop policy offered by FCIC will not be available under

[[Page 85]]

this endorsement, except the Late Planting Agreement Option. Written 
agreements are not available for any crop insured under this 
endorsement.
    (b) Notwithstanding any provision contained in any other crop 
policy, hail and fire coverage and high-risk land may not be excluded 
under catastrophic risk protection.

             12. Eligibility for Other USDA Program Benefits

    (a) Even if it was a crop of economic significance for the previous 
crop year, if you do not intend to plant the crop in the current crop 
year, you do not have to obtain crop insurance or execute a waiver of 
your eligibility for any emergency crop loss assistance in connection 
with the crop to remain eligible for the USDA program benefits specified 
in subsection (e). However, if, after the sales closing date, you plant 
that crop, you will be unable to obtain insurance for that crop and you 
must execute a waiver of your eligibility for emergency crop loss 
assistance in connection with the crop to remain eligible for the USDA 
program benefits specified in section 12(e). Failure to execute such a 
waiver will require you to refund any benefits already received under a 
program specified in section 12(e).
    (b) You are initially responsible to determine the crops of economic 
significance in the county. The insurance provider may assist you in 
making these initial determinations. However, these determinations will 
not be binding on the insurance provider. To determine the percentage 
value of each crop:
    (1) Multiply the acres planted to the crop, times your share, times 
the approved yield, and times the price;
    (2) Add the values of all crops grown by the producer in the county; 
and
    (3) Divide the value of the specific crop by the result of section 
12(b)(2).
    (c) You may use the type of price such as the current local market 
price, futures price, established price, highest amount of insurance, 
etc., for the price when calculating the value of each crop, provided 
that you use the same type of price for all crops in the county.
    (d) You may be required to justify the calculation and provide 
adequate records to enable the insurance provider to verify whether a 
crop is of economic significance.
    (e) You must obtain at least catastrophic coverage for each crop of 
economic significance in the county in which you have an insurable 
share, if insurance is available in the county for the crop, unless you 
execute a waiver of any eligibility for emergency crop loss assistance 
in connection with the crop to be eligible for:
    (1) Benefits under the Agricultural Market Transition Act;
    (2) Loans or any other USDA provided farm credit, including: 
guaranteed and direct farm ownership loans, operating loans, and 
emergency loans under the Consolidated Farm and Rural Development Act 
provided after October 13, 1994; and
    (3) Benefits under the Conservation Reserve Program derived from any 
new or amended application or contracts executed after October 13, 1994.
    (f) Failure to comply with all provisions of the policy constitutes 
a breach of contract and may result in ineligibility for certain other 
farm program benefits for that crop year and any benefit already 
received must be refunded. If you breach the insurance contract, the 
execution of a waiver of any eligibility for emergency crop loss 
assistance will not be effective for the crop year in which the breach 
occurs.

[61 FR 42985, Aug. 20, 1996, as amended at 63 FR 40631, July 30, 1998; 
64 FR 40740, July 28, 1999; 65 FR 40484, June 30, 2000; 69 FR 48730, 
Aug. 10, 2004]

                        PARTS 403-406 [RESERVED]



PART 407_GROUP RISK PLAN OF INSURANCE REGULATIONS FOR THE 2005 AND 
SUCCEEDING CROP YEARS--Table of Contents




Sec.
407.1 Applicability.
407.2 Availability of Federal crop insurance.
407.3 Premium rates, amounts of protection, and coverage levels.
407.4 OMB control numbers.
407.5 Creditors.
407.6 [Reserved]
407.7 The contract.
407.8 The application and policy.
407.9 Group risk plan common policy.
407.10 Group risk plan for barley.
407.11 Group risk plan for corn.
407.12 Group risk plan for cotton.
407.13 Group risk plan for forage.
407.14 Group risk plan for peanuts.
407.15 Group risk plan for sorghum.
407.16 Group risk plan for soybean.
407.17 Group risk plan for wheat.

    Authority: 7 U.S.C. 1506(1), 1506(p).

    Source: 64 FR 30219, June 7, 1999, unless otherwise noted.



Sec. 407.1  Applicability.

    The provisions of this part are applicable only to those crops and 
crop years for which a Crop Provision is contained in this part.

[[Page 86]]



Sec. 407.2  Availability of Federal crop insurance.

    (a) Insurance shall be offered under the provisions of this part on 
the insured crop in counties within the limits prescribed by and in 
accordance with the provisions of the Federal Crop Insurance Act, (7 
U.S.C. 1501 et seq.) (the Act). The crops and counties shall be 
designated by the Manager of the Federal Crop Insurance Corporation 
(FCIC) from those approved by the Board of Directors of FCIC.
    (b) The insurance will be offered through companies reinsured by 
FCIC under the same terms and conditions as the contract contained in 
this part. These contracts are clearly identified as being reinsured by 
FCIC. Additionally, the contract contained in this part may be offered 
directly to producers through agents of the United States Department of 
Agriculture. Those contracts are specifically identified as being 
offered by FCIC.
    (c) No person may have in force more than one insurance policy 
issued or reinsured by FCIC on the same crop for the same crop year, in 
the same county, unless specifically approved in writing by FCIC.
    (d) Except as specified in paragraph (c) of this section, if a 
person has more than one contract authorized under the Act that provides 
coverage for the same loss on the same crop for the same crop year in 
the same county, all such contracts shall be voided for that crop year 
and the person will be liable for the premium on all contracts, unless 
the person can show to the satisfaction of the Corporation that the 
multiple contracts of insurance were without the fault of the person.
    (1) If the multiple contracts of insurance are shown to be without 
the fault of the person and:
    (i) One contract is an additional coverage policy and the other 
contract is a Catastrophic Risk Protection policy, the additional 
coverage policy will apply if both policies are with the same insurance 
provider, or if not, both insurance providers agree, and the 
Catastrophic Risk Protection policy will be canceled (If the insurance 
providers do not agree, the policy with the earliest date of application 
will be in force and the other contract will be canceled); or
    (ii) Both contracts are additional coverage policies or both are 
Catastrophic Risk Protection policies, the contract with the earliest 
signature date on the application will be valid and the other contract 
on that crop in the county for that crop year will be canceled, unless 
both policies are with the same insurance provider and the insurance 
provider agrees otherwise or both policies are with different insurance 
providers and both insurance providers agree otherwise.
    (2) No liability for indemnity or premium will attach to the 
contracts canceled as specified in paragraphs (d)(1)(i) and (ii) of this 
section.
    (e) The person must repay all amounts received in violation of this 
section with interest at the rate contained in the contract (see Sec. 
407.9, section 15).
    (f) A person whose contract with FCIC or with a company reinsured by 
FCIC under the Act has been terminated because of violation of the terms 
of the contract is not eligible to obtain crop insurance under the Act 
with FCIC or with a company reinsured by FCIC unless the person can show 
that the termination was improper and should not result in subsequent 
ineligibility.
    (g) All applicants for insurance under the Act must advise the 
insurance provider, in writing at the time of application, of any 
previous applications for insurance or contracts of insurance under the 
Act within the last 5 years and the present status of any such 
applications or insurance.

[64 FR 30219, June 7, 1999, as amended at 69 FR 48731, Aug. 10, 2004]



Sec. 407.3  Premium rates, amounts of protection, and coverage levels.

    (a) The Manager of FCIC shall establish premium rates, amounts of 
protection, and coverage levels for the insured crop that will be 
included in the actuarial documents on file in the insurance provider's 
office. Premium rates, amounts of protection, and coverage levels may be 
changed from year to year.
    (b) At the time the application for insurance is made, the person 
must elect

[[Page 87]]

an amount of protection and a coverage level from among those contained 
in the actuarial documents for the crop year.



Sec. 407.4  OMB control numbers.

    The information collection activity associated with this rule has 
been previously approved by the Office of Management and Budget (OMB) 
under control number 0563-0053.



Sec. 407.5  Creditors.

    An interest of a person in an insured crop existing by virtue of a 
lien, mortgage, garnishment, levy, execution, bankruptcy, involuntary 
transfer or other similar interest shall not entitle the holder of the 
interest to any benefit under the contract.



Sec. 407.6  [Reserved]



Sec. 407.7  The contract.

    The insurance contract shall become effective upon the acceptance by 
FCIC or the reinsured company of a complete, duly executed application 
for insurance on a form prescribed or approved by FCIC. The contract 
shall consist of the accepted application, Group Risk Plan of Insurance 
Basic Provisions, Crop Provisions, Special Provisions, Actuarial Table, 
and any amendments, endorsements, or options thereto. Changes made in 
the contract shall not affect its continuity from year to year. No 
indemnity shall be paid unless the person complies with all terms and 
conditions of the contract. The forms required under this part and by 
the contract are available at the office of the insurance provider, or 
the local FSA office, if applicable.

[64 FR 30219, June 7, 1999, as amended at 69 FR 48731, Aug. 10, 2004]



Sec. 407.8  The application and policy.

    (a) Application for insurance, on a form prescribed or approved by 
FCIC, must be made by any person who wishes to participate in the 
program in order to cover such person's share in the insured crop as 
landlord, owner-operator, tenant, or other crop ownership interest. No 
other person's interest in the crop may be insured under the 
application. The application must be submitted to the insurance provider 
on or before the applicable sales closing date on file in the insurance 
provider's local office.
    (b) FCIC or the reinsured company may reject or no longer accept 
applications upon the FCIC's determination that the insurance risk is 
excessive. The Manager of the Corporation is authorized in any crop year 
to extend the sales closing date for submitting applications for fall 
planted crops, unless prohibited by law, upon determining that the 
probability and severity of claims will not increase because of the 
extension, by placing the extended date on file in the insurance 
provider's office and publishing a notice in the Federal Register. If 
adverse conditions should develop during the extended period, the 
Corporation will require the insurance provider to immediately 
discontinue acceptance of applications.
    (c) Since this Group Risk Plan differs significantly from 
traditional Multiple Peril Crop Insurance, persons who purchase the 
Group Risk Plan and their crop insurance agents will be required to 
execute an ``Acknowledgment of Differences'' that explains that the 
terms and conditions of the Group Risk Plan are different from 
traditional crop insurance in that:
    (1) The Group Risk Plan indemnity payment, if any, will be made 
after the Group Risk Plan premium is received;
    (2) A person may have a low yield on his or her individual farm and 
not receive a payment under Group Risk Plan; and
    (3) A person may not have any loss of production and still collect 
under the policy if a loss of production is general in the area.
    (4) By executing the ``Acknowledgment of Differences,'' the insured 
certifies that:
    (i) He or she understands the terms of the Group Risk Plan;
    (ii) An MPCI policy may be available in the county; and
    (iii) Both a Group Risk Plan and a MPCI Plan cannot be purchased on 
the same crop by the same insured in the same county.

[[Page 88]]



Sec. 407.9  Group risk plan common policy.

    The provisions of the Group Risk Plan Common Policy for the 2005 and 
succeeding crop years are as follows:

    [FCIC policies]

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                      Group Risk Plan Common Policy

    [Reinsured policies]
(Appropriate title for insurance provider)
(This is a continuous policy. Refer to Section 18.)

    [FCIC policies]
    This insurance policy establishes a risk management program 
developed by the Federal Crop Insurance Corporation (FCIC), an agency of 
the United States Government, under the authority of the Federal Crop 
Insurance Act (Act), as amended (7 U.S.C. 1501 et seq.). All terms of 
the policy and rights and responsibilities of the parties thereto are 
subject to the Act and all regulations under the Act published in 7 CFR 
chapter IV. The provisions of this policy may not be waived or modified 
in any way by us, your insurance agent or any employee of USDA unless 
the policy specifically authorizes a waiver or modification by written 
agreement. Procedures (handbooks, manuals, memoranda, and bulletins), 
issued by us and published on the RMA Web site at http://
www.rma.usda.gov/ or a successor Web site will be used in the 
administration of this policy. All provisions of state and local laws in 
conflict with the provisions of this policy as published at 7 CFR part 
407 are preempted and the provisions of this policy control.
    Throughout this policy, ``you'' and ``your'' refer to the person 
shown on the accepted application and ``we,'' ``us,'' and ``our'' refer 
to the Federal Crop Insurance Corporation. Unless the context indicates 
otherwise, the use of the plural form of a word includes the singular 
use and the singular form of the word includes the plural.
    AGREEMENT TO INSURE: In return for the payment of the premium, and 
subject to all of the provisions of this policy, we agree with you to 
provide the insurance as stated in this policy. If there is a conflict 
between the Act, the regulations published at 7 CFR chapter IV, and the 
procedures issued by us, the order of priority is as follows: (1) The 
Act; (2) the regulations; and (3) the procedures issued by us, with (1) 
controlling (2), etc. If there is a conflict between the policy 
provisions published at 7 CFR part 407 and the administrative 
regulations published at 7 CFR part 400, the policy provisions published 
at 7 CFR part 407 control. If a conflict exists among the policy 
provisions, the order of priority is: (1) The Catastrophic Risk 
Protection Endorsement, as applicable; (2) the Special Provisions; (3) 
the Crop Provisions; and (4) these Basic Provisions, with (1) 
controlling (2), etc.
    [Reinsured policies]
    This insurance policy establishes a risk management program 
developed by the Federal Crop Insurance Corporation (FCIC), an agency of 
the United States Government, under the authority of the Federal Crop 
Insurance Act (Act), as amended (7 U.S.C. 1501 et seq.).
    This insurance policy is reinsured by FCIC under the provisions of 
the Act. All terms of the policy and rights and responsibilities of the 
parties are subject to the Act and all regulations under the Act 
published in 7 CFR chapter IV. The provisions of this policy may not be 
waived or modified in any way by us, our insurance agent or any other 
contractor or employee of ours or any employee of USDA unless the policy 
specifically authorizes a waiver or modification by written agreement. 
We will use the procedures (handbooks, manuals, memoranda, and 
bulletins), as issued by FCIC and published on the RMA Web site at 
http://www.rma.usda.gov/ or a successor Web site, in the administration 
of this policy. All provisions of state and local laws in conflict with 
the provisions of this policy as published at 7 CFR part 407 are 
preempted and the provisions of this policy will control. In the event 
that we cannot pay your loss because we are insolvent or are otherwise 
unable to perform our duties under our reinsurance agreement with FCIC, 
your claim will be settled in accordance with the provisions of this 
policy and FCIC will be responsible for any amounts owed. No state 
guarantee fund will be liable for your loss.
    Throughout this policy, ``you'' and ``your'' refer to the person 
shown on the accepted application and ``we,'' ``us,'' and ``our'' refer 
to the reinsured company issuing this policy. Unless the context 
indicates otherwise, the use of the plural form of a word includes the 
singular use and the singular form of the word includes the plural.
    AGREEMENT TO INSURE: In return for the payment of premium and 
subject to all of the provisions of this policy, we agree with you to 
provide risk protection as stated in this policy. If there is a conflict 
between the Act, the regulations published at 7 CFR chapter IV, and the 
procedures as issued by FCIC, the order of priority is as follows: (1) 
The Act; (2) the regulations; and (3) the procedures as issued by FCIC, 
with (1) controlling (2), etc. If there is a conflict between the policy 
provisions published at 7 CFR part 407 and the administrative 
regulations published at 7 CFR part 400, the policy provisions published 
at 7 CFR part 407 control. If a conflict exists among the policy 
provisions, the order of priority is: (1) the Catastrophic Risk 
Protection Endorsement, as applicable; (2) the

[[Page 89]]

Special Provisions; (3) the Crop Provisions; and (4) these Basic 
Provisions, with (1) controlling (2), etc.
    [Both policies]
    The Group Risk Plan of Insurance (GRP) is designed as a risk 
management tool to insure against widespread loss of production of the 
insured crop in a county. It is primarily intended for use by those 
producers whose farm yields tend to follow the average county yield. It 
is possible for you to have a low yield on the acreage that you insure 
and still not receive a payment under this plan.
    For additional coverage you may select any percent coverage level 
shown on the actuarial documents. Multiplying your coverage level 
percent by the expected county yield shown on the actuarial documents 
gives your trigger yield. If the payment yield that FCIC publishes for 
the insured crop year falls below your trigger yield, you will receive a 
payment.
    On or before the sales closing date, you may select any dollar 
amount of protection between 60 and 100 percent (except for Catastrophic 
Risk Protection (CAT) which is 45 percent) of the maximum protection per 
acre shown on the actuarial documents. This protection will be provided 
for each acre of the crop planted by the acreage reporting date and 
shown on your acreage report (unless otherwise provided in the crop 
provisions) in which you have a share.
    In accordance with the Act, FCIC will pay a portion of your premium, 
as published in the actuarial documents. The premium rates, practices, 
types, maximum protection per acre, and maximum subsidy per acre are 
also shown on the actuarial documents.
    FCIC will issue the payment yield in the calendar year following the 
crop year insured. This yield will be the official estimated yield 
published by the National Agricultural Statistics Service (NASS). You 
will be paid if the payment yield falls below your trigger yield. The 
amount of your payment per net insured acre will be calculated by 
subtracting the payment yield from the trigger yield, dividing that 
quantity by the trigger yield, and multiplying that result by your 
protection per acre for each net acre that you have insured.
    To be eligible to participate in the Group Risk Plan of Insurance 
for any crop in any county, and to receive an indemnity thereunder, you 
must have an insurable interest in an insured crop that is planted in 
the county shown on the approved application. The crop must be planted 
for harvest and be reported to us by the acreage reporting date. You may 
only purchase coverage under the Group Risk Plan of Insurance on your 
net acres of the insured crop.
    The insurance contract shall become effective upon the acceptance by 
us of a duly executed application for insurance on our form. The policy 
will consist of the accepted application, these Basic Provisions, the 
Crop Provisions, the Special Provisions, other applicable amendments, 
endorsements or options, the actuarial documents for the insured 
agricultural commodity, the Catastrophic Risk Protection Endorsement, if 
applicable, and the applicable regulations published in 7 CFR chapter 
IV. Insurance for each agricultural commodity in each county will 
constitute a separate policy.

                          Terms and Conditions

              Group Risk Plan of Insurance Basic Provisions

                             1. Definitions

    Acreage report. A report required by section 7 of these Basic 
Provisions that contains, in addition to other information, your report 
of your share of all acreage of an insured crop in the county, whether 
insurable or not insurable.
    Acreage reporting date. The date contained in the Special Provisions 
by which you must submit your acreage report in order to be eligible for 
Group Risk Insurance.
    Act. Federal Crop Insurance Act, (7 U.S.C. 1501 et seq.).
    Actuarial documents. The material for the crop year which is 
available for public inspection in your agent's office and published on 
RMA's Web site at http://www.rma.usda.gov/ or a successor Web site, and 
which shows the maximum protection per acre, expected county yield, 
coverage levels, information needed to determine the premium rates, 
practices, program dates, and other related information regarding crop 
insurance in the county.
    Additional coverage. For GRP, an amount of protection greater than 
catastrophic risk protection. The protection is on a per acre basis as 
specified in the actuarial documents for the crop, practice, and type.
    Agricultural commodity. Any crop or other commodity produced, 
regardless of whether or not it is insurable.
    Agricultural experts. Persons who are employed by the Cooperative 
State Research, Education and Extension Service or the agricultural 
departments of universities, or other persons approved by FCIC, whose 
research or occupation is related to the specific crop or practice for 
which such expertise is sought.
    Area. Land surrounding the insured acreage with geographic 
characteristics, topography, soil types and climatic conditions similar 
to the insured acreage.
    Billing date. The date, contained in the actuarial documents, by 
which we will bill you for the premium and administrative fee on the 
insured crop.
    Cancellation date. The calendar date specified in the Crop 
Provisions on which insurance for the next crop year will automatically 
renew unless the policy is canceled in

[[Page 90]]

writing by either you or us or terminated in accordance with policy 
terms.
    Catastrophic risk protection. The minimum level of coverage offered 
by FCIC. For GRP, an amount of protection equal to 65 percent of the 
expected county yield indemnified at 45 percent of the maximum 
protection per acre specified in the actuarial documents for the crop, 
practice, and type.
    County. Any county, parish, or other political subdivision of a 
state shown on your accepted application.
    Certifying agent. A private or governmental entity accredited by the 
USDA Secretary of Agriculture for the purpose of certifying a 
production, processing or handling operation as organic.
    Code of Federal Regulations (CFR). The codification of general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. Rules published in 
the Federal Register by FCIC are contained in 7 CFR chapter IV. The full 
text of the CFR is available in electronic format at http://
www.access.gpo.gov/ or a successor Web site.
    Contract change date. The calendar date by which changes to the 
policy, if any, will be made available in accordance with section 19 of 
these Basic Provisions.
    Conventional farming practice. A system or process for producing an 
agricultural commodity, excluding organic farming practices, that is 
necessary to produce the crop that may be, but is not required to be, 
generally recognized by agricultural experts for the area to conserve or 
enhance natural resources and the environment.
    Cover crop. A crop generally recognized by agricultural experts as 
agronomically sound for the area for erosion control or other reasons 
related to conservation or soil improvement. A cover crop may be 
considered to be a second crop (see the definition of ``second crop'').
    Crop practice. The combination of inputs such as fertilizer, 
herbicide, and pesticide, and operations such as planting, cultivation, 
and irrigation, used to produce the insured crop. The insurable 
practices are contained in the actuarial documents.
    Crop Provisions. The part of the policy that contains the specific 
provisions of insurance for each insured crop.
    Crop year. The period of time within which the insured crop is 
normally grown and designated by the calendar year in which the crop is 
normally harvested.
    Delinquent debt. Any administrative fees or premiums for insurance 
issued under the authority of the Act, and the interest on those 
amounts, if applicable, that are not postmarked or received by us or our 
agent on or before the termination date unless you have entered into an 
agreement acceptable to us to pay such amounts or have filed for 
bankruptcy on or before the termination date; any other amounts due us 
for insurance issued under the authority of the Act (including, but not 
limited to, indemnities found not to have been earned or that were 
overpaid), and the interest on such amounts, if applicable, which are 
not postmarked or received by us or our agent by the due date specified 
in the notice to you of the amount due; or any amounts due under an 
agreement with you to pay the debt, which are not postmarked or received 
by us or our agent by the due dates specified in such agreement.
    Dollar amount of protection per acre. The percentage of coverage 
selected by you multiplied by the maximum protection per acre specified 
in the actuarial documents for the crop, practice, and type. The dollar 
amount of protection per acre is shown on your Summary of Protection.
    Double crop. Producing two or more crops for harvest on the same 
acreage in the same crop year.
    Expected county yield. The yield contained in the actuarial 
documents, on which your coverage for the crop year is based. This yield 
is determined using historical NASS county average yields, as adjusted 
by FCIC.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
corporation within USDA.
    First insured crop. With respect to a single crop year and any 
specific crop acreage, the first instance that an agricultural commodity 
is planted for harvest or prevented from being planted and is insured 
under the authority of the Act. For example, if winter wheat that is not 
insured is planted on acreage that is later planted to soybeans that are 
insured, the first insured crop would be soybeans. If the winter wheat 
was insured, it would be the first insured crop.
    FSA. The Farm Service Agency, an agency of the United States 
Department of Agriculture, or a successor agency.
    Generally recognized. When agricultural experts or the organic 
agricultural industry, as applicable, are aware of the production method 
or practice and there is no genuine dispute regarding whether the 
production method or practice allows the crop to make normal progress 
toward maturity.
    Good farming practices. The production methods utilized to produce 
the insured crop and allow it to make normal progress toward maturity, 
which are: (1) For conventional or sustainable farming practices, those 
generally recognized by agricultural experts for the area; or (2) for 
organic farming practices, those generally recognized by the organic 
agricultural industry for the area or contained in the organic plan that 
is in accordance with the National Organic Program published in 7 CFR 
part 205. We may, or you may request us to, contact FCIC to determine 
whether or not production methods will be considered to be ``good 
farming practices.''
    GRP. Group Risk Plan of Insurance.

[[Page 91]]

    Household. A domestic establishment including the members of a 
family (parents, brothers, sisters, children, spouse, grandchildren, 
aunts, uncles, nieces, nephews, first cousins, or grandparents, related 
by blood, adoption or marriage, are considered to be family members) and 
others who live under the same roof.
    Insurable loss. Damage for which coverage is provided under the 
terms of your policy, and for which you accept an indemnity payment.
    Insurance provider. The FSA or a private insurance company approved 
by FCIC which provides crop insurance coverage to producers 
participating in any Federal crop insurance program administered under 
the Act.
    Limited resource farmer. A person with:
    (1) Direct or indirect gross farm sales not more than $100,000.00 in 
each of the previous two years (to be increased starting in fiscal year 
2004 to adjust for inflation using Prices Paid by Farmer Index as 
compiled by NASS); and
    (2) A total household income at or below the national poverty level 
for a family of four, or less than 50 percent of county median household 
income in each of the previous two years (to be determined annually 
using Commerce Department Data).
    Maximum protection per acre. The highest amount of protection 
specified in the actuarial documents.
    MPCI. Multiple peril crop insurance, an insurance product based on 
an individual yield or amount of insurance.
    NASS. National Agricultural Statistics Service, an agency within 
USDA, or its successor, that publishes the official United States 
Government yield estimates.
    Net acres. The planted acreage of the insured crop multiplied by 
your share.
    Offset. The act of deducting one amount from another amount.
    Organic agricultural industry. Persons who are employed by the 
following organizations: Appropriate Technology Transfer for Rural 
Areas, Sustainable Agriculture Research and Education or the Cooperative 
State Research, Education and Extension Service, the agricultural 
departments of universities, or other persons approved by FCIC, whose 
research or occupation is related to the specific organic crop or 
practice for which such expertise is sought.
    Organic farming practice. A system of plant production practices 
approved by a certifying agent in accordance with 7 CFR part 205.
    Payment yield. The yield determined by FCIC based on NASS yields for 
each insurable crop's type and practice, as adjusted by FCIC, and used 
to determine whether an indemnity will be due.
    Person. An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and wherever applicable, a state 
or a political subdivision or agency of a state.
    Replanted crop. The same agricultural commodity replanted on the 
same acreage as the first insured crop for harvest in the same crop year 
if the replanting is specifically made optional by the policy and you 
elect to replant the crop and insure it under the policy covering the 
first insured crop, or replanting is required by the policy.
    Sales closing date. The date contained in the Special Provisions by 
which an application must be filed. The last date by which you may 
change your crop insurance coverage for a crop year.
    Second crop. With respect to a single crop year, the next occurrence 
of planting any agricultural commodity for harvest following a first 
insured crop on the same acreage. The second crop may be the same or a 
different agricultural commodity as the first insured crop, except the 
term does not include a replanted crop. A cover crop, planted after a 
first insured crop and planted for the purpose of haying, grazing or 
otherwise harvesting in any manner or that is hayed or grazed during the 
crop year, or that is otherwise harvested is considered to be a second 
crop. A cover crop that is covered by FSA's noninsured crop disaster 
assistance program (NAP) or receives other USDA benefits associated with 
forage crops will be considered as planted for the purpose of haying, 
grazing or otherwise harvesting. A crop meeting the conditions stated 
herein will be considered to be a second crop regardless of whether or 
not it is insured.
    Share. Your percentage of interest in the insured crop, as an owner, 
operator, or tenant at the time insurance attaches. Premium will be 
determined on your share as of the acreage reporting date. However, only 
for the purpose of determining the amount of indemnity, your share will 
not exceed your share at the acreage reporting date or on the date of 
harvest, whichever is less.
    Special provisions. The part of the policy that contains specific 
provisions of insurance for each crop that may vary by geographic area.
    Subsidy. The portion of your premium, shown on the actuarial 
documents, that FCIC will pay in accordance with the Act.
    Substantial beneficial interest. An interest held by any person of 
at least 10 percent in you. The spouse of any individual applicant or 
individual insured will be considered to have a substantial beneficial 
interest in the applicant or insured unless the spouses can prove they 
are legally separated or otherwise legally separate under state law. Any 
child of an individual applicant or individual insured will not be 
considered to have a substantial beneficial interest in the applicant or 
insured unless the child has a separate legal interest in such person. 
For example,

[[Page 92]]

there are two partnerships that each have a 50 percent interest in you 
and each partnership is made up of two individuals, each with a 50 
percent share in the partnership. In this case, each individual would be 
considered to have a 25 percent interest in you, and both the 
partnerships and the individuals would have a substantial beneficial 
interest in you (The spouses of the individuals would not be considered 
to have a substantial beneficial interest unless the spouse was one of 
the individuals that made up the partnership). However, if each 
partnership is made up of six individuals with equal interests, then 
each would only have an 8.33 percent interest in you and although the 
partnership would still have a substantial beneficial interest in you, 
the individuals would not for the purposes of reporting in section 18.
    Summary of protection. Our statement to you of the crop insured, 
dollar amount of protection per acre, premiums, and other information 
obtained from your accepted application, acreage report, and the 
actuarial documents.
    Sustainable farming practice. A system or process for producing an 
agricultural commodity, excluding organic farming practices, that is 
necessary to produce the crop and is generally recognized by 
agricultural experts for the area to conserve or enhance natural 
resources and the environment.
    Termination date. The calendar date contained in the Crop Provisions 
upon which insurance ceases to be in effect because of nonpayment of any 
amount due us under the policy, including premium and administrative 
fees.
    Trigger yield. The result of multiplying the expected county yield 
by the coverage level percentage chosen by you. When the payment yield 
falls below the trigger yield, an indemnity is due.
    Type. Plants of the insured crop having common traits or 
characteristics that distinguish them as a group or class, and which are 
designated in the actuarial documents.
    USDA. United States Department of Agriculture.

                             2. Insured Crop

    The insured crop will be the crop shown on your accepted 
application, as specified in the applicable Crop Provisions, and must be 
grown on insurable acres.

                    3. Insured and Insurable Acreage

    (a) The insurable acreage is all of the acreage of the insured crop 
for which premium rates are provided by the actuarial documents and in 
which you have a share and which is in the county listed in your 
accepted application. The dollar amount of protection per acre, amount 
of premium, and indemnity will be calculated separately for each county, 
type, and practice.
    (b) Only the acreage seeded to the insured crop on or before the 
acreage reporting date (unless otherwise provided in the Crop 
Provisions) and physically located in the county listed on your accepted 
application will be insured. Crops grown on acreage physically located 
in another county must be reported and insured separately.
    (c) We will not insure any acreage:
    (1) Where the crop was destroyed or put to another use during the 
crop year for the purpose of conforming with, or obtaining a payment 
under, any other program administered by the USDA;
    (2) Where you have failed to follow good farming practices for the 
insured crop; or
    (i) Planted to a type, class or variety not generally recognized for 
the area; or
    (ii) Where the conditions under which the crop is planted are not 
generally recognized for the area (For example, where agricultural 
experts determine that planting a non-irrigated corn crop after a failed 
small grain crop on the same acreage in the same crop year is not 
appropriate for the area);
    (3) Of a second crop, if you elect not to insure such acreage when 
an indemnity for a first insured crop may be subject to reduction in 
accordance with the provisions of section 21 and you intend to collect 
an indemnity payment that is equal to 100 percent of the insurable loss 
for the first insured crop acreage. This election must be made for all 
first insured crop acreage that may be subject to an indemnity reduction 
if the first insured crop is insured under this policy, or on a first 
insured crop unit basis if the first insured crop is not insured under 
this policy. For example, if the first insured crop under this policy 
consists of 40 acres, or the first insured crop unit insured under 
another policy contains 40 planted acres, then no second crop can be 
insured on any of the 40 acres. In this case:
    (i) If the first insured crop is insured under this policy, you must 
provide written notice to us of your election not to insure acreage of a 
second crop by the acreage reporting date for the second crop if it is 
insured under this policy, or before planting the second crop if it is 
insured under any other policy, or, if the first insured crop is not 
insured under this policy, at the time the first insured crop acreage is 
released by us (if no acreage in the first insured crop unit is 
released, this election must be made by the earlier of the acreage 
reporting date for the second crop or when you sign the claim for the 
first insured crop), and if you fail to provide such notice, the second 
crop acreage will be insured in accordance with applicable policy 
provisions and you must repay any overpaid indemnity for the first 
insured crop;
    (ii) In the event a second crop is planted and insured with a 
different insurance provider, or planted and insured by a different

[[Page 93]]

person, you must provide written notice to each insurance provider that 
a second crop was planted on acreage on which you had a first insured 
crop; and
    (iii) You must report the crop acreage that will not be insured on 
the applicable acreage report; or
    (4) Of a crop planted following a second crop or following an 
insured crop that is prevented from being planted after a first insured 
crop, unless it is a practice that is generally recognized by 
agricultural experts or the organic agricultural industry for the area 
to plant three or more crops for harvest on the same acreage in the same 
crop year, and additional coverage insurance provided under the 
authority of the Act is offered for the third or subsequent crop in the 
same crop year. Insurance will only be provided for a third or 
subsequent crop as follows:
    (i) You must provide records acceptable to us that show:
    (A) You have produced and harvested the insured crop following two 
other crops harvested on the same acreage in the same crop year in at 
least two of the last four years in which you produced the insured crop; 
or
    (B) The applicable acreage has had three or more crops produced and 
harvested on it in at least two of the last four years in which the 
insured crop was grown on it; and
    (ii) The amount of insurable acreage will not exceed 100 percent of 
the greatest number of acres for which you provide the records required 
in section 3(c)(4)(i)(A) or (B).

                          4. Policy Protection

    (a) For catastrophic risk protection GRP policies, the dollar amount 
of protection per acre will be 45 percent of the maximum protection per 
acre specified on the actuarial documents for each insured crop, 
practice, and type. For additional coverage GRP policies, you may select 
any dollar amount of protection from 60 percent through 100 percent of 
the maximum protection per acre shown on the actuarial documents for the 
crop, practice, and type.
    (b) The dollar amount of protection per acre, multiplied by your net 
insured acreage, is your policy protection for each insured crop, 
practice, and type specified in the actuarial documents.
    (c) All yields are based on NASS determinations, and such 
determinations for the county will be conclusively presumed to be 
accurate.

                           5. Coverage Levels

    (a) For catastrophic risk protection GRP policies, the coverage 
level is shown on the actuarial documents for each insured crop, 
practice, and type. For additional coverage GRP policies, you may select 
any percentage of coverage shown on the actuarial documents for the 
crop, practice, and type.
    (b) Your coverage level multiplied by the expected county yield 
shown on the actuarial documents is your trigger yield. If the payment 
yield published by FCIC for the insured crop, practice, and type for the 
insured crop year falls below your trigger yield, you will receive an 
indemnity payment.
    (c) You may change the coverage level or amount of protection for 
each insured crop on or before the sales closing date. Changes must be 
in writing and received by us by the sales closing date.

                      6. Payment Calculation Factor

    Your payment calculation factor will be ((your trigger yield-payment 
yield) / your trigger yield) for the purposes of calculating an 
indemnity payment.

                     7. Report of Acreage and Share

    (a) You must report on our form all acreage for each insured crop in 
which you have a share (insurable and not insured) by practice and type 
specified in the actuarial documents in each county listed on your 
accepted application. This report must be submitted each year on or 
before the acreage reporting date for the insured crop contained in the 
actuarial documents. If you do not submit an acreage report by the 
acreage reporting date, we will determine your acreage and share or deny 
liability on the policy.
    (b) We will not insure any acreage of the insured crop planted after 
the acreage reporting date, unless otherwise provided in the Crop 
Provisions.
    (c) The premium amount and payment of an indemnity will be based on 
your insurable acreage on the acreage reporting date subject to section 
7(d).
    (d) You must provide all required reports and you are responsible 
for the accuracy of all information contained in those reports. You 
should verify the information on all such reports prior to submitting 
them to us.
    (1) If you submit information on any report that is different than 
what is determined to be correct and such information results in:
    (i) A lower amount of policy protection than the correct amount, the 
amount of policy protection will be reduced to an amount consistent with 
the reported information; or
    (ii) A higher amount of policy protection than the correct amount, 
the information contained in the acreage report will be revised to be 
consistent with the correct information.
    (2) In addition to the other adjustments specified in section 
7(d)(1), if you misreport any information that results in an amount of 
policy protection greater than 110.0 percent or lower than 90.0 percent 
of the correct amount of policy protection, any indemnity

[[Page 94]]

will be based on the amount of policy protection determined in 
accordance with section 7(d)(1)(i) or (ii) and will be reduced in an 
amount proportionate with the amount of policy protection that is 
misreported in excess of the tolerances stated in this paragraph (For 
example, if the correct amount of policy protection is determined to be 
$100.00, but you reported a policy protection amount of $120.00, any 
indemnity will be reduced by 10.0 percent ($120.00 / $100.00 = 1.20, and 
1.20 -1.10 = 0.10)).
    (e) If you request an acreage measurement prior to the acreage 
reporting date and submit documentation of such request and an acreage 
report with estimated acreage by the acreage reporting date, you must 
provide the measurement to us, we will revise your acreage report if 
there is a discrepancy, and no indemnity will be paid until the acreage 
measurement has been received by us (Failure to provide the measurement 
to us will result in the application of section 7(d) if the estimated 
acreage is not correct, and estimated acreage under this paragraph will 
no longer be accepted for any subsequent acreage report).
    (f) If there is an irreconcilable difference between:
    (1) The acreage measured by FSA or a measuring service and our on-
farm measurement, our on-farm measurement will be used; or
    (2) The acreage measured by a measuring service, other than our on-
farm measurement, and FSA, the FSA measurement will be used.
    (g) Information on the initial acreage report will not be considered 
misreported for the purposes of section 7(d) if the acreage report is 
revised:
    (1) In accordance with section 7(e) or (f);
    (2) Because information is clearly transposed;
    (3) When you provide adequate evidence that we or someone from USDA 
have committed an error regarding the information; or
    (4) As expressly permitted by the policy.
    (h) If we discover you have incorrectly reported any information on 
the acreage report for any crop year, you may be required to provide 
documentation in subsequent crop years substantiating your report of 
acreage for those crop years, including, but not limited to, an acreage 
measurement service at your own expense. If the correction of any 
misreported information would affect an indemnity that was paid in a 
prior crop year, such claim will be adjusted and you will be required to 
repay any overpaid amounts.
    (i) You may insure only your share of the crop, which includes any 
share of your spouse and dependent children unless it is demonstrated to 
our satisfaction, prior to the sales closing date, that you and your 
spouse maintain completely separate farming operations and that each 
spouse is the operator of his or her own separate operation. Any 
commingling of any part of the operations will cause shares of you and 
your spouse to be combined.

                8. Administrative Fees and Annual Premium

    (a) If you obtain a catastrophic risk protection GRP policy, you 
will pay an administrative fee, unless otherwise specified in 7 CFR part 
400:
    (1) Of $100 per crop per county;
    (2) Payable to the insurance provider on the billing date for the 
crop.
    (b) If you obtain an additional coverage GRP policy, you will pay an 
administrative fee:
    (1) Of $30 per crop per county;
    (2) Payable to the insurance provider on the billing date for the 
crop.
    (c) The administrative fee will be waived if you request it and:
    (1) You qualify as a limited resource farmer; or
    (2) You were insured prior to the 2005 crop year or for the 2005 
crop year and your administrative fee was waived for one or more of 
those crop years because you qualified as a limited resource farmer 
under a policy definition previously in effect, and you remain qualified 
as a limited resource farmer under the definition that was in effect at 
the time the administrative fee was waived.
    (d) For additional coverage GRP policies, your premium is determined 
by multiplying your policy protection by the premium rate per hundred 
dollars of protection for your coverage level contained in the actuarial 
documents, by 0.01, and subtracting the applicable subsidy.
    (e) For catastrophic risk protection and additional coverage GRP 
policies, payment of an administrative fee will not be required if you 
file a bona fide zero acreage report on or before the acreage reporting 
date for the crop (if you falsely file a zero acreage report you may be 
subject to criminal and administrative sanctions).
    (f) The annual premium is earned and payable at the time the insured 
crop is planted. For each insured crop, you will be billed for premium 
and the administrative fee not earlier than the billing date specified 
in the Special Provisions. Premium, administrative fee, and any other 
amount owed us is due on the billing date and interest will accrue if 
the premium, administrative fee, or any other amount owed is not 
received by us before the first day of the month following the premium 
billing date.
    (g) If the amount of premium (gross premium less premium subsidy 
paid on your behalf by FCIC) and administrative fee you are required to 
pay for any acreage exceeds the amount of protection for the acreage, 
coverage for those acres will not be provided (no premium or 
administrative fee will be due

[[Page 95]]

and no indemnity will be paid for such acreage).

                          9. Written Agreements

    Terms of this policy which are specifically designated for the use 
of written agreements may be altered by written agreement in accordance 
with the following:
    (a) You must apply in writing for each written agreement or for 
renewal of any written agreement no later than the sales closing date, 
unless you demonstrate your physical inability to submit the request 
prior to the sales closing date (For example, you have been hospitalized 
or a blizzard has made it impossible to submit the written agreement 
request in person or by mail);
    (b) The application for written agreement must contain all variable 
terms of the contract between you and us that will be in effect if the 
written agreement is not approved;
    (c) If approved by FCIC, the written agreement will include all 
variable terms of the contract, including, but not limited to, crop 
practice, and type or variety;
    (d) Each written agreement will only be valid for the number of crop 
years specified in the written agreement and a multi-year written 
agreement:
    (1) Will only apply for any particular crop year designated in the 
written agreement if all terms and conditions in the written agreement 
are still applicable for the crop year and the conditions under which 
the written agreement has been provided have not changed prior to the 
beginning of the crop year (If conditions change during or prior to a 
crop year, the written agreement will not be effective for that crop 
year but may still be effective for a subsequent crop year if conditions 
under which the written agreement has been provided exist for such 
year);
    (2) May be canceled in writing by:
    (i) FCIC not less than 30 days before the cancellation date if it 
discovers that any term or condition of the written agreement, including 
the premium rate, is not appropriate for the crop; or
    (ii) You or us on or before the cancellation date;
    (3) That is not renewed in writing after it expires, is not 
applicable for a crop year, or is canceled, then insurance coverage will 
be in accordance with the terms and conditions stated in this policy, 
without regard to the written agreement; and
    (4) Will be automatically cancelled if you transfer your policy to 
another insurance provider (No notice will be provided to you and for 
any subsequent crop year, for a written agreement to be effective, you 
must timely request renewal of the written agreement in accordance with 
this section);
    (e) A request for any written agreement must contain:
    (1) A completed ``Request for Actuarial Change'' form;
    (2) Evidence from agricultural experts or the organic agricultural 
industry, as applicable, that the crop can be produced in the area if 
the request is to provide insurance for practices, types, or varieties 
that are not insurable, unless we are notified in writing by FCIC that 
such evidence is not required;
    (3) The legal description of the land (in areas where legal 
descriptions are available), FSA Farm Serial Number including tract 
number, and a FSA aerial photograph, acceptable Geographic Information 
System or Global Positioning System maps, or other legible maps 
delineating field boundaries where you intend to plant the crop for 
which insurance is requested; and
    (4) Such other information as specified in the Special Provisions or 
required by FCIC;
    (f) A request for written agreement will not be accepted if:
    (1) The request is submitted to us after the deadline contained in 
section 9(a);
    (2) All the information required in section 9(e) is not submitted to 
us with the request for a written agreement (The request for a written 
agreement may be accepted if any missing information is available from 
other acceptable sources); or
    (3) The request is to add land or crops to an existing written 
agreement or to add land or crops to a request for a written agreement 
and the request is not submitted by the deadlines specified in section 
9(a);
    (g) A request for a written agreement will be denied if:
    (1) FCIC determines the risk is excessive;
    (2) There is not adequate information available to establish an 
actuarially sound premium rate and insurance coverage for the crop and 
acreage; or
    (3) Agricultural experts or the organic agricultural industry 
determines the crop practices, types, or varieties are not generally 
recognized for the county;
    (h) A written agreement will be denied unless FCIC approves the 
written agreement and the original written agreement is signed by you 
and sent to us not later than the expiration date;
    (i) With respect to your and our ability to reject an offer for a 
written agreement:
    (1) When a single Request for Actuarial Change form is submitted, 
regardless of how many requests for changes are contained on the form, 
you and we can only accept or reject the written agreement in its 
entirety (you cannot reject specific terms of the written agreement and 
accept others);
    (2) When multiple Request for Actuarial Change forms are submitted, 
regardless of when the forms are submitted, for the same condition, all 
these forms may be treated as one request and you and we will only have

[[Page 96]]

the option of accepting or rejecting the written agreement in its 
entirety (you cannot reject specific terms of the written agreement and 
accept others);
    (3) When multiple Request for Actuarial Change forms are submitted, 
regardless of when the forms are submitted, for the different conditions 
or for different crops, separate agreements may be issued and you and we 
will have the option to accept or reject each written agreement; and
    (4) If we reject an offer for a written agreement approved by FCIC, 
you may seek arbitration or mediation of our decision to reject the 
offer in accordance with section 16;
    (j) Any information that is submitted by you after the applicable 
deadlines in section 9(a) will not be considered, unless such 
information is specifically requested in accordance with section 
9(e)(4);
    (k) If the written agreement or the policy is canceled for any 
reason, or the period for which an existing written agreement is in 
effect ends, a request for renewal of the written agreement must contain 
all the information required by this section and be submitted in 
accordance with section 9(a), unless otherwise specified by FCIC; and
    (l) If a request for a written agreement is not approved by FCIC, a 
request for a written agreement for any subsequent crop year that fails 
to address the stated basis for the denial will not be accepted (If the 
request for a written agreement contains the same information that was 
previously rejected or denied, you will not have any right to arbitrate, 
mediate or appeal the non-acceptance of your request).

             10. Access to Insured Crop and Record Retention

    (a) We, and any employee of USDA authorized to investigate or review 
any matter relating to crop insurance, have the right to examine the 
insured crop, any records relating to the crop and this insurance, and 
any records regarding mediation, arbitration or litigation involving the 
insured crop, at any location where such crop or records may be found or 
maintained, as often as reasonably required during the record retention 
period.
    (b) You must retain, and provide upon our request, or the request of 
any employee of USDA authorized to investigate or review any matter 
relating to crop insurance, complete records pertaining to the planting 
of the insured crop and your net acres for a period of three years after 
the end of the crop year or three years after the date of final payment 
of the indemnity, whichever is later. This requirement also applies to 
all such records for acreage that is not insured.
    (c) We, or any employee of USDA authorized to investigate or review 
any matter relating to crop insurance, may extend the record retention 
period beyond three years by notifying you of such extension in writing.
    (d) By signing the application for insurance authorized under the 
Act or by continuing insurance for which you have previously applied, 
you authorize us or USDA, or any person acting for us or USDA authorized 
to investigate or review any matter relating to crop insurance, to 
obtain records relating to the planting, replanting, inputs, production, 
harvesting, and disposition of the insured crop from any person who may 
have custody of such records, including but not limited to, FSA offices, 
banks, warehouses, gins, cooperatives, marketing associations, and 
accountants. You must assist in obtaining all records we or any employee 
of USDA authorized to investigate or review any matter relating to crop 
insurance request from third parties.
    (e) Failure to provide access to the insured crop or the farm, 
maintain or provide any required records, authorize access to the 
records maintained by third parties, or assist in obtaining all such 
records will result in a determination that no indemnity is due for the 
crop year in which such failure occurred.

             11. Transfer of Coverage and Right to Indemnity

    If you transfer any part of your share during the crop year, you may 
transfer your coverage rights, if the transferee is eligible for crop 
insurance. We will not be liable for any more than the liability 
determined in accordance with your policy that existed before the 
transfer occurred. The transfer of coverage rights must be on our form 
and will not be effective until approved by us in writing. Both you and 
the transferee are jointly and severally liable for payment of the 
premium. The transferee has all rights and responsibilities under this 
policy consistent with the transferee's interest.

                       12. Assignment of Indemnity

    You may assign to another person your right to an indemnity for the 
crop year. The assignment must be on our form and will not be effective 
until approved in writing by us.

                          13. Other Insurance.

    Nothing in this section prevents you from obtaining other insurance 
not authorized under the Act. However, unless specifically required by 
policy provisions, you must not obtain any other crop insurance 
authorized under the Act on your share of the insured crop. If you 
cannot demonstrate that you did not intend to have more than one policy 
in effect, you may be subject to the consequences authorized under this 
policy, the Act, or any other applicable statute. If you can demonstrate 
that you did not intend to have more than one policy in effect (For 
example, an application to transfer your policy

[[Page 97]]

or written notification to an insurance provider that states you want to 
purchase, or transfer, insurance and you want any other policies for the 
crop canceled would demonstrate you did not intend to have duplicate 
policies), and:
    (a) One is an additional coverage policy and the other is a 
Catastrophic Risk Protection policy:
    (1) The additional coverage policy will apply if both policies are 
with the same insurance provider or, if not, both insurance providers 
agree; or
    (2) The policy with the earliest date of application will be in 
force if both insurance providers do not agree; or
    (b) Both are additional coverage policies or both are Catastrophic 
Risk Protection policies, the policy with the earliest date of 
application will be in force and the other policy will be void, unless 
both policies are with:
    (1) The same insurance provider and the insurance provider agrees 
otherwise; or
    (2) Different insurance providers and both insurance providers agree 
otherwise.

                             14. [Reserved]

    [FCIC policy]

            15. Restrictions, Limitations, and Amounts Due Us

    (a) We may restrict the amount of acreage we will insure to the 
amount allowed under any acreage limitation program established by USDA.
    (b) Violation of Federal statutes including, but not limited to, the 
Act; the controlled substance provisions of the Food Security Act of 
1985; the Food, Agriculture, Conservation, and Trade Act of 1990; and 
the Omnibus Budget Reconciliation Act of 1993, and any regulation 
promulgated thereunder, will result in cancellation, termination, or 
voidance of your crop insurance contract. We will recover any and all 
monies paid to you or received by you during your period of 
ineligibility, and your premium will be refunded, less an amount for 
expenses and handling not to exceed 20 percent of the premium paid or to 
be paid by you.
    (c) Our maximum liability under this policy will be limited to the 
policy protection specified in section 4 of this policy.
    (d) We will pay simple interest computed on the net indemnity 
ultimately found to be due by us or determined by a final judgment of a 
court of competent jurisdiction or a final administrative determination 
from, and including, the 61st day after the date we receive the NASS 
county yield estimates for the insured crop year. Interest will be paid 
only if the reason for our failure to timely pay is not due to your 
failure to provide information or other material necessary for the 
computation or payment of the indemnity. The interest rate will be that 
established by the Secretary of the Treasury under section 12 of the 
Contract Disputes Act of 1978 (41 U.S.C. 611 et seq.), and published in 
the Federal Register.
    (e) Any amount illegally or erroneously paid to you or that is owed 
to us but is delinquent may be recovered by us through offset by 
deducting it from any loan or payment due you under any Act of Congress 
or program administered by any United States Government Agency, or by 
other collection action.
    (f) Interest will accrue at the rate not to exceed 1.25 percent 
simple interest per calendar month, or any part thereof, on any unpaid 
premium or administrative fee balance. For the purpose of premium and 
administrative fee amounts due us, interest will begin to accrue on the 
first day of the month following the premium billing date specified in 
the Special Provisions.
    (g) For the purpose of any other amounts due us, such as repayment 
of indemnities found not to have been earned:
    (1) Interest will start to accrue on the date that notice is issued 
to you for the collection of the unearned amount;
    (2) Amounts found due under this paragraph will not be charged 
interest if payment is made in full within 30 days of issuance of the 
notice by us;
    (3) The amount will be considered delinquent if not paid within 30 
days of the date the notice is issued by us;
    (4) Penalties and interest will be charged in accordance with 31 
U.S.C. 3717 and 4 CFR part 102; and
    (5) The penalty for accounts more than 90 days delinquent is an 
additional 6 percent per annum.
    (h) Interest on any amount due us found to have been received by you 
because of fraud, misrepresentation, or presentation by you of a false 
claim will start on the date you received the amount with the additional 
6 percent penalty beginning on the 31st day after the notice of amount 
due is issued to you. This interest is in addition to any other amount 
found to be due under any other Federal criminal or civil statute.
    (i) If we determine that it is necessary to contract with a 
collection agency, refer the debt to governmental collection centers, 
the Department of Treasury Offset Program, or to employ an attorney to 
assist in collection, you agree to pay all of the expenses of 
collection.
    (j) All amounts paid by you will be applied first to expenses of 
collection if any, second to reduction of any penalties which may have 
been assessed, then to reduction of accrued interest, and finally, to 
reduction of the principal balance.
    [Reinsured policy]

[[Page 98]]

            15. Restrictions, Limitations, and Amounts Due Us

    (a) We may restrict the amount of acreage we will insure to the 
amount allowed under any acreage limitation program established by USDA.
    (b) Violation of Federal statutes including, but not limited to, the 
Act; the controlled substance provisions of the Food Security Act of 
1985; the Food, Agriculture, Conservation, and Trade Act of 1990; and 
the Omnibus Budget Reconciliation Act of 1993, and any regulation 
promulgated thereunder, will result in cancellation, termination, or 
voidance of your crop insurance contract. We will recover any and all 
monies paid to you or received by you during your period of 
ineligibility, and your premium will be refunded, less a reasonable 
amount for expenses and handling not to exceed 20 percent of the premium 
paid or to be paid by you.
    (c) Our maximum liability under this policy will be limited to the 
policy protection specified in section 4 of this policy.
    (d) Interest will accrue at the rate not to exceed 1.25 percent 
simple interest per calendar month, or any part thereof, on any unpaid 
premium or administrative fee balance. For the purpose of premium and 
administrative fee amounts due us, interest will begin to accrue on the 
first day of the month following the premium billing date specified in 
the Special Provisions.
    (e) For the purpose of any amounts due us, such as repayment of 
indemnities found not to have been earned, interest will start to accrue 
on the date that notice is issued to you for the collection of the 
unearned amount. Amounts found due under this paragraph will not be 
charged interest if payment in full is made within 30 days of issuance 
of notice by us. The amount will be considered delinquent if not paid in 
full within 30 days of the date the notice is issued by us.
    (f) All amounts paid will be applied first to expenses of collection 
(see subsection (g) of this section) if any, second to reduction of 
accrued interest, and then to reduction of the principal balance.
    (g) If we determine that it is necessary to contract with a 
collection agency or to employ an attorney to assist in collection, you 
agree to pay all of the expenses of collection.
    (h) A portion of the amount paid to you to which you were not 
entitled may be collected through administrative offset from payments 
you receive from United States government agencies in accordance with 31 
U.S.C. chapter 37.
    (i) We will pay simple interest computed on the net indemnity 
ultimately found to be due by us or determined by a final judgment of a 
court of competent jurisdiction or a final administrative determination 
from, and including, the 61st day after the date we receive the NASS 
county yield estimates for the insured crop year. Interest will be paid 
only if the reason for our failure to timely pay is not due to your 
failure to provide information or other material necessary for the 
computation or payment of the indemnity. The interest rate will be that 
established by the Secretary of the Treasury under section 12 of the 
Contract Disputes Act of 1978 (41 U.S.C. 611 et seq.), and published in 
the Federal Register.
    [FCIC policy]

             16. Appeals, Administrative and Judicial Review

    (a) All determinations required by the policy will be made by us.
    (b) If you disagree with our determinations, you may:
    (1) Except for determinations specified in section 16(b)(2), obtain 
an administrative review in accordance with 7 CFR part 400, subpart J or 
appeal in accordance with 7 CFR part 11; or
    (2) For determinations regarding whether you have used good farming 
practices, request reconsideration in accordance with the 
reconsideration process established for this purpose and published at 7 
CFR part 400, subpart J.
    (c) If you fail to exhaust your administrative remedies under 7 CFR 
part 11 or the reconsideration process for determinations of good 
farming practices described in section 16(b)(2), as applicable, you will 
not be able to resolve the dispute through judicial review.
    (d) If reconsideration for good farming practices under 7 CFR part 
400, subpart J or appeal under 7 CFR part 11 has been initiated within 
the time frames specified in those sections and judicial review is 
sought, any suit against us must be:
    (1) Filed not later than one year after the date of the decision 
rendered in the reconsideration process for good farming practices or 
administrative review process under 7 CFR part 11; and
    (2) Brought in the United States district court for the district in 
which the insured farm involved in the decision is located.
    (e) You may only recover contractual damages from us. Under no 
circumstances can you recover any attorney fees or other expenses, or 
any punitive, compensatory or any other damages from us in 
administrative review, appeal or litigation.
    [Reinsured policy]

  16. Mediation, Arbitration, Appeals, and Administrative and Judicial 
                                 Review

    (a) If you and we fail to agree on any determination made by us 
except those specified in section 16(d), the disagreement may be 
resolved through mediation in accordance with section 16(g). If 
resolution cannot be reached through mediation, or you and we do not 
agree to mediation, the disagreement must

[[Page 99]]

be resolved through arbitration in accordance with the rules of the 
American Arbitration Association (AAA), except as provided in sections 
16(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 16(d), 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.
    (i) Any interpretation by FCIC will be binding in any mediation or 
arbitration.
    (ii) Failure to obtain any required interpretation from FCIC will 
result in the nullification of any agreement or award.
    (iii) An interpretation by FCIC of a policy provision is considered 
a rule of general applicability and is not appealable. If you disagree 
with an interpretation of a policy provision by FCIC, you must obtain a 
Director's review from the National Appeals Division in accordance with 
7 CFR 11.6 before obtaining judicial review in accordance with 
subsection (e).
    (iv) An interpretation by FCIC of a procedure may be appealed to the 
National Appeals Division in accordance with 7 CFR part 11.
    (2) Unless the dispute is resolved through mediation, the arbitrator 
must provide to you and us a written statement describing the issues in 
dispute, the factual findings, the determinations and the amount and 
basis for any award and breakdown by claim for any award. The statement 
must also include any amounts awarded for interest. Failure of the 
arbitrator to provide such written statement will result in the 
nullification of all determinations of the arbitrator. All agreements 
reached through settlement, including those resulting from mediation, 
must be in writing and contain at a minimum a statement of the issues in 
dispute and the amount of the settlement.
    (b) Regardless of whether mediation is elected:
    (1) The initiation of arbitration proceedings must occur within one 
year of the date we denied your claim or rendered the determination with 
which you disagree, whichever is later;
    (2) If you fail to initiate arbitration in accordance with section 
16(b)(1) and complete the process, you will not be able to resolve the 
dispute through judicial review;
    (3) If arbitration has been initiated in accordance with section 
16(b)(1) and completed, and judicial review is sought, suit must be 
filed not later than one year after the date the arbitration decision 
was rendered; and
    (4) In any suit, 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, an interpretation must 
be obtained from FCIC in accordance with 7 CFR part 400, subpart X or 
such other procedures as established by FCIC. Such interpretation will 
be binding.
    (c) Any decision rendered in arbitration is binding on you and us 
unless judicial review is sought in accordance with section 16(b)(3). 
Notwithstanding any provision in the rules of the AAA, you and we have 
the right to judicial review of any decision rendered in arbitration.
    (d) If you do not agree with any determination made by us or FCIC 
regarding whether you have used a good farming practice, you may request 
reconsideration by FCIC of this determination in accordance with the 
reconsideration process established for this purpose and published at 7 
CFR part 400, subpart J (reconsideration).
    (1) You must complete reconsideration before filing suit against 
FCIC and any such suit must be brought in the United States district 
court for the district in which the insured farm is located.
    (2) Suit must be filed not later than one year after the date of the 
decision rendered in the reconsideration.
    (3) You cannot sue us for determinations of whether good farming 
practices were used by you.
    (e) Except as provided in section 16(d), if you disagree with any 
other determination made by FCIC, you may obtain an administrative 
review in accordance with 7 CFR part 400, subpart J (administrative 
review) or appeal in accordance with 7 CFR part 11 (appeal). If you 
elect to bring suit after completion of any appeal, such suit must be 
filed against FCIC not later than one year after the date of the 
decision rendered in such appeal. Under no circumstances can you recover 
any attorney fees or other expenses, or any punitive, compensatory or 
any other damages from FCIC.
    (f) In any mediation, arbitration, appeal, administrative review, 
reconsideration or judicial process, the terms of this policy, the Act, 
and the regulations published at 7 CFR chapter IV, including the 
provisions of 7 CFR part 400, subpart P, are binding. Conflicts between 
this policy and any state or local laws will be resolved in accordance 
with section 31. If there are conflicts between any rules of the AAA and 
the provisions of your policy, the provisions of your policy will 
control.

[[Page 100]]

    (g) To resolve any dispute through mediation, you and we must both:
    (1) Agree to mediate the dispute;
    (2) Agree on a mediator; and
    (3) Be present, or have a designated representative who has 
authority to settle the case present, at the mediation.
    (h) Except as provided in section 16(i), no award or settlement in 
mediation, arbitration, appeal, administrative review or reconsideration 
process or judicial review can exceed the amount of liability 
established or which should have been established under the policy, 
except for interest awarded in accordance with section 15(i).
    (i) In a judicial review only, you may recover attorneys fees or 
other expenses, or any punitive, compensatory or any other damages from 
us only if you obtain a determination from FCIC that we, our agent or 
loss adjuster failed to comply with the terms of this policy or 
procedures issued by FCIC and such failure resulted in you receiving a 
payment in an amount that is less than the amount to which you were 
entitled. Requests for such a determination should be addressed to the 
following: USDA/RMA/Deputy Administrator of Compliance/Stop 0806, 1400 
Independence Avenue, SW., Washington, DC 20250-0806.
    (j) If FCIC elects to participate in the adjustment of your claim, 
or modifies, revises or corrects your claim, prior to payment, you may 
not bring an arbitration, mediation or litigation action against us. You 
must request administrative review or appeal in accordance with section 
16(e).

                        17. Holidays and Weekends

    If any date specified in this program falls on Saturday, Sunday, or 
a legal Federal holiday, that date will be extended to the next business 
day.

            18. Life of Policy, Cancellation, and Termination

    (a) This is a continuous policy and will remain in effect for each 
crop year following the acceptance of the original application until 
canceled by you in accordance with the terms of the policy or terminated 
by operation of the terms of the policy or by us.
    (b) Your application for insurance must contain your social security 
number (SSN) if you are an individual or employer identification number 
(EIN) if you are a person other than an individual, and all SSNs and 
EINs, as applicable, of all persons with a substantial beneficial 
interest in you, the coverage level, price election, crop, type, 
variety, or class, plan of insurance, and any other material information 
required on the application to insure the crop. If you or someone with a 
substantial beneficial interest is not legally required to have a SSN or 
EIN, you must request and receive an identification number for the 
purposes of this policy from us or the Internal Revenue Service (IRS) if 
such identification number is available from the IRS. If any of the 
information regarding persons with a substantial beneficial interest 
changes during the crop year, you must revise your application by the 
next sales closing date applicable under your policy to reflect the 
correct information.
    (1) Applications that do not contain your SSN, EIN or identification 
number, or any of the other information required in section 18(b) are 
not acceptable and insurance will not be provided (Except if you fail to 
report the SSNs, EINs or identification numbers of persons with a 
substantial beneficial interest in you, the provisions in section 
18(b)(2) will apply);
    (2) If the application does not contain the SSNs, EINs or 
identification numbers of all persons with a substantial beneficial 
interest in you, you fail to revise your application in accordance with 
section 18(b), or the reported SSNs, EINs or identification numbers are 
incorrect and the incorrect SSN, EIN or identification number has not 
been corrected by the acreage reporting date, and:
    (i) Such persons are eligible for insurance, the amount of coverage 
for all crops included on this application will be reduced 
proportionately by the percentage interest in you of such persons, you 
must repay the amount of indemnity that is proportionate to the interest 
of the persons whose SSN, EIN or identification number was unreported or 
incorrect for such crops, and your premium will be reduced 
commensurately; or
    (ii) Such persons are not eligible for insurance, except as provided 
in section 18(b)(3), the policy is void and no indemnity will be owed 
for any crop included on this application, and you must repay any 
indemnity that may have been paid for such crops. If previously paid, 
the balance of any premium and any administrative fees will be returned 
to you, less twenty percent of the premium that would otherwise be due 
from you for such crops. If not previously paid, no premium or 
administrative fees will be due for such crops.
    (3) The consequences described in section 18(b)(2)(ii) will not 
apply if you have included an ineligible person's SSN, EIN or 
identification number on your application and do not include the 
ineligible person's share on the acreage report.
    (c) After acceptance of the application, you may not cancel this 
policy for the initial crop year. Thereafter, the policy will continue 
in force for each succeeding crop year unless canceled or terminated as 
provided below.
    (d) Either you or we may cancel this policy after the initial crop 
year by providing written notice to the other on or before the 
cancellation date shown in the Crop Provisions.

[[Page 101]]

    (e) Any amount due to us for any policy authorized under the Act 
will be offset from any indemnity due you for this or any other crop 
insured with us.
    (1) Even if your claim has not yet been paid, you must still pay the 
premium and administrative fee on or before the termination date for you 
to remain eligible for insurance.
    (2) If we offset any amount due us from an indemnity owed to you, 
the date of payment for the purpose of determining whether you have a 
delinquent debt will be the date FCIC publishes the payment yield for 
the applicable crop year.
    (f) A delinquent debt for any policy will make you ineligible to 
obtain crop insurance authorized under the Act for any subsequent crop 
year and result in termination of all policies in accordance with 
section 18(f)(2).
    (1) With respect to ineligibility:
    (i) Ineligibility for crop insurance will be effective on:
    (A) The date that a policy was terminated in accordance with section 
18(f)(2) for the crop for which you failed to pay premium, an 
administrative fee, or any related interest owed, as applicable;
    (B) The payment due date contained in any notification of 
indebtedness for any overpaid indemnity, if you fail to pay the amount 
owed, including any related interest owed, as applicable, by such due 
date;
    (C) The termination date for the crop year prior to the crop year in 
which a scheduled payment is due under a payment agreement if you fail 
to pay the amount owed by any payment date in any agreement to pay the 
debt; or
    (D) The termination date the policy was or would have been 
terminated under sections 18(f)(2)(i)(A), (B) or (C) if your bankruptcy 
petition is dismissed before discharge.
    (ii) If you are ineligible and a policy has been terminated in 
accordance with section 18(f)(2), you will not receive any indemnity, 
and such ineligibility and termination of the policy may affect your 
eligibility for benefits under other USDA programs. Any indemnity that 
may be owed for the policy before it has been terminated will remain 
owed to you, but may be offset in accordance with section 18(e), unless 
your policy was terminated in accordance with sections 18(f)(2)(i)(D) or 
(E).
    (2) With respect to termination:
    (i) Termination will be effective on:
    (A) For a policy with unpaid administrative fees or premiums, the 
termination date immediately subsequent to the billing date for the crop 
year;
    (B) For a policy with other amounts due, the termination date 
immediately following the date you have a delinquent debt;
    (C) For each policy for which the termination date has passed before 
you become ineligible, the termination date immediately following the 
date you become ineligible;
    (D) For execution of an agreement to pay any amounts owed and 
failure to make any scheduled payment, the termination date for the crop 
year prior to the crop year in which you failed to make the scheduled 
payment; or
    (E) For dismissal of a bankruptcy petition before discharge, the 
termination date the policy was or would have been terminated under 
sections 18(f)(2)(i)(A), (B) or (C).
    (ii) For all policies terminated under sections 18(f)(2)(i)(D) and 
(E), any indemnities paid subsequent to the termination date must be 
repaid.
    (iii) Once the policy is terminated, it cannot be reinstated for the 
current crop year unless the termination was in error. Failure to timely 
pay because of illness, bad weather, or other such extenuating 
circumstances is not grounds for reinstatement in the current crop year.
    (3) To regain eligibility, you must:
    (i) Repay the delinquent debt in full;
    (ii) Execute an agreement to pay any amounts owed and make payments 
in accordance with the agreement (We will not enter into an agreement 
with you to pay the amounts owed if you have previously failed to make a 
scheduled payment under the terms of any other agreement to pay with us 
or any other insurance provider); or
    (iii) File a petition to have your debts discharged in bankruptcy 
(Dismissal of the bankruptcy petition before discharge will terminate 
all policies in effect retroactive to the date your policy would have 
been terminated in accordance with section 18(f)(2)(i));
    (4) After you become eligible for crop insurance, if you want to 
obtain coverage for your crops, you must submit a new application on or 
before the sales closing date for the crop (Since applications for crop 
insurance cannot be accepted after the sales closing date, if you make 
any payment after the sales closing date, you cannot apply for insurance 
until the next crop year);
    (5) For example, for the 2003 crop year, if crop A, with a 
termination date of October 31, 2003, and crop B, with a termination 
date of March 15, 2004, are insured and you do not pay the premium for 
crop A by the termination date, you are ineligible for crop insurance as 
of October 31, 2003, and crop A's policy is terminated as of that date. 
Crop B's policy does not terminate until March 15, 2004, and an 
indemnity for the 2003 crop year may still be owed. If you enter an 
agreement to repay amounts owed on September 25, 2004, the earliest date 
by which you can obtain crop insurance for crop A is to apply for crop 
insurance by the October 31, 2004, sales closing date and for crop B is 
to apply for crop insurance by the March 15, 2005, sales closing date. 
If you fail to make a payment that was scheduled to be made on April 1, 
2005, your policy will terminate as of October 31, 2004, for crop A, and 
March 15, 2005, for

[[Page 102]]

crop B, and no indemnity will be due for that crop year for either crop. 
You will not be eligible to apply for crop insurance for any crop until 
after the amounts owed are paid in full or you file a petition to 
discharge the debt in bankruptcy.
    (6) If you are determined to be ineligible under section 18(f), 
persons with a substantial beneficial interest in you may also be 
ineligible until you become eligible again.
    (g) If you die, disappear, or are judicially declared incompetent, 
or if you are an entity other than an individual and such entity is 
dissolved, the policy will terminate as of the date of death, judicial 
declaration, or dissolution. If such event occurs after coverage begins 
for any crop year, the policy will continue in force through the crop 
year and terminate at the end of the insurance period and any indemnity 
will be paid to the person or persons determined to be beneficially 
entitled to the indemnity. The premium will be deducted from the 
indemnity or collected from the estate. Death of a partner in a 
partnership will dissolve the partnership unless the partnership 
agreement provides otherwise. If two or more persons having a joint 
interest are insured jointly, death of one of the persons will dissolve 
the joint entity.
    (h) We may cancel your policy if no premium is earned for 3 
consecutive years.
    (i) The cancellation and termination dates are contained in the Crop 
Provisions.

                          19. Contract Changes

    (a) We may change any terms and conditions of this policy from year 
to year.
    (b) Any changes in policy provisions, expected county yields, 
maximum amounts of protection, premium rates, and program dates (except 
as allowed herein) can be viewed on the RMA Web site at http://
www.rma.usda.gov/ or a successor Web site not later than the contract 
change date contained in the Crop Provisions. We may only revise this 
information after the contract change date to correct clear errors (For 
example, the maximum amount of protection was announced at $2500.00 per 
acre instead of $250.00 per acre).
    (c) After the contract change date, all changes specified in section 
19(b) will also be available upon request from your crop insurance 
agent. You will be provided, in writing, a copy of the changes to the 
Basic Provisions and Crop Provisions and a copy of the Special 
Provisions not later than 30 days prior to the cancellation date for the 
insured crop. Acceptance of the changes will be conclusively presumed in 
the absence of notice from you to change or cancel your insurance 
coverage.

             20. Eligibility for Other Farm Program Benefits

    To remain eligible for benefits under the Agriculture Marketing 
Transition Act, the conservation reserve program, or certain farm loans, 
you are required to obtain at least the catastrophic level of coverage 
for either GRP or any other plan of insurance that is available in the 
county, for all crops of economic significance, or execute a waiver of 
your rights to any emergency crop assistance on or before the sales 
closing date for the crop.

                 21. Indemnity and Premium Limitations.

    (a) With respect to acreage where you are due a loss for your first 
insured crop in the crop year, except in the case of double cropping 
described in section 21(c):
    (1) You may elect to not plant or to plant and not insure a second 
crop on the same acreage for harvest in the same crop year and collect 
an indemnity payment that is equal to 100 percent of the insurable loss 
for the first insured crop; or
    (2) You may elect to plant and insure a second crop on the same 
acreage for harvest in the same crop year (you will pay the full premium 
and if there is an insurable loss to the second crop, receive the full 
amount of indemnity that may be due for the second crop, regardless of 
whether there is a subsequent crop planted on the same acreage) and:
    (i) Collect an indemnity payment that is 35 percent of the insurable 
loss for the first insured crop;
    (ii) Be responsible for a premium that is 35 percent of the premium 
that you would otherwise owe for the first insured crop; and
    (iii) If the second crop does not suffer an insurable loss:
    (A) Collect an indemnity payment for the other 65 percent of 
insurable loss that was not previously paid under section 21(a)(2)(i); 
and
    (B) Be responsible for the remainder of the premium for the first 
insured crop that you did not pay under section 21(a)(2)(ii).
    (b) The reduction in the amount of indemnity and premium specified 
in section 21(a), as applicable, will apply:
    (1) Notwithstanding the priority contained in the Agreement to 
Insure section, which states that the Crop Provisions have priority over 
the Basic Provisions when a conflict exists, to any premium owed or 
indemnity paid in accordance with the Crop Provisions, and any 
applicable endorsement.
    (2) Even if another person plants the second crop on any acreage 
where the first insured crop was planted.
    (3) If you fail to provide any records we require to determine 
whether an insurable loss occurred for the second crop.
    (c) You may receive a full indemnity for a first insured crop when a 
second crop is

[[Page 103]]

planted on the same acreage in the same crop year, regardless of whether 
or not the second crop is insured or sustains an insurable loss, if each 
of the following conditions are met:
    (1) It is a practice that is generally recognized by agricultural 
experts or the organic agricultural industry for the area to plant two 
or more crops for harvest in the same crop year;
    (2) The second or more crops are customarily planted after the first 
insured crop for harvest on the same acreage in the same crop year in 
the area;
    (3) Additional coverage insurance offered under the authority of the 
Act is available in the county on the two or more crops that are double 
cropped; and
    (4) You provide records acceptable to us of acreage and production 
that show you have double cropped acreage in at least two of the last 
four crop years in which the first insured crop was planted, or that 
show the applicable acreage was double cropped in at least two of the 
last four crop years in which the first insured crop was grown on it.
    (d) The receipt of a full indemnity on both crops that are double 
cropped is limited to the number of acres for which you can demonstrate 
you have double cropped or that have been historically double cropped as 
specified in section 21(c).

                 An Example To Demonstrate How GRP Works

    Producer A buys 90 percent coverage and selects $160 protection per 
acre. Producer B buys 75 percent coverage and selects $185 protection 
per acre. Both producers have 100 percent share and both plant 200 acres 
of a crop in the county. The expected county yield is 45 bushels per 
acre. The premium rate for 90 percent coverage is $6.14 per hundred 
dollars of protection and the premium rate for 75 percent coverage is 
$3.30 per hundred dollars of protection.
    A's trigger yield is 40.5 bushels per acre (90% x 45), and the total 
premium due is $1,965 ($160 x $6.14 x 200 acres x 0.01). Of that amount, 
FCIC pays $614 (200 acres x the maximum subsidy of $3.07 per acre). A's 
policy protection is $32,000 ($160 x 200 acres).
    B's trigger yield is 33.8 bushels per acre (75% of 45), and the 
total premium due is $1,221 ($185 x $3.30 x 200 acres x 0.01). Of that 
amount, FCIC pays $442 (200 acres x the subsidy amount of $2.21 per 
acre). B's policy protection is $37,000 ( $185 x 200 acres).

Scenario 1 (likely)
    FCIC issues a payment yield of 46 bushels per acre. This is above 
both producers' trigger yields, so no indemnity payment is made, even if 
one or both have individual yields that are below the trigger yield.
Scenario 2 (less likely)
    FCIC issues a payment yield of 38 bushels per acre. A's payment 
calculation factor is 0.062 ((40.5 - 38) / 40.5). This number multiplied 
by the policy protection yields an indemnity payment of $1,984 (.062 x 
$32,000). B's trigger yield is less than the payment yield, so no 
indemnity payment is made.
Scenario 3 (least likely)
    FCIC issues a payment yield of 22 bushels per acre. A's payment 
calculation factor is 0.457 ((40.5 - 22) / 40.5). The payment is $14,624 
(0.457 x $32,000). B's payment calculation factor is 0.349 ((33.8 - 22) 
/ 33.8), and the final indemnity payment is $12,913 (0.349 x $37,000).

[64 FR 30219, June 7, 1999, as amended at 65 FR 40485, June 30, 2000; 68 
FR 37721, June 25, 2003; 69 FR 48731, Aug. 10, 2004]



Sec. 407.10  Group risk plan for barley.

    The provisions of the Group Risk Plan for Barley for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or threshing the barley for grain.
    NASS yield. The yield calculated by dividing the NASS estimate of 
the barley production in the county, by the NASS estimate of the acres 
of barley in the county, as specified in the actuarial documents. The 
actuarial documents will specify whether harvested or planted acreage is 
used to calculate the yield used to establish the expected county yield 
and calculate indemnities.
    Planted acreage. Land in which the barley seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Land on which seed is initially 
spread onto the soil surface by any method and which subsequently is 
mechanically incorporated into the soil in a timely manner and at the 
proper depth, will also be considered planted.

                             2. Crop Insured

    The insured crop will be all barley:
    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested as grain; and
    (d) Not planted into an established grass or legume, interplanted 
with another crop, or planted as a nurse crop, unless seeded at the 
normal rate and intended for harvest as grain.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.

[[Page 104]]

    (b) Payment yields will be determined prior to the April 1 following 
the crop year.
    (c) We will issue any payment to you prior to the May 1 immediately 
following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Kit Carson, Lincoln, Elbert, El Paso,       September 30.........................  June 30.
 Pueblo, Las Animas Counties, Colorado and
 all Colorado Counties south and east
 thereof; all New Mexico counties except
 Taos County; Kansas; Missouri; Illinois;
 Indiana; Ohio; Pennsylvania; New York;
 Massachusetts; and all states south and
 east thereof.
Arizona; California; and Clark and Nye      October 31...........................  June 30.
 Counties, Nevada.
All Colorado counties except Kit Carson,    March 15.............................  November 30.
 Lincoln, Elbert, El Paso, Pueblo, and Las
 Animas Counties and all Colorado counties
 south and east thereof; all Nevada
 counties except Clark and Nye Counties;
 Taos County, New Mexico; and all other
 states except: Arizona, California, and
 (except) Kansas, Missouri, Illinois,
 Indiana, Ohio, Pennsylvania, New York,
 and Massachusetts and all States south
 and east thereof.
----------------------------------------------------------------------------------------------------------------



Sec. 407.11  Group risk plan for corn.

    The provisions of the Group Risk Plan for Corn for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or picking corn for grain, or severing the stalk 
from the land and chopping the stalk and ear for the purpose of 
livestock feed.
    NASS yield. The yield calculated by dividing the NASS estimate of 
the corn for grain production in the county, by the NASS estimate of the 
acres of corn for grain in the county, as specified in the actuarial 
documents. The actuarial documents will specify whether harvested or 
planted acreage is used to calculate the yield used to establish the 
expected county yield and calculate indemnities.
    Planted acreage. Land in which the corn seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Broadcast and subsequent 
mechanical incorporation of the corn seed is not allowed.

                             2. Crop Insured

    (a) The insured crop will be all field corn:
    (1) Grown on insurable acreage in the county listed in the accepted 
application;
    (2) Properly planted and reported by the acreage reporting date;
    (3) Planted with the intent to be harvested as grain, silage, or 
green chop; and
    (4) Not planted into an established grass or legume or interplanted 
with another crop.
    (b) Hybrid seed corn, popcorn, sweet corn, and other specialty corn 
may only be insured if a written agreement exists between you and us. 
Your request to insure such crop must be in writing and submitted to 
your agent not later than the sales closing date.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to April 16 following 
the crop year.
    (c) We will issue any payment to you prior to the May 16 immediately 
following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,   January 15...........................  November 30.
 Wilson, Karnes, Goliad, Victoria, and
 Jackson Counties, Texas, and all Texas
 counties lying south thereof.

[[Page 105]]

 
El Paso, Hudspeth, Culberson, Reeves,       February 15..........................  November 30.
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas Counties
 lying south and east thereof to and
 including Terrell, Crockett, Sutton,
 Kimble, Gillespie, Blanco, Comal,
 Guadalupe, Gonzales, De Witt, Lavaca,
 Colorado, Wharton, and Matagorda
 Counties, Texas.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; South Carolina.
All other Texas counties and all other      March 15.............................  November 30.
 states.
----------------------------------------------------------------------------------------------------------------



Sec. 407.12  Group risk plan for cotton.

    The provisions of the Group Risk Plan for Cotton for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Removal of the seed cotton from the stalk.
    NASS yield. The yield calculated by dividing the NASS estimate of 
upland cotton production in the county, by the NASS estimate of the 
acres of upland cotton in the county, as specified in the actuarial 
documents. The actuarial documents will specify whether harvested or 
planted acreage is used to calculate the yield used to establish the 
expected county yield and calculate indemnities.
    Planted acreage. Land in which the cotton seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Broadcast and subsequent 
mechanical incorporation of the cotton seed is not allowed.

                             2. Crop Insured

    The insured crop will be all upland cotton:
    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested; and
    (d) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Colored cotton lint;
    (2) Planted into an established grass or legume;
    (3) Interplanted with another spring planted crop;
    (4) Grown on acreage in which a hay crop was harvested in the same 
calendar year unless the acreage is irrigated; or
    (5) Grown on acreage on which a small grain crop reached the heading 
stage in the same calendar year unless the acreage is irrigated or 
adequate measures are taken to terminate the small grain crop prior to 
heading and less than 50 percent of the small grain plants reach the 
heading stage.

                               3. Payment.

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to July 16 following the 
crop year.
    (c) We will issue any payment to you prior to the August 16 
immediately following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,   January 15...........................  November 30.
 Wilson, Karnes, Goliad, Victoria, and
 Jackson Counties, Texas, and all Texas
 counties lying south thereof.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; South Carolina;
 El Paso, Hudspeth, Culberson, Reeves,
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas counties
 lying south and east thereof to and
 including Terrell, Crockett, Sutton,
 Kimble, Gillespie, Blanco, Comal,
 Guadalupe, Gonzales, De Witt, Lavaca,
 Colorado, Wharton, and Matagorda
 Counties, Texas.
All other Texas counties and all other      March 15.............................  November 30.
 States.
----------------------------------------------------------------------------------------------------------------


[[Page 106]]



Sec. 407.13  Group risk plan for forage.

    The provisions of the Group Risk Plan for Forage for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Removal of the forage from the field, and rotational 
grazing.
    NASS yield. The yield calculated by dividing the NASS estimate of 
the production of hay in the county by the NASS estimate of the acres of 
hay in the county, as specified in the actuarial documents. The 
actuarial documents will specify whether the harvested or planted 
acreage is used to calculate the yield used to establish the expected 
county yield and calculate indemnities.
    Planted acreage. Land seeded to forage, by a planting method 
appropriate for forage, into a properly prepared seedbed.
    Rotational grazing. The defoliation of the insured forage by 
livestock, within a pasturing system whereby the forage field is 
subdivided into smaller parcels and livestock are moved from one area to 
another, allowing a period of grazing followed by a period for forage 
regrowth.

                             2. Crop Insured

    The insured crop will be the forage types shown on the Special 
Provisions:
    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Intended for harvest; and
    (d) Not grown with another crop.

                          3. Insurable Acreage

    In addition to section 3 of the Basic Provisions of the Group Risk 
Plan Common Policy, acreage seeded to forage after July 1 of the 
previous crop year will not be insurable. Acreage physically located in 
another county not listed on the accepted application is not insured 
under this policy.

                               4. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to May 1 following the 
crop year.
    (c) We will issue any payment to you prior to the May 31 immediately 
following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            5. Program Dates

    November 30 is the Cancellation and Termination Date for all states. 
The Contract Change Date is August 31 for all states.

                            6. Annual Premium

    In lieu of section 8(g) of the Basic Provisions of the Group Risk 
Plan Common Policy, the annual premium is earned and payable on the 
acreage reporting date. You will be billed for premium due on the date 
shown in the Special Provisions. The premium will be determined based on 
the rate shown on the actuarial documents.



Sec. 407.14  Group risk plan for peanuts.

    The provisions of the Group Risk Plan for Peanuts for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or threshing the peanuts.
    NASS yield. The yield calculated by dividing the NASS estimate of 
peanut production in the county, by the NASS estimate of the acres of 
peanuts in the county, as specified in the actuarial documents. The 
actuarial documents will specify whether the harvested or planted 
acreage is used to calculate the yield used to establish the expected 
county yield and calculate indemnities.
    Planted acreage. Land in which the peanut seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice.

                             2. Crop Insured

    The insured crop will be all peanuts:
    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested as peanuts; and
    (d) Not interplanted with an established grass or legume or 
interplanted with another crop.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to June 16 following the 
crop year.
    (c) We will issue any payment to you prior to the July 16 
immediately following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.

[[Page 107]]

    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak,   January 15...........................  November 30.
 McMullen, La Salle, and Dimmit Counties,
 Texas and all Texas Counties lying south
 thereof.
El Paso, Hudspeth, Culberson, Reeves,       February 28..........................  November 30.
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, Cooke
 Counties, Texas, and all Texas counties
 south and east thereof; and all other
 states except New Mexico, Oklahoma, and
 Virginia.
New Mexico; Oklahoma; Virginia; and all     March 15.............................  November 30.
 other Texas Counties.
----------------------------------------------------------------------------------------------------------------



Sec. 407.15  Group risk plan for sorghum.

    The provisions of the Group Risk Plan for Sorghum for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or threshing the sorghum for grain, or severing 
the stalk from the land and chopping the stalk and head for the purpose 
of livestock feed.
    NASS yield. The yield calculated by dividing the NASS estimate of 
sorghum for grain production in the county, by the NASS estimate of the 
acres of sorghum for grain in the county, as specified in the actuarial 
documents. The actuarial documents will specify whether the harvested or 
planted acreage is used to calculate the yield used to establish the 
expected county yield and calculate indemnities.
    Planted acreage. Land in which the sorghum seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Broadcast and subsequent 
mechanical incorporation of the sorghum seed is not allowed.

                             2. Crop Insured

    (a) The insured crop will be all sorghum:
    (1) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (2) Properly planted and reported by the acreage reporting date;
    (3) Planted with the intent to be harvested as grain or silage; and
    (4) Not interplanted with an established grass or legume or 
interplanted with another crop.
    (b) Hybrid sorghum seed may only be insured if a written agreement 
exists between you and us. Your request to insure such crop must be in 
writing and submitted to your agent not later than the sales closing 
date.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to April 16 following 
the crop year.
    (c) We will issue any payment to you prior to the May 16 immediately 
following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                Cancellation and  termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,   January 15...........................  November 30.
 Wilson, Karnes, Goliad, Victoria, and
 Jackson Counties, Texas, and all Texas
 counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves,       February 15..........................  November 30.
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas counties
 south and east thereof to and including
 Terrell, Crockett, Sutton, Kimble,
 Gillespie, Blanco, Comal, Guadalupe,
 Gonzales, De Witt, Lavaca, Colorado,
 Wharton, and Matagorda Counties, Texas.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; and South
 Carolina.
All other Texas counties and all other      March 15.............................  November 30.
 states.
----------------------------------------------------------------------------------------------------------------


[[Page 108]]



Sec. 407.16  Group risk plan for soybean.

    The provisions of the Group Risk Plan for Soybeans for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or threshing the soybeans.
    NASS yield. The yield calculated by dividing the NASS estimate of 
soybean production in the county, by the NASS estimate of the acres of 
soybeans in the county, as specified in the actuarial documents. The 
actuarial documents will specify whether the harvested or planted 
acreage is used to calculate the yield used to establish the expected 
county yield and calculate indemnities.
    Planted acreage. Land in which the soybean seed has been placed by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Land on which seed is initially 
spread onto the soil surface by any method and which subsequently is 
mechanically incorporated into the soil in a timely manner and at the 
proper depth, will also be considered planted.

                             2. Crop Insured

    The insured crop will be all soybeans:
    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested as soybeans; and
    (d) Not planted into an established grass or legume or interplanted 
with another crop.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to April 16 following 
the crop year.
    (c) We will issue any payment to you prior to the May 16 immediately 
following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified on the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak,   February 15..........................  November 30.
 McMullen, La Salle, and Dimmit Counties,
 Texas and all Texas counties lying south
 thereof.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; South Carolina;
 and El Paso, Hudspeth, Culberson, Reeves,
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas counties
 lying south and east thereof to and
 including Maverick, Zavala, Frio,
 Atascosa, Karnes, De Witt, Lavaca,
 Colorado, Wharton, and Matagorda
 Counties, Texas.
All other Texas counties and all other      March 15.............................  November.
 States.
All other Texas counties and all other      March 15.............................  November 30.
 states..
----------------------------------------------------------------------------------------------------------------



Sec. 407.17  Group risk plan for wheat.

    The provisions of the Group Risk Plan for Wheat for the 2000 and 
succeeding crop years are as follows:

                             1. Definitions

    Harvest. Combining or threshing the wheat for grain.
    NASS yield. The yield calculated by dividing the NASS estimate of 
the wheat production in the county, by the NASS estimate of the acres of 
wheat in the county, as specified in the actuarial documents. The 
actuarial documents will specify whether the harvested or planted 
acreage is used to calculate the yield used to establish the expected 
county yield and calculate indemnities.
    Planted acreage. Land in which the wheat seed has been planted by a 
machine appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice. Land on which seed is initially 
spread onto the soil surface by any method and which subsequently is 
mechanically incorporated into the soil in a timely manner and at the 
proper depth, will also be considered planted.

                             2. Crop Insured

    The insured crop will be all wheat:
    (a) Grown on insurable acreage in the county or counties listed in 
the accepted application;
    (b) Properly planted and reported by the acreage reporting date;

[[Page 109]]

    (c) Planted with the intent to be harvested as grain; and
    (d) Not planted into an established grass or legume, interplanted 
with another crop, or planted as a nurse crop, unless seeded at the 
normal rate and intended for harvest as grain.

                               3. Payment

    (a) A payment will be made only if the payment yield for the insured 
crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to April 1 following the 
crop year.
    (c) We will issue any payment to you prior to the May 1 immediately 
following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice and 
type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS yield 
may be subsequently revised.

----------------------------------------------------------------------------------------------------------------
             State and county                Cancellation and  termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
All Colorado counties except Alamosa,       September 30.........................  June 30.
 Conejos, Costilla, Rio Grande, and
 Saguache; all Montana counties except
 Daniels and Sheridan Counties; all South
 Dakota counties except Corson, Walworth,
 Edmonds, Faulk, Spink, Beadle, Kingsbury,
 Miner, McCook, Turner, and Yankton
 Counties and all South Dakota counties
 east thereof; all Wyoming counties except
 Big Horn, Fremont, Hot Springs, Park, and
 Washakie Counties; and all other states
 except Alaska, Arizona, California,
 Maine, Minnesota, Nevada, New Hampshire,
 North Dakota, Utah, and Vermont..
Arizona; California; Nevada; and Utah.....  October 31...........................  June 30.
Alaska; Alamosa, Conejos, Costilla, Rio     March 15.............................  November 30.
 Grande, and Saguache Counties, Colorado;
 Maine; Minnesota; Daniels and Sheridan
 Counties, Montana; New Hampshire; North
 Dakota; Corson, Walworth, Edmunds, Faulk,
 Spink, Beadle, Kingsbury, Miner, McCook,
 Turner, and Yankton Counties South
 Dakota, and all South Dakota counties
 east thereof; Vermont; and Big Horn,
 Fremont, Hot Springs, Park, and Washakie
 Counties, Wyoming..
----------------------------------------------------------------------------------------------------------------

                        PARTS 408-411 [RESERVED]



PART 412_PUBLIC INFORMATION_FREEDOM OF INFORMATION--Table of Contents




Sec.
412.1 General statement.
412.2 Public inspection and copying.
412.3 Index.
412.4 Requests for records.
412.5 Appeals.
412.6 Timing of responses to requests.

    Authority: 5 U.S.C. 552 and 7 U.S.C. 1506.

    Source: 62 FR 67694, Dec. 30, 1997, unless otherwise noted.



Sec. 412.1  General statement.

    This part is issued in accordance with the regulations of the 
Secretary of Agriculture published at 7 CFR 1.1-1.23, and appendix A, 
implementing the Freedom of Information Act (5 U.S.C. 552). The 
Secretary's regulations, as implemented by this part, and the Risk 
Management Agency (RMA) govern availability of records of the Federal 
Crop Insurance Corporation (FCIC) as administration of the crop 
insurance program for FCIC.



Sec. 412.2  Public inspection and copying.

    (a) Members of the public may request access to the information 
specified in Sec. 412.2(d) for inspection and copying.
    (b) To obtain access to specified information, the public should 
submit a written request, in accordance with 7 CFR 1.6, to the Appeals, 
Litigation and Legal Liaison Staff, Risk Management Agency, United 
States Department of Agriculture, 1400 Independence Avenue, SW, STOP 
0807, room 6618-S, Washington, DC 20250-0807, from 9:00 a.m.-4:00 pm., 
EDT Monday through Friday, except holidays.
    (c) When the information requested is not located at the office of 
the Appeals, Litigation and Legal Liaison Staff, the Appeals, Litigation 
and Legal Liaison Staff will direct the request to the appropriate 
office where the information can be obtained. The requester will be 
informed that the request has been forwarded to the appropriate office.
    (d) FCIC will make available for inspection and copying, unless 
otherwise exempt from publication under sections 552(a)(2)(C) and 
552(b):

[[Page 110]]

    (1) Final opinions, including concurring and dissenting opinions and 
orders made in the adjudication of cases; and
    (2) Those statements of policy and interpretations that have been 
adopted by FCIC and RMA and are not published in the Federal Register; 
and
    (3) Administrative staff manuals and instructions to staff that 
affect a member of the public.



Sec. 412.3  Index.

    5 U.S.C. 552(a)(2) requires that each agency publish, or otherwise 
make available, a current index of all materials available for public 
inspection and copying. RMA and FCIC will maintain a current index 
providing identifying information for the public as to any material 
issued, adopted, or promulgated by the Agency since July 4, 1967, and 
required by section 552(a)(2). Pursuant to the Freedom of Information 
Act provisions, RMA and FCIC have determined that in view of the small 
number of public requests for such index, publication of such an index 
would be unnecessary and impracticable. Copies of the index will be 
available upon request in person or by mail at the address stated in 
Sec. 412.2(b).



Sec. 412.4  Requests for records.

    The Director of the Appeals, Litigation and Legal Liaison staff, RMA 
located at the above stated address, is the person authorized to receive 
Freedom of Information Act and to determine whether to grant or deny 
such requests in accordance with 7 CFR 1.8.



Sec. 412.5  Appeals.

    Any person whose request under Sec. 412.4 is denied shall have the 
right to appeal such denial. This appeal shall be submitted in 
accordance with 7 CFR 1.13 and addressed to the Manager, Federal Crop 
Insurance Corporation, United States Department of Agriculture, 1400 
Independence Avenue, SW., STOP 0807, room 6618-S, Washington, DC 20250-
0807.



Sec. 412.6  Timing of responses to requests.

    (a) In general, FCIC will respond to requests according to their 
order of receipt.
    (b) Existing responsive documents or information may be maintained 
in RMA's field offices. Therefore, extra time may be necessary to search 
and collect the documents.

                        PARTS 413-456 [RESERVED]



PART 457_COMMON CROP INSURANCE REGULATIONS--Table of Contents




Sec.
457.1 Applicability.
457.2 Availability of Federal crop insurance.
457.3 Premium rates, production guarantees or amounts of insurance, 
          coverage levels, and prices at which indemnities shall be 
          computed.
457.4 OMB control numbers.
457.5 Creditors.
457.6 [Reserved]
457.7 The contract.
457.8 The application and policy.
457.9 Appropriation contingency.
457.10-457.100 [Reserved]
457.101 Small grains crop insurance.
457.102 Wheat or barley winter coverage endorsement.
457.103 [Reserved]
457.104 Cotton crop insurance provisions.
457.105 Extra long staple cotton crop insurance provisions.
457.106 Texas citrus tree crop insurance provisions.
457.107 Florida citrus fruit crop insurance provisions.
457.108 Sunflower seed crop insurance provisions.
457.109 Sugar beet crop insurance provisions.
457.110 Fig crop insurance provisions.
457.111 Pear crop insurance provisions.
457.112 Hybrid sorghum seed crop insurance provisions.
457.113 Coarse grains crop insurance provisions.
457.114-457.115 [Reserved]
457.115 Nursery frost, freeze, and cold damage exclusion option.
457.116 Sugarcane crop insurance provisions.
457.117 Forage production crop insurance provisions.
457.118 Malting barley crop insurance.
457.119 Texas citrus fruit crop insurance provisions.
457.120 [Reserved]
457.121 Arizona-California citrus crop insurance provisions.
457.122 Walnut crop insurance provisions.
457.123 Almond crop insurance provisions.
457.124 Raisin crop insurance provisions.
457.125 Safflower crop insurance provisions.
457.126 Popcorn crop insurance provisions.
457.127 [Reserved]

[[Page 111]]

457.128 Guaranteed production plan of fresh market tomato crop insurance 
          provisions.
457.129 Fresh market sweet corn crop insurance provisions.
457.130 Madacamia tree crop insurance provisions.
457.131 Macadamia nut crop insurance provisions.
457.132 Cranberry crop insurance provisions.
457.133 Prune crop insurance provisions.
457.134 Peanut crop insurance provisions.
457.135 Onion crop insurance provisions.
457.136 Guaranteed tobacco crop insurance provisions.
457.137 Green pea crop insurance provisions.
457.138 Grape crop insurance provisions.
457.139 Fresh market tomato (dollar plan) crop insurance provisions.
457.140 Dry pea crop insurance provisions.
457.141 Rice crop insurance provisions.
457.142 Northern potato crop insurance provisions.
457.143 Northern potato crop insurance--quality endorsement.
457.144 Northern potato crop insurance--processing quality endorsement.
457.145 Potato crop insurance--certified seed endorsement.
457.146 Northern potato crop insurance--storage coverage endorsement.
457.147 Central and Southern potato crop insurance provisions.
457.148 Fresh market pepper crop insurance provisions.
457.149 Table grape crop insurance provisions.
457.150 Dry bean crop insurance provisions.
457.151 Forage seeding crop insurance provisions.
457.152 Hybrid seed corn crop insurance provisions.
457.153 Peach crop insurance provisions.
457.154 Processing sweet corn crop insurance provisions.
457.155 Processing bean crop insurance provisions.
457.156 Quota tobacco crop insurance provisions.
457.157 Plum crop insurance provisions.
457.158 Apple crop insurance provisions.
457.159 Stonefruit crop insurance provisions.
457.160 Processing tomato crop insurance provisions.
457.161 Canola and rapeseed crop insurance provisions.
457.162 Nursery crop insurance provisions.
457.163 Nursery peak inventory endorsement.
457.164 Nursery rehabilitation endorsement.
457.165 Millet crop insurance provisions.
457.166 Blueberry crop insurance provisions.
457.167 Pecan revenue crop insurance provisions.

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

    Source: 56 FR 1351, Jan. 14, 1991, unless otherwise noted.



Sec. 457.1  Applicability.

    The provisions of this part are applicable only to crops for which a 
crop provision is published as a section to 7 CFR part 457 and then only 
for the crops and crop year designated by the application section.



Sec. 457.2  Availability of Federal crop insurance.

    (a) Insurance shall be offered under the provisions of this section 
on the insured crop in counties within the limits prescribed by and in 
accordance with the provisions of the Federal Crop Insurance Act, as 
amended (the Act). The crops and counties shall be designated by the 
Manager of the Corporation from those approved by the Board of Directors 
of the Corporation.
    (b) The insurance is offered through companies reinsured by the 
Federal Crop Insurance Corporation (FCIC) that offer contracts 
containing the same terms and conditions as the contract set out in this 
part. These contracts are clearly identified as being reinsured by FCIC. 
FCIC may offer the contract for the catastrophic level of coverage 
contained in this part and part 402 directly to the insured through 
local offices of the Department of Agriculture only if the Secretary 
determines that the availability of local agents is not adequate. Those 
contracts are specifically identified as being offered by FCIC.
    (c) Except as specified in the Crop Provisions, the Catastrophic 
Risk Protection Endorsement (part 402 of this chapter) and part 400, 
subpart T of this chapter, no person may have in force more than one 
contract on the same crop for the same crop year in the same county.
    (d) Except as specified in paragraph (c) of this section, if a 
person has more than one contract authorized under the Act that provides 
coverage for the same loss on the same crop for the same crop year in 
the same county, all such contracts shall be voided for that crop year 
and the person will be liable for the premium on all contracts, unless 
the person can show to the satisfaction of the Corporation that the

[[Page 112]]

multiple contracts of insurance were without the fault of the person.
    (1) If the multiple contracts of insurance are shown to be without 
the fault of the person and:
    (i) One contract is an additional coverage policy and the other 
contract is a Catastrophic Risk Protection policy, the additional 
coverage policy will apply if both policies are with the same insurance 
provider, or if not, both insurance providers agree, and the 
Catastrophic Risk Protection policy will be canceled (If the insurance 
providers do not agree, the policy with the earliest date of application 
will be in force and the other contract will be canceled); or
    (ii) Both contracts are additional coverage policies or both are 
Catastrophic Risk Protection policies, the contract with the earliest 
signature date on the application will be valid and the other contract 
on that crop in the county for that crop year will be canceled, unless 
both policies are with the same insurance provider and the insurance 
provider agrees otherwise or both policies are with different insurance 
providers and both insurance providers agree otherwise.
    (2) No liability for any indemnity, prevented planting payment, 
replanting payment or premium will attach to the contracts canceled as 
specified in paragraphs (d)(1)(i) and (ii) of this section.
    (e) The person must repay all amounts received in violation of this 
section with interest at the rate contained in the contract (see Sec. 
457.8, paragraph 24).
    (f) An insured whose contract with the Corporation or with a company 
reinsured by the Corporation under the Act has been terminated because 
of violation of the terms of the contract is not eligible to obtain 
multiple peril crop insurance under the Act with the Corporation or with 
a company reinsured by the Corporation unless the insured can show that 
the default in the prior contract was cured prior to the sales closing 
date of the contract applied for or unless the insured can show that the 
termination was improper and should not result in subsequent 
ineligibility.
    (g) All applicants for insurance under the Act must advise the 
agent, in writing, at the time of application, of any previous 
applications for insurance or policies of insurance under the Act and 
the present status of any such applications or insurance.

[56 FR 1351, Jan. 14, 1991, as amended at 58 FR 58262, Nov. 1, 1993; 62 
FR 65154, Dec. 10, 1997; 63 FR 66712, Dec. 3, 1998; 69 FR 48738, Aug. 
10, 2004]



Sec. 457.3  Premium rates, production guarantees or amounts of insurance, 
coverage levels, and prices at which indemnities shall be computed.

    (a) The Manager shall establish premium rates, production guarantees 
or amounts of insurance, coverage levels, and prices at which 
indemnities shall be computed for the insured crop which will be 
included in the actuarial table on file in the applicable agents' office 
for the county and which may be changed from year to year.
    (b) At the time the application for insurance is made, the applicant 
will elect an amount of insurance or a coverage level and price from 
among those contained in the actuarial table for the crop year.



Sec. 457.4  OMB control numbers.

    The information collection requirements contained in these 
regulations have been approved by the Office of Management and Budget 
(OMB) under the provisions of 44 U.S.C. chapter 35 and have been 
assigned OMB number 0563-0053.

[62 FR 65154, Dec. 10, 1997]



Sec. 457.5  Creditors.

    An interest of a person in an insured crop existing by virtue of a 
lien, mortgage, garnishment, levy, execution, bankruptcy, involuntary 
transfer or other similar interest shall not entitle the holder of the 
interest to any benefit under the contract.



Sec. 457.6  [Reserved]



Sec. 457.7  The contract.

    The insurance contract shall become effective upon the acceptance by 
the Corporation or the reinsured company of a duly executed application 
for insurance on a form prescribed by the

[[Page 113]]

Corporation. Changes made in the contract shall not affect its 
continuity from year to year. No indemnity shall be paid unless the 
insured complies with all terms and conditions of the contract, except 
as provided in the policy. The forms referred to in the contract are 
available at the offices of the crop insurance agent.

[56 FR 1351, Jan. 14, 1991, as amended at 69 FR 48739, Aug. 10, 2004]



Sec. 457.8  The application and policy.

    (a) Application for insurance on a form prescribed by the 
Corporation, or approved by the Corporation, must be made by any person 
who wishes to participate in the program, to cover such person's share 
in the insured crop as landlord, owner-operator, crop ownership 
interest, or tenant. No other person's interest in the crop may be 
insured under an application unless that person's interest is clearly 
shown on the application and unless that other person's interest is 
insured in accordance with the procedures of the Corporation. The 
application must be submitted to the Corporation or the reinsured 
company through the crop insurance agent and must be submitted on or 
before the applicable sales closing date on file.
    (b) FCIC or the reinsured company may reject or discontinue the 
acceptance of applications in any country or of any individual 
application upon FCIC's determination that the insurance risk is 
excessive.

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                    [or policy issuing company name]

                      Common Crop Insurance Policy

           (This is a continuous policy. Refer to section 2.)

                              FCIC Policies

    This is an insurance policy issued by the Federal Crop Insurance 
Corporation (FCIC), a United States government agency. The provisions of 
the policy may not be waived or modified in any way by us, your 
insurance agent or any employee of USDA unless the policy specifically 
authorizes a waiver or modification by written agreement. Procedures 
(handbooks, manuals, memoranda, and bulletins), issued by us and 
published on the RMA Web site at http://www.rma.usda.gov/ or a successor 
Web site will be used in the administration of this policy, including 
the adjustment of any loss or claim submitted hereunder.
    Throughout this policy, ``you'' and ``your'' refer to the named 
insured shown on the accepted application and ``we,'' ``us,'' and 
``our'' refer to the Federal Crop Insurance Corporation. Unless the 
context indicates otherwise, use of the plural form of a word includes 
the singular and use of the singular form of the word includes the 
plural.
    AGREEMENT TO INSURE: In return for the payment of the premium, and 
subject to all of the provisions of this policy, we agree with you to 
provide the insurance as stated in this policy. If there is a conflict 
between the Act, the regulations published at 7 CFR chapter IV, and the 
procedures issued by us, the order of priority is as follows: (1) The 
Act; (2) the regulations; and (3) the procedures issued by us, with (1) 
controlling (2), etc. If there is a conflict between the policy 
provisions published at 7 CFR part 457 and the administrative 
regulations published at 7 CFR part 400, the policy provisions published 
at 7 CFR part 457 control. If a conflict exists among the policy 
provisions, the order of priority is: (1) The Catastrophic Risk 
Protection Endorsement, as applicable; (2) the Special Provisions; (3) 
the Crop Provisions; and (4) these Basic Provisions, with (1) 
controlling (2), etc.

                           Reinsured Policies

    This insurance policy is reinsured by the Federal Crop Insurance 
Corporation (FCIC) under the provisions of the Federal Crop Insurance 
Act (Act) (7 U.S.C. 1501 et seq.). All provisions of the policy and 
rights and responsibilities of the parties are specifically subject to 
the Act. The provisions of the policy may not be waived or varied in any 
way by us, our insurance agent or any other contractor or employee of 
ours or any employee of USDA unless the policy specifically authorizes a 
waiver or modification by written agreement. We will use the procedures 
(handbooks, manuals, memoranda and bulletins), as issued by FCIC and 
published on the RMA Web site at http://www.rma.usda.gov/ or a successor 
Web site, in the administration of this policy, including the adjustment 
of any loss or claim submitted hereunder. In the event that we cannot 
pay your loss because we are insolvent or are otherwise unable to 
perform our duties under our reinsurance agreement with FCIC, your claim 
will be settled in accordance with the provisions of this policy and 
FCIC will be responsible for any amounts owed. No state guarantee fund 
will be liable for your loss.
    Throughout this policy, ``you'' and ``your'' refer to the named 
insured shown on the accepted application and ``we,'' ``us,'' and

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``our'' refer to the insurance company providing insurance. Unless the 
context indicates otherwise, use of the plural form of a word includes 
the singular and use of the singular form of the word includes the 
plural.
    AGREEMENT TO INSURE: In return for the payment of the premium, and 
subject to all of the provisions of this policy, we agree with you to 
provide the insurance as stated in this policy. If there is a conflict 
between the Act, the regulations published at 7 CFR chapter IV, and the 
procedures as issued by FCIC, the order of priority is as follows: (1) 
The Act; (2) the regulations; and (3) the procedures as issued by FCIC, 
with (1) controlling (2), etc. If there is a conflict between the policy 
provisions published at 7 CFR part 457 and the administrative 
regulations published at 7 CFR part 400, the policy provisions published 
at 7 CFR part 457 control. If a conflict exists among the policy 
provisions, the order of priority is: (1) The Catastrophic Risk 
Protection Endorsement, as applicable; (2) the Special Provisions; (3) 
the Crop Provisions; and (4) these Basic Provisions, with (1) 
controlling (2), etc.

                          Terms and Conditions

                            Basic Provisions

                             1. Definitions

    Abandon. Failure to continue to care for the crop, providing care so 
insignificant as to provide no benefit to the crop, or failure to 
harvest in a timely manner, unless an insured cause of loss prevents you 
from properly caring for or harvesting the crop or causes damage to it 
to the extent that most producers of the crop on acreage with similar 
characteristics in the area would not normally further care for or 
harvest it.
    Acreage report. A report required by section 6 of these Basic 
Provisions that contains, in addition to other required information, 
your report of your share of all acreage of an insured crop in the 
county, whether insurable or not insurable.
    Acreage reporting date. The date contained in the Special Provisions 
or as provided in section 6 by which you are required to submit your 
acreage report.
    Act. The Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
    Actual Production History (APH). A process used to determine 
production guarantees in accordance with 7 CFR part 400, subpart (G).
    Actual yield. The yield per acre for a crop year calculated from the 
production records or claims for indemnities. The actual yield is 
determined by dividing total production (which includes harvested and 
appraised production) by planted acres.
    Actuarial documents. The material for the crop year which is 
available for public inspection in your agent's office and published on 
RMA's Web site at http://www.rma.usda.gov/ or a successor Web site, and 
which shows available coverage levels, information needed to determine 
amounts of insurance, premium rates, premium adjustment percentages, 
practices, particular types or varieties of the insurable crop, 
insurable acreage, and other related information regarding crop 
insurance in the county.
    Additional coverage. A level of coverage greater than catastrophic 
risk protection.
    Administrative fee. An amount you must pay for catastrophic risk 
protection, and additional coverage for each crop year as specified in 
section 7 and the Catastrophic Risk Protection Endorsement.
    Agricultural commodity. Any crop or other commodity produced, 
regardless of whether or not it is insurable.
    Agricultural experts. Persons who are employed by the Cooperative 
State Research, Education and Extension Service or the agricultural 
departments of universities, or other persons approved by FCIC, whose 
research or occupation is related to the specific crop or practice for 
which such expertise is sought.
    Annual crop. An agricultural commodity that normally must be planted 
each year.
    Application. The form required to be completed by you and accepted 
by us before insurance coverage will commence. This form must be 
completed and filed in your agent's office not later than the sales 
closing date of the initial insurance year for each crop for which 
insurance coverage is requested. If cancellation or termination of 
insurance coverage occurs for any reason, including but not limited to 
indebtedness, suspension, debarment, disqualification, cancellation by 
you or us or violation of the controlled substance provisions of the 
Food Security Act of 1985, a new application must be filed for the crop. 
Insurance coverage will not be provided if you are ineligible under the 
contract or under any Federal statute or regulation.
    Approved yield. The actual production history (APH) yield, 
calculated and approved by the verifier, used to determine the 
production guarantee by summing the yearly actual, assigned, adjusted or 
unadjusted transitional yields and dividing the sum by the number of 
yields contained in the database, which will always contain at least 
four yields. The database may contain up to 10 consecutive crop years of 
actual or assigned yields. The approved yield may have yield adjustments 
elected under section 36, revisions according to section 3, or other 
limitations according to FCIC approved procedures applied when 
calculating the approved yield.
    Area. Land surrounding the insured acreage with geographic 
characteristics, topography, soil types and climatic conditions similar 
to the insured acreage.
    Assignment of indemnity. A transfer of policy rights, made on our 
form, and effective when approved by us. It is the arrangement

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whereby you assign your right to an indemnity payment to any party of 
your choice for the crop year.
    Average yield. The yield, calculated by summing the yearly actual, 
assigned, adjusted or unadjusted transitional yields and dividing the 
sum by the number of yields contained in the database, prior to any 
adjustments, including those elected under section 36, revisions 
according to section 3, or other limitations according to FCIC approved 
procedures.
    Basic unit. All insurable acreage of the insured crop in the county 
on the date coverage begins for the crop year:
    (1) In which you have 100 percent crop share; or
    (2) Which is owned by one person and operated by another person on a 
share basis. (Example: If, in addition to the land you own, you rent 
land from five landlords, three on a crop share basis and two on a cash 
basis, you would be entitled to four units; one for each crop share 
lease and one that combines the two cash leases and the land you own.) 
Land which would otherwise be one unit may, in certain instances, be 
divided according to guidelines contained in section 34 of these Basic 
Provisions and in the applicable Crop Provisions.
    Buffer zone. A parcel of land, as designated in your organic plan, 
that separates agricultural commodities grown under organic practices 
from agricultural commodities grown under non-organic practices, and 
used to minimize the possibility of unintended contact by prohibited 
substances or organisms.
    Cancellation date. The calendar date specified in the Crop 
Provisions on which coverage for the crop will automatically renew 
unless canceled in writing by either you or us or terminated in 
accordance with the policy terms.
    Catastrophic risk protection. The minimum level of coverage offered 
by FCIC that is required before you may qualify for certain other USDA 
program benefits unless you execute a waiver of any eligibility for 
emergency crop loss assistance in connection with the crop.
    Catastrophic Risk Protection Endorsement. The part of the crop 
insurance policy that contains provisions of insurance that are specific 
to catastrophic risk protection.
    Certified organic acreage. Acreage in the certified organic farming 
operation that has been certified by a certifying agent as conforming to 
organic standards in accordance with 7 CFR part 205.
    Certifying agent. A private or governmental entity accredited by the 
USDA Secretary of Agriculture for the purpose of certifying a 
production, processing or handling operation as organic.
    Claim for indemnity. A claim made on our form by you for damage or 
loss to an insured crop and submitted to us not later than 60 days after 
the end of the insurance period (see section 14).
    Consent. Approval in writing by us allowing you to take a specific 
action.
    Code of Federal Regulations (CFR). The codification of general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. Rules published in 
the Federal Register by FCIC are contained in 7 CFR chapter IV. The full 
text of the CFR is available in electronic format at http://
www.access.gpo.gov/ or a successor Web site.
    Contract. (See ``policy'').
    Contract change date. The calendar date by which changes to the 
policy, if any, will be made available in accordance with section 4 of 
these Basic Provisions.
    Conventional farming practice. A system or process for producing an 
agricultural commodity, excluding organic farming practices, that is 
necessary to produce the crop that may be, but is not required to be, 
generally recognized by agricultural experts for the area to conserve or 
enhance natural resources and the environment.
    County. Any county, parish, or other political subdivision of a 
state shown on your accepted application, including acreage in a field 
that extends into an adjoining county if the county boundary is not 
readily discernible.
    Coverage. The insurance provided by this policy, against insured 
loss of production or value, by unit as shown on your summary of 
coverage.
    Coverage begins, date. The calendar date insurance begins on the 
insured crop, as contained in the Crop Provisions, or the date planting 
begins on the unit (see section 11 of these Basic Provisions for 
specific provisions relating to prevented planting).
    Cover crop. A crop generally recognized by agricultural experts as 
agronomically sound for the area for erosion control or other purposes 
related to conservation or soil improvement. A cover crop may be 
considered to be a second crop (see the definition of ``second crop'').
    Crop Provisions. The part of the policy that contains the specific 
provisions of insurance for each insured crop.
    Crop year. The period within which the insured crop is normally 
grown, regardless of whether or not it is actually grown, and designated 
by the calendar year in which the insured crop is normally harvested, 
unless otherwise specified in the Crop Provisions.
    Damage. Injury, deterioration, or loss of production of the insured 
crop due to insured or uninsured causes.
    Days. Calendar days.
    Deductible. The amount determined by subtracting the coverage level 
percentage you choose from 100 percent. For example, if you

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elected a 65 percent coverage level, your deductible would be 35 percent 
(100% - 65% = 35%).
    Delinquent debt. Any administrative fees or premiums for insurance 
issued under the authority of the Act, and the interest on those 
amounts, if applicable, that are not postmarked or received by us or our 
agent on or before the termination date unless you have entered into an 
agreement acceptable to us to pay such amounts or have filed for 
bankruptcy on or before the termination date; any other amounts due us 
for insurance issued under the authority of the Act (including, but not 
limited to, indemnities, prevented planting payments or replanting 
payments found not to have been earned or that were overpaid), and the 
interest on such amounts, if applicable, which are not postmarked or 
received by us or our agent by the due date specified in the notice to 
you of the amount due; or any amounts due under an agreement with you to 
pay the debt, which are not postmarked or received by us or our agent by 
the due dates specified in such agreement.
    Disinterested third party. A person that does not have any familial 
relationship (parents, brothers, sisters, children, spouse, 
grandchildren, aunts, uncles, nieces, nephews, first cousins, or 
grandparents, related by blood, adoption or marriage, are considered to 
have a familial relationship) with you or who will not benefit 
financially from the sale of the insured crop. Persons who are 
authorized to conduct quality analysis in accordance with the Crop 
Provisions are considered disinterested third parties unless there is a 
familial relationship.
    Double crop. Producing two or more crops for harvest on the same 
acreage in the same crop year.
    Earliest planting date. The initial planting date contained in the 
Special Provisions, which is the earliest date you may plant an insured 
agricultural commodity and qualify for a replanting payment if such 
payments are authorized by the Crop Provisions.
    End of insurance period, date of. The date upon which your crop 
insurance coverage ceases for the crop year (see Crop Provisions and 
section 11).
    Enterprise unit. All insurable acreage of the insured crop in the 
county in which you have a share on the date coverage begins for the 
crop year. To qualify, an enterprise unit must contain all of the 
insurable acreage of the same insured crop in:
    (1) One or more basic units that are located in two or more separate 
sections, section equivalents, FSA farm serial numbers, or units 
established by written agreement, with at least some planted acreage in 
two or more separate sections, section equivalents, FSA farm serial 
numbers, or two or more separate units as established by written 
agreement; or
    (2) Two or more optional units established by separate sections, 
section equivalents, FSA farm serial numbers, or as established by 
written agreement, with at least two optional units containing some 
planted acreage.
    Field. All acreage of tillable land within a natural or artificial 
boundary (e.g., roads, waterways, fences, etc.). Different planting 
patterns or planting different crops do not create separate fields.
    Final planting date. The date contained in the Special Provisions 
for the insured crop by which the crop must initially be planted in 
order to be insured for the full production guarantee or amount of 
insurance per acre.
    First insured crop. With respect to a single crop year and any 
specific crop acreage, the first instance that an agricultural commodity 
is planted for harvest or prevented from being planted and is insured 
under the authority of the Act. For example, if winter wheat that is not 
insured is planted on acreage that is later planted to soybeans that are 
insured, the first insured crop would be soybeans. If the winter wheat 
was insured, it would be the first insured crop.
    FSA. The Farm Service Agency, an agency of the USDA, or a successor 
agency.
    FSA farm serial number. The number assigned to the farm by the local 
FSA office.
    Generally recognized. When agricultural experts or the organic 
agricultural industry, as applicable, are aware of the production method 
or practice and there is no genuine dispute regarding whether the 
production method or practice allows the crop to make normal progress 
toward maturity and produce at least the yield used to determine the 
production guarantee or amount of insurance.
    Good farming practices. The production methods utilized to produce 
the insured crop and allow it to make normal progress toward maturity 
and produce at least the yield used to determine the production 
guarantee or amount of insurance, including any adjustments for late 
planted acreage, which are: (1) For conventional or sustainable farming 
practices, those generally recognized by agricultural experts for the 
area; or (2) for organic farming practices, those generally recognized 
by the organic agricultural industry for the area or contained in the 
organic plan. We may, or you may request us to, contact FCIC to 
determine whether or not production methods will be considered to be 
``good farming practices.''
    Household. A domestic establishment including the members of a 
family (parents, brothers, sisters, children, spouse, grandchildren, 
aunts, uncles, nieces, nephews, first cousins, or grandparents, related 
by blood, adoption or marriage, are considered to be family members) and 
others who live under the same roof.

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    Insurable loss. Damage for which coverage is provided under the 
terms of your policy, and for which you accept an indemnity payment.
    Insured. The named person as shown on the application accepted by 
us. This term does not extend to any other person having a share or 
interest in the crop (for example, a partnership, landlord, or any other 
person) unless specifically indicated on the accepted application.
    Insured crop. The crop in the county for which coverage is available 
under your policy as shown on the application accepted by us.
    Interplanted. Acreage on which two or more crops are planted in a 
manner that does not permit separate agronomic maintenance or harvest of 
the insured crop.
    Irrigated practice. A method of producing a crop by which water is 
artificially applied during the growing season by appropriate systems 
and at the proper times, with the intention of providing the quantity of 
water needed to produce at least the yield used to establish the 
irrigated production guarantee or amount of insurance on the irrigated 
acreage planted to the insured crop.
    Late planted. Acreage initially planted to the insured crop after 
the final planting date.
    Late planting period. The period that begins the day after the final 
planting date for the insured crop and ends 25 days after the final 
planting date, unless otherwise specified in the Crop Provisions or 
Special Provisions.
    Liability. The dollar amount of insurance coverage used in the 
premium computation for the insured agricultural commodity.
    Limited resource farmer. A person with:
    (1) Direct or indirect gross farm sales not more than $100,000.00 in 
each of the previous two years (to be increased starting in fiscal year 
2004 to adjust for inflation using Prices Paid by Farmer Index as 
compiled by National Agricultural Statistical Service (NASS)); and
    (2) A total household income at or below the national poverty level 
for a family of four, or less than 50 percent of county median household 
income in each of the previous two years (to be determined annually 
using Commerce Department Data).
    Negligence. The failure to use such care as a reasonably prudent and 
careful person would use under similar circumstances.
    Non-contiguous. Acreage of an insured crop that is separated from 
other acreage of the same insured crop by land that is neither owned by 
you nor rented by you for cash or a crop share. However, acreage 
separated by only a public or private right-of-way, waterway, or an 
irrigation canal will be considered as contiguous.
    Offset. The act of deducting one amount from another amount.
    Organic agricultural industry. Persons who are employed by the 
following organizations: Appropriate Technology Transfer for Rural 
Areas, Sustainable Agriculture Research and Education or the Cooperative 
State Research, Education and Extension Service, the agricultural 
departments of universities, or other persons approved by FCIC, whose 
research or occupation is related to the specific organic crop or 
practice for which such expertise is sought.
    Organic farming practice. A system of plant production practices 
approved by a certifying agent in accordance with 7 CFR part 205.
    Organic plan. A written plan, in accordance with the National 
Organic Program published in 7 CFR part 205, that describes the organic 
farming practices that you and a certifying agent agree upon annually or 
at such other times as prescribed by the certifying agent.
    Organic standards. Standards in accordance with the Organic Foods 
Production Act of 1990 (7 U.S.C. 6501 et seq.) and 7 CFR part 205.
    Perennial crop. A plant, bush, tree or vine crop that has a life 
span of more than one year.
    Person. An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and wherever applicable, a State 
or a political subdivision or agency of a State. ``Person'' does not 
include the United States Government or any agency thereof.
    Planted acreage. Land in which seed, plants, or trees have been 
placed, appropriate for the insured crop and planting method, at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice.
    Policy. The agreement between you and us to insure an agricultural 
commodity and consisting of the accepted application, these Basic 
Provisions, the Crop Provisions, the Special Provisions, other 
applicable endorsements or options, the actuarial documents for the 
insured agricultural commodity, the Catastrophic Risk Protection 
Endorsement, if applicable, and the applicable regulations published in 
7 CFR chapter IV. Insurance for each agricultural commodity in each 
county will constitute a separate policy.
    Practical to replant. Our determination, after loss or damage to the 
insured crop, based on all factors, including, but not limited to 
moisture availability, marketing window, condition of the field, and 
time to crop maturity, that replanting the insured crop will allow the 
crop to attain maturity prior to the calendar date for the end of the 
insurance period. It will be considered to be practical to replant 
regardless of availability of seed or plants, or the input costs 
necessary to produce the insured crop such as those that would be 
incurred for seed or plants, irrigation water, etc.

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    Premium billing date. The earliest date upon which you will be 
billed for insurance coverage based on your acreage report. The premium 
billing date is contained in the Special Provisions.
    Prevented planting. Failure to plant the insured crop with proper 
equipment by the final planting date designated in the Special 
Provisions for the insured crop in the county. You may also be eligible 
for a prevented planting payment if you failed to plant the insured crop 
with the proper equipment within the late planting period. You must have 
been prevented from planting the insured crop due to an insured cause of 
loss that is general in the surrounding area and that prevents other 
producers from planting acreage with similar characteristics.
    Price election. The amounts contained in the Special Provisions, or 
an addendum thereto, that is the value per pound, bushel, ton, carton, 
or other applicable unit of measure for the purposes of determining 
premium and indemnity under the policy.
    Production guarantee (per acre). The number of pounds, bushels, 
tons, cartons, or other applicable units of measure determined by 
multiplying the approved yield per acre by the coverage level percentage 
you elect.
    Production report. A written record showing your annual production 
and used by us to determine your yield for insurance purposes (see 
section 3). The report contains yield information for previous years, 
including planted acreage and harvested production. This report must be 
supported by written verifiable records from a warehouseman or buyer of 
the insured crop or by measurement of farm-stored production, or by 
other records of production approved by us on an individual case basis.
    Prohibited substance. Any biological, chemical, or other agent that 
is prohibited from use or is not included in the organic standards for 
use on any certified organic, transitional or buffer zone acreage. Lists 
of such substances are contained at 7 CFR part 205.
    Replanted crop. The same agricultural commodity replanted on the 
same acreage as the first insured crop for harvest in the same crop year 
if the replanting is specifically made optional by the policy and you 
elect to replant the crop and insure it under the policy covering the 
first insured crop, or replanting is required by the policy.
    Replanting. Performing the cultural practices necessary to prepare 
the land to replace the seed or plants of the damaged or destroyed 
insured crop and then replacing the seed or plants of the same crop in 
the same insured acreage. The same crop does not necessarily mean the 
same type or variety of the crop unless different types or varieties 
constitute separate crops or it is otherwise specified in the policy.
    Representative sample. Portions of the insured crop that must remain 
in the field for examination and review by our loss adjuster when making 
a crop appraisal, as specified in the Crop Provisions. In certain 
instances we may allow you to harvest the crop and require only that 
samples of the crop residue be left in the field.
    Sales closing date. A date contained in the Special Provisions by 
which an application must be filed. The last date by which you may 
change your crop insurance coverage for a crop year.
    Section. (for the purposes of unit structure) A unit of measure 
under a rectangular survey system describing a tract of land usually one 
mile square and usually containing approximately 640 acres.
    Second crop. With respect to a single crop year, the next occurrence 
of planting any agricultural commodity for harvest following a first 
insured crop on the same acreage. The second crop may be the same or a 
different agricultural commodity as the first insured crop, except the 
term does not include a replanted crop. A cover crop, planted after a 
first insured crop and planted for the purpose of haying, grazing or 
otherwise harvesting in any manner or that is hayed or grazed during the 
crop year, or that is otherwise harvested is considered to be a second 
crop. A cover crop that is covered by FSA's noninsured crop disaster 
assistance program (NAP) or receives other USDA benefits associated with 
forage crops will be considered as planted for the purpose of haying, 
grazing or otherwise harvesting. A crop meeting the conditions stated 
herein will be considered to be a second crop regardless of whether or 
not it is insured. Notwithstanding the references to haying and grazing 
as harvesting in these Basic Provisions, for the purpose of determining 
the end of the insurance period, harvest of the crop will be as defined 
in the applicable Crop Provisions.
    Share. Your percentage of interest in the insured crop as an owner, 
operator, or tenant at the time insurance attaches. However, only for 
the purpose of determining the amount of indemnity, your share will not 
exceed your share at the earlier of the time of loss or the beginning of 
harvest.
    Special Provisions. The part of the policy that contains specific 
provisions of insurance for each insured crop that may vary by 
geographic area.
    State. The state shown on your accepted application.
    Substantial beneficial interest. An interest held by any person of 
at least 10 percent in you. The spouse of any individual applicant or 
individual insured will be considered to have a substantial beneficial 
interest in the applicant or insured unless the spouses can prove they 
are legally separated or otherwise legally separate under state law. Any 
child of an individual applicant or individual insured will not be 
considered to have a substantial beneficial interest in the applicant

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or insured unless the child has a separate legal interest in such 
person. For example, there are two partnerships that each have a 50 
percent interest in you and each partnership is made up of two 
individuals, each with a 50 percent share in the partnership. In this 
case, each individual would be considered to have a 25 percent interest 
in you, and both the partnerships and the individuals would have a 
substantial beneficial interest in you (The spouses of the individuals 
would not be considered to have a substantial beneficial interest unless 
the spouse was one of the individuals that made up the partnership). 
However, if each partnership is made up of six individuals with equal 
interests, then each would only have an 8.33 percent interest in you and 
although the partnership would still have a substantial beneficial 
interest in you, the individuals would not for the purposes of reporting 
in section 2.
    Summary of coverage. Our statement to you, based upon your acreage 
report, specifying the insured crop and the guarantee or amount of 
insurance coverage provided by unit.
    Sustainable farming practice. A system or process for producing an 
agricultural commodity, excluding organic farming practices, that is 
necessary to produce the crop and is generally recognized by 
agricultural experts for the area to conserve or enhance natural 
resources and the environment.
    Tenant. A person who rents land from another person for a share of 
the crop or a share of the proceeds of the crop (see the definition of 
``share'' above).
    Termination date. The calendar date contained in the Crop Provisions 
upon which your insurance ceases to be in effect because of nonpayment 
of any amount due us under the policy, including premium.
    Timely planted. Planted on or before the final planting date 
designated in the Special Provisions for the insured crop in the county.
    Transitional acreage. Acreage on which organic farming practices are 
being followed that does not yet qualify to be designated as organic 
acreage.
    USDA. United States Department of Agriculture.
    Void. When the policy is considered not to have existed for a crop 
year as a result of concealment, fraud or misrepresentation (see section 
27).
    Whole farm unit. All insurable acreage of two or more insured crops 
planted in the county in which you have a share on the date coverage 
begins for each crop for the crop year. All crops for which the whole 
farm unit structure is available must be included in the whole farm 
unit. At least two of the insured crops must each constitute at least 10 
percent of the total liability of all insured crops in the whole farm 
unit, and all crops in the unit must be insured under the same plan of 
insurance and with the same insurance provider.
    Written agreement. A document that alters designated terms of a 
policy as authorized under these Basic Provisions, the Crop Provisions, 
or the Special Provisions for the insured crop (see section 18).

            2. Life of Policy, Cancellation, and Termination

    (a) This is a continuous policy and will remain in effect for each 
crop year following the acceptance of the original application until 
canceled by you in accordance with the terms of the policy or terminated 
by operation of the terms of the policy or by us.
    (b) Your application for insurance must contain your social security 
number (SSN) if you are an individual or employer identification number 
(EIN) if you are a person other than an individual, and all SSNs and 
EINs, as applicable, of all persons with a substantial beneficial 
interest in you, the coverage level, price election, crop, type, 
variety, or class, plan of insurance, and any other material information 
required on the application to insure the crop. If you or someone with a 
substantial beneficial interest is not legally required to have a SSN or 
EIN, you must request and receive an identification number for the 
purposes of this policy from us or the Internal Revenue Service (IRS) if 
such identification number is available from the IRS. If any of the 
information regarding persons with a substantial beneficial interest 
changes during the crop year, you must revise your application by the 
next sales closing date applicable under your policy to reflect the 
correct information.
    (1) Applications that do not contain your SSN, EIN or identification 
number, or any of the other information required in section 2(b) are not 
acceptable and insurance will not be provided (Except if you fail to 
report the SSNs, EINs or identification numbers of persons with a 
substantial beneficial interest in you, the provisions in section 
2(b)(2) will apply);
    (2) If the application does not contain the SSNs, EINs or 
identification numbers of all persons with a substantial beneficial 
interest in you, you fail to revise your application in accordance with 
section 2(b), or the reported SSNs, EINs or identification numbers are 
incorrect and the incorrect SSN, EIN or identification number has not 
been corrected by the acreage reporting date, and:
    (i) Such persons are eligible for insurance, the amount of coverage 
for all crops included on this application will be reduced 
proportionately by the percentage interest in you of such persons, you 
must repay the amount of indemnity, prevented planting payment or 
replanting payment that is proportionate to the interest of the persons 
whose SSN, EIN or identification number was unreported or

[[Page 120]]

incorrect for such crops, and your premium will be reduced 
commensurately; or
    (ii) Such persons are not eligible for insurance, except as provided 
in section 2(b)(3), the policy is void and no indemnity, prevented 
planting payment or replanting payment will be owed for any crop 
included on this application, and you must repay any indemnity, 
prevented planting payment or replanting payment that may have been paid 
for such crops. If previously paid, the balance of any premium and any 
administrative fees will be returned to you, less twenty percent of the 
premium that would otherwise be due from you for such crops. If not 
previously paid, no premium or administrative fees will be due for such 
crops.
    (3) The consequences described in section 2(b)(2)(ii) will not apply 
if you have included an ineligible person's SSN, EIN or identification 
number on your application and do not include the ineligible person's 
share on the acreage report.
    (c) After acceptance of the application, you may not cancel this 
policy for the initial crop year. Thereafter, the policy will continue 
in force for each succeeding crop year unless canceled or terminated as 
provided below.
    (d) Either you or we may cancel this policy after the initial crop 
year by providing written notice to the other on or before the 
cancellation date shown in the Crop Provisions.
    (e) Any amount due to us for any policy authorized under the Act 
will be offset from any indemnity or prevented planting payment due you 
for this or any other crop insured with us under the authority of the 
Act.
    (1) Even if your claim has not yet been paid, you must still pay the 
premium and administrative fee on or before the termination date for you 
to remain eligible for insurance.
    (2) If we offset any amount due us from an indemnity or prevented 
planting payment owed to you, the date of payment for the purpose of 
determining whether you have a delinquent debt will be the date that you 
submit the claim for indemnity in accordance with section 14(c) (Your 
Duties).
    (f) A delinquent debt for any policy will make you ineligible to 
obtain crop insurance authorized under the Act for any subsequent crop 
year and result in termination of all policies in accordance with 
section 2(f)(2).
    (1) With respect to ineligibility:
    (i) Ineligibility for crop insurance will be effective on:
    (A) The date that a policy was terminated in accordance with section 
2(f)(2) for the crop for which you failed to pay premium, an 
administrative fee, or any related interest owed, as applicable;
    (B) The payment due date contained in any notification of 
indebtedness for any overpaid indemnity, prevented planting payment or 
replanting payment, if you fail to pay the amount owed, including any 
related interest owed, as applicable, by such due date;
    (C) The termination date for the crop year prior to the crop year in 
which a scheduled payment is due under a payment agreement if you fail 
to pay the amount owed by any payment date in any agreement to pay the 
debt; or
    (D) The termination date the policy was or would have been 
terminated under sections 2(f)(2)(i)(A), (B) or (C) if your bankruptcy 
petition is dismissed before discharge.
    (ii) If you are ineligible and a policy has been terminated in 
accordance with section 2(f)(2), you will not receive any indemnity, 
prevented planting payment or replanting payment, if applicable, and 
such ineligibility and termination of the policy may affect your 
eligibility for benefits under other USDA programs. Any indemnity, 
prevented planting payment or replanting payment that may be owed for 
the policy before it has been terminated will remain owed to you, but 
may be offset in accordance with section 2(e), unless your policy was 
terminated in accordance with sections 2(f)(2)(i)(D) or (E).
    (2) With respect to termination:
    (i) Termination will be effective on:
    (A) For a policy with unpaid administrative fees or premiums, the 
termination date immediately subsequent to the billing date for the crop 
year;
    (B) For a policy with other amounts due, the termination date 
immediately following the date you have a delinquent debt;
    (C) For each policy for which insurance has attached before you 
become ineligible, the termination date immediately following the date 
you become ineligible;
    (D) For execution of an agreement to pay any amounts owed and 
failure to make any scheduled payment, the termination date for the crop 
year prior to the crop year in which you failed to make the scheduled 
payment; or
    (E) For dismissal of a bankruptcy petition before discharge, the 
termination date the policy was or would have been terminated under 
sections 2(f)(2)(i)(A), (B) or (C).
    (ii) For all policies terminated under sections 2(f)(2)(i)(D) and 
(E), any indemnities, prevented planting payments or replanting payments 
paid subsequent to the termination date must be repaid.
    (iii) Once the policy is terminated, it cannot be reinstated for the 
current crop year unless the termination was in error. Failure to timely 
pay because of illness, bad weather, or other such extenuating 
circumstances is not grounds for reinstatement in the current year.
    (3) To regain eligibility, you must:
    (i) Repay the delinquent debt in full;
    (ii) Execute an agreement to pay any amounts owed and make payments 
in accordance with the agreement (We will not enter into an agreement 
with you to pay the

[[Page 121]]

amounts owed if you have previously failed to make a scheduled payment 
under the terms of any other agreement to pay with us or any other 
insurance provider); or
    (iii) File a petition to have your debts discharged in bankruptcy 
(Dismissal of the bankruptcy petition before discharge will terminate 
all policies in effect retroactive to the date your policy would have 
been terminated in accordance with section 2(f)(2)(i));
    (4) After you become eligible for crop insurance, if you want to 
obtain coverage for your crops, you must submit a new application on or 
before the sales closing date for the crop (Since applications for crop 
insurance cannot be accepted after the sales closing date, if you make 
any payment after the sales closing date, you cannot apply for insurance 
until the next crop year);
    (5) For example, for the 2003 crop year, if crop A, with a 
termination date of October 31, 2003, and crop B, with a termination 
date of March 15, 2004, are insured and you do not pay the premium for 
crop A by the termination date, you are ineligible for crop insurance as 
of October 31, 2003, and crop A's policy is terminated as of that date. 
Crop B's policy does not terminate until March 15, 2004, and an 
indemnity for the 2003 crop year may still be owed. If you enter an 
agreement to repay amounts owed on September 25, 2004, the earliest date 
by which you can obtain crop insurance for crop A is to apply for crop 
insurance by the October 31, 2004, sales closing date and for crop B is 
to apply for crop insurance by the March 15, 2005, sales closing date. 
If you fail to make a payment that was scheduled to be made on April 1, 
2005, your policy will terminate as of October 31, 2004, for crop A, and 
March 15, 2005, for crop B, and no indemnity, prevented planting payment 
or replanting payment will be due for that crop year for either crop. 
You will not be eligible to apply for crop insurance for any crop until 
after the amounts owed are paid in full or you file a petition to 
discharge the debt in bankruptcy.
    (6) If you are determined to be ineligible under section 2(f), 
persons with a substantial beneficial interest in you may also be 
ineligible until you become eligible again.
    (g) If you die, disappear, or are judicially declared incompetent, 
or if you are an entity other than an individual and such entity is 
dissolved, the policy will terminate as of the date of death, judicial 
declaration, or dissolution. If such event occurs after coverage begins 
for any crop year, the policy will continue in force through the crop 
year and terminate at the end of the insurance period and any indemnity 
will be paid to the person or persons determined to be beneficially 
entitled to the indemnity. The premium will be deducted from the 
indemnity or collected from the estate. Death of a partner in a 
partnership will dissolve the partnership unless the partnership 
agreement provides otherwise. If two or more persons having a joint 
interest are insured jointly, death of one of the persons will dissolve 
the joint entity.
    (h) We may cancel your policy if no premium is earned for 3 
consecutive years.
    (i) The cancellation and termination dates are contained in the Crop 
Provisions.
    (j) When obtaining catastrophic, or additional coverage, you must 
provide information regarding crop insurance coverage on any crop 
previously obtained at any other local FSA office or from an approved 
insurance provider, including the date such insurance was obtained and 
the amount of the administrative fee.
    (k) Any person may sign any document relative to crop insurance 
coverage on behalf of any other person covered by such a policy, 
provided that the person has a properly executed power of attorney or 
such other legally sufficient document authorizing such person to sign. 
You are still responsible for the accuracy of all information provided 
on your behalf and may be subject to the consequences in section 6(g), 
and any applicable consequences, if any information has been 
misreported.

          3. Insurance Guarantees, Coverage Levels, and Prices.

    (a) Unless adjusted or limited in accordance with your policy, the 
production guarantee or amount of insurance, coverage level, and price 
at which an indemnity will be determined for each unit will be those 
used to calculate your summary of coverage for each crop year.
    (b) You must select the same coverage, catastrophic risk protection 
or additional coverage, and select one level of additional coverage for 
all acreage of the crop in the county unless one of the following 
applies:
    (1) The applicable Crop Provisions allow you the option to 
separately insure individual crop types or varieties. In this case, each 
individual type or variety insured by you will be subject to separate 
administrative fees. For example, if two grape varieties in California 
are insured under the Catastrophic Risk Protection Endorsement and two 
varieties are insured under an additional coverage policy, a separate 
administrative fee will be charged for each of the four varieties. 
Although insurance may be elected by type or variety in these instances, 
failure to insure a type or variety that is of economic significance may 
result in the denial of other farm program benefits unless you execute a 
waiver of any eligibility for emergency crop loss assistance in 
connection with the crop.
    (2) If you have additional coverage for the crop in the county and 
the acreage has been designated as ``high risk'' by FCIC, you will be 
able to obtain a High Risk Land Exclusion Option for the high risk land 
under the additional coverage policy and insure the high risk acreage 
under a separate Catastrophic

[[Page 122]]

Risk Protection Endorsement, provided that the Catastrophic Risk 
Protection Endorsement is obtained from the same insurance provider from 
which the additional coverage was obtained.
    (c) In addition to the price election or amount of insurance 
available on the contract change date, we may provide an additional 
price election or amount of insurance no later than 15 days prior to the 
sales closing date. You must select the additional price election or 
amount of insurance on or before the sales closing date for the insured 
crop. These additional price elections or amounts of insurance will not 
be less than those available on the contract change date. If you elect 
the additional price election or amount of insurance, any claim 
settlement and amount of premium will be based on this amount.
    (d) You may change the coverage level, price election, or amount of 
insurance for the following crop year by giving written notice to us not 
later than the sales closing date for the insured crop. Since the price 
election or amount of insurance may change each year, if you do not 
select a new price election or amount of insurance on or before the 
sales closing date, we will assign a price election or amount of 
insurance which bears the same relationship to the price election 
schedule as the price election or amount of insurance that was in effect 
for the preceding year. (For example: If you selected 100 percent of the 
market price for the previous crop year and you do not select a new 
price election for the current crop year, we will assign 100 percent of 
the market price for the current crop year.)
    (e) You must report production to us for the previous crop year by 
the earlier of the acreage reporting date or 45 days after the 
cancellation date unless otherwise stated in the Special Provisions:
    (1) If you do not provide the required production report, we will 
assign a yield for the previous crop year. The yield assigned by us will 
not be more than 75 percent of the yield used by us to determine your 
coverage for the previous crop year. The production report or assigned 
yield will be used to compute your approved yield for the purpose of 
determining your coverage for the current crop year.
    (2) If you have filed a claim for any crop year, the documents 
signed by you which state the amount of production used to complete the 
claim for indemnity will be the production report for that year unless 
otherwise specified by FCIC.
    (3) Production and acreage for the prior crop year must be reported 
for each proposed optional unit by the production reporting date. If you 
do not provide the information stated above, the optional units will be 
combined into the basic unit.
    (4) Appraisals obtained from only a portion of the acreage in a 
field that remains unharvested after the remainder of the crop within 
the field has been destroyed or put to another use will not be used to 
establish your actual yield unless representative samples are required 
to be left by you in accordance with the Crop Provisions.
    (f) It is your responsibility to accurately report all information 
that is used to determine your approved yield. You must certify to the 
accuracy of this information on your production report.
    (1) If you do not have written verifiable records to support the 
information on your production report, you will receive an assigned 
yield in accordance with section 3(e)(1) and 7 CFR part 400, subpart G 
for those crop years for which you do not have such records.
    (2) If you misreport any material information used to determine your 
approved yield:
    (i) We will correct the unit structure, if necessary; and
    (ii) You will be subject to the provisions regarding misreporting 
contained in section 6(g), unless we correct the information because the 
incorrect information was the result of our error or the error of 
someone from USDA.
    (g) In addition to any consequences in section 3(f), at any time the 
circumstances described below are discovered, your approved yield will 
be adjusted:
    (1) By including an assigned yield determined in accordance with 
section 3(e)(1) and 7 CFR part 400, subpart G, if the actual yield 
reported in the database is excessive for any crop year, as determined 
by FCIC under its procedures, and you do not provide verifiable records 
to support the yield in the database (If there are verifiable records 
for the yield in your database, the yield is significantly different 
from the other yields in the county or your other yields for the crop 
and you cannot prove there is a valid basis to support the differences 
in the yields, the yield will be the average of the yields for the crop 
or the applicable county transitional yield if you have no other yields 
for the crop, and you may be subject to the provisions of section 27);
    (2) By reducing it to an amount consistent with the average of the 
approved yields for other databases for your farming operation with the 
same crop, type, and practice or the county transitional yield, as 
applicable, if:
    (i) The approved APH yield is greater than 115 percent of the 
average of the approved yields of all applicable databases for your 
farming operation that have actual yields in them or it is greater than 
115 percent of the county transitional yield if no applicable databases 
exist for comparison; and

[[Page 123]]

    (ii) The current year's insured acreage (including applicable 
prevented planting acreage) is greater than 400 percent of the average 
number of acres in the database or the acres contained in two or more 
individual years in the database are each less than 10 percent of the 
current year's insurable acreage in the unit (including applicable 
prevented planting acreage); or
    (3) To an amount consistent with the production methods actually 
carried out for the crop year if you use a different production method 
than was previously used and the production method actually carried out 
is likely to result in a yield lower than the average of your previous 
actual yields. The yield will be adjusted based on your other units 
where such production methods were carried out or to the applicable 
county transitional yield for the production methods if other such units 
do not exist. You must notify us of changes in your production methods 
by the acreage reporting date. If you fail to notify us, in addition to 
the reduction of your approved yield described herein, you will be 
considered to have misreported information and you will be subject to 
the consequences in section 6(g). For example, for a non-irrigated unit, 
your yield is based upon acreage of the crop that is watered once prior 
to planting, and the crop is not watered prior to planting for the 
current crop year. Your approved APH yield will be reduced to an amount 
consistent with the actual production history of your other non-
irrigated units where the crop has not been watered prior to planting or 
limited to the non-irrigated transitional yield for the unit if other 
such units do not exist.
    (h) Unless you meet the double cropping requirements contained in 
section 17(f)(4), if you elect to plant a second crop on acreage where 
the first insured crop was prevented from being planted, you will 
receive a yield equal to 60 percent of the approved yield for the first 
insured crop to calculate your average yield for subsequent crop years 
(Not applicable to crops if the APH is not the basis for the insurance 
guarantee). If the unit contains both prevented planting and planted 
acreage of the same crop, the yield for such acreage will be determined 
by:
    (1) Multiplying the number of insured prevented planting acres by 60 
percent of the approved yield for the first insured crop;
    (2) Adding the totals from section 3(h)(1) to the amount of 
appraised or harvested production for all of the insured planted 
acreage; and
    (3) Dividing the total in section 3(h)(2) by the total number of 
acres in the unit.
    (i) Hail and fire coverage may be excluded from the covered causes 
of loss for an insured crop only if you select additional coverage of 
not less than 65 percent of the approved yield indemnified at the 100 
percent price election, or an equivalent coverage as established by 
FCIC, and you have purchased the same or a higher dollar amount of 
coverage for hail and fire from us or any other source.
    (j) The applicable premium rate, or formula to calculate the premium 
rate, and transitional yield will be those contained in the actuarial 
documents except, in the case of high risk land, a written agreement may 
be requested to change such transitional yield or premium rate.

                           4. Contract Changes

    (a) We may change the terms of your coverage under this policy from 
year to year.
    (b) Any changes in policy provisions, amounts of insurance, premium 
rates, program dates, and price elections (except as allowed herein or 
as specified in section 3) can be viewed on the RMA Web site at http://
www.rma.usda.gov/ or a successor Web site not later than the contract 
change date contained in the Crop Provisions. We may only revise this 
information after the contract change date to correct clear errors (For 
example, the price election for corn was announced at $25.00 per bushel 
instead of $2.50 per bushel or the final planting date should be May 10 
but the final planting date in the Special Provisions states August 10).
    (c) After the contract change date, all changes specified in section 
4(b) will also be available upon request from your crop insurance agent. 
You will be provided, in writing, a copy of the changes to the Basic 
Provisions and Crop Provisions and a copy of the Special Provisions not 
later than 30 days prior to the cancellation date for the insured crop. 
Acceptance of the changes will be conclusively presumed in the absence 
of notice from you to change or cancel your insurance coverage.

                              5. [Reserved]

                          6. Report of Acreage

    (a) An annual acreage report must be submitted to us on our form for 
each insured crop in the county on or before the acreage reporting date 
contained in the Special Provisions, except as follows:
    (1) If you insure multiple crops with us that have final planting 
dates on or after August 15 but before December 31, you must submit an 
acreage report for all such crops on or before the latest applicable 
acreage reporting date for such crops; and
    (2) If you insure multiple crops with us that have final planting 
dates on or after December 31 but before August 15, you must submit an 
acreage report for all such crops on or before the latest applicable 
acreage reporting date for such crops.
    (3) Notwithstanding the provisions in sections 6(a) (1) and (2):
    (i) If the Special Provisions designate separate planting periods 
for a crop, you must

[[Page 124]]

submit an acreage report for each planting period on or before the 
acreage reporting date contained in the Special Provisions for the 
planting period; and
    (ii) If planting of the insured crop continues after the final 
planting date or you are prevented from planting during the late 
planting period, the acreage reporting date will be the later of:
    (A) The acreage reporting date contained in the Special Provisions;
    (B) The date determined in accordance with sections (a)(1) or (2); 
or
    (C) Five (5) days after the end of the late planting period for the 
insured crop, if applicable.
    (b) If you do not have a share in an insured crop in the county for 
the crop year, you must submit an acreage report, on or before the 
acreage reporting date, so indicating.
    (c) Your acreage report must include the following information, if 
applicable:
    (1) All acreage of the crop in the county (insurable and not 
insurable) in which you have a share;
    (2) Your share at the time coverage begins;
    (3) The practice;
    (4) The type; and
    (5) The date the insured crop was planted.
    (d) Regarding the ability to revise an acreage report you have 
submitted to us:
    (1) For planted acreage, you cannot revise any information 
pertaining to the planted acreage after the acreage reporting date 
without our consent (Consent may only be provided when no cause of loss 
has occurred; our appraisal has determined that the insured crop will 
produce at least 90 percent of the yield used to determine your 
guarantee or the amount of insurance for the unit (including reported 
and unreported acreage), except when there are unreported units (see 
section 6(f)); the information on the acreage report is clearly 
transposed; you provide adequate evidence that we or someone from USDA 
have committed an error regarding the information on your acreage 
report; or if expressly permitted by the policy);
    (2) For prevented planting acreage reported on the acreage report, 
you cannot revise any information pertaining to the prevented planting 
acreage after the report is initially submitted to us without our 
consent (Consent may only be provided when information on the acreage 
report is clearly transposed or you provide adequate evidence that we or 
someone from USDA have committed an error regarding the information on 
your acreage report);
    (3) For prevented planting acreage not reported on the acreage 
report, you cannot revise your acreage report to add prevented planting 
acreage;
    (4) If you request an acreage measurement prior to the acreage 
reporting date and submit documentation of such request and an acreage 
report with estimated acreage by the acreage reporting date, you must 
provide the measurement to us, we will revise your acreage report if 
there is a discrepancy, and no indemnity, prevented planting payment or 
replant payment will be paid until the acreage measurement has been 
received by us (Failure to provide the measurement to us will result in 
the application of section 6(g) if the estimated acreage is not correct 
and estimated acreage under this section will no longer be accepted for 
any subsequent acreage report);
    (5) If there is an irreconcilable difference between:
    (i) The acreage measured by FSA or a measuring service and our on-
farm measurement, our on-farm measurement will be used; or
    (ii) The acreage measured by a measuring service, other than our on-
farm measurement, and FSA, the FSA measurement will be used; and
    (6) If the acreage report has been revised in accordance with 
section 6(d)(1), (2), (4), or (5), the information on the initial 
acreage report will not be considered misreported for the purposes of 
section 6(g).
    (e) We may elect to determine all premiums and indemnities based on 
the information you submit on the acreage report or upon the factual 
circumstances we determine to have existed, subject to the provisions 
contained in section 6(g).
    (f) If you do not submit an acreage report by the acreage reporting 
date, or if you fail to report all units, we may elect to determine by 
unit the insurable crop acreage, share, type and practice, or to deny 
liability on such units. If we deny liability for the unreported units, 
your share of any production from the unreported units will be 
allocated, for loss purposes only, as production to count to the 
reported units in proportion to the liability on each reported unit. 
However, such production will not be allocated to prevented planting 
acreage or otherwise affect any prevented planting payment.
    (g) You must provide all required reports and you are responsible 
for the accuracy of all information contained in those reports. You 
should verify the information on all such reports prior to submitting 
them to us.
    (1) If you submit information on any report that is different than 
what is determined to be correct and such information results in:
    (i) A lower liability than the actual liability determined, the 
production guarantee or amount of insurance on the unit will be reduced 
to an amount consistent with the reported information (In the event the 
insurable acreage is under-reported for any unit, all production or 
value from insurable acreage in that unit will be considered production 
or value to count in determining the indemnity); or

[[Page 125]]

    (ii) A higher liability than the actual liability determined, the 
information contained in the acreage report will be revised to be 
consistent with the correct information.
    (2) In addition to the other adjustments specified in section 
6(g)(1), if you misreport any information that results in liability 
greater than 110.0 percent or lower than 90.0 percent of the actual 
liability determined for the unit, any indemnity, prevented planting 
payment, or replanting payment will be based on the amount of liability 
determined in accordance with section 6(g)(1)(i) or (ii) and will be 
reduced in an amount proportionate with the amount of liability that is 
misreported in excess of the tolerances stated in this section (For 
example, if the actual liability is determined to be $100.00, but you 
reported liability of $120.00, any indemnity, prevented planting payment 
or replanting payment will be reduced by 10.0 percent ($120.00 / $100.00 
= 1.20, and 1.20 - 1.10 = 0.10)).
    (h) If we discover you have incorrectly reported any information on 
the acreage report for any crop year, you may be required to provide 
documentation in subsequent crop years substantiating your report of 
acreage for those crop years, including, but not limited to, an acreage 
measurement service at your own expense. If the correction of any 
misreported information would affect an indemnity, prevented planting 
payment or replant payment that was paid in a prior crop year, such 
claim will be adjusted and you will be required to repay any overpaid 
amounts.
    (i) Errors in reporting units may be corrected by us at the time of 
adjusting a loss to reduce our liability and to conform to applicable 
unit division guidelines.

                7. Annual Premium and Administrative Fees

    (a) The annual premium is earned and payable at the time coverage 
begins. You will be billed for the premium and administrative fee not 
earlier than the premium billing date specified in the Special 
Provisions.
    (b) Premium or administrative fees owed by you will be offset from 
an indemnity or prevented planting payment due you in accordance with 
section 2(e).
    (c) The annual premium amount is determined, as applicable, by 
either:
    (1) Multiplying the production guarantee per acre times the price 
election, times the premium rate, times the insured acreage, times your 
share at the time coverage begins, and times any premium adjustment 
percentages that may apply; or
    (2) Multiplying the amount of insurance per acre times the premium 
rate, times the insured acreage, times your share at the time coverage 
begins, and times any premium adjustment percentages that may apply.
    (d) The premium will be computed using the price election or amount 
of insurance you elect or that we assign in accordance with section 
3(d). The information needed to determine the premium rate and any 
premium adjustment percentages that may apply are contained in the 
actuarial documents or an approved written agreement.
    (e) In addition to the premium charged:
    (1) You, unless otherwise authorized in 7 CFR part 400, must pay an 
administrative fee each crop year of $30 per crop per county for all 
levels of coverage in excess of catastrophic risk protection.
    (2) The administrative fee must be paid no later than the time that 
premium is due.
    (3) Payment of an administrative fee will not be required if you 
file a bona fide zero acreage report on or before the acreage reporting 
date for the crop. If you falsely file a zero acreage report you may be 
subject to criminal and administrative sanctions.
    (4) The administrative fee will be waived if you request it and:
    (i) You qualify as a limited resource farmer; or
    (ii) You were insured prior to the 2005 crop year or for the 2005 
crop year and your administrative fee was waived for one or more of 
those crop years because you qualified as a limited resource farmer 
under a policy definition previously in effect, and you remain qualified 
as a limited resource farmer under the definition that was in effect at 
the time the administrative fee was waived.
    (5)-(6) [Reserved]
    (7) Failure to pay the administrative fees when due may make you 
ineligible for certain other USDA benefits.
    (f) If the amount of premium (gross premium less premium subsidy 
paid on your behalf by FCIC) and administrative fee you are required to 
pay for any acreage exceeds the liability for the acreage, coverage for 
those acres will not be provided (no premium or administrative fee will 
be due and no indemnity will be paid for such acreage).

                             8. Insured Crop

    (a) The insured crop will be that shown on your accepted application 
and as specified in the Crop Provisions or Special Provisions and must 
be grown on insurable acreage.
    (b) A crop which will NOT be insured will include, but will not be 
limited to, any crop:
    (1) That is not grown on planted acreage (except for the purposes of 
prevented planting coverage), or that is a type, class or variety or 
where the conditions under which the crop is planted are not generally 
recognized for the area (For example, where agricultural experts 
determine that planting a non-irrigated corn crop after a failed small 
grain crop on the same acreage in the same crop year is not appropriate 
for the area);
    (2) For which the information necessary for insurance (price 
election, premium rate,

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etc.) is not included in the actuarial documents, unless such 
information is provided by a written agreement;
    (3) That is a volunteer crop;
    (4) Planted following the same crop on the same acreage and the 
first planting of the crop has been harvested in the same crop year 
unless specifically permitted by the Crop Provisions or the Special 
Provisions (For example, the second planting of grain sorghum would not 
be insurable if grain sorghum had already been planted and harvested on 
the same acreage during the crop year);
    (5) That is planted for the development or production of hybrid seed 
or for experimental purposes, unless permitted by the Crop Provisions or 
by written agreement to insure such crop; or
    (6) That is used solely for wildlife protection or management. If 
the lease states that specific acreage must remain unharvested, only 
that acreage is uninsurable. If the lease specifies that a percentage of 
the crop must be left unharvested, your share will be reduced by such 
percentage.
    (c) Although certain policy documents may state that a crop type, 
class, variety or practice is not insurable, it does not mean all other 
crop types, classes, varieties or practices are insurable. To be 
insurable the crop type, class, variety or practice must meet all the 
conditions in this section.

                          9. Insurable Acreage

    (a) Acreage planted to the insured crop in which you have a share is 
insurable except acreage:
    (1) That has not been planted and harvested or insured (including 
insured acreage that was prevented from being planted) in at least one 
of the three previous crop years unless you can show that:
    (i) Such acreage was not planted:
    (A) In at least two of the previous three crop years to comply with 
any other USDA program;
    (B) Because of crop rotation, (e.g., corn, soybeans, alfalfa; and 
the alfalfa remained for four years before the acreage was planted to 
corn again); or
    (C) Because a perennial tree, vine, or bush crop was grown on the 
acreage;
    (ii) The Crop Provisions or a written agreement specifically allow 
insurance for such acreage; or
    (iii) Such acreage constitutes five percent or less of the insured 
planted acreage in the unit;
    (2) That has been strip-mined, unless otherwise approved by written 
agreement, or unless an agricultural commodity other than a cover, hay, 
or forage crop (except corn silage), has been harvested from the acreage 
for at least five crop years after the strip-mined land was reclaimed;
    (3) For which the actuarial documents do not provide the information 
necessary to determine the premium rate, unless insurance is allowed by 
a written agreement;
    (4) On which the insured crop is damaged and it is practical to 
replant the insured crop, but the insured crop is not replanted;
    (5) That is interplanted, unless allowed by the Crop Provisions;
    (6) That is otherwise restricted by the Crop Provisions or Special 
Provisions;
    (7) That is planted in any manner other than as specified in the 
policy provisions for the crop unless a written agreement to such 
planting exists;
    (8) Of a second crop, if you elect not to insure such acreage when 
an indemnity for a first insured crop may be subject to reduction in 
accordance with the provisions of section 15 and you intend to collect 
an indemnity payment that is equal to 100 percent of the insurable loss 
for the first insured crop acreage. This election must be made on a 
first insured crop unit basis. For example, if the first insured crop 
unit contains 40 planted acres that may be subject to an indemnity 
reduction, then no second crop can be insured on any of the 40 acres. In 
this case:
    (i) If the first insured crop is insured under this policy, you must 
provide written notice to us of your election not to insure acreage of a 
second crop at the time the first insured crop acreage is released by us 
(if no acreage in the first insured crop unit is released, this election 
must be made by the earlier of the acreage reporting date for the second 
crop or when you sign the claim for indemnity for the first insured 
crop) or, if the first insured crop is insured under the Group Risk 
Protection Plan of Insurance (7 CFR part 407), this election must be 
made before the second crop insured under this policy is planted, and if 
you fail to provide such notice, the second crop acreage will be insured 
in accordance with the applicable policy provisions and you must repay 
any overpaid indemnity for the first insured crop;
    (ii) In the event a second crop is planted and insured with a 
different insurance provider, or planted and insured by a different 
person, you must provide written notice to each insurance provider that 
a second crop was planted on acreage on which you had a first insured 
crop; and
    (iii) You must report the crop acreage that will not be insured on 
the applicable acreage report; or
    (9) Of a crop planted following a second crop or following an 
insured crop that is prevented from being planted after a first insured 
crop, unless it is a practice that is generally recognized by 
agricultural experts or the organic agricultural industry for the area 
to plant three or more crops for harvest on the same acreage in the same 
crop year, and additional coverage insurance provided under the 
authority of the Act is offered for

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the third or subsequent crop in the same crop year. Insurance will only 
be provided for a third or subsequent crop as follows:
    (i) You must provide records acceptable to us that show:
    (A) You have produced and harvested the insured crop following two 
other crops harvested on the same acreage in the same crop year in at 
least two of the last four years in which you produced the insured crop; 
or
    (B) The applicable acreage has had three or more crops produced and 
harvested on it in at least two of the last four years in which the 
insured crop was grown on it; and
    (ii) The amount of insurable acreage will not exceed 100 percent of 
the greatest number of acres for which you provide the records required 
in section 9(a)(9)(i)(A) or (B).
    (b) If insurance is provided for an irrigated practice, you must 
report as irrigated only that acreage for which you have adequate 
facilities and adequate water, or the reasonable expectation of 
receiving adequate water at the time coverage begins, to carry out a 
good irrigation practice. If you knew or had reason to know that your 
water may be reduced before coverage begins, no reasonable expectation 
exists.
    (c) Notwithstanding the provisions in section 8(b)(2), if acreage is 
irrigated and we do not provide a premium rate for an irrigated 
practice, you may either report and insure the irrigated acreage as 
``non-irrigated,'' or report the irrigated acreage as not insured.
    (d) We may restrict the amount of acreage that we will insure to the 
amount allowed under any acreage limitation program established by the 
United States Department of Agriculture if we notify you of that 
restriction prior to the sales closing date.

                            10. Share Insured

    (a) Insurance will attach only to the share of the person completing 
the application and will not extend to any other person having a share 
in the crop unless the application clearly states that:
    (1) The insurance is requested for an entity such as a partnership 
or a joint venture; or
    (2) You as landlord will insure your tenant's share, or you as 
tenant will insure your landlord's share. In this event, you must 
provide evidence of the other party's approval (lease, power of 
attorney, etc.). Such evidence will be retained by us. You also must 
clearly set forth the percentage shares of each person on the acreage 
report. For each landlord or tenant that is an individual, you must 
report the landlord's or tenant's social security number. For each 
landlord or tenant that is a person other than an individual or for a 
trust administered by the Bureau of Indian Affairs, you must report each 
landlord's or tenant's social security number, employer identification 
number, or other identification number assigned for the purposes of this 
policy.
    (b) We may consider any acreage or interest reported by or for your 
spouse, child or any member of your household to be included in your 
share.
    (c) Acreage rented for a percentage of the crop, or a lease 
containing provisions for both a minimum payment (such as a specified 
amount of cash, bushels, pounds, etc.,) and a crop share will be 
considered a crop share lease.
    (d) Acreage rented for cash, or a lease containing provisions for 
either a minimum payment or a crop share (such as a 50/50 share or 
$100.00 per acre, whichever is greater) will be considered a cash lease.

                          11. Insurance Period

    (a) Except for prevented planting coverage (see section 17), 
coverage begins on each unit or part of a unit at the later of:
    (1) The date we accept your application (For the purposes of this 
paragraph, the date of acceptance is the date that you submit a properly 
executed application in accordance with section 2);
    (2) The date the insured crop is planted; or
    (3) The calendar date contained in the Crop Provisions for the 
beginning of the insurance period.
    (b) Coverage ends at the earliest of:
    (1) Total destruction of the insured crop on the unit;
    (2) Harvest of the unit;
    (3) Final adjustment of a loss on a unit;
    (4) The calendar date contained in the Crop Provisions for the end 
of the insurance period;
    (5) Abandonment of the crop on the unit; or
    (6) As otherwise specified in the Crop Provisions.

                           12. Causes of Loss

    The insurance provided is against only unavoidable loss directly 
caused by specific causes of loss contained in the Crop Provisions. All 
specified causes of loss, except where the Crop Provisions specifically 
cover loss of revenue due to a reduced price in the marketplace, must be 
due to a naturally occurring event. All other causes of loss, including 
but not limited to the following, are NOT covered:
    (a) Negligence, mismanagement, or wrongdoing by you, any member of 
your family or household, your tenants, or employees;
    (b) Failure to follow recognized good farming practices for the 
insured crop;
    (c) Water that is contained by or within structures that are 
designed to contain a specific amount of water, such as dams, locks or 
reservoir projects, etc., on any acreage when such water stays within 
the designed limits (For example, a dam is designed to contain water to 
an elevation of

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1,200 feet but you plant a crop on acreage at an elevation of 1,100 
feet. A storm causes the water behind the dam to rise to an elevation of 
1,200 feet. Under such circumstances, the resulting damage would not be 
caused by an insurable cause of loss. However, if you planted on acreage 
that was above 1,200 feet elevation, any damage caused by water that 
exceeded that elevation would be caused by an insurable cause of loss);
    (d) Failure or breakdown of the irrigation equipment or facilities 
unless the failure or breakdown is due to a cause of loss specified in 
the Crop Provisions (If damage is due to an insured cause, you must make 
all reasonable efforts to restore the equipment or facilities to proper 
working order within a reasonable amount of time unless we determine it 
is not practical to do so. Cost will not be considered when determining 
whether it is practical to restore the equipment or facilities);
    (e) Failure to carry out a good irrigation practice for the insured 
crop, if applicable; or
    (f) Any cause of loss that results in damage that is not evident or 
would not have been evident during the insurance period, including, but 
not limited to, damage that only becomes evident after the end of the 
insurance period unless expressly authorized in the Crop Provisions. 
Even though we may not inspect the damaged crop until after the end of 
the insurance period, damage due to insured causes that would have been 
evident during the insurance period will be covered.

                         13. Replanting Payment

    (a) If allowed by the Crop Provisions, a replanting payment may be 
made on an insured crop replanted after we have given consent and the 
acreage replanted is at least the lesser of 20 acres or 20 percent of 
the insured planted acreage for the unit (as determined on the final 
planting date or within the late planting period if a late planting 
period is applicable).
    (b) No replanting payment will be made on acreage:
    (1) On which our appraisal establishes that production will exceed 
the level set by the Crop Provisions;
    (2) Initially planted prior to the earliest planting date 
established by the Special Provisions; or
    (3) On which one replanting payment has already been allowed for the 
crop year.
    (c) The replanting payment per acre will be your actual cost for 
replanting, but will not exceed the amount determined in accordance with 
the Crop Provisions.
    (d) No replanting payment will be paid if we determine it is not 
practical to replant.

 14. Duties in the Event of Damage, Loss, Abandonment, Destruction, or 
                   Alternative Use of Crop or Acreage

    Your Duties--
    (a) In case of damage to any insured crop you must:
    (1) Protect the crop from further damage by providing sufficient 
care;
    (2) Give us notice within 72 hours of your initial discovery of 
damage (but not later than 15 days after the end of the insurance 
period), by unit, for each insured crop;
    (3) If representative samples are required by the Crop Provisions, 
leave representative samples intact of the unharvested crop if you 
report damage less than 15 days before the time you begin harvest or 
during harvest of the damaged unit (The samples must be left intact 
until we inspect them or until 15 days after completion of harvest on 
the unit, whichever is earlier. Unless otherwise specified in the Crop 
Provisions or Special Provisions, the samples of the crop in each field 
in the unit must be 10 feet wide and extend the entire length of the 
row, if the crop is planted in rows, or if the crop is not planted in 
rows, the longest dimension of the field. The period to retain 
representative samples may be extended if it is necessary to accurately 
determine the loss. You will be notified in writing of any such 
extension); and
    (4) Cooperate with us in the investigation or settlement of the 
claim, and, as often as we reasonably require:
    (i) Show us the damaged crop;
    (ii) Allow us to remove samples of the insured crop; and
    (iii) Provide us with records and documents we request and permit us 
to make copies.
    (b) You must obtain consent from us before, and notify us after you:
    (1) Destroy any of the insured crop that is not harvested;
    (2) Put the insured crop to an alternative use;
    (3) Put the acreage to another use; or
    (4) Abandon any portion of the insured crop. We will not give 
consent for any of the actions in sections 14(b) (1) through (4) if it 
is practical to replant the crop or until we have made an appraisal of 
the potential production of the crop.
    (c) In addition to complying with the notice requirements, you must 
submit a claim for indemnity declaring the amount of your loss not later 
than 60 days after the end of the insurance period unless you request an 
extension in writing and we agree to such extension. Extensions will 
only be granted if the amount of the loss cannot be determined within 
such time period because the information needed to determine the amount 
of the loss is not available. The claim for indemnity must include all 
information we require to settle the claim. Failure to submit a

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claim or provide the required information will result in no indemnity, 
prevented planting payment or replant payment (Even though no indemnity 
or other payment is due, you will still be required to pay the premium 
due under the policy for the unit).
    (d) You must:
    (1) Provide a complete harvesting and marketing record of each 
insured crop by unit including separate records showing the same 
information for production from any acreage not insured. In addition, if 
you insure any acreage that may be subject to an indemnity reduction as 
specified in section 15(e)(2) (for example, you planted a second crop on 
acreage where a first insured crop had an insurable loss and you do not 
qualify for the double cropping exemption), you must provide separate 
records of production from such acreage for all insured crops planted on 
the acreage. For example, if you have an insurable loss on 10 acres of 
wheat and subsequently plant cotton on the same 10 acres, you must 
provide records of the wheat and cotton production on the 10 acres 
separate from any other wheat and cotton production that may be planted 
in the same unit. If you fail to provide such separate records, we will 
allocate the production of each crop to the acreage in proportion to our 
liability for the acreage; and
    (2) Upon our request, or that of any USDA employee authorized to 
conduct investigations of the crop insurance program, submit to an 
examination under oath.
    (e) You must establish the total production or value received for 
the insured crop on the unit, that any loss of production or value 
occurred during the insurance period, and that the loss of production or 
value was directly caused by one or more of the insured causes specified 
in the Crop Provisions.
    (f) In the event you are prevented from planting an insured crop 
which has prevented planting coverage, you must notify us within 72 
hours after:
    (1) The final planting date, if you do not intend to plant the 
insured crop during the late planting period or if a late planting 
period is not applicable; or
    (2) You determine you will not be able to plant the insured crop 
within any applicable late planting period.
    (g) All notices required in this section that must be received by us 
within 72 hours may be made by telephone or in person to your crop 
insurance agent but must be confirmed in writing within 15 days.
    (h) It is your duty to prove you have complied with all provisions 
of this policy.
    (1) Failure to comply with the requirements of section 14(c) (Your 
Duties) will result in denial of your claim for indemnity or prevented 
planting or replant payment for the acreage for which the failure 
occurred. Failure to comply with all other requirements of this section 
will result in denial of your claim for indemnity or prevented planting 
or replant payment for the acreage for which the failure occurred, 
unless we still have the ability to accurately adjust the loss (Even 
though no indemnity or other payment is due, you will still be required 
to pay the premium due under the policy for the unit); and
    (2) Failure to comply with other sections of the policy will subject 
you to the consequences specified in those sections.
    Our Duties--
    (a) If you have complied with all the policy provisions, we will pay 
your loss within 30 days after the later of:
    (1) We reach agreement with you;
    (2) Completion of arbitration, reconsideration of determinations 
regarding good farming practices or any other appeal that results in an 
award in your favor, unless we exercise our right to appeal such 
decision;
    (3) Completion of any investigation by USDA, if applicable, of your 
current or any past claim for indemnity if no evidence of wrongdoing has 
been found (If any evidence of wrongdoing has been discovered, the 
amount of any indemnity, prevented planting or replant overpayment as a 
result of such wrongdoing may be offset from any indemnity or prevented 
planting payment owed to you); or
    (4) The entry of a final judgment by a court of competent 
jurisdiction.
    (b) In the event we are unable to pay your loss within 30 days, we 
will give you notice of our intentions within the 30-day period.
    (c) We may defer the adjustment of a loss until the amount of loss 
can be accurately determined. We will not pay for additional damage 
resulting from your failure to provide sufficient care for the crop 
during the deferral period.
    (d) We recognize and apply the loss adjustment procedures 
established or approved by the Federal Crop Insurance Corporation.

    15. Production Included in Determining an Indemnity and Payment 
                               Reductions.

    (a) The total production to be counted for a unit will include all 
production determined in accordance with the policy.
    (b) Appraised production will be used to calculate your claim if you 
are not going to harvest your acreage. Such appraisals may be conducted 
after the end of the insurance period. If you harvest the crop after the 
crop has been appraised:
    (1) You must provide us with the amount of harvested production; and
    (2) If the harvested production exceeds the appraised production, 
claims will be adjusted using the harvested production, and you will be 
required to repay any overpaid indemnity; or
    (3) If the harvested production is less than the appraised 
production, and:

[[Page 130]]

    (i) You harvest after the end of the insurance period, your 
appraised production will be used to adjust the loss unless you can 
prove that no additional causes of loss or deterioration of the crop 
occurred after the end of the insurance period; or
    (ii) You harvest before the end of the insurance period, your 
harvested production will be used to adjust the loss.
    (c) If you elect to exclude hail and fire as insured causes of loss 
and the insured crop is damaged by hail or fire, appraisals will be made 
as described in the applicable Form FCI-78 ``Request To Exclude Hail and 
Fire'' or a form containing the same terms approved by the Federal Crop 
Insurance Corporation.
    (d) The amount of an indemnity that may be determined under the 
applicable provisions of your policy may be reduced by an amount, 
determined in accordance with the Crop Provisions or Special Provisions, 
to reflect out-of-pocket expenses that were not incurred by you as a 
result of not planting, caring for, or harvesting the crop. Indemnities 
paid for acreage prevented from being planted will be based on a reduced 
guarantee as provided for in the policy and will not be further reduced 
to reflect expenses not incurred.
    (e) With respect to acreage where you have suffered an insurable 
loss to planted acreage of your first insured crop in the crop year, 
except in the case of double cropping described in section 15(h):
    (1) You may elect to not plant or to plant and not insure a second 
crop on the same acreage for harvest in the same crop year and collect 
an indemnity payment that is equal to 100 percent of the insurable loss 
for the first insured crop; or
    (2) You may elect to plant and insure a second crop on the same 
acreage for harvest in the same crop year (you will pay the full premium 
and, if there is an insurable loss to the second crop, receive the full 
amount of indemnity that may be due for the second crop, regardless of 
whether there is a subsequent crop planted on the same acreage) and:
    (i) Collect an indemnity payment that is 35 percent of the insurable 
loss for the first insured crop;
    (ii) Be responsible for premium that is 35 percent of the premium 
that you would otherwise owe for the first insured crop; and
    (iii) If the second crop does not suffer an insurable loss:
    (A) Collect an indemnity payment for the other 65 percent of 
insurable loss that was not previously paid under section 15(e)(2)(i); 
and
    (B) Be responsible for the remainder of the premium for the first 
insured crop that you did not pay under section 15(e)(2)(ii).
    (f) With respect to acreage where you were prevented from planting 
the first insured crop in the crop year, except in the case of double 
cropping described in section 15(h):
    (1) If a second crop is not planted on the same acreage for harvest 
in the same crop year, you may collect a prevented planting payment that 
is equal to 100 percent of the prevented planting payment for the 
acreage for the first insured crop; or
    (2) If a second crop is planted on the same acreage for harvest in 
the same crop year (you will pay the full premium and, if there is an 
insurable loss to the second crop, receive the full amount of indemnity 
that may be due for the second crop, regardless of whether there is a 
subsequent crop planted on the same acreage) and:
    (i) Provided the second crop is not planted on or before the final 
planting date or during the late planting period (as applicable) for the 
first insured crop, you may collect a prevented planting payment that is 
35 percent of the prevented planting payment for the first insured crop; 
and
    (ii) Be responsible for premium that is 35 percent of the premium 
that you would otherwise owe for the first insured crop.
    (g) The reduction in the amount of indemnity or prevented planting 
payment and premium specified in sections 15(e) and 15(f), as 
applicable, will apply:
    (1) Notwithstanding the priority contained in the Agreement to 
Insure section, which states that the Crop Provisions have priority over 
the Basic Provisions when a conflict exists, to any premium owed or 
indemnity or prevented planting payment made in accordance with the Crop 
Provisions, and any applicable endorsement.
    (2) Even if another person plants the second crop on any acreage 
where the first insured crop was planted or was prevented from being 
planted, as applicable.
    (3) For prevented planting only:
    (i) If a volunteer crop or cover crop is hayed or grazed from the 
same acreage, after the late planting period (or after the final 
planting date if a late planting period is not applicable) for the first 
insured crop in the same crop year, or is otherwise harvested anytime 
after the late planting period (or after the final planting date if a 
late planting period is not applicable); or
    (ii) If you receive cash rent for any acreage on which you were 
prevented from planting.
    (h) You may receive a full indemnity, or a full prevented planting 
payment for a first insured crop when a second crop is planted on the 
same acreage in the same crop year, regardless of whether or not the 
second crop is insured or sustains an insurable loss, if each of the 
following conditions are met:
    (1) It is a practice that is generally recognized by agricultural 
experts or the organic agricultural industry for the area to plant two 
or more crops for harvest in the same crop year;

[[Page 131]]

    (2) The second or more crops are customarily planted after the first 
insured crop for harvest on the same acreage in the same crop year in 
the area;
    (3) Additional coverage insurance offered under the authority of the 
Act is available in the county on the two or more crops that are double 
cropped;
    (4) You provide records acceptable to us of acreage and production 
that show you have double cropped acreage in at least two of the last 
four crop years in which the first insured crop was planted, or that 
show the applicable acreage was double cropped in at least two of the 
last four crop years in which the first insured crop was grown on it; 
and
    (5) In the case of prevented planting, the second crop is not 
planted on or prior to the final planting date or, if applicable, prior 
to the end of the late planting period for the first insured crop.
    (i) The receipt of a full indemnity or prevented planting payment on 
both crops that are double cropped is limited to the number of acres for 
which you can demonstrate you have double cropped or that have been 
historically double cropped as specified in section 15(h).
    (j) If any Federal or State agency requires destruction of any 
insured crop or crop production, as applicable, because it contains 
levels of a substance, or has a condition, that is injurious to human or 
animal health in excess of the maximum amounts allowed by the Food and 
Drug Administration, other public health organizations of the United 
States or an agency of the applicable State, you must destroy the 
insured crop or crop production, as applicable, and certify that such 
insured crop or crop production has been destroyed prior to receiving an 
indemnity payment. Failure to destroy the insured crop or crop 
production, as applicable, will result in you having to repay any 
indemnity paid and you may be subject to administrative sanctions in 
accordance with section 515(h) of the Act and 7 CFR part 400, subpart R, 
and any applicable civil or criminal sanctions.

                            16. Late Planting

    Unless limited by the Crop Provisions, insurance will be provided 
for acreage planted to the insured crop after the final planting date in 
accordance with the following:
    (a) The production guarantee or amount of insurance for each acre 
planted to the insured crop during the late planting period will be 
reduced by 1 percent per day for each day planted after the final 
planting date.
    (b) Acreage planted after the late planting period (or after the 
final planting date for crops that do not have a late planting period) 
may be insured as follows:
    (1) The production guarantee or amount of insurance for each acre 
planted as specified in this subsection will be determined by 
multiplying the production guarantee or amount of insurance that is 
provided for acreage of the insured crop that is timely planted by the 
prevented planting coverage level percentage you elected, or that is 
contained in the Crop Provisions if you did not elect a prevented 
planting coverage level percentage;
    (2) Planting on such acreage must have been prevented by the final 
planting date (or during the late planting period, if applicable) by an 
insurable cause occurring within the insurance period for prevented 
planting coverage; and
    (3) All production from insured acreage as specified in this section 
will be included as production to count for the unit.
    (c) The premium amount for insurable acreage specified in this 
section will be the same as that for timely planted acreage. If the 
amount of premium you are required to pay (gross premium less our 
subsidy) for such acreage exceeds the liability, coverage for those 
acres will not be provided (no premium will be due and no indemnity will 
be paid).
    (d) Any acreage on which an insured cause of loss is a material 
factor in preventing completion of planting, as specified in the 
definition of ``planted acreage'' (e.g., seed is broadcast on the soil 
surface but cannot be incorporated) will be considered as acreage 
planted after the final planting date and the production guarantee will 
be calculated in accordance with section 16(b)(1).

                         17. Prevented Planting

    (a) Unless limited by the policy provisions, a prevented planting 
payment may be made to you for eligible acreage if:
    (1) You were prevented from planting the insured crop (Failure to 
plant when other producers in the area were planting will result in the 
denial of the prevented planting claim) by an insured cause that occurs:
    (i) On or after the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on or after the sales closing 
date for the previous crop year for the insured crop in the county, 
provided insurance has been in force continuously since that date. 
Cancellation for the purpose of transferring the policy to a different 
insurance provider for the subsequent crop year will not be considered a 
break in continuity for the purpose of the preceding sentence;
    (2) You include any acreage of the insured crop that was prevented 
from being planted on your acreage report; and
    (3) You did not plant the insured crop during or after the late 
planting period. If such acreage was planted to the insured crop during 
or after the late planting period, it is covered under the late planting 
provisions.

[[Page 132]]

    (b) The actuarial documents may contain additional levels of 
prevented planting coverage that you may purchase for the insured crop:
    (1) Such purchase must be made on or before the sales closing date.
    (2) If you do not purchase one of those additional levels by the 
sales closing date, you will receive the prevented planting coverage 
specified in the Crop Provisions.
    (3) If you have a Catastrophic Risk Protection Endorsement for any 
crop, the additional levels of prevented planting coverage will not be 
available for that crop.
    (4) You may not increase your elected or assigned prevented planting 
coverage level for any crop year if a cause of loss that will or could 
prevent planting is evident prior to the time you wish to change your 
prevented planting coverage level.
    (c) The premium amount for acreage that is prevented from being 
planted will be the same as that for timely planted acreage except as 
specified in section 15(f). If the amount of premium you are required to 
pay (gross premium less our subsidy) for acreage that is prevented from 
being planted exceeds the liability on such acreage, coverage for those 
acres will not be provided (no premium will be due and no indemnity will 
be paid for such acreage).
    (d) Drought or failure of the irrigation water supply will be 
considered to be an insurable cause of loss for the purposes of 
prevented planting only if on the final planting date (or within the 
late planting period if you elect to try to plant the crop):
    (1) For non-irrigated acreage, the area that is prevented from being 
planted has insufficient soil moisture for germination of seed or 
progress toward crop maturity due to a prolonged period of dry weather. 
Prolonged precipitation deficiencies must be verifiable using 
information collected by sources whose business it is to record and 
study the weather, including, but not limited to, local weather 
reporting stations of the National Weather Service; or
    (2) For irrigated acreage, there is not a reasonable expectation of 
having adequate water to carry out an irrigated practice. If you knew or 
had reason to know that your water is reduced before the final planting 
date, no reasonable expectation existed.
    (e) The maximum number of acres that may be eligible for a prevented 
planting payment for any crop will be determined as follows:
    (1) The total number of acres eligible for prevented planting 
coverage for all crops cannot exceed the number of acres of cropland in 
your farming operation for the crop year, unless you are eligible for 
prevented planting coverage on double cropped acreage in accordance with 
section 17(f) (4). The eligible acres for each insured crop will be 
determined in accordance with the following table.

------------------------------------------------------------------------
                                                     Eligible acres if,
                               Eligible acres if,   in any of the 4 most
                              in any of the 4 most   recent crop years,
                               recent crop years,   you have not planted
                              you have planted any     any crop in the
                               crop in the county     county for which
        Type of crop           for which prevented   prevented planting
                               planting insurance       insurance was
                                was available or      available or have
                                 have received a       not received a
                               prevented planting    prevented planting
                               insurance guarantee   insurance guarantee
------------------------------------------------------------------------
(i) The crop is not required  (A) The maximum       (B) The number of
 to be contracted with a       number of acres       acres specified on
 processor to be insured.      certified for APH     your intended
                               purposes, or          acreage report
                               insured acres         which is submitted
                               reported, for the     to us by the sales
                               crop in any one of    closing date for
                               the 4 most recent     all crops you
                               crop years (not       insure for the crop
                               including reported    year and that is
                               prevented planting    accepted by us. The
                               acreage that was      total number of
                               planted to a second   acres listed may
                               crop unless you       not exceed the
                               meet the double       number of acres of
                               cropping              cropland in your
                               requirements in       farming operation
                               section 17(f)(4)).    at the time you
                               The number of acres   submit the intended
                               determined above      acreage report. The
                               for a crop may be     number of acres
                               increased by          determined above
                               multiplying it by     for a crop may only
                               the ratio of the      be increased by
                               total cropland        multiplying it by
                               acres that you are    the ratio of the
                               farming this year     total cropland
                               (if greater) to the   acres that you are
                               total cropland        farming this year
                               acres that you        (if greater) to the
                               farmed in the         number of acres
                               previous year,        listed on your
                               provided that you     intended acreage
                               submit proof to us    report, if you meet
                               that for the          the conditions
                               current crop year     stated in section
                               you have purchased    17(e)(1)(i)(A).
                               or leased
                               additional land or
                               that acreage will
                               be released from
                               any USDA program
                               which prohibits
                               harvest of a crop.
                               Such acreage must
                               have been
                               purchased, leased,
                               or released from
                               the USDA program,
                               in time to plant it
                               for the current
                               crop year using
                               good farming
                               practices. No cause
                               of loss that would
                               prevent planting
                               may be evident at
                               the time you lease
                               the acreage (except
                               acreage you leased
                               the previous year
                               and continue to
                               lease in the
                               current crop year);
                               you buy the
                               acreage; the
                               acreage is released
                               from a USDA program
                               which prohibits
                               harvest of a crop;
                               you request a
                               written agreement
                               to insure the
                               acreage; or you
                               otherwise acquire
                               the acreage (such
                               as inherited or
                               gifted acreage)..

[[Page 133]]

 
(ii)The crop must be          (A) The number of     (B) The number of
 contracted with a processor   acres of the crop     acres of the crop
 to be insured.                specified in the      as determined in
                               processor contract,   section
                               if the contract       17(e)(1)(ii)(A).
                               specifies a number
                               of acres contracted
                               for the crop year;
                               or the result of
                               dividing the
                               quantity of
                               production stated
                               in the processor
                               contract by your
                               approved yield, if
                               the processor
                               contract specifies
                               a quantity of
                               production that
                               will be accepted.
                               If a minimum number
                               of acres or amount
                               of production is
                               specified in the
                               processor contract,
                               this amount will be
                               used to determine
                               the eligible acres.
                               If a processor
                               cancels or does not
                               provide contracts,
                               or reduces the
                               contracted acreage
                               or production from
                               what would have
                               otherwise been
                               allowed, solely
                               because the acreage
                               was prevented from
                               being planted due
                               to an insured cause
                               of loss, we may
                               elect to determine
                               the number of acres
                               eligible based on
                               the number of acres
                               or amount of
                               production you had
                               contracted in the
                               county in the
                               previous crop year.
                               If you did not have
                               a processor
                               contract in place
                               for the previous
                               crop year, you will
                               not have any
                               eligible prevented
                               planting acreage
                               for the applicable
                               processor crop. The
                               total eligible
                               prevented planting
                               acres in all
                               counties cannot
                               exceed the total
                               number of acres or
                               amount of
                               production
                               contracted in all
                               counties in the
                               previous crop year.
                               If the applicable
                               crop provisions
                               require that the
                               price election be
                               based on a contract
                               price, and a
                               contract is not in
                               force for the
                               current year, the
                               price election may
                               be based on the
                               contract price in
                               place for the
                               previous crop year..
------------------------------------------------------------------------

    (2) Any eligible acreage determined in accordance with the table 
contained in section 17(e)(1) will be reduced by subtracting the number 
of acres of the crop (insured and uninsured) that are timely and late 
planted, including acreage specified in section 16(b).
    (f) Regardless of the number of eligible acres determined in section 
17(e), prevented planting coverage will not be provided for any acreage:
    (1) That does not constitute at least 20 acres or 20 percent of the 
insurable crop acreage in the unit, whichever is less, and any prevented 
planting acreage within a field that contains planted acreage will be 
considered to be acreage of the same crop, type, and practice that is 
planted in the field except that the prevented planting acreage may be 
considered to be acreage of a crop, type, and practice other than that 
which is planted in the field if:
    (i) The acreage that was prevented from being planted constitutes at 
least 20 acres or 20 percent of the total insurable acreage in the field 
and you produced both crops, crop types, or followed both practices in 
the same field in the same crop year within any one of the four most 
recent crop years;
    (ii) You were prevented from planting a first insured crop and you 
planted a second crop in the field (There can only be one first insured 
crop in a field unless the requirements in section 17(f)(1)(i) or (iii) 
are met); or
    (iii) The insured crop planted in the field would not have been 
planted on the remaining prevented planting acreage (For example, where 
rotation requirements would not be met or you already planted the total 
number of acres specified in the processor contract);
    (2) For which the actuarial documents do not provide the information 
needed to determine a premium rate unless a written agreement designates 
such premium rate;
    (3) Used for conservation purposes, intended to be left unplanted 
under any program administered by the USDA or other government agency, 
or required to be left unharvested under the terms of the lease or any 
other agreement (The number of acres eligible for prevented planting 
will be limited to the number of acres specified in the lease for which 
you are required to pay either cash or share rent);
    (4) On which the insured crop is prevented from being planted, if 
you or any other person receives a prevented planting payment for any 
crop for the same acreage in the same crop year (It is your 
responsibility to

[[Page 134]]

determine whether a prevented planting payment had previously been made 
for the crop year on the acreage for which you are now claiming a 
prevented planting payment and report such information to us before any 
prevented planting payment can be made), excluding share arrangements, 
unless:
    (5) On which the insured crop is prevented from being planted, if:
    (i) Any crop is planted within or prior to the late planting period 
or on or prior to the final planting date if no late planting period is 
applicable, unless:
    (A) You meet the double cropping requirements in section 17(f)(4);
    (B) The crop planted was a cover crop; or
    (C) No benefit, including any benefit under any USDA program, was 
derived from the crop; or
    (ii) Any volunteer or cover crop is hayed, grazed or otherwise 
harvested within or prior to the late planting period or on or prior to 
the final planting date if no late planting period is applicable;
    (6) For which planting history or conservation plans indicate that 
the acreage would remain fallow for crop rotation purposes or on which 
any pasture or other forage crop is in place on the acreage during the 
time that planting of the insured crop generally occurs in the area;
    (7) That exceeds the number of acres eligible for a prevented 
planting payment;
    (8) That exceeds the number of eligible acres physically available 
for planting;
    (9) For which you cannot provide proof that you had the inputs 
available to plant and produce a crop with the expectation of at least 
producing the yield used to determine the production guarantee or amount 
of insurance (Evidence that you have previously planted the crop on the 
unit will be considered adequate proof unless your planting practices or 
rotational requirements show that the acreage would have remained fallow 
or been planted to another crop);
    (10) Based on an irrigated practice production guarantee or amount 
of insurance unless adequate irrigation facilities were in place to 
carry out an irrigated practice on the acreage prior to the insured 
cause of loss that prevented you from planting. Acreage with an 
irrigated practice production guarantee will be limited to the number of 
acres allowed for that practice under sections 17(e) and (f);
    (11) Based on a crop type that you did not plant, or did not receive 
a prevented planting insurance guarantee for, in at least one of the 
four most recent crop years. Types for which separate price elections, 
amounts of insurance, or production guarantees are available must be 
included in your APH database in at least one of the four most recent 
crop years, or crops that do not require yield certification (crops for 
which the insurance guarantee is not based on APH) must be reported on 
your acreage report in at least one of the four most recent crop years 
except as allowed in section 17(e)(1)(i)(B). We will limit prevented 
planting payments based on a specific crop type to the number of acres 
allowed for that crop type as specified in sections 17(e) and (f); or
    (12) If a cause of loss has occurred that would prevent planting at 
the time:
    (i) You lease the acreage (except acreage you leased the previous 
crop year and continue to lease in the current crop year);
    (ii) You buy the acreage;
    (iii) The acreage is released from a USDA program which prohibits 
harvest of a crop;
    (iv) You request a written agreement to insure the acreage; or
    (v) You acquire the acreage through means other than lease or 
purchase (such as inherited or gifted acreage).
    (g) If you purchased an additional coverage policy for a crop, and 
you executed a High Risk Land Exclusion Option that separately insures 
acreage which has been designated as ``high-risk'' land by FCIC under a 
Catastrophic Risk Protection Endorsement for that crop, the maximum 
number of acres eligible for a prevented planting payment will be 
limited for each policy as specified in sections 17(e) and (f).
    (h) If you are prevented from planting a crop for which you do not 
have an adequate base of eligible prevented planting acreage, as 
determined in accordance with section 17(e)(1), your prevented planting 
production guarantee or amount of insurance, premium, and prevented 
planting payment will be based on the crops insured for the current crop 
year, for which you have remaining eligible prevented planting acreage. 
The crops used for this purpose will be those that result in a prevented 
planting payment most similar to the prevented planting payment that 
would have been made for the crop that was prevented from being planted.
    (1) For example, assume you were prevented from planting 200 acres 
of corn and have 100 acres eligible for a corn prevented planting 
guarantee that would result in a payment of $40 per acre. You also had 
50 acres of potato eligibility that would result in a $100 per acre 
payment, 90 acres of grain sorghum eligibility that would result in a 
$30 per acre payment, and 100 acres of soybean eligibility that would 
result in a $25 per acre payment. Your prevented planting coverage for 
the 200 acres would be based on 100 acres of corn ($40 per acre), 90 
acres of grain sorghum ($30 per acre), and 10 acres of soybeans ($25 per 
acre).
    (2) Prevented planting coverage will be allowed as specified in this 
section (17(h)) only if the crop that was prevented from being planted 
meets all policy provisions, except for having an adequate base of 
eligible prevented planting acreage. Payment may be made based on crops 
other than those that

[[Page 135]]

were prevented from being planted even though other policy provisions, 
including but not limited to, processor contract and rotation 
requirements, have not been met for the crop on which payment is being 
based. However, if you were prevented from planting any non-irrigated 
crop acreage and you do not have any remaining eligible acreage for that 
crop and you do not have any other crop remaining with eligible acres 
under a non-irrigated practice, no prevented planting payment will be 
made for the acreage.
    (i) The prevented planting payment for any eligible acreage within a 
unit will be determined by:
    (1) Multiplying the liability per acre for timely planted acreage of 
the insured crop (the amount of insurance per acre or the production 
guarantee per acre multiplied by the price election for the crop, or 
type if applicable) by the prevented planting coverage level percentage 
you elected, or that is contained in the Crop Provisions if you did not 
elect a prevented planting coverage level percentage;
    (2) Multiplying the result of section 17(i)(1) by the number of 
eligible prevented planting acres in the unit; and
    (3) Multiplying the result of section 17(i)(2) by your share.

                         18. Written Agreements

    Terms of this policy which are specifically designated for the use 
of written agreements may be altered by written agreement in accordance 
with the following:
    (a) You must apply in writing for each written agreement no later 
than the sales closing date, except as provided in section 18(e);
    (b) The application for a written agreement must contain all 
variable terms of the contract between you and us that will be in effect 
if the written agreement is not approved;
    (c) If approved by FCIC, the written agreement will include all 
variable terms of the contract, including, but not limited to, crop 
practice, type or variety, the guarantee (except for a written agreement 
in effect for more than one year) and premium rate or information needed 
to determine the guarantee and premium rate, and price election (Price 
elections will not exceed the price election contained in the Special 
Provisions, or an addendum thereto, for the county that is used to 
establish the other terms of the written agreement. If no price election 
can be provided, the written agreement will not be approved by FCIC);
    (d) Each written agreement will only be valid for the number of crop 
years specified in the written agreement, and a multi-year written 
agreement:
    (1) Will only apply for any particular crop year designated in the 
written agreement if all terms and conditions in the written agreement 
are still applicable for the crop year and the conditions under which 
the written agreement has been provided have not changed prior to the 
beginning of the insurance period (If conditions change during or prior 
to the crop year, the written agreement will not be effective for that 
crop year but may still be effective for a subsequent crop year if 
conditions under which the written agreement has been provided exist for 
such year);
    (2) May be canceled in writing by:
    (i) FCIC not less than 30 days before the cancellation date if it 
discovers that any term or condition of the written agreement, including 
the premium rate, is not appropriate for the crop; or
    (ii) You or us on or before the cancellation date;
    (3) That is not renewed in writing after it expires, is not 
applicable for a crop year, or is canceled, then insurance coverage will 
be in accordance with the terms and conditions stated in this policy, 
without regard to the written agreement; and
    (4) Will be automatically cancelled if you transfer your policy to 
another insurance provider (No notice will be provided to you and for 
any subsequent crop year, for a written agreement to be effective, you 
must timely request renewal of the written agreement in accordance with 
this section);
    (e) A request for a written agreement may be submitted:
    (1) After the sales closing date, but on or before the acreage 
reporting date, if you demonstrate your physical inability to submit the 
request prior to the sales closing date (For example, you have been 
hospitalized or a blizzard has made it impossible to submit the written 
agreement request in person or by mail);
    (2) For the first year the written agreement will be in effect only:
    (i) On or before the acreage reporting date, to:
    (A) Insure unrated land, or an unrated practice, type or variety of 
a crop (Such written agreements may be approved only after inspection of 
the acreage by us and the written agreement may only be approved by FCIC 
if the crop's potential is equal to or exceeds 90 percent of the yield 
used to determine the production guarantee or the amount of insurance 
and you sign the agreement on the same day the appraisal is made); or
    (B) Establish optional units in accordance with FCIC procedures that 
otherwise would not be allowed, change the premium rate or transitional 
yield for designated high risk land, change a tobacco classification, or 
insure acreage that is greater than five percent of the planted acreage 
in the unit where the acreage has not been planted and harvested or 
insured in any of the three previous crop years; or

[[Page 136]]

    (ii) On or before the cancellation date, to insure a crop in a 
county that does not have actuarial documents for the crop (If the Crop 
Provisions do not provide a cancellation date for the county, the 
cancellation date for other insurable crops in the same state that have 
similar final planting and harvesting dates will be applicable); or
    (iii) On or before the date specified in the Crop Provisions or 
Special Provisions;
    (3) On or before the sales closing date, for all requests for 
renewal of written agreements, except as provided in section 18(e)(1);
    (4) To add land or a crop to an existing written agreement or to add 
land or a crop to a request for a written agreement provided the request 
is submitted by the deadlines specified in this subsection;
    (f) A request for a written agreement must contain:
    (1) For all written agreement requests:
    (i) A completed ``Request for Actuarial Change'' form;
    (ii) An APH form (except for policies that do not require APH) 
containing all the information needed to determine the approved yield 
for the current crop year (completed APH form), signed by you, or an 
unsigned, completed APH form with the applicable production reports 
signed and dated by you that are based on verifiable records of actual 
yields for the crop and county for which the written agreement is being 
requested (the actual yields do not necessarily have to be from the same 
physical acreage for which you are requesting a written agreement) for 
at least the most recent crop year during the base period and verifiable 
records of actual yields if required by FCIC;
    (iii) Evidence from agricultural experts or the organic agricultural 
industry, as applicable, that the crop can be produced in the area if 
the request is to provide insurance for practices, types, or varieties 
that are not insurable, unless we are notified in writing by FCIC that 
such evidence is not required by FCIC;
    (iv) The legal description of the land (in areas where legal 
descriptions are available), FSA Farm Serial Number including tract 
number, and a FSA aerial photograph, acceptable Geographic Information 
System or Global Positioning System maps, or other legible maps 
delineating field boundaries where you intend to plant the crop for 
which insurance is requested;
    (v) For any perennial crop, an inspection report completed by us; 
and
    (vi) All other information that supports your request for a written 
agreement (including but not limited to records pertaining to levees, 
drainage systems, flood frequency data, soil types, elevation, etc.);
    (2) For written agreement requests for counties without actuarial 
documents for the crop, the requirements in section 18(f)(1) (except 
section 18(f)(1)(ii)) and:
    (i) A completed APH form (except for policies that do not require 
APH) based on verifiable records of actual yields for:
    (A) The crop and county for which the written agreement is being 
requested (the actual yields do not necessarily have to be from the same 
physical acreage for which you are requesting a written agreement) for 
at least the most recent three crop years in which the crop was planted 
during the base period; or
    (B) A similar crop in the county, or a combination of actual yields 
for a similar crop in the county and the crop in the county for which 
the written agreement is being requested if you have not produced the 
crop for which the written agreement is being requested for at least 
three crop years.
    (1) To be considered a similar crop to the crop for which a written 
agreement is being requested, such crop must:
    (i) Be included in the same category of crops, e.g., row crops 
(including, but not limited to, small grains, coarse grains, and oil 
seed crops), vegetable crops grown in rows, tree crops, vine crops, bush 
crops, etc., as defined by FCIC;
    (ii) Have substantially the same growing season (i.e., normally 
planted around the same dates and harvested around the same dates);
    (iii) Require comparable agronomic conditions (e.g., comparable 
water, soil, etc. needs); and
    (iv) Be subject to substantially the same risks (frequency and 
severity of loss would be expected to be comparable from the same cause 
of loss);
    (2) The actual yields for the similar crop do not necessarily have 
to be from the same physical acreage for which you are requesting a 
written agreement;
    (ii) Acceptable production records for at least the most recent 
three crop years in which the crop or a similar crop was planted;
    (iii) The dates you and other growers in the area normally plant and 
harvest the crop, if applicable;
    (iv) The name, location of, and approximate distance to the place 
the crop will be sold or used by you;
    (v) For any irrigated practice, the water source, method of 
irrigation, and the amount of water needed for an irrigated practice for 
the crop; and
    (vi) All other information that supports your request for a written 
agreement (such as publications regarding yields, practices, risks, 
climatic data, etc.); and
    (3) Such other information as specified in the Special Provisions or 
required by FCIC;
    (g) A request for a written agreement will not be accepted if:
    (1) The request is submitted to us after the deadline contained in 
sections 18(a) or (e);
    (2) All the information required in section 18(f) is not submitted 
to us with the request

[[Page 137]]

for a written agreement (The request for a written agreement may be 
accepted if any missing information is available from other acceptable 
sources); or
    (3) The request is to add land to an existing written agreement or 
to add land to a request for a written agreement and the request to add 
the land is not submitted by the deadlines specified in sections (a) or 
(e);
    (h) A request for a written agreement will be denied if:
    (1) FCIC determines the risk is excessive;
    (2) Your APH history demonstrates you have not produced at least 50 
percent of the transitional yield for the crop, type, and practice 
obtained from a county with similar agronomic conditions and risk 
exposure;
    (3) There is not adequate information available to establish an 
actuarially sound premium rate and insurance coverage for the crop and 
acreage;
    (4) The crop was not previously grown in the county or there is no 
evidence of a market for the crop based on sales receipts, 
contemporaneous feeding records or a contract for the crop (applicable 
only for counties without actuarial documents); or
    (5) Agricultural experts or the organic agricultural industry 
determines the crop is not adapted to the county;
    (i) A written agreement will be denied unless:
    (1) FCIC approves the written agreement;
    (2) The original written agreement is signed by you and sent to us 
not later than the expiration date; and
    (3) The crop meets the minimum appraisal amount specified in section 
18(e)(2)(i)(A), if applicable;
    (j) Multiyear written agreements may be canceled and requests for 
renewal may be rejected if the severity or frequency of your loss 
experience under the written agreement is significantly worse than 
expected based on the information provided by you or used to establish 
your premium rate and the loss experience of other crops with similar 
risks in the area;
    (k) With respect to your and our ability to reject an offer for a 
written agreement:
    (1) When a single Request for Actuarial Change form is submitted, 
regardless of how many requests for changes are contained on the form, 
you and we can only accept or reject the written agreement in its 
entirety (you cannot reject specific terms of the written agreement and 
accept others);
    (2) When multiple Request for Actuarial Change forms are submitted, 
regardless of when the forms are submitted, for the same condition or 
for the same crop (i.e., to insure corn on ten legal descriptions where 
there are no actuarial documents in the county or the request is to 
change the premium rates from the high risk rates) all these forms may 
be treated as one request and you and we will only have the option of 
accepting or rejecting the written agreement in its entirety (you cannot 
reject specific terms of the written agreement and accept others);
    (3) When multiple Request for Actuarial Change forms are submitted, 
regardless of when the forms are submitted, for the different conditions 
or for different crops, separate agreements may be issued and you and we 
will have the option to accept or reject each written agreement; and
    (4) If we reject an offer for a written agreement approved by FCIC, 
you may seek arbitration or mediation of our decision to reject the 
offer in accordance with section 20;
    (l) Any information that is submitted by you after the applicable 
deadlines in sections 18(a) and (e) will not be considered, unless such 
information is specifically requested in accordance with section 
18(f)(3);
    (m) If the written agreement or the policy is canceled for any 
reason, or the period for which an existing written agreement is in 
effect ends, a request for renewal of the written agreement must contain 
all the information required by this section and be submitted in 
accordance with section 18(e), unless otherwise specified by FCIC; and
    (n) If a request for a written agreement is not approved by FCIC, a 
request for a written agreement for any subsequent crop year that fails 
to address the stated basis for the denial will not be accepted (If the 
request for a written agreement contains the same information that was 
previously rejected or denied, you will not have any right to arbitrate, 
mediate or appeal the non-acceptance of your request).

                          19. Crops as Payment

    You must not abandon any crop to us. We will not accept any crop as 
compensation for payments due us.

                           [For FCIC Policies]

    20. Appeal, Reconsideration, Administrative and Judicial Review.

    (a) All determinations required by the policy will be made by us.
    (b) If you disagree with our determinations, you may:
    (1) Except for determinations specified in section 20(b)(2), obtain 
an administrative review in accordance with 7 CFR part 400, subpart J 
(administrative review) or appeal in accordance with 7 CFR part 11 
(appeal); or
    (2) For determinations regarding whether you have used good farming 
practices (excluding determinations of the amount of assigned production 
for uninsured causes for your failure to use good farming practices), 
request reconsideration in accordance with the reconsideration process 
established for this purpose and published at 7 CFR part 400, subpart J 
(reconsideration). To appeal or request administrative review of 
determinations of the amount of assigned production,

[[Page 138]]

you must use the appeal or administrative review process.
    (c) If you fail to exhaust your right to appeal or for 
reconsideration, as applicable, you will not be able to resolve the 
dispute through judicial review.
    (d) If reconsideration or appeal has been initiated within the time 
frames specified in those sections and judicial review is sought, any 
suit against us must be:
    (1) Filed not later than one year after the date of the decision 
rendered in the reconsideration or appeal; and
    (2) Brought in the United States district court for the district in 
which the insured farm involved in the decision is located.
    (e) You may only recover contractual damages from us. Under no 
circumstances can you recover any attorney fees or other expenses, or 
any punitive, compensatory or any other damages from us in 
administrative review, appeal, reconsideration or litigation.

                        [For Reinsured Policies]

20. Mediation, Arbitration, Appeal, Reconsideration, and Administrative 
                          and Judicial Review.

    (a) If you and we fail to agree on any determination made by us 
except those specified in section 20(d), 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), 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.
    (i) Any interpretation by FCIC will be binding in any mediation or 
arbitration.
    (ii) Failure to obtain any required interpretation from FCIC will 
result in the nullification of any agreement or award.
    (iii) An interpretation by FCIC of a policy provision is considered 
a rule of general applicability and is not appealable. If you disagree 
with an interpretation of a policy provision by FCIC, you must obtain a 
Director's review from the National Appeals Division in accordance with 
7 CFR 11.6 before obtaining judicial review in accordance with 
subsection (e).
    (iv) An interpretation by FCIC of a procedure may be appealed to the 
National Appeals Division in accordance with 7 CFR part 11.
    (2) Unless the dispute is resolved through mediation, the arbitrator 
must provide to you and us a written statement describing the issues in 
dispute, the factual findings, the determinations and the amount and 
basis for any award and breakdown by claim for any award. The statement 
must also include any amounts awarded for interest. Failure of the 
arbitrator to provide such written statement will result in the 
nullification of all determinations of the arbitrator. All agreements 
reached through settlement, including those resulting from mediation, 
must be in writing and contain at a minimum a statement of the issues in 
dispute and the amount of the settlement.
    (b) Regardless of whether mediation is elected:
    (1) The initiation of arbitration proceedings must occur within one 
year of the date we denied your claim or rendered the determination with 
which you disagree, whichever is later;
    (2) If you fail to initiate arbitration in accordance with section 
20(b)(1) and complete the process, you will not be able to resolve the 
dispute through judicial review;
    (3) If arbitration has been initiated in accordance with section 
20(b)(1) and completed, and judicial review is sought, suit must be 
filed not later than one year after the date the arbitration decision 
was rendered; and
    (4) In any suit, 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, an interpretation must 
be obtained from FCIC in accordance with 7 CFR part 400, subpart X or 
such other procedures as established by FCIC. Such interpretation will 
be binding.
    (c) Any decision rendered in arbitration is binding on you and us 
unless judicial review is sought in accordance with section 20(b)(3). 
Notwithstanding any provision in the rules of the AAA, you and we have 
the right to judicial review of any decision rendered in arbitration.
    (d) If you do not agree with any determination made by us or FCIC 
regarding whether you have used a good farming practice (excluding 
determinations by us of the amount of assigned production for uninsured 
causes for your failure to use good farming practices), you may request 
reconsideration by FCIC of this determination in accordance with the 
reconsideration process established for this purpose and published at 7 
CFR part

[[Page 139]]

400, subpart J (reconsideration). To resolve disputes regarding 
determinations of the amount of assigned production, you must use the 
arbitration or mediation process contained in this section.
    (1) You must complete reconsideration before filing suit against 
FCIC and any such suit must be brought in the United States district 
court for the district in which the insured farm is located.
    (2) Suit must be filed not later than one year after the date of the 
decision rendered in the reconsideration.
    (3) You cannot sue us for determinations of whether good farming 
practices were used by you.
    (e) Except as provided in section 20(d), if you disagree with any 
other determination made by FCIC, you may obtain an administrative 
review in accordance with 7 CFR part 400, subpart J (administrative 
review) or appeal in accordance with 7 CFR part 11 (appeal). If you 
elect to bring suit after completion of any appeal, such suit must be 
filed against FCIC not later than one year after the date of the 
decision rendered in such appeal. Under no circumstances can you recover 
any attorney fees or other expenses, or any punitive, compensatory or 
any other damages from FCIC.
    (f) In any mediation, arbitration, appeal, administrative review, 
reconsideration or judicial process, the terms of this policy, the Act, 
and the regulations published at 7 CFR chapter IV, including the 
provisions of 7 CFR part 400, subpart P, are binding. Conflicts between 
this policy and any state or local laws will be resolved in accordance 
with section 31. If there are conflicts between any rules of the AAA and 
the provisions of your policy, the provisions of your policy will 
control.
    (g) To resolve any dispute through mediation, you and we must both:
    (1) Agree to mediate the dispute;
    (2) Agree on a mediator; and
    (3) Be present, or have a designated representative who has 
authority to settle the case present, at the mediation.
    (h) Except as provided in section 20(i), no award or settlement in 
mediation, arbitration, appeal, administrative review or reconsideration 
process or judicial review can exceed the amount of liability 
established or which should have been established under the policy, 
except for interest awarded in accordance with section 26.
    (i) In a judicial review only, you may recover attorneys fees or 
other expenses, or any punitive, compensatory or any other damages from 
us only if you obtain a determination from FCIC that we, our agent or 
loss adjuster failed to comply with the terms of this policy or 
procedures issued by FCIC and such failure resulted in you receiving a 
payment in an amount that is less than the amount to which you were 
entitled. Requests for such a determination should be addressed to the 
following: USDA/RMA/Deputy Administrator of Compliance/Stop 0806, 1400 
Independence Avenue, SW., Washington, DC 20250-0806.
    (j) If FCIC elects to participate in the adjustment of your claim, 
or modifies, revises or corrects your claim, prior to payment, you may 
not bring an arbitration, mediation or litigation action against us. You 
must request administrative review or appeal in accordance with section 
20(e).

      21. Access to Insured Crop and Records, and Record Retention.

    (a) We, and any employee of USDA authorized to investigate or review 
any matter relating to crop insurance, have the right to examine the 
insured crop and all records related to the insured crop and any 
mediation, arbitration or litigation involving the insured crop as often 
as reasonably required during the record retention period.
    (b) You must retain, and provide upon our request, or the request of 
any employee of USDA authorized to investigate or review any matter 
relating to crop insurance:
    (1) Complete records of the planting, replanting, inputs, 
production, harvesting, and disposition of the insured crop on each unit 
for three years after the end of the crop year (This requirement also 
applies to all such records for acreage that is not insured); and
    (2) All records used to establish the amount of production you 
certified on your production reports used to compute your approved yield 
for three years after the end of the crop year for which you initially 
certified such records, unless such records have already been provided 
to us (For example, if your approved yield for the 2003 crop year was 
based on production records you certified for the 1997 through 2002 crop 
years, you must retain all such records through the 2006 crop year, 
unless such records have already been provided to us).
    (c) We, or any employee of USDA authorized to investigate or review 
any matter relating to crop insurance, may extend the record retention 
period beyond three years by notifying you of such extension in writing.
    (d) By signing the application for insurance authorized under the 
Act or by continuing insurance for which you have previously applied, 
you authorize us or USDA, or any person acting for us or USDA authorized 
to investigate or review any matter relating to crop insurance, to 
obtain records relating to the planting, replanting, inputs, production, 
harvesting, and disposition of the insured crop from any person who may 
have custody of such records, including but not limited to, FSA offices, 
banks, warehouses, gins, cooperatives, marketing associations, and 
accountants. You must assist in obtaining all records we or any employee 
of USDA authorized to investigate or review

[[Page 140]]

any matter relating to crop insurance request from third parties.
    (e) Failure to provide access to the insured crop or the farm, 
authorize access to the records maintained by third parties or assist in 
obtaining such records will result in a determination that no indemnity 
is due for the crop year in which such failure occurred.
    (f) Failure to maintain or provide records will result in:
    (1) The imposition of an assigned yield in accordance with section 
3(e)(1) and 7 CFR part 400, subpart G for those crop years for which you 
do not have the required production records to support a certified 
yield;
    (2) A determination that no indemnity is due if you fail to provide 
records necessary to determine your loss;
    (3) Combination of the optional units into the applicable basic 
unit;
    (4) Assignment of production to the units by us if you fail to 
maintain separate records:
    (i) For your basic units; or
    (ii) For any uninsurable acreage; and
    (5) The imposition of consequences specified in section 6(g), as 
applicable.
    (g) If the imposition of an assigned yield under section 21(f)(1) 
would affect an indemnity, prevented planting payment or replant payment 
that was paid in a prior crop year, such claim will be adjusted and you 
will be required to repay any overpaid amounts.

                           22. Other Insurance

    (a) Other Like Insurance--Nothing in this section prevents you from 
obtaining other insurance not authorized under the Act. However, unless 
specifically required by policy provisions, you must not obtain any 
other crop insurance authorized under the Act on your share of the 
insured crop. If you cannot demonstrate that you did not intend to have 
more than one policy in effect, you may be subject to the consequences 
authorized under this policy, the Act, or any other applicable statute. 
If you can demonstrate that you did not intend to have more than one 
policy in effect (For example, an application to transfer your policy or 
written notification to an insurance provider that states you want to 
purchase, or transfer, insurance and you want any other policies for the 
crop canceled would demonstrate you did not intend to have duplicate 
policies), and:
    (1) One is an additional coverage policy and the other is a 
Catastrophic Risk Protection policy:
    (i) The additional coverage policy will apply if both policies are 
with the same insurance provider or, if not, both insurance providers 
agree; or
    (ii) The policy with the earliest date of application will be in 
force if both insurance providers do not agree; or
    (2) Both are additional coverage policies or both are Catastrophic 
Risk Protection policies, the policy with the earliest date of 
application will be in force and the other policy will be void, unless 
both policies are with:
    (i) The same insurance provider and the insurance provider agrees 
otherwise; or
    (ii) Different insurance providers and both insurance providers 
agree otherwise.
    (b) Other Insurance Against Fire. If you have other insurance, 
whether valid or not, against damage to the insured crop by fire during 
the insurance period, and you have not excluded coverage for fire from 
this policy, we will be liable for loss due to fire caused by a 
naturally occurring event only for the smaller of:
    (1) The amount of indemnity determined pursuant to this policy 
without regard to such other insurance; or
    (2) The amount by which the loss from fire is determined to exceed 
the indemnity paid or payable under such other insurance.
    (c) For the purpose of subsection (b) of this section the amount of 
loss from fire will be the difference between the fair market value of 
the production of the insured crop on the unit involved before the fire 
and after the fire, as determined from appraisals made by us.

                   23. Conformity to Food Security Act

    Although your violation of a number of federal statutes, including 
the Act, may cause cancellation, termination, or voidance of your 
insurance contract, you should be specifically aware that your policy 
will be canceled if you are determined to be ineligible to receive 
benefits under the Act due to violation of the controlled substance 
provisions (title XVII) of the Food Security Act of 1985 (Pub. L. 99-
198) and the regulations promulgated under the Act by USDA. Your 
insurance policy will be canceled if you are determined, by the 
appropriate Agency, to be in violation of these provisions. We will 
recover any and all monies paid to you or received by you during your 
period of ineligibility, and your premium will be refunded, less a 
reasonable amount for expenses and handling not to exceed 20 percent of 
the premium paid or to be paid by you.

                            For FCIC policies

                           24. Amounts Due Us

    (a) Any amount illegally or erroneously paid to you or that is owed 
to us but is delinquent may be recovered by us through offset by 
deducting it from any loan or payment due you under any Act of Congress 
or program administered by any United States Government Agency, or by 
other collection action.
    (b) Interest will accrue at the rate of 1.25 percent simple interest 
per calendar month, or any part thereof, on any unpaid premium amount or 
administrative fee due us. With

[[Page 141]]

respect to any premiums or administrative fees owed, interest will start 
to accrue on the first day of the month following the premium billing 
date specified in the Special Provisions.
    (c) For the purpose of any other amounts due us, such as repayment 
of indemnities found not to have been earned:
    (1) Interest will start on the date that notice is issued to you for 
the collection of the unearned amount;
    (2) Amounts found due under this paragraph will not be charged 
interest if payment is made within 30 days of issuance of the notice by 
us;
    (3) The amount will be considered delinquent if not paid within 30 
days of the date the notice is issued by us;
    (4) Penalties and interest will be charged in accordance with 31 
U.S.C. 3717 and 4 CFR part 102; and
    (5) The penalty for accounts more than 90 days delinquent is an 
additional 6 percent per annum.
    (d) Interest on any amount due us found to have been received by you 
because of fraud, misrepresentation or presentation by you of a false 
claim will start on the date you received the amount with the additional 
6 percent penalty beginning on the 31st day after the notice of amount 
due is issued to you. This interest is in addition to any other amount 
found to be due under any other federal criminal or civil statute.
    If we determine that it is necessary to contract with a collection 
agency, refer the debt to government collection centers, the Department 
of Treasury Offset Program, or to employ an attorney to assist in 
collection, you agree to pay all the expenses of collection.
    (f) All amounts paid will be applied first to expenses of collection 
if any, second to the reduction of any penalties which may have been 
assessed, then to reduction of accrued interest, and finally to 
reduction of the principal balance.

                         For reinsured policies

                           24. Amounts Due Us

    (a) Interest will accrue at the rate of 1.25 percent simple interest 
per calendar month, or any portion thereof, on any unpaid amount owed to 
us or on any unpaid administrative fees owed to FCIC. For the purpose of 
premium amounts owed to us or administrative fees owed to FCIC, interest 
will start to accrue on the first day of the month following the premium 
billing date specified in the Special Provisions. We will collect any 
unpaid amounts owed to us and any interest owed thereon and, prior to 
the termination date, we will collect any administrative fees and 
interest owed thereon to FCIC. After the termination date, FCIC will 
collect any unpaid administrative fees and any interest owed thereon.
    (b) For the purpose of any other amounts due us, such as repayment 
of indemnities found not to have been earned, interest will start to 
accrue on the date that notice is issued to you for the collection of 
the unearned amount. Amounts found due under this paragraph will not be 
charged interest if payment is made within 30 days of issuance of the 
notice by us. The amount will be considered delinquent if not paid 
within 30 days of the date the notice is issued by us.
    (c) All amounts paid will be applied first to expenses of collection 
(see subsection (d) of this section) if any, second to the reduction of 
accrued interest, and then to the reduction of the principal balance.
    (d) If we determine that it is necessary to contract with a 
collection agency or to employ an attorney to assist in collection, you 
agree to pay all of the expenses of collection.
    (e) The portion of the amounts owed by you for a policy authorized 
under the Act that are owed to FCIC may be collected in part through 
administrative offset from payments you receive from United States 
government agencies in accordance with 31 U.S.C. chapter 37. Such 
amounts include all administrative fees, and the share of the overpaid 
indemnities and premiums retained by FCIC plus any interest owed 
thereon.

                             25. [Reserved]

                        26. Interest Limitations

    We will pay simple interest computed on the net indemnity ultimately 
found to be due by us or by a final judgment of a court of competent 
jurisdiction, from and including the 61st day after the date you sign, 
date, and submit to us the properly completed claim on our form. 
Interest will be paid only if the reason for our failure to timely pay 
is NOT due to your failure to provide information or other material 
necessary for the computation or payment of the indemnity. The interest 
rate will be that established by the Secretary of the Treasury under 
section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611) and 
published in the Federal Register semiannually on or about January 1 and 
July 1 of each year, and may vary with each publication.

               27. Concealment, Misrepresentation or Fraud

    (a) If you have falsely or fraudulently concealed the fact that you 
are ineligible to receive benefits under the Act or if you or anyone 
assisting you has intentionally concealed or misrepresented any material 
fact relating to this policy:
    (1) This policy will be voided; and
    (2) You may be subject to remedial sanctions in accordance with 7 
CFR part 400, subpart R.

[[Page 142]]

    (b) Even though the policy is void, you may still be required to pay 
20 percent of the premium due under the policy to offset costs incurred 
by us in the service of this policy. If previously paid, the balance of 
the premium will be returned.
    (c) Voidance of this policy will result in you having to reimburse 
all indemnities paid for the crop year in which the voidance was 
effective.
    (d) Voidance will be effective on the first day of the insurance 
period for the crop year in which the act occurred and will not affect 
the policy for subsequent crop years unless a violation of this section 
also occurred in such crop years.

             28. Transfer of Coverage and Right to Indemnity

    If you transfer any part of your share during the crop year, you may 
transfer your coverage rights, if the transferee is eligible for crop 
insurance. We will not be liable for any more than the liability 
determined in accordance with your policy that existed before the 
transfer occurred. The transfer of coverage rights must be on our form 
and will not be effective until approved by us in writing. Both you and 
the transferee are jointly and severally liable for the payment of the 
premium and administrative fees. The transferee has all rights and 
responsibilities under this policy consistent with the transferee's 
interest.

                       29. Assignment of Indemnity

    You may assign to another party your right to an indemnity for the 
crop year. The assignment must be on our form and will not be effective 
until approved in writing by us. The assignee will have the right to 
submit all loss notices and forms as required by the policy. If you have 
suffered a loss from an insurable cause and fail to file a claim for 
indemnity within 60 days after the end of the insurance period, the 
assignee may submit the claim for indemnity not later than 15 days after 
the 60-day period has expired. We will honor the terms of the assignment 
only if we can accurately determine the amount of the claim. However, no 
action will lie against us for failure to do so.

          30. Subrogation (Recovery of Loss From a Third Party)

    Since you may be able to recover all or a part of your loss from 
someone other than us, you must do all you can to preserve this right. 
If you receive any compensation for your loss, excluding private hail 
insurance payments and payments covered by section 35, and the indemnity 
due under this policy plus the amount you receive from the person 
exceeds the amount of your actual loss, the indemnity will be reduced by 
the excess amount, or if the indemnity has already been paid, you will 
be required to repay the excess amount, not to exceed the amount of the 
indemnity. The total amount of the actual loss is the difference between 
the value of the insured crop before and after the loss, based on your 
production records and the highest price election or amount of insurance 
available for the crop. If we pay you for your loss, your right to 
recovery will, at our option, belong to us. If we recover more than we 
paid you plus or expenses, the excess will be paid to you.

              31. Applicability of State and Local Statutes

    If the provisions of this policy conflict with statutes of the State 
or locality in which this policy is issued, the policy provisions will 
prevail. State and local laws and regulations in conflict with federal 
statutes, this policy, and the applicable regulations do not apply to 
this policy.

                        32. Descriptive Headings

    The descriptive headings of the various policy provisions are 
formulated for convenience only and are not intended to affect the 
construction or meaning of any of the policy provisions.

                               33. Notices

    (a) All notices required to be given by you must be in writing and 
received by your crop insurance agent within the designated time unless 
otherwise provided by the notice requirement. Notices required to be 
given immediately may be by telephone or in person and confirmed in 
writing. Time of the notice will be determined by the time of our 
receipt of the written notice. If the date by which you are required to 
submit a report or notice falls on Saturday, Sunday, or a Federal 
holiday, or if your agent's office is, for any reason, not open for 
business on the date you are required to submit such notice or report, 
such notice or report must be submitted on the next business day.
    (b) All notices and communications required to be sent by us to you 
will be mailed to the address contained in your records located with 
your crop insurance agent. Notice sent to such address will be 
conclusively presumed to have been received by you. You should advise us 
immediately of any change of address.

                            34. Unit Division

    (a) You may elect an enterprise unit or a whole farm unit if the 
Special Provisions allow such unit structure, subject to the following:
    (1) You must make such election on or before the earliest sales 
closing date for the insured crops and report such unit structure to us 
in writing. Your unit selection will remain in effect from year to year 
unless you notify us in writing by the earliest sales

[[Page 143]]

closing date for the crop year for which you wish to change this 
election. These units may not be further divided except as specified 
herein;
    (2) For an enterprise unit:
    (i) You must report the acreage for each optional or basic unit on 
your acreage report that comprises the enterprise unit;
    (ii) These basic units or optional units that comprise the 
enterprise unit must each have insurable planted acreage of the same 
crop in the crop year insured;
    (iii) You must comply with all reporting requirements for the 
enterprise unit (While separate records of acreage and production for 
basic or optional units must be maintained, if you want to change your 
unit structure in subsequent crop years, it is not required to qualify 
for an enterprise unit);
    (iv) The qualifying basic units or optional units may not be 
combined into an enterprise unit on any basis other than as described 
herein;
    (v) If you do not comply with the production reporting provisions 
for the enterprise unit, your yield for the enterprise unit will be 
determined in accordance with section 3(e)(1);
    (vi) At any time we discover you do not qualify for an enterprise 
unit, we will assign the basic unit structure; and
    (vii) The discount contained in the actuarial documents will only 
apply to acreage in the enterprise unit that has been planted.
    (3) For a whole farm unit:
    (i) You must report on your acreage report the acreage for each 
optional or basic unit for each crop produced in the county that 
comprises the whole farm unit;
    (ii) Although you may insure all of your crops under a whole farm 
unit, you will be required to pay separate applicable administrative 
fees for each crop included in the whole farm unit; and
    (iii) At any time we discover you do not qualify for a whole farm 
unit, we will assign the basic unit structure.
    (b) Unless limited by the Crop Provisions or Special Provisions, a 
basic unit as defined in section 1 of the Basic Provisions may be 
divided into optional units if, for each optional unit, you meet the 
following:
    (1) You must plant the crop in a manner that results in a clear and 
discernible break in the planting pattern at the boundaries of each 
optional unit;
    (2) All optional units you select for the crop year are identified 
on the acreage report for that crop year (Units will be determined when 
the acreage is reported but may be adjusted or combined to reflect the 
actual unit structure when adjusting a loss. No further unit division 
may be made after the acreage reporting date for any reason);
    (3) You have records, that are acceptable to us, for at least the 
previous crop year for all optional units that you will report in the 
current crop year (You may be required to produce the records for all 
optional units for the previous crop year);
    (4) You have records of marketed or stored production from each 
optional unit maintained in such a manner that permits us to verify the 
production from each optional unit, or the production from each optional 
unit is kept separate until loss adjustment is completed by us; and
    (c) Each optional unit must meet one or more of the following, 
unless otherwise specified in the Crop Provisions or allowed by written 
agreement:
    (1) Optional units may be established if each optional unit is 
located in a separate section. In the absence of sections, we may 
consider parcels of land legally identified by other methods of measure 
such as Spanish grants, as the equivalents of sections for unit 
purposes. In areas which have not been surveyed using sections, section 
equivalents or in areas where boundaries are not readily discernible, 
each optional unit must be located in a separate FSA farm serial number;
    (2) In addition to, or instead of, establishing optional units by 
section, section equivalent or FSA farm serial number, optional units 
may be based on irrigated and non-irrigated acreage. To qualify as 
separate irrigated and non-irrigated optional units, the non-irrigated 
acreage may not continue into the irrigated acreage in the same rows or 
planting pattern. The irrigated acreage may not extend beyond the point 
at which the irrigation system can deliver the quantity of water needed 
to produce the yield on which the guarantee is based, except the corners 
of a field in which a center-pivot irrigation system is used may be 
considered as irrigated acreage if the corners of a field in which a 
center-pivot irrigation system is used do not qualify as a separate non-
irrigated optional unit. In this case, production from both practices 
will be used to determine your approved yield; and
    (3) In addition to, or instead of, establishing optional units by 
section, section equivalent or FSA farm serial number, or irrigated and 
non-irrigated acreage, separate optional units may be established for 
acreage of the insured crop grown and insured under an organic farming 
practice. Certified organic, transitional and buffer zone acreages do 
not individually qualify as separate units. (See section 37 for 
additional provisions regarding acreage insured under an organic farming 
practice).
    (d) Optional units are not available for crops insured under a 
Catastrophic Risk Protection Endorsement.
    (e) If you do not comply fully with the provisions in this section, 
we will combine all optional units that are not in compliance with these 
provisions into the basic unit

[[Page 144]]

from which they were formed. We will combine the optional units at any 
time we discover that you have failed to comply with these provisions. 
If failure to comply with these provisions is determined by us to be 
inadvertent, and the optional units are combined into a basic unit, that 
portion of the additional premium paid for the optional units that have 
been combined will be refunded to you for the units combined.
    35. Multiple Benefits
    (a) If you are eligible to receive an indemnity under anadditional 
coverage plan of insurance and are also eligible to receive benefits for 
the same loss under any other USDA program, you may receive benefits 
under both programs, unless specifically limited by the crop insurance 
contract or by law.
    (b) The total amount received from all such sources may not exceed 
the amount of your actual loss. The total amount of the actual loss is 
the difference between the fair market value of the insured commodity 
before and after the loss, based on your production records and the 
highest price election or amount of insurance available for the crop.
    (c) FSA will determine and pay the additional amount due you for any 
applicable USDA program after first considering the amount of any crop 
insurance indemnity.
    36. Substitution of Yields.
    (a) When you have actual yields in your production history database 
that, due to an insurable cause of loss, are less than 60 percent of the 
applicable transitional yield (T-yield) you may elect, on an individual 
actual yield basis, to exclude and replace one or more of any such 
yields within each database.
    (b) Each election made in section 36(a) must be made on or before 
the production reporting date for the insured crop and each such 
election will remain in effect for succeeding years unless cancelled by 
the production reporting date for the succeeding crop year. If you 
cancel an election, the actual yield will be used in the database. For 
example, if you elected to substitute yields in your database for the 
1998 and 2000 crop year, for any subsequent crop year, you can elect to 
cancel the substitution for either or both years.
    (c) Each excluded actual yield will be replaced with a yield equal 
to 60 percent of the applicable T-yield for the crop year in which the 
yield is being replaced (For example, if you elect to exclude a 2001 
crop year actual yield, the T-yield in effect for the 2001 crop year in 
the county will be used. If you also elect to exclude a 2002 crop year 
actual yield, the T-yield in effect for the 2002 crop year in the county 
will be used). The replacement yields will be used in the same manner as 
actual yields for the purpose of calculating the approved yield.
    (d) Once you have elected to exclude an actual yield from the 
database, the replacement yield will remain in effect until such time as 
that crop year is no longer included in the database unless this 
election is cancelled in accordance with section 36(b).
    (e) Although your approved yield will be used to determine your 
amount of premium owed, the premium rate will be increased to cover the 
additional risk associated with the substitution of higher yields.
    37. Organic Farming Practices.
    (a) In accordance with section 8(b)(2), insurance will not be 
provided for any crop grown using an organic farming practice, unless 
the information needed to determine a premium rate for an organic 
farming practice is specified on the actuarial table, or insurance is 
allowed by a written agreement.
    (b) If insurance is provided for an organic farming practice as 
specified in section 37(a), only the following acreage will be insured 
under such practice:
    (1) Certified organic acreage;
    (2) Transitional acreage being converted to certified organic 
acreage in accordance with an organic plan; and
    (3) Buffer zone acreage.
    (c) On the date you report your acreage, you must have:
    (1) For certified organic acreage, a written certification in effect 
from a certifying agent indicating the name of the entity certified, 
effective date of certification, certificate number, types of 
commodities certified, and name and address of the certifying agent (A 
certificate issued to a tenant may be used to qualify a landlord or 
other similar arrangement);
    (2) For transitional acreage, a certificate as described in section 
37(c)(1), or written documentation from a certifying agent indicating an 
organic plan is in effect for the acreage; and
    (3) Records from the certifying agent showing the specific location 
of each field of certified organic, transitional,

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buffer zone, and acreage not maintained under organic management.
    (d) If you claim a loss on any acreage insured under an organic 
farming practice, you must provide us with copies of the records 
required in section 37(c).
    (e) If any acreage qualifies as certified organic or transitional 
acreage on the date you report such acreage, and such certification is 
subsequently revoked by the certifying agent, or the certifying agent no 
longer considers the acreage as transitional acreage for the remainder 
of the crop year, that acreage will remain insured under the reported 
practice for which it qualified at the time the acreage was reported. 
Any loss due to failure to comply with organic standards will be 
considered an uninsured cause of loss.
    (f) Contamination by application or drift of prohibited substances 
onto land on which crops are grown using organic farming practices will 
not be an insured peril on any certified organic, transitional or buffer 
zone acreage.
    (g) In addition to the provisions contained in section 17(f), 
prevented planting coverage will not be provided for any acreage based 
on an organic farming practice in excess of the number of acres that 
will be grown under an organic farming practice and shown as such in the 
records required in section 37(c).
    (h) In lieu of the provisions contained in section 17(f)(1) that 
specify prevented planting acreage within a field that contains planted 
acreage will be considered to be acreage of the same practice that is 
planted in the field, prevented planting acreage will be considered as 
organic practice acreage if it is identified as certified organic, 
transitional, or buffer zone acreage in the organic plan.

[56 FR 1351, Jan. 14, 1991, as amended at 58 FR 58262, 58263, Nov. 1, 
1993; 59 FR 42751, Aug. 19, 1994; 62 FR 65154, Dec. 10, 1997; 63 FR 
40634, July 30, 1998; 63 FR 66712, Dec. 3, 1998; 64 FR 40742, July 28, 
1999; 65 FR 40485, June 30, 2000; 68 FR 37723, June 25, 2003; 68 FR 
43457, July 23, 2003; 69 FR 48738, Aug. 10, 2004; 69 FR 74405, Dec. 14, 
2004; 70 FR 71751, Nov. 30, 2005]



Sec. 457.9  Appropriation contingency.

    Notwithstanding the cancellation date stated in the policy, if there 
are insufficient funds appropriated by the Congress to deliver the crop 
insurance program, the policy will automatically terminate without 
liability.

[59 FR 45972, Sept. 6, 1994]



Sec. 457.10-457.100  [Reserved]



Sec. 457.101  Small grains crop insurance.

    The small grains crop insurance provisions for the 2004 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                      Small Grains Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Adequate stand--A population of live plants per unit of acreage 
which will produce at least the yield used to establish your production 
guarantee.
    Harvest--Combining or threshing the insured crop for grain or 
cutting for hay or silage on any acreage. A crop which is swathed prior 
to combining is not considered harvested.
    Initially planted--The first occurrence of planting the insured crop 
on insurable acreage for the crop year.
    Khorasan. The common name for a variety of wheat (Triticum 
turanicum) that is marketed under trademarks such as Kamut. Khorasan is 
considered to be spring wheat for the purposes of this policy.
    Latest final planting date--
    (1) The final planting date for spring-planted acreage in all 
counties for which the Special Provisions designate a final planting 
date for spring-planted acreage only;
    (2) The final planting date for fall-planted acreage in all counties 
for which the Special Provisions designate a final planting date for 
fall-planted acreage only; or
    (3) The final planting date for spring-planted acreage in all 
counties for which the Special Provisions designate final planting dates 
for both spring-planted and fall-planted acreage.
    Local market price. The cash grain price per bushel for the 
applicable quality level indicated below and offered by buyers in the 
area in which you normally market the insured crop. The local market 
price will reflect the maximum limits of quality deficiencies allowable 
for the applicable quality level indicated below. Factors not associated 
with the specified quality levels, including but not

[[Page 146]]

limited to protein, oil or moisture content, or milling quality will not 
be considered.
    (1) U.S. No. 2 for Wheat (subclass hard amber durum for durum wheat 
and subclass northern spring for hard red spring wheat), except 
Khorasan; barley (including hull-less barley); oats (including hull-less 
oats); rye; and flax.
    (2) The quality factor levels required for durum wheat to grade U.S. 
No. 2 for Khorasan.
    (3) No. 2 grade buckwheat determined in accordance with the 
applicable state grading standards.
    Nurse crop (companion crop)--A crop planted into the same acreage as 
another crop, that is intended to be harvested separately, and which is 
planted to improve growing conditions for the crop with which it is 
grown.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, except for flax, land on which seed is initially 
spread onto the soil surface by any method and subsequently is 
mechanically incorporated into the soil in a timely manner and at the 
proper depth will be considered planted. Flax seed must initially be 
planted in rows to be considered planted, unless otherwise provided by 
the Special Provisions, actuarial documents, or by written agreement.
    Prevented planting. In lieu of the definition contained in the Basic 
Provisions, failure to plant the insured crop with proper equipment by 
the latest final planting date designated in the Special Provisions for 
the insured crop in the county. You may also be eligible for a prevented 
planting payment if you failed to plant the insured crop with the proper 
equipment within the applicable late planting period following the 
latest final planting date. You must have been prevented from planting 
the insured crop due to an insured cause of loss that is general in the 
surrounding area and that prevents other producers from planting acreage 
with similar characteristics.
    Sales closing date--In lieu of the definition contained in the Basic 
Provisions, a date contained in the Special Provisions by which an 
application must be filed and by which you may change your crop 
insurance coverage for a crop year. If the Special Provisions provide a 
sales closing date for both winter and spring types of the insured crop 
and you plant any insurable acreage of the winter type, you may not 
change your crop insurance coverage after the sales closing date for the 
winter type.
    Small grains. Wheat, including only common wheat (Triticum 
aestivum), club wheat (T. compactum), durum wheat (T. durum) and 
Khorasan (T. turanicum); barley (Hordeum vulgare), including hull-less 
barley and excluding black barley; oats (Avena sativa, and A. 
byzantina), and hull-less oats (A. Nuda); rye (Secale cereale); flax 
(Linum usitatissimum); and buckwheat (Fagopyrum esculentum).
    Swathed-- Severance of the stem and grain head from the ground 
without removal of the seed from the head and placing into a windrow.

                            2. Unit Division

    In addition to the requirements of section 34(b) of the Basic 
Provisions, for wheat only, in addition to, or instead of, establishing 
optional units by section, section equivalent or FSA farm serial number 
and by irrigated and non-irrigated practices, optional units may be 
established if each optional unit contains only initially planted winter 
wheat, only initially planted spring wheat, only initially planted club 
wheat or only initially planted durum wheat. Separate optional units for 
initially planted winter wheat and initially planted spring wheat may be 
established only in counties having both winter and spring type final 
planting dates as designated in the Special Provisions. A separate 
optional unit for club wheat may be established only in counties for 
which the Special Provisions designate club wheat as a wheat type 
(separate optional units may be established for initially planted winter 
club and initially planted spring club wheat if the Special Provisions 
specify both as wheat types). A separate optional unit for durum wheat 
may be established only in counties for which the Special Provisions 
designate durum wheat as a separate wheat type (separate optional units 
may be established for initially planted winter durum wheat and 
initially planted spring durum wheat if the Special Provisions specify 
both as wheat types).

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election for each crop in the 
county insured under this policy unless the Special Provisions provide 
different price elections by type, in which case each type must be 
insured using the price election for the respective type. The price 
elections you choose for each type must have the same percentage 
relationship to the maximum price offered by us for each type. For 
example, if you choose 100 percent of the maximum price election for one 
type, you must also choose 100 percent of the maximum price election for 
all other types.
    (b) In addition to the requirements of section 3 of the Basic 
Provisions, in counties with both fall and spring sales closing dates 
for the insured crop, you may only change your coverage level or price 
election until the spring sales closing date if you do not have any 
insured fall planted acreage of the insured crop. If you have any 
insured fall

[[Page 147]]

planted acreage of the insured crop, you may not change your coverage 
level or price election after the fall sales closing date.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date for counties 
with a March 15 cancellation date and June 30 preceding the cancellation 
date for all other counties.

                  5. Cancellation and Termination Dates

    The cancellation and termination dates are:

----------------------------------------------------------------------------------------------------------------
         Crop, state and county                     Cancellation date                   Termination date
----------------------------------------------------------------------------------------------------------------
Wheat:
    All Colorado counties except          September 30........................  September 30.
     Alamosa, Archuleta, Conejos,
     Costilla, Custer, Delta, Dolores,
     Eagle, Garfield, Grand, La Plata,
     Mesa, Moffat, Montezuma, Montrose,
     Ouray, Pitkin, Rio Blanco, Rio
     Grande, Routt, Saguache, and San
     Miguel; all Iowa counties except
     Plymouth, Cherokee, Buena Vista,
     Pocahontas, Humbolt, Wright,
     Franklin, Butler, Black Hawk,
     Buchanan, Delaware, Dubuque and all
     Iowa counties north thereof; all
     Wisconsin counties except Buffalo,
     Trempealeau, Jackson, Wood,
     Portage, Waupaca, Outagamie, Brown,
     Kewaunee and all Wisconsin counties
     north thereof; all other states
     except Alaska, Arizona, California,
     Connecticut, Idaho, Maine,
     Massachusetts, Minnesota, Montana,
     Nevada, New Hampshire, New York,
     North Dakota, Oregon, Rhode Island,
     South Dakota, Utah, Vermont,
     Washington, and Wyoming.
    Del Norte, Humboldt, Lassen, Modoc,   September 30........................  November 30.
     Plumas, Shasta, Siskiyou and
     Trinity Counties, California;
     Archuleta, Custer, Delta, Dolores,
     Eagle, Garfield, Grand, La Plata,
     Mesa, Moffat, Montezuma, Montrose,
     Ouray, Pitkin, Rio Blanco, Routt
     and San Miguel Counties, Colorado;
     Connecticut; Idaho; Plymouth,
     Cherokee, Buena Vista, Pocahontas,
     Humbolt, Wright, Franklin, Butler,
     Black Hawk, Buchanan, Delaware and
     Dubuque Counties, Iowa, and all
     Iowa counties north thereof;
     Massachusetts; all Montana counties
     except Daniels and Sheridan; New
     York; Oregon; Rhode Island; all
     South Dakota counties except
     Corson, Walworth, Edmunds, Faulk,
     Spink, Beadle, Kingsbury, Miner,
     McCook, Turner, Yankton and all
     South Dakota counties north and
     east thereof; Washington; Buffalo,
     Trempealeau, Jackson, Wood,
     Portage, Waupaca, Outagamie, Brown
     and Kewaunee Counties, Wisconsin,
     and all Wisconsin counties north
     thereof; all Wyoming counties
     except Big Horn, Fremont, Hot
     Springs, Park, and Washakie.
    Arizona; all California counties      October 31..........................  November 30.
     except Del Norte, Humboldt, Lassen,
     Modoc, Plumas, Shasta, Siskiyou and
     Trinity; Nevada; and Utah.
    Alaska; Alamosa, Conejos, Costilla,   March 15............................  March 15.
     Rio Grande and Saguache Counties,
     Colorado; Maine; Minnesota; Daniels
     and Sheridan Counties, Montana; New
     Hampshire; North Dakota; Corson,
     Walworth, Edmunds, Faulk, Spink,
     Beadle, Kingsbury, Miner, McCook,
     Turner, and Yankton Counties, South
     Dakota, and all South Dakota
     counties north and east thereof;
     Vermont; and Big Horn, Fremont, Hot
     Springs, Park, and Washakie
     Counties, Wyoming.
Barley:
    All New Mexico counties except Taos;  September 30........................  September 30.
     Texas, Oklahoma, Missouri,
     Illinois, Indiana, Ohio,
     Pennsylvania, New Jersey and all
     states south and east thereof.
    Kit Carson, Lincoln, Elbert, El       September 30........................  November 30.
     Paso, Pueblo and Las Animas
     Counties, Colorado, and all
     Colorado counties south and east
     thereof; Connecticut; Kansas;
     Massachusetts; New York; and Rhode
     Island.
    Arizona; all California counties      October 31..........................  November 30.
     except Del Norte, Humboldt, Lassen,
     Modoc, Plumas, Shasta, Siskiyou and
     Trinity; Clark, Humboldt, Nye and
     Pershing Counties, Nevada; and Box
     Elder, Millard and Utah Counties,
     Utah.
    Del Norte, Humboldt, Lassen, Modoc,   March 15............................  March 15.
     Plumas, Shasta, Siskiyou and
     Trinity Counties, California; All
     Colorado counties except Kit
     Carson, Lincoln, Elbert, El Paso,
     Pueblo and Las Animas, and all
     Colorado counties south and east
     thereof; all Nevada counties except
     Clark, Humboldt, Nye and Pershing;
     Taos County, New Mexico; all Utah
     counties except Box Elder, Millard
     and Utah; and all other states
     except Arizona, and (except) Texas,
     Oklahoma, Missouri, Illinois,
     Indiana, Ohio, Pennsylvania, New
     Jersey and all states south and
     east thereof.
Oats:

[[Page 148]]

 
    Alabama; Arkansas; Florida; Georgia;  September 30........................  September 30.
     Louisiana; Mississippi; All New
     Mexico counties except Taos County;
     North Carolina; Oklahoma; South
     Carolina; Tennessee; Texas; and
     Patrick, Franklin, Pittsylvania,
     Campbell, Appomattox, Fluvanna,
     Buckingham, Louisa, Spotsylvania,
     Caroline, Essex, and Westmoreland
     Counties, Virginia, and all
     Virginia counties east thereof.
    Arizona; All California counties      October 31..........................  October 31.
     except Del Norte, Humboldt, Lassen,
     Modoc, Plumas, Shasta, Siskiyou and
     Trinity.
    Del Norte, Humbolt, Lassen, Modoc,    March 15............................  March 15.
     Plumas, Shasta, Siskiyou, and
     Trinity Counties, California; Taos
     County, New Mexico; all Virginia
     counties except Patrick, Franklin,
     Pittsylvania, Campbell, Attomattox,
     Fluvanna, Buckingham, Louisa,
     Spotsylvania, Caroline, Essex, and
     Westmoreland, and all Virginia
     counties east thereof; and all
     other states except Alabama,
     Arizona, Arkansas, Florida,
     Georgia, Louisiana, Mississippi,
     North Carolina, Oklahoma, South
     Carolina, Tennessee, and Texas.
Rye:
    All states..........................  September 30........................  September 30.
Flax:
    All states..........................  March 15............................  March 15.
Buckwheat:
    All states..........................  March 15............................  March 15.
----------------------------------------------------------------------------------------------------------------

                             6. Insured Crop

    (a) The crop insured will be each small grain you elect to insure, 
that is grown in the county on insurable acreage, and for which premium 
rates are provided by the actuarial documents:
    (1) In which you have a share;
    (2) That is planted for harvest as grain (a grain mixture in which 
barley or oats is the predominate grain may also be insured if allowed 
by the Barley or Oat Special Provisions, or if we agree in writing to 
insure such mixture. The crop insured will be the grain which is 
predominate in the mixture. The production from such mixture will be 
considered as the predominate grain on a weight basis);
    (3) That is not:
    (i) Interplanted with another crop except as allowed in paragraph 
6.(a)(2);
    (ii) Planted into an established grass or legume; or
    (iii) Planted as a nurse crop, unless planted as a nurse crop for 
new forage seeding, but only if seeded at a normal rate and intended for 
harvest as grain.
    (4) We may agree, in writing, to insure a crop prohibited under 
paragraph 6.(a)(3) if you so request. Your request to insure such crop 
must be in writing, and submitted to your agent not later than 15 days 
after the acreage reporting date.
    (b) If you anticipate destroying any acreage prior to harvest you:
    (1) May report all planted acreage when you report your acreage for 
the crop year and specify any acreage to be destroyed as uninsurable 
acreage (By doing so, no coverage will be considered to have attached on 
the specified acreage and no premium will be due for such acreage. If 
you do not destroy such acreage, you will be subject to the under-
reporting provisions contained in section 6 of the Basic Provisions); or
    (2) May report all planted acreage as insurable when you report your 
acreage for the crop year. Premium will be due on all the acreage except 
as set forth herein. If the Special Provisions allow a reduced premium 
amount for acreage intentionally destroyed prior to harvest, you may 
qualify for such reduction only if you notify us in writing on or before 
the date designated in the Special Provisions of the intended 
destruction, and do not claim an indemnity on the acreage. No premium 
reduction will be allowed if the required notice is not given or if you 
claim an indemnity for the acreage. Upon receiving timely notice, 
insurance coverage on the acreage you do not intend to harvest will 
cease and we will revise your acreage report to indicate the applicable 
reduction in premium. If you do not destroy the crop as intended, you 
will be subject to the under-reporting provisions contained in section 6 
of the Basic Provisions.
    (c) In counties for which the actuarial table provides premium rates 
for the Wheat or Barley Winter Coverage Endorsement (7 CFR 457.102), 
additional coverage is available for wheat or barley damaged between the 
time coverage begins and the spring final planting date. Coverage under 
the endorsement is effective only if you qualify under the terms of the 
endorsement and you execute the endorsement by the sales closing date.
    (d) In counties for which the actuarial table provides premium rates 
for malting barley coverage, an endorsement is available (7 CFR 457.118) 
that provides additional insurance protection for malting barley. This 
endorsement provides coverage for producers who grow malting barley 
under contract and

[[Page 149]]

for those who do not have a contract. Coverage under the endorsement is 
effective only if you qualify under the terms of the endorsement and you 
execute the endorsement by the sales closing date.

                           7. Insurance Period

    In lieu of the requirements under section 11 (Insurance Period) of 
the Basic Provisions (Sec. 457.8), and subject to any provisions 
provided by the Wheat or Barley Winter Coverage Endorsement (Sec. 
457.102) if you have elected such endorsement, the insurance period is 
as follows:
    (a) Insurance attaches on each unit or part thereof on the later of 
the date we accept your application or the date the insured crop is 
planted.
    (1) For oats, rye, flax and buckwheat, the following limitations 
apply:
    (i) The acreage must be planted on or before the final planting date 
designated in the Special Provisions for the insured crop except as 
allowed in section 12 of these Crop Provisions and section 16 of the 
Basic Provisions.
    (ii) Any acreage of the insured crop damaged before the final 
planting date, to the extent that producers in the surrounding area 
would not normally further care for the crop, must be replanted unless 
we agree that it is not practical to replant.
    (2) For barley and wheat, the following limitations apply:
    (i) The acreage must be planted on or before the final planting date 
designated in the Special Provisions for the type (winter or spring) 
except as allowed in section 12 of these Crop Provisions and section 16 
of the Basic Provisions.
    (ii) Whenever the Special Provisions designate only a fall final 
planting date, any acreage of winter barley or wheat damaged before such 
final planting date, to the extent that growers in the area would 
normally not further care for the crop, must be replanted to a winter 
type of the insured crop unless we agree that replanting is not 
practical.
    (iii) Whenever the Special Provisions designate both fall and spring 
final planting dates, any winter barley or winter wheat that is damaged 
before the spring final planting date, to the extent that growers in the 
area would normally not further care for the crop, must be replanted to 
a winter type of the insured crop to maintain insurance based on the 
winter type unless we agree that replanting is not practical. If it is 
not practical to replant to the winter type of wheat or barley but is 
practical to replant to a spring type, you must replant to a spring type 
to keep your insurance based on the winter type in force. Any winter 
barley or winter wheat acreage that is replanted to a spring type of the 
same crop when it was practical to replant the winter type will be 
insured as the spring type and the production guarantee, premium and 
price election applicable to the spring type will be used. In this case, 
the acreage will be considered to be initially planted to the spring 
type. If you have elected coverage under a barley or wheat winter 
coverage endorsement (if available in the county), insurance will be in 
accordance with the option.
    (iv) Whenever the Special Provisions designate a spring final 
planting date, any acreage of spring barley or wheat damaged before such 
final planting date, to the extent that growers in the area would 
normally not further care for the crop, must be replanted to a spring 
type of the insured crop unless we agree that replanting is not 
practical.
    (v) Whenever the Special Provisions designate only a spring final 
planting date, any acreage of fall planted barley or fall planted wheat 
is not insured unless you request such coverage on or before the spring 
sales closing date, and we agree in writing that the acreage has an 
adequate stand in the spring to produce the yield used to determine your 
production guarantee. The fall planted barley or fall planted wheat will 
be insured as a spring type for the purpose of the production guarantee, 
premium and price election. Insurance will attach to such acreage on the 
date we determine an adequate stand exists or on the spring final 
planting date if we do not determine adequacy of the stand by the spring 
final planting date. Any acreage of such fall planted barley or fall 
planted wheat that is damaged after it is accepted for insurance but 
before the spring final planting date, to the extent that growers in the 
area would normally not further care for the crop, must be replanted to 
a spring type of the insured crop unless we agree it is not practical to 
replant. If fall planted acreage is not to be insured it must be 
recorded on the acreage report as uninsured fall planted acreage.
    (b) Insurance ends on each unit at the earliest of:
    (1) Total destruction of the insured crop on the unit;
    (2) Harvest of the unit;
    (3) Final adjustment of a loss on the unit;
    (4) The following applicable date of the calendar year in which the 
crop is normally harvested:
    (i) September 25 following planting in Alaska;
    (ii) July 31 in Alabama, Arizona, Arkansas, Connecticut, Delaware, 
Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, New 
Jersey, North Carolina, South Carolina and Tennessee; or
    (iii) October 31 in all other states; or
    (5) Abandonment of the crop on the unit.

                            8. Causes of Loss

    In addition to the provisions under section 12 (Causes of Loss) of 
the Basic Provisions, any loss covered by this policy must occur within 
the insurance period.

[[Page 150]]

    The specific causes of loss for small grains are:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage allowed because of insufficient or 
improper application of pest control measures;
    (d) Plant disease, but not damage allowed because of insufficient or 
improper application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply.

                         9. Replanting Payments

    (a) A replanting payment is allowed as follows:
    (1) In lieu of provisions in section 13 of the Basic Provisions that 
limit the amount of a replant payment to the actual cost of replanting, 
the amount of any replanting payment will be determined in accordance 
with these crop provisions;
    (2) You must comply with all requirements regarding replanting 
payments contained in section 13 of the Basic Provisions (except as 
allowed in section 9(a)(1)) and in any winter coverage endorsement for 
which you are eligible and which you have elected;
    (3) The insured crop must be damaged by an insurable cause of loss 
to the extent that the remaining stand will not produce at least 90 
percent of the production guarantee for the acreage;
    (4) The acreage must have been initially planted to a spring type of 
the insured crop in those counties with only a spring final planting 
date;
    (5) Damage must occur after the fall final planting date in those 
counties where both a fall and spring final planting date are designated 
(If the Special Provisions provide more than one fall final planting 
date, the fall final planting date applicable to policies with the Wheat 
or Barley Winter Coverage Endorsement will be used for this purpose, 
regardless of whether or not the endorsement is actually in effect.); 
and
    (6) The replanted crop must be seeded at a rate sufficient to 
achieve a total (undamaged and new seeding) plant population that will 
produce at least the yield used to determine your production guarantee.
    (b) No replanting payment will be made for acreage initially planted 
to a winter type of the insured crop (including rye) in any county for 
which the Special Provisions contain only a fall final planting date 
(including final planting dates in December, January and February).
    (c) The maximum amount of the replanting payment per acre will be 
the lesser of 20.0 percent of the production guarantee or the number of 
bushels for the applicable crop specified below, multiplied by your 
price election and your share:
    (1) 2 bushels for flax or buckwheat;
    (2) 4 bushels for wheat; or
    (3) 5 bushels for barley or oats.
    (d) When the crop is replanted using a practice that is uninsurable 
for an original planting, the liability on the unit will be reduced by 
the amount of the replanting payment. The premium amount will not be 
reduced.
    (e) Replanting payments will be calculated using the price election 
and production guarantee for the crop type that is replanted and 
insured. For example, if damaged spring wheat is replanted to durum 
wheat, the price election applicable to durum wheat will be used to 
calculate any replanting payment that may be due. A revised acreage 
report will be required to reflect the replanted type. Notwithstanding 
the previous two sentences, the following will have a replanting payment 
based on the guarantee and price election for the crop type initially 
planted:
    (1) Any damaged winter crop type that is replanted to a spring crop 
type, but that retains insurance based on the winter crop type guarantee 
and price election; and
    (2) Any acreage replanted at a reduced seeding rate into a partially 
damaged stand of the insured crop.

                10. Duties in the Event of Damage or Loss

    In addition to your duties under section 14 of the Basic Provisions 
(Sec. 457.8), if you initially discover damage to any insured crop 
within 15 days of, or during harvest, you must leave representative 
samples of the unharvested crop for our inspection. The samples must be 
at least 10 feet wide and the entire length of each field in the unit, 
and must not be harvested or destroyed until the earlier of our 
inspection or 15 days after harvest of the balance of the unit is 
completed.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production that are acceptable to us 
for any:
    (1) Optional unit, we will combine all optional units for which 
acceptable records of production were not provided; or for any
    (2) Basic unit, we will allocate any commingled production to such 
units in proportion to our liability on the harvested acreage for each 
unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election;
    (3) Totaling the results of section 11(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable (see sections 11(c), (d), and (e)), by the respective price 
election;

[[Page 151]]

    (5) Totaling the results of section 11(b)(4);
    (6) Subtracting the result of section 11(b)(5) from the result in 
section 11(b)(3); and
    (7) Multiplying the result of section 11(b)(6) by your share.
    (c) The total production (bushels) to count from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) Which is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
subsection 11.(d));
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (d) Mature wheat, barley, oat, rye, and buckwheat production may be 
adjusted for excess moisture and quality deficiencies. Flax production 
may be adjusted for quality deficiencies only. If a moisture adjustment 
is applicable, it will be made prior to any adjustment for quality.
    (1) Production will be reduced by .12 percent for each .1 percentage 
point of moisture in excess of:
    (i) 13.5 percent for wheat;
    (ii) 14.5 percent for barley;
    (iii) 14.0 percent for oats; and
    (iv) 16.0 percent for rye and buckwheat.
    We may obtain samples of the production to determine the moisture 
content.
    (2) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality, in accordance with the Official United 
States Standards for Grain including the definition of terms used in 
section 11(d), result in:
    (A) Wheat, except Khorasan, not meeting the grade requirements for 
U.S. No. 4 (grades U.S. No. 5 or worse) because of test weight; total 
damaged kernels (heat-damaged kernels will not be considered to be 
damaged); shrunken or broken kernels; defects (foreign material and heat 
damage will not be considered to be defects); a musty, sour, or 
commercially objectionable foreign odor (except smut odor); or grading 
garlicky, light smutty, smutty or ergoty;
    (B) Barley, except hull-less barley, not meeting the grade 
requirements for U.S. No. 4 (grades U.S. No. 5 or worse) because of test 
weight; percentage of sound barley (heat-damaged kernels will be 
considered to be sound barley); damaged kernels (heat-damaged kernels 
will not be considered to be damaged); thin barley; black barley; a 
musty, sour, or commercially objectionable foreign odor (except smut or 
garlic odor); or grading blighted, smutty, garlicky or ergoty;
    (C) Oats, except hull-less oats, not meeting the grade requirements 
for U.S. No. 4 (grade U.S. sample grade) because of test weight; 
percentage of sound oats (heat-damaged kernels will be considered to be 
sound oats); a musty, sour, or commercially objectionable foreign odor 
(except smut or garlic odor); or grading smutty, thin, garlicky or 
ergoty;
    (D) Rye not meeting the grade requirements for U.S. No. 3 (grades 
U.S. No. 4 or worse) because of test weight; percent damaged kernels 
(heat-damaged kernels will not be considered to be damaged); thin rye; a 
musty, sour, or commercially objectionable foreign odor (except smut or 
garlic odor); or grading light smutty, smutty, light garlicky, garlicky, 
or ergoty;
    (E) Flaxseed not meeting the grade requirements for U.S. No. 2 
(grades U.S. sample grade) due to test weight; damaged kernels (heat-
damaged kernels will not be considered to be damaged); or a musty, sour, 
or commercially objectionable foreign odor (except smut or garlic odor);
    (ii) Deficiencies in the quality of buckwheat, determined in 
accordance with applicable state grading standards, result in it not 
meeting No. 3 grade requirements due to test weight; a musty, sour or 
commercially objectionable foreign odor (except smut or garlic odor); or 
grading garlicky, smutty or ergoty if such grades are provided for by 
the applicable state grading standards;
    (iii) Quality factors for Khorasan fall below the levels contained 
in the Official United States Standards for Grain that cause durum wheat 
to grade less than U.S.

[[Page 152]]

No. 4. For example, if durum wheat grades less than U.S. No. 4 when its 
test weight falls below 54.0 pounds per bushel, Khorasan would be 
eligible for quality adjustment if its test weight falls below 54.0 
pounds per bushel. The same quality factors considered for quality 
adjustment of durum wheat will be applicable and determination of 
deficiencies will be made in accordance with the Federal Grain 
Inspection Service directive that establishes procedures for quality 
factor analysis of Khorasan seed. Quality adjustment discount factors 
for U.S. grades specified in the Special Provisions will also apply to 
Khorasan at the same levels applicable to durum wheat;
    (iv) Quality factors for hull-less barley fall below the levels 
contained in the Official United States Standards for Grain that cause 
barley to grade less than U.S. No. 4. For example, if barley grades less 
than U.S. No. 4 when its test weight falls below 40.0 pounds per bushel, 
hull-less barley would be eligible for quality adjustment if its test 
weight falls below 40.0 pounds per bushel. The same quality factors 
considered for quality adjustment of barley will be applicable and 
determination of deficiencies will be made in accordance with the 
Federal Grain Inspection Service directive that establishes procedures 
for quality factor analysis of hull-less barley. Quality adjustment 
discount factors for U.S. grades specified in the Special Provisions 
will also apply to hull-less barley at the same levels applicable to 
barley;
    (v) Quality factors for hull-less oats fall below the levels 
contained in the Official United States Standards for Grain that cause 
oats to grade less than U.S. No. 4. For example, if oats grade less than 
U.S. No. 4 when its test weight falls below 27.0 pounds per bushel, 
hull-less oats would be eligible for quality adjustment if the test 
weight falls below 27.0 pounds per bushel. The same quality factors 
considered for quality adjustment of oats will be applicable and 
determination of deficiencies will be made in accordance with the 
Federal Grain Inspection Service directive that establishes procedures 
for quality factor analysis of hull-less oats. Quality adjustment 
discount factors for U.S. grades specified in the Special Provisions 
will also apply to hull-less oats at the same levels applicable to oats; 
or
    (vi) Substances or conditions are present, including mycotoxins, 
that are identified by the Food and Drug Administration or other public 
health organizations of the United States as being injurious to human or 
animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions;
    (ii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or by 
a disinterested third party approved by us;
    (iii) With regard to deficiencies in quality (except test weight, 
which may be determined by our loss adjustor), the samples are analyzed 
by:
    (A) A grain grader licensed under the United States Grain Standards 
Act or the United States Warehouse Act;
    (B) A grain grader licensed under State law and employed by a 
warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation; or
    (C) A grain grader not licensed under State law, but who is employed 
by a warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (iv) With regard to substances or conditions injurious to human or 
animal health, the samples are analyzed by a laboratory approved by us.
    (4) Small grain production that is eligible for quality adjustment, 
as specified in sections 11(d)(2) and (3), will be reduced by the 
quality adjustment factor contained in the Special Provisions.
    (e) Any production harvested from plants growing in the insured crop 
may be counted as production of the insured crop on a weight basis.

                            12. Late Planting

    A late planting period is applicable to small grains, except to any 
barley or wheat acreage covered under the terms of the Wheat or Barley 
Winter Coverage Endorsement. Barley or wheat covered under the terms of 
the Winter Coverage Endorsement must be planted on or prior to the 
applicable final planting date specified in the Special Provisions. In 
counties having one fall final planting date for acreage covered under 
the Wheat or Barley Winter Coverage Endorsement and another fall final 
planting date for acreage not covered under the endorsement, the fall 
late planting period will begin after the final planting date for 
acreage not covered under the endorsement.

                         13. Prevented Planting

    (a) In addition to the provisions contained in section 17 of the 
Basic Provisions, in counties for which the Special Provisions designate 
a spring final planting date, your prevented planting production 
guarantee will be based on your approved yield for spring-planted 
acreage of the insured crop.
    (b) Your prevented planting coverage will be 60 percent of your 
production guarantee

[[Page 153]]

for timely planted acreage. If you have limited or additional levels of 
coverage, as specified in 7 CFR part 400, subpart T, and pay an 
additional premium, you may increase your prevented planting coverage to 
a level specified in the actuarial documents.

[59 FR 9391, Feb. 28, 1994, as amended at 60 FR 62723, Dec. 7, 1995; 62 
FR 65164, Dec. 10, 1997; 67 FR 43526, June 28, 2002; 68 FR 34268, June 
9, 2003]



Sec. 457.102  Wheat or barley winter coverage endorsement.

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

               Wheat or Barley Winter Coverage Endorsement

(This is a continuous endorsement)

    1. In return for payment of the additional premium designated in the 
actuarial documents, this endorsement is attached to and made part of 
the Small Grains Crop Provisions subject to the terms and conditions 
described herein.
    2. This endorsement is available only in counties for which the 
Special Provisions for the insured crop designate both a fall final 
planting date and a spring final planting date, and for which the 
actuarial documents provide a premium rate for this coverage.
    3. You must have a Small Grains Crop Insurance Policy in force and 
elect to insure barley or wheat under that policy.
    4. You must select this coverage, by crop, on your application for 
insurance. Failure to do so means you have rejected this coverage for 
both wheat and barley and this endorsement is void.
    5. In addition to the requirements of section 34(b) of the Basic 
Provisions and section 2 of the Small Grains Crop Provisions, optional 
units may be established for barley if each optional unit contains only 
initially planted winter barley or only initially planted spring barley.
    6. If you elect this endorsement for winter barley, the contract 
change, cancellation, and termination dates applicable to wheat in the 
county will be applicable to all your spring and winter barley.
    7. Coverage under this endorsement begins on the later of the date 
we accept your application for coverage or on the fall final planting 
date designated in the Special Provisions. Coverage ends on the spring 
final planting date designated in the Special Provisions.
    8. The provisions of section 14 of the Basic Provisions are amended 
to require that all notices of damage be provided to us by the spring 
final planting date designated in the Special Provisions.
    9. All eligible acreage of each crop covered under this endorsement 
must be insured.
    10. The amount of any indemnity paid under the terms of this 
endorsement will be subject to any reduction specified in the Basic 
Provisions for multiple crop benefits in the same crop year.
    11. Whenever any winter wheat or barley is damaged during the 
insurance period and at least 20 acres or 20 percent of the insured 
planted acreage in the unit, whichever is less, does not have an 
adequate stand to produce at least 90 percent of the production 
guarantee for the acreage, you may, at your option, take one of the 
following actions:
    (a) Continue to care for the damaged crop. By doing so, coverage 
will continue under the terms of the Basic Provisions, the Small Grains 
Crop Insurance Provisions and this endorsement.
    (b) Replant the acreage to an appropriate variety of the insured 
crop, if it is practical, and receive a replanting payment in accordance 
with the terms of section 9 (Replanting Payments) of the Small Grains 
Crop Insurance Provisions. By doing so, coverage will continue under the 
terms of the Basic Provisions, the Small Grains Crop Insurance 
Provisions and this endorsement, and the production guarantee for winter 
wheat or barley will remain in effect.
    (c) Destroy the remaining crop on such acreage. By doing so, you 
agree to accept an appraised amount of production determined in 
accordance with section 11(c)(1) of the Small Grains Crop Insurance 
Provisions to count against the unit production guarantee. This amount 
will be considered production to count in determining any final 
indemnity on the unit and will be used to settle your claim as described 
in section 11 (Settlement of Claim) of the Small Grains Crop Insurance 
Provisions. You may use such acreage for any purpose, including planting 
and separately insuring any other crop if such insurance is available. 
If you elect to plant and elect to insure a spring type of the same crop 
(you must elect whether or not you want insurance on the spring type of 
the same crop at the time we release the winter type acreage), you must 
pay additional premium for the insurance. Such acreage will be insured 
in accordance with the policy provisions that are applicable to acreage 
that is initially planted to a spring type of the insured crop, and you 
must:
    (1) Plant the spring type in a manner which results in a clear and 
discernable break in the planting pattern at the boundary between it and 
any remaining acreage of the winter type; and
    (2) Store or market the production in a manner which permits us to 
verify the amount of spring type production separately from any winter 
type production. In the event you are unable to provide records of 
production that are acceptable to us, the

[[Page 154]]

spring type acreage will be considered to be a part of the original 
winter type unit.

           Option A (30 Percent Coverage and Acreage Release)

    Whenever any winter wheat is damaged during the insurance period 
(see section 3, above), and at least 20 acres or 20 percent of the 
acreage in the unit, whichever is less, does not have an adequate stand 
to produce at least 90 percent of the production guarantee for the 
acreage, you may take any one of the following actions:
    (a) Destroy the remaining crop on such acreage. By doing so, you 
agree to accept an amount of production to count against the unit 
production guarantee equal to 70 percent of the production guarantee for 
the damaged acreage, or an appraisal determined in accordance with 
paragraph 11.(c)(1) of the Small Grains Crop Insurance Provisions (Sec. 
457.101) if such an appraisal results in a greater amount of production. 
This amount will be considered production to count in determining any 
final indemnity on the unit and will be used to settle your claim as 
described in the provisions under section 11. (Settlement of Claim) of 
the Small Grains Crop Insurance Provisions (Sec. 457.101). You may use 
such acreage for any purpose, including planting and separately insuring 
any other crop. If you elect to utilize such acreage for the production 
of spring wheat, you must:
    (1) Plant the spring wheat in a manner which results in a clear and 
discernible break in the planting pattern at the boundary between it and 
any remaining winter wheat; and
    (2) Store or market the production from such acreage in a manner 
which permits us to verify the amount of spring wheat production 
separately from any winter wheat production.
    In the event you are unable to provide records of production that 
are acceptable to us, the spring wheat acreage will be considered to be 
a part of the original winter wheat unit. If you elected to insure the 
spring wheat acreage as a separate optional unit, any premium amount for 
such acreage will be considered earned and payable to us.
    (b) Continue to care for the damaged crop. By doing so, coverage 
will continue under the terms of the Common Crop Insurance Policy (Sec. 
457.8), the Small Grains Crop Insurance Provisions (Sec. 457.101), and 
this Option.
    (c) Replant the acreage to an appropriate variety of wheat, if it is 
practical, and receive a replanting payment in accordance with the terms 
of section 9. (Replanting Payments) of the Small Grains Crop Provisions 
(Sec. 457.101). By doing so, coverage will continue under the terms of 
the Common Crop Insurance Policy (Sec. 457.8), the Small Grains Crop 
Insurance Provisions (Sec. 457.101), and this Option, and the 
production guarantee for winter wheat will remain in effect.

               Option B (With Full Winter Damage Coverage)

    Whenever any winter wheat is damaged during the insurance period and 
at least 20 acres or 20 percent of the acreage in the unit, whichever is 
less, does not have an adequate stand to produce at least 90 percent of 
the production guarantee for the acreage, you may, at your option, take 
one of the following actions:
    (a) Continue to care for the damaged crop. By doing so, coverage 
will continue under the terms of the Common Crop Insurance Policy (Sec. 
457.8), the Small Grains Crop Insurance Provisions (Sec. 457.101), and 
this Option.
    (b) Replant the acreage to an appropriate variety of wheat, if it is 
practical, and receive a replanting payment in accordance with the terms 
of section 9. (Replanting Payments) of the Small Grains Crop Provisions 
(Sec. 457.101). By doing so, coverage will continue under the terms of 
the Common Crop Insurance Policy (Sec. 457.8), the Small Grains Crop 
Insurance Provisions (Sec. 457.101), and this Option, and the 
production guarantee for winter wheat will remain in effect.
    (c) Accept our appraisal of the crop on the damaged acreage as 
production to count against the production guarantee for the damaged 
acreage, destroy the remaining crop on such acreage, and be eligible for 
any indemnity due under the terms of the Common Crop Insurance Policy 
(Sec. 457.8) and the Small Grains Crop Provisions (Sec. 457.101). The 
appraisal will be considered production to count in determining any 
final indemnity on the unit and will be used to settle your claim as 
described in the provisions of section 11. (Settlement of Claim) of the 
Small Grains Crop Insurance Provisions (Sec. 457.101). You may use such 
acreage for any purpose, including planting and separately insuring any 
other crop. If you elect to utilize such acreage for the production of 
spring wheat, you must:
    (1) Plant the spring wheat in a manner which results in a clear and 
discernable break in the planting pattern at the boundary between it and 
any remaining winter wheat; and
    (2) Store or market the production from such acreage in a manner 
which permits us to verify the amount of spring wheat production 
separately from any winter wheat production.
    In the event you are unable to provide records of production that 
are acceptable to us, the spring wheat acreage will be considered to be 
a part of the original winter wheat unit. If you elected to insure the 
spring wheat acreage as a separate optional unit,

[[Page 155]]

any premium amount for such acreage will be considered earned and 
payable to us.

[59 FR 9397, Feb. 28, 1994, as amended at 68 FR 34272, June 9, 2003]]



Sec. 457.103  [Reserved]



Sec. 457.104  Cotton crop insurance provisions.

    The cotton crop insurance provisions for the 1998 and succeeding 
crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                         Cotton Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Cotton--Varieties identified as American Upland Cotton.
    Growth area--A geographic area designated by the Secretary of 
Agriculture for the purpose of reporting cotton prices.
    Harvest--The removal of the seed cotton from the open cotton boll, 
or the severance of the open cotton boll from the stalk by either manual 
or mechanical means.
    Mature cotton--Cotton that can be harvested either manually or 
mechanically.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, cotton must be planted in rows, unless otherwise 
provided by the Special Provisions, actuarial documents, or by written 
agreement. The yield conversion factor normally applied to non-irrigated 
skip-row cotton acreage will not be used if the land between the rows of 
cotton is planted to any other spring planted crop.
    Production guarantee--The number of pounds determined by multiplying 
the approved yield per acre by any applicable yield conversion factor 
for non-irrigated skip-row planting patterns, and multiplying the result 
by the coverage level percentage you elect.
    Skip-row--A planting pattern that:
    (1) Consists of alternating rows of cotton and fallow land or land 
planted to another crop the previous fall; and
    (2) Qualifies as a skip-row planting pattern as defined by the Farm 
Service Agency (FSA) or a successor agency.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8), you may select only one price election for all 
cotton in the county insured under this policy.

                           3. Contract Changes

    The contract change date is November 30 (December 17 for the 1998 
crop year only) preceding the cancellation date (see the provisions of 
section 4 (Contract Changes) of the Basic Provisions).

                  4. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
                                                    Cancellation and
               State and county                     termination dates
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,       January 15.
 Wilson, Karnes, Goliad, Victoria, and Jackson
 Counties, Texas, and all Texas counties lying
 south thereof.
Alabama; Arizona; Arkansas; California;         February 28.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; South Carolina; El
 Paso, Hudspeth, Culberson, Reeves, Loving,
 Winkler, Ector, Upton, Reagon, Sterling,
 Coke, Tom Green, Concho, McCulloch, San Saba,
 Mills, Hamilton, Bosque, Johnson, Tarrant,
 Wise, and Cooke Counties, Texas, and all
 Texas counties lying south and east thereof
 to and including Terrell, Crocket, Sutton,
 Kimble, Gillespie, Blanco, Comal, Guadalupe,
 Gonzales, De Witt, Lavaca, Colorado, Wharton,
 Matagorda Counties, Texas..
All other Texas counties and all other States.  March 15.
------------------------------------------------------------------------

                             5. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the cotton lint, in the 
county for which premium rates are provided by the actuarial documents:
    (a) In which you have a share; and
    (b) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Colored cotton lint;
    (2) Planted into an established grass or legume;
    (3) Interplanted with another spring planted crop;
    (4) Grown on acreage from which a hay crop was harvested in the same 
calendar year unless the acreage is irrigated; or
    (5) Grown on acreage on which a small grain crop reached the heading 
stage in the

[[Page 156]]

same calendar year unless the acreage is irrigated or adequate measures 
are taken to terminate the small grain crop prior to heading and less 
than fifty percent (50%) of the small grain plants reach the heading 
stage.

                          6. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8):
    (a) The acreage insured will be only the land occupied by the rows 
of cotton when a skip row planting pattern is utilized; and
    (b) Any acreage of the insured crop damaged before the final 
planting date, to the extent that a majority of the producers in the 
area would not normally further care for the crop, must be replanted 
unless we agree that it is not practical to replant.

                           7. Insurance Period

    (a) In lieu of section 11(b)(2) of the Basic Provisions, insurance 
will end upon the removal of the cotton from the field.
    (b) In accordance with the provisions under section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the 
end of the insurance period is the date immediately following planting 
as follows:
    (1) September 30 in Val Verde, Edwards, Kerr, Kendall, Bexar, 
Wilson, Karnes, Goliad, Victoria, and Jackson Counties, Texas, and all 
Texas counties lying south thereof;
    (2) January 31 in Arizona, California, New Mexico, Oklahoma, and all 
other Texas counties; and
    (3) December 31 in all other states.

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss which occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control meaures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if applicable, due to an 
unavoidable cause of loss occurring within the insurance period.

                9. Duties in the Event of Damage or Loss

    (a) In addition to your duties under section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), in the event 
of damage or loss:
    (1) The cotton stalks must remain intact for our inspection; and
    (2) If you initially discover damage to the insured crop within 15 
days of harvest, or during harvest, you must leave representative 
samples of the unharvested crop in the field for our inspection. The 
samples must be at least 10 feet wide and extend the entire length of 
each field in the unit.
    (b) The stalks must not be destroyed, and required samples must not 
be harvested, until the earlier of our inspection or 15 days after 
harvest of the balance of the unit is completed and written notice of 
probable loss given to us.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by the production guarantee;
    (2) Subtracting from this the total production to count;
    (3) Multiplying the remainder by your price election; and
    (4) Multiplying this result by your share.
    (c) The total production (pounds) to count from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage;
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes;
    (D) For which you fail to provide records of production that are 
acceptable to us; or
    (E) On which the cotton stalks are destroyed, in violation of 
section 9;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production of white 
cotton may be adjusted for quality deficiencies in accordance with 
subsection 10(d)); and
    (iv) Potential production on insured acreage you want to put to 
another use or you wish to abandon or no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement, the 
insurance period for that acreage will end if you put the acreage to 
another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:
    (A) If you do not elect to continue to care for the crop we may give 
you consent to put the acreage to another use if you agree to

[[Page 157]]

leave intact, and provide sufficient care for, representative samples of 
the crop in locations acceptable to us (The amount of production to 
count for such acreage will be based on the harvested production of 
appraisals from the samples at the time harvest should have occurred. If 
you do not leave the required samples intact, or you fail to provide 
sufficient care for the samples, our appraisal made prior to giving you 
consent to put the acreage to another use will be used to determine the 
amount of production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage, including 
any mature cotton retrieved from the ground.
    (d) Mature white cotton may be adjusted for quality when production 
has been damaged by insured causes. Such production to count will be 
reduced if the price quotation for cotton of like quality (price 
quotation ``A'') for the applicable growth area is less than seventy-
five percent (75%) of price quotation ``B.'' Price quotation ``B'' is 
defined as the price quotation for the applicable growth area for cotton 
of the color and leaf grade, staple length, and micronaire reading 
designated in the Special Provisions for this purpose. Price quotations 
``A'' and ``B'' will be the price quotations contained in the Daily Spot 
Cotton Quotations published by the USDA Agricultural Marketing Service 
on the date the last bale from the unit is classed. If the date the last 
bale classed is not available, the price quotations will be determined 
on the date the last bale from the unit is delivered to the warehouse, 
as shown on the producer's account summary obtained from the gin. If 
eligible for adjustment, the amount of production to be counted will be 
determined by multiplying the number of pounds of such production by the 
factor derived from dividing price quotation ``A'' by seventy-five 
percent (75%) of price quotation ``B.''
    (e) Colored cotton lint will not be eligible for quality adjustment.

                         11. Prevented Planting

    (a) In addition to the provisions contained in section 17 of the 
Basic Provisions, your prevented planting production guarantee will be 
based on your approved yield without adjustment for skip-row planting 
patterns.
    (b) Your prevented planting coverage will be 50 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[59 FR 49154, Sept. 27, 1994, as amended at 60 FR 62725, Dec. 7, 1995; 
62 FR 7134, Feb. 18, 1997; 62 FR 63633, Dec. 2, 1997; 62 FR 65164, Dec. 
10, 1997; 63 FR 55497, Oct. 16, 1998; 63 FR 66717, Dec. 3, 1998]



Sec. 457.105  Extra long staple cotton crop insurance provisions.

    The extra long staple cotton crop insurance provisions for the 1998 
and succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                       ELS Cotton Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement; (2) the Special Provisions; (3) these Crop Provisions; (4) 
the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Cotton--Varieties identified as Extra Long Staple (ELS) cotton and 
American Upland (AUP) cotton if ELS cotton is destroyed by an insured 
cause and acreage is replanted to AUP cotton.
    ELS cotton--Extra Long Staple cotton (also called Pima cotton, 
American-Egyptian cotton, and American Pima cotton).
    Harvest--The removal of the seed cotton from the open cotton boll, 
or the severance of the open cotton boll from the stalk by either manual 
or mechanical means.
    Mature ELS cotton--ELS cotton that can be harvested either manually 
or mechanically.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, cotton must be planted in rows, unless otherwise 
provided by the Special Provisions, actuarial documents, or by written 
agreement. The yield conversion factor normally applied to non-irrigated 
skip-row cotton acreage will not be used if the land between the rows of 
cotton is planted to any other spring planted crop.
    Production guarantee-- The number of pounds determined by 
multiplying the approved yield per acre by any applicable yield 
conversion factor for non-irrigated skip-row planting patterns, and 
multiplying the result by the coverage level percentage you elect.
    Replanting-- Performing the cultural practices necessary to replace 
the ELS cotton seed, and replacing the seed with either ELS or AUP 
cotton seed in the insured acreage with the expectation of growing a 
successful crop.
    Skip-row-- A planting pattern that:

[[Page 158]]

    (1) Consists of alternating rows of cotton and fallow land or land 
planted to another crop the previous fall; and
    (2) Qualifies as a skip-row planting pattern as defined by the Farm 
Service Agency (FSA) or a successor agency.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8) you may select only one price election for all 
the cotton in the county insured under this policy.

                           3. Contract Changes

    The contract change date is November 30 (December 17 for the 1998 
crop year only) preceding the cancellation date (see the provisions of 
section 4 (Contract Changes) of the Basic Provisions).

                  4. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
                                            Cancellation and termination
                  States                                dates
------------------------------------------------------------------------
New Mexico................................  March 15.
All other States..........................  Feb. 28.
------------------------------------------------------------------------

                             5. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the cotton lint in the 
county for which premium rates are provided by the actuarial documents:
    (a) In which you have a share; and
    (b) That is not (unless allowed by the Special Provisions or by a 
written agreement):
    (1) Planted into an established grass or legume;
    (2) Interplanted with another spring planted crop;
    (3) Grown on acreage from which a hay crop was harvested in the same 
calendar year unless the acreage is irrigated; or
    (4) Grown on acreage on which a small grain crop reached the heading 
stage in the same calendar year unless the acreage is irrigated or 
adequate measures are taken to terminate the small grain crop prior to 
heading and less than fifty percent (50%) of the small grain plants 
reach the heading stage.

                          6. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8):
    (a) The acreage insured will be only the land occupied by the rows 
of cotton when a skip row planting pattern is utilized; and
    (b) Any acreage of the insured crop damaged before the final 
planting date, to the extent that a majority of producers in the area 
would not be replanted unless we agree that it is not practical to 
replant.

                           7. Insurance Period

    (a) In lieu of section 11(b)(b)(2) of the Basic Provisions, 
insurance will end upon the removal of the cotton from the field.
    (b) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the 
end of the insurance period is January 31 immediately following 
planting.

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss which occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of irrigation water supply, if applicable, due to an 
unavoidable cause of loss occurring within the insurance period.

                9. Duties in the Event of Damage or Loss

    (a) In addition to your duties under section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), in the event 
of damage or loss:
    (1) You must give us notice if you intend to replant any acreage 
originally planted to ELS cotton to AUP cotton;
    (2) The cotton stalks must remain intact for our inspection; and
    (3) If you initially discover damage to any insured crop within 15 
days of harvest, or during harvest, you must leave representative 
samples of the unharvested crop for our inspection. The samples must be 
at least 10 feet wide and extend the entire length of the field in the 
unit.
    (b) The stalks must not be destroyed, and required samples must not 
be harvested, until the earlier of our inspection or 15 days after 
harvest of the balance of the unit is completed and written notice of 
probable loss is given to us.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:

[[Page 159]]

    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by the production guarantee;
    (2) Subtracting from this the total production to count;
    (3) Multiplying the remainder by your price election; and
    (4) Multiplying this result by your share.
    (c) The total production (pounds) to count from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes;
    (D) For which you fail to provide records of production that are 
acceptable to us; or
    (E) On which the cotton stalks are destroyed in violation of section 
9;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies in accordance with subsection:
    (A) 10(d) and (e) if it is mature ELS cotton; or
    (B) 10(f) if it is AUP cotton insured under these crop provisions); 
and
    (iv) Potential production on insured acreage you want to put to 
another use or you wish to abandon or no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement the 
insurance period for that acreage will end if you put the acreage to 
another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provided sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count.); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage, including 
any mature cotton retrieved from the ground.
    (d) Mature ELS cotton production may be adjusted for quality when 
production has been damaged by insured causes. Such production to count 
will be reduced if the price quotation for ELS cotton of like quality 
(price quotation ``A'') for the applicable growth area is less than 75 
percent of price quotation ``B.'' Price quotation ``B'' is defined as 
the price quotation for the applicable growth area for ELS cotton of the 
grade, staple length, and micronaire reading designated in the Special 
Provisions for this purpose. Price quotations ``A'' and ``B'' will be 
the price quotations contained in the Daily Spot Cotton Quotations 
published by the USDA Agricultural Marketing Service on the date the 
last bale from the unit is classed. If the date the last bale is classed 
is not available, the price quotations will be determined when the last 
bale from the unit is delivered to the warehouse, as shown on the 
producers account summary obtained from the gin. If eligible for quality 
adjustment, the amount of production to be counted will be determined by 
multiplying the number of pounds of such production by the factor 
derived from dividing price quotation ``A'' by 75 percent of price 
quotation ``B.''
    (e) For ELS cotton to be eligible for quality adjustment as shown in 
subsection 10(d), ginning must have been completed at a gin using roller 
equipment.
    (f) Any AUP cotton harvested or appraised from the acreage 
originally planted to ELS cotton in the same growing season will be 
reduced by the factor obtained by dividing the price per pound of the 
AUP cotton by the price quotation for the ELS cotton of the grade, 
staple length, and micronaire reading designated in the Special 
Provisions for this purpose. The prices used for the AUP and ELS cotton 
will be the price quotations contained in the Daily Spot Cotton 
Quotations published by the USDA Agricultural Marketing Service on the 
date the last bale from the unit is classed. If the date the last bale 
is classed is not available, the price quotations will be determined 
when the last bale from the unit is delivered to the warehouse, as shown 
on the producer's account summary obtained from the gin. If either price 
quotation is unavailable for the dates stated above, the price 
quotations for the nearest prior date for which price quotations for 
both the AUP and ELS cotton are available will be used. If prices are 
not yet available for the insured crop year, the previous season's 
average prices will be used.

[[Page 160]]

                            11. Late Planting

    A late planting period is not applicable to ELS cotton. Any ELS 
cotton that is planted after the final planting date will not be insured 
unless you were prevented from planting it by the final planting date. 
Such acreage will be insurable, and the production guarantee and premium 
for the acreage will be determined in accordance with section 16 of the 
Basic Provisions.

                         12. Prevented Planting

    (a) In addition to the provisions contained in section 17 of the 
Basic Provisions, your prevented planting production guarantee will be 
based on your approved yield without adjustment for skip-row planting 
patterns.
    (b) Your prevented planting coverage will be 50 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[59 FR 49169, Sept. 27, 1994, as amended at 60 FR 62726, Dec. 7, 1995; 
62 FR 6704, Feb. 13, 1997; 62 FR 63633, Dec. 2, 1997; 62 FR 65165, Dec. 
10, 1997; 63 FR 55497, Oct. 16, 1998; 63 FR 66717, Dec. 3, 1998]



Sec. 457.106  Texas citrus tree crop insurance provisions.

    The Texas Citrus Tree Crop Insurance Provisions for the 1999 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured policies

               (Appropriate title for insurance provider)

    Both FCIC and Reinsured Policies

                    Texas Citrus Tree Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Bud union--The location on the tree trunk where a bud from one tree 
variety is grafted onto root stock of another variety.
    Crop--Specific groups of citrus fruit trees as listed in the Special 
Provisions.
    Crop year--For the 1998 crop year only, a period of time that begins 
on June 1, 1997, and ends on November 20, 1998. For all other crop 
years, a period of time that begins on November 21 of the calendar year 
prior to the year the trees normally bloom, and ends on November 20 of 
the following calendar year. The crop year is designated by the year in 
which the insurance period ends.
    Dehorning--Cutting all scaffold limbs to a length not longer than 
\1/4\ the height of the tree before such cutting.
    Destroyed--Trees damaged to the extent that removal is necessary.
    Excess precipitation--An amount of precipitation sufficient to 
directly damage the tree.
    Excess wind--A natural movement of air that has sustained speeds in 
excess of 58 miles per hour recorded at the U.S. Weather Service 
reporting station nearest to the crop at the time of crop damage.
    Freeze--The formation of ice in the cells of the trees caused by low 
air temperatures.
    Good farming practices--The cultural practices generally in use in 
the county for the trees to have normal growth and vigor and recognized 
by the Cooperative State Research, Education, and Extension Service as 
compatible with agronomic and weather conditions in the county.
    Interplanted--Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Irrigated practice--A method by which the normal growth and vigor of 
the insured trees is maintained by artificially applying adequate 
quantities of water during the growing season using the appropriate 
irrigation systems at the proper times.
    Root stock--A root or a piece of a root of one tree variety onto 
which a bud from another tree variety is grafted.
    Scaffold limbs--Major limbs attached directly to the trunk.
    Set out--Transplanting the tree into the grove.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by each citrus crop 
designated in the Special Provisions.
    (b) Sections 34(a) (1), (3), and (4) of the Basic Provisions are not 
applicable.
    (c) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.
    (d)Instead of establishing optional units by section, section 
equivalent, or FSA farm serial number optional units may be established 
if each optional unit is located on non-contiguous land.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In lieu of the requirement of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8), that prohibits you from selecting more than 
one coverage level

[[Page 161]]

for each insured crop, you may select a different coverage level for 
each crop designated in the Special Provisions that you elect to insure.
    (b) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8):
    (1) If you insure trees within a crop which are either of a 
different variety or are planted at a different population density, the 
per acre amount of insurance for each variety or population density for 
the crop must bear the same relationship to the maximum amount of 
insurance available for each variety and population density of the crop 
as specified in the Actuarial documents. For example, if you elect 100 
percent of the maximum amount of insurance for a variety within a 
population density for the crop, you must select 100 percent of the 
maximum amount of insurance for that variety for all population 
densities for the crop. The amount of insurance for each variety and 
population density must be multiplied by any applicable factor contained 
in section 3(b)(2).
    (2) The amount of insurance per acre will be the product obtained by 
multiplying the reference maximum dollar amount of insurance that is 
shown in the actuarial documents for the applicable population density 
by the percentage for the level of coverage you select and by:
    (i) Thirty-three percent (0.33) for the year of set out, the year 
following dehorning, or the year following grafting of a set out tree. 
(Insurance will be limited to this amount until trees that are set out 
are one year of age or older on the first day of the crop year);
    (ii) Sixty percent (0.60) for the first growing season after being 
set out, the second year following dehorning, or the second year 
following grafting of a set out tree;
    (iii) Eighty percent (0.80) for the second growing season after 
being set out, the third year following dehorning, or the third year 
following grafting of a set out tree; or
    (iv) Ninety percent (0.90) for the third growing season after being 
set out, the fourth year following dehorning, or the fourth year 
following grafting of a set out tree.
    (3) The amount of insurance per acre for each population density, or 
factor as appropriate, will be multiplied by the applicable number of 
insured acres. These results will then be added together to determine 
the amount of insurance for the unit.
    (4) The amount of insurance will be reduced proportionately for any 
unit on which the stand is less than 90 percent, based on the original 
planting pattern. For example, if the amount of insurance you selected 
is $2,000 and the remaining stand is 85 percent of the original stand, 
the amount of insurance on which the premium and any indemnity will be 
based is $1,700 ($2,000 multiplied by 0.85).
    (5) If any insurable acreage of trees is set out after the first day 
of the crop year, and you elect to insure such acreage during that crop 
year, you must report the acreage, practice, crop, number of trees, date 
set out is completed, and your share to us within 72 hours after set out 
is completed for the unit.
    (6) Production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), are not applicable.
    (7) You must report, by the sales closing date contained in the 
Special Provisions, by type if applicable:
    (i) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the amount of insurance, and the number of 
affected acres;
    (ii) The number of trees on insurable and uninsurable acreage;
    (iii) The date of original set out and the planting pattern;
    (iv) The date of replacement or dehorning, if more than 10 percent 
of the trees on any unit have been replaced or dehorned in the previous 
5 years; and
    (v) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed:
    (A) The age of the interplanted crop, and type if applicable;
    (B) The planting pattern; and
    (C) Any other information that we request in order to establish your 
amount of insurance.
    We will reduce the amount of insurance as necessary, based on our 
estimate of the effect of interplanting a perennial crop; removal of 
trees; damage; change in practices and any other circumstance on the 
potential of the insured crop. If you fail to notify us of any 
circumstance that may reduce the potential for the insured crop, we will 
reduce your amount of insurance as necessary at any time we become aware 
of the circumstance.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are November 20.

[[Page 162]]

                            6. Annual Premium

    In addition to the provisions of section 5 (Annual Premium) of the 
Basic Provisions (Sec. 457.8), for the 1998 crop year, the premium 
amount otherwise payable for the 1998 crop year will be increased by 46 
percent as a result of the additional six months of coverage for that 
crop year.

                             7. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all of each citrus 
tree crop designated in the Special Provisions in the county for which a 
premium rate is provided by the actuarial documents and that you elect 
to insure:
    (1) In which you have an ownership share;
    (2) That is adapted to the area;
    (3) That is set out for the purpose of growing fruit to be harvested 
for the commercial production of fresh fruit or for juice;
    (4) That is irrigated; and
    (5) That have the potential to produce at least 70 percent of the 
county average yield for the crop and age, unless a written agreement is 
approved to insure the trees with lesser potential.
    (b) In addition to section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), we do not insure any citrus trees:
    (1) During the crop year the application for insurance is filed, 
unless we inspect the acreage and consider it acceptable; or
    (2) That have been grafted onto existing root stock or nursery stock 
within the one-year period prior to the date insurance attaches.
    (c) We may exclude from insurance or limit the amount of insurance 
on any acreage that was not insured the previous year.

                          8. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, citrus trees interplanted with another 
perennial crop are insurable, unless we inspect the acreage and 
determine that it does not meet the requirements contained in your 
policy.

                           9. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8):
    (a) The insurance period is as follows:
    (1) For the 1998 crop year only, coverage will begin on June 1, 
1997, and will end on November 20, 1998.
    (2) For all subsequent crop years, coverage begins on November 21 of 
the calendar year prior to the year the insured crop normally blooms, 
except that for the year of application, if your application is received 
after November 11 but prior to November 21, insurance will attach on the 
10th day after your properly completed application is received in our 
local office, unless we inspect the acreage during the 10 day period and 
determine that it does not meet the requirements for insurability 
contained in your policy. You must provide any information that we 
require for the crop or to determine the condition of the grove.
    (3) The calendar date for the end of the insurance period for each 
crop year is November 20.
    (b) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (c) If you relinquish your insurable share on any insurable acreage 
of citrus trees on or before the acreage reporting date for the crop 
year, insurance will not be considered to have attached to and no 
premium or indemnity will be due for such acreage for that crop year 
unless:
    (1) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (2) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (3) The transferee is eligible for crop insurance.

                           10. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur within the insurance period:
    (a) Excess precipitation;
    (b) Excess wind;
    (c) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the grove;
    (d) Freeze;
    (e) Hail;
    (f) Tornado; or
    (g) Failure of the irrigation water supply if caused by an insured 
peril or drought that occurs during the insurance period.

                11. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), in case of 
damage or probable loss, if you intend to claim an indemnity on any 
unit, you must allow us to inspect all insured acreage before pruning, 
dehorning, or removal of any damaged trees.

[[Page 163]]

                         12. Settlement of Claim

    (a) In the event of damage covered by this policy, we will settle 
your claim on a unit basis by:
    (1) Determining the actual percent of damage for the unit in 
accordance with sections 12 (b), (c), and (d);
    (2) Subtracting your deductible from the percent of damage for the 
unit (this result must be greater than zero to receive an indemnity);
    (3) Dividing the result of section 12(a)(2) by your coverage level 
percentage;
    (4) Multiplying the result of section 12(a)(3) by the amount of 
insurance per acre determined in accordance with section 3(b)(2);
    (5) Multiplying the result of section 12(a)(4) by the number of 
insured acres; and
    (6) Multiplying the result of section 12(a)(5) by your share.
    (b) The percent of damage for any tree will be determined as 
follows:
    (1) For damage occurring during the year of set out (trees that have 
not been set out for at least one year at the time insurance attaches):
    (i) One-hundred percent (100%) whenever there is no live wood above 
the bud union;
    (ii) Ninety percent (90%) whenever there is less than 12 inches of 
live wood above the bud union; or
    (iii) The tree will be considered undamaged whenever there is more 
than 12 inches of live wood above the bud union; or
    (2) For damage occurring in any year following the year of set out:
    (i) The percentage of damage will be determined by dividing the 
number of scaffold limbs damaged in an area from the trunk to a length 
equal to one-fourth (\1/4\) the height of the tree, by the total number 
of scaffold limbs before damage occurred. Whenever this percentage 
exceeds 80 percent, the tree will be considered as 100 percent damaged.
    (ii) The percent of damage for the unit will be determined by 
computing the average of the determinations made for the individual 
trees. If this percent of damage exceeds 80 percent, the unit will be 
considered 100 percent damaged.
    (c) The percent of damage on the unit will be reduced by the 
percentage of damage due to uninsured causes.

                     13. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 4117, Jan. 29, 1997, as amended at 62 FR 65166, Dec. 10, 1997; 63 
FR 55779, Oct. 19, 1998]



Sec. 457.107  Florida citrus fruit crop insurance provisions.

    The Florida citrus fruit crop insurance provisions for the 1999 and 
succeeding crop years are as follows:

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                  Florida Citrus Fruit Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Amount of insurance (acre). The dollar amount determined by 
multiplying the Reference Maximum Dollar Amount shown on the actuarial 
documents for the citrus fruit times the coverage level you elect, times 
your share.
    Box. A standard field box as prescribed in the State of Florida 
Citrus Fruit Laws.
    Citrus fruit type. Any of the following:
    (1) Type I--Early and mid-season oranges;
    (2) Type II--Late oranges juice;
    (3) Type III--Grapefruit for which freeze damage will be adjusted on 
a juice basis;
    (4) Type IV--Navel Oranges, Tangelos and Tangerines;
    (5) Type V--Murcott Honey Oranges (also known as Honey Tangerines) 
and Temple Oranges;
    (6) Type VI--Lemons and Limes; and
    (7) Type VII--Grapefruit for which freeze damage will be adjusted on 
a fresh fruit basis, and late oranges fresh.
    Freeze. The formation of ice in the cells of the fruit caused by low 
air temperatures.
    Good farming practices. The cultural practices generally in use in 
the county for the crop to make normal progress toward maturity and 
produce the expected yield for the type and age of citrus fruit, and are 
those recognized by the Cooperative State Research, Education, and 
Extension Service as compatible with agronomic and weather conditions in 
the county.
    Harvest. The severance of mature citrus fruit from the tree by 
pulling, picking, or any other means, or collecting the marketable fruit 
from the ground.
    Hurricane. A windstorm classified by the U.S. Weather Service as a 
hurricane.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Potential production. Citrus fruit that would have been produced had 
damage not occurred, including citrus fruit that:
    (1) Was harvested before damage occurred;

[[Page 164]]

    (2) Remained on the tree after damage occurred; and
    (3) Was lost from either an insured or uninsured cause;
    But not including citrus fruit that:
    (1) Was lost before insurance attached for any crop year;
    (2) Was lost by normal dropping; or
    (3) Any tangerines that normally would not meet the 210 pack size (2 
and 4/16 inch minimum diameter) under United States Standards by the end 
of the insurance period for tangerines.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by each citrus crop 
designated in the Special Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.
    (c)Instead of establishing optional units by section, section 
equivalent, or FSA farm serial number, optional units may be established 
if each optional unit is located on non-contiguous land.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one coverage level for each Florida citrus 
fruit type shown in section 1 of these crop provisions or designated in 
the Special Provisions, that you elect to insure. If different amounts 
of insurance are available for citrus fruit within a type, you must 
select the same coverage level for each citrus fruit. For example, if 
you choose the 75 percent coverage level for a specific citrus fruit 
within a type, you must also choose the 75 percent coverage level for 
all other citrus fruit within that type.
    (b) In lieu of the production reporting date contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), potential production 
for each unit will be determined during loss adjustment.
    (c) By the sales closing date contained in the Special Provisions, 
for the first year of insurance for acreage interplanted with another 
citrus fruit crop, and anytime the planting pattern of such acreage is 
changed, you must report the following:
    (1) The age of the interplanted trees and type if applicable;
    (2) The planting pattern; and
    (3) Any other information we request in order to establish your 
amount of insurance.
    (d) We will reduce acreage or the amount of insurance or both, as 
necessary, based on our estimate of the effect of the interplanted 
citrus fruit trees on the insured citrus fruit crop. If you fail to 
notify us of any circumstance that may reduce the acreage or amount of 
insurance, we will reduce the acreage or amount of insurance or both as 
necessary any time we become aware of the circumstance.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is March 15 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation 
date is April 30 preceding the crop year. The termination date is April 
30 of the crop year.

                             6. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all acreage of each 
citrus fruit type that you elect to insure, in which you have a share, 
that is grown in the county shown on the application, and for which a 
premium rate is quoted in the actuarial documents.
    (b) In addition to the citrus fruit not insurable in section 8 
(Insured Crop) of the Basic Provisions (Sec. 457.8), we do not insure 
any citrus fruit:
    (1) That cannot be expected to mature each crop year within the 
normal maturity period for the type;
    (2) Produced by trees that have not reached the fifth growing season 
after being set out, unless otherwise provided in the Special Provisions 
or by a written agreement to insure such citrus fruit;
    (3) Of ``Meyer Lemons'' and oranges commonly known as ``Sour 
Oranges'' or ``Clementines''; or
    (4) Of the Robinson tangerine variety, for any crop year in which 
you have elected to exclude such tangerines from insurance. (You must 
elect this exclusion prior to the crop year for which the exclusion is 
to be effective, except that for the first crop year you must elect this 
exclusion by the later of April 30 or the time you submit the 
application for insurance.)
    (c) Upon our approval, prior to the date insurance attaches, you may 
elect to insure or exclude from insurance any insurable acreage that has 
a potential production of less than 100 boxes per acre. If you:
    (1) Elect to insure such acreage, we will consider the potential 
production to be 100 boxes per acre when determining the amount of loss; 
or

[[Page 165]]

    (2) Elect to exclude such acreage, we will disregard the acreage for 
all purposes related to this contract.
    (d) In addition to the provisions in section 6 (Report of Acreage) 
of the Basic Provisions (Sec. 457.8), if you fail to notify us of your 
election to insure or exclude acreage, and the potential production from 
such acreage is 100 or more boxes per acre, we will determine the 
percent of damage on all of the insurable acreage for the unit, but will 
not allow the percent of damage for the unit to be increased by 
including such acreage.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, citrus fruit interplanted with another 
citrus fruit crop is insurable unless we inspect the acreage and 
determine that it does not meet the requirements contained in your 
policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on May 1 of each crop year, except that for the 
year of application if your application is received by us after April 
21, but prior to May 1, insurance will attach on the 10th day after your 
properly completed application, acreage, and production reports are 
received in our local office, unless we inspect the acreage during the 
10 day period and determine that it does not meet the requirements for 
insurability contained in your policy. You must provide any information 
that we require for the crop to determine the condition of the grove to 
be insured.
    (2) The calendar date for the end of the insurance period for each 
crop year is:
    (i) January 31 for tangerines and navel oranges;
    (ii) April 30 for lemons, limes, tangelos, early and mid-season 
oranges; and
    (iii) June 30 for late oranges, grapefruit, Temple, and Murcott 
Honey Oranges.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins, but on or before the acreage reporting date of any crop 
year, and if after inspection we consider the acreage acceptable, then 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of citrus fruit on or before the acreage reporting date of any crop 
year, insurance will not be considered to have attached to, no premium 
will be due and no indemnity paid for, such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur within the insurance 
period:
    (1) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the grove;
    (2) Freeze;
    (3) Hail;
    (4) Hurricane; or
    (5) Tornado.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Any damage to the blossoms or trees; or
    (2) Inability to market the citrus fruit for any reason other than 
actual physical damage from an insurable cause specified in this 
section. For example, we will not pay you an indemnity if you are unable 
to market due to quarantine, boycott, or refusal of any person to accept 
production.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Calculating the amount of insurance for the unit by multiplying 
the number of acres by the respective dollar amount of insurance per 
acre for the citrus fruit and multiplying that result by your share;
    (2) Calculating the average percent of damage to the respective 
citrus fruit, rounded to the nearest tenth of a percent (0.1%). The 
percent of damage will be the ratio of the number of boxes of citrus 
fruit considered damaged from an insured cause divided by the undamaged 
potential production. Citrus fruit will be considered undamaged 
potential production if it is:

[[Page 166]]

    (i) Marketed or could be marketed as fresh fruit;
    (ii) Harvested prior to inspection by us; or
    (iii) Harvested within 7 days after a freeze;
    (3) Subtracting the coverage level percentage from 100 percent;
    (i) Subtracting this result from the result of section (10)(b)(2); 
and
    (ii) If the result section (10)(b)(3)(i) is positive, dividing this 
result by the coverage level percentage;
    (4) Multiplying the result of section (10)(b)(3)(ii) by the amount 
of insurance for the unit for the respective citrus fruit.
    (For example, if the average percent of damage is 70 percent and the 
coverage level is 75 percent (the deductible is 25 percent), the amount 
payable is 60 percent times the amount of insurance (70% damage - 25 % 
level deductible) = 45% (45% / 75%) 60% adjusted damage times the amount 
of insurance); and
    (5) Totaling all such results of section (10)(b)(4) to determine the 
amount payable for the unit.
    (c) Citrus fruit of Types IV, V, and VII that are seriously damaged 
by freeze, as determined by a fresh-fruit cut of a representative sample 
of fruit in the unit in accordance with the applicable provisions of the 
State of Florida Citrus Fruit laws, and that are not or could not be 
marketed as fresh fruit, will be considered damaged to the following 
extent:
    (1) If less than 16 percent of the fruit in a sample shows serious 
freeze damage, the fruit will be considered undamaged; or
    (2) If 16 percent or more of the fruit in a sample shows serious 
freeze damage, the fruit will be considered 50 percent damaged, except 
that:
    (i) For tangerines of Type IV, damage in excess of 50 percent will 
be the actual percent of damaged fruit; and
    (ii) Citrus of Types IV (except tangerines), V, and VII, if it is 
determined that the juice loss in the fruit exceeds 50 percent, such 
percent will be considered the percent of damage.
    (d) Notwithstanding the provisions of section 10(c) of these crop 
provisions as to citrus fruit of Types IV, V, and VII, in any unit that 
is mechanically separated using the specific-gravity (floatation) method 
into undamaged and freeze-damaged fruit, the amount of damage will be 
the actual percent of freeze-damaged fruit not to exceed 50 percent and 
will not be affected by subsequent fresh-fruit marketing. However, the 
50 percent limitation on mechanically-separated, freeze-damaged fruit 
will not apply to tangerines of citrus fruit Type IV.
    (e) Any citrus fruit of Types I, II, III, and VI damaged by freeze, 
but that can be processed into products for human consumption, will be 
considered as marketable for juice. The percent of damage will be 
determined by relating the juice content of the damaged fruit to:
    (1) The average juice content of the fruit produced on the unit for 
the three previous crop years based on your records, if they are 
acceptable to us; or
    (2) The following juice content, if acceptable records are not 
furnished:
    (i) Type I--52 pounds of juice per box
    (ii) Type II--54 pounds of juice per box
    (iii) Type III--45 pounds of juice per box
    (iv) Type VI--43 pounds of juice per box
    (f) Any citrus fruit on the ground that is not collected and 
marketed will be considered as 100 percent damaged if the damage was due 
to an insured cause.
    (g) Any citrus fruit that is unmarketable either as fresh fruit or 
as juice because it is immature, unwholesome, decomposed, adulterated, 
or otherwise unfit for human consumption due to an insured cause will be 
considered as 100 percent damaged.
    (h) Citrus fruit of Types IV, V, and VII that are unmarketable as 
fresh fruit due to serious damage from hail as defined in the applicable 
United States Standards for Grades of Florida fruit will be considered 
totally lost.

                     11. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[61 FR 69002, Dec. 31, 1996, as amended at 62 FR 65166, Dec. 10, 1997]



Sec. 457.108  Sunflower seed crop insurance provisions.

    The sunflower seed crop insurance provisions for the 2003 and 
succeeding crop years are as follows:

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                     Sunflower Seed Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Harvest--Combining or threshing the sunflowers for seed.
    Local market price--The cash seed price per pound for oil type 
sunflower seed grading U.S. No. 2, or non-oil type sunflower seed with a 
test weight of at least 22 pounds per bushel and less than five percent 
(5%) kernel damage, offered by buyers in the area in which you normally 
market the sunflower seed. The local market price for oil type sunflower 
seed will reflect the maximum limits of quality deficiencies allowable 
for the U.S.

[[Page 167]]

No. 2 grade of sunflower seed. Factors not associated with grading of 
sunflower seed under the Official United States Standards for Grain 
including, but not limited to, oil or moisture content will not be 
considered.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, sunflower seed must initially be planted ini rows far 
enough apart to permit mechanical cultivation, unless otherwise provided 
by the Special Provisions, actuarial documents, or by written agreement.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8), you may select only one price election for all 
the sunflower seed in the county insured under this policy. 
Notwithstanding the preceding sentence, if the Special Provisions 
provide different price elections by type, you may select one price 
election for each sunflower seed type designated in the Special 
Provisions.

                           3. Contract Changes

    The contract change date is November 30 (December 17 for the 1998 
crop year only) preceding the cancellation date (see the provisions of 
Section 4 (Contract Changes) of the Basic Provisions).

                  4. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions (Sec. 457.8), 
the cancellation and termination dates are March 15.

                             5. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the oil and non-oil type 
sunflower seed in the county for which a premium rate is provided by the 
actuarial documents:
    (a) In which you have a share;
    (b) That is planted for harvest as sunflower seed; and
    (c) That is not (unless a written agreement allows otherwise):
    (1) Interplanted with another crop; or
    (2) Planted into an established grass or legume.

                          6. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8):
    (a) We will not insure any acreage which does not meet the rotation 
requirements shown in the Special Provisions; and
    (b) Any acreage of the insured crop damaged before the final 
planting date, to the extent that a majority of producers in the area 
would not normally further care for the crop, must be replanted unless 
we agree that it is not practical to replant.

                           7. Insurance Period

    In accordance with the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8), the calendar date for the end of 
the insurance period is November 30, immediately following planting.

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss which occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) If applicable, failure of the irrigation water supply due to an 
unavoidable cause of loss occurring after the beginning of planting.

                         9. Replanting Payments

    (a) In accordance with section 13 of the Basic Provisions, a 
replanting payment for sunflower seed is allowed if the sunflowers are 
damaged by an insurable cause of loss to the extent that the remaining 
stand will not produce at least ninety percent of the production 
guarantee for the acreage and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of twenty percent (20%) of the production guarantee or 175 
(pounds of seed), multiplied by your price election, multiplied by your 
insured share or the share determined in accordance with section 9(c), 
if applicable.
    (c) When more than one person insures the same crop on a share 
basis, a replanting payment based on the total shares insured by us may 
be made to the insured person who incurs the total cost of replanting. 
Payment will be made in this manner only if an agreement exists between 
the insured persons which:
    (1) Requires one person to incur the entire cost of replanting; or
    (2) Gives the right to all replanting payments to one person.
    (d) When sunflower seed is replanted using a practice that is 
uninsurable as an original planting, the liability for the unit will be 
reduced by the amount of the replanting payment which is attributable to 
your share. The premium amount will not be reduced.

[[Page 168]]

                10. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 
representative samples of the unharvested crop must be at least 10 feet 
wide and extend the entire length of each field in the unit. The samples 
must not be harvested or destroyed until the earlier of our inspection 
or 15 days after harvest of the balance of the unit is completed.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage of each type of sunflower seed 
by the production guarantee for the applicable type;
    (2) Multiplying each result by the price election for the applicable 
type;
    (3) Adding these values;
    (4) Multiplying the production to count of each type of sunflower 
seed by the price election for that type;
    (5) Adding these dollar values;
    (6) Subtracting the result of step (5) from the result of step (3); 
and
    (7) Multiplying the result by your share.
    (c) The total production (pounds) to count from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
subsection 11(d)); and
    (iv) Potential production on insured acreage you want to put to 
another use or you wish to abandon and no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement, the 
insurance period for that acreage will end if you put the acreage to 
another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us, (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count.); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage.
    (d) Mature sunflower seed production may be adjusted for excess 
moisture and quality deficiencies. If moisture adjustment is applicable, 
it will be made prior to any adjustment for quality.
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of ten percent (10%). We may 
obtain samples of the production to determine the moisture content.
    (2) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality result in:
    (A) Oil type sunflower seed not meeting the grade requirements for 
U.S. No. 2 (grades U.S. sample grade) because of test weight, kernel 
damage (excluding heat damage), or a musty, sour or commercially 
objectionable foreign odor; or
    (B) Non-oil type sunflower seed having a test weight below 22 pounds 
per bushel or kernel damage (excluding heat damage) in excess of five 
percent (5%) or a musty, sour or commercially objectionable foreign 
odor; or
    (ii) Substances or conditions are present that are identified by the 
Food and Drug Administration or other public health organizations of the 
United States as being injurious to human or animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions, resulted from a 
cause of loss against which insurance is provided under these crop 
provisions and within the insurance period ;
    (ii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or by 
a disinterested third party approved by us;

[[Page 169]]

    (iii) With regard to deficiencies in quality (except test weight, 
which may be determined by our loss adjustor), the samples are analyzed 
by:
    (A) A grain grader licensed under the United States Grain Standards 
Act or the United States Warehouse Act;
    (B) A grain grader licensed under State law and employed by a 
warehouse operator who has a storage agreement with the Commodity Credit 
Corporation; or
    (C) A grain grader not licensed under State law, but who is employed 
by a warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (iv) With regard to substances or conditions injurious to human or 
animal health, the samples are analyzed by a laboratory approved by us.
    (4) Sunflower seed production that is eligible for quality 
adjustment, as specified in paragraphs 11(d) (2) and (3), will be 
reduced:
    (i) In accordance with quality adjustment factor provisions 
contained in the Special Provisions; or
    (ii) As follows, if quality adjustment factor provisions are not 
contained in the Special Provisions:
    (A) The market price of the qualifying damaged production and the 
local market price will be determined on the earlier of the date such 
quality adjusted production is sold or the date of final inspection for 
the unit. The price for the qualifying damaged production will be the 
market price for the local area to the extent feasible. Discounts used 
to establish the net price of the damaged production will be limited to 
those which are usual, customary, and reasonable. The price will not be 
reduced for:
    (1) Moisture content;
    (2) Damage due to uninsured causes; or
    (3) Drying, handling, processing, or any other costs associated with 
normal harvesting, handling, and marketing of the sunflower seed; 
except, if the price of the damaged production can be increased by 
conditioning, we may reduce the price of the production after it has 
been conditioned by the cost of conditioning but not lower than the 
value of the production before conditioning. (We may obtain prices from 
any buyer of our choice. If we obtain prices from one or more buyers 
located outside your local market area, we will reduce such prices by 
the additional costs required to deliver the sunflower seed to those 
buyers.);
    (B) The value of the damaged or conditioned production will be 
divided by the local market price to determine the quality adjustment 
factor; and
    (C) The number of pounds remaining after any reduction due to 
excessive moisture (the moisture-adjusted gross pounds (if appropriate)) 
of the damaged or conditioned production will then be multiplied by the 
quality adjustment factor to determine the net production to count.
    (e) Any production harvested from plants growing in the insured crop 
may be counted as production of the insured crop on a weight basis.

                         12. Prevented Planting

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase you prevented 
planting coverage to a level specified in the actuarial documents.

[59 FR 67136, Dec. 29, 1994, as amended at 60 FR 62727, Dec. 7, 1995; 62 
FR 63633, Dec. 2, 1997; 62 FR 65166, Dec. 10, 1997; 67 FR 55690, Aug. 
30, 2002]



Sec. 457.109  Sugar Beet Crop Insurance Provisions.

    The Sugar Beet Crop Insurance Provisions for the 1998 and succeeding 
crop years in countries with a contract change date of November 30, and 
for the 1999 and succeeding crop years in countries with a contract 
change date of April 30, are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured policies

               (Appropriate title for insurance provider)

    Both FCIC and Reinsured Policies

                       Sugar Beet Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Crop year. In Imperial, Lassen, Modoc, Shasta and Siskiyou counties, 
California and all other States, the period within which the sugar beets 
are normally grown, which is designated by the calendar year in which 
the sugar beets are normally harvested. In all other California 
counties, the period from planting until the applicable date for the end 
of the insurance period which is designated by:
    (a) The calendar year in which planted if planted on or before July 
15; or
    (b) The following calendar year if planted after July 15.

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    Harvest. Topping and lifting of sugar beets in the field.
    Initially planted. The first occurrence that land is considered as 
planted acreage for the crop year.
    Local market price. The price per pound for raw sugar offered by 
buyers in the area in which you normally market the sugar beets.
    Planted acreage.--In addition to the definition contained in the 
Basic Provisions, sugar beets must initially be planted in rows, unless 
otherwise provided by the Special Provisions, actuarial documents, or by 
written agreement.
    Practical to replant. In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8), 
practical to replant is defined as our determination, after loss or 
damage to the insured crop, based on factors, including but not limited 
to moisture availability, condition of the field, time to crop maturity, 
and marketing window, that replanting the insured crop will allow the 
crop to attain maturity prior to the calendar date for the end of the 
insurance period. It will not be considered practical to replant if 
production from the replanted acreage cannot be delivered under the 
terms of the processor contract, or 30 days after the initial planting 
date for all counties where a late planting period is not applicable, 
unless replanting is generally occurring in the area.
    Processor. Any business enterprise regularly engaged in processing 
sugar beets for sugar that possesses all licenses and permits for 
processing sugar beets required by the State in which it operates, and 
that possesses facilities, or has contractual access to such facilities, 
with enough equipment to accept and process the contracted sugar beets 
within a reasonable amount of time after harvest.
    Production guarantee (per acre):
    (a) First stage production guarantee--The final stage production 
guarantee multiplied by 60 percent.
    (b) Final stage production guarantee--The number of tons determined 
by multiplying the approved yield per acre by the coverage level 
percentage you elect.
    Raw sugar. Sugar that has not been extracted from the sugar beet.
    Standardized ton. A ton of sugar beets containing the percentage of 
raw sugar specified in the Special Provisions.
    Sugar beet processor contract. A written contract between the 
producer and the processor, containing at a minimum:
    (1) The producer's commitment to plant and grow sugar beets, and to 
deliver the sugar beet production to the processor;
    (2) The processor's commitment to purchase the production stated in 
the contract; and
    (3) A price or formula for a price based on third party data that 
will be paid to the producer for the production stated in the contract.
    Thinning. The process of removing, either by machine or hand, a 
portion of the sugar beet plants to attain a desired plant population.
    Ton. Two thousand (2,000) pounds avoirdupois.

                            2. Unit Division

    In addition to the requirements of section 34 of the Basic 
Provisions, basic units may be divided into optional units only if you 
have a sugar beet processor contract that requires the processor to 
accept all production from a number of acres specified in the sugar beet 
processor contract. Acreage insured to fulfil a sugar beet contract 
which provides that the processor will accept a designated amount of 
production or a combination of acreage and production will not be 
eligible for optional units.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one price 
election for all the sugar beets in the county insured under this 
policy.
    (b) The production guarantees are progressive by stages, and 
increase at specified intervals to the final stage. The stages are:
    (1) First stage, with a guarantee of 60 percent (60%) of the final 
stage production guarantee, extends from planting until:
    (i) July 1 in Lassen, Modoc, Shasta and Siskiyou counties, 
California and all other States except Arizona; and
    (ii) The earlier of thinning or 90 days after planting in Arizona 
and all other California counties.
    (2) Final stage, with a guarantee of 100 percent (100%) of the final 
stage production guarantee, applies to all insured sugar beets that 
complete the first stage.
    (c) The production guarantee will be expressed in standardized tons.
    (d) Any acreage of sugar beets damaged in the first stage to the 
extent that growers in the area would not normally further care for the 
sugar beets will be deemed to have been destroyed, even though you may 
continue to care for it. The production guarantee for such acreage will 
not exceed the first stage production guarantee.

                           4. Contract Changes

    In accordance with the provisions of section 4 (Contract Changes) of 
the Basic Provisions, the contract change date is April 30 preceding the 
cancellation date for counties with a July 15 or August 31 cancellation 
date and November 30 (December 17 for the 1998

[[Page 171]]

crop year only) preceding the cancellation date for all other counties.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
        State and County          Cancellation date    Termination date
------------------------------------------------------------------------
Arizona; and Imperial County,    August 31..........  August 31.
 California.
All California counties, except  July 15............  November 30.
 Imperial, Lassen, Modoc,
 Shasta and Siskiyou.
All Other States, and Lassen,    March 15...........  March 15.
 Modoc, Shasta and Siskiyou
 Counties, California.
------------------------------------------------------------------------

                            6. Annual Premium

    In lieu of the premium computation method contained in section 7 
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual 
premium amount is computed by multiplying the final stage production 
guarantee by the price election, the premium rate, the insured acreage, 
your share at the time of planting, and any applicable premium 
adjustment factors contained in the Actuarial Table.

                             7. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the sugar beets 
in the county for which a premium rate is provided by the actuarial 
documents:
    (1) In which you have a share;
    (2) That are planted for harvest as sugar beets;
    (3) That are grown under a sugar beet processor contract executed 
before the acreage reporting date and are not excluded from the 
processor contract at any time during the crop year; and
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop;
    (ii) Planted into an established grass or legume; or
    (iii) Planted prior to submitting a properly completed application.
    (b) Sugar beet growers who are also processors may establish an 
insurable interest if they meet the following requirements:
    (1) The processor must meet the definition of a ``processor'' in 
section 1 of these crop provisions and have a valid insurable interest 
in the sugar beet crop;
    (2) The Board of Directors or officers of the processor must have 
duly promulgated a resolution that sets forth essentially the same terms 
as a sugar beet processor contract. Such resolution will be considered a 
sugar beet processing contract under the terms of the sugar beet crop 
insurance policy;
    (3) The sales records of the processor showing the amount of sugar 
produced the previous year must be supplied to us to confirm the 
processor has produced and sold sugar in the past; and
    (4) Our inspection of the processing facilities determines that they 
conform to the definition of processor contained in section 1 of these 
crop provisions.

                          8. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8):
    (a) We will not insure any acreage planted to sugar beets:
    (1) The preceding crop year, unless otherwise specified in the 
Special Provisions for the county;
    (2) In any crop year following the discovery of rhizomania on the 
acreage, unless allowed by the Special Provisions or by written 
agreement; or
    (3) That does not meet the rotation requirements shown in the 
Special Provisions;
    (b) Any acreage of the insured crop damaged before the final 
planting date, (or within 30 days of initial planting for those counties 
without a final planting date) to the extent that growers in the area 
would normally not further care for the crop, must be replanted unless 
we agree that replanting is not practical.

                           9. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the 
end of the insurance period is:
    (1) July 15 in Arizona and in Imperial County, California;
    (2) The last day of the 12th month after the insured crop was 
initially planted in all California counties except Imperial, Lassen, 
Modoc, Shasta and Siskiyou;
    (3) October 31 in Lassen, Modoc, Shasta and Siskiyou Counties, 
California, and in Klamath County, Oregon;
    (4) November 25 in Ohio;
    (5) December 31 in New Mexico and Texas; and
    (6) November 15 in all other States and counties.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8), regarding the end of the 
insurance period, the insurance period ends for all units when the 
production delivered to the processor equals the amount of production 
stated in the sugar beet processor contract.

[[Page 172]]

                           10. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.

                         11. Replanting Payments

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if the crop is 
damaged by an insurable cause of loss to the extent that the remaining 
stand will not produce at least 90 percent (90%) of the final stage 
production guarantee for the acreage and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of 10 percent (10%) of the final stage production guarantee 
or one ton, multiplied by your price election, multiplied by your 
insured share.
    (c) When sugar beets are replanted using a practice that is 
uninsurable for an original planting, our liability on the unit will be 
reduced by the amount of the replanting payment. The premium amount will 
not be reduced.

                12. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8):
    (a) Representative samples of the unharvested crop must be at least 
10 feet wide and extend the entire length of each field in the unit. The 
samples must not be harvested or destroyed until the earlier of our 
inspection or 15 days after harvest of the balance of the unit is 
completed; and
    (b) You must provide a copy of your sugar beet processor contract or 
corporate resolution if you are the processor.

                         13. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which acceptable production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Subtracting the total production to count from the result in 
paragraph (b)(1);
    (3) Multiplying the result of paragraph (b)(2) by your price 
election; and
    (4) Multiplying the result of paragraph (b)(3) by your share.
    (c) The total production to count (in standardized tons) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records that 
are acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (unharvested production that is 
appraised prior to the earliest delivery date that the processor accepts 
harvested production will not be eligible for a conversion to 
standardized tons in accordance with section 13 (d) and (e));
    (iv) Only appraised production in excess of the difference between 
the first and final stage production guarantee for acreage that does not 
qualify for the final stage guarantee will be counted, except that all 
production from acreage subject to section 13(c)(1) (i) and (ii) will be 
counted; and
    (v) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end if you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will

[[Page 173]]

be used to determine the amount of production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage.
    (d) Harvested production or unharvested production that is appraised 
after the earliest delivery date that the processor accepts harvested 
production and that meets the minimum acceptable standards contained in 
the sugar beet processor contract or corporate resolution will be 
converted to standardized tons by:
    (1) Dividing the average percentage of raw sugar in such sugar beets 
by the raw sugar content percentage shown in the Special Provisions; and
    (2) Multiplying the result (rounded to three places) by the number 
of tons of such sugar beets.
    The average percentage of raw sugar will be determined from tests 
performed by the processor at the time of delivery. If individual tests 
of raw sugar content are not made at the time of delivery, the average 
percent of raw sugar may be based on the results of previous tests 
performed by the processor during the crop year if it is determined that 
such results are representative of the total production. If not 
representative, the average percent of raw sugar will equal the raw 
sugar content percent shown in the Special Provisions.
    (e) Harvested production or unharvested production that is appraised 
after the earliest delivery date that the processor accepts harvested 
production and that does not meet the minimum acceptable standards 
contained in the sugar beet processor contract due to an insured peril 
will be converted to standardized tons by:
    (1) Dividing the gross dollar value of all of the damaged sugar 
beets on the unit (including the value of cooperative stock, patronage 
refunds, etc.) by the local market price per pound on the earlier of the 
date such production is sold or the date of final inspection for the 
unit;
    (2) Dividing that result by 2,000; and
    (3) Dividing that result by the county average raw sugar factor 
contained in the Special Provisions for this purpose.
    For example, assume that the total dollar value of the damaged sugar 
beets is $6,000.00; the local market price is $0.10; and the county 
average raw sugar factor is 0.15. The amount of production to count 
would be calculated as follows: (($6,000.00 / $0.10) / 2,000) / 0.15 = 
200 tons.

                     14. Late and Prevented Planting

    The late planting provisions contained in section 16 of the Basic 
Provisions are not applicable in California counties with a July 15, 
cancellation date.

                         15. Prevented Planting

    (a) The prevented planting provision contained in sectino 17 of the 
Basic Provisions are not applicable in Califronia counties with a July 
15, cancellation date.
    (b) Except in those counties indicated in section 15(a), your 
prevented planting coverage will be 45 percent of your production 
guarantee for timely planted acreage. If you have limited or additional 
levels of coverage, as specified in 7 CFR part 400, subpart T, and pay 
an additional premium, you may increase your prevented planting coverage 
to a level specified in the actuarial documents.

[61 FR 58775, Nov. 19, 1996, as amended at 62 FR 63633, Dec. 2, 1997; 62 
FR 65167, Dec. 10, 1997]



Sec. 457.110  Fig crop insurance provisions.

    The Fig Crop Insurance Provisions for the 2001 and succeeding crop 
years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Fig Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Harvest--The picking of the figs from the trees or ground by hand or 
machine for the purpose of removal from the orchard.
    Interplanted--Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Manufacturing grade production-- Production that meets the minimum 
grade standards and is defined as ``manufacturing grade'' by the 
Marketing Order for Dried Figs, as amended, which is in effect on the 
date insurance attaches.
    Marketable figs-- Figs that grade manufacturing grade or better in 
accordance with the Marketing Order for Dried Figs, as amended, which is 
in effect on the date insurance attaches.
    Substandard production-- Production that does not meet minimum grade 
standards and is defined as ``substandard'' by the Marketing Order for 
Dried Figs, as amended, which is in effect on the date insurance 
attaches.

[[Page 174]]

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by each fig type designated 
in the Special Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements under section 3 of the Basic 
Provisions, you may select only one price election for each fig type 
designated in the Special Provisions and insured in the county under 
this policy.
    (b) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that could or would reduce the yield of the insured crop 
has occurred prior to the time you request the increase.
    (c) You must report, by the production reporting date designated in 
section 3 of the Basic Provisions, by type if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern;
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed, the age of the crop that is interplanted with the figs, and 
type if applicable, and the planting pattern; and
    (5) Any other information that we request in order to establish your 
approved yield. We will reduce the yield used to establish your 
production guarantee as necessary, based on our estimate of the effect 
of the following: Interplanted perennial crop; removal of trees; damage; 
change in practices and any other circumstance on the yield potential of 
the insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstance.

                           4. Contract Changes

    The contract change date is October 31 preceding the cancellation 
date (see the provisions under section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8)).

                  5. Cancellation and Termination Dates

    The cancellation and termination dates are February 28.

                          6. Report of Acreage

    By applying for fig crop insurance, you authorize us to have access 
to and to determine or verify your production and acreage from records 
maintained by the California Fig Advisory Board and the fig packer.

                             7. Insured Crop

    The crop insured will be all the commercially grown dried figs that 
are grown in the county on insurable acreage, and for which a premium 
rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown for harvest as dried figs;
    (c) That are irrigated;
    (d) That have reached the seventh growing season after being set 
out; and
    (e) For which acceptable production records for at least the 
previous crop year are provided;
    (f) That are not figs:
    (1) Grown on acreage with less than 90 percent of a stand based on 
the original planting pattern unless we agree, in writing, to insure 
such figs;
    (2) Which we inspect and consider not acceptable;
    (3) Grown for the crop year the application is filed unless 
inspected and accepted by us; or
    (4) Grown on acreage acquired for the crop year unless such acreage 
has been inspected and accepted by us.

                          8. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions, that 
prohibit insurance attaching to a crop planted with another crop, figs 
interplanted with another perennial crop are insurable unless we inspect 
the acreage and determine that it does not meet the requirements 
contained in your policy.

                           9. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) Coverage begins on March 1, except that for the year of 
application, if your application is received after February 19 but prior 
to March 1, insurance will attach on the 10th day after your properly 
completed application is received in our local office, unless we inspect 
the acreage during the 10 day period and determine that it does not meet 
insurability requirements. You must provide any information that we 
require for the crop or to determine the condition of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is October

[[Page 175]]

31 or the date harvest of the figs (by type) should have started on any 
acreage that will not be harvested (Exceptions, if any, for specific 
counties or varieties or varietal group are contained in the Special 
Provisions).
    (b) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that the policy remains continuously in force, 
coverage begins on the day immediately following the end of the 
insurance period for the prior crop year. Policy cancellation that 
results solely from transferring to a different insurance provider for a 
subsequent crop year will not be considered a break in continuous 
coverage.
    (c) If your fig policy is canceled or terminated for any crop year, 
in accordance with the terms of the policy, after insurance attached for 
that crop year but on or before the cancellation and termination dates 
whichever is later, insurance will not be considered to have attached 
for that crop year and no premium, administrative fee, or indemnity will 
be due for such crop year.

                           10. Causes of Loss

    (a) In addition to the provisions under section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), any loss covered by this policy 
must occur within the insurance period. The specific causes of loss for 
figs are:
    (1) Adverse weather conditions;
    (2) Earthquake;
    (3) Fire;
    (4) Volcanic eruption;
    (5) Wildlife; or
    (6) Failure of the irrigation water supply.
    (b) In addition to the causes of loss not insured against contained 
in section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we 
will not insure against:
    (1) Any loss of production due to fire, where weeds and other forms 
of undergrowth have not been controlled or tree pruning debris has not 
been removed from the grove; or
    (2) The inability to market the fruit as a direct result of 
quarantine, boycott, or refusal of any entity to accept production.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production that are acceptable to us 
for any:
    (1) Optional unit, we will combine all optional units for which 
acceptable records of production were not provided; or
    (2) Basic unit, we will allocate any commingled production to such 
units in proportion to our liability on the harvested acreage for each 
unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by the production guarantee;
    (2) Subtracting from this the total production to count;
    (3) Multiplying the remainder by your price election; and
    (4) Multiplying this result by your share.
    (c) The total production (pounds) to count from all insurable 
acreage on the unit will include all harvested and appraised marketable 
figs.
    (1) Figs, which due to insurable causes, grade manufacturing grade 
will be adjusted by:
    (i) Dividing the value per pound of the manufacturing grade 
production by the highest price election available for the insured type; 
and
    (ii) Multiplying the result (not to exceed 1) by the number of 
pounds of such manufacturing grade production.
    (2) Figs, which due to insurable causes, grade substandard and are 
delivered to the substandard pool will not be considered production to 
count, provided all the insured's substandard production is inspected by 
us and we give written consent to such delivery prior to delivery. If we 
do not give written consent prior to the delivery to the substandard 
pool, all production will be counted as undamaged marketable production. 
Substandard production for which we give written consent to you prior to 
delivery to the substandard pool, which is not delivered to the 
substandard pool, and is sold by you, will be considered production to 
count and adjusted as follows:
    (i) Dividing the value per pound received for such substandard 
production by the highest price election available for the insured type; 
and
    (ii) Multiplying the result (not to exceed 1) by the number of 
pounds of such substandard production.
    (3) Appraised production to be counted will include:
    (i) Potential production lost due to uninsured causes and failure to 
follow recognized good fig farming practices;
    (ii) Not less than the production guarantee for the figs on any 
acreage:
    (A) That is abandoned without our consent;
    (B) Damaged solely by uninsured causes;
    (c) If the figs are destroyed by you without our consent; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (iii) Unharvested production which would be marketable if harvested; 
and
    (iv) Potential production on insured acreage that you want to 
abandon and no longer care for if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end if you abandon the crop. If agreement on the appraised 
amount of production is not reached:
    (A) We may require you to continue to care for the crop so that a 
subsequent appraisal

[[Page 176]]

may be made or the crop harvested to determine actual production. You 
must notify us within three days of the date harvest should have started 
if the crop is not harvested; or
    (B) You may elect to continue to care for the crop. We will 
determine the amount of production to count for the acreage using the 
harvested production or our reappraisal if the crop is not harvested.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[59 FR 9615, Mar. 1, 1994, as amended at 62 FR 65167, Dec. 10, 1997; 65 
FR 47836, Aug. 4, 2000]



Sec. 457.111  Pear crop insurance provisions.

    The Pear Crop Insurance Provisions for the 2001 and succeeding crop 
years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

    Both FCIC and Reinsured Policies

                          Pear Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper, or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Harvest. The picking of mature pears from the trees or the 
collecting of marketable pears from the ground.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Marketable. Pear production acceptable for processing or other human 
consumption even if failing to meet any U.S. or applicable state grading 
standard.
    Ton. Two thousand (2,000) pounds avoirdupois.
    Varietal group. Types of pears with similar characteristics that are 
grouped for insurance purposes as specified in the Special Provisions.

                            2. Unit Division

    (a) Provisions in the Basic Provision that allow optional units by 
irrigated and non-irrigated practices are not applicable.
    (b) Instead of establishing optional units by section, section 
equivalents, or FSA farm serial number optional units may be established 
if each optional unit is located on non-contiguous.
    (c) In addition to, or instead of, establishing optional units by 
section, section equivalents, FSA farm serial number, or on non-
contiguous land, optional units may be established by varietal group 
when provided for in the Special Provisions. The requirements of section 
34(a)(1) of the Basic Provisions are not applicable for this method of 
unit division.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election for all the pears in the 
county insured under this policy unless the Special Provisions provide 
different price elections by varietal group, in which case you may 
select one price election for each varietal group designated in the 
Special Provisions. The price elections you choose for each varietal 
group must have the same percentage relationship to the maximum price 
offered by us for each varietal group. For example, if you choose one 
hundred percent (100%) of the maximum price election for one varietal 
group, you must also choose one hundred percent (100%) of the maximum 
price election for all other varietal groups.
    (b) You must report, by the production reporting date designated in 
section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by 
varietal group:
    (1) Any damage, removal of trees, change in practices or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage is changed:
    (i) The age of the interplanted crop, and type if applicable;
    (ii) The planting pattern; and

[[Page 177]]

    (iii) Any other information that we request in order to establish 
your approved yield. We will reduce the yield used to establish your 
production guarantee as necessary, based on our estimate of the effect 
of the following: interplanted perennial crop; removal of trees; damage; 
change in practices or any other circumstance on the yield potential of 
the insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time that we become aware of the 
circumstance.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that could or would reduce the yield of the insured crop 
has occurred prior to the time that you request the increase.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is October 31 
preceding the cancellation date for states with a January 31 
cancellation date and August 31 preceding the cancellation date for all 
other states.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
                                           Cancellation and termination
                 States                               dates
------------------------------------------------------------------------
California.............................  January 31.
All other states.......................  November 20.
------------------------------------------------------------------------

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the pears in the county for 
which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are of varieties adapted to the area;
    (c) That are grown on trees that have produced an average of at 
least five (5) tons of pears per acre in at least one of the four 
previous crop years unless the Special Provisions or a written agreement 
establishes a lower production level; and
    (d) That are grown in an orchard that, if inspected, is considered 
acceptable by us.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, pears interplanted with another 
perennial crop are insurable unless we inspect the acreage and determine 
that it does not meet the requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins:
    (i) In California, on February 1 of each crop year, except that for 
the year of application, if your application is received after January 
22 but prior to February 1, insurance will attach on the 10th day after 
your properly completed application is received in our local office, 
unless we inspect the acreage during the 10 day period and determine 
that it does not meet insurability requirements. You must provide any 
information that we require for the crop or to determine the condition 
of the orchard; or
    (ii) In all other states, on November 21 of each crop year, except 
that for the year of application, if your application is received after 
November 11 but prior to November 21, insurance will attach on the 10th 
day after your properly completed application is received in our local 
office, unless we inspect the acreage during the 10 day period and 
determine that it does not meet insurability requirements. You must 
provide any information that we require for the crop or to determine the 
condition of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is:
    (i) September 15 for Bartlett (green and red) and Star Crimson 
(Crimson Red) varietal groups; or
    (ii) October 15 for all other varietal groups.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable interest on any insurable 
acreage of pears on or before the acreage reporting date of any crop 
year, insurance will not be considered to have attached to, and no 
premium will be due, and no indemnity paid, for such acreage for that 
crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

[[Page 178]]

    (c) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that the policy remains continuously in force, 
coverage begins on the day immediately following the end of the 
insurance period for the prior crop year. Policy cancellation that 
results solely from transferring to a different insurance provider for a 
subsequent crop year will not be considered a break in continuous 
coverage.
    (d) If your pear policy is canceled or terminated for any crop year, 
in accordance with the terms of the policy, after insurance attached for 
that crop year but on or before the cancellation and termination dates 
whichever is later, insurance will not be considered to have attached 
for that crop year and no premium, administrative fee, or indemnity will 
be due for such crop year.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur within the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the orchard;
    (3) Earthquake;
    (4) Volcanic eruption; or
    (5) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available.
    (2) Failure of the fruit to color properly; or
    (3) Inability to market the pears for any reason other than actual 
physical damage from an insurable cause specified in this section. For 
example, we will not pay you an indemnity if you are unable to market 
due to quarantine, boycott, or refusal of any person to accept 
production.

                10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following 
will apply:
    (a) You must notify us within 3 days of the date harvest should have 
started if the crop will not be harvested.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing. We will conduct an appraisal 
that will be used to determine your production to count for production 
that is sold by direct marketing. If damage occurs after this appraisal, 
we will conduct an additional appraisal. These appraisals, and any 
acceptable records provided by you, will be used to determine your 
production to count. Failure to give timely notice that production will 
be sold by direct marketing will result in an appraised amount of 
production to count of not less than the production guarantee per acre 
if such failure results in our inability to make the required appraisal.
    (c) If you intend to claim an indemnity on any unit, you must notify 
us at least 15 days prior to the beginning of harvest if you previously 
gave notice in accordance with section 14 of the Basic Provisions (Sec. 
457.8), so that we may inspect the damaged production. You must not sell 
or dispose of the damaged crop until after we have given you written 
consent to do so. If you fail to meet the requirements of this section, 
and such failure results in our inability to inspect the damaged 
production, all such production will be considered undamaged and 
included as production to count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate, acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each varietal group if 
applicable, by its respective production guarantee;
    (2) Multiplying the results of section 11(b)(1) by the respective 
price election for each varietal group, if applicable;
    (3) Totaling the results of section 11(b)(2);
    (4) Multiplying the total production to be counted of each varietal 
group, if applicable, by the respective price election;
    (5) Totaling the results of section 11(b)(4);
    (6) Subtracting this result of section 11(b)(5) from the result of 
section 11(b)(3); and
    (7) Multiplying the result of section 11(b)(6) by your share.
    (c) The total production to count (in tons) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;

[[Page 179]]

    (B) That is sold by direct marketing if you fail to meet the 
requirements contained in section 10;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and
    (2) For all states except California, all harvested and appraised 
marketable pear production from the insurable acreage.
    (3) For California, all harvested and appraised production that:
    (i) Meets the standards for first grade canning as defined by the 
California Pear Advisory Board or for U.S. Number 1 as defined by the 
United States Standards for Grades of Summer and Fall Pears, or Pears 
for Processing, or for U.S. Extra Number 1 or U.S. Number 1 as defined 
by the United States Standards for Grades of Winter Pears;
    (ii) Is accepted by a processor for canning or packing; or
    (iii) Is marketable for any purpose. However, if the pears are 
damaged by an insured cause, the production to count will be reduced by 
the greater of the following amounts:
    (A) The excess over ten percent (10%) of pears that are size 180 or 
smaller for varieties other than Forelle, Seckel or Winter Nelis; or
    (B) The result of dividing the value per ton of such pears by the 
highest price election for the insured varietal group, subtracting this 
result from 1.000, and multiplying this difference (if positive) by the 
number of tons of such pears.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

                 13. Pear Quality Adjustment Endorsement

    (a) This endorsement applies to any crop year: Provided,
    (1) The insured pears are located in a State other than California 
and the actuarial documents designate a premium rate for this 
endorsement;
    (2) You have not elected to insure your pears under the Catastrophic 
Risk Protection (CAT) Endorsement;
    (3) You elected it on your application or other form approved by us, 
and did so on or before the sales closing date for the initial crop year 
for which you wish it to be effective. By doing so, you agreed to pay 
the additional premium designated in the actuarial documents for this 
optional coverage; and
    (4) You or we did not cancel it in writing on or before the 
cancellation date. Your election of CAT coverage for any crop year after 
this endorsement is effective will be considered as notice of 
cancellation by you.
    (b) If the pear production is damaged by hail and if eleven percent 
(11%) or more of the harvested and appraised production does not grade 
at least U.S. No. 2 in accordance with applicable United States 
Standards for Grades of Summer and Fall Pears, United States Standards 
for Grades of Winter Pears, or United States Standards for Grades of 
Pears for Processing, as applicable, due solely to hail, the amount of 
production to count will be reduced as follows:
    (1) By two percent (2%) for each full one percent (1%) in excess of 
ten percent (10%), when eleven percent (11%) through sixty percent (60%) 
of the pears fail the grade standard; or
    (2) By one hundred percent (100%) when more than sixty percent (60%) 
of the pears fail the grade standard.
    The difference between the reduced production determined in section 
13(b) and the total production will be considered as cull production.
    (c) Pears that are knocked to the ground by wind or that are frozen 
and cannot be packed or marketed as fresh pears will be considered one 
hundred percent (100%) cull production.
    (d) Marketable production that grades less than U.S. No. 2 due to 
causes not covered by this endorsement will not be reduced.
    (e) Fifteen percent (15%) of all production considered as cull 
production in accordance with section 13 (b) and (c) will be production 
to count.

[61 FR 57580, Nov. 7, 1996; 62 FR 2007, Jan. 15, 1997; 62 FR 65167, Dec. 
10, 1997; 65 FR 47837, Aug. 4, 2000]



Sec. 457.112  Hybrid sorghum seed crop insurance provisions.

    The Hybrid Sorghum Seed Crop Insurance Provisions for the 1998 and 
succeeding crop years are as follows:
    FCIC policies:

[[Page 180]]

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

    Both FCIC and Reinsured Policies

                   Hybrid Sorghum Seed Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows:
    (1) The Catastrophic Risk Protection Endorsement, if applicable; (2) 
the Special Provisions; (3) these Crop Provisions; and (4) the Basic 
Provisions, (Sec. 457.8) with (1) controlling (2), etc.

                             1. Definitions

    Adjusted yield. An amount determined by multiplying the county yield 
by the coverage level factor.
    Amount of insurance per acre. A dollar amount determined by 
multiplying the adjusted yield by the price election you select and 
subtracting any minimum guaranteed payment, not to exceed the total 
compensation specified in the hybrid sorghum seed processor contract. If 
your hybrid sorghum seed processor contract contains a minimum 
guaranteed payment that is stated in bushels, we will convert that value 
to dollars by multiplying it by the price election you selected.
    Approved yield. In lieu of the definition contained in the Basic 
Provisions, an amount FCIC determines to be representative of the yield 
that the female parent plants are expected to produce when grown under a 
specific production practice. FCIC will establish the approved yield 
based upon records provided by the seed company and other information it 
deems appropriate.
    Bushel. Fifty-six pounds avoirdupois of the insured crop.
    Certified seed test. A warm germination test performed on clean seed 
according to specifications of the ``Rules for Testing Seeds'' of the 
Association of Official Seed Analysts.
    Commercial hybrid sorghum seed. The offspring produced by crossing a 
male and female parent plant, each having a different genetic character. 
This offspring is the product intended for use by an agricultural 
producer to produce a commercial field sorghum crop for grain or forage.
    County yield. An amount contained in the actuarial documents that is 
established by FCIC to represent the yield that a producer of hybrid 
sorghum seed would be expected to produce if the acreage had been 
planted to commercial field sorghum.
    Coverage level factor. A factor contained in the Special Provisions 
to adjust the county yield for commercial field sorghum to reflect the 
higher value of hybrid sorghum seed.
    Dollar value per bushel. An amount that determines the value of any 
seed production to count. It is determined by dividing the amount of 
insurance per acre by the result of multiplying the approved yield by 
the coverage level percentage, expressed as a decimal.
    Female parent plants. Sorghum plants that are grown for the purpose 
of producing commercial hybrid sorghum seed and are male sterile.
    Field run. Commercial hybrid sorghum seed production before it has 
been processed or screened.
    Good farming practices. In addition to the definition contained in 
the Basic Provisions, good farming practices include those practices 
required by the hybrid sorghum seed processor contract.
    Harvest. Combining, threshing or picking of the female parent plants 
to obtain commercial hybrid sorghum seed.
    Hybrid sorghum seed processor contract. An agreement executed in 
writing between the hybrid sorghum seed crop producer and a seed company 
containing, at a minimum:
    (a) The producer's promise to plant and grow male and female parent 
plants, and to deliver all commercial hybrid sorghum seed produced from 
such plants to the seed company;
    (b) The seed company's promise to purchase the commercial hybrid 
sorghum seed produced by the producer; and
    (c) Either a fixed price per unit of measure (bushels, 
hundredweight, etc.) of the commercial hybrid sorghum seed or a formula 
to determine the value of such seed. Any formula for establishing the 
value must be based on data provided by a public third party that 
establishes or provides pricing information to the general public, based 
on prices paid in the open market (e.g., commodity futures exchanges), 
to be acceptable for the purpose of this policy.
    Inadequate germination. Germination of less than 80 percent of the 
commercial hybrid sorghum seed as determined by using a certified seed 
test.
    Insurable interest. Your share of the financial loss that occurs in 
the event seed production is damaged by a cause of loss specified in 
section 10.
    Local market price. The cash price offered by buyers for any 
production from the female parent plants that is not considered 
commercial hybrid sorghum seed under the terms of this policy.
    Male parent plants. Sorghum plants grown for the purpose of 
pollinating female parent plants.
    Minimum guaranteed payment. A minimum amount (usually stated in 
dollars or bushels) specified in your hybrid sorghum seed processor 
contract that will be paid or credited to you by the seed company 
regardless of the quantity of seed produced.

[[Page 181]]

    Non-seed production. Production that does not qualify as seed 
production because of inadequate germination.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, the insured crop must be planted in rows wide enough 
to permit mechanical cultivation, unless provided by the Special 
Provisions or by written agreement.
    Planting pattern. The arrangement of the rows of the male and female 
parent plants in a field. An example of a planting pattern is four 
consecutive rows of female parent plants followed by two consecutive 
rows of male parent plants.
    Practical to replant. In addition to the definition contained in the 
Basic Provisions, practical to replant applies to either the female or 
male parent plant. It will not be considered practical to replant unless 
production from the replanted acreage can be delivered under the terms 
of the hybrid sorghum seed processor contract, or the seed company 
agrees that it will accept the production from the replanted acreage.
    Prevented planting. In addition to the definition contained in the 
Basic Provisions, prevented planting applies to the female and male 
parent plants. The male parent plants must be planted in accordance with 
the requirements of the hybrid sorghum seed processor contract to be 
considered planted.
    Sample. For the purpose of the certified seed test, at least 3 
pounds of randomly selected field run sorghum seed for each type or 
variety of commercial hybrid sorghum seed grown on the unit.
    Seed company. A business enterprise that possesses all licenses for 
marketing commercial hybrid sorghum seed required by the state in which 
it is domiciled or operates, and which possesses facilities with enough 
storage and drying capacity to accept and process the insured crop 
within a reasonable amount of time after harvest. If the seed company is 
the insured, it must also be a corporation.
    Seed production. All seed produced by female parent plants with a 
germination rate of at least 80 percent as determined by a certified 
seed test.
    Type. Grain sorghum, forage sorghum, or sorghum sudan parent plants.
    Variety. The name, number or code assigned to a specific genetic 
cross by the seed company or the Special Provisions for the insured crop 
in the county.

                            2. Unit Division

    (a) For any processor contract that stipulates the amount of 
production to be delivered:
    (1) In lieu of the definition of ``basic unit'' contained in the 
Basic Provisions, a basic unit will consist of all acreage planted to 
the insured crop in the county that will be used to fulfill a hybrid 
sorghum seed processor contract;
    (2) There will be no more than one basic unit for all production 
contracted with each processor contract;
    (3) In accordance with section 12, all production from any basic 
unit in excess of the amount under contract will be included as 
production to count if such production is applied to any other basic 
unit for which the contracted amount has not been fulfilled; and
    (4) Optional units will not be established.
    (b) For any processor contract that stipulates a number of acres to 
be planted, the provisions in the Basic Provisions that allow optional 
units by irrigated and non-irrigated practices are not applicable.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election for all the hybrid 
sorghum seed in the county insured under this policy unless the Special 
Provisions provide different price elections by type or variety, in 
which case you may elect one price election for each hybrid sorghum seed 
type or variety designated in the Special Provisions. The price election 
you choose for each type or variety must have the same percentage 
relationship to the maximum price offered by us for each type or 
variety. For example, if you choose 100 percent of the maximum price 
election for one specific type or variety, you must also choose 100 
percent of the maximum price election for all other types or varieties.
    (b) The production reporting requirements contained in section 3 of 
the Basic Provisions are not applicable to this contract.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are March 15.

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions, you must:
    (a) Report by type and variety, the location and insurable acreage 
of the insured crop;
    (b) Report any acreage that is uninsured, including that portion of 
the total acreage occupied by male parent plants; and
    (c) Certify that you have a hybrid sorghum seed processor contract 
and report the amount, if any, of any minimum guaranteed payment.

[[Page 182]]

                             7. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the female parent plants in the county for which a 
premium rate is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That are grown under a hybrid sorghum seed processor contract 
executed before the acreage reporting date;
    (3) That are planted for harvest as commercial hybrid sorghum seed 
in accordance with the requirements of the hybrid sorghum seed processor 
contract and the production management practices of the seed company; 
and
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Planted with a mixture of female and male parent seed in the 
same row;
    (ii) Planted for any purpose other than for commercial hybrid 
sorghum seed;
    (iii) Interplanted with another crop; or
    (iv) Planted into an established grass or legume.
    (b) An instrument in the form of a ``lease'' under which you retain 
control of the acreage on which the insured crop is grown and that 
provides for delivery of the crop under substantially the same terms as 
a hybrid sorghum seed processor contract will be treated as a contract 
under which you have an insurable interest in the crop.
    (c) A commercial hybrid sorghum seed producer who is also a 
commercial hybrid sorghum seed company may be able to insure the hybrid 
sorghum seed crop if the following requirements are met:
    (1) The seed company has an insurable interest in the hybrid sorghum 
seed crop;
    (2) Prior to the sales closing date, the Board of Directors of the 
seed company has executed and adopted a corporate resolution containing 
the same terms as an acceptable hybrid sorghum seed processor contract. 
This corporate resolution will be considered a contract under the terms 
of this policy;
    (3) Sales records for at least the previous years' seed production 
must be provided to confirm that the seed company has produced and sold 
seed. If such records are not available, the crop may be insured under 
the Coarse Grains Crop Provisions with a written agreement; and
    (4) Our inspection reveals that the storage and drying facilities 
satisfy the definition of a seed company.
    (d) Any of the insured crop that is under contract with different 
seed companies may be insured under separate policies with different 
insurance providers provided all acreage of the insured crop in the 
county is insured. If you elect to insure the insured crop with 
different insurance providers, you agree to pay separate administrative 
fees for each insurance policy.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
we will not insure any acreage of the insured crop:
    (a) Planted and occupied exclusively by male parent plants;
    (b) Not in compliance with the rotation requirements contained in 
the Special Provisions or, if applicable, required by the hybrid sorghum 
seed processor contract; or
    (c) If either the female or male parent plants are damaged before 
the final planting date and we determine that insured crop is practical 
to replant but it is not replanted.

                           9. Insurance Period

    (a) In addition to the provisions of section 11 of the Basic 
Provisions, insurance attaches upon completion of planting of:
    (1) The female parent plant seed on or before the final planting 
date designated in the Special Provisions, except as allowed in section 
16 of the Basic Provisions; and
    (2) The male parent plant seed.
    (b) In accordance with the provisions of section 11 of the Basic 
Provisions, the calendar date for the end of the insurance period is the 
November 30 immediately following planting.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if due to a cause of 
loss contained in section 10(a) (1) through (7) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded by section 12 of the 
Basic Provisions, we will not insure against any loss of production due 
to:
    (1) The use of unadapted, incompatible, or genetically deficient 
male or female parent plant seed;
    (2) Frost or freeze after the date set by the Special Provisions;
    (3) Failure to follow the requirements stated in the hybrid sorghum 
seed processor contract and production management practices of the seed 
company;
    (4) Inadequate germination, even if resulting from an insured cause 
of loss, unless you

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have provided adequate notice as required by section 11(b)(1); or
    (5) Failure to plant the male parent plant seed at a time or in a 
manner sufficient to assure adequate pollination of the female parent 
plants, unless you are prevented from planting the male parent plant 
seed by an insured cause of loss.

                11. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, you must leave representative samples of at least one 
complete planting pattern of the male and female parent plant rows that 
extend the entire length of each field in the unit. If you are going to 
destroy any acreage of the insured crop that will not be harvested, the 
samples must not be destroyed until after our inspection.
    (b) In addition to the requirements of section 14 of the Basic 
Provisions:
    (1) You must give us notice of probable loss at least 15 days before 
the beginning of harvest if you anticipate inadequate germination on any 
unit; and
    (2) You must provide a completed copy of your hybrid sorghum seed 
processor contract unless we have determined it has already been 
provided by the seed company, and the seed company certifies that such 
contract is used for all its producers without any waivers or 
amendments.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) You will not receive an indemnity payment on a unit if the seed 
company refuses to provide us with records we require to determine the 
dollar value per bushel of production for each variety.
    (c) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by its respective amount of 
insurance per acre, by type and variety if applicable;
    (2) Totaling the results of section 12(c)(1) if there are more than 
one type or variety;
    (3) Multiplying the total seed production to count (see section 
12(d)) for each type and variety of commercial hybrid sorghum seed by 
the applicable dollar value per bushel for that type or variety;
    (4) Multiplying the total non-seed production to count (see section 
12(e)) for each type and variety by the applicable local market price 
determined on the earlier of the date the non-seed production is sold or 
the date of final inspection;
    (5) Totaling the results of sections 12(c)(3) and 12(c)(4) by type 
and variety;
    (6) Subtracting the result of section 12(c)(5) from the result of 
section 12(c)(1) if there is only one type or variety, or subtracting 
the result of 12(c)(5) from the result of section 12(c)(2) if there are 
more than one type or variety; and
    (7) Multiplying the result of section 12(c)(6) by your share.
For example:
    You have a 100 percent share in 50 acres insured for the development 
of type ``A'' hybrid sorghum seed in the unit, with an amount of 
insurance per acre guarantee of $361 (county yield of 170 bushels times 
a coverage level factor of .867 for the 65 percent coverage level, times 
a price election of $2.45 per bushel, minus the minimum guaranteed 
payment of zero). Your seed production was 1,400 bushels and the dollar 
value per bushel was $3.47. Your non-seed production was 100 bushels 
with a local market value of $2.00 per bushel. Your indemnity would be 
calculated as follows:
    (1) 50 acres x $361 = $18,050 amount of insurance guarantee;
    (3) 1,400 bushels x $3.47 = $4,858 value of seed production;
    (4) 100 bushels of non-seed x $2.00 = $200 of non-seed production;
    (5) $4,858 + $200 = $5,058;
    (6) $18,050 - $5,058 = $12,992; and
    (7) $12,992 x 100 percent share = $12,992 indemnity payment.
    You also have a 100 percent share in 50 acres insured for the 
development of type ``B'' hybrid sorghum seed in the unit, with an 
amount of insurance per acre guarantee of $340 (county yield of 160 
bushels times a coverage level factor of .867 for the 65 percent 
coverage level, times a price election of $2.45 per bushel, minus the 
minimum guaranteed payment of zero). You harvested 1,200 bushels and the 
dollar value per bushel for the harvested amount was $4.63. You also 
harvested 200 bushels of non-seed with a market value of $2.00 per 
bushel. Your indemnity would be calculated as follows:
    (1) 50 acres x $361 = $18,050 amount of insurance guarantee for type 
``A'' and 50 acres x $340 = $17,000 amount of insurance guarantee for 
type ``B'';
    (2) $18,050 + $17,000 = $35,050 amount of insurance guarantee;
    (3) 1,400 bushels x $3.47 = $4,858 value of seed production for type 
``A'' and 1,200 bushels x $4.63 = $5,556 value of seed production for 
type ``B'';
    (4) 100 bushels of non-seedx$2.00 = $200 of non-seed production for 
type ``A'' and 200 bushels of non-seed x $2.00 = $400 of non-seed 
production for type ``B''

[[Page 184]]

    (5) $4,858 + $200 + $5,556 + $400 = $11,014 value of production to 
count;
    (6) $35,050 - $11,014 = $24,036; and
    (7) $24,036 x 100 percent share = $24,036 indemnity payment.
    (d) Production to be counted as seed production will include:
    (1) All appraised production as follows:
    (i) Not less than the amount of insurance per acre for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Mature unharvested production with a germination rate of at 
least 80 percent of the commercial hybrid sorghum seed as determined by 
a certified seed test. Any such production may be adjusted in accordance 
with section 12(f);
    (iv) Immature appraised production;
    (v) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or fail to provide sufficient care 
for the samples, our appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) Harvested production that you deliver as commercial hybrid 
sorghum seed to the seed company stated in your hybrid sorghum seed 
processor contract, regardless of quality, unless the production has 
inadequate germination.
    (e) Production to be counted as non-seed production will include all 
harvested or mature appraised production that does not qualify as seed 
production to count as specified in section 12(d). Any such production 
may be adjusted in accordance with section 12(f).
    (f) For the purpose of determining the quantity of mature 
production:
    (1) Commercial hybrid sorghum seed production will be:
    (i) Increased 0.12 percent for each 0.1 percentage point of moisture 
below 13.0 percent; or
    (ii) Decreased 0.12 percent for each 0.1 percentage point of 
moisture in excess of 13.0 percent.
    (2) When records of commercial hybrid sorghum seed production 
provided by the seed company have been adjusted to a basis of 13.0 
percent moisture and 56 pound avoirdupois bushels, section 12(f)(1) 
above will not apply to harvested production. In such cases, records of 
the seed company will be used to determine the amount of production to 
count, provided that the moisture and weight of such production are 
calculated on the same basis as that used to determine the approved 
yield.

                         13. Prevented Planting

    Your prevented planting coverage will be 60 percent of your amount 
of insurance for timely planted acreage. If you have limited or 
additional levels of coverage as specified in 7 CFR part 400, subpart T, 
and pay an additional premium, you may increase your prevented planting 
coverage to a level specified in the actuarial documents.

[62 FR 65318, Dec. 12, 1997]



Sec. 457.113  Coarse grains crop insurance provisions.

    The coarse grains crop insurance provisions for the 2003 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                      Coarse Grains Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Coarse grains-- Corn, grain sorghum, and soybeans.
    Grain sorghum-- The crop defined as sorghum under the United States 
Grain Standards Act.
    Harvest-- Combining, threshing, or picking the insured crop for 
grain, or cutting for hay, silage, or fodder.
    Local market price-- The cash grain price per bushel for the U.S. 
No. 2 yellow corn,

[[Page 185]]

U.S. No. 2 grain sorghum, or U.S. No. 1 soybeans, offered by buyers in 
the area in which you normally market the insured crop. The local market 
price will reflect the maximum limits of quality deficiencies allowable 
for the U.S. No. 2 grade for yellow corn and grain sorghum, or U.S. No. 
1 grade for soybeans. Factors not associated with grading under the 
Official United States Standards for Grain, including but not limited to 
protein and oil, will not be considered.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, coarse grains must initially be planted in rows (corn 
must be planted in rows far enough apart to permit mechanical 
cultivation), unless otherwise provided by the Special Provisions, 
actuarial documents, or by written agreement.
    Production guarantee(per acre)--In lieu of the definition contained 
in the Basic Provisions, the number of bushels (tons for corn insured a 
silage) determined by multiplying the approved actual production history 
(APH) yield per acre, calculated in accordance with 7 CFR part 400, 
subpart G, by the coverage level percentage you elect.
    Silage-- A product that results from severing the plant from the 
land and chopping it for the purpose of livestock feed.
    Ton-- Two thousand (2000) pounds avoirdupois.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8) you may select:
    (1) For grain sorghum and soybeans, only one price election for each 
crop in the county insured under this policy; and
    (2) For corn, only one price election for all the corn in the county 
insured as grain under this policy, and only one price election for all 
the corn in the county insured as silage under this policy. The price 
elections you choose for grain and silage must have the same percentage 
relationship to the maximum price election offered by us for grain and 
silage. For example, if you choose one hundred percent (100%) of the 
maximum grain price election and you also insure corn on a silage basis, 
you must choose one hundred percent (100%) of the maximum silage price 
election.
    (b) For corn only, if you harvest the crop in a manner other than 
the manner you reported (for example, you reported grain but harvested 
as silage) and you did not select a price election for the type 
harvested, we will assign a price election for the type harvested that 
bears the same percentage relationship to the maximum price election you 
selected for the type reported (for example, if you selected a grain 
price election in the amount of eighty percent (80%) of the maximum 
price election for grain and you did not select a silage price election, 
we will assign a silage price election in the amount of eighty percent 
(80%) of the maximum price election for silage specified in the Special 
Provisions if you harvest for silage). This assigned price election will 
be used only to determine the dollar value of production to count for 
indemnity purposes and will not be used to determine the amount of 
insurance or premium.

                           3. Contract Changes

    The contract change date is November 30 (December 17 for the 1998 
crop year only) preceding the cancellation date (see the provisions of 
Section 4 (Contract Changes) of the Basic Provisions).

                  4. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions (Sec. 457.8), 
the cancellation and termination dates are:

------------------------------------------------------------------------
                                                    Cancellation and
               State and county                     termination dates
------------------------------------------------------------------------
(a) For corn and grain sorghum:
  Val Verde, Edwards, Kerr, Kendall, Bexar,     January 15.
   Wilson, Karnes, Goliad, Victoria, and
   Jackson Counties, Texas, and all Texas
   counties lying south thereof.
  El Paso, Hudspeth, Culberson, Reeves,         February 15.
   Loving, Winkler, Ector, Upton, Reagan,
   Sterling, Coke, Tom Green, Concho,
   McCulloch, San Saba, Mills, Hamilton,
   Bosque, Johnson, Tarrant, Wise, Cooke
   Counties, Texas, and all Texas counties
   lying south and east thereof to and
   including Terrell, Crockett, Sutton,
   Kimble, Gillespie, Blanco, Comal,
   Guadalupe, Gonzales, De Witt, Lavaca,
   Colorado, Wharton, and Matagorda Counties,
   Texas.
  Alabama; Arizona; Arkansas; California;       February 28.
   Florida; Georgia; Louisiana; Mississippi;
   Nevada; North Carolina; and South Carolina.
  All other Texas counties and all other        March 15.
   states.
(b) For soybeans:
  Jackson, Victoria, Goliad, Bee, Live Oak,     February 15.
   McMullen, LaSalle, and Dimmit Counties,
   Texas and all Texas counties lying south
   thereof.

[[Page 186]]

 
  Alabama; Arizona; Arkansas; California;       February 28.
   Florida; Georgia; Louisiana; Mississippi;
   Nevada; North Carolina; and South Carolina;
   and El Paso, Hudspeth, Culberson, Reeves,
   Loving, Winkler, Ector, Upton, Reagan,
   Sterling, Coke, Tom Green, Concho,
   McCulloch, San Saba, Mills, Hamilton,
   Bosque, Johnson, Tarrant, Wise, Cooke
   Counties, Texas, and all Texas counties
   lying south and east thereof to and
   including Maverick, Zavala, Frio, Atascosa,
   Karnes, De Witt, Lavaca, Colorado, Wharton,
   and Matagorda Counties, Texas.
  All other Texas counties and all other        March 15.
   states.
------------------------------------------------------------------------

                             5. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be each coarse grain 
crop you elect to insure for which premium rates are provided by the 
actuarial documents:
    (1) In which you have a share;
    (2) That is adapted to the area based on days to maturity and is 
compatible with agronomic and weather conditions in the area; and
    (3) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop except as allowed in paragraph 
5(b)(1); or
    (ii) Planted into an established grass or legume.
    (b) For corn only, in addition to the provisions of subsection 5(a), 
the corn crop insured will be all corn that is:
    (1) Planted for harvest either as grain or as silage (see subsection 
5(c)). A mixture of corn and sorghum (grain or forage-type) will be 
insured as corn silage if the sorghum does not constitute more than 
twenty percent (20%) of the plants;
    (2) Yellow dent or white corn, including mixed yellow and white, 
waxy or high-lysine corn, and excluding:
    (i) High-amylose, high-oil, high-protein, flint, flour, Indian, or 
blue corn, or a variety genetically adapted to provide forage for 
wildlife or any other open pollinated corn, unless a written agreement 
allows insurance of such excluded crops.
    (ii) A variety of corn adapted for silage use only when the corn is 
reported for insurance as grain.
    (c) For corn only, if the actuarial documents for the county provide 
a premium rate for:
    (1) Both grain and silage, all insurable acreage will be insured as 
the type or types reported by you on or before the acreage reporting 
date;
    (2) Grain but not silage, all insurable acreage will be insured as 
grain unless a written agreement allows insurance on all or a portion of 
the insurable acreage as silage; or
    (3) Silage but not grain, all insurable corn acreage will be insured 
as silage unless a written agreement allows insurance on all or a 
portion of the insurable acreage as grain.
    (d) For grain sorghum only, in addition to the provisions of 
subsection 5(a), the grain sorghum crop insured will be all of the grain 
sorghum in the county:
    (1) That is planted for harvest as grain;
    (2) That is a combine-type hybrid grain sorghum (grown from hybrid 
seed); and
    (3) That is not a dual-purpose type of grain sorghum (a type used 
for both grain and forage), unless a written agreement allows insurance 
of such grain sorghum.
    (e) For soybeans only, in addition to the provisions of subsection 
5(a), the soybean crop insured will be all of the soybeans in the county 
that are planted for harvest as beans.

                          6. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
any acreage of the insured crop damaged before the final planting date, 
to the extent that a majority of producers in the area would not 
normally further care for the crop, must be replanted unless we agreee 
that it is not practical to replant.

                           7. Insurance Period

    In accordance with the provisions under section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the 
end of the insurance period is the date immediately following planting 
as follows:

(a) For corn insured as grain:
  (1) Val Verde, Edwards, Kerr, Kendall,        September 30.
   Bexar, Wilson, Karnes, Goliad, Victoria,
   and Jackson Counties, Texas, and all Texas
   counties lying south thereof.
  (2) Clark, Cowlitz, Grays Harbor, Island,     October 31.
   Jefferson, King, Kitsap, Lewis, Pierce,
   Skagit, Snohomish, Thurston, Wahkiakum, and
   Whatcom Counties, Washington.
  (3) All other counties and states...........  December 10.
(b) For corn insured as silage:
  All states..................................  September 30.

[[Page 187]]

 
(c) For grain sorghum:
  (1) Val Verde, Edwards, Kerr, Kendall,        September 30.
   Bexar, Wilson, Karnes, Goliad, Victoria,
   and Jackson Counties, Texas, and all Texas
   counties lying south thereof.
  (2) All other Texas counties and all other    December 10.
   states.
(d) For soybeans: All states..................  December 10.
 

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss which occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if applicable, due to an 
unavoidable cause of loss occurring within the insurance period.

                         9. Replanting Payments

    (a) In accordance with section 13 of the Basic Provisions, 
replanting payments for coarse grains are allowed if the coarse grains 
are damaged by an insurable cause of loss to the extent that the 
remaining stand will not produce at least 90 percent of the production 
guarantee for the acreage and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of twenty percent (20%) of the production guarantee or the 
number of bushels (tons for corn insured as silage) set out herein, 
multiplied by your price election multiplied by your insured share or 
the share determined under 9(c), if applicable. The number of bushels or 
tons are 8 bushels for corn grain; 1 ton for corn silage; 7 bushels for 
grain sorghum; and 3 bushels for soybeans.
    (c) When more than one person insures the same crop on a share 
basis, a replanting payment based on the total shares insured by us may 
be made to the insured person who incurs the total cost of replanting. 
Payment will be made in this manner only if an agreement exists between 
the insured persons which:
    (1) Requires one person to incur the entire cost of replanting; or
    (2) Gives the right to all replanting payments to one person.
    (d) When the insured crop is replanted using a practice that is 
uninsurable as an original planting, the liability for the unit will be 
reduced by the amount of the replanting payment which is attributable to 
your share. The premium amount will not be reduced.

                10. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if you 
initially discover damage to any insured crop within 15 days of or 
during harvest, you must leave representative samples of the unharvested 
crop for our inspection. The samples must be at least 10 feet wide and 
extend the entire length of each field in the unit, and must not be 
harvested or destroyed until the earlier of our inspection or 15 days 
after harvest of the balance of the unit is completed.
    (b) For any corn unit that has separate dates for the end of the 
insurance period (grain and silage):
    (1) In lieu of paragraph 14.(a)(2) of the Basic Provisions (Sec. 
457.8), if damage occurs:
    (i) Before the earliest end of insurance period date (grain or 
silage), you must give us notice within 72 hours of your initial 
discovery of damage (but not later than 15 days after that earliest end 
of insurance period date); or
    (ii) If damage does not occur before the earliest end of insurance 
period date (grain or silage), but occurs before the latest end of 
insurance period date (grain or silage), you must give notice within 72 
hours of your initial discovery of damage (but not later than 15 days 
after that latest end of insurance period date).
    (2) In lieu of subsection 14.(c) of the Basic Provisions (Sec. 
457.8), in addition to complying with all other notice requirements, you 
must submit a claim for indemnity declaring the amount of your loss not 
later than 60 days after the latest date for the end of insurance period 
for the unit. This claim must include all the information we require to 
settle the claim.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.

[[Page 188]]

    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit:
    (1) For grain sorghum and soybeans by:
    (i) Multiplying the insured acreage by the production guarantee;
    (ii) Subtracting from this the total production to count;
    (iii) Multiplying the remainder by your price election; and
    (iv) Multiplying this result by your share.
    (2) For corn by:
    (i) Multiplying the insured acreage of each type (grain/silage) by 
the production guarantee for the applicable type;
    (ii) Multiplying each result by the price election for the 
applicable type;
    (iii) Adding these values;
    (iv) Multiplying the production to count of each type (see 
subsection 11(d)) by the price election for that type (see the 
provisions under section 2 (Insurance Guarantees, Coverage Levels, and 
Prices for Determining Indemnities));
    (v) Adding these dollar values;
    (vi) Subtracting the result of step (v) from the result of step 
(iii); and
    (vii) Multiplying the result by your share.
    (c) The total production in bushels (tons for corn silage) (see 
subsection 11(d)) to count from all insurable acreage on the unit will 
include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
subsection 11(e)); and
    (iv) Potential production on insured acreage you want to put to 
another use or you wish to abandon and no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement the 
insurance period for that acreage will end if you put the acreage to 
another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:
    (A) If you do not elect to continue to care for the crop we may give 
you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage.
    (d) The production to count for corn will be in bushels for grain 
and in tons for silage as follows:
    (1) For harvested acreage, according to the method of harvest; and
    (2) For unharvested acreage, according to the information contained 
on your acreage report;

except as otherwise provided in paragraph 11(c)(1).
    (e) Mature coarse grain production (excluding corn insured or 
harvested as silage) may be adjusted for excess moisture and quality 
deficiencies. If moisture adjustment is applicable it will be made prior 
to any adjustment for quality. Corn insured or harvested as silage will 
be adjusted for excess moisture and quality only as specified in 
subsection 11(f).
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of:
    (i) Fifteen percent (15%) for corn (If moisture exceeds 30 percent 
(30%), production will be reduced 0.2 percent for each 0.1 percentage 
point above 30 percent (30%));
    (ii) Fourteen percent (14%) for grain sorghum; and
    (iii) Thirteen percent (13%) for soybeans.
    We may obtain samples of the production to determine the moisture 
content.
    (2) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality, in accordance with the Official United 
States Standards for Grain, result in:
    (A) Corn not meeting the grade requirements for U.S. No. 4 (grades 
U.S. No. 5 or worse) because of test weight or kernel damage (excluding 
heat damage) or having a musty, sour, or commercially objectionable 
foreign odor;
    (B) Grain sorghum not meeting the grade requirements for U.S. No. 4 
(grades U.S. Sample grade) because of test weight or kernel damage 
(excluding heat damage) or having a musty, sour, or commercially 
objectionable foreign odor (except smut odor), or meets the special 
grade requirements for smutty grain sorghum; or
    (C) Soybeans not meeting the grade requirements for U.S. No. 4 
(grades U.S. Sample grade) because of test weight or kernel damage 
(excluding heat damage) or having a musty, sour, or commercially 
objectionable foreign odor (except garlic odor), or which

[[Page 189]]

meet the special grade requirements for garlicky soybeans; or
    (ii) Substances or conditions are present that are identified by the 
Food and Drug Administration or other public health organizations of the 
United States as being injurious to human or animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions;
    (ii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or by 
a disinterested third party approved by us;
    (iii) With regard to deficiencies in quality (except test weight, 
which may be determined by our loss adjuster), the samples are analyzed 
by:
    (A) A grain grader licensed under the United States Grain Standards 
Act or the United States Warehouse Act;
    (B) A grain grader licensed under State law and employed by a 
warehouse operator who has a storage agreement with the Commodity Credit 
Corporation; or
    (C) A grain grader not licensed under State law, but who is employed 
by a warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (iv) With regard to substances or conditions injurious to human or 
animal health, the samples are analyzed by a laboratory approved by us.
    (4) Coarse grain production that is eligible for quality adjustment, 
as specified in paragraphs 11.(e) (2) and (3), will be reduced by the 
quality adjustment factor contained in the Special Provisions.
    (f) For corn insured or harvested as silage:
    (1) Whenever our appraisal of grain content is less than 4.5 bushels 
of grain per ton of silage, the silage production will be reduced by 1 
percentage point for each 0.1(1/10) of a bushel less than 4.5 bushels 
per ton (If we cannot make a grain appraisal before harvest and you do 
not leave a representative unharvested sample, in accordance with the 
policy no reduction for grain-deficient silage will be made.); and
    (2) If the normal silage harvesting period has ended, or for any 
acreage harvested as silage or appraised as silage after September 30 of 
the crop year we may increase the silage production to count to 65 
percent (65%) moisture equivalent to reflect the normal moisture content 
of silage harvested during the normal silage harvesting period.
    (g) Any production harvested from plants growing in the insured crop 
may be counted as production of the insured crop on a weight basis.

                         12. Prevented Planting

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted aceage. if you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[59 FR 49161, Sept. 27, 1994; 59 FR 60063, Nov. 22, 1994, as amended at 
60 FR 62728, 62729, Dec. 7, 1995; 62 FR 63633, Dec. 2, 1997; 62 FR 
65168, Dec. 10, 1997; 67 FR 55690, Aug. 30, 2002]



Sec. Sec. 457.114-457.115  [Reserved]



Sec. 457.116  Sugarcane crop insurance provisions.

    The Sugarcane Crop Insurance Provisions for the 2004 and succeeding 
crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                        Sugarcane Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Crop year--The period within which the insured sugarcane is normally 
grown and designated by the calendar year in which the harvest of 
sugarcane normally begins in the county.
    Harvest--Cutting and removing the mature sugarcane from the field.
    Irrigated practice--A method of producing a crop by which water is 
artificially applied during the growing season by appropriate systems 
and at the proper times, with the intention of providing the quantity of 
water needed to produce at least the yield used to establish the 
irrigated production guarantee on the irrigated acreage planted to the 
insured crop.
    Local market price--The price per pound for raw sugar offered by 
buyers in the area in which you normally market the sugarcane.
    Plant cane--The insured crop which grows from seed planted for the 
crop year.
    Stubble cane--The insured crop which grows from the stubble of 
sugarcane that was harvested the previous crop year.
    Sugarcane. The grass, Saccharum officinarum, that is grown to 
produce sugar.

[[Page 190]]

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one price 
election for all the sugarcane in the county insured under this policy.
    (b) Instead of reporting your sugarcane production for the previous 
crop year as required by subsection 3.(c) of the Basic Provisions (Sec. 
457.8), there is a lag period of one year and you are required to report 
production from two crop years previously, e.g., 1994 crop year 
production must be reported by the required date for the 1996 crop year.

                           3. Contract Changes

    In accordance with section 4 of the Basic Provisions (Sec. 457.8), 
the contract change date is June 30 preceding the cancellation date.

                  4. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions (Sec. 457.8), 
the cancellation and termination dates are September 30.

                             5. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions (Sec. 
457.8), the crop insured will be all the sugarcane in the county for 
which a premium rate is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That is grown for processing for sugar or for seed; and
    (3) That is not interplanted with another crop, unless allowed by a 
written agreement.
    (b) In addition to the crop listed as not insured in section 8(b) of 
the Basic Provisions (Sec. 457.8), we will not insure any sugarcane:
    (1) That was damaged the previous crop year to the extent the 
sugarcane is unable to produce the yield used to establish the 
production guarantee for the unit for the current crop year; or
    (2) That exceeds the age limitations (by variety, if applicable) 
contained in the Special Provisions , unless we agree in writing to 
insure such acreage. An agreement in writing will not be provided 
unless, after an appraisal, we determine that the crop is able to 
produce at least the yield used to establish the production guarantee 
for the unit for the current crop year.

                          6. Insurable Acreage

    Section 9(a)(3) of the Basic Provisions (Sec. 457.8), is not 
applicable to the Sugarcane Crop Insurance Provisions.

                           7. Insurance Period

    (a) In addition to the provisions of section 11 of the Basic 
Provisions (Sec. 457.8), insurance attaches:
    (1) On the later of the day we accept your application or at the 
time of planting for plant cane;
    (2) On the first day following harvest of the previous crop for 
stubble cane except as contained in sections 7(a)(3) and (4);
    (3) On the later of April 15 or 30 days following harvest of the 
previous crop for stubble cane damaged during the previous crop year in 
all states (except Louisiana); and
    (4) On the later of April 30 or 30 days following harvest of the 
previous crop for stubble cane damaged during the previous crop year in 
Louisiana.
    (b) In accordance with the provisions of section 11 of the Basic 
Provisions (Sec. 457.8), the calendar date for the end of the insurance 
period is:
    (1) January 31 in Louisiana; and
    (2) April 30 in all other states.

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if applicable, due to an 
unavoidable cause of loss occurring within the insurance period.

 9. Duties in the Event of Damage or Loss or Cutting the Sugarcane for 
                                  Seed

    (a) In addition to your duties under section 14 of the Basic 
Provisions (Sec. 457.8), in the event of damage or loss:
    (1) All sugarcane stubble must remain intact for our inspection; and
    (2) You must give us notice at least 15 days before you begin 
cutting any sugarcane for seed. Your notice must include the unit number 
and the number of acres you intend to harvest as seed. Failure to give 
us timely notice will cause the acreage cut for seed to be considered as 
put to another use without consent. The production to count for such 
acreage will not be less than the production guarantee.
    (3) You must request an appraisal if any time during the crop year 
sugarcane acreage cut for seed will not produce at least the production 
guarantee so we can determine the production to count. If you do not 
request an appraisal, the production to count for such acreage will be 
the production guarantee.

[[Page 191]]

    (b) In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if you 
initially discover damage to any insured crop within 15 days of, or 
during harvest, you must leave representative samples of the unharvested 
crop for our inspection. The representative samples of the unharvested 
crop must be at least 10 feet wide and extend the entire length of each 
field in the unit. The stubble must not be destroyed and the required 
samples must not be harvested until the earlier of our inspection or 15 
days after harvest of the balance of the unit is completed.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by the production guarantee;
    (2) Subtracting from this the total production to count;
    (3) Multiplying the remainder by your price election; and
    (4) Multiplying this result by your share.

    Example 1: Assume you have a 100 percent share in a unit of 100 
acres of sugarcane, an approved yield of 6,000 pounds of raw sugar per 
acre, a coverage election of 65 percent, and a price election of $0.12 a 
pound. The production guarantee would be 3,900 pounds of raw sugar per 
acre (6,000 x 65%). Further assume that you are only able to harvest 
200,000 pounds of raw sugar because the unit was damaged by an insurable 
cause of loss. Your indemnity would be calculated as follows:
    (1) 100 acres x 3,900 pound production guarantee = 390,000 pound 
production guarantee;
    (2) 390,000 pound production guarantee-200,000 pounds harvested 
production = 190,000 pound production loss;
    (3) 190,000 pound production loss x $0.12 price election = $22,800 
loss; and
    (4) $22,800 loss x 100 percent share = $22,800 indemnity payment.
    Example 2: Assume the same set of facts. Also, assume that you cut 
20 acres of this unit for seed without giving notice that you were 
cutting this acreage for seed and that you are only able to harvest 
200,000 pounds from the remaining 80 acres. Your indemnity would be 
calculated as follows:
    (1) 100 acres x 3,900 pound production guarantee = 390,000 pound 
production guarantee;
    (2) 390,000 pound production guarantee-278,000 (200,000 pounds 
harvested production + 78,000 pounds production for putting acreage to 
another use without consent, (20 acres x 3,900 pound production 
guarantee per acre)) = 112,000 pound production loss;
    (3) 112,000 pound production loss x $0.12 price election = $13,440 
loss; and
    (4) $13,440 loss x 100 percent share = $13,440 indemnity payment.

    (c) The total production (pounds of sugar) to count from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes;
    (D) For which you fail to provide records of production that are 
acceptable to us; or
    (E) On which the sugarcane stubble is destroyed within 15 days after 
harvest is completed without our consent;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production;
    (iv) Potential production on insured acreage harvested for seed (see 
section 9(a)(3));
    (v) Potential production on insured acreage you want to put to 
another use or you wish to abandon and no longer care for, if you and we 
agree on the appraised amount of production. Upon such agreement, the 
insurance period for that acreage will end if you put the acreage to 
another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us. (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count.); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from insurable acreage. Final records 
of sugar production

[[Page 192]]

will be used to determine the amount of production to count. Preliminary 
mill estimates will not be used.
    (d) Harvested sugarcane may be adjusted for low quality if it is 
damaged by one or more freezes occurring within the insurance period to 
the extent that it cannot be processed for sugar by the boiling house 
operation. The amount of production to count for such sugarcane will be 
determined by dividing the dollar value of the damaged production by the 
local market price per pound for raw sugar. The prices used for this 
adjustment will be determined on the earlier of the date such quality-
adjusted production is sold or the date of final inspection for the 
unit.

                     11. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[60 FR 25602, May 12, 1995, as amended at 62 FR 65169, Dec. 10, 1997; 67 
FR 46095, July 12, 2002; 67 FR 52841, Aug. 14, 2002]



Sec. 457.117  Forage production crop insurance provisions.

    The Forage Production Crop Insurance Provisions for the 2001 and 
succeeding crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

    Both FCIC and Reinsured Policies

               Forage Production Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Adequate stand--A population of live forage plants that equals or 
exceeds the minimum required number of plants per square foot as shown 
in the Special Provisions.
    Air-dry forage--Forage that has dried in windrows by natural means 
to less than 13 percent moisture before being put into stacks or bales.
    Crop year--The period from the date insurance attaches until harvest 
is normally completed, which is designated by the calendar year in which 
the majority of the forage is normally harvested.
    Cutting. The severance of the forage plant from its roots.
    Direct marketing. Sale of the forage crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
shipper, buyer, or broker. An example of direct marketing is selling 
directly to other producers.
    Fall planted. A forage crop seeded after June 30.
    Forage--Planted perennial alfalfa, perennial red clover, perennial 
grasses, or a mixture thereof, or other species as shown in the 
Actuarial Documents.
    Harvest--Removal of forage from the windrow or field. Grazing will 
not be considered harvested.
    Spring planted. A forage crop seeded before July 1.
    Ton--Two thousand (2,000) pounds avoirdupois.
    Windrow. Forage that is cut and placed in a row.
    Year of establishment--The period between seeding and when the 
forage crop has developed an adequate stand. Insurance during the year 
of establishment may be available under the forage seeding policy. 
Insurance under this policy does not attach until after the year of 
establishment. The year of establishment is determined by the date of 
seeding. The year of establishment for spring planted forage is 
designated by the calendar year in which seeding occurred. The year of 
establishment for fall planted forage is designated by the calendar year 
after the year in which the crop was planted.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
         overage Levels, and Prices for Determining Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may only select one price election for all the forage in the 
county insured under this policy unless the Special Provisions provide 
different price elections by type, in which case you may select one 
price election for each forage type designated in the Special 
Provisions. The price elections you choose for each type must have the 
same percentage relationship to the maximum price offered by us for each 
type. For example, if you choose 100 percent of the maximum price 
election for a specific type, you must also choose 100 percent of the 
maximum price election for all other types.
    (b) You must report the total production harvested from insurable 
acreage for all cuttings for each unit by the production reporting date.
    (c) Separate guarantees will be determined by forage type, as 
applicable.

[[Page 193]]

                           3. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is June 30 preceding 
the cancellation date.

                 4. Cancellation and Termination Dates.

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
                  State                    Cancellation/termination date
------------------------------------------------------------------------
California, Nevada and Utah..............  October 31;
All other states.........................  September 30.
------------------------------------------------------------------------

                          5. Report of Acreage.

    In lieu of the provisions of section 6(a) of the Basic Provisions, a 
report of all insured acreage of forage production must be submitted on 
or before each forage production acreage reporting date specified in the 
Special Provisions.

                             6. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the forage in the county for which a premium rate is 
provided by the actuarial documents:
    (1) In which you have a share; and
    (2) That is grown during one or more years after the year of 
establishment.
    (b) In addition to the crop listed as not insured in section 8 
(Insured Crop) of the Basic Provisions (Sec. 457.8), we will not insure 
any forage that:
    (1) Does not have an adequate stand at the beginning of the 
insurance period;
    (2) Is grown with a non-forage crop; or
    (3) Exceeds the age limitations for forage stands contained in the 
Special Provisions.

                           7. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8):
    (a) Insurance attaches on acreage with an adequate stand on the 
following dates:
    (1) For the calendar year following the year of seeding for:
    (i) Spring planted forage in Lassen, Modoc, Mono, Shasta and 
Siskiyou Counties California, Colorado, Idaho, Nebraska, Nevada, Oregon, 
Utah and Washington--April 15;
    (ii) Spring planted forage in Iowa, Minnesota, Montana, New 
Hampshire, New York, North Dakota, Pennsylvania, Wisconsin, Wyoming and 
all other states--May 22;
    (iii) Fall planted forage in Lassen, Modoc, Mono, Shasta and 
Siskiyou Counties California, and all other states--October 16;
    (iv) Fall planted forage in all California counties except Lassen, 
Modoc, Mono, Shasta, and Siskiyou--December 1.
    (2) For the calendar year of seeding for spring planted acreage in 
all California counties except Lassen, Modoc, Mono, Shasta and 
Siskiyou--December 1.
    (3) For calendar years subsequent to the calendar year following the 
year of seeding for:
    (i) Lassen, Modoc, Mono, Shasta and Siskiyou California counties, 
and all other states--October 16;
    (ii) All California counties except Lassen, Modoc, Mono, Shasta and 
Siskiyou--December 1.
    (b) Insurance ends at the earliest of:
    (1) Total destruction of the forage crop;
    (2) Removal from the windrow or the field for each cutting;
    (3) Final adjustment of a loss;
    (4) The date grazing commences on the forage crop;
    (5) Abandonment of the forage crop; or
    (6) The following dates of the crop year:
    (i) For Lassen, Modoc, Mono, Shasta, and Siskiyou Counties 
California and all other states--October 15;
    (ii) For all California counties except Lassen, Modoc, Mono, Shasta 
and Siskiyou--November 30.
    (c) In order to obtain year-round coverage for a calendar year, you 
must purchase the Forage Production Winter Coverage Endorsement (Sec. 
457.127).

                            8. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss specifically excluded in 
section 12 of the Basic Provisions, we will not insure against damage of 
loss of production that occurs after removal from the windrow.

                9. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (a) You must notify us within 3 days of the date harvest should have 
started if the insured crop will not be harvested;

[[Page 194]]

    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing unless you have records 
verifying that the forage was direct marketed. Failure to give timely 
notice that production will be sold by direct marketing will result in 
an appraised amount of production to count of not less than the 
production guarantee per acre if such failure results in our inability 
to make the required appraisal;
    (c) If you intend to claim an indemnity on any unit, you must notify 
us at least 15 days prior to the beginning of harvest if you previously 
gave notice in accordance with section 14 of the Basic Provisions so 
that we may inspect the damaged production. You must not destroy the 
damaged crop until after we have given you written consent to do so. If 
you fail to meet the requirements of this section, and such failure 
results in our inability to inspect the damaged production, all such 
production will be considered undamaged and will be included as 
production to count; and
    (d) You must notify us at least 5 days before grazing of insured 
forage begins so we can conduct an appraisal to determine production to 
count. Failure to give timely notice that the acreage will be grazed 
will result in an appraised amount of production to count of not less 
than the production guarantee per acre.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type, by its respective 
production guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election you selected;
    (3) Totaling the results of each crop type in section 11(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable, (see section 11(c)) by the respective price election you 
selected;
    (5) Totaling the results of each crop type in section 11(b)(4);
    (6) Subtracting the result in section 11(b)(5) from the result in 
section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.

                                Example 1

    Assume you have a 100 percent share in 100 acres of type A forage in 
the unit, with a guarantee of 3.0 tons per acre and a price election of 
$65.00 per ton. Due to adverse weather you were only able to harvest 
50.0 tons. Your indemnity would be calculated as follows:
    1. 100 acres type A x 3 tons = 300 ton guarantee;
    2 & 3. 300 tons x $65 price election = $19,500 total value 
guarantee;
    4 & 5. 50 tons production to count x $65 price election = $3,250 
total value of production to count;
    6. $19,500 value guarantee--$3,250 = $16,250 loss; and
    7. $16,250 x 100 percent share = $16,250 indemnity payment.

                                Example 2

    Assume you also have a 100 percent share in 100 acres of type B 
forage in the same unit, with a guarantee of 1.0 ton per acre and a 
price election of $50.00 per ton. Due to adverse weather you were only 
able to harvest 5.0 tons. Your total indemnity for forage production for 
both types A and B in the same unit would be calculated as follows:
    1. 100 acres x 3 tons = 300 ton guarantee for type A; and 100 acres 
x 1 ton = 100 ton guarantee for type B;
    2. 300 ton guarantee x $65 price election = $19,500 total value of 
the guarantee for type A; and 100 ton guarantee x $50 price election = 
$5,000 total value of the guarantee for type B;
    3. $19,500 + $5,000 = $24,500 total value of the guarantee;
    4. 50 tons x $65 price election = $3,250 total value of production 
to count for type A; and 5 tons x $50 price election = $250 total value 
of production to count for type B;
    5. $3,250 + $250 = $ 3,500 total value of production to count for 
types A and B;
    6. $24,500--$3,500 = $21,000 loss; and
    7. $21,000 loss x 100 percent share = $21,000 indemnity payment.
    (c) The total production to count (in tons) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production;
    (iv) Potential production on insured acreage that you intend to put 
to another use or

[[Page 195]]

abandon, if you and we agree on the appraised amount of production. Upon 
such agreement, the insurance period for that acreage will end when you 
put the acreage to another use or abandon the crop. If agreement on the 
appraised amount of production is not reached and:
    (A) You do not elect to continue to care for the crop, we may give 
you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or fail to provide sufficient care 
for the samples, our appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (B) You elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage.
    (d) When forage is harvested as other than air-dry forage, the 
production to count will be adjusted to the equivalent of air-dry 
forage.
    (e) Any harvested production from plants growing in the forage will 
be counted as forage on a weight basis.
    (f) In addition to the provisions of section 15 (Production Included 
in Determining Indemnities) of the Basic Provisions (Sec. 457.8), we 
may determine the amount of production of any unharvested forage on the 
basis of our field appraisals conducted after the normal time for each 
cutting for the area.

                     11. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 14285, Mar. 26, 1997, as amended at 62 FR 65169, Dec. 10, 1997; 
65 FR 3783, Jan. 25, 2000; 65 FR 11457, Mar. 3, 2000]



Sec. 457.118  Malting barley crop insurance.

    The malting barley crop insurance provisions for the 1996 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

Small Grains Crop Insurance Malting Barley Price and Quality Endorsement

(This is a continuous endorsement. Refer to section 2 of the Common Crop 
Insurance Policy.)
    In return for your payment of premium for the coverage contained 
herein, this endorsement will be attached to and made part of the Common 
Crop Insurance Policy (Sec. 457.8) and Small Grains Crop Provisions 
(Sec. 457.101), subject to the terms and conditions described herein.
    1. You must have the Common Crop Insurance Policy (Sec. 457.8) and 
the Small Grains Crop Insurance Provisions (Sec. 457.101) in force to 
elect to insure malting barley under this endorsement.
    2. You must select either Option A or Option B on or before the 
sales closing date. Failure to select either Option A or Option B, or if 
you elect Option B but fail to have a malting barley contract in effect 
by the acreage reporting date, will result in no coverage under this 
endorsement for the applicable crop year. If you elect coverage under 
Option A, and subsequently enter into a malting barley contract, your 
coverage will continue under the terms of Option A. Your selection 
(Option A or B) will continue from year to year unless you cancel or 
change your selection on or before the sales closing date.
    3. You must select either an additional value price election or a 
percentage of the maximum additional value price election on or before 
the sales closing date. The percentage of the maximum additional value 
price election you select does not have to be the same as that selected 
under the Small Grains Crop Provisions for feed barley. In the event 
that you choose a percentage of the maximum additional value price 
election, we will multiply that percentage by the maximum additional 
value price election specified in Option A or B to determine the 
additional value price election that pertains to your contract.
    4. The additional premium amount for this coverage will be 
determined by multiplying your malting barley production guarantee per 
acre by your selected additional value price election, times the premium 
rate stated in the Actuarial Table, times the acreage planted to 
approved malting barley varieties, times your share at the time coverage 
begins.
    5. In addition to the reporting requirements contained in section 6 
of the Common Crop Insurance Policy (Sec. 457.8), you must provide the 
information required by the Option you select.
    6. In lieu of the provisions regarding units and unit division in 
the Common Crop Insurance Policy (Sec. 457.8) and the Small Grains Crop 
Provisions (Sec. 457.101), all barley acreage in the county that is 
planted to malting varieties that is insurable under the Small Grains 
Crop Provisions for feed barley and your selected Option must be insured 
under this endorsement and will be considered as one unit regardless of 
whether such acreage is owned, rented for cash, or rented for a

[[Page 196]]

share of the crop. The producer's shares in the malting barley acreage 
to be insured under this endorsement must be designated on the acreage 
report.
    7. In lieu of the provisions in the Common Crop Insurance Policy 
(Sec. 457.8) that requires us to pay your loss within 30 days after we 
reach agreement with you, whenever any production fails one or more of 
the quality criteria specified herein, the claim may not be settled 
until the earlier of:
    (a) The date you sell, feed, donate, or otherwise utilize such 
production for any purpose; or
    (b) May 31 of the calendar year immediately following the calendar 
year in which the insured malting barley is normally harvested.
    If the production meets all quality criteria contained herein or 
grades U.S. No. 4 or lower in accordance with the grades and grade 
requirements for the subclasses Six-rowed and Two-rowed barley, and for 
the class Barley in accordance with the Official United States Standards 
for Grain, the claim will be settled within 30 days in accordance with 
the Common Crop Insurance Policy (Sec. 457.8).
    8. This endorsement does not provide additional prevented planting 
coverage. Such coverage is only provided in accordance with the 
provisions of the Small Grain Crop Provisions for feed barley.
    9. Production from all acreage insured under this endorsement and 
any production of feed barley varieties must not be commingled prior to 
our making all determinations necessary for the purposes of this 
insurance. Failure to keep production separate may result in denial of 
your claim for indemnity.
    10. Definitions:
    (a) APH. Actual production history as determined in accordance with 
7 CFR part 400, subpart G.
    (b) Approved malting variety. A variety of barley specified as such 
in the Special Provisions.
    (c) Brewery. A facility where malt beverages are commercially 
produced for human consumption.
    (d) Contracted production. A quantity of barley the producer agrees 
to grow and deliver, and the buyer agrees to accept, under the terms of 
the malting barley contract.
    (e) Licensed grain grader. A person authorized by the U.S. 
Department of Agriculture to inspect and grade barley under the U.S. 
Standards for malt barley.
    (f) Malting barley contract. An agreement in writing between the 
producer and a brewery or a business enterprise that produces or sells 
malt or processed mash to a brewery, or a business enterprise owned by 
such brewery or business, that contains the amount of contracted 
production, the purchase price, or a method to determine such price, and 
other such terms that establish the obligations of each party to the 
agreement.
    (g) Objective test. A determination made by a qualified person using 
standardized equipment that is widely used in the malting industry, and 
following a procedure approved by the American Society of Brewing 
Chemists when determining percent germination or protein content; 
grading performed by following a procedure approved by the Federal Grain 
Inspection Service when determining quality factors other than percent 
germination or protein content; or by the Food and Drug Administration 
when determining concentrations of mycotoxins or other substances or 
conditions that are identified as being injurious to human or animal 
health.
    (h) Subjective test. A determination made by a person using 
olfactory, visual, touch or feel, masticatory, or other senses unless 
performed by a licensed grain grader; or that uses non-standardized 
equipment; or that does not follow a procedure approved by the American 
Society of Brewing Chemists, the Federal Grain Inspection Service, or 
the Food and Drug Administration.
    (i) Unit. All insurable acreage of approved malting varieties in the 
county on the date coverage begins for the crop year.

 Option A--(Available for Producers of Production Contracted After the 
   Sales Closing Date, Non-Contracted Production, or a Combination of 
                Contracted and Non-Contracted Production)

    This option provides coverage for malting barley production and 
quality losses at a price per bushel greater than that offered under the 
Small Grains Crop Provisions.
    1. To be eligible for coverage under this option, you must provide 
us acceptable records of your sales of malting barley and the number of 
acres planted to malting varieties for at least the four crop years in 
your APH database prior to the crop year immediately preceding the 
current crop year. For example, to determine your production guarantee 
for the 1996 crop year, records must be provided for the 1991 through 
the 1994 crop years, if malting barley varieties were planted in each of 
those crop years. Failure to provide acceptable records or reports as 
required herein will make you ineligible for coverage under this 
endorsement. You must provide these records to us no later than the 
production reporting date specified in the Common Crop Insurance Policy 
(Sec. 457.8).
    2. Your malting barley production guarantee per acre will be the 
lesser of:
    (a) The production guarantee for feed barley for acreage planted to 
approved malting varieties calculated in accordance with the Small 
Grains Crop Provisions and APH regulations; or
    (b) A production guarantee calculated in accordance with APH 
procedures using the

[[Page 197]]

malting barley sales and acreage records provided by you.
    3. The additional value price per bushel elected cannot exceed the 
maximum price designated in the Special Provisions.
    4. The amount of production to count against your malting barley 
production guarantee will be determined as follows:
    (a) Production to count will include all:
    (1) Appraised production determined in accordance with sections 
11(c)(1) (i) and (ii) of the Small Grains Crop Provisions;
    (2) Harvested production and potential unharvested production that 
meets, or would meet if properly handled;
    (i) Tolerances established by the Food and Drug Administration or 
other public health organization of the United States for substances or 
conditions, including mycotoxins, that are identified as being injurious 
to human health; and
    (ii) The following quality standards, as applicable:

------------------------------------------------------------------------
                                   Six-rowed malting   Two-rowed malting
                                   barley (percent)    barley (percent)
------------------------------------------------------------------------
Protein (dry basis).............  14.0 maximum......  14.0 maximum
Plump kernels...................  65.0 minimum......  75.0 minimum
Thin kernels....................  10.0 maximum......  10.0 maximum
Germination.....................  95.0 minimum......  95.0 minimum
Blight damaged..................  4.0 maximum.......  4.0 maximum
Injured by mold.................  5.0 maximum.......  5.0 maximum
Mold damaged....................  0.4 maximum.......  0.4 maximum
Sprout damaged..................  1.0 maximum.......  1.0 maximum
Injured by frost................  5.0 maximum.......  5.0 maximum
Frost damaged...................  0.4 maximum.......  0.4 maximum
------------------------------------------------------------------------

    (3) Harvested production that does not meet the quality standards 
contained in section 4(a)(2) of this Option, but is accepted by a buyer 
for malting purposes. For such production, the production to count may 
be reduced or the price used to settle the claim may be adjusted in 
accordance with sections 4 (b), (c), and (d) of this Option.
    (b) The quantity of production that initially fails any quality 
standard contained in section 4(a)(2), but is sold as malting barley 
(except production included in section 4(c)), may be reduced as 
described in this subsection, provided the failure of such production to 
meet these standards is due to insurable causes. The production to count 
of production sold under section 4(a)(3) will be determined by:
    (1) Adding the maximum barley price election under the Small Grains 
Crop Provisions and the maximum additional value price;
    (2) Dividing the price per bushel received for the damaged 
production by the result of paragraph (1); and
    (3) Multiplying the result of paragraph (2) (not to exceed 1.000) by 
the number of bushels of damaged production.
    (c) The production to count for production that initially fails any 
quality standard contained in section 4 (a)(2), sold as malting barley, 
but is conditioned before the sale will not be reduced under section 
4(b). Such production will be considered separately from all other 
production to count. (See section 5(d).)
    (d) The additional value price election per bushel used to determine 
the value of the production to count for production that initially fails 
any quality standard contained in section 4(a)(2), but is sold as 
malting barley, may be reduced by the cost incurred for any conditioning 
required to improve the quality of production so that it is marketable 
as malting barley, provided the failure of such production to meet these 
standards is due to insurable causes.
    (e) No reduction in the production to count or the additional value 
price election will be allowed for moisture content, damage due to 
uninsured causes; costs or reduced value associated with drying, 
handling, processing, or quality factors other than those contained in 
section 4(a)(2) of this Option; or any other costs associated with 
normal handling and marketing of malting barely.
    (f) All grade and quality determinations must be based on the 
results of objective tests. No indemnity will be paid for any loss 
established by subjective tests. We may obtain one or more samples of 
the insured crop and have tests performed at an official grain 
inspection location established under the U.S. Grain Standards Act or 
laboratory of our choice to verify the results of any test. In the event 
of a conflict in the test results, our results will determine the amount 
of production to count.
    5. In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (a) Multiplying the insured acreage times your malting barley 
production guarantee per acre;
    (b) Multiplying the result in subsection (a) of this section times 
your additional value price election per bushel;
    (c) Multiplying the number of bushels of production to count 
determined in accordance with sections 4(a) and (b) of this Option times 
your elected additional value price per bushel;
    (d) Multiplying the production to count determined under section 
4(c) of this Option times the additional value price per bushel 
determined in section 4(d) of the Option;
    (e) Adding the results of subsections (c) and (d) of this section;
    (f) Subtracting the result of subsection (e) of this section from 
the result in subsection (b); and
    (g) Multiplying the result of subsection (f) of this section times 
your share.
    6. For example, assume you insure two units of barley under the 
Small Grains Crop Provisions in which you have a 100% share and that are 
planted to approved malting varieties. Assume the following:
    (a) Each unit contains 40 acres;

[[Page 198]]

    (b) You have sold an average of 20 bushels per acre of malting 
barley for each of the last 6 years;
    (c) You have selected the 70 percent coverage level;
    (d) Your production guarantee under the Small Grains Crop Provisions 
and the APH regulations for feed barley is 30 bushels per acre;
    (e) Your total production from all units under the Small Grains Crop 
Provisions is 1,000 bushels, all of which fails to meet the quality 
standards specified by this Option. Two hundred bushels are sold for 
malting purposes after conditioning. Conditioning costs are $0.05 per 
bushel; and
    (f) Your additional value price election is $0.40 per bushel.
    Your malting barley production guarantee is 1120.0 bushels (the 
lesser of 20 or 30x70 percent coverage level x80 acres). The value of 
your production guarantee is $448.00 (1120 bushels x$0.40 per bushel). 
Your production to count is 200 bushels. The value of your production to 
count is $70.00 (200 bushels x$0.35 ($0.40--$0.05)). Your indemnity for 
the malting barley unit is $378.00 (($448.00--$70.00) x100 percent 
share). Any remaining loss is paid under the Small Grains Crop 
Provisions for feed barley.

    Option B--(Available for Producers of Contracted Production Only)

    This option provides coverage for malting barley production and 
quality losses at a price per bushel greater than that offered under the 
Small Grains Crop Provisions provided you have a malting barley 
contract.
    1. If you elect this option you must provide us a copy of your 
malting barley contract on or before the acreage reporting date. All 
terms and conditions of the contract, including the contract price or 
futures contract premium price, must be specified in the contract and be 
effective on or before the acreage reporting date. If you fail to timely 
provide the contract, or any terms are omitted, we may elect to 
determine the relevant information necessary for insurance under this 
Option (B), or deny liability. Only contracted production or acreage is 
covered by this Option (B).
    2. Your malting barley guarantee per acre will be the lesser of:
    (a) The production guarantee for feed barley for acreage planted to 
approved malting barley varieties calculated in accordance with the 
Small Grains Crop Provisions and APH regulations; or
    (b) The number of bushels obtained by:
    (1) Dividing the number of bushels of contracted production by the 
number of acres planted to approved malting varieties in the current 
crop year; and
    (2) Multiplying the result by the percentage for the coverage level 
you elected under the Small Grains Crop Provisions.
    3. The additional value price election per bushel will be the lesser 
of, as applicable:
    (a) The guaranteed sale price per bushel established in the malting 
barley contract (without regard to discounts or incentives that may 
apply) minus the maximum price election for feed barley; or
    (b) The premium price per bushel (without regard to discounts or 
incentives) if the sale price is based on a future market price as 
specified in the malting barley contract.
    Under no circumstances will the additional value price election per 
bushel exceed $2.00 per bushel.
    4. The amount of production to count against your malting barley 
production guarantee will be determined as follows:
    (a) Production to count will include all:
    (1) Appraised production determined in accordance with sections 
11(c)(1) (i) and (ii) of the Small Grains Crop Provisions;
    (2) Harvested production and potential unharvested production that 
meets, or would meet if properly handled, the minimum acceptance 
standards contained in the malting barley contract for protein, plump 
kernels, thin kernels, germination, blight damage, mold injury or 
damage, sprout damage, frost injury or damage, and mycotoxins or other 
substances or conditions identified by the Food and Drug Administration 
or other public health organization of the United States as being 
injurious to human health, or the following quality standards as 
applicable:

------------------------------------------------------------------------
                                   Six-rowed malting   Two-rowed malting
                                        barley              barley
                                 ---------------------------------------
                                       (percent)           (percent)
------------------------------------------------------------------------
Protein (dry basis).............  14.0 maximum......  14.0 maximum
Plump kernels...................  65.0 minimum......  75.0 minimum
Thin kernels....................  10.0 maximum......  10.0 maximum
Germination.....................  95.0 minimum......  95.0 minimum
Blight damaged..................  4.0 maximum.......  4.0 maximum
Injured by mold.................  5.0 maximum.......  5.0 maximum
Mold damaged....................  0.4 maximum.......  0.4 maximum
Sprout damaged..................  1.0 maximum.......  1.0 maximum
Injured by frost................  5.0 maximum.......  5.0 maximum
Frost damaged...................  0.4 maximum.......  0.4 maximum
------------------------------------------------------------------------

    (3) Harvested production that does not meet the quality standards 
contained in section 4(a)(2) of this Option, but is accepted by a buyer 
for malting purposes. For such production, the production to count may 
be reduced or the price used to settle the claim may be adjusted in 
accordance with sections 4 (b), (c), and (d) of this Option.
    (b) The quantity of production that initially fails any quality 
standard contained in section 4(a)(2), but is sold as malting barley 
(except production included in section 4(c)), may be reduced as 
described in this subsection, provided the failure of such production to 
meet these standards is due to insurable causes. The production to count 
of production sold under section 4(a)(3) will be determined by:

[[Page 199]]

    (1) Adding the maximum barley price election under the Small Grains 
Crop Provisions and the maximum additional value price;
    (2) Dividing the price per bushel received for the damaged 
production by the result of paragraph (1); and
    (3i) Multiplying the result of paragraph (2) (not to exceed 1.000) 
by the number of bushels of damaged production.
    (c) The production to count for production that initially fails any 
quality standard contained in section 4(a)(2), sold as malting barley, 
but is conditioned before the sale will not be reduced under section 
4(b). Such production will be considered separately from all other 
production to count. (See section 5(d).)
    (d) The additional value price election per bushel used to determine 
the value of the production to count for production that initially fails 
any quality standard contained in section 4(a)(2), but is sold as 
malting barley, may be reduced by the cost incurred for any conditioning 
required to improve the quality of production so that it is marketable 
as malting barley, provided the failure of such production to meet these 
standards is due to insurable causes.
    (e) No reduction in the production to count or the additional value 
price election will be allowed for moisture content, damage due to 
uninsured causes; costs or reduced value associated with drying, 
handling, processing, or quality factors other than those contained in 
section 4(a)(2) of this Option; or any other costs associated with 
normal handling and marketing of malting barely.
    (f) All grade and quality determinations must be based on the 
results of objective tests. No indemnity will be paid for any loss 
established by subjective tests. We may obtain one or more samples of 
the insured crop and have tests performed at an official grain 
inspection location established under the U.S. Grain Standards Act or 
laboratory of our choice to verify the results of any test. In the event 
of a conflict in the test results, our results will determine the amount 
of production to count.
    5. In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (a) Multiplying the insured acreage times your malting barley 
production guarantee per acre;
    (b) Multiplying the result in subsection (a) of this section times 
your additional value price election per bushel;
    (c) Multiplying the number of bushels of production to count 
determined in accordance with sections 4 (a) and (b) of this Option 
times your elected additional value price per bushel;
    (d) Multiplying the production to count determined under section 
4(c) of this Option times the additional value price per bushel 
determined in section 4(d) of the Option;
    (e) Adding the results of subsections (c) and (d) of this section;
    (f) Subtracting the result of subsection (e) of this section from 
the result in subsection (b); and
    (g) Multiplying the result of subsection (f) of this section times 
your share.
    6. For example, assume you insure two units of barley under the 
Small Grains Crop Provisions in which you have a 100% share and that are 
planted to approved malting varieties. Assume the following:
    (a) Each unit contains 40 acres;
    (b) You have a contract for the sale of 2500 bushels of malting 
barley;
    (c) You have selected the 70 percent coverage level;
    (d) Your production guarantee under the Small Grains Crop Provisions 
and the APH regulations for feed barley is 35 bushels per acre;
    (e) Your total production from all units under the Small Grains Crop 
Provisions is 1,000 bushels, all of which fails to meet the quality 
standards specified by this Option. Two hundred bushels are sold for 
malting purposes after conditioning. Conditioning cost $0.05 per bushel; 
and
    (f) Your additional value price election is $0.60 per bushel.
    Your malting barley production guarantee is 1750.0 bushels (the 
lesser of 35 or 21.875 (2500 contracted bushels /80 acresx70 percent 
coverage)x80 acres). The value of your production guarantee is $1050.00 
(1750 bushelsx$0.60 per bushel). Your production to count is 200 
bushels. The value of your production to count is $110.00 (200 
bushelsx$0.55 ($0.60--$0.05)). Your indemnity for the malting barley 
unit is $940.00 (($1050.00-$110.00)x100 percent share). Any remaining 
loss is paid under the Small Grains Crop Provisions for feed barley.

[61 FR 8855, Mar. 6, 1996; 61 FR 27245, May 31, 1996]



Sec. 457.119  Texas citrus fruit crop insurance provisions.

    The Texas citrus fruit crop insurance provisions for the 2000 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                   Texas Citrus Fruit Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

[[Page 200]]

                             1. Definitions

    Crop. Specific groups of citrus fruit as listed in the Special 
Provisions.
    Crop year. The period beginning with the date insurance attaches to 
the citrus crop and extending through the normal harvest time. It is 
designated by the calendar year following the year in which the bloom is 
normally set.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper, or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Excess rain. An amount of precipitation that damages the crop.
    Excess wind. A natural movement of air that has sustained speeds 
exceeding 58 miles per hour recorded at the U. S. Weather Service 
reporting station operating nearest to the grove at the time of damage.
    Freeze. The formation of ice in the cells of the tree, its blossoms, 
or its fruit caused by low air temperatures.
    Harvest. The severance of mature citrus fruit from the tree by 
pulling, picking, or any other means, or by collecting marketable fruit 
from the ground.
    Hedged. A process of trimming the sides of the citrus trees for 
better or more fruitful growth of the citrus fruit.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Local market price. The applicable citrus price per ton offered by 
buyers in the area in which you normally market the insured crop.
    Production guarantee (per acre):
    (a) First stage production guarantee. The second stage production 
guarantee multiplied by forty percent (40%).
    (b) Second stage production guarantee. The quantity of citrus (in 
tons) determined by multiplying the yield determined in accordance with 
section 3 by the coverage level percentage you elect.
    Ton. Two thousand (2,000) pounds avoirdupois.
    Topped. A process of trimming the uppermost portion of the citrus 
trees for better and more fruitful growth of the citrus fruit.
    Varieties. Subclasses of crops as listed in the Special Provisions.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by each citrus crop 
designated in the Special Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.
    (c) Instead of establishing optional units by section, section 
equivalent, or FSA farm serial number, optional unit is located on non-
contiguous land.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election and coverage level for 
each citrus fruit crop designated in the Special Provisions that you 
elect to insure. The price election you choose for each crop need not 
bear the same percentage relationship to the maximum price offered by us 
for each crop. For example, if you choose one hundred percent (100%) of 
the maximum price election for early oranges, you may choose seventy-
five percent (75%) of the maximum price election for late oranges. 
However, if separate price elections are available by variety within 
each crop, the price elections you choose within the crop must have the 
same percentage relationship to the maximum price offered by us for each 
variety within the crop.
    (b) The production guarantee per acre is progressive by stage and 
increases at specific intervals to the final stage production guarantee. 
The stages and production guarantees per acre are:
    (1) The first stage extends from the date insurance attaches through 
April 30 of the calendar year of normal bloom. The production guarantee 
will be forty percent (40%) of the yield calculated in section 3(e) 
multiplied by your coverage level.
    (2) The second or final stage extends from May 1 of the calendar 
year of normal bloom until the end of the insurance period. The 
production guarantee will be the yield calculated in section 3(e) 
multiplied by your coverage level.
    (c) Any acreage of citrus damaged in the first stage to the extent 
that the majority of producers in the area would not further maintain it 
will be limited to the first stage production guarantee even though you 
may continue to maintain it.
    (d) In addition to the reported production, each crop year you must 
report by type:
    (1) The number of trees damaged, topped, hedged, pruned or removed; 
any change in practices or any other circumstance that may reduce the 
expected yield below the yield upon which the insurance guarantee is 
based; and the number of affected acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and

[[Page 201]]

    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed:
    (i) The age of the interplanted crop, and type if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the following: 
interplanted perennial crop; removal, topping, hedging, or pruning of 
trees; damage; change in practices and any other circumstance on the 
yield potential of the insured crop. If you fail to notify us of any 
circumstance that may reduce your yields from previous levels, we will 
reduce your production guarantee as necessary at any time we become 
aware of the circumstance.
    (e) The yield used to compute your production guarantee will be 
determined in accordance with Actual Production History (APH) 
regulations, 7 CFR part 400, subpart G, and applicable policy provisions 
unless damage or changes to the grove or trees, require establishment of 
the yield by another method. In the event of such damage or changes, the 
yield will be based on our appraisal of the potential of the insured 
acreage for the crop year.
    (f) Instead of reporting your citrus production for the previous 
crop year, as required by section 3 of the Basic Provisions (Sec. 
457.8), there is a one year lag period. Each crop year you must report 
your production from two crop years ago, e.g., on the 1998 crop year 
production report, you will provide your 1996 crop year production.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are November 20.

                            6. Annual Premium

    In lieu of the premium computation method in section 7 (Annual 
Premium) of the Basic Provisions (Sec. 457.8), the annual premium 
amount is computed by multiplying the second stage production guarantee 
per acre by the price election, the premium rate, the insured acreage, 
your share at the time coverage begins, and by any applicable premium 
adjustment percentages contained in the Special Provisions.

                             7. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the acreage in the county of 
each citrus crop designated in the Special Provisions that you elect to 
insure and for which a premium rate is provided by the actuarial 
documents:
    (a) In which you have a share;
    (b) That are adapted to the area;
    (c) That are irrigated;
    (d) That has produced an average yield of at least three tons per 
acre the previous year, or we have appraised the yield potential of at 
least three tons per acre;
    (e) That is grown in a grove that, if inspected, is considered 
acceptable by us; and
    (f) That is not sold by direct marketing, unless allowed by the 
Special Provisions or by written agreement.

                          8. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, citrus interplanted with another 
perennial crop is insurable unless we inspect the acreage and determine 
it does not meet the requirements contained in your policy.

                           9. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on November 21 of each crop year, except that 
for the year of application, if your application is received after 
November 11 but prior to November 21, insurance will attach on the 10th 
day after your properly completed application is received in our local 
office, unless we inspect the acreage during the 10 day period and 
determine that it does not meet insurability requirements. You must 
provide any information that we require for the crop or to determine the 
condition of the grove.
    (2) The calendar date for the end of the insurance period for each 
crop year is the second May 31st of the crop year.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins, but on or before the acreage reporting date for the 
crop year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of citrus on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to, and no premium 
will be

[[Page 202]]

due, and no indemnity paid for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur within the insurance 
period:
    (1) Excess rain;
    (2) Excess wind;
    (3) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the grove;
    (4) Freeze;
    (5) Hail;
    (6) Tornado;
    (7) Wildlife; or
    (8) Failure of the irrigation water supply if caused by an insured 
peril or drought that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless a cause of loss specified 
in section 10(a):
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available;
    (2) Inability to market the citrus for any reason other than actual 
physical damage from an insurable cause specified in this section. For 
example, we will not pay you an indemnity if you are unable to market 
due to quarantine, boycott, or refusal of any person to accept 
production.

                11. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following 
will apply:
    (a) If the Special Provisions permit or a written agreement 
authorizing direct marketing exists, you must notify us at least 15 days 
before any production from any unit will be sold by direct marketing. We 
will conduct an appraisal that will be used to determine your production 
to count for production that is sold by direct marketing. If damage 
occurs after this appraisal, we will conduct an additional appraisal. 
These appraisals, and any acceptable records provided by you, will be 
used to determine your production to count. Failure to give timely 
notice that production will be sold by direct marketing will result in 
an appraised amount of production to count of not less than the 
production guarantee per acre if such failure results in our inability 
to make the required appraisal.
    (b) If you intend to claim an indemnity on any unit, you must notify 
us before beginning to harvest any damaged production so we may have an 
opportunity to inspect it. You must not sell or dispose of the damaged 
crop until after we have given you written consent to do so. If you fail 
to meet the requirements of this section all such production will be 
considered undamaged and included as production to count.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on a unit basis by:
    (1) Multiplying the insured acreage for each crop, or variety if 
applicable, by its respective production guarantee (see sections 1 and 
3);
    (2) Multiplying the results of section 12(b)(1) by the respective 
price election for each crop or variety, if applicable;
    (3) Totaling the results of section 12(b)(2);
    (4) Multiplying the total production to count of each variety, if 
applicable (see section 12(c)) by the respective price election;
    (5) Totaling the results of section 12(b)(4);
    (6) Subtracting this result of section 12(b)(5) from the result of 
section 12(b)(3); and
    (7) Multiplying the result of section 12(b)(6) by your share.
    (c) The total production to count (in tons) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) For which you fail to provide acceptable production records;
    (C) That is damaged solely by uninsured causes; or
    (D) From which production is sold by direct marketing, if direct 
marketing is specifically permitted by the Special Provisions or a 
written agreement, and you fail to meet the requirements contained in 
section 11;

[[Page 203]]

    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage you intend to abandon 
or no longer care for, if you and we agree on the appraised amount of 
production. Upon such agreement, the insurance period for that acreage 
will end. If you do not agree with our appraisal, we may defer the claim 
only if you agree to continue to care for the crop. We will then make 
another appraisal when you notify us of further damage or that harvest 
is general in the area unless you harvested the crop, in which case we 
will use the harvested production. If you do not continue to care for 
the crop, our appraisal made prior to deferring the claim will be used 
to determine the production to count; and
    (2) All harvested production from the insurable acreage.
    (d) Any citrus fruit that is not marketed as fresh fruit and, due to 
insurable causes, does not contain 120 or more gallons of juice per ton, 
will be adjusted by:
    (1) Dividing the gallons of juice per ton obtained from the damaged 
citrus by 120; and
    (2) Multiplying the result by the number of tons of such citrus.
    If individual records of juice content are not available, an average 
juice content from the nearest juice plant will be used, if available. 
If not available, a field appraisal will be made to determine the 
average juice content.
    (e) Where the actuarial documents provide, and you elect, the fresh 
fruit option, citrus fruit that is not marketable as fresh fruit due to 
insurable causes will be adjusted by:
    (1) Dividing the value per ton of the damaged citrus by the price of 
undamaged citrus fruit; and
    (2) Multiplying the result by the number of tons of such citrus 
fruit. The applicable price for undamaged citrus fruit will be the local 
market price the week before damage occurred.
    (f) Any production will be considered marketed or marketable as 
fresh fruit unless, due solely to insured causes, such production was 
not marketed as fresh fruit.
    (g) In the absence of acceptable records of disposition of harvested 
citrus fruit, the disposition and amount of production to count for the 
unit will be the guarantee on the unit.
    (h) Any citrus fruit on the ground that is not harvested will be 
considered totally lost if damaged by an insured cause.

                     13. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[61 FR 41300, Aug. 8, 1996; 61 FR 57583, Nov. 7, 1996, as amended at 62 
FR 65169, Dec. 10, 1997]



Sec. 457.120  [Reserved]



Sec. 457.121  Arizona-California citrus crop insurance provisions.

    The Arizona-California citrus crop insurance provisions for the 2000 
and succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                Arizona-California Citrus Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Carton. The standard container for marketing the fresh packed citrus 
fruit crop as shown below. In the absence of marketing records on a 
carton basis, production will be converted to cartons on the basis of 
the following average net pounds of packed fruit in a standard packed 
carton.

------------------------------------------------------------------------
            Container size                    Fruit crop         Pounds
------------------------------------------------------------------------
Container 58................  Navel oranges, Valencia        38
                                        oranges & Sweet
                                        oranges.
Container 58................  Lemons.................        40
Container 59................  Grapefruit.............        32
Container 63................  Tangerines (including          25
                                        Tangelos) & Mandarin
                                        oranges.
------------------------------------------------------------------------

    Crop. Citrus fruit as listed in the Special Provisions.
    Crop year. The period beginning with the date insurance attaches to 
the citrus crop and extending through normal harvest time. It is 
designated by the calendar year following the year in which the bloom is 
normally set.
    Dehorning. Cutting of any scaffold limb to a length that is not 
greater than one-fourth (\1/4\) the height of the tree before cutting.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Harvest. The severance of mature citrus from the tree by pulling, 
picking, or any other means, or by collecting marketable fruit from the 
ground.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.

[[Page 204]]

    Scaffold limb. A major limb attached directly to the trunk.
    Set out. Transplanting a tree into the grove.
    Variety. Subclass of crop as listed in the Special Provisions.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will also be divided into additional basic units by each citrus crop 
designated in the Special Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one price 
election and coverage level for each citrus fruit crop designated in the 
Special Provisions that you elect to insure. The price election you 
choose for each crop need not bear the same percentage relationship to 
the maximum price offered by us for each crop. For example, if you 
choose one hundred percent (100%) of the maximum price election for 
sweet oranges, you may choose seventy-five percent (75%) of the maximum 
price election for grapefruit. However, if separate price elections are 
available by variety within each crop, the price elections you choose 
for each variety must have the same percentage relationship to the 
maximum price offered by us for each variety within the crop.
    (b) In lieu of reporting your citrus production of marketable fresh 
fruit for the previous crop year, as required by section 3 of the Basic 
Provisions (Sec. 457.8), there is a lag period of one year. Each crop 
year, you must report your production from two crop years ago, e.g., on 
the 1998 crop year production report, you will provide your 1996 crop 
year production.
    (c) In addition, you must report, by the production reporting date 
designated in section 3 (Insurance Guarantees, Coverage Levels, and 
Prices for Determining Indemnities) of the Basic Provisions (Sec. 
457.8), by type, if applicable:
    (1) The number of trees damaged, dehorned or removed; any change in 
practices or any other circumstance that may reduce the expected yield 
below the yield upon which the insurance guarantee is based; and the 
number of affected acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed:
    (i) The age of the interplanted crop, and type, if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the following: 
interplanted perennial crop; damage; dehorning; removal of trees; change 
in practices and any other circumstance on the yield potential of the 
insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstance.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are November 20.

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the acreage in the county of 
each citrus crop designated in the Special Provisions that you elect to 
insure and for which a premium rate is provided by the actuarial 
documents:
    (a) In which you have a share;
    (b) That is adapted to the area;
    (c) That is irrigated;
    (d) That is grown in a grove that, if inspected, is considered 
acceptable by us;
    (e) That is not sold by direct marketing, unless allowed by the 
Special Provisions or by written agreement; and
    (f) That has reached at least the sixth growing season after being 
set out. However, we may agree to insure acreage that has not reached 
this age if we inspect and approve a written agreement to insure such 
acreage.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, citrus interplanted with another 
perennial crop is

[[Page 205]]

insurable unless we inspect the acreage and determine it does not meet 
the requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on November 21 of each crop year, except that 
for the year of application, if your application is received after 
November 11 but prior to November 21, insurance will attach on the 10th 
day after your properly completed application is received in our local 
office unless we inspect the acreage during the 10 day period and 
determine that it does not meet insurability requirements. You must 
provide any information that we require for the crop or to determine the 
condition of the grove.
    (2) The calendar date for the end of the insurance period for each 
crop year is:
    (i) August 31 for Navel oranges and Southern California lemons;
    (ii) November 20 for Valencia oranges; and
    (iii) July 31 for all other citrus crops.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins, but on or before the acreage reporting date for the 
crop year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of citrus on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to and no premium will 
be due, and no indemnity paid, for such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the grove;
    (3) Wildlife;
    (4) Earthquake;
    (5) Volcanic eruption; or
    (6) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather 
conditions:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available;
    (2) Inability to market the citrus for any reason other than actual 
physical damage from an insurable cause specified in this section. For 
example, we will not pay you an indemnity if you are unable to market 
due to quarantine, boycott, or refusal of any person to accept 
production.

                10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following 
will apply:
    (a) If the Special Provisions permit or a written agreement 
authorizing direct marketing exists, you must notify us at least 15 days 
before any production from any unit will be sold by direct marketing. We 
will conduct an appraisal that will be used to determine your production 
to count for production that is sold by direct marketing. If damage 
occurs after this appraisal, we will conduct an additional appraisal. 
These appraisals, and any acceptable records provided by you, will be 
used to determine your production to count. Failure to give timely 
notice that production will be sold by direct marketing will result in 
an appraised amount of production to count of not less than the 
production guarantee per acre if such failure results in our inability 
to make the required appraisal.
    (b) If you intend to claim an indemnity on any unit, you must notify 
us before beginning to harvest any damaged production so that we may 
have an opportunity to inspect it. You must not sell or dispose of the 
damaged crop until after we have given you written consent to do so. If 
you fail to meet the requirements of this section, all such production 
will be considered undamaged and included as production to count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or

[[Page 206]]

    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each crop, or variety if 
applicable, by its respective production guarantee;
    (2) Multiplying the results of section 11(b)(1) by the respective 
price election for each crop, or variety, if applicable;
    (3) Totaling the results of section 11(b)(2);
    (4) Multiplying the total production to be counted of each variety, 
if applicable (see section 11(c)), by the respective price election;
    (5) Totaling the results of section 11(b)(4);
    (6) Subtracting this result of section 11(b)(5) from the result of 
section 11(b)(3); and
    (7) Multiplying the result of section 11(b)(6) by your share;
    (c) The total production to count (in cartons) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) For which you fail to provide acceptable production records;
    (C) That is damaged solely by uninsured causes; or
    (D) From which production is sold by direct marketing, if direct 
marketing is specifically permitted by the Special Provisions or a 
written agreement, and you fail to meet the requirements contained in 
section 10;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production determined to be marketable as fresh 
packed fruit; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count;
    (2) All harvested production marketed as fresh packed fruit from the 
insurable acreage; and
    (3) All citrus that was disposed of or sold without an inspection or 
written consent.
    (d) Any production will be considered marketed or marketable as 
fresh packed fruit unless, due solely to insured causes, such production 
was not marketed or marketable as fresh packed fruit.
    (e) Citrus that cannot be marketed as fresh packed fruit due to 
insurable causes will not be considered production to count.
    (f) If we determine that frost protection equipment was not properly 
utilized or not properly reported, the indemnity for the unit will be 
reduced by the percentage of premium reduction allowed for frost 
protection equipment. You must, at our request, provide us records 
showing the start-stop times by date for each period the frost 
protection equipment was used.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[61 FR 44147, Aug. 28, 1996, as amended at 62 FR 65170, Dec. 10, 1997]



Sec. 457.122  Walnut crop insurance provisions.

    The Walnut Crop Insurance Provisions for the 2001 and succeeding 
crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

    Both FCIC and reinsured policies:

                         Walnut Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Harvest--Removal of the walnuts from the orchard.
    Interplanted--Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Net delivered weight--Delivered weight (pounds) of dry, hulled, in-
shell walnuts, excluding foreign material.
    Pound--A unit of weight equal to 16 ounces avoirdupois.
    Production guarantee (per acre)--The number of pounds (whole in-
shell walnuts), determined by multiplying the approved APH yield per 
acre by the coverage level percentage you elect.

                            2. Unit Division

    Provisions in the Basic Provisions that allow optional units by 
section, section

[[Page 207]]

equivalent, or FSA farm serial number and by irrigated and non-irrigated 
practices are not applicable. Optional units may be established only if 
each optional unit is located on non-contiguous land, unless otherwise 
allowed by written agreement.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic Provisions 
(Sec. 457.8):
    (a) You may select only one price election for all the walnuts in 
the county insured under this policy unless the Special Provisions 
provide different price elections by variety or varietal group, in which 
case you may select one price election for each walnut variety or 
varietal group designated in the Special Provisions. The price elections 
you choose for each variety or varietal group must have the same 
percentage relationship to the maximum price offered by us for each 
variety or varietal group. For example, if you choose 100 percent of the 
maximum price election for a specific variety or varietal group, you 
must also choose 100 percent of the maximum price election for all other 
varieties or varietal groups.
    (b) You must report, by the production reporting date designated in 
section 3 of the Basic Provisions (Sec. 457.8), by variety or varietal 
group if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern;
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed, the age of the crop that is interplanted with the walnuts, 
and type if applicable, and the planting pattern; and
    (5) Any other information that we request in order to establish your 
approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the following: 
interplanted perennial crop; removal of trees; damage; change in 
practices and any other circumstance on the yield potential of the 
insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstances.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that could or would reduce the yield of the insured crop 
has occurred prior to the time that you request the increase.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change dates are October 31 for California and August 31 preceding the 
cancellation date for all other states.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are January 31 for California and 
November 20 for all other states.

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions (Sec. 457.8), 
the crop insured will be all the commercially grown English Walnuts 
(excluding black walnuts) in the county for which a premium rate is 
provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown on tree varieties that:
    (1) Were commercially available when the trees were set out;
    (2) Are adapted to the area; and
    (3) Are grown on a root stock that is adapted to the area;
    (c) That are grown in an orchard that, if inspected, are considered 
acceptable by us;
    (d) On acreage where at least 90 percent of the trees have reached 
at least the ninth growing season after being set out, unless we agree 
in writing to insure trees not meeting this requirement; and
    (e) That are in a unit that consists of at least five acres, unless 
we agree in writing to insure a smaller unit.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions 
(Sec. 457.8), that prohibit insurance attaching to a crop planted with 
another crop, walnuts interplanted with another perennial crop are 
insurable unless we inspect the acreage and determine that it does not 
meet the requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) Coverage begins on February 1 in California and November 21 in 
all other states of each crop year, except that for the year of 
application, if your application is received after January 22 but prior 
to February 1 in California or after November 11 but prior to November 
21 in all states, insurance will attach on the 10th day after your 
properly completed application is received in our local office, unless 
we inspect the acreage during the 10 day period and determine that it 
does not meet insurability requirements.

[[Page 208]]

You must provide any information that we require for the crop or to 
determine the condition of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is November 15 (Exceptions, if any, for specific counties or 
varieties or varietal group are contained in the Special Provisions).
    (3) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that the policy remains continuously in force, 
coverage begins on the day immediately following the end of the 
insurance period for the prior crop year. Policy cancellation that 
results solely from transferring to a different insurance provider for a 
subsequent crop year will not be considered a break in continuous 
coverage.
    (4) If your walnut policy is canceled or terminated for any crop 
year, in accordance with the terms of the policy, after insurance 
attached for that crop year but on or before the cancellation and 
termination dates whichever is later, insurance will not be considered 
to have attached for that crop year and no premium, administrative fee, 
or indemnity will be due for such crop year.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period. Acreage 
acquired after the acreage reporting date will not be insured.
    (2) If you relinquish your insurable share on any insurable acreage 
of walnuts on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to, and no premium or 
indemnity will be due for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions (Sec. 457.8), insurance is provided only against the 
following causes of loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and undergrowth have not been controlled or 
pruning debris has not been removed from the orchard;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against any damage or loss of production due to the inability to market 
the walnuts for any reason other than actual physical damage to the 
walnuts from an insurable cause specified in this section. For example, 
we will not pay you an indemnity if you are unable to market due to 
quarantine, boycott, or refusal of any person to accept production.

               10. Duties in the Event of Damage or Loss.

    (a) In addition to the requirements of section 14 of the Basic 
Provisions, if you intend to claim an indemnity on any unit:
    (1) You must notify us prior to the beginning of harvest so that we 
may inspect the damaged production;
    (2) You must give notice when knowledge is obtained of any mold 
damage or 15 days prior to harvest so that we may inspect the mold 
damaged production; and
    (3) You must not sell or dispose of the damaged crop until we have 
given you written consent to do so.
    (b) If you fail to meet the requirements of this section, all such 
production will be considered undamaged and included as production to 
count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by the respective production 
guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election for each variety or varietal group;
    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted of each variety 
or varietal group, if

[[Page 209]]

applicable, (see section 11(c)) by the respective price election;
    (5) Totaling the results in section 11(b)(4);
    (6) Subtracting the result in section 11(b)(5) from the result in 
section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 acres of walnuts in the unit, 
with a guarantee of 2,500 pounds per acre and a price election of $0.61 
per pound. You are only able to harvest 200,000 pounds. Your indemnity 
would be calculated as follows:
    (1) 100 acres x 2,500 pounds = 250,000 pound insurance guarantee;
    (2 & 3) 250,000 pounds x $0.61 price election = $152,500 total value 
of insurance guarantee;
    (4 & 5) 200,000 pounds production to count x $0.61 price election = 
$122,000 total value of production to count;
    (6) $152,500 total value guarantee--$122,000 total value of 
production to count = $30,500 loss; and
    (7) $30,500 x 100 percent share = $30,500 indemnity payment.
    (c) The total production to count (whole in-shell pounds) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is damaged solely by uninsured causes; or
    (C) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and
    (2) All harvested production from the insurable acreage.
    (d) Mature walnut production damaged due to an insurable cause of 
loss which occurs within the insurance period may be adjusted for 
quality based on an inspection by the Dried Fruit Association or during 
our loss adjustment process. Walnut production that has mold damage 
greater than 8 percent, based on the net delivered weight, will be 
reduced by the quality adjustment factors contained in the Special 
Provisions. Walnut production that exceeds 30 percent mold damage and 
will not be sold, the production to count will be zero.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 20091, Apr. 25, 1997, as amended at 62 FR 65170, Dec. 10, 1997; 
65 FR 47837, Aug. 4, 2000]



Sec. 457.123  Almond crop insurance provisions.

    The Almond Crop Insurance Provisions for the 2001 and succeeding 
crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and Reinsured Policies

                         Almond Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Harvest. The removal of mature almonds from the orchard.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Meat pounds. The total pounds of almond meats (whole, chipped and 
broken, and in-shell meats). In-shell almonds will be converted to meat 
pounds in accordance with FCIC approved procedures.
    Production guarantee (per acre). The quantity of almonds (total meat 
pounds per acre) determined by multiplying the approved actual 
production history (APH) yield per acre by the coverage level percentage 
you elect.
    Set out. Transplanting the tree into the orchard.

                            2. Unit Division

    Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.

[[Page 210]]

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic Provisions 
(Sec. 457.8):
    (a) You may select only one price election for all the almonds in 
the county insured under this policy unless the Special Provisions 
provide different price elections by type, in which case you may select 
one price election for each almond type designated in the Special 
Provisions. The price elections you choose for each type must have the 
same percentage relationship to the maximum price offered by us for each 
type. For example, if you choose 100 percent of the maximum price 
election for one type, you must also choose 100 percent of the maximum 
price election for all other types.
    (b) You must report, by the production reporting date designated in 
section 3 of the Basic Provisions (Sec. 457.8), by type if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting patterns;
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed, the age of the crop that is interplanted with the almonds, 
and type if applicable, and the planting pattern; and
    (5) Any other information that we request in order to establish your 
approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the following: 
interplanted perennial crop; removal of trees; damage; change in 
practices and any other circumstance on the yield potential of the 
insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstance.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that would or could reduce the yield of the insured crop 
has occurred prior to the time that you request the increase.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions (Sec. 457.8), 
the contract change date is August 31 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions (Sec. 457.8), 
the cancellation and termination dates are December 31.

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions (Sec. 457.8), 
the crop insured will be all the almonds in the county for which a 
premium rate is provided by the actuarial documents:
    (a) In which you have a share unless allowed otherwise by section 
8(b);
    (b) That are grown for harvest as almonds;
    (c) That are irrigated;
    (d) That are grown in an orchard that, if inspected, is considered 
acceptable to us; and
    (e) On acreage where at least 90 percent of the trees have reached 
at least the seventh growing season after set out, unless we agree in 
writing to insure trees not meeting this requirement.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions 
(Sec. 457.8), that prohibit insurance attaching to a crop planted with 
another crop, almonds interplanted with another perennial crop are 
insurable unless we inspect the acreage and determine that it does not 
meet the requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions (Sec. 457.8):
    (1) Coverage begins on January 1 of each crop year, except that for 
the year of application, if your application is received after December 
21, but prior to January 1, insurance will attach on the 10th day after 
your properly completed application is received in our local office 
unless we inspect the acreage during the 10 day period and determine 
that it does not meet insurability requirements. You must provide any 
information that we require for the crop or to determine the condition 
of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is November 30.
    (3) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that the policy remains continuously in force, 
coverage begins on the day immediately following the end of the 
insurance period for the prior crop year. Policy cancellation that 
results solely from transferring to a different insurance provider for a 
subsequent crop year will not be considered a break in continuous 
coverage.
    (4) If your almond policy is canceled or terminated for any crop 
year, in accordance with the terms of the policy, after insurance 
attached for that crop year but on or before the cancellation and 
termination dates

[[Page 211]]

whichever is later, insurance will not be considered to have attached 
for that crop year and no premium, administrative fee, or indemnity will 
be due for such crop year.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period. Acreage 
acquired after the acreage reporting date will not be insured.
    (2) If you relinquish your insurable share on any insurable acreage 
of almonds on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to, and no premium or 
indemnity will be due for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions (Sec. 457.8), insurance is provided only against the 
following causes of loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and undergrowth have not been controlled or 
pruning debris has not been removed from the orchard;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Earthquake;
    (6) Volcanic eruption;
    (7) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period; or
    (8) Wildlife, unless control measures have not been taken.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to the inability to market the 
almonds for any reason other than actual physical damage to the almonds 
from an insurable cause specified in this section. For example, we will 
not pay you an indemnity if you are unable to market due to quarantine, 
boycott, or refusal of any person to accept production.

                10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 of the Basic 
Provisions (Sec. 457.8), if you intend to claim an indemnity on any 
unit, you must notify us prior to the beginning of harvest so that we 
may inspect the damaged production. You must not sell or dispose of the 
damaged crop until after we have given you written consent to do so. If 
you fail to meet the requirements of this section, all such production 
will be considered undamaged and included as production to count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (l) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election for the type;
    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable, (see subsection 11(c)) by the respective price election;
    (5) Totaling the results in section 11(b)(4);
    (6) Subtracting the result in section 11(b)(5) from the result in 
section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 acres of almonds in the unit, 
with a guarantee of 1,200 pounds per acre and a price election of $1.70 
per pound. You are only able to harvest 100,000 pounds. Your indemnity 
would be calculated as follows:
    (1) 100 acres x 1,200 pounds = 120,000 pound insurance guarantee;
    (2 & 3) 120,000 pounds x $1.70 price election = $204,000 total value 
of insurance guarantee;
    (4 & 5) 100,000 pounds production to count x $1.70 price election = 
$170,000 total value of production to count;
    (6) $204,000 total of value guarantee--$170,000 total value of 
production to count = $34,000 loss; and
    (7) $34,000 x 100 percent share = $34,000 indemnity payment.
    (c) The total production to count, specified in meat pounds, from 
all insurable acreage on the unit will include:
    (1) All appraised production as follows:

[[Page 212]]

    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is damaged solely by uninsured causes; or
    (C) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and
    (2) All harvested meat pounds, including meat pounds damaged due to 
uninsured causes of loss.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 25108, May 8, 1997, as amended at 62 FR 65170, Dec. 10, 1997; 65 
FR 47838, Aug. 4, 2000]



Sec. 457.124  Raisin crop insurance provisions.

    The raisin crop insurance provisions for the 1998 and succeeding 
crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and Reinsured Policies

                         Raisin Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Crop year--In lieu of the definition of ``Crop year'' contained in 
section 1 of the Basic Provisions (Sec. 457.8), the calendar year in 
which the raisins are placed on trays for drying.
    Delivered ton--A ton of raisins delivered to a packer, processor, 
buyer or a reconditioner, before any adjustment for U. S. Grade B and 
better maturity standards, and after adjustments for moisture over 16 
percent and substandard raisins over 5 percent.
    RAC--The Raisin Administrative Committee, which operates under an 
order of the United States Department of Agriculture (USDA).
    Raisins--The sun-dried fruit of varieties of grapes designated 
insurable by the actuarial documents. These grapes will be considered 
raisins for the purpose of this policy when laid on trays in the 
vineyard to dry.
    Reference maximum dollar amount--The value per ton established by 
FCIC and shown in the actuarial documents.
    Substandard--Raisins that fail to meet the requirements of U.S. 
Grade C, or layer (cluster) raisins with seeds that fail to meet the 
requirements of U.S. Grade B.
    Table grapes--Grapes grown for commercial sale as fresh fruit on 
acreage where appropriate cultural practices were followed.
    Ton--Two thousand (2,000) pounds avoirdupois.
    Tonnage report--A report used to annually report, by unit, all the 
tons of raisins produced in the county in which you have a share.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by grape variety.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.

            3. Amounts of Insurance and Production Reporting

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one coverage level percentage for all the 
raisins in the county insured under this policy.
    (b) The amount of insurance for the unit will be determined by 
multiplying the insured tonnage by the reference maximum dollar amount, 
by the coverage level percentage you elect, and by your share.
    (c) Insured tonnage is determined as follows:
    (1) For units not damaged by rain--The delivered tons; or

[[Page 213]]

    (2) For units damaged by rain--By adding the delivered tons to any 
verified loss of production due to rain damage. When production from a 
portion of the acreage within a unit is removed from the vineyard and 
production from the remaining acreage is lost in the vineyard, the 
amount of production lost in the vineyard will be determined based on 
the number of tons of raisins produced on the acreage from which 
production was removed. When no production has been removed from the 
vineyard, the amount of production lost in the vineyard will be 
determined based on an appraisal.
    (3) Insured tonnage will be adjusted as follows:
    (i) The insured tonnage will be reduced 0.12 percent for each 0.10 
percent of moisture in excess of 16.0 percent. For example, 10.0 tons of 
raisins containing 18.0 percent moisture will be reduced to 9.760 tons 
of raisins;
    (ii) Insured tonnage used for dry edible fruit will be reduced by 
0.10 percent for each 0.10 percent of substandard raisins in excess of 
5.0 percent; and
    (iii) When raisins contain moisture in excess of 24.3 percent at the 
time of delivery and are released for a use other than dry edible fruit 
(e.g. distillery material), they will be considered to contain 24.3 
percent moisture.
    (4) If any raisins are delivered, the moisture content will be 
determined at the time of delivery.
    (d) Section 3(c) of the Basic Provisions is not applicable to this 
crop.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is April 30 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are July 31.

                  6. Acreage Report and Tonnage Report

    In lieu of the provisions contained in section 6 of the Basic 
Provisions (Sec. 457.8):
    (a) You must report by unit, and on our form, the acreage on which 
you intend to produce raisins for the crop year. This acreage report 
must be submitted to us on or before the sales closing date, and contain 
the following information:
    (1) All acreage of the crop (insurable and not insurable) in which 
you will have a share;
    (2) Your anticipated share at the time coverage will begin;
    (3) The variety; and
    (4) The location of each vineyard.
    (b) Acreage of the crop acquired after the acreage was reported, may 
be included on the acreage report if we agree to accept the additional 
acreage. Such additional acreage will not be added to the acreage report 
after you first place raisins from the additional acreage on trays for 
drying. Failure to report any acreage in which you have a share will 
result in denial of liability. If you elect not to produce raisins on 
any part of the acreage included on your acreage report, you must notify 
us in writing on or before September 21, and provide any records we may 
require to verify that raisins were not produced on that acreage.
    (c) If you fail to file an acreage report in a timely manner, or if 
the information reported is incorrect, we may deny liability on any 
unit.
    (d) In addition to the acreage report, you must annually submit a 
tonnage report, on our form, which includes by unit the number of 
delivered tons of raisins, and, if damage has occurred, the amount of 
any tonnage we determined was lost due to rain damage in the vineyard 
for each unit designated in the acreage report.
    (e) The tonnage report must be submitted to us as soon as the 
information is available, but not later than March 1 of the year 
following the crop year. Indemnities may be determined on the basis of 
information you submitted on this report. If you do not submit this 
report by the reporting date, we may, at our option, either determine 
the insured tonnage and share by unit or we may deny liability on any 
unit. This report may be revised only upon our approval. Errors in 
reporting units may be corrected by us at any time we discover the 
error.

                            7. Annual Premium

    In lieu of the premium computation method contained in section 7 
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual 
premium amount is determined by multiplying the amount of insurance for 
the unit at the time insurance attaches by the premium rate and then 
multiplying that result by any applicable premium adjustment factors 
that may apply.

                             8. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the raisins in 
the county of grape varieties for which a premium rate is provided by 
the actuarial documents and in which you have a share.
    (b) In addition to the raisins not insurable under section 8 
(Insured Crop) of the Basic Provisions (Sec. 457.8), we do not insure 
any raisins:
    (1) Laid on trays after September 8 in vineyards with north-south 
rows in Merced or

[[Page 214]]

Stanislaus Counties, or after September 20 in all other counties;
    (2) From table grape strippings; or
    (3) From vines that received manual, mechanical, or chemical 
treatment to produce table grape sizing.

                           9. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8), insurance attaches on each unit at the 
time the raisins are placed on trays for drying and ends the earlier of:
    (a) October 20;
    (b) The date the raisins are removed from the trays;
    (c) The date the raisins are removed from the vineyard;
    (d) Total destruction of all raisins on a unit;
    (e) Final adjustment of a loss on a unit; or
    (f) Abandonment of the raisins.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against unavoidable loss of production resulting from rain that occurs 
during the insurance period and while the raisins are on trays or in 
rolls in the vineyard for drying.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to inability to market the 
raisins for any reason other than actual physical damage from an 
insurable cause specified in this section. For example, we will not pay 
you an indemnity if you are unable to market due to quarantine, boycott, 
or refusal of a person to accept production.

               11. Reconditioning Requirements and Payment

    (a) We may require you to recondition a representative sample of not 
more than 10 tons of damaged raisins to determine if they meet standards 
established by the RAC once reconditioned. If such standards are met, we 
may require you to recondition all the damaged production. If we 
determine that it is possible to recondition any damaged production and, 
if you do not do so, we will value the damaged production at the 
reference maximum dollar amount, except if your damaged production 
undergoes a USDA inspection and is stored by your packer with other 
producer's production to be reconditioned at a later date. If we agree, 
in writing, that it is not practical to recondition the damaged 
production, we will determine the number of tons meeting RAC standards 
that could be obtained if the production were reconditioned.
    (b) If the representative sample of raisins that we require you to 
recondition does not meet RAC standards for marketable raisins after 
reconditioning, the reconditioning payment will be the actual cost you 
incur to recondition the sample, not to exceed an amount that is 
reasonable and customary for such reconditioning, regardless of the 
coverage level selected.
    (c) A reconditioning payment, based on the actual (unadjusted) 
weight of the raisins, will be made if:
    (1) Insured raisin production:
    (i) Is damaged by rain within the insurance period;
    (ii) Is reconditioned by washing with water and then drying;
    (iii) Is insured at a coverage level greater than that applicable to 
the catastrophic risk protection plan of insurance; and either
    (2) The damaged production undergoes an inspection by USDA and is 
found to contain mold, embedded sand, or other rain-caused contamination 
determined by micro-analysis in excess of standards established by the 
RAC, or is found to contain moisture in excess of 18 percent; or
    (3) We give you consent to recondition the damaged production.
    (d) Your request for consent to any wash-and-dry reconditioning must 
identify the acreage on which the production to be reconditioned was 
damaged in order to be eligible for a reconditioning payment.
    (e) The reconditioning payment for raisins that meet RAC standards 
for marketable raisins after reconditioning will be the lesser of your 
actual cost for reconditioning or the amount determined by:
    (1) Multiplying the greater of $125.00 or the reconditioning dollar 
amount per ton contained in the Special Provisions by your coverage 
level;
    (2) Multiplying the result of section 11(e)(1) by the actual number 
of tons of raisins (unadjusted weight) that are wash-and-dry 
reconditioned; and
    (3) Multiplying the result of section 11(e)(2) by your share.
    (f) Only one reconditioning payment will be made for any lot of 
raisins damaged during the crop year. Multiple reconditioning payments 
for the same production will not be made.

                12. Duties in the Event of Damage or Loss

    (a) In addition to the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 
following will apply:
    (1) If you intend to claim an indemnity on any unit, you must give 
us notice within 72 hours of the time the rain fell on the raisins. We 
may reject any claim for indemnity if such notice is later. You must 
provide us the following information when you give us this notice:

[[Page 215]]

    (i) The grape variety;
    (ii) The location of the vineyard and number of acres; and
    (iii) The number of vines from which the raisins were harvested.
    (2) We will not pay any indemnity unless you:
    (i) Authorize us in writing to obtain all relevant records from any 
raisin packer, raisin reconditioner, the RAC, or any other person who 
may have such records. If you fail to meet the requirements of this 
subsection, all insured production will be considered undamaged and 
valued at the reference maximum dollar value.
    (ii) Upon our request, provide us with records of previous years'' 
production and acreage. This information may be used to establish the 
amount of insured tonnage when insurable damage results in discarded 
production.
    (b) In lieu of the provisions in section 14 (Duties in the Event of 
Damage or Loss) of the Basic Provisions (Sec. 457.8) that require you 
to submit a claim for indemnity not later than 60 days after the end of 
the insurance period, any claim for indemnity must be submitted to us 
not later than March 31 following the date for the end of the insurance 
period.

                         13. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the acreage from which 
raisins were removed for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured tonnage of raisins by the reference 
maximum dollar amount and your coverage level percentage;
    (2) Subtracting from the total in section 13(b)(1) the total value 
of all insured damaged and undamaged raisins; and
    (3) Multiplying the result of section 13(b)(2) by your share.
    (c) For the purpose of determining the amount of indemnity, your 
share will not exceed the lesser of your share at the time insurance 
attaches or at the time of loss.
    (d) Undamaged raisins or raisins damaged solely by uninsured causes 
will be valued at the reference maximum dollar amount.
    (e) Raisins damaged partially by rain and partially by uninsured 
causes will be valued at the highest prices obtainable, adjusted for any 
reduction in value due to uninsured causes.
    (f) Raisins that are damaged by rain, but that are reconditioned and 
meet RAC standards for raisins, will be valued at the reference maximum 
dollar amount.
    (g) The value to count for any raisins produced on the unit that are 
damaged by rain and not removed from the vineyard will be the larger of 
the appraised salvage value or $35.00 per ton, except that any raisins 
that are damaged and discarded from trays or are lost from trays 
scattered in the vineyard as part of normal handling will not be 
considered to have any value. You must box and deliver any raisins that 
can be removed from the vineyard.
    (h) At our sole option, we may acquire all the rights and title to 
your share of any raisins damaged by rain. In such event, the raisins 
will be valued at zero in determining the amount of loss and we will 
have the right of ingress and egress to the extent necessary to take 
possession, care for, and remove such raisins.
    (i) Raisins destroyed, put to another use without our consent, or 
abandoned will be valued at the reference maximum dollar amount.

                     14. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 12070, Mar. 14, 1997, as amended at 62 FR 65170, Dec. 10, 1997]



Sec. 457.125  Safflower crop insurance provisions.

    The safflower crop insurance provisions for the 2003 and succeeding 
crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                   Safflower Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Harvest. Collecting the safflower seed by combining or threshing.
    Local market price. The cash price per pound for undamaged safflower 
(test weight of 35 pounds per bushel or higher and seed damage less than 
25 percent) offered by buyers.

[[Page 216]]

    Nurse crop (companion crop). A crop planted into the same acreage as 
another crop, that is intended to be harvested separately, and which is 
planted to improve growing conditions for the crop with which it is 
grown.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, safflowers must initially be planted in rows, unless 
otherwise provided by the Special Provisions, actuarial documents, or by 
written agreement.
    Pound. Sixteen ounces avoirdupois.
    Value per pound. The cash price per pound for damaged safflower 
(test weight below 35 pounds per bushel, seed damage in excess of 25 
percent, or both).

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8), you may select only one price election for all 
the safflower in the county insured under this policy unless the Special 
Provisions provide different price elections by type, in which case you 
may select one price election for each safflower type designated in the 
Special Provisions. The price elections you choose for each type must 
have the same percentage relationship to the maximum price offered by us 
for each type. For example, if you choose 100 percent of the maximum 
price election for one type, you must also choose 100 percent of the 
maximum price election for all other types.

                           3. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date for California, and December 31 
preceding the cancellation date for all other states.

                  4. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
                                           Cancellation and termination
                 State                                dates
------------------------------------------------------------------------
California.............................  December 31.
All other states.......................  March 15.
------------------------------------------------------------------------

                             5. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all safflower in the county for 
which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That is planted for harvest as safflower seed;
    (c) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Interplanted with another crop; or
    (2) Planted into an established grass or legume.

                          6. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), we will not insure:
    (a) Safflower planted on land on which safflower, sunflower seed, 
any variety of dry beans, soybeans, mustard, rapeseed, or lentils were 
grown the preceding crop year, unless other rotation requirements are 
specified in the Special Provisions or we agree in writing to insure 
such acreage; or
    (b) Any acreage of safflower damaged before the final planting date, 
to the extent that the majority of producers in the area would normally 
not further care for the crop, unless the crop is replanted or we agree 
that it is not practical to replant.

                           7. Insurance Period

    In accordance with the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8), the calendar date for the end of 
the insurance period is October 31 immediately following planting.

                            8. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur during the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife, unless proper measures to control wildlife have not 
been taken;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by an insured 
cause of loss that occurs during the insurance period.

                          9. Replanting Payment

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if the crop is 
damaged by an insurable cause of loss to the extent that the remaining 
stand will not produce at least 90 percent of the production guarantee 
for the acreage and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of 20

[[Page 217]]

percent of the production guarantee or 160 pounds, multiplied by your 
price election, multiplied by your insured share.
    (c) When safflower is replanted using a practice that is uninsurable 
as an original planting, the liability on the unit will be reduced by 
the amount of the replanting payment. The premium amount will not be 
reduced.

                10. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 
representative samples of the unharvested crop must be at least 10 feet 
wide and extend the entire length of each field in the unit. The samples 
must not be harvested or destroyed until the earlier of our inspection 
or 15 days after harvest of the balance of the unit is completed.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election;
    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted of each type if 
applicable, (see section 11(c)) by the respective price election;
    (5) Totaling the results in section 11(b)(4);
    (6) Subtracting the results from the total in section 11(b)(5) from 
the results in section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.
    (c) The total production to count (in pounds) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for the acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
section 11(d)); and
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or fail to provide sufficient care 
for the samples, our appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage.
    (d) Mature safflower may be adjusted for excess moisture and quality 
deficiencies. If moisture adjustment is applicable, it will be made 
prior to any adjustment for quality.
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of 8 percent. We may obtain 
samples of the production to determine the moisture content.
    (2) Production will be eligible for quality adjustment if such 
production:
    (i) Has a test weight below 35 pounds per bushel;
    (ii) Has seed damage in excess of 25 percent; or
    (iii) Contains substances or conditions that are identified by the 
Food and Drug Administration or other public health organizations of the 
United States as being injurious to human or animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions and that occurred within the insurance period;
    (ii) The deficiencies, substances, or conditions result in a value 
per pound that is less than the local market price;
    (iii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by

[[Page 218]]

us or by a disinterested third party approved by us;
    (iv) With regard to deficiencies in quality (except test weight, 
which may be determined by our loss adjuster), the samples are analyzed 
by:
    (A) A grader licensed under the United States Agricultural Marketing 
Act or the United States Warehouse Act;
    (B) A grader licensed under State law and employed by a warehouse 
operator who has a storage agreement with the Commodity Credit 
Corporation; or
    (C) A grader not licensed under State law, but who is employed by a 
warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (v) With regard to substances or conditions injurious to human or 
animal health, the samples are analyzed by a laboratory approved by us.
    (4) Safflower production that is eligible for quality adjustment, as 
specified in sections 11(d) (2) and (3), will be reduced as follows:
    (i) In accordance with the quality adjustment factors contained in 
the Special Provisions; or
    (ii) If quality adjustment factors are not contained in the Special 
Provisions:
    (A) By determining the value per pound and the local market price on 
the earlier of the date such quality adjusted production is sold or the 
date of final inspection for the unit. Discounts used to establish the 
value per pound will be limited to those which are usual, customary, and 
reasonable. The value per pound will not be reduced for:
    (1) Moisture content;
    (2) Damage due to uninsured causes; or
    (3) Drying, handling, processing, or any other costs associated with 
normal harvesting, handling, and marketing of safflower. We may obtain 
values per pound from any buyer of our choice. If we obtain values per 
pound from one or more buyers located outside your local market area, we 
will reduce such values per pound by the additional costs required to 
deliver the production to those buyers.
    (B) Divide the value per pound by the local market price to 
determine the quality adjustment factor; and
    (C) Multiply the adjustment factor by the number of pounds of the 
damaged production remaining after any reduction due to excessive 
moisture to determine the net production to count.
    (e) Any production harvested from other plants growing in the 
insured crop may be counted as production of the insured crop on a 
weight basis.

                         12. Prevented Planting

    Your prevented planing coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have limited or 
aditional levels of coverage, as specified in 7 CFR part 400, subpart T, 
and pay an additional premium, you may increase your prevented planting 
coverage to a level specified in the actuarial documents.

[62 FR 42649, Aug. 8, 1997, as amended at 62 FR 65171, Dec. 10, 1997; 67 
FR 55690, Aug. 30, 2002]



Sec. 457.126  Popcorn cop isurance povisions.

    The Popcorn Crop Insurance Provisions for the 1999 and succeeding 
crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                    Popcorn Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Base contract price. The price stipulated on the contract executed 
between you and the processor before any adjustments for quality.
    Harvest. Removing the grain or ear from the stalk either by hand or 
by machine.
    Merchantable popcorn. Popcorn that meets the provisions of the 
processor contract.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, popcorn must initially be planted in rows far enough 
apart to permit mechanical cultivation, unless otherwise provided by the 
Special Provisions, actuarial documents, or by written agreement.
    Pound. Sixteen (16) ounces avoirdupois.
    Practical to replant. In addition to the definition contained in the 
Basic Provisions, it will not be considered practical to replant unless 
production from the replanted acreage can be delivered under the terms 
of the popcorn processor contract, or the processor agrees in writing 
that it will accept the production from the replanted acreage.
    Processor. Any business enterprise regularly engaged in processing 
popcorn that possesses all licenses, permits or approved inspections for 
processing popcorn required by the state in which it operates, and that 
possesses facilities, or has contractual access to

[[Page 219]]

such facilities, with enough equipment to accept and process the 
contracted popcorn within a reasonable amount of time after harvest.
    Processor contract. A written agreement between the producer and a 
processor, containing at a minimum:
    (a) The producer's commitment to plant and grow popcorn, and to 
deliver the popcorn production to the processor;
    (b) The processor's commitment to purchase all the production stated 
in the processor contract;
    (c) A date, if specified on the processor's contract, by which the 
crop must be harvested to be accepted; and
    (d) A base contract price.
Multiple contracts with the same processor, each of which stipulates a 
specific amount of production to be delivered under the terms of the 
processor contact, will be considered as a single processor contract.

                            2. Unit Division

    (a) For processor contracts that stipulate the amount of production 
to be delivered:
    (1) In lieu of the definition contained in the Basic Provisions, a 
basic unit will consist of all the acreage planted to the insured crop 
in the county that will be used to fulfill contracts with each 
processor;
    (i) There will be no more than one basic unit for all production 
contracted with each processor contract;
    (ii) In accordance with section 13 of these Crop Provisions, all 
production from any basic unit in excess of the amount under contract 
will be included as production to count if such production is applied to 
any other basic unit for which the contracted amount has not been 
fulfilled; and
    (2) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable.
    (b) For any processor contract that stipulates only the number of 
acres to be planted, the provisions contained in section 34 of the Basic 
Provisions will apply.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election for all the popcorn 
in the county insured under this policy unless the Special Provisions 
provide different price elections by type, in which case you may select 
one price election for each popcorn type designated in the Special 
Provisions. The price elections you choose for each type must have the 
same percentage relationship to the maximum price offered by us for each 
type. For example, if you choose 100 percent of the maximum price 
election for one type, you must also choose 100 percent of the maximum 
price election for all other types.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
                                            Cancellation and termination
             State and county                          dates
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,  January 15.
 Wilson, Karnes, Goliad, Victoria, and
 Jackson counties Texas, and all Texas
 counties lying south thereof.
All other Texas counties and all other     March 15.
 states.
------------------------------------------------------------------------

                          6. Report of Acreage

    In addition to the provisions of section 6 of the Basic Provisions, 
you must provide a copy of all processor contracts to us on or before 
the acreage reporting date.

                             7. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the popcorn in the county for which a premium rate 
is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That is planted for harvest as popcorn;
    (3) That is grown under, and in accordance with the requirements of, 
a processor contract executed on or before the acreage reporting date 
and is not excluded from the processor contract at any time during the 
crop year; and
    (4) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop; or
    (ii) Planted into an established grass or legume.
    (b) You will be considered to have a share in the insured crop if, 
under the processor contract, you retain control of the acreage on which 
the popcorn is grown, you have a risk of loss, and the processor 
contract provides for delivery of popcorn under specified conditions and 
at a stipulated base contract price.
    (c) A popcorn producer who is also a processor may be able to 
establish an insurable interest if the following requirements are met:
    (1) The producer must comply with these Crop Provisions;
    (2) The Board of Directors or officers of the processor must, prior 
to the sales closing date, execute and adopt a resolution that contains 
the same terms as an acceptable

[[Page 220]]

processor contract. Such resolution will be considered a processor 
contract under this policy; and
    (3) Our inspection reveals that the processing facilities comply 
with the definition of a processor contained in these Crop Provisions.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
any acreage of the insured crop damaged before the final planting date, 
to the extent that the majority of producers in the area would normally 
not further care for the crop, must be replanted unless we agree that it 
is not practical to replant.

                           9. Insurance Period

    In lieu of the provisions contained in section 11 of the Basic 
Provisions, regarding the end of the insurance period, insurance ceases 
on each unit or part of a unit at the earliest of:
    (a) The date the popcorn:
    (1) Was destroyed;
    (2) Should have been harvested but was not harvested;
    (3) Was abandoned; or
    (4) Was harvested;
    (b) When the processor contract stipulates a specific amount of 
production to be delivered, the date the production accepted by the 
processor equals the contracted amount of production;
    (c) Final adjustment of a loss; or
    (d) December 10 immediately following planting.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if caused by a cause of 
loss specified in sections 10(a)(1) through (7) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded by section 12 of the 
Basic Provisions, we do not insure against any loss of production due 
to:
    (1) Damage resulting from frost or freeze after the date designated 
in the Special Provisions; or
    (2) Failure to follow the requirements contained in the processor 
contract.

                         11. Replanting Payment

    (a) In accordance with section 13 of the Basic Provisions, a 
replanting payment is allowed if the crop is damaged by an insurable 
cause of loss to the extent that the remaining stand will not produce at 
least 90 percent of the production guarantee for the acreage and it is 
practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of 20 percent of the production guarantee or 150 pounds, 
multiplied by your price election, multiplied by your insured share.
    (c) When popcorn is replanted using a practice that is uninsurable 
as an original planting, our liability for the unit will be reduced by 
the amount of the replanting payment. The premium amount will not be 
reduced.

                12. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 of the Basic 
Provisions, the representative samples of the unharvested crop must be 
at least 10 feet wide and extend the entire length of each field in the 
unit. The samples must not be destroyed until the earlier of our 
inspection or 15 days after harvest of the balance of the unit is 
completed.

                         13. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type, if applicable, by 
its respective production guarantee;
    (2) Multiplying the result of section 13(b)(1) by the respective 
price election for each type, if applicable;
    (3) Totaling the results of section 13(b)(2) if there is more than 
one type;
    (4) Multiplying the total production to count (see section 13(c)), 
of each type if applicable, by its respective price election;
    (5) Totaling the results of section 13(b)(4) if there is more than 
one type;
    (6) Subtracting the result of section 13(b)(4) from the result in 
section 13(b)(2) if there is only one type or subtracting the result of 
section 13(b)(5) from the result of section 13(b)(3) if there is more 
than one type; and

[[Page 221]]

    (7) Multiplying the result of section 13(b)(6) by your share.

 
 
 
For example:
You have a 100 percent share in 100 acres of Type A popcorn in the unit,
 with a guarantee of 2,500 pounds per acre and a price election of $.12
 per pound. You are only able to harvest 150,000 pounds. Your indemnity
 would be calculated as follows:
1....................  100 acres x 2,500 pounds = 250,000 pound
                        guarantee;
2....................  250,00 pounds x $.12 price election = $30,000
                        value of guarantee;
4....................  150,000 pounds production to count x $.12 price
                        election = $18,000 value of production to count;
6....................  $30,000-$18,000 = $12,000 loss; and
7....................  $12,000 x 100 percent share = $12,000 indemnity
                        payment.
You also have a 100 percent share in 150 acres of type B popcorn in the
 same unit, with a guarantee of 2,250 pounds per acre and a price
 election of $.10 per pound. You are only able to harvest 70,000 pounds.
 Your total indemnity for both popcorn types A and B would be calculated
 as follows:
1....................  100 acres x 2,500 pounds = 250,000 guarantee for
                        type A and 150 acres x 2,250 pounds = 337,500
                        pound guarantee for type B;
2....................  250,000 pound guarantee x $.12 price election =
                        $30,000 value of guarantee for type A and
                        337,500 pound guarantee x $.10 price election =
                        $33,750 value guarantee for type B;
3....................  $30,000 + $33,750 = $63,750 total value
                        guarantee;
4....................  150,000 pounds x $.12 price election = $18,000
                        value of production to count for type A and
                       70,000 pounds x $.10 price election = $7,000
                        value of production to count for type B;
5....................  $18,000 + $7,000 = $25,000 total value of
                        production to count;
6....................  $63,750-$25,000 = $38,750 loss; and
7....................  $38,750 x 100 percent = $38,750 indemnity
                        payment.
 

    (c) The total production to count (in pounds) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide production records;
    (ii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
section 13(d));
    (iii) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or fail to provide sufficient care 
for the samples, our appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested;
    (2) All harvested production from the insurable acreage in the unit;
    (3) All harvested and appraised production lost or damaged by 
uninsured causes; and
    (4) For processor contracts that stipulate the amount of production 
to be delivered, all harvested popcorn production from any other 
insurable unit that has been used to fulfill your processor contract 
applicable to this unit.
    (5) Any production from yellow or white dent corn will be counted as 
popcorn on a weight basis and any production harvested from plants 
growing in the insured crop may

[[Page 222]]

be counted as popcorn production on a weight basis.
    (6) Any ear production for which we cannot determine a shelling 
factor will be considered to have an 80 percent shelling factor.
    (d) Mature popcorn may be adjusted for excess moisture and quality 
deficiencies. If moisture adjustment is applicable, it will be made 
prior to any adjustment for quality.
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point for moisture in excess of 15 percent. We may obtain 
samples of the production to determine the moisture content.
    (2) Popcorn production will be eligible for quality adjustment if, 
due to an insurable cause of loss that occurs within the insurance 
period, it is not merchantable popcorn and is rejected by the processor. 
The production will be adjusted by:
    (i) Dividing the value per pound of the damaged popcorn by the base 
contract price per pound for undamaged popcorn; and
    (ii) Multiplying the result by the number of pounds of such popcorn.

                            14. Late Planting

    Late planting provisions in the Basic Provisions are applicable for 
popcorn if you provide written approval from the processor by the 
acreage reporting date that it will accept the production from the late 
planted acres when it is expected to be ready for harvest.

                         15. Prevented Planting

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[63 FR 33838, June 22, 1998]



Sec. 457.127  [Reserved]



Sec. 457.128  Guaranteed production plan of fresh market tomato crop 
insurance provisions.

    The Guaranteed Production Plan of Fresh Market Tomato Crop Insurance
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

    Guarantee Production Plan of Fresh Market Tomato Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Acre--Forty-three thousand five hundred sixty (43,560) square feet 
of land when row widths do not exceed six feet, or if row widths exceed 
six feet, the land area on which at least 7,260 linear feet of rows are 
planted.
    Carton--A container that contains 25 pounds of fresh tomatoes unless 
otherwise provided in the Special Provisions.
    Direct marketing--Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    First fruit set--The date when 30 percent of the plants on the unit 
have produced fruit that has reached a minimum size of one inch in 
diameter.
    Harvest--Picking of marketable tomatoes.
    Mature green tomato--A tomato that:
    (a) Has a heightened gloss due to a waxy skin that cannot be torn by 
scraping;
    (b) Has a well-formed jelly-like substance in the locules;
    (c) Has seeds that are sufficiently hard so they are pushed aside 
and not cut by a sharp knife in slicing; and
    (d) Shows no red color.
    Planting--Transplanting the tomato plants into the field.
    Planting period--The time period designated in the Special 
Provisions during which the tomatoes must be planted to be insured as 
either spring-or fall-planted tomatoes.
    Plant stand--The number of live plants per acre before any damage 
occurs.
    Potential production--The number of cartons per acre of mature green 
or ripe tomatoes that the tomato plants would have produced by the end 
of the insurance period:
    (a) With a classification size of 6x7 (2-8/32 inch minimum diameter) 
or larger for all types except cherry, roma, or plum; or
    (b) Meeting the criteria specified in the Special Provisions for 
cherry, roma, or plum types.
    Practical to replant--In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8), 
practical to replant is defined as our determination, after loss or 
damage to the insured

[[Page 223]]

crop, based on factors, including but not limited to moisture 
availability, condition of the field, time to crop maturity, and 
marketing windows that replanting the insured crop will allow the crop 
to attain maturity prior to the calendar date for the end of the 
insurance period. In counties that do not have both spring and fall 
planting periods, it will not be considered practical to replant after 
the final planting date unless replanting is generally occurring in the 
area. In counties that have spring and fall planting periods, it will 
not be considered practical to replant after the final planting date for 
the planting period in which the crop was initially planted.
    Ripe tomato--A tomato that meets the definition of a mature green 
tomato, except the tomato shows some red color and can still be packed 
for fresh market under the agreement or contract with the packer.
    Row width--The distance in feet from the center of one row of plants 
to the center of an adjacent row.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by planting period, if 
separate planting periods are provided for in the Special Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election for all the tomatoes in 
the county insured under this policy unless the Special Provisions 
provide different price elections by type, in which case you may select 
one price election for each tomato type designated in the Special 
Provisions. The price election you choose for each type must have the 
same percentage relationship to the maximum price offered by us for each 
type. For example, if you choose 100 percent of the maximum price 
election for one type, you must also choose 100 percent of the maximum 
price election for all other types.
    (b) The production guarantees per acre are progressive by stages and 
increase at specified intervals to the final stage production guarantee. 
The stages and production guarantees are as follows:
    (1) For California:

------------------------------------------------------------------------
                            Percent of
                              stage 3
                              (final
           Stage              stage)             Length of time
                            production
                             guarantee
------------------------------------------------------------------------
1.........................         50   From planting until first fruit
                                         set.
2.........................         70   From first fruit set until
                                         harvested.
3.........................        100   Harvested acreage.
------------------------------------------------------------------------

    (2) For all other states, except California:

------------------------------------------------------------------------
                            Percent of
                              stage 4
                              (final
           Stage              stage)             Length of time
                            production
                             guarantee
------------------------------------------------------------------------
                  1.......         50   From planting until qualifying
                                         for stage 2.
2.........................         75   From the earlier of stakes
                                         driven, one tie and pruning, or
                                         30 days after planting until
                                         qualifying for stage 3.
3.........................         90   From the earlier of the end of
                                         stage 2 or 60 days after
                                         planting until qualifying for
                                         stage 4.
4.........................        100   From the earlier of 75 days
                                         after planting or the beginning
                                         of harvest.
------------------------------------------------------------------------

    (c) Any acreage of tomatoes damaged to the extent that producers in 
the area generally would not further care for the tomatoes will be 
deemed to have been destroyed even though you continue to care for the 
tomatoes. The production guarantee for such acreage will be the 
guarantee for the stage in which such damage occurs.
    (d) Any production guarantees for cherry, roma, or plum type 
tomatoes will be specified in the Special Provisions.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is September 30 
preceding the cancellation date for counties with a January 15 
cancellation date and December 31 preceding the cancellation date for 
all other counties.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

                      Cancellation and Termination
------------------------------------------------------------------------
                 State                                Dates
------------------------------------------------------------------------
California, Florida, Georgia, and South  January 15.
 Carolina.
All other states.......................  March 15.
------------------------------------------------------------------------


[[Page 224]]

                          6. Report of Acreage

    (a) In addition to the provisions of section 6 (Report of Acreage) 
of the Basic Provisions (Sec. 457.8), you must report the row width.
    (b) If spring and fall planting periods are allowed in the Special 
Provisions you must report all the information required by section 6 
(Report of Acreage) of the Basic Provisions (Sec. 457.8) and these Crop 
Provisions by the acreage reporting date for each planting period.

                            7. Annual Premium

    In lieu of provisions contained in the Basic Provisions (Sec. 
457.8), for determining premium amounts, the annual premium is 
determined by multiplying the final stage production guarantee by the 
price election, by the premium rate, by the insured acreage, by your 
share at the time coverage begins, and by any applicable premium 
adjustment factor contained in the Special Provisions.

                             8. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the tomatoes in the county 
for which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are transplanted tomatoes that have been planted for 
harvest as fresh market tomatoes;
    (c) That are planted within the spring or fall planting periods, as 
applicable, specified in the Special Provisions;
    (d) That, on or before the acreage reporting date, are subject to 
any agreement in writing (packing contract) executed between you and a 
packer, whereby the packer agrees to accept and pack the production 
specified in the agreement, unless you control a packing facility or an 
exception exists in the Special Provisions; and
    (e) That are not (unless allowed by the Special Provisions):
    (1) Grown for direct marketing;
    (2) Interplanted with another crop;
    (3) Planted into an established grass or legume; or
    (4) Cherry, roma, or plum type tomatoes.

                          9. Insurable Acreage

    (a) In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8):
    (1) Any acreage of the insured crop damaged before the final 
planting date, to the extent that the majority of growers in the area 
would normally not further care for the crop, must be replanted unless 
we agree that it is not practical to replant. Unavailability of plants 
will not be considered a valid reason for failure to replant.
    (2) We do not insure any acreage of tomatoes:
    (i) Grown by any person if the person had not previously:
    (A) Grown fresh market tomatoes for commercial sales; or
    (B) Participated in the management of a fresh market tomato farming 
operation, in at least one of the three previous years.
    (ii) That does not meet the rotation requirements contained in the 
Special Provisions;
    (iii) On which tomatoes, peppers, eggplants, or tobacco have been 
grown within the previous two years unless the soil was fumigated or 
nematicide was applied before planting the tomatoes, except that this 
limitation does not apply to a first planting in Pennsylvania or if 
otherwise specified in the Special Provisions; or
    (b) In lieu of the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), that prohibit insurance from 
attaching if a crop has not been planted and harvested in at least one 
of the three previous calendar years, we will insure newly cleared land 
or former pasture land planted to fresh market tomatoes.

                          10. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8):
    (a) Coverage begins on each unit or part of a unit on the later of 
the date you submit your application or when the tomatoes are planted.
    (b) Coverage will end on any insured acreage at the earliest of:
    (1) Total destruction of the tomatoes;
    (2) Discontinuance of harvest;
    (3) The date harvest should have started on any acreage that was not 
harvested;
    (4) 120 days after the date of transplanting or replanting;
    (5) Completion of harvest;
    (6) Final adjustment of a loss; or
    (7) October 15 of the crop year in Delaware, Maryland, New Jersey, 
North Carolina, and Virginia; October 31 of the crop year in California; 
November 10 of the crop year in Florida, Georgia, and South Carolina; 
and September 20 of the crop year in all other States.

                           11. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;

[[Page 225]]

    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production that occurs or becomes evident 
after the tomatoes have been harvested.

                         12. Replanting Payment

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if the crop is 
damaged by an insurable cause of loss and the acreage to be replanted 
has sustained a loss in excess of 50 percent of the plant stand.
    (b) The maximum amount of the replanting payment per acre will be:
    (1) Seventy (70) cartons multiplied by your price election, 
multiplied by your insured share for all insured tomatoes except cherry, 
roma or plum types; and
    (2) As specified in the Special Provisions for cherry, roma, or plum 
types.
    (c) In lieu of the provisions contained in section 13 (Replanting 
Payment) of the Basic Provisions (Sec. 457.8) that permit only one 
replanting payment each crop year, when both spring and fall planting 
periods are contained in the Special Provisions, you may be eligible for 
one replanting payment for acreage planted during each planting period 
within the crop year.

                         13. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate, acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type, if applicable, by 
its respective production guarantee for the stage in which the damage 
occurred;
    (2) Multiplying the results of section 13(b)(1) by the respective 
price election for each type, if applicable;
    (3) Totaling the results of section 13(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable, (see section 13(c)) by the respective price election;
    (5) Totaling the results of section 13(b)(4);
    (6) Subtracting this result of section 13(b)(5) from the results in 
section 13(b)(3); and
    (7) Multiplying the result of section 13(b)(6) by your share.
    (c) The total production to count (in cartons) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Potential production lost due to uninsured causes;
    (iii) Unharvested production of mature green and ripe tomatoes 
remaining after harvest has ended:
    (A) With a classification size of 6 x 7 (2\8/32\ inch minimum 
diameter) or larger and that would grade eighty-five percent (85%) or 
better U.S. No. 1 for types other than cherry, roma, or plum; or
    (B) That grade in accordance with the requirements specified in the 
Special Provisions for cherry, roma or plum types.
    (iv) Potential production on unharvested acreage and potential 
production on acreage when final harvest has not been completed;
    (v) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage:

[[Page 226]]

    (i) That is marketed, regardless of grade; and
    (ii) That is unmarketed and:
    (A) That grades eighty-five percent (85%) or better U.S. No. 1 with 
a classification size of 6x7 (2-8/32 inch minimum diameter) or larger 
for all types except cherry, roma, or plum; or
    (B) That grade in accordance with the requirements specified in the 
Special Provisions for cherry, roma, or plum types.
    (d) Only that amount of appraised production that exceeds the 
difference between the final stage guarantee and the stage guarantee 
applicable to the acreage will be production to count.

                     14. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 23631, May 1, 1997; 62 FR 33539, June 20, 1997, as amended at 62 
FR 65171, Dec. 10, 1997; 63 FR 36157, July 2, 1998; 63 FR 50753, Sept. 
23, 1998]



Sec. 457.129  Fresh market sweet corn crop insurance provisions.

    The fresh market sweet corn crop insurance provisions for the 1999 
and succeeding crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and Reinsured Policies

                 Fresh Market Sweet Corn Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Container--The unit for measurement of the insured crop as specified 
in the Special Provisions.
    Crop year--In lieu of the definition of ``crop year'' contained in 
section 1 (Definitions) of the Basic Provisions (Sec. 457.8), crop year 
is a period of time that begins on the first day of the earliest 
planting period for fall planted sweet corn and continues through the 
last day of the insurance period for spring planted sweet corn. The crop 
year is designated by the calendar year in which spring planted sweet 
corn is harvested.
    Direct marketing--Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Excess rain--An amount of precipitation sufficient to directly 
damage the crop.
    Excess wind--Wind speed strong enough to prevent adequate 
pollination or cause lodging of stalks and prevent a normal harvest.
    Freeze--The formation of ice in the cells of the plant or its fruit, 
caused by low air temperatures.
    Harvest--The picking of sweet corn on the unit.
    Marketable sweet corn--Sweet corn that meets the standards for 
grading U.S. No. 1 or better and will withstand normal handling and 
shipping.
    Plant stand--The number of live plants per acre prior to the 
occurrence of an insurable cause of loss.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, for each planting period, sweet corn seed must be 
planted in rows far enough apart to permit mechanical cultivation, 
unless otherwise provided by the Special Provisions, actuarial 
documents, or by written agreement.
    Planting period--The period of time designated in the actuarial 
documents in which fresh market sweet corn must be planted to be 
considered fall, winter, or spring-planted sweet corn.
    Potential production--The number of containers of sweet corn that 
the sweet corn plants will or would have produced per acre by the end of 
the insurance period, assuming normal growing conditions and practices.
    Practical to replant--In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8), 
practical to replant is defined as our determination, after loss or 
damage to the insured crop, based on factors, including but not limited 
to moisture availability, condition of the field, marketing windows, and 
time to crop maturity, that replanting to the insured crop will allow 
the crop to attain maturity prior to the calendar date for the end of 
the insurance period (inability to obtain seed will not be considered 
when determining if it is practical to replant).
    Sweet corn--A type of corn with kernels containing a high percentage 
of sugar that is adapted for human consumption as a vegetable.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will also be divided into additional basic units by planting period.

[[Page 227]]

    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.

              3. Amounts of Insurance and Production Stages

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one coverage 
level (and the corresponding amount of insurance designated in the 
actuarial documents for the applicable planting period and practice) for 
all the sweet corn in the county insured under this policy.
    (b) The amount of insurance you choose for each planting period and 
practice must have the same percentage relationship to the maximum price 
offered by us for each planting period and practice. For example, if you 
choose 100 percent of the maximum amount of insurance for a specific 
planting period and practice, you must also choose 100 percent of the 
maximum amount of insurance for all other planting periods and 
practices.
    (c) The production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), do not apply to 
fresh market sweet corn.
    (d) The amounts of insurance are progressive by stages as follows:

------------------------------------------------------------------------
                       Percent of
                       the amount
                           of
        Stage          insurance               Length of time
                        per acre
                        that you
                        selected
------------------------------------------------------------------------
 1..................           65  From planting through the beginning
                                    of tasseling (which is when the
                                    tassel becomes visible above the
                                    whorl).
Final...............          100  From tasseling until the acreage is
                                    harvested.
------------------------------------------------------------------------

    (e) Any acreage of sweet corn damaged in the first stage to the 
extent that the majority of producers in the area would not normally 
further care for it, will be deemed to have been destroyed. The 
indemnity payable for such acreage will be based on the stage the plants 
had achieved when the damage occurred.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date shown below is the 
date preceding the cancellation date:

------------------------------------------------------------------------
             State and county                           Date
------------------------------------------------------------------------
All Florida counties; and all Georgia      April 30.
 counties for which the Special
 Provisions designate a fall planting
 period.
All Georgia counties for which the         November 30.
 Special Provisions do not designate a
 fall planting period; and all other
 States.
------------------------------------------------------------------------

                  5. Cancellation and Termination dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
                                           Cancellation and termination
            State and county                           Dates
------------------------------------------------------------------------
Florida; Atkinson, Baker, Berrien,        July 31.
 Brantley, Camden, Colquitt, Cook,
 Early, Mitchell, and Ware Counties
 Georgia and all counties south thereof
 for which the Special Provisions
 designate a fall planting period.
Alabama; South Carolina; and all Georgia  February 15.
 Counties for which the Special
 Provisions do not designate a fall
 planting period.
All other States........................  March 15.
------------------------------------------------------------------------

                          6. Report of Acreage

    In addition to the requirements of section 6 (Report of Acreage) of 
the Basic Provisions (Sec. 457.8), you must report on or before the 
acreage reporting date contained in the Special Provisions for each 
planting period, all the acreage of sweet corn in the county insured 
under this policy in which you have a share.

                            7. Annual Premium

    In lieu of the premium amount determinations contained in section 7 
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual 
premium amount for each cultural practice (e.g., fall-planted irrigated) 
is determined by multiplying the final stage amount of insurance per 
acre by the premium rate for the cultural practice as established in the 
Actuarial Table, by the insured acreage, by your share at the time 
coverage begins, and

[[Page 228]]

by any applicable premium adjustment factors contained in the actuarial 
documents.

                             8. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the sweet corn in the county 
for which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That is:
    (1) Planted to be harvested and sold as fresh market sweet corn;
    (2) Planted within the planting periods designated in the actuarial 
documents;
    (3) Grown under an irrigated practice, unless otherwise provided in 
the Special Provisions;
    (4) Grown by a person who in at least one of the three previous crop 
years:
    (i) Grew sweet corn for commercial sale; or
    (ii) Participated in managing a sweet corn farming operation;
    (c) That is not:
    (1) Interplanted with another crop;
    (2) Planted into an established grass or legume; or
    (3) Grown for direct marketing.

                          9. Insurable Acreage

    (a) In lieu of the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), that prohibit insurance attaching if 
a crop has not been planted in at least one of the three previous crop 
years, we will insure newly cleared land or former pasture land planted 
to fresh market sweet corn.
    (b) In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8):
    (1) You must replant any acreage of sweet corn damaged during the 
planting period in which initial planting took place whenever less than 
75 percent of the plant stand remains: and
    (i) It is practical to replant: and
    (ii) If, at the time the crop was damaged, the final day of the 
planting period has not passed.
    (2) Whenever sweet corn initially is planted during the fall or 
winter planting periods and the condition specified in section 
9(b)(1)(ii) is not satisfied, you may elect:
    (i) To replant such acreage and collect any replant payment due as 
specified in section 12. The initial planting period coverage will 
continue for such replanted acreage.
    (ii) Not to replant such acreage and receive an indemnity based on 
the stage of growth the plants had attained at the time of damage. 
However, such an election will result in the acreage being uninsurable 
in the subsequent planting period.

                          10. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8), coverage begins on each unit or part of 
a unit the later of the date we accept your application, or when the 
sweet corn is planted in each planting period. Coverage ends at the 
earliest of:
    (a) Total destruction of the sweet corn on the unit;
    (b) Abandonment of the sweet corn on the unit;
    (c) The date harvest should have started on the unit on any acreage 
which will not be harvested;
    (d) Final adjustment of a loss on the unit;
    (e) Final harvest; or
    (f) 100 days after the date of planting or replanting.

                           11. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Excess rain;
    (2) Excess wind;
    (3) Fire;
    (4) Freeze;
    (5) Hail;
    (6) Tornado; or
    (7) Failure of the irrigation water supply, if caused by an insured 
cause of loss that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against any loss of production due to:
    (1) Disease or insect infestation, unless no effective control 
measure exists for such disease or insect infestation; or
    (2) Failure to market the sweet corn, unless such failure is due to 
actual physical damage caused by an insured cause of loss that occurs 
during the insurance period.

                         12. Replanting Payments

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if, due to an 
insured cause of loss, more than 25 percent of the plant stand will not 
produce sweet corn and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of your actual cost of replanting or the result obtained by 
multiplying the per acre replanting payment amount contained in the 
Special Provisions by your insured share.
    (c) In lieu of the provisions contained in section 13 (Replanting 
Payment) of the Basic Provisions (Sec. 457.8), limiting a replanting 
payment to one each crop year, only one replanting payment will be made 
for acreage

[[Page 229]]

planted during each planting period within the crop year.

                13. Duties in the Event of Damage or Loss

    In addition to the requirements contained in section 14 (Duties in 
the Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if 
you intend to claim an indemnity on any unit you also must give us 
notice not later than 72 hours after the earliest of:
    (a) The time you discontinue harvest of any acreage on the unit;
    (b) The date harvest normally would start if any acreage on the unit 
will not be harvested; or
    (c) The calendar date for the end of the insurance period.

                         14. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage in each stage by the amount of 
insurance per acre for the final stage;
    (2) Multiplying each result in section 14(b)(1) by the percentage 
for the applicable stage (see section 3(d));
    (3) Total the results of section 14(b)(2);
    (4) Subtracting either of the following values from the result of 
section 14(b)(3):
    (i) For other than catastrophic risk protection coverage, the total 
value of production to be counted (see section 14(c)); or
    (ii) For catastrophic risk protection coverage, the result of 
multiplying the total value of production to be counted (see section 
14(c)) times:
    (A) Sixty percent for the 1998 crop year; or
    (B) Fifty-five percent for 1999 and subsequent crop years; and
    (5) Multiplying the result of section 14(b)(4) by your share.
    (c) The total value of production to count from all insurable 
acreage on the unit will include:
    (1) Not less than the amount of insurance per acre for the stage for 
any acreage:
    (i) That is abandoned;
    (ii) Put to another use without our consent;
    (iii) That is damaged solely by uninsured causes; or
    (iv) For which you fail to provide acceptable production records;
    (2) The value of the following appraised production will not be less 
than the dollar amount obtained by multiplying the number of containers 
of appraised sweet corn times the minimum value per container shown in 
the Special Provisions for the planting period:
    (i) Unharvested production (unharvested production that is damaged 
or defective due to insurable causes and is not marketable will not be 
counted as production to count);
    (ii) Production lost due to uninsured causes; and
    (iii) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) We may require you to continue to care for the crop so that a 
subsequent appraisal may be made or the crop harvested to determine 
actual production (If we require you to continue to care for the crop 
and you do not do so, the original appraisal will be used); or
    (B) You may elect to continue to care for the crop, in which case 
the amount of production to count for the acreage will be the harvested 
production, or our reappraisal if the crop is not harvested.
    (3) The total value of all harvested production from the insurable 
acreage will be the dollar amount obtained by subtracting the allowable 
cost contained in the Special Provisions from the price received for 
each container of sweet corn (this result may not be less than the 
minimum value shown in the Special Provisions for any container of sweet 
corn), and multiplying this result by the number of containers of sweet 
corn harvested. Harvested mature sweet corn that is damaged or defective 
due to insurable causes and is not marketable, will not be counted as 
production to count.

                     15. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

                        16. Minimum Value Option

    (a) The provisions of this option are continuous and will be 
attached to and made a part of your insurance policy, if:
    (1) You elect the Minimum Value Option on your application, or on a 
form approved by us, on or before the sales closing date for the initial 
crop year in which you wish to insure fresh market sweet corn under this 
option, and pay the additional premium indicated in the actuarial 
documents for this optional coverage; and
    (2) You have not elected coverage under the Catastrophic Risk 
Protection Endorsement.

[[Page 230]]

    (b) In lieu of the provisions contained in section 14(c)(3), the 
total value of harvested production will be determined as follows:
    (1) For sold production, the dollar amount obtained by subtracting 
the allowable cost contained in the Special Provisions from the price 
received for each container of sweet corn (this result may not be less 
than zero for any container of sweet corn), and multiplying this result 
by the number of containers of sweet corn sold; and
    (2) For marketable production that is not sold, the dollar amount 
obtained by multiplying the number of containers of such sweet corn on 
the unit by the minimum value shown in the Special Provisions for the 
planting period (harvested production that is damaged or defective due 
to insurable causes and is not marketable will not be counted as 
production).
    (c) This option may be canceled by either you or us for any 
succeeding crop year by giving written notice on or before the 
cancellation date preceding the crop year for which the cancellation of 
this option is to be effective.

[62 FR 14783, Mar. 28, 1997; 62 FR 26205, May 13, 1997, as amended at 62 
FR 65171, Dec. 10, 1997]



Sec. 457.130  Macadamia tree crop insurance provisions.

    The macadamia tree crop insurance provisions for the 1999 and 
succeeding crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider).

Both FCIC and reinsured policies:

                     Macadamia Tree Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Age. The number of complete 12-month periods that have elapsed since 
the month the trees were set out or were grafted, whichever is later. 
Age determination will be made for each unit, or portion thereof, as of 
January 1 of each crop year.
    Crop year. A period beginning with the date insurance attaches to 
the macadamia tree crop extending through December 31 of the same 
calendar year. The crop year is designated by the calendar year in which 
insurance attaches.
    Destroyed. Trees damaged to the extent that we determine 
replacement, including grafts, is required.
    Good farming practices. The cultural practices generally in use in 
the county for the crop to have normal growth and vigor, and are those 
recognized by the Cooperative State Research, Education, and Extension 
Service as compatible with agronomic and weather conditions in the area.
    Graft. The uniting of a macadamia shoot to an established macadamia 
tree rootstock for future production of macadamia nuts.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Irrigated practice. A method by which the normal growth and vigor of 
the insured trees is maintained by artificially applying adequate 
quantities of water during the growing season by appropriate systems and 
at the proper times.
    Rootstock. The root and stem portion of a macadamia tree to which a 
macadamia shoot can be grafted.

                            2. Unit Division

    (a) Sections 34(a) (1), (3), and (4) of the Basic Provisions are not 
applicable.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Unless otherwise allowed 
by written agreement, optional units may be established only if each 
optional unit:
    (1) Contains at least 80 acres of insurable age macadamia trees; or
    (2) Is located on non-contiguous land.
    (c) You must have provided records, which can be independently 
verified, of acreage and age of trees for each unit for at least the 
last crop year.

    3. Insurance Guarantees, Coverage Levels, and Dollar Amounts for 
                         Determining Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8):
    (1) You may select only one dollar amount of insurance for all the 
macadamia trees in the county in each age group contained in the 
actuarial table that are insured under this policy. The dollar amount of 
insurance you choose for each age group must have the same percentage 
relationship to the maximum dollar amount offered by us for each age 
group. For example, if you choose 100 percent of the maximum dollar 
amount of insurance for one age group, you must also choose 100 percent 
of the maximum dollar amount of insurance for all other age groups.

[[Page 231]]

    (2) If the stand is less than 90 percent, based on the original 
planting pattern, the dollar amount of insurance will be reduced 1 
percent for each percent below 90 percent. For example, if the dollar 
amount of insurance you selected is $2,000 and the stand is 85 percent 
of the original stand, the dollar amount of insurance on which any 
indemnity will be based is $1,900 ($2,000 multiplied by 0.95).
    (3) You must report, by the sales closing date contained in the 
Special Provisions, by type if applicable:
    (i) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the dollar amount of insurance and the 
number of affected acres;
    (ii) The number of trees on insurable and uninsurable acreage;
    (iii) The month and year on which the trees were set out or grafted 
and the planting pattern;
    (iv) For the first year of insurance following replacement, the 
month and year of replacement if more than 10 percent of the trees on 
any unit have been replaced in the previous five crop years; and
    (v) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage is changed:
    (A) The age of the interplanted crop, and type if applicable;
    (B) The planting pattern; and
    (C) Any other information that we request in order to establish your 
dollar amount of insurance.
    We will reduce the dollar amount of insurance as necessary, based on 
our estimate of the effect of interplanted perennial crop, removal of 
trees, damage, change in practices, and any other circumstance that 
adversely affects the insured crop. If you fail to notify us of any 
circumstance that may reduce your dollar amount of insurance from 
previous levels, we will reduce your dollar amount of insurance as 
necessary at any time we become aware of the circumstance.
    (b) The production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), do not apply to 
macadamia trees.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are December 31.

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all macadamia trees in the 
county for which a premium rate is provided by the actuarial table:
    (a) In which you have a share;
    (b) That are grown for the production of macadamia nuts;
    (c) For which the rootstock is adapted to the area;
    (d) That are at least one year of age when the insurance period 
begins; and
    (e) That, if the orchard is inspected, is considered acceptable by 
us.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, macadamia trees interplanted with 
another perennial crop are insurable unless we inspect the acreage and 
determine that it does not meet the requirements contained in your 
policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on January 1 of each crop year, except that for 
the year of application, if your application is received after December 
22 but prior to January 1, insurance will attach on the 10th day after 
your properly completed application is received in our local office, 
unless we inspect the acreage during the 10-day period and determine 
that it does not meet insurability requirements. You must provide any 
information that we require for the crop or to determine the condition 
of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is December 31.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of macadamia trees on or before the acreage reporting date for the crop 
year, insurance will not be considered to have attached to, and no 
premium or indemnity will be due for such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;

[[Page 232]]

    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the orchard;
    (3) Earthquake;
    (4) Volcanic eruption;
    (5) Wildlife, unless proper measures to control wildlife have not 
been taken; or
    (6) Failure of irrigation water supply, if caused by an insured 
cause of loss that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage due to disease or insect infestation, unless adverse 
weather:
    (1) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (2) Causes disease or insect infestation for which no effective 
control mechanism is available.

                10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), in case of 
damage or probable loss, if you intend to claim an indemnity on any 
unit, you must allow us to inspect all insured acreage before pruning or 
removing any damaged trees.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by the dollar amount of 
insurance per acre for each age group;
    (2) Totaling the results in section 11(b)(1);
    (3) Multiplying the total dollar amount of insurance obtained in 
section 11(b)(2) by the applicable percent of loss, which is determined 
as follows:
    (i) Subtract the coverage level percent you elected from 100 
percent;
    (ii) Subtract the result obtained in section 11(b)(3)(i) from the 
actual percent of loss;
    (iii) Divide the result in section 11(b)(3)(ii) by the coverage 
level you elected (For example, if you elected the 75 percent coverage 
level and your actual percent of loss was 70 percent, the percent of 
loss specified in section 11(b)(3) would be calculated as follows: 100% 
- 75% = 25%; 70% - 25% = 45%; 45% / 75% = 60%.); and
    (4) Multiply the result in section 11(b)(3) by your share.
    (c) The total amount of loss will include both trees damaged and 
trees destroyed as follows:
    (1) Any orchard with over 80 percent actual damage due to an insured 
cause of loss will be considered to be 100 percent damaged; and
    (2) Any percent of damage by uninsured causes will not be included 
in the percent of loss.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 35668, July 2, 1997, as amended at 62 FR 65172, Dec. 10, 1997]



Sec. 457.131  Macadamia nut crop insurance provisions.

    The macadamia nut crop insurance provisions for the 2000 and 
succeeding crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                      Macadamia Nut Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Age. The number of complete 12-month periods that have elapsed since 
the month the trees were set out or were grafted, whichever is later. An 
age determination will be made for each unit, or portion thereof, as of 
January 1 of each crop year.
    Crop year. A period beginning with the date insurance attaches to 
the macadamia nut crop and extending through the normal harvest time. 
The crop year is designated by the calendar year in which the insurance 
period ends.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling

[[Page 233]]

through an on-farm or roadside stand, farmer's market, and permitting 
the general public to enter the orchard for the purpose of picking all 
or a portion of the crop.
    Graft. The uniting of a macadamia shoot to an established macadamia 
tree rootstock for future production of macadamia nuts.
    Harvest. Picking of mature macadamia nuts from the ground.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Pound. A unit of weight equal to 16 ounces avoirdupois.
    Production guarantee (per acre). The number of wet, in-shell pounds 
determined by multiplying the approved APH yield per acre by the 
coverage level percentage you elect.
    Rootstock. The root and stem portion of a macadamia tree to which a 
macadamia shoot can be grafted.
    Wet in-shell. The weight of the macadamia nuts as they are removed 
from the orchard with the nut meats in the shells after removal of the 
husk but prior to being dried.

                            2. Unit Division

    (a) Section 34(a)(1) of the Basic Provisions is not applicable.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Unless otherwise allowed 
by written agreement, optional units may be established only if each 
optional unit:
    (1) Contains at least 80 acres of bearing macadamia trees; or
    (2) Is located on non-contiguous land.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election for all the macadamia 
nuts in the county insured under this policy unless the Special 
Provisions provide different price elections by type, in which case you 
may select one price election for each macadamia nut type designated in 
the Special Provisions. The price elections you choose for each type 
must have the same percentage relationship to the maximum price offered 
by us for each type. For example, if you choose 100 percent of the 
maximum price election for one type, you must also choose 100 percent of 
the maximum price election for all other types.
    (b) You must report, by the production reporting date designated in 
section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by type 
if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based and the number of affected acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed:
    (i) The age of the interplanted crop, and type if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the following: 
interplanted perennial crop; removal of trees; damage; change in 
practices and any other circumstance on the yield potential of the 
insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstance.
    (c) The yield used to compute your production guarantee will be 
determined in accordance with Actual Production History (APH) 
regulations, 7 CFR part 400, subpart G, and applicable policy provisions 
unless damage or changes to the orchard or trees require establishment 
of the yield by another method. In the event of such damage or changes, 
the yield will be based on our appraisal of the potential of the insured 
acreage for the crop year.
    (d) Instead of reporting your macadamia nut production for the 
previous crop year, as required by section 3 of the Basic Provisions 
(Sec. 457.8), there is a one year lag period. Each crop year you must 
report your production from two crop years ago, e.g., on the 2001 crop 
year production report, you will provide your 1999 crop year production.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are December 31.

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all macadamia nuts in the

[[Page 234]]

county for which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown on tree varieties that:
    (1) Were commercially available when the trees were set out;
    (2) Are adapted to the area; and
    (3) Are grown on a rootstock that is adapted to the area.
    (c) That are grown in an orchard that, if inspected, is considered 
acceptable by us;
    (d) That are grown on trees that have reached at least the fifth 
growing season after being set out or grafted. However, we may agree in 
writing to insure acreage that has not reached this age if it has 
produced at least 200 pounds of (wet, in-shell) macadamia nuts per acre 
in a previous crop year; and
    (e) That are produced from blooms that normally occur during the 
calendar year in which insurance attaches and that are normally 
harvested prior to the end of the insurance period.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, macadamia nuts interplanted with another 
perennial crop are insurable unless we inspect the acreage and determine 
that it does not meet the requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on January 1 of each crop year, except that for 
the year of application, if your application is received after December 
22 but prior to January 1, insurance will attach on the 10th day after 
your properly completed application is received in our local office, 
unless we inspect the acreage during the 10-day period and determine 
that it does not meet insurability requirements. You must provide any 
information that we require for the crop or to determine the condition 
of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is the second June 30th after insurance attaches.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of macadamia nuts on or before the acreage reporting date for the crop 
year, insurance will not be considered to have attached to, and no 
premium or indemnity will be due for such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the orchard;
    (3) Earthquake;
    (4) Volcanic eruption;
    (5) Wildlife, unless proper measures to control wildlife have not 
been taken; or
    (6) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available;
    (2) Inability to market the macadamia nuts for any reason other than 
actual physical damage from an insurable cause specified in this 
section. For example, we will not pay you an indemnity if you are unable 
to market due to quarantine, boycott, or refusal of any person to accept 
production.

                10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following 
will apply:
    (a) You must notify us within 3 days of the date harvest should have 
started if the crop will not be harvested.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing. We will conduct an appraisal 
that will be used to determine your production to count for production 
that is sold by direct marketing. If damage occurs

[[Page 235]]

after this appraisal, we will conduct an additional appraisal. These 
appraisals, and any acceptable records provided by you, will be used to 
determine your production to count. Failure to give timely notice that 
production will be sold by direct marketing will result in an appraised 
amount of production to count of not less than the production guarantee 
per acre if such failure results in our inability to make the required 
appraisal.
    (c) If you intend to claim an indemnity on any unit, you must notify 
us at least 15 days prior to the beginning of harvest or immediately if 
damage is discovered during harvest, so that we may inspect the damaged 
production. You must not destroy the damaged crop until after we have 
given you written consent to do so. If you fail to meet the requirements 
of this section and such failure results in our inability to inspect the 
damaged production, we may consider all such production to be undamaged 
and include it as production to count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate, acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type, if applicable, by 
its respective production guarantee;
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election for each type, if applicable;
    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable, (see section 11(c)) by the respective price election;
    (5) Totaling the results in section 11(b)(4);
    (6) Subtracting the results in section 11(b)(5) from the results in 
section 11(b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.
    (c) The total production to count (wet, in-shell pounds) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is sold by direct marketing if you fail to meet the 
requirements contained in section 10;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and
    (2) All harvested production from the insurable acreage.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 35664, July 2, 1997, as amended at 62 FR 65172, Dec. 10, 1997]



Sec. 457.132  Cranberry crop insurance provisions.

    The cranberry crop insurance provisions for the 1999 and succeeding 
crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and Reinsured Policies

                        Cranberry Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Barrel--100 pounds of cranberries.
    Harvest--Removal of the cranberries from the bog.
    Market price--The cash price per barrel of cranberries offered by 
buyers in the area in which you normally market the cranberries.

                            2. Unit Division

    Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are

[[Page 236]]

not applicable. Optional units may be established only if each optional 
unit is located on non-contiguous land, unless otherwise allowed by 
written agreement.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election for all the cranberries 
in the county insured under this policy.
    (b) You must report, by the production reporting date designated in 
section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8):
    (1) Any damage, removal of vines, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The age of the vines; and
    (3) Any other information that we request in order to establish your 
approved yield.
    We will adjust the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the removal of 
vines, damage, change in practices, and any other circumstance that may 
affect the yield potential of the insured crop. If you fail to notify us 
of any circumstance that may affect your yields from previous levels, we 
will adjust your production guarantee as necessary at any time we become 
aware of the circumstance.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are November 20.

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the cranberries in the 
county for which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown for harvest as cranberries;
    (c) That are grown in a bog that, if inspected, is considered 
acceptable by us; and
    (d) That are grown on vines that have completed four growing seasons 
after the vines were set out, unless otherwise provided by the actuarial 
table or by written agreement.

                           7. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on November 21 of each crop year, except that 
for the year of application, if your application is received after 
November 11, but prior to November 21, insurance will attach on the 10th 
day after your properly completed application is received in our local 
office, unless we inspect the acreage during the 10 day period and 
determine that it does not meet insurability requirements. You must 
provide any information that we require for the crop or to determine the 
condition of the bog.
    (2) The calendar date for the end of the insurance period for each 
crop year is November 20.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of cranberries on or before the acreage reporting date for the crop 
year, insurance will not be considered to have attached to, and no 
premium or indemnity will be due for, such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                            8. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the bog;
    (3) Wildlife;
    (4) Earthquake;
    (5) Volcanic eruption;
    (6) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period; or
    (7) Failure or breakdown of irrigation equipment or facilities due 
to direct damage to the irrigation equipment or facilities from

[[Page 237]]

an insurable cause of loss if the cranberry crop is damaged by freezing 
temperatures within 72 hours of such failure or breakdown and repair or 
replacement was not possible before damage occurred.
    (b) In addition to the causes of loss excluded in section 12 (Cause 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available; or
    (2) Inability to market the cranberries for any reason other than 
actual physical damage from an insurable cause of loss specified in this 
section. For example, we will not pay you an indemnity if you are unable 
to market due to quarantine, boycott, or refusal of any person to accept 
production.

                9. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8):
    (a) If you discover damage, or if you intend to claim an indemnity 
on any insured unit, you must give us notice of probable loss:
    (1) At least 15 days before the beginning of any harvesting, or
    (2) Immediately if probable loss is discovered after harvesting has 
begun.
    (b) You must not sell or dispose of any damaged production until the 
earlier of 15 days from the date of notice of loss or when we give you 
written consent to do so.
    (c) If you fail to meet the requirements of this section, and such 
failure results in our inability to inspect the damaged production, all 
such production will be considered undamaged and included as production 
to count.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying the result of section 10(b)(1) by the price 
election;
    (3) Multiplying the total production to be counted, (see section 
10(c)) by the price election;
    (4) Subtracting the total in section 10(b)(3) from the total in 
section 10(b)(2); and
    (5) Multiplying the result in section 10(b)(4) by your share.
    (c) The total production to count (in barrels) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) Damaged solely by uninsured causes;
    (C) For which you fail to provide acceptable production records; or
    (D) Destroyed or put to another use without our consent;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we will use 
the appraised amount of production or defer the claim if you agree to 
continue to care for the crop. We will then make another appraisal when 
you notify us of further damage or that harvest is general to the area 
unless you harvested the crop, in which case we will use the harvested 
production. If you do not continue to care for the crop, our appraisal 
made prior to deferring the claim will be used to determine the 
production to count; and
    (2) All harvested production from the insurable acreage.
    (3) Harvested production which, due to insurable causes, is 
determined not to meet the United States Standards for Fresh Cranberries 
if available, or would not meet those standards if properly handled, or 
does not meet the quality requirements of the receiving handler if the 
United States Standards for Fresh Cranberries, if not available, and 
such harvested production has a value less than 75 percent of the market 
price for cranberries meeting the minimum requirements will be adjusted 
by:
    (i) Dividing the value per barrel of such cranberries by the market 
price per barrel for cranberries meeting the minimum requirements; and
    (ii) Multiplying the result by the number of barrels of such 
cranberries.

                     11. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 5905, Feb. 10, 1997, as amended at 62 FR 65172, Dec. 10, 1997]

[[Page 238]]



Sec. 457.133  Prune crop insurance provisions.

    The Prune Crop Insurance Provisions for the 2001 and succeeding crop 
years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                          Prune Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include: selling through an on-farm or roadside stand, 
farmer's market, and permitting the general public to enter the field 
for the purpose of picking all or a portion of the crop.
    Harvest. Picking of mature prunes from the trees or ground either by 
hand or machine.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Market price for standard prunes. The price per ton shown on the 
processor's settlement sheet for each size count of standard prunes.
    Natural condition prunes. The condition of prunes in which they are 
normally delivered from a dehydrator or dry yard.
    Prunes. Any type or variety of plums that is grown in the area for 
the production of prunes and that meets the requirements defined in the 
applicable Federal Marketing Agreement Dried Prune Order.
    Standard prunes. Any natural condition prunes:
    (a) That grade ``C'' or better in accordance with the United States 
Standards for Grades of Fresh Plums and Prunes; or
    (b) That meet or exceed the grading standards in effect for the crop 
year if a Federal Marketing Agreement Dried Prune Order has been 
established for the area in which the insured crop is grown.
    Substandard prunes. Any natural condition prunes failing to meet the 
applicable grading specifications for standard prunes.
    Ton. Two thousand (2,000) pounds avoirdupois.

                            2. Unit Division

    Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable. Instead of 
establishing optional units by section, section equivalent, or FSA farm 
serial number optional units may be established if each optional unit is 
located on non-contiguous land.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may select only one price election for all the prunes in the 
county insured under this policy unless the Special Provisions provide 
different price elections by varietal group, in which case you may 
select one price election for each prune varietal group designated in 
the Special Provisions. The price elections you choose for each varietal 
group must have the same percentage relationship to the maximum price 
offered by us for each varietal group. For example, if you choose 100 
percent of the maximum price election for one varietal group, you must 
also choose 100 percent of the maximum price election for all other 
varietal groups.
    (b) You must report, by the production reporting date designated in 
section 3 of the Basic Provisions, by varietal group if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yields below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage is changed:
    (i) The age of the interplanted crop, and varietal group if 
applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of interplanting the 
perennial crop; removal of trees; damage; a change in practices, and any 
other circumstance that may affect the yield potential of the insured 
crop. If you fail to notify us of any circumstance that may reduce your 
yields from previous levels, we will reduce your production guarantee at 
any time we become aware of the circumstance.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election

[[Page 239]]

if a cause of loss that could or would reduce the yield of the insured 
crop has occurred prior to the time that you request the increase.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is October 31 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are January 31.

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the prunes in the county for which a premium rate is 
provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown for the production of natural condition prunes;
    (c) That are grown on tree varieties that:
    (1) Were commercially available when the trees were set out;
    (2) Are adapted to the area;
    (3) Are grown on rootstock that is adapted to the area; and
    (4) Are irrigated (except where otherwise provided in the Special 
Provisions);
    (d) That are grown in an orchard that, if inspected, is considered 
acceptable by us; and
    (e) That are grown on trees that have reached at least the seventh 
growing season after being set out.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions that 
prohibit insurance attaching to a crop planted with another crop, prunes 
interplanted with another perennial crop are insurable unless we inspect 
the acreage and determine that it does not meet the insurability 
requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) Coverage begins for each crop year on March 1.
    (2) The calendar date for the end of the insurance period for each 
crop year is:
    (i) October 1 for California; or
    (ii) October 15 for Oregon.
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of prunes on or before the acreage reporting date for the crop year and 
if the acreage was insured by you the previous crop year, insurance will 
not be considered to have attached to, and no premium or indemnity will 
be due for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.
    (c) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that the policy remains continuously in force, 
coverage begins on the day immediately following the end of the 
insurance period for the prior crop year. Policy cancellation that 
results solely from transferring to a different insurance provider for a 
subsequent crop year will not be considered a break in continuous 
coverage.
    (d) If your prune policy is canceled or terminated for any crop 
year, in accordance with the terms of the policy, after insurance 
attached for that crop year but on or before the cancellation and 
termination dates whichever is later, insurance will not be considered 
to have attached for that crop year and no premium, administrative fee, 
or indemnity will be due for such crop year.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and undergrowth have not been controlled or 
pruning debris has not been removed from the orchard;
    (3) Wildlife;
    (4) Earthquake;
    (5) Volcanic eruption; or
    (6) Failure of the irrigation water supply, if due to a cause 
specified in section 9(a)(1) through (5) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded in section 12 of the 
Basic Provisions, we will not insure against damage or loss of 
production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available; or

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    (2) Inability to market the prunes for any reason other than actual 
physical damage from an insurable cause specified in this section. For 
example, we will not pay you an indemnity if you are unable to market 
due to quarantine, boycott, or refusal of any person to accept 
production.

                10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (a) You must notify us within 3 days of the date harvest should have 
started if the crop will not be harvested.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing or sold as fresh fruit. We 
will conduct an appraisal that will be used to determine your production 
to count for production that is sold by direct marketing or is sold as 
fresh fruit production. If damage occurs after this appraisal, we will 
conduct an additional appraisal. These appraisals, and any acceptable 
records provided by you, will be used to determine your production to 
count. Failure to give timely notice that production will be sold by 
direct marketing or sold as fresh fruit will result in an appraised 
amount of production to count of not less than the production guarantee 
per acre if such failure results in our inability to make the required 
appraisal.
    (c) If you intend to claim an indemnity on any unit, you must notify 
us at least 15 days prior to the beginning of harvest, or immediately if 
damage is discovered during harvest, so that we may inspect the damaged 
production.
    (d) You must not destroy the damaged crop until after we have given 
you written consent to do so. If you fail to meet the requirements of 
this section and such failure results in our inability to inspect the 
damaged production, all such production will be considered undamaged and 
included as production to count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each varietal group, if 
applicable, by its respective production guarantee;
    (2) Multiplying the result of 11(b)(1) by the respective price 
election for each varietal group, if applicable;
    (3) Totaling the results of section 11(b)(2) if there is more than 
one varietal group;
    (4) Multiplying the total production to count (see section 11(c)), 
of each varietal group if applicable, by its respective price election;
    (5) Totaling the results of section 11(b)(4) if there is more than 
one varietal group;
    (6) Subtracting the result of section 11(b)(4) from the result of 
section 11(b)(2) if there is only one varietal group or subtracting the 
result of section 11(b)(5) from the result of section 11(b)(3) if there 
is more than one varietal group; and
    (7) Multiplying the result of section 11(b)(6) by your share.

                               For Example

    You have a 100 percent share in 50 acres of varietal group A prunes 
in the unit, with a guarantee of 2.5 tons per acre and a price election 
of $630.00 per ton. You are only able to harvest 10.0 tons. Your 
indemnity would be calculated as follows:
    (1) 50 acres x 2.5 tons = 125.0 ton guarantee;
    (2) 125.0 tons x $ 630.00 price election = $78,750.00 value of 
guarantee;
    (4) 10.0 tons x $630.00 price election = $6,300.00 value of 
production to count;
    (6) $78,750.00 - $6,300.00 = $72,450.00 loss; and
    (7) $72,450.00 x 100 percent = $72,450 indemnity payment.
    You also have a 100 percent share in 50 acres of varietal group B 
prunes in the same unit, with a guarantee of 2.0 ton per acre and a 
price election of $550.00 per ton. You are only able to harvest 5.0 
tons. Your total indemnity for both varietal groups A and B would be 
calculated as follows:
    (1) 50 acres x 2.5 tons = 125.0 ton guarantee for varietal group A 
and 50.0 acres x 2.0 tons = 100.0 ton guarantee for varietal group B;
    (2) 125.0 ton guarantee x $630.00 price election = $78,750.00 value 
of guarantee for varietal group A and 100.0 ton guarantee x $550.00 
price election = $55,000.00 value guarantee for varietal group B;
    (3) $78,750.00 + $55,000.00 = $133,750.00 total value guarantee;
    (4) 10.0 tons x $630.00 price election = $6,300.00 value of 
production to count for varietal group A and 5.0 tons x $550.00 price 
election = $2,750.00 value of production to count for varietal group B;
    (5) $6,300.00 + $2,750.00 = $9,050.00 total value of production to 
count;
    (6) $133,750.00 - $9,050.00 = $124,700.00 loss; and
    (7) $124,700.00 loss x 100 percent = $124,700 indemnity payment.
    (c) The total production to count (in tons) from all insurable 
acreage on the unit will include all harvested and appraised production 
of natural condition prunes that grade

[[Page 241]]

substandard or better and any production that is harvested and intended 
for use as fresh fruit. The total production to count will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is sold by direct marketing or sold as fresh fruit if you 
fail to meet the requirements contained in section 10;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage you intend to abandon 
or no longer care for, if you and we agree on the appraised amount of 
production. Upon such agreement, the insurance period for that acreage 
will end. If you do not agree with our appraisal, we may defer the claim 
only if you agree to continue to care for the crop. We will then make 
another appraisal when you notify us of further damage or that harvest 
is general in the area unless you harvested the crop, in which case we 
will use the harvested production. If you do not continue to care for 
the crop, our appraisal made prior to deferring the claim will be used 
to determine the production to count; and
    (2) All harvested production from the insurable acreage.
    (d) Any prune production harvested for fresh fruit will be converted 
to a dried prune weight basis by dividing the total amount (in tons) of 
fresh fruit production by 3.0.
    (e) Any production of substandard prunes resulting from damage by 
insurable causes will be adjusted based on the average size count as 
indicated on the applicable Dried Fruit Association (DFA) Inspection 
Report and Certification Form. Any insurable damage will be adjusted by:
    (1) Dividing the value per ton of such substandard prunes by the 
market price per ton for standard prunes (of the same size count); and
    (2) Multiplying the result by the number of tons of such prunes.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 58630, Oct. 30, 1997, as amended at 62 FR 65172, Dec. 10, 1997; 
65 FR 47839, Aug. 4, 2000]



Sec. 457.134  Peanut crop insurance provisions.

    The peanut crop insurance provisions for the 2005 and succeeding 
crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                    Peanut Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions, with (1) controlling (2), etc.

                             1. Definitions

    Approved yield. The yield calculated in accordance with 7 CFR part 
400, subpart G, if required by section 3(c) of these provisions.
    Average price per pound:
    (1) The average CCC support price per pound, by type, for 
Segregation I peanuts and Segregation II and III peanuts eligible to be 
valued as quota peanuts; or
    (2) The highest non-quota price election contained in the Special 
Provisions for all Segregation II and III peanuts not eligible to be 
valued as quota peanuts.
    Average support price per pound. The average price per pound for 
each type of quota peanuts announced by the USDA under the peanut price 
support program.
    CCC. Commodity Credit Corporation, a wholly owned government 
corporation within USDA.
    County. In addition to the definition contained in the Basic 
Provisions, ``county'' also includes any land identified by a FSA farm 
serial number for such county but physically located in another county.
    Effective poundage marketing quota. The number of pounds reported on 
the acreage report as eligible for the average support price per pound 
(including transfers of quota peanuts from one farm serial number to 
another farm serial number), not to exceed the Marketing Quota 
established by FSA for the farm serial number.
    Farmers' stock peanuts. Peanuts customarily marketed by producers, 
produced in the United States, and which are not shelled, crushed, 
cleaned, or otherwise changed (except for removal of foreign material, 
loose shelled kernels, and excess moisture) from the condition in which 
peanuts are harvested.

[[Page 242]]

    Green peanuts. Peanuts that are harvested and marketed prior to 
maturity without drying or removal of moisture either by natural or 
artificial means.
    Inspection certificate and sales memorandum. A USDA form that 
records the inspection grading results and marketing record for the net 
weight of peanuts delivered to a buyer.
    Non-quota peanuts. Peanuts other than quota peanuts.
    Planted acreage. In addition to the requirement in the definition in 
the Basic Provisions, peanuts must initially be planted in rows wide 
enough apart to permit mechanical cultivation. Acreage planted in any 
other manner will not be insurable unless otherwise provided by the 
Special Provisions or by written agreement.
    Production guarantee (per acre). In addition to the definition of 
``production guarantee (per acre)'' in the Basic Provisions, the 
production guarantee (per acre) is the number of pounds determined by 
multiplying the yield per acre contained in the actuarial documents or 
the approved yield multiplied by the coverage level percentage you 
elect.
    Quota peanuts. Peanuts that are eligible to be valued at the average 
support price per pound.
    Segregation I, II, or III. Grades designated and defined for peanuts 
by the Agricultural Marketing Service of USDA.
    Value per pound. A price determined by USDA as shown on the USDA 
``Inspection Certificate and Sales Memorandum'' or other value accepted 
by us.

                              2. [Reserved]

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) The price elections you choose for the quota and non-quota 
peanuts must have the same percentage relationship to the maximum price 
election offered by us for quota and non-quota peanuts. For example, if 
you choose 100 percent of the maximum quota peanut price election, you 
must also choose 100 percent of the maximum non-quota election.
    (b) The maximum pounds that may be insured at the quota price 
election are the lesser of :
    (1) The effective poundage marketing quota; or
    (2) The insured acreage multiplied by the production guarantee. If 
the insured acres multiplied by the production guarantee exceeds the 
effective poundage marketing quota, the difference will be insured at 
the non-quota peanut price election.
    (c) You may be required to file an annual production report to us, 
if required by the Special Provisions, to establish an approved yield in 
lieu of the yield published in the actuarial documents. If we require 
you to file an annual production report, you must do so in accordance 
with section 3(c) of the Basic Provisions.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

                      Cancellation and Termination
------------------------------------------------------------------------
                  State and county                          Dates
------------------------------------------------------------------------
Jackson, Victoria, Golliad, Bee, Live Oak,           January 15
 McMullen, La Salle, and Dimmit Counties, Texas and
 all Texas Counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, Loving,        February 28
 Winkler, Ector, Upton, Reagan, Sterling, Coke, Tom
 Green, Concho, McCulloch, San Saba, Mills,
 Hamilton, Bosque, Johnson, Tarrant, Wise, Cooke
 Counties, Texas, and all Texas counties south and
 east thereof; and all other states.
New Mexico; Oklahoma; Virginia; and all other Texas  March 15
 counties.
------------------------------------------------------------------------

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions, you must report the effective poundage marketing quota, if 
any, that is applicable to each basic and optional unit for the current 
crop year.

                            7. Annual Premium

    In lieu of the premium amount determinations contained in section 
7(c) of the Basic Provisions, the annual premium will be determined by:
    (a) Multiplying the insured effective poundage marketing quota by 
the price election for quota peanuts;
    (b) Multiplying the insured pounds of non-quota peanuts by the price 
election for non-quota peanuts;
    (c) Totaling the results of section 7(a) and 7(b);

[[Page 243]]

    (d) Multiplying the total of section 7(c) by the applicable premium 
rate stated in the actuarial documents;
    (e) Multiplying the result of section 7(d) by your share at the time 
coverage begins; and
    (f) Multiplying the result of section 7(e) by any premium adjustment 
percentages that may apply.

                             8. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the peanuts in the county for which a premium rate 
is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are planted for the purpose of marketing as farmers' stock 
peanuts;
    (c) That are a type of peanut designated in the Special Provisions 
as being insurable; and
    (d) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Planted for the purpose of harvesting as green peanuts;
    (2) Interplanted with another crop; or
    (3) Planted into an established grass or legume.

                          9. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions:
    (a) Any acreage of the insured crop damaged before the final 
planting date, to the extent that the majority of producers in the area 
would normally not further care for the crop, must be replanted unless 
we agree that replanting is not practical.
    (b) We will not insure any acreage:
    (1) On which peanuts are grown using no-till or minimum tillage 
farming methods unless allowed by the Special Provisions or written 
agreement; or
    (2) Which does not meet the rotation requirements, if any, contained 
in the Special Provisions.

                          10. Insurance Period

    In accordance with the provisions of section 11 of the Basic 
Provisions, the calendar date for the end of the insurance period is the 
date immediately following planting as follows:
    (a) November 30 in all states except New Mexico, Oklahoma, and 
Texas; and
    (b) December 31 in New Mexico, Oklahoma, and Texas.
    (c) ``Removal of peanuts from the field'' replaces ``harvest'' as an 
event marking the end of the insurance period in section 11 of the Basic 
Provisions.

                           11. Causes of Loss

    In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if due to a cause of 
loss contained in section 11(a) through (g) that occurs during the 
insurance period.

                         12. Replanting Payments

    (a) In accordance with section 13 of the Basic Provisions:
    (1) A replanting payment is allowed if the crop is damaged by an 
insurable cause of loss to the extent that the remaining stand will not 
produce at least 90 percent of the production guarantee for the acreage 
and it is practical to replant.
    (2) The maximum amount of the replanting payment for the unit will 
be the lesser of :
    (i) Eighty dollars ($80.00) per acre multiplied by the number of 
acres replanted and multiplied by your insured share;
    (ii) The actual cost of replanting per acre multiplied by the number 
of acres replanted and multiplied by your insured share; or
    (iii) Twenty percent (20%) of the production guarantee multiplied by 
your quota price election, multiplied by the number of acres replanted, 
and multiplied by your insured share.
    (b) When peanuts are replanted using a practice that is uninsurable 
as an original planting, the liability for the unit will be reduced by 
the amount of the replanting payment. The premium amount will not be 
reduced.

                13. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 of the Basic 
Provisions, the representative samples of the unharvested crop that we 
may require must be at least 10 feet wide and extend the entire length 
of each field in the unit. If you intend to put the acreage to another 
use or not harvest the crop, the samples must not be harvested or 
destroyed until our inspection.

                         14. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; and
    (2) For any basic units, we will allocate any commingled production 
to such units in

[[Page 244]]

proportion to our liability on the harvested acreage for the units.
    (b) When settling your claim, the effective poundage marketing 
quota, if any, for each unit will be limited to the lesser of:
    (1) The amount of the effective poundage marketing quota reported on 
the acreage report;
    (2) The amount of the FSA effective poundage marketing quota; or
    (3) The amount determined at the final settlement of your claim.
    (c) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for the unit by the production 
guarantee per acre, by type if applicable;
    (2) Subtracting the insured effective poundage marketing quota from 
the result of section 14(c)(1) to determine the amount of insured non-
quota peanuts;
    (3) Multiplying the insured effective poundage marketing quota and 
the result of section 14(c)(2) by the respective price election by type, 
if applicable, for quota and non-quota peanuts, respectively;
    (4) Totaling the results of section 14(c)(3) (This amount will be 
the same as (3) if there is only one type);
    (5) Multiply the production to count for quota and non-quota peanuts 
(see section 14(d)), for each type if applicable, by the respective 
price elections;
    (6) Totaling the results of section 14(c)(5) (This amount will be 
the same as (5) if there is only one type);
    (7) Subtracting the result of section 14(c)(6) from section 
14(c)(4); and
    (8) Multiplying the result in section 14(b)(7) and section 14(b)(8) 
by your share.
    For example:
    You have 100 percent share in 25 acres of Valencia peanuts in the 
unit, with a 2000 pounds per acre guarantee, an effective poundage 
marketing quota of 40,000 pounds, and a price election of $0.34 per 
pound for quota and $0.15 per pounds for non-quota. You are able to 
harvest 43,000 pounds in which 40,000 pounds are quota segregation I and 
3,000 pounds are non-quota segregation II and III due to quality 
adjustment. Your indemnity would be calculated as follows:
    (1) 25 acres x 2,000 pounds per acre = 50,000 pounds guarantee;
    (2) 50,000 pounds guarantee - 40,000 pounds of effective marketing 
quota = 10,000 pounds of non-quota guarantee;
    (3) 40,000 pounds x $.34 price election for quota = $13,600.00 value 
of guarantee; 10,000 pounds x $.15 price election for non-quota = 
$1,500.00 value of guarantee;
    (4) $13,600.00 + $1,500.00 = $15,100.00 total of value of guarantee;
    (5) 40,000 pounds of quota production to count x .34 = $13,600.00 
quota value of production to count;
    3,000 pounds of non-quota production to count x .15 = $450.00 non-
quota value of production to count;
    (6) $13,600.00 + $450.00 = $14,050.00 total value of production to 
count;
    (8) $15,100.00 total value guarantee - $14,050.00 total value of 
production to count = $1,050.00 loss; and
    (9) $1,050.00 value of loss x 100 percent = $1,050.00 indemnity 
payment.
    (d) The total production to count (in pounds) from all insurable 
acreage on the unit will include all appraised and harvested production.
    (e) All appraised production will include:
    (1) Not less than the production guarantee for acreage:
    (i) That is abandoned;
    (ii) Put to another use without our consent;
    (iii) Damaged solely by uninsured causes; or
    (iv) For which you fail to provide production records that are 
acceptable to us.
    (2) Production lost due to uninsured causes;
    (3) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
section 14(f)); and
    (4) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (i) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or fail to provide sufficient care 
for the samples, our appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (ii) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (5) All harvested production from the insurable acreage.
    (f) Mature peanut production that is damaged by insurable causes and 
for which the value per pound is less than the average support price per 
pound for the type will be adjusted by:

[[Page 245]]

    (1) Dividing the value per pound for the insured type of peanuts by 
the applicable average price per pound; and
    (2) Multiplying this result by the number of pounds of such 
production.
    (g) To enable us to determine the net weight and quality of 
production of any peanuts for which an ``Inspection Certificate and 
Sales Memorandum'' has not been issued, we must be given the opportunity 
to have such peanuts inspected and graded before you dispose of them. If 
you dispose of any production without giving us the opportunity to have 
the peanuts inspected and graded, the gross weight of such production 
will be used in determining total production to count unless you submit 
a marketing record satisfactory to us which clearly shows the net weight 
and quality of such peanuts.

    Note: In accordance with the Federal Crop Insurance Act, in the 
event of a crop loss, policyholders with the Catastrophic Risk 
Protection level of coverage must elect to either receive benefits under 
these Crop Provisions or if applicable, the Commodity Credit Corporation 
Quota Loan Pool Regulations.)

[63 FR 31335, June 9, 1998; 63 FR 52134, Sept. 30, 1998, as amended at 
64 FR 33378, June 23, 1999; 69 FR 63043, Oct. 29, 2004]



Sec. 457.135  Onion crop insurance provisions.

    The onion crop insurance provisions for the 2000 and succeeding crop 
years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                          Onion Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2) etc.

                             1. Definitions

    Damaged onion production. Storage type onions that do not grade U.S. 
No. 1 or do not satisfy any other standards that may be contained in the 
Special Provisions; or non-storage type onions which do not satisfy 
standards contained in any applicable marketing order or other standards 
that may be contained in the Special Provisions.
    Direct Marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of harvesting all or a portion of the crop.
    Direct seeded. Placing onion seed by machine or by hand at the 
correct depth, into a seedbed that has been properly prepared for the 
planting method and production practice.
    Harvest. Removal of the onions from the field after topping and 
lifting or digging.
    Hundredweight. 100 pounds avoirdupois.
    Lifting or digging. A pre-harvest process in which the onion roots 
are severed from the soil and the onion bulbs laid on the surface of the 
soil for drying in the field.
    Non-storage onions. Generally of a Bermuda, Granex, or Grano 
variety, or hybrids developed from these varieties, that are harvested 
as a bulb and dried only a short time, and consequently have a higher 
moisture content. They are thinner skinned, contain a higher sugar 
content, and are generally milder in flavor than storage onions. Due to 
a higher moisture and sugar content, they are subject to deterioration 
both on the surface and internally if not used shortly after harvest.
    Onion production. Onions of recoverable size and condition, with 
excess dirt and foliage material removed and that are not considered 
damaged onion production.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, onions must be planted in rows.
    Production Guarantee (per acre):
    (a) First stage production guarantee--Thirty-five percent (35%) of 
the final stage production guarantee for direct seeded storage and non-
storage onions and 45 percent of the final stage production guarantee 
for transplanted storage and non-storage onions, unless otherwise 
specified in the Special Provisions.
    (b) Second stage production guarantee--Seventy percent (70%) of the 
final stage production guarantee for direct seeded storage onions and 60 
percent of the final stage production guarantee for transplanted storage 
onions and all non-storage onions, unless otherwise specified in the 
Special Provisions.
    (c) Final stage production guarantee--The quantity of onions (in 
hundredweight) determined by multiplying the approved yield per acre by 
the coverage level percentage you elect.
    Storage onions. Onions other than a Bermuda, Granex, or Grano 
variety, or hybrids developed from these varieties that are harvested as 
a bulb and dried to a lower moisture content, are firmer, have more 
outer layers of paper-like skin, and are darker in

[[Page 246]]

color than non-storage onions. They are generally more pungent, have a 
lower sugar content, and can normally be stored for several months under 
proper conditions prior to use without deterioration.
    Topping. A pre-harvest process to initiate curing, in which onion 
foliage is removed or bent over.
    Transplanted. Placing of the onion plant or bulb, by machine or by 
hand at the correct depth, into a seedbed that has been properly 
prepared for the planting method and production practice.
    Type. A category of onions as identified in the Special Provisions.

                            2. Unit Division

    2. Unit Division.
    In addition to, or instead of, establishing optional units as 
provided in section 34 of the Basic Provisions, optional units may be 
established by type, if the type is designated in the Special 
Provisions.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one price 
election for all the onions in the county insured under this policy 
unless the Special Provisions provide different price elections by type, 
in which case you may select one price election for each onion type 
designated in the Special Provisions. The price elections you choose for 
each type must have the same percentage relationship to the maximum 
price offered by us for each type. For example, if you choose 100 
percent of the maximum price election for one type, you must also choose 
100 percent of the maximum price election for all other types.
    (b) Your production guarantee progresses, in stages, to the final 
stage production guarantee. Stages will be determined on an acre basis 
and at least 75% of the plants on such acreage must be at the same stage 
to qualify for the applicable stage guarantee. The stages are as 
follows:
    (1) First stage extends:
    (i) For direct seeded storage and non-storage onions, from planting 
until the emergence of the fourth leaf; and
    (ii) For transplanted storage and non-storage onions, from 
transplanting of onion plants or sets through the 30th day after 
transplanting.
    (2) Second stage extends:
    (i) For direct seeded storage and non-storage onions, from the 
emergence of the fourth leaf; and
    (ii) For transplanted storage and non-storage onions, from the 31st 
day after transplanting.
    (3) Final stage extends from the completion of topping and lifting 
or digging on the acreage until the end of the insurance period, and is 
the quantity of onions (in hundredweight) determined by multiplying the 
approved yield per acre by the coverage level percentage elected.
    (c) Any acreage of onions damaged in the first or second stage, to 
the extent that producers in the area would not normally further care 
for the onions, will be deemed to have been destroyed even though you 
may continue to care for the onions. The production guarantee for such 
acreage will not exceed the production guarantee for the stage in which 
the damage occurred.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is June 30 preceding 
the cancellation date for counties with an August 31 cancellation date, 
and November 30 preceding the cancellation date for all other counties.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
         State & County           Termination Date    Cancellation Date
------------------------------------------------------------------------
All Georgia Counties; Kinney,..
Uvalde, Medina, Bexar, Wilson,.
Karnes, Bee, and San Patrico
 Counties,.
Texas, and all Texas Counties    August 31........  August 31.
 lying south thereof..
Umatilla County, Oregon; and
 Walla.
Walla County, Washington.......  August 31........  September 30.
All other states and counties..  February 1.......  February 1.
------------------------------------------------------------------------

                            6. Annual Premium

    In lieu of the provisions of section 7(c) (Annual Premium) of the 
Basic Provisions (Sec. 457.8), the annual premium amount is computed by 
multiplying the final stage production guarantee by the price election, 
the premium rate, the insured acreage, your share at the time of 
planting, and any applicable premium adjustment factors contained in the 
actuarial documents.

[[Page 247]]

                             7. Insured Crop

    In accordance with section 8 (Insured Crop of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the storage and non-storage 
onions (excluding green (bunch) or seed onions, chives, garlic, leeks, 
and scallions) in the county for which a premium rate is provided by the 
actuarial documents:
    (a) In which you have a share;
    (b) That are planted for harvest as either storage onions or non-
storage onions;
    (c) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Interplanted with another crop, unless the onions are 
interplanted with a windbreak crop and the windbreak crop is destroyed 
within 70 days after completion of seeding or transplanting; or
    (2) Planted into an established grass or legume.

                          8. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), we will not insure any acreage of 
the insured crop that:
    (a) Was planted the previous year to storage or non-storage onions, 
green (bunch) onions, seed onions, chives, garlic, leeks, shallots, or 
scallions unless different rotation requirements are specified in the 
Special Provisions or we agree in writing to insure such acreage; or
    (b) Is damaged before the final planting date to the extent that the 
majority of producers in the area would normally not further care for 
the crop and is not replanted, unless we agree that it is not practical 
to replant.

                           9. Insurance Period

    (a) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8), the acreage must be planted on or 
before the final planting date designated in the Special Provisions 
except as allowed in section 14(c).
    (b) The insurance period ends at the earliest of:
    (1) The calendar date for the end of the insurance period as 
follows:
    (i) June 1 for Vidalia, and any other non-storage onions planted in 
the State of Georgia;
    (ii) July 15 for 1015 Super Sweets, and any other non-storage onions 
in the State of Texas;
    (iii) July 31 for Walla Walla Sweets, and any other non-storage 
onions in the states of Oregon and Washington;
    (iv) August 31 for all non-storage onions in any other state; and
    (v) October 15 for all storage onions; or
    (2) The following event for each unit or portion of a unit:
    (i) Removal of the onions from the field; or
    (ii) Fourteen days after lifting or digging.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur within the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife, unless control measures have not been taken;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss not insured against as listed 
in section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we 
will not insure against any loss of production due to damage that occurs 
or becomes evident after the end of the insurance period, including, but 
not limited to, loss of production that occurs after onions have been 
placed in storage.

                         11. Replanting Payment

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if the crop is 
damaged by an insurable cause of loss to the extent that the remaining 
stand will not produce at least 90 percent of the final stage production 
guarantee for the acreage and we determine that it is practical to 
replant.
    (b) The maximum amount of the replanting payment per acre will be 
your actual cost for replanting, but will not exceed the lesser of:
    (1) 7 percent of the final stage production guarantee multiplied by 
your price election for the type originally planted and by your insured 
share; or
    (2) 18 hundredweight multiplied by your price election for the type 
originally planted and by your insured share.
    (c) When onions are replanted using a practice that is uninsurable 
as an original planting, the liability for the unit will be reduced by 
the amount of the replanting payment. The premium amount will not be 
reduced.

                12. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), any 
representative samples of the unharvested crop that may be required must 
be at least 10

[[Page 248]]

feet wide and extend the entire length of each field in the unit. The 
samples must not be harvested or destroyed until the earlier of our 
inspection or 15 days after harvest of the balance of the unit is 
completed.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing. We will conduct an appraisal 
that will be used to determine your production to count for production 
that is sold by direct marketing. If damage occurs after this appraisal, 
we will conduct an additional appraisal. These appraisals, and any 
acceptable records provided by you, will be used to determine your 
production to count. Failure to give timely notice that production will 
be sold by direct marketing will result in an appraised amount of 
production to count that is not less than the production guarantee per 
acre if such failure results in our inability to make the required 
appraisal.

                         13. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide production records:
    (1) For any optional units, we will combine all optional units for 
which acceptable production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying each result of section 13(b)(1) by the respective 
price election;
    (3) Totaling the results in section 13(b)(2);
    (4) Multiplying the total production to be counted (see section 
13(c)) by the respective price elections you chose;
    (5) Totaling the results of section 13(b)(4);
    (6) Subtracting the result in section 13(b)(5) from the result in 
13(b)(3); and
    (7) Multiplying the result in section 13(b)(6) by your share.
    (c) The total production (in hundredweight) to count from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) That is direct marketed to consumers if you fail to meet the 
requirements contained in section 12;
    (C) Put to another use without our consent;
    (D) That is damaged solely by uninsured causes; or
    (E) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested onion production (mature unharvested production 
may be adjusted based on the percent of damaged onion production in 
accordance with section 13(d));
    (iv) The appraised production that exceeds the difference between 
the first or second stage (as applicable) and the final stage production 
guarantee for acreage that does not qualify for the final stage 
guarantee, if such acreage is not subject to section 13(c)(1) (i) and 
(ii); and
    (v) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end if you put the acreage to another use or abandon the 
crop.
    (vi) If agreement on the appraised amount of production is not 
reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us. (The amount of production to count 
for such acreage will be based on the harvested onion production or 
appraisals from the samples at the time harvest should have occurred. If 
you do not leave the required samples intact, or fail to provide 
sufficient care for the samples, our appraisal made prior to giving you 
consent to put the acreage to another use will be used to determine the 
amount of production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested onion 
production, or our reappraisal if additional damage occurs and the crop 
is not harvested.
    (2) All harvested onion production from the insurable acreage.
    (d) If the damage to harvested or unharvested onion production 
exceeds the percentage shown in the Special Provisions for the type, no 
production will be counted for that unit or portion of a unit unless 
such damaged onion production from that acreage is sold. If sold, the 
hundredweight of production to be counted will be adjusted by dividing 
the price received for the damaged onion production by the price 
election and multiplying the resulting factor times the hundredweight 
sold.
    (e) The extent of any damaged onion production must be determined 
not later than the time onions are placed in storage if the production 
is stored prior to sale, or the date the onions are delivered to a 
packer, processor, or other handler if production is not stored.

                         14. Prevented Planting

    Your prevented planting coverage will be 45 percent of your 
production guarantee for

[[Page 249]]

timely planted acreage. Additional prevented planting coverage levels 
are not available for onions.

[62 FR 28613, May 27, 1997, as amended at 62 FR 65173, Dec. 10, 1997; 64 
FR 33385, June 23, 1999]



Sec. 457.136  Guaranteed tobacco crop insurance provisions

    The Guaranteed Tobacco Crop Insurance Provisions for the 1999 and 
succeeding crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

              Guaranteed Tobacco Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Adequate stand. A population of live plants per unit of acreage that 
can be expected to produce at least your production guarantee.
    Approved yield. The yield calculated in accordance with 7 CFR part 
400, subpart G, if required by section 3(b) of these provisions.
    Average value. For appraised production, the estimated value of all 
such production divided by the appraised pounds. For harvested 
production, the total value of such production divided by the harvested 
pounds.
    Basic unit. In lieu of the definition in the Basic Provisions, a 
basic unit is all insurable acreage of an insurable type of tobacco in 
the county in which you have a share on the date of planting for the 
crop year and that is identified by a single FSA farm serial number at 
the time insurance first attaches under these provisions for the crop 
year.
    Carryover tobacco. Any tobacco produced on the FSA farm serial 
number in previous years that remained unsold at the end of the most 
recent marketing year.
    Discount variety. Tobacco defined as such under the provisions of 
the United States Department of Agriculture tobacco price support 
program.
    Fair market value. The current year's tobacco season average market 
price for the applicable type of tobacco obtained from the average sale 
of tobacco through a market other than an auction warehouse.
    Harvest. Cutting or priming and removing all insured tobacco from 
the field in which it was grown.
    Hydroponic plants. Seedlings grown in liquid nutrient solutions.
    Late planting period. In lieu of the definition in section 1 of the 
Basic Provisions, the period that begins the day after the final 
planting date for the insured crop and ends 15 days after the final 
planting date, unless otherwise specified in the Special Provisions.
    Market price.
    (a) For types 11, 12, 13, 14, 21, 22, 23, 31, 35, 36, 37, 42, 44, 
54, and 55:
    (1) The support price per pound for the insured type of tobacco as 
announced by the USDA for its tobacco price support program; or
    (2) The current year's season average market price, when available; 
if not available because the insured type of tobacco has not been 
marketed in the area, the previous year's season average market price 
for the applicable insured type tobacco grown in the area for any crop 
year a tobacco price support program is not in effect.
    (b) For types 32, 41, 51, 52, and 61, the current year's season 
average market price, when available; if not available because the 
insured type of tobacco has not been marketed in the area, the previous 
year's season average market price for the applicable insured type of 
tobacco grown in the area.
    Planted acreage. Land in which tobacco seedlings, including 
hydroponic plants, have been transplanted by hand or machine from the 
tobacco bed to the field.
    Pound. Sixteen ounces avoirdupois.
    Priming. A method of harvesting tobacco by which each leaf is 
severed from the stalk as it matures.
    Production guarantee (per acre). Either the number of pounds of 
tobacco for the tobacco type and classification shown on the county 
actuarial table, or the approved yield as provided in the Special 
Provisions, multiplied by the coverage level percentage you elect.
    Replanting. In lieu of the definition in section 1 of the Basic 
Provisions, performing the cultural practices necessary to replace the 
tobacco plant, and then replacing the tobacco plant in the insured 
acreage with the expectation of producing at least the guarantee.
    Season average market price. The simple average price paid by buyers 
for a tobacco type for all days sales occur at public markets during the 
tobacco sales season in the area in which the farm is located.
    Support price. The average price per pound for the type of tobacco 
as announced by the USDA under its tobacco price support program, or, if 
there is no such program, as announced by FCIC.
    Tobacco bed. An area protected from adverse weather in which tobacco 
seeds are

[[Page 250]]

sown and seedlings are grown until transplanted into the tobacco field 
by hand or machine.

                            2. Unit Division

    A unit will be determined in accordance with the definition of basic 
unit contained in section 1 of these Crop Provisions. The provision in 
the Basic Provisions regarding optional units are not applicable, unless 
specified by the Special Provisions.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You must select only one price election and coverage level for 
each guaranteed tobacco type designated in the Special Provisions that 
you elect to insure.
    (b) A production report, if required by the Special Provisions, must 
be filed in accordance with section 3(c) of the Basic Provisions.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are March 15.

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions, you must report any carryover tobacco from previous years on 
the acreage report.

                             7. Insured Crop

    In accordance with section 8 of the Basic Provisions, the insured 
crop will be any of the tobacco types designated in the Special 
Provisions, in which you have a share, that you elect to insure, and for 
which a premium rate is provided by the actuarial documents.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
we will not insure any acreage under these crop provisions that is:
    (a) Planted to a discount variety;
    (b) Planted to a tobacco type for which no premium rate is provided 
by the actuarial documents;
    (c) Planted in any manner other than as provided in the definition 
of ``planted acreage'' in section 1 of these Crop Provisions, unless 
otherwise provided by the Special Provisions or by written agreement; or
    (d) Damaged before the final planting date to the extent that most 
producers of tobacco acreage with similar characteristics in the area 
would normally not further care for the crop, unless such crop is 
replanted or we agree that replanting is not practical.

                           9. Insurance Period

    In accordance with the provisions of section 11 of the Basic 
Provisions, insurance ceases at the earliest of:
    (a) Total destruction of the tobacco on the unit;
    (b) Weighing-in at the tobacco warehouse;
    (c) Removal of the tobacco from the field where grown except for 
curing, grading, packing, or immediate delivery to the tobacco 
warehouse; or
    (d) The calendar date for the end of the insurance period, which is:
    (i) Types 11 and 12--November 30;
    (ii) Type 13--October 31;
    (iii) Type 14--October 15;
    (iv) Types 31 and 36--February 28;
    (v) Types 21, 35 and 37--March 15;
    (vi) Types 22 and 23--April 15;
    (vii) Type 32--May 15;
    (viii) All other types--April 30.

                           10. Causes of Loss

    In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by a peril 
specified in section 10(a) through (g) that occurs during the insurance 
period.

                11. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, any representative samples we may require of each 
unharvested tobacco type must be at least 5 feet wide (at least two 
rows), and extend the entire length of each field in the unit. The 
samples must not be harvested or destroyed until after our inspection.
    (b) If tobacco types 11, 12, 13, or 14 are insured and you have 
filed a notice of damage, you also must leave all tobacco stalks and 
stubble intact for our inspection. The stalks and stubble must not be 
destroyed until we give you written consent to do so or until 30 days 
after the end of the insurance period, whichever is earlier.

[[Page 251]]

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee, by type if applicable;
    (2) Multiplying each result in section 12(b)(1) by the respective 
price election, by type if applicable;
    (3) Totaling the results of section 12(b)(2) if there are more than 
one type;
    (4) Multiplying the total production to count (see section 12(c)), 
for each type if applicable, by its respective price election;
    (5) Totaling the results of section 12(b)(4), if there are more than 
one type;
    (6) Subtracting the results of section 12(b)(4) from the results of 
section 12(b)(2) if there is only one type or subtracting the results of 
section 12(b)(5) from the result of section 12(b)(3) if there are more 
than one type; and
    (7) Multiplying the result of section 12(b)(6) by your share.
    For example:
    You have 100 percent share in 1 acre of type 35 (dark air cured) 
guaranteed tobacco in the unit, with a 2,000 pounds per acre guarantee 
and a price election of $2.00 per pound. You are only able to harvest 
500 pounds. Your indemnity would be calculated as follows:
    (1) 1.0 acre x 2,000 pounds = 2,000 pounds guarantee;
    (2) 2,000 pounds x $2.00 price election = $4,000.00 value of 
guarantee;
    (4) 500 pounds x $2.00 price election = $1,000.00 value of 
production to count;
    (6) $4,000.00 - $1,000.00 = $3,000.00 loss; and
    (7) $3,000 x 100 percent = $3,000 indemnity payment.
    (c) The total production to count (pounds of appraised or harvested 
production multiplied by the applicable price) for all insurable acreage 
on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for the unit for 
any acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes;
    (D) For which you fail to provide production records, if required by 
the Special Provisions, that are acceptable to us; or
    (E) Of types 11, 12, 13, or 14 when the stalks and stubble have been 
destroyed without our consent;
    (ii) Production lost due to uninsured causes.
    (iii) Potential production on insured acreage that you intend to put 
to another use or abandon with our consent, if you and we agree on the 
appraised amount of production. Upon such agreement, the insurance 
period for that acreage will end when you put the acreage to another use 
or abandon the crop. If agreement on the appraised amount of production 
is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The value of production to count for 
such acreage will be the number of pounds harvested or appraised 
production multiplied by the support price taken from the samples at the 
time harvest should have occurred. If you do not leave the required 
samples intact, or fail to provide sufficient care for the samples, our 
appraisal made prior to giving you consent to put the acreage to another 
use will be used to determine the amount of production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from insurable acreage.
    (d) Mature tobacco production that is damaged by insurable causes 
will be adjusted for quality based on the USDA Official Standard Grades 
for the insured type if it has an average value less than the market 
price, as follows:
    (1) Divide the average value of the damaged appraised and/or 
harvested production by the market price;
    (2) Multiply the result in section 12(d)(1) (not to exceed 1.0) by 
the number of pounds of damaged appraised and/or harvested tobacco; and
    (3) Multiply the product by your price election.
    If no market price has been established for the grade of the damaged 
tobacco, a market price will be imputed by reducing the lowest available 
market price by 20 percent for each grade that the production falls 
below the grade for which such lowest market price is available.
    (e) To enable us to determine the fair market value of tobacco not 
sold through auction warehouses, we must be given the opportunity to 
inspect such tobacco before it is sold, contracted to be sold, or 
otherwise disposed. Failure to provide us the opportunity to inspect 
such tobacco may result in rejection of any claim for indemnity.

[[Page 252]]

    (f) If we consider the best offer you receive for any such tobacco 
to be inadequate, we may obtain additional offers on your behalf.
    (g) Once we agree that any carryover or current year's tobacco has 
no market value due to insured causes, you must destroy it and it will 
not be considered production to count. If you refuse to destroy such 
tobacco, we will include it as production to count and value it at the 
support price.

                            13. Late Planting

    In lieu of late planting provisions in the Basic Provisions 
regarding acreage initially planted after the final planting date, 
insurance will be provided for acreage planted to the insured crop after 
the final planting date as follows:
    (a) The production guarantee (per acre) for each type planted during 
the late planting period will be reduced by:
    (1) One percent (1%) for the 1st through the 10th day; and
    (2) Two percent (2%) for the 11th through the 15th day;
    (b) The premium amount for insurable acreage planted to the insured 
crop after the final planting date will be the same as that for timely 
planted acreage. If the amount of premium you are required to pay (gross 
premium less our subsidy) for acreage planted after the final planting 
date exceeds the liability on such acreage, coverage for those acres 
will not be provided (no premium will be due and no indemnity will be 
paid for such acreage).

                         14. Prevented Planting

    The prevented planting provisions in the Basic Provisions are not 
applicable to guaranteed tobacco.

[63 FR 34552, June 25, 1998]



Sec. 457.137  Green pea crop insurance provisions.

    The Green Pea Crop Insurance Provisions for the 1998 and succeeding 
crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies

                        Green Pea Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Base contract price. The price stipulated in the processor contract 
for the tenderometer reading, grade factor, or sieve size that is 
designated in the Special Provisions, if applicable, without regard to 
discounts or incentives that may apply.
    Bypassed acreage. Land on which production is ready for harvest but 
the processor elects not to accept such production so it is not 
harvested.
    Combining (vining). Separating pods from the vines and, in the case 
of shell peas, separating the peas from the pod for delivery to the 
processor.
    Dry peas. Green peas that have matured to the dry form for use as 
food, feed, or seed.
    Good farming practices. The cultural practices generally in use in 
the county for the crop to make normal progress toward maturity and 
produce at least the yield used to determine the production guarantee 
and are those required by the green pea processor contract with the 
processing company, and recognized by the Cooperative State Research, 
Education, and Extension Service as compatible with agronomic and 
weather conditions in the county.
    Green peas. Shell type and pod type peas that are grown under a 
processor contract to be canned or frozen and sold for human 
consumption.
    Harvest. Combining (vining) of the peas.
    Nurse crop (companion crop). A crop planted into the same acreage as 
another crop, that is intended to be harvested separately, and which is 
planted to improve growing conditions for the crop with which it is 
grown.
    Peas. Green or dry peas.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, peas must initially be placed in rows to be considered 
planted. Acreage planted in any other manner will not be insurable 
unless otherwise provided by the Special Provisions or by written 
agreement.
    Pod type. Green peas genetically developed to be eaten without 
shelling (e.g., snap peas, snow peas, and Chinese peas).
    Practical to replant. In lieu of the definition of ``practical to 
replant'' contained in section 1 of the Basic Provisions, practical to 
replant is defined as our determination, after loss or damage to the 
insured crop, based on factors including, but not limited to, moisture 
availability, condition of the field, time to crop maturity, and 
marketing window, that replanting the insured crop will allow the crop 
to attain maturity prior to the calendar date for the end of the 
insurance period. It will not be considered practical to replant unless 
the replanted acreage can produce at least 75 percent of the approved 
yield, and the processor agrees in writing

[[Page 253]]

that it will accept the production from the replanted acreage.
    Price election. In lieu of the definition of ``Price election'' 
contained in section 1 of the Basic Provisions, price election is 
defined as the price per pound stated in the processor contract 
(contracted price) for the tenderometer reading, grade factor, or sieve 
size contained in the Special Provisions.
    Processor. Any business enterprise regularly engaged in canning or 
freezing green peas for human consumption, that possesses all licenses 
and permits for processing green peas required by the state in which it 
operates, and that possesses facilities, or has contractual access to 
such facilities, with enough equipment to accept and process contracted 
green peas within a reasonable amount of time after harvest.
    Processor contract. A written agreement between the producer and a 
processor, containing at a minimum:
    (a) The producer's commitment to plant and grow green peas, and to 
deliver the green pea production to the processor;
    (b) The processor's commitment to purchase all the production stated 
in the processor contract; and
    (c) A base contract price.
    Multiple contracts with the same processor that specify amounts of 
production will be considered as a single processor contract unless the 
contracts are for different types of green peas.
    Production guarantee (per acre). The number of pounds determined by 
multiplying the approved actual production history yield per acre by the 
coverage level percentage you elect. For shell type peas, the weight 
will be determined after shelling.
    Shell type. Green peas genetically developed to be shelled prior to 
eating, canning or freezing.

                            2. Unit Division

    (a) For any processor contract that stipulates the amount of 
production to be delivered:
    (1) In lieu of the definition contained in the Basic Provisions, a 
basic unit will consist of all acreage planted to the insured crop in 
the county that will be used to fulfill contracts with each processor;
    (i) There will be no more than one basic unit for all production 
contracted with each processor contract;
    (ii) In accordance with section 12, all production from any basic 
unit in excess of the amount under contract will be included as 
production to count if such production is applied to any other basic 
unit for which the contracted amount has not been fulfilled; and
    (2) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may only 
be established based on shell type and pod type green peas if the shell 
type acreage does not continue into the pod type acreage in the same 
rows or planting pattern.
    (b) For any processor contract that stipulates the number of acres 
to be planted, in addition to or instead of, establishing optional units 
by section, section equivalent or FSA farm serial number, or irrigated 
and non-irrigated acreage, optional units may be established based on 
shell type and pod type green peas if the shell type acreage does not 
continue into the pod type acreage in the same rows or planting pattern.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                              Indemnities.

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may select only one price election for all the green peas in 
the county insured under this policy unless the Special Provisions 
provide different price elections by type. The percentage of the maximum 
price election you choose for one type will be applicable to all other 
types insured under this policy.
    (b) The appraised production from bypassed acreage that could have 
been accepted by the processor will be included when determining your 
approved yield.
    (c) Acreage that is bypassed because it was damaged by an insurable 
cause of loss will be considered to have a zero yield when determining 
your approved yield.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

                      Cancellation and Termination
------------------------------------------------------------------------
                   State                                Dates
------------------------------------------------------------------------
Delaware and Maryland......................  Feb. 15.
All other states...........................  Mar. 15.
------------------------------------------------------------------------

                          6. Report of Acreage

    In addition to the provisions of section 6 of the Basic Provisions, 
you must provide a copy of all processor contracts to us on or before 
the acreage reporting date.

                             7. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the shell type and pod type green peas in the county 
for which a premium rate is provided by the actuarial documents:

[[Page 254]]

    (1) In which you have a share;
    (2) That are grown under, and in accordance with, the requirements 
of a processor contract executed on or before the acreage reporting date 
and are not excluded from the processor contract at any time during the 
crop year; and
    (3) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop;
    (ii) Planted into an established grass or legume; or
    (iii) Planted as a nurse crop.
    (b) You will be considered to have a share in the insured crop if, 
under the processor contract, you retain control of the acreage on which 
the green peas are grown, you are at risk of loss, and the processor 
contract provides for delivery of green peas under specified conditions 
and at a stipulated base contract price.
    (c) A commercial green pea producer who is also a processor may 
establish an insurable interest if the following requirements are met:
    (1) The producer must comply with these Crop Provisions;
    (2) Prior to the sales closing date, the Board of Directors or 
officers of the processor must execute and adopt a resolution that 
contains the same terms as an acceptable processor contract. Such 
resolution will be considered a processor contract under this policy; 
and
    (3) Our inspection reveals that the processing facilities comply 
with the definition of a processor contained in these Crop Provisions.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions:
    (a) Any acreage of the insured crop that is damaged before the final 
planting date, to the extent that the majority of producers in the area 
would normally not further care for the crop, must be replanted unless 
we agree that it is not practical to replant; and
    (b) We will not insure any acreage that does not meet the rotation 
requirements, if applicable, contained in the Special Provisions.

                           9. Insurance Period

    In lieu of the provisions contained in section 11 of the Basic 
Provisions, regarding the end of the insurance period, insurance ceases 
at the earlier of:
    (a) The date the green peas:
    (1) Were destroyed;
    (2) Should have been harvested but were not harvested;
    (3) Were abandoned; or
    (4) Were harvested;
    (b) The date you harvest sufficient production to fulfill your 
processor contract if the processor contract stipulates a specific 
amount of production to be delivered;
    (c) Final adjustment of a loss; or
    (d) September 15 of the calendar year in which the insured green 
peas would normally be harvested; or
    (e) September 30 of the calendar year in which the insured peas 
would normally be harvested if you provide notice to us that the insured 
crop will be harvested as dry peas (see section 11(d)).

                           10. Causes of Loss

    In accordance with the provisions of section 12 of the Basic 
Provisions:
    (a) Insurance is provided only against the following causes of loss 
that occur during the insurance period:
    (1) Adverse weather conditions, including:
    (i) Excessive moisture that prevents harvesting equipment from 
entering the field or that prevents the timely operation of harvesting 
equipment; and
    (ii) Abnormally hot or cold temperatures that cause an unexpected 
number of acres over a large producing area to be ready for harvest at 
the same time, affecting the timely harvest of a large number of such 
acres or the processing of such production is beyond the capacity of the 
processor, either of which causes the acreage to be bypassed.
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease but only on acreage not planted to peas the 
previous crop year. (In certain instances, contained in the Special 
Provisions or in a written agreement, acreage planted to peas the 
previous year may be covered. Damage due to insufficient or improper 
application of disease control measures is not covered);
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if due to a cause of 
loss contained in section 10(a)(1) through (7) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded by section 12 of the 
Basic Provisions, we will not insure any loss of production due to:
    (1) Bypassed acreage because of:
    (i) The breakdown or non-operation of equipment or facilities; or
    (ii) The availability of a crop insurance payment. We may deny any 
indemnity immediately in such circumstance or, if an indemnity has been 
paid, require you to repay it to us with interest at any time acreage 
was bypassed due to the availability of a crop insurance payment or;
    (2) Your failure to follow the requirements contained in the 
processor contract.

[[Page 255]]

                11. Duties in the Event of Damage or Loss

    In addition to the notices required by section 14 of the Basic 
Provisions, you must give us notice:
    (a) Not later than 48 hours after:
    (1) Total destruction of the green peas on the unit; or
    (2) Discontinuance of harvest on a unit on which unharvested 
production remains.
    (b) Within 3 days after the date harvest should have started on any 
acreage that will not be harvested unless we have previously released 
the acreage. You must also provide acceptable documentation of the 
reason the acreage was bypassed. Failure to provide such documentation 
will result in our determination that the acreage was bypassed due to an 
uninsured cause of loss. If the crop will not be harvested and you wish 
to destroy the crop, you must leave representative samples of the 
unharvested crop for our inspection. The samples must be at least 10 
feet wide and extend the entire length of each field in each unit. The 
samples must not be destroyed until the earlier of our inspection or 15 
days after notice is given to us;
    (c) At least 15 days prior to the beginning of harvest if you intend 
to claim an indemnity on any unit, or immediately if damage is 
discovered during the 15 day period or during harvest, so that we may 
inspect any damaged production. If you fail to notify us and such 
failure results in our inability to inspect the damaged production, we 
will consider all such production to be undamaged and include it as 
production to count. You are not required to delay harvest; and
    (d) Prior to the time the green peas would normally be harvested if 
you intend to harvest the green peas as dry peas.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate, acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee, by type if applicable;
    (2) Multiplying each result of section 12(b)(1) by the respective 
price election, by type if applicable;
    (3) Totaling the results of section 12(b)(2) if there are more than 
one type;
    (4) Multiplying the total production to count (see section 12(c)), 
for each type if applicable, by its respective price election;
    (5) Totaling the results of section 12(b)(4) if there are more than 
one type;
    (6) Subtracting the results of section 12(b)(4) from the results of 
section 12(b)(2) if there is only one type or subtracting the results of 
section 12(b)(5) from the result of section 12(b)(3) if there are more 
than one type; and
    (7) Multiplying the result of section 12(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 acres of shell type green peas 
in the unit, with a guarantee of 4,000 pounds per acre and a price 
election of $0.09 per pound. You are only able to harvest 200,000 
pounds. Your indemnity would be calculated as follows:
    (1) 100 acres x 4,000 pounds = 400,000 pounds guarantee;
    (2) 400,000 pounds x $0.09 price election = $36,000.00 value of 
guarantee;
    (4) 200,000 pounds x $0.09 price election = $18,000.00 value of 
production to count;
    (6) $36,000.00 - $18,000.00 = $18,000.00 loss; and
    (7) $18,000.00 x 100 percent = $18,000.00 indemnity payment.
    You also have a 100 percent share in 100 acres of pod type green 
peas in the same unit, with a guarantee of 5,000 pounds per acre and a 
price election of $0.13 per pound. You are only able to harvest 450,000 
pounds. Your total indemnity for both shell type and pod type green peas 
would be calculated as follows:
    (1) 100 acres x 4,000 pounds = 400,000 pounds guarantee for the 
shell type, and 100 acres x 5,000 pounds = 500,000 pounds guarantee for 
the pod type;
    (2) 400,000 pounds guarantee x $0.09 price election = $36,000.00 
value of guarantee for the shell type, and 500,000 pounds guarantee x 
$0.13 price election = $65,000.00 value of guarantee for the pod type;
    (3) $36,000.00 + $65,000.00 = $101,000.00 total value of guarantee;
    (4) 200,000 pounds x $0.09 price election = $18,000.00 value of 
production to count for the shell type, and
    4450,000 pounds x $0.13 = $58,500.00 value of production to count 
for the pod type;
    (5) $18,000.00 + $58,500.00 = $76,500.00 total value of production 
to count;
    (6) $101,000.00 - $76,500.00 = $24,500.00 loss; and
    (7) $24,500.00 loss x 100 percent = $24,500.00 indemnity payment.
    (c) The total production to count, specified in pounds, from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) That is put to another use without our consent;

[[Page 256]]

    (C) That is damaged solely by uninsured causes or;
    (D) For which you fail to provide production records that are 
acceptable to us.
    (ii) Production lost due to uninsured causes.
    (iii) Production on acreage that is bypassed unless the acreage was 
bypassed due to an insured cause of loss which resulted in production 
which would not be acceptable under the terms of the processor contract.
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or fail to provide sufficient care 
for the samples, our appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested.
    (2) All harvested green pea production from the insurable acreage. 
The amount of such production will be determined by dividing the dollar 
amount paid, payable, or which should have been paid under the terms of 
the processor contract for the quality and quantity of the peas 
delivered to the processor by the base contract price per pound;
    (3) All harvested green pea production from any of your other 
insurable units that have been used to fulfill your processor contract 
for this unit; and
    (4) All dry pea production from the insurable acreage if you gave 
notice in accordance with section 11(d) for any acreage you intended to 
harvest as dry peas. The harvested or appraised dry pea production will 
be multiplied by 1.667 for shell types and 3.000 for pod types to 
determine the green pea production equivalent. No adjustment for quality 
deficiencies will be allowed for dry pea production.

                            13. Late Planting

    A late planting period is not applicable to green peas unless 
allowed by the Special Provisions and you provide written approval from 
the processor by the acreage reporting date that it will accept the 
production from the late planted acres when it is expected to be ready 
for harvest.

                         14. Prevented Planting

    Your prevented planting coverage will be 40 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[62 FR 61903, Nov. 20, 1997, as amended at 62 FR 65173, Dec. 10, 1997]



Sec. 457.138  Grape crop insurance provisions.

    The grape crop insurance provisions for the 2000 and succeeding crop 
years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                          Grape Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Graft. To unite a shoot or bud (scion) with a rootstock or an 
existing vine in accordance with recommended practices to form a living 
union.
    Harvest. Picking the clusters of grapes from the vines either by 
hand or machine.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Set out. Physically planting the desired variety of grape plant in 
the ground in a desired planting pattern.
    Ton. Two thousand (2,000) pounds avoirdupois.
    Varietal group. Grapes with similar characteristics that are grouped 
for insurance purposes as specified in the Special Provisions.

                            2. Unit Division

    (a) In California only, a basic unit, as defined in section 1 of the 
Basic Provisions will

[[Page 257]]

be divided into additional basic units by each variety that you insure.
    (b) In California only, provisions in the Basic Provisions that 
provide for optional units by section, section equivalent, or FSA farm 
serial number and by irrigated and non-irrigated practices are not 
applicable. Optional units may be established only if each optional unit 
is located on non-contiguous land, unless otherwise allowed by written 
agreement.
    (c) In all states except California, in addition to, or instead of, 
establishing optional units by section, section equivalent, or FSA farm 
serial number and by irrigated and non-irrigated acreage as provided in 
the unit division provisions contained in the Basic Provisions a 
separate optional unit may be established if each optional unit:
    (1) Is located on non-contiguous land; or
    (2) Consists of a separate varietal group when separate varietal 
groups are specified in the Special Provisions.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) In California, you may select only one price election and 
coverage level for each grape variety in the county specified in the 
Special Provisions.
    (b) In Idaho, Oregon, and Washington, you may select only one price 
election and coverage level for each grape varietal group specified in 
the Special Provisions.
    (c) In all states except California, Idaho, Oregon, and Washington, 
you may select only one price election and coverage level for all the 
grapes in the county insured under this policy unless the Special 
Provisions provide different price elections by varietal group, in which 
case you may select one price election for each varietal group 
designated in the Special Provisions. The price elections you choose for 
each varietal group must have the same percentage relationship to the 
maximum price offered by us for each varietal group. For example, if you 
choose 100 percent of the maximum price election for one varietal group, 
you must also choose 100 percent of the maximum price election for all 
other varietal groups.
    (d) In California only, if the Special Provisions do not provide a 
price election for a specific variety you wish to insure, you may apply 
for a written agreement to establish a price election. Your application 
for the written agreement must include:
    (1) The number of tons sold for at least the two most recent crop 
years; and
    (2) The price received for all production of the variety in the 
years for which production records are provided.
    (e) You must report, by the production reporting date designated in 
section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by 
variety or varietal group, if applicable :
    (1) Any damage, removal of bearing vines, change in practices or any 
other circumstance that may reduce the expected yield below the yield 
upon which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing vines on insurable and uninsurable 
acreage;
    (3) The age of the vines and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed:
    (i) The age of the interplanted crop, and the type or variety or 
varietal group, if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production 
guarantee, based on our estimate of the effect of the following: 
Interplanted perennial crop; removal of vines; damage; change in 
practices and any other circumstance that may affect the yield potential 
of the insured crop. If you fail to notify us of any circumstance that 
may reduce your yields from previous levels, we will reduce your 
production guarantee at any time we become aware of the circumstance.
    (f) In California, Idaho, Mississippi, Oregon, Texas, and 
Washington, you may not increase your elected or assigned coverage level 
or the ratio of your price election to the maximum price election we 
offer if a cause of loss that could or would reduce the yield of the 
insured crop is evident prior to the time that you request the increase.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date for all states except California, and 
October 31 preceding the cancellation date for California.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are January 31 in California and November 20 in all 
other states.

                          6. Report of Acreage

    In addition to the requirements of section 6 (Report of Acreage) of 
the Basic Provisions (Sec. 457.8), you must report your acreage by

[[Page 258]]

each grape variety you insure in California, or by varietal group in all 
other states.

                             7. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be any insurable variety that you 
elect to insure in California or all insurable varieties in all other 
states in the county for which a premium rate is provided by the 
actuarial documents:
    (a) In which you have a share;
    (b) That are grown for wine, juice, raisins, or canning;
    (c) That are grown in a vineyard that, if inspected, is considered 
acceptable by us;
    (d) That, after being set out or grafted, have reached the number of 
growing seasons designated by the Special Provisions; and
    (e) That have produced an average of two tons of grapes per acre 
during at least one of the three crop years immediately preceding the 
insured crop year, unless we inspect and allow insurance on such 
acreage.

                          8. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8) that prohibit insurance attaching to a 
crop planted with another crop, grapes interplanted with another 
perennial crop are insurable unless we inspect the acreage and determine 
that it does not meet the requirements contained in your policy.

                           9. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on February 1 in California and November 21 in 
all other states of each crop year. Notwithstanding the previous 
sentence, for the year of application, if your application is received 
after January 22 but prior to February 1 in California, or after 
November 11 but prior to November 21 in all other states, insurance will 
attach on the 10th day after your properly completed application is 
received in our local office, unless we inspect the acreage during the 
10 day period and determine that it does not meet insurability 
requirements. You must provide any information that we require for the 
crop or to determine the condition of the vineyard.
    (2) In California, Idaho, Mississippi, Oregon, Texas, and 
Washington, for each subsequent crop year that the policy remains 
continuously in force, coverage begins on the day immediately following 
the end of the insurance period for the prior crop year. Policy 
cancellation that results solely from transferring to a different 
insurance provider for a subsequent crop year will not be considered a 
break in continuous coverage.
    (3) The calendar date for the end of the insurance period for each 
crop year is the date during the calendar year in which the grapes are 
normally harvested, as follows:
    (i) October 10 in Mississippi and Texas;
    (ii) November 1 in Idaho, Oregon, and Washington;
    (iii) November 10 in California; and
    (iv) November 20 in all other states.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins, but on or before the acreage reporting date for the 
crop year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period. Acreage 
acquired after the acreage reporting date will not be insured.
    (2) If you relinquish your insurable share on any insurable acreage 
of grapes on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to, and no premium or 
indemnity will be due for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the vineyard;
    (3) Insects, except as excluded in 10(b)(1), but not damage due to 
insufficient or improper application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Phylloxera, regardless of cause; or

[[Page 259]]

    (2) Inability to market the grapes for any reason other than actual 
physical damage from an insurable cause specified in this section. For 
example, we will not pay you an indemnity if you are unable to market 
due to quarantine, boycott, or refusal of any person to accept 
production.

                11. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following 
will apply:
    (a) You must notify us within 3 days of the date harvest should have 
started if the crop will not be harvested.
    (b) If the crop has been damaged during the growing season and you 
previously gave notice in accordance with section 14 of the Basic 
Provisions (Sec. 457.8), you must also provide notice at least 15 days 
prior to the beginning of harvest if you intend to claim an indemnity as 
a result of the damage previously reported. You must not destroy the 
damaged crop that is marketed in normal commercial channels, until after 
we have given you written consent to do so. If you fail to meet the 
requirements of this section, all such production will be considered 
undamaged and included as production to count.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying each result in section 12(b)(1) by the respective 
price election you selected for each variety or varietal group;
    (3) Totaling the results in section 12(b)(2);
    (4) Multiplying the total production to count of each variety or 
varietal group, if applicable, (see section 12 (c) through (e)) by the 
respective price election you selected;
    (5) Totaling the results in section 12(b)(4);
    (6) Subtracting the result in section 12(b)(5) from the result in 
section 12(b)(3); and
    (7) Multiplying the result in section 12(b)(6) by your share.
    (c) The total production to count (in tons) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned or destroyed by you without our consent;
    (B) That is damaged solely by uninsured causes; or
    (C) For which you fail to provide production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies in accordance with subsection 12 (e)); 
and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and
    (2) All harvested production from the insurable acreage. Grape 
production that is harvested and dried for raisins will be converted to 
a fresh weight basis by multiplying the number of tons of raisin 
production by 4.5.
    (d) If any grapes are harvested before normal maturity or for a 
special use (such as Champagne or Botrytis-affected grapes), the 
production of such grapes will be increased by the factor obtained by 
dividing the price per ton received for such grapes by the price per ton 
for fully matured grapes of the type for which the claim is being made.
    (e) Mature marketable grape production may be adjusted for quality 
deficiencies as follows:
    (1) Production will be eligible for quality adjustment if, due to 
insurable causes, it has a value of less than 75 percent of the average 
market price of undamaged grapes of the same or similar variety. The 
value per ton of the qualifying damaged production and the average 
market price of undamaged grapes will be determined on the earlier of 
the date the damaged production is sold or the date of final inspection 
for the unit. The average market price of undamaged production will be 
calculated by averaging the prices being paid by usual marketing outlets 
for the area during the week in which the damaged grapes were valued.
    (2) Grape production that is eligible for quality adjustment, as 
specified in subsection 12(e)(1) will be reduced by:
    (i) Dividing the value per ton of the damaged grapes by the maximum 
price election

[[Page 260]]

available for such grapes to determine the quality adjustment factor; 
and
    (ii) Multiplying this result (not to exceed 1.000) by the number of 
tons of the eligible damaged grapes.

                     13. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 33741, June 23, 1997, as amended at 62 FR 65173, Dec. 10, 1997; 
63 FR 31338, June 9, 1998; 64 FR 24932, May 10, 1999]



Sec. 457.139  Fresh market tomato (dollar plan) crop insurance provisions.

    The fresh market tomato (dollar plan) crop insurance provisions for 
the 1999 and succeeding crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and Reinsured Policies

            Fresh market tomato (dollar plan) crop provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Acre--43,560 square feet of land when row widths do not exceed six 
feet, or if row widths exceed six feet, the land area on which at least 
7,260 linear feet of rows are planted.
    Carton--Twenty-five (25) pounds of the insured crop.
    Crop year--In lieu of the definition of ``crop year'' contained in 
section 1 (Definitions) of the Basic Provisions (Sec. 457.8), crop year 
is a period of time that begins on the first day of the earliest 
planting period for fall planted tomatoes and continues through the last 
day of the insurance period for spring planted tomatoes. The crop year 
is designated by the calendar year in which spring planted tomatoes are 
harvested.
    Direct marketing--Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Excess rain--An amount of precipitation sufficient to directly 
damage the crop.
    Freeze--The formation of ice in the cells of the plant or its fruit, 
caused by low air temperatures.
    Harvest--The picking of tomatoes on the unit.
    Mature green tomato--A tomato that:
    (1) Has a glossy waxy skin that cannot be torn by scraping;
    (2) Has well-formed, jelly-like substance in the locules;
    (3) Has seeds that are sufficiently hard so as to be pushed aside 
and not cut by a sharp knife in slicing; and
    (4) Shows no red color.
    Plant stand--The number of live plants per acre prior to the 
occurrence of an insurable cause of loss.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, for each planting period, tomato seed or transplants 
must initially be planted in rows, unless otherwise provided by Special 
Provisions, actuarial documents, or by written agreement.
    Planting period--The period of time designated in the actuarial 
documents in which the tomatoes must be planted to be considered fall, 
winter or spring-planted tomatoes.
    Potential production--The number of cartons of mature green or ripe 
tomatoes that the tomato plants will or would have produced per acre, 
assuming normal growing conditions and practices, by the end of the 
insurance period:
    (a) With a classification size of 6x7 (2\8/32\ inch minimum 
diameter) or larger for all types except cherry or plum tomatoes; or
    (b) With a classification size as allowed by written agreement for 
cherry or plum tomatoes.
    Practical to replant--In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8), 
practical to replant is defined as our determination, after loss or 
damage to the insured crop, based on factors, including but not limited 
to moisture availability, condition of the field, marketing windows, and 
time to crop maturity, that replanting to the insured crop will allow 
the crop to attain maturity prior to the calendar date for the end of 
the insurance period (inability to obtain plants or seed will not be 
considered when determining if it is practical to replant).
    Ripe tomato--A tomato that has a definite break in color from green 
to tannish-yellow, pink or red.
    Row width--The widest distance from the center of one row of plants 
to the center of an adjacent row of plants.

[[Page 261]]

    Tropical depression--A system identified by the U.S. Weather Service 
as a tropical depression, and for the period of time so designated, 
including tropical storms, gales, and hurricanes.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will also be divided into additional basic units by planting period.
    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.

              3. Amounts of Insurance and Production Stages

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one coverage 
level (and the corresponding amount of insurance designated in the 
actuarial documents for the applicable planting period and practice) for 
all the tomatoes in the county insured under this policy.
    (b) The amount of insurance you choose for each planting period and 
practice must have the same percentage relationship to the maximum price 
offered by us for each planting period and practice. For example, if you 
choose 100 percent of the maximum amount of insurance for a specific 
planting period and practice, you must also choose 100 percent of the 
maximum amount of insurance for all other planting periods and 
practices.
    (c) The production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), do not apply to 
fresh market dollar plan tomatoes.
    (d) The amounts of insurance per acre are progressive by stages as 
follows:

------------------------------------------------------------------------
                  Percent of
                  amount of
                  insurance     Length of time if     Length of time if
     Stage         per acre       direct seeded         transplanted
                   that you
                   selected
------------------------------------------------------------------------
1..............           50  From planting         From planting
                               through the 59th      through the 29th
                               day after planting.   day after planting.
2..............           75  From the 60th day     From the 30th day
                               after planting        after planting
                               until the beginning   until the beginning
                               of stage 3.           of stage 3.
3..............           90  From the 90th day     From the 60th day
                               after planting        after planting
                               until the beginning   until the beginning
                               of the final stage.   of the final stage.
Final..........          100  Begins the earlier    Begins the earlier
                               of 105 days after     of 75 days after
                               planting, or the      planting, or the
                               beginning of          beginning of
                               harvest.              harvest.
------------------------------------------------------------------------

    (e) Any acreage of tomatoes damaged in the first, second, or third 
stage to the extent that the majority of producers in the area would not 
normally further care for it, will be deemed to have been destroyed. The 
indemnity payable for such acreage will be based on the stage the plants 
had achieved when the damage occurred.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is April 30 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are July 31.

                          6. Report of Acreage

    In addition to the requirements of section 6 (Report of Acreage) of 
the Basic Provisions (Sec. 457.8), you must report on or before the 
acreage reporting date contained in the Special Provisions for each 
planting period:
    (a) All the acreage of tomatoes in the county insured under this 
policy in which you have a share;
    (b) The dates the acreage was planted within each planting period; 
and
    (c) The row width.

                            7. Annual Premium

    In lieu of the premium amount determinations contained in section 7 
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual 
premium amount for each cultural practice (e.g., fall direct-seeded 
irrigated) is determined by multiplying the final stage amount of 
insurance per acre by the premium rate for the cultural practice as 
established in the Actuarial Table, by the insured acreage, by your 
share at the time coverage begins, and by any applicable premium 
adjustment factors contained in the actuarial documents.

[[Page 262]]

                             8. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the tomatoes in the county 
for which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are:
    (1) Planted to be harvested and sold as fresh market tomatoes;
    (2) Planted within the planting periods designated in the actuarial 
documents;
    (3) Grown under an irrigated practice;
    (4) Grown on acreage covered by plastic mulch except where the 
Special Provisions allows otherwise;
    (5) Grown by a person who in at least one of the three previous crop 
years:
    (i) Grew tomatoes for commercial sale; or
    (ii) Participated in managing a fresh market tomato farming 
operation;
    (c) That are not:
    (1) Interplanted with another crop;
    (2) Planted into an established grass or legume;
    (3) Grown for direct marketing; or
    (4) Plum or cherry type tomatoes, unless allowed by written 
agreement.

                          9. Insurable Acreage

    (a) In lieu of the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), that prohibit insurance attaching if 
a crop has not been planted in at least one of the three previous crop 
years, we will insure newly cleared land and former pasture land planted 
to fresh market tomatoes.
    (b) In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8):
    (1) You must replant any acreage of tomatoes damaged during the 
planting period in which initial planting took place whenever less than 
50 percent of the plant stand remains: and
    (i) It is practical to replant;
    (ii) If, at the time the crop was damaged, the final day of the 
planting period has not passed; and
    (iii) The damage occurs within 30 days of transplanting or 60 days 
of direct seeding.
    (2) Whenever tomatoes initially are planted during the fall or 
winter planting periods and the conditions specified in sections 9(b)(1) 
(ii) and (iii) are not satisfied, you may elect:
    (i) To replant such acreage and collect any replant payment due as 
specified in section 12. The initial planting period coverage will 
continue for such replanted acreage.
    (ii) Not to replant such acreage and receive an indemnity based on 
the stage of growth the plants had attained at the time of damage. 
However, such an election will result in the acreage being uninsurable 
in the subsequent planting period.
    (3) We will not insure any acreage on which tomatoes (except for 
replanted tomatoes in accordance with sections 9(b) (1) and (2)), 
peppers, eggplants, or tobacco have been grown and the soil was not 
fumigated or otherwise properly treated before planting tomatoes.

                          10. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8), coverage begins on each unit or part of 
a unit the later of the date we accept your application, or when the 
tomatoes are planted in each planting period. Coverage ends at the 
earliest of:
    (a) Total destruction of the tomatoes on the unit;
    (b) Abandonment of the tomatoes on the unit;
    (c) The date harvest should have started on the unit on any acreage 
which will not be harvested;
    (d) Final adjustment of a loss on the unit;
    (e) Final harvest; or
    (f) The calendar date for the end of the insurance period as 
follows:
    (1) 140 days after the date of direct seeding or replanting with 
seed; and
    (2) 125 days after the date of transplanting or replanting with 
transplants.

                           11. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Excess rain;
    (2) Fire;
    (3) Freeze;
    (4) Hail;
    (5) Tornado;
    (6) Tropical depression; or
    (7) Failure of the irrigation water supply, if caused by an insured 
cause of loss that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against any loss of production due to:
    (1) Disease or insect infestation, unless no effective control 
measure exists for such disease or insect infestation; or
    (2) Failure to market the tomatoes, unless such failure is due to 
actual physical damage caused by an insured cause of loss that occurs 
during the insurance period.

                         12. Replanting Payments

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if, due to an 
insured cause of loss, more than 50 percent of the plant stand will not 
produce tomatoes and it is practical to replant.

[[Page 263]]

    (b) The maximum amount of the replanting payment per acre will be 
the lesser of your actual cost of replanting or the result obtained by 
multiplying the per acre replanting payment amount contained in the 
Special Provisions by your insured share.
    (c) In lieu of the provisions contained in section 13 (Replanting 
Payment) of the Basic Provisions (Sec. 457.8), that limit a replanting 
payment to one each crop year, only one replanting payment will be made 
for acreage planted during each planting period within the crop year.

                13. Duties in the Event of Damage or Loss

    In addition to the requirements contained in section 14 (Duties in 
the Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if 
you intend to claim an indemnity on any unit you must also give us 
notice not later than 72 hours after the earliest of:
    (a) The time you discontinue harvest of any acreage on the unit;
    (b) The date harvest normally would start if any acreage on the unit 
will not be harvested; or
    (c) The calendar date for the end of the insurance period.

                         14. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage in each stage by the amount of 
insurance per acre for the final stage;
    (2) Multiplying each result in section 14(b)(1) by the percentage 
for the applicable stage (see section 3(d));
    (3) Total the results of section 14(b)(2);
    (4) Subtracting either of the following values from the result of 
section 14(b)(3):
    (i) For other than catastrophic risk protection coverage, the total 
value of production to be counted (see section 14(c)); or
    (ii) For catastrophic risk protection coverage, the result of 
multiplying the total value of production to be counted (see section 
14(c)) by:
    (A) Sixty percent for the 1998 crop year; or
    (B) Fifty-five percent for 1999 and subsequent crop years; and
    (5) Multiplying the result of section 14(b)(4) by your share.
    (c) The total value of production to count from all insurable 
acreage on the unit will include:
    (1) Not less than the amount of insurance per acre for the stage for 
any acreage:
    (i) That is abandoned;
    (ii) Put to another use without our consent;
    (iii) That is damaged solely by uninsured causes; or
    (iv) For which you fail to provide acceptable production records;
    (2) The value of the following appraised production will not be less 
than the dollar amount obtained by multiplying the number of cartons of 
appraised tomatoes by the minimum value per carton shown in the Special 
Provisions for the planting period:
    (i) Potential production on any acreage that has not been harvested 
the second time for ground-culture tomatoes (the third time for staked 
tomatoes);
    (ii) Unharvested mature green tomatoes (unharvested production that 
is damaged or defective due to insurable causes and is not marketable 
will not be counted as production to count);
    (iii) Production lost due to uninsured causes; and
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) We may require you to continue to care for the crop so that a 
subsequent appraisal may be made or the crop harvested to determine 
actual production. (If we require you to continue to care for the crop 
and you do not do so, the original appraisal will be used); or
    (B) You may elect to continue to care for the crop, in which case 
the amount of production to count for the acreage will be the harvested 
production, or our reappraisal if the crop is not harvested.
    (3) The total value of all harvested production from the insurable 
acreage will be the dollar amount obtained by subtracting the allowable 
cost contained in the Special Provisions from the price received for 
each carton of tomatoes (this result may not be less than the minimum 
value shown in the Special Provisions for any carton of tomatoes), and 
multiplying this result by the number of cartons of tomatoes harvested. 
Harvested production that is damaged or defective due to insurable 
causes and is not marketable, will not be counted as production to 
count.

                     15. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[[Page 264]]

                        16. Minimum Value Option

    (a) The provisions of this option are continuous and will be 
attached to and made a part of your insurance policy, if:
    (1) You elect either Option I or Option II of the Minimum Value 
Option on your application, or on a form approved by us, on or before 
the sales closing date for the initial crop year in which you wish to 
insure fresh market tomatoes (dollar plan) under this option, and pay 
the additional premium indicated in the actuarial documents for this 
optional coverage; and
    (2) You have not elected coverage under the Catastrophic Risk 
Protection Endorsement.
    (b) In lieu of the provisions contained in section 14(c)(3), the 
total value of harvested production will be determined as follows:
    (1) If you selected Option I of the Minimum Value Option, the total 
value of harvested production will be as follows:
    (i) For sold production, the dollar amount obtained by subtracting 
the allowable cost contained in the Special Provisions from the price 
received for each carton of tomatoes (this result may not be less than 
the minimum value option price contained in the Special Provisions for 
any cartons of tomatoes), and multiplying this result by the number of 
carton of tomatoes sold; and
    (ii) For marketable production that is not sold, the dollar amount 
obtained by multiplying the number of cartons of such tomatoes on the 
unit by the minimum value shown in the Special Provisions for the 
planting period (harvested production that is damaged or defective due 
to insurable causes and is not marketable will not be counted as 
production).
    (2) If you selected Option II of the Minimum Value Option, the total 
value of harvested production will be as provided in section 16(b)(1), 
except that the dollar amount specified in section (16)(b)(1)(i) may not 
be less than zero.
    (c) This option may be canceled by either you or us for any 
succeeding crop year by giving written notice on or before the 
cancellation date preceding the crop year for which the cancellation of 
this option is to be effective.

[62 FR 14777, Mar. 28, 1997; 62 FR 63634, Dec. 2, 1997, as amended at 62 
FR 65174, Dec. 10, 1997]



Sec. 457.140  Dry pea crop insurance provisions.

    The dry pea crop insurance provisions for the 2003 and succeeding 
crop years are as follows:
    FCIC policies:

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                         Dry Pea Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions.

    Adequate stand. A population of live plants per acre that will 
produce at least the yield used to establish your production guarantee.
    Base price. The price per pound stipulated in the processor contract 
without regard to discounts or incentives that may apply, and that will 
be paid to the producer for at least 50 percent of the total production 
under contract with the seed company.
    Combining. A mechanical process that separates the peas from the 
pods and other vegetative matter and place the peas into a temporary 
storage receptacle.
    Conditioning. A process that improves the quality of production by 
screening or any other operation commonly used in the dry pea industry 
to remove dry peas that are deficient in quality.
    Contract seed peas. Dry peas produced for seed to be planted at a 
future date and that:
    (a) Are grown on acreage enrolled in the seed certification program 
administered by the state in which the peas are produced;
    (b) Are grown on acreage planted in the spring; and
    (c) Are under a seed company contract.
    Dry peas. Peas of the following types:
    (a) All spring-planted smooth green and yellow varieties of 
commercial dry edible peas, and peas grown to produce seed to be planted 
at a future date that do not meet the requirements contained in the seed 
company contract;
    (b) All fall-planted varieties of Austrian Winter Peas only if 
provided for in the Special Provisions;
    (c) All spring-planted varieties of lentils; and
    (d) All varieties of contract seed peas.
    Harvest. Combining of dry peas.
    Local market price. The cash price per pound for the U.S. No. 1 
grade of dry peas as determined by us. Such price will be the prevailing 
dollar amount these buyers are willing to pay for dry peas containing 
the maximum limits of quality deficiencies allowable for the U.S. No. 1 
grade. Factors not associated with grading under the United

[[Page 265]]

States Standards for Whole Dry Peas, Split Peas and Lentils will not be 
considered.
    Nurse crop (companion crop). A crop planted into the same acreage as 
another crop, that is intended to improve the growing conditions for the 
crop with which it is grown and that is not intended to be harvested 
with the insured crop.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, dry peas must initially be planted in rows to be 
considered planted. Acreage planted in any other manner will not be 
insurable unless otherwise provided by the Special Provisions or by 
written agreement.
    Practical to replant. In addition to the definition contained in the 
Basic Provisions, it will not be considered practical to replant dry 
peas, except for seed peas, more than 25 days after the final planting 
date unless replanting is generally occurring in the area. For seed 
peas, it will not be considered practical to replant unless production 
from the replanted acreage can be delivered under the terms of the seed 
pea processor contract or the seed company agrees in writing to accept 
such production.
    Price election. In addition to the provisions of the definition 
contained in the Basic Provisions, the price election for contract seed 
peas will be a percentage (not to exceed 100 percent) of the base price 
that you elect.
    Seed company. Any business enterprise regularly engaged in the 
processing of contract seed peas, that possesses all licenses and 
permits for marketing contract seed peas required by the state in which 
it operates, and that owns, or has contracted, sufficient drying, 
screening, and bagging or packaging equipment to accept and process the 
contract seed peas within a reasonable amount of time after harvest.
    Seed company contract. A written agreement between the producer and 
the seed company, executed by the acreage reporting date, containing at 
a minimum:
    (a) The producer's promise to plant and grow one or more specific 
varieties of contract seed peas, and deliver the production from those 
varieties to the seed company;
    (b) The seed company's promise to purchase all the production stated 
in the contract; and
    (c) A fixed price, or a method to determine such price based on 
published information compiled by a third party, that will be paid to 
the producer for at least 50 percent of the production stated in the 
contract.

                            2. Unit Division

    (a) In addition to, or instead of, establishing optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated acreage as provided in the unit division provisions 
contained in the Basic Provisions, a separate optional unit may be 
established for each pea type listed in section 1 of these Crop 
Provisions.
    (b) Contract seed peas may qualify for optional units only if the 
seed company contract specifies the number of acres under contract. 
Contract seed peas produced under a seed company contract that specifies 
only an amount of production or a combination of acreage and production, 
are not eligible for optional units.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election for all the dry peas, 
including contract seed peas, in the county insured under this policy 
unless the Special Provisions provide different price elections by type, 
in which case you may select one price election for each dry pea type so 
designated in the Special Provisions. The price elections you choose for 
each type are not required to have the same percentage relationship to 
the maximum price offered by us for each type. For example, if you 
choose 100 percent of the maximum price election for one type, you may 
choose 80 percent of the maximum price election for another type. 
However, if you elect the Catastrophic Risk Protection level of 
insurance for any dry pea type, the same level of coverage will be 
applicable to all insured acreage in the county.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are March 15.

                          6. Report of Acreage

    In addition to the provisions of section 6 of the Basic Provisions, 
you must submit a copy of the seed company contract to us on or before 
the acreage reporting date if you are insuring contract seed peas.

                             7. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the dry pea types in the county (including Austrian 
Winter Peas if you request insurance for such peas in accordance with 
section 7(c)) for which a premium rate is provided by the actuarial 
documents:
    (1) In which you have a share;
    (2) That are planted for harvest as dry peas and which, if grown 
under a seed company contract, are not excluded from such contract 
during the crop year;

[[Page 266]]

    (3) That are grown in accordance with the requirements of the seed 
company contract, if applicable;
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop;
    (ii) Planted into an established grass or legume; or
    (iii) Planted as a nurse crop.
    (b) You will be considered to have a share in the insured crop if, 
under the processor contract, you retain control of the acreage on which 
the contract seed peas are grown, you are at risk of loss, and the 
processor contract is in effect.
    (c) Austrian Winter Peas are only insurable if you request insurance 
in writing for such dry peas, and we agree in writing to provide 
coverage. Your request to insure Austrian Winter Peas must be submitted 
to us not later than the sales closing date. We will not agree to insure 
Austrian Winter Peas unless an adequate stand exists in the spring.
    (d) Any acreage of dry peas that is destroyed and replanted to a 
different insurable type of dry peas will be considered insured acreage. 
The guarantee and premium for acreage replanted to a different insurable 
type will be based on the replanted type and will be calculated in 
accordance with sections 3 and 7 of the Basic Provisions and section 3 
of these Crop Provisions.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions:
    (a) We will not insure any acreage that does not meet the rotation 
requirements, if applicable, contained in the Special Provisions; or
    (b) Any acreage of the insured crop damaged before the final 
planting date, to the extent that most producers of the crop or acreage 
with similar characteristics in the area would normally not further care 
for the crop, must be replanted unless we agree that it is not practical 
to replant. We will not require you to replant if it is not practical to 
replant the type of dry peas originally planted.

                           9. Insurance Period

    In addition to the provisions of section 11 of the Basic Provisions:
    (a) Coverage for Austrian Winter Peas, will begin on the earlier of 
March 16 or the date we agree to accept the acreage for insurance, but 
not before March 1; and
    (b) The calendar date for the end of the insurance period for all 
insurable types of dry peas in the county is September 30 of the crop 
year in which the crop normally is harvested unless otherwise specified 
in the Special Provisions.

                           10. Causes of Loss

    In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if due to a cause of 
loss contained in section 10(a) through (g) that occurs during the 
insurance period.

                11. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 of the Basic 
Provisions, the representative samples of the unharvested crop must be 
at least 10 feet wide and extend the entire length of each field in the 
unit. If you intend to destroy the crop prior to harvest, the samples 
must not be destroyed until after our inspection.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage to your pea crop covered by this 
policy, we will settle your claim by:
    (1) Multiplying the insured acreage of each dry pea type, if 
applicable, excluding contract seed peas, by its respective production 
guarantee;
    (2) Multiplying each result of section 12(b)(1) by the respective 
price election;
    (3) Totaling the results of section 12(b)(2);
    (4) Multiplying the insured acreage of each contract seed pea 
variety by its respective production guarantee;
    (5) Multiplying each result of section 12(b)(4) by the applicable 
base price;
    (6) Multiplying each result of section 12(b)(5) by your selected 
price election percentage;
    (7) Totaling the results of section 12(b)(6);
    (8) Totaling the results of section 12(b)(3) and section 12(b)(7);

[[Page 267]]

    (9) Multiplying the total production to be counted of each dry pea 
type, excluding contract seed peas, if applicable (see section 12(d)), 
by the respective price elections;
    (10) Totaling the value of all contract seed pea production (see 
section 12(c));
    (11) Totaling the results of section 12(b)(9) and section 12(b)(10);
    (12) Subtracting the result of section 12(b)(11) from the result in 
section 12(b)(8); and
    (13) Multiplying the result of section 12(b)12 by your share.
    For example:
    You have a 100 percent share in 100 acres of spring-planted smooth 
green dry edible peas in the unit, with a guarantee of 4,000 pounds per 
acre and a price election of $0.09 per pound. You are only able to 
harvest 200,000 pounds. Your indemnity would be calculated as follows:
    (1) 100 acres x 4,000 pounds = 400,000 pounds guarantee;
    (2) 400,000 pounds x $0.09 price election = $36,000.00 value of 
guarantee;
    (9) 200,000 pounds x $0.09 price election = $18,000.00 value of 
production to count; $36,000.00 value of guarantee - $18,000.00 value of 
production to count = $18,000.00 loss; and
    (13) $18,000.00 x 100 percent = $18,000.00 indemnity payment.
    You also have a 100 percent share in 100 acres of contract seed peas 
in the same unit, with a guarantee of 5,000 pounds per acre and a base 
price of $0.40 per pound. Your selected price election percentage is 75 
percent. You are only able to harvest 450,000 pounds. Your total 
indemnity for both spring-planted smooth green dry edible peas and 
contract seed peas would be calculated as follows:
    (1) 100 acres x 4,000 pounds = 400,000 pounds guarantee for the 
spring-planted smooth green dry edible pea type, and
    (4) 100 acres x 5,000 pounds = 500,000 pounds guarantee for the 
contract seed pea type;
    (2) 400,000 pounds guarantee x $0.09 price election = $36,000.00 
value of guarantee for the spring-planted smooth green dry edible pea 
type, and
    (5) 500,000 pounds guarantee x $0.40 base price = $200,000.00 gross 
value of guarantee for the contract seed pea type;
    (6) $200,000 x .75 price election percentage = $150,000 net value of 
guarantee for the contract seed pea type;
    (8) $36,000.00 + $150,000.00 = $186,000.00 total value of guarantee;
    (9) 200,000 pounds x $0.09 price election = $18,000.00 value of 
production to count for the spring-planted smooth green dry edible pea 
type, and
    (10) 450,000 pounds x $0.30 = $135,000.00 value of production to 
count for the contract seed pea type;
    (11) $18,000.00 + $135,000.00 = $153,000.00 total value of 
production to count;
    (12) $186,000.00 - $153,000.00 = $33,000.00 loss; and
    (13) $33,000.00 loss x 100 percent = $33,000.00 indemnity payment.
    (c) The value of contract seed pea production to count for each 
variety in the unit will be determined as follows:
    (1) For production meeting the minimum quality requirements 
contained in the seed company contract, and for production that does not 
meet such requirements due to uninsured causes:
    (i) Multiplying the local market price or base price per pound, 
whichever is greater, by the price election percentage you selected; and
    (ii) Multiplying the result by the number of pounds of such 
production.
    (2) For mature production not meeting the minimum quality 
requirements contained in the seed pea processor contract due to 
insurable causes, and immature production that is appraised:
    (i) Multiplying the highest local market price available for such 
dry peas by the price election percentage you selected; and
    (ii) Multiplying the result by the number of pounds of such 
production.
    (d) The total pea production to count (in pounds) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production of dry 
peas, excluding Austrian Winter Peas, may be adjusted for quality 
deficiencies in accordance with section 12 (c) or (e), if applicable); 
and
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not

[[Page 268]]

leave the required samples intact, or fail to provide sufficient care 
for the samples, our appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if the crop is not harvested; and
    (2) All harvested production from the insurable acreage.
    (e) Mature production of smooth green and yellow peas, lentils, and 
seed peas that do not qualify as contract seed peas under the policy 
terms, and that are not deliverable under the contract or are sold under 
the contract for less than the contract price, may be adjusted for 
quality deficiencies. No adjustment for quality deficiencies will be 
allowed for Austrian Winter Peas.
    (1) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality, in accordance with the United States 
Standards for Whole Dry Peas, Split Peas, and Lentils, result in 
production grading U.S. No. 2 or worse because of defects, color, 
skinned production (lentils only), odor, material weathering, or 
distinctly low quality; or
    (ii) Substances or conditions are present that are identified by the 
Food and Drug Administration or other public health organizations of the 
United States as being injurious to human or animal health.
    (2) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these Crop 
Provisions and which occurs within the insurance period;
    (ii) The deficiencies, substances, or conditions result in a net 
price for the damaged production that is less than the local market 
price;
    (iii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or by 
a disinterested third party approved by us;
    (iv) With regard to deficiencies in quality (except test weight, 
which may be determined by our loss adjuster), the samples are analyzed 
by:
    (A) A grader licensed under the United States Agricultural Marketing 
Act or the United States Warehouse Act;
    (B) A grader licensed under State law and employed by a warehouse 
operator who has a storage agreement with the Commodity Credit 
Corporation; or
    (C) A grader not licensed under State law, but who is employed by a 
warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (v) With regard to substances or conditions injurious to human or 
animal health, the samples are analyzed by a laboratory approved by us.
    (3) Dry Pea production that is eligible for quality adjustment, as 
specified in sections 12(e) (1) and (2), will be reduced as follows:
    (i) The highest local market price for the qualifying damaged 
production will be determined on the earlier of the date such damaged 
production is sold or the date of final inspection for the unit. The 
highest local market price for the qualifying damaged production will be 
determined in the local area to the extent feasible. We may obtain 
prices from any buyer of our choice. If we obtain prices from one or 
more buyers located outside your local market area, we will reduce such 
prices by the additional costs required to deliver the dry peas to those 
buyers. Discounts used to establish the net value of the damaged 
production will be limited to those that are usual, customary, and 
reasonable.
    The value will not be reduced for:
    (A) Moisture content;
    (B) Damage due to uninsured causes; or
    (C) Drying, handling, processing, or any other costs associated with 
normal harvesting, handling, and marketing of the dry peas; except, if 
the value of the damaged production can be increased by conditioning, we 
may reduce the value of the production after it has been conditioned by 
the cost of conditioning but not lower than the value of the production 
before conditioning;
    (ii) The value per pound of the damaged or conditioned production 
will be divided by the local market price to determine the quality 
adjustment factor;
    (iii) The number of pounds of the damaged or conditioned production 
will then be multiplied by the quality adjustment factor to determine 
the production count to be included in section 12(d); and
    (iv) Any production harvested from plants growing in the insured 
crop may be counted as production of the insured crop on a weight basis.

                         13. Prevented Planting

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage as specified in 7 CFR part 400, subpart T, 
and pay an additional premium, you may increase your prevented planting 
coverage to a level specified in the actuarial documents.

[62 FR 65744, Dec. 16, 1997, as amended at 63 FR 36157, July 2, 1998; 67 
FR 55691, Aug. 30, 2002]

[[Page 269]]



Sec. 457.141  Rice crop insurance provisions.

    The rice crop insurance provisions for the 2003 and succeeding crop 
years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and Reinsured Policies

                          Rice Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Flood irrigation. An irrigated practice commonly used for rice 
production whereby the planted acreage is intentionally covered with 
water that is maintained at a uniform and shallow depth throughout the 
growing season.
    Harvest. Combining or threshing the rice for grain. A crop that is 
swathed prior to combining is not considered harvested.
    Local market price. The cash price per pound for the U.S. No. 3 
grade of rough rice offered by buyers in the area in which you normally 
market the rice. Factors not associated with grading under the United 
States Standards for Rice including, but not limited to, protein and oil 
content or milling quality will not be considered.
    Planted. The uniform placement of an adequate amount of rice seed 
into a prepared seedbed by one of the following methods:
    (a) Drill seeding--Using a grain drill to incorporate the seed to a 
proper soil depth;
    (b) Broadcast seeding--Distributing seed evenly onto the surface of 
an un-flooded seedbed followed by either timely mechanical incorporation 
of the seed to a proper soil depth in the seedbed or flushing the 
seedbed with water; or
    (c) Broadcast seeding into a controlled flood--Distributing the rice 
seed onto a prepared seedbed that has been intentionally covered to a 
proper depth by water. The water must be free of movement and be 
completely contained on the acreage by properly constructed levees and 
gates.
    Acreage seeded in any other manner will not be insurable unless 
otherwise provided by the Special Provisions or by written agreement.
    Saline water. Water that contains a concentration of salt sufficient 
to cause damage to the insured crop.
    Second crop rice. The regrowth of a stand of rice following harvest 
of the initially insured rice crop that can be harvested in the same 
crop year.
    Swathed. Severance of the stem and grain head from the ground 
without removal of the rice kernels from the plant and placing in a 
windrow.
    Total milling yield. Rice production consisting of heads, second 
heads, screenings, and brewer's rice as defined by the official United 
States Standards for Rice.

                            2. Unit Division

    Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8), you may select only one price election for all 
the rice in the county insured under this policy unless the Special 
Provisions provide different price elections by type, in which case you 
may select one price election for each rice type designated in the 
Special Provisions. The price elections you choose for each type must 
have the same percentage relationship to the maximum price offered by us 
for each type. For example, if you choose 100 percent of the maximum 
price election for one type, you must also choose 100 percent of the 
maximum price election for all other types.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is November 30 
preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

------------------------------------------------------------------------
                                            Cancellation and termination
             State and county                           date
------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak,  January 15.
 McMullen, La Salle, and Dimmit Counties,
 Texas; and all Texas counties south
 thereof.
Florida..................................  February 15.
All other Texas counties and all other     February 28.
 states.
------------------------------------------------------------------------


[[Page 270]]

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the rice in the county for 
which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That is planted for harvest as grain;
    (c) That is flood irrigated; and
    (d) That is not wild rice.

                          7. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8):
    (a) We will not insure any acreage planted to rice:
    (1) The preceding crop year unless allowed by the Special 
Provisions; or
    (2) That does not meet the rotation requirements shown in the 
Special Provisions; and
    (b) Any acreage of the insured crop damaged before the final 
planting date, to the extent that producers in the area would normally 
not further care for the crop, must be replanted unless we agree that it 
is not practical to replant.

                           8. Insurance Period

    In accordance with the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8), the calendar date for the end of 
the insurance period is October 31 immediately following planting.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Adverse weather conditions (except drought);
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply if caused by an insured 
cause of loss specified in sections 9(a)(1) through (7), drought, or the 
intrusion of saline water.
    (b) In addition to the causes of loss not insured against in section 
12 of the Basic Provisions, we will not insure against any loss of 
production due to the application of saline water, except as specified 
in section 9(a)(8) of these crop provisions.

                         10. Replanting Payment

    (a) A replanting payment for rice is allowed as follows:
    (1) You must comply with all requirements regarding replanting 
payments contained under section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8);
    (2) The rice must be damaged by an insurable cause of loss to the 
extent that the remaining stand will not produce at least 90 percent of 
the production guarantee for the acreage; and
    (3) The replanted rice must be seeded at a rate that is normal for 
initially planted rice (if new seed is planted at a reduced seeding rate 
into a partially damaged stand of rice, the acreage will not be eligible 
for a replanting payment).
    (b) In accordance with the provisions of section 13 (Replanting 
Payment) of the Basic Provisions (Sec. 457.8), the maximum amount of 
the replanting payment per acre will be the lesser of 20 percent of the 
production guarantee or 400 pounds, multiplied by your price election, 
multiplied by your insured share.
    (c) When rice is replanted using a practice that is uninsurable for 
an original planting, the liability for the unit will be reduced by the 
amount of the replanting payment. The premium amount will not be 
reduced.

                11. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 
representative samples of the unharvested crop must be at least 10 feet 
wide and extend the entire length of each field in the unit. The samples 
must not be harvested or destroyed until the earlier of our inspection 
or 15 days after harvest of the balance of the unit is completed.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by its respective production 
guarantee by type, if applicable;
    (2) Multiplying each result in section 12(b)(1) by the respective 
price election by type, if applicable;
    (3) Totaling the results of section 12(b)(2);
    (4) Multiplying the total production to be counted by type, if 
applicable, (see section

[[Page 271]]

12(c) through (e)) by the respective price election;
    (5) Totaling the results of section 12(b)(4);
    (6) Subtracting the result of section 12(b)(5) from the result of 
section 12(b)(3); and
    (7) Multiplying the result of section 12(b)(6) by your share.
    (c) The total production to count (in pounds) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
section 12(d));
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage, including 
any production from a second rice crop harvested in the same crop year.
    (d) Mature rough rice may be adjusted for excess moisture and 
quality deficiencies. If moisture adjustment is applicable, it will be 
made prior to any adjustment for quality.
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of 12 percent. We may obtain 
samples of the production to determine the moisture content.
    (2) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality, in accordance with the Official United 
States Standards for Rice, result in rice not meeting the grade 
requirements for U.S. No. 3 (grades U.S. No. 4 or worse) because of red 
rice, chalky kernels or damaged kernels;
    (ii) The rice has a total milling yield of less than 68 pounds per 
hundredweight;
    (iii) The whole kernel weight is less than 55 pounds per 
hundredweight of milled rice for medium and short grain varieties;
    (iv) The whole kernel weight is less than 48 pounds per 
hundredweight of milled rice for long grain varieties; or
    (v) Substances or conditions are present that are identified by the 
Food and Drug Administration or other public health organizations of the 
United States as being injurious to human or animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions specified in section 
12(d)(2) resulted from a cause of loss against which insurance is 
provided under these crop provisions and which occurs within the 
insurance period;
    (ii) The deficiencies, substances, or conditions specified in 
section 12(d)(2) result in a net price for the damaged production that 
is less than the local market price;
    (iii) All determinations of these deficiencies, substances, or 
conditions specified in section 12(d)(2) are made using samples of the 
production obtained by us or by a disinterested third party approved by 
us;
    (iv) With regard to deficiencies in quality (except test weight, 
which may be determined by our loss adjuster), the samples are analyzed 
by:
    (A) A grader licensed under the United States Agricultural Marketing 
Act or the United States Warehouse Act;
    (B) A grader licensed under State law and employed by a warehouse 
operator who has a storage agreement with the Commodity Credit 
Corporation; or
    (C) A grader not licensed under State law, but who is employed by a 
warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (v) With regard to substances or conditions injurious to human or 
animal health, the samples are analyzed by a laboratory approved by us.
    (4) Rice production that is eligible for quality adjustment, as 
specified in sections 12(d) (2) and (3), will be reduced as follows:
    (i) In accordance with quality adjustment factors contained in the 
Special Provisions; or

[[Page 272]]

    (ii) If quality adjustment factors are not contained in the Special 
Provisions, as follows:
    (A) The market price of the qualifying damaged production and the 
local market price will be determined on the earlier of the date such 
quality adjusted production is sold or the date of final inspection for 
the unit. The price for the qualifying damaged production will be the 
market price for the local area to the extent feasible. Discounts used 
to establish the net price of the damaged production will be limited to 
those that are usual, customary, and reasonable. The price will not be 
reduced for:
    (1) Moisture content;
    (2) Damage due to uninsured causes; or
    (3) Drying, handling, processing, or any other costs associated with 
normal harvesting, handling, and marketing of the rice; except, if the 
price of the damaged production can be increased by conditioning, we may 
reduce the price of the production after it has been conditioned by the 
cost of conditioning but not lower than the value of the production 
before conditioning,
    (We may obtain prices from any buyer of our choice. If we obtain 
prices from one or more buyers located outside your local market area, 
we will reduce such prices by the additional costs required to deliver 
the rice to those buyers.);
    (B) The value of the damaged or conditioned production will be 
divided by the local market price to determine the quality adjustment 
factor; and
    (C) The number of pounds remaining after any reduction due to 
excessive moisture (the moisture-adjusted gross pounds (if appropriate)) 
of the damaged or conditioned production will then be multiplied by the 
quality adjustment factor to determine the net production to count.
    (e) Any production harvested from plants growing in the insured crop 
may be counted as production of the insured crop on a weight basis.

                         13. Prevented Planting

    Your prevented planting coverage will be 45 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[62 FR 28310, May 23, 1997, as amended at 62 FR 65174, Dec. 10, 1997; 65 
FR 56774, Sept. 20, 2000; 67 FR 55691, Aug. 30, 2002]



Sec. 457.142  Northern potato crop insurance provisions.

    The Northern Potato Crop Insurance Provisions for the 1998 and 
succeeding crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                     Northern Potato Crop Provisions

    These provisions will be applicable in: Alaska; Humboldt, Modoc, and 
Siskiyou Counties, California; Colorado; Connecticut; Idaho; Indiana; 
Iowa; Maine; Massachusetts; Michigan; Minnesota; Montana; Nebraska; 
Nevada; New York; North Dakota; Ohio; Oregon; Pennsylvania; Rhode 
Island; South Dakota; Utah; Washington; Wisconsin; and Wyoming.
    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, as applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions, with (1) controlling (2), etc.

                             1. Definitions

    Buyer. A business entity in the business of buying or processing 
potatoes, that possesses all the licenses and permits required by the 
state in which it operates, and has the facilities to accept the 
potatoes purchased.
    Certified seed. Potatoes for planting a potato crop in a subsequent 
crop year that have been found to meet the standards of the public 
agency that is responsible for the seed certification process within the 
state in which they were grown.
    Discard. Disposal of production by you, or a person acting for you, 
without receiving any value for it.
    Disposed. Any disposition of the crop including but not limited to 
sale or discard.
    Grade inspection. An inspection in which samples of production are 
obtained by us, or a party approved by us, prior to the sale, storage, 
or disposal of any lot of potatoes, or any portion of a lot and the 
potatoes are evaluated and quality (grade) determinations are made by 
us, a laboratory approved by us, or a potato grader licensed or 
certified by the applicable State or the United States Department of 
Agriculture, in accordance with the United States Standards for Grades 
of Potatoes.
    Harvest. Lifting potatoes from within the soil to the soil surface.
    Hundredweight. One hundred (100) pounds avoirdupois.

[[Page 273]]

    Local market. The area in which the insured potatoes are normally 
sold.
    Lot. A quantity of production that can be separated from other 
quantities of production by grade characteristics, load, location or 
other distinctive features.
    Processor contract. A written agreement between the producer and a 
processor, containing at a minimum:
    (a) The producer's commitment to plant and grow potatoes, and to 
deliver the potato production to the processor;
    (b) The processor's commitment to purchase the production stated in 
the contract; and
    (c) A price that will be paid to the producer for the production 
stated in the contract.
    Reduction percentage. A factor determined based on the weight of 
only freeze damaged production in a sample of potatoes in relationship 
to the total weight of the sample, and the provisions in section 
11(g)(1) of these crop provisions; and that is used to determine a 
quantity of potatoes that will not be included as production to count.
    Tuber rot. Any soft, mushy, or leaky condition of potato tissue 
(soft rot or wet breakdown as defined in the United States Standards for 
Grades of Potatoes), including, but not limited to, breakdown caused by 
Southern Bacterial Wilt, Ring Rot, or Late Blight.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election for all the potatoes 
in the county insured under this policy unless the Special Provisions 
provide different price elections by type. If the Special Provisions 
provide for different price elections by type, you may select one price 
election for each potato type designated in the Special Provisions. The 
price elections you choose for each type must have the same percentage 
relationship to the maximum price election offered by us for each type. 
For example, if you choose 100 percent of the maximum price election for 
one type, you must also choose 100 percent of the maximum price election 
for all other types.
    (b) If the production from any acreage of the insured crop is not 
harvested, the price used to determine your indemnity will be 80 percent 
of your price election.
    (c) Any acreage of potatoes damaged to the extent that similarly 
situated producers in the area would not normally further care for the 
potatoes will be deemed to have been destroyed even though you may 
continue to care for the potatoes. The price election for unharvested 
acreage will apply to such acreage.

                           3. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  4. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are March 15.

                            5. Annual Premium

    In lieu of the premium computation method contained in section 7 of 
the Basic Provisions, the annual premium amount (y) is computed by 
multiplying (a) the production guarantee by (b) the price election for 
harvested acreage, by (c) the premium rate, by (d) the insured acreage, 
by (e) your share at the time of planting, and by (f) any applicable 
premium adjustment factors contained in the actuarial documents 
(axbxcxdxexf=y).

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the potatoes in the county for which a premium rate 
is provided by the actuarial documents:
    (a) In which you have a share;
    (b) Planted with certified seed (unless otherwise permitted by the 
Special Provisions);
    (c) Planted for harvest as certified seed stock, or for human 
consumption, (unless specified otherwise in the Special Provisions);
    (d) That are not (unless allowed by the Special Provision or by 
written agreement):
    (1) Interplanted with another crop; or
    (2) Planted into an established grass or legume.

                          7. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
we will not insure any acreage that:
    (a) Does not meet the rotation requirements contained in the Special 
Provisions for the crop; or
    (b) Is damaged before the final planting date to the extent that 
similarly situated producers in the area would normally not further care 
for the crop, unless it is replanted or we agree that it is not 
practical to replant.

                           8. Insurance Period

    In accordance with the provisions of section 11 of the Basic 
Provisions, the calendar date for the end of the insurance period is the 
date immediately following planting as follows (exceptions, if any, for 
specific counties, varieties or types are contained in the Special 
Provisions):
    (a) October 1, in Alaska;
    (b) October 10 in Nebraska and Wyoming;

[[Page 274]]

    (c) October 15 in Colorado; Indiana; Iowa; Michigan; Minnesota; 
Montana; Nevada; North Dakota; South Dakota; Utah; and Wisconsin;
    (d) October 20 in Maine; and
    (e) October 31 in Humboldt, Modoc, and Siskiyou Counties, 
California; Connecticut; Idaho; Massachusetts; New York; Ohio; Oregon; 
Pennsylvania; Rhode Island; and Washington.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur within the insurance period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but only if sufficient and proper pest control measures 
are used;
    (4) Plant disease, but only if sufficient and proper disease control 
measures are used;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period (see section 9(a)(1) 
through (7)).
    (b) In addition to the causes of loss not insured against as 
contained in section 12 of the Basic Provisions, we will not insure 
against any loss of production due to:
    (1) Damage that occurs or becomes evident after the end of the 
insurance period, including, but not limited to, damage that occurs or 
becomes evident in storage; or
    (2) Causes, such as freeze after certain dates, as limited by the 
Special Provisions.

                10. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, you must leave representative samples at least 10 feet wide 
and extending the entire length of each field in the unit if you are 
going to destroy any acreage of the insured crop that will not be 
harvested.
    (b) We must be given the opportunity to perform a grade inspection 
on the production from any unit for which you have given notice of 
damage.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which acceptable production records were not provided; and
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee (If there is unharvested acreage in the unit, the harvested 
and unharvested acreage will be determined separately);
    (2) Multiplying each result in section 11(b)(1) by the respective 
price election (The price election may be limited as specified in 
section 3.);
    (3) Totaling the results of section 11(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable (see section 11(d)), by the respective price election;
    (5) Totaling the results of section 11(b)(4);
    (6) Subtracting the results of section 11(b)(5) from the result in 
section 11(b)(3); and
    (7) Multiplying the result of section 11(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 harvested acres of potatoes in 
the unit, with a guarantee of 150 hundredweight per acre and a price 
election of $4.00 per hundredweight. You are only able to harvest 10,000 
hundredweight. Your indemnity would be calculated as follows:
    (1) 100 acres x 150 hundredweight = 15,000 hundredweight guarantee;
    (2) 15,000 hundredweight x $4.00 price election = $60,000.00 value 
of guarantee;
    (4) 10,000 hundredweight x $4.00 price election = $40,000.00 value 
of production to count;
    (6) $60,000.00 - $40,000.00 = $20,000.00 loss; and
    (7) $20,000.00 x 100 percent = $20,000.00 indemnity payment.
    You also have a 100 percent share in 100 unharvested acres of 
potatoes in the same unit, with a guarantee of 150 hundredweight per 
acre and a price election of $3.20 per hundredweight. The price election 
for unharvested acreage is 80.0 percent of your elected price election 
($4.00 x 0.80 = $3.20.) This unharvested acreage was appraised at 35 
hundredweight per acre for a total of 3500 hundredweight as production 
to count. Your total indemnity for the harvested and unharvested acreage 
would be calculated as follows:
    (1) 100 acres x 150 hundredweight = 15,000 hundredweight guarantee 
for the harvested acreage, and 100 acres x 150 hundredweight = 15,000 
hundredweight guarantee for the unharvested acreage;
    (2) 15,000 hundredweight guarantee x $4.00 price election = 
$60,000.00 value of guarantee for the unharvested acreage, and 15,000 
hundredweight guarantee x $3.20 price election = $48,000.00 value of 
guarantee for the unharvested acreage;
    (3) $60,000.00 + $48,000.00 = $108,000.00 total value of guarantee;
    (4) 10,000 hundredweight x $4.00 price election = $40,000.00 value 
of production to count

[[Page 275]]

for the harvested acreage, and 3500 hundredweight x $3.20 = $11,200.00 
value of production to count for the unharvested acreage;
    (5) $40,000.00 + $11,200.00 = $51,200.00 total value of production 
to count;
    (6) $108,000.00 - $51,200.00 = $56,800.00 loss; and
    (7) $56,800.00 loss x 100 percent = $56,800.00 indemnity payment.
    (c) The extent of any quality loss must be determined based on 
samples obtained no later than the time the potatoes are placed in 
storage, if the production is stored prior to sale, or the date they are 
delivered to a buyer, wholesaler, packer, broker, or other handler if 
production is not stored.
    (d) The total production to count (in hundredweight) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is put to another use without our consent;
    (C) That is damaged solely by uninsured causes;
    (D) From which any production is disposed of without a grade 
inspection; or
    (E) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Production lost due to harvest prior to full maturity. 
Production to count from such acreage will be determined by increasing 
the amount of harvested production by 2 percent per day for each day the 
potatoes were harvested prior to the date the potatoes would have 
reached full maturity. The date the potatoes would have reached full 
maturity will be considered to be 45 days prior to the calendar date for 
the end of the insurance period, unless otherwise specified in the 
Special Provisions. This adjustment will not be made if the potatoes are 
damaged by an insurable cause of loss, and leaving the crop in the field 
would either reduce production or decrease quality;
    (iv) Unharvested production (the value of unharvested production 
will be calculated using the reduced price election determined in 
section 2(b) and unharvested production may be adjusted in accordance 
with sections 11(e), (f), (g), and (h)); and
    (v) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The price used to determine the 
amount of any indemnity will be limited as specified in section 2 even 
if the representative samples are harvested. The amount of production to 
count for such acreage will be based on the harvested production or 
appraisals from the samples at the time harvest should have occurred. If 
you do not leave the required samples intact, or fail to provide 
sufficient care for the samples, our appraisal made prior to giving you 
consent to put the acreage to another use will be used to determine the 
amount of production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage (the amount 
of production prior to the sorting or discarding of any production).
    (e) Potato production is eligible for quality adjustment if:
    (1) The potatoes have freeze damage or tuber rot that is evident at, 
or prior to, the end of the insurance period; and
    (2) A grade inspection is performed.
    (f) Potato production that is eligible for quality adjustment, as 
specified in section 11(e), with 5 percent damage or less (by weight) 
will be adjusted 0.1 percent for each 0.1 percent of damage through 5.0 
percent.
    (g) Potato production that is eligible for quality adjustment, as 
specified in section 11(e), with 5.1 percent damage or more (by weight) 
will be adjusted as follows:
    (1) For potatoes damaged by freeze, production will be reduced 0.1 
percent for each 0.1 percent of damage through 5.0 percent, 0.5 percent 
for each 0.1 percent of damage from 5.1 through 15.0 percent, and by 1.0 
percent for each 0.1 percent of damage from 15.1 through 19.5 percent. 
However, if you do not discard any harvested production within 21 days 
of the end of the insurance period that has freeze damage in excess of 
17.9 percent, we will include 15 percent of such production when 
determining the amount of production to count.
    (2) For potatoes that have tuber rot due to an insurable cause other 
than freeze, production to count will be determined as follows:
    (i) For potatoes for which a price is agreed upon between you and a 
buyer within 21 days (60 days if the Northern Potato Crop Insurance 
Storage Coverage Endorsement is applicable) if the end of the insurance 
period, or that are delivered to a buyer within 21 days (60 days if the 
Northern Potato Crop Insurance Storage Coverage Endorsement is 
applicable) of the end of the insurance period, by dividing the price 
received or that will be received per hundredweight by the highest

[[Page 276]]

price election designated in the Special Provisions for the insured 
potato type, and multiplying the result (not to exceed 1.0) by the 
number of hundredweight of sold production. If production is sold for a 
price lower than the value appropriate to and representative of the 
local market, we will determine the value of the production based on the 
price you could have received in the local market;
    (ii) For harvested potatoes discarded within 21 days (60 days if the 
Northern Potato Crop Insurance Storage Coverage Endorsement is 
applicable) of the end of the insurance period and appraised unharvested 
production that could:
    (A) Not have been sold, the production to count will be zero; or
    (B) Have been sold, the production will be reduced as follows (all 
percentage points of damage will be rounded to the nearest 0.1 percent):
    (1) 0.1 percent for each 0.1 percent of damage through 5.0 percent;
    (2) 05. percent for each 0.1 percent of damage from 5.1 percent 
through 6.0 percent;
    (3) 1.0 percent for each 0.1 percent of damage from 6.1 through 8.0 
percent;
    (4) 2.0 percent for each 0.1 percent of damage from 8.1 through 9.0 
percent; and
    (5) 2.5 percent for each 0.1 percent of damage from 9.1 through 10.4 
percent.
    (iii) For potatoes for which a price is not agreed upon between you 
and a buyer within 21 days (60 days if the Northern Potato Crop 
Insurance Storage Coverage Endorsement is applicable) of the end of the 
insurance period and that remain in storage 22 or more days (61 or more 
days if the Northern Potato Crop Insurance Storage Coverage Endorsement 
is applicable) after the end of the insurance period, adjustment will be 
made in accordance with section 11(g)(2)(ii)(B).
    (h) When a combination of freeze damage or a tuber rot condition is 
5.1 percent (by weight) or greater, the amount of production to count 
for production affected by tuber rot will first be determined in 
accordance with section 11(g)(2). If production is not sold within the 
time frame specified in section 11(g)(2), this amount will be further 
adjusted as follows:
    (1) The percentage of potatoes with freeze damage will be determined 
by dividing the weight of potatoes with only freeze damage in 
representatives samples of the production by the total weight of the 
samples;
    (2) The reduction percentage will be determined based on the result 
of section 11(h)(1) and section 11(g)(1); and
    (3) The reduction percentage determined in section 11(h)(2) will be 
multiplied by the amount of production determined in accordance with 
section 11(g)(2).

                         12. Prevented Planting

    Your prevented planting coverage will be 25 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional coverage, as specified in 7 CFR part 400, subpart T, and pay 
an additional premium, you may increase your prevented planting coverage 
to a level specified in the actuarial documents.

[62 FR 65331, Dec. 12, 1997]



Sec. 457.143  Northern potato crop insurance--quality endorsement.

    The Northern Potato Crop Insurance Quality Endorsement provisions 
for the 1998 and succeeding years are as follows:
    FCIC policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

           Northern Potato Crop Insurance Quality Endorsement

    1. In return for payment of the additional premium designated in the 
actuarial documents, this endorsement is attached to and made part of 
your Northern Potato Crop Provisions subject to the terms and conditions 
described herein. In the event of a conflict between the Northern Potato 
Crop Provisions and this endorsement, this endorsement will control.
    2. You must elect this endorsement on or before the sales closing 
date for the initial crop year in which you wish to insure your potatoes 
under this endorsement. This endorsement will continue in effect until 
canceled. It may be canceled by either you or us for any succeeding crop 
year by giving written notice to the other party on or before the 
cancellation date.
    3. All acreage of potatoes insured under the Northern Potato Crop 
Provisions will be insured under this endorsement except:
    (a) Any acreage specifically excluded by the actuarial documents; 
and
    (b) Any acreage grown for seed.
    4. We will adjust production to count (determined in accordance with 
section 15 of the Basic Provisions and section 11 of the Northern Potato 
Crop Provisions) from (1) unharvested acreage; (2) harvested acreage 
that is stored after a grade inspection; or (3) that is marketed after a 
grade inspection; and that contains potatoes that grade less than U.S. 
No. 2 due to:
    (a) Internal defects (the number of potatoes with such defects must 
be in excess of the tolerance allowed for U.S. No. 2 grade potatoes on a 
lot basis and must not be separable from undamaged production using

[[Page 277]]

methods used by the potato packers or processors to whom you normally 
deliver your potato production), will be adjusted as follows:
    (1) For potatoes for which a price is agreed upon in writing between 
you and a buyer within 21 days (60 days if the Northern Potato Crop 
Insurance Storage Coverage Endorsement is applicable) of the end of the 
insurance period, or that are delivered to a buyer within 21 days (60 
days if the Northern Potato Crop Insurance Storage Coverage Endorsement 
is applicable) of the end of the insurance period, by multiplying the 
production to count by the factor (not to exceed 1.0) that results from 
dividing the price received or that will be received per hundredweight 
of the damaged production by the highest available price election. This 
method of adjustment will not be performed if it has already been 
performed under the terms of section 11(g)(2)(i) of the Northern Potato 
Crop Insurance Provisions. If production is sold for a price lower than 
the value appropriate to and representative of the local market, we will 
determine the value of the production based on the price you could have 
received in the local market.
    (2) For harvested potatoes discarded within 21 days (60 days if the 
Northern Potato Crop Insurance Storage Coverage Endorsement is 
applicable) of the end of the insurance period and appraised unharvested 
production that could:
    (i) Not have been sold, the production to count will be zero; or
    (ii) Have been sold, the production to count will be determined in 
accordance with section 4(a)(1). The price used for the damaged 
production will be the price you could have received in the local 
market.
    (3) For potatoes for which a price is not agreed upon between you 
and a buyer within 21 days (60 days if the Northern Potato Crop 
Insurance Storage Coverage Endorsement is applicable) of the end of the 
insurance period and that remain in storage 22 or more days (61 or more 
days if the Northern Potato Crop Insurance Storage Coverage Endorsement 
is applicable) after the end of the insurance period, production to 
count will be determined in accordance with section 4(b).
    (b) Factors other than those specified in section 4(a), by 
multiplying by a factor (not to exceed 1.0) that is determined as 
follows:
    (1) The combined weight of sampled potatoes that grade U.S. No. 2 or 
better and that are damaged by freeze or tuber rot will be divided by 
the total sample weight; and
    (2) The percentage determined in section 4(b)(1) above will be 
divided by the applicable percentage factor determined in accordance 
with section 9.
    5. Potatoes harvested or appraised prior to full maturity that do 
not grade U.S. No. 2 due solely to size will be considered to have met 
U.S. No. 2 standards unless the potatoes are damaged by an insurable 
cause of loss and leaving the crop in the field would either reduce 
production or decrease quality.
    6. Production to count for potatoes destroyed, stored or marketed 
without a grade inspection will be 100 percent of the gross weight of 
such potatoes.
    7. All determinations must be based upon a grade inspection.
    8. The actuarial documents may provide ``U.S. No. 1'' in place of 
``U.S. No. 2'' as used in this endorsement. If both U.S. No. 1 and 2 are 
available in the actuarial documents, you may elect U.S. No. 1 or 2 by 
potato type or group, if separate types or groups are specified in the 
Special Provisions.
    9. Percentage factor means the historical average percentage of 
potatoes grading U.S. No. 2 or better, by type, determined from your 
records. If at least 4 continuous years of records are available, the 
percentage factor will be the simple average of the available records 
not to exceed 10 years. If less than four years of records are 
available, the percentage factor will be determined based on a 
combination of your records and the percentage factor contained in the 
Special Provisions.

[62 FR 65335, Dec. 12, 1997]



Sec. 457.144  Northern potato crop insurance--processing quality 
endorsement

    The Northern Potato Crop Insurance Processing Quality Endorsement 
provisions for the 1998 and succeeding crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

      Northern Potato Crop Insurance Processing Quality Endorsement

    1. In return for payment of the additional premium designated in the 
actuarial documents, this endorsement is attached to and made part of 
your Northern Potato Crop Provisions and Quality Endorsement subject to 
the terms and conditions described herein. In the event of a conflict 
between the Northern Potato Crop Provisions or Quality Endorsement and 
this endorsement, this endorsement will control.
    2. You must have a Northern Potato Quality Endorsement in place and 
elect this endorsement on or before the sales closing date for the 
initial crop year in which you wish to insure your potatoes under this 
endorsement. This endorsement may be canceled by

[[Page 278]]

either you or us for any succeeding crop year by giving written notice 
to the other party on or before the cancellation date.
    3. All terms of the Northern Potato Quality Endorsement not modified 
by this endorsement will be applicable to acreage covered under this 
endorsement.
    4. A processor contract must be executed with a potato processor for 
the potato types insured under this endorsement and a copy submitted to 
us on or before the acreage reporting date for potatoes. If you elect 
this endorsement, all insurable acreage of production under contract 
with the processor must be insured under this endorsement.
    5. When the processor contract requires the processor to purchase a 
stated amount of production, rather than all of the production from a 
stated number of acres, the insurable acreage will be determined by 
dividing the stated amount of production by the approved yield for the 
acreage. The number of acres insured under this endorsement will not 
exceed the actual number of acres planted to the potato types and which 
are needed to fulfill the contract.
    6. In lieu of the provisions contained in section 4 of the Northern 
Potato Quality Endorsement, production that is rejected by the processor 
will be adjusted as follows: Production to count (determined in 
accordance with section 15 of the Basic Provisions and section 11 of the 
Northern Potato Crop Provisions) from (1) unharvested acreage; (2) 
harvested acreage that is stored after a grade inspection; or (3) that 
is marketed after a grade inspection; and that contains potatoes that:
    (a) Grade less than U.S. No. 2 due to internal defects, a specific 
gravity lower than the lesser of 1.074 or the minimum acceptable amount 
specified in the processor contract, or a fry color of No. 3 or darker 
due to either sugar exceeding 10 percent or sugar ends exceeding 19 
percent (the number of potatoes with such defects must be in excess of 
the tolerance allowed for U.S. No. 2 grade potatoes on a lot basis and 
must not be separable from undamaged production using methods used by 
the processors to which you normally deliver your potato production), 
will be adjusted as follows:
    (1) For potatoes for which a price is agreed upon in writing between 
you and a buyer within 21 days (60 days if the Northern Potato Crop 
Insurance Storage Coverage Endorsement is applicable) of the end of the 
insurance period, or that are delivered to a buyer within 21 days (60 
days if the Northern Potato Crop Insurance Storage Coverage Endorsement 
is applicable) of the end of the insurance period, by multiplying the 
production to count by the factor (not to exceed 1.0) that results from 
dividing the price received or that will be received per hundredweight 
of the damaged production by the highest available price election. This 
method of adjustment will not be performed if it has already been 
performed under the terms of section 11(g)(2)(i) of the Northern Potato 
Crop Insurance Provisions. If production is sold for a price lower than 
the value appropriate and representative of the local market, we will 
determine the value of the production based on the price you could have 
received in the local market.
    (2) For harvested potatoes discarded within 21 days (60 days if the 
Northern Potato Crop Insurance Storage Coverage Endorsement is 
applicable) of the end of the insurance period and appraised unharvested 
production that could:
    (i) Not have been sold, the production to count will be zero; or
    (ii) Have been sold, the production to count will be determined in 
accordance with section 6(a)(1). The price used for the damaged 
production will be the price you could have received in the local 
market.
    (3) For potatoes for which a price is not agreed upon in writing 
between you and a buyer within 21 days (60 days if the Northern Potato 
Crop Insurance Storage Coverage Endorsement is applicable) of the end of 
the insurance period and that remain in storage 22 or more days (61 or 
more days if the Northern Potato Crop Insurance Storage Coverage 
Endorsement is applicable) after the end of the insurance period, 
production to count will be determined in accordance with section 6(b).
    (b) Grade less than U.S. No. 2 due to factors other than those 
specified in section 6(a) will be multiplied by a factor (not to exceed 
1.0) that is determined as follows:
    (1) The combined weight of sampled potatoes that grade U.S. No. 2 or 
better and that are damaged by freeze or tuber rot will be divided by 
the total sample weight; and
    (2) The percentage determined in section 6(b)(1) above will be 
divided by the applicable percentage factor determined in accordance 
with section 10.
    7. All grade determinations for the purposes of this endorsement 
will be made using the United States Standards for Grades of Potatoes 
for Processing or Chipping.
    8. All determinations must be based upon a grade inspection.
    9. The actuarial documents may provide ``U.S. No. 1'' in place of 
``U.S. No. 2'' as used in this endorsement. If both U.S. No. 1 and 2 are 
available in the actuarial documents, you may elect U.S. No. 1 or 2 by 
potato type or group, if separate types or groups are specified in the 
Special Provisions.
    10. Percentage factor means the historical average percentage of 
potatoes grading U.S. No. 2 or better, by type, determined from your 
records. If at least 4 continuous years of records are available, the 
percentage factor will be the simple average of the available records 
not to exceed 10 years. If less than

[[Page 279]]

four years of records are available, the percentage factor will be 
determined based on a combination of your records and the percentage 
factor contained in the Special Provisions.

[62 FR 65336, Dec. 12, 1997]



Sec. 457.145  Potato crop insurance--certified seed endorsement.

    The potato Certified Seed Endorsement provisions for the 2001 and 
succeeding crop years are as follows:
    FCIC policies:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

            Potato Crop Insurance Certified Seed Endorsement

    1. In return for payment of the additional premium designated in the 
actuarial documents, this endorsement is attached to and made part of 
your Northern Potato Crop Provisions subject to the terms and conditions 
described herein. In the event of a conflict between the Northern Potato 
Provisions and this endorsement, this endorsement will control.
    2. For the purpose of this endorsement, the term ``potato certified 
seed program'' means the state program administered by the public agency 
responsible for the seed certification process within the state in which 
the seed is produced.
    3. You must elect this endorsement on or before the sales closing 
date for the initial crop year you wish to insure your potatoes under 
this endorsement. This endorsement will continue in effect until 
canceled. It may be canceled by either you or us for any succeeding crop 
year by giving written notice to the other party on or before the 
cancellation date.
    4. All potatoes grown on insurable acreage and that are entered into 
the potato seed certification program administered by the state in which 
the seed is grown must be insured unless limited by section 5 below.
    5. Your certified seed production guarantee per-acre will be the 
per-acre production guarantee used to cover the same acreage under the 
terms of the Northern Potato Crop Provisions. However, unless a written 
agreement provides otherwise, if the total amount of insurable certified 
seed acreage you have for the current crop year is greater than 125 
percent of your average number of acres entered into and passing 
certification in the potato certified seed program in the three previous 
calendar years, your certified seed production guarantee for each unit 
will be reduced as follows:
    6. You must provide acceptable records of your certified seed potato 
acreage and production for the previous three years. These records must 
clearly indicate the number of your acres entered into the potato seed 
certification program administered by the state in which the seed is 
grown.
    7. All potatoes insured for certified seed production must be 
produced and managed in accordance with standards, practices, and 
procedures required for certification by the state's certifying agency 
and applicable regulations.
    8. If, due to insurable causes occurring within the insurance 
period, the amount of certified seed you produce is less than your 
certified seed production guarantee, we will settle your claim by:
    (a) Multiplying the insured acreage by its respective certified seed 
production guarantee;
    (b) Multiplying each result in section 8(a) by the dollar amount per 
hundredweight contained in the Special Provisions for production covered 
under this endorsement;
    (c) Totaling the results of section 8(b);
    (d) Multiplying the number of hundredweight of production that 
qualify as certified seed and any amount of production lost due to 
uninsured causes, or that does not qualify as certified seed due to 
uninsured causes, by the dollar amount per hundredweight contained in 
the Special Provisions for production covered under this endorsement;
    (e) Subtracting the result of section 8(d) from the result of 
section 8(c); and
    (f) Multiplying the result of section 8(e) by your share.
    9. You must notify us of any loss under this endorsement not later 
than 14 days after you receive notice from the state certification 
agency that any acreage or production has failed certification. Nothing 
herein extends the insurance period beyond the time period specified in 
section 8 of the Northern Potato Crop Provisions and section 11 of the 
Basic Provisions.
    10. Acreage covered under the terms of this endorsement will have 
the same unit structure as provided under the Basic Provisions and the 
Northern Potato Crop Provisions. For example, if you have two optional 
units (00101 and 00102) under your Northern Potato Crop Insurance Policy 
and you elect this endorsement, you will also have two optional units 
(00201 and 00202) for certified seed coverage, provided that certified 
seed is grown in both units 00101 and 00102. Or, if you have two basic 
units (00100 and 00200) under your Northern Potato Crop Insurance Policy 
and you elect this endorsement, you will also have two basic units 
(00300 and 00400) for certified seed coverage, provided that certified 
seed is grown in both units 00100 and 00200. In the event certified seed 
acreage is not grown

[[Page 280]]

in the same optional or basic units as acreage covered under the Basic 
Provisions and the Northern Potato Crop Provisions, certified seed units 
will be established in accordance with the unit division provisions 
contained in the Basic Provisions and the Northern Potato Crop 
Provisions. For example, if a basic unit is divided into two optional 
units for potato acreage covered under the Basic Provisions and the 
Northern Potato Crop Provisions, but certified seed is grown in only one 
of those optional units, the certified seed acreage will be insured as 
one basic unit.
    11. Any production that does not qualify as certified seed because 
of varietal mixing or your failure to follow the standard practices and 
procedures required for certification will be considered as lost due to 
uninsured causes.

[62 FR 65337, Dec. 12, 1997, as amended at 64 FR 71271, Dec. 21, 1999]



Sec. 457.146  Northern potato crop insurance--storage coverage 
endorsement.

    The Northern Potato Crop Insurance Storage Coverage Endorsement 
provisions for the 1998 and succeeding years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

       Northern Potato Crop Insurance Storage Coverage Endorsement

    1. In return for payment of the required additional premium as 
contained in the actuarial documents, this endorsement is attached to 
and made part of your Northern Potato Crop Provisions subject to the 
terms and conditions described herein. In the event of a conflict 
between the Northern Potato Crop Provisions and this endorsement, this 
endorsement will control.
    2. You must elect this endorsement on or before the sales closing 
date for the initial crop year in which you wish to insure your potatoes 
under this endorsement. This endorsement will continue in effect until 
canceled. It may be canceled by either you or us for any succeeding crop 
year by giving written notice to the other party on or before the 
cancellation date.
    3. Potato production grown under a contract that requires the 
production to be delivered to a buyer within three days of harvest will 
not be insured under this endorsement. When such contract requires 
delivery of a stated amount of production, rather than all of the 
production from a stated amount of acres, the number of acres not 
insured under this endorsement will be determined by dividing the stated 
amount of production by the approved yield for the acreage. All other 
potato production insured under the Northern Potato Crop Provisions must 
be insured under this endorsement unless the Special Provisions allow 
you to exclude certain potato varieties, types, or groups from this 
endorsement, and you elect to exercise this option. If you elect this 
endorsement, such exclusions must be shown annually on your acreage 
report and will be applicable to all acreage of the excluded varieties, 
types, or groups for the crop year.
    4. When production from separate insurance units, basic or optional, 
is commingled in storage, the production to count for each unit will be 
allocated pro rata based on the production placed in storage from each 
unit. Such allocation will be allowed only if verifiable records of 
production placed in storage are available by unit. If you do not have 
verifiable records, all units without verifiable records will be 
combined in accordance with section 11 of the Northern Potato Crop 
Provisions. For example, if 500 hundredweight from one unit are 
commingled with 1,500 hundredweight from another unit and the production 
to count from the stored production is 1,000 hundredweight, 250 
hundredweight of production to count will be allocated to the unit 
contributing 500 hundredweight and 750 hundredweight to the unit 
contributing 1500 hundredweight to the stored production. This provision 
does not eliminate or change any other requirement contained in this 
policy to provide or maintain separate records of acreage or production 
by unit.
    5. The extended coverage provided by this endorsement will be 
applicable only if:
    (a) Insured potatoes are damaged within the insurance period by an 
insured cause other than freeze that later results in:
    (1) Tuber rot as defined in the Northern Potato Crop Provisions, to 
the extent that 5.1 percent (by weight) or more of the insured 
production is affected;
    (2) Internal defects to the extent that such defects are in excess 
of the amount allowed for the U.S. grade standard you elected for 
purposes of coverage under the Northern Potato Crop Insurance Quality 
Endorsement. Such defects must not be separable from undamaged 
production using methods used by the packers or processors to which you 
normally deliver your potato production. This coverage is applicable 
only to production covered under the Northern Potato Crop Insurance 
Quality Endorsement; or
    (3) A specific gravity lower than the lesser of 1.074 or the minimum 
acceptable amount specified in the processor contract, or a fry color of 
No. 3 or darker due to either sugar

[[Page 281]]

exceeding 10 percent or sugar ends exceeding 19 percent. This coverage 
is applicable only to production covered under the Northern Potato Crop 
Insurance Processing Quality Endorsement.
    (b) You notify us within 72 hours of your initial discovery of any 
damage that has or that may later result in the quality deficiencies 
specified in section 5(a);
    (c) The percentage of production that has any of the quality 
deficiencies specified in section 5(a) is determined no later than 60 
days after the end of the insurance period; and
    (d) The potatoes are evaluated and quality (grade) determinations 
are made by us, a laboratory approved by us, or a potato grader licensed 
or certified by the applicable State or the United States Department of 
Agriculture, in accordance with the United States Standards for Grades 
of Potatoes. Samples of damaged production must be obtained by us or 
party approved by us prior to the sale or disposal of any lot of 
potatoes. Or, if production is not sold or disposed of within 60 days of 
the end of the insurance period, samples must be obtained within 60 days 
of the end of the insurance period.

[62 FR 65337, Dec. 12, 1997]



Sec. 457.147  Central and Southern potato crop insurance provisions.

    The Central and Southern Potato Crop Insurance Provisions for the 
1999 and succeeding crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

               Central and Southern Potato Crop Provisions

    These provisions will be applicable in: Alabama; Arizona; all 
California counties except Humboldt, Modoc and Siskiyou; Delaware; 
Florida; Georgia; Maryland; Missouri; New Jersey; New Mexico; North 
Carolina; Oklahoma; Texas; and Virginia.
    If a conflict exists among the policy provisions, the order of 
priority is as follows:
    (1) The Catastrophic Risk Protection Endorsement, as applicable; (2) 
the Special Provisions; (3) these Crop Provisions; and (4) the Basic 
Provisions, with (1) controlling (2), etc.

                             1. Definitions

    Certified seed. Potatoes for planting a potato crop in a subsequent 
crop year that have been found to meet the standards of the public 
agency that is responsible for the seed certification process within the 
state in which they were grown.
    Discard. Disposal of production by you, or a person acting for you, 
without receiving any value for it.
    Disposed. Any disposition of the crop including but not limited to 
sale or discard.
    Grade inspection. An inspection in which samples of production are 
obtained by us, or a party approved by us, prior to the sale, storage or 
disposal of any lot of potatoes, or any portion of a lot and the 
potatoes are evaluated and quality (grade) determinations are made by 
us, a laboratory approved by us, or a potato grader licensed or 
certified by the applicable State or the United States Department of 
Agriculture, in accordance with the United States Standards for Grades 
of Potatoes.
    Harvest. Lifting potatoes from within the soil to the soil surface.
    Hundredweight. One hundred (100) pounds avoirdupois.
    Lot. A quantity of production that can be separated from other 
quantities of production by grade characteristics, load, location or 
other distinctive features.
    Planting period. The period of time between the calendar dates 
designated in the Special Provisions for the planting of spring-planted, 
summer-planted, fall-planted, or winter-planted potatoes.
    Practical to replant. In lieu of the definition of ``Practical to 
replant'' contained in section one of the Basic Provisions, practical to 
replant is defined as our determination, after loss or damage to the 
insured crop, based on factors including, but not limited to, moisture 
availability, condition of the field, marketing windows, and time to 
crop maturity, that replanting to the insured crop will allow the crop 
to attain maturity prior to the calendar date for the end of the 
insurance period. It will not be considered practical to replant after 
the end of the late planting period, or the end of the planting period 
in which initial planting took place in counties for which the Special 
Provisions designates separate planting periods, unless replanting is 
generally occurring in the area.

                            2. Unit Division

    A basic unit, as defined in section 1 of the Basic Provisions, will 
be divided into additional basic units by planting period.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 2 of the Basic 
Provisions, you may select only one price election for all the potatoes 
in the county insured under this policy unless the Special Provisions 
provide different price elections by type. If the Special

[[Page 282]]

Provisions provide for different price elections by type, you may select 
one price election for each potato type designated in the Special 
Provisions. The price elections you choose for each type must have the 
same percentage relationship to the maximum price election offered by us 
for each type. For example, if you choose 100 percent of the maximum 
price election for one type, you must also choose 100 percent of the 
maximum price election for all other types.
    (b) If the production from any acreage of the insured crop is not 
harvested, the price used to determine your indemnity will be 80 percent 
of your price election.
    (c) Any acreage of potatoes damaged to the extent that similarly 
situated producers in the area would not normally further care for the 
potatoes will be deemed to have been destroyed even though you may 
continue to care for the potatoes. The price election for unharvested 
acreage will apply to such acreage.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is:
    (a) June 30 preceding the cancellation date for counties with a 
September 30 cancellation date;
    (b) September 30 preceding the cancellation date for counties with a 
November 30 or December 31 cancellation date; and
    (c) November 30 preceding the cancellation date for counties with a 
February 28 or March 15 cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
                 State and county                          Dates
------------------------------------------------------------------------
Pinellas, Hillsborough, Polk, Oseola, and Brevard  Sep. 30.
 Counties, Florida, and all Florida counties
 lying south thereof.
Arizona; all California counties; and all Texas    Nov. 30.
 counties except Bailey, Castro, Dallam, Deaf
 Smith, Floyd, Gaines, Hale, Hartley, Haskell,
 Knox, Lamb, Parmer, Swisher, and Yoakum.
Alabama; Delaware; Georgia; Maryland; Missouri;    Dec. 31.
 New Jersey; North Carolina; Virginia; and all
 Florida counties except Pinellas, Hillsborough,
 Polk, Oseola, and Brevard Counties, Florida, and
 all Florida counties to the south thereof.
Oklahoma; and Haskell and Knox Counties, Texas...  Feb. 28.
Bailey, Castro, Dallam, Deaf Smith, Floyd,         Mar. 15.
 Gaines, Hale, Hartley, Lamb, Parmer, Swisher,
 and Yoakum Counties, Texas; and New Mexico.
------------------------------------------------------------------------

                            6. Annual Premium

    In lieu of the premium computation method contained in section 7 of 
the Basic Provisions, the annual premium amount (y) is computed by 
multiplying (a) the production guarantee by (b) the price election for 
harvested acreage, by (c) the premium rate, by (d) the insured acreage, 
by (e) your share at the time of planting, and by (f) any applicable 
premium adjustment factors contained in the actuarial documents 
(axbxcxdxexf = y).

                             7. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the potatoes in the county for which a premium rate 
is provided by the actuarial documents:
    (a) In which you have a share;
    (b) Planted with certified seed (unless otherwise permitted by the 
Special Provisions);
    (c) Planted for harvest as certified seed stock, or for human 
consumption, (unless specified otherwise in the Special Provisions);
    (d) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Interplanted with another crop; or
    (2) Planted into an established grass or legume.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
we will not insure any acreage that:
    (a) Does not meet the rotation requirements contained in the Special 
Provisions for the crop; or
    (b) Is damaged before the final planting date or before the end of 
the applicable planting period in counties for which the Special 
Provisions designate separate planting periods, to the extent that 
similarly situated producers in the area would normally not further care 
for the crop, unless it is replanted or we agree that it is not 
practical to replant.

                           9. Insurance Period

    In accordance with the provisions of section 11 of the Basic 
Provisions, the calendar date for the end of the insurance period is the 
date immediately following planting as follows (exceptions, if any, for 
specific counties, varieties or types are contained in the Special 
Provisions):
    (a) July 15 in Missouri; North Carolina; and all Texas counties 
except Bailey, Castro, Dallam, Deaf Smith, Floyd, Gaines, Hale, Haskell, 
Hartley, Knox, Lamb, Parmer, Swisher, and Yoakum.
    (b) July 25 in Arizona; and Virginia.

[[Page 283]]

    (c) August 15 in Oklahoma; and Haskell and Knox Counties, Texas.
    (d) In Alabama; California; Florida; and Georgia; the dates 
established by the Special Provisions for each planting period; and
    (e) October 15 in Bailey, Castro, Dallam, Deaf Smith, Floyd, Gains, 
Hale, Hartley, Lamb, Parmer, Swisher, and Yoakum Counties, Texas; 
Delaware; Maryland; New Jersey; and New Mexico.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss which occur within the insurance period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but only if sufficient and proper pest control measures 
are used;
    (4) Plant disease, but only if sufficient and proper disease control 
measures are used;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period (see section 10(a) (1) 
through (7)).
    (b) In addition to the causes of loss not insured against as 
contained in section 12 of the Basic Provisions, we will not insure 
against any loss of production due to:
    (1) Damage that occurs or becomes evident after the end of the 
insurance period, including, but not limited to, damage that occurs 
after potatoes have been placed in storage; or
    (2) Causes, such as freeze after certain dates, as limited by the 
Special Provisions.

                11. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, you must leave representative samples at least 10 feet wide 
and extending the entire length of each field in the unit if you are 
going to destroy any acreage of the insured crop that will not be 
harvested.
    (b) We must be given the opportunity to perform a grade inspection 
on the production from any unit for which you have given notice of 
damage.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which acceptable production records were not provided; and
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee (if there is unharvested acreage in the unit, the harvested 
and unharvested acreage will be determined separately);
    (2) Multiplying each result in section 12(b)(1) by the respective 
price election (the price election may be limited as specified in 
section 3.);
    (3) Totaling the results of section 12(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable, (see section 12(d)) by the respective price election;
    (5) Totaling the results of section 12(b)(4);
    (6) Subtracting the results of section 12(b)(5) from the result in 
section 12(b)(3); and
    (7) Multiplying the result of section 12(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 harvested acres of potatoes in 
the unit, with a guarantee of 150 hundredweight per acre and a price 
election of $4.00 per hundredweight. You are only able to harvest 10,000 
hundredweight. Your indemnity would be calculated as follows:
    (1) 100 acres x 150 hundredweight = 15,000 hundredweight guarantee;
    (2) 15,000 hundredweight x $4.00 price election = $60,000.00 value 
of guarantee;
    (4) 10,000 hundredweight x $4.00 price election = $40,000.00 value 
of production to count;
    (6) $60,000.00-$40,000.00 = $20,000.00 loss; and
    (7) $20,000.00x100 percent = $20,000.00 indemnity payment.
    You also have a 100 percent share in 100 unharvested acres of 
potatoes in the same unit, with a guarantee of 150 hundredweight per 
acre and a price election of $3.20 per hundredweight. (The price 
election for unharvested acreage is 80.0 percent of your elected price 
election ($4.00 x 0.80 = $3.20.) This unharvested acreage was appraised 
at 35 hundredweight per acre for a total of 3,500 hundredweight as 
production to count. Your total indemnity for the harvested and 
unharvested acreage would be calculated as follows:
    (1) 100 acres x 150 hundredweight = 15,000 hundredweight guarantee 
for the harvested acreage, and
    100 acres x 150 hundredweight = 15,000 hundredweight guarantee for 
the unharvested acreage;
    (2) 15,000 hundredweight guarantee x $4.00 price election = 
$60,000.00 value of guarantee for the harvested acreage, and
    15,000 hundredweight guarantee x $3.20 price election = $48,000.00 
value of guarantee for the unharvested acreage;
    (3) $60,000.00 + $48,000.00 = $108,000.00 total value of guarantee;

[[Page 284]]

    (4) 10,000 hundredweight x $4.00 price election = $40,000.00 value 
of production to count for the harvested acreage, and
    3500 hundredweight x $3.20 = $11,200.00 value of production to count 
for the unharvested acreage;
    (5) $40,000.00 + $11,200.00 = $51,200.00 total value of production 
to count;
    (6) $108,000.00 - $51,200 = $56,800.00 loss; and
    (7) $56,800.00 loss x 100 percent = $56,800.00 indemnity payment.
    (c) The extent of any quality loss must be determined based on 
samples obtained no later than the time potatoes are placed in storage, 
if the production is stored prior to sale, or the date they are 
delivered to a buyer, wholesaler, packer, broker, or other handler if 
production is not stored.
    (d) The total production to count (in hundredweight) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is put to another use without our consent;
    (C) That is damaged solely by uninsured causes;
    (D) From which any production is disposed of without a grade 
inspection; or
    (E) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Production lost due to harvest prior to full maturity. 
Production to count from such acreage will be determined by increasing 
the amount of harvested production by 2 percent per day for each day the 
potatoes were harvested prior to the date the potatoes would have 
reached full maturity. The date the potatoes would have reached full 
maturity will be considered to be 45 days prior to the calendar date for 
the end of the insurance period, unless otherwise specified in the 
Special Provisions. This adjustment will not be made if the potatoes are 
damaged by an insurable cause of loss, and leaving the crop in the field 
would either reduce production or decrease quality.
    (iv) Unharvested production (the value of unharvested production 
will be calculated using the reduced price election determined in 
section 3(b) and unharvested production may be adjusted in accordance 
with section 12(e)); and
    (v) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The price used to determine the 
amount of any indemnity will be limited as specified in section 3 even 
if the representative samples are harvested. The amount of production to 
count for such acreage will be based on the harvested production or 
appraisals from the samples at the time harvest should have occurred. If 
you do not leave the required samples intact, or fail to provide 
sufficient care for the samples, our appraisal made prior to giving you 
consent to put the acreage to another use will be used to determine the 
amount of production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage determined 
in accordance with section 12(e).
    (e) With the exception of production with external defects, only 
marketable lots of mature potatoes will be production to count for loss 
adjustment purposes. Production not meeting the standards for grading 
U.S. No. 2 due to external defects will be determined on an individual 
potato basis for all unharvested potatoes and for any harvested potatoes 
if we determine it is practical to separate the damaged production. All 
determinations must be based upon a grade inspection.
    (1) Marketable lots of potatoes will include any lot of potatoes 
that is:
    (i) Stored;
    (ii) Sold as seed;
    (iii) Sold for human consumption; or
    (iv) Harvested and not sold or that is appraised if such lot meets 
the standards for grading U.S. No. 2 or better on a sample basis.
    (2) Marketable lots will also include any potatoes that we 
determine:
    (i) Could have been sold for seed or human consumption in the 
general marketing area;
    (ii) Were not sold as a result of uninsured causes including, but 
not limited to, failure to meet chipper or processor standards for fry 
color or specific gravity; or
    (iii) Were disposed of without our prior written consent and such 
disposition prevented our determination of marketability.
    (3) Unless included in section 12(e) (1) or (2), a potato lot will 
not be considered marketable if, due to insurable causes of damage, it:
    (i) Is partially damaged, and is salvageable only for starch, 
alcohol, or livestock feed;

[[Page 285]]

    (ii) Is left unharvested and does not meet the standards for grading 
U.S. No. 2 or better due to internal defects; or
    (iii) does not meet the standards for grading U.S. No. 2 or better 
due to external defects, is harvested, and it is not practical to 
separate the damaged production.

                         13. Prevented Planting

    Your prevented planting coverage will be 25 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional coverage, as specified in 7 CFR part 400, subpart T, and pay 
an additional premium, you may increase your prevented planting coverage 
to a level specified in the actuarial documents.

[62 FR 65333, Dec. 12, 1997]



Sec. 457.148  Fresh market pepper crop insurance provisions.

    The fresh market pepper crop insurance provisions for the 1999 and 
succeeding crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and Reinsured Policies

                   Fresh Market Pepper Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Acre--43,560 square feet of land when row widths do not exceed six 
feet, or if row widths exceed six feet, the land area on which at least 
7,260 linear feet of rows are planted.
    Bell pepper--An annual pepper (of the capsicum annum species, 
grossum group), widely cultivated for its large, crisp, edible fruit.
    Box--One and one-ninth (1\1/9\) bushels of the insured crop.
    Crop year--In lieu of the definition of ``crop year'' contained in 
section 1 (Definitions) of the Basic Provisions (Sec. 457.8), crop year 
is a period of time that begins on the first day of the earliest 
planting period for fall planted peppers and continues through the last 
day of the insurance period for spring planted peppers. The crop year is 
designated by the calendar year in which spring planted peppers are 
harvested.
    Direct marketing--Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Excess rain--An amount of precipitation sufficient to directly 
damage the crop.
    Freeze--The formation of ice in the cells of the plant or its fruit, 
caused by low air temperatures.
    Harvest--The picking of peppers on the unit.
    Mature bell pepper--A pepper that has reached the stage of 
development that will withstand normal handling and shipping.
    Plant stand--The number of live plants per acre prior to the 
occurrence of an insurable cause of loss.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, for each planting period, pepper seed or transplants 
must initially be planted in rows, unless otherwise provided by the 
Special Provisions, actuarial documents, or by written agreement.
    Planting period--The period of time designated in the actuarial 
documents in which the peppers must be planted to be considered fall, 
winter or spring-planted peppers.
    Potential production--The number of boxes of mature bell peppers 
that the pepper plants will or would have produced per acre by the end 
of the insurance period, assuming normal growing conditions and 
practices.
    Practical to replant--In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8), 
practical to replant is defined as our determination, after loss or 
damage to the insured crop, based on factors, including but not limited 
to moisture availability, condition of the field, marketing windows, and 
time to crop maturity, that replanting to the insured crop will allow 
the crop to attain maturity prior to the calendar date for the end of 
the insurance period (inability to obtain plants or seed will not be 
considered when determining if it is practical to replant).
    Row width--The widest distance from the center of one row of plants 
to the center of an adjacent row of plants.
    Tropical depression--A system identified by the U.S. Weather Service 
as a tropical depression, and for the period of time so designated, 
including tropical storms, gales, and hurricanes.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will also be divided into additional basic units by planting period.

[[Page 286]]

    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.

              3. Amounts of Insurance and Production Stages

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one coverage 
level (and the corresponding amount of insurance designated in the 
actuarial documents for the applicable planting period and practice) for 
all the peppers in the county insured under this policy.
    (b) The amount of insurance you choose for each planting period and 
practice must have the same percentage relationship to the maximum price 
offered by us for each planting period and practice. For example, if you 
choose 100 percent of the maximum amount of insurance for a specific 
planting period and practice, you must also choose 100 percent of the 
maximum amount of insurance for all other planting periods and 
practices.
    (c) The production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8) do not apply to fresh 
market peppers.
    (d) The amounts of insurance per acre are progressive by stages as 
follows:

------------------------------------------------------------------------
                    Percent of
                    the amount
                        of
      Stage         insurance    Length of time if    Length of time if
                     per acre      direct-seeded         transplanted
                     that you
                     selected
------------------------------------------------------------------------
1................           65  From planting        From planting
                                 through the 74th     through the 44th
                                 day after planting.  day after
                                                      planting.
2................           85  From the 75th day    From the 45th day
                                 after planting       after planting
                                 until the            until the
                                 beginning of stage   beginning of stage
                                 3.                   3.
3................          100  Begins the earlier   Begins the earlier
                                 of 110 days after    of 80 days after
                                 planting, or the     planting, or the
                                 beginning of         beginning of
                                 harvest.             harvest.
------------------------------------------------------------------------

    (e) Any acreage of peppers damaged in the first or second stage to 
the extent that the majority of producers in the area would not normally 
further care for it, will be deemed to have been destroyed. The 
indemnity payable for such acreage will be based on the stage the plants 
had achieved when the damage occurred.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is April 30 preceding 
the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are July 31.

                          6. Report of Acreage

    In addition to the requirements of section 6 (Report of Acreage) of 
the Basic Provisions (Sec. 457.8), you must report on or before the 
acreage reporting date contained in the Special Provisions for each 
planting period:
    (a) All the acreage of peppers in the county insured under this 
policy in which you have a share;
    (b) The dates the acreage was planted within each planting period; 
and
    (c) The row width.

                            7. Annual Premium

    In lieu of the premium amount determinations contained in section 7 
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual 
premium amount for each cultural practice (e.g., fall direct-seeded 
irrigated) is determined by multiplying the third stage amount of 
insurance per acre by the premium rate for the cultural practice as 
established in the Actuarial Table, by the insured acreage, by your 
share at the time coverage begins, and by any applicable premium 
adjustment factors contained in the actuarial documents.

                             8. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the bell peppers in the 
county for which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are:
    (1) Planted to be harvested and sold as mature fresh market bell 
peppers;
    (2) Planted within the planting periods designated in the actuarial 
documents;
    (3) Grown under an irrigated practice;
    (4) Grown on acreage covered by plastic mulch except where the 
Special Provisions allow otherwise;
    (5) Grown by a person who in at least one of the three previous crop 
years:

[[Page 287]]

    (i) Grew bell peppers for commercial sale; or
    (ii) Participated in managing a bell pepper farming operation;
    (c) That are not:
    (1) Interplanted with another crop;
    (2) Planted into an established grass or legume;
    (3) Pimento peppers; or
    (4) Grown for direct marketing.

                          9. Insurable Acreage

    (a) In lieu of the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), that prohibit insurance attaching if 
a crop has not been planted in at least one of the three previous crop 
years, we will insure newly cleared land or former pasture land planted 
to fresh market peppers.
    (b) In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8):
    (1) You must replant any acreage of peppers damaged during the 
planting period in which initial planting took place whenever less than 
50 percent of the plant stand remains: and
    (i) It is practical to replant;
    (ii) If, at the time the crop was damaged, the final day of the 
planting period has not passed; and
    (iii) The damage occurs within 30 days of transplanting or 60 days 
of direct-seeding.
    (2) Whenever peppers initially are planted during the fall or winter 
planting periods and the conditions specified in sections 9(b)(1) (ii) 
and (iii) are not satisfied, you may elect:
    (i) To replant such acreage and collect any replant payment due as 
specified in section 12. The initial planting period coverage will 
continue for such replanted acreage.
    (ii) Not to replant such acreage and receive an indemnity based on 
the stage of growth the plants had attained at the time of damage. 
However, such an election will result in the acreage being uninsurable 
in the subsequent planting period.
    (3) We will not insure any acreage on which peppers (except for 
replanted peppers in accordance with sections 9(b)(1) and (2)), 
tomatoes, eggplants, or tobacco have been grown and the soil was not 
fumigated or otherwise properly treated before planting peppers.

                          10. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8), coverage begins on each unit or part of 
a unit the later of the date we accept your application, or when the 
peppers are planted in each planting period. Coverage ends at the 
earliest of:
    (a) Total destruction of the peppers on the unit;
    (b) Abandonment of the peppers on the unit;
    (c) The date harvest should have started on the unit on any acreage 
which will not be harvested;
    (d) Final adjustment of a loss on the unit;
    (e) Final harvest; or
    (f) The calendar date for the end of the insurance period as 
follows:
    (1) 165 days after the date of direct-seeding or replanting with 
seed; and
    (2) 150 days after the date of transplanting or replanting with 
transplants.

                           11. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Excess rain;
    (2) Fire;
    (3) Freeze;
    (4) Hail;
    (5) Tornado;
    (6) Tropical depression; or
    (7) Failure of the irrigation water supply, if caused by an insured 
cause of loss that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against any loss of production due to:
    (1) Disease or insect infestation, unless no effective control 
measure exists for such disease or insect infestation; or
    (2) Failure to market the peppers, unless such failure is due to 
actual physical damage caused by an insured cause of loss that occurs 
during the insurance period.

                         12. Replanting Payments

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if, due to an 
insured cause of loss, more than 50 percent of the plant stand will not 
produce peppers and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of your actual cost of replanting or the result obtained by 
multiplying the per acre replanting payment amount contained in the 
Special Provisions by your insured share.
    (c) In lieu of the provisions contained in section 13 (Replanting 
Payment) of the Basic Provisions (Sec. 457.8), that limit a replanting 
payment to one each crop year, only one replanting payment will be made 
for acreage planted during each planting period within the crop year.

                13. Duties in the Event of Damage or Loss

    In addition to the requirements contained in section 14 (Duties in 
the Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if

[[Page 288]]

you intend to claim an indemnity on any unit you also must give us 
notice not later than 72 hours after the earliest of:
    (a) The time you discontinue harvest of any acreage on the unit;
    (b) The date harvest normally would start if any acreage on the unit 
will not be harvested; or
    (c) The calendar date for the end of the insurance period.

                         14. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage in each stage by the amount of 
insurance per acre for the final stage;
    (2) Multiplying each result in section 14(b)(1) by the percentage 
for the applicable stage (see section 3(d));
    (3) Total the results of section 14(b)(2);
    (4) Subtracting either of the following values from the result of 
section 14(b)(3):
    (i) For other than catastrophic risk protection coverage, the total 
value of production to be counted (see section 14(c)); or
    (ii) For catastrophic risk protection coverage, the result of 
multiplying the total value of production to be counted (see section 
14(c)) by:
    (A) Sixty percent for the 1998 crop year; or
    (B) Fifty-five percent for 1999 and subsequent crop years; and
    (5) Multiplying the result of section 14(b)(4) by your share.
    (c) The total value of production to count from all insurable 
acreage on the unit will include:
    (1) Not less than the amount of insurance per acre for the stage for 
any acreage:
    (i) That is abandoned;
    (ii) Put to another use without our consent;
    (iii) That is damaged solely by uninsured causes; or
    (iv) For which you fail to provide acceptable production records;
    (2) The value of the following appraised production will not be less 
than the dollar amount obtained by multiplying the number of boxes of 
appraised peppers by the minimum value per box shown in the Special 
Provisions for the planting period:
    (i) Potential production on any acreage that has not been harvested 
the third time;
    (ii) Unharvested mature bell peppers (unharvested production that is 
damaged or defective due to insurable causes and is not marketable will 
not be counted as production to count);
    (iii) Production lost due to uninsured causes; and
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) We may require you to continue to care for the crop so that a 
subsequent appraisal may be made or the crop harvested to determine 
actual production (If we require you to continue to care for the crop 
and you do not do so, the original appraisal will be used); or
    (B) You may elect to continue to care for the crop, in which case 
the amount of production to count for the acreage will be the harvested 
production, or our reappraisal if the crop is not harvested.
    (3) The total value of all harvested production from the insurable 
acreage will be the dollar amount obtained by subtracting the allowable 
cost contained in the Special Provisions from the price received for 
each box of peppers (this result may not be less than the minimum value 
shown in the Special Provisions for any box of peppers), and multiplying 
this result by the number of boxes of peppers harvested. Harvested 
production that is damaged or defective due to insurable causes and is 
not marketable, will not be counted as production to count.

                     15. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

                        16. Minimum Value Option

    (a) The provisions of this option are continuous and will be 
attached to and made a part of your insurance policy, if:
    (1) You elect either Option I or Option II of the Minimum Value 
Option on your application, or on a form approved by us, on or before 
the sales closing date for the initial crop year in which you wish to 
insure fresh market peppers under this option, and pay the additional 
premium indicated in the actuarial documents for this optional coverage; 
and
    (2) You have not elected coverage under the Catastrophic Risk 
Protection Endorsement.
    (b) In lieu of the provisions contained in section 14(c)(3), the 
total value of harvested production will be determined as follows:
    (1) If you selected Option I of the Minimum Value Option, the total 
value of harvested production will be as follows:

[[Page 289]]

    (i) For sold production, the dollar amount obtained by subtracting 
the allowable cost contained in the Special Provisions from the price 
received for each box of peppers (this result may not be less than the 
minimum value option price contained in the Special Provisions for any 
box of peppers), and multiplying this result by the number of boxes of 
peppers sold; and
    (ii) For marketable production that is not sold, the dollar amount 
obtained by multiplying the number of boxes of such peppers on the unit 
by the minimum value shown in the Special Provisions for the planting 
period (harvested production that is damaged or defective due to 
insurable causes and is not marketable will not be counted as 
production).
    (2) If you selected Option II of the Minimum Value Option, the total 
value of harvested production will be as provided in section 16(b)(1), 
except that the dollar amount specified in section 16(b)(1)(i) may not 
be less than zero.
    (c) This option may be canceled by either you or us for any 
succeeding crop year by giving written notice on or before the 
cancellation date preceding the crop year for which the cancellation of 
this option is to be effective.

[62 FR 14789, Mar. 28, 1997, as amended at 62 FR 65174, Dec. 10, 1997]



Sec. 457.149  Table grape crop insurance provisions.

    The Table Grape Crop Insurance Provisions for the 2001 and 
succeeding crop years are as follows:
    For FCIC policies:

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                         For Reinsured Policies

(Insurance provider's name or other appropriate heading)
    For both FCIC and reinsured policies:

                       Table Grape Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Adapted. Varieties that are recognized by the Cooperative State 
Research, Education, and Extension Service as compatible with agronomic 
and weather conditions in the county.
    Cluster thinning and removal. Removing parts of an immature cluster 
or the entire cluster of grapes.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Graft. To unite a shoot or bud (scion) with a rootstock or an 
existing vine in accordance with recommended practices to form a living 
union.
    Harvest. Severing the clusters of mature grapes from the vine.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Lug. Twenty pounds of table grapes in the Coachella Valley, 
California district; 21 pounds in all other California districts; and 20 
pounds in Arizona.
    Set out. Physically planting the grape plant in the vineyard.
    Table grapes. Grapes that are grown for commercial sale for human 
consumption as fresh fruit on acreage where the cultural practices to 
produce fresh marketable grapes are carried out.

                            2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by each table grape variety 
designated in the Special Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units may be 
established only if each optional unit is located on non-contiguous 
land, unless otherwise allowed by written agreement.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election and coverage level for 
each table grape variety in the county insured under this policy.
    (b) You must report, by the production reporting date designated in 
section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by 
variety if applicable:
    (1) Any damage, removal of bearing vines, change in practices, or 
any other circumstance that may reduce the expected

[[Page 290]]

yield below the yield upon which the insurance guarantee is based, and 
the number of affected acres;
    (2) The number of bearing vines on insurable and uninsurable 
acreage;
    (3) The age of the vines and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage is changed:
    (i) The age of the interplanted crop, and type if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of the following: 
Interplanting perennial crop, removal of vines, damage, change in 
practices and any other circumstance that may affect the yield potential 
of the insured crop. If you fail to notify us of any circumstance that 
may reduce your yields from previous levels, we will reduce your 
production guarantee as necessary at any time we become aware of the 
circumstance.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that could or would reduce the yield of the insured crop 
has occurred prior to the time that you request the increase.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is October 31 
preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are January 31.

                          6. Report of Acreage

    In addition to the requirements of section 6 (Report of Acreage) of 
the Basic Provisions (Sec. 457.8), you must report the acreage of table 
grapes in the county by variety.

                             7. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be any insurable variety 
of grapes in the county that you elect and for which a premium rate is 
provided by the actuarial documents:
    (1) In which you have a share;
    (2) That are grown for harvest as table grapes;
    (3) That are adapted to the area; and
    (4) That are grown in a vineyard that, if inspected, is considered 
acceptable by us.
    (b) In addition to table grapes not insurable under section 8 
(Insured Crop) of the Basic Provisions (Sec. 457.8), we do not insure 
any table grapes grown on vines:
    (1) That, after being set out or grafted, have not reached the 
number of growing seasons designated by the Special Provisions; or
    (2) That have not produced an average of at least 150 lugs of table 
grapes per acre in at least one of the most recent three crop years in 
your actual production history base period. However, we may inspect and 
agree in writing to insure acreage that has not produced this amount.

                          8. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8) that prohibit insurance attaching to a 
crop planted with another crop, table grapes interplanted with another 
perennial crop are insurable unless we inspect the acreage and determine 
that it does not meet the requirements contained in your policy.

                           9. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on February 1 of each crop year, except that for 
the year of application, if your application is received after January 
22 but prior to February 1, insurance will attach on the 10th day after 
your properly completed application is received in our local office, 
unless we inspect the acreage during the 10-day period and determine 
that it does not meet insurability requirements. You must provide any 
information that we require for the crop or to determine the condition 
of the vineyard.
    (2) The calendar date for the end of the insurance period for each 
crop year is the date during the calendar year in which the grapes are 
normally harvested or contained in the Special Provisions as provided to 
you on or before the contract change date.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of table grapes on or before the acreage reporting date for the crop 
year, insurance will not be considered to have attached to, and no 
premium will be

[[Page 291]]

due or indemnity paid for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.
    (c) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that the policy remains continuously in force, 
coverage begins on the day immediately following the end of the 
insurance period for the prior crop year. Policy cancellation that 
results solely from transferring to a different insurance provider for a 
subsequent crop year will not be considered a break in continuous 
coverage.
    (d) If your table grape policy is canceled or terminated for any 
crop year, in accordance with the terms of the policy, after insurance 
attached for that crop year but on or before the cancellation and 
termination dates whichever is later, insurance will not be considered 
to have attached for that crop year and no premium, administrative fee, 
or indemnity will be due for such crop year.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the vineyard;
    (3) Wildlife;
    (4) Earthquake;
    (5) Volanic eruption; or
    (6) Failure of irrigation water supply, if caused by an insured 
cause of loss ((a)(1) through (5) of this section) that occurs during 
the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available;
    (2) Phylloxera, regardless of cause; or
    (3) Inability to market the table grapes for any reason other than 
actual physical damage from an insurable cause specified in this 
section. For example, we will not pay you an indemnity if you are unable 
to market due to quarantine, boycott, or refusal of any person to accept 
production.

                11. Duties In the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following 
will apply:
    (a) You must notify us within 3 days after the date harvest should 
have started if the crop will not be harvested.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing. We will conduct an appraisal 
that will be used to determine your production to count for production 
that is sold by direct marketing. If damage occurs after this appraisal, 
we will conduct an additional appraisal. These appraisals, and any 
acceptable records provided by you, will be used to determine your 
production to count. Failure to give timely notice that production will 
be sold by direct marketing will result in an appraised amount of 
production to count of not less than the production guarantee per acre 
if such failure results in our inability to make the required appraisal.
    (c) If the crop has been damaged during the growing season, you must 
provide notice at least 15 days prior to the beginning of harvest if you 
intend to claim an indemnity as a result of the damage previously 
reported. You must not destroy the damaged crop until the earlier of 15 
days from the date you gave notice of loss, or our written consent to do 
so. If you fail to meet the requirements of this section all such 
production will be considered undamaged and included as production to 
count.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying the result in section 12(b)(1) by the respective 
price election for the variety;
    (3) Totaling the results in section 12(b)(2);
    (4) Multiplying the total production to be counted of the variety 
(see section 12(c)) by the respective price election;
    (5) Totaling the results in section 12(b)(4);
    (6) Subtracting the result of section 12(b)(5) from the result in 
section 12(b)(3); and

[[Page 292]]

    (7) Multiplying the result of section 12(b)(6) by your share.
    (c) The total production to count (in lugs) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is sold by direct marketing if you fail to meet the 
requirements in section 11(b);
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production that meets, or would meet if properly 
handled, the California Department of Food and Agriculture minimum 
standards for table grapes; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and
    (2) All harvested production from insurable acreage regardless of 
condition or disposition. The quantity of production to count for table 
grape production damaged by insurable causes within the insurance period 
that is marketed for any use other than table grapes will be determined 
by multiplying the greater of (1) the value of the table grapes per ton 
or (2) $50, by the number of tons and dividing that result by the 
highest price election available for the insured unit. This result will 
be the number of lugs to count.

                     13. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 47747, Sept. 11, 1997, as amended at 62 FR 65175, Dec. 10, 1997; 
65 FR 47839, Aug. 4, 2000]



Sec. 457.150  Dry bean crop insurance provisions.

    The dry bean crop insurance provisions for the 2003 and succeeding 
crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and Reinsured Policies

                        Dry Bean Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Actual value--The dollar value received, or that could be received, 
for contract seed beans under a seed bean processor contract if the 
contract seed bean production is properly handled in accordance with the 
requirements of such contract.
    Base price--The price per pound (excluding any discounts or 
incentives that may apply) that is stated in the seed bean processor 
contract and that will be paid to the producer for at least 50 percent 
of the total production under contract with the seed company.
    Beans--Dry beans and contract seed beans.
    Combining--A harvesting process that uses a machine to separate the 
beans from the pods and other vegetative matter and place the beans into 
a temporary storage receptacle.
    Contract seed beans--Dry beans grown under the terms of a seed bean 
processor contract for the purpose of producing seed to be used for 
producing dry beans or vegetable beans in a future crop year.
    Dry beans--The crop defined by The United States Standards for Beans 
excluding contract seed beans.
    Harvest--Combining the beans. Beans which are swathed or knifed 
prior to combining are not considered harvested.
    Local market price--The cash price per hundredweight for the U.S. 
No. 2 grade of dry beans of the insured type offered by buyers in the 
area in which you normally market the dry beans. Moisture content and 
factors not associated with grading under the United States Standards 
for Beans will not be considered in establishing this price.
    Net price--The dollar value of dry bean production received, or that 
could have been received, after reductions in value due to insurable 
causes of loss.
    Pick--The percentage, on a weight basis, of defects including 
splits, damaged (including discolored) beans, contrasting types, and 
foreign material that remains in the dry beans after dockage has been 
removed by the proper use of screens or sieves.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, beans

[[Page 293]]

must initially be planted in rows far enough apart to permit mechanical 
cultivation, unless otherwise provided by the Special Provisions, 
actuarial documents, or by written agreement.
    Practical to replant--In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8), 
practical to replant is defined as our determination, after loss or 
damage to the insured crop, based on factors, including but not limited 
to moisture availability, condition of the field, time to crop maturity, 
and marketing window, that replanting the insured crop will allow the 
crop to attain maturity prior to the calendar date for the end of the 
insurance period. It will not be considered practical to replant after 
the end of the late planting period unless replanting is generally 
occurring in the area. For contract seed beans, it will not be 
considered practical to replant unless production from the replanted 
acreage can be delivered under the terms of the seed bean processor 
contract or the seed company agrees to accept such production.
    Seed bean processor contract--A written agreement between the 
contract seed bean producer and the seed company, containing at a 
minimum:
    (a) The contract seed bean producer's promise to plant and grow one 
or more specific varieties of contract seed beans, and deliver the 
production from those varieties to the seed company;
    (b) The seed company's promise to purchase all the production stated 
in the contract; and
    (c) A base price, or a method to determine such price based on 
published independent information, that will be paid to the contract 
seed bean producer for the production stated in the contract.
    Seed company--Any business enterprise regularly engaged in the 
processing of seed beans, that possesses all licenses and permits for 
marketing seed beans required by the State in which it operates, and 
that possesses or has contracted for facilities, with enough drying, 
screening and bagging or packaging equipment to accept and process the 
seed beans within a reasonable amount of time after harvest.
    Swathing or knifing--Severance of the bean plant from the ground, 
including the pods and beans, and placing them into windrows.
    Type--A category of beans identified as a type in the Special 
Provisions.

                            2. Unit Division

    (a) In addition to the definition of basic unit in section 1 of the 
Basic Provisions, all acreage of contract seed beans qualifies as a 
separate basic unit. For production based seed bean processor contracts, 
the basic unit will consist of all the acreage needed to produce the 
amount of production under contract, based on the actual production 
history of the acreage. For acreage based seed bean processor contracts, 
the basic unit will consist of all acreage specified in the contract.
    (b) In addition to, or instead of, establishing optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated acreage as provided in the unit division provisions 
contained in the Basic Provisions, a separate optional unit may be 
established for each bean type shown in the Special Provisions.
    (c) Contract seed beans may qualify for optional units only if the 
seed bean processor contract specifies the number of acres under 
contract. Contract seed beans produced under a seed bean processor 
contract that specifies only an amount of production or a combination of 
acreage and production, are not eligible for optional units.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3(b) (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of 
the Basic Provisions (Sec. 457.8), you may select only one price 
election for all the dry beans in the county insured under this policy 
unless the Special Provisions provide different price elections by type, 
in which case you may select one price election for each dry bean type 
designated in the Special Provisions. The price elections you choose for 
each type are not required to have the same percentage relationship to 
the maximum price offered by us for each type. For example, if you 
choose 100 percent of the maximum price election for one type, you may 
also choose 75 percent of the maximum price election for another type.
    (b) For contract seed beans only, the dollar amount of insurance is 
obtained by multiplying the production guarantee per acre for each 
variety in the unit by the insured acreage of that variety, times the 
applicable base price, and times the price election percentage you 
selected. The total of these results will be the amount of insurance for 
contract seed beans in the unit.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions, the contract change date is November 30 (December 17 for the 
1998 crop year only) preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are:

[[Page 294]]



----------------------------------------------------------------------------------------------------------------
                   State and county                                Cancellation and termination  dates
----------------------------------------------------------------------------------------------------------------
California............................................                                              February 28.
All other States......................................                                                 March 15.
----------------------------------------------------------------------------------------------------------------

                          6. Report of Acreage

    For contract seed beans only, in addition to the requirements of 
section 6 (Report of Acreage) of the Basic Provisions (Sec. 457.8), you 
must submit a copy of the seed bean processor contract on or before the 
acreage reporting date.

                             7. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions(Sec. 457.8), the crop insured will be all the beans in the 
county for which a premium rate is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That are planted for harvest as:
    (i) Dry beans; or
    (ii) If applicable, contract seed beans, if the seed bean processor 
contract is executed on or before the acreage reporting date; and
    (3) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop; or
    (ii) Planted into an established grass or legume.
    (b) For contract seed beans only:
    (1) An instrument in the form of a ``lease'' under which you retain 
control of the acreage on which the insured crop is grown and that 
provides for delivery of the crop under substantially the same terms as 
a seed bean processor contract may be treated as a contract under which 
you have an insurable interest in the crop; and
    (2) We will not insure any acreage of contract seed beans produced 
by a seed company.
    (c) In addition to the types of dry beans designated in the Special 
Provisions, we will insure other types if:
    (1) The type you intend to plant has been demonstrated to be adapted 
to the area. Evidence of adaptability must include:
    (i) Results of test plots for 2 years and recommendations by a 
university or seed company; or
    (ii) Two years of production reports that indicate your experience 
producing the type in your production area;
    (2) You submit on or before the sales closing date your production 
reports and prices received, or the test plot results, and evidence of 
market potential, including the price buyers are willing to pay for the 
type; and
    (3) Both parties (you and us) enter into a written agreement 
allowing insurance on the type in accordance with section 18 of the 
Basic Provisions.
    (d) Any acreage of beans that is destroyed and replanted to a 
different insurable type of beans will be considered insured acreage in 
accordance with section 11.

                          8. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8):
    (a) We will not insure any acreage that does not meet the rotation 
requirements contained in the Special Provisions; or
    (b) Any acreage of the insured crop damaged before the final 
planting date, to the extent that the majority of growers in the area 
would normally not further care for the crop, must be replanted unless 
we agree that replanting is not practical. We will not require you to 
replant if it is not practical to replant to the same type of beans as 
originally planted.

                           9. Insurance Period

    In accordance with the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8), the calendar date for the end of 
the insurance period is the date immediately following planting as 
follows:
    (a) October 15 in Oklahoma, New Mexico, and Texas;
    (b) November 15 in California; and
    (c) October 31 in all other States.

                           10. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes of loss that occur during the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.

                         11. Replanting Payments

    (a) In accordance with section 13 (Replanting Payment) of the Basic 
Provisions (Sec. 457.8), a replanting payment is allowed if the bean 
crop is damaged by an insurable

[[Page 295]]

cause of loss to the extent that the remaining stand will not produce at 
least 90 percent of the production guarantee for the acreage and it is 
practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of 10 percent of the production guarantee for the type to be 
replanted or 120 pounds multiplied by your price election for the type 
to be replanted and by your insured share.
    (c) When beans are replanted using a practice that is uninsurable as 
an original planting, the liability for the unit will be reduced by the 
amount of the replanting payment. The premium amount will not be 
reduced.
    (d) The guarantee and premium for acreage replanted to a different 
insurable type will be based on the replanted type and will be 
calculated in accordance with sections 3 (Insurance Guarantees, Coverage 
Levels, and Prices for Determining Indemnities) and 7 (Annual Premium) 
of the Basic Provisions (Sec. 457.8) and section 3 of these Crop 
Provisions.

                12. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), 
representative samples of the unharvested crop must be at least 10 feet 
wide and extend the entire length of each field in the unit. The samples 
must not be harvested or destroyed until the earlier of our inspection 
or 15 days after harvest of the balance of the unit is completed.

                         13. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the unit.
    (b) In the event of loss or damage to your bean crop covered by this 
policy, we will settle your claim by:
    (1) Multiplying the insured acreage of each dry bean type by its 
respective production guarantee;
    (2) Multiplying each result in section 13(b)(1) by the respective 
price election for each insured type;
    (3) Totaling the results in section 13(b)(2);
    (4) Multiplying the insured acreage of each contract seed bean type 
by its respective production guarantee;
    (5 ) Multiplying each result in section 13(b)(4) by the applicable 
base price;
    (6) Multiplying each result in section 13(b)(5) by your selected 
price election percentage;
    (7) Totaling the results in section 13(b)(6);
    (8) Totaling the results in section 13(b)(3) and section 13(b)(6);
    (9) Multiplying the total production to be counted of each dry bean 
type if applicable, (see section 13(d)) by the respective price 
election;
    (10) Totaling the value of all contract seed bean production (see 
section 13(c));
    (11) Totaling the results in section 13(b)(9) and section 13(b)(10);
    (12) Subtracting the total in section 13(b)(11) from the total in 
section 13(b)(8); and
    (13) Multiplying the result by your share.
    (c) The value of contract seed bean production to count for each 
type in the unit will be determined as follows:
    (1) For production meeting the minimum quality requirements 
contained in the seed bean processor contract and for production that 
does not meet such requirements due to uninsured causes:
    (i) Multiplying the actual value or base price per pound, whichever 
is greater, by the price election percentage you selected; and
    (ii) Multiplying the result by the number of pounds of such 
production.
    (2) For production not meeting the minimum quality requirements 
contained in the seed bean processor contract due to insurable causes:
    (i) Multiplying the actual value by the price election percentage 
you selected; and
    (ii) Multiplying the result by the number of pounds of such 
production.
    (d) The total bean production to count (in pounds) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production of dry 
beans may be adjusted for quality deficiencies and excess moisture in 
accordance with section 13(e)); and
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put

[[Page 296]]

the acreage to another use if you agree to leave intact, and provide 
sufficient care for, representative samples of the crop in locations 
acceptable to us (The amount of production to count for such acreage 
will be based on the harvested production or appraisals from the samples 
at the time harvest should have occurred. If you do not leave the 
required samples intact, or fail to provide sufficient care for the 
samples, our appraisal made prior to giving you consent to put the 
acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage.
    (e) Mature dry bean production to count may be adjusted for excess 
moisture and quality deficiencies. If moisture adjustment is applicable, 
it will be made prior to any adjustment for quality. Adjustment for 
excess moisture and quality deficiencies will not be applicable to 
contract seed beans.
    (1) Production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of 18 percent. We may obtain 
samples of the production to determine the moisture content.
    (2) Production will be eligible for quality adjustment if:
    (i) A pick is designated in the Special Provisions and the pick of 
the damaged production exceeds this designation; or
    (ii) A pick is not designated in the Special Provisions and 
deficiencies in quality, in accordance with the United States Standards 
for Beans, result in dry beans not meeting the grade requirements for 
U.S. No. 2 (grades U.S. No. 3 or worse) because the beans are damaged or 
badly damaged; or
    (iii) Substances or conditions are present that are identified by 
the Food and Drug Administration or other public health organizations of 
the United States as being injurious to human or animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions and which occurs within the insurance period;
    (ii) The deficiencies, substances, or conditions result in a net 
price for the damaged production that is less than the local market 
price;
    (iii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or by 
a disinterested third party approved by us;
    (iv) With regard to deficiencies in quality (except test weight, 
which may be determined by our loss adjuster), the samples are analyzed 
by:
    (A) A grader licensed under the United States Agricultural Marketing 
Act or the United States Warehouse Act;
    (B) A grader licensed under State law and employed by a warehouse 
operator who has a storage agreement with the Commodity Credit 
Corporation; or
    (C) A grader not licensed under State law, but who is employed by a 
warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (v) With regard to substances or conditions injurious to human or 
animal health, the samples are analyzed by a laboratory approved by us.
    (4) Dry bean production that is eligible for quality adjustment, as 
specified in sections 13(e) (2) and (3), will be reduced:
    (i) If a conversion factor is designated by the Special Provisions, 
by multiplying the number of pounds of eligible production by the 
conversion factor designated in the Special Provisions for the 
applicable grade or pick; or
    (ii) If a conversion factor is not designated by the Special 
Provisions as follows:
    (A) The market price of the qualifying damaged production and the 
local market price will be determined on the earlier of the date such 
quality adjusted production is sold or the date of final inspection for 
the unit. If a local market price is not available for the insured crop 
year, the current years' maximum price election available for the 
applicable type will be used. The price for the qualifying damaged 
production will be the market price for the local area to the extent 
feasible. We may obtain prices from any buyer of our choice. If we 
obtain prices from one or more buyers located outside your local market 
area, we will reduce such prices by the additional costs required to 
deliver the dry beans to those buyers. Discounts used to establish the 
net price of the damaged production will be limited to those that are 
usual, customary, and reasonable. The price of the damaged production 
will not be reduced for:
    (1) Moisture content;
    (2) Damage due to uninsured causes; or
    (3) Drying, handling, processing, including trading tare for grade 
to obtain a higher grade and price, or any other costs associated with 
normal harvesting, handling, and marketing of the dry beans; except, if 
the price of the damaged production can be increased by conditioning, we 
may reduce the price of the production after it has been conditioned by 
the cost of conditioning but not lower than the value of the production 
before conditioning;

[[Page 297]]

    (B) The value per pound of the damaged or conditioned production 
will be divided by the local market price to determine the quality 
adjustment factor; and
    (C) The number of pounds remaining after any reduction due to 
excessive moisture (the moisture-adjusted gross pounds (if appropriate)) 
of the damaged or conditioned production will then be multiplied by the 
quality adjustment factor to determine the net production to count.
    (f) Any production harvested from plants growing in the insured crop 
may be counted as production of the insured crop on a weight basis.

                         14. Prevented Planting

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[62 FR 6105, Feb. 11, 1997, as amended at 62 FR 63633, Dec. 2, 1997; 62 
FR 65175, Dec. 10, 1997; 67 FR 55690, Aug. 30, 2002]



Sec. 457.151  Forage seeding crop insurance provisions.

    The Forage Seeding Crop Insurance Provisions for 2003 and succeeding 
crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and Reinsured Policies:

                     Forage Seeding Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Crop year--The period within which the planting is or normally would 
become established and shall be designated by the calendar year in which 
the planting is made for spring planted acreage and the next succeeding 
calendar year for fall planted acreage.
    Fall planted--A forage crop seeded after June 30.
    Forage--Planted perennial alfalfa, perennial red clover, perennial 
grasses, or a mixture thereof, or other species, as shown in the 
actuarial documents.
    Good farming practices--The cultural practices generally in use in 
the county for the crop to make normal progress toward maturity and 
produce a normal stand, and are those recognized by the Cooperative 
State Research, Education, and Extension Service as compatible with 
agronomic and weather conditions in the county.
    Harvest. Severance of the forage plant from its roots. Acreage that 
is only grazed will not be considered harvested.
    Normal stand--A population of live plants per square foot that meets 
the minimum required number of plants as shown in the Special 
Provisions.
    Nurse Crop (companion crop)--A crop seeded into the same acreage as 
another crop, that is intended to be harvested separately, and that is 
planted to improve growing conditions for the crop with which it is 
grown.
    Planted acreage--In addition to the provisions in section 1 of the 
Basic Provisions, land on which seed is initially spread onto the soil 
surface by any method and subsequently is mechanically incorporated into 
the soil in a timely manner and at the proper depth will be considered 
planted, unless otherwise provided by the Special Provisions, actuarial 
documents, or written agreement.
    Replanting--Performing the cultural practices necessary to prepare 
the land for replacing of the forage seed and then replacing the forage 
seed in the insured acreage with the expectation of producing a normal 
stand. Replacing new seed into an existing damaged stand, which results 
in a reduced seeding rate from the original seeding rate, will not be 
considered replanting.
    Sales closing date--In lieu of the definition contained in the Basic 
Provisions, a date contained in the Special Provisions by which an 
application must be filed and by which you may change your crop 
insurance coverage for a crop year. If the Special Provisions provide a 
sales closing date for both fall seeded and spring seeded practices for 
the insured crop and you plant any insurable fall seeded acreage, you 
may not change your crop insurance coverage after the fall sales closing 
date for the fall seeded practice.
    Spring planted--A forage crop seeded before July 1.

                            2. Unit Division

    A basic unit, as defined in section 1 of the Basic Provisions, will 
also be divided into additional basic units by spring planted and fall 
planted acreage.

                         3. Amounts of Insurance

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities)

[[Page 298]]

of the Basic Provisions (Sec. 457.8), you may only select one coverage 
level and the corresponding amount of insurance designated in the 
actuarial documents for the applicable type and practice for all the 
forage seeding in the county that is insured under this policy. The 
amount of insurance you choose for each type and practice must have the 
same percentage relationship to the maximum amount of insurance offered 
by us for each type and practice. For example, if you choose 100 percent 
of the maximum amount of insurance for a specific type and practice, you 
must also choose 100 percent of the maximum amount of insurance for all 
other types and practices.
    (b) The production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), do not apply to 
forage seeding.

                          4. Contract Changes.

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date for counties 
with a March 15 cancellation date and April 30 preceding the 
cancellation date for all other counties.

                 5. Cancellation and Termination Dates.

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
                                                   Cancellation and
              State and county                    termination dates
------------------------------------------------------------------------
California, Nevada, New Hampshire, New       July 31.
 York, Pennsylvania, South Dakota counties
 for which the Special Provisions designate
 both fall and spring final planting dates,
 and Vermont.
South Dakota counties for which the Special  March 15.
 Provisions designate only a spring final
 planting date, and all other states.
------------------------------------------------------------------------

                          6. Report of Acreage.

    In lieu of the provisions of section 6(a) of the Basic Provisions, a 
report of all insured acreage of forage seeding must be submitted on or 
before each forage seeding acreage report date specified in the Special 
Provisions.

                             7. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the forage in the county for 
which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That is planted during the current crop year, or replanted 
during the calendar year following planting, to establish a normal stand 
of forage;
    (c) That is not grown with the intent to be grazed, or not grazed at 
any time during the insurance period; and
    (d) That is not interplanted with another crop, except nurse crops, 
unless allowed by the Special Provisions or by written agreement.

                          8. Insurable Acreage.

    In addition to the provisions of section 9 of the Basic Provisions:
    (a) In California counties Lassen, Modoc, Mono, Shasta, Siskiyou and 
all other states, any acreage of the insured crop damaged before the 
final planting date, to the extent that such acreage has less than 75 
percent of a normal stand, must be replanted unless we agree that it is 
not practical to replant; and
    (b) In California, unless otherwise specified in the Special 
Provisions, any acreage of the insured crop damaged anytime during the 
crop year to the extent that such acreage has less than 75 percent of a 
normal stand must be replanted unless it cannot be replanted and reach a 
normal stand within the insurance period.

                           9. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of the 
Basic Provisions (Sec. 457.8) regarding when insurance ends, forage 
seeding insurance will end at the earliest of:
    (a) Total destruction of the insured crop on the unit;
    (b) The initial harvest of the unit, if a late harvest date is not 
listed in the Special Provisions;
    (c) The first harvest after the late harvest date, if a late harvest 
date is specified in the Special Provisions. You may harvest the crop as 
often as practical in accordance with good farming practices on or 
before the late harvest date.
    (d) Final adjustment of a loss on a unit;
    (e) Abandonment of the insured crop;
    (f) The date grazing commences on the insured crop; or
    (g) The following calendar dates:
    (1) During the calendar year following the year of seeding for:
    (i) Fall planted acreage in all California counties except
    Lassen, Modoc, Mono, Shasta and Siskiyou--November 30;

[[Page 299]]

    (ii) Spring planted acreage in Lassen, Modoc, Mono, Shasta and 
Siskiyou Counties California, Colorado, Idaho, Nebraska, Nevada, Oregon, 
Utah and Washington--April 14;
    (iii) Spring planted acreage in all other states--May 21;
    (iv) Fall planted acreage in Lassen, Modoc, Mono, Shasta and 
Siskiyou Counties California and all other states--October 15;
    (2) During the calendar year of seeding for spring planted acreage 
in all California counties except Lassen, Modoc, Mono, Shasta and 
Siskiyou--November 30.

                           10. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) of 
the Basic Provisions (Sec. 457.8), insurance is provided only against 
the following causes that result in loss of, or failure to establish, a 
stand of forage that occur during the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.

                         11. Replanting Payment

    In lieu of the provisions contained in section 13 of the Basic 
Provisions:
    (a) A replanting payment is allowed if:
    (1) In California, unless specified otherwise in the Special 
Provisions, acreage planted to the insured crop is damaged by an 
insurable cause of loss occurring within the insurance period to the 
extent that less than 75 percent of a normal stand remains and the crop 
can reach maturity before the end of the insurance period;
    (2) In Lassen, Modoc, Mono, Shasta, Siskiyou Counties, California, 
and all other states:
    (i) A replanting payment is allowed only whenever the Special 
Provisions designate both fall and spring final planting dates;
    (ii) The insured fall planted acreage is damaged by an insurable 
cause of loss to the extent that less than 75 percent of a normal stand 
remains;
    (iii) It is practical to replant;
    (iv) We give written consent to replant; and
    (v) Such acreage is replanted the following spring by the spring 
planting date.
    (b) The amount of the replanting payment will be equal to 50 percent 
of the amount of indemnity determined in accordance with section 13 
unless otherwise specified in the Special Provisions.
    (c) No replanting payment will be made on acreage for which one 
replanting payment has been allowed.
    (d) If the information reported by you on the acreage report results 
in a lower premium than the actual premium determined to be due based on 
the acreage, share, practice, or type determined actually to have 
existed, the replanting payment will be reduced proportionately.

                12. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 
representative samples of the crop must be at least 10 feet wide and 
extend the entire length of each field in the unit. The samples must not 
be harvested or destroyed until the earlier of our inspection or 15 days 
after tilling of the balance of the unit is completed.
    (b) In addition to the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), you must 
give us written notice if, during the period before destroying the crop 
on any fall planted acreage that is damaged, you decide to replant the 
acreage by the spring final planting date.

                        13. Settlement of Claim.

    (a) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage of each type and practice by the 
amount of insurance for the applicable type and practice;
    (2) Totaling the results in section 13(a)(1);
    (3) Multiplying the total acres with an established stand for the 
insured acreage of each type and practice in the unit by the amount of 
insurance for the applicable type and practice;
    (4) Totaling the results in section 13(a)(3);
    (5) Subtracting the result in section 13(a)(4) from the result in 
section 13(a)(2); and
    (6) Multiplying the result in section 13(a)(5) by your share.
    Example: Assume you have 100 percent share in 30 acres of type A 
forage in the unit, with an amount of insurance of $100.00 per acre. At 
the time of loss, the following findings are established: 10 acres had a 
remaining stand of 75 percent or greater. You also have 20 acres of type 
B forage in the unit, with an amount of insurance of $90.00 per acre. 10 
acres had a remaining stand of 75 percent or greater. Your indemnity 
would be calculated as follows:
    1. 30 acres x $100.00 = $3,000 amount of insurance for type A; 20 
acres x $90.00 = $1,800 amount of insurance for type B;

[[Page 300]]

    2. $3,000 + $1,800 = $4,800 total amount of insurance;
    3. 10 acres with 75% stand or greater x $100.00 = $1,000 production 
to count for type A: 10 acres with 75% stand or greater x $90.00 = $900 
production to count for type B;
    4. $1,000 + $900 = $1,900 total production to count;
    5. $4,800-$1,900 = $2,900 loss;
    6. $2,900 x 100 percent share = $2,900 indemnity payment.
    (b) The acres with an established stand will include:
    (1) Acreage that has at least 75 percent of a normal stand;
    (2) Acreage abandoned or put to another use without our prior 
written consent;
    (3) Acreage damaged solely by an uninsured cause; or
    (4) Acreage that is harvested and not reseeded.
    (c) The amount of indemnity on any spring planted acreage determined 
in accordance with section 13(a) will be reduced 50 percent if the stand 
is less than 75 percent but more than 55 percent of a normal stand.

                     14. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 13291, Mar. 20, 1997, as amended at 62 FR 65175, Dec. 10, 1997; 
65 FR 3784, Jan. 25, 2000; 65 FR 11457, Mar. 3, 2000; 66 FR 42730, Aug. 
15, 2001; 66 FR 53076, Oct. 19, 2001; 67 FR 65030, Oct. 23, 2002]

    Editorial Note: At 62 FR 65175, Dec. 10, 1997, Sec. 457.151 was 
amended in section 1 by revising the definition ``Sales closing date'', 
however, this definition was not included when this section was added at 
62 FR 13291, Mar. 20, 1997.



Sec. 457.152  Hybrid seed corn crop insurance provisions.

    The Hybrid Seed Corn Crop Insurance Provisions for the 1998 and 
succeeding crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and Reinsured policies

                    Hybrid Seed Corn Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions, (Sec. 457.8) with (1) 
controlling (2), etc.

                             1. Definitions

    Adjusted yield. An amount determined by multiplying the county yield 
by the coverage level factor.
    Amount of insurance per acre. A dollar amount determined by 
multiplying the adjusted yield by the price election you select and 
subtracting any minimum guaranteed payment, not to exceed the total 
compensation specified in the hybrid seed corn processor contract. If 
your hybrid seed corn processor contract contains a minimum guaranteed 
payment that is stated in bushels, we will convert that value to dollars 
by multiplying it by the price election you selected.
    Approved yield. In lieu of the definition contained in the Basic 
Provisions, an amount FCIC determines to be representative of the yield 
that the female parent plants are expected to produce when grown under a 
specific production practice. FCIC will establish the approved yield 
based upon records provided by the seed company and other information it 
deems appropriate.
    Bushel. Fifty-six pounds avoirdupois of shelled corn, 70 pound 
avoirdupois of ear corn, or the number of pounds determined under the 
seed company's normal conversion chart when that chart is used to 
determine the approved yield and the claim for indemnity.
    Certified seed test. A warm germination test performed on clean seed 
according to specifications of the ``Rules for Testing Seeds'' of the 
Association of Official Seed Analysts.
    Commercial hybrid seed corn. The offspring produced by crossing a 
male and female parent plant, each having a different genetic character. 
This offspring is the product intended for use by an agricultural 
producer to produce a commercial field corn crop for grain.
    County yield. An amount contained in the actuarial documents that is 
established by FCIC to represent the yield that a producer of hybrid 
seed corn would be expected to produce if the acreage had been planted 
to commercial field corn.
    Coverage level factor. A factor contained in the Special Provisions 
to adjust the county yield for commercial field corn to reflect the 
higher value of hybrid seed corn.
    Dollar value per bushel. An amount that determines the value of any 
seed production to count. It is determined by dividing the amount of 
insurance per acre by the result of multiplying the approved yield by 
the coverage level percentage, expressed as a decimal.
    Female parent plants. Corn plants that are grown for the purpose of 
producing commercial hybrid seed corn and have had the stamens removed 
or are otherwise male sterile.

[[Page 301]]

    Field run. Commercial hybrid seed corn production before it has been 
dried, screened, or processed.
    Good farming practices. In addition to the definition contained in 
the Basic Provisions, good farming practices include those practices 
required by the hybrid seed corn processor contract.
    Harvest. Combining, threshing or picking ears from the female parent 
plants to obtain commercial hybrid seed corn.
    Hybrid seed corn processor contract. An agreement executed between 
the hybrid seed corn crop producer and a seed company containing, at a 
minimum:
    (a) The producer's promise to plant and grow male and female parent 
plants, and to deliver all commercial hybrid seed corn produced from 
such plants to the seed company;
    (b) The seed company's promise to purchase the commercial hybrid 
seed corn produced by the producer; and
    (c) Either a fixed price per unit of measure (bushels, 
hundredweight, etc.) of the commercial hybrid seed corn or a formula to 
determine the value of such seed. Any formula for establishing the value 
must be based on data provided by a public third party that establishes 
or provides pricing information to the general public, based on prices 
paid in the open market (e.g., commodity futures exchanges), to be 
acceptable for the purpose of this policy.
    Inadequate germination. Germination of less than 80 percent of the 
commercial hybrid seed corn as determined by using a certified seed 
test.
    Insurable interest. Your share of the financial loss that occurs in 
the event seed production is damaged by a cause of loss specified in 
section 10.
    Local market price. The cash price offered by buyers for any 
production from the female parent plants that is not considered 
commercial hybrid seed corn under the terms of this policy.
    Male parent plants. Corn plants grown for the purpose of pollinating 
female parent plants.
    Minimum guaranteed payment. A minimum amount (usually stated in 
dollars or bushels) specified in your hybrid seed corn processor 
contract that will be paid or credited to you by the seed company 
regardless of the quantity of seed produced.
    Non-seed production. Production that does not qualify as seed 
production because of inadequate germination.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, the insured crop must be planted in rows wide enough 
to permit mechanical cultivation, unless otherwise provided by the 
Special Provisions or by written agreement.
    Planting pattern. The arrangement of the rows of the male and female 
parent plants in a field. An example of a planting pattern is four 
consecutive rows of female parent plants followed by two consecutive 
rows of male parent plants.
    Practical to replant. In addition to the definition contained in the 
Basic Provisions, practical to replant applies to either the female or 
male parent plant. It will not be considered practical to replant unless 
production from the replanted acreage can be delivered under the terms 
of the hybrid seed corn processor contract, or the seed company agrees 
that it will accept the production from the replanted acreage.
    Prevented planting. In addition to the definition contained in the 
Basic Provisions, prevented planting applies to the female and male 
parent plants. The male parent plants must be planted in accordance with 
the requirements of the hybrid seed corn processor contract to be 
considered planted.
    Sample. For the purpose of the certified seed test, at least 3 
pounds of randomly selected field run shelled corn for each variety of 
commercial hybrid seed corn grown on the unit.
    Seed company. A business enterprise that possesses all licenses for 
marketing commercial hybrid seed corn required by the state in which it 
is domiciled or operates, and which possesses facilities with enough 
storage and drying capacity to accept and process the insured crop 
within a reasonable amount of time after harvest. If the seed company is 
the insured, it must also be a corporation.
    Seed production. All seed produced by female parent plants with a 
germination rate of at least 80 percent as determined by a certified 
seed test.
    Shelled corn. Kernels that have been removed from the cob.
    Variety. The name, number or code assigned to a specific genetic 
cross by the seed company or the Special Provisions for the insured crop 
in the county.

                            2. Unit Division

    For any processor contract that stipulates the amount of production 
to be delivered:
    (a) In lieu of the definition of ``basic unit'' contained in the 
Basic Provisions, a basic unit will consist of all acreage planted to 
the insured crop in the county that will be used to fulfill a hybrid 
seed corn processor contract;
    (b) There will be no more than one basic unit for all production 
contracted with each processor contract;
    (c) In accordance with section 12, all production from any basic 
unit in excess of the amount under contract will be included as 
production to count if such production is applied to any other basic 
unit for which the contracted amount has not been fulfilled; and
    (d) Optional units will not be established.

[[Page 302]]

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election for all the hybrid 
seed corn in the county insured under this policy unless the Special 
Provisions provide different price elections by variety, in which case 
you may select one price election for each hybrid seed corn variety 
designated in the Special Provisions. The price election you choose for 
each variety must have the same percentage relationship to the maximum 
price offered by us for each variety. For example, if you choose 100 
percent of the maximum price election for one specific variety, you must 
also choose 100 percent of the maximum price election for all other 
varieties.
    (b) The production reporting requirements contained in section 3 of 
the Basic Provisions are not applicable to this contract.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are March 15.

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions, you must:
    (a) Report by type and variety, the location and insurable acreage 
of the insured crop;
    (b) Report any acreage that is uninsured, including that portion of 
the total acreage occupied by male parent plants; and
    (c) Certify that you have a hybrid seed corn processor contract and 
report the amount, if any, of any minimum guaranteed payment.

                             7. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the female parent plants in the county for which a 
premium rate is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That are grown under a hybrid seed corn processor contract 
executed before the acreage reporting date;
    (3) That are planted for harvest as commercial hybrid seed corn in 
accordance with the requirements of the hybrid seed corn processor 
contract and the production management practices of the seed company; 
and
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Planted with a mixture of female and male parent seed in the 
same row;
    (ii) Planted for any purpose other than for commercial hybrid seed 
corn;
    (iii) Interplanted with another crop; or
    (iv) Planted into an established grass or legume.
    (b) An instrument in the form of a ``lease'' under which you retain 
control of the acreage on which the insured crop is grown and that 
provides for delivery of the crop under substantially the same terms as 
a hybrid seed corn processor contract will be treated as a contract 
under which you have an insurable interest in the crop.
    (c) A commercial hybrid seed corn producer who is also a seed 
company may be able to insure the hybrid seed corn crop if the following 
requirements are met:
    (1) The seed company has an insurable interest in the hybrid seed 
corn crop;
    (2) Prior to the sales closing date, the Board of Directors of the 
seed company has executed and adopted a corporate resolution that 
contains the same terms as a hybrid seed corn processor contract. This 
corporate resolution will be considered a contract under this policy;
    (3) Sales records for at least the previous years' seed production 
must be provided to confirm that the seed company has produced and sold 
seed. If such records are not available, the crop may be insured under 
the Coarse Grains Crop Provisions with a written agreement; and
    (4) Our inspection reveals that the storage and drying facilities 
satisfy the definition of a seed company.
    (d) Any of the insured crop that is under contract with different 
seed companies may be insured under separate policies with different 
insurance providers provided all acreage of the insured crop in the 
county is insured. If you elect to insure the insured crop with 
different insurance providers, you agree to pay separate administrative 
fees for each insurance policy.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
we will not insure any acreage of the insured crop:
    (a) Planted and occupied exclusively by male parent plants;
    (b) Not in compliance with the rotation requirements contained in 
the Special Provisions or, if applicable, required by the hybrid seed 
corn processor contract; or
    (c) If either the female or male parent plants are damaged before 
the final planting date and we determine that the insured crop is 
practical to replant but it is not replanted.

[[Page 303]]

                           9. Insurance Period

    (a) In addition to the provisions of section 11 of the Basic 
Provisions, insurance attaches upon completion of planting of:
    (1) The female parent plant seed on or before the final planting 
date designated in the Special Provisions, except as allowed in section 
16 of the Basic Provisions; and
    (2) The male parent plant seed.
    (b) In accordance with the provisions of section 11 of the Basic 
Provisions, the calendar date for the end of the insurance period is the 
October 31 immediately following planting.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur within the insurance period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if due to a cause of 
loss contained in section 10(a) (1) through (7) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded by section 12 of the 
Basic Provisions, we will not insure against any loss of production due 
to:
    (1) The use of unadapted, incompatible, or genetically deficient 
male or female parent plant seed;
    (2) Frost or freeze after the date established by the Special 
Provisions;
    (3) Failure to follow the requirements stated in the hybrid seed 
corn processor contract and production management practices of the seed 
company;
    (4) Inadequate germination, even if resulting from an insured cause 
of loss, unless you have provided adequate notice as required by section 
11(b)(1); or
    (5) Failure to plant the male parent plant seed at a time or in a 
manner sufficient to assure adequate pollination of the female parent 
plants, unless you are prevented from planting the male parent plant 
seed by an insured cause of loss.

                11. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, you must leave representative samples of at least one 
complete planting pattern of the female and male parent plant rows that 
extend the entire length of each field in the unit. If you are going to 
destroy any acreage of the insured crop that will not be harvested, the 
samples must not be destroyed until after our inspection.
    (b) In addition to the requirements of section 14 of the Basic 
Provisions:
    (1) You must give us notice of probable loss at least 15 days before 
the beginning of harvest if you anticipate inadequate germination on any 
unit; and
    (2) You must provide a completed copy of your hybrid seed corn 
processor contract unless we have determined it has already been 
provided by the seed company, and the seed company certifies that such 
contract is used for all its growers without any waivers or amendments.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) You will not receive an indemnity payment on a unit if the seed 
company refuses to provide us with records we require to determine the 
dollar value per bushel of production for each variety.
    (c) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by its respective amount of 
insurance per acre, by type and variety if applicable;
    (2) Totaling the results of section 12(c)(1) if there are more than 
one type or variety;
    (3) Multiplying the total seed production to count (see section 
12(d)) for each type and variety of commercial hybrid seed corn by the 
applicable dollar value per bushel for that type or variety;
    (4) Multiplying the total non-seed production to count (see section 
12(e)) for each type and variety by the applicable local market price 
determined on the earlier of the date the non-seed production is sold or 
the date of final inspection;
    (5) Totaling the results of sections 12(c)(3) and 12(c)(4) by type 
and variety;
    (6) Subtracting the result of section 12(c)(5) from the result of 
section 12(c)(1) if there is only one type or variety, or subtracting 
the result of 12(c)(5) from the result of section 12(c)(2) if there are 
more than one type or variety; and
    (7) Multiplying the result of section 12(c)(6) by your share. For 
example:
    You have a 100 percent share in 50 acres insured for the development 
of variety ``A'' hybrid seed corn in the unit, with an amount of

[[Page 304]]

insurance per acre guarantee of $340 (county yield of 160 bushels times 
a coverage level factor of .867 for the 65 percent coverage level, times 
a price election of $2.45 per bushel, minus the minimum guaranteed 
payment of zero). Your seed production was 1,400 bushels and the dollar 
value per bushel was $9.80. Your non-seed production was 100 bushels 
with a local market value of $2.00 per bushel. Your indemnity would be 
calculated as follows:
    (1) 50 acres x $340 = $17,000 amount of insurance guarantee;
    (3) 1,400 bushels x $9.80 = $13,720 value of seed production;
    (4) 100 bushel of non-seed x $2.00 = $200 of non-seed production;
    (5) $13,720 + $200 = $13,920;
    (6) $17,000 - $13,920 = $3,080; and
    (7) $3,080 x 100 percent share = $3,080 indemnity payment.
    You also have a 100 percent share in 50 acres insured for the 
development of variety ``B'' hybrid seed corn in the unit, with an 
amount of insurance per acre guarantee of $297 (county yield of 140 
bushels times a coverage level factor of .867 for the 65 percent 
coverage level, times a price election of $2.45 per bushel, minus the 
minimum guaranteed payment of zero). You harvested 1,200 bushels and the 
dollar value per bushel for the harvested amount was $8.56. You also 
harvested 200 bushels of non-seed with a market value of $2.00 per 
bushel. Your indemnity would be calculated as follows:
    (1) 50 acres x $340 = $17,000 amount of insurance guarantee for type 
``A'' and 50 acres x $297 = $14,850 amount of insurance guarantee for 
type ``B'';
    (2) $17,000 + $14,850 = $31,850 amount of insurance guarantee;
    (3) 1,400 bushels x $9.80 = $13,720 value of seed production for 
type ``A'' and 1,200 bushels x $8.56 = $10,272 value of seed production 
for type ``B'';
    (4) 100 bushels of non-seed x $2.00 = $200 of non-seed production 
for type ``A'' and 200 bushels of non-seed x $2.00 = $400 of non-seed 
production for type ``B'';
    (5) $13,720 + $200 + $10,272 + $400 = $24,592 value of production to 
count;
    (6) $31,850 - $24,592 = $7,258; and
    (7) $7,258 x 100 percent share = $7,258 indemnity payment.
    (d) Production to be counted as seed production will include:
    (1) All appraised production as follows:
    (i) Not less than the amount of insurance per acre for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Mature unharvested production with a germination rate of at 
least 80 percent of the commercial hybrid seed corn as determined by a 
certified seed test. Any such production may be adjusted in accordance 
with section 12(f);
    (iv) Immature appraised production;
    (v) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or fail to provide sufficient care 
for the samples, our appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) Harvested production that you deliver as commercial hybrid seed 
corn to the seed company stated in your hybrid seed corn processor 
contract, regardless of quality, unless the production has inadequate 
germination.
    (e) Production to be counted as non-seed production will include all 
harvested or mature appraised production that does not qualify as seed 
production to count as specified in section 12(d). Any such production 
may be adjusted in accordance with section 12(f).
    (f) For the purpose of determining the quantity of mature 
production:
    (1) Shelled commercial hybrid seed corn will be:
    (i) Increased 0.12 percent for each 0.1 percentage point of moisture 
below 15 percent; or
    (ii) Decreased 0.12 percent for each 0.1 percentage point of 
moisture in excess of 15 percent.
    (2) The weight of ear corn required to equal one bushel of shelled 
seed corn will be increased 1.5 pounds for each full percentage point of 
moisture in excess of 14 percent, and

[[Page 305]]

any portion of a percentage point will be disregarded. The moisture 
content of ear corn will be determined from a shelled sample of the ear 
corn.
    (3) When records of commercial hybrid seed corn production provided 
by the seed company have been adjusted to a shelled corn basis of 15.0 
percent moisture and 56 pound avoirdupois bushels, sections 12(f)(1) and 
(2) above will not apply to harvested production. In such cases, records 
of the seed company will be used to determine the amount of production 
to count, provided that the moisture and weight of such production are 
calculated on the same basis as that used to determine the approved 
yield.

                         13. Prevented Planting

    Your prevented planting coverage will be 50 percent of your amount 
of insurance for timely planted acreage. If you have limited or 
additional levels of coverage as specified in 7 CFR part 400, subpart T, 
and pay an additional premium, you may increase your prevented planting 
coverage to a level specified in the actuarial documents.

[62 FR 65350, Dec. 12, 1997; 62 FR 67117, Dec. 23, 1997]



Sec. 457.153  Peach crop insurance provisions.

    The Peach Crop Insurance Provisions for the 2001 and succeeding crop 
years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured policies:

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                          Peach Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Actual price per bushel for:
    (a) Fresh peaches means the average price per bushel of U.S. Extra 
No. 1 ``2-inch'' peaches (if not available, the next larger size for 
which a price is available) determined from applicable prices reported 
by the Market News Service of the United States Department of 
Agriculture for seven consecutive marketing days, commencing with the 
day harvest of the variety begins. In the absence of FOB shipping point 
price from the Market News Service, the price per bushel of U.S. Extra 
No. 1 ``2-inch'' peaches will be the total of the price election and 
allowable costs for the undamaged peaches; and
    (b) Processing peaches means the average price per bushel received 
from the processor for that applicable variety determined for seven 
consecutive marketing days, commencing with the day harvest of the 
variety begins.
    Bearing tree. A tree in at least the 4th growing season after set 
out.
    Bushel. Fifty pounds of ungraded peaches.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, or permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Harvest. The picking or removal of mature peaches from the trees 
either by hand or machine.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Loss in quality. When the crop is damaged to the extent that the 
producer does not receive the average price for U.S. Extra No. 1 peach.
    Marketable. Peach production acceptable for processing or other 
human consumption even if failing to meet any U.S. or applicable state 
grading standard.
    Packing shed. A facility at which peaches are graded, packed and 
cooled in preparation for shipment to a wholesale market.
    Set out. Transplanting the tree into the orchard.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election for all the peaches in 
the county insured under this policy unless the Special Provisions 
provide different price elections by type, in which case you may select 
one price election for each peach type (fresh or processing) designated 
in the Special Provisions. The price elections you choose for each type 
must have the same percentage relationship to the maximum price offered 
by us for each type. For example, if you choose 100 percent of the 
maximum price election for one type, you must choose 100 percent of the 
maximum price election for all other types.
    (b) You must report, not later than the production reporting date 
designated in section 3 (Insurance Guarantees, Coverage Levels, and 
Prices for Determining Indemnities)

[[Page 306]]

of the Basic Provisions (Sec. 457.8), by type if applicable:
    (1) Any damage, removal of or addition of trees, or change in 
practices, or any other circumstance that may reduce the expected yield 
below the yield upon which the insurance guarantee is based, and the 
number of affected acres;
    (2) The number of bearing and non-bearing trees on insurable and 
uninsurable acreage;
    (3) The age of the trees, variety, type, and the planting pattern; 
and
    (4) For the first year of insurance, acreage interplanted with 
another perennial crop, and anytime the planting pattern of such acreage 
is changed:
    (i) The age of the crop that is interplanted with the peaches;
    (ii) The variety, and type if applicable;
    (iii) The planting pattern; and
    (iv) Any other reasonable and pertinent information that we request 
in order to establish your approved yield.
    We will adjust the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of interplanting a 
perennial crop; removal or addition of trees or varieties of trees; 
physical or structural tree damage; a change in practices or changes in 
tree population and density, and any other circumstance affecting the 
yield potential of the insured crop. If you fail to notify us of any 
circumstance that may affect your yields from previous levels, we will 
adjust your production guarantee as necessary at any time we become 
aware of the circumstance.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that could or would reduce the yield of the insured crop 
has occurred prior to the time that you request the increase.

                           3. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date.

                  4. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and 
termination dates are November 20.

                             5. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the peaches in the county 
for which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown on tree varieties that:
    (1) Were commercially available when the trees were set out;
    (2) Are a variety having a chilling hour requirement that is 
appropriate for the area;
    (3) Are grown on a root stock that is adapted to the area.
    (c) That the crop insured will be any of the types or varieties of 
peaches that are grown for the production of Fresh or Processing Peaches 
(except Processing Peaches excluded in California) on insured acreage 
and for which a guarantee and premium rate are provided by the Actuarial 
Table.
    (d) That are grown in an orchard that, if inspected, is considered 
acceptable by us; and
    (e) That has reached at least the fourth growing season after set 
out. However, we may agree in writing to insure acreage that has not 
reached this age if it has produced at least 100 bushels of peaches per 
acre.

                          6. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, peaches interplanted with another 
perennial crop are insurable unless we inspect the acreage and determine 
that it does not meet the requirements contained in your policy.

                           7. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on November 21 of each crop year, except that 
for the year of application, if your application is received after 
November 11 but prior to November 21, insurance will attach on the 10th 
day after your properly completed application is received in our local 
office, unless we inspect the acreage during the 10-day period and 
determine that it does not meet insurability requirements. You must 
provide any information that we require for the crop to determine the 
condition of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is September 30.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable interest on any acreage of 
peaches on or before the acreage reporting date for the crop year and

[[Page 307]]

if the acreage was insured by you the previous crop year, insurance will 
not be considered to have attached, and no premium or indemnity will be 
due for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.
    (c) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that the policy remains continuously in force, 
coverage begins on the day immediately following the end of the 
insurance period for the prior crop year. Policy cancellation that 
results solely from transferring to a different insurance provider for a 
subsequent crop year will not be considered a break in continuous 
coverage.
    (d) If your peach policy is canceled or terminated for any crop 
year, in accordance with the terms of the policy, after insurance 
attached for that crop year but on or before the cancellation and 
termination dates whichever is later, insurance will not be considered 
to have attached for that crop year and no premium, administrative fee, 
or indemnity will be due for such crop year.

                            8. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur within the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the orchard;
    (3) Earthquake;
    (4) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (5) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (6) Volcanic eruption;
    (7) Wildlife, unless control measures have not been taken;
    (8) An insufficient number of chilling hours to effectively break 
dormancy; or
    (9) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Split pits, regardless of cause; or
    (2) Inability to market the peaches for any reason other than actual 
physical damage from an insurable cause specified in this section. For 
example, we will not pay you an indemnity if you are unable to market 
due to quarantine, boycott, or refusal of any person to accept 
production.

                9. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), and unless the 
insurance period has ended prior to each of the following events, the 
following will apply:
    (a) You must notify us within three days of the date that harvest of 
the damaged variety should have started if the crop will not be 
harvested.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing unless you have records 
verifying that the direct market peaches were ``weighed and graded'' 
through a packing shed. Failure to give timely notice that production 
will be sold by direct marketing will result in an appraised amount of 
production to count not less than the production guarantee per acre if 
such failure results in our inability to make the required appraisal.
    (c) If you previously gave notice in accordance with section 14 of 
the Basic Provisions (Sec. 457.8), and if you intend to claim an 
indemnity on any unit, you must notify us at least 15 days prior to the 
beginning of harvest of the damaged variety, so that we may inspect the 
damaged production. You must not sell or dispose of the damaged crop 
until after we have given you written consent to do so.
    (d) If you fail to meet the requirements of this section and such 
failure results in our inability to inspect the damaged production, all 
such production will be considered undamaged and included as production 
to count.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type, if applicable, by 
its respective production guarantee;
    (2) Multiplying each result in section 10(b)(1) by the respective 
price election;
    (3) Totaling the results in section 10(b)(2);

[[Page 308]]

    (4) Multiplying the total production to be counted by type, if 
applicable, (see subsection 10(c)) by the respective price election;
    (5) Totaling the results in section 10(b)(4);
    (6) Subtracting the total in section 10(b)(5) from the total in 
section 10(b)(3); and
    (7) Multiplying the result in section 10(b)(6) by your share.
    (c) The total production to count (in bushels) from all insurable 
acreage on the unit will include:
    (1) All appraised production will be determined as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) From which production is sold by direct marketing if you fail to 
meet the requirements contained in section 9;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production;
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
adequately care for the crop, our appraisal made prior to deferring the 
claim will be used to determine the production to count; and
    (v) Any appraised production on insured acreage will be considered 
production to count unless such production is exceeded by the actual 
harvested production.
    (2) All harvested production from the insurable acreage.
    (3) Mature marketable peach production may be reduced as a result of 
a loss in quality due to an insured cause of loss. The amount of 
production to count for such peaches will be determined as follows:
    (i) Peaches grown for fresh use by:
    (A) Dividing the value of the damaged peaches by the actual price 
for undamaged peaches; and
    (B) Multiplying the result of section 10(c)(3)(i)(A) by the number 
of bushels of the eligible damaged peaches.
    (ii) Peaches grown for processing by:
    (A) Dividing the value of the damaged peaches by the actual price of 
undamaged peaches for processing; and
    (B) Multiplying the result of section 10(c)(3)(ii)(A) by the number 
of bushels of the eligible damaged peaches.
    (4) Peaches that cannot be marketed due to insurable causes will not 
be considered production to count.

                     11. Late and Prevented Planting

    the late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 39923, July 25, 1997, as amended at 62 FR 65176, Dec. 10, 1997; 
65 FR 47839, Aug. 4, 2000]



Sec. 457.154  Processing sweet corn crop insurance provisions.

    The Processing Sweet Corn Crop Insurance Provisions for the 1998 and 
succeeding crop years are as follows:
    FCIC Policies

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                  Processing Sweet Corn Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Base contract price. The price stipulated on the processor contract 
without regard to discounts or incentives that may apply.
    Bypassed acreage. Land on which production is ready for harvest but 
the processor elects not to accept such production so it is not 
harvested.
    Good farming practices. The cultural practices generally in use in 
the county for the crop to make normal progress toward maturity and 
produce at least the yield used to determine the production guarantee 
and are those required by the sweet corn processor contract with the 
processing company, and recognized by the Cooperative State Research, 
Education, and Extension Service as compatible with agronomic and 
weather conditions in the county.
    Harvest. The removal of the ears from the stalks for the purpose of 
delivery to the processor.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, sweet corn must initially be placed in rows far enough 
apart to permit mechanical cultivation. Acreage planted in any other 
manner

[[Page 309]]

will not be insurable unless otherwise provided by the Special 
Provisions or by written agreement.
    Practical to replant. In lieu of the definition of Practical to 
replant contained in section 1 of the Basic Provisions, practical to 
replant is defined as our determination, after loss or damage to the 
insured crop, based on factors including, but not limited to, moisture 
availability, condition of the field, time to crop maturity, and 
marketing window, that replanting the insured crop will allow the crop 
to attain maturity prior to the calendar date for the end of the 
insurance period. It will not be considered practical to replant unless 
the replanted acreage can produce at least 75 percent of the approved 
yield, and the processor agrees in writing that it will accept the 
production from the replanted acreage.
    Processor. Any business enterprise regularly engaged in canning or 
freezing processing sweet corn for human consumption, that possesses all 
licenses and permits for processing sweet corn required by the state in 
which it operates, and that possesses facilities, or has contractual 
access to such facilities, with enough equipment to accept and process 
contracted processing sweet corn within a reasonable amount of time 
after harvest.
    Processor contract. A written agreement between the producer and a 
processor, containing at a minimum:
    (a) The producer's commitment to plant and grow sweet corn, and to 
deliver the sweet corn production to the processor;
    (b) The processor's commitment to purchase all the production stated 
in the processor contract; and
    (c) A base contract price.
    Multiple contracts with the same processor that specify amounts of 
production will be considered as a single processor contract.
    Ton. Two thousand (2,000) pounds avoirdupois.
    Unhusked ear weight. Weight of the seed-bearing spike of sweet corn 
including the membranous or green outer envelope.
    Usable tons. The quantity of sweet corn for which the producer is 
compensated or should have been compensated by the processor.

                            2. Unit Division

    (a) For processor contracts that stipulate the amount of production 
to be delivered:
    (1) In lieu of the definition contained in the Basic Provisions, a 
basic unit will consist of all acreage planted to the insured crop in 
the county that will be used to fulfill contracts with each processor;
    (i) There will be no more than one basic unit for all production 
contracted with each processor contract;
    (ii) In accordance with section 12, all production from any basic 
unit in excess of the amount under contract will be included as 
production to count if such production is applied to any other basic 
unit for which the contracted amount has not been fulfilled; and
    (2) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable.
    (b) For any processor contract that stipulates the number of acres 
to be planted, the provisions contained in section 34 of the Basic 
Provisions will apply.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may select only one price election for all the processing 
sweet corn in the county insured under this policy unless the Special 
Provisions provide different price elections by type. The percentage of 
the maximum price elections you choose for one type will be applicable 
to all other types insured under this policy.
    (b) The insurance guarantee per acre is expressed as tons of 
unhusked ear weight. Any other measured production will be converted to 
an unhusked ear weight equivalent.
    (c) The appraised production from bypassed acreage that could have 
been accepted by the processor will be included when determining your 
approved yield.
    (d) Acreage that is bypassed because it was damaged by an insurable 
cause of loss will be considered to have a zero yield when determining 
your approved yield.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are March 15.

                          6. Report of Acreage

    In addition to the provisions of section 6 of the Basic Provisions, 
you must provide a copy of all processor contracts to us on or before 
the acreage reporting date.

                             7. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the processing sweet corn in the county for which a 
premium rate is provided by the actuarial documents:
    (1) In which you have a share;

[[Page 310]]

    (2) That is grown under, and in accordance with, the requirements of 
a processor contract executed on or before the acreage reporting date 
and not excluded from the processor contract at any time during the crop 
year; and
    (3) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop; or
    (ii) Planted into an established grass or legume.
    (b) You will be considered to have a share in the insured crop if, 
under the processor contract, you retain control of the acreage on which 
the sweet corn is grown, you are at risk of loss, and the processor 
contract provides for delivery of sweet corn under specified conditions 
and at a stipulated base contract price.
    (c) A commercial sweet corn producer who is also a processor may 
establish an insurable interest if the following requirements are met:
    (1) The producer must comply with these Crop Provisions;
    (2) Prior to the sales closing date, the Board of Directors or 
officers of the processor must execute and adopt a resolution that 
contains the same terms as an acceptable processor contract. Such 
resolution will be considered a processor contract under this policy; 
and
    (3) Our inspection reveals that the processing facilities comply 
with the definition of a processor contained in these Crop Provisions.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions:
    (a) Any acreage of the insured crop that is damaged before the final 
planting date, to the extent that the majority of producers in the area 
would normally not further care for the crop, must be replanted unless 
we agree that it is not practical to replant; and
    (b) We will not insure any acreage that does not meet the rotation 
requirements, if applicable, contained in the Special Provisions.

                           9. Insurance Period

    In lieu of the provisions contained in section 11 of the Basic 
Provisions, regarding the end of the insurance period, insurance ceases 
at the earlier of:
    (a) The date the sweet corn:
    (1) Was destroyed;
    (2) Should have been harvested but was not harvested;
    (3) Was abandoned; or
    (4) Was harvested;
    (b) The date you harvest sufficient production to fulfill your 
processor contract if the processor contract stipulates a specific 
amount of production to be delivered;
    (c) Final adjustment of a loss; or
    (d) Unless otherwise agreed to in writing, the calendar date for the 
end of the insurance period in which the sweet corn would normally be 
harvested as follows:
    (1) September 30 in Malheur County, Oregon, all Idaho counties, and 
all Iowa counties;
    (2) October 20 in all other Oregon counties, and in all Washington 
counties; or
    (3) September 20 in all other states.

                           10. Causes of Loss

    In accordance with the provisions of section 12 of the Basic 
Provisions:
    (a) Insurance is provided only against the following causes of loss 
that occur during the insurance period:
    (1) Adverse weather conditions, including:
    (i) Excessive moisture that prevents harvesting equipment from 
entering the field or that prevents the timely operation of harvesting 
equipment; and
    (ii) Abnormally hot or cold temperatures that cause an unexpected 
number of acres over a large producing area to be ready for harvest at 
the same time, affecting the timely harvest of a large number of such 
acres or the processing of such production is beyond the capacity of the 
processor, either of which causes the acreage to be bypassed.
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures or as otherwise limited by the 
Special Provisions;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if due to a cause of 
loss listed in section 10(a)(1) through (7) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded in section 12 of the 
Basic Provisions, we will not insure any loss of production due to:
    (1) Bypassed acreage because of:
    (i) The breakdown or non-operation of equipment or facilities; or
    (ii) The availability of a crop insurance payment. We may deny any 
indemnity immediately in such circumstance or, if an indemnity has been 
paid, require you to repay it to us with interest at any time acreage 
was bypassed due to the availability of a crop insurance payment; or
    (2) Your failure to follow the requirements contained in the 
processor contract.

[[Page 311]]

                11. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 of the Basic 
Provisions, you must give us notice:
    (a) Not later than 48 hours after:
    (1) Total destruction of the sweet corn on the unit; or
    (2) Discontinuance of harvest on a unit on which unharvested 
production remains.
    (b) Within 3 days after the date harvest should have started on any 
acreage that will not be harvested unless we have previously released 
the acreage. You must also provide acceptable documentation of the 
reason the acreage was bypassed. Failure to provide such documentation 
will result in our determination that the acreage was bypassed due to an 
uninsured cause of loss. If the crop will not be harvested and you wish 
to destroy the crop, you must leave representative samples of the 
unharvested crop for our inspection. The samples must be at least 10 
feet wide and extend the entire length of each field in each unit. The 
samples must not be destroyed until the earlier of our inspection or 15 
days after notice is given to us; and
    (c) At least 15 days prior to the beginning of harvest if you intend 
to claim an indemnity on any unit, or immediately if damage is 
discovered during the 15 day period or during harvest, so that we may 
inspect any damaged production. If you fail to notify us and such 
failure results in our inability to inspect the damaged production, we 
will consider all such production to be undamaged and include it as 
production to count. You are not required to delay harvest.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate, acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee, by type if applicable;
    (2) Multiplying each result of section 12(b)(1) by the respective 
price election, by type if applicable;
    (3) Totaling the results of section 12(b)(2) if there are more than 
one type;
    (4) Multiplying the total production to count (see section 12(c)), 
for each type if applicable, by its respective price election;
    (5) Totaling the results of section 12(b)(4) if there are more than 
one type;
    (6) Subtracting the results of section 12(b)(4) from the results of 
section 12(b)(2) if there is only one type or subtracting the results of 
section 12(b)(5) from the result of section 12(b)(3) if there are more 
than one type; and
    (7) Multiplying the result of section 12(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 acres of type A processing sweet 
corn in the unit, with a guarantee of 3.0 tons per acre and a price 
election of $50.00 per ton. You are only able to harvest 200 tons. Your 
indemnity would be calculated as follows:
    (1) 100 acres x 3.0 tons = 300 tons guarantee;
    (2) 300 tons x $50.00 price election = $15,000.00 value of 
guarantee;
    (4) 200 tons x $50.00 price election = $10,000.00 value of 
production to count;
    (6) $15,000.00 - $10,000.00 = $5,000.00 loss;
    (7) $5,000.00 x 100 percent = $5,000.00 indemnity payment.
    You also have a 100 percent share in 100 acres of type B processing 
sweet corn in the same unit, with a guarantee of 4.0 tons per acre and a 
price election of $45.00 per ton. You are only able to harvest 350 tons. 
Your total indemnity for both types A and B would be calculated as 
follows:
    (1) 100 acres x 3.0 tons = 300 tons guarantee for type A, and
    100 acres x 4.0 tons = 400 tons guarantee for type B;
    (2) 300 tons x $50.00 price election = $15,000.00 value of guarantee 
for type A, and
    400 tons x $45.00 price election = $18,000.00 value of guarantee for 
type B;
    (3) $15,000.00 + $18,000.00 = $33,000.00 total value of guarantee;
    (4) 200 tons x $50.00 price election = $10,000.00 value of 
production to count for type A, and
    350 tons x $45.00 price election = $15,750.00 value of production to 
count for type B;
    (5) $10,000.00 + $15,750.00 = $25,750.00 total value of production 
to count;
    (6) $33,000.00 - $25,750.00 = $7,250.00 loss;
    (7) $7,250.00 loss x 100 percent = $7,250.00 indemnity payment.
    (c) The total production to count, specified in tons of unhusked ear 
weight, from all insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) That is put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us.
    (ii) Production lost due to uninsured causes.
    (iii) Production on acreage that is bypassed unless the acreage was 
bypassed due to an insured cause of loss which resulted in

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production which would not be acceptable under the terms of the 
processor contract.
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or fail to provide sufficient care 
for the samples, our appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested.
    (2) All harvested processing sweet corn production from the 
insurable acreage. The amount of such production will be:
    (i) The usable tons of processing sweet corn shown on the processor 
settlement sheet, if available; or
    (ii) Determined by dividing the dollar amount paid, payable, or 
which should have been paid under the terms of the processor contract 
for the quantity of the sweet corn delivered to the processor by the 
base contract price per ton; and
    (3) All harvested processing sweet corn production from any other 
insurable units that have been used to fulfill your processor contract 
for this unit.
    The total production to count will be expressed as an unhusked ear 
weight. Any other measure of production will be converted to an unhusked 
ear weight equivalent.

                            13. Late Planting

    A late planting period is not applicable to processing sweet corn 
unless allowed by the Special Provisions and you provide written 
approval from the processor by the acreage reporting date that it will 
accept the production from the late planted acres when it is expected to 
be ready for harvest.

                         14. Prevented Planting.

    Your prevented planting coverage will be 40 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to the levels specified in the actuarial documents.

[62 FR 65342, Dec. 12, 1997]



Sec. 457.155  Processing bean crop insurance provisions.

    The Processing Bean Crop Insurance Provisions for the 1998 and 
succeeding crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                     Processing Bean Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Base contract price. The price stipulated in the processor contract 
for the grade factor or sieve size that is designated in the Special 
Provisions, if applicable, without regard to discounts or incentives 
that may apply.
    Broker. A business enterprise that has all the licenses and permits 
required by the state in which it operates, and has a long term 
agreement in writing with a processor to purchase and deliver processing 
beans.
    Bypassed acreage. Land on which production is ready for harvest but 
the processor elects not to accept such production so it is not 
harvested.
    Good farming practices. The cultural practices generally in use in 
the county for the crop to make normal progress toward maturity and 
produce at least the yield used to determine the production guarantee 
and are those required by the bean processor contract with the 
processing company, and recognized by the Cooperative State Research, 
Education, and Extension Service as compatible with agronomic and 
weather conditions in the county.
    Harvest. The mechanical picking of bean pods from the vines.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, beans must initially be placed in rows far enough 
apart to permit mechanical cultivation to be considered planted. Acreage 
planted in any other manner will not be insurable unless

[[Page 313]]

otherwise provided by the Special Provisions or by written agreement.
    Practical to replant. In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions, practical to 
replant is defined as our determination, after loss or damage to the 
insured crop, based on factors including, but not limited to, moisture 
availability, condition of the field, time to crop maturity, and 
marketing window, that replanting the insured crop will allow the crop 
to attain maturity prior to the calendar date for the end of the 
insurance period. It will not be considered practical to replant unless 
the replanted acreage can produce at least 75 percent of the approved 
yield, and the processor agrees in writing that it will accept the 
production from the replanted acreage.
    Processing beans. Lima, snap, or other bean types identified in the 
Special Provisions that are grown under a processor contract to be 
canned or frozen and sold for human consumption.
    Processor. Any business enterprise regularly engaged in canning or 
freezing processing beans for human consumption, that possesses all 
licenses and permits for processing beans required by the state in which 
it operates, and that possesses facilities, or has contractual access to 
such facilities, with enough equipment to accept and process the 
contracted beans within a reasonable amount of time after harvest.
    Processor contract. A written agreement between the producer and a 
processor, or between the producer and a broker, containing at a 
minimum:
    (a) The producer's commitment to plant and grow processing beans, 
and to deliver the bean production to the processor or broker;
    (b) The processor's, or broker's, commitment to purchase all the 
production stated in the processor contract; and
    (c) A base contract price.
    Multiple contracts with the same processor that specify amounts of 
production will be considered as a single processor contract unless the 
contracts are for different types of processing beans.
    Ton. Two thousand (2,000) pounds avoirdupois.
    Type. A category of processing beans identified as a type in the 
Special Provisions.

                            2. Unit Division

    (a) For any processor contract that stipulates the amount of 
production to be delivered:
    (1) In lieu of the definition contained in the Basic Provisions, a 
basic unit will consist of all acreage planted to the insured crop in 
the county that will be used to fulfill contracts with each processor;
    (i) There will be no more than one basic unit for all production 
contracted with each processor contract;
    (ii) In accordance with section 12, all production from any basic 
unit in excess of the amount under contract will be included as 
production to count if such production is applied to any other basic 
unit for which the contracted amount has not been fulfilled; and
    (2) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units will not 
be established.
    (b) For any processor contract that stipulates the number of acres 
to be planted, in addition to or instead of, establishing optional units 
by section, section equivalent or FSA farm serial number, or irrigated 
and non-irrigated acreage, optional units may be established by type if 
acreage of one type does not continue into acreage of another type in 
the same rows or planting pattern.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may select only one price election for all the processing 
beans in the county insured under this policy unless the Special 
Provisions provide different price elections by type. The percentage of 
the maximum price elections you choose for one type will be applicable 
to all other types insured under this policy.
    (b) The appraised production from bypassed acreage that could have 
been accepted by the processor will be included when determining your 
approved yield.
    (c) Acreage that is bypassed because it was damaged by an insurable 
cause of loss will be considered to have a zero yield when determining 
your approved yield.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are March 15.

                          6. Report of Acreage

    In addition to the provisions of section 6 of the Basic Provisions, 
you must provide a copy of all processor contracts to us on or before 
the acreage reporting date.

                             7. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the processing beans in the county for which a 
premium rate is provided by the actuarial documents:

[[Page 314]]

    (1) In which you have a share;
    (2) That are grown under, and in accordance with, the requirements 
of a processor contract executed on or before the acreage reporting date 
and are not excluded from the processor contract at any time during the 
crop year; and
    (3) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Interplanted with another crop; or
    (ii) Planted into an established grass or legume.
    (b) You will be considered to have a share in the insured crop if, 
under the processor contract, you retain control of the acreage on which 
the processing beans are grown, you are at risk of loss, and the 
processor contract provides for delivery of the processing beans under 
specified conditions and at a stipulated base contract price.
    (c) A commercial processing bean producer who is also a processor or 
broker may establish an insurable interest if the following requirements 
are met:
    (1) The producer must comply with these Crop Provisions;
    (2) Prior to the sales closing date, the Board of Directors or 
officers of the processor or the broker must execute and adopt a 
resolution that contains the same terms as an acceptable processor 
contract. Such resolution will be considered a processor contract under 
this policy; and
    (3) Our inspection reveals that the processing facilities comply 
with the definition of a processor contained in these Crop Provisions.

                          8. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions:
    (a) Any acreage of the insured crop that is damaged before the final 
planting date, to the extent that the majority of producers in the area 
would normally not further care for the crop, must be replanted unless 
we agree that it is not practical to replant; and
    (b) We will not insure acreage that does not meet any rotation 
requirements, if applicable, contained in the Special Provisions.

                           9. Insurance Period

    In lieu of the provisions contained in section 11 of the Basic 
Provisions, regarding the end of the insurance period, insurance ceases 
at the earlier of:
    (a) The date the processing beans:
    (1) Were destroyed;
    (2) Should have been harvested but were not harvested;
    (3) Were abandoned; or
    (4) Were harvested;
    (b) The date you harvest sufficient production to fulfill your 
processor contract if the processor contract stipulates a specific 
amount of production to be delivered;
    (c) Final adjustment of a loss; or
    (d) The date shown below for the end of the insurance period in the 
calendar year in which the processing beans would normally be harvested, 
unless otherwise agreed to in writing, as follows:
    (1) October 30 for all processing beans in the state of Arkansas;
    (2) October 15 for all processing beans in the states of Delaware, 
Maryland, and New Jersey;
    (3) October 5 for all processing beans in the states of Idaho, 
Oregon, and Washington;
    (4) September 30 for snap beans in the state of New York;
    (5) September 20 for snap beans in all other states; or
    (6) October 5 for lima beans in all other states.

                           10. Causes of Loss

    In accordance with the provisions of section 12 of the Basic 
Provisions:
    (a) Insurance is provided only against the following causes of loss 
that occur during the insurance period:
    (1) Adverse weather conditions, including:
    (i) Excessive moisture that prevents the harvesting equipment from 
entering the field or that prevents the timely operation of harvesting 
equipment; and
    (ii) Abnormally hot or cold temperatures that cause an unexpected 
number of acres over a large producing area to be ready for harvest at 
the same time, affecting the timely harvest of a large number of such 
acres or the processing of such production is beyond the capacity of the 
processor, either of which causes the acreage to be bypassed.
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease on acreage not planted to processing beans the 
previous crop year. (In certain instances, contained in the Special 
Provisions or in a written agreement, acreage planted to processing 
beans the previous year may be covered. Damage due to insufficient or 
improper application of disease control measures is not covered);
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if due to a cause of 
loss contained in section 10 (a)(1) through (7) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded in section 12 of the 
Basic Provisions, we will not insure any loss of production due to:
    (1) Bypassed acreage because of:
    (i) The breakdown or non-operation of equipment or facilities; or

[[Page 315]]

    (ii) The availability of a crop insurance payment. We may deny any 
indemnity immediately in such circumstance or, if an indemnity has been 
paid, require you to repay it to us with interest at any time acreage 
was bypassed due to the availability of a crop insurance payment; or
    (2) Your failure to follow the requirements contained in the 
processor contract.

                11. Duties in the Event of Damage or Loss

    In addition to the notice required by section 14 of the Basic 
Provisions, you must give us notice:
    (a) Not later than 48 hours after:
    (1) Total destruction of the processing beans on the unit; or
    (2) Discontinuance of harvest on a unit on which unharvested 
production remains.
    (b) Within 3 days after the date harvest should have started on any 
acreage that will not be harvested unless we have previously released 
the acreage. You must also provide acceptable documentation of the 
reason the acreage was bypassed. Failure to provide such documentation 
will result in our determination that the acreage was bypassed due to an 
uninsured cause of loss. If the crop will not be harvested and you wish 
to destroy the crop, you must leave representative samples of the 
unharvested crop for our inspection. The samples must be at least 10 
feet wide and extend the entire length of each field in each unit. The 
samples must not be destroyed until the earlier of our inspection or 15 
days after notice is given to us; and
    (c) At least 15 days prior to the beginning of harvest if you intend 
to claim an indemnity on any unit, or immediately if damage is 
discovered during the 15 day period or during harvest. If you fail to 
notify us and such failure results in our inability to inspect the 
damaged production, we will consider all such production to be undamaged 
and include it as production to count. You are not required to delay 
harvest.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate, acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee, by type if applicable;
    (2) Multiplying each result of section 12(b)(1) by the respective 
price election, by type if applicable;
    (3) Totaling the results of section 12(b)(2) if there are more than 
one type;
    (4) Multiplying the total production to count (see section 12(c)), 
for each type if applicable, by its respective price election;
    (5) Totaling the results of section 12(b)(4) if there are more than 
one type;
    (6) Subtracting the results of section 12(b)(4) from the results of 
section 12(b)(2) if there is only one type or subtracting the results of 
section 12(b)(5) from the result of section 12(b)(3) if there are more 
than one type; and
    (7) Multiplying the result of section 12(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 acres of snap type processing 
beans in the unit, with a guarantee of 3.0 tons per acre and a price 
election of $110.00 per ton. You are only able to harvest 200 tons. Your 
indemnity would be calculated as follows:
    (1) 100 acres x 3.0 tons = 300 tons guarantee;
    (2) 300 tons x $110.00 price election = $33,000.00 value of 
guarantee;
    (3) 200 tons x $110.00 price election = $22,000.00 value of 
production to count;
    (4) $33,000.00 - $22,000.00 = $11,000.00 loss; and
    (5) $11,000.00 x 100 percent = $11,000.00 indemnity payment.
    You also have a 100 percent share in 100 acres of lima type 
processing beans in the same unit, with a guarantee of 1.0 ton per acre 
and a price election of $225.00 per ton. You are only able to harvest 75 
tons. Your total indemnity for both snap and lima types processing beans 
would be calculated as follows:
    (1) 100 acres x 3.0 tons = 300 tons guarantee for the snap type, and 
100 acres x 1.0 ton = 100 tons guarantee for the lima type;
    (2) 300 tons x $110.00 price election = $33,000.00 value of 
guarantee for the snap type, and 100 tons x $225.00 price election = 
$22,500.00 value of guarantee for the lima type;
    (3) $33,000.00 + $22,500.00 = $55,500.00 total value of guarantee;
    (4) 200 tons x $110.00 price election = $22,000.00 value of 
production to count for the snap type, and 75 tons x $225.00 price 
election = $16,875.00 value of production to count for the lima type;
    (5) $22,000.00 + $16,875.00 = $38,875.00 total value of production 
to count;
    (6) $55,500.00 - $38,875.00 = $16,625.00 loss; and
    (7) $16,625.00 loss x 100 percent = $16,625.00 indemnity payment.
    (c) The total production to count, specified in tons, from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;

[[Page 316]]

    (B) That is put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us.
    (ii) Production lost due to uninsured causes.
    (iii) Production on acreage that is bypassed unless the acreage was 
bypassed due to an insured cause of loss which resulted in production 
which would not be acceptable under the terms of the processor contract.
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or fail to provide sufficient care 
for the samples, our appraisal made prior to giving you consent to put 
the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested.
    (2) All harvested processing bean production from the insurable 
acreage. The amount of such production will be:
    (i) The usable tons of processing beans shown on the processor 
settlement sheet, if available; or
    (ii) Determined by dividing the dollar amount paid, payable, or 
which should have been paid under the terms of the processor contract 
for the quality and quantity of beans to be delivered to the processor 
by the base contract price per ton; and
    (3) All harvested processing bean production from any other 
insurable units that have been used to fulfill your processor contract 
for this unit.

                            13. Late Planting

    A late planting period is not applicable to processing beans unless 
allowed by the Special Provisions and you provide written approval from 
the processor by the acreage reporting date that it will accept the 
production from the late planted acres when it is expected to be ready 
for harvest.

                         14. Prevented Planting

    Your prevented planting coverage will be 40 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[62 FR 58625, Oct. 30, 1997, as amended at 62 FR 65176, Dec. 10, 1997]



Sec. 457.156  Quota tobacco crop insurance provisions.

    The Quota Tobacco Crop Insurance Provisions for the 1999 and 
succeeding crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured policies:

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                 Quota Tobacco Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Amount of insurance. The dollar amount determined by multiplying the 
insured poundage quota by the current year's support price or the 
percentage of the current year's support price you select less any 
adjustments for late planting as specified in section 14.
    Approved yield. The yield calculated in accordance with 7 CFR part 
400, subpart G, if required by the Special Provisions.
    Basic unit. In lieu of the definition in the Basic Provisions, a 
basic unit is all insurable acreage of an insurable type of tobacco in 
the county in which you have a share on the date of planting for the 
crop year and that is identified by a single FSA farm serial number at 
the time insurance first attaches under these provisions for the crop 
year.
    Carryover tobacco. Any tobacco produced on the land identified by a 
FSA farm serial number in previous years that remained unsold at the end 
of the most recent marketing year.
    County. In lieu of the definition in the Basic Provisions, county is 
defined as the county or other political subdivision of a

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state shown on your accepted application including any land identified 
by a FSA farm serial number for such county but physically located in 
another county.
    Discount variety. Tobacco defined as such under the provisions of 
the United States Department of Agriculture tobacco price support 
program.
    Effective poundage marketing quota. The farm marketing quota as 
established and recorded by the local FSA office for the land identified 
by the FSA farm serial number plus any additional poundage, as allowed 
by the USDA Tobacco Marketing Quota Regulations, that you intend to 
produce for each unit in that crop year minus the amount of any 
carryover tobacco. The term may not include any tobacco that would be 
subject to a marketing quota penalty under USDA Tobacco Marketing Quota 
Regulations. For any crop year in which there are no effective USDA 
Tobacco Marketing Quota Regulations, the effective poundage marketing 
quota will be the pounds obtained by multiplying the applicable approved 
yield per acre by the lower of the reported or insured acreage on the 
basic unit, unless otherwise provided by the actuarial documents.
    Fair market value. The current year's tobacco season average price 
for the applicable type of tobacco obtained from the sale of the tobacco 
through a market other than an auction warehouse.
    Farm yield. The yield per acre used by FSA to establish the 
effective poundage marketing quota for land identified by a FSA farm 
serial number, unless we have estab lished a yield for that land in the 
actuarial documents.
    Harvest. Cutting and removing all insured tobacco from the field in 
which it was grown.
    Hydroponic plants. Seedlings grown in liquid nutrient solutions.
    Insured poundage quota. The lesser of:
    (1) The product (in pounds) obtained by multiplying the effective 
poundage marketing quota for the land identified by a FSA farm serial 
number by your selected coverage level; or
    (2) The farm yield or approved yield, as applicable, adjusted for 
late planting in accordance with section 14, if applicable, multiplied 
by the appropriate number of insured acres and by your selected coverage 
level.
    Late planting period. In lieu of the definition in section 1 of the 
Basic Provisions, the period that begins the day after the final 
planting date for the insured crop and ends 15 days after the final 
planting date, unless otherwise specified in the Special Provisions.
    Market price. The previous years' season average price published by 
National Agricultural Statistics Service for the applicable type of 
tobacco in the area.
    Marketing year. The marketing year published by National 
Agricultural Statistics Service for the applicable type of tobacco in 
the area.
    Planted acreage. Land in which tobacco seedlings, including 
hydroponic plants, have been transplanted by hand or machine from the 
tobacco bed to the field.
    Pound. Sixteen ounces avoirdupois.
    Replanting. In lieu of the definition in section 1 of the Basic 
Provisions, performing the cultural practices necessary to replace the 
tobacco plant, and then replacing the tobacco plant in the insured 
acreage with the expectation of producing at least the quota.
    Support price. The average price per pound for the type of tobacco 
as announced by the USDA under its tobacco price support program, or, if 
there is no such program, as announced by FCIC.
    Tobacco bed. An area protected from adverse weather, in which 
tobacco seeds are sown and seedlings are grown until transplanted into 
the tobacco field by hand or machine.

                            2. Unit Division

    A unit will be determined in accordance with the definition of basic 
unit contained in section 1 of these Crop Provisions. The provision in 
the Basic Provisions regarding optional units are not applicable, unless 
specified by the Special Provisions.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to section 3 of the Basic Provisions, a production 
report, if required by the Special Provisions, must be filed in 
accordance with section 3(c) of the Basic Provisions.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are March 15.

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions:
    (a) You must report the effective poundage marketing quota and 
specify any amount of carryover tobacco, if applicable.
    (b) You must provide a copy of any written lease agreement between 
you and any landlord or tenant showing the amount of the effective 
poundage marketing quota allocated to you. The written lease agreement 
must:
    (1) Identify all other persons sharing in the effective poundage 
marketing quota; and
    (2) Be submitted to your local insurance provider's office on or 
before the acreage reporting date.

[[Page 318]]

    (c) In the event of a loss, if the written lease agreement has been 
submitted timely, we will distribute the effective poundage marketing 
quota in accordance with the terms of the written lease agreement. If 
the written lease agreement is not submitted timely, we will prorate the 
effective poundage marketing quota across the FSA farm serial number to 
all insured and uninsured persons based on planted acres within land 
identified by the FSA farm serial number.

                            7. Annual Premium

    In lieu of paragraph (c) of section 7 of the Basic Provisions, your 
annual premium amount is determined by either:
    (a) Multiplying the amount of insurance by the rate, your share, and 
any premium adjustment percentages that may apply; or
    (b) If no support price program exists, multiplying the approved 
yield by the coverage level, the support price, the acres, your share, 
and any premium adjustment percentages that may apply.

                             8. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be any of the tobacco types designated in the Special 
Provisions for the county, in which you have a share, that you elect to 
insure, and for which a premium rate is provided by the actuarial 
documents.
    (b) In addition to section 8 of the Basic Provisions, the crop 
insured will not include any poundage above the effective poundage 
marketing quota or the insured poundage quota.

                          9. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions, 
we will not insure any acreage under these crop provisions that is:
    (a) Planted to a discount variety;
    (b) Planted to a tobacco type for which no premium rate is provided 
by the actuarial documents;
    (c) Planted in any manner other than as provided in the definition 
of ``planted acreage'' in section 1 of these Crop Provisions, unless 
otherwise provided by the Special Provisions or by written agreement; or
    (d) Damaged before the final planting date to the extent that most 
of the producers of tobacco acreage with similar characteristics in the 
area would normally not further care for the crop, unless such crop is 
replanted or we agree that replanting is not practical.

                          10. Insurance Period

    In accordance with the provisions of section 11(b) of the Basic 
Provisions, insurance ceases at the earliest of:
    (a) Total destruction of the tobacco on the unit;
    (b) Weighing-in at the tobacco warehouse;
    (c) Removal of the tobacco from the field where grown except for 
curing, grading, packing, or immediate delivery to the tobacco 
warehouse; or
    (d) The February 28 immediately following the normal harvest period.

                           11. Causes of Loss

    In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by a peril 
specified in section 11 (a) through (g) that occurs during the insurance 
period.

                12. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 of the Basic 
Provisions, any representative samples we may require of each 
unharvested tobacco type must be at least 5 feet wide (at least two 
rows) and extend the entire length of each field in the unit. The 
samples must not be harvested or destroyed until after our inspection.

                         13. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records, we will 
allocate any commingled production to such units in proportion to our 
liability on the harvested acreage for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured poundage quota by your elected 
percentage of the current year's support price.
    (2) Subtracting the total value of the production to be counted (see 
section 13(c)) from the amount of insurance; and
    (3) Multiplying the result in section 13(b)(1) by your share. For 
example:
    You have 100 percent share of type 31 quota tobacco in the unit, 
with an insurable poundage quota of 1,000 pounds and a support price of 
$1.73 per pound. The amount of insurance equals $1730.00 (1,000 
insurable poundage quota x $1.73 support price). You are only able to 
harvest 600 pounds. The value of the total production to count equals 
$1038.00 (600 harvested pounds x $1.73 support price). Your indemnity 
would be calculated as follows:

[[Page 319]]

    (1) $1730.00 (amount of insurance) - $1038.00 (value of the total 
production to count) = $692.00 loss
    (2) $692.00 loss x 100 percent = $692.00 indemnity payment
    (c) The value of the total production to count (pounds of appraised 
or harvested production) for all insurable acreage on the unit will 
include:
    (1) All appraised production as follows:
    (i) Not less than the amount of insurance per insured acre for the 
unit for any acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records, if 
required by the Special Provisions;
    (ii) The value of production lost due to uninsured causes which is 
the number of pounds of such production multiplied by the support price;
    (iii) The value of potential production on unharvested insured 
acreage that you intend to put to another use with our consent, if you 
and we agree on the number of pounds of such production to count which 
will be multiplied by the support price. Upon such agreement, the 
insurance period for that acreage will end when you put the acreage to 
another use or abandon the crop. If agreement on the appraised amount of 
production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
allow you to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The value of production to count for 
such acreage will be the number of pounds of harvested or appraised 
production taken from samples at the time harvest should have occurred 
multiplied by the support price. If you do not leave the required 
samples intact, or you fail to provide sufficient care for the samples, 
the value of production to count will be our appraisal made prior to 
giving you consent to put the acreage to another use multiplied by the 
support price); or
    (B) If you elect to continue to care for the crop, the value of 
production to count for the acreage will be the harvested production, or 
our reappraisal multiplied by the support price if additional damage 
occurs and the crop is not harvested;
    (2) All harvested production from insurable acreage multiplied by:
    (i) The average price for any tobacco sold on a warehouse floor; and
    (ii) Fair market value for all other tobacco sold or not sold.
    (d) Mature tobacco production that is damaged by insurable causes 
will be adjusted for quality based on the USDA Official Standard Grades 
for the insured type of tobacco.
    (e) To enable us to determine the fair market value of tobacco not 
sold through auction warehouses, you must give us the opportunity to 
inspect such tobacco before it is sold, contracted to be sold, or 
otherwise disposed. Failure to provide us the opportunity to inspect 
such tobacco may result in rejection of any claim for indemnity.
    (f) If we consider the best offer you receive for such tobacco to be 
inadequate, we may obtain additional offers on your behalf.
    (g) Once we agree that any carryover or current year's tobacco has 
no market value due to insured causes, you must destroy it. If you 
disagree and refuse to destroy the tobacco with no value, we will 
determine the value and count it as production to count.

                            14. Late Planting

    (a) In lieu of late planting provisions in the Basic Provisions 
regarding acreage initially planted after the final planting date, 
insurance will be provided for acreage planted to the insured crop after 
the final planting date as follows:
    (1) For each acre or portion thereof planted during the first 10 
days after the final planting date, the farm yield will be reduced by 1 
percent per day; and
    (2) For each acre or portion thereof planted during the 11th through 
the 15th day after the final planting date, the farm yield will be 
reduced by 2 percent per day.
    (b) If you plant enough acreage to fulfill the effective poundage 
marketing quota, there will be no reduction in the insured poundage 
quota as a result of any late planted acreage.

                         15. Prevented Planting

    The prevented planting provisions in the Basic Provisions are not 
applicable to quota tobacco.

[63 FR 34782, June 26, 1998]



Sec. 457.157  Plum crop insurance provisions.

    The Plum Crop Insurance Provisions for the 2001 and succeeding crop 
years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

[[Page 320]]

                          Plum Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic isions with (1) controlling (2), etc.

                             1. Definitions

    Adapted. Varieties of the insured crop that are recognized by the 
Cooperative State Research, Education, and Extension Service as 
compatible with agronomic and weather conditions in the county.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper, or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Harvest. The picking of mature plums from the trees by hand.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Lug. Twenty-eight (28) pounds of the insured crop.
    Scion. Twig or portion of a twig of one plant that is grafted onto a 
stock of another.
    Varietal group. Different varieties of plums that are grouped 
according to the normal maturity dates as specified in the Special 
Provisions.

                            2. Unit Division

    Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Optional units must meet 
one or more of the following, as applicable, unless otherwise provided 
by the Special Provisions, actuarial documents, or written agreement:
    (a) Optional units may be established if each optional unit is 
located on non-contiguous land.
    (b) In addition to, or instead of, establishing optional units for 
non-contiguous land, optional units may be established by varietal group 
when provided for in the Special Provisions. The requirements of section 
34(a)(1) of the Basic Provisions are not applicable for this method of 
unit division.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election for all the plums in the 
county insured under this policy unless the Special Provisions provide 
different price elections by varietal group, in which case you may 
select one price election for each plum varietal group designated in the 
Special Provisions. The price elections you choose for each varietal 
group must have the same percentage relationship to the maximum price 
offered by us for each varietal group. For example, if you choose 100 
percent of the maximum price election for one varietal group, you must 
also choose 100 percent of the maximum price election for all other 
varietal groups.
    (b) You must report, by the production reporting date designated in 
section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by 
varietal group if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage is changed:
    (i) The age of the interplanted crop and varietal group if 
applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of interplanting a 
perennial crop, removal of trees, damage, change in practice, and any 
other circumstance that may effect the yield potential of the insured 
crop. If you fail to notify us of any circumstance that may reduce your 
yields from previous levels, we will reduce your production guarantee as 
necessary at any time we become aware of the circumstance.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election if a 
cause of loss that could or would reduce the yield of the insured crop 
has occurred prior to the time that you request the increase.

                           4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is October 31 
preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the

[[Page 321]]

Basic Provisions (Sec. 457.8), the cancellation and termination dates 
are January 31.

                             6. Insured Crop

    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the plums in the county for 
which a premium rate is provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown on tree varieties that:
    (1) Were commercially available when the trees were set out;
    (2) Are adapted to the area;
    (3) Are grown on rootstock that is adapted to the area; and
    (4) Are regulated by the California Tree Fruit Agreement, California 
Advisory Board Standards, a related crop advisory board, or the State;
    (c) That are irrigated;
    (d) That have produced an average of at least 200 lugs per acre in 
at least one of the three most recent actual production history crop 
years, unless we inspect the acreage and give our approval to insure 
such acreage in writing;
    (e) That are grown in an orchard that, if inspected, is considered 
acceptable by us; and
    (f) That have reached at least the fifth (5th) growing season after 
set out. Plums produced on scions that have not reached the fifth 
growing season may be insured if the provisions in section 6(a), (b), 
(c), and (e) are met. Such trees must have produced at least 200 lugs 
per acre in at least one year after being grafted.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8) that prohibit insurance attaching to a 
crop planted with another crop, plums interplanted with another 
perennial crop are insurable unless we inspect the acreage and determine 
that it does not meet the requirements contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on February 1 of each crop year. Notwithstanding 
the previous sentence, for the year of application, if your application 
is received after January 22 but prior to February 1, insurance will 
attach on the 10th day after your properly completed application is 
received in our local office unless we inspect the acreage during the 
10-day period and determine that it does not meet insurability 
requirements. You must provide any information that we require for the 
crop or to determine the condition of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is September 30.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of plums on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to, and no premium or 
indemnity will be due for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.
    (c) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that the policy remains continuously in force, 
coverage begins on the day immediately following the end of the 
insurance period for the prior crop year. Policy cancellation that 
results solely from transferring to a different insurance provider for a 
subsequent crop year will not be considered a break in continuous 
coverage.
    (d) If your plum policy is canceled or terminated for any crop year, 
in accordance with the terms of the policy, after insurance attached for 
that crop year but on or before the cancellation and termination dates 
whichever is later, insurance will not be considered to have attached 
for that crop year and no premium, administrative fee, or indemnity will 
be due for such crop year.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur during the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the orchard;
    (3) Wildlife, unless control measures have not been taken;
    (4) Earthquake;
    (5) Volcanic eruption;
    (6) An insufficient number of chilling hours to effectively break 
dormancy; or

[[Page 322]]

    (7) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 (Causes 
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure 
against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available;
    (2) Rejection of the crop by the packing house due to being 
undersized, immature, overripe, or mechanically damaged; or
    (3) Inability to market the plums for any reason other than actual 
physical damage from an insurable cause specified in this section. For 
example, we will not pay you an indemnity if you are unable to market 
due to quarantine, boycott, or refusal of any person to accept 
production.

                10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following 
will apply:
    (a) You must notify us within 3 days of the date harvest should have 
started if the crop will not be harvested.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing. We will conduct an appraisal 
that will be used to determine your production to count for production 
that is sold by direct marketing. If damage occurs after this appraisal, 
we will conduct an additional appraisal. These appraisals, and any 
acceptable records provided by you, will be used to determine your 
production to count. Failure to give timely notice that production will 
be sold by direct marketing will result in an appraised amount of 
production to count of not less than the production guarantee per acre 
if such failure results in our inability to make the required appraisal.
    (c) If you intend to claim an indemnity on any unit, you must notify 
us at least 15 days prior to the beginning of harvest or immediately if 
damage is discovered during harvest, so that we may inspect the damaged 
production.
    (d) You must not destroy the damaged crop until after we have given 
you written consent to do so.
    (e) If you fail to notify us in accordance with this section, we may 
consider all such production to be undamaged and include it as 
production to count.

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate, acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
from such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each varietal group, if 
applicable, by its respective production guarantee;
    (2) Multiplying the results in section 11(b)(1) by the respective 
price election for each varietal group, if applicable;
    (3) Totaling the results in section 11(b)(2);
    (4) Multiplying the total production to be counted of each varietal 
group, if applicable, (see section 11(c)) by the respective price 
election;
    (5) Totaling the results in section 11(b)(4);
    (6) Subtracting the results in section 11(b)(5) from the results in 
section 11 (b)(3); and
    (7) Multiplying the result in section 11(b)(6) by your share.
    (c) The total production to count (in lugs) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is sold by direct marketing directly if you fail to meet 
the requirement contained in section 10;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us.
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count; and
    (2) All harvested production from the insurable acreage:

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    (i) That is packed and sold as fresh fruit and meets the U.S. No. 1 
standards as modified by the California Tree Fruit Agreement publication 
for plums for the applicable crop year;
    (ii) That is packed and sold as fresh fruit but does not meet the 
grade requirements specified in section 11(c)(2)(i) due to insurable 
causes. Such production will be adjusted by:
    (A) Dividing the value per lug of this production by the highest 
price election available for the applicable varietal group; and
    (B) Multiplying the resulting factor, if less than 1.0, by the 
number of lugs of such plums.
    (iii) That is damaged and is, or could be, marketed for any use 
other than fresh packed plums. Such production will be adjusted by:
    (A) Multiplying the number of tons of such production by the value 
per ton of the damaged plums or $50.00, whichever is greater; and
    (B) Dividing that result by the highest price election available for 
the applicable varietal group.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 33735, June 23, 1997, as amended at 62 FR 65177, Dec. 10, 1997; 
65 FR 47839, Aug. 4, 2000]



Sec. 457.158  Apple crop insurance provisions.

    The Apple Crop Insurance Provisions for the 2005 and succeeding crop 
years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                     Apple Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions, with (1) controlling (2), etc.

                             1. Definitions

    Apple production. All production of fresh apples and processing 
apples from the insurable acreage.
    Area A. A geographic area that includes Montana, Wyoming, Utah, New 
Mexico and all states west thereof.
    Area B. A geographic area that includes all states not included in 
Area A, except Colorado.
    Area C. Colorado.
    Bin. A container that contains a minimum of 875 pounds of apples or 
another quantity as designated in the Special Provisions.
    Box. A container that contains 35 pounds of apples or another 
quantity as designated in the Special Provisions.
    Bushel. In all states except Colorado, 42 pounds of apples. In 
Colorado, 40 pounds of apples.
    Damaged apple production.
    (1) With respect to losses calculated under section 12 only, the 
percentage of fresh or processing apple production that fails to grade 
U.S. No. 1 Processing or better in accordance with the grade standards, 
within each lot, bin, bushel or box, as applicable, due to an insurable 
cause of loss; or
    (2) With respect to losses calculated under section 14, the 
percentage of fresh apple production that fails to grade U.S. Fancy or 
better in accordance with the grade standards, within each lot, bin, 
bushel, or box, as applicable, due to an insurable cause of loss.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper, buyer, or broker. Examples of 
direct marketing include selling through an on-farm or roadside stand, 
or a farmer's market, and permitting the general public to enter the 
field for the purpose of picking all or a portion of the crop.
    Fresh apples. Apple production:
    (1) That is sold, or could be sold, for consumption without 
undergoing any change in its basic form, such as peeling, juicing, 
crushing, etc.; and
    (2) From acreage that is reported as fresh apples on the acreage 
report.
    Grade standards. The United States Standards for Grades of Apples, 
the United States Standards for Grades of Apples for Processing, or such 
other standards contained in the Special Provisions.
    Harvest. The picking of mature apples from the trees or collecting 
of mature apples from the ground. Apples collected from the ground that 
cannot be sold for human consumption will not be considered harvested.
    Lot. A quantity of production that can be separated from other 
quantities of production by grade characteristics, load, location or 
other distinctive features.
    Marketable. Apple production that is not damaged apple production.
    Mature. Apples defined as ``mature'' under the applicable grade 
standards.
    Pounds. Sixteen (16) ounces avoirdupois.
    Processing apples. Apple production:

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    (1) That is sold after it had undergone a change to its basic 
structure such as peeling, juicing, crushing, etc.; and
    (2) From acreage designated as processing apples on the acreage 
report.
    Production guarantee (per acre). The quantity of apples in boxes or 
bushels determined by multiplying the approved APH yield per acre by the 
coverage level percentage you elect. If the production of apples has 
been measured in bins, the amount must be converted to boxes or bushels.
    Russeting. A defect on the surface of the apple as described in the 
grade standards.
    Sunburn. A defect as described in the grade standards.
    Type. Fresh, processing, or varietal group apples as specified in 
the Special Provisions.
    Varietal group. Apple varieties with similar characteristics that 
are grouped for insurance purposes as specified in the Special 
Provisions.

                            2. Unit Division

    In addition to the requirements of section 34(b) of the Basic 
Provisions, optional units may be established if each optional unit is:
    (a) Located on non-contiguous land; or
    (b) By varietal group.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may select only one price election for all the apples in the 
county insured under this policy unless the Special Provisions provide 
different price elections by type, in which case you may select one 
price election for each apple type designated in the Special Provisions. 
The price elections you choose for each type must have the same 
percentage relationship to the maximum price offered by us for each 
type. For example, if you choose 100 percent of the maximum price 
election for one type, you must also choose 100 percent of the maximum 
price election for all other types.
    (b) You must report, by the production reporting date designated in 
section 3 of the Basic Provisions, by type, if applicable:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage has changed:
    (i) The age and type of the interplanted crop, if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    (c) We will reduce the yield used to establish your production 
guarantee as necessary, based on our estimate of the effect of the 
following: Interplanted perennial crop; removal of trees; damage; change 
in practices; and any other circumstance on the yield potential of the 
insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstance.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is October 31 preceding the cancellation date for California 
and August 31 preceding the cancellation date for all other states.

                  5. Cancellation and Termination Dates

    (a) In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are January 31 in California and 
November 20 in all other states.
    (b) If your apple policy is canceled or terminated by us for any 
crop year, in accordance with the terms of the policy, after insurance 
attached for that crop year, but on or before the cancellation and 
termination dates whichever is later, insurance will be considered to 
have not attached for that crop year and no premium, administrative fee, 
or indemnity will be due for such crop year.
    (c) We may not cancel your policy when an insured cause of loss has 
occurred after insurance attached, but prior to the cancellation date. 
However, your policy can be terminated if a cause for termination 
contained in sections 2 or 27 of the Basic Provisions exists.

                          6. Report of Acreage

    In addition to the requirements contained in section 6 of the Basic 
Provisions, you must report and designate all acreage by type by the 
acreage reporting date. Blocks of apple acreage grown for processing are 
not eligible for the Optional Coverage for Fresh Quality Adjustment 
option contained in section 14 of these Crop Provisions.

                             7. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all apples in the county for which a premium rate is 
provided by the actuarial table:
    (a) In which you have a share;
    (b) That are grown on tree varieties that are adapted to the area 
and have, in at least one of the previous four years, produced:
    (1) 10 bins of apples per acre in Area A; or

[[Page 325]]

    (2) 150 bushels of apples per acre in Area B; or
    (3) 200 bushels of apples per acre in Area C; and
    (c) That are grown in an orchard that, if inspected, is considered 
acceptable by us.

                          8. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions that 
prohibit insurance from attaching to a crop planted with another crop, 
apples interplanted with another perennial crop are insurable unless we 
inspect the acreage and determine that it does not meet the requirements 
contained in your policy.

                           9. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) For the year of application in California, coverage begins on 
February 1 of the calendar year the insured crop normally blooms. In all 
other states, coverage begins November 21 of the calendar year prior to 
the calendar year the insured crop normally blooms, except that, if your 
application is received by us after January 12 but prior to February 1 
in California, or after November 1 but prior to November 21 in all other 
states, insurance will attach on the 20th day after your properly 
completed application is received in our local office, unless we inspect 
the acreage during the 20-day period and determine that it does not meet 
insurability requirements. You must provide any information that we 
require for the crop or to determine the condition of the apple acreage.
    (2) For each subsequent crop year that the policy remains 
continuously in force, coverage begins on the day immediately following 
the end of the insurance period for the prior crop year. Policy 
cancellation that results solely from transferring an existing policy to 
a different insurance provider for a subsequent crop year will not be 
considered a break in continuous coverage.
    (3) The calendar date for the end of the insurance period for each 
crop year is November 5, or such other date as specified in the Special 
Provisions.
    (4) Notwithstanding the provisions in this section, coverage will 
not be considered to have begun for a crop year if the policy is 
canceled or terminated in accordance with section 5(b).
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period. There will be 
no coverage of any insurable interest acquired after the acreage 
reporting date.
    (2) If you relinquish your insurable share on any insurable acreage 
of apples on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to, and no premium or 
indemnity will be due for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.
    (3) If you relinquish your insurable share on any insurable acreage 
of apples after the acreage reporting date for the crop year, insurance 
coverage will be provided for any loss due to an insurable cause of loss 
that occurred prior to the date that you relinquished your insurable 
share and the whole premium will be due for such acreage for that crop 
year.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period and result in damaged apple 
production:
    (1) Adverse weather conditions;
    (2) Fire unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the orchard;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Earthquake;
    (6) Volcanic eruption;
    (7) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period;
    (8) Wildlife; and
    (9) All other natural causes of loss that cannot be prevented, 
including, but not limited to, hail, wind, excess sun causing sunburn 
and frost and freeze causing russeting.
    (b) In addition to the causes of loss excluded in section 12 of the 
Basic Provisions, we will not insure against damage or loss of 
production due to your inability to market the apples for any reason 
other than actual physical damage from an insurable cause specified in 
this section. For example, we will not pay you an indemnity if you are 
unable to market due to quarantine, boycott, or refusal of any person to 
accept production.

[[Page 326]]

                11. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (a) You must notify us at least 3 days prior to the date harvest 
should have started if the crop will not be harvested.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing. We will conduct an appraisal 
that will be used to determine your production to count for production 
that is sold by direct marketing. If damage occurs after this appraisal, 
we will conduct an additional appraisal. These appraisals, and any 
acceptable records provided by you, will be used to determine your 
production to count. Failure to give timely notice that production will 
be sold by direct marketing will result in an appraised amount of 
production to count of not less than the production guarantee per acre 
if such failure results in our inability to make the required appraisal.
    (c) If you intend to claim an indemnity on any unit, you must notify 
us at least 15 days prior to the beginning of harvest, or immediately if 
damage is discovered during harvest. You must not sell or dispose of the 
damaged crop until after we have given you written consent to do so. If 
you fail to meet the requirements of this section and such failure 
results in our inability to inspect the damaged production, all such 
production will be considered undamaged and included as production to 
count.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by its respective production 
guarantee, by type as applicable;
    (2) Multiplying each result in section 12(b)(1) by the respective 
price election;
    (3) Totaling the results in section 12(b)(2) if there are more than 
one type;
    (4) Multiplying the total production to count (see section 12(c)), 
for each type as applicable, by the respective price election;
    (5) Totaling the results in section 12(b)(4), if there are more than 
one type;
    (6) Subtracting the total in section 12(b)(5) from the total in 
section 12(b)(3); and
    (7) Multiplying the result in section 12(b)(6) by your share.
    (c) The total production to count (in boxes or bushels) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is sold by direct marketing if you fail to meet the 
requirements contained in section 11;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested apple production that would be marketable if 
harvested; and
    (iv) Potential marketable apple production on insured acreage that 
you intend to abandon or no longer care for, if you and we agree on the 
appraised amount of production. Upon such agreement, the insurance 
period for that acreage will end. If you do not agree with our 
appraisal, we may defer the claim only if you agree to continue to care 
for the crop. We will then make another appraisal when you notify us of 
further damage or that harvest is general in the area unless you 
harvested the crop, in which case we will use the harvested production. 
If you do not continue to care for the crop, our appraisal made prior to 
deferring the claim will be used to determine the production to count; 
and
    (2) All harvested marketable production from the insurable acreage.
    Basic Coverage example:
    You have 100 percent share and designated 10 acres of fresh apples 
and 5 acres of processing apples in the unit on the acreage report, with 
a 600 bushels per acre guarantee for both fresh and processing apples 
and a price election of $9.10 per bushel for fresh apples and $4.76 per 
bushel for processing apples. You are only able to harvest 5,000 bushels 
of fresh apples and 1,000 bushels of processing apples that grade at 
least U.S. No. 1 Processing. Your indemnity would be calculated as 
follows:
    A. 10 acres x 600 bushels = 6,000 bushels guarantee of fresh apples; 
5 acres x 600 bushels = 3,000 bushels guarantee of processing apples;
    B. 6,000 bushels x $9.10 price election = $54,600.00 value of 
guarantee for fresh apples; 3,000 bushels x $4.76 price election = 
$14,280.00 value of guarantee for processing apples;
    C. $54,600.00 value of guarantee for fresh apples + $14,280.00 value 
of guarantee for processing apples = $68,880.00 total value guarantee;
    D. 5,000 bushels of harvested marketable fresh apple production to 
count x $9.10 price election = $45,500.00 value of production to count 
for fresh apples; 1,000 bushels of harvested marketable processing apple 
production to count x $4.76 price election = $4,760.00

[[Page 327]]

value of production to count for processing apples;
    E. $45,500.00 value of production to count for fresh apples + 
$4,760.00 value of production to count for processing apples = 
$50,260.00 total value of production to count;
    F. $68,880.00 total value guarantee -$50,260.00 total value of 
production to count = $18,620.00 value of loss; and
    G. $18,620.00 value of loss x 100 percent share = $18,620.00 
indemnity payment.
    [End of Example]
    (d) The production to count determined in accordance with section 
12(c) will be used for APH purposes, regardless of whether there are any 
adjustments under section 14.

                     13. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

        14. Optional Coverage for Fresh Fruit Quality Adjustment.

    (a) In the event of a conflict between the Apple Crop Insurance 
Provisions and this option, this option will control.
    (b) In return for payment of the additional premium designated in 
the actuarial documents, this option provides for quality adjustment of 
fresh apple production as follows:
    (1) To be eligible for this option, you must have elected to insure 
your apples at the additional coverage level. If you elect Catastrophic 
Risk Protection (CAT) after this option is effective, it will be 
considered as notice of cancellation of this option by you.
    (2) You must elect this option on or before the sales closing date 
for the initial crop year for which you wish to insure your apples under 
this option. This option will continue in effect until canceled by 
either you or us for any succeeding crop year by written notice to the 
other party on or before the cancellation date.
    (3) This option will apply to all your apple acreage designated in 
your acreage report as grown for fresh apples and that meets the 
insurability requirements specified in the Apple Crop Insurance 
Provisions, except any acreage specifically excluded by the actuarial 
documents. Any acreage designated in your acreage report as grown for 
processing apples is not eligible for coverage under this option.
    (4) In lieu of sections 12(c)(1)(iii) and (iv) and (2), the 
production to count will include all appraised and harvested production 
for a unit's fresh apple acreage that grades at least U.S. No. 1 
Processing, adjusted in accordance with this option.
    (5) If appraised or harvested fresh apple production is damaged to 
the extent that 20 percent or more of the apples do not grade U.S. Fancy 
or better the following adjustments will apply:
    (i) Fresh apple production to count with 21 percent through 40 
percent damaged apple production will be reduced 2 percent for each full 
percent in excess of 20 percent.
    (ii) Fresh apple production to count with 41 percent through 50 
percent damaged apple production will be reduced 40 percent plus an 
additional 3 percent for each full percent in excess of 40 percent.
    (iii) Fresh apple production to count with 51 percent through 64 
percent damaged apple production will be reduced 70 percent plus an 
additional 2 percent for each full percent in excess of 50 percent.
    (iv) Fresh apple production to count with 65 percent or more damaged 
apple production will not be considered production to count.
    (v) Notwithstanding sections 14(b)(5)(i) through (iv), if you sell 
any of your fresh apple production as U.S. Fancy, all such sold 
production will be included as production to count under this option.
    The following is an example of loss under the Optional Coverage for 
Fresh Fruit Quality Adjustment:
    You have 100 percent share and designated 10 acres of fresh apples 
and 5 acres of processing apples in the unit on the acreage report, with 
a 600 bushel per acre guarantee for both fresh and processing apples and 
a price election of $9.10 per bushel for fresh apples and $4.76 per 
bushel for processing apples. You harvest 5,000 bushels of apples from 
your designated fresh acreage that grade U.S. No. 1 Processing or 
better, but only 2,650 of those bushels grade U.S. Fancy or better. You 
also harvest from your designated processing acreage 1,000 bushels 
apples that grade U.S. No. 1 Processing or better. Your indemnity would 
be calculated as follows:
    A. 10 acres x 600 bushels per acre = 6,000 bushels guarantee of 
fresh apples; 5 acres x 600 bushels per acre = 3,000 bushels guarantee 
of processing apples;
    B. 6,000 bushels guarantee of fresh apples x $9.10 price election = 
$54,600.00 value of guarantee for fresh apples acreage; 3,000 bushels 
guarantee of processing apples x $4.76 price election = $14,280.00 value 
of guarantee for processing apple acreage;
    C. $54,600.00 value of guarantee for fresh apple acreage + 
$14,280.00 value of guarantee for processing apple acreage = $68,880.00 
total value of guarantee for all apple acreage;
    D. The value of the fresh apple and processing apple production to 
count is determined as follows:
    i. 5,000 bushels of apples that graded U.S. No. 1 or better - 2,650 
bushels that graded U.S. Fancy = 2,350 bushels not grading U.S. Fancy;
    ii. 2,350 / 5,000 = 47 percent of fresh apples that did not make 
U.S. Fancy grade;
    iii. In accordance with section 14(b)(5)(ii): 47 percent - 40 
percent = 7 percent in excess of 40 percent;
    iv. 7 percent x 3 percent = 21 percent;

[[Page 328]]

    v. 40 percent + 21 percent = 61 percent;
    vi. 5,000 bushels of apples that graded U.S. No. 1 or better x .61 
(61 percent) = 3,050 bushels of fresh apple production to count;
    vii. 5,000 bushels of apples that graded U.S. No. 1 or better minus 
3,050 bushels of fresh apple production not grading U.S. Fancy or better 
= 1,950 bushels of fresh apple production to count.
    viii. 1,950 bushels of fresh apples production to count x $9.10 = 
$17,745.00 value of the fresh apple production to count; 1,000 bushels 
of harvested marketable processing apple production to count x $4.76 
price election = $4,760.00 value of the processing apple production to 
count;
    E. $17,745.00 value of the fresh apple production to count + 
$4,760.00 value of the processing apple production to count = $22,505.00 
total value of production to count;
    F. $68,880.00 total value of guarantee for all apple acreage - 
$22,505.00 total value of production to count = $46,375.00 value of 
loss; and
    G. $46,375.00 value of loss x 100 percent share = $46,375.00 
indemnity payment.
    [End of Example]

[63 FR 17054, Apr. 8, 1998, as amended at 65 FR 47839, Aug. 4, 2000; 69 
FR 52591, Aug. 27, 2004; 69 FR 53500, Sept. 1, 2004; 69 FR 62803, Oct. 
28, 2004]



Sec. 457.159  Stonefruit crop insurance provisions.

    The Stonefruit Crop Insurance Provisions for the 2001 and succeeding 
crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                  Stonefruit Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as wholesaler, 
retailer, packer, processor, shipper, or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, and permitting the general public to enter the field for the 
purpose of picking all or a portion of the crop.
    Grading standards. As specified in the Special Provisions.
    Harvest. The picking of mature stonefruit either by hand or machine.
    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Lug. A container of fresh stonefruit of specified weight. Lugs of 
varying sizes will be converted to standard lug equivalents on the basis 
of the following average net pounds of packed fruit:

------------------------------------------------------------------------
                                                                  Pounds
                              Crop                               per lug
------------------------------------------------------------------------
Fresh Apricots.................................................       24
Fresh Nectarines...............................................       25
Fresh Freestone Peaches........................................       22
------------------------------------------------------------------------

    Weight for Processing Apricots, Processing Cling Peaches, and 
Processing Freestone Peaches are specified in tons.
    Marketable. Stonefruit production acceptable for processing or other 
human consumption, even if it fails to meet the State Department of Food 
and Agriculture minimum grading standard.
    Processor. A business enterprise regularly engaged in processing 
fruit for human consumption that possesses all licenses and permits for 
processing fruit required by the state in which it operates, and that 
possesses facilities, or has contractual access to such facilities, with 
enough equipment to accept and process contracted fruit within a 
reasonable amount of time after harvest.
    Stonefruit. Any of the following crops grown for fresh market or 
processing:
    (a) Fresh Apricots,
    (b) Fresh Freestone Peaches,
    (c) Fresh Nectarines,
    (d) Processing Apricots,
    (e) Processing Cling Peaches, and
    (f) Processing Freestone Peaches.
    Ton. Two thousand (2,000) pounds avoirdupois.
    Type. Class of a stonefruit crop with similar characteristics that 
are grouped for insurance purposes.
    Varietal group. A subclass of type.

                            2. Unit Division

    Notwithstanding the provisions of section 34 of the Basic Provisions 
that allow optional units by section, section equivalent, or FSA farm 
serial number and by irrigated and non-irrigated practices, optional 
units will only be allowed as stated herein or by written agreement.
    (a) Optional Units on Acreage Located on Non-contiguous Land: 
Optional units may be established if each optional unit is located on 
non-contiguous land.
    (b) Optional Units by Type or Varietal Group: Optional units may be 
established by type or

[[Page 329]]

varietal group if allowed by the Special Provisions.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may select only one price election and coverage level for 
each crop grown in the county and listed in the Special Provisions that 
is insured under this policy. If separate price elections are available 
by type or varietal group of a crop, the price elections you choose for 
each type or varietal group must have the same percentage relationship 
to the maximum price offered by us for each type or varietal group. For 
example, if you choose 100 percent of the maximum price election for one 
type of cling peaches, you must choose 100 percent of the maximum price 
election for all other types of cling peaches.
    (b) You must report, by the production reporting date designated in 
section 3 of the Basic Provisions, by type or varietal group, if 
applicable, for each stonefruit crop:
    (1) Any damage, removal of trees, change in practices, or any other 
circumstance that may reduce the expected yield below the yield upon 
which the insurance guarantee is based, and the number of affected 
acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop, and any time the planting pattern of such 
acreage is changed:
    (i) The age of the interplanted crop, and type or varietal group if 
applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production guarantee 
as necessary, based on our estimate of the effect of interplanting a 
perennial crop, removal of trees, damage, change in practice, and any 
other circumstance that could affect the yield potential of the insured 
crop. If you fail to notify us of any circumstance that may reduce your 
yields from previous levels, we will reduce your production guarantee as 
necessary at any time we become aware of the circumstance.
    (c) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election we offer 
if a cause of loss that could or would reduce the yield of the insured 
crop is evident prior to the time that you request the increase.

                          4. Contract Changes.

    In accordance with section 4 of the Basic Provisions, the contract 
change date is October 31 for California and August 31 preceding the 
cancellation date for all other states.

                 5. Cancellation and Termination Dates.

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are January 31 for California and 
November 20 for all other states.

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all of each stonefruit crop you elect to insure, that is 
grown in the county, and for which premium rates are provided in the 
actuarial documents:
    (a) In which you have a share;
    (b) That is grown on trees that:
    (1) Were commercially available when the trees were set out;
    (2) Is adapted to the area; and
    (3) Is grown on a root stock that is adapted to the area;
    (c) That is irrigated;
    (d) That have produced at least 200 lugs of fresh market production 
per acre, or at least 2.2 tons per acre for processing crops, in at 
least 1 of the 3 most recent actual production history crop years, 
unless we inspect such acreage and give our approval in writing;
    (e) That are regulated by the applicable state's Tree Fruit 
Agreement or related crop advisory board for the state (for applicable 
crop or type);
    (f) That are grown in an orchard that, if inspected, is considered 
acceptable by us; and
    (g) That have reached at least the fifth growing season after set 
out. However, we may agree in writing to insure acreage that has not 
reached this age if it meets the requirements of subsection (d) of this 
section.

                          7. Insurable Acreage

    In lieu of the provisions of section 9 of the Basic Provisions that 
prohibit insurance attaching to a crop planted with another crop, 
stonefruit interplanted with another perennial crop is insurable unless 
we inspect the acreage and determine that it does not meet the 
requirements for insurability contained in your policy.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) Coverage begins on February 1 in California and November 21 for 
all other states of each crop year, except that for the year of 
application, if your application is received after January 22 but prior 
to February 1 in California or after November 11 but prior to November 
21 in all other states, insurance will attach on the 10th day after your 
properly completed application is received in our local office, unless 
we inspect the acreage

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during the 10 day period and determine that it does not meet 
insurability requirements. You must provide any information that we 
require for the crop or to determine the condition of the orchard.
    (2) The calendar date for the end of the insurance period for each 
crop year is:
    (i) July 31 for all apricots; and
    (ii) September 30 for all nectarines and peaches; and
    (iii) As otherwise provided for specific counties or types in the 
Special Provisions.
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date of acquisition.
    (2) If you lose or relinquish your insurable share on any insurable 
acreage of stonefruit on or before the acreage reporting date for the 
crop year and if the acreage was insured by you the previous crop year, 
insurance will not be considered to have attached to, and no premium or 
indemnity will be due for such acreage for that crop year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.
    (c) Notwithstanding paragraph (a)(1) of this section, for each 
subsequent crop year that the policy remains continuously in force, 
coverage begins on the day immediately following the end of the 
insurance period for the prior crop year. Policy cancellation that 
results solely from transferring to a different insurance provider for a 
subsequent crop year will not be considered a break in continuous 
coverage.
    (d) If your stonefruit policy is canceled or terminated for any crop 
year, in accordance with the terms of the policy, after insurance 
attached for that crop year but on or before the cancellation and 
termination dates whichever is the later, insurance will not be 
considered to have attached for that crop year and no premium, 
administrative fee, or indemnity will be due for such crop year.

                            9. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the orchard;
    (3) Wildlife;
    (4) Earthquake;
    (5) Volcanic eruption; or
    (6) Failure of the irrigation water supply, if due to a cause of 
loss contained in sections 9(a)(1) through (5) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded by section 12 of the 
Basic Provisions, we will not insure against damage or loss of 
production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available;
    (2) Split pits regardless of cause; or
    (3) Inability to market the insured crop for any reason other than 
actual physical damage from an insurable cause of loss specified in this 
section. For example, we will not pay you an indemnity if you are unable 
to market due to quarantine, boycott, or refusal of any person to accept 
production.

                10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (a) You must notify us within 3 days after the date harvest should 
have started if the insured crop will not be harvested.
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing. We will conduct an appraisal 
that will be used to determine your production to count for production 
that is sold by direct marketing. If damage occurs after this appraisal, 
we will conduct an additional appraisal. These appraisals, and any 
acceptable records provided by you, will be used to determine your 
production to count. Failure to give timely notice that production will 
be sold by direct marketing will result in an appraised amount of 
production to count of not less than the production guarantee per acre 
if such failure results in our inability to make the required appraisal.
    (c) In addition to section 14 of the Basic Provisions, if you intend 
to claim an indemnity on any unit, you must give us notice at least 15 
days prior to the beginning of harvest. You must not destroy the damaged 
crop until after we have given you written consent to do so. If you fail 
to notify us and such failure results in our inability to inspect the 
damaged production, we may consider all such production to be undamaged 
and include it as production to count.

[[Page 331]]

                         11. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type or varietal group 
by its respective production guarantee;
    (2) Multiplying each result of section 11(b)(1) by the respective 
price election for the type or varietal group;
    (3) Totaling the results of section 11(b)(2). (If there is only one 
type or varietal group, the result of (3) will be the same as the result 
of (2));
    (4) Multiplying the total production to count (see section 11(c)), 
for each type or varietal group, by the respective price election;
    (5) Totaling the results of section 11(b)(4);
    (6) Subtracting the result of section 11(b)(5) from the result of 
section 11(b)(2). (If there is only one type or varietal group, the 
result of (6) will be the same as the result of (5)); and
    (7) Multiplying the result of section 11(b)(6) by your share.
    For example:
    You have a 100 percent share in 50 acres of varietal group A 
stonefruit in the unit, with a guarantee of 500 lugs per acre and a 
price election of $6.00 per lug. You are only able to harvest 5,000 
lugs. Your indemnity would be calculated as follows:
    (1) 50.0 acres x 500 lugs = 25,000 lugs guarantee;
    (2) and (3) 25,000 lugs x $6.00 price election = $150,000.00 value 
of guarantee;
    (4) 5,000 lugs x $6.00 price election = $30,000.00 value of 
production to count;
    (5) and (6) $150,000.00--$30,000.00 = $120,000.00 loss; and
    (7) $120,000.00 x 100 percent = $120,000 indemnity payment.
    You also have a 100 percent share in 50 acres of varietal group B 
stonefruit in the unit, with a guarantee of 300 lugs per acre and a 
price election of $3.00 per lug. You are only able to harvest 3,000 
lugs. Your indemnity would be calculated as follows:
    (1) 50.0 acres x 500 lugs varietal group A = 25,000 lugs guarantee; 
and 50.0 acres x 300 lugs varietal group B = 15,000 lugs guarantee;
    (2) 25,000 lugs x $ 6.00 price election = $150,000.00 value of 
guarantee for varietal group A; and 15,000 lugs x $3.00 price election = 
$45,000.00 value of guarantee for varietal group B;
    (3) $150,00.00 + $45,000.00 = $195,000.00 total value of guarantee;
    (4) 5,000 lugs varietal group A x $6.00 price election = $30,000.00 
value of production to count; and 3,000 lugs varietal group B x $3.00 
price election = $9,000.00 value of production to count; and
    (5) $30,000.00 + $9,000.00 = $39,000.00 total value of production to 
count;
    (6) $195,000.00--$39,000.00 = $156,000.00 loss
    (7) $156,000.00 loss x 1.000 = $156,000 indemnity payment.
    (c) The total production to count (in lugs or tons) from all 
insurable acres on a unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is sold by direct marketing if you fail to meet the 
requirements contained in section 10;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production that would be marketable if harvested; 
and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the insured crop. We 
will then make another appraisal when you notify us if any further 
damage or that harvest is general in the area unless you harvested the 
crop. If you harvest the crop we will use the harvested production. If 
you do not continue to care for the crop, our appraisal made prior to 
deferring the claim will be used to determine the production to count; 
and
    (2) All harvested production from the insurable acreage.
    (3) The quantity of harvested production will be reduced if the 
following conditions apply:
    (i) The value of the damaged production is less than 75 percent of 
the marketable value of undamaged production due to an insured cause of 
loss; and
    (ii) For stonefruit insured as fresh fruit only, the stonefruit 
either is packed and sold as fresh fruit and meets only the utility 
grade requirements of the applicable grading standards, or fails to meet 
the applicable grading standards but is or could be sold for any use 
other than fresh packed stonefruit.
    (4) Harvested production of stonefruit that is eligible for quality 
adjustment as specified in section 11(c)(3) will be reduced as follows:
    (i) When packed and sold as fresh fruit or when insured as a 
processing crop, by dividing the marketable value per lug or ton by

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the highest price election (for the applicable coverage level) and 
multiplying the result (not to exceed 1.00) by the quantity of such 
production; or
    (ii) For all other fresh stonefruit, multiplying the number of tons 
that could be marketed by the value per ton (for the applicable coverage 
level) and dividing that result by the highest price election available 
for that type.

                     12. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
(Sec. 457.8) are not applicable.

[63 FR 29935, June 2, 1998, as amended at 65 FR 47840, Aug. 4, 2000]



Sec. 457.160  Processing tomato crop insurance provisions.

    The Processing Tomato Crop Insurance Provisions for the 2005 and 
succeeding crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured polices:

                    Processing Tomato Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Acre. 43,560 square feet of land on which row widths do not exceed 6 
feet, or the land on which at least 7,260 linear feet rows are planted 
if row widths exceed 6 feet.
    Broker. An enterprise in the business of buying and selling tomatoes 
possessing all the licenses and permits required by the state in which 
it operates, and that has a written contract with a processor to 
purchase processing tomatoes on behalf of the processor and to deliver 
such tomatoes to the processor.
    Bypassed acreage. Land on which production is ready for harvest but 
the processor elects not to accept such production so it is not 
harvested.
    First fruit set. The reproductive stage of the plant at which 30 
percent of the plants have produced a fruit that has reached a minimum 
of one inch in diameter.
    Good Farming Practices. In addition to the definition of ``good 
farming practices'' contained in section 1 of the Basic Provisions, good 
farming practices include the cultural practices required under the 
processor contract.
    Harvest. The severance of tomatoes from the vines.
    Plant stand. The number of plants per acre considered to be normal 
for the applicable tomato variety and growing area.
    Planted acreage--In addition to the definition contained in the 
Basic Provisions, tomatoes must initially be placed in rows to be 
considered planted. Acreage planted in any other manner will not be 
insurable unless otherwise provided by the Special Provisions or by 
written agreement.
    Practical to replant. In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions, practical to 
replant is defined as our determination, after loss or damage to the 
insured crop, based on factors, including but not limited to moisture 
availability, marketing window, condition of the field, and time to crop 
maturity, that replanting the insured crop will allow the crop to attain 
maturity prior to the calendar date for the end of the insurance period. 
It will not be considered practical to replant unless the replanted 
acreage can produce at least 75% of the approved yield, and the 
processor agrees in writing that it will accept the production from the 
replanted acreage.
    Processor. Any business enterprise regularly engaged in processing 
tomatoes for human consumption, that possesses all licenses and permits 
for processing tomatoes required by the state in which it operates, and 
that possesses facilities, or has contractual access to such facilities, 
with enough equipment to accept and process contracted processing 
tomatoes within a reasonable amount of time after harvest.
    Processor Contract. A written agreement between the producer and a 
processor, or between the producer and a broker, containing at a 
minimum:
    (a) The producer's commitment to plant and grow processing tomatoes, 
and to deliver the tomato production to the processor or broker;
    (b) The processor's, or broker's, commitment to purchase all the 
production stated in the processor contract; and
    (c) A price per ton that will be paid for the production.
    Ton. Two thousand (2,000) pounds avoirdupois.

                            2. Unit Division

    (a) Notwithstanding the provisions of this section or any unit 
division provisions contained in the Basic Provisions, no indemnity will 
be paid for any loss of production on any unit if the insured produced a 
crop sufficient to fulfill the processor contracts forming the basis for 
the guarantee, and any indemnity

[[Page 333]]

will be limited to the amount necessary to compensate for loss in yield 
at the price elected between production to count and the contract 
requirements.
    (b) In California only, in addition to, or instead of, establishing 
optional units by section, section equivalent or FSA farm serial number 
and by irrigated and non-irrigated acreage as provided in the unit 
division provisions contained in the Basic Provisions, optional units 
may be established if acreage planted to tomatoes is separated by a 
field that is not planted to tomatoes, or by a permanent boundary such 
as a permanent waterway, fence, public road or woodland. Such optional 
unit must consist of the minimum number of acres stated in the Special 
Provisions. Acreage planted to tomatoes that is less than the minimum 
number of acres required will attach to the closest unit within the 
section, section equivalent, or FSA farm serial number.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may select only one price election for all the processing 
tomatoes in the county insured under this policy unless the Special 
Provisions provide different price elections by type. The percentage of 
the maximum price election you choose for one type will be applicable to 
all other types insured under this policy. For example, if you choose 
100 percent of the maximum price election for one type, you must also 
choose 100 percent of the maximum price election for all other types.
    (b) Liability under this policy will not exceed the number of tons 
required to be accepted by the processor under a processor contract in 
effect on or before:
    (1) The earlier of August 20 or the date of damage to the insured 
crop in all counties with an acreage reporting date of July 15; or
    (2) The earlier of the acreage reporting date or the date of damage 
in all other counties. (Exclude indemnities that occur in stage one and 
replant payments.)
    (c) The price election used to determine the amount of an indemnity 
is progressive by stage and increases, at specified intervals, to the 
price used for final stage losses. Stages will be determined on an acre 
basis. The stages and applicable price elections are:
    (1) First stage is from planting until first fruit set. If any 
acreage of the insured crop is destroyed in this stage, the price used 
to establish the amount of any indemnity owed for such acreage will be 
50 percent of your price election;
    (2) Second stage is from the first fruit set until harvest. If any 
acreage of the insured crop is destroyed in this stage, the price used 
to establish the amount of any indemnity owed for such acreage will be 
80 percent of your price election; and
    (3) Third stage (final stage) is harvested acreage. The price 
election used in this stage to establish the amount of any indemnity 
owed will be 100 percent of your price election.
    (d) Any acreage of tomatoes damaged to the extent, that the majority 
of producers in the area would not normally further care for the 
tomatoes, will be deemed to have been destroyed even though you may 
continue to care for it. The price election used to determine the amount 
of an indemnity will be that applicable to the stage in which the 
tomatoes were destroyed.
    (e) The appraised production from bypassed acreage that could have 
been accepted by the processor will be included when determining your 
approved yield.
    (f) Acreage that is bypassed because it was damaged by an insurable 
cause of loss to the extent that the processor cannot use the product 
will be considered to have a zero yield when determining your approved 
yield.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is August 31 preceding the cancellation date for California 
and November 30 preceding the cancellation date for all other states.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are January 15 in California and 
March 15 in all other states.

                          6. Report of Acreage

    In addition to the provisions of section 6 of the Basic Provisions, 
you must provide a copy of all processor contracts to us on or before 
the acreage reporting date in all counties, unless otherwise specified 
in the Special Provisions.

                            7. Annual Premium

    In lieu of the premium amount determinations contained in section 7 
of the Basic Provisions, the annual premium amount per acre is 
determined by multiplying the production guarantee per acre by the price 
election for the third (final) stage; by the premium rate; by the 
insured acreage; by the applicable share at the time of planting; and 
ultimately by any applicable premium adjustment factors contained in the 
actuarial documents.

                             8. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the tomatoes in the county for which a premium rate 
is provided by the actuarial documents:

[[Page 334]]

    (1) In which you have a share;
    (2) That are planted for harvest as processing tomatoes;
    (3) That are grown under, and in accordance with, the requirements 
of a processor contract executed on or before August 20 in all counties 
with an acreage reporting date of July 15, or on or before the acreage 
reporting date in all other counties, and are not excluded from the 
processor contract for or during the crop year; and
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Grown on acreage on which tomatoes were grown in either of the 
two previous years, except in California;
    (ii) Interplanted with another crop; or
    (iii) Planted into an established grass or legume.
    (b) You will be considered to have a share in the insured crop if, 
under the processor contract, you retain control of the acreage on which 
the tomatoes are grown, you are at risk of loss, and the processor 
contract provides for delivery of processing tomatoes under specified 
conditions and at a stipulated price.
    (c) A tomato producer who is also a processor or broker may 
establish an insurable interest if the following requirements are met:
    (1) The processor or broker, as applicable, must comply with these 
Crop Provisions;
    (2) Prior to the sales closing date, the Board of Directors or 
officers of the processor or the broker must execute and adopt a 
resolution that contains the same terms as an acceptable processor 
contract. (Such resolution will be considered a processor contract under 
this policy); and
    (3) As applicable, our inspection reveals that the processing 
facilities comply with the definition of a processor contained in these 
Crop Provisions.

                           9. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions:
    (a) Any acreage of the insured crop that is damaged before the final 
planting date, to the extent that the majority of producers in the area 
would normally not further care for the crop, must be replanted unless 
we agree that it is not practical to replant; and
    (b) We will not insure any acreage that does not meet the rotation 
requirements, if applicable, contained in the Special Provisions.

                          10. Insurance Period

    In lieu of the provisions contained in section 11 of the Basic 
Provisions, regarding the end of the insurance period, insurance ceases 
at the earlier of the date:
    (a) You harvest sufficient production to fulfill your processor 
contract if the processor contract stipulates a specific amount of 
production to be delivered;
    (b) The tomatoes should have been harvested but was not harvested;
    (c) The tomatoes were abandoned;
    (d) Harvest was completed;
    (e) Final adjustment of a loss was completed; or
    (f) The following calendar date for the end of the insurance period
    (1) October 20 in California; and
    (2) October 10 in all other states.

                           11. Causes of Loss

    In accordance with the provisions of section 12 of the Basic 
Provisions:
    (a) Insurance is provided only against the following causes of loss 
that occur during the insurance period:
    (1) Adverse weather conditions, including:
    (i) Excessive moisture that prevents the harvesting equipment from 
entering the field or that prevents the timely operation of harvesting 
equipment; and
    (ii) Abnormally hot or cold temperatures that cause an unexpected 
number of acres over a large producing area to be ready for harvest at 
the same time, affecting the timely harvest of a large number of such 
acres or the processing of such production being beyond the capacity of 
the processor, either of which causes the acreage to be bypassed;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) Failure of the irrigation water supply, if due to a cause of 
loss contained in sections 11(a)(1) through (7) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded by section 12 of the 
Basic Provisions, we will not insure against any loss of production due 
to:
    (1) Acreage being bypassed, if the acreage is bypassed because:
    (i) The breakdown or non-operation of equipment or facilities; or
    (ii) The availability of a crop insurance payment. We may deny any 
indemnity immediately in such circumstance or, if an indemnity has been 
paid, require you to repay it to us with interest at any time acreage 
was bypassed due to the availability of a crop insurance payment;
    (2) The processing tomatoes not being timely harvested, unless such 
delay in harvesting is solely and directly due to an insured cause of 
loss; or
    (3) Your failure to follow the requirements contained in the 
processor contract.

[[Page 335]]

                         12. Replanting Payment

    (a) In accordance with section 13 of the Basic Provisions, a 
replanting payment is allowed if the crop sustained a loss exceeding 50 
percent of the plant stand and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
determined as follows:
    (1) The amount shown on the Special Provisions multiplied by your 
share; or
    (2) If an amount is not contained in the Special Provisions, the 
lesser of 20 percent of the production guarantee or three tons, 
multiplied by your third stage (final) price election, multiplied by 
your share; and
    (3) In no event will the replanting payment per acre exceed your 
actual cost of replanting.

                13. Duties in the Event of Damage or Loss

    In addition to the notice required by section 14 of the Basic 
Provisions, you must give us notice:
    (a) Not later than 48 hours after:
    (1) Total destruction of the tomatoes in the unit; or
    (2) Discontinuance of harvest on a unit on which unharvested 
production remains;
    (b) Within 3 days after the date harvest should have started on any 
acreage that will not be harvested. You must also provide acceptable 
documentation of the reason the acreage was bypassed. Failure to provide 
such documentation will result in our determination that the acreage was 
bypassed due to an uninsured cause of loss. If the crop will not be 
harvested and you wish to destroy the crop, you must leave 
representative samples of the unharvested crop for our inspection. The 
samples must be at least 10 feet wide and extend the entire length of 
each field in the unit. The samples must not be destroyed until the 
earlier of our inspection or 15 days after notice is given to us; and
    (c) At least 15 days prior to the beginning of harvest if you intend 
to claim an indemnity on any unit, or immediately if damage is 
discovered during the 15 day period or during harvest, so that we may 
inspect the damaged production. If you fail to notify us and such 
failure results in our inability to inspect the damaged production, we 
will consider all such production to be undamaged and include it as 
production to count. You are not required to delay harvest.

                         14. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee, by type if applicable;
    (2) Multiplying each result of section 14(b)(1) by the respective 
price election, by type if applicable;
    (3) Totaling the results of section 14(b)(2) if there are more than 
one type;
    (4) Multiplying the total production to counted (see section 14(c)), 
for each type if applicable, by its respective price election;
    (5) Totaling the results of section 14(b)(4) if there are more than 
one type;
    (6) Subtracting the result of section 14(b)(4) from the result of 
section 14(b)(2) if there is only one type or subtracting the result of 
section 14(b)(5) from the result of section 14(b)(3) if there are more 
than one type; and
    (7) Multiplying the result of section 14(b)(6) by your share.
For example:
    You have a 100 percent share in 50 acres of type A processing 
tomatoes in the unit, with a guarantee of 18.8 tons per acre and a price 
election of $50.00 per ton. You are only able to harvest 10.0 tons. Your 
indemnity would be calculated as follows:
    (1) 50.0 acres x 18.8 tons = 940.0 tons guarantee;
    (2) 940.0 tons x $50.00 price election = $47,000.00 value guarantee;
    (4) 10.0 tons x $50.00 price election = $500.00 value of production 
to count;
    (6) $47,000.00 - $500.00 = $46,500.00 loss; and
    (7) $46,500 x 100 percent = $46,500.00 indemnity payment.
    You also have a 100 percent share in 50 acres of type B processing 
tomatoes in the same unit, with a guarantee of 15.0 tons per acre and a 
price election of $35.00 per ton. You are only able to harvest 5.0 tons. 
Your total indemnity for both types A and B would be calculated as 
follows:
    (1) 50.0 acres x 18.8 tons = 940.0 ton guarantee for type A and 50.0 
acres x 15.0 tons = 750.0 ton guarantee for type B;
    (2) 940.0 ton guarantee x $50.00 price election = $47,000.00 value 
of guarantee for type A and 750.0 ton guarantee x $35.00 = $26,500.00 
value of guarantee for type B;
    (3) $47,000.00 + $26,500.00 = $72,500.00 total value of guarantee;
    (4) 10.0 tons x $50.00 price election = $500.00 value of production 
to count for type A and 5.0 tons x $35.00 price election = $175.00 value 
of production to count for type B;
    (5) $500.00 + $175.00 = $675.00 total value of production to count;
    (6) $72,500.00 - $675.00 = $71,575.00 loss; and
    (7) $71,575 loss x 100 percent = $71,575.00 indemnity payment.

[[Page 336]]

    (c) The total production to count, specified in tons, from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us.
    (ii) Production lost due to uninsured causes;
    (iii) Production on acreage that is bypassed unless the acreage was 
bypassed due to an insured cause of loss which resulted in production 
which would not be acceptable under the terms of the processor contract;
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandoned, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us, (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested;
    (2) All harvested production (in tons) delivered to the processor 
which meets the quality requirements of the processor contract 
(expressed as usable or payable weight).
    (3) All harvested tomato production delivered to processor which 
does not meet the quality requirements of the processor contract due to 
not being timely delivered.
    (d) Once harvest has begun on any acreage covered by a processor 
contract that specifies the number of tons to be delivered, the total 
indemnity payable will be limited to an amount based on the lesser of 
the guaranteed tons, or the tons remaining unfulfilled under the 
processor contract.

                     15. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

[62 FR 54342, Oct. 20, 1997, as amended at 62 FR 65177, Dec. 10, 1997; 
69 FR 44576, July 27, 2004]



Sec. 457.161  Canola and rapeseed crop insurance provisions.

    The canola and rapeseed crop insurance provisions for the 2003 and 
succeeding crop years are as follows:
    FCIC policies:

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                   Canola and Rapeseed Crop Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) the Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions, with (1) controlling (2), etc.

                             1. Definitions

    Canola. A crop of the genus Brassica as defined in accordance with 
the Official United States Standards for Grain--Subpart C--U.S. 
Standards for Canola.
    Harvest. Combining or threshing for seed. A crop that is swathed 
prior to combining is not considered harvested.
    Local market price (Canola). The cash price per pound for U.S. No. 2 
grade canola that reflects the maximum limits of quality deficiencies 
allowable for the U.S. No. 2 grade canola.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, land on which seed is initially spread onto the soil 
surface by any method and subsequently is mechanically incorporated into 
the soil in a timely manner and at the proper depth will be considered 
planted. Acreage planted in any other manner will not be insurable 
unless otherwise provided by the Special Provisions, actuarial 
documents, or by written agreement.
    Price of damaged production. The cash price per pound available if 
the production were sold for canola that qualifies for quality 
adjustment in accordance with section 12 of these crop provisions.
    Rapeseed. A crop of the genus Brassica that contains at least 30 
percent of an industrial type of oil as shown on the Special Provisions 
and that is measured on a basis free from foreign material.

[[Page 337]]

    Swathed. Severance of the stem and seed pods from the ground and 
placing into windrows without removal of the seed from the pod.

                            2. Unit Division

    In addition to optional units by section, section equivalent or FSA 
farm serial number and by irrigated and non-irrigated practices, 
optional units may be by type if the type is designated on the Special 
Provisions.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election for all the canola 
and rapeseed in the county insured under this policy unless the Special 
Provisions provide different price elections by type, in which case you 
may select one price election for each canola and rapeseed type 
designated in the Special Provisions. The price elections you choose for 
each type must have the same percentage relationship to the maximum 
price offered by us for each type. For example, if you choose 100 
percent of the maximum price election for a specific type, you must also 
choose 100 percent of the maximum price election for all other types.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date for counties 
with a March 15 cancellation date, and June 30 preceding the 
cancellation date for all other counties.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
                                                   Cancellation and
              State and county                    Termination dates
------------------------------------------------------------------------
All counties in Georgia....................  Sept. 30.
All other counties without fall planted      Mar. 15.
 types specified on the actuarial table.
All other counties with fall planted types   Aug. 31.
 specified on the actuarial table.
------------------------------------------------------------------------

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all canola and rapeseed in the county for which a 
premium rate is provided by the actuarial table:
    (a) In which you have a share;
    (b) That is planted for harvest as seed; and
    (c) That is not, unless allowed by Special Provisions or by written 
agreement:
    (1) Interplanted with another crop; or
    (2) Planted into an established grass or legume.

                          7. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions,
    (a) Any acreage of the insured crop that is damaged before the final 
planting date, to the extent that most producers producing crops on 
similarly situated acreage in the area would not normally further care 
for the crop, must be replanted unless we agree that it is not practical 
to replant; and
    (b) We will not insure any acreage that does not meet the rotation 
requirements contained in the Special Provisions.

                           8. Insurance Period

    In accordance with the provisions of section 11 of the Basic 
Provisions, the end of the insurance period is October 31 of the 
calendar year in which the crop is normally harvested.

                            9. Causes of Loss

    In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss which occur during the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if applicable, caused by 
an insured cause of loss that occurs during the insurance period.

                         10. Replanting Payment

    (a) In accordance with section 13 of the Basic Provisions, a 
replanting payment is allowed if the insured crop is damaged by an 
insurable cause of loss to the extent that most producers producing the 
crop on similarly situated acreage in the area, would not continue to 
care for the crop and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of 20 percent of the production guarantee or 175 pounds, 
multiplied by your price election, multiplied by your insured share.
    (c) When the canola or rapeseed is replanted using a practice or 
type that is uninsurable as an original planting, the liability for the 
unit will be reduced by the amount of the replanting payment that is 
attributable to your share. The premium amount will not be reduced.

[[Page 338]]

                11. Duties in the Event of Damage or Loss

    In accordance with the requirements of section 14 of the Basic 
Provisions, the representative samples of the unharvested crop that we 
may require must be at least 10 feet wide and extend the entire length 
of each field in the unit. If you intend to put the acreage to another 
use or not harvest the acreage, the samples must not be harvested or 
destroyed until our inspection.

                         12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which acceptable production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage by its respective production 
guarantee;
    (2) Multiplying each result in section 12(b)(1) by the respective 
price election for each type, if applicable;
    (3) If there are more than one type, totaling the results in section 
12(b)(2);
    (4) Multiplying the total production to be counted of each type, if 
applicable, (see section 12(c)) by the respective price election;
    (5) If there are more than one type, totaling the results in section 
12(b)(4);
    (6) If there are more than one type, subtracting the total in 
section 12(b)(5) from the total in section 12(b)(3);
    (7) If there is only one type, subtracting the total in section 
12(b)(4) from the total in section 12(b)(2); and
    (8) Multiplying the result in section 12(b)(6) and 12(b)(7), as 
applicable, by your share.
    (c) The total production to count (pounds) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee for acreage:
    (A) That is abandoned;
    (B) That is put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
section 12(d)); and
    (iv) Potential production on insured acreage that you intend to put 
to another use or abandon, if you and we agree on the appraised amount 
of production. Upon such agreement, the insurance period for that 
acreage will end when you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage.
    (d) Mature canola may be adjusted for excess moisture and quality 
deficiencies. Mature rapeseed may be adjusted for excess moisture only. 
If moisture adjustment is applicable, it will be made prior to any 
adjustment for quality.
    (1) Canola and rapeseed production will be reduced by 0.12 percent 
for each 0.1 percentage point of moisture in excess of 8.5 percent. We 
must be permitted to obtain samples of the production to determine the 
moisture content.
    (2) Canola production will be eligible for quality adjustment if:
    (i) Deficiencies in quality, in accordance with the Official United 
States Standards for Grain, result in the canola not meeting the grade 
requirements for U.S. No. 3 or better (U.S. Sample grade) because of 
kernel damage (excluding heat damage), or a musty, sour, or commercially 
objectionable foreign odor; or
    (ii) Substances or conditions are present that are identified by the 
Food and Drug Administration or other public health organizations of the 
United States as being injurious to human or animal health.
    (3) Quality will be a factor in determining your loss in canola 
production only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these Crop 
Provisions and which occurs within the insurance period;
    (ii) The deficiencies, substances, or conditions result in a net 
price for the damaged production that is less than the local market 
price;

[[Page 339]]

    (iii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or by 
a disinterested third party approved by us;
    (iv) With regard to deficiencies in quality, the samples are 
analyzed by:
    (A) A grain grader licensed under the United States Grain Standards 
Act or the United States Warehouse Act;
    (B) A grain grader licensed under State law and employed by a 
warehouse operator who has a storage agreement with the Commodity Credit 
Corporation; or
    (C) A grain grader not licensed under State law, but who is employed 
by a warehouse operator who has a commodity storage agreement with the 
Commodity Credit Corporation and is in compliance with State law 
regarding warehouses; and
    (v) With regard to substances or conditions injurious to human or 
animal health, the samples analyzed by a laboratory approved by us.
    (4) Canola production that is eligible for quality adjustment, as 
specified in sections 12(d)(2) and (3), will be reduced:
    (i) In accordance with the quality adjustment factors contained in 
the Special Provisions; or
    (ii) As follows if quality adjustment factors are not contained in 
the Special Provisions:
    (A) Divide the price of damaged production by the local market price 
to determine the quality adjustment factor.
    (B) The number of pounds remaining after any reduction due to 
excessive moisture (the moisture-adjusted gross pounds) of the damaged 
or conditioned production will then be multiplied by the quality 
adjustment factor to determine the net production to count.
    (5) For canola, the price of damaged production and the local market 
price will be determined at the earlier of the date such quality 
adjusted production is sold or the date of final inspection for the unit 
subject to the following conditions:
    (i) Discounts used to establish the price of damaged production will 
be limited to those that are usual, customary, and reasonable.
    (ii) The price of damaged production will not be reduced for:
    (A) Moisture content;
    (B) Damage due to uninsured causes;
    (C) Drying, handling, processing, or any other costs associated with 
normal harvesting, handling, and marketing of the canola; except, if the 
price of damaged production can be increased by conditioning, we may 
reduce the price of damaged production after the production has been 
conditioned by the cost of conditioning but not lower than the price of 
damaged production before conditioning. We may obtain prices of damaged 
production from any buyer of our choice. If we obtain prices of damaged 
production from one or more buyers located outside your local market 
area, we will reduce such price of damaged production by the additional 
costs required to deliver the canola to those buyers; or
    (D) Erucic acid or glucosinolates in excess of the amount allowed 
under the definition of canola contained in the Official United States 
Standards for Grain; and
    (iii) Factors not associated with grading under the Official United 
States Standards for Grain including, but not limited to protein and 
oil, will not be considered.
    (e) Any production harvested from plants growing in the insured crop 
may be counted as production of the insured crop on an unadjusted weight 
basis.
    For example:
    You have 100 percent share in 25 acres of Fall Oleic Canola in a 
unit with a 650 pound production guarantee and a price election of $0.11 
per pound. You are only able to harvest 14,700 pounds and there is no 
appraised production. Your indemnity would be calculated as follows:
    (1) 25 acres x 650 pounds = 16,250 pounds of Fall Oleic Canola;
    (2) 16,250 pounds x $0.11 price election = $1,788 value of guarantee 
for Fall Oleic Canola;
    (3) 14,700 pounds x $0.11 price election = $1,617 total value of 
production to count for Fall Oleic Canola;
    (4) $1,788 value of guarantee - $1,617 value of production to count 
= $171 value of loss; and
    (5) $171 value of loss x 100 percent = $171 indemnity payment.
    You also have a 100 percent share in 50 acres of Fall High Erucic 
Rapeseed in the same unit with a production guarantee of 750 pounds per 
acre and a price election of $0.15 per pound. You are only able to 
harvest 14,000 pounds and there is no appraised production. Your total 
indemnity for both Fall Oleic Canola and Fall High Erucic Rapeseed would 
be calculated as follows:
    (1) 25 acres x 650 pounds = 16,250 pounds guarantee for the Fall 
Oleic Canola, and 50 acres x 750 pounds = 37,500 pounds guarantee for 
the Fall High Erucic Rapeseed;
    (2) 16,250 pounds guarantee x $0.11 price election = $1,788 value of 
the guarantee for the Fall Oleic Canola, and 37,500 pounds guarantee x 
$0.15 price election = $5,625 value of the guarantee for the Fall High 
Erucic Rapeseed;
    (3) $1,788 + $5,625 = $7,413 total value of the guarantees;
    (4) 14,700 pound x $0.11 price election = $1,617 value of production 
to count for the Fall Oleic Canola, and 14,000 pounds x $0.15 price 
election = $2,100 value of production to count for the Fall High Erucic 
Rapeseed;
    (5) $1,617 + $2,100 = $3,717 total value of production to count;
    (6) $7,413 value of guarantee - $3,717 value of production = $3,696 
loss; and

[[Page 340]]

    (7) $3,696 value of loss x 100 percent = $3,696 indemnity payment.

                            13. Late Planting

    In lieu of section 16(a) of the Basic Provisions, the production 
guarantee for each acre planted to the insured crop during the late 
planting period will be reduced by 1 percent per day for each day 
planted after the final planting date unless otherwise specified in the 
Special Provisions.

                         14. Prevented Planting

    In addition to the provisions contained in section 17 of the Basic 
Provisions, your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have limited or 
additional levels of coverage, as specified in 7 CFR part 400, subpart 
T, and pay an additional premium, you may increase your prevented 
planting coverage to the levels specified in the actuarial documents.

[62 FR 65997, Dec. 17, 1997, as amended at 67 FR 43526, June 28, 2002]



Sec. 457.162  Nursery crop insurance provisions.

    The Nursery Crop Insurance Provisions for the 2006 and succeeding 
crop years are as follows:
    FCIC Policies

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured Policies

               (Appropriate title for insurance provider)

Both FCIC and Reinsured Policies

                    Nursery Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Act. The Federal Crop Insurance Act, 7 U.S.C. 1501 et seq.
    American Standard for Nursery Stock. A publication of the American 
Nursery and Landscape Association, or a subsequent successor 
organization, issued in accordance with the rules of the American 
National Standards Institute, Inc. that provides common terminology and 
standards for nurseries.
    Amount of insurance. For each basic unit, your basic unit value 
multiplied by the coverage level percentage you elect and multiplied by 
your share.
    Basic unit value. The full value of all insurable plants in each 
basic unit as shown on your PIVR, including any revision that increases 
the value of your insurable plant inventory.
    Container grown. Nursery plants planted and grown in standard 
nursery containers either above ground or that are placed in the ground, 
either directly or when placed in another pot in the ground (i.e., pot-
in-pot).
    Crop year. The period beginning the day insurance attaches and 
extending until the following May 31. Crop year is designated by the 
year in which the insurance period ends.
    Crop year deductible. The deductible percentage multiplied by the 
sum of all plant inventory values for each basic unit. The crop year 
deductible will be increased for any increases in the inventory value on 
the PIVR or through the purchase of a Peak Inventory Endorsement, if in 
effect at the time of loss. The crop year deductible will be reduced by 
any previously incurred deductible, except any incurred under the 
Rehabilitation Endorsement, if you timely report each loss to us.
    Deductible percentage. An amount equal to 100 percent minus the 
percent of coverage you select.
    Eligible Plant List. A list that includes the botanical and common 
names of insurable plants, the winter protection requirements for 
container grown material and the areas in which they apply, the 
hardiness zone to which field grown material is insurable, the 
designated hardiness zone for each county, and the unit classification 
for each plant on the list, published by FCIC on RMA's Web site at 
http://www.rma.usda.gov. It is also available on compact disk from your 
crop insurance agent.
    Fabric grow bag. A fabric bag (including a woven or matted bag with 
a plastic or fabric bottom) used for growing woody plants in-ground or 
as an above-ground nursery plant container that provides adequate 
drainage and is appropriate in size for the plant.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
corporation within the USDA, or a successor agency.
    Field grown. Nursery plants planted and grown in the ground without 
the use of an artificial root containment device. Plants grown in in-
ground fabric grow bags, plants that are balled and burlapped or plants 
grown in containers that allow the plants to root (excluding fibrous 
roots) into the ground (for example, a container without a bottom) are 
also considered field grown.
    Field market value A. The value of undamaged insurable plants, based 
on the lesser of: (1) The prices contained in the Plant Price Schedule; 
or (2) the prices contained in your catalog or price list in the basic 
unit immediately prior to the occurrence of any loss, as determined by 
our appraisal. This allows the amount of insurance

[[Page 341]]

under the policy to be divided among the individual units in accordance 
with the actual value of the plants in the unit at the time of loss to 
determine whether you are entitled to an indemnity for insured losses in 
the basic unit. This value is also used to calculate the actual value of 
the plants in the basic unit at the time of loss to ensure that you have 
not under-reported your plant values. For liners, the total value of 
undamaged liners is multiplied by the survival factor to determine the 
value of undamaged insurable plants.
    Field market value B. The value of insurable plants, based on the 
lesser of: (1) The prices contained in the Plant Price Schedule; or (2) 
the prices contained in your catalog or price list in the basic unit 
following the occurrence of a loss, as determined by our appraisal, plus 
any reduction in value due to uninsured causes. This is used to 
determine the loss of value for each individual unit so that losses can 
be paid on an individual unit basis.
    Good nursery practices. In lieu of the definition of ``good farming 
practices'' contained in section 1 of the Basic Provisions, the 
horticultural practices generally in use in the area for nursery plants 
to make normal progress toward the stage of growth at which marketing 
can occur and: (1) For conventional practices, generally recognized by 
agricultural experts for the area as compatible with the nursery plant 
production practices and weather conditions in the county; or (2) for 
organic practices, generally recognized by the organic agricultural 
industry for the area as compatible with the nursery plant production 
practices and weather conditions in the county or contained in the 
organic plan. We may, or you may request us to, contact FCIC to 
determine whether or not production methods will be considered to be 
``good nursery practices.''
    Irrigated practice. In lieu of the definition in the Basic 
Provisions, the application of water, using appropriate systems and at 
the proper times, to provide the quantity of water needed to sustain 
normal growth of your insured plant inventory and provide cold 
protection for applicable plants as specified in the Eligible Plant 
List.
    Liners. Plants produced in standard nursery containers that are 
equal to or greater than 1 inch in diameter (including trays containing 
200 or fewer individual cells, unless specifically provided by the 
Special Provisions) but less than 3 inches in diameter at the widest 
point of the container or cell interior, have an established root system 
reaching the sides of the containers, are able to maintain a firm root 
ball when lifted from the containers, and meet all other conditions 
specified in the Special Provisions.
    Loss. Field market value A minus field market value B.
    Marketable. Of a condition that it may be offered for sale in the 
market.
    Monthly proration factors. Factors contained in the actuarial 
documents that are used to calculate premium when you do not insure the 
nursery plants for an entire crop year.
    Nursery. A business enterprise that grows the nursery plants and 
derives at least 50 percent of its gross income from the wholesale 
marketing of such plants.
    Occurrence deductible. This deductible allows a smaller deductible 
than the crop year deductible to be used when the inventory value is 
less than the reported basic unit value. The occurrence deductible is 
the lesser of: (1) The deductible percentage multiplied by field market 
value A multiplied by the under-report factor; or (2) the crop year 
deductible.
    PIVR. The plant inventory value report, your report that declares 
the value of insurable plants in accordance with section 6.
    Plant Price Schedule. A schedule of insurable plant prices that 
establishes the maximum insurable value of undamaged insurable plants, 
published by FCIC as an actuarial document available on RMA's Web site 
at http://www.rma.usda.gov. It is also available on compact disk from 
your crop insurance agent.
    Practice. A cultural method of producing plants. Container grown and 
field grown are considered separate insurable practices.
    Sales closing date. In lieu of the definition in section 1 of the 
Basic Provisions, the date shown in the Special Provisions. New-policy 
applications may be filed at any time. However, all applications, 
including those for new or amended coverage, are subject to a 30-day 
waiting period before commencement of coverage as specified in sections 
3(d) and 9(a).
    Standard nursery containers. Rigid containers not less than 1 inch 
in diameter at the widest point of the container interior (including 
trays that contain 200 or fewer individual cells, unless specifically 
provided by the Special Provisions), above-ground fabric grow bags, and 
other types of containers specified in the Special Provisions that are 
appropriate in size and provide adequate drainage for the plant. In-
ground fabric grow bags, balled and burlapped, and trays (flats) without 
individual cells are not considered standard nursery containers.
    Stock plants. Plants used solely for propagation during the 
insurance period.
    Survival factor. A factor shown on the Special Provisions that 
specifies the expected percentage of liners that normally survive the 
period from insurance attachment to market.
    Under-report factor. The factor that adjusts your indemnity for 
under-reporting of inventory values. The factor is always used in 
determining indemnities. For each basic unit,

[[Page 342]]

the under-report factor is the lesser of: (1) 1.000; or (2) the basic 
unit value, including a Peak Inventory Value Report during the coverage 
term of a Peak Inventory Endorsement, minus the total of all previous 
losses, as adjusted by any previous under-report factor, divided by 
field market value A. Payments made under the Rehabilitation Endorsement 
will not be considered a previous loss when calculating the under-report 
factor.
    Wholesale. To sell nursery plants in large quantities at a price 
below that offered on low-quantity sales to retailers, commercial users, 
governmental end-users, or other end-users for business purposes (e.g. 
sales to landscape contractors and commercial fruit producers). This 
determination will be based on a county-by-county basis.

                            2. Unit Division

    (a) If you elect additional coverage for a practice, a basic unit, 
as defined in section 1 of the Basic Provisions, may be divided into 
additional basic units by each insurable plant type designated in 
section 2(b) for which a premium rate is provided by the actuarial 
documents.
    (b) Only the following plant types contained on the Eligible Plant 
List are insurable:
    (1) Deciduous Trees (Shade and Flower);
    (2) Broad-leaf Evergreen Trees;
    (3) Coniferous Evergreen Trees;
    (4) Fruit and Nut Trees;
    (5) Deciduous Shrubs;
    (6) Broad-leaf Evergreen Shrubs;
    (7) Coniferous Evergreen Shrubs;
    (8) Small Fruits;
    (9) Herbaceous Perennials;
    (10) Roses;
    (11) Ground Cover and Vines;
    (12) Annuals;
    (13) Foliage;
    (14) Palms and Cycads;
    (15) Liners (container grown only and inclusive of all insurable 
plant types); and
    (16) Other plant types listed in the Special Provisions.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    (a) The production reporting requirements, including the 
misreporting provisions, contained in section 3 of the Basic Provisions 
are not applicable.
    (b) In addition to the requirements of section 3 of the Basic 
Provisions, you may select either catastrophic risk protection or 
additional coverage for each insured practice. An administrative fee 
established in accordance with section 7(e) of the Basic Provisions will 
be owed for each practice insured.
    (c) In lieu of section 3(b) of the Basic Provisions:
    (1) If you select additional coverage for a practice:
    (i) You may select one coverage level for each plant type insured in 
that practice if you elect basic units by plant type;
    (ii) You will receive 100 percent of the price election for all 
plant types in that practice;
    (iii) You must provide on the application a coverage level 
percentage for each plant type that will be insured; and
    (iv) You must select a coverage level if:
    (A) A new plant is added under a revised PIVR or Peak Inventory 
Endorsement; and
    (B) The plant is not categorized under a plant type reported on the 
initial PIVR.
    (2) If you select catastrophic risk protection for a practice, all 
plant types under the practice must be insured at the catastrophic risk 
protection level.
    (d) In lieu of section 3(d) of the Basic Provisions, you may request 
changes to the coverage level for a plant type by submitting them in 
writing to us as follows:
    (1) For new policies, changes cannot be made for the crop year after 
the date of the application; and
    (2) For carryover policies:
    (i) For the 2006 crop year only, changes must be requested on or 
before September 30th prior to the start of the crop year;
    (ii) For all subsequent crop years, changes must be requested on or 
before the sales closing date; and
    (iii) Unless we reject the proposed increase because a loss occurs 
within 30 days of the date the request is made (Rejection can occur at 
any time we discover such loss has occurred), requested changes will 
take effect:
    (A) For the 2006 crop year, 30 days after the date you submitted 
your request; and
    (B) For all subsequent crop years, on the date of the start of the 
crop year.
    (e) Your amount of insurance will be reduced by the amount of any 
indemnity paid under this policy. For losses occurring when a Peak 
Inventory Endorsement is in effect, to determine the amount of insurance 
remaining after the loss you must subtract the amount of the indemnity 
from the peak amount of insurance, then subtract any remaining amount of 
indemnity from the amount of insurance.
    (f) If you restock your nursery plant inventory, you may increase 
your amount of insurance in accordance with section 6(g).

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is January 31 of each crop year.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are May 31 preceding the crop year.

[[Page 343]]

                                 6. PIVR

    (a) Section 6 of the Basic Provisions is not applicable.
    (b) You must submit a PIVR for each insured practice, as applicable, 
and two copies of your most recent wholesale catalogs or price lists in 
accordance with subsection (k) to us with your application on or before 
the sales closing date for each crop year following the year of 
application.
    (1) You will be notified in writing if an application for insurance 
is refused because the inventory or wholesale catalog or price list is 
not acceptable.
    (2) If you fail to provide a PIVR or applicable catalog or price 
list on or before the sales closing date for any crop year, insurance 
will not attach until 30 days after all such documents have been 
received by your crop insurance agent and we will not be liable for any 
losses that occur before insurance has attached.
    (c) The PIVR must include, by basic unit, all growing locations, 
basic unit value, coverage level selected, as applicable, and your 
share.
    (1) If you do not elect additional basic units by plant type or you 
elect CAT coverage, the plant inventory values for each plant type in 
the basic unit must be separately reported on the PIVR and totaled to 
determine the basic unit value.
    (2) At our option, you will be required to provide documentation in 
support of your PIVR, including, but not limited to, a detailed plant 
inventory listing that includes the name, the number, and the size of 
each plant; acceptable records of sales and purchases of plants for the 
three previous crop years in the amount of detail we require; and your 
ability to properly obtain and maintain nursery stock. Acceptable 
records must contain the name and telephone number of the purchaser or 
seller, as applicable, names of the plants, the number of each plant 
sold or purchased, and the sales price for each plant.
    (3) Failure to provide documentation when requested or providing 
inadequate documentation will result in denial of insurance for the crop 
year for any basic units for which such documentation was not provided. 
This provision does not apply to:
    (i) Plant varieties you have not previously grown; or
    (ii) New nurseries where an inspection has determined you have the 
ability to properly obtain and maintain the nursery stock.
    (d) Your PIVR, including any revised report, and your Peak Inventory 
Value Report will be used to determine your premium and amount of 
insurance.
    (e) Your PIVR must reflect your insurable nursery plant inventory 
value by basic unit.
    (1) The price for each plant and size listed on your PIVR will be 
the lower of the Plant Price Schedule price or the lowest wholesale 
price in your nursery catalog or price list submitted in accordance with 
section 6(k).
    (2) In no instance will we be liable for plant values greater than 
those contained in the Plant Price Schedule.
    (3) If you have previously made a claim and the loss adjuster is 
unable to determine whether a plant was damaged prior to submission of 
your PIVR for the current crop year, the plant will be insurable at full 
value based on the lesser of the Eligible Plant List price or the 
catalog or price list price. The value of the plant may be reduced at 
any time during the crop year if the extent of damage is discovered.
    (f) For catastrophic level policies only, you must report, on the 
PIVR for each practice insured, your greatest plant sales in any of the 
previous 3 years and the actual inventory value on the date insurance 
attaches.
    (1) You may be required to provide documentation to support the 
above reporting requirements. To be considered adequate, sales documents 
must contain the name and telephone number of the purchaser, names of 
the plants, the number of each plant sold, and the sales price for each 
plant.
    (2) For each applicable practice, the total of your basic unit 
values cannot exceed 110 percent of the higher of your:
    (i) Greatest amount of plant sales in any of the previous 3 years; 
or
    (ii) Actual inventory value on the date insurance attaches.
    (3) Failure to provide documentation when requested or providing 
inadequate documentation will result in denial of insurance for the crop 
year for any basic unit for which such documentation was not provided. 
This provision does not apply to:
    (i) Plant varieties you have not previously grown; or
    (ii) New nurseries where an inspection has determined you have the 
ability to properly obtain and maintain the nursery stock.
    (g) You may increase your reported inventory value for each basic 
unit no more than twice during the crop year by submitting a revised 
PIVR prior to 30 days before the end of such crop year.
    (1) Any requested increase must be made in writing and contain the 
same information as required in section 6(c). The limitations in section 
3(d) regarding making changes to the coverage level after a specified 
date are not applicable to a revised PIVR that adds new plant types. The 
limitations continue to apply if plants are added for a specific plant 
type.
    (2) An inspection will be performed when the total of all the basic 
unit values contained on the revised PIVRs is increased 50 percent or 
more from the previous total of all the basic unit values on the PIVR, 
and the increase is not due to restocking subsequent to an insured loss.

[[Page 344]]

    (3) At our discretion, we may inspect the inventory if an increase 
of less than 50 percent is reported on the revised PIVR.
    (4) Your revised PIVR will be considered accepted by us and 
insurance will attach on any proposed increase in inventory value 30 
days after your written request is received unless we reject the 
proposed increase in your plant inventory value in writing.
    (5) We will reject any requested increase if a loss occurs within 30 
days of the date the request is made.
    (6) You cannot revise your PIVR to decrease the plant inventory 
value after the start of the insurance period specified in section 9.
    (h) For insurable plants that were damaged prior to the attachment 
of insurance coverage:
    (1) The applicable price, as determined in accordance with section 
6(e), will be reduced for inventory reporting purposes if we accept such 
plants for insurance coverage;
    (2) The plants will be removed from the PIVR if they are not 
accepted;
    (3) The procedure for calculating the insurable value of damaged 
plants that are accepted for coverage is contained in the Special 
Provisions.
    (i) You must report the full value of each basic unit value in 
accordance with section 6(e). Failure to report the full value of each 
basic unit value will result in the reduction of any claim in accordance 
with section 12(d).
    (j) Insurable plants in over-sized containers will be valued for 
purposes of reporting inventory and loss adjustment as if the plants 
were in appropriate-sized containers in accordance with the standards 
contained in the current American Standard for Nursery Stock. Each cell 
in a multiple-cell container is considered a separate container. (See 
the Eligible Plant List at http://www.rma.usda.gov/ for additional 
information and requirements on container specifications and volume 
calculation.)
    (k) At a minimum, your wholesale catalog or price list must:
    (1) Be type-written and legible;
    (2) Show an issue date on the cover page (may be handwritten);
    (3) Contain the name, address, and phone number of your nursery;
    (4) Be provided to customers and used in the sale of your plants; 
and
    (5) List each plant's name (scientific or common), plant or 
container size, and wholesale price.

                               7. Premium

    (a) In lieu of section 7(c) of the Basic Provisions, we will 
determine your premium by multiplying the amount of insurance by the 
appropriate premium rate, any premium adjustment factor, and the monthly 
proration factor contained in the actuarial documents, if applicable.
    (b) In addition to the provisions in section 7 of the Basic 
Provisions, we will prorate your premium based on:
    (1) The time remaining in the crop year after insurance attaches:
    (i) If you have made application after the start of the insurance 
period specified in section 9; or
    (ii) If you submit a PIVR or wholesale catalog or price list after 
the sales closing date;
    (2) The time remaining in the crop year after insurance attaches and 
the additional amount of inventory reported, if you submit a revised 
PIVR to report an increase in inventory value for a basic unit; and
    (3) The time period for which insurance is provided under the Peak 
Inventory Endorsement.
    (c) If your premium is prorated, premium will be charged for the 
entire month for any calendar month during which any amount of coverage 
is provided under these provisions or the Peak Inventory Endorsement.
    (d) In lieu of section 7(a) of the Basic Provisions:
    (1) If you apply for insurance before April 1st, the annual premium 
is earned and payable at the time coverage begins. You will be billed 
for the premium and administrative fee not earlier than the premium 
billing date specified in the Special Provisions.
    (2) If you apply for insurance, or submit your PIVR or wholesale 
catalog or price list, on or after April 1st, the premium for the 
partial crop year will be due and must be paid at the time of 
application.
    (3) Failure to pay the premium at the time of application, or when 
you submit your PIVR or wholesale catalog or price list, will result in 
no insurance and no indemnity being owed for the crop year.

                       8. Insured Crop and Plants

    In lieu of the provisions of sections 8 and 9 of the Basic 
Provisions, the crop insured will be all nursery plants and plant types 
in each practice, contained on the Eligible Price List, in which you 
have a share, that you elect to insure, and that:
    (a) Are shown on the Eligible Plant List and meet all the 
requirements for insurability (plant types, species and cultivars not 
insurable under the eligible plant list may be insured by written 
agreement, subject to FCIC's determination that the proper storage 
requirements and an accurate insurable price for the plant can be 
determined, and provided all other requirements, such as plant and 
container size, are met);
    (b) Are determined by us to be acceptable;
    (c) Are grown in a county for which a premium rate is provided in 
the actuarial documents;

[[Page 345]]

    (d) Are grown in a nursery inspected by us and determined to be 
acceptable;
    (e) Are irrigated unless otherwise provided by the Special 
Provisions (You must have adequate irrigation equipment and water to 
irrigate all insurable nursery plants at the time coverage begins and 
throughout the insurance period);
    (f) Are grown in accordance with the production practices for which 
premium rates have been established;
    (g) Are grown in an appropriate medium;
    (h) Are not grown for sale as Christmas trees;
    (i) Are not stock plants or plants being grown solely for harvest of 
buds, flowers, or greenery;
    (j) May produce edible fruits or nuts provided the plants are made 
available for sale (Harvest of the edible fruit or nuts does not affect 
insurability); and
    (k) Are not produced in nursery containers that contain two or more 
different genera, species, subspecies, varieties or cultivars.

                           9. Insurance Period

    (a) In lieu of section 11 of the Basic Provisions:
    (1) For the year of application, if you apply for coverage:
    (i) On or before August 31, 2005, for the 2006 crop year, coverage 
begins on October 1, 2005, unless we notify you in writing that your 
inventory is not acceptable;
    (ii) After August 31, 2005, and on or before May 1, 2006, for the 
2006 crop year, or on or before May 1st of the crop year for any 
subsequent crop year, coverage begins 30 days after your crop insurance 
agent receives an application signed by you, unless we notify you in 
writing that your inventory is not acceptable;
    (iii) After May 1, 2006, or after May 1st for any subsequent crop 
year, coverage will not begin until the next crop year, subject to the 
30-day delay specified in subparagraph (ii); and
    (2) For continuous policies:
    (i) For the 2006 crop year, the insurance period begins on October 
1, 2005.
    (ii) For the 2007 crop year, the insurance period begins on June 1, 
2006, and for each subsequent crop year, the insurance period begins on 
each June 1st.
    (b) Insurance ends at the earliest of:
    (1) The date of final adjustment of a loss when the total 
indemnities due equal the amount of insurance;
    (2) Removal of bare root nursery plant material from the field;
    (3) Removal of all other insured plant material from the nursery; or
    (4) 11:59 p.m. on May 31, 2006, for the 2006 crop year, and on May 
31st for each subsequent crop year.

                           10. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided for unavoidable damage caused only by 
the following causes of loss that occur within the insurance period:
    (1) Adverse weather conditions, except as specified in section 10(c) 
or the Special Provisions;
    (2) Fire, provided weeds and undergrowth in the vicinity of the 
plants or buildings on your insured site are controlled by chemical or 
mechanical means;
    (3) Wildlife;
    (4) Earthquake; or
    (5) Volcanic eruption.
    (b) Insurance is also provided against the following if due to a 
cause of loss specified in section 10(a) that occurs within the 
insurance period:
    (1) A loss in plant values because of an inability to market such 
plants, provided such plants would have been marketed during the crop 
year (e.g. poinsettias that are not marketable during their usual and 
recognized marketing period of November 1st through December 25th);
    (2) Failure of the irrigation water supply; or
    (3) Failure of, or reduction in, the power supply.
    (c) In addition to the causes of loss excluded in sections 12(a) and 
(c) through (f) of the Basic Provisions, we do not insure against any 
loss caused by:
    (1) Disease or insect infestation, unless:
    (i) A disease or insect infestation occurs for which no effective 
control measure exists; or
    (ii) Coverage is specifically provided by the Special Provisions.
    (2) The inability to market the nursery plants as a result of:
    (i) The refusal of a buyer to accept production;
    (ii) Boycott; or
    (iii) An order from a public official prohibiting sales including, 
but not limited to, a stop sales order, quarantine, or phytosanitary 
restriction on sales;
    (3) Cold temperatures, if cold protection is required in the 
eligible plant list, unless:
    (i) You have installed adequate cold protection equipment or 
facilities and there is a failure or breakdown of the cold protection 
equipment or facilities resulting from an insurable cause of loss 
specified in section 10(a) (the insured plants must be damaged by cold 
temperatures and the damage must occur within 72 hours of the failure of 
such equipment or facilities unless we establish that repair or 
replacement was not possible between the time of failure or breakdown 
and the time the damaging temperatures occurred); or

[[Page 346]]

    (ii) The lowest temperature or its duration exceeded the ability of 
the required cold protection equipment to keep the insured plants from 
sustaining cold damage;
    (4) Collapse or failure of buildings or structures, unless the 
damage to the building or structures results from a cause of loss 
specified in section 10(a);
    (5) Any cause of loss, including those specified in section 10(a), 
if the only damage suffered is a failure of plants to grow to an 
expected size; or
    (6) In lieu of section 12(b) of the Basic Provisions, failure to 
follow recognized good nursery practices.

                11. Duties in the Event of Damage or Loss

    (a) In addition to your duties contained in section 14 of the Basic 
Provisions,
    (1) You must obtain our written consent prior to:
    (i) Destroying, selling or otherwise disposing of any plant 
inventory that is damaged; or
    (ii) Changing or discontinuing your normal growing practices with 
respect to care and maintenance of the insured plants.
    (2) You must submit a claim for indemnity to us on our form, not 
later than 60 days after the date of your loss, but in no event later 
than 60 days after the end of the insurance period. This requirement 
will be waived by us if the final adjustment of your claim is totally or 
partially deferred because we are unable to make an accurate 
determination of the amount of damage to the insured plants. If within 
the time frame specified we notify you that we are unable to make an 
accurate determination of damage on all or some of your damaged plants:
    (i) For those damaged plants on which the loss adjustment and claim 
have not been deferred, you must submit a partial claim within the time 
frame specified in section 11(a)(2) and we will settle your claim on 
such plants;
    (ii) For those damaged plants on which the loss adjustment and claim 
have been deferred, we will determine the amount of damage at the 
earliest possible date but no later than one year after the end of the 
insurance period for the crop year in which the damage occurred; and
    (iii) You must maintain the identity of the plants on which loss 
adjustment is deferred throughout the deferral period.
    (b) Failure to obtain our written consent as required by section 
11(a)(1) will result in the denial of your claim.

                         12. Settlement of Claim

    We will determine indemnities for any unit as follows:
    (a) Determine the under-report factor for the basic unit;
    (b) Determine the occurrence deductible;
    (c) Subtract field market value B from field market value A;
    (d) Multiply the result of 12(c) by the under-report factor;
    (e) Subtract the occurrence deductible from the result in section 
12(d); and
    (f) If the result of section 12(e) is greater than zero, and subject 
to the limit of section 12(g);
    (1) For other than catastrophic risk protection coverage, your 
indemnity equals the result of section 12(e), multiplied by your share.
    (2) For catastrophic risk protection coverage, your indemnity equals 
the result of section 12(e) multiplied by fifty-five percent, multiplied 
by your share.
    (g) The total of all indemnities for the crop year will not exceed 
the amount of insurance, including any peak amount of insurance during 
the coverage term of the Peak Inventory Endorsement, if this endorsement 
is elected.

                     13. Late and Prevented Planting

    The late and prevented planting provisions in the Basic Provisions 
are not applicable.

                         14. Written Agreements

    (a) In lieu of section 18(a) of the Basic Provisions, you must 
request in writing a written agreement with the application for the 
initial crop year, and not later than the cancellation date for each 
subsequent crop year, except as provided in section 14(c).
    (b) In lieu of the requirements of section 18(d) of the Basic 
Provisions, any written agreement is valid only until the end of the 
insurance period for the crop year such written agreement applies; and
    (c) In lieu of section 18(e) of the Basic Provisions, an application 
for a written agreement submitted after the date of application for the 
initial crop year and the cancellation date for all subsequent crop 
years may be approved if:
    (1) You demonstrate your physical inability to have applied timely; 
and
    (2) After physical examination of the nursery plant inventory, we 
determine the inventory will be marketable at the value shown on the 
PIVR.

                              15. Examples

                           Single Unit Example

    Assume you have a 100 percent share and the plant inventory value 
reported by you is $100,000, and your coverage level is 75 percent. Your 
amount of insurance is $75,000 ($100,000 x .75). At the time of loss, 
field market value A is $125,000, and field market value B is $80,000. 
The under-report factor is .80 ($100,000 divided by $125,000). The 
deductible percentage is 25 percent (100 - 75), the crop year deductible 
is $25,000 (.25 x $100,000)

[[Page 347]]

and the occurrence deductible is $25,000 (.25 x $125,000 x .80). Your 
indemnity would be calculated as follows:
    Step (1) Determine the under-report factor $100,000 / $125,000 = 
.80;
    Step (2) Field market value A minus field market value B $125,000 - 
$80,000 = $45,000;
    Step (3) The result of step (2) multiplied by the result of step (1) 
$45,000 x .80 = $36,000;
    Step (4) The result of step (3) minus the occurrence deductible 
$36,000 - $25,000 = $11,000; and
    Step (5) Result of step (4) multiplied by your share $11,000 x 1.000 
= $11,000 indemnity payment.

                   Peak Inventory Value Report Example

    Assume you have a second loss on the same basic unit. Your amount of 
insurance has been reduced by subtracting your previous indemnity 
payment of $11,000 from your amount of insurance ($75,000 - $11,000 = 
$64,000). Your crop year deductible has been reduced to zero by the 
previous loss ($25,000 - $36,000, but not less than zero). You purchase 
a Peak Inventory Endorsement and report $60,000 in inventory. Your peak 
amount of insurance is your reported inventory times your coverage level 
($60,000 x .75 = $45,000). The combined amount of insurance for the 
coverage term of the peak endorsement is $64,000 + $45,000 = $109,000. 
Your crop year deductible is increased by $15,000 ($60,000 x .25). At 
the time of loss, field market value A is $124,000, and field market 
value B is $58,000. The under-report factor is 1.00 [($160,000 - 
$36,000)/$124,000]. The crop year deductible is $15,000 (.25 x $60,000) 
and the occurrence deductible is $15,000 (the lesser of field market 
value A x .25 or the crop year deductible). Your indemnity would be 
calculated as follows:
    Step (1) Determine the under-report factor $160,000 - $36,000) / 
$124,000 = 1.00;
    Step (2) Field market value A minus field market value B $124,000 - 
$58,000 = $66,000;
    Step (3) The result of step (2) multiplied by the result of step (1) 
$66,000 x 1.0 = $66,000;
    Step (4) The result of step (3) minus the occurrence deductible 
$66,000 - $15,000 = $51,000; and
    Step (5) Result of step (4) multiplied by your share $51,000 x 1.000 
= $51,000 indemnity payment.
    Your peak amount of insurance is reduced to zero. Your amount of 
insurance is reduced by the amount the indemnity exceeds the peak amount 
of insurance. $64,000 - ($51,000 - 45,000) = $64,000 - $6,000 = $58,000.

[63 FR 50975, Sept. 24, 1998; 63 FR 57046, Oct. 26, 1998, as amended at 
70 37241, June 28, 2005]



Sec. 457.163  Nursery peak inventory endorsement.

                         Nursery Crop Insurance

                       Peak Inventory Endorsement

    This endorsement is not continuous and must be purchased for each 
crop year to be effective for that crop year.

    In return for payment of premium for the coverage contained herein, 
this endorsement will be attached to and made part of the Nursery Crop 
Insurance Provisions, subject to the terms and conditions described 
herein.

                             1. Definitions

    Coverage commencement date. The later of the date you declare as the 
beginning of the coverage or 30 days after a properly completed Peak 
Inventory Value Report is received by us.
    Coverage term. A period of time that begins on the coverage 
commencement date and ends on the coverage termination date.
    Coverage termination date. The date you declare that the peak amount 
of insurance will cease. This date cannot be after the end of the crop 
year.
    Peak amount of insurance. The additional inventory value reported on 
the Peak Inventory Value Report for each basic unit multiplied by your 
coverage level and by your share.
    Peak Inventory Value Report. A report that increases the value of 
insurable plants over the value reported on the PIVR, declares the 
coverage commencement and coverage termination dates, and the other 
requirements of section 6 of the Nursery Crop Insurance Provisions.
    Peak inventory premium adjustment factor. A factor calculated by 
subtracting the monthly proration factor for the month following the 
month containing the coverage termination date from the proration factor 
for the month in which coverage commenced. Peak Inventory Endorsements 
with a coverage termination date during the month of May will have a 
premium adjustment factor equal to the proration factor for the month 
containing the coverage commencement date.
    Restock. Replacement of lost or damaged plants that increase the 
value of your insurable inventory to an amount greater than your 
remaining amount of insurance.

                             2. Eligibility

    (a) You must have insurance under the Nursery Crop Insurance 
Provision in effect for the crop year that this endorsement applies;
    (b) You must have elected an additional level of coverage.

[[Page 348]]

    (c) You must submit a Peak Inventory Value Report, which will serve 
as the application for coverage under this endorsement.
    (1) The Peak Inventory Value Report may contain one or more plant 
type basic units and each plant type basic unit will be considered a 
separate Peak Inventory Endorsement.
    (2) We may reject the Peak Inventory Value Report if all 
requirements in this endorsement and the Nursery Crop Insurance 
Provisions are not met.
    (d) You may purchase no more than one Peak Inventory Endorsement for 
each basic unit during the crop year unless you have suffered insured 
losses and have restocked your nursery, in which case an additional Peak 
Inventory Endorsement may be purchased after each insured loss.

                               3. Coverage

    (a) The amount of insurance provided under the Nursery Crop 
Provisions for each basic unit is increased by the peak amount of 
insurance for such unit for the coverage term.
    (b) Except as provided herein, this endorsement does not change, 
amend or otherwise modify any other provision of your Nursery Crop 
Insurance Policy.

                        4. Peak Insurance Period

    Coverage begins on the coverage commencement date and ends at 11:59 
p.m. on the coverage termination date.

                               5. Premium

    (a) The premium for this endorsement is determined by multiplying 
the peak amount of insurance by the appropriate premium rate and by the 
peak inventory premium adjustment factor.

     Example of Peak Inventory Endorsement Total Premium Calculation

    Assume a grower reports a peak amount of insurance on a basic unit 
of $100,000 with a 65 percent coverage level and a share of 1.000. The 
base premium rate is $0.051. The proration factors for the Peak 
Inventory Endorsement are 0.68 for the month that coverage commenced and 
0.52 for the month following the month containing the coverage 
termination date, as stated in the actuarial documents. The peak premium 
adjustment factor is 0.16 (0.68--0.52). The total premium amount for the 
Peak Inventory Endorsement is $530.40 ($100,000 x 0.65 x 1.000 x $0.051 
x 0.16).
    (b) The premium for this endorsement is due and payable in 
accordance with section 7 of the Nursery Crop Insurance Provisions.

                        6. Reporting Requirements

    In addition to the reporting requirements of section 6 of the 
Nursery Crop Insurance Provisions, you must submit a Peak Inventory 
Value Report on our form.

                           7. Liability Limit

    The peak amount of insurance is limited to 200 percent of the basic 
unit value you declare under the Nursery Crop Insurance Provisions.

[63 FR 50979, Sept. 24, 1998; 63 FR 57047, Oct. 26, 1998, as amended at 
70 FR 36246, June 28, 2005]



Sec. 457.164  Nursery rehabilitation endorsement.

            Nursery Crop Insurance Rehabilitation Endorsement

    If you elect this endorsement and pay the additional premium 
designated in the actuarial documents, this endorsement is attached to 
and made a part of your Nursery Crop Insurance Provisions subject to the 
terms and conditions herein. In the event of a conflict between the 
Nursery Crop Insurance Provisions and this endorsement, this endorsement 
will control.

                             1. Eligibility

    (a) You must have purchased additional coverage under the Nursery 
Crop Insurance Provisions, and you must comply with all terms and 
conditions contained in the applicable Nursery Crop Insurance Provisions 
and endorsements.
    (b) All field grown nursery plants insured under the Nursery Crop 
Insurance Provisions must be insured under this endorsement. Nursery 
plants produced in standard nursery containers are not covered under 
this endorsement.
    (c) You must elect this endorsement:
    (1) At the time of application for the initial crop year your field 
grown nursery plants will be insured under the Nursery Crop Insurance 
Provisions; or
    (2) By October 1, 2005, for the 2006 crop year and by the sales 
closing date for each subsequent crop year if your field grown plants 
are already insured under the Nursery Crop Insurance Provisions.

                               2. Coverage

    (a) This endorsement is only applicable to field grown plants 
damaged by an insured cause of loss specified in

[[Page 349]]

section 10 of the Nursery Crop Insurance Provisions.
    (b) Rehabilitation costs covered by this endorsement are limited to 
expenditures for labor and materials for pruning and setup (righting, 
propping, and staking).
    (c) To be eligible for a rehabilitation payment:
    (1) The damaged plants must have a reasonable expectation of 
recovery based on:
    (i) The type of damage (e.g., broken limbs from high winds, trees 
uprooted by hurricane, etc.);
    (ii) The extent of damage (e.g., twenty percent of the limbs broken, 
half the canopy removed, etc.); and
    (iii) Whether the plant can recover to the point it is marketable;
    (2) Verifiable records must be provided showing actual expenditures 
for rehabilitation and such expenditures must be reasonable and 
customary for the type and extent of damage sustained by the plants;
    (3) Rehabilitation procedures must be performed directly following 
the occurrence of damage and before additional deterioration of the 
damaged plants occurs;
    (4) We must determine it is practical to rehabilitate the damaged 
plants (It is not practical if the costs of rehabilitation are greater 
than the value of the plant); and
    (5) The total actual rehabilitation costs for each loss occurrence 
on the basic unit must be at least the lesser of 2.0 percent of field 
market value A or $5,000.
    (d) The maximum amount of each rehabilitation payment for each basic 
unit will be the lesser of:
    (1) Your total actual rehabilitation costs multiplied by the under-
report factor contained in the Nursery Crop Insurance Provisions; or
    (2) An amount equal to 7.5 percent of the value (based on insurable 
plant prices determined in accordance with section 6 of the Nursery Crop 
Insurance Provisions) of all your insurable field grown plants that were 
rehabilitated subsequent to an insured cause of loss, multiplied by the 
under-report factor described in the Nursery Crop Insurance Provisions, 
multiplied by the coverage level percentage you elect, and multiplied by 
your share. Insurable, rehabilitated plants that have not recovered from 
damage that occurred prior to attachment of this endorsement will have a 
reduced value in accordance with section 6(h) of the Nursery Crop 
Insurance Provisions.
    (e) The total of all rehabilitation payments for the crop year for 
the basic unit will not exceed 7.5 percent of the value (based on 
insurable plant prices determined in accordance with section 6 of the 
Nursery Crop Insurance Provisions) of all your insurable field grown 
plants in such basic unit, multiplied by the under-report factor 
described in the Nursery Crop Insurance Provisions, multiplied by the 
coverage level percentage you elect, and multiplied by your share.

                             3. Cancellation

    This endorsement will continue in effect until canceled or coverage 
under the Nursery Crop Insurance Provisions is cancelled or terminated. 
This endorsement may be canceled by you or us for any succeeding crop 
year by giving written notice to the other party on or before the 
cancellation date, contained in the Nursery Crop Insurance Provisions, 
preceding the crop year for which the cancellation of this endorsement 
is to be effective.

[70 FR 37247, June 28, 2005]



Sec. 457.165  Millet crop insurance provisions.

    The Millet Crop Insurance Provisions for the 2003 and succeeding 
crop years are as follows:
    FCIC policies:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

    Reinsured policies:

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                    Millet Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

[[Page 350]]

                             1. Definitions

    Bushel. Fifty pounds of millet, or any other quantity which is 
designated in the Special Provisions for that purpose.
    Harvest. Combining or threshing the millet for grain. A crop that is 
swathed prior to combining is not considered harvested.
    Late planting period. In lieu of the definition of ``Late planting 
period'' contained in section 1 of the Basic Provisions, late planting 
period is defined as the period that begins the day after the final 
planting date for the insured crop and ends 20 days after the final 
planting date.
    Local market price. The cash price for millet with a 50-pound test 
weight adjusted to zero percent foreign material content basis offered 
by buyers in the area in which you normally market the millet. Factors 
not associated with grading, including, but not limited to moisture 
content, will not be considered.
    Millet. Proso millet produced for grain to be used primarily as bird 
and livestock feed.
    Nurse crop (companion crop). A crop planted into the same acreage as 
another crop, that is intended to be harvested separately, and that is 
planted to improve growing conditions for the crop with which it is 
grown.
    Planted acreage. In addition to the definition of ``Planted 
acreage'' contained in section 1 of the Basic Provisions, planted 
acreage is also defined as land on which seed is initially spread onto 
the soil surface by any method and is subsequently mechanically 
incorporated into the soil in a timely manner and at the proper depth. 
Acreage planted in any manner not contained in the definition of 
``planted acreage'' will not be insurable unless otherwise provided by 
the Special Provisions.
    Swathed. Severance of the stem and grain head from the ground 
without removal of the seed from the head and placing into a windrow.
    Windrow. Millet that is cut and placed in a row.

  2. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election for all the millet in 
the county insured under this policy.

                           3. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is November 30 preceding the cancellation date.

                  4. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are March 15.

                             5. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the millet in the county for which a premium rate is 
provided by the actuarial documents:
    (a) In which you have a share;
    (b) That is planted for harvest as grain;
    (c) That is not planted as a nurse crop; and
    (d) That is not (unless allowed by Special Provisions or written 
agreement):
    (1) Interplanted with another crop; or
    (2) Planted into an established grass or legume.

                          6. Insurable Acreage

    In addition to section 9 of the Basic Provisions, any acreage of the 
insured crop damaged before the final planting date, to the extent that 
a majority of producers in the area would not normally further care for 
the crop, must be replanted unless we agree that it is not practical to 
replant.

                           7. Insurance Period

    In accordance with section 11 of the Basic Provisions, the calendar 
date for the end of the insurance period is the date immediately 
following planting as follows:
    (a) North Dakota and South Dakota:
    (1) September 15 for acreage not swathed and windrowed; or
    (2) October 10 for acreage swathed and windrowed by September 15;
    (b) All other states, unless otherwise specified in the Special 
Provisions:
    (1) September 30 for acreage not swathed and windrowed by September 
30; or
    (2) October 15 for acreage swathed and windrowed by September 30.

                            8. Causes of Loss

    In accordance with section 12 of the Basic Provisions, insurance is 
provided only against the following causes of loss that occur within the 
insurance period:
    (a) Adverse weather conditions;
    (b) Fire;
    (c) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (d) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (e) Wildlife;
    (f) Earthquake;
    (g) Volcanic eruption; or
    (h) Failure of the irrigation water supply, if caused by a cause of 
loss that occurs during the insurance period.

                9. Duties In the Event of Damage or Loss

    In accordance with section 14 of the Basic Provisions, the 
representative samples of the unharvested crop must be at least 10 feet 
wide and extend the entire length of each

[[Page 351]]

field in the unit. The samples must not be harvested or destroyed until 
the earlier of our inspection or 15 days after harvest of the balance of 
the unit is completed.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide records of production:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim on any unit by:
    (1) Multiplying the insured acreage by the production guarantee;
    (2) Subtracting the total production to count (See section 10(c)) 
from the result of section 10(b)(1);
    (3) Multiplying the result of section 10(b)(2) by your price 
election; and
    (4) Multiplying the result of section 10(b)(3) by your share and any 
adjustment from section 10(f).
    For example:
    You have a 100 percent share in 100 acres of millet in the unit, 
with a guarantee of 15 bushels per acre and a price election of $4.00 
per bushel. You are only able to harvest 800 bushels. Your indemnity 
would be calculated as follows:
    (1) 100 acres x 15 bushel = 1,500 bushel guarantee;
    (2)1,500 bushels guarantee - 800 bushel production to count = 700 
bushel loss;
    (3) 700 bushel x $4.00 price election = $2,800 loss; and
    (4) $2,800 x 100 percent share = $2,800 indemnity payment.
    (c) The total production (bushels) to count from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Your appraised production will not be less than the production 
guarantee for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide records of production that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production (mature unharvested production may be 
adjusted for quality deficiencies and excess moisture in accordance with 
subsection 10(d));
    (iv) Potential production on insured acreage you want to put to 
another use or you wish to abandon, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end if you put the acreage to another use or abandon the 
crop. If agreement on the appraised amount of production is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to leave 
intact, and provide sufficient care for, representative samples of the 
crop in locations acceptable to us. (The amount of production to count 
for such acreage will be based on the harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do not 
leave the required samples intact, or you fail to provide sufficient 
care for the samples, our appraisal made prior to giving you consent to 
put the acreage to another use will be used to determine the amount of 
production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested production, or 
our reappraisal if additional damage occurs and the crop is not 
harvested; and
    (2) All harvested production from the insurable acreage.
    (d) Mature millet may be adjusted for excess moisture and quality 
deficiencies. If moisture adjustment is applicable, it will be made 
prior to any adjustment for quality.
    (1) Production will be reduced by .12 percent for each 0.1 percent 
point of moisture in excess of 12 percent. We may obtain samples of the 
production to determine the moisture content.
    (2) Production will be eligible for quality adjustment if:
    (i) Deficiencies in quality, result in the millet weighing less than 
50 pounds per bushel; or
    (ii) Substances or conditions are present that are identified by the 
Food and Drug Administration or other public health organizations of the 
United States as being injurious to human or animal health.
    (3) Quality will be a factor in determining your loss only if:
    (i) The deficiencies, substances, or conditions resulted from a 
cause of loss against which insurance is provided under these crop 
provisions and within the insurance period;
    (ii) The deficiencies, substances, or conditions result in a net 
price for the damaged production that is less than the local market 
price;
    (iii) All determinations of these deficiencies, substances, or 
conditions are made using samples of the production obtained by us or by 
a disinterested third party approved by us; and
    (iv) The samples are analyzed by a grader or by a laboratory 
approved by us with regard to substances or conditions injurious to 
human or animal health (test weight for

[[Page 352]]

quality adjustment purposes may be determined by our loss adjuster).
    (4) Millet production that is eligible for quality adjustment, as 
specified in sections 10(d)(2) and (3), will be reduced by the quality 
adjustment factor contained in the Special Provisions if quality 
adjustment factors are not available in the county, the eligible millet 
production will be reduced as follows:
    (i) The market price of the qualifying damaged production and the 
local market price will be determined on the earlier of the date such 
quality adjusted production is sold or the date of final inspection for 
the unit.
    (ii) The price for the qualifying damaged production will be the 
market price for the local area to the extent feasible. Discounts used 
to establish the net price of the damaged production will be limited to 
those that are usual, customary, and reasonable. The price will not be 
reduced for:
    (A) Moisture content;
    (B) Damage due to uninsured causes; or
    (C) Drying, handling, processing, or any other costs associated with 
normal harvesting, handling, and marketing of the millet; except, if the 
value of the damaged production can be increased by conditioning, we may 
reduce the value of the production after it has been conditioned by the 
cost of conditioning but not lower than the value of the production 
before conditioning. We may obtain prices from any buyer of our choice. 
If we obtain prices from one or more buyers located outside your local 
market area, we will reduce such prices by the additional costs required 
to deliver the millet to those buyers.
    (iii) The value of the damaged or conditioned production determined 
in section 10(d)(4)(ii) will be divided by the local market price to 
determine the quality adjustment factor;
    (iv) The number of bushels remaining after any reduction due to 
excessive moisture (the moisture-adjusted gross bushel, if appropriate) 
of the damaged or conditioned production under section 10(d)(1) will 
then be multiplied by the quality adjustment factor from section 
10(d)(4)(iii) to determine the production to count.
    (e) Any production harvested from plants growing in the insured crop 
may be counted as production of the insured crop on a weight basis.
    (f) If the insured crop is not swathed and not harvested, the amount 
of indemnity payable under section 10(b)(4) will be reduced by 30 
percent to reflect those costs not incurred by you. If the insured crop 
is swathed but not harvested, the amount of indemnity payable under 
section 10(b)(4) will be reduced by 15 percent to reflect those costs 
not incurred by you.

                            11. Late Planting

    In lieu of the provisions contained in section 16(a) of the Basic 
Provisions, the production guarantee for each acre planted to the 
insured crop during the late planting period, unless otherwise specified 
in the Special Provisions, will be reduced by:
    (a) One percent for the first through the tenth day; and
    (b) Three percent for the eleventh through the twentieth day.

                         12. Prevented Planting

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have an 
additional coverage level, as specified in 7 CFR part 400, subpart T, 
and pay an additional premium, you may increase your prevented planting 
coverage to a level specified in the actuarial documents.

[67 FR 3037, Jan. 23, 2002, as amended at 67 FR 5925, Feb. 8, 2002]



Sec. 457.166  Blueberry crop insurance provisions.

    The Blueberry Crop Insurance Provisions for the 2005 and succeeding 
crop years are as follows:
    FCIC policies:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                           Reinsured policies

               (Appropriate title for insurance provider)

Both FCIC and reinsured policies:

                   Blueberry Crop Insurance Provisions

    If a conflict exists among the policy provisions, the order of 
priority is as follows: (1) The Catastrophic Risk Protection 
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop 
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.

                             1. Definitions

    Damaged blueberries. Blueberries ready to harvest that due to an 
insurable cause of loss as shown in section 8 of these Crop Provisions 
do not meet the United States Standards for Grades of Blueberries, U.S. 
No. 1, or such other applicable grading standards specified in the 
Special Provisions.
    Direct marketing. Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, farmer's 
market, or permitting the general public to enter the field for the 
purpose of picking the crop.
    Harvest. Picking mature blueberries from the bushes either by hand 
or machine.

[[Page 353]]

    Mature blueberry production. Blueberries ready to harvest that meet 
or exceed the United States Standards for Grades of Blueberries, U.S. 
No. 1, or such other applicable grading standards contained in the 
Special Provisions.
    Pound. Sixteen ounces avoirdupois.
    Production guarantee (per acre). The number of pounds determined by 
multiplying the approved yield per acre by the coverage level percentage 
you elect.
    Prune. A cultural practice performed to increase blueberry 
production as follows:
    (a) For lowbush blueberries, a process by which the acreage is 
either burned or mowed; and
    (b) For all other blueberries, a process by which parts of the bush 
are cut off or the bush is cut back.

                            2. Unit Division

    The enterprise, whole-farm, and optional unit provisions in the 
Basic Provisions are not applicable, and blueberry acreage is limited to 
basic units as defined in section 1 of the Basic Provisions, unless 
otherwise specified in the Special Provisions.

  3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
                               Indemnities

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may select only one price election percentage for each 
blueberry type designated in the Special Provisions. The price elections 
you choose for each type must have the same percentage relationship to 
the maximum price offered by us for each type. For example, if you 
choose 100 percent of the maximum price election for one type, you must 
also choose 100 percent of the maximum price election for all other 
types.
    (b) You must report (by type, if applicable) by the production 
reporting date designated in section 3 of the Basic Provisions:
    (1) For all types of blueberries: any damage; removal of bushes; 
change in practices, or any other circumstance that may reduce the 
expected yield below the yield upon which the insurance guarantee is 
based; and the number of affected acres; and
    (2) For highbush and rabbiteye blueberry types:
    (i) The number of bearing bushes on insurable and uninsurable 
acreage; and
    (ii) The age of the bushes and the planting pattern.
    (c) We will reduce the yield used to establish your production 
guarantee as necessary, based on our estimate of the effect of the 
following: Removal of bushes; damage to bushes; changes in practices; 
and any other circumstance that may affect the yield potential of the 
insured crop. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we will reduce your production 
guarantee as necessary at any time we become aware of the circumstance.
    (d) You may not increase your elected or assigned coverage level or 
the ratio of your price election to the maximum price election we offer 
for the next year if a cause of loss that could or would reduce the 
yield of the insured crop is evident prior to the time you request the 
increase.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is August 31 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    (a) In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are November 20.
    (b) If your blueberry policy is canceled or terminated by us for any 
crop year, in accordance with the terms of the policy, after insurance 
attached for that crop year but on or before the cancellation and 
termination dates whichever is later, insurance will be considered to 
have not attached for that crop year and no premium, administrative fee, 
or indemnity will be due for such crop year.
    (c) We may not cancel your policy when an insured cause of loss has 
occurred after insurance attached, but prior to the cancellation date. 
However, your policy can be terminated if a cause for termination 
contained in sections 2 or 27 of the Basic Provisions exists.

                             6. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the blueberries in the county for which a premium 
rate is provided in the actuarial documents:
    (1) In which you have a share;
    (2) That are grown on bush varieties that:
    (i) Were commercially available when the bushes were set out or have 
subsequently became commercially available; and
    (ii) Are varieties adapted to the area of the following types:
    (A) Highbush blueberries;
    (B) Lowbush blueberries;
    (C) Rabbiteye blueberries; or
    (D) Other blueberry types listed on the Special Provisions.
    (3) That are produced on bushes that have reached the minimum 
insurable age or have produced the minimum yield per acre designated in 
the Special Provisions; and
    (4) That, if inspected, are considered acceptable by us.
    (b) Lowbush blueberry plants (or other types as specified in the 
Special Provisions) must be pruned every other year to be eligible for 
insurance.

[[Page 354]]

                           7. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) For the year of application, coverage begins on November 21 of 
the calendar year prior to the year the insured crop normally blooms, 
except that, if your application is received by us after November 1, 
insurance will attach on the twentieth day after your properly completed 
application is received in our local office unless we inspect the 
acreage during the 20-day period and determine that it does not meet 
insurability requirements. You must provide any information that we 
require for the crop or to determine the condition of the blueberry 
acreage.
    (2) For each subsequent crop year that the policy remains 
continuously in force, coverage begins on the day immediately following 
the end of the insurance period for the prior crop year. Policy 
cancellation that results solely from transferring an existing policy to 
a different insurance provider for a subsequent crop year will not be 
considered a break in continuous coverage.
    (3) The calendar date for the end of insurance period for each crop 
year is September 30 for Michigan and September 15 for all other states, 
unless specified otherwise in the Special Provisions.
    (4) Notwithstanding the provisions in this section, coverage may not 
begin for a crop year if the policy is cancelled or terminated in 
accordance with section 5(b).
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period. There will be 
no coverage of any insurable interest acquired after the acreage 
reporting date.
    (2) If you relinquish your insurable share on any insurable acreage 
of blueberries on or before the acreage reporting date for the crop 
year, insurance will not be considered to have attached to, and no 
premium or indemnity will be due for such acreage for that crop year 
unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.
    (3) If you relinquish your insurable share on any insurable acreage 
of blueberries after the acreage reporting date for the crop year, 
insurance coverage will be provided for any loss due to an insurable 
cause of loss that occurred prior to the date that you relinquished your 
insurable share and the whole premium will be due for such acreage for 
that crop.

                            8. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the unit;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or improper 
application of disease control measures;
    (5) Earthquake;
    (6) Volcanic eruption;
    (7) An insufficient number of chilling hours to effectively break 
dormancy;
    (8) Wildlife, unless appropriate control measures have not been 
taken; and
    (9) Failure of the irrigation water supply, if caused by a cause of 
loss specified in this section that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 of the 
Basic Provisions, we will not insure against damage or loss of 
production due to:
    (1) Failure to install and maintain a proper drainage system;
    (2) Failure to harvest in a timely manner;
    (3) Inability to market the blueberries for any reason other than 
actual physical damage to the blueberries from an insurable cause 
specified in this section (for example, we will not pay you an indemnity 
if you are unable to market due to quarantine, boycott, or refusal of 
any person to accept production); or
    (4) Mechanical damage.

                9. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (a) You must notify us:
    (1) Within 3 days of the date harvest should have started if the 
crop will not be harvested.
    (2) Within 24 hours if any cause of loss occurs:
    (i) Within 15 days of harvest;
    (ii) When the blueberries are mature and ready for harvest; or
    (iii) During harvest.
    (3) At least 15 days before any production from any unit will be 
sold by direct marketing. We will conduct an appraisal that

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will be used to determine your production to count sold by direct 
marketing. If damage occurs after this appraisal, we will conduct an 
additional appraisal. These appraisals and acceptable records provided 
by you will be used to determine your production to count. Failure to 
give timely notice that production will be sold by direct marketing will 
result in an appraised amount of production to count that is not less 
than the production guarantee per acre if such failure results in our 
inability to make the required appraisal.
    (4) At least 15 days prior to the beginning of harvest if you intend 
to claim an indemnity on any unit as a result of previously reported 
damage, so that we may inspect the damaged production.
    (b) You must not sell or dispose of the damaged crop until after we 
have given you written consent to do so. If you fail to meet the 
requirements of this section, and such failure results in our inability 
to inspect the damaged production, all such production will be 
considered undamaged and included as production to count.
    (c) You may be required to harvest a sample, selected by us, to be 
used for appraisal purposes.

                         10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide acceptable production records for any basic unit, 
we will allocate any commingled production to such units in proportion 
to our liability on the harvested acreage for each unit.
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insured acreage for each type, if applicable, by 
its respective production guarantee;
    (2) Multiplying each result in section 10(b)(1) by the respective 
price election, by type if applicable;
    (3) Totaling the results in section 10(b)(2) if there is more than 
one type;
    (4) Multiplying the total production to count for each blueberry 
type, if applicable, by the respective price election;
    (5) Totaling the results in section 10(b)(4), if there is more than 
one type;
    (6) Subtracting the result in section 10(b)(5) from the result in 
section 10(b)(3); and
    (7) Multiplying the result in section 10(b)(6) by your share.

                        Example For Section 10(b)

    You have 100 percent share in 25 acres of highbush blueberries with 
a production guarantee of 4,000 pounds per acre and a price election of 
$.45 per pound. You are only able to harvest 62,500 total pounds because 
adverse weather reduced the yield. Your indemnity would be calculated as 
follows:
A. 25 acres x 4,000 pound production guarantee/acre = 100,000 pound 
total production guarantee;
B. 100,000 pounds x $.45 price election = $45,000 guarantee;
C. One type only, so same as (2) above, $45,000;
D. 62,500 pounds production to count x $.45 price election = $28,125 
value of production to count;
E. One type only, so same as (4) above, $28,125;
F. $45,000-$28,125 = $16,875 loss; and
G. $16,875 x 100 percent share = $16,875 indemnity payment.
End of Example

    (c) The total production to count (in pounds) from all insurable 
acreage on the unit will include:
    (1) All appraised blueberry production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) That is sold by direct marketing if you fail to meet the 
requirements contained in section 9;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide production records;
    (ii) Production lost due to uninsured causes; and
    (iii) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvest the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the production to count.
    (2) All harvested mature blueberry production from the insurable 
acreage.
    (d) If you have harvested or unharvested damaged blueberries and the 
percent of damaged blueberries exceeds that shown in the Special 
Provisions for that type, production to count for the damaged unit or 
portion of a unit will be determined as follows:
    (1) The blueberries from the specific acreage will not be considered 
production to count if no blueberries are harvested and sold from such 
acreage;
    (2) For damaged blueberries that are harvested and sold, the 
production to count for such damaged blueberries will be determined by:

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    (i) Subtracting the harvest costs contained in the Special 
Provisions from the price received for the damaged blueberries;
    (ii) Dividing the result in section 10(d)(2)(i) by the price 
election; and
    (iii) Multiplying the resulting factor from section 10(d)(2)(ii), 
not less than zero, by the pounds of damaged blueberries;
    (e) If you have harvested or unharvested damaged blueberries and the 
percent of damaged blueberries does not exceed that shown in the Special 
Provisions for that type, the production to count for the damaged unit 
or portion of a unit will be the appraised or harvested production of 
blueberries.
    (f) If we determine that frost protection equipment, as shown on 
your accepted application, was not properly utilized, the indemnity for 
the affected acreage in the unit will be reduced by the percentage 
reduction allowed for frost protection equipment as specified in the 
Special Provisions. You must, at our request, provide us records by date 
for each period the frost protection equipment was used.

                     11. Late and Prevented Planting

    The late and prevented planting provisions in the Basic Provisions 
are not applicable.

[69 FR 52155, Aug. 25, 2004]



Sec. 457.167  Pecan revenue crop insurance provisions.

    The Pecan Revenue Crop Insurance Provisions for the 2005 and 
succeeding crop years are as follows:
    FCIC policies:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

     Reinsured policies: (Appropriate title for insurance provider)

Both FCIC and reinsured policies: Pecan Revenue Crop Insurance 
Provisions

                             1. Definitions

    AMS. The Agricultural Marketing Service of the United States 
Department of Agriculture.
    Amount of insurance per acre--The amount determined by multiplying 
your approved average revenue per acre by the coverage level percentage 
you elect.
    Average gross sales per acre--Your gross sales of pecans for a crop 
year divided by your net acres of pecans grown during that crop year. 
For example, if for the 2004 crop year, your gross sales were $100,000 
and your net acres of pecans was 100, then your average gross sales per 
acre for the 2004 crop year would be $1,000.
    Approved average revenue per acre--The total of your average gross 
sales per acre based on at least the most recent consecutive four years 
of sales records building to ten years and dividing that result by the 
number of years of average gross sales per acre. If you provide more 
than four years of sales records, they must be the most recent 
consecutive 6, 8 or 10 years of sales records. If you do not provide at 
least four years of gross sales records, your approved average revenue 
will be:
    (1) The average of two years of your gross sales per acre and two 
years of the lowest available dollar span amount provided in the 
actuarial documents; or
    (2) If you do not provide any gross sales records, the lowest 
available dollar span amount provided in the actuarial documents.
    Crop year--The period beginning February 1 of the calendar year in 
which the pecan trees bloom and extending through January 31 of the year 
following such bloom, and will be designated by the calendar year in 
which the pecan trees bloom.
    Direct marketing--Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as wholesaler, 
retailer, packer, processor, sheller, shipper, buyer or broker. Examples 
of direct marketing include selling through an on-farm or roadside 
stand, or a farmer's market, or permitting the general public to enter 
the field for the purpose of harvesting all or a portion of the crop, or 
shelling and packing your own pecans.
    Enterprise unit--In lieu of the definition of ``enterprise unit'' 
contained in the Basic Provisions, for pecan revenue, an enterprise unit 
will be all your insurable pecan acreage in the county in which you have 
any share on the date coverage begins for the crop year.
    Gross sales--Total value of in-shell pecans grown during a crop 
year.
    Harvest--Collecting mature pecans from the orchard.
    Hedge--The removal of vegetative growth from the tree to prevent 
overcrowding of pecan trees.
    In-shell pecans--Pecans as they are removed from the orchard with 
the nut-meats in the shell.
    Interplanted--Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Market price--The market price that is the greater of:
    (1) The average price per pound for in-shell pecans of the same 
variety or varieties insured offered by buyers on the day you sell any 
of your pecans, you harvest any of your pecans if they are not sold, or 
your pecans are appraised if you are not harvesting them, in the area in 
which you normally market the pecans (If buyers are not available in 
your immediate area, we will use the average in-shell price per pound 
offered by buyers nearest to your area.);

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    (2) The actual price received for any sold pecan production;
    (3) The average of the AMS prices for similar quality pecans 
published during the week you sell any of your pecans, you harvest your 
pecans if they are not sold, or your pecans are appraised if you are not 
harvesting them (For example, if you sell production on November 5 and 
harvest production on November 14 but do not sell the production, the 
average of the AMS prices for the week containing November 5 will be 
used to determine the market price for the production sold on November 5 
and the average of the AMS prices for the week containing November 14 
will be used to determine the market price for the production harvested 
on November 14).
    Net acres--The insured acreage of pecans multiplied by your share.
    Pound--A unit of weight equal to sixteen ounces avoirdupois of in-
shell pecans.
    Scion--Twig or portion of a pecan variety used in top work.
    Sequentially thinned--A method of systematically removing pecan 
trees for the purpose of improving sunlight penetration and maintaining 
the proper spacing necessary for continuous production.
    Set Out--The transplanting of pecan trees into the orchard.
    Top work--To graft scions of one pecan variety onto the tree or 
branch of another pecan variety.
    Two-year coverage module--A two-crop-year subset of a continuous 
policy in which you agree to insure the crop for both years of the 
module, and we agree to offer the same premium rate, amount of insurance 
per acre, coverage level, terms and conditions of insurance for each 
year of coverage except for legislatively mandated changes, as long as 
all policy terms and conditions are met for each year of the coverage 
module, including the timely payment of premium, and you have not done 
anything that would result in a revision to these terms, as specified in 
this policy.

                            2. Unit Division

    (a) For both years of the two-year coverage module a unit will be:
    (1) A enterprise unit as defined in section 1; or
    (2) A basic unit as defined in section 1 of the Basic Provisions.
    (b) Provisions in section 34 of the Basic Provisions that allow 
optional units by section, section equivalent, or FSA farm serial 
number, by irrigated and non-irrigated practices, or grown under an 
organic farming practice are not applicable.

 3. Insurance Guarantees and Coverage Levels for Determining Indemnities

    In lieu of section 3 of the Basic Provisions the following applies:
    (a) You may select only one coverage level for both years of the 
two-year coverage module for all pecans in the county. By giving us 
written notice, you may change the coverage level for the succeeding 
two-year coverage module not later than the sales closing date of the 
next two-year coverage module.
    (b) For coverage in excess of catastrophic risk protection, your 
insurance guarantee for the unit will be determined by multiplying your 
amount of insurance per acre by the net acres.
    (c) For coverage under the Catastrophic Risk Protection Endorsement, 
your insurance guarantee for each unit equals your approved average 
revenue per acre multiplied by the percentage listed in the Special 
Provisions and multiplied by the net acres.
    (d) Your amount of insurance per acre will remain the same as stated 
in the Summary of Coverage on each unit for each year of the two-year 
coverage module unless:
    (1) Otherwise provided in the Special Provisions, you sequentially 
thin more than 12.5 percent of your insured acres, your average gross 
sales for those acres thinned will be multiplied by a factor of .80 for 
the first year after thinning or a factor contained in the Special 
Provisions.
    (2) You increase the previous year's insured acreage by more than 
12.5 percent, which will result in the recalculation of your approved 
average revenue using the sales records for the added acreage. If such 
sales records are not available for the added acreage, the lowest 
available dollar span amount provided in the actuarial documents will 
apply to the added acreage.
    (3) You take any other action that may reduce your gross sales below 
your approved average revenue, which will result in an adjustment to 
your approved average revenue to conform to the amount of the reduction 
in gross sales expected from the action.
    (e) If you remove a contiguous block of trees from the unit, you 
must report such removal on your acreage report in accordance with 
section 6, or within 3 days if removal has occurred after the acreage 
reporting date, and your insurable acreage will be reduced by the number 
of acres of trees that have been removed.
    (f) You must report for each unit your gross sales including the 
amount of harvested and appraised potential production to us for each 
year of the two-year coverage module on or before the acreage reporting 
date for the first year of the next two-year coverage module.
    (1) If you do not report your gross sales in accordance with this 
paragraph, we will assign a gross sales amount for any year you

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fail to report. The gross sales amount assigned by us will be not 
greater than the lowest available dollar span provided by the actuarial 
table for the current coverage module.
    (2) If your gross sales are reported after the acreage reporting 
date for the two-year coverage module, we will readjust your average 
gross sales per acre for the next crop year.
    (3) The gross sales or your assigned gross sales amount will be used 
to compute your sales history for the next two-year coverage module.
    (4) If you filed a claim for any year, the value of harvested 
production and appraised potential production used to determine your 
indemnity payment will be the gross sales for that year.
    (g) Hail and fire coverage may be excluded from the covered causes 
of loss for your insured crop only if you selected additional coverage 
of not less than 65 percent of your approved average revenue per acre, 
and you have purchased the same or a higher dollar amount of coverage 
for hail and fire from us or any other source.
    (h) If you have additional coverage for pecans in the county and the 
acreage has been designated as ``high risk'' by FCIC, you will be able 
to obtain a High Risk Land Exclusion Option for the high risk land under 
the additional coverage policy and insure the high risk acreage under a 
separate Catastrophic Risk Protection Endorsement, provided that the 
Catastrophic Risk Protection Endorsement is obtained from the same 
insurance provider from which the additional coverage was obtained.
    (i) Any person may sign any document related to pecan crop insurance 
coverage on behalf of any other person covered by this policy provided 
that person has a properly executed power of attorney or such other 
legally sufficient document authorizing such person to sign.

                           4. Contract Changes

    In lieu of the provisions contained in section 4 of the Basic 
Provisions:
    (a) We may change the terms of your coverage under this policy for 
any two-year coverage module. Any change to your policy within a two-
year coverage module may only be done in accordance with this policy.
    (b) Any changes in policy provisions, amounts of insurance, premium 
rates, and program dates (except as allowed herein or as specified in 
section 3) can be viewed on the RMA Web site at http://www.rma.usda.gov/ 
or a successor website not later than the contract change date contained 
in these Crop Provisions. We may revise this information after the 
contract change date to correct clerical errors.
    (c) The contract change date is October 31 preceding the next two-
year coverage module.
    (d) After the contract change date, all changes specified in section 
4(b) will also be available upon request from your crop insurance agent. 
You will be provided, in writing, a copy of the changes to the Basic 
Provisions, Crop Provisions, and a copy of the Special Provisions. If 
changes are made that will be effective for the second year of the two-
year coverage module, such copies will be provided not later than 30 
days prior to the termination date. If changes are made that will be 
effective for a subsequent two-year coverage module, such copies will be 
provided not later than 30 days prior to the cancellation date. For 
changes effective for subsequent two-year coverage modules, acceptance 
of the changes will be conclusively presumed in the absence of written 
notice from you to change or cancel your insurance coverage in 
accordance with the terms of this policy.

          5. Life of Policy, Cancellation and Termination Dates

    (a) In lieu of section 2(a) of the Basic Provisions, this is a 
continuous policy with a two-year coverage module and will remain in 
effect for each subsequent two-year coverage module until canceled by 
you in accordance with the terms of this policy or terminated by us or 
by the operation of the terms of this policy.
    (b) In lieu of section 2(c) of the Basic Provisions, after 
acceptance of your application, you may not cancel or transfer your 
policy to a different insurance provider during the initial two-year 
coverage module. Thereafter, the policy will continue in force for each 
succeeding two-year coverage module unless canceled, terminated, or 
transferred to a different insurance provider in accordance with the 
terms of this policy.
    (c) In lieu of section 2(d) of the Basic Provisions, this contract 
may be canceled by either you or us for the next two-year coverage 
module by giving written notice on or before the cancellation date.
    (d) Your policy may be terminated before the end of the two-year 
coverage module if you are determined to be ineligible to participate in 
any crop insurance program authorized under the Act in accordance with 
section 2(e) of the Basic Provisions or 7 CFR part 400, subpart U.
    (e) The cancellation date is January 31 of the second crop year of 
each two-year coverage module.
    (f) The termination date is January 31 of each crop year.

                          6. Report of Acreage

    (a) In addition to the requirements of section 6 of the Basic 
Provisions you must report, by the acreage reporting date designated in 
the Special Provisions:

[[Page 359]]

    (1) Any damage to trees, removal of trees, change in practices, 
sequential thinning in excess of 12.5 percent of your insured acreage or 
any other action that may reduce the gross sales below the approved 
average revenue upon which the amount of insurance per acre is based and 
the number of affected acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern;
    (4) Any acreage that is excluded under sections 8 or 9; and
    (5) Your gross sales receipts as required under section 3(f);
    (b) We will reduce the amount of your insurable acreage based on our 
estimate of the removal of a contiguous block of trees or damage to 
trees of the insured crop. We will reduce your amount of insurance per 
acre based on our estimate of the expected reduction in gross sales from 
a change in practice or sequential thinning in excess of 12.5 percent of 
your insured acreage.
    (c) If you fail to notify us of any circumstance stated in section 
6(a)(1), we will reduce your insured acreage or your amount of insurance 
per acre to an amount to reflect the expected reduction of gross sales, 
as applicable, at any time we become aware of the circumstance.

                7. Annual Premium and Administrative Fees

    In addition to the requirements of section 7 of the Basic 
Provisions, the premium and administrative fees, as applicable, are due 
annually for each year of the two-year insurance period.

                             8. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the pecans in the county for which a premium rate is 
provided by the actuarial documents:
    (a) In which you have a share;
    (b) That are grown for harvest as pecans;
    (c) That are grown in an orchard that, if inspected, is considered 
acceptable by us;
    (d) That are grown on trees that have reached at least the 12th 
growing season after either being set out or replaced by transplants, or 
that are in at least the 5th growing season after top work and have 
produced at least 600 pounds of pecans in-shell per acre in at least one 
year after having been grafted;
    (e) That are in an orchard that consists of a minimum of one (1) 
contiguous acre, unless allowed by written agreement; and
    (f) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Grown on trees that are or have been hedged; or
    (2) Direct marketed to consumers.

                          9. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions that 
prohibit insurance attaching to a crop planted with another crop, pecans 
interplanted with another perennial crop are insurable if allowed by the 
Special Provisions or by written agreement.

                          10. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) Coverage begins on February 1 of each crop year. However, for 
the year of application, we will inspect all pecan acreage and will 
notify you of the acceptance or rejection of your application not later 
than 30 days after the sales closing date. If we fail to notify you by 
that date, your application will be accepted unless other grounds exist 
to reject the application, as specified in section 2 of the Basic 
Provisions of the application. You must provide any information that we 
require for the crop or to determine the condition of the orchard.
    (2) For each subsequent two-year coverage module that the policy 
remains continuously in force, coverage begins on the day immediately 
following the end of the insurance period for the prior two-year 
coverage module. Policy cancellation that results solely from 
transferring an existing policy to a different insurance provider for a 
subsequent two-year coverage module will not be considered a break in 
continuous coverage.
    (3) The calendar date for the end of the insurance period is January 
31 of the crop year.
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
    (1) If you acquire an insurable share in any insurable acreage after 
coverage begins but on or before the acreage reporting date for the crop 
year, and after an inspection we consider the acreage acceptable, 
insurance will be considered to have attached to such acreage on the 
calendar date for the beginning of the insurance period. Acreage 
acquired after the acreage reporting date will not be insured.
    (2) If you relinquish your insurable share on any insurable acreage 
of pecans on or before the acreage reporting date for the crop year, 
insurance will not be considered to have attached to, and no premium or 
indemnity will be due for such acreage for that crop year unless:
    (i) A request for a transfer of right to an indemnity is submitted 
by all affected parties and approved by us;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.
    (3) If you relinquish your insurable share on any insurable acreage 
of pecans after the

[[Page 360]]

acreage reporting date for the crop year, insurance coverage will be 
provided for any loss due to an insurable cause of loss that occurred 
prior to the date that you relinquished your insurable share and the 
whole premium will be due for such acreage for that crop year.

                           11. Causes of Loss

    (a) In lieu of the first sentence of section 12 of the Basic 
Provisions, insurance is provided against an unavoidable decline in 
revenue due to the following causes of loss that occur within the 
insurance period:
    (1) Adverse weather conditions;
    (2) Fire unless weeds and other forms of undergrowth have not been 
controlled or unmulched pruning debris has not been removed from the 
orchard;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not due to insufficient or improper 
application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption;
    (8) Failure of the irrigation water supply, if caused by a cause of 
loss specified in sections 11(a)(1) through (7) that occurs during the 
insurance period; or
    (9) Decline in market price;
    (b) If damage occurs before the beginning of the crop year, coverage 
is only provided if and to the extent the crop was insured the previous 
crop year;
    (c) In addition to the causes of loss excluded in section 12 of the 
Basic Provisions, we will not insure against damage or loss of 
production due to the inability to market the pecans for any reason 
other than actual physical damage from an insurable cause specified in 
this section. For example, we will not pay you an indemnity if you are 
unable to market due to quarantine, boycott, or refusal of any person to 
accept production.

                12. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (a) You must notify us within 3 days of the date harvest should have 
started if the crop will not be harvested.
    (b) If the Special Provisions permit or you have a written agreement 
authorizing direct marketing, you must notify us at least 15 days before 
harvest begins if any production from any unit will be sold by direct 
marketing. We will conduct an appraisal that will be used to determine 
your production to count for production that is sold by direct 
marketing. If damage occurs after this appraisal, we will conduct an 
additional appraisal. These appraisals, and any acceptable records 
provided by you, will be used to determine the dollar value of your 
production to count. Failure to give timely notice that production will 
be sold by direct marketing will result in an appraised dollar value of 
production to count that is not less than the amount of insurance per 
acre for the direct-marketed acreage if such failure results in our 
inability to make the required appraisal.
    (c) If you intend to claim an indemnity, you must notify us at least 
15 days prior to the beginning of harvest, or immediately if a loss 
occurs during harvest, so that we may inspect the damaged production.
    (d) You must not sell, destroy or dispose of the damaged crop until 
after we have given you written consent to do so.
    (e) If you fail to meet the requirements of this section, and such 
failure results in our inability to inspect the damaged production, all 
such production will be considered undamaged and included as production 
to count.
    (f) You may be required to harvest a sample, selected by us, to be 
used for appraisal purposes.

                         13. Settlement of Claim

    (a) Indemnities will be calculated separately for each year in the 
two-year coverage module.
    (b) We will determine your loss on a unit basis.
    (c) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the amount of insurance per acre by the net acres of 
the insured pecans;
    (2) Subtracting the dollar value of the total production to count as 
determined in section 13(d) from the result of section 13(c)(1):
    (i) For additional coverage, the total dollar value of the total 
production to count determined in accordance with section 13(d); or
    (ii) For catastrophic risk protection coverage, the result of 
multiplying the total dollar value of the total production to count 
determined in accordance with section 13(d) by the catastrophic risk 
protection factor contained in the Special Provisions; and
    (d) The dollar value of the total production to count from all 
insurable acreage will include:
    (1) The value of all appraised production as follows:
    (i) Not less than your amount of insurance per acre for acreage;
    (A) That is abandoned;
    (B) That is sold by direct marketing if you fail to meet the 
requirements contained in section 12;
    (C) That is damaged solely by uninsured causes;
    (D) For which no sales records or unacceptable sales records are 
provided to us;

[[Page 361]]

    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production;
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for that 
acreage will end. If you do not agree with our appraisal, we may defer 
the claim only if you agree to continue to care for the crop. We will 
then make another appraisal when you notify us of further damage or that 
harvest is general in the area unless you harvested the crop, in which 
case we will use the harvested production. If you do not continue to 
care for the crop, our appraisal made prior to deferring the claim will 
be used to determine the value of production to count; and
    (v) The market price will be used to value all appraised production 
in section 13(d)(1); and
    (2) The value of all harvested production from the insurable acreage 
determined as follows:
    (i) The dollar amount obtained by multiplying the number of pounds 
of pecans sold by the market price for each day the pecans were sold;
    (ii) Totaling the results of section 13(d)(2)(i), as applicable;
    (iii) The dollar amount obtained by multiplying the number of pounds 
of pecans harvested, but not sold production, by the market price;
    (iv) Totaling the result of section 13(d)(2)(iii), as applicable; 
and
    (v) Totaling the results of section 13(d)(2)(ii) and (iv).

                          Pecan Revenue Example
------------------------------------------------------------------------
                                                  Average      Average
               Year                   Acres      pounds per  gross sales
                                                    acre       per acre
------------------------------------------------------------------------
  2004...........................          100          750       $1,050
  2003...........................          100          625          625
  2002...........................          100          200          250
  2001...........................          100         1250          750
                                                            ------------
      Total Average Gross Sales    ...........  ...........        2,675
       Per Acre..................
------------------------------------------------------------------------
The approved average revenue equals the total average gross sales per
  acre divided by the number of years ($2,675 / 4 = $669).
The amount of insurance per acre equals the approved average revenue
  multiplied by the coverage level percent ($669 x .65 = $435).
Assume the insured produced, harvested and sold 70 acres of pecans with
  300 pounds per acre of pecans on the 13th with an average price per
  pound of $0.75, an actual price received of $0.73, and an average AMS
  price of $0.74, and elected not to harvest the other 30 acres of
  pecans, which were appraised on the 30th at 100 pounds per acre, but
  because of the quality, the average price per pound was $0.65 and an
  average AMS price was $0.64. The total dollar value of production to
  count is (300 pounds x $0.75 x 70 net acres) + (100 pounds x $0.65 x
  30 net acres) = $15,750 + $1,950 = $17,700.
The indemnity would be:
The amount of insurance per acre multiplied by the net acres minus the
  dollar value of the total production to count equals the dollar amount
  of indemnity ($435 x 100 = $43,500.00 - $17,700.00 = $25,800).

                     14. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

                       15. Substitution of Yields

    The substitution of yield provisions of the Basic Provisions are not 
applicable.

                         16. Written Agreements

    Not withstanding the provisions of section 18 of the Basic 
Provisions, for counties with actuarial documents for pecans, you must 
have at least two years of production and gross sales records and for 
counties without actuarial documents, you must have at least four years 
of production and gross sales records to qualify for a written 
agreement.

[69 FR 52163, Aug. 25, 2004; 69 FR 54179, Sept. 7, 2004, as amended at 
69 FR 63041, Oct. 29, 2004]

                           PART 458 [RESERVED]

[[Page 363]]



   CHAPTER V--AGRICULTURAL RESEARCH SERVICE, DEPARTMENT OF AGRICULTURE




  --------------------------------------------------------------------
Part                                                                Page
500             National Arboretum..........................         365
501             Conduct on U.S. Meat Animal Research Center, 
                    Clay Center, Nebraska...................         370
502             Conduct on Beltsville Agriculture Research 
                    Center Property, Beltsville, Maryland...         373
503             Conduct on Plum Island Animal Disease Center         375
504             User fees...................................         377
505             National Agricultural Library fees for loans 
                    and copying.............................         377
510             Public information..........................         379
520             Procedures for implementing National 
                    Environmental Policy Act................         380

[[Page 365]]



PART 500_NATIONAL ARBORETUM--Table of Contents




          Subpart A_Conduct on U.S. National Arboretum Property

Sec.
500.1 General.
500.2 Recording presence.
500.3 Preservation of property.
500.4 Conformity with signs and emergency directions.
500.5 Nuisances.
500.6 Gambling.
500.7 Intoxicating beverages and narcotics.
500.8 Soliciting, vending, debt collection, and distribution of 
          handbills.
500.9 Photographs for news or advertising.
500.10 Pets.
500.11 Vehicular and pedestrian traffic.
500.12 Weapons and explosives.
500.13 Nondiscrimination.
500.14 Exceptions.
500.15 Penalties and other law.

Subpart B_Fee Schedule for Certain Uses of National Arboretum Facilities 
                              and Grounds.

500.20 Scope.
500.21 Fee schedule for tram and tours.
500.22 Fees and conditions for use of facilities and grounds.
500.23 Fees for commercial photography and cinematography on grounds.
500.24 Fee schedule.
500.25 Payment of fees.

    Authority: 20 U.S.C. 196(a); sub secs. 2, 4, 5; 40 U.S.C. 121(d); 40 
U.S.C. 1315(c).

    Source: 70 FR 55708, Sept. 23, 2005, unless otherwise noted.



         Subpart A_Conduct on U.S. National Arboreturm Property



Sec. 500.1  General.

    The rules and regulations in this part apply to the buildings and 
grounds of the U.S. National Arboretum (USNA), Washington, DC, and to 
all persons entering in or on such property. The Administrator, General 
Services Administration, has delegated to the Secretary of Agriculture, 
with authority to further delegate, the authority to make all the 
needful rules and regulations for the protection of the buildings and 
grounds of the USNA (34 FR 6406). The Secretary of Agriculture has in 
turn delegated such authority to the Administrator, Agricultural 
Research Service (34 FR 7389). The rules and regulations in this part 
are issued pursuant to such delegations.



Sec. 500.2  Recording presence.

    Admission to the USNA during periods when it is closed to the public 
will be limited to authorized individuals who may be required to sign 
the register or display identification documents when requested by the 
Security Staff, or other authorized individuals.



Sec. 500.3  Preservation of property.

    (a) While at the USNA, it is unlawful to:
    (1) Willfully destroy, damage, or remove USNA property or any part 
thereof;
    (2) Set or maintain any open fire on the property of the USNA; 
however, the use of small candles may be approved at the discretion of 
the Director, USNA; or
    (3) Apply any type of insecticide or herbicide on the grounds of the 
USNA, except for USNA employees in the course of their official duties 
or other persons authorized by the Director, USNA.
    (b) Persons not employed by USNA are not permitted to bring 
biological agents of any kind, including but not limited to disease and 
pest agents of plants, onto the property without written permission of 
the Director, USNA.



Sec. 500.4  Conformity with signs and emergency directions.

    Persons in and on property of the USNA shall comply with official 
signs of prohibitory or directive nature and with the directions of 
authorized individuals.



Sec. 500.5  Nuisances.

    (a) The use of loud, abusive, or otherwise improper language; 
unwarranted loitering, sleeping, or assembly; the creation of any hazard 
to persons or things; improper disposal of rubbish; spitting; prurient 
prying; the commission of any obscene or indecent act, or any other 
unseemly or disorderly conduct; throwing articles of any kind from a 
building, and climbing upon any part of a building is prohibited.
    (b) Playing of music or creation of other noises of a decibel level 
high

[[Page 366]]

enough to be heard outside of the USNA is prohibited.



Sec. 500.6  Gambling.

    Participating in games for money or other personal property, or the 
operation of gambling devices, the conduct of a lottery or pool, or the 
selling or purchasing of numbers tickets, in or on USNA property, is 
prohibited.



Sec. 500.7  Intoxicating beverages and narcotics.

    (a) Entering USNA property or the operation of a motor vehicle 
thereon, by a person under the influence of intoxicating beverages or a 
narcotic drug, is prohibited.
    (b) Except as provided in subpart B of this part, possession of or 
consumption of intoxicating beverages on USNA property is prohibited.
    (c) The sale of alcoholic beverages on the grounds of the USNA is 
prohibited.
    (d) The possession of or use of narcotic drugs on the grounds of the 
USNA is prohibited.



Sec. 500.8  Soliciting, vending, debt collection, and distribution 
of handbills.

    (a) The following activities are prohibited on USNA grounds:
    (1) Soliciting of alms or contributions;
    (2) Display or distribution of commercial advertising;
    (3) Collecting private debts;
    (4) Campaigning for election to any office;
    (5) Soliciting and vending for commercial purposes (including, but 
not limited to, the vending of newspapers and other publications);
    (6) Soliciting signatures on petitions, polls, or surveys (except as 
authorized by the USNA); and
    (7) Impeding ingress to or egress from the USNA.
    (b) Distribution to USNA general public visitors of material such as 
pamphlets, handbills, and flyers is prohibited without prior approval of 
the Director, USNA.
    (c) The prohibitions in paragraphs (a) and (b) of this section do 
not apply to:
    (1) Commercial or nonprofit activities performed under contract or 
concession with the USNA or pursuant to the provisions of the Randolph 
Sheppard Act;
    (2) The solicitation of USNA personnel for contributions for the 
Combined Federal Campaign (CFC);
    (3) National or local drives for funds for welfare, health, and 
other purposes sponsored or approved by the Agricultural Research 
Service; or
    (4) Personal notices posted by employees on authorized bulletin 
boards.



Sec. 500.9  Photographs for news or advertising.

    Photographs for news purposes may be taken at the USNA without prior 
permission. Photographs for advertising and other commercial purposes 
may be taken, but only with the prior approval of the Director, USNA and 
fees may be charged pursuant to Sec. 500.23.



Sec. 500.10  Pets.

    Pets brought upon USNA property must have proper vaccinations and, 
except assistance trained animals, must be kept on leash at all times. 
The release or abandonment of fish, plants, and animals of any kind on 
USNA grounds is prohibited.



Sec. 500.11  Vehicular and pedestrian traffic.

    (a) Drivers of all vehicles in or on USNA property shall drive only 
on established roads, shall drive in a careful and safe manner at all 
times, and shall comply with the signals and directions of the Security 
Staff and all posted traffic signs.
    (b) The blocking of entrances, driveways, walks, loading platforms, 
or fire hydrants, and parking in designated no parking areas in or on 
USNA property is prohibited.
    (c) Except in emergencies, parking in or on USNA property in other 
than designated areas is not allowed without a permit. Parking without 
authority, parking in unauthorized locations or in locations reserved 
for other persons, or contrary to the direction of posted signs, is 
prohibited.
    (d) USNA approval is required for all vehicles needed for access 
setup and

[[Page 367]]

breakdown activities relating to special events, ceremonies, or related 
activities. Off-road routes will be determined by the USNA.
    (e) In addition to the penalties provided in Sec. 500.15, vehicles 
parked in violation of this section are subject to being towed and the 
cost of such towing being assessed to the owner of such vehicle.
    (f) This section may be supplemented from time to time, by the 
issuance and posting of specific traffic directives as may be required, 
and when so issued and posted such directives shall have the same force 
and effect as if incorporated in this subpart.



Sec. 500.12  Weapons and explosives.

    (a) No person while in or on USNA property shall carry firearms, 
other dangerous or deadly weapons, or explosives, either openly or 
concealed, except for authorized official purposes.
    (b) No person while in or on the USNA shall ignite fireworks or 
other pyrotechnical devices.



Sec. 500.13  Nondiscrimination.

    The USNA is subject to the policy of nondiscrimination in programs 
or activities conducted by the United States Department of Agriculture 
as set forth in 7 CFR part 15d.



Sec. 500.14  Exceptions.

    The Administrator, Agricultural Research Service, may in individual 
cases make prior, written exceptions to the rules and regulations in 
this part if it is determined to be not adverse to the public interest.



Sec. 500.15  Penalties and other law.

    Whoever shall be found guilty of violating the rules and regulations 
in this subpart is subject to fine under title 18, United States Code, 
or imprisonment of not more than 30 days, or both (see 40 U.S.C. 
1315(c)). Nothing contained in the rules and regulations in this part 
shall be construed as abrogating or authorizing the abrogation of any 
other regulations or any Federal law or any laws and regulations of the 
District of Columbia that may be applicable.



Subpart B_Fee Schedule for Certain Uses of National Arboretum Facilities 
                               and Grounds



Sec. 500.20  Scope.

    This subpart sets forth schedules of fees for temporary use by 
individuals or groups of United States National Arboretum (USNA) 
facilities and grounds. This subpart also sets forth schedules of fees 
for the use of the USNA for commercial photography and cinematography. 
Fees generated will be used to offset costs of services or for the 
purposes of promoting the mission of the USNA. All rules and regulations 
noted in 7 CFR 500, subpart A--Conduct on the U.S. National Arboretum 
Property, will apply to individuals or groups granted approval to use 
the facilities and grounds for the purposes specified in this subpart.



Sec. 500.21  Fee schedule for tram and tours.

    The USNA provides tours of the USNA grounds in a 48-passenger tram 
(accommodating 2 wheelchairs). The fee is as follows: $4.00 per adult, 
$3.00 per senior citizen or Friend of the National Arboretum, and $2.00 
per child under the age 17. Children under 4 sharing a seat with an 
adult will not be charged. Pre-scheduled tram tours for groups may be 
arranged for a set fee of $125.00. Additionally, a tour guide may be 
pre-arranged to provide a non-tram tour for the fee of $50 per hour. 
Promotional programs offering discounted fees for these programs may be 
instituted at the discretion of the USNA. Payment for use of the tram is 
due at the time of ticket purchase. Payment for pre-scheduled tram tours 
must be made at least one week in advance. Payment for pre-scheduled, 
non-tram guided tours must be made at least one week in advance of the 
tour date.



Sec. 500.22  Fees and conditions for use of facilities and grounds.

    (a) Fee requirement. (1) The USNA will charge a fee for temporary 
use by individuals or groups of USNA facilities and grounds. Fees for 
specific sites are listed in Sec. 500.24.
    (2) Non-profit scientific or educational organizations whose 
purposes and interests are complementary to

[[Page 368]]

the mission of the USNA and which substantially support the mission and 
purpose of the USNA (e.g., Friends of the National Arboretum, National 
Bonsai Foundation, National Capital Area Federation of Garden Clubs, 
Herb Society of America) may be exempted from the fee for use of USNA 
facility or grounds requirement of this subpart by the Director, but 
still must reimburse the USNA for its costs, including setup, clean-up, 
security, and other costs as applicable.
    (3) A Half Day usage is defined as 4 hours or less; a Whole Day 
usage is defined as more than 4 hours in a day. In all cases, usage 
includes all time during which a venue is committed, including time used 
to set up before and clean up after an event. For after-hours usage of 
sites or facilities, an additional $40/hour will be added for 
supervision for each required staff member or security officer, with 
higher amounts required for sites or facilities that are more sensitive.
    (b) Reservations. (1) Facilities and grounds are available by 
reservation at the discretion of the Director of the USNA and may be 
available to individuals or groups for uses that are consistent with the 
mission of the USNA. Agency initiatives may be granted first priority. 
Offices and hallways inside secured doors will not be available for use.
    (2) Reservations to use USNA facilities and grounds may be made 
directly with the USNA. To ensure consideration, reservation requests 
should be made as far in advance as possible with a minimum of 15 
calendar days prior to the date of use required for all reservations. 
This advanced notice will provide the USNA adequate time to prepare 
sites and assign staff and supervision as necessary.
    (3) The USNA will make every effort to respond to requests in a 
quick and timely fashion. The USNA will respond to reservation requests 
within 5 working days with information as to whether the requested site 
is available for use. The USNA will also give notice to the prospective 
user of any planned activities (construction, maintenance, pesticide 
applications, and any similar activities) that might affect the planned 
use or event.
    (4) A 50 percent non-refundable deposit will be due at the time of a 
booking in order to reserve a specific date and location. The remaining 
50 percent is due five working days prior to the event.
    (c) Terms and conditions of use. (1) The USNA provides space, water, 
and electrical hookup when available, and restrooms where available. 
Users must provide all tents, tables, chairs, trash receptacles, or 
other property required for the scheduled event. Users must remove all 
trash from the property at the conclusion of the event. Users must 
remove all tents, tables and chairs, and other property no later than 
5:00 p.m. of the day following the event. The USNA will charge a 
facility use and break down fee of $500.00 per day for each day 
following the deadline to remove temporary facilities and equipment. The 
USNA will not store temporary facilities or equipment for users.
    (2) Users must abide by USNA vehicle regulations in Sec. 500.11 
including the requirement to obtain USNA approval whenever off road 
access is required for setup.
    (3) The USNA will not assume any responsibility for last minute 
changes due to failure of current mechanical systems, severe storms and 
other weather events, emergencies relating to security and safety.
    (4) Some events that involve bringing animals and certain plants 
onto the USNA property may not be compatible with the plant research, 
display, and education mission of the USNA. Such events will be 
evaluated on a case-by-case basis and exceptions may be made by the 
Director of the USNA.
    (5) Music and bands will be permitted but the decibel level of music 
should not be loud enough to be heard outside the boundaries of the 
USNA.
    (6) (i) A refundable deposit as specified in paragraph (c)(6)(ii) of 
this section for use of the facility or grounds, excluding the 
classroom, will be collected in advance. In the event of building, 
property, or grounds damage or excessive cleaning requirements, the 
deposit will be used for repair and remediation and the balance will be 
refunded within 30 days of the event date.

[[Page 369]]

In the event that cleaning requirements or damage to the building, 
property or grounds exceeds the amount of the refundable deposit, the 
deposit will be used in full, with additional charges billed and due 
within 30 days of billing. Damages to plants, grounds, facilities, or 
equipment will be assessed on a value based on replacement costs, 
including labor.
    (ii) Refundable Deposit Schedule.

------------------------------------------------------------------------
                                                              Refundable
                         Event fee                             deposit
                                                               required
------------------------------------------------------------------------
$15,000-10,000.............................................       $2,000
$9,999-5,000...............................................        1,000
$4,999 and less............................................          500
------------------------------------------------------------------------

    (7) Upon prior request, the Director may approve the consumption of 
beer and wine during uses of USNA pursuant to this section. Such 
permission generally will not be granted during times when USNA is open 
to the public. Director approval shall be conditioned upon compliance by 
users and by any of their agents or contractors, with all applicable 
provisions of the District of Columbia Code governing sale and 
consumption of alcoholic beverages, including the rules of the District 
of Columbia Department of Consumer Affairs, Alcoholic Beverage 
Regulation Administration.
    (8) All users of the USNA pursuant to this subpart, as well as all 
those contracting with such users of the USNA, shall comply with all 
Federal and local laws.
    (9) The USNA is a Federal property under the jurisdiction of the 
United States Department of Agriculture.
    All activities are subject to Federal rules and regulations 
governing the use of public buildings and grounds.
    (10) The USNA will not be responsible for any damage or loss 
suffered by an individual, group, or their contractor during a permitted 
event at the USNA.
    (11) The Director may impose additional incidental terms and 
conditions concerning the use of the USNA facilities consistent with 
this part.
    (12) Marriage ceremonies and accompanying receptions may only be 
held in the Dogwood Collection.



Sec. 500.23  Fees for commercial photography and cinematography on 
grounds.

    The USNA may charge a fee for the use of the facility or grounds for 
purposes of commercial photography or cinematography as specified in 
Sec. 500.24. Facilities and grounds are available for use for 
commercial photography or cinematography at the discretion of the USNA 
Director. Requests for use should be made a minimum of two weeks in 
advance of the required date. The USNA will charge for supervision costs 
at the rate of $40.00 per hour per security officer, in addition to the 
fees listed below. The USNA Director may waive fees for photography or 
cinematography conducted for the purpose of disseminating information to 
the public regarding the USNA and its mission or for the purpose of 
First Amendment activity. The USNA will charge a non-refundable 
application fee of $30 for commercial photography or cinematography 
activities that use models, sets or props that are not part of the 
natural, cultural resources, or administrative facilities features of 
the site; take place where members of the public are generally not 
allowed; or take place at a location where additional administrative 
costs are likely. If the application is approved and fees will be 
incurred, the application fee will be applied to the total fee due. No 
other credits will be given for the application fee. Fee payments for 
use of facilities or grounds or for commercial photography and 
cinematography must be made in advance of services being rendered. These 
payments are to be made in the form of a check or money order.



Sec. 500.24  Fee Schedule.

----------------------------------------------------------------------------------------------------------------
          Event by category                     Fee*                      Unit                     Notes
----------------------------------------------------------------------------------------------------------------
USNA Terrace........................  $12,000.................  Per Day.................  Up to 240 seated or
                                                                                           300 standing.

[[Page 370]]

 
USNA Herb Garden....................  10,000..................  Per Day.................  Entrance Circle, Rose
                                                                                           and Knot Garden: Up
                                                                                           to 48 seated or 100
                                                                                           standing; cannot be
                                                                                           tented. Specialty
                                                                                           Garden: Up to 200
                                                                                           standing; may not be
                                                                                           tented.
USNA Meadow.........................  15,000..................  Per Day.................  Up to 600 seated or
                                                                                           1000 standing.
USNA Administration Building Lobby..  2,000...................  Per Day.................  Up to 150 standing.
USNA Auditorium.....................  2,500...................  Per Day.................  Up to 120 seated or
                                                                                           200 standing.
Friendship Garden...................  1,500...................  Per Day.................  Up to 60 seated or 100
                                                                                           standing.
National Capitol Columns............  10,000..................  Per Day.................  Up to 190 seated or
                                                                                           400 standing; cannot
                                                                                           be tented; includes
                                                                                           night lighting of
                                                                                           columns.
Bonsai Museum International,          10,000..................  Per Day.................  Up to 120 seated or
 Pavilion and Upper Courtyard.                                                             200 standing.
Bonsai Museum Chinese Pavilion......  10,000..................  Per Day.................  Up to 50 seated or 100
                                                                                           standing.
Dogwood Collection Allee & Circle...  3,000...................  Per Day.................  Up to maximum of 150
                                                                                           people at event;
                                                                                           reserved for marriage
                                                                                           ceremonies and
                                                                                           accompanying
                                                                                           receptions only.
M Street Picnic Area................  5,000...................  Per Day.................  Up to 200 seated or
                                                                                           standing; paved or
                                                                                           grassy areas can be
                                                                                           tented.
Classroom...........................  125.....................  Per Day.................  Standard set-up with
                                      50......................  Per Half Day............   40 chairs; includes
                                                                                           microphone/lectern,
                                                                                           screen, projection
                                                                                           stand, two flip
                                                                                           charts (no paper),
                                                                                           and trashcan.
Still Photography:
    Individual......................  No Charge...............  ........................  For personal use only;
                                                                                           includes hand-held
                                                                                           cameras, recorders
                                                                                           and tripods.
Other...............................  $30.....................  Application Fee.........  All photography that
                                      $250 plus Supervision...  Per Half Day............   use models, sets or
                                                                                           props that are not
                                                                                           part of the site's
                                                                                           natural or cultural
                                                                                           resources or
                                                                                           administrative
                                                                                           facilities; or take
                                                                                           place where members
                                                                                           of the public are
                                                                                           generally not
                                                                                           allowed; or take
                                                                                           place at a location
                                                                                           where additional
                                                                                           administrative costs
                                                                                           are likely.
Cinematography:
    Set Preparation.................  $30.....................  Application Fee.........  Set up; no filming.
                                      $250 plus Supervision...  Per Whole Day...........
Filming.............................  $1,500 to $3,900........  Per Whole Day...........  Sliding scale based on
                                                                                           number of people in
                                                                                           cast and crew and
                                                                                           number of pieces of
                                                                                           equipment from 45
                                                                                           people and 6 pieces
                                                                                           of equipment = $1,500
                                                                                           to 200 people =
                                                                                           $3,900; 5 people with
                                                                                           carry on equipment =
                                                                                           same as still
                                                                                           photography.
----------------------------------------------------------------------------------------------------------------
 *Fees include only access to sites; additional security charges may be necessary depending upon the site and
  the number of people participating.



Sec. 500.25  Payment of fees.

    (a) Unless provided otherwise, all payments due under this subpart 
must be made by cash, check, or money order (in U.S. funds). Checks and 
money orders for payment of any fees imposed under this part are to be 
made payable, in U.S. funds, to the ``U.S. National Arboretum.'' Upon 
request, the USNA shall provide receipts to requesters for their records 
or billing purposes. If the USNA enters into an agreement to allow USNA 
visitors and users to make payment in the form of a credit card, USNA 
visitors and users who are assessed user fees may pay those fees with a 
credit card subject to the terms and conditions of such agreement.
    (b) Any fees that become past due shall be collected in accordance 
with 7 CFR part 3.



PART 501_CONDUCT ON U.S. MEAT ANIMAL RESEARCH CENTER, CLAY CENTER, 
NEBRASKA--Table of Contents




Sec.
501.1 General.
501.2 Admission.
501.3 Preservation of property.
501.4 Conformity with signs and emergency directions.
501.5 Nuisances.
501.6 Gambling.
501.7 Intoxicating beverages and narcotics.

[[Page 371]]

501.8 Soliciting, vending, debt collection, and distribution of 
          handbills.
501.9 Photographs for news, advertising, or commercial purposes.
501.10 Pets.
501.11 Mobile equipment and pedestrian traffic.
501.12 Weapons and explosives.
501.13 Nondiscrimination.
501.14 Non-Federal law enforcement.
501.15 Exceptions.
501.16 Penalties and other law.

    Authority: Secs. 2, 4, 62 Stat. 281; 40 U.S.C. 318(a), (c); sec. 
103, 63 Stat. 380; 40 U.S.C. 753; sec. 205(d), 63 Stat. 389; 40 U.S.C. 
486(d); 36 FR 1293 and 36 FR 21706.

    Source: 37 FR 2423, Feb. 1, 1972, unless otherwise noted.



Sec. 501.1  General.

    The rules and regulations in this part apply to all property of or 
under the charge or control of the U.S. Meat Animal Research Center, 
Clay Center, Nebr. (hereinafter referred to as the Research Center), and 
to all persons entering in or on such property. The Administrator, 
General Services Administration, has delegated to the Secretary of 
Agriculture, with authority to redelegate, the authority to make all the 
needful rules and regulations for the protection of the Research Center 
(36 FR 1293). The Secretary of Agriculture has delegated this authority 
to the Director of Science and Education (36 FR 21706) who in turn has 
delegated such authority to the Administrator, Agricultural Research 
Service (36 FR 21706). The rules and regulations in this part are issued 
pursuant to such delegations. It is the responsibility of occupant or 
cooperating agency to require observance of these rules and regulations.



Sec. 501.2  Admission.

    Admission to the Research Center during ``off duty'' hours shall be 
restricted to the main arteries and any deviation therefrom by 
individuals shall be limited to authorized individuals who may be 
required to sign a register and display identification documents when 
requested by a guard or other authorized individuals. ``Off duty'' hours 
will be posted at the Research Center. Admission during ``duty'' hours 
when the Center is closed to the public in emergency situations will be 
limited to authorized individuals who may be required to sign a register 
and display identification documents when requested by a guard or other 
authorized individual.



Sec. 501.3  Preservation of property.

    It is unlawful to willfully destroy, damage, or remove property or 
any part thereof. Hunting, fishing, motorcycling, using snowmobiles, and 
other disturbances or encroachment activities are prohibited except for 
official purposes.



Sec. 501.4  Conformity with signs and emergency directions.

    Persons in and on property of the Research Center shall comply with 
official signs of a prohibitory or directory nature, and with the 
directions of authorized individuals.



Sec. 501.5  Nuisances.

    The use of loud, abusive, or otherwise improper language, 
unwarranted loitering, sleeping, or assembly, the creation of any hazard 
to persons or things, improper disposal of rubbish, spitting, prurient 
prying, the commission of any obscene or indecent act, or any other 
unseemly or disorderly conduct, throwing articles of any kind from a 
building, or climbing upon any part of a building is prohibited. 
Further, conduct which obstructs the usual use of entrances, foyers, 
corridors, offices, elevators, stairways and parking lots, or which 
otherwise tends to impede or disturb Center employees in the performance 
of their duties or which otherwise impedes the general public from 
obtaining the administrative services provided by the Research Center is 
prohibited.



Sec. 501.6  Gambling.

    Participating in games for money or other personal property, or the 
operation of gambling devices, the conduct of a lottery or pool, or the 
selling or purchasing of numbers tickets, in or on Research Center 
property, is prohibited.



Sec. 501.7  Intoxicating beverages and narcotics.

    Entering Research Center property or the operating of a motor 
vehicle

[[Page 372]]

thereon, by a person under the influence of intoxicating beverages or 
narcotic drug, hallucinogen, marijuana, barbiturate, or amphetamine 
(unless prescribed by a physician) or the consumption of such beverages, 
or the use of any such drug or substance in or on the Research Center 
property, is prohibited.



Sec. 501.8  Soliciting, vending, debt collection, and distribution of 
handbills.

    The soliciting of alms and contributions, commercial soliciting and 
vending of all kinds, the display or distribution of commercial 
advertising, or the collecting of private debts, in or on Research 
Center property, is prohibited. This section does not apply to national 
or local drives for funds for welfare, health, and other purposes 
sponsored or approved by the Agricultural Research Service, concessions, 
or personal notices posted by employees on authorized bulletin boards. 
Distribution of material such as pamphlets, handbills, and flyers or the 
posting of mateirals on bulletin boards or elsewhere, is prohibited 
without prior approval of authorized individuals.



Sec. 501.9  Photographs for news, advertising, or commercial purposes.

    Except where security regulations apply, or a Federal court order or 
rules prohibit it, photographs for news purposes may be taken in 
entrances, lobbies, foyers or auditoriums when used for public meetings 
without prior permission. Photographs for advertising and commercial 
purposes may be taken only with the prior written permission of the 
Director, Research Center. Photographs for news, advertising, or 
commercial purposes may be taken in space or areas occupied by a 
cooperator only with the consent of the cooperator concerned and the 
Director, Research Center.



Sec. 501.10  Pets.

    Animals shall be brought or allowed, as applicable, upon the 
Research Center only with the prior written approval of the Director, 
Research Center, except seeing eye dogs may be brought to the reception 
area serving the offices of the Director, Research Center, without prior 
approval.



Sec. 501.11  Mobile equipment and pedestrian traffic.

    (a) Drivers, operators, or pilots of all equipment whether or not 
motorized in or on Research Center property, or within the scope of 
Research Center activity, shall operate in a careful and safe manner at 
all times and shall comply with the signals and directions of guards, 
special policemen, or other authorized individuals, and all posted 
traffic signs;
    (b) The blocking of entrances, driveways, walks, railways, runways, 
loading platforms, or fire hydrants in or on Research Center property is 
prohibited;
    (c) Except in emergencies, parking or landing in or on Research 
Center property in other than designated areas is not allowed without a 
permit. Parking without authority, parking in unauthorized locations or 
in locations reserved for other persons, or parking continuously in 
excess of ten hours without permission, or contrary to the direction of 
posted signs is prohibited. This section may be supplemented from time 
to time by the issuance and posting of specific traffic directives as 
may be required, and when so issued and posted such directives shall 
have the same force and effect as if made a part hereof;
    (d) The operation of unlicensed gasoline powered vehicles is 
prohibited.



Sec. 501.12  Weapons and explosives.

    No person while in or on Research Center property shall carry 
firearms, bows and arrows, darts, other dangerous or deadly weapons, or 
explosives, either openly or concealed, except as officially authorized, 
for official purposes.



Sec. 501.13  Nondiscrimination.

    There shall be no discrimination by segregation or otherwise against 
any person or persons because of race, sex, religion, color, or national 
origin, in furnishing, or by refusing to furnish to such person or 
persons the use of any facility of a public nature, including all 
service, privileges, accommodations, and activities provided thereby on 
Research Center property.

[[Page 373]]



Sec. 501.14  Non-Federal law enforcement.

    Research Center special policemen may be deputized by State or local 
law enforcement agencies to exercise police power on property outside 
the Research Center. With the consent of any State or local law 
enforcement agency, the facilities or services of such State or local 
law enforcement agency may be utilized by the Research Center.



Sec. 501.15  Exceptions.

    The Administrator, Agricultural Research Service, may in individual 
cases make prior, written exceptions to the rules and regulations in 
this part if he determines it to be not adverse to the public interest.



Sec. 501.16  Penalties and other law.

    Whoever shall be found guilty of violating the rules and regulations 
in this part where the United States has and exercises exclusive or 
concurrent legislative jurisdiction, is subject to fine of not more than 
$50 or imprisonment or not more than 30 days, or both (see 40 U.S.C. 
318c). Nothing contained in the rules, regulations, or penalties in this 
part shall be construed as abrogating or authorizing the abrogation of 
any other rules, regulations, penalties, or any Federal law, or any 
State and local laws and regulations which may be applicable.



PART 502_CONDUCT ON BELTSVILLE AGRICULTURE RESEARCH CENTER PROPERTY, 
BELTSVILLE, MARYLAND--Table of Contents




Sec.
502.1 General.
502.2 Admission.
502.3 Preservation of property.
502.4 Conformity with signs and emergency directions.
502.5 Nuisances.
502.6 Hunting, fishing, camping, horseback riding.
502.7 Gambling.
502.8 Intoxicating beverages and narcotics.
502.9 Soliciting, vending, debt collection, and distribution of 
          handbills.
502.10 Photographs by visitors or for news, advertising, or commercial 
          purposes.
502.11 Pets.
502.12 Vehicular and pedestrian traffic.
502.13 Weapons and explosives.
502.14 Nondiscrimination.
502.15 Exceptions.
502.16 Penalties and other law.

    Authority: Secs. 2, 4, 62 Stat. 281; 40 U.S.C. 318 (a), (c); sec. 
103, 63 Stat. 380; 40 U.S.C. 753; sec. 205(d), 63 Stat. 389; 40 U.S.C. 
486(d); 36 FR 18440 and 60 FR 56392.

    Source: 37 FR 2424, Feb. 1, 1972, unless otherwise noted.



Sec. 502.1  General.

    The rules and regulations in this part apply to the buildings and 
grounds of the Beltsville Agricultural Research Center (BARC), 
Beltsville, MD, and to any persons entering in or on such property. The 
Administrator, General Services Administration, has delegated to the 
Secretary of Agriculture, with authority to redelegate, the authority to 
make all the needful rules and regulations for the protection of the 
buildings, grounds, equipment, and experimental plants and animals of 
BARC (36 FR 18440). The Secretary of Agriculture has delegated this 
authority to the Under Secretary for Research, Education, and Economics 
(60 FR 56392) who in turn has delegated such authority to the 
Administrator, Agricultural Research Service (60 FR 56392). The rules 
and regulations in this part are issued pursuant to such delegations.

[61 FR 51211, Oct. 1, 1996]



Sec. 502.2  Admission.

    Admission to BARC during ``off duty'' hours shall be restricted to 
the main arteries and any deviation therefrom by individuals shall be 
limited to authorized individuals who may be required to sign a register 
and display identification documents when requested by BARC Security or 
other authorized individual. ``Off duty'' hours will be posted at BARC. 
Admission during ``duty'' hours when BARC is closed to the public in 
emergency situations will be limited to authorized individuals who may 
be required to sign a register and display identification documents when 
requested by BARC Security or other authorized individual.

[61 FR 51211, Oct. 1, 1996]



Sec. 502.3  Preservation of property.

    It is unlawful to willfully destroy, damage, or remove property or 
any part thereof.

[[Page 374]]



Sec. 502.4  Conformity with signs and emergency directions.

    Persons in and on property of BARC shall comply with official signs 
of a prohibitory or directory nature, and with the directions of 
authorized individuals.

[61 FR 51211, Oct. 1, 1996]



Sec. 502.5  Nuisances.

    The use of loud, abusive or otherwise improper language, unwarranted 
loitering, sleeping, or assembly, the creating of any hazard to persons 
or things, improper disposal of rubbish, spitting, prurient prying, the 
commission of any obscene or indecent act, or any other unseemly or 
disorderly conduct, throwing articles of any kind from a building, or 
climbing upon any part of a building is prohibited. Further, conduct 
which obstructs the usual use of entrances, foyers, corridors, office 
elevators, stairways and parking lots, or which otherwise tends to 
impede or disturb BARC employees in the performance of their duties or 
which otherwise impedes the general public from obtaining the 
administrative services provided by BARC is prohibited.

[61 FR 51211, Oct. 1, 1996]



Sec. 502.6  Hunting, fishing, camping, horseback riding.

    The use of BARC grounds for any form of hunting, fishing, camping, 
or horseback riding is prohibited. Further, the use of these grounds for 
unauthorized picnicking is also prohibited.

[61 FR 51211, Oct. 1, 1996]



Sec. 502.7  Gambling.

    Participating in games for money or other personal property, or the 
operation of gambling devices, the conduct of a lottery or pool, or the 
selling or purchasing of numbers tickets, in or on BARC property, is 
prohibited.

[61 FR 51211, Oct. 1, 1996]



Sec. 502.8  Intoxicating beverages and narcotics.

    Entering BARC property or the operation of a motor vehicle thereon, 
by a person under the influence of intoxicating beverages or narcotic 
drug, hallucinogen, marihuana, barbiturate, or amphetamine (unless 
prescribed by a physician) or the consumption of such beverages, or the 
use of any such drug or substance in or on BARC property, is prohibited.

[61 FR 51211, Oct. 1, 1996]



Sec. 502.9  Soliciting, vending, debt collection, and distribution of 
handbills.

    The soliciting of alms and contributions, commercial soliciting and 
vending of all kinds or the display or distribution of commercial 
advertising, or the collecting of private debts, in or on BARC property, 
is prohibited. This section does not apply to national or local drives 
for funds for welfare, health, and other purposes sponsored or approved 
by the Agricultural Research Service, concessions, or personal notices 
posted by employees on authorized bulletin boards. Distribution of 
material such as pamphlets, handbills, and flyers or the posting of 
materials on bulletin boards or elsewhere is prohibited without prior 
approval of the Director, Beltsville Area.

[61 FR 51211, Oct. 1, 1996]



Sec. 502.10  Photographs by visitors or for news, advertising, or 
commercial purposes.

    Photographs may be taken by visitors or for news purposes without 
prior permission. Photographs for advertising and commercial purposes 
may be taken at BARC only with the prior written approval of the 
Director, Beltsville Area.

[61 FR 51212, Oct. 1, 1996]



Sec. 502.11  Pets.

    Pets, except assistance trained animals, brought upon BARC property 
must be kept on a leash and have proper vaccinations. Pets that are the 
property of employees residing on BARC must be up to date on their 
vaccinations, in accordance with State or local laws, and be kept on a 
leash or similarly restrained. The abandonment of unwanted animals on 
BARC grounds is prohibited.

[61 FR 51212, Oct. 1, 1996]

[[Page 375]]



Sec. 502.12  Vehicular and pedestrian traffic.

    (a) Drivers of all vehicles whether or not motorized in or on BARC 
property shall drive in a careful and safe manner at all times and shall 
comply with the signals and directions of the security staff and all 
posted traffic signs;
    (b) The blocking of entrances, driveways, walks, loading platforms, 
or fire hydrants in or on BARC property is prohibited;
    (c) Except in emergencies, parking in or on BARC property in other 
than designated areas is not allowed without a permit. Parking without 
authority, parking in unauthorized locations or in locations reserved 
for other persons, or contrary to the direction of posted signs is 
prohibited. This section may be supplemented from time to time, by the 
issuance and posting of specific traffic directives as may be required, 
and when so issued and posted such directives shall have the same force 
and effect as if made a part hereof.
    (d) The operation of unlicensed gasoline powered vehicles is 
prohibited.

[37 FR 2424, Feb. 1, 1972, as amended at 61 FR 51212, Oct. 1, 1996]



Sec. 502.13  Weapons and explosives.

    No person while in or on BARC property shall carry firearms, other 
dangerous or deadly weapons, or explosives, either openly or concealed, 
except as officially authorized for official purposes.

[61 FR 51212, Oct. 1, 1996]



Sec. 502.14  Nondiscrimination.

    There shall be no discrimination by segregation or otherwise against 
any person or persons because of race, religion, color, sex, age, 
disability or national origin, in furnishing, or by refusing to furnish 
to such person or persons the use of any facility of a public nature, 
including all services, privileges, accommodations, and activities 
provided thereby on BARC property.

[61 FR 51212, Oct. 1, 1996]



Sec. 502.15  Exceptions.

    The Administrator, Agricultural Research Service, may in individual 
cases, make prior, written exceptions to the rules and regulations in 
this part, if a determination is made that the exception is not adverse 
to the public interest.

[61 FR 51212, Oct. 1, 1996]



Sec. 502.16  Penalties and other law.

    Whoever shall be found guilty of violating the rules and regulations 
in this part is subject to fine of not more than $50 or imprisonment of 
not more than 30 days, or both (see 40 U.S.C. 318c). Nothing contained 
in the rules and regulations in this part shall be construed as 
abrogating or authorizing the abrogation of any other regulations or any 
Federal law or any laws and regulations of the State of Maryland.

[37 FR 2424, Feb. 1, 1972. Redesignated at 61 FR 51212, Oct. 1, 1996]



PART 503_CONDUCT ON PLUM ISLAND ANIMAL DISEASE CENTER--Table of Contents




Sec.
503.1 General.
503.2 Admission.
503.3 Preservation of property.
503.4 Conformity with Plum Island regulations.
503.5 Nuisances.
503.6 Camping, boating, and fishing.
503.7 Gambling.
503.8 Intoxicating beverages and narcotics.
503.9 Soliciting, vending, debt collection, and distribution of 
          handbills.
503.10 Photographs for news, advertising, commercial purposes or for 
          personal use.
503.11 Pets.
503.12 Vehicular and pedestrian traffic.
503.13 Weapons and explosives.
503.14 Nondiscrimination.
503.15 Exceptions.
503.16 Penalties and other law.

    Authority: Secs. 2, 4, 62 Stat. 281; 40 U.S.C. 318(a), (c); sec. 
103, 63 Stat. 380; 40 U.S.C. 486(d); 38 FR 31165 and 38 FR 31166.

    Source: 39 FR 36563, Oct. 11, 1974, unless otherwise noted.



Sec. 503.1  General.

    The rules and regulations in this part cover the buildings, grounds, 
and vessels of the Plum Island Animal Disease Center (PIADC), United 
States Department of Agriculture, Orient Point, New York, and apply to 
all persons entering in or on such properties both on the mainland, 
Orient Point, New York, and on Plum Island. The Administrator,

[[Page 376]]

General Services Administration, has delegated to the Secretary of 
Agriculture authority to make all needful rules and regulations, and to 
annex to such rules and regulations such reasonable penalties (not to 
exceed those prescribed in 40 U.S.C. 318c) as will ensure their 
enforcement for the protection of persons and property at Plum Island, 
New York. The Secretary of Agriculture has redelegated this authority to 
the Assistant Secretary for Conservation, Research, and Education, who 
in turn has delegated it to the Administrator, Agricultural Research 
Service (38 FR 31166).



Sec. 503.2  Admission.

    No person will be admitted to PIADC, into animal holding areas, 
specified restricted areas, laboratory compounds, or into laboratories 
without having in his or her possession a specific approved pass or 
permit authorized by the Director, PIADC, to enter such areas. The pass 
must be presented at the request of the guard or other authorized PIADC 
safety representative.



Sec. 503.3  Preservation of property.

    The willful destruction, damage to or removal of property or any 
part thereof from the Government-owned buildings, grounds, and vessels 
in or on the PIADC is prohibited.



Sec. 503.4  Conformity with Plum Island regulations.

    Persons in and on PIADC shall at all times comply with official 
signs of a prohibitory or directory nature and with the directions of 
law enforcement or other authorized officials.



Sec. 503.5  Nuisances.

    The use of loud, abusive or otherwise improper language, unwarranted 
loitering, sleeping or assembly, the creation of any hazard to persons 
or things, improper disposal of rubbish, spitting, prurient prying, or 
the commission of any obscene or indecent act in or on the PIADC is 
prohibited.



Sec. 503.6  Camping, boating, and fishing.

    The use of PIADC as a recreational area for camping, boating, 
fishing, and picnicking is prohibited. The use of Plum Island beaches 
for unauthorized landings and sightseeing is prohibited.



Sec. 503.7  Gambling.

    Participating in games for money or other personal property, or the 
operation of gambling devices, the conduct of a lottery or pool, or the 
selling or purchasing of numbers tickets in or on the PIADC is 
prohibited.



Sec. 503.8  Intoxicating beverages and narcotics.

    Entering the PIADC or operating a motor vehicle thereon by a person 
under the influence of intoxicating beverages or narcotic drugs, or the 
consumption of such beverages or the use of such drugs in or on the 
PIADC, is prohibited.



Sec. 503.9  Soliciting, vending, debt collection, and distribution 
of handbills.

    The soliciting of alms and contributions, commercial soliciting and 
vending of all kinds, the display or distribution of commercial 
advertising, or the collecting of private debts, in or on PIADC is 
prohibited. This section does not apply to national or local drives for 
funds for welfare, health, and other purposes, sponsored or approved by 
the PIADC, or concessions or personal notices posted by employees on 
authorized bulletin boards. Unauthorized distribution of materials such 
as pamphlets, handbills, and flyers is prohibited.



Sec. 503.10  Photographs for news, advertising, commercial purposes or 
for personal use.

    Photographs on the PIADC for news, advertising, commercial purposes, 
or personal use may be taken only with prior written permission of 
Director, PIADC.



Sec. 503.11  Pets.

    No pets or animals of any kind may be brought to the PIADC.



Sec. 503.12  Vehicular and pedestrian traffic.

    Drivers of all vehicles on the PIADC Government-owned parking areas 
in PIADC shall drive in a careful and safe manner at all times and shall 
comply with the signals and directions of

[[Page 377]]

guards and all posted traffic signs. Pedestrians will also observe 
specific safety directives as may be issued and posted from time to time 
by the Director, PIADC, or his authorized representative.



Sec. 503.13  Weapons and explosives.

    No person while in or on the PIADC shall carry firearms or other 
dangerous or deadly weapons or explosives either openly or concealed, 
except when authorized to do so for official purposes by the Director, 
PIADC, or his authorized representative.



Sec. 503.14  Nondiscrimination.

    There shall be no discrimination by segregation or otherwise against 
any person or persons because of race, religion, sex, color, or national 
origin in furnishing or refusing to furnish to such person or persons 
the use of any facility of a public nature, including all services, 
privileges, accommodations and activities provided by the PIADC.



Sec. 503.15  Exceptions.

    The Director, PIADC, may, in specific cases, make prior written 
exceptions to the rules and regulations in this part if he determines it 
to be in the best interest of the Government.



Sec. 503.16  Penalties and other law.

    Whoever shall be found guilty of violating any rule or regulation in 
this part while in or on the PIADC is subject to a fine of not more than 
$50 or imprisonment of not more than 30 days, or both. (See 40 U.S.C. 
318c.) Nothing contained in these rules and regulations shall be 
construed to abrogate any other Federal laws or regulations, or any 
State and local laws and regulations, applicable to the PIADC.



PART 504_USER FEES--Table of Contents




Sec.
504.1 General statement.
504.2 Fees for deposit and requisition of microbial cultures.
504.3 Payment of fees.
504.4 Exemptions from user fee charges.
504.5 Address.

    Authority: 31 U.S.C. 9701.

    Source: 50 FR 5365, Feb. 8, 1985, unless otherwise noted.



Sec. 504.1  General statement.

    This part sets forth fees to be charged for the deposit and 
distribution of microbial patent cultures. The fees set forth in this 
part are applicable to the Agricultural Research Service (ARS) Patent 
Culture Collection, Northern Regional Research Center, Peoria, Illinois.



Sec. 504.2  Fees for deposit and requisition of microbial cultures.

    (a) Depositors of microbial cultures must pay a one-time $500 user 
fee for each culture deposited on or after November 1, 1983.
    (b) For cultures deposited on or after November 1, 1983, requesters 
must pay a $20 user fee for each culture distributed. Cultures which 
were deposited on or after November 1, 1983 have an identification 
number greater than 15,722.



Sec. 504.3  Payment of fees.

    (a) Payment of user fees must accompany a culture deposit or 
request.
    (b) Payment shall be made by check, draft, or money order payable to 
USDA, National Finance Center.



Sec. 504.4  Exemptions from user fee charges.

    (a) USDA laboratories and ARS cooperators designated by the Curator 
of the ARS Patent Culture Collection are exempt from fee assessments.
    (b) The Curator of the ARS Patent Culture Collection is delegated 
the authority to approve and revoke exemptions from fee assessments.



Sec. 504.5  Address.

    Deposits of and requests for microbial patent cultures should be 
directed to the Curator, ARS Patent Culture Collection, Northern 
Regional Research Center, USDA-ARS, 1815 N. University St., Peoria, 
Illinois 61604; (309) 685-4011.



PART 505_NATIONAL AGRICULTURAL LIBRARY FEES FOR LOANS AND COPYING
--Table of Contents




Sec.
505.1 Scope and purpose.

[[Page 378]]

505.2 Fees for loans of materials in library collections.
505.3 Fees for copying, duplicating, and reproduction of materials in 
          library collections.
505.4-505.5 Reserved.
505.6 Payment of fees.

    Authority: 5 U.S.C. 301; 7 U.S.C. 3125a.

    Source: 65 FR 6528, Feb. 10, 2000, unless otherwise noted.



Sec. 505.1  Scope and purpose.

    These regulations establish fees for loans, paper copying, 
duplication, or reproduction of materials in the collections of the 
National Agricultural Library (NAL) within the United States Department 
of Agriculture (USDA).



Sec. 505.2  Fees for loans of materials in library collections.

    (a) NAL will make loans of original materials from its collections, 
and charge fees for such loans, to other non-Federal and non-USDA 
libraries and institutions in the United States and Canada only. Loans 
will not be made directly to individuals.
    (b) Loans will be made at a flat fee of $15.00 per loaned item.
    (c) Cost for replacement of lost or damaged items will be the actual 
cost to purchase a replacement plus a $50.00 processing fee; or if the 
cost cannot be determined, a flat rate of $75.00 for monographs or 
$150.00 for audiovisuals per item, plus a $50.00 processing fee.
    (d) All services in this section will incur a billing surcharge per 
invoice generated in addition to the above fees which may change as 
vendor's charges change. This fee, currently $10.00, is billed as a 
direct cost recovery based on charges to the library by the billing 
vendor. Interlibrary loan requests submitted by participants in the ILL 
Fee Management (IFM) program under the Online Computer Library Center, 
Inc. (OCLC) will not incur the billing surcharge as their activities 
will not generate an invoice.



Sec. 505.3  Fees for paper copying, duplicating, and reproduction of 
materials in library collections.

    (a) Photocopy reproduction of paper copy will be set as a flat fee 
of $13.00 for domestic requests and $16.00 for international requests 
for each document requested with a maximum of 50 pages per article for 
copyright compliance. Materials delivered to international addresses via 
the Internet will be charged at the domestic rate. Photocopy 
reproduction of paper copy that requires special handling due to size or 
condition will incur special handling fees to recover costs at $20.00 
per half hour or fraction thereof.
    (b) Paper copies of microfilm or microfiche will be produced at a 
flat fee of $13.00 for requests delivered domestically and $16.00 for 
requests requiring delivery to an international address. This charge is 
for each document requested with a maximum of 50 pages per article for 
copyright compliance.
    (c) Duplication of NAL owned microfiche will be charged a flat fee 
of $13.00 per each 5 microfiche duplicated or fraction thereof. 
Duplication of NAL owned microfilm will be charged a flat fee of $20.00 
for each reel produced.
    (d) Photographic services from NAL Special Collections will be 
charged at cost for reproduction of the photo product (slides, 
transparencies, etc.) plus a preparation fee of $25.00 per half hour or 
fraction thereof.
    (e) All services in this section will incur a billing surcharge, 
currently $10.00, per invoice generated in addition to the above fees. 
This fee is a direct cost recovery based on charges to the library by 
the billing vendor and is subject to change. Interlibrary loan requests 
submitted by participants in the IFM program on OCLC will not incur the 
billing surcharge as their activities will not generate an invoice.



Sec. Sec. 505.4-505.5  [Reserved]



Sec. 505.6  Payment of fees.

    Charges which include billing and handling will be invoiced 
quarterly by the National Technical Information Service (NTIS) of the 
United States Department of Commerce. The NAL encourages users to 
establish deposit accounts with NTIS. Payment for services will be made 
by check, money order or credit card in U.S. funds directly to the NTIS 
upon receipt of invoice from NTIS. Subject to a reduction for the actual 
costs of performing the invoicing service by NTIS, all funds received 
will be returned to NAL for credit to the appropriations account

[[Page 379]]

charged with the cost of processing the loan or copying request.



PART 510_PUBLIC INFORMATION--Table of Contents




Sec.
510.1 General statement.
510.2 Public inspection, copying, and indexing.
510.3 Requests for records.
510.4 Multitrack processing.
510.5 Denials.
510.6 Appeals.

    Authority: 5 U.S.C. 301, 552; 7 CFR part 1, subpart A and appendix A 
thereto.

    Source: 66 FR 57841, Nov. 19, 2001, unless otherwise noted.



Sec. 510.1  General statement.

    This part is issued in accordance with the regulations of the 
Secretary of Agriculture in part 1, subpart A of this title and appendix 
A thereto, implementing the Freedom of Information Act (FOIA) (5 U.S.C. 
552). The Secretary's regulations, as implemented by the regulations in 
this part, govern the availability of records of the Agricultural 
Research Service (ARS) to the public.



Sec. 510.2  Public inspection, copying, and indexing.

    5 U.S.C. 552(a)(2) requires that certain materials be made available 
for public inspection and copying and that a current index of these 
materials be published quarterly or otherwise be made available. Members 
of the public may request access to such materials maintained by ARS at 
the following office: Information Staff, ARS, REE, USDA, Room 1-2248, 
Mail Stop 5128, 5601 Sunnyside Avenue, Beltsville, MD 20705-5128; 
Telephone (301) 504-1640 or (301) 504-1655; TTY-VOICE (301) 504-1743. 
Office hours are 8 a.m. to 4:30 p.m. Information maintained in our 
electronic reading room can be accessed at http://www.ars.usda.gov/is/
foia/#Electronic.



Sec. 510.3  Requests for records.

    Requests for records of ARS under 5 U.S.C. 552(a)(3) shall be made 
in accordance with Subsection 1.5 of this title and submitted to the 
FOIA Coordinator, Information Staff, ARS, REE, USDA, Mail Stop 5128, 
5601 Sunnyside Avenue, Beltsville, MD 20705-5128; Telephone (301) 504-
1640 or (301) 504-1655; TTY-VOICE (301) 504-1743; Facsimile (301) 504-
1648; e-mail [email protected] or [email protected]. The 
FOIA Coordinator is delegated authority to make determinations regarding 
such requests in accordance with Subsection 1.3(c) of this title.



Sec. 510.4  Multitrack processing.

    (a) When ARS has a significant number of requests, the nature of 
which precludes a determination within 20 working days, the requests may 
be processed in a multitrack processing system, based on the date of 
receipt, the amount of work and time involved in processing the request, 
and whether the request qualifies for expedited processing.
    (b) ARS may establish as many processing tracks as appropriate; 
processing within each track shall be based on a first-in, first-out 
concept, and rank-ordered by the date of receipt of the request.
    (c) A requester whose request does not qualify for the fastest track 
may be given an opportunity to limit the scope of the request in order 
to qualify for the fastest track. This multitrack processing system does 
not lessen agency responsibility to exercise due diligence in processing 
requests in the most expeditious manner possible.
    (d) ARS shall process requests in each track on a ``first-in, first-
out'' basis, unless there are unusual circumstances as set forth in 
Sec. 1.16 of this title, or the requester is entitled to expedited 
processing as set forth in Sec. 1.9 of this title.



Sec. 510.5  Denials.

    If the FOIA Coordinator determines that a requested record is exempt 
from mandatory disclosure and that discretionary release would be 
improper, the FOIA Coordinator shall give written notice of denial in 
accordance with Sec. 1.7(a) of this title.



Sec. 510.6  Appeals.

    Any person whose request is denied shall have the right to appeal 
such denial. Appeals shall be made in accordance with Sec. 1.14 of this 
title and should be addressed as follows: Administrator,

[[Page 380]]

ARS, U.S. Department of Agriculture, Washington, DC 20250.



PART 520_PROCEDURES FOR IMPLEMENTING NATIONAL ENVIRONMENTAL POLICY ACT
--Table of Contents




Sec.
520.1 General statement.
520.2 Definition.
520.3 Policy.
520.4 Responsibilities.
520.5 Categorical exclusions.
520.6 Preparation of an Environmental Assessment (EA).
520.7 Preparation of an Environmental Impact Statement (EIS).

    Authority: National Environmental Policy Act (NEPA) as amended, 42 
U.S.C. 4321 et seq.; E.O. 11514, 34 FR 4247, as amended by E.O. 11991, 
42 FR 26927; E.O. 12144, 44 FR 11957; 5 U.S.C. 301; 40 CFR 1500-1508.

    Source: 51 FR 34191, Sept. 25, 1986, unless otherwise noted.



Sec. 520.1  General statement.

    These procedures assure that research and other activities of the 
Agricultural Research Service (ARS) comply with the intent of the 
National Environmental Policy Act of 1969 (NEPA) and appropriate 
regulations implementing this Act. These procedures incorporate and 
supplement, and are not a substitute for, CEQ regulations under 40 CFR 
parts 1500-1508, and Department of Agriculture NEPA Policies and 
Procedures under 7 CFR part 1b. ARS conducts and supports research as 
authorized by legislation to support one of the USDA goals of assuring 
adequate supplies of high quality food and fiber. Information generated 
through such research often forms the basic data needed to assess the 
impact of a new technology upon the environment. Large scale projects 
simulating commercial practices are normally implemented in cooperation 
with other agencies of the Federal or State Governments.



Sec. 520.2  Definition.

    Control Agents mean biological material or chemicals which are 
intended to enhance the production efficiency of an agricultural crop or 
animal such as through elimination of a pest.



Sec. 520.3  Policy.

    (a) It is ARS policy to comply with the provisions of NEPA and 
related laws and policies.
    (b) Environmental documents should be concise, written in plain 
language, and address the issues pertinent to the decision being made.
    (c) Environmental documents may be substituted or combined with 
other reports which serve to facilitate decisionmaking.
    (d) Costs of analyses and environmental documents are to be planned 
for during the budgetary process for the plan, program, or project. 
Special provisions for financing NEPA process activities which are 
unanticipated and extraordinary may be made in the Office of the 
Administrator of ARS.
    (e) ARS personnel will cooperate with other agencies, States, 
contractors, or other entities proposing to undertake activities 
involving the ARS to assure that NEPA considerations are addressed early 
in the planning process to avoid delays and conflicts as required by 40 
CFR 1501.2.
    (f) For some activities, project participants outside ARS may be 
required to provide data and documentation. When an applicant or 
contractor prepares an environmental assessment (EA) or a contractor 
prepares an environmental impact statement (EIS), the activities shall 
be carried out according to 40 CFR 1506.5.
    (g) Environmental documents, decision notices, and records of 
decision must be made available for review by the public. There shall be 
an early and open process for determining the scope of issues to be 
addressed in the environmental analysis process (40 CFR 1501.7).
    (h) The concepts of tiering to eliminate repetitive discussions 
applicable to EIS's (40 CFR Part 1502) are also applicable to EA's.
    (i) ARS personnel may adopt an existing EA or EIS when a proposed 
action is substantially the same as the action for which the existing EA 
or EIS was prepared (40 CFR 1506.3 (b)).
    (j) ARS personnel may incorporate by reference any existing 
documents in order to reduce the bulk of an EA or EIS (40 CFR 1502.21).

[[Page 381]]

    (k) After prior consultation with the Council on Environmental 
Quality, ARS personnel may forego preparation of an EA or EIS in 
emergency situations (40 CFR 1506.11).



Sec. 520.4  Responsibilities.

    (a) Administrator. The Administrator is responsible for 
environmental analysis and documentation required for compliance with 
the provisions of NEPA and related laws, policies, plans, programs, and 
projects. The ARS Assistant Administrator for Cooperative Interactions 
has been delegated responsibility for the establishment of procedures 
and coordination necessary to carry out the policies and provisions of 
NEPA.
    (b) Deputy Administrators and Area Directors. The Deputy 
Administrators and Area Directors are responsible to the Administrator 
for assuring that ARS programs are in compliance with the policies and 
procedures of NEPA.



Sec. 520.5  Categorical exclusions.

    For the following categories of actions, the preparation of an EA or 
EIS is not required:
    (a) Department of Agriculture categorical exclusions (7 CFR 1b.3). 
(1) Policy development, planning and implementation which are related to 
routine activities such as personnel, organizational changes or similar 
administrative functions;
    (2) Activities which deal solely with the functions of programs, 
such as program budget proposals, disbursement, transfer or 
reprogramming of funds;
    (3) Inventories, research activities and studies, such as resource 
inventories and routine data collection when such actions are clearly 
limited in context and intensity;
    (4) Educational and information programs and activities;
    (5) Activities which are advisory and consultative to other 
agencies, public and private entities, and
    (6) Activities related to trade representation and market 
development activities overseas.
    (b) ARS categorical exclusions. ARS actions which, based on previous 
experience, have been found to have limited scope and intensity and 
produce little or no individual or cumulative impacts to the human 
environment. Some examples are:
    (1) Repair, replacement of structural components or equipment, or 
other routine maintenance of facilities controlled in whole or in part 
by ARS;
    (2) Research programs or projects of limited size and magnitude or 
with only short-term effects on the environment. Examples are:
    (i) Research operations conducted within any laboratory, greenhouse 
or other contained facility where research practices and safeguards 
prevent environment impacts such as the release of hazardous materials 
into the environment;
    (ii) Inventories, studies or other such activities that have limited 
context and minimal intensity in terms of changes in the environment;
    (iii) Testing outside of the laboratory, such as in small isolated 
field plots, which does not involve the use of control agents requiring 
containment or a special license or a permit from a regulatory agency.
    (c) Exceptions to categorical exclusions. An environmental 
assessment shall be prepared for an activity which is normally within 
the purview of categorical exclusion if there are extraordinary 
circumstances which may cause such activity to have a significant 
environmental effect.



Sec. 520.6  Preparation of an Environmental Assessment (EA).

    (a) Actions requiring EA. The following actions would normally 
require an EA:
    (1) Programs, supported in the majority by ARS, which may assist in 
the transition of a particular technology from field evaluation stage to 
large-scale demonstration or simulated commercial phase;
    (2) Field work having an impact on the local environment such as 
earth excavation, explosives, weather modifications, or other such 
techniques; and
    (3) The testing outside the laboratory, such as small isolated field 
plots, of control agents which require containment precautions or either 
a special license or a permit from a regulatory agency.
    (b) Multiple agencies actions. If more than one Federal agency 
participates

[[Page 382]]

in a program activity, the EA shall be prepared by the lead agency as 
provided in 40 CFR 1501.5.
    (c) Format and conclusion. An EA can be in any format provided it 
covers in a logical and succinct fashion the information necessary for 
determining whether a proposed Federal action may have a significant 
environmental impact and thus warrant preparation of an EIS. The EA will 
contain the information required by 40 CFR 1508.9. This information will 
include brief discussions of the need for the project or other proposal, 
alternatives, environmental impacts of the proposed action and 
alternatives and a listing of agencies and persons consulted.
    (d) Decision notice. Upon completion of an EA, the responsible 
official will consider the information it contains, decide whether an 
EIS is required or that no significant environmental impact will occur, 
and will document the decision and the reasons for it. The decision and 
the EA shall be available to the public in a manner appropriate to the 
situation. If there is a finding of no significant impact, the EA may be 
combined with the decision notice.



Sec. 520.7  Preparation of an Environmental Impact Statement (EIS).

    (a) Actions requiring EIS. An EIS will normally be prepared for:
    (1) Proposals for legislation which are determined to be a major 
Federal action significantly affecting the quality of the human 
environment; or,
    (2) Other major Federal actions significantly affecting the quality 
of the human environment. In the experience of ARS, an environmental 
impact statement shall normally be required in situations when a 
research project has advanced beyond the laboratory and small plot 
testing to full scale field testing over a very large area and involving 
the introduction of control agents.
    (b) Notice of intent. If the responsible official recommends the 
preparation of an EIS, then the public shall be apprised of the 
decision. This notice shall be prepared according to 40 CFR 1508.22.
    (c) Draft and final EIS. The process of preparing the draft and 
final EIS, as well as the format, shall be according to 40 CFR parts 
1502-1506.
    (d) Decisionmaking and implementation. The responsible official may 
make a decision no sooner than thirty days after the notice of 
availability of the final EIS has been published in the Federal Register 
by the Environmental Protection Agency (40 CFR 1506.10). The decision 
will be documented in a Record of Decision required by 40 CFR 1502.2, 
and monitoring and mitigation activities will be implemented as required 
by 40 CFR 1505.3.

[[Page 383]]



   CHAPTER VI--NATURAL RESOURCES CONSERVATION SERVICE, DEPARTMENT OF 
                               AGRICULTURE




  --------------------------------------------------------------------


  Editorial Note: Nomenclature changes to chapter VI appear at 60 FR 
28514, June 1, 1995.

                          SUBCHAPTER A--GENERAL
Part                                                                Page
600             Organization................................         385
601             Functions...................................         388
                  SUBCHAPTER B--CONSERVATION OPERATIONS
610             Technical assistance........................         392
611             Soil surveys................................         399
612             Snow surveys and water supply forecasts.....         400
613             Plant materials centers.....................         402
614             Appeal procedures...........................         404
                      SUBCHAPTER C--WATER RESOURCES
621             River basin investigations and surveys......         409
622             Watershed projects..........................         413
623             Emergency wetlands reserve program..........         416
624             Emergency watershed protection..............         424
                   SUBCHAPTER D--LONG TERM CONTRACTING
630             Long term contracting.......................         431
631             Great Plains Conservation Program...........         431
632             Rural Abandoned Mine Program................         435
633             Water Bank Program..........................         447
634             Rural Clean Water Program...................         453
635             Equitable relief from ineligibility.........         473
636             Wildlife Habitat Incentives Program.........         476
                         SUBCHAPTER E [RESERVED]
                    SUBCHAPTER F--SUPPORT ACTIVITIES
650             Compliance with NEPA........................         482

[[Page 384]]

651             [Reserved]
652             Technical service provider assistance.......         504
653             Technical standards.........................         514
654             Operation and maintenance...................         515
655             [Reserved]
656             Procedures for the protection of 
                    archeological and historical properties 
                    encountered in NRCS-assisted programs...         519
657             Prime and unique farmlands..................         520
658             Farmland Protection Policy Act..............         523
                       SUBCHAPTER G--MISCELLANEOUS
660             [Reserved]
661             Public information and right to privacy.....         531
662-699         [Reserved]

[[Page 385]]



                          SUBCHAPTER A_GENERAL





PART 600_ORGANIZATION--Table of Contents




Sec.
600.1 General.
600.2 National headquarters.
600.3 Regional offices.
600.4 State offices.
600.5 Area offices.
600.6 Field offices.
600.7 Specialized field offices.
600.8 Plant materials centers.
600.9 Major land resource area soil survey offices.

    Authority: 7 U.S.C. 6962.

    Source: 65 FR 14781, Mar. 20, 2000, unless otherwise noted.



Sec. 600.1  General.

    (a) The Natural Resources Conservation Service (NRCS) was authorized 
by the Federal Crop Insurance Reform and Department of Agriculture 
Reorganization Act of 1994 (Pub. L. 103-354, 7 U.S.C. 6901 note) and 
established by Secretary's Memorandum 1010-1 (2.b.6), Reorganization of 
the Department of Agriculture, to provide national leadership in the 
conservation, development, and productive use of the Nation's natural 
resources. Such leadership encompasses the conservation of soil, water, 
air, plant, and animal resources with consideration of the many human 
(economic and sociological) interactions. NRCS is the Federal agency 
that works with landowners on private lands to help them conserve their 
natural resources. NRCS employees are highly skilled in many scientific 
and technical specialties, including soil science, soil conservation, 
agronomy, biology, agroecology, range conservation, forestry, 
engineering, geology, hydrology, wetlands science, cultural resources, 
and economics. NRCS was formerly the Soil Conservation Service (SCS) 
which was established by the Soil Conservation Act of 1935 (Pub. L. 74-
46, 49 Stat. 163 (16 U.S.C. 590 (a-f))). NRCS has responsibility for 
three major areas:
    (1) Soil and water conservation;
    (2) Natural resource surveys including soil surveys, resources 
inventory, snow surveys, and water supply forecasting; and
    (3) Community resource protection and management including watershed 
projects, river basin studies and investigations, resource conservation 
and development areas, land evaluation and site assessment, and 
emergency watershed protection. In addition, NRCS has leadership for the 
Wetlands Reserve Program, Environmental Quality Incentives Program, 
Grazing Lands Conservation Initiative, Farmland Protection Program, 
Wildlife Habitat Incentives Program, Forestry Incentives Program, and 
Conservation Farm Option. NRCS provides technical support for the 
Conservation Reserve Program.
    (b) The NRCS organization consists of a National Headquarters 
located in Washington, D.C.; six regional offices; 50 state offices and 
two equivalent offices in the Caribbean Area and the U.S. Trust 
Territories of the Pacific Basin Area; approximately 2,500 field offices 
and 300 specialized offices; 26 plant materials centers; 17 major land 
resource area soil survey offices; nine national centers; and seven 
national institutes. A Chief who reports to the USDA Under Secretary for 
Natural Resources and Environment heads NRCS.



Sec. 600.2  National headquarters.

    (a) Chief. The Chief, with assistance of the Associate Chief, is 
responsible for administering a coordinated national program of natural 
resource conservation; planning, directing, and coordinating all 
program, technical, and administrative activities of NRCS; developing 
policies and procedures; correlating NRCS conservation programs with 
other agencies; accepting departmental leadership for programs for other 
activities assigned by the Secretary of Agriculture; and serving as 
Equal Employment Opportunity Officer for NRCS.
    (b) Deputy chiefs. Five deputy chiefs assist the Chief as follows:
    (1) Deputy Chief for Management. The Deputy Chief for Management is 
responsible for policies, guidelines, and standards for management 
services,

[[Page 386]]

human resources management, financial management, information 
technology, administrative support (providing a coordinated 
administrative management program for National Headquarters activities), 
NRCS outreach, training, and correspondence management. This deputy 
chief also is responsible for the activities of three national centers: 
business management, information technology, and employee development.
    (2) Deputy Chief for Strategic Planning and Accountability. The 
Deputy Chief for Strategic Planning and Accountability is responsible 
for policies, guidelines, and standards for strategic and performance 
planning, budget planning and analysis, and operations management and 
oversight.
    (3) Deputy Chief for Programs. The Deputy Chief for Programs is 
responsible for policies, guidelines, and standards for conservation 
operations, resource conservation and community development, watersheds 
and wetlands, international programs, conservation compliance 
activities, conservation programs funded by the Commodity Credit 
Corporation, and animal husbandry and clean water programs.
    (4) Deputy Chief for Soil Survey and Resource Assessment. The Deputy 
Chief for Soil Survey and Resource Assessment is responsible for 
policies, guidelines, and standards for NRCS technical activities, and 
provides leadership for soils, resource inventory, and resource 
assessment. This deputy chief also is responsible for the activities of 
two national centers (soil survey and cartography and geospatial) and 
two national institutes (soil quality and natural resources inventory 
and analysis).
    (5) Deputy Chief for Science and Technology. The Deputy Chief for 
Science and Technology is responsible for policies, guidelines, and 
standards for the agency, and provides leadership for resource economics 
and social sciences, conservation engineering, and ecological sciences. 
This deputy chief also is responsible for the activities of four 
national centers (water and climate, water management, soil mechanics, 
and plant data) and five national institutes (grazing lands technology, 
social sciences, watershed science, wetlands science, and wildlife 
habitat management). This deputy chief, working closely with the deputy 
chiefs for Management and Soil Survey and Resource Assessment, provides 
overall direction for the National Science and Technology Consortium.
    (c) National Science and Technology Consortium. The consortium 
consists of three divisions, four centers, five technical institutes, 
and several cooperating scientists under the Deputy Chief for Science 
and Technology; two divisions, two centers, and two technical institutes 
under the Deputy Chief for Soil Survey and Resource Assessment; and one 
division and three centers under the Deputy Chief for Management.
    (1) Centers. The nine centers provide specific products and services 
that maintain and enhance the technical quality of the agency. The 
centers are: water and climate, water management, soil mechanics, plant 
data, soil survey, cartography and geospatial, information technology, 
business management, and employee development.
    (2) Institutes. The seven institutes are: soil quality, natural 
resources inventory and analysis, grazing lands technology, social 
sciences, watershed science, wetlands science, and wildlife habitat 
management. The institutes provide training; develop technical 
materials; and acquire, develop, and transfer needed technology in 
special emphasis areas so field employees can better serve their 
customers. The institutes often establish partnerships with other 
Federal agencies, universities, and public and private organizations.
    (3) Cooperating Scientists. Cooperating scientists work in the areas 
of soil erosion and sedimentation, air quality, and agroforestry. These 
scientists are located at various universities and research centers.
    (d) Civil Rights. The Civil Rights staffs provide coordination, 
assistance, and recommendations to the Chief on civil rights employment 
and program compliance issues.
    (e) Legislative Affairs. The Legislative Affairs Staff provides 
coordination and assistance to the Chief on legislative affairs issues 
and activities.
    (f) Conservation Communications. The Conservation Communications 
Staff is

[[Page 387]]

responsible for communications, volunteer programs, conservation 
education, and public affairs activities.
    (g) Strategic Natural Resource Issues. The Strategic Natural 
Resource Issues Staff is responsible for coordinating priority strategic 
issues as determined by the Chief.



Sec. 600.3  Regional offices.

    Each regional office is under the direction and supervision of a 
regional conservationist. Regional offices are responsible for
    (1) Providing agency leadership, guidance, coordination, and 
partnering for solutions to regional resource issues;
    (2) Program implementation, consistency, and accountability;
    (3) Region-wide strategic planning, performance measurement, and 
operations management;
    (4) Administrative operations and support;
    (5) Fund integrity and accountability;
    (6) Technical quality of work; and
    (7) All NRCS activities in the region. Regional offices are located 
in Beltsville, Maryland; Atlanta, Georgia; Fort Worth, Texas; Madison, 
Wisconsin; Lincoln, Nebraska; and Sacramento, California.



Sec. 600.4  State offices.

    Each office is under the direction and supervision of a State 
conservationist. Each State conservationist is responsible for NRCS 
programs in a State. The Pacific Basin Area Office, under the direction 
and supervision of a director, serves the U.S. Trust Territories in that 
area. The Caribbean Area Office, under the direction and supervision of 
a director, serves the Commonwealth of Puerto Rico and the U.S. Virgin 
Islands. Directors of the Pacific Basin and Caribbean areas have the 
same responsibility and authority as a State conservationist. All 
references to State conservationists in this chapter include the 
directors of the Pacific Basin and Caribbean areas.



Sec. 600.5  Area offices.

    Each area office is under the direction and supervision of an area 
conservationist or assistant State conservationist for field operations 
who is responsible for NRCS activities in the geographical area served 
by the area office. Usually the geographical area includes multiple 
field offices and counties. Many area offices now consist of teams 
working on a watershed or other geopolitical basis.



Sec. 600.6  Field offices.

    Each field office is under the direction and supervision of a 
district conservationist who is responsible for NRCS activities in the 
geographical area served by the field office. Usually the geographical 
area of a field office includes one or more conservation districts and 
one or more counties. Field offices are generally collocated with other 
USDA agencies in USDA Service Centers.



Sec. 600.7  Specialized field offices.

    Other field offices serve specialized activities, such as watershed 
protection and flood reduction projects, construction projects, resource 
conservation and development areas, and soil survey activities. State 
conservationists designate direction and supervision of these offices.



Sec. 600.8  Plant materials centers.

    Plant materials centers (PMC) assemble and test plant species for 
conservation uses. Usually a PMC serves two or more States, and is under 
the jurisdiction of the State conservationist where the center is 
located. Each PMC is directed and supervised by a manager who is 
responsible to a State office specialist/manager as designated by the 
State conservationist.



Sec. 600.9  Major land resource area soil survey offices.

    The United States is divided into 17 major land resource areas 
(MLRA) for the purpose of soil survey production. Major land resource 
area soil survey offices (MO) provide the technical leadership, 
coordination, and quality assurance for all soil survey project 
activities within the respective MLRA. Each MO serves two or more States 
(except for the MO in Alaska), and is under the jurisdiction of the 
State conservationist where the office is located. Each MO is directed 
and supervised by

[[Page 388]]

a leader who is designated by the State conservationist.



PART 601_FUNCTIONS--Table of Contents




Sec.
601.1 Functions assigned.
601.2 Functions reserved to the Secretary of Agriculture.
601.3 Defense responsibilities.

    Authority: 7 U.S.C. 1010-1011; 16 U.S.C. 590a-590f, 1001-1008, 2001-
2009, 2203-2205, 3801 et seq.; 33 U.S.C. 701b-1.

    Source: 65 FR 14783, Mar. 20, 2000, unless otherwise noted.



Sec. 601.1  Functions assigned.

    The Natural Resources Conservation Service (NRCS) is the Federal 
agency that works with private landowners to conserve their natural 
resources. NRCS employees help land users and communities approach 
conservation planning and implementation with an understanding of how 
natural resources relate to each other and to people--and how human 
activities affect those resources. The agency emphasizes voluntary, 
science-based assistance, partnerships, and cooperative problem solving 
at the community level. The mission of NRCS is to work on the Nation's 
non-Federal lands to conserve, improve, and sustain natural resources. 
The following functions support the mission.
    (a) NRCS facilitates and provides conservation technical assistance 
at the local level that helps people assess their natural resource 
conditions and needs, set goals, identify programs and other resources 
to address those needs, develop proposals and recommendations, implement 
solutions, and measure their success. The agency's role is to assist 
with:
    (1) Resource inventories,
    (2) Resource assessments,
    (3) Planning assistance, and/or
    (4) Technical assistance.
    (b) NRCS provides technical assistance through local conservation 
districts to land users, communities, watershed groups, Federal and 
State agencies, other partners, and customers.
    (c) NRCS provides assistance on a voluntary basis.
    (d) The agency's work focuses on soil, water, air, plant, and animal 
conservation including erosion reduction, water quality improvement, 
wetland restoration and protection, fish and wildlife habitat 
improvement, range management, stream restoration, water management, and 
other natural resource issues.
    (e) Through the conservation operations program, NRCS maintains a 
cadre of conservationists and interdisciplinary technical experts who 
provide landowners with advice and recommendations. Science based 
procedures and techniques are based on new knowledge and research 
provided by the Agricultural Research Service and others. NRCS developed 
and maintains a system of directives--including manuals, handbooks, and 
technical references--to institutionalize new methods, procedures, and 
standards used to deliver technical assistance at the field level.
    (f) NRCS has general responsibility for administration of the 
following programs:
    (1) Conservation operations, authorized by the Soil Conservation Act 
of 1935 and the Soil and Water Resources Conservation Act of 1977. 
Activities include:
    (i) Conservation technical assistance to land users, communities, 
units of State and local government, and other Federal agencies in 
planning and implementing natural resource solutions to reduce erosion, 
improve soil and water quantity and quality, improve and conserve 
wetlands, enhance fish and wildlife habitat, improve air quality, 
improve pasture and range conditions, reduce upstream flooding, and 
improve woodlands. Assistance is also provided to implement the highly 
erodible land (HEL) and wetland conservation (Swampbuster) provisions 
and--on a reimbursable basis--the Wetlands Reserve Program (WRP) and 
Conservation Reserve Program (CRP) in the 1985 Food Security Act, as 
amended by the Food, Agriculture, Conservation and Trade Act of 1990 and 
Federal Agriculture Improvement and Reform Act of 1996. NRCS technical 
field staff make HEL and wetland determinations and assist land users to 
develop and implement conservation plans needed

[[Page 389]]

to ensure compliance with the law. NRCS is also the lead Federal agency 
for delineating wetlands on agricultural lands for purposes of 
implementing both the provisions of the Food Security Act and Section 
404 of the Clean Water Act.
    (ii) Soil surveys that provide the public with local information on 
the uses and capabilities of their soil resource. Soil surveys are based 
on scientific analysis and classification of the soils and are used to 
determine land capabilities and conservation treatment needs. Surveys 
are conducted cooperatively with other Federal agencies, land grant 
universities, State agencies, and local units of government. NRCS is the 
world leader in soil classification and soil mapping, and is expanding 
into soil quality.
    (iii) Snow survey and water supply forecasts that provide western 
States and Alaska with vital information and forecasts of seasonable 
variable water supplies. NRCS field staff in cooperation with partnering 
organizations manually collect data from 850 remote high mountain sites. 
Data is electronically collected from an additional 600 SNOTEL 
(automated snowpack telemetry network) sites. In cooperation with the 
National Weather Service, the data is assembled and analyzed. Then, NRCS 
staff develop seasonal water supply forecasts.
    (iv) Plant Material Centers that assemble, test, and encourage 
increased plant propagation and usefulness of plant species for biomass 
production, carbon sequestration, erosion reduction, wetland 
restoration, water quality improvement, streambank and riparian area 
protection, coastal dune stabilization, and to meet other special 
conservation treatment needs. The work is carried out cooperatively with 
State and Federal agencies, private organizations, commercial 
businesses, and seed and nursery associations. After species are proven, 
they are released to the private sector for commercial production.
    (v) National Resources Inventory (NRI) that is a statistically-based 
survey designed and implemented using scientific principles to assess 
conditions and trends of soil, water, and related resources on 
nonfederal lands in the United States. The NRI captures data on land 
cover and use, soil erosion, prime farmland, wetlands, habitat 
diversity, selected conservation practices, and related attributes at 
thousands of scientifically selected sample sites in all 50 states, 
Puerto Rico, the U.S. Virgin Islands, and some Pacific Basin locations.
    (2) Conservation programs in the Federal Agriculture Improvement and 
Reform Act of 1996, most of which are funded by the Commodity Credit 
Corporation (CCC). NRCS provides leadership and technical assistance for 
the following programs:
    (i) Environmental Quality Incentives Program (EQIP). EQIP provides a 
single, voluntary conservation program for farmers and ranchers who face 
serious threats to soil, water, and related natural resources. 
Nationally, it provides technical, financial, and educational 
assistance, half of it targeted to livestock-related natural resource 
problems and half to more general conservation priorities.
    (ii) Wetlands Reserve Program (WRP). WRP is a voluntary program to 
restore and protect wetlands on private property. It provides an 
opportunity for landowners to receive financial incentives to restore 
wetlands in exchange for retiring marginal agricultural land.
    (iii) Wildlife Habitat Incentives Program (WHIP). WHIP is a 
voluntary program for people who want to develop and improve wildlife 
habitat on private lands. It provides both technical assistance and cost 
sharing to help establish and improve fish and wildlife habitat.
    (iv) Farmland Protection Program (FPP). This program provides funds 
to help purchase development rights to keep productive farmland in 
agricultural use. Working through existing programs, USDA joins with 
State, tribal, or local governments to acquire voluntary conservation 
easements or other interests from landowners.
    (v) Forestry Incentives Program (FIP). FIP supports good forest 
management practices on privately owned, non-industrial forest lands 
nationwide. FIP is designed to benefit the environment while meeting 
future demands for wood products. Although not funded by CCC, Section 
373 of the Federal Agriculture Improvement and Reform Act of 1996

[[Page 390]]

extended the program under discretionary appropriations.
    (3) Resource Conservation and Development (RC&D) Program, authorized 
by Section 102 of the Flood and Agriculture Act of 1962 (Pub. L. 87-702) 
and Sections 1528-1538 of the Agriculture and Food Act of 1981 (Pub. L. 
97-98). This program is initiated and directed at the local level by 
volunteers who involve multiple communities, various units of 
government, municipalities, and grassroots organizations. RC&D is a 
catalyst for civic-oriented groups to share knowledge and resources in a 
collective attempt to solve common problems. The program offers aid in 
balancing the environmental, economic, and social needs of an area.
    (4) Rural Abandoned Mine Program (RAMP) and other responsibilities 
assigned under the Surface Mining Control and Reclamation Act of 1977 
(Pub. L. 95-87). Under RAMP, NRCS provides technical and financial 
assistance to landowners to reclaim certain abandoned coal-mined lands. 
This assistance can be used to reclaim these lands for approved uses, 
which include pasture, range, woodland, cropland, noncommercial 
recreation, and wildlife habitat. The program's first priority is to 
protect public health, welfare, safety, and property from hazards caused 
by past surface coal mining or by surface effects of deep mining.
    (5) Watershed surveys and planning, authorized by the Watershed 
Protection and Flood Prevention Act (Pub. L. 83-566, Section 6 (16 
U.S.C. 1001-1008)). The 1996 appropriations act combined the Small 
Watershed Planning and the River Basin Surveys and Investigations 
programs into a new program called the Watershed Surveys and Planning 
Program. The program involves cooperation with other Federal, State, and 
local agencies to conduct watershed planning, river basin surveys and 
investigations, flood hazard analysis, and floodplain management 
assistance, which aid in the development of coordinated water resource 
programs, including the development of guiding principles and 
procedures.
    (6) Watershed and flood prevention operations include several 
activities. Watershed operations are authorized by the Flood Control Act 
of 1944 (Public Law 78-534) and the Watershed Protection and Flood 
Prevention Act of 1954 (Public Law 87-566) and amendments; both of which 
are addressed by 7 CFR 622. Since 1998, the appropriations act for the 
Watershed Protection and Flood Prevention Act (Public Law 83-566) has 
included funds, not to exceed a specified amount, that may be used for 
Public Law 78-534 projects.
    (i) Publc Law 83-566 and Public Law 78-534, jointly called the Small 
Watershed Program, authorize the Secretary of Agriculture to cooperate 
with State and local agencies to plan and carry out works of improvement 
for flood prevention; for the conservation, development, utilization, 
and disposal of water; and for the conservation and proper use of land 
in watershed or sub-watershed areas. Under Public Law 83-566, these 
areas shall not exceed 250,000 acres. There is no acreage limitation 
under Public Law 78-534.
    (ii) The Small Watershed Program provides for cooperation with State 
and other public agencies (called project sponsors) in the installation 
of planned works of improvement and land treatment measures in 
authorized watershed projects. Eligible measures include flood 
prevention, water conservation, recreation, agricultural water 
management, floodplain easements, municipal and industrial water, and 
rural water supply.
    (7) Emergency Watershed Protection (EWP) Program, authorized by 
Section 216 of Public Law 81-516, 33 U.S.C. 701b-1, and Section 403 of 
the Agriculture Credit Act of 1978 (Public Law 95-334, 16 U.S.C. 2203), 
as amended by Section 382 of the Federal Agriculture Improvement and 
Reform Act of 1996 (Public Law 104-127, 110 Stat. 888, 1016). EWP 
provides assistance to reduce an imminent threat to life and property 
caused by a sudden impairment of a watershed from a natural disaster. 
Emergency work includes such measures as removing debris from streams, 
stabilizing streambanks, repairing levees, critical area stabilization, 
and purchasing floodplain easements. Technical and financial assistance 
is available to sponsoring local organizations (units of government, 
Indian tribes and tribal organizations, and organizations formed by 
State law) for this disaster

[[Page 391]]

recovery work. Sponsors are required to provide the local share of the 
costs; obtain real property rights, water rights, and permits; and do 
any needed operation and maintenance.



Sec. 601.2  Functions reserved to the Secretary of Agriculture.

    (a) Designation of new Resource Conservation and Development (RC&D) 
areas. Once designated, these areas may receive RC&D Program assistance 
from NRCS.
    (b) Administration of the Soil and Water Resources Conservation Act 
of 1977 (Public Law 95-192) to conduct an appraisal and develop a 
national conservation program every five years.



Sec. 601.3  Defense responsibilities.

    In the event of nuclear attack, NRCS is responsible for providing:
    (a) Technical guidance, based upon results of radiological 
monitoring and the extent of radiological contamination to farmers, 
ranchers, and others relating to:
    (1) The selection and use of land for agricultural production.
    (2) The harvesting of crops.
    (3) The use of crops stored on the farm.
    (4) The use, conservation, disposal, and control of water to insure 
adequate usable water for agricultural purposes and to prevent floods.
    (5) The safety of livestock.
    (b) Basic soil information, land use guides, and onsite technical 
assistance in selecting land for production and in applying practices to 
increase production of food and fiber with maximum efficiency.

[[Page 392]]



                  SUBCHAPTER B_CONSERVATION OPERATIONS





PART 610_TECHNICAL ASSISTANCE--Table of Contents




                    Subpart A_Conservation Operations

Sec.
610.1 Purpose.
610.2 Scope.
610.3 Assistance through conservation districts.
610.4 Technical assistance furnished.
610.5 Interdisciplinary assistance.

               Subpart B_Soil Erosion Prediction Equations

610.11 Purpose and scope.
610.12 Equations for predicting soil loss due to water erosion.
610.13 Equations for predicting soil loss due to wind erosion.
610.14 Use of USLE, RUSLE, and WEQ.

                  Subpart C_State Technical Committees

610.21 Purpose and scope.
610.22 State Technical Committee membership.
610.23 State Technical Committee meetings.
610.24 Responsibilities of State Technical Committees.
610.25 Specialized Subcommittees.

             Subpart D_Conservation of Private Grazing Land

610.31 Purpose and scope.
610.32 Technical assistance furnished.

    Authority: 16 U.S.C. 590a-f, 590q, 2005b, 3861, 3862.

    Source: 42 FR 38169, July 27, 1977, unless otherwise noted.



                    Subpart A_Conservation Operations



Sec. 610.1  Purpose.

    This subpart sets forth Natural Resource Conservation Service (NRCS) 
policies and procedures for furnishing technical assistance in 
conservation operations.

[61 FR 27999, June 4, 1996]



Sec. 610.2  Scope.

    (a) Conservation operations, including technical assistance, is the 
basic soil and water conservation program of NRCS. This program is 
designed to:
    (1) Reduce soil losses from erosion;
    (2) Help solve soil, water, and agricultural waste management 
problems;
    (3) Bring about adjustments in land use as needed;
    (4) Reduce damage caused by excess water and sedimentation;
    (5) Enhance the quality of fish and wildlife habitat; and
    (6) Improve all agricultural lands, including cropland, forestland, 
and grazing lands that include pastureland, rangeland, and grazed 
forestland so that the long-term sustainability of the resource base is 
achieved.
    (b) The Natural Resources Conservation Service is USDA's technical 
agency for providing assistance to private landowners, conservation 
districts, and other organizations in planning and carrying out their 
conservation activities and programs. NRCS works with individuals, 
groups, and units of government to help them plan and carry out 
conservation decisions to meet their objectives.

[64 FR 42003, Aug. 3, 1999]



Sec. 610.3  Assistance through conservation districts.

    (a) Technical assistance is provided through and in cooperation with 
conservation districts in the 50 States, the Commonwealth of Puerto 
Rico, and the U.S. Virgin Islands. These districts, formed under 
authority of State laws, are operated and controlled by local citizens. 
They provide the leadership and the program needed to meet the 
conservation objectives of the district.
    (b) NRCS furnishes technical assistance to conservation districts as 
specified in memorandums of understanding. Soil conservationists 
assigned to conservation districts work directly with land users and 
others according to the program needs and the priorities established by 
the conservation districts.
    (c) The practical experience of land users is combined with the 
scientific knowledge and skills of professional conservationists to plan 
and carry out locally formulated conservation programs.

[[Page 393]]

    (d) When requested, technical assistance may be provided to owners, 
operators, or groups using land that is under the jurisdiction of the 
United States Department of the Interior if such land is included in a 
conservation district or if assistance is in accordance with memorandums 
of understanding identifying the coordination of agency activities.



Sec. 610.4  Technical assistance furnished.

    The Natural Resources Conservation Service provides technical 
assistance to land users and others who are responsible for making 
decisions and setting policies that influence land use, conservation 
treatment, and resource management. Technical assistance furnished by 
NRCS consists of program assistance, planning assistance, application of 
conservation practices, and assistance in the technical phases of USDA 
cost-share programs.
    (a) Program assistance is provided to conservation districts and 
other organizations concerned with the conservation of soil, water, 
plant, and wildlife resources. This assistance includes providing 
resource inventory data and identifying conservation problems and needs 
in order for districts to develop long-range soil and water conservation 
programs. Individuals, groups, and organizations requesting NRCS 
assistance through conservation districts include:
    (1) Farmers, ranchers, and other land users concerned with the 
conservation of land and water resources.
    (2) County and other local government units such as park 
authorities, departments of public works, planning, zoning (rural, 
urban, and flood plain), school, and institution boards, highway 
departments, and tax assessors.
    (3) Citizen groups, youth groups, recreation groups, and garden 
clubs.
    (4) State and local units of government (highway, health, 
recreation, water resources, and regional planning) involved in 
establishing public policy regarding the use of resources.
    (5) Federal departments and agencies such as Defense, Housing and 
Urban Development, Public Roads, Health and Human Services; and 
Interior.
    (6) Professional consultants who provide services such as 
engineering, planning, environmental assessment, tax assessment, and 
forest management.
    (b) Planning assistance includes evaluation of soil, water, 
vegetation, and other resource data needed for making land use, 
environmental and conservation treatment decisions. NRCS helps land 
users make conservation plans for farms, ranches, and other land units. 
This help includes onsite planning assistance in making conservation 
plans. The plans are based on a soil survey and interpretations for the 
intended land uses and conservation treatment. Plans may also include 
other inventories of soil, water, plant, and related resources needed in 
the planning process. Information about the responses of each kind of 
soil and the conservation practices and resource management needed for 
different land uses is provided. The land user's decisions recorded in 
the plan are based on his conservation objectives. Conservation plans 
provide for the orderly installation of conservation practices. 
Conservation plans reflect changing conditions.
    (c) Application assistance is provided to help land users apply and 
maintain planned conservation work. NRCS assistance for applying the 
conservation practices in the plan may include:
    (1) Designing, constructing, and maintaining conservation practices;
    (2) Selecting management alternatives and cultural practices needed 
to establish and maintain vegetation; and
    (3) Other conservation practices needed to protect land and water 
resources.
    (d) The Natural Resources Conservation Service assists in carrying 
out certain phases of USDA soil and water conservation cost-share 
programs. NRCS assists individual program participants with conservation 
plans needed for long-term cost-share agreements. NRCS is assigned 
responsibility by the Secretary of Agriculture for technical phases of 
applying conservation practices on the land. This assignment includes:
    (1) Determining what practices are needed and feasible to install, 
(2) selecting sites and planning and designing practices, (3) providing 
assistance

[[Page 394]]

for installing practices, and (4) certifying that the work done is in 
accordance with NRCS standards and specifications.

[42 FR 38169, July 27, 1977, as amended at 47 FR 56473, Dec. 17, 1982]



Sec. 610.5  Interdisciplinary assistance.

    Technical assistance is based on the principle that soil, water, 
plant, and related resources are interdependent and must be managed 
accordingly. Soil conservationists integrate the various technical 
fields in providing for the conservation of land and water resources. 
Staff scientists and specialists develop conservation standards, prepare 
necessary specifications, provide training, and review work performance, 
NRCS uses consultants for conservation problems that require special 
expertise.



               Subpart B_Soil Erosion Prediction Equations

    Source: 61 FR 27999, June 4, 1996, unless otherwise noted.



Sec. 610.11  Purpose and scope.

    This subpart sets forth the equations and rules for utilizing the 
equations that are used by the Natural Resources Conservation Service 
(NRCS) to predict soil erosion due to water and wind. Section 301 of the 
Federal Agriculture Improvement and Reform Act of 1996 (FAIRA) and the 
Food Security Act, as amended, 16 U.S.C. 3801-3813 specified that the 
Secretary would publish the universal soil loss equation (USLE) and wind 
erosion equation (WEQ) used by the Department within 60 days of the 
enactment of FAIRA. This subpart sets forth the equations, definition of 
factors, and provides the rules under which NRCS will utilize the USLE, 
the revised universal soil loss equation (RUSLE), and the WEQ.



Sec. 610.12  Equations for predicting soil loss due to water erosion.

    (a) The equation for predicting soil loss due to erosion for both 
the USLE and the RUSLE is A = R x K x LS x C x P. (For further 
information about USLE see the U.S. Department of Agriculture Handbook 
537, ``Predicting Rainfall Erosion Losses--A Guide to Conservation 
Planning,'' dated 1978. Copies of this document are available from the 
Natural Resources Conservation Service, P.O. Box 2890, Washington, DC 
20013. For further information about RUSLE see the U.S. Department of 
Agriculture Handbook 703, ``Predicting Soil Erosion by Water: A Guide to 
Conservation Planning with the Revised Universal Soil Loss Equation 
(RUSLE).'' Copies may be purchased from the National Technical 
Information Service, 5285 Port Royal Road, Springfield, VA 22161.)
    (b) The factors in the USLE equation are:
    (1) A is the estimation of average annual soil loss in tons per acre 
caused by sheet and rill erosion.
    (2) R is the rainfall erosivity factor. Accounts for the energy and 
intensity of rainstorms.
    (3) K is the soil erodibility factor. Measures the susceptibility of 
a soil to erode under a standard condition.
    (4) LS is the slope length and steepness factor. Accounts for the 
effect of length and steepness of slope on erosion.
    (5) C is the cover and management factor. Estimates the soil loss 
ratio for each of 4 or 5 crop stage periods throughout the year, 
accounting for the combined effect of all the interrelated cover and 
management variables.
    (6) P is the support practice factor. Accounts for the effect of 
conservation support practices, such as contouring, contour 
stripcropping, and terraces on soil erosion.
    (c) The factors in the RUSLE equation are defined as follows:
    (1) A is the estimation of average annual soil loss in tons per acre 
caused by sheet and rill erosion.
    (2) R is the rainfall erosivity factor. Accounts for the energy and 
intensity of rainstorms.
    (3) K is the soil erodibility factor. Measures the susceptibility of 
a soil to erode under a standard condition and adjusts it bi-monthly for 
the effects of freezing and thawing, and soil moisture.
    (4) LS is the slope length and steepness factor. Accounts for the 
effect of

[[Page 395]]

length and steepness of slope on erosion based on 4 tables reflecting 
the relationship of rill to interrill erosion.
    (5) C is the cover and management factor. Estimates the soil loss 
ratio at one-half month intervals throughout the year, accounting for 
the individual effects of prior land use, crop canopy, surface cover, 
surface roughness, and soil moisture.
    (6) P is the support practice factor. Accounts for the effect of 
conservation support practices, such as cross-slope farming, 
stripcropping, buffer strips, and terraces on soil erosion.



Sec. 610.13  Equations for predicting soil loss due to wind erosion.

    (a) The equation for predicting soil loss due to wind in the Wind 
Erosion Equation (WEQ) is E = f(IKCLV). (For further information on WEQ 
see the paper by N.P. Woodruff and F.H. Siddaway, 1965. ``A Wind Erosion 
Equation,'' Soil Science Society of America Proceedings, Vol. 29, No. 5, 
pages 602-608, which is available from the American Society of Agronomy, 
Madison, Wisconsin. In addition, the use of the WEQ in NRCS is explained 
in the Natural Resources Conservation Service (NRCS) National Agronomy 
Manual, 190-V-NAM, second ed., Part 502, March, 1988, which is available 
from the NRCS, P.O. Box 2890, Washington, DC 20013.)
    (b) [Reserved]
    (c) The factors in the WEQ equation are defined as follows:
    (1) E is the estimation of the average annual soil loss in tons per 
acre.
    (2) f indicates the equation includes functional relationships that 
are not straight-line mathematical calculations.
    (3) I is the soil erodibility index. It is the potential for soil 
loss from a wide, level, unsheltered, isolated field with a bare, 
smooth, loose and uncrusted surface. Soil erodibility is based on soil 
surface texture, calcium carbonate content, and percent day.
    (4) K is the ridge roughness factor. It is a measure of the effect 
of ridges formed by tillage and planting implements on wind erosion. The 
ridge roughness is based on ridge spacing, height, and erosive wind 
directions in relation to the ridge direction
    (5) C is the climatic factor. It is a measure of the erosive 
potential of the wind speed and surface moisture at a given location 
compared with the same factors at Garden City, Kansas. The annual 
climatic factor at Garden City is arbitrarily set at 100. All climatic 
factor values are expressed as a percentage of that at Garden City.
    (6) L is the unsheltered distance. It is the unsheltered distance 
across an erodible field, measured along the prevailing wind erosion 
direction. This distance is measured beginning at a stable border on the 
upwind side and continuing downward to the nonerodible or stable area, 
or to the downwind edge of the area being evaluated.
    (7) V is the vegetative cover factor. It accounts for the kind, 
amount, and orientation of growing plants or plant residue on the soil 
surface.



Sec. 610.14  Use of USLE, RUSLE, and WEQ.

    (a) All Highly Erodible Land (HEL) determinations are based on the 
formulas set forth in 7 CFR Sec. 12.21 using some of the factors from 
the USLE and WEQ and the factor values that were contained in the local 
Field Office Technical Guide (FOTG) as of January 1, 1990. In addition, 
this includes the soil loss tolerance values used in those formulas for 
determining HEL. The soil loss tolerance value is used as one of the 
criteria for planning soil conservation systems. These values are 
available in the FOTG in the local field office of the Natural Resources 
Conservation Service.
    (b) RUSLE will be used to:
    (1)(i) Evaluate the soil loss estimates of conservation systems 
contained in the FOTG.
    (ii) Evaluate the soil loss estimates of systems actually applied, 
where those systems were applied differently than specified in the 
conservation plan adopted by the producer or where a conservation plan 
was not developed, in determining whether a producer has complied with 
the HEL conservation provisions of the Food Security Act of 1985, as 
amended, 16 U.S.C. Sec. 3801 et seq., set forth in 7 CFR Part 12; and
    (2) Develop new or revised conservation plans.

[[Page 396]]



                  Subpart C_State Technical Committees

    Source: 64 FR 42003, Aug. 3, 1999, unless otherwise noted.



Sec. 610.21  Purpose and scope.

    This subpart sets forth the procedures for establishing and using 
the advice of State Technical Committees. NRCS shall establish in each 
State a technical committee to assist in making technical 
recommendations relating to the implementation of natural resource 
conservation activities and programs. USDA will use State Technical 
Committees in an advisory capacity in the administration of certain 
conservation programs and initiatives. These State Technical Committees 
are exempt from the provisions of the Federal Advisory Committee Act (5 
U.S.C. App.2).



Sec. 610.22  State Technical Committee membership.

    (a) State Technical Committees shall include members who represent a 
variety of natural resource sciences and occupations, including those 
related to soil, water, wetlands, plants, and wildlife. The State 
Conservationist in each State will serve as chairperson. In addition, 
committee membership will include one representative from each of the 
following agencies or groups, if willing to serve:
    (1) NRCS, USDA;
    (2) Farm Service Agency, USDA;
    (3) State Farm Service Agency Committee, USDA;
    (4) Forest Service, USDA;
    (5) Cooperative State Research, Education, and Extension Service, 
USDA;
    (6) Rural Development, USDA;
    (7) Fish and Wildlife Service, United States Department of Interior;
    (8) United States Environmental Protection Agency;
    (9) Bureau of Land Management, United States Department of Interior;
    (10) Bureau of Indian Affairs, United States Department of Interior;
    (11) U.S. Geological Survey, United States Department of Interior;
    (12) Bureau of Reclamation, United States Department of Interior;
    (13) Corps of Engineers, United States Department of the Army;
    (14) Each of the Federally recognized American Indian Tribal 
Governments and Alaskan Native Corporations encompassing 100,000 acres 
or more in the State;
    (15) State departments and agencies that the NRCS State 
Conservationist deems appropriate, including a member from each of the 
following agencies or entities within the State:
    (i) Fish and wildlife agency;
    (ii) Forestry agency;
    (iii) Water resources agency;
    (iv) Department of agriculture;
    (v) Association of soil and water conservation districts;
    (vi) Soil and water conservation agency;
    (vii) Coastal zone management agency; and
    (16) Other Federal, State, tribal, and local agency personnel with 
expertise in soil, water, wetlands, plant, and wildlife management, as 
the NRCS State Conservationist considers appropriate.
    (b) In addition to agency and Tribal membership, State Technical 
Committees shall include members from the following private interests, 
if willing to serve:
    (1) Agricultural producers with demonstrable conservation expertise;
    (2) Nonprofit organizations with demonstrable conservation 
expertise;
    (3) Persons knowledgeable about economic and environmental impacts 
of conservation techniques and programs; and
    (4) Representatives from agribusiness.
    (c) To ensure that recommendations of the State Technical Committees 
take into account the needs of the diverse groups served by the USDA, 
membership shall include, to the extent practicable, individuals with 
demonstrated ability to represent the conservation and related technical 
concerns of particular historically under-served groups and individuals; 
i.e., minorities, women, persons with disabilities and socially and 
economically disadvantaged groups.
    (d) In accordance with the guidelines in paragraphs (a), (b), and 
(c) of this section, the State Conservationist establishes membership on 
the State Technical Committee. Individuals or

[[Page 397]]

groups wanting to participate on a State Technical Committee within a 
specific State may submit to the State Conservationist of that 
particular State a request that explains their interest and outlines 
their credentials which they believe are relevant to becoming a member 
of the State Technical Committee. Decisions of the State Conservationist 
concerning membership on the committee are final and not appealable to 
any other individual or group within USDA.



Sec. 610.23  State Technical Committee meetings.

    (a) The State Conservationist shall provide public notice of State 
Technical Committee meetings in which issues related to conservation 
programs will be considered.
    (b) The State Conservationist shall publish a meeting notice no 
later than 14 calendar days prior to the meeting. Notification may 
exceed this 14-day minimum where State open meeting laws exist and 
provide for a longer notification period. This minimum 14-day notice 
requirement may be waived in the case of exceptional conditions. The 
State Conservationist shall publish this notice in at least one or more 
newspaper(s), including recommended Tribal publications, to attain 
statewide circulation. The State Conservationist, as Chairperson, 
schedules and conducts the meetings, although a meeting may be requested 
by any USDA agency as needed.



Sec. 610.24  Responsibilities of State Technical Committees.

    (a) Each State Technical Committee established under this subpart 
shall meet on a regular basis, as determined by the State 
Conservationist, to provide information, analysis, and recommendations.
    (b) The State Technical Committee shall provide, in writing to the 
implementing USDA program agency, recommendations, data, and technical 
analyses, which reflect the professional information and judgment of the 
State Technical Committee. Such information, analyses, and 
recommendations shall be provided in a manner that will assist in 
determining matters of fact, technical merit, or scientific question.
    (c) The responsibilities of the State Technical Committee include 
making recommendations with respect to the technical matters such as:
    (1) Guidelines for evaluating petitions by agricultural producers 
regarding new conservation practices and systems not already described 
in field office technical guides;
    (2) Aspects of wetland protection, restoration, and mitigation 
requirements;
    (3) Criteria to be used in evaluating bids for enrollment of 
environmentally-sensitive lands in the Conservation Reserve Program (16 
U.S.C. 3831-3836);
    (4) Guidelines for haying or grazing and the control of weeds to 
protect nesting wildlife on set-aside acreage;
    (5) Highly erodible land exemptions and the appeals process as it 
pertains to technical issues and information;
    (6) Wetland and highly erodible land conservation compliance 
exemptions and the appeals process;
    (7) Methods to address common weed and pest problems, and programs 
to control weeds and pests found on acreage enrolled in the Conservation 
Reserve Program (16 U.S.C. 3831-3836);
    (8) Guidelines for planting perennial cover for water quality and 
wildlife habitat improvement on set-aside lands;
    (9) Criteria and priorities for state initiatives under the 
Environmental Quality Incentives Program (EQIP) (16 U.S.C. 3839aa), 
including:
    (i) Criteria to prioritize applications from applicants with 
significant statewide resource concerns outside a priority area;
    (ii) Eligible conservation practices for an EQIP priority area or 
for significant statewide resource concerns outside a priority area;
    (iii) Criteria to be used in defining a large confined livestock 
operation under EQIP;
    (iv) Suggestions on how often producers' EQIP applications are 
ranked and selected;
    (v) Criteria to prioritize applications from applicants with 
significant statewide resource concerns outside a priority area; and

[[Page 398]]

    (vi) Determination of cost share and incentive payment limits for 
participants subject to environmental requirements or with significant 
statewide resource concerns outside a priority area.
    (10) The implementation of the Wildlife Habitat Incentives Program 
(WHIP) (16 U.S.C 3836a);
    (11) The technical merits of proposals submitted for the Farmland 
Protection Program (16 U.S.C. 3830);
    (12) The development of a Wetland Reserve Program (WRP) (16 U.S.C. 
3837) wetland restoration plan;
    (13) Statewide program guidelines applicable to WRP easement 
compensation, restoration planning, priority ranking, and related policy 
matters, 7 CFR part 1467;
    (14) Identification of any categories of wetland conversion 
activities and conditions which are routinely determined by NRCS to have 
minimal effect on wetland functions and values as described in 7 CFR 
part 12.
    (15) Conservation techniques and measures related to achieving 
environmental justice needs; and
    (16) Types or classes of wetland that are not eligible for 
mitigation exemption under the Wetland Conservation provisions of 7 CFR 
part 12.
    (d) The implementing agency reserves the authority to accept or 
reject the Committee's recommendations; however, the implementing USDA 
agency shall give strong consideration to the Committee's suggestions.



Sec. 610.25  Specialized subcommittees.

    In some situations, specialized subcommittees, made up of State 
Technical Committee members, may be needed to analyze and refine 
specific issues. The State Conservationist may assemble certain members 
to discuss, examine, and focus on a particular technical or programmatic 
topic. The subcommittee may seek public participation; however, it is 
not required to do so. Nevertheless, decisions resulting from these 
subcommittee sessions shall be made only in a general session of the 
State Technical Committee, where the public is notified and invited to 
attend.



             Subpart D_Conservation of Private Grazing Land

    Source: 67 FR 68497, Nov. 12, 2002, unless otherwise noted.



Sec. 610.31  Purpose and scope.

    (a) This subpart sets forth the policies for the Conservation of 
Private Grazing Land (CPGL) Program, as authorized by Section 386 of the 
Federal Agriculture Improvement and Reform Act of 1996, (Pub. L. 104-
127, April 4, 1996) 16 U.S.C. 2005b. Under the CPGL Program, NRCS will 
provide technical assistance to landowners and managers who request 
assistance based on locally-established priorities and resource 
concerns. The purpose of the CPGL Program is to provide technical 
assistance to private grazing land owners and managers to voluntarily 
conserve or enhance grazing land resources to meet ecological, economic, 
and social demands.
    (b) The term ``private grazing land'' means private, State-owned, 
tribally owned, and any other non-federally owned rangeland, 
pastureland, grazed forestland, hayland, and other lands used for 
grazing.
    (c) The NRCS Chief may implement the CPGL Program in any of the 50 
States, the District of Columbia, Commonwealth of Puerto Rico, Guam, the 
U.S. Virgin Islands, and American Samoa. NRCS will provide assistance in 
cooperation with conservation districts, or directly to a landowner or 
operator.



Sec. 610.32  Technical assistance furnished.

    (a) Provide technical assistance to grazing-land owners and managers 
to plan and implement resource conservation on grazing land. The 
objective of planning on grazing land is to assist landowners and 
managers in understanding the basic ecological principles associated 
with managing their land. This objective can be met by implementing a 
plan that meets the needs of the resources (soil, water, air, plants, 
and animals) and management objectives of the owner or manager. NRCS may 
provide assistance, at the request of the private grazing-land owner or 
manager to:

[[Page 399]]

    (1) Maintain and improve private grazing land resources that provide 
multiple benefits;
    (2) Ensure the long-term sustainability of private grazing land 
resources;
    (3) Implement new grazing land management technologies;
    (4) Manage resources on private grazing land through conservation 
planning, including, but not limited to; grazing management, nutrient 
management, and weed and invasive species control;
    (5) Maintain and improve water quality and quantity, aquatic and 
wildlife habitat, recreational opportunities, and aesthetics on private 
grazing land;
    (6) Harvest, process, and market private grazing land resources; and
    (7) Identify opportunities to diversify private grazing land 
enterprises.
    (b) Refer to 7 CFR 610.4 on other items relating to technical 
assistance.
    (c) To receive technical assistance, a landowner or manager may 
contact NRCS or the local conservation district to seek assistance to 
solve identified natural resource problems or opportunities. 
Participation in this program is voluntary.



PART 611_SOIL SURVEYS--Table of Contents




                            Subpart A_General

Sec.
611.1 Purpose and scope.
611.2 Cooperative relationships.

                    Subpart B_Soil Survey Operations

611.10 Standards, guidelines, and plans.
611.11 Soil survey information.

                    Subpart C_Cartographic Operations

611.20 Function.
611.21 Availability of aerial photography.
611.22 Availability of satellite imagery.

    Authority: 16 U.S.C. 590a-590f, 590q, 42 U.S.C. 3271-3274.

    Source: 69 FR 60283, Oct. 8, 2004, unless otherwise noted.



                            Subpart A_General



Sec. 611.1  Purpose and scope.

    (a) This part sets forth policy on soil survey operations of the 
Natural Resources Conservation Service (NRCS).
    (b) NRCS is responsible for soil survey activities of the U.S. 
Department of Agriculture (USDA). A soil survey provides:
    (1) An orderly, on-the-ground, scientific inventory of soil 
resources according to their potentialities and problems of use; and
    (2) Information about each kind of soil in sufficient detail to meet 
all reasonable needs of farmers, agricultural technicians, community 
planners, engineers, and scientists in planning and transferring the 
findings of research and experience to specific land areas.



Sec. 611.2  Cooperative relationships.

    (a) Soil surveys on nonfederal lands are carried out cooperatively 
with State agricultural experiment stations and other State agencies. 
The cooperative effort is evidenced in a memorandum of understanding 
setting forth guidelines for actions to be taken by each cooperating 
party in the performance of soil surveys. Similar cooperative 
arrangements exist between NRCS and other Federal agencies for soil 
surveys on Federal lands.
    (b) Arrangements for nonfederal financial participation in the cost 
of soil surveys may be made with States, counties, soil conservation 
districts, planning agencies, and other local groups.



                    Subpart B_Soil Survey Operations



Sec. 611.10  Standards, guidelines, and plans.

    (a) NRCS conducts soil surveys under national standards and 
guidelines for naming, classifying, and interpreting soils and for 
disseminating soil survey information.
    (b) A soil survey Memorandum of Understanding (MOU) is prepared 
prior to the start of each soil survey project, or a work plan is 
prepared for soil survey maintenance activities. These documents provide 
specific details and technical specifications to support the 
interpretive and data needs of the area to be surveyed. The MOU is 
signed by representatives of NRCS, land grant universities, and in some 
States representatives of other State agencies. Federal land 
administering agencies also sign

[[Page 400]]

the MOU if federal lands are included in the survey.



Sec. 611.11  Soil survey information.

    (a) Availability. NRCS disseminates soil survey information to the 
public by any of the means described in paragraph (d) of this section. 
NRCS makes soil survey information available as soon as is practicable 
following field work or other soil survey activity that provides new 
soil survey information.
    (b) Content. Soil survey information conforms with standards and 
meets the needs identified in the soil survey MOU or work plan as 
described in Sec. 611.10 of this part. Soil survey information 
includes:
    (1) Soil maps that delineate the location and extent of various soil 
areas;
    (2) Soil characteristics for each of the soil areas shown on soil 
maps;
    (3) Interpretations of the soil characteristics; and
    (4) Information about the source, version, and applicability or 
limitations associated with the soil survey information.
    (c) Maintenance. Soil survey information is reviewed on a periodic 
basis to ensure that the information continues to meet evolving needs.
    (d) Distribution. Soil survey information is disseminated to the 
public through electronically accessible maps and reports, electronic 
access to data files, or printed documents. To the extent practicable, 
as limited by commonly accepted technology, soil survey information is 
disseminated in electronic form.
    (e) Resource conservation plan data. Information prepared 
specifically for use in developing resource conservation plans for soil 
conservation district cooperators is considered confidential. Soil maps 
and interpretations prepared for this use will not be made available to 
others without the consent of the landowner as well as the district 
governing body. However, soil survey information from which the 
conservation plan was developed may be disseminated as described in 
paragraph (a) of this section.



                    Subpart C_Cartographic Operations



Sec. 611.20  Function.

    The NRCS National Cartography and Geospatial Center provides 
cartographic services needed to carry out NRCS functions. Cartographic 
services include general cartography, photogrammetry, aerial 
photography, planimetric and topographic mapping, drafting, and 
specialized types of reproduction.



Sec. 611.21  Availability of aerial photography.

    The National Cartography and Geospatial Center obtains necessary 
clearance for all aerial photography for NRCS. New aerial photography of 
designated areas in the United States is obtained yearly by NRCS through 
competitive contracting. This photography is obtained only after it is 
determined that imagery of these areas available from other sources does 
not meet NRCS scale and quality requirements. Orders for reproductions 
of NRCS aerial photography are subject to the fee schedule cited in 
Sec. 1.2(b) of this title. Order reproductions from the National 
Cartography and Geospatial center: USDA--National Resources Conservation 
Service; P.O. Box 6567, FWFC-Bldg. 23; 501 W. Felix Street; Forth Worth, 
Texas 76115.



Sec. 611.22  Availability of satellite imagery.

    Cloud-free maps of the United States based on imagery received from 
a satellite are prepared and released to the pubic by NRCS. The maps 
offer the first image of the United States not obscured by clouds or 
distortions. Orders or requests for information should be directed to 
the National Cartography and Geospatial Center, USDA--Natural Resources 
Conservation Service; P.O. Box 6567, FWFC-Bldg. 23; 501 W. Felix Street; 
Forth Worth, Texas 76115. Orders are subject to the fee schedule cited 
in Sec. 1.2(b) of this title.



PART 612_SNOW SURVEYS AND WATER SUPPLY FORECASTS--Table of Contents




Sec.
612.1 Purpose and scope.

[[Page 401]]

612.2 Snow survey and water supply forecast activities.
612.3 Data collected and forecasts.
612.4 Eligible individuals or groups.
612.5 Dissemination of water supply forecasts and basic data.
612.6 Application for water supply forecast service.
612.7 Forecast user responsibility.

    Authority: 26 Stat. 653; Sec. 8, Reorg. Plan No. IV of 1940, 54 
Stat. 1234 (5 U.S.C. App. II); 5 FR 2421, 3 CFR 1938-1943 Comp. P. 1288.

    Source: 40 FR 12067, Mar. 17, 1975, unless otherwise noted.



Sec. 612.1  Purpose and scope.

    This part sets forth Natural Resources Conservation Service (NRCS) 
policy and procedure for the administration of a cooperative snow survey 
and water supply forecast program. The program provides agricultural 
water users and other water management groups in the western states area 
with water supply forecasts to enable them to plan for efficient water 
management. The program also provides the public and the scientific 
community with a data base that can be used to accurately determine the 
extent of the now resource. The western states area comprises Alaska, 
Arizona, California (east side of the Sierra Nevada mountain range 
only), Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, 
Washington, and Wyoming.



Sec. 612.2  Snow survey and water supply forecast activities.

    To carry out the cooperative snow survey and water supply forecast 
program, NRCS:
    (a) Establishes, maintains, and operates manual and automated snow 
course and related hydro meteorological networks. Planning for such 
networks is carried out in accordance with OMB Circular A-62.
    (b) Determines and provides information on the expected water 
supply, including seasonal streamflow data. If pertinent and appropriate 
to the needs of cooperators and not otherwise available to them, may 
provide necessary interpretative analyses and forecasts required for 
operation of water-control structures and/or agricultural operations.
    (c) On request and to the extent NRCS resources and any required 
cooperator contributions are available, establishes hydrometeorological 
stations to cllect and provide data and necessary interpretive analyses 
to the requesting party. By written agreement NRCS may accept 
cooperators' funds, materials, equipment, and services for this purpose.
    (d) Develops and encourages use of new techniques and improving data 
collection and processing.
    (e) Cooperates with other federal, state, and local agencies, 
organizations, and Canadian provinces and agencies.



Sec. 612.3  Data collected and forecasts.

    (a) Basic data are currently collected at numerous sites in the 
western states area. Data sites generally include a snow course where 
both snow depth and water equivalent of snow are measured. However, 
special sites may measure only snow depth or water equivalent. Many of 
these sites also provide related drometeorological data, such as 
precipitation, temperature, humidity, solar tradiation, and wind.
    (b) Water supply forecasts in the western states area are generally 
made monthly from January through June. Forecasts may be made more 
frequently for an established need when data are available to NRCS.



Sec. 612.4  Eligible individuals or groups.

    (a) Any individual or group who is a significant water user and who 
would benefit from a water supply forecast may obtain forecasts from 
NRCS on a regular basis provided data are available to NRCS to develop a 
forecast at the desired location.
    (b) The program collects and interprets data as a service and an aid 
to agricultural interests, particularly those served by or affiliated 
with soil, water, and other conservation districts. Information 
collected by NRCS for these agricutural users is also made available to 
other Federal, State, and private agencies and to the general public 
without charge. Cooperator financial contribution is usually required 
for special measurements or interpretations beyond the scope of the 
regular program.

[[Page 402]]



Sec. 612.5  Dissemination of water supply forecasts and basic data.

    Water supply outlook reports prepared by NRCS and its cooperators 
containing water supply forecasts and basic data are usually issued 
monthly by each NRCS state office in the western states area for the 
months of January through June. Other reports jointly issued by NRCS and 
its cooperators include a fall water supply summary, annual and 
accumulative summaries of data, and a western states area report 
covering water supply outlook.



Sec. 612.6  Application for water supply forecast service.

    Requests for obtaining water supply forecasts or related assistance 
may be directed to any NRCS office in the western states areas. NRCS 
offices are described in part 600 of this chapter.



Sec. 612.7  Forecast user responsibility.

    The forecast user's obligation to the federal government is to give 
appropriate credit and recognition to NRCS for information furnished. 
The Federal Government does not assume any responsibility for management 
decisions the user makes which may be based in whole or part on 
information provided by NRCS.



PART 613_PLANT MATERIALS CENTERS--Table of Contents




Sec.
613.1 Purpose.
613.2 Policy and objectives.
613.3 NRCS responsibilities in plant materials.
613.4 Special production of plant materials.
613.5 Plant materials centers.

    Authority: Pub. L. 74-46, 49 Stat. 163 (16 U.S.C. 590a-f); Pub. L. 
74-210, 50 Stat. 525 (7 U.S.C. 1010-1011)

    Source: 49 FR 12188, Mar. 29, 1984, unless otherwise noted.



Sec. 613.1  Purpose.

    This part provides Natural Resources Conservation Service (NRCS) 
policy on the operations of plant materials centers. The centers have 
responsibilities for assembling, testing, releasing, and providing for 
the commercial production and use of plant materials for programs of 
soil, water, and related resource conservation and development.



Sec. 613.2  Policy and objectives.

    (a) It is NRCS policy to assemble, comparatively evaluate, release, 
and distribute for commercial increase new or improved plant materials 
needed for broad programs of resource conservation and development for 
agriculture, wildlife, urban, recreation, and other land uses and 
environmental needs. It is NRCS policy to conduct plant materials work 
in cooperation with other agencies of the U.S. Department of 
Agriculture, such as the Agricultural Research Service, and with other 
federal and state research agencies including state agricultural 
experiment stations. The emphasis of the NRCS plant materials work is to 
find suitable plants for erosion control adapted to soil and site 
conditions where vegetation is difficult to establish. In contrast, the 
emphasis of research agencies and organizations in plant development is 
to improve economically important crops. The NRCS program of testing and 
releasing new seed-propagated plant materials follows the guidelines in 
``Statement of Responsibilities and Policies Relating to the 
Development, Release, and Multiplication of Publicly Developed Varieties 
of Seed-Propagated Crops,'' which was adopted in June 1972 by land grant 
colleges and interested federal agencies. NRCS releases improved 
conservation plant materials requiring vegetative multiplication in ways 
appropriate for particular states and particular species by working with 
experiment stations, crop improvement associations, and other state and 
federal agencies.
    (b) The objective of the plant materials activity is to select or 
develop special and improved plants, and techniques for their successful 
establishment and maintenance to solve conservation problems and needs 
related to:
    (1) Controlling soil erosion on all lands.
    (2) Conserving water.
    (3) Protecting upstream watersheds.
    (4) Reducing sediment movement into waterways and reservoirs through 
the stabilization of critical sediment sources such as surface mined 
lands,

[[Page 403]]

highway slopes, recreation sites, and urban and industrial development 
areas.
    (5) Stabilizing disposal areas for liquid and solid wastes.
    (6) Improving plant diversity and lengthening grazing season on 
dryland pastures and rangelands.
    (7) Replacing brush on mountain slopes with fire-retarding plant 
cover to reduce the possibility of fires that threaten life and property 
or result in serious sediment sources.
    (8) Improving the effectiveness of windbreaks and shelterbelts for 
reducing airborne sediment, controlling snow drifting, and preventing 
crop damage from wind erosion.
    (9) Protecting streambank, pond, and lake waterlines from erosion by 
scouring and wave action.
    (10) Improving wildlife food and cover.
    (11) Selecting special-purpose plants to meet specific needs for 
environment protection and enhancement.
    (12) Selecting plants that tolerate air pollution agents and toxic 
soil chemicals.



Sec. 613.3  NRCS responsibilities in plant materials.

    NRCS operates or enters into agreements with state universities or 
other state organizations to operate plant materials centers. NRCS 
employs specialists for selecting and using plant materials. NRCS 
responsibilities are to:
    (a) Identify the need for suitable plant materials and cultural and 
management methods in resource conservation and for environmental 
protection and enhancement.
    (b) Assemble and comparatively evaluate plant materials at the plant 
materials centers and on sites where soil, climate, or other conditions 
differ significantly from those at the centers.
    (c) Make comparative field plantings for final testing of promising 
plants and techniques in cooperation with conservation districts and 
other interested cooperators.
    (d) Release cooperatively improved conservation plants and maintain 
the breeder or foundation stocks in ways appropriate for particular 
state and plant species by working with experiment stations, crop 
improvement associations, and other state and federal agencies.
    (e) Produce limited amounts of foundation or foundation-quality seed 
and plants available by grant to or by exchange with conservation 
districts, experiment stations, other federal and state research 
agencies, and state seed certifying organizations that will use the 
material to establish seed fields, seed orchards or plantings for 
vegetative increase.
    (f) Encourage conservation districts, commercial seed producers, and 
commercial and state nurseries to produce needed plant materials for 
conservation uses and to assist them in this production.
    (g) Encourage the use of improved plant materials in resource 
conservation and environmental improvement programs.



Sec. 613.4  Special production of plant materials.

    NRCS can produce plant materials in the quantity required to do a 
specific conservation job if this production will serve the public 
welfare and only if the plant materials are not available commercially. 
This function will be performed only until the plant materials are 
available commercially. Specific production of plant materials by NRCS 
requires the approval of the Chief.



Sec. 613.5  Plant materials centers.

    (a) The National Plant Materials Center. The National Plant 
Materials Center at Beltsville, Maryland, serves as the central facility 
for assembling, increasing, and determining the characteristics of plant 
materials from foreign and domestic sources. Plant materials with 
potential value for conservation and related uses are distributed to 
other plant materials centers.
    (b) Other Plant Materials Centers. There are 23 other plant 
materials centers. Each serves several major land resource areas. 
Seventeen of these other centers are operated by NRCS, and six by 
cooperating agencies, as follows:
    (1) Operated by NRCS:

Tucson, Arizona
Lockeford, California
Brooksville, Florida
Americus, Georgia

[[Page 404]]

Molokai, Hawaii
Aberdeen, Idaho
Manhattan, Kansas
Quicksand, Kentucky
East Lansing, Michigan
Coffeeville, Mississippi
Elsberry, Missouri
Bridger, Montana
Cape May Courthouse, New Jersey
Big Flats, New York
Corvallis, Oregon
Knox City, Texas
Pullman, Washington

    (2) Operated by cooperating agencies with financial and technical 
assistance from NRCS:

Los Lunas, New Mexico (New Mexico State University)
Bismarck, North Dakota (North Dakota Association of Soil Conservation 
Districts)
Meeker, Colorado (White River and Douglas Creek Soil Conservation 
Districts with partial funding from NRCS)

    (3) Operated by cooperating agencies with technical assistance from 
NRCS:

Palmer, Alaska (State of Alaska)
Kingsville, Texas (Caesar Kleberg Wildlife Research Institute, Texas 
Agricultural and Industrial University, and South Texas Association of 
Conservation Districts)
Nacogdoches, Texas (Stephen F. Austin University and the East Texas 
Association of Conservation Districts)



PART 614_APPEAL PROCEDURES--Table of Contents




                      Subpart A_General Provisions

Sec.
614.1 Purpose and scope.
614.2 Definitions.
614.3 Applicability.
614.4 Reservation of authority.
614.5 Decisions not subject to appeal.

      Subpart B_Appeals of Technical Determinations Related to the 
  Conservation Title (Title XII) of the Food Security Act of 1985, as 
                                 Amended

614.100 Applicability.
614.101 Notice of preliminary technical determinations.
614.102 Mediation of preliminary technical determinations.
614.103 Final determinations.
614.104 Appeals of technical determinations.

  Subpart C_Appeals of Decision Related to Conservation Programs (non-
                               Title XII)

614.200 Applicability.
614.201 Notice of final decisions.
614.202 Time frames for filing requests for informal hearings.
614.203 Mediation of adverse final decisions.
614.204 Appeals of adverse final decisions.

    Authority: 5 U.S.C. 301, sections 226 and 275 of Pub. L. 103-354 (7 
U.S.C. 6932 and 6995); 16 U.S.C. 3843(a).

    Source: 60 FR 67313, Dec. 29, 1995, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 614.1  Purpose and scope.

    This part sets forth the informal procedures under which a landowner 
or program participant may appeal adverse technical determinations or 
decisions made by officials of the Natural Resources Conservation 
Service (NRCS) or its successor agency.



Sec. 614.2  Definitions.

    Adverse technical determination or decision includes, in addition to 
the definition of adverse decision in 7 CFR part 11, an NRCS technical 
determination or decision that affects the legal substantive status of 
the land, though it may not necessarily be adverse.
    Chief means the Chief of NRCS. For the purposes of this part, the 
term ``Chief'' includes an official of NRCS national headquarters 
designated by the Chief to act for the Chief in making decisions under 
this part.
    Conservation district means any district or unit of State or local 
government formed under State law or territorial law for the express 
purpose of developing and carrying out a local soil and water 
conservation program. Such district or unit of government may be 
referred to as a conservation district, soil conservation district, soil 
and water conservation district, natural resource district, land 
conservation committee, or a similar name.
    County committee means a Farm Service Agency (FSA) county or area 
committee established in accordance with section 8(b) of the Soil 
Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)).
    Decision means a conclusion reached by an NRCS official based on 
applicable regulations and program instructions which relates to 
eligibility for program benefits, including a technical

[[Page 405]]

determination used as a basis for the decision.
    Designated conservationist means the NRCS official, usually the 
district conservationist, whom the State Conservationist designates to 
be responsible for the program or compliance requirement to which this 
part is applicable.
    Mediation means a process in which a neutral third party, the 
mediator, meets with the disputing parties (e.g., the landowner or 
program participant and the agency), facilitates discussions, and works 
with the parties to resolve their disputes, narrow areas of 
disagreement, and improve communications and relationships. A mediator 
has no authority to render a decision or determination.
    Preliminary technical determination means the initial written 
technical determination provided to a client which will become final 
after 30 days unless the client takes action in accordance with Sec. 
614.101 to stay the preliminary technical determination from becoming 
final.
    State Conservationist means the NRCS official in charge of NRCS 
operations within a State, as set forth in part 600 of this chapter.
    Technical determination means a conclusion concerning the status and 
condition of the natural resources and cultural practices based on 
science and best professional judgment of natural resource professionals 
concerning the soils, water, air, plants, and animals.
    Refer to 7 CFR 11.1 for other definitions applicable to appeals of 
adverse technical determinations and decisions covered by this part.



Sec. 614.3  Applicability.

    (a) Appeals of adverse technical determinations and adverse 
decisions covered by this part are also governed by National Appeals 
Division (NAD) regulations at 7 CFR part 11.
    (b) Decisions which are subject to this part include any decision 
under one or more NRCS programs; and technical determinations or 
decisions that affect the status of the land even though they may not 
affect the landowner's or program participant's eligibility for USDA 
program benefits.
    (c) The failure of an official of NRCS to issue a technical 
determination or decision is subject to this part.
    (d) Complaints involving discrimination in program delivery will be 
handled under the existing USDA civil rights rules and regulations.
    (e) Appeals on contractual issues that are subject to the 
jurisdiction of the Agriculture Board of Contract Appeals are not 
appealable under the procedures within this part.



Sec. 614.4  Reservation of authority.

    Nothing contained in the regulations of this part shall preclude the 
Secretary of Agriculture or the Chief from determining at any time any 
question arising under the programs to which the regulations of this 
part apply, or from reversing or modifying in writing, with sufficient 
reason given therefore, any technical determination or decision made by 
an NRCS official.



Sec. 614.5  Decisions not subject to appeal.

    The following are examples of decisions which are not appealable:
    (a) General program requirements that apply to all participants;
    (b) Science-based formulas and criteria;
    (c) Procedural decisions relating to administration of the programs; 
and
    (d) Denials of assistance due to lack of funds or authority.



      Subpart B_Appeals of Technical Determinations Related to the 
  Conservation Title (Title XII) of the Food Security Act of 1985, as 
                                 Amended



Sec. 614.100  Applicability.

    The provisions of this subpart set forth the procedures under which 
a landowner or program participant may seek mediation of a preliminary 
technical determination or appeal from technical determinations made by 
NRCS officials on or after January 16, 1996 regarding technical 
determinations within the following programs:
    (1) Highly Erodible Land Conservation;
    (2) Wetland Conservation, including wetland technical determinations

[[Page 406]]

made by NRCS officials not related to a request for USDA program 
benefits;
    (3) Conservation Reserve Program;
    (4) Wetlands Reserve Program;
    (5) Agricultural Water Quality Incentives Program; and
    (6) Environmental Easement Program.



Sec. 614.101  Notice of preliminary technical determinations.

    (a) All preliminary technical determinations related to programs 
provided for in Sec. 614.100 shall be in writing and shall inform the 
landowner or program participant of the following:
    (1) The preliminary technical determination will become final after 
30 days if the landowner or program participant does not arrange with 
the designated conservationist for either or both of the following 
options:
    (i) A field visit to the site to gather additional information and 
to discuss the facts concerning the preliminary technical determination, 
together with, at the option of the conservation district, a district 
representative; and
    (ii) Mediation.
    (2) Once the technical determination is final, the landowner or 
program participant may appeal the technical determination to the FSA 
county or area committee pursuant to 7 CFR part 780. Landowners or 
program participants wishing to appeal must exhaust any available appeal 
procedures through the FSA county committee prior to appealing to NAD. 
Judicial review is available only as specified in 7 CFR part 11.
    (b) The document containing the preliminary technical determination 
shall be mailed or hand delivered to the landowner or program 
participant.



Sec. 614.102  Mediation of preliminary technical determinations.

    (a)(1) Any dispute with respect to a preliminary technical 
determination related to the programs provided in Sec. 614.100 shall, 
at the request of the landowner or program participant, be mediated:
    (i) Through certified individuals in those States where a State 
mediation program certified by the United States Department of 
Agriculture (USDA) has been established. Conservation district officials 
in certified State Mediation Program States may become certified by the 
State and utilized for mediation, if they choose to participate.
    (ii) In States with no certified mediation program in effect, 
through mediation by a qualified representative of a local conservation 
district, if a local conservation district chooses to participate. Upon 
mutual agreement of the parties, other individuals may serve as 
mediators.
    (2) Upon receiving a request for mediation, NRCS shall notify other 
USDA and Federal agencies, as appropriate.
    (b) The parties shall have not more than 30 days to reach an 
agreement following a mediation session. The mediator shall notify the 
designated conservationist in writing at the end of this period whether 
the parties reached an agreement. Any agreement reached during, or as a 
result of, the mediation process shall conform to the statutory, 
regulatory, and manual provisions governing the program.



Sec. 614.103  Final determinations.

    (a) Preliminary technical determinations shall become final:
    (1) 30 days after receipt by the landowner or program participant of 
the notice of a preliminary technical determination issued pursuant to 
Sec. 614.101, unless a field visit or mediation is requested;
    (2) After the earlier of 30 days after the field visit provided for 
under Sec. 614.101(a) or receipt by the landowner or program 
participant of a final determination from the designated 
conservationist; or
    (3) 30 days after a mediation session if a mutual agreement has not 
been reached by the parties.
    (b) The final technical determination shall set forth the decision, 
the basis for the decision, including all factors, technical criteria, 
and facts relied upon in making the decision, and shall inform the 
landowner or program participant of the procedure for requesting and 
pursuing further review.



Sec. 614.104  Appeals of technical determinations.

    (a) Technical determinations related to the programs in Sec. 
614.100 may only be appealed, pursuant to the provisions of

[[Page 407]]

7 CFR part 780, to the FSA county committee with jurisdiction.
    (b) In cases where a field visit has not already been completed in 
accordance with Sec. 614.101(a), a field visit shall be completed by 
the designated conservationist before the FSA county committee considers 
the appeal.
    (c) If the FSA county committee hearing the appeal requests review 
of the technical determination by the applicable State Conservationist 
prior to issuing their decision, the State Conservationist may:
    (1) Designate an appropriate NRCS official to gather any additional 
information necessary for review of the technical determination;
    (2) Obtain additional oral and documentary evidence from any party 
with personal or expert knowledge about the facts under review; and
    (3) Conduct a field visit to review and obtain additional 
information and to discuss the facts concerning the technical 
determination. The State Conservationist shall provide the applicable 
FSA county committee with a written technical determination, including 
all factors, technical criteria, and facts relied upon in making the 
technical determination.
    (d) Any landowner or program participant who is adversely affected 
by a decision of the FSA county committee may appeal to NAD in 
accordance with 7 CFR part 11.



  Subpart C_Appeals of Decisions Related to Conservation Programs (non-
                               Title XII)



Sec. 614.200  Applicability.

    The provisions of this subpart set forth the procedures under which 
a landowner or program participant may seek an informal hearing on 
adverse decisions made by NRCS officials (exclusive of those decisions 
that are appealable to the USDA Board of Contract Appeals) after January 
16, 1996 in the following program areas:
    (1) Great Plains Conservation Program;
    (2) Rural Abandoned Mine Program;
    (3) Emergency Watershed Projects;
    (4) Rural Clean Water Program;
    (5) Colorado River Basin Salinity Control Program;
    (6) Forestry Incentive Program;
    (7) Water Bank Program;
    (8) Flood Prevention and Watershed Protection Programs;
    (9) Any other program which subsequently incorporates these 
procedures through reference to this subpart within the program 
regulations.



Sec. 614.201  Notice of final decisions.

    (a) All final decisions related to programs provided for in Sec. 
614.200 that are made by the designated conservationist shall be in 
writing and shall inform the landowner or program participant of their 
right to request any or all of the following:
    (1) An informal hearing before NRCS;
    (2) Mediation; or
    (3) A hearing before NAD in accordance with 7 CFR part 11.
    (b) The document containing the decision shall be mailed or hand 
delivered to the landowner or program participant.



Sec. 614.202  Time frames for filing requests for informal hearings.

    (a) A request for an informal hearing before NRCS shall be filed 
within 30 days after written notice of the final decision, which is the 
subject of the request, is mailed or otherwise made available to the 
landowner or program participant. A request for an informal hearing 
shall be considered ``filed'' when personally delivered in writing to 
the appropriate reviewing authority or when the properly addressed 
request, postage paid, is postmarked.
    (b) A request for appeal may be accepted and acted upon even though 
it is not filed within the time prescribed in paragraph (a) of this 
section if, in the judgment of the reviewing authority with whom such 
request is filed, the circumstances warrant such action.



Sec. 614.203  Mediation of adverse final decisions.

    (a) Any dispute with respect to an adverse final decision related to 
the programs provided in Sec. 614.200 shall, at the request of the 
landowner or program, be mediated:
    (1) Through certified individual in those States where a State 
Mediation Program has been established. Conservation district officials 
in certified

[[Page 408]]

State Mediation Program States may become certified by the State and 
utilized for mediation, if they choose to participate.
    (2) In States where no certified mediation program is in effect, 
through mediation by a qualified representative of a local conservation 
district, if a local conservation district chooses to participate. Upon 
mutual agreement of the parties, other individuals may serve as 
mediators.
    (b)(1) The parties shall have not more than 30 days to reach an 
agreement following a mediation session. The mediator shall notify the 
designated conservationist in writing at the end of this period whether 
the parties reached an agreement.
    (2) Any agreement reached during, or as a result of, the mediation 
process shall conform to the statutory, regulatory, and manual 
provisions governing the program.
    (3) If the parties fail to reach an agreement within the specified 
period, the designated conservationist shall have up to 30 days after 
the conclusion of mediation to issue a final decision.



Sec. 614.204  Appeals of adverse final decisions.

    (a) Any landowner or program participant, who is adversely affected 
by a decision made by a designated conservationist related to the 
programs in Sec. 614.200, may appeal the decision to the State 
Conservationist in the applicable State for an informal hearing or to 
NAD in accordance with 7 CFR part 11.
    (b) The State Conservationist may designate a NRCS official to 
gather information and conduct the informal hearing before making a 
decision.
    (c) Any landowner or program participant who is adversely affected 
by a decision of the State Conservationist may appeal to NAD in 
accordance with 7 CFR part 11.

[[Page 409]]



                      SUBCHAPTER C_WATER RESOURCES





PART 621_RIVER BASIN INVESTIGATIONS AND SURVEYS--Table of Contents




                            Subpart A_General

Sec.
621.1 Purpose.
621.2 Scope.

                   Subpart B_USDA Cooperative Studies

621.10 Description.
621.11 Who may obtain assistance.
621.12 How to request assistance.
621.13 Conditions for approval.
621.14 Recipient responsibility.

               Subpart C_Floodplain Management Assistance

621.20 Description.
621.21 Who may obtain assistance.
621.22 How to request assistance.
621.23 Conditions for approval.
621.24 NRCS responsibility.
621.25 Recipient responsibility.

 Subpart D_Joint Investigations and Reports With the Department of the 
                                  Army

621.30 Description.
621.31 Who may request assistance.
621.32 How to request assistance.
621.33 Conditions for approval.
621.34 Recipient responsibility.

                   Subpart E_Interagency Coordination

621.40 Participation in Federal interagency policy activities at the 
          national level.
621.41 Participation in Federal-State policy and planning activities at 
          the regional level.
621.42 Federal-State compacts.
621.43 Interstate compacts and commissions.
621.44 Special studies.
621.45 Flood insurance studies.

    Authority: Sec. 6 (Pub. L. 83-566) 68 Stat. 666 (16 U.S.C. 1006).

    Source: 48 FR 18788, Apr. 26, 1983, unless otherwise noted.



                            Subpart A_General



Sec. 621.1  Purpose.

    This part describes policies, requirements, and procedures governing 
the Department of Agriculture's (USDA's) investigations and surveys of 
watersheds of rivers and other waterways as a basis for developing 
coordinated programs. These activities are undertaken in cooperation 
with other Federal, State, and local agencies. The delegation of 
authority to the Natural Resources Conservation Service (NRCS) to 
provide national leadership for the conservation, development, and 
productive use of the Nation's soil, water, and related resources, 
including the activities treated in this part is found at Sec. 2.62 of 
this title.



Sec. 621.2  Scope.

    USDA river basin activities include:
    (a) Cooperative river basin surveys in coordination with Federal, 
State, and local agencies;
    (b) Floodplain management assistance in coordination with the 
responsible State agency and involved local governments;
    (c) Joint investigations and reports with the Department of the Army 
under Pub. L. 87-639, 76 Statute 438 (16 U.S.C. 1009); and
    (d) Interagency coordination of water resources activities.



                   Subpart B_USDA Cooperative Studies



Sec. 621.10  Description.

    Cooperative river basin studies provide USDA planning assistance to 
Federal, State, and local governments. The purpose of these studies is 
to assist in appraising water and related land resources; defining and 
determining the extent of the problems; and formulating alternative 
plans, including land treatment, nonstructural or structural measures, 
or combinations thereof, that would solve existing problems or meet 
existing and projected needs. These studies concentrate on specific 
objectives identified by the requesting agencies and citizen groups that 
are consistent with USDA authorities and responsibilities and current 
NRCS priorities. The objectives ordinarily include the formulation of a 
plan but may require only inventories of available resources and 
associated problems to be used by other agencies in plan

[[Page 410]]

formulation. USDA assistance is provided through field advisory 
committees composed of representatives of the Economic Research Service, 
Forest Service, and NRCS. The NRCS representative chairs the field 
advisory committee.



Sec. 621.11  Who may obtain assistance.

    Assistance is available to conservation districts, communities. 
county governments, regional planning boards, other planning groups, and 
State and Federal agencies. Local groups express their desires for a 
cooperative study to the governor or appropriate State agency.



Sec. 621.12  How to request assistance.

    For a cooperative study a governor, or a Federal, State, or local 
government agency must submit a written request and a Proposal to Study 
(PTS) through the NRCS State Conservationist to the Chief. Assistance in 
preparing the proposal may be obtained by contacting the State 
Conservationist. The State Conservationist sends the request and 
proposal with comments to the Chief for consideration. The proposal 
should:
    (a) Describe the basin or study area, including a map of the study 
area;
    (b) Explain the need for the study;
    (c) Explain the need for USDA participation;
    (d) State the responsibility and authority of the requesting agency 
in the study;
    (e) Estimate the extent of participation of other Federal and State 
agencies;
    (f) Discuss views and priorities of affected soil conservation 
districts regarding the proposed study;
    (g) Briefly describe the intended management organization of the 
study;
    (h) Specifically describe the expected results of the study;
    (i) Identify primary users of the study results and the manner in 
which the results will be used;
    (j) State the relationship of the study to ongoing and completed 
river basin studies;
    (k) State that procedures for informing clearinghouses and for 
eliciting public participation will be followed;
    (l) Estimate the duration and scope of the study; and
    (m) Estimate the study costs by year and agency.



Sec. 621.13  Conditions for approval.

    The Chief may authorize requested cooperative studies recommended by 
the State Conservationist. Priority for starting cooperative studies is 
based on the date of application, the readiness of the requesting agency 
to begin participation, the importance and significance of problems to 
be studied, the monetary or in-kind contributions toward the study, the 
sequence of ongoing and future studies, the type of study, the duration 
of study, the cost of study, the potential for implementation and other 
factors affecting the effectiveness and efficiency of the study. The 
number and location of cooperative studies started each year are 
governed by the availability of USDA funds and personnel.



Sec. 621.14  Recipient responsibility.

    Leadership in arrangements for other needed Federal, State, and 
local agency participation is responsibility of the requesting agency. 
Consistent with national objectives and NRCS policy and procedures, the 
requesting agency has leadership responsibility for developing specific 
study objectives, providing the necessary study organization, and 
ensuring public participation in the planning process.



               Subpart C_Floodplain Management Assistance



Sec. 621.20  Description.

    Floodplain management studies provide needed information and 
assistance to local and State entities so that they can implement 
programs for reducing existing and future flood damages in rural and 
urban communities. Assistance is targeted to communities where flood 
damage is a serious concern and local governments are sincerely 
interested in taking action to reduce damage.



Sec. 621.21  Who may obtain assistance.

    Assistance is available to conservation districts, communities, 
county

[[Page 411]]

governments, regional planning boards, other planning groups, and State 
and Federal agencies.



Sec. 621.22  How to request assistance.

    (a) A conservation district, local community or other jurisdiction 
may request floodplain management assistance for a local area for which 
they are responsible, by letter to the governor or the agency of State 
government responsible for floodplain management activities. Assistance 
in making application may be obtained by contacting any NRCS office.
    (b) The governor or his designee may request floodplain management 
assistance for the State by submitting a written request to the State 
Conservationist.



Sec. 621.23  Conditions for approval.

    (a) USDA floodplain management studies are authorized by the 
Director of the Basin and Area Planning Division. Priority for starting 
floodplain management studies is based on the same factors as for USDA 
Cooperative Studies as described in Sec. 621.13.
    (b) A study for an individual community may be started upon 
completion of a plan of work in which the Director of the Basin and Area 
Planning Division concurs and for which funds are available. Preparation 
of the plan of work is the responsibility of and must be approved by the 
applicant, the responsible State agency, and the State Conservationist. 
The plan sets forth the responsibilities of the applicant, the State, 
and USDA in carrying out the study and interpreting and using the data 
in a local floodplain management program. The State agency responsible 
for floodplain management activities may establish priorities on which 
to base the sequence of approval of floodplain management studies within 
its State. The number of studies started each Federal fiscal year is 
governed by the availability of funds and personnel and the amount of 
State and local assistance available.
    (c) States and communities are encouraged to make monetary or in-
kind contributions toward the floodplain management study. The State and 
local share may reflect in-kind contributions in lieu of fund transfers.



Sec. 621.24  NRCS responsibility.

    NRCS is responsible for providing leadership for scheduling and 
implementing the technical phases of the studies and preparing the 
reports. NRCS assists in interpreting the study results.



Sec. 621.25  Recipient responsibility.

    The State agency is responsible for developing State priorities for 
floodplain management studies and coordinating this work with related 
activities in the State. The cooperating local government entity is 
responsible for obtaining permission for carrying out field surveys. The 
State and local participants assist in distributing and interpreting the 
report and providing public information and educational services.



 Subpart D_Joint Investigations and Reports With the Department of the 
                                  Army



Sec. 621.30  Description.

    (a) As provided by Pub. L. 87-639, joint investigations and reports 
by USDA and the Department of the Army may be authorized by resolutions 
adopted by the Committee on Environment and Public Works of the U.S. 
Senate or the Committee on Public Works and Transportation of the U.S. 
House of Representatives for any watershed area in the 50 States, the 
Commonwealth of Puerto Rico, and the U.S. Virgin Islands if the nature 
of the watershed area problems dictates need for a joint effort by the 
two Departments.
    (b) Authorized joint investigations and reports are made to 
determine works of improvement needed in the study area for flood 
prevention; for the conservation, development, use, and disposal of 
water; for flood control; for the conservation and proper use of land; 
and for allied purposes. The joint report to Congress may include a 
water and related land resources plan recommended for implementation. 
Such an implementation plan must be accompanied by an environmental 
impact statement (EIS) and must be in sufficient detail to permit its 
implementation.

[[Page 412]]

    (c) As mutually agreed by USDA and the Department of the Army Corps 
of Engineers, the report and EIS are forwarded to Congress through 
appropriate channels after technical, public, and interagency reviews in 
accordance with NRCS policy as described in Sec. 622.34, or in 
accordance with the Corps of Engineers' policy concerning technical and 
public review. Implementation of these plans is contingent on 
congressional action.



Sec. 621.31  Who may request assistance.

    Any organization, group, or State or local government may request 
assistance.



Sec. 621.32  How to request assistance.

    Applicants for a joint investigation and report should request their 
congressional representative(s) to initiate appropriate action under 
Pub. L. 87-639.



Sec. 621.33  Conditions for approval.

    A joint investigation and report is authorized by a resolution of 
the Committee on Environment and Public Works of the U.S. Senate or the 
Committee on Public Works and Transportation of the U.S. House of 
Representatives. Studies are initiated when funds for them are 
appropriated by the Congress.



Sec. 621.34  Recipient responsibility.

    Participating local and State governments work with USDA and the 
Department of the Army representatives in developing objectives, 
collecting data, analyzing problems, planning and formulating proposals, 
and considering financial plans. Active public participation is 
solicited in the planning process through means such as questionnaires, 
public meetings, citizen advisory boards, and technical committees.



                   Subpart E_Interagency Coordination



Sec. 621.40  Participation in Federal interagency policy activities at 
the national level.

    (a) Policy development in water and related land resources is 
coordinated at the Federal level through the Cabinet Council on Natural 
Resources and Environment. NRCS provides staff support and 
representation in these activities as requested.
    (b) Within the Department, all interested USDA agencies participate 
in water policy development through the USDA Committee on Natural 
Resources and Environment and the Water Issues Work Group.
    (c) NRCS provides appropriate staff support when requested for 
committees, work groups, and task forces established for interagency 
coordination of water resources related activities of Federal agencies.



Sec. 621.41  Participation in Federal-State policy and planning 
activities at the regional level.

    (a) NRCS has a responsibility to represent the Department when 
needed to assist regional water planning entities and interagency 
committees which coordinate water resources planning activities.
    (b) For the Arkansas-White-Red Basin Interagency Committee (AWRBIAC) 
and the Pacific Southwest Interagency Committee (PSIAC), the USDA member 
periodically serves as chairperson and provides an executive secretary. 
For the Southeast Basin Interagency Committee (SEBIAC), NRCS 
periodically provides an executive secretary for the chairperson, who is 
a State government official.
    (c) Under the leadership of NRCS, other USDA agencies, principally 
the Forest Service and Economic Research Service, also participate.



Sec. 621.42  Federal-State compacts.

    NRCS is designated to represent USDA in assisting the U.S. 
Commissioners of the Delaware River Basin Commission and the Susquehanna 
River Basin Commission. In carrying out this responsibility, NRCS 
provides a liaison officer to work with the U.S. Commissioners on policy 
level matters, as well as providing the USDA representatives on the 
Federal field committees to assist the Commissioners.



Sec. 621.43  Interstate compacts and commissions.

    As assigned, an NRCS State Conservationist is the USDA point of 
contact for governing bodies of interstate compacts and commissions 
concerned

[[Page 413]]

with the conservation, development, and proper use of water, soil, and 
related resources.



Sec. 621.44  Special studies.

    As designated, NRCS represents USDA on special study groups such as 
for the Colorado River Basin Salinity Control Program Studies.



Sec. 621.45  Flood insurance studies.

    As requested by the Federal Emergency Management Agency (FEMA), and 
within the limits of available resources, NRCS carries out flood 
insurance studies of various types under the National Flood Insurance 
Program (Pub. L. 90-448, 82 Statute, 574 (42 U.S.C. 4012)), as amended. 
In this activity, NRCS performs detailed technical studies to determine 
the extent and frequency of flooding. The flood insurance program is 
administered by FEMA. NRCS is reimbursed by that agency for actual costs 
incurred in carrying out the studies. Local entities desiring flood 
insurance coverage should contact the responsible State agency or FEMA 
and apply in accordance with procedures of that agency.



PART 622_WATERSHED PROJECTS--Table of Contents




                            Subpart A_General

Sec.
622.1 Purpose.
622.2 Scope.
622.3 Relationship to the Pub. L. 78-534 Program.
622.4 Relationship to other agencies.
622.5 Guidelines.
622.6 Equal opportunity.
622.7 Notification under Executive Order 12372.

                        Subpart B_Qualifications

622.10 Sponsors.
622.11 Eligible watershed projects.

                     Subpart C_Application Procedure

622.20 Application.
622.21 State agency approval.

                           Subpart D_Planning

622.30 General.
622.31 Basic planning efforts.
622.32 Reviews and approvals.

    Authority: Pub. L. 83-566, 68 Stat. 666 as amended (16 U.S.C. 1001, 
et seq.); Pub. L. 78-534, 58 Stat. 889, 33 U.S.C. 701b-1.

    Source: 49 FR 6078, Feb. 17, 1984, unless otherwise noted.



                            Subpart A_General



Sec. 622.1  Purpose.

    This part sets forth the general policies for planning and carrying 
out watershed projects under Pub. L. 83-566, 68 Stat. 666 (16 U.S.C. 
1001 et seq.) and flood prevention projects under Pub. L. 78-534, 58 
Stat. 889 (33 U.S.C. 701b-1).



Sec. 622.2  Scope.

    (a) To assist sponsors in preparing and carrying out watershed 
plans, the Natural Resources Conservation Service (NRCS) shall conduct 
investigations and surveys, with the cooperation and assistance of other 
Federal agencies, to:
    (1) Determine the extent of watershed problems and needs, and
    (2) Set forth viable alternative solutions consistent with local, 
regional, and national objectives, including an alternative solution 
which makes the greatest net contribution to national economic 
development.
    (b) Alternatives will consist of either land treatment, 
nonstructural or structural measures, or combinations thereof that will 
help accomplish one or more of the authorized project purposes.
    (c) Authorized project purposes are watershed protection, 
conservation and proper utilization of land, flood prevention, 
agricultural water management including irrigation and drainage, public 
recreation, public fish and wildlife, municipal and industrial water 
supply, hydropower, water quality management, ground water supply, 
agricultural pollution control, and other water management.
    (d) After a final plan for works of improvement is agreed upon 
between NRCS and the sponsors and the approval processes are completed, 
NRCS will provide technical and financial assistance to install the 
project, subject to the availability of funds and the budgeting and 
fiscal policies of the President.

[[Page 414]]



Sec. 622.3  Relationship to the Pub. L. 78-534 Program.

    (a) General. The purposes and objectives of the programs under Pub. 
L. 83-566 and Pub. L. 78-534 are the same in most cases. Planning 
criteria, economic justification, local sponsorship, agency 
participation, financial assistance, eligible measures, operation and 
maintenance arrangements for the Pub. L. 78-534 program are consistent 
with those of the Pub. L. 83-566 program. The differences with the Pub. 
L. 78-534 program are outlined below.
    (b) Initiation. Flood prevention projects are individually 
authorized by Federal legislation. The state conservationist and the 
sponsors agree on a plan of action and notify interested parties to 
solicit their participation. The sponsors keep the public informed and 
solicit their views and comments.
    (c) Subwatershed plans. These plans are administratively approved by 
the state conservationist. If the plan involves purposes other than 
flood prevention, clearance must be obtained from the Office of 
Management and Budget before approval. Financial assistance available 
differs only in that program funds may be used for the purchase of land 
rights for single-purpose flood prevention structures and installing 
land treatment on Federal lands.
    (d) Installation. NRCS shall award and administer contracts for the 
installation of project measures unless the sponsors agree to perform 
the work. Project agreements between the sponsors and NRCS are not 
required if the work consists of flood prevention structures built and 
funded by NRCS.



Sec. 622.4  Relationship to other agencies.

    NRCS will coordinate responsibilities with other water and land 
resource development agencies on projects that may come under the 
jurisdictions of various authorities. This will include any land 
management agencies which may have land which would be affected by 
project measures. Coordination with the U.S. Department of the 
Interior's Fish and Wildlife Service will be in accordance with section 
12 of Pub. L. 83-566 (as amended).



Sec. 622.5  Guidelines.

    Guidelines for carrying out programs authorized under Pub. L. 83-566 
and Pub. L. 78-534 are contained in miscellaneous instructions, manuals, 
and handbooks issued by the Natural Resources Conservation Service, 
Regulations for Implementing NEPA (40 CFR Parts 1500-1508) issued by the 
Council on Environmental Quality, and in Economic and Environmental 
Principles and Guidelines for Water and Related Land Resources 
Implementation Studies issued by the Water Resources Council. Watershed 
projects are to be planned and carried out in a way that will conform to 
conditions mandated by the above and other applicable laws, Executive 
orders, and codified rules.



Sec. 622.6  Equal opportunity.

    The Pub. L. 83-566 and Pub. L. 78-534 programs will be conducted in 
compliance with all requirements respecting nondiscrimination as 
contained in the Civil Rights Act of 1964, as amended, and in the 
regulations of the Secretary of Agriculture (7 CFR Part 15), which 
provide that no person in the United States shall, on the grounds of 
race, color, national origin, sex, age, handicap, or religion be 
excluded from participation in, be denied the benefits of, or be 
otherwise subjected to discrimination under any program or activity 
conducted or assisted by the Department of Agriculture.



Sec. 622.7  Notification under Executive Order 12372.

    This program is covered under Executive Order 12372, 
``Intergovernmental Review of Federal Programs'' and 7 CFR Part 3015, 
Subpart V, ``Intergovernmental Review of the Department of Agriculture 
Programs and Activities.'' State processes or directly affected State, 
areawide, regional and local officials and entities have 60 days for 
comment starting from the date of submission of the application to the 
State Single Point of Contact.



                        Subpart B_Qualifications



Sec. 622.10  Sponsors.

    (a) Watershed projects are sponsored by one or more local 
organizations

[[Page 415]]

qualifying as sponsors. All watershed plans shall be sponsored by 
entities legally organized under State law or by any Indian tribe or 
tribal organization having the authority to carry out, operate and 
maintain works of improvement. Those plans that incorporate the use of 
nonstructural or structural measures shall be sponsored by organizations 
that, individually or collectively, have:
    (1) The power of eminent domain,
    (2) The authority to levy taxes or use other adequate funding 
sources, including state, regional, or local appropriations, to finance 
their share of the project cost and all operation and maintenance costs.
    (b) To receive Federal assistance for project installation, sponsors 
must commit themselves to use their powers and authority to carry out 
and maintain the project as planned.



Sec. 622.11  Eligible watershed projects.

    (a) To be eligible for Federal assistance, a watershed project must:
    (1) Meet the definition of a watershed area as defined in NRCS's 
National Watersheds Manual.
    (2) Not exceed 250,000 acres in size.
    (3) Not include any single structure that provides more than 12,500 
acre-feet of floodwater detention capacity nor more than 25,000 acre-
feet of total capacity.
    (4) Have significant land or water management problems that can be 
solved or alleviated by measures for watershed protection, flood 
prevention, drainage, irrigation, recreation, fish and wildlife, 
municipal or industrial water supply, or other water management.
    (5) Produce substantial benefits to the general public, to 
communities, and to groups of landowners.
    (6) Cannot be installed by individual or collective landowners under 
alternative cost-sharing assistance.
    (7) Have strong local citizen and sponsor support through agreement 
to obtain land rights, contribute the local cost of construction, and 
carry out operation and maintenance.
    (b) Works and improvement that may be included in a watershed 
project are those that:
    (1) Contribute to reducing floodwater, erosion, and sediment 
damages.
    (2) Further the conservation, development, utilization, and disposal 
of water and the conservation and proper utilization of land.
    (3) Have the greatest net national economic benefits consistent with 
protecting the Nation's environment (for structural water resource 
projects) relative to alternative works, unless an exception is granted 
by the Secretary.



                     Subpart C_Application Procedure



Sec. 622.20  Application.

    Sponsors shall follow State developed procedures (based on Executive 
Order 12372) for coordination of proposed Federal financial assistance 
and also USDA's 7 CFR part 3015 in applying for Pub. L. 83-566 
assistance. Standard forms for Federal assistance or other approved 
forms may be obtained from NRCS State, area, or field offices. These 
forms should be submitted to the Single Point of Contact in accordance 
with the State developed procedures.



Sec. 622.21  State agency approval.

    The governor or designated State agency will approve or disapprove 
the application. If disapproved, no further action is required of NRCS. 
If approved or not disapproved within 45 days, the application shall be 
sent to the NRCS state conservationist. After the state conservationist 
has determined that the application is legally valid, he will notify the 
sponsor of receipt of the application. If found not legally valid, the 
state conservationist will return it to the originator with an opinion.



                           Subpart D_Planning



Sec. 622.30  General.

    (a) Watershed projects are to be planned and carried out in a way 
that will (1) minimize all adverse impacts, and (2) mitigate unavoidable 
losses to the maximum practicable degree. Projects must comply with the 
requirements of the National Environmental Policy Act of 1969 (Pub. L. 
91-190, 83 Stat. 852) (42 U.S.C. 4321 et seq.).
    (b) Fish and Wildlife enhancement measures proposed by Federal or 
State

[[Page 416]]

fish and wildlife agencies will be included if they are technically and 
economically feasible and are acceptable to the sponsors and the NRCS. 
If additional sponsors are needed to carry out the recommended fish and 
wildlife measures, NRCS will assist fish and wildlife agencies in 
attempting to obtain such sponsors.
    (c) All planning efforts by NRCS and the sponsors must include well 
publicized public meetings to obtain public input and views on the 
project.



Sec. 622.31  Basic planning efforts.

    Upon receipt of an application, the NRCS will make any necessary 
field studies and develop a report to justify the need for planning 
effort. Once planning is authorized by the Chief of NRCS, a watershed 
plan-environmental impact statement (plan-EIS) or a watershed plan-
environmental assessment (plan-EA) will be prepared by NRCS to request 
funding. This effort must be coordinated with other State and Federal 
agencies.



Sec. 622.32  Reviews and approvals.

    (a) The watershed plan-environmental impact statement (or 
assessment) will be subject to internal technical reviews, sponsor and 
other local party review, interagency review by other Federal, state, 
and concerned groups, and a final review as stated in NRCS's National 
Watersheds Manual.
    (b) After thorough review by NRCS and other agencies, the NRCS and 
the sponsors shall accept the plan-EIS or plan-EA by signing the 
watershed agreement. The watershed plan must be approved by the 
Committees of Congress or the Chief of NRCS. Funding for installation 
can then be granted by the Chief of NRCS.



PART 623_EMERGENCY WETLANDS RESERVE PROGRAM--Table of Contents




Sec.
623.1 Purpose and scope.
623.2 Definitions.
623.3 Eligible person.
623.4 Eligible land.
623.5 Ineligible land.
623.6 Transfer of lands from the CRP to the EWRP.
623.7 Terms of the easement.
623.8 Easement value.
623.9 Easement priority.
623.10 Application to participate.
623.11 Obligations of the landowner.
623.12 Payments to landowners by NRCS.
623.13 Wetland Reserve Plan of Operations.
623.14 Easement modifications.
623.15 Transfer of land.
623.16 Monitoring and enforcement of easement terms and conditions.
623.17 Violations and Remedies.
623.18 Access to land.
623.19 Assignments.
623.20 Appeals.
623.21 Scheme and device.
623.22 Filing of false claims.

    Authority: 16 U.S.C. 3837-3837f; Pub. L. 103-75, Chapter 1, 107 
Stat. 739, 742.

    Source: 58 FR 62497, Nov. 29, 1993, unless otherwise noted.



Sec. 623.1  Purpose and scope.

    (a) The regulations in this part set forth the policies, procedures, 
and requirements for the Emergency Wetlands Reserve Program (EWRP). 
Under the EWRP, NRCS will make offers to purchase wetland conservation 
easements from persons owning croplands that were damaged by the 1993 
Midwest floods if those lands have the potential for restoration to 
wetland conditions and if the owner voluntarily agrees to restore and 
maintain those conditions. The easements are to be purchased to promote 
the restoration and maintenance of wetland characteristics, such as 
hydrologic conditions of inundation or saturation of the soil and 
hydrophytic vegetation. The functions and values of the wetlands for 
wildlife habitat, water quality improvement, flood water retention, 
floodway enhancement, ground water recharge, open space, aesthetic 
values, and environmental education will thus be promoted. The wetland 
conservation easements will permanently prohibit use of the affected 
land as cropland. Additionally, the easement shall require permanent 
maintenance of the wetland conditions, except in the case of natural 
disaster.
    (b) The EWRP is available only in the following States: Illinois, 
Iowa, Kansas, Minnesota, Missouri, Nebraska, South Dakota, and 
Wisconsin. Certain cropland areas within these States have been 
determined to have been inundated by the Midwest floods of 1993. As more 
fully defined and described in

[[Page 417]]

this part, eligible land may include farmed wetlands or prior converted 
wetlands (wetlands converted prior to December 23, 1985), together with 
adjacent lands on which the wetlands are functionally dependent so long 
as the likelihood of successful restoration of such land and the 
potential wetland values merit inclusion in the program with reasonable 
costs.



Sec. 623.2  Definitions.

    The following definitions shall be applicable for the purposes of 
this part:
    (a) Agricultural commodity--means any crop planted and produced by 
annual tilling of the soil, or on an annual basis by one trip planters, 
or alfalfa and other multiyear grasses and legumes in rotation as 
approved by the Secretary. For purposes of determining crop history, as 
relevant to eligibility to enroll land in the program, land shall be 
``considered planted to an agricultural commodity'' during a crop year 
if, as determined by ASCS, as action of the Secretary prevented land 
from being planted to the commodity during the crop year.
    (b) Applicant--means a person who submits to NRCS an application to 
participate in the EWRP.
    (c) Commodity Credit Corporation--a wholly owned government 
corporation within the U.S. Department of Agriculture.
    (d) Conservation District (CD)--means a subdivision of a State or 
local government organized pursuant to applicable State law to promote 
soil and water conservation practices.
    (e) Conservation Reserve Program--means the program under which 
long-term payments and cost-share assistance is provided to individuals 
to establish permanent vegetative cover on cropland that is highly 
erodible or environmentally sensitive.
    (f) Prior converted wetland--means wetland that has been drained, 
dredged, filled, leveled, or otherwise manipulated (including any 
activity that results in impairing or reducing the flow, circulation, or 
reach of water) prior to December 23, 1985, for the purpose, or that has 
the effect, of making the production of agricultural commodities 
possible if such production would not have been possible but for such 
action.
    (g) Cost-share payment--means the payment made by NRCS to assist 
program participants in establishing the practices required in a WRPO.
    (h) Chief--means the Chief of the Natural Resources Conservation 
Service, or the Chief's designee.
    (i) Easement--means the real property interest acquired by NRCS 
under this part for wetland restoration and maintenance and which is 
properly filed with the appropriate local or State government official.
    (j) Easement area--means the land to which the approved wetland 
restoration practices and wetland conservation restrictions are to be 
applied.
    (k) Fair market value (FMV)--means the price that a willing seller 
would accept and a willing buyer would pay in an open, informed 
transaction.
    (l) Farmed wetland--means wetland that was drained, dredged, filled, 
or otherwise manipulated prior to December 23, 1985 to the extent that 
the production of agricultural commodities was made possible, but which 
continues to meet wetland criteria [refer to 7 CFR 12.32(a)(3) for 
descriptions of farmed wetlands].
    (m) Floodwater control systems--means dikes, levees, or other 
similar structural measures for the protection of cropland from 
flooding.
    (n) FWS--means the Fish and Wildlife Service of the United States 
Department of the Interior.
    (o) Local NRCS office--means the office of the Natural Resources 
Conservation Service serving the county or combination of counties in 
which the landowner's farm or ranch is located.
    (p) Participant--means a person(s) owning land subject to a 
perfected easement purchased by the Natural Resources Conservation 
Service under this part.
    (q) Offer--means the total payment NRCS will make to a landowner to 
purchase an easement.
    (r) Permanent easement--means an easement in perpetuity.
    (s) Substantially altered lands--means lands which have not been and 
are not now wetlands but could likely develop wetland characteristics in 
the future,

[[Page 418]]

as a result of the Midwest floods of 1993.
    (t) Practice--means the wetland and easement area development 
restoration measures agreed to in the WRPO to accomplish the desired 
program objectives.
    (u) Technical assistance--means the assistance provided to land 
owners to facilitate implementation of the WRPO.
    (v) Wetland--means land that (1) has a predominance of hydric soils; 
(2) is inundated or saturated by surface or groundwater at a frequency 
and duration sufficient to support a prevalence of hydrophytic 
vegetation typically adapted for life in saturated soil conditions; and 
(3) does support a prevalence of such vegetation under normal 
circumstances.



Sec. 623.3  Eligible person.

    To be eligible to participate in the EWRP, a person must be the 
owner of eligible land for which enrollment is sought and must have been 
the owner of such land for at least the preceding 12 months prior to the 
time the enrollment offer is declared by NRCS, as provided in this part. 
The person shall provide to NRCS adequate proof of ownership of the 
land. NRCS may waive the 12 month ownership requirement if:
    (a) The land was acquired by will or succession as a result of the 
death of the previous owner; or
    (b) Adequate assurances have been presented that the new owner of 
such land did not acquire such land for the purpose of placing it in the 
EWRP.



Sec. 623.4  Eligible land.

    (a) Except as otherwise provided in this section, land is eligible 
for enrollment in the EWRP only if NRCS determines that the land:
    (1) Was inundated by the Midwest floods of 1993;
    (2) If restored to productive condition, would have a fair market 
value that is less than the estimated costs of restoring the land to 
productive condition and repairing related floodwater control systems;
    (3) Is likely to have its wetland value restored with minimal costs; 
and
    (4) Is wetland farmed under natural conditions, a farmed wetland or 
prior converted wetland, or substantially altered lands which are 
cropland; or
    (5) Is wetland that has been restored on the land under a CRP 
contract, or under a Federal or State wetland restoration program with 
an easement for a period of less than 30 years.
    (b) To be eligible for enrollment in the EWRP, land must also:
    (1) Be determined by ASCS to have been annually planted or 
considered planted to an agricultural commodity in at least 1 of the 5 
previous crop years; or
    (2) Be land under a CRP contract, in which case, the land need only 
to have been planted to an agricultural commodity during 2 of the 1981 
through 1985 crop years.
    (c) Other lands may be considered eligible if the inclusion of such 
lands in the EWRP easement would significantly add to the functions and 
values of the wetlands to be restored under this part, as determined by 
NRCS.
    (d) The criteria and procedures contained in 7 CFR part 12 will be 
used to identify wetlands, converted wetlands, and farmed wetlands.



Sec. 623.5  Ineligible land.

    Notwithstanding any other provisions of this part, the following 
land is not eligible for enrollment in the EWRP:
    (a) Land that contains either timber stands or trees established in 
connection with a CRP contract;
    (b) Lands owned or acquired by an agency of the Federal Government;
    (c) Land already subject to a deed restriction prohibiting the 
production of agricultural commodities or the alternation of existing 
wetland hydrologic conditions;
    (d) Land located between the pre-flood mainstem levees and the 
river; or
    (e) Land that was restored to wetland conditions, as required under 
Part 12 of this title, to mitigate the conversion of wetland to cropland 
use.



Sec. 623.6  Transfer of lands from the CRP to the EWRP.

    Land that is subject to an existing CRP contract administered under 
7 CFR parts 704 and 1410 may be transferred into the EWRP only if:

[[Page 419]]

    (a) The land and landowner(s) meet the requirements of this part; 
and
    (b) The application for transfer into the EWRP is approved by 
Commodity Credit Corporation (CCC), if found to be in the interest of 
the program. If such transfer is requested by the owner and approved by 
CCC, the CRP contract for the property will be terminated or otherwise 
modified subject to such terms and conditions as are mutually agreed by 
the landowner, CCC, and NRCS.



Sec. 623.7  Terms of the easement.

    Landowners will grant to NRCS an easement which shall run with the 
land and be in favor of NRCS and its assigns or delegates. The easement 
shall require the land to be monitored as specified by the WRPO to 
promote the purposes of this part, including but not limited to 
maintenance of the restored wetland for entire length of the easement. 
Such easement shall: (a) be a permanent reserve interest easement; (b) 
require that the maintenance of the land be in accordance with the terms 
of the easement and with the terms of the WRPO and shall be the 
responsibility of the owners of the property and their successors of any 
kind, including, but not limited to, the owners' heirs and assigns; (c) 
grant to NRCS a right of access in favor of NRCS and its delegates, 
assigns and successors of any kind, to the portion of the property which 
is subject to the provisions of the easement. Maintenance of such access 
shall be the responsibility of the owner and their successors of any 
kind; (d) reserve to NRCS the right to permit such compatible uses of 
the easement area as may be identified in the WRPO; (e) reserve to the 
landowner those compatible uses identified in the WRPO that are 
permitted to be pursued by the landowner; (f) be signed by each person 
with an interest of any kind in the land covered by the easement; (g) 
permanently prohibit use of the easement area for cropland, except to 
harvest an agricultural commodity planted before the easement is 
perfected; and (h) require permanent maintenance of the wetland 
conditions, except in the case of natural disaster.



Sec. 623.8  Easement value.

    NRCS offers for easements will be based on the fair market value, as 
determined by the NRCS State Conservationist, of the land covered by the 
easements. Fair market value will be based on post-flood conditions as 
if reclaimed. Land easement values will be determined by the State 
Conservationist in consultation with a technical committee. A technical 
committee shall included representatives of: ASCS, Extension Service, 
and FWS. Additionally, the State Conservationist may collect information 
from other sources as he deems necessary. Coordination between States 
will be provided by the Chief, NRCS.



Sec. 623.9  Easement priority.

    The State Conservationist, in consultation with the FWS and with 
input from a technical committee and other interested Federal agencies, 
will establish a ranking process to establish the priority of parcels 
offered into the EWRP. This process will rank the floodway enhancement 
and environmental benefits per dollar of government expenditure on 
restoration and easement purchase. The factors for determining the 
priority for selection will consider the following:
    (a) Protection and enhancement of habitat for migratory birds and 
wildlife, including the contribution the restoration may make to the 
recovery of threatened and endangered species,
    (b) Floodway expansion,
    (c) Proximity to other protected wetlands,
    (d) Level of hydrology restored,
    (e) Wetland function or values,
    (f) Likelihood of successful restoration of wetland values,
    (g) Cost of restoration and easement purchase, and
    (h) Other factors as determined appropriate by NRCS.



Sec. 623.10  Application to participate.

    (a) A person seeking to enroll land in the EWRP must apply for 
enrollment on an approved NRCS form. The application to participate must 
be filed with the local NRCS field office during an announced period for 
such submissions.

[[Page 420]]

    (b) A person submitting an application to participate shall not be 
obligated to accept an NRCS offer to purchase an easement if one is 
forthcoming.
    (c) An application to participate must be signed by all owners of 
the property or their duly authorized representative(s).



Sec. 623.11  Obligations of the landowner.

    (a) All owners of land who accept an EWRP offer from NRCS shall:
    (1) Comply with the terms of the easement.
    (2) Comply with all terms and conditions of the WRPO for the full 
life of the easement.
    (3) Ensure that the easement granted to NRCS is superior to the 
interest of all other parties who may have an interest in the easement 
area, except as authorized by NRCS. Such action shall include, but not 
be limited to, obtaining a written statement of consent to such a 
superior easement from those holding a security interest or any other 
encumbrance or the land covered by the easement. Additionally, the 
landowner shall perfect the easement with superior NRCS interest in 
accordance with State law.
    (4) Agree to the permanent retirement of the aggregate total of crop 
acreage bases, and allotment and mandatory quota on the farm or ranch in 
order to maintain the base allotment on quota acres at or below the 
number of acres of cropland after the easement has been perfected.
    (5) Not allow grazing or commercial use of the land covered by an 
easement except as provided for in the WRPO, or harvesting of any 
agricultural commodity produced on the land subject to the EWRP 
easement.
    (6) Comply with Federal or State noxious week laws in the manner 
specified in the WRPO.
    (7) Control other identified weed and pest species, in the manner 
specified in the WRPO.
    (8) Be responsible for repairs, improvements, and inspections of the 
WRPO practices as necessary to maintain existing public drainage systems 
when the land is restored to the condition required by the terms of the 
easement, the contract, and the easement.
    (9) Be permitted to control public access, in accordance with the 
WRPO, on the land enrolled in the program.
    (10) Implement any additional provisions that are required by NRCS 
in consultation with FWS in the contract, WRPO, or easement, in order 
to, as determined by NRCS, facilitate the administration of the EWRP.
    (11) Not alter the vegetation, except to harvest already planted 
crops or forage, or hydrology on such acres subsequent to perfection of 
the easement by the landowner, except as provided for in the easement or 
WRPO.
    (12) Be responsible for the long-term management of the easement in 
accordance with the terms of the easement and related agreements 
including the WRPO. Owners may enter into agreements with Federal or 
State agencies or private organizations to assist in the management of 
the easement area. No NRCS funds will be provided to these agencies or 
organizations for management expenses. Responsibility for management of 
the easement shall in all cases remain with the owner and the owner's 
successors of any kind regardless of whether arrangements are made for 
third-party management.
    (13) Agree that each person with an interest in the land covered by 
an easement under EWRP shall be jointly and severally responsible for 
compliance with the WRPO, the easement, the provisions of this part, and 
for any refunds or payment adjustment which may be required for 
violation of any terms or conditions of the WRPO, the easement, or 
provisions of this part.
    (14) Refrain from taking any action on the easement area unless 
specifically authorized in the reserve interest easement or the WRPO; 
and
    (15) Secure any necessary local, State and Federal permits prior to 
commencing restoration of the designated area.
    (b) In addition, program participants and their successors of any 
kind may:
    (1) Not alter wildlife habitat and other natural land features of 
the enrolled land unless authorized by the WRPO.
    (2) Apply pesticides or fertilizers on enrolled land or mow such 
land, only as provided for in the WRPO.

[[Page 421]]

    (3) Not engage in any activities on other land on the farm on which 
the easement exists that will, as determined by NRCS; (i) alter the flow 
of surface or subsurface water into or out of the easement area except 
as specified in the WRPO; or (ii) be otherwise inconsistent with the 
terms of the easement.
    (c) The activities of any person on the property shall be considered 
for purposes of this section to be the actions of the program 
participant. However, if the NRCS determines that the activities of the 
person were beyond the control of the program participants, NRCS may 
adjust the remedies provided for in this part to the extent determined 
consistent with program goals. Obligations created by the easement shall 
run with the land and shall bind all persons having an interest in the 
property at any time whether such interest is created by death of the 
owner, sale, assignment, or otherwise.



Sec. 623.12  Payments to landowners by NRCS.

    (a) NRCS will share the cost with landowners of rehabilitating the 
enrolled land in the EWRP as provided in the WRPO. The amount of the 
cost-share assistance shall be specified in the contract. Eligible costs 
for such cost-share assistance by NRCS shall only include those costs 
which NRCS determines are appropriate and shall be subject to the 
following restrictions:
    (1) The State Conservationist will establish cost-share rates of 
between 75 to 100 percent of the historical cost of establishing or 
installing the practices specified in the WRPO; or pay the average cost 
of establishing the practices specified in the WRPO, based on the 
historical cost of establishing the practices in the State;
    (2) Cost-share payments may be made only upon a determination that 
an approved practice or an identifiable unit of the practice has been 
completed in compliance with NRCS approved standards and specifications; 
and
    (3) Cost-share payments may not be made for the maintenance of the 
practice except as specifically permitted in writing by the State 
Conservationist.
    (b) Notwithstanding paragraph (a)(3) of this section, cost share 
payments may be authorized for the replacement or restoration of 
practices for which cost share assistance has been previously allowed 
under the EWRP, but only if:
    (1) Replacement or restoration of the practice is needed to meet the 
objectives for which the easement was established; and
    (2) The failure of the original practice was due to reasons beyond 
the control of the participant.
    (c)(1) NRCS shall pay the amount agreed upon by NRCS and the 
landowner for the purchase of the easement in a lump-sum amount after 
the easement is perfected in compliance with State law, except in the 
case of paragraph (c)(2) of this section.
    (2) For all easements, NRCS shall pay no more than 75 percent of the 
total easement price pending completion of the practices to restore the 
wetlands as provided under the WRPO. The remaining amount shall be paid 
when NRCS determines the restoration is complete.
    (d) After an easement is perfected, NRCS will reimburse landowners 
for fair and reasonable expenses incurred for title searches, filing 
expenses, and related costs, as determined by NRCS.



Sec. 623.13  Wetlands reserve plan of operations.

    (a) After NRCS has accepted the applicant for enrollment in the 
program, a WRPO will be developed by the landowner and NRCS, in 
consultation with FWS.
    (b) The WRPO shall:
    (1) Include an aerial photo displaying the land offered for 
enrollment;
    (2) Specify the manner in which the eligible land shall be restored, 
operated, and maintained to accomplish the goal of the program, 
including, but not limited to: (i) measures to control noxious weeds and 
insect pests in order to comply with applicable Federal, or State 
noxious weed and pest control laws; and (ii) measures to control other 
specified species of weeds, insects or pests;
    (3) Specify compatible land uses for personal enjoyment for which 
the landowner may be compensated. These compatible land uses shall be 
reserved to the landowner in the easement. Such uses may include, among 
others:

[[Page 422]]

(1) recreational use, hunting and fishing; (ii) manage timber production 
including harvesting; and (iii) managed haying or grazing consistent 
with the goals of the program;
    (4) Set out cost estimates of the practices required by the WRPO, 
the offer for the easement, and other reimbursement costs;
    (5) Identify access routes to be maintained for wetland restoration 
activities and future management and easement monitoring in connection 
with the land to be enrolled;
    (6) Make provisions deemed necessary for maintaining public drainage 
systems if present on lands subject to the WRPO;
    (7) Contain scheduled implementation dates for restoration 
practices;
    (8) Contain other provisions or limitations as NRCS, in consultation 
with the FWS, determines to be necessary.
    (c) NRCS in consultation with FWS will collect from State or Federal 
agencies whatever additional information is deemed necessary for the 
development of the WRPO with the landowner.
    (d) The WRPO must be signed by NRCS, FWS, Conservation District 
(CD), and the landowner(s). However, if agreement between NRCS and FWS, 
or CD at the local level is not reached within 20 calendar days, the 
WRPO shall be developed by the State Conservationist of NRCS in 
consultation with FWS or CD.
    (e) The WRPO may require that a temporary vegetative or water cover 
be established on the property if immediate establishment of a permanent 
cover is not practicable or otherwise desirable.
    (f) The terms of an approved WRPO shall not relieve the program 
participant of any obligation or term imposed or provided for in the 
contract, the easement, or this part.
    (g) WRPO, where appropriate, will provide for the development of a 
tree planting plan with the assistance of the FS or State forestry 
agency.
    (h) The WRPO, where appropriate, will provide for the development by 
NRCS of detailed plans for weed control, structural measures and their 
operation, vegetation establishment and management, and other measures 
as needed.
    (i) Revisions of the WRPO to enhance or protect the value for which 
the easement was established may be made at any time at the request of 
either NRCS, FWS, the owner and upon the concurrence of all three 
parties.



Sec. 623.14  Easement modifications.

    After the easement has been perfected, no change will be made in the 
easement without a written request by the participant and the written 
consent of the Chief. Approval may be granted to achieve the goals of 
EWRP or facilitate the practical administration and management of the 
easement area or the program and the approval will not adversely affect 
the functions and values for which the easement was established. A 
modified easement shall be perfected in accordance with State law and 
NRCS superior interest shall be reserved by the landowner in accordance 
with Sec. Sec. 623.7 and 623.11(a)(3).



Sec. 623.15  Transfer of land.

    (a) If a new owner purchases or obtains the right and interest in, 
or right to occupancy of, the land subject to a EWRP easement, such new 
owner shall be subject to the terms and conditions of the easement. The 
participant who is the signatory to the easement shall be entitled to 
receive all remaining payments, if any, for the purchase of the 
easement. Eligible cost-share payments shall be made to the 
participants. with respect to costs actually incurred.
    (b) Upon the transfer of the property subject to an EWRP easement, 
any remaining cost-share payments shall be paid to the new owner or 
purchaser only if the new owner or purchaser becomes a party to the WRPO 
within 60 days of the perfection of the deed transferring title to the 
new owner. Such payments shall be paid in the manner agreed to by the 
participant and the buyer. The new owner or purchaser shall be 
responsible for assuring completion of all measures and practices 
required by the contract and the WRPO.
    (c) Any transfer of the property prior to the perfection of the 
easement shall void any NRCS offer or WRPO unless

[[Page 423]]

the new owner agrees to accept the offer within 60 days of the 
perfection of the deed transferring the land to the new owner.



Sec. 623.16  Monitoring and enforcement of easement terms and conditions.

    (a) NRCS or its representative shall be permitted to inspect each 
easement area at any and all times determined necessary by NRCS to 
ensure that:
    (1) Structural and vegetative restoration work are properly 
maintained;
    (2) The wetlands and adjacent upland habitat of the easement area is 
being managed as required in the WRPO and the terms of the easement; and
    (3) Uses of the area are consistent with the terms and conditions of 
the easement and the WRPO.
    (b) If an owner or other interested party is unwilling to 
voluntarily correct, in a timely manner, deficiencies in compliance with 
the terms of the WRPO, the EWRP easement, or any related agreements, 
NRCS may at the expense of any person who is subject to the EWRP 
easement correct such deficiency. Such NRCS action shall be in addition 
to other remedies available to NRCS.
    (c) Monitoring and enforcement responsibilities may be delegated by 
NRCS at any time to other Federal or State agencies. Landowners may 
transfer management responsibilities only to Federal, State, or local 
agencies or private organizations that have been approved by NRCS in 
advance as having the appropriate authority, expertise, and resources 
necessary to carry out such delegated responsibilities.



Sec. 623.17  Violations and remedies.

    (a) If a violation of the terms and conditions of the contract, the 
WRPO, or the recorded EWRP easement occurs, the easement shall remain in 
force and NRCS may:
    (1) Require the owner to fully restore the easement area to fulfill 
the terms and conditions of the easement and WRPO; and
    (2) Require the owner, who received payments from NRCS for any 
purpose under this part, to refund all or part of such payments received 
together with interest, as determined appropriate by NRCS.
    (b) If an owner fails to carry out the terms and conditions of an 
easement, appropriate legal action may be initiated. The owner of the 
property shall reimburse NRCS for all costs incurred including, but not 
limited to, legal fees.



Sec. 623.18  Access to land.

    In order to determine eligibility and compliance with respect to 
this part, representatives of the Department, or designee thereof, shall 
have the right of access to:
    (a) Land which is the subject of an application made in accordance 
with this part,
    (b) Land which is subject to an easement made in accordance with 
this part, and
    (c) Records of the participant showing status of all ownership 
interest in lands subject to this part.



Sec. 623.19  Assignments.

    Any participant entitled to any cash payment under this program may 
assign the right to receive such cash payments, in whole or in part.



Sec. 623.20  Appeals.

    A participant in the EWRP may obtain a review of any administrative 
determination concerning land eligibility, development of a WRPO, or any 
adverse determination under this part in accordance with the 
administrative appeal regulations provided in part 614 of this title.

[60 FR 67316, Dec. 29, 1995]



Sec. 623.21  Scheme and device.

    (a) If it is determined by NRCS that a landowner has employed a 
scheme or device to defeat the purposes of this part, any part of any 
program payment otherwise due or paid such landowner during the 
applicable period may be withheld or be required to be refunded with 
interest thereon, as determined appropriate by NRCS, and the contract 
with the landowner may be terminated. In such a case, NRCS may also 
continue to hold the easement interest acquired under this part.
    (b) A scheme or device includes, but is not limited to, coercion, 
fraud, misrepresentation, depriving any other

[[Page 424]]

person of payments for cost-share practices or easements for the purpose 
of obtaining a payment to which a person would otherwise not be 
entitled.
    (c) An owner of land subject to this part who succeeds to the 
responsibilities under this part shall report in writing to NRCS any 
interest of any kind in the land subject to this part that is retained 
by a previous participant. Such interest includes a present, future or 
conditional interest, reversionary interest or any option, future or 
present, with respect to such land and any interest of any lender in 
such land where the lender has, will, or can obtain, a right of 
occupancy to such land or an interest in the equity in such land other 
than an interest in the appreciation in the value of such land occurring 
after the loan was made. A failure of full disclosure will be considered 
a scheme or device under this section.



Sec. 623.22  Filing of false claims.

    If it is determined by NRCS that any participant has knowingly 
supplied false information or has knowingly filed a false claim, such 
participant shall be ineligible for any payment under this part. False 
information or false claims include claims for payment for practices 
which do not meet the specifications of the applicable WRPO. Any amounts 
paid under these circumstances shall be refunded, together with interest 
as determined by NRCS, and any amounts otherwise due such participant 
shall be withheld.



PART 624_EMERGENCY WATERSHED PROTECTION--Table of Contents




Sec.
624.1 Purpose.
624.2 Objective.
624.3 Scope.
624.4 Definitions.
624.5 Coordination.
624.6 Program administration.
624.7 Cost-sharing.
624.8 Assistance.
624.9 Time limits.
624.10 Floodplain easements.
624.11 Waivers.

    Authority: Sec. 216, P.L. 81-516, 33 U.S.C. 70lb-1; Sec. 403, P.L. 
95-334, as amended, 16 U.S.C. 2203; 5 U.S.C. 301.

    Source: 70 FR 16926, Apr. 4, 2005, unless otherwise noted.



Sec. 624.1  Purpose.

    The Natural Resources Conservation Service (NRCS) and United States 
Forest Service (FS) are responsible for administering the Emergency 
Watershed Protection (EWP) Program. This part sets forth the 
requirements and procedures for Federal assistance, administered by 
NRCS, under Section 216, Public Law 81-516, 33 U.S.C. 701b-1; and 
Section 403 of the Agricultural Credit Act of 1978, Public Law 95-334, 
as amended by Section 382, of the Federal Agriculture Improvement and 
Reform Act of 1996, Public Law 104-127, 16 U.S.C. 2203. The Secretary of 
Agriculture has delegated the administration of the EWP Program to the 
Chief of NRCS on state, tribal, and private lands, and Chief of FS on 
National Forest Systems lands, including any other lands that are 
administered under a formal agreement with the FS. The FS administers 
the EWP Program in accordance with the Forest Service Manuals 1950 and 
3540, and the Forest Service Handbook 1909.15



Sec. 624.2  Objective.

    The objective of the EWP Program is to assist sponsors, landowners, 
and operators in implementing emergency recovery measures for runoff 
retardation and erosion prevention to relieve imminent hazards to life 
and property created by a natural disaster that causes a sudden 
impairment of a watershed.



Sec. 624.3  Scope.

    EWP Program technical and financial assistance may be made available 
to a qualified sponsor, or landowners when a floodplain easement is the 
selected alternative by the Secretary of Agriculture, upon a qualified 
sponsor or landowner's request when a Federal emergency is declared by 
the President or when a local emergency is declared by the NRCS State 
Conservationist. The EWP Program is designed for emergency recovery 
work, including the purchase of floodplain easements. Emergency 
watershed protection is authorized in the 50 States, the District of 
Columbia, the Commonwealth of

[[Page 425]]

Puerto Rico, the U.S. Virgin Islands, Guam, the Commonwealth of the 
Northern Mariana Islands, and American Samoa.



Sec. 624.4  Definitions.

    (a) Defensibility means the extent to which an action is:
    (1) More beneficial than adverse in the extent and intensity of its 
environmental and economic effects;
    (2) In compliance with Federal, State, and local laws;
    (3) Acceptable to affected individuals and communities;
    (4) Effective in restoring or protecting the natural resources;
    (5) Complete with all necessary components included; and
    (6) Efficient in achieving the desired outcome.
    (b) Exigency means those situations that demand immediate action to 
avoid potential loss of life or property, including situations where a 
second event may occur shortly thereafter that could compound the 
impairment, cause new damages or the potential loss of life if action to 
remedy the situation is not taken immediately.
    (c) Floodplain easement means a reserved interest easement, which is 
an interest in land, defined and delineated in a deed whereby the 
landowner conveys all rights and interest in the property to the 
grantee, but the landowner retains those rights, title, and interest in 
the property which are specifically reserved to the landowner in the 
easement deed.
    (d) Imminent threat means a substantial natural occurrence that 
could cause significant damage to property or threaten human life in the 
near future.
    (e)(1) Limited resource area is defined as a county where:
    (i) Housing values are less than 75 percent of the State housing 
value average; and
    (ii) Per capita income is 75 percent or less than the National per 
capita income; and
    (iii) Unemployment is at least twice the U.S. average over the past 
3 years based upon the annual unemployment figures.
    (2) NRCS will use the most recent National census information 
available when determining paragraphs (e)(1)(i) and (ii) of this 
section.
    (f) Natural occurrence includes, but is not limited to, floods, 
fires, windstorms, ice storms, hurricanes, typhoons, tornadoes, 
earthquakes, volcanic actions, slides, and drought.
    (g) Project sponsor means a State government or a State agency or a 
legal subdivision thereof, local unit of government, or any Native 
American tribe or tribal organization as defined in section 4 of the 
Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b), 
with a legal interest in or responsibility for the values threatened by 
a watershed emergency; is capable of obtaining necessary land rights; 
and is capable of carrying out any operation and maintenance 
responsibilities that may be required.
    (h) Watershed emergency means adverse impacts to resources exist 
when a natural occurrence causes a sudden impairment of a watershed and 
creates an imminent threat to life or property.
    (i) Watershed impairment means the situation that exists when the 
ability of a watershed to carry out its natural functions is reduced to 
the point where an imminent threat to health, life, or property is 
created. This impairment can also include sediment and debris deposition 
in floodplains and upland portions of the watershed.



Sec. 624.5  Coordination.

    (a) If the President declares an area to be a major disaster area, 
NRCS will provide assistance which will be coordinated with the Federal 
Emergency Management Agency (FEMA) or its designee. FEMA is the lead 
federal agency for Presidentially-declared natural disasters.
    (b) When an NRCS State Conservationist determines that a watershed 
impairment exists, but the President does not declare an area to be a 
major disaster area, FEMA does not coordinate assistance. In this 
situation, NRCS will assume the lead, provide assistance, and coordinate 
work with the appropriate State office of emergency preparedness and 
other Federal, tribal, or local agencies involved with emergency 
activities, as appropriate.
    (c) In the case where the watershed impairment exists solely on FS 
System

[[Page 426]]

lands, the FS will determine the existence of the impairment, assume the 
lead, provide assistance and coordinate work with the appropriate State 
office of emergency preparedness and other Federal, tribal, or local 
agencies involved with emergency activities, as appropriate.



Sec. 624.6  Program administration.

    (a) Sponsors. (1) When the State Conservationist declares that a 
watershed impairment exists, NRCS may, upon request, make assistance 
available to a sponsor which must be a State or political subdivision 
thereof, qualified Indian tribe or tribal organization, or unit of local 
government. Private entities or individuals may receive assistance only 
through the sponsorship of a governmental entity.
    (2) Sponsors must:
    (i) Contribute their share of the project costs, as determined by 
NRCS, by providing funds or certain services necessary to undertake the 
activity. Contributions that may be applied towards the sponsor's 
applicable cost-share of construction costs include:
    (A) Cash;
    (B) In-kind services such as labor, equipment, design, surveys, 
contract administration and construction inspection, and other services 
as determined by the State Conservationist; or
    (C) A combination of cash and in-kind services;
    (ii) Obtain any necessary real property rights, water rights, and 
regulatory permits; and
    (iii) Agree to provide for any required operation and maintenance of 
the completed emergency measures.
    (b) Eligibility. NRCS will provide assistance based upon the NRCS 
State Conservationist's determination that the current condition of the 
land or watershed impairment poses a threat to health, life, or 
property. This assistance includes EWP practices associated with the 
removal of public health and safety threats, and restoration of the 
natural environment after disasters, including acquisition of floodplain 
easements.
    (1) Priority EWP assistance is available to alleviate exigency 
situations. NRCS may approve assistance for temporary correction 
practices to relieve an exigency situation until a more acceptable 
solution can be designed and implemented.
    (2) Limitations. (i) In cases where the same type of natural event 
occurs within a 10-year period and a structural measure has been 
installed or repaired twice within that period using EWP assistance, 
then EWP assistance is limited to those sites eligible for the purchase 
of a floodplain easement as described in Sec. 624.10 of this part.
    (ii) EWP assistance will not be used to perform operation or 
maintenance, such as the periodic work that is necessary to maintain the 
efficiency and effectiveness of a measure to perform as originally 
designed and installed.
    (iii) EWP assistance will not be used to repair, rebuild, or 
maintain private or public transportation facilities, public utilities, 
or similar facilities.
    (iv) EWP assistance, funded by NRCS, will not be provided on any 
Federal lands if such assistance is found to augment the appropriations 
of other Federal agencies.
    (v) EWP assistance is not available for repair or rehabilitation of 
nonstructural management practices, such as conservation tillage and 
other similar practices.
    (3) Repair of structural, enduring, and long-life conservation 
practices. (i) Sponsors may receive EWP assistance for structural, 
enduring, and long-life conservation practices including, but not 
limited to, grassed waterways, terraces, embankment ponds, diversions, 
and water conservation systems, except where the recovery measures are 
eligible for assistance under the Emergency Conservation Program 
administered by the Farm Service Agency.
    (ii) EWP assistance may be available for the repair of certain 
structural practices (i.e., dams and channels) originally constructed 
under Public Law 83-566; Public Law 78-534; Subtitle H of Title XV of 
the Agriculture and Food Act of 1981 (16 U.S.C. 3451 et seq., commonly 
known as the Resource Conservation and Development Program); and the 
Pilot Watershed Program of the Department of Agriculture Appropriation 
Act of 1954 (Pub. L. 83-156; 67 Stat. 214). EWP assistance may not be

[[Page 427]]

used to perform operation and maintenance activities specified in the 
agreement for the covered structure project entered into with the 
eligible local organization responsible for the works of improvement.
    (iii) NRCS may authorize EWP assistance for modifying damaged 
practices when technology advances or construction techniques warrant 
modifications, including when modifications are the result of federal 
permitting or other requirements necessary to implement the recovery 
measure, and will be cost-shared as described in Sec. 624.7.
    (iv) EWP assistance is only available when public or private 
landowners, land managers, land users, or others document they have 
exhausted or have insufficient funding or other resources available to 
provide adequate relief from applicable hazards.
    (4) Increased level of protection. In cases other than those 
described in paragraph (b)(3)(iii) of this section, if the sponsor 
desires to increase the level of protection that would be provided by 
the EWP practice, the sponsor will be responsible for paying 100 percent 
of the costs of the upgrade or additional work.
    (c) Eligible practices. NRCS will only provide assistance for 
measures that:
    (1) Provide protection from additional flooding or soil erosion; 
and,
    (2) Reduce threats to life or property from a watershed impairment, 
including sediment and debris removal in floodplains and uplands; and
    (3) Restore the hydraulic capacity to the natural environment to the 
maximum extent practical; and
    (4) Are economically and environmentally defensible and technically 
sound.
    (d) Documentation. NRCS will document the economic rationale of 
proposed practices in appropriate detail before the allocation of 
emergency funding, including projects under consideration for floodplain 
easements in Sec. 624.10. Generally, the expected value of the property 
restored should exceed the cost of emergency measures, including taking 
into consideration environmental benefits. Documentation will include, 
but is not limited to:
    (1) Number of locations and extent of damage, including 
environmental and cultural resources at risk, because of the watershed 
impairment;
    (2) Estimated damages to the values at risk if the threat is 
imminent but not yet realized;
    (3) Events that must occur for any imminent threat to be realized 
and the estimated probability of their occurrence both individually and 
collectively;
    (4) Estimates of the nature, extent, and costs of the emergency 
practices to be constructed to recover from an actual threat or relieve 
an imminent threat;
    (5) Thorough description of the beneficial and adverse effects on 
environmental resources, including fish and wildlife habitat;
    (6) Description of water quality and water conservation impacts, as 
appropriate;
    (7) Analysis of effects on downstream water rights; and
    (8) Other information deemed appropriate by NRCS to describe 
adequately the environmental impacts to comply with the National 
Environmental Policy Act, Endangered Species Act, National Historic 
Preservation Act, and related requirements.
    (e) Implementation. When planning emergency recovery practices, NRCS 
will emphasize measures that are the most economical and are to be 
accomplished by using the least damaging practical construction 
techniques and equipment that retain as much of the existing 
characteristics of the landscape and habitat as possible. Construction 
of emergency practices may include, but are not limited to, timing of 
the construction to avoid impacting fish spawning, clearing of right-of-
ways, reshaping spoil, debris removal, use of bioengineering techniques, 
and revegetation of disturbed areas. Mitigation actions needed to offset 
potential adverse impacts of the EWP Program practices should be planned 
for installation before, or concurrent with, the installation of the EWP 
Program practices. In rare occurrences where mitigation cannot be 
installed concurrently, plans will require mitigation be accomplished as 
soon as practical.
    (f) NRCS may determine that a measure is not eligible for assistance 
for

[[Page 428]]

any reason, including economic and environmental factors or technical 
feasibility.



Sec. 624.7  Cost-sharing.

    (a) Except as provided in paragraph (b) of this section, the Federal 
contribution toward the implementation of emergency measures may not 
exceed 75 percent of the construction cost of such emergency measures, 
including work done to offset or mitigate adverse impacts as a result of 
the emergency measures.
    (b) If NRCS determines that an area qualifies as a limited resource 
area, the Federal contribution toward the implementation of emergency 
measures may not exceed 90 percent of the construction cost of such 
emergency measures.



Sec. 624.8  Assistance.

    (a) Sponsors must submit a formal request to the State 
Conservationist for assistance within 60 days of the natural disaster 
occurrence, or 60 days from the date when access to the sites becomes 
available. Requests must include a statement that the sponsors 
understand their responsibilities and are willing to pay its cost-shared 
percentage as well as information pertaining to the natural disaster, 
including the nature, location, and scope of the problems and the 
assistance needed.
    (b) On receipt of a formal request for EWP assistance, the State 
Conservationist or designee shall immediately investigate the emergency 
situation to determine whether EWP is applicable and to prepare an 
initial cost estimation for submission to the NRCS Chief or designee. 
The cost estimation will be submitted no later than 60 days from receipt 
of the formal request from the sponsor. The State Conservationist will 
take into account the funding priorities identified in paragraph (c) (3) 
of this section. The State Conservationist will forward the damage 
survey report, which provides the information pertaining to proposed EWP 
practice(s) and indicates the amount of funds necessary to undertake the 
Federal portion, to the NRCS Chief or designee. This information will be 
submitted no later that 60 days from receipt of the formal request from 
the sponsor, or no later than 60 days from the date funding is made 
available to the State Conservationist, whichever is later. NRCS may not 
commit funds until notified by the Chief, or designee, of the 
availability of funds.
    (c) Before the release of financial assistance, NRCS will enter into 
a Cooperative Agreement with a sponsor that specifies the 
responsibilities of the sponsor under this part, including any required 
operation and maintenance responsibilities. NRCS will not provide 
funding for activities undertaken by a sponsor prior to the signing of 
the agreement between NRCS and the sponsor.
    (1) NRCS will only provide funding for work that is necessary to 
reduce applicable threats.
    (2) Efforts must be made to avoid or minimize adverse environmental 
impacts associated with the implementation of emergency measures, to the 
extent practicable, giving special attention to protecting cultural 
resources and fish and wildlife habitat.
    (3) Funding priorities for recovery measures. NRCS will provide EWP 
assistance based on the following criteria, which are ranked in the 
order of importance:
    (i) Exigency situations;
    (ii) Sites where there is a serious, but not immediate threat to 
human life;
    (iii) Sites where buildings, utilities, or other important 
infrastructure components are threatened;
    (iv) When reviewing paragraphs (c)(3)(i) through (iii) of this 
section, NRCS will take into account the following resources as they may 
affect the priority, including, but not limited to:
    (A) Sites inhabited by federally listed threatened and endangered 
species or containing federally designated critical habitat where the 
species or the critical habitat could be jeopardized, destroyed, or 
adversely modified without the EWP practice;
    (B) Sites that contain or are in the proximity to cultural sites 
listed on the National Register of Historic Places where the listed 
resource would be jeopardized if the EWP practice were not installed;
    (C) Sites where prime farmland supporting high value crops is 
threatened;

[[Page 429]]

    (D) Sites containing wetlands that would be damaged or destroyed 
without the EWP practice;
    (E) Sites that have a major effect on water quality; and
    (F) Sites containing unique habitat, including but not limited to, 
areas inhabited by State-listed threatened and endangered species, fish 
and wildlife management areas, or State-identified sensitive habitats; 
and
    (v) Other funding priorities established by the Chief of NRCS.



Sec. 624.9  Time limits.

    Funds must be obligated by the State Conservationist and 
construction completed within 220 calendar days after the date funds are 
committed to the State Conservationist, except for exigency situations 
in which case the construction must be completed within 10 days after 
the date the funds are committed.



Sec. 624.10  Floodplain easements.

    (a) General. NRCS may purchase floodplain easements as an emergency 
measure. NRCS will only purchase easements from landowners on a 
voluntary basis.
    (b) Floodplain easements. (1) Floodplain easements established under 
this part will be:
    (i) Held by the United States, through the Secretary of Agriculture;
    (ii) Administered by NRCS or its designee; and
    (iii) Perpetual in duration;
    (2) Eligible land. NRCS may determine land is eligible under this 
section if:
    (i) The floodplain lands were damaged by flooding at least once 
within the previous calendar year or have been subject to flood damage 
at least twice within the previous 10 years; or
    (ii) Other lands within the floodplain would contribute to the 
restoration of the flood storage and flow, erosion control, or that 
would improve the practical management of the easement; or
    (iii) Lands would be inundated or adversely impacted as a result of 
a dam breach.
    (3) Ineligible land. NRCS may determine that land is ineligible 
under this section if:
    (i) Implementation of restoration practices would be futile due to 
``on-site'' or ``off-site'' conditions;
    (ii) The land is subject to an existing easement or deed restriction 
that provides sufficient protection or restoration, as determined by the 
Chief of NRCS, of the floodplain's functions and values; or
    (iii) The purchase of an easement would not meet the purposes of 
this part.
    (4) Compensation for easements. NRCS will determine easement 
compensation in accordance with applicable regulation and other law.
    (5) NRCS will not acquire any easement unless the landowner accepts 
the amount of the easement payment that is offered by NRCS. NRCS 
reserves the right not to purchase an easement if the easement 
compensation for a particular easement would be too expensive, as 
determined by NRCS.
    (6) NRCS may provide up to 100 percent of the restoration and 
enhancement costs of the easement. NRCS may enter into an agreement with 
the landowner or another third party to ensure that identified practices 
are implemented. NRCS, the landowner, or other designee may implement 
identified practices. Restoration and enhancement efforts may include 
both structural and non-structural practices. An easement acquired under 
this part shall provide NRCS with the full authority to restore, 
protect, manage, maintain, and enhance the functions and values of the 
floodplain.
    (7) The landowner must:
    (i) Comply with the terms of the easement;
    (ii) Comply with all terms and conditions of any associated 
agreement; and
    (iii) Convey title to the easement that is acceptable to NRCS and 
warrant that the easement is superior to the rights of all others, 
except for exceptions to the title that are deemed acceptable by NRCS.
    (8) Structures, including buildings, within the floodplain easement 
may be demolished and removed, or relocated outside the 100-year 
floodplain or dam breach inundation area.
    (c) Easements acquired under this part may not be modified or 
terminated. However, in limited situations,

[[Page 430]]

as determined by the Chief of NRCS and when in the best interest of the 
Government, land exchanges may be authorized pursuant to (7 U.S.C. 428a) 
and other applicable authorities.
    (d) Enforcement. (1) In the event of a violation of an easement, the 
violator will be given reasonable notice and an opportunity to correct 
the violation within 30 days of the date of the notice, or such 
additional time as NRCS may allow.
    (2) NRCS reserves the right to enter upon the easement area at any 
time to remedy deficiencies or easement violations. Such entry may be 
made at the discretion of NRCS when such actions are deemed necessary to 
protect important floodplain functions and values or other rights of the 
United States under the easement. The landowner will be liable for any 
costs incurred by the United States as a result of the landowner's 
negligence or failure to comply with easement or agreement obligations.
    (3) In addition to any and all legal and equitable remedies as may 
be available to the United States under applicable law, NRCS may 
withhold any easement and cost-share payments owing to landowners at any 
time there is a material breach of the easement covenants or any 
associated agreements. Such withheld funds may be used to offset costs 
incurred by the United States, in any remedial actions, or retained as 
damages pursuant to court order or settlement agreement.
    (4) NRCS will be entitled to recover any and all administrative and 
legal costs, including attorney's fees or expenses, associated with any 
enforcement or remedial action.
    (5) On the violation of the terms or conditions of the easement or 
related agreement, the easement shall remain in force, and NRCS may 
require the landowner to refund all or part of any payments received by 
the landowner under this Part, together with interest thereon as 
determined appropriate by NRCS.
    (6) All the general penal statutes relating to crimes and offenses 
against the United States shall apply in the administration of 
floodplain easements acquired under this part.



Sec. 624.11  Waivers.

    To the extent allowed by law, the NRCS Deputy Chief for Programs may 
waive any provision of these regulations when the agency makes a written 
determination that such waiver is in the best interest of the Federal 
government.

[[Page 431]]



                   SUBCHAPTER D_LONG TERM CONTRACTING





PART 630_LONG TERM CONTRACTING--Table of Contents




    Authority: Pub. L. 75-430, 49 Stat. 1151 (16 U.S.C. 590d); Pub. L. 
84-1021, 70 Stat. 1115 (16 U.S.C. 590p(b); Pub. L. 91-118, 83 Stat. 194 
(16 U.S.C. 590d).



Sec. 630.1  Purpose.

    The purpose of this subchapter is to provide for programs to extend 
cost sharing and technical assistance through long term contracts to 
landowners and others for making land use changes and to install 
measures to conserve, develop, and utilize the soil, water, and related 
natural resources on their lands.

[40 FR 53370, Nov. 18, 1975]



PART 631_GREAT PLAINS CONSERVATION PROGRAM--Table of Contents




                      Subpart A_General Provisions

Sec.
631.1 Purpose.
631.2 Definitions.
631.3 Administration.
631.4 Program applicability.
631.5 Land user eligibility.
631.6 Land eligible for the program.
631.7 Conservation treatment eligible for cost sharing.
631.8 Cost-share rates.
631.9 Conservation plan.

                           Subpart B_Contracts

631.10 Contracts.
631.11 Conservation practice maintenance.
631.12 Cost-share payments.
631.13 Disputes and appeals for matters other than contract violations.
631.14 Contract violations.

                         Subpart C_Miscellaneous

631.20 Setoffs.
631.21 Compliance with regulatory measures.
631.22 Access to operating unit.
631.23 State conservationist's authority.

    Authority: 16 U.S.C. 590p(b).

    Source: 49 FR 11142, Mar. 27, 1984, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 631.1  Purpose.

    (a) The Great Plains Conservation Program (GPCP) is a special 
program targeted to the total conservation treatment of farm or ranch 
units with the most severe soil and water resources problems. The 
purpose of the program is to assist farm, ranch and other land users to 
make changes in their cropping systems and land uses which are needed to 
conserve, develop, protect, and utilize the soil and water resources of 
their lands. This purpose is achieved by controlling erosion, conserving 
water, and adjusting land use to mitigate climatic, soil, topographic, 
flood, saline and other natural hazards.
    (b) Program participation is voluntary and is carried out by 
applying a conservation plan encompassing an entire operating unit. A 
conservation plan is developed with the land user in consultation with 
the local conservation district and is used to establish a GPCP 
contract. This contract provides for cost sharing between the land user 
and the Secretary of Agriculture for applying needed land use 
adjustments and conservation treatment within a specified time schedule. 
The program is supplemental to, not a substitution for, other programs 
in the Great Plains area.



Sec. 631.2  Definitions.

    The terms defined shall have the following meaning in this part and 
in all contracts, forms, documents, instructions, and procedures in 
connection therewith, unless the contract or subject matter requires 
otherwise.
    Applicant. A land user who has requested in writing to participate 
in the GPCP.
    Area conservationist. The NRCS employee who is the supervisor with 
primary responsibility for quality control. This person serves as 
contracting officer if designated by the state conservationist.
    Chief. The Chief of the Natural Resources Conservation Service 
(NRCS), USDA.

[[Page 432]]

    Conservation district (CD). A conservation district, soil 
conservation district, soil and water conservation district, natural 
resource district, or similar legally constituted body with which the 
Secretary of Agriculture cooperates pursuant to the Soil Conservation 
and Domestic Allotment Act. The members of governing bodies of these 
organizations may be known as supervisors, directors, or commissioners.
    Conservation plan. A written record of the land user's decisions 
regarding planned land use and treatment, including estimates of extent 
and cost. The timing of applications for each practice and/or 
identifiable unit is scheduled in the conservation plan.
    Conservation practice. A specific treatment which is planned and 
applied according to NRCS standards and specifications as a part of a 
resource management system for land, water, and related resources.
    Contract. A legal document that binds both the participants and the 
federal government to carry out the terms and conditions of the 
conservation plan. The contract forms the basis for GPCP sharing the 
costs of implementing the conservation plan.
    Contracting officer. The NRCS employee authorized to sign GPCP 
contracts on behalf of NRCS.
    County program committee. A group of Federal, State, and local 
officials selected by the designated conservationist. The committee 
provides ideas to the designated conservationist regarding program 
development and interagency program coordination.
    Designated county. A county within a Great Plains state that the 
Chief has designated for participation.
    Designated conservationist. A district conservationist or other NRCS 
employee who the state conservationist has designated to be responsible 
for administration of the GPCP in a designated county.
    District conservationist. The NRCS employee assigned to direct and 
supervise NRCS activities in one or more conservation districts.
    Great Plains area. The area comprising those counties within the 
Great Plains states designated for GPCP participation.
    Great Plains states. Colorado, Kansas, Montana, Nebraska, New 
Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming.
    Identifiable unit. A discernibly distinct component of a 
conservation practice.
    Land user. An individual, partnership, firm, joint-stock company, 
corporation, association, trust, estate, or other nonpublic legal entity 
having control of a unit of land. This definition includes two or more 
persons having a joint or common interest.
    Life span. The period of time specified in the contract and/or 
operation and maintenance agreement during which the resource management 
systems of component practices are to be maintained and used for the 
intended purpose. Most practices will have a useful life beyond the 
specified life span.
    Operation and maintenance agreement. A document signed by both the 
participant and the contracting officer outlining the operation and 
maintenance requirements for applied conservation treatment.
    Operating unit. A parcel or parcels of land, whether contiguous or 
noncontiguous, constituting a single management unit for agricultural 
purposes.
    Other land. Nonagricultural land on which erosion must be controlled 
to protect agricultural land and which can be covered by contract.
    Participant. A land user who is a party to a GPCP contract.
    Resource management system. A combination of conservation practices 
identified by the land or water use that, if installed, will protect or 
improve the soil or water resource base.
    Specifications. Minimum guantity or quality requirements established 
by NRCS to meet the standard for a specific conservation practice.
    State conservationist. The NRCS employee authorized to direct and 
supervise NRCS activities within the state.
    State program committee. A group of Federal, state, and local 
officials selected by the state conservationist. The committee provides 
ideas to the state conservationist regarding program development, 
coordination, general policies, and operating procedures of GPCP in the 
state.

[[Page 433]]

    Technical assistance. Guidance provided to land users regarding the 
use and treatment of soil, water, plant, animal, and related resources. 
This assistance may include conservation plan formulation, application, 
and maintenance and is usually confined to those activities which the 
recipient could not reasonably be expected to do without specialized 
assistance.
    Technical guide. A document containing detailed information on the 
conservation of soil, water, plant, animal, and related resources 
applicable specifically to the area for which it is prepared.



Sec. 631.3  Administration.

    (a) NRCS is responsible for the administration of the Great Plains 
Conservation Program (GPCP).
    (b) The program shall be carried out in close cooperation with 
interested Federal, state, and local government units and organizations. 
The program in designated counties shall be coordinated with the long-
range program of conservation districts operating in such counties and 
with other USDA activities.
    (c) Applicants who have USDA-Farmers Home Administration (FmHA) 
loans must furnish to NRCS satisfactory evidence that the conservation 
plan used as a basis for the GPCP contract is compatible with assistance 
provided by FmHA. Such evidence may consist of written acknowledgement 
by the authorized FmHA official that the GPCP conservation plan is 
compatible with the farm management plan prepared for FmHA program 
purposes.



Sec. 631.4  Program applicability.

    The program is applicable only to designated counties within the 
Great Plains states. County designation is a responsibility of the NRCS 
Chief.



Sec. 631.5  Land user eligibility.

    Any land user in a designated county may file an application for 
participation in the GPCP with the NRCS field office. A land user who 
develops an acceptable conservation plan in cooperation with NRCS and 
the conservation district that is in compliance with the terms and 
conditions of the program is eligible to sign a contract.



Sec. 631.6  Land eligible for the program.

    The program is applicable to: (a) Privately owned land, (b) 
nonfederally owned public land under private control for the contract 
period and included in the participant's operating unit, and (c) 
federally owned land, if installation of conservation practices would 
directly benefit nearby or adjoining privately owned land of persons who 
maintain and use the Federal land.



Sec. 631.7  Conservation treatment eligible for cost sharing.

    (a) The state conservationist, in consultation with the state 
program committee, shall select the resource management systems, 
conservation practices, or identifiable units eligible for GPCP cost 
sharing in the state.
    (b) The designated conservationist, in consultation with the county 
program committee, shall select from the state list the eligible 
conservation systems, practices, or identifiable units eligible for GPCP 
cost sharing in the county.



Sec. 631.8  Cost-share rates.

    (a) The Federal rate may not exceed 80 percent.
    (b) The maximum Federal rate (percentage) within each state for each 
practice or identifiable unit shall be established by the state 
conservationist.
    (c) The maximum rate (percentage) for each county is established by 
the designated conservationist not to exceed the state rate 
(percentage).
    (d) The rate (percentage) established by a state conservationist or 
a designated conservationist shall not exceed the amount necessary and 
appropriate to apply conservation treatment.



Sec. 631.9  Conservation plan.

    (a) An applicant is responsible for developing a conservation plan, 
in cooperation with the conservation district, that protects the 
resource base in a manner acceptable to NRCS. This plan will be used as 
a basis for developing a contract. Conservation treatment is to be 
planned and implemented as a resource management system.
    (b) The applicant decides how the land will be used and selects the 
resource management systems that will achieve the applicant's objectives 
and

[[Page 434]]

provide protection of soil, water, and related resources acceptable to 
NRCS. Eligible practices may be included in the conservation plan to 
enhance fish and wildlife and recreation resources, promote the economic 
use of land, and reduce or control agriculture-related pollution.
    (c) Technical assistance will be provided by NRCS, as needed by the 
land user. NRCS may utilize the services of private, local, state, and 
other Federal agencies in discharging its responsibilities for technical 
assistance.
    (d) Participants are responsible for accomplishing the conservation 
plan and may use all available sources of assistance, including other 
USDA programs that are consistent with the conservation plan.
    (e) All conservation practices scheduled in the conservation plan 
are to be carried out in accordance with the applicable NRCS technical 
guide.



                           Subpart B_Contracts



Sec. 631.10  Contracts.

    (a) To participate in the program, an applicant must enter into a 
contract agreeing to implement a conservation plan. All persons who 
control or share control of the operating unit for the proposed contract 
period must sign the contract or one person with power-of-attorney may 
sign the contract for all persons. The applicant must provide the 
contracting officer with satisfactory evidence of control of the 
operating unit for the life of the proposed contract.
    (b) Contracts may be entered into not later than September 30, 1991. 
The contract shall be for a period needed to establish the conservation 
treatment scheduled in the conservation plan and must extend at least 3 
years but not more than 10 years.
    (c) Contracts may be transferred or modified by mutual consent. The 
transferee assumes full responsibility for the contract including 
operation and maintenance of all land treatment installed under the 
contract. Also included are payments made under the contract to the 
participant or preceding participants before and after the transfer.
    (d) Contracts may be terminated by mutual consent or by NRCS for 
cause.



Sec. 631.11  Conservation practice maintenance.

    (a) Each participant is obligated to maintain the resource 
management systems or conservation practices applied under the contract 
for the duration of the contract. Practices installed before execution 
of the contract are to be maintained as specified in the contract.
    (b) If the life span of the practices or resource management systems 
extends beyond the period of the contract, state conservationists may 
make the operation and maintenance of those practices or systems a 
condition of the contract. The length of such operation and maintenance 
shall extend for the expected life span.



Sec. 631.12  Cost-share payments.

    (a) Federal cost sharing shall be adjusted so that the combined cost 
share by Federal and state government or subdivision of a state shall 
not exceed 100 percent of the cost.
    (b) Cost-share payments for completing resource management systems 
or a practice or an identifiable unit according to specifications will 
be made by NRCS as specified in the contract or as adjusted according to 
Sec. 631.12(a).



Sec. 631.13  Disputes and appeals for matters other than contract 
violations.

    Applicants or participants may appeal decisions regarding matters 
other than contract disputes under this part in accordance with part 614 
of this title.

[60 FR 67316, Dec. 29, 1995]



Sec. 631.14  Contract violations.

    Contract violations, determinations and appeals will be handled in 
accordance with the terms of the contract and attachments thereto. 
Violations involving fraud are to be handled in accordance with current 
USDA regulations.

[[Page 435]]



                         Subpart C_Miscellaneous



Sec. 631.20  Setoffs.

    (a) If any participant to whom compensation is payable under the 
program is indebted to U.S. Department of Agriculture (USDA), or any 
agency thereof, or is indebted to any other agency of the United States, 
and such indebtedness is listed on the county claim control record 
maintained in the office of the county ASC committee, the compensation 
due the participant shall be set off against the indebtedness. 
Indebtedness owing to USDA, or any agency thereof, shall be given first 
consideration. Setoffs made pursuant to this section shall not deprive 
the participant of any right to contest the justness of the indebtedness 
involved either by administrative appeal or by legal action.
    (b) Participants who are indebted to this program for any reason 
will be placed on the USDA claim control record promptly by the state 
conservationist after the participant has been given opportunity to pay 
the debt.



Sec. 631.21  Compliance with regulatory measures.

    Participants who carry out conservation practices shall be 
responsible for obtaining the authorities, rights, easements, or other 
approvals necessary for the implementation and maintenance of the 
conservation practices in keeping with applicable laws and regulations. 
Participants shall save the United States harmless from any 
infringements upon the rights of others or from any failure to comply 
with applicable laws or regulations.



Sec. 631.22  Access to operating unit.

    Any authorized NRCS representative shall have the right to enter an 
operating unit for the purpose of ascertaining the accuracy of any 
representations made in a contract or leading up to a contract, and as 
to the performance of the terms and conditions of the contract. Access 
shall include the right to measure acreages, render technical 
assistance, and inspect any work undertaken under the contract.



Sec. 631.23  State conservationist's authority.

    The state conservationist may take the initiative to revise or 
require revision of any determination made by the contracting officer or 
the district conservationist in connection with the program, except that 
the state conservationist may not revise any executed contract other 
than as may specifically be authorized herein.



PART 632_RURAL ABANDONED MINE PROGRAM--Table of Contents




                            Subpart A_General

Sec.
632.1 Purpose and scope.
632.2 Objectives.
632.3 Responsibilities.
632.4 Definitions.

                        Subpart B_Qualifications

632.10 Applicability.
632.11 Availability of funds.
632.12 Funding priorities.
632.13 Eligible lands and water.
632.14 Eligible land users.
632.15 Eligible uses and treatment of reclaimed lands.
632.16 Methods of applying planned land use and treatment.
632.17 Cost-share rates.
632.18 Special projects.
632.19 Crop history and allotments.

                         Subpart C_Participation

632.20 Application for assistance.
632.21 Reclamation plan.
632.22 Contracts.
632.23 Access to land unit and records.

                     Subpart D_Cost-Share Procedures

632.30 Applicability.
632.31 Cost-share payment.

                    Subpart E_Appeals and Violations

632.40 Appeals.
632.41 Violations.
632.42 Violation procedures.

                          Subpart F_Environment

632.50 Environmental evaluation.
632.51 Accord with environmental laws and orders.
632.52 Identifying typical classes of action.

    Authority: Sec. 406, Pub. L. 95-87; 91 Stat. 460 (30 U.S.C. 1236).

[[Page 436]]


    Source: 43 FR 44749, Sept. 28, 1978, unless otherwise noted.



                            Subpart A_General



Sec. 632.1  Purpose and scope.

    (a) The purpose of this part is to set forth the Natural Resources 
Conservation Service (NRCS) rules and regulations to carry out the Rural 
Abandoned Mine Program under section 406, Pub. L. 95-87; 91 Stat. 460 
(30 U.S.C. 1236).
    (b) The Rural Abandoned Mine Program:
    (1) Through the NRCS delivery system, assists land users to 
voluntarily develop reclamation plans and apply conservation treatment 
for the reclamation, conservation, and development of eligible coal-
mined lands and water, and
    (2) Provides cost sharing through long-term contracts according to 
an approved reclamation plan, to land users for establishing land use 
and conservation treatment on these lands.



Sec. 632.2  Objectives.

    (a) The objectives of the program are to protect people and the 
environment from the adverse effects of past coal-mining practices and 
to promote the development of the soil and water resources of 
unreclaimed mined lands by:
    (1) Stabilizing mined lands.
    (2) Controlling erosion and sediment on mined areas and areas 
affected by mining.
    (3) Reclaiming lands and water for useful purposes.
    (4) Enhancing water quality or quantity where it has been disturbed 
by past coal-mining practices.



Sec. 632.3  Responsibilities.

    (a) The Rural Abandoned Mine Program is administered by the U.S. 
Department of Agriculture (USDA) through NRCS in accordance with the 
delegation of responsibility contained in Sec. 601.1(h) of this 
chapter.
    (1) The Chief of NRCS is responsible for national program management 
and administration and for coordinating program operations with the 
Office of Surface Mining (OSM), U.S. Department of the Interior.
    (2) State conservationists (Responsible Federal Officials) are 
responsible for program operations within a State including program 
coordination with the State reclamation agency and the representatives 
of OSM.
    (b) The primary public contacts for program assistance are the 
district conservationists located in local NRCS field offices.
    (c) NRCS is assisted by other USDA agencies in accordance with 
existing authorities and agreements in carrying out the program.
    (d) NRCS is to coordinate Rural Abandoned Mine Program activities 
with NRCS programs and the other reclamation programs authorized by Pub. 
L. 95-87 that are carried out by the Office of Surface Mining of the 
U.S. Department of the Interior, State reclamation agencies, and Indian 
tribes. Coordination includes program development, development of 
reclamation standards, preparation of special reports, requests for 
funding, and related actions required to achieve coordination between 
programs.
    (e) NRCS is to consult with State and local reclamation committees 
to obtain recommendations on program operation, evaluation of 
applications for reclamation assistance, and public participation. The 
NRCS State Conservationist is to use existing reclamation committees or 
encourage the organization of a new State committee for this purpose. 
The State Conservationist is to serve as a member when the committee is 
functioning for the purposes of this program. Representatives of the 
Office of Surface Mining, State reclamation agency, State water quality 
agency, State conservation agency, and other agencies or groups are to 
be invited to participate as members. Individual citizens may 
participate through the State committee. Local committees, if needed, 
are to be organized on a multicounty, county, conservation district, or 
other appropriate area with a local membership structure similar to the 
State committee. The district conservationist is to be a member of a 
local reclamation committee organized to provide program guidance.

[43 FR 44749, Sept. 28, 1978, as amended at 45 FR 65181, Oct. 2, 1980]

[[Page 437]]



Sec. 632.4  Definitions.

    Abandoned mined lands. Unreclaimed coal-mined lands that existed 
before August 3, 1977, and for which there is no continuing reclamation 
responsibility on the part of a mine operator, permittee, or agent under 
State or Federal law or on the part of the State as a result of a bond 
forfeiture. See Sec. 632.13.
    Average costs. The calculated cost, determined by recent actual 
costs and current cost estimates, considered necessary for a land user 
to carry out a conservation practice or an identifiable unit of a 
conservation practice.
    Conservation district. A legal subdivision of State government 
responsible for developing and carrying out programs of soil and water 
conservation with which the Secretary of Agriculture cooperates under 
the Soil Conservation and Domestic Allotment Act of 1935.
    Conservation treatment. Specific conservation or reclamation 
practices applied to the land according to current standards and 
specifications in NRCS technical guides.
    Contract. A binding agreement between NRCS and the land user that 
includes the reclamation plan and provides for cost sharing the 
conservation treatment.
    Contracting officer. The NRCS official authorized to enter into and 
administer contracts for the Rural Abandoned Mine Program.
    Cost. The monetary amount actually paid or obligated to be paid by 
the land user for equipment use, materials, and services for carrying 
out a conservation practice or identifiable unit. If the land user uses 
his own resources, it includes the computed value of his labor, 
equipment use, and materials.
    Cost-share payments. Payments made to or on behalf of land users at 
established rates as specified in contracts for carrying out a 
conservation practice or an identifiable unit of such practices 
according to the contract.
    Financial burden. The land user's cost of reclamation that cannot be 
expected to be recovered within the contract period and that would 
probably prevent participation in the program. The land user must sign a 
statement to substantiate financial burden.
    Identifiable unit. A component of a conservation practice that can 
be clearly identified as a step in carrying out the conservation 
practice.
    Inadequately reclaimed. Lands or water that are mined for coal or 
are affected by mining conducted before August 3, 1977, which continue 
in their present condition to substantially degrade the quality of the 
environment, prevent or damage beneficial use of land or water 
resources, or endanger the health or safety of the public.
    Landrights. An interest acquired by fee simple title, easements, and 
rights-of-way to occupy or use land, buildings, structures, or other 
improvements.
    Land user. Any person, partnership, firm, company, corporation, 
association, trust, estate, other entity, or agent that owns or has 
management control of the surface rights of the land during the contract 
period or owns water rights on eligible lands. Also included are State 
or local public entities that own or control eligible land and water.
    Main benefits. The principal values or benefits that can be 
identified and/or quantified as a result of reclamation. Main offsite 
benefits are those values that accrue to surrounding land users or the 
public in general as a result of the reclamation. Main onsite benefits 
are those that accrue to the participant. Examples of principal values 
or benefits include but are not limited to human lives and property 
protected, reduction of erosion or sediment damage, elimination of 
public safety or health hazards, improvement of water quality, improved 
visual quality, improved fish or wildlife habitat, or restoration of 
beneficial uses of reclaimed areas.
    Reclamation committee. A committee on a local or State level 
consisting of representatives of Federal and State agencies and other 
organizations or individuals that have responsibilities or interest in 
abandoned mine reclamation. The committee provides guidance to NRCS on 
the operation of the Rural Abandoned Mine Program.
    Reclamation plan. A conservation and development plan as referred to 
in Pub. L. 95-87, consisting of a written record of land user decisions 
on proposed use,

[[Page 438]]

conservation treatment, and maintenance of eligible lands and water that 
will protect, enhance, and maintain the resource base. A reclamation 
plan contains pertinent soils data, a planned land use map or drawing, a 
record of use and treatment decisions including a schedule of 
conservation treatment, and other resource data as appropriate.
    Specified maximum costs. The maximum amount of cost-share money that 
is to be paid to a land user for carrying out a conservation practice or 
an identifiable unit of a conservation practice.
    Standards and specifications. Requirements that establish the 
acceptable quality level for planning, designing, and installing a 
conservation practice so it achieves its intended purpose. NRCS 
standards and specifications are contained in the NRCS field office 
technical guides and are designed to be sound and practicable under 
local conditions. Technical guides are on file in local NRCS field 
offices.
    Water rights. Any interest acquired in, priority established for, or 
permission obtained for the use of water.

[43 FR 44749, Sept. 28, 1978; 45 FR 65181, Oct. 2, 1980]



                        Subpart B_Qualifications



Sec. 632.10  Applicability.

    This program applies to any county or other designated area within a 
State that had abandoned or inadequately reclaimed coal-mined lands 
within its borders before August 3, 1977.



Sec. 632.11  Availability of funds.

    (a) The provisions of the program are subject to the annual 
appropriation by Congress of funds from the Abandoned Mine Reclamation 
Fund and the transfer of as much as 20 percent of these funds from the 
Office to Surface Mining to NRCS for program operation.
    (b) Allotments of Rural Abandoned Mine Program funds to state 
conservationists are to reflect the national program needs, the 
geographic areas from which the funds were derived, the funding priority 
assigned to applications for program assistance, including benefits 
expected to be derived, and the practicability and feasibility of the 
reclamation work proposed.



Sec. 632.12  Funding priorities.

    (a) All eligible applications within a State are to be assigned a 
funding priority and subpriority. Assignment of a priority and 
subpriority establishes the order in which the proposed reclamation work 
will be selected and evaluated for funding. (See Sec. 632.20(b) for 
additional selection criteria.) Applications for individual, joint, or 
special projects (See Sec. 632.18) for areas of different priorities or 
subpriorities are to be assigned the highest applicable priority or 
subpriority. The funding priorities are as follows:
    (1) Priority 1. Protection of public health, safety, general 
welfare, and property from extreme danger of adverse effects of coal-
mining practices. Extreme danger means a condition that could be 
expected to cause substantial physical harm to persons, property, or the 
environment and to which persons or improvements on real property are 
exposed.
    (2) Priority 2. Protection of public health, safety, and general 
welfare from the adverse effects of coal-mining practices that do not 
constitute an extreme danger.
    (3) Priority 3. Restoration of the land and water resources and the 
environment where previously degraded by the adverse effects of coal-
mining practices, including measures for the conservation and 
development of soil, water (excluding channelization), woodland, fish 
and wildlife, recreation resources, and agricultural productivity. First 
consideration in this priority is to be the reduction of offsite damage 
affecting the public. Second consideration is to be given to restoring 
to beneficial uses for the main benefit of the land user.
    (b) Eligible and feasible applications for program assistance within 
each priority category (Sec. 632.12(a)) are to be funded in the 
following order:
    (1) Individual persons or public entities who owned the eligible 
area before May 2, 1977, and who neither consented to nor exercised 
control over the mining operation.

[[Page 439]]

    (2) Individual persons who would actively use the area, if 
reclaimed, for agricultural or silvicultural purposes.
    (3) All other participants.

[43 FR 44749, Sept. 28, 1978; 45 FR 65181, Oct. 2, 1980]



Sec. 632.13  Eligible lands and water.

    Lands and water eligible for reclamation are those that were mined 
for coal or were affected by coal-mining processes and were abandoned or 
inadequately reclaimed before August 3, 1977. These lands and water are 
not eligible if:
    (a) There is continuing reclamation responsibility on the part of a 
mine operator, permittee, or agent under State or Federal law or on the 
part of the State as a result of bond forfeiture. However, if the amount 
of the bond forfeiture was insufficient to reclaim the area covered by 
the bond, the area will be considered eligible.
    (b) They are under Federal ownership and control.
    (c) The surface rights are under easement or lease to be remined for 
coal or other minerals.



Sec. 632.14  Eligible land users.

    Landowners holding surface land and water rights, residents, 
tenants, or their agents who own or have management control of eligible 
land and/or water are eligible to participate in the program. Residents 
or tenants who do not own the land must have control of the land for the 
period of the proposed contract and have the written consent of the 
landowner. Land users may participate by operating as persons, 
partnerships, associations, corporations, estates, trusts, or non-
Federal public entities, and by acting individually or jointly with 
other eligible land users. However, joint participation with other 
eligible land users is required if the primary purpose of reclamation is 
enhancement of water quality or quantity.



Sec. 632.15  Eligible uses and treatment of reclaimed lands.

    (a) Reclaimed lands and water may be used for cropland, hayland, 
pasture land, rangeland, woodland, wildlife land, natural areas, 
noncommercial recreation land, and the supporting uses associated with 
these land uses. Other land uses proposed by public entities for public 
use and benefit such as open space, conservation uses, natural areas, 
and recreation sites may be approved by the NRCS State conservationist 
in accordance with the priorities stated in Sec. 632.12. However, 
development of public sites, such as the installation of recreation 
facilities, is not eligible for cost sharing.
    (b) Reclaimed land use is determined by the objectives of the land 
user, compatibility of the land use with surrounding land use, and the 
practicability and feasibility of restoring the soil and water resources 
to support the use selected.
    (c) The maximum acreage of eligible lands and water that may be 
offered for contract under one ownership is 320 acres for the life of 
the program.
    (d) Conservation treatment eligible for Federal cost sharing 
includes the combination of practices needed and feasible to achieve:
    (1) Protection of life, property, and elimination of public health 
and safety hazards, including land stabilization.
    (2) Restoration of the environment where degraded by past mining, 
including water quality, visual quality, recreation resources, fish and 
wildlife habitat, and erosion and sediment control.
    (3) A site that can be developed for a beneficial use as specified 
in Sec. 632.15(a). Examples of eligible treatment that may be cost 
shared include but are not limited to: Land shaping and grading, 
critical area planting or other plantings for stabilization, improving 
visual quality, wildlife food and cover, diversions or terraces, 
waterways or lined ditches, grade stabilization structures, sediment 
basins, and special practices for sealing shafts and tunnels, correcting 
subsidence problems, or other unusual situations. Practices not eligible 
for cost sharing are those that are solely applied to develop a 
reclamation site (including sites developed by public entities for 
public use), increase the production of crops, or for the recurring 
maintenance of applied reclamation.
    (e) Applied conservation treatment is to meet the applicable Federal 
and State standards for the reclamation

[[Page 440]]

and conservation treatment of abandoned or inadequately reclaimed coal-
mined lands and water. Where needed, these standards are incorporated in 
local NRCS technical guides as the NRCS standards and specifications 
applicable to the program. Special practices as specified in Sec. 
632.15(d) are to be developed in cooperation with appropriate State or 
Federal agencies having the expertise or responsibility for the 
practices.
    (f) NRCS State conservationists, in consultation with the State 
reclamation committee, are to:
    (1) Develop a list of practices that are eligible for cost sharing, 
and
    (2) Maintain, as applicable, lists of average costs of applying 
conservation treatment to eligible lands and waters.



Sec. 632.16  Methods of applying planned land use and treatment.

    (a) Land users may arrange to apply the planned land uses and 
conservation treatment specified in the contract by one or more of the 
following methods:
    (1) By performing the required treatment with his own labor and 
equipment.
    (2) By hiring a qualified contractor to install the required 
treatment.
    (3) By requesting NRCS to award and administer a contract to perform 
the required treatment in accordance with 41 CFR chapters I and IV.
    (b) State conservationists are to develop criteria specifying the 
conditions for which NRCS will award and administer a contract. Criteria 
will consider: Type of equipment required, type and amount of 
conservation treatment required, costs of the required reclamation, 
needs of the land user, and the applicable cost-share rate. If the 
Federal share is less than 100 percent, a land user must put up his 
estimated share of the cost before NRCS awards the contract.



Sec. 632.17  Cost-share rates.

    (a) Cost-share rates paid by the Federal Government are to be 
established and issued as instructions by the NRCS Administrator in 
accordance with the following criteria:
    (1) For 120 acres or less, the cost-share rate is to provide up to 
80 percent of the costs of land use and conservation treatment depending 
on the income-producing potential of the land after reclamation. 
However, this rate may be increased to a level required to obtain 
participation if the main benefits of reclamation are offsite (in the 
public interest) and there is a declaration of financial burden by the 
participant.
    (2) The rate on acreage in excess of 120 acres up to 320 acres 
maximum is to be reduced by up to 0.5 percent per acre. This reduced 
rate applies to the entire acreage offered for contract.



Sec. 632.18  Special projects.

    (a) The NRCS State conservationist may approve the following types 
of special projects subject to the eligibility requirements, funding 
priorities, and cost-share rates as stated in Sec. Sec. 632.12, 632.13, 
632.14, 632.15, and 632.17:
    (1) Field trials or demonstration projects recommended by the State 
reclamation committee.
    (2) Projects to enhance water quality and quantity where past coal-
mining practices disturbed local water supplies and where joint action 
by a group of eligible land users in cooperation with Federal and State 
agencies is needed to restore the water resource.



Sec. 632.19  Crop history and allotments.

    (a) Most crop history and allotments on eligible lands were 
discontinued at the time of mining. However, if eligible lands are 
classified as cropland at the time the contract is signed, the cropland 
crop history and allotment, if any, may be:
    (1) Preserved for a period not to exceed twice the length of the 
contract as provided in 7 CFR part 719, or
    (2) Voluntarily surrendered by the land user.



                         Subpart C_Participation



Sec. 632.20  Application for assistance.

    (a) Land users must submit an application for program assistance 
through the local conservation district or NRCS field office. NRCS is to 
announce dates for receiving applications through local media. 
Applications are to be reviewed by the conservation district and/or 
local reclamation committee,

[[Page 441]]

which is to verify eligibility and recommend funding priorities to the 
NRCS district conservationist. The NRCS district conservationist is to 
assign funding priorities according to the recommendations unless he 
determines that applications are incomplete, ineligible, or unfeasible. 
Low priority applications that cannot be serviced within specific time 
periods established by the State conservationist are to be returned to 
the applicant with an appropriate explanation. These applicants may 
reapply at a later date if they are still interested.
    (b) Eligible applicants are serviced within each subpriority 
according to the following criteria:
    (1) The specific type, amount, and relative importance of benefits 
to be derived. (Public benefits and offsite environmental improvement 
will take precedence over onsite benefits.)
    (2) Feasibility and practicability of reclaiming for the proposed 
uses.
    (3) Land user's ability to proceed.
    (4) Date of the application.



Sec. 632.21  Reclamation plan.

    (a) Responsibility. Land users are responsible for developing a 
reclamation plan that will serve as a basis for a contract. Normally, a 
land user will need the technical services of NRCS and the conservation 
district or another professional to develop an acceptable plan.
    (b) Objectives and priorities. The reclamation plan is to provide 
for the appropriate program objectives and priorities as stated in 
Sec. Sec. 632.2 and 632.12 and meet the definition of a reclamation 
plan as defined in Sec. 632.4.
    (c) Review. (1) In areas served by conservation districts, 
reclamation plans are to be reviewed and signed by the district board to 
insure that planned land use and treatment is compatible with 
surrounding land uses and that proposed assistance is consistent with 
the district plan of work and priorities. In areas not served by 
conservation districts, the land use compatibility review may be 
performed by the local reclamation committee.
    (2) If reclamation plans include lands within or adjacent to Federal 
lands, the plan is to be reviewed with the appropriate Federal land 
management agency to insure that the planned land use is compatible with 
that of the surrounding area.
    (3) Land users are responsible for insuring that the proposed land 
use and treatment is compatible with local land use ordinances.
    (d) Approval. Proposed land use, conservation treatment, and 
sequence of application contained in the plan are to be agreed to by 
both NRCS and the land user. The district conservationist is to sign the 
reclamation plan to indicate technical approval.



Sec. 632.22  Contracts.

    (a) Cost-sharing contracts. A land user who has an approved 
reclamation plan may enter into a contract with NRCS to receive Federal 
cost-share assistance. All land users are to sign the contract. A land 
user is required to furnish evidence of management control, such as a 
long-term lease, recorded deed, or land contract, and must have the 
written consent of the landowner. The NRCS contracting officer is to 
sign the contract after determining that all documents meet program 
requirements.
    (b) Effect of contract. A land user who signs a contract is 
obligated to apply or arrange for the application of the land use and 
conservation treatment as scheduled in the reclamation plan according to 
approved standards and specifications. A land user may request NRCS to 
award and administer a contract to apply the conservation treatment as 
scheduled in the reclamation plan in accordance with Sec. 632.16(a)(3).
    (c) Permits, landrights, and water rights. The land user is 
responsible for obtaining the permits, surface land- rights, and water 
rights that may be required to perform the planned work. NRCS is to 
assist land users in identifying the specific permit, landright, or 
water right required.
    (d) Operation and maintenance. During the contract period the land 
user is responsible for the operation and maintenance of applied 
conservation treatment. Operation and maintenance requirements are to be 
included in the contract.
    (e) Period of contract. The contract period is to be no less than 5 
nor more than 10 years. A contract is to extend

[[Page 442]]

for at least 3 years after the application of the last cost-shared 
conservation treatment to insure adequate establishment of vegetation 
and other treatment. Exceptions to the 3-year provision may be granted 
by the state conservationist for unusual circumstances.
    (f) Transfer of contract. (1) If during the contract period all or 
part of the right and interest in the land is transferred by sale or 
other action, the contract is terminated on the land unit that was 
transferred and the land user:
    (i) Forfeits all right to any future cost-share payments on the 
transferred land unit, and
    (ii) Must refund cost-share payments that have been made on the 
transferred land unit not to exceed the difference between the estimated 
value of the land at the time of entering into the contract and at the 
time of transfer, unless the new land user becomes a party to the 
contract as provided in paragraph (f)(2) of this section.
    (2) If the new land user becomes a party to the contract:
    (i) He is to assume all obligations of the previous land user on the 
transferred land unit.
    (ii) The contract with the new land user is to remain in effect with 
the original terms and conditions.
    (iii) The contract is to be modified in writing to show the changes 
caused by the transfer. If the modification is not acceptable to the 
contracting officer, the provisions of paragraphs (f)(1) (i) and (ii) of 
this section apply.
    (3) The transfer of all or part of a land unit by a land user does 
not affect the rights and obligations of other land users who have 
signed the contract.
    (g) Modification of contract. (1) A contract previously entered into 
with a land user may be modified only with the approval of the State 
conservationist or as authorized under established policies. No contract 
may be modified unless it is determined that the modification is 
desirable to carry out the program.
    (2) Contracts may be modified to add, delete, substitute, or reapply 
conservation treatment if:
    (i) Applied conservation treatment failed to achieve the desired 
results through no fault of the land user,
    (ii) Applied treatment deteriorated because of conditions beyond the 
control of the land user, or
    (iii) Other treatment is substituted that will achieve the desired 
results.
    (h) Joint contract. A land user may enter a contract jointly with 
other land users subject to the 320 acres maximum limitation per 
landowner. However, joint participation is permitted only if it will 
result in better land use and treatment than individual participation or 
if it is required by Sec. Sec. 632.14 and 632.18(a)(2).
    (i) Termination of contract. Contracts may be terminated by mutual 
consent of the signatories only if the State conservationist determines 
that the termination is authorized under established policies and is in 
the public interest. In this case, the State conservationist is to 
determine the amount of refund.



Sec. 632.23  Access to land unit and records.

    Any authorized NRCS employee or agent is to have the right of access 
to land under application or contract and the right to examine any 
program records to ascertain the accuracy of any representations made in 
the application or contract. This includes the right to furnish 
technical assistance and to inspect work done under the contract.



                     Subpart D_Cost-Share Procedures



Sec. 632.30  Applicability.

    This subpart contains procedures for making cost-share payments to a 
land user when land use and conservation treatment is applied as 
specified in Sec. 632.16(a)(1) or (2).



Sec. 632.31  Cost-share payment.

    (a) Amount of cost-share payment. Cost-share payments are to be made 
at rates specified in the contract. The cost-share payment is to be 
determined by one of the following methods:
    (1) Average cost.
    (2) Actual cost but not more than the average cost.
    (3) Specified maximum cost. If the average cost or the specified 
maximum cost at the time of starting the installation of a conservation 
practice or

[[Page 443]]

identifiable unit is less than the cost specified in the contract, 
payment is to be made at the lower rate. If the cost at the start of 
installation is higher, payment may be made at the higher rate. A 
contract modification is necessary if NRCS determines that the higher 
cost is a significant increase in the total cost-share obligation. If 
costs are significant, cost-share payment is not to be made until the 
modification reflecting the increase is approved. If the higher costs 
are not significant, cost-share payments may be made if funds are 
available.
    (b) Time of payment. Cost-share payments are to be made to the land 
user after a practice or an identifiable unit has been satisfactorily 
applied. The land user is to submit claims for payment to the district 
conservationist no later than September 30 of the year after 
application. Late claims require approval of the State conservationist 
before payment can be made. A claim is to show the proportion of each 
land user's contribution to the applied practice or identifiable unit.
    (c) Approval. The district conservationist must certify that a 
practice or identifiable unit has been satisfactorily applied before 
NRCS can make cost-share payments.
    (d) Ineligible claim. A land user is not eligible to receive cost-
share payments for a practice or an identifiable unit that was not 
carried out under program requirements.
    (e) Authorization for payment. (1) Materials or services needed to 
carry out contracts are to be obtained by land users. Contracts may 
provide for part or all of the cost-share payment for a practice or 
identifiable unit to be made directly to suppliers of materials or 
services. The materials or services must be delivered or performed 
before payment is made.
    (2) The contracting officer is to authorize payment for materials or 
services not exceeding:
    (i) The cost share of the material or service used, or
    (ii) The total cost share of the practices or identifiable unit if 
requested by the land user.
    (3) The land user who purchases materials or services to carry out a 
contract is responsible for them until the district conservationist 
determines that the material or service was used for the intended 
purpose. If a material or service cost-shared by NRCS is used for a 
purpose other than to carry out the contract, the land user is indebted 
to the United States for the cost of the misused material or service. 
This indebtedness is to be repaid to NRCS as a refund or withheld from 
cost-share payments otherwise due the land user under the contract.
    (4) NRCS has the right to inspect materials or services and to take 
samples for testing. Inspections by NRCS will not be necessary if NRCS 
considers State inspection regulations adequate.
    (5) Materials or services must meet the quality standards as 
specified. NRCS may make exceptions for materials or services that do 
not meet the standards only if they will satisfactorily serve the 
intended purpose. NRCS is to deduct from the cost-share payment the 
difference between the price of the materials or services specified and 
the actual value of the different materials or services.
    (f) Division of cost-share payments. Federal cost-share payments 
made directly to suppliers of materials or services are credited to the 
land user who was issued the authorization. The remainder of the cost 
share is credited to the land user who carried out the remainder of the 
practice or identifiable unit. If more than one land user contributed to 
carrying out a practice or identifiable unit, the cost-share payment is 
to be divided proportionately according to the contribution made by each 
of the land users. Furnishing a landright or water right is not a 
contribution for cost-share payment purposes.
    (g) Other aid. Non-Federal public entities may furnish all or part 
of the land user's portion of the cost of applying a practice or 
identifiable unit with no reduction in the Federal cost share.
    (h) Assignments and claims. Land users may not assign cost-share 
payments except as provided under the authority of 31 U.S.C. 203, as 
amended by 41 U.S.C. 15. Federal cost-share payments due any land user 
are not subject to claims for advances except as provided in this 
section.

[[Page 444]]



                    Subpart E_Appeals and Violations



Sec. 632.40  Appeals.

    Land users may appeal decisions under this part in accordance with 
part 614 of this title.

[60 FR 67316, Dec. 29, 1995]



Sec. 632.41  Violations.

    (a) Actions causing violation. The following actions constitute 
violation of a contract by a land user:
    (1) Knowingly or negligently damaging or causing conservation 
treatment to be impaired.
    (2) Adopting land use or treatment that tends to defeat the program 
purposes during the period of the contract.
    (3) Failing to comply with the terms of the contract.
    (4) Filing a false claim.
    (5) Misusing an authorization.
    (b) Effect of violation--(1) Contract to be terminated. (i) By 
signing a contract, the land user agrees to forfeit all rights to 
further cost-share payments under a contract and to refund cost-share 
payments received not to exceed the difference between the estimated 
value of the land at time of entering into the contract and the value at 
time of termination, if the contracting officer, with approval of the 
State conservationist, determines that:
    (A) There was a violation of the contract during the time the land 
user had control of the land, and
    (B) The violation was of a nature as to warrant termination of the 
contract.
    (ii) The land user is to be obligated to refund cost-share payments 
and cost shares paid under authorizations not to exceed the difference 
between the estimated value of the land at time of entering into the 
contract and the value at time of termination.
    (2) Contract not terminated. (i) By signing a contract, the land 
user agrees to refund cost-share payments received under the contract or 
to accept payment adjustment if the contracting officer, with the 
approval of the State conservationist, determines that:
    (A) There was a violation of the contract during the time the land 
user had control of the land, and
    (B) The nature of the violation does not warrant termination of the 
contract.
    (ii) Payment adjustments may include decreasing the rate of a cost 
share, deleting a cost-share commitment from the contract, or 
withholding cost-share payments earned but not paid. The land user who 
signs the contract may be obligated to refund cost-share payments and 
cost shares paid under authorizations.



Sec. 632.42  Violation procedures.

    (a) Scope. This section prescribes the regulations dealing with 
contract violations. The Chief reserves the right to revise or 
supplement any of the provisions of this section at any time if the 
action does not adversely affect the land user, or if the land user has 
been officially notified before this action is taken. No cost-share 
payment shall be made pending the decision on whether a contract 
violation has occurred.
    (b) Determination by contracting officer. On notification that a 
contract violation may have occurred, the contracting officer is to:
    (1) Determine, with the approval of the State conservationist, that 
a violation did not occur or that the violation was of such a nature 
that no penalty of forfeiture, refund, or payment adjustment is 
necessary. No notice is issued to the land user, and no further action 
is to be taken; or
    (2) Determine that a violation did occur, but the land user agrees 
to accept the penalty. If the land user agrees in writing to accept a 
penalty of forfeiture, refund, payment adjustment or termination, no 
further action is to be taken. The land user's agreement to accept the 
penalty must be approved by the contracting officer and State 
conservationist.
    (c) Notice of possible violation. (1) When the State conservationist 
is notified that a contract violation may have occurred that may warrant 
a penalty of forfeiture, refund, payment adjustment, or termination, he 
is to notify, in writing, each land user who signed the agreement of the 
alleged violation. This notice may be personally delivered or sent by 
certified or registered mail. A land user is considered to have

[[Page 445]]

received the notice at the time of personal receipt acknowledged in 
writing, at the time of the delivery of a certified or registered 
letter, or at the time of the return of a certified or registered letter 
where delivery was refused.
    (2) The notice setting forth the nature of the alleged violation is 
to give the land user an opportunity to appear at a hearing before a 
hearing officer designated by the State conservationist. The land user's 
request for a hearing is to be submitted in writing and must be received 
in the NRCS field office within 30 days after receipt of the notice. The 
land user is to be notified in writing by the hearing officer of the 
time, date, and place for the hearing. The land user is to have no right 
to a hearing if he does not file a written request for a hearing, or if 
he or his representative does not appear at the appointed time, unless 
the hearing officer, at his discretion, permits an appearance. A request 
for a hearing filed by a land user is considered to be a request by all 
land users who signed the contract.
    (d) Hearing. A public hearing is to be conducted to obtain the facts 
about the alleged violation. The hearing officer is to limit the hearing 
to relevant facts and evidence and is not to be bound by the strict 
rules of evidence as required in courts of law. Witnesses may be sworn 
in at the discretion of the hearing officer.
    (1) The land user or his representative is to be given full 
opportunity to present oral or documentary evidence about the alleged 
violation. Likewise, the United States may submit statements and 
evidence. Individuals not otherwise represented at the hearing may be 
permitted, at the discretion of the hearing officer, to give information 
of evidence. The hearing officer, at his discretion, may permit 
witnesses to be cross-examined.
    (2) The hearing officer is to make a record of the hearing so that 
the testimony can be summarized. A summary of the testimony may be made 
if both the land user and the State conservationist agree. A transcript 
of the hearing is to be made if requested by either the State 
conservationist or the land user within 10 days of the hearing. If a 
transcript is requested by the land user, the land user may be assessed 
the cost of a copy of the transcript.
    (3) The hearing officer is to close the hearing after a reasonable 
period of time if the land user or his representative is not present at 
the scheduled time. The hearing officer may, at his discretion, accept 
information and evidence submitted by others present for the hearing.
    (4) The hearing officer is to furnish the State conservationist with 
a written report setting forth his findings, conclusions, and 
recommendations. The report is to include the summary of testimony or 
transcript made of the hearing and any other information that would aid 
the State conservationist in reaching his decision.
    (e) Decision by State conservationist. The State conservationist is 
to make a decision after considering the hearing officer's report, 
including recommendations of the conservation district board if any, and 
any other information available to him, including, if applicable, the 
amount of the forfeiture, refund, or payment adjustment. The decision is 
to state whether the violation is of such a nature as to warrant 
termination of the contract. The State conservationist is to notify, in 
writing, each land user who signed the contract of his decision. The 
State conservationist may authorize or require the reopening of any 
hearing before a hearing officer for any reason at any time before his 
decision.
    (f) Appeal to Chief. Any land user affected by a decision of the 
State conservationist has the right of appeal to the Chief. The appeal 
and any briefs or statements must be received in the Office of the Chief 
within 30 days after the land user has received notice of the State 
conservationist's decision. The State conservationist is to file a brief 
or statement in the Office of the Chief within 20 days after the land 
user's brief or statement is received there. The appeal is to be limited 
to the records and the issues made before the State conservationist. The 
Chief's decision is final. The decision is to be determined by the 
record before him and the issues presented in the appeal, and the land 
user is to be notified in writing.

[[Page 446]]

    (1) If the decision provides for termination of the contract, it is 
to state that the contract is terminated, that all rights to further 
cost-share payments under the contract are forfeited, and that cost-
share payments received under the contract are to be refunded, but the 
refund is not to exceed the difference between the estimated value of 
the land at time of entering into the contract and the value at time of 
termination. The decision is to state the amount of refund and method of 
payment.
    (2) If the decision does not provide for termination of the 
contract, the land user may be required to make a refund of cost-share 
payments or to accept payment adjustments. The decision is to state the 
amount of refunds of cost-share payments or payment adjustments. In 
determining amounts of refund or payment adjustments, the following are 
to be considered:
    (i) The extent of the violation.
    (ii) Whether the violation was deliberate or the result of 
negligence or was caused by circumstances beyond the control of the land 
user.
    (iii) The effect on the program if no refund or payment adjustment 
is required.
    (iv) The extent to which the land user benefited by the violation.
    (v) The effect of the violation on the contract as a whole.
    (vi) Other considerations including the appropriateness and 
reasonableness of the refund or payment adjustment.

[43 FR 44749, Sept. 28, 1978; 45 FR 65181, Oct. 2, 1980]



                          Subpart F_Environment



Sec. 632.50  Environmental evaluation.

    (a) Environmental evaluation is an integral part of planning used by 
NRCS in developing each reclamation plan under this program. Planning 
includes site inventory and analysis, evaluation of reasonable 
alternatives, and identification of significant environmental impacts. 
Major points in planning when NRCS or the land user can make decisions 
concerning further action are:
    (1) After an evaluation of the application for program assistance to 
verify eligibility, land user objectives, and priorities for funding.
    (2) After a site-specific inventory and analysis to evaluate 
feasible treatment alternatives, costs, and environmental impacts.
    (3) After development of an acceptable reclamation plan as a basis 
for contract.
    (4) Before the signing of a mutually acceptable contract for 
financial cost-share assistance.
    (b) The scope and complexity of the assessment is to be consistent 
with the scope and complexity of the proposed reclamation.
    (c) An interdisciplinary team, consisting of NRCS and/or other 
cooperating agency personnel as needed, is used in making the 
assessment.
    (d) The Responsible Federal Official (RFO) is to use the 
environmental evaluation to make a decision concerning the need to 
prepare an environmental impact statement (EIS) in accordance with Sec. 
632.52.

[43 FR 44749, Sept. 28, 1978; 45 FR 65181, Oct. 2, 1980]



Sec. 632.51  Accord with environmental laws and orders.

    (a) A final program EIS is available in compliance with section 
102(2)(c) of the National Environmental Policy Act of 1969 (NEPA). This 
statement discloses the cumulative program impacts that significantly 
affect the quality of the human environment.
    (b) The program is to be conducted in accordance with other laws and 
Executive orders concerning environmental protection.
    (c) Channelization of streams is prohibited under this program. 
Channelization as used herein means the overall widening, deepening, 
realining, or constructing a nonvegetative protective lining over all or 
part of the perimeter of a perennial stream channel as described in NRCS 
Channel Modification Guidelines, Part B, Items 4, 5, 6, and 7, as 
published in the Federal Register on March 1, 1978 (43 FR 8278).

[[Page 447]]



Sec. 632.52  Identifying typical classes of action.

    (a) The RFO will analyze the environmental assessment of the 
proposed action to determine which of the following classes of action 
applies. This determination will be recorded and will be available to 
the public on request.
    (1) Actions not requiring a site-specific EIS. All proposed actions 
and their impacts that are determined to be adequately discussed in the 
program EIS or determined not to be major Federal actions will not 
require a site-specific EIS. However, if the assessment reveals that 
these proposed actions will have significant adverse effects on the 
quality of the human environment, the RFO will:
    (i) Modify the action to eliminate or mitigate the significant 
adverse impacts, or
    (ii) Withdraw further Federal assistance if significant adverse 
impacts cannot be eliminated or mitigated.
    (2) Actions requiring a site-specific EIS. A site-specific EIS is 
required for proposed actions if their impacts are not adequately 
discussed in the program EIS, and the proposal is determined to be a 
major Federal action significantly affecting the quality of the human 
environment in accordance with Sec. 650.7(b) of this chapter. When a 
decision is made to prepare an EIS, a Notice of Intent will be published 
in the Federal Register. The content and format of the EIS is to be 
consistent with the format of the program EIS and use scoping and 
tiering techniques to focus on the significant environmental issues.
    (3) Actions excluded from the EIS requirements. Those actions taken 
to prevent loss of life or property under the extreme danger provisions 
of priority 1 as described in Sec. 632.12. These actions are determined 
by a limited environmental assessment that reasonably identifies the 
possible loss of life or property.



PART 633_WATER BANK PROGRAM--Table of Contents




Sec.
633.1 Purpose and scope.
633.2 Definitions.
633.3 Administration.
633.4 Program requirements.
633.5 Application procedures.
633.6 Program participation requirements.
633.7 Annual payments.
633.8 Cost-share payments.
633.9 Conservation plan.
633.10 Modifications.
633.11 Transfer of an interest in an agreement.
633.12 Termination of agreements.
633.13 Violations and remedies.
633.14 Debt collection.
633.15 Payments not subject to claims.
633.16 Assignments.
633.17 Appeals.
633.18 Scheme and device.

    Authority: 16 U.S.C. 1301-1311.

    Source: 62 FR 48472, Sept. 16, 1997, unless otherwise noted.



Sec. 633.1  Purpose and scope.

    The regulations in this part set forth the policies, procedures, and 
requirements for the Water Bank Program (WBP) as administered by the 
Natural Resources Conservation Service (NRCS) for program 
implementation.



Sec. 633.2  Definitions.

    The following definitions shall be applicable to this part:
    Adjacent land means land on a farm which adjoins designated types 1 
through 7 wetlands and is considered essential for the protection of the 
wetland or for the nesting, breeding, or feeding of migratory waterfowl. 
Adjacent land need not be contiguous to the land designated as wetland, 
but cannot be located more than one quarter of a mile away.
    Agreement means the document that specifies the obligations and 
rights of any person who has been accepted for participation in the WBP.
    Annual payment means the consideration paid to a participant each 
year for entering an agreement with the NRCS under the WBP.
    Chief means the Chief of the Natural Resources Conservation Service 
or the person delegated authority to act for the Chief.
    Conservation District is a subdivision of a State government 
organized pursuant to applicable State law to promote and undertake 
actions for the conservation of soil, water, and other natural 
resources.

[[Page 448]]

    Conservation plan means a written record of the land user's decision 
on the use and management of the wetland and adjacent areas covered by 
the agreement.
    Cost-share payment means the payment made by the NRCS to achieve the 
protection of the wetland functions and values of the agreement area in 
accordance with the conservation plan.
    Landowner means a person or persons having legal ownership of 
farmland, including those who may be buying farmland under a purchase 
agreement. Landowner may include all forms of collective ownership 
including joint tenants, tenants in common, and life tenants and 
remaindermen in a farm property.
    Natural Resources Conservation Service (NRCS) is an agency of the 
United States Department of Agriculture, formerly called the Soil 
Conservation Service.
    Operator means the person who is in general control of the farming 
operations on the farm during the crop year.
    Person means one or more individuals, partnerships, associations, 
corporations, estates or trusts, or other business enterprises or other 
legal entities and, whenever applicable, a State, a political 
subdivision of a State, or any agency thereof.
    Practice means a measure necessary or desirable to accomplish the 
desired program objectives.
    State Technical Committee means a committee established by the 
Secretary of the United States Department of Agriculture in a State 
pursuant to 16 U.S.C. 3861. The State Conservationist will be the 
chairperson of the State Technical Committee.
    U.S. Fish and Wildlife Service is an agency of the United States 
Department of the Interior.
    Wetlands mean the inland fresh areas defined under 16 U.S.C. 1302 
and described as types 1 through 7 in Circular 39, Wetlands of the 
United States, as published by the United States Department of the 
Interior.
    Wetlands functions and values mean the hydrological and biological 
characteristics of wetlands and the social worth placed upon these 
characteristics, including:
    (1) Habitat for migratory birds and other wildlife, in particular at 
risk species;
    (2) Protection and improvement of water quality;
    (3) Attenuation of water flows due to flooding;
    (4) The recharge of ground water;
    (5) Protection and enhancement of open space and aesthetic quality;
    (6) Protection of flora and fauna which contributes to the Nation's 
natural heritage; and
    (7) Contribution to educational and scientific scholarship.
    WBP means the Water Bank Program.



Sec. 633.3  Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the Chief.
    (b) As determined by the Chief and the Administrator of the Farm 
Service Agency, the NRCS will seek the agreement of the Farm Service 
Agency in establishing policies, priorities, and guidelines related to 
the implementation of this part.
    (c) The State Conservationist will consultation with the State 
Technical Committee, on program administration and related policy 
matters. No determination by the State Technical Committee shall compel 
the NRCS to take any action which the NRCS determines will not serve the 
purposes of the program established by this part.
    (d) The NRCS may enter into cooperative agreements with Federal or 
State agencies and with private conservation organizations to assist the 
NRCS with educational efforts, agreement management and monitoring, 
program implementation assistance, and to assure a solid technical 
foundation for the program.
    (e) The NRCS shall consult with the U.S. Fish and Wildlife Service 
in the implementation of the program and in establishing program 
policies.
    (f) The Chief may allocate funds for such purposes related to 
special pilot programs for wetland management and monitoring, 
emergencies, cooperative agreements with other Federal or State agencies 
for program implementation, coordination of enrollment

[[Page 449]]

across State boundaries, or for other goals of the WBP found in this 
part.



Sec. 633.4  Program requirements.

    (a) General. Under the WBP, the NRCS will enter 10-year agreements 
with eligible persons who voluntarily cooperate in the protection of 
wetlands and associated lands. To participate in WBP, a person will 
agree to the implementation of a conservation plan, the effect of which 
is to protect, enhance, maintain, and manage the hydrologic conditions 
of inundation or saturation of the soil, native vegetation, and natural 
topography of eligible lands. The NRCS may provide cost-share assistance 
for the activities that promote the protection of wetland functions and 
values. Specific protection actions may be undertaken by the participant 
or other NRCS designee.
    (b) Participant eligibility. To be eligible to participate in the 
WBP, a person must:
    (1) Be the landowner of eligible land for which enrollment is 
sought; or
    (2) Have possession of the land by written lease over all designated 
acreage in the agreement for at least two years preceding the date of 
the agreement and will have possession over the all designated acreage 
for the agreement period.
    (c) Eligible land. (1) The NRCS shall determine whether land is 
eligible for enrollment and whether, once found eligible, the lands may 
be included in the program based on the likelihood of successful 
protection of wetland functions and values when considering the cost of 
entering the agreement and protection costs. Land placed under an 
agreement shall be specifically identified and designated for the period 
of the agreement.
    (2) The following land is eligible for enrollment in the WBP:
    (i) Privately owned inland fresh wetland areas of types 1 through 7.
    (ii) Privately owned inland fresh wetland areas of types 1 through 7 
which are under a drainage easement with the U.S. Department of the 
Interior or with a State government which permits agricultural use; or
    (iii) Other privately owned land which is adjacent to or within one 
quarter mile of designated types 1 through 7 wetlands and which is 
determined by the State Conservationist to be essential for the nesting, 
breeding, or feeding of migratory waterfowl, or for the protection of 
wetland.
    (d) Ineligible land. The following land is not eligible for 
enrollment in the WBP:
    (1) Converted wetlands if the conversion was in violation of 16 
U.S.C. 3821 et seq.;
    (2) Lands owned by an agency of the United States;
    (3) Land which is set aside or diverted under any other program 
administered by the Department of Agriculture;
    (4) Land which is harvested in the first year of the agreement 
period prior to being designated, except for land on which timber is 
harvested in accordance with a Forest Management Plan which is included 
in the conservation plan and is approved by the State forester or 
equivalent State official;
    (5) Lands where implementation of agreement practices would be 
futile due to on-site or off-site conditions; and
    (6) Land on which the ownership has changed during the 2-year period 
preceding the first year of the agreement period unless:
    (i) The new ownership was acquired by will or succession as a result 
of the death of the previous owner,
    (ii) The land was acquired by the owner or operator to replace 
eligible land from which he was displaced because of its acquisition by 
any Federal, State, or other agency having the right of eminent domain, 
or
    (iii) The new owner operated the land to be designated for as long 
as 2 years preceding the first year of the agreement and has control of 
such land for the agreement period.



Sec. 633.5  Application procedures.

    (a) Application for participation. To apply for enrollment, a person 
must submit an application for participation in the WBP.
    (b) Preliminary agency actions. The NRCS must certify that the 
designated acreage that would be placed under an agreement constitutes a 
viable wetland unit, contains sufficient adjacent land

[[Page 450]]

to protect the wetland, and provides essential habitat for the nesting, 
breeding or feeding of migratory waterfowl.
    (c) Where funds allocated to the State do not permit accepting all 
requests which are filed, the State Conservationist, in consultation 
with the State Technical Committee, may establish ranking criteria and 
limit the approval of requests for agreements in accordance with the 
ranking scheme. Any ranking scheme shall consider estimated costs of the 
agreement, costs of protection, availability of matching funds, 
significance of wetland functions and values, and estimated success of 
protection measures.
    (d) The NRCS may place higher priority on certain geographic regions 
of the State where the protection of wetlands may better achieve NRCS 
State and regional goals and objectives.
    (e) Notwithstanding any limitation of this part, the State 
Conservationist may enroll eligible lands at any time in order to 
encompass total wetland areas subject to multiple ownership or otherwise 
to achieve program objectives. Similarly, the State Conservationist may, 
at any time, exclude otherwise eligible lands if the participation of 
the adjacent landowners is essential to the successful protection of the 
wetlands and those adjacent landowners are unwilling to participate.



Sec. 633.6  Program participation requirements.

    (a) WBP Agreement. An agreement shall be executed for each 
participating farm. The agreement shall be signed by the owner of the 
designated acreage and any other person who, as landlord, tenant, or 
share cropper, will share in the payment or has an interest in the 
designated acreage. There may be more than one agreement for a farm.
    (b) Agreement period. The agreement period shall:
    (1) Be for a term of 10 years;
    (2) Become effective on January 1 of the year in which the agreement 
is approved except that the agreement shall become effective on January 
1 of the next succeeding year in cases where, at the time the agreement 
is approved, the NRCS determines that the agreement signers will be 
unable to comply with the provisions of paragraph (c) of this section in 
the year in which such agreement is approved.
    (c) Agreement terms and conditions. The acreage designated under an 
agreement shall:
    (1) Be maintained for the agreement period in a manner which will 
preserve, restore, or improve the wetland character of the land;
    (2) Not be drained, burned, filled, or otherwise used in a manner 
which would destroy the wetland character of the acreage, except that 
the provisions of this paragraph shall not prohibit the carrying out of 
management practices which are specified in a conservation plan for the 
farm;
    (3) Not be used as a dumping area for draining other wetlands, 
except where the State Conservationist determines that such use is 
consistent with the sound management of wetlands and is specified in the 
conservation plan;
    (4) Not be used as a source of irrigation water;
    (5) Not be used for the harvesting of a crop;
    (6) Not be hayed except for during periods of severe drought and 
only under conditions prescribed by the State Conservationist in 
consultation with the Secretary of the Interior or his designee; and
    (7) Not be grazed, except as may be specified in the conservation 
plan.



Sec. 633.7  Annual payments.

    (a) Person on the farm having an interest in the designated acreage, 
including tenants and sharecroppers, shall be eligible for an annual 
payment in the manner agreed upon by them as representing their 
respective contributions to compliance with the agreement. The State 
Conservationist shall not approve an agreement if it is determined that 
the proposed division of payment is not fair and equitable.
    (b) The annual per acre payment rates for wetlands and for adjacent 
land shall be determined for each county by the State Conservationist, 
based on recommendations of the State Technical Committee.
    (c) Maximum payments. In order to ensure that limited program funds 
are expended to maximize program benefits, the State Conservationist, in 
consultation with the State Technical

[[Page 451]]

Committee, may establish uniform maximum annual payment limits for 
agreements within a State or for geographic areas within a State.
    (d) Preliminary estimates of annual payments. Upon request prior to 
filing an application for enrollment, a person may be apprised of the 
maximum annual payment rates.
    (e) Adjustment of annual rates.
    (1) The State Conservationist, in consultation with the State 
Technical Committee, shall reexamine the payment rates with respect to 
each agreement at the beginning of the fifth year of any ten-year 
initial or renewal period and before the renewal expires.
    (2) An adjustment in the payment rates shall be made for any initial 
or renewal period taking into consideration the current land rental 
rates and crop values in the area. No adjustment shall be made in a 
payment rate which will result in a reduction of an annual payment rate 
from the rate which is specified in the initial or renewal agreement.
    (3) The rate or rates of annual payments may be increased if the 
program participant permits access by the general public to the 
designated acreage for hunting, trapping, fishing, and hiking, subject 
to applicable State and Federal regulations.



Sec. 633.8  Cost-share payments.

    (a) In addition to annual payments, the NRCS may share the cost with 
program participants of protecting the wetland functions and values of 
the enrolled land as provided in the conservation plan. The NRCS may pay 
up to 75 percent of such costs.
    (b) Cost-share payments may be made only upon a determination by the 
NRCS that an eligible practice or an identifiable unit of the practice 
has been established in compliance with appropriate standards and 
specifications. Identified practices may be implemented by the program 
participant or other designee.
    (c) A program participant may seek additional cost-share assistance 
from other public or private organizations as long as the activities 
funded are in compliance with this part. In no event shall the program 
participant receive an amount which exceeds 100 percent of the total 
actual cost of the practices.



Sec. 633.9  Conservation plan.

    (a) The program participant, with assistance from NRCS and in 
consultation with the Conservation District, shall prepare a 
conservation plan for the acreage designated under an agreement.
    (b) The conservation plan is the basis for the agreement and is 
incorporated therein. It includes a schedule of conservation treatment 
and management required to protect and to maintain the wetland and 
adjacent land as a functional wetland unit for the life of the 
agreement.
    (c) Conservation treatment and management of the vegetation for 
wetland protection, wildlife habitat, or other authorized objectives are 
consistent with the program objectives and priorities.



Sec. 633.10  Modifications.

    The NRCS may approve modifications to the agreement or associated 
conservation plan after consultation with the Conservation District. Any 
modification must meet WBP program objectives, and must be in compliance 
with this part.



Sec. 633.11  Transfer of interest in an agreement.

    (a) If the ownership or operation of a farm changes in such a manner 
that the agreement no longer contains the signatures of the persons 
required by Sec. 633.6(a) to sign the agreement, the agreement shall be 
modified to reflect the new interested persons and new divisions of 
payments.
    (b) If such persons are not willing to become parties to the 
modified agreement or for any other reason a modified agreement is not 
executed, the agreement shall be terminated and all unearned payments 
shall be forfeited or refunded.
    (c) The annual payment for the year in which the change of ownership 
or operation occurs shall not be considered to have been earned unless 
the designated acreage is continued in the program and there is 
compliance with the agreement for the full agreement year.

[[Page 452]]

    (d) The signatories to the agreement prior to the change of 
ownership or operation shall be jointly and severally responsible for 
refunding the unearned payments previously made.



Sec. 633.12  Termination of agreements.

    (a) The State Conservationist may, by mutual agreement with the 
parties to the agreement, consent to the termination of the agreement 
where:
    (1) The parties to the agreement are unable to comply with the terms 
of the agreement as the result of conditions beyond their control;
    (2) Compliance with the terms of the agreement would work a severe 
hardship on the parties to the agreement; or
    (3) Termination of the agreement would be in the public interest.
    (b) If an agreement is terminated in accordance with the provisions 
of this section, the annual payment for the year in which the agreement 
is terminated shall not be considered to have been earned unless there 
is compliance with the terms and conditions of the agreement for the 
entire calendar year.



Sec. 633.13  Violations and remedies.

    (a) In the event of a violation of an agreement or any associated 
conservation plan, the parties to the agreement shall be given 
reasonable notice and an opportunity to voluntarily correct the 
violation within 30 days of the date of the notice, or such additional 
time as the State Conservationist may allow.
    (b) In addition to any and all legal and equitable remedies as may 
be available to the NRCS under applicable law, the NRCS may withhold any 
annual or cost-share payments owing to the parties of the agreement at 
any time there is a material breach of the agreement or any conservation 
plan. Such withheld funds may be used to offset costs incurred by the 
NRCS in any remedial actions or retained as damages pursuant to court 
order or settlement agreement.
    (c) The NRCS shall be entitled to recover any and all administrative 
and legal costs, including attorney's fees or expenses, associated with 
any enforcement or remedial action.



Sec. 633.14  Debt collection.

    Any debts arising under this program are governed with respect to 
their collection by the Federal Claims Collection Act of 1966 (31 U.S.C. 
3701) and the regulations found in 4 CFR chapter II.



Sec. 633.15  Payments not subject to claims.

    (a) Any payments due any person shall be determined and allowed 
without regard to State land and without regard to any claim or lien 
against any crop, or proceeds thereof, which may be asserted by any 
creditor, except as provided in paragraph (b) of this section.
    (b) The regulations governing setoffs and withholdings, in part 13 
of this title, as amended, shall be applicable to this program.



Sec. 633.16  Assignments.

    Any person entitled to any cash payment under this program may 
assign the right to receive such cash payments, in whole or in part.



Sec. 633.17  Appeals.

    (a) Any person may obtain reconsideration and review of 
determinations affecting participation in this program in accordance 
with part 614 of this chapter.
    (b) Before a person may seek judicial review of any action taken 
under this part, the person must exhaust all administrative appeal 
procedures set forth in paragraph (a) of this section, and for purposes 
of judicial review, no decision shall be a final agency action except a 
decision of the Chief of NRCS under these procedures.



Sec. 633.18  Scheme and device.

    (a) If it is determined by the NRCS that a person has employed a 
scheme or device to defeat the purposes of this part, any part of any 
program payment otherwise due or paid such person during the applicable 
period may be withheld or be required to be refunded with interest 
thereon, as determined appropriate by the NRCS.
    (b) A scheme or device includes, but is not limited to, coercion, 
fraud, misrepresentation, depriving any other person of an annual 
payment or payments for cost-share practices for the

[[Page 453]]

purpose of obtaining a payment to which a person would otherwise not be 
entitled.
    (c) A program participant who succeeds to the responsibilities under 
this part shall report in writing to the NRCS any interest of any kind 
in enrolled land that is held by a predecessor or any lender. A failure 
of full disclosure will be considered a scheme or device under this 
section.



PART 634_RURAL CLEAN WATER PROGRAM--Table of Contents




                            Subpart A_General

Sec.
634.1 Purpose and scope.
634.2 Objective.
634.3 Administration.
634.4 Responsibilities.
634.5 Definitions.

               Subpart B_Project Authorization and Funding

634.10 Applicability.
634.11 Availability of funds.
634.12 Eligible project areas.
634.13 Project applications.
634.14 Review and approval of project applications.
634.15 Agreements.
634.16 Suspension of grants.
634.17 Termination of grant agreement.
634.18 Termination of project.
634.19 Project completion and closeout.

                  Subpart C_Participant RCWP Contracts

634.20 Eligible land.
634.21 Eligible participants.
634.22 Application for assistance.
634.23 Water quality plan.
634.24 Cost sharing.
634.25 Contracting.
634.26 Contract modifications.
634.27 Cost-share payment.
634.28 Appeals not related to contract violations.
634.29 Violations.
634.30 Appeals in USDA administered proj- ects.
634.31 Appeals of contract violations.

                     Subpart D_Financial Management

634.40 Financial management.

                   Subpart E_Monitoring and Evaluation

634.50 Program and project monitoring and evaluation.

    Authority: Sec. 35, Pub. L. 95-217, 91 Stat. 1579 (33 U.S.C. 1288).

    Source: 43 FR 50855, Nov. 1, 1978, unless otherwise noted.



                            Subpart A_General



Sec. 634.1  Purpose and scope.

    (a) The purpose of this part is for the U.S. Department of 
Agriculture (USDA), with the concurrence of the U.S. Environmental 
Protection Agency (EPA), to set forth regulations to carry out a Rural 
Clean Water Program (RCWP) under section 35, Pub. L. 95-217; 91 Stat. 
1579; 33 U.S.C. 1288.
    (b) The Rural Clean Water Program provides financial and technical 
assistance to private landowners and operators (participants) having 
control of rural land. The assistance is provided through long-term 
contracts (5 to 10 years) to install best management practices (BMP's) 
in project areas which have critical water quality problems resulting 
from agricultural activities. The proposed project area must be within a 
high priority area in an approved agricultural portion of a 208 water 
quality management plan. Participation in RCWP is voluntary.
    (c) The program is a new USDA program and an extension of existing 
water-quality management programs of EPA.



Sec. 634.2  Objective.

    The RCWP is designed to reduce agricultural nonpoint source 
pollutants to improve water quality in rural areas to meet water quality 
standards or water quality goals. The objective is to be achieved in the 
most cost-effective manner possible in keeping with the provision of 
adequate supplies of food and fiber and a quality environment.



Sec. 634.3  Administration.

    At the national level, the Secretary of Agriculture, with the 
concurrence of the Administrator, EPA, administers RCWP. The Secretary 
of Agiculture has delegated responsibility for administration of the 
program (43 FR 8252) to the Administrator, Natural Resources 
Conservation Service (NRCS). NRCS will be assisted by other USDA 
agencies in accordance with existing authorities.

[[Page 454]]

    (a) A National Rural Clean Water Coordinating Committee (NRCWCC), 
chaired by the Administrator, NRCS, is to assist in carrying out the 
Rural Clean Water Program.
    (b) At the State level, a State Rural Clean Water Coordinating 
Committee (SRCWCC) is to assist the State Conservationist, NRCS, in 
administering the program. The State Conservationist will chair the 
SRCWCC.
    (c) To assure coordination at the project level, a local Rural Clean 
Water Coordinating Committee is to be established at the time the 
application is developed. An existing local committee may be used, where 
practicable, to perform the functions of this committee.
    (d) The Administrator, NRCS, through the State Conservationists, 
NRCS, is to enter into agreements, where practicable, with soil 
conservation districts, State soil and water conservation agencies, or 
State water quality agencies to administer all or part of the program 
for a project area. That portion of program administration to be 
conducted by these agencies will be defined in the project application 
and grant agreement. Where this is not practicable, USDA will administer 
the program in a project area. In those instances where USDA retains 
administration of the program in a project area, NRCS will enter into 
agreements for the transfer of funds to the Agricultural Stabilization 
and Conservation Service (ASCS) for the administration of part of the 
program.



Sec. 634.4  Responsibilities.

    (a) Environmental Protection Agency (EPA) will--
    (1) Approve 208 water quality management plans,
    (2) Participate in the National and State Rural Clean Water 
Coordinating Committees,
    (3) Review and concur in project applications approved for funding 
in accordance with Sec. 634.14,
    (4) Advise the Secretary of Agriculture of practices which tend to 
defeat the purposes of contracts with rural landowners or operators in 
accordance with section 208(j)(1)(iv) of the act,
    (5) Assist USDA in evaluating the effectiveness of the program in 
improving water quality, and
    (6) Concur in the selection of project areas and the criteria for 
comprehensive, joint USDA-EPA water quality monitoring, evaluation, and 
analysis in accordance with Sec. 634.50.
    (b) U.S. Department of Agriculture (USDA) will--
    (1) With the concurrence of EPA, administer a program to enter into 
contracts to install and maintain best management practices to control 
agricultural nonpoint source pollution for improved water quality,
    (2) Act through NRCS and such other USDA agencies as the Secretary 
may designate,
    (3) Provide technical assistance and share the cost of carrying out 
best management practices that are set forth in the contracts,
    (4) Where practicable, enter into agreements with soil conservation 
districts, State soil and water conservation agencies, or State water 
quality agencies to administer all or part of the program for a project 
area,
    (5) Administer the program where it is not practicable for soil 
conservation districts, State soil and water conservation agencies, or 
State water quality agencies to administer all or part of the program 
for a project area,
    (6) Together with local soil conservation districts, determine the 
priorities for assistance to individual participants to assure that the 
most critical water quality problems are addressed,
    (7) Assist in evaluating the overall effectiveness of the program in 
improving water quality, and
    (8) Within the framework of the 208 planning process, make 
additional investigations or plans, where necessary, to supplement 
information contained in the approved agricultural portion of 208 water 
quality management plans for the purpose of selecting among projects to 
be funded.
    (c) Natural Resources Conservation Service (NRCS) will--
    (1) Provide RCWP leadership,
    (2) Retain major technical responsibility for RCWP, and provide 
leadership to assure the adequacy of standards and specifications for 
use by all administering agencies,

[[Page 455]]

    (3) Manage budgeting, accounting, and reporting,
    (4) Chair NRCWCC and assure that RCWP applications are distributed 
to the NRCWCC, including EPA, for review,
    (5) For the Secretary of Agriculture, with the concurrence of the 
Administrator, EPA, approve RCWP projects for funding,
    (6) For the Secretary of Agriculture, select and enter into 
agreements with either soil conservation districts, State soil and water 
conservation agencies, or State water quality agencies, where 
practicable, to adminster all or part of the program,
    (7) Enter into fund transfer agreements to transfer funds to ASCS in 
those instances where the administration of contracts is retained by 
USDA,
    (8) Enter into agreements with other USDA agencies, as appropriate, 
for support which they are to provide,
    (9) Chair SRCWCC,
    (10) For the Secretary of Agriculture, in coordination with NRCWCC, 
determine the maximum Federal contribution to the total cost of the 
project,
    (11) Provide technical assistance through soil conservation 
districts or arrange for other Federal, State, local agencies, or 
private individuals or firms to provide technical assistance as 
appropriate,
    (12) Provide technical assistance to soil conservation districts and 
County Agricultural Stabilization and Conservation (ASC) Committees to 
assist them in determining priorities of assistance among individual 
participants,
    (13) Develop appropriate technical and administrative training 
programs,
    (14) Provide leadership for USDA for comprehensive joint USDA-EPA 
water quality monitoring, evaluation, and analysis in selected project 
areas,
    (15) Provide leadership for USDA in evaluating the effectiveness of 
the program in improving water quality,
    (16) Carry out the function of soil conservation districts for 
approving water quality plans where no soil conservation district 
exists, and
    (17) Through the State Conservationist, after considering 
recommendations of the SRCWCC, reach agreement with the Governor on the 
recommended administering agency to be included in the project 
application.
    (d) The Agricultural Stabilization and Conservation Service (ASCS) 
will--
    (1) Participate on the National, State, and local coordinating 
committees.
    (2) Provide guidance to State and County ASC Committees and 
coordinate the Agricultural Conservation Program (ACP) and the Forestry 
Incentives Program (FIP) with RCWP,
    (3) Where the administration of contracts is retained by USDA, enter 
into agreements with NRCS for the transfer of funds to be allocated to 
County ASC Committees,
    (4) Consolidate reports of the annual cost-share disbursements made 
by the State ASC Committee, and report these disbursements to NRCS,
    (5) Furnish data on land use, crop history, and cost-shared 
conservation measures,
    (6) Review plans and contracts to assure coordination with other 
farm programs, and
    (e) The Forest Service (FS) will--
    (1) Retain technical responsibility for forestry,
    (2) Provide technical assistance through the State forestry agency 
(State Forester as appropriate) for planning, applying, and maintaining 
forestry best management practices, and
    (3) Participate on the National, and as appropriate, State, and 
local coordinating committees.
    (f) The Science and Education Administration (SEA) will--
    (1) Develop, implement, and coordinate educational programs for 
agricultural nonpoint source water pollution control,
    (2) Participate on the National, and as appropriate, State, and 
local coordinating committees, and
    (3) Provide technical assistance for appropriate BMP's.
    (g) The Economics, Statistics, and Cooperatives Service (ESCS) will:
    (1) Participate on the National coordinating committee and, as 
appropriate, particpate in State, and local coordinating committee 
activities,
    (2) Assist in the economic evaluation of best management practices 
and RCWP projects,

[[Page 456]]

    (3) Make data available from existing and planned ESCS surveys 
relating to water quality and related matters,
    (4) Assist in RCWP evaluation by making available the ESCS land and 
water resource economic modeling systems, and
    (5) Conduct socioeconomic research, within ESCS authorities and 
funds, on relevant policy and program issues pertinent to RCWP.
    (h) The Farmers Home Administration (FmHA) will--
    (1) Participate on the National, and as appropriate, State and local 
coordinating committees, and
    (2) Provide assistance and coordinate their farm loan and grant 
programs with RCWP.
    (i) The NRCWCC is chaired by the Administrator, NRCS. Other members 
of the National Committee are the Administrators of ASCS, FmHA, and 
ESCS; the Chief of FS; the Director of SEA; and the Assistant 
Administrator for Water and Waste Management, EPA. Non-Federal agencies 
such as conservation districts, State soil and water conservation 
agencies, State water quality agencies, and other organizations are 
invited to attend as observers. The duties of the Committee are to:
    (1) Coordinate individual agency programs with the Rural Clean Water 
Program,
    (2) Recommend to the Administrator, NRCS, the project applications 
to be funded,
    (3) Advise the Administrator, NRCS, on the maximum Federal 
contribution to the total cost of the project,
    (4) Assist the Administrator, NRCS, in mediating agency differences 
at the State level,
    (5) Periodically advise the Secretary and Assistant Secretary for 
Conservation, Research and Education of program and policy issues, and
    (6) Recommend project areas and criteria for comprehensive, joint 
USDA/EPA water quality monitoring, evaluation, and analyses.
    (j) The SRCWCC is chaired by the State Conservationist, NRCS. Other 
members of the State committee are the State 208 water quality agency, a 
designated representative of the areawide agencies, the State soil and 
water conservation agency, a designated representative of soil and water 
conservation districts, other State and local agencies or individuals as 
the Governor deems appropriate, and representatives of the agency 
members of the NRCWCC. The duties of the committee are to insure that a 
process exists:
    (1) To consult with the Governor or his designee on the Governor's 
determination of priority project areas,
    (2) To assure coordination of activities at the project level by 
assisting in determining the composition and responsibilities of the 
local rural clean water coordinating committee,
    (3) To prepare the RCWP applications for the Governor to submit to 
the State Conservationist, NRCS, based on priorities established by the 
Governor,
    (4) To incorporate adequate public participation, including public 
meeting(s), and appropriate environmental assessment in the preparation 
of RCWP applications,
    (5) To monitor and evaluate the RCWP in the State and to assist USDA 
and EPA in their comprehensive, joint water quality monitoring and 
evaluation of selected project areas in accordance with Sec. 634.50,
    (6) To develop procedures for coordination between conservation 
districts and county ASC committees and between RCWP and other water 
quality programs at the local level,
    (7) To assist the State Conservationist, NRCS, in mediating agency 
differences at the local level,
    (8) To initiate a written agreement setting forth any or all of the 
above activities when the Governor and the Secretary of Agriculture or 
his designee deem it appropriate, and
    (9) To make recommendations to the State Conservationist, NRCS, 
concerning the selection of the administering agency to be included in 
the project application.
    (k) The State soil and water conservation agency will, as 
appropriate:
    (1) Assist in preparing and submitting applications for RCWP,
    (2) Administer all or part of the RCWP for a project area,
    (3) Carry out the responsibilities of soil conservation districts 
for determining priority for assistance among

[[Page 457]]

individual participants where no soil conservation district exists, and
    (4) Participate on the State and local coordinating committees.
    (l) The State 208 water quality agency will, as appropriate:
    (1) Assist in preparing and submitting applications for rural clean 
water projects,
    (2) Administer all or part of the RCWP for a project area,
    (3) Participate on the State and local coordinating committees, and
    (4) Assist in monitoring and evaluating the water quality 
effectiveness of projects.
    (m) The soil conservation district will:
    (1) As appropriate, assist in the preparation and submission of 
applications for rural clean water projects,
    (2) As appropriate, administer all or part of the RCWP in a project 
area.
    (3) As appropriate, participate on the local coordinating 
committees,
    (4) Approve participants' water quality plans, and
    (5) Together with the county ASC Committee, determine the priority 
for assistance among individual participants to assure that the most 
critical water quality problems are addressed.
    (n) The county ASC committee will:
    (1) Together with the soil conservation district, determine the 
priorty for assistance among individual participants to assure that the 
most critical water quality problems are addressed,
    (2) Receive applications for assistance for individual participants 
where USDA retains administration of the program,
    (3) Make cost-share payments to individual participants where USDA 
retains administration of the program, and
    (4) As appropriate, participate on the local coordinating 
committees.
    (o) The designated management agency(s) for the agricultural portion 
of a 208 plan for the project area will:
    (1) Assist in preparing and submitting an application for a rural 
clean water project in an area for which they were designated,
    (2) Submit a letter, as part of the project application, certifying 
that the BMP's proposed for cost sharing are consistent with the BMP's 
in the approved 208 plan,
    (3) Submit a letter, including a schedule, giving assurance that an 
adequate level of participation in the project will be achieved within 5 
years, and
    (4) As appropriate, serve as the administering agency.
    (p) The administering agency will:
    (1) As appropriate, enter into a grant agreement or fund transfer 
agreement with the Natural Resources Conservation Service for:
    (i) Receiving funds from the Natural Resources Conservation Service 
for administrative costs, cost sharing, and technical assistance, as 
appropriate, associated with carrying out the project,
    (ii) Establishing detailed work schedules in accordance with the 
approved project application,
    (iii) Establishing the maximum amount of administrative costs 
chargeable to the grant,
    (iv) Establishing an adequate financial management system,
    (v) Preparing a cost allocation plan,
    (vi) Monitoring and reporting performance,
    (vii) Reviewing applications for assistance from landowners or 
operators,
    (viii) Certifying availability of funds, and
    (ix) Complying with OMB Circular A-102 and other appropriate 
regulations,
    (2) Enter into contracts with participants for the installation and 
maintenance of BMP's based on water quality plans developed by 
participants,
    (3) Make cost-share payments to participants upon receipt of 
certification by NRCS,
    (4) Issue modifications to participant RCWP contracts,
    (5) Develop average cost rates for each practice applicable in the 
project area.
    (6) Sample and inspect materials used in the installation of BMP's,
    (7) Establish a contract violations and appeals and collections 
process,
    (8) Provide for public involvement in the implementation of RCWP in 
a project area, and maintain a mailing list of interested individuals 
and organizations for informing the public

[[Page 458]]

about the activities contemplated and carried out in the project area, 
and
    (9) Maintain records, provide necessary facilities, personnel, and 
legal counsel for carrying out these responsibilities.
    (q) The Governor of each State will:
    (1) In order to qualify for assistance under RCWP:
    (i) Establish priorities for RCWP project areas in the State,
    (ii) Coordinate the development of RCWP project applications with 
the SRCWCC and local agencies,
    (iii) Submit, in order of priority, RCWP project applications to the 
Administrator, NRCS, through the State Conservationist, NRCS, and
    (iv) Recommend an eligible State or local agency to serve as the 
administering agency of the project, or request USDA to be the 
administering agency.
    (2) Where appropriate, with the State Conservationist, NRCS, set 
forth the activities of the SRCWCC in a written agreement,
    (3) Assign additional State and local agencies or individuals to 
membership on the SRCWCC, as appropriate, and
    (4) Reach agreement with the State Conservationist, NRCS, in 
selecting the administering agency.



Sec. 634.5  Definitions.

    (a) Adequate level of participation. An adequate level of 
participation is reached when participants, having control of 75 percent 
of the identified critical area or source of the pollution problem in 
the project area, are under contract. Exceptions may be made where the 
approved agricultural portion of the 208 plan provides data and analyses 
which indicate that a greater or lesser percentage of the critical area 
or source treated is needed to attain water quality standards or water 
quality goals. Fifty (50) percent of the adequate level of participation 
is to be achieved within 3 years; the remainder within 5 years.
    (b) Administering agency. A soil conservation district, State soil 
and water conservation agency, or State water quality agency that enters 
into an agreement with the State Conservationist, NRCS, to administer 
assigned responsibilities for RCWP projects; or ASCS, when USDA retains 
contract administration.
    (c) Administrative cost. Grant and fund transfer costs, including 
allowable costs incurred by the Administering agency in contract 
administration. These costs, indirect and direct, include charges for 
personnel, travel, materials, and supplies. The costs are limited to a 
maximum of 5 percent of the Federal share for BMP cost.
    (d) Agreement. A legal instrument reflecting the relationship 
between NRCS and the administering agency for performance of RCWP 
activities.
    (e) Agricultural nonpoint source pollution. Pollution originating 
from existing nonpoint sources that are (a) agriculturally related, 
including runoff from animal waste disposal areas and from land used for 
livestock and crop production, or (b) silviculturally related pollution.
    (f) Agricultural portion of a 208 plan. That portion of the 208 plan 
that deals with agriculture and those silvicultural activities related 
to farming and ranching enterprises.
    (g) Appeals board. A group of three or more individuals, including a 
hearing officer, established by the administering agency with the 
concurrence of the State conservationist, NRCS, to review asserted 
contract violations, hear associated appeals, and report its findings, 
conclusions, decisions, and recommendations in State or locally 
administered projects.
    (h) Average cost. The calculated cost, determined by recent actual 
local costs and current cost estimates, considered necessary for 
carrying out BMP's or an identifiable unit thereof.
    (i) Best Management Practice (BMP). A single practice or a system of 
practices included in the approved RCWP application that reduces or 
prevents agricultural nonpoint source pollution to improve water 
quality.
    (j) BMP cost. The amount of money actually paid or obligated to be 
paid by the participant for equipment use, materials, and services for 
carrying out BMP's or an identifiable unit of a BMP. If the participant 
uses his or her own resources, the cost includes the computed value of 
his or her own labor, equipment use, and materials.

[[Page 459]]

    (k) Contract. The legal document, that includes the water-quality 
plan and is executed by the participant and the administering agency. It 
details the agreement between parties for carrying out BMP's on the 
participant's land.
    (l) Cost-share level. The percentage of the total cost of installing 
BMP's included in the participant's contract that is paid by the 
administering agency.
    (m) Critical areas or sources. Those finite areas or sources of 
agricultural nonpoint source pollutants identified as having the most 
significant impact on the quality of the receiving waters.
    (n) Federal Management Circular FMC 74-4. ``Cost Principles 
Applicable to Grants and Contracts with State and Local Governments.''
    (o) Financal burden. The participant's contribution to the total 
cost of BMP's that would be inequitable or probably prevent 
participation in RCWP.
    (p) Identifiable unit. A component of a BMP that can be clearly 
identified in carrying out BMP's in the water quality plan.
    (q) Letter of Credit--Treasury Regional Disbursing Officer System. 
The system whereby the letters of credit are maintained and serviced by 
Treasury disbursing centers and Treasury regional disbursing officers.
    (r) Management agency. The Federal, State, interstate, regional, or 
local agency designated by the Governor to carry out the approved 
agricultural portion of the 208 water-quality management plan.
    (s) OMB Circular A-34. ``Instructions on Budget Execution.''
    (t) OMB Circular A-102 (Rev.) Office of Management and Budget 
Uniform Administrative Requirements for Grants-in-Aid to State and local 
governments.
    (u) Offsite benefits. Those favorable effects of BMP's that occur 
away from the land of the participant receiving RCWP assistance and 
accrue to the public as a result of improved water quality.
    (v) Participant. A landowner or operator who applies for and 
receives assistance under RCWP.
    (w) Participants water quality plan. The plan which identifies 
critical agricultural nonpoint source(s) of water quality problems and 
sets forth BMP's which contribute to meeting the water quality 
objectives of the project.
    (x) Privately owned rural land. Those lands not held by Federal, 
State, or local governments which include cropland, pastureland, forest 
land, rangeland, and other associated lands.
    (y) RCWP projects. The total system of BMP's, institutional 
arrangements, and technical, cost-sharing, and administrative assistance 
activities that are authorized in a RCWP project area.
    (z) Standards and specifications. Requirements that establish the 
minimum acceptable quality level for planning, designing, installing, 
and maintaining BMP's.
    (aa) State. Any of the several States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin 
Islands, Guam, American Samoa, the Commonwealth of the Northern 
Marianas, and the Trust Territory of the Pacific Islands.
    (bb) Technical assistance cost. Those direct and indirect costs 
associated with the preparation and review of participant water quality 
plans; design, layout and application of BMP's; and investigations 
associated with monitoring and evaluating progress toward meeting 
project objectives.
    (cc) Treasury Circular 1075 (Rev.). Uniform Administrative 
Requirements for Grants-in-Aid to State and local governments.



               Subpart B_Project Authorization and Funding



Sec. 634.10  Applicability.

    RCWP is applicable in project areas that meet the criteria for 
eligibility contained in Sec. 634.12 and are authorized for funding by 
the Administrator, NRCS.



Sec. 634.11  Availability of funds.

    (a) The provisions of the program are subject to the appropriation 
of funds by Congress to the U.S. Department of Agriculture.
    (b) The allocation of funds to the administering agencies is to be 
made on the basis of the total funds needed to carry out the project.
    (c) The obligation of Federal funds for RCWP contracts with 
participants

[[Page 460]]

is to be made on the basis of the total contract costs.



Sec. 634.12  Eligible project areas.

    (a) Only those project areas which are included in an approved 
agricultural portion of a 208 water quality management plan, or revised 
portions thereof, and have identified agricultural nonpoint source water 
quality problems are eligible for authorization under RCWP. Those 
critical areas or sources of pollutants significantly contributing to 
the water quality problems are eligible for financial and technical 
assistance.
    (b) The management agency designated by the Governor under section 
208(c)(1) of the Act to implement the agricultural portion of the 208 
plan must assure in writing in the project application that there will 
be an adequate level of participation by land owners or operators with 
critical areas or sources in a project area.
    (c) An RCWP project area is a hydrologically related land area. 
Exceptions may be made for ease of administration, or to focus on 
concentrated critical areas. To be designated as an RCWP project area 
eligible for authorization, the area's water quality problems must be 
related to agricultural nonpoint source pollutants, including sediment 
animal waste, irrigation return flows, runoff, or leachate that contain 
high concentrations of nitrogen, phosphorus, dissolved solids, toxics 
(pesticides and heavy metals), or high pathogen levels. Generally, the 
project areas will be less than 200,000 acres.



Sec. 634.13  Project applications.

    (a) The SRCWCC is to assure that a process exists to prepare the 
RCWP project applications for submission by the Governor in order of 
priority to the Administrator, NRCS, through the State Conservationst, 
NRCS. This process must include the opportunity for public 
participation, especially participation by potential RCWP participants. 
Applications will be submitted in conformance with OMB Circular A-95.
    (b) The preparation and submission of applications are to be based 
on the priorities established by the Governor and data and information 
in the approved agricultural portion of the State or areawide 208 water 
quality management plan.
    (c) Applications shall contain the following components. Additional 
material may be added when, in the judgment of the applicant, it is 
needed to fully support the application and/or would enhance the 
probability of project authorization. Information provided under each 
component shall be in sufficient detail to permit the NRCWCC to evaluate 
the application using priority criteria in Sec. 634.14.
    (1) Description of the project area,
    (2) Severity of the water quality problem,
    (3) Objectives and planned action,
    (4) Schedule for carrying out the plan, and
    (5) Estimated cost. This component is to identify and show the basis 
for those costs associated with completing the project. The project 
application shall include an estimate of the total cost of the project, 
the Federal contribution, and the non-Federal contribution. The Federal 
contribution shall not exceed 50 percent unless the application, based 
on offsite benefits and financial burden, show that a higher level is 
appropriate.
    (6) Estimated water quality benefits and effects.
    (7) Arrangements for project administration. This component is to 
set out the applicant's plan for carrying out the program in the project 
area. The plan should:
    (i) Identify the administering agency and document the capability of 
the agency to carry out the responsibilities described in Sec. 
634.4(p). In addition, information should be included to describe the 
administering agency staff, the location of that staff relative to the 
project area, and the experience of the agency in administering 
comparable grant programs.
    (ii) Where appropriate, describe the specific arrangements that have 
been made, or that are anticipated, for local, State, and Federal agency 
participation such as technical assistance and other cost-sharing 
programs.
    (8) Attachments. The following attachments are the minimum required 
with each application:

[[Page 461]]

    (i) A letter from the water-quality management agency designated by 
the Governor to carry out the approved agricultural portion of the 208 
water quality management plan for the area or source certifying that the 
BMPs to be cost shared are consistent with the BMP's in the 208 plan,
    (ii) A letter from the designated management agency which assures 
and sets out a strategy for reaching an adequate level of participation 
(Sec. 634.5(a)).
    (iii) As appropriate, the preapplication for Federal assistance (OMB 
Circular A-102) from the identified administering agency, and
    (iv) A listing of the prevailing cost-share levels of other programs 
in the project area.



Sec. 634.14  Review and approval of project applications.

    (a) In reviewing applications and recommending priorities, the 
NRCWCC will consider the following:
    (1) Severity of the water quality problem caused by agricultural and 
silvicultural related pollutants, including:
    (i) State designated uses of the water affected,
    (ii) Kinds, sources, and effects of pollutants, and
    (iii) Miles of stream or acres of water bodies affected,
    (2) Demonstration of public benefits from the project, including:
    (i) Effects on human health,
    (ii) Population benefited by improved water quality,
    (iii) Effects on the natural environment, and
    (iv) Additional beneficial uses of the waters that result from 
improvement of the water quality,
    (3) Economic, and technical feasibility to control water quality 
problems within the life of the project, including:
    (i) Cost effectiveness of BMP's,
    (ii) Size of the area and BMP's needed, and
    (iii) Cost per participant and cost per acre for solution of 
problem,
    (4) State and local input in the project area, including:
    (i) Funds for cost-sharing, technical, and administrative costs. 
States or local governments with their own cost-share programs may 
receive greater consideration for the funding of RCWP projects,
    (ii) Commitment of local leadership to promote the program, and
    (5) The project area's contribution to meeting the national water 
quality goals.
    (b) Based on the project applications, the NRCWCC is to recommend an 
upper limit of the Federal contribution to the total cost of the 
project.
    (c) All project applications will be reviewed by EPA. Project 
applications approval for funding require written EPA concurrence, 
except that the Administrator, NRCS, may assume EPA's concurrence if EPA 
does not act within 45 days following receipt of the project 
application. EPA review of project applications will occur concurrently 
with review by the NRCWCC.
    (d) The Administrator, NRCS, will approve projects for funding. The 
NRCWCC acting through the Chairman will announce the approval of the 
project. The State Conservationist, NRCS, through the SRCWCC, will also 
inform the other involved Federal, State, and local agencies of the 
approval.



Sec. 634.15  Agreements.

    The State Conservationist, NRCS, upon receiving notice of an 
approved project, is to enter into a grant agreement with the 
administering agency, except in those cases where USDA is to administer 
the program. When USDA retains administration, the State 
Conservationist, NRCS, is to enter into a fund transfer agreement with 
the State Executive Director, ASCS.
    (a) Grant agreements. Grant agreements detail the working 
arrangements and applicable operating regulations between NRCS and the 
administering agency. A written grant agreement identifying the parties 
involved, their responsibilities for carrying out the program, and the 
amount of program funds to be encumbered by NRCS is to be executed by 
the parties. This agreement is the fund obligating document. It also 
sets out the necessary working arrangements between parties for 
determining and allocating the administering agency's costs. All grants 
to administering agencies are to be in

[[Page 462]]

accordance with OMB Circular No. A-102, Department of the Treasury 
Circular No. 1075, and Federal Management Circular No. 74-4. State or 
local administering agency grants will be funded under Letter-of-Credit 
serviced by the U.S. Treasury Regional Disbursing Office, or by NRCS 
approved advance/reimbursement financing arrangements subject to the 
terms and conditions of the grant agreement.
    (1) The grant agreement will provide for payment of cost-sharing for 
BMP (Sec. 634.5(j)) and administrative costs (Sec. 634.5(c)).
    (2) The grant agreement may provide for payment of technical 
assistance costs when the administering agency has the capability, and 
the NRCS designates that agency to provide this assistance to RCWP 
participants.
    (3) The administering agency is to monitor the performance of 
activities supported by RCWP grant funds to assure that time schedules 
and participant RCWP contract requirements are being met. Performance 
goals are to be measured against the terms of the grant agreement and 
program directives. When NRCS determines that onsite technical 
inspections, certified completion data, and financial status reports do 
not provide adequate grant evaluation data, the following information 
may be requested:
    (i) A comparison of actual accomplishments with the objectives 
established for the plan,
    (ii) Reasons why established objectives were not met, and
    (iii) Objectives established for the next reporting period.
    (4) Grant agreements may be amended by mutural agreement of the 
parties to the agreement. NRCS may unilaterally amend agreements when 
the sole consideration is a change in the cost and the Administrator, 
NRCS, based on NRCWCC recommendations, determines that such an 
adjustment is necessary to carry out the program efficiently and 
effectively.
    (b) Fund transfer agreements. When it is impractical for NRCS to 
enter into agreements with local soil conservation districts, State soil 
and water conservation agencies, or State water quality agencies to 
administer the program in a project area, USDA will retain program 
administration. In this case, the State Executive Director, ASCS, and 
the State Conservationist, NRCS, are to enter into an agreement for the 
transfer of funds to ASCS through county ASC committees for activities 
included in administrative cost (Sec. 634.5(c)) and BMP cost (Sec. 
634.5(j)). The following general working arrangements are to apply:
    (1) Administering contracts, making cost-share payment, and program 
reporting are to be provided by ASCS as the administering agency.
    (2) NRCS, or its designee, with appropriate Federal or State agency 
support, will provide technical assistance to participants in preparing 
RCWP contracts and in carrying out their water-quality plans.
    (c) Agreements for services. NRCS may enter into an agreement for 
services with a State or local agency. The designee must meet the 
requirements of OMB Circular No. A-102.
    (d) Contracts for services. NRCS may enter into contracts for 
services with individuals or firms for providing technical assistance.



Sec. 634.16  Suspension of grants.

    (a) Suspension orders. Work on a project or on a portion or phase of 
a project for which a grant has been awarded, may be suspended by order 
of the State Conservationist, NRCS. Suspension does not affect RCWP 
contracts existing at the time the suspension order is issued, or the 
administering agency's responsibility to make payments under such 
contracts unless specifically provided for in the suspend order. In no 
event will the participant's right to cost-share payment be diminished 
by action taken under this section.
    (b) Use of suspension orders. Suspension may be required for good 
cause, such as default by the administering agency, failure to comply 
with the terms and conditions of the grant, realignment of programs, or 
advancements in the state of the art.
    (c) Contents of suspension orders. Prior to issuance, suspension 
orders will be discussed with the administering agency and may be 
appropriately modified, in the light of such discussions. Suspension 
orders are to include:

[[Page 463]]

    (1) A clear description of the work to be suspended,
    (2) Instructions as to the issuance of further orders by the 
administering agency for materials or services,
    (3) Instructions as to the administering agency entering into new 
RCWP contracts in the project area,
    (4) Instructions as to the administering agency servicing existing 
RCWP contracts in the project area, and
    (5) Other instructions to the administering agency for minimizing 
Federal costs.
    (d) Issuance of suspension order. Suspension orders are issued by 
the State Conservationist, NRCS, by letter to the administering agency 
(certified mail, return receipt requested). A suspension order may not 
exceed forty-five (45) calendar days.
    (e) Effect of suspension order. (1) Upon receipt of a suspension 
order, the administering agency shall promptly comply with its terms and 
take all reasonable steps to minimize costs allocable to the work 
covered by the order during the period of work suspension. During the 
suspension period, NRCS shall either:
    (i) Cancel the suspension order, in full or in part, and authorize 
resumption of work, or
    (ii) Take action to terminate the work covered by such order as 
provided by Sec. 634.17.
    (2) If a suspension order is canceled, or the period of the order 
expires, the administering agency shall promptly resume the suspended 
work. An equitable adjustment shall be made in the grant period, the 
project period, or grant amount, or all of these, and the grant 
agreement may be amended:
    (i) The suspension order results in an increase in the time, or cost 
properly allocable to, the performance of any part of the project; and
    (ii) The administering agency asserts a written claim for such 
adjustment within thirty (30) days after the end of the period of work 
suspension. If no written claim is made, NRCS may unilaterally make such 
adjustments.
    (iii) Reasonable costs resulting from the suspension order shall be 
allowed in arriving at any terminations settlement.
    (3) Costs incurred by the administering agency after a suspension 
order is delivered that are not authorized by this section or 
specifically authorized in writing by the State Conservationist, NRCS, 
shall not be allowable costs.



Sec. 634.17  Termination of grant agreement.

    (a) Termination agreement or notice. (1) The State Conservationist, 
NRCS, may, based on evidence of failure to comply with the terms of the 
grant agreement, issue a notice of intent to terminate the grant 
agreement. The notice of intent to terminate has the force and effect of 
extending or modifying the conditions of the suspend order. Any 
modification of the conditions of the suspend order shall be shown in 
the notice and discussed with the administering agency. The State 
Conservationist shall give not less than ten (10) days written notice to 
the administering agency (certified mail, return receipt requested) of 
intent to terminate the grant in whole or in part.
    (2) After the administering agency has been afforded an opportunity 
for consultation, the State Conservationist, NRCS, may request 
authorization from the Administrator, NRCS, to terminate the grant in 
whole or in part. If the Administrator, NRCS, concurs in the termination 
action, the proposed termination notice will be forwarded to the 
Administrator, EPA, for concurrence.
    (3) After the Administrators, NRCS and EPA, have been informed of 
any expressed views of the administering agency and concurred in the 
proposed termination, the State Conservationist, NRCS, may, in writing 
(certified mail, return receipt requested), terminate the grant in whole 
or in part.
    (4) Termination of all or part of the grant agreement may be carried 
out by either execution of a termination agreement by the State 
Conservationist, NRCS, or issuance of a grant termination notice by the 
State Conservationist, NRCS. The agreement or notice shall establish the 
effective date of termination of the grant, the basis for settlement of 
grant termination

[[Page 464]]

costs, and the amount and date of payment of any sums due either party.
    (b) Basis for termination. A grant may be terminated by NRCS for 
good cause subject to negotiation and payment of appropriate termination 
settlement costs. Cause for termination by NRCS includes:
    (1) Failure by the administering agency to make satisfactory 
progress toward achieving an adequate level of participation; or other 
evidence satisfactory to the NRCWCC, Administrator, EPA, and the 
Administrator, NRCS, that the administering agency has failed or is 
unable to perform in accordance with the provisions of the grant 
agreement; or
    (2) Failure through no fault of the administering agency to achieve 
an adequate level of participation; or other evidence satisfactory to 
the NRCWCC, Administrator, EPA, and the Administrator, NRCS, that the 
planned actions approved in the project application cannot be achieved.
    (c) Effect of grant termination. (1)(i) In those cases where cause 
for grant termination is based on the administering agency's failure or 
inability to perform (Sec. 634.17(b)(1)), upon termination, the 
administering agency must refund or credit to the United States that 
portion of the grant funds paid or owed to the administering agency and 
allocable to the terminated project work. Funds needed to meet 
unavoidable commitments may be retained. All other funds, including 
unexpended cost-sharing monies for existing RCWP contracts executed 
prior to the termination date, shall be refunded to the United States. 
The administering agency shall not make any new commitments or enter 
into any new RCWP contracts. The administering agency shall reduce the 
amount of other outstanding commitments insofar as possible and report 
to the State Conservationist, NRCS, the uncommitted balance of funds 
awarded under the grant. The allowability of termination costs will be 
determined in conformance with applicable Federal cost principles.
    (ii) Upon termination of a grant agreement, existing RCWP contracts 
and their related obligations will immediately, and in no case later 
than 5 calendar days be transferred to the ASCS county office to assure 
continuity in payments to participants. The State Conservationist, NRCS, 
will immediately initiate action under Sec. 634.15 to establish a new 
administering agency for completion of the project.
    (2) In those cases where cause for grant termination is based on 
failure to achieve the planned actions through no fault of the 
administering agency, the termination agreement and amended grant 
agreement are to permit the administering agency to fulfill the 
obligations of its existing RCWP contracts. The administering agency 
shall not make any new commitments or enter into any new RCWP contracts 
without NRCS approval.



Sec. 634.18  Termination of project.

    (a) An RCWP project is terminated by the State Conservationist 
because an adequate level of participation cannot be achieved. Upon this 
determination, the State Conservationist shall publish in a newspaper of 
public record in the project area a notice of intent to terminate all or 
part of the grant agreement and the project (Sec. 634.7(c)), and an 
announcement of the time and place of a public hearing.
    (b) No sooner than 15 days from the publication of the notice of 
intent to terminate all or part of the project and grant agreement, the 
State Conservationist will conduct a public hearing in the project area.
    (c) If, based on the hearing record, the performance record of the 
administering agency, and the recommendations of the SRCWCC, the State 
Conservationist determines that the proj ect will be terminated pursuant 
to Sec. 634.17(c), the State Conservationist will enter into a grant 
termination agreement or issue a grant termination notice.
    (d) The existing RCWP contracts will be transferred to the ASCS 
county office pursuant to Sec. 634.17(c)(1)(ii).
    (e) The State Conservationist will prepare a project close-out 
report summarizing the actions accomplished.

[[Page 465]]



Sec. 634.19  Project completion and closeout.

    (a) The maximum total life of a project shall be fifteen (15) years 
or less.
    (b) The allowable contracting period may be increased if an adequate 
level of participation has been achieved and the designated management 
agency assures a significant increase in participation can be reached in 
a reasonable time.
    (c) The grant or fund transfer agreement with an administering 
agency shall expire when the administering agency has fulfilled all of 
its obligations in the long-term RCWP contracts.
    (d) When a project is completed, the administering agency is to 
provide the State Conservationist, NRCS, a closeout report which 
summarizes the actions accomplished.



                  Subpart C_Participant RCWP Contracts



Sec. 634.20  Eligible land.

    RCWP is only applicable to privately owned land. Land owned by 
corporations whose ownership is public (i.e., their stock is publicly 
traded over the market) is eligible for program assistance only if the 
corporation can document that the installation of BMP's places an 
inappropriate financial burden on the corporation.



Sec. 634.21  Eligible participants.

    (a) Any landowner or operator whose land or activities in a project 
area is contributing to the area's agricultural nonpoint source water 
quality problems and who has an approved water quality plan is eligible 
to enter into an RCWP contract.
    (b) This program will be conducted in compliance with all 
nondiscrimination requirements as contained in the Civil Rights Act of 
1964 and amendments thereto and the Regulations of the Secretary of 
Agriculture (7 CFR 15.1 through 15.12).



Sec. 634.22  Application for assistance.

    (a) Landowners or operators must apply for RCWP assistance through 
the office of the administering agency or its designee(s) by completing 
the prescribed application form.
    (b) The priority for assistance among landowners and operators in 
developing water quality plans is to be determined jointly, through an 
agreed-to process, by the county ASC committee and the soil conservation 
district, with technical assistance from NRCS.
    (c) Applications that are ineligible or technically infeasible are 
to be returned to the applicant with a letter stating the reasons for 
disapproval. Applications that are of a low priority will be retained 
and the applicant will be sent a notice that the application is being 
held for a period to be determined locally for future consideration.



Sec. 634.23  Water quality plan.

    (a) The participant's water quality plan, developed with technical 
assistance by the NRCS or its designee, is to include appropriate BMP's 
identified in the approved agricultural portion of the 208 water quality 
management plan. Such BMP's must reduce the amount of pollutants that 
enter a stream or lake by:
    (1) Methods, such as reducing the application rates or changing the 
application methods of potential pollutants, and
    (2) Methods, such as practices or combinations of practices which 
prevent potential pollutants from leaving source areas or reduce the 
amount of potential pollutants that reach a stream or lake after leaving 
a source area.
    (b) Participant's water quality plans shall as a minimum include 
BMP's for all critical areas or sources. The plans will include BMP's 
which are required but not cost-shared. Non-cost-shared BMP's, essential 
for the performance and maintenance of cost-shared BMP's shall be 
required as a condition of the RCWP contract.
    (c) The participant is responsible for compliance with all other 
applicable Federal, State, and local laws that deal with the 
participant's nonpoint source water quality problems, such as the 
treatment, storage, and disposal of hazardous waste. BMP's required for 
compliance may be cost shared.
    (d) It is recognized that the participants' water-quality plans upon 
which

[[Page 466]]

the RCWP contracts are to be based may include conservation measures 
other than those related to water quality improvement. These measures 
are not eligible for cost sharing under this program. The installation 
of such conservation measures will not be required as a condition of the 
RCWP contract and will not be shown in the time schedules for 
implementing BMP's.
    (e) Time schedules for implementing BMP's are to be provided in the 
participant's water quality plan. The time schedule is to establish the 
length of the contract within the 5 to 10 year period established by 
law.
    (f) The Natural Resources Conservation Service will certify as to 
the technical adequacy of the water-quality plan.
    (g) The soil conservation districts are to review and approve all 
water-quality plans and modifications.



Sec. 634.24  Cost sharing.

    (a) The portion of BMP cost (including labor) to be cost shared 
shall be that part which the Secretary determines is necessary and 
appropriate. The value of land upon which BMP's are applied, or the 
participant's water rights, cannot be considered a part of the 
participant's share of the cost.
    (b) The administering agency, in consultation with the county ASC 
committee(s), soil conservation dis trict(s), and designated management 
agency will annually set maximum individual BMP cost-share levels for 
the project area. However, the Federal share of the cost of the contract 
cannot exceed 50 percent unless a variance has been granted.
    (c) Recommended variances exceeding the 50 percent level must be in 
the public interest and based on the following criteria:
    (1) The main benefits to be derived from measures are related to 
improving offsite water quality, and
    (2) The matching share requirements would place a burden on the 
landowner or operator which would probably prevent him or her from 
participating in the program.
    (d) BMP's to be cost shared must have a positive effect on water 
quality by reducing the amount of agricultural nonpoint source 
pollutants that enter a stream or lake.
    (e) Cost sharing is not to be made available for:
    (1) Measures installed primarily for bringing additional land into 
crop production, including but not limited to land clearing and brush 
removal;
    (2) Measures installed primarily for increasing production on 
existing cropland, including but not limited to bedding, field ditches, 
open drains, and tile drains;
    (3) Measures having flood protection as the primary purpose, 
including but not limited to open channels, clearing and snagging, and 
obstruction removal;
    (4) Structural measures authorized for installation under Pub. L. 
83-566.
    (f) The Federal cost-share level is not to be reduced by the 
contribution of a State or subdivision thereof. Total payments from 
Federal, State, and local sources for a BMP may not exceed the total 
cost of that BMP.



Sec. 634.25  Contracting.

    (a) To participate in RCWP, a landowner or operator must enter into 
a contract in which he or she agrees to apply his or her water-quality 
plan. Any person who controls, or shares control, of the farm, ranch, or 
other land for the proposed contract period (5 to 10 years) must sign 
the contract.
    (b) Cost-sharing payments cannot be provided for any measure that is 
initiated before the contract is approved by the administering agency.
    (c) The participant must furnish satisfactory evidence of his or her 
control of the farm, ranch, or other land. The administering agency is 
to determine the acceptability of the evidence and maintain current 
ownership evidence in the contract file.
    (d) RCWP contracts shall include the basic contract document, 
special provisions as needed, the participant's water-quality plan, 
schedule of operations, and any other data necessary.
    (e) NRCS or its designee shall approve the technical adequacy of the 
RCWP contract and obtain the required signature of the participants. The 
NRCS or its designee will provide the contract to the administering 
agency for certification of fund availability and for execution.

[[Page 467]]

    (f) Participants shall install best management practices according 
to the specifications that are applicable at the time measures are 
installed.
    (g) NRCS will provide technical assistance to participants for 
installing BMPs. The State Conservationist, NRCS, or its designee may 
enter into contracts with qualified soil conservation districts or 
others to provide technical assistance.
    (h) The RCWP contract is to require BMPs to be operated and 
maintained by the participant at no cost to that administering agency.
    (i) The contract period is to be not less than 5 and not more than 
10 years. A contract is to extend for at least 1 year after the 
application of the last cost-shared BMPs. All contract items are to be 
accomplished prior to contract expiration.
    (j) A land owner or operator may enter into a contract jointly 
(pooling ageement) with other land owners or operators to solve mutual 
water quality problems. Each participant must enter into an RCWP 
contract to treat water quality problems not covered by the joint 
arrangement.
    (k) Participants may use all available sources of assistance to 
accomplish their water-quality objectives. They are responsible for:
    (1) Accomplishing the water-quality plan;
    (2) Keeping the administering agency informed of their current 
mailing address;
    (3) Obtaining, having in hand, and maintaining any required permits 
and landrights necessary to perform the planned work;
    (4) Applying or arranging for the application of BMPs, as scheduled 
in the plan, according to approved standards and specifications;
    (5) The operation and maintenance of BMPs installed during the 
contract period; and
    (6) Obtaining the authorities, rights, easements, or other approvals 
necessary to maintain BMPs in keeping with applicable laws and 
regulations.
    (l) Unless otherwise approved by the Administrator, NRCS, and 
Administrator, EPA, the administering agency shall not enter into any 
new RCWP contracts after five (5) years of elapsed time from the date 
when RCWP funds are first made available to begin the project.
    (m) Contracts may be terminated due to hardship by mutual agreement 
if the administering agency and the State Conservationist, NRCS, 
determine that such action would be in the public interest.



Sec. 634.26  Contract modifications.

    (a) The administering agency may modify contracts previously entered 
into if it is determined to be desirable to carry out the purposes of 
the program, facilitate the practical administration thereof, or to 
accomplish equitable treatment with respect to other conservation, land-
use, or water-quality programs.
    (b) Requirements of active contracts may be waived or modified by 
the administering agency only if such waiver or modification is 
specifically provided for in these regulations. NRCS concurrence in 
modifications is necessary when modifications involve a technical aspect 
of the participant's water-quality plan. A contract may be modified only 
if it is determined that such modifications are desirable to carry out 
purposes of the program or to facilitate the program's practical 
administration.
    (c) Contracts may be modified to add, delete, substitute, or 
reinstall best management practices when:
    (1) The installed measure failed to achieve the desired results 
through no fault of the participant,
    (2) The installed measure deteriorated because of conditions beyond 
the control of the participant, or
    (3) Another BMP is substituted that will achieve the desired 
results.
    (d) Contract modifications are not required when items of work are 
accomplished prior to scheduled completion or within 1 year following 
the year of scheduled completion.
    (e) If, during the contract period, all or part of the right and 
interest in the land is transferred by sale or other transfer action, 
the contract is terminated on the land unit that was transferred and the 
participant having control over such land:

[[Page 468]]

    (1) Forfeits all right to any future cost-share payments on the 
transferred land unit, and
    (2) Must refund with interest all cost-share payments that have been 
made on the transferred land unit unless the new land owner or operator 
becomes a party to the contract, except that where it is determined by 
the administering agency, with the approval of the State 
conservationist, NRCS, that the established BMPs will provide water 
quality benefits for the design life of the BMP, the payment may be 
retained.
    (f) If the new land owner or operator becomes a party to the 
contract:
    (1) Payment which has been earned, but not made to the participant 
who applied the BMPs and had control prior to the transfer, can be made,
    (2) Such land owner or operator is to assume all obligations of the 
previous participant on the transferred land unit,
    (3) The contract with the new participant is to remain in effect 
with the original terms and conditions, and
    (4) The contract is to be modified in writing to show the changes 
caused by the transfer. If the modification is not acceptable to the 
administering agency, the provisions of paragraphs (e) (1) and (2) of 
this section apply.
    (g) The transfer of all or part of a land unit by a participant does 
not affect the rights and obligations of other participants who have 
signed the contract.



Sec. 634.27  Cost-share payment.

    (a) General. Participants are to obtain or contract for materials or 
services as needed to install BMPs. Federal Cost-share payments are to 
be made by the administering agency upon certification by the District 
Conservationist, NRCS, or its designee, that the BMPs, or an 
identifiable unit thereof, have been properly carried out and meet the 
appropriate standards and specifications.
    (b) Payment maximum. The maximum total Federal cost-share payment to 
a participant shall be limited to $50,000. Exceptions to this limit may 
be made by the administering agency with concurrence of the 
Administrator, NRCS, upon recommedation of the NRCWCC, where it 
determines that the main benefits to be derived are essential for 
meeting the water quality objectives in the project area.
    (c) Basis for cost-share payment. (1) Cost-share payments are to be 
made by the administering agency at the cost-share percentage and by one 
of the following methods designated by the administering agency and set 
out in the contract:
    (i) Average cost, or
    (ii) Actual cost not to exceed average cost.
    (2) If the average cost at the time of starting the installation of 
a BMP or identifiable unit is less than the costs specified in the 
contract, payment is to be at the lower rate. If the costs at the start 
of installation are higher, payment may be made at the higher rate. A 
modification will be necessary if the higher cost results in a 
significant increase in the total cost-share obligation. Cost-share 
payment is not to be made until the modification reflecting the increase 
is approved.
    (d) Average cost development. Average costs are to be developed by 
the administering agency for each project using cost data from the local 
area. These costs should be reviewed by the SRCWCC for consistency with 
average costs in other USDA programs. The average cost list is to be 
updated annually by the administering agency.
    (e) Application for payment. Cost-share payments can be made by the 
administering agency after a participant has carried out a BMP or an 
identifiable unit of a BMP. Application for payment must be submitted to 
the administering agency, be certified by the NRCS or its designee, and 
be supported by such cost receipts as are required by the administering 
agency. It is the participant's responsibility to apply for payments.
    (f) Authorizations for payments to suppliers. (1) The contract may 
authorize that part or all of the Federal cost share for a BMP or an 
identifiable unit be made directly to suppliers of materials or 
services. The materials or services must be delivered or performed 
before payment is made.
    (2) Federal cost shares will not be in excess of the cost share 
attributable to the material or service used or not in

[[Page 469]]

excess of the cost share for all identifiable units as may be requested 
by the participant.
    (g) Material inspection and analysis. When authorizations for 
payments to suppliers are specified, the administering agency, its 
representatives, or the Government reserve the right to inspect, sample, 
and analyze materials or services prior to their use.
    (h) Assignments, set-offs, and claims. (1) A State or local 
administering agency may allow the assignment of payments to the extent 
provided by State law. When ASCS is designated as the administering 
agency, assignments by any participant who may be entitled to cost-share 
payment under the program are prohibited unless they are made in 
accordance with the provisions of section 203, Title 31, U.S.C., as 
amended, and section 15, Title 41, U.S.C., as amended.
    (2) If any participant to whom compensation is payable under RCWP is 
indebted to the United States and such indebtedness is listed on the 
county register of indebtedness maintained by the County ASC committee, 
the compensation due the participant must be used (set-off) to reduce 
that idebtedness. Indebtedness to USDA is to be given first 
consideration. Deductions for setoffs involving a nonresident alien 
shall be made as provided by 26 U.S.C. 871. Setoffs made pursuant to 
this section are not to deprive the participant of any right to contest 
the justness of the indebtedness involved, either by administrative 
appeal or by legal action.
    (3) Any cost-share payment due any participant shall be allowed 
without deduction of claims for advances except as provided for above 
and without regard to any claim or lien against any crop, or proceeds 
thereof, in favor of the participant or any other creditor.
    (i) Access to land unit and records. Any authorized administering 
agency, or NRCS employees or agents, shall have the right of access at 
reasonable times to land under application or contract, and the right to 
examine any program records to ascertain the accuracy of any 
representations made in the application or contract. This is limited to 
the right to furnish technical assistance and to inspect work performed 
under the contract.
    (j) Suspension of payments. No cost-share payments will be made 
pending a decision on whether or not a contract violation has occurred.
    (k) Ineligible payments. The filing of requests for payment for 
BMP's not carried out, or for BMP's carried out in such a manner that 
they do not meet contract specifications, constitutes a violation of the 
contract.



Sec. 634.28  Appeals not related to contract violations.

    (a) The participant may, prior to execution of the contract, request 
that the administering agency review or reconsider criteria being used 
in developing his or her contract. Such review or reconsideration may 
include the eligibility of BMP's which had not been approved for 
application in the project area, cost-sharing levels for BMP's, 
priorities for developing water quality plans, and standards and 
specifications.
    (1) If verbal agreement is not reached, the participant may make a 
written request within 30 days after receiving notice of the decision of 
his or her verbal request.
    (2) The administering agency shall have 30 days in which to make a 
decision and notify the participant in writing.
    (3) The decision of the administering agency shall be final.
    (b) If, after the contract has been executed, the participant and 
the administering agency are unable to reach written agreement relative 
on matters which are not related to contract violations, the participant 
may request and receive a review by the appeals board. The administering 
agency will:
    (1) Notify the participant, in writing, of the date the appeals 
board will consider the appeal.
    (2) Within 30 days after receiving the administering agency's 
notice, the participant may file a request to appear and present oral 
and other evidence. If the participant does not request an appearance, 
the administering agency appeals board will decide the dispute on

[[Page 470]]

the evidence available to them, including statements or briefs of the 
authorized representatives of the soil conservation district and NRCS. 
The administering agency shall notify the participants of the appeals 
board's decision in writing. There shall be no further administrative 
appeal of this decision.
    (c) Filing of documents. A document is considered filed when it is 
received in the office of the person or agency concerned.



Sec. 634.29  Violations.

    (a) Actions causing violations. The following actions constitute 
violation of a contract by a participant:
    (1) Knowingly or negligently damaging or causing BMP's to become 
impaired.
    (2) Adopting a land use or practice during the contract period which 
tends to defeat the purposes of the program.
    (3) Failing to comply with the terms of the contract.
    (4) Filing a false claim.
    (5) Misusing authorizations for payment.
    (b) Contract termination as a result of violations. (1) By signing a 
contract, the participant agrees to forfeit all rights to further cost-
sharing payments under a contract and to refund all cost-share payments 
received, with interest, if the administering agency, with the 
concurrence of the State Conservationist, NRCS, determines that:
    (i) There was a violation of the contract during the time the 
participant had control of the land; and
    (ii) The violation was of such a nature as to warrant termination of 
the contract.
    (2) The participant shall be obligated to refund all cost-share 
payments and all cost shares paid under authorizations, with interest, 
at the rates established by the Secretary of the Treasury pursuant to 
Pub. L. 92-41, 85 Stat. 97.
    (c) Payment adjustments and refunds resulting from violations. (1) 
By signing a contract, the participant agrees to refund cost-share 
payments received under the contract or to accept payment adjustments if 
the administering agency determines and the State Conservationist, NRCS, 
concurs that:
    (i) There was a violation of the contract during the time the 
participant had control of the land; and
    (ii) The nature of the violation does not warrant termination of the 
contract.
    (2) Payment adjustments may include decreasing the rate of cost 
share, or deleting from the contract a cost-share commitment, or 
withholding cost-share payments earned but not paid. The participant who 
signs the contract may be obligated to refund cost-share payments.



Sec. 634.30  Appeals in USDA administered projects.

    The participant in a USDA-administered RCWP project may appeal 
decisions of the administering agency in accordance with part 614 of 
this title.

[60 FR 67316, Dec. 29, 1995]



Sec. 634.31  Appeals of contract violations.

    (a) Scope. This section prescribes the regulations dealing with 
contract violations. The Administrator, NRCS, reserves the right to 
revise or supplement any of the provisions of this section at any time 
if the action does not adversely affect the participant, or if the 
participant has been officially notified before this action is taken.
    (b) Determination by administering agency. Upon notification that a 
contract violation may have occurred, the administering agency:
    (1) Determines that a violation did not occur or that the violation 
was of such a nature that no further action is to be taken; or
    (2) Determines that a violation did occur and the participant agrees 
to accept a written penalty of forfeiture, refund, payment adjustment, 
or termination. If no agreement is reached, further action is to be 
taken.
    (c) Notice of possible violation. (1) When the administering agency 
is notified that a contract violation may have occurred and the matter 
is not resolved under Sec. 634.31(b)(1) it shall notify, in writing, 
each participant who signed the contract of the alleged violation. This 
notice setting forth the alleged violation may be personally delivered 
or sent by certified or registered mail.

[[Page 471]]

A participant is considered to have received the notice at the time of 
personal receipt acknowledged in writing, at the time of delivery of a 
certified or registered letter, or at the time of the return of a 
refused certified or registered letter.
    (2) The notice shall give the participant an opportunity to appear 
at a hearing before an appeals board. The participant's request for a 
hearing shall be submitted in writing, and must be received by the 
appeals board within 30 days after receipt of the notice. The 
participant shall be notified in writing by the appeals board of the 
time, date, and place for the hearing. The participant shall have no 
right to a hearing if he does not file a written request for a hearing, 
or if he or his representative does not appear at the appointed time, 
unless the appeals board, at its discretion, permits an appearance. A 
request for a hearing filed by a participant shall be considered to be a 
request by all participants who signed the contract.
    (d) Hearing. The appeals board shall conduct an open hearing to 
obtain the facts about the alleged violation. The appeals board shall 
limit the hearing to relevant facts and evidence, and shall not be bound 
by the strict rules of evidence. Witnesses may be sworn in at the 
discretion of the appeals board.
    (1) The participant or his or her representative shall be given full 
opportunity to present oral or documentary evidence about the alleged 
violation. Likewise, the administering agency may submit statements and 
evidence. Individuals not otherwise represented at the hearing may, at 
the discretion of the appeals board, be permitted to give information or 
evidence. The appeals board, at its discretion, may permit witnesses to 
be cross-examined.
    (2) The appeals board shall make a record of the hearing. A summary 
of the testimony may be made if both the participant and the appeals 
board agree. A transcript of the hearing shall be made if requested by 
either the appeals board or the participant within 10 days prior to the 
hearing. If a transcript is requested by the participant, the 
participant may be assessed the cost of a copy of the transcript.
    (3) The appeals board shall, after a reasonable period of time, 
close the hearing if the participant or his or her representative is not 
present at the scheduled time. The appeals board may, at its discretion, 
accept information and evidence submitted by others present for the 
hearing.
    (4) The appeals board shall furnish the administering agency and the 
State Conservationist, NRCS, with a written report setting forth their 
findings, conclusions, and recommendations. The report shall include the 
summary of testimony or transcript made of the hearing and any other 
information which would aid the administering agency in reaching a 
decision.
    (e) Decision by the administering agency. The administering agency 
shall make a decision within 30 days on the basis of the appeals board 
report, recommendations of soil conservation district board, if any, and 
any other information available, including if applicable, the amount of 
the forfeiture, refund, or payment adjustment. The decision shall state 
whether the violation is of such a nature as to warrant termination of 
the contract. The administering agency shall notify, in writing, each 
participant who signed the contract of its decision. The administering 
agency may authorize or require the reopening of any hearing before the 
appeals board for any reason at any time before their decision. The 
administering agency's decision shall be final.
    (1) If the decision provides for termination of the contract, it 
shall state that the contract is terminated and that all rights to 
further cost-share payments under the contract are forfeited and that 
all cost-share payments received under the contract shall be refunded 
with interest. The decision is to state the amount of refund and method 
of payment.
    (2) If the decision does not provide for termination of the 
contract, the participant may be required to make a refund of cost-share 
payments or to accept payment adjustments. The decision shall state the 
amount and justification for refunds of cost-share payments or payment 
adjustments.

[[Page 472]]



                     Subpart D_Financial Management



Sec. 634.40  Financial management.

    (a)(1) Finance and accounting will be in conformance with Office of 
Management & Budget Circular A-102, (Rev.); U.S. Department of Health, 
Education & Welfare Brochure OASC-10, Federal Management Circular FMC 
74-4, ``Cost Principles Applicable to Grants and Contracts with State 
and Local Government''; Department of the Treasury, Department Circular 
No. 1075 (4th Rev.), ``Withdrawal of Cash from the Treasury for Advances 
under Federal Grant and other Programs''; Office of Management & Budget 
Circular No. A-34, ``Instruction on Budget Execution''; U.S. Treasury 
Requirements Manual for Guidance of Departments and Agencies; and 
General Accounting Office Policy & Procedures Manual for Guidance of 
Federal Agencies.
    (2) Administering agency RCWP grants will be funded under Letter-of-
Credit serviced by the U.S. Treasury Regional Disbursing Office (RCO), 
subject to the terms and conditions of the grant agreement or by NRCS 
approved advance/reimbursement financing agreements.
    (3) The State of local administering agency shall maintain a 
financial management system which provides accurate and complete 
disclosure of the financial status of the RCWP grant in accordance with 
prescribed reporting requirements.
    (4) The State or local administering agency shall upon request make 
its financial management system records available to NRCS, USDA Office 
of Inspector General, and the General Accounting Office.
    (5) Participation in comprehensive USDA/EPA joint water quality 
monitoring, evaluating, and analysis will be funded according to the 
plan approved in Sec. 634.50(a)(3).
    (b)(1) The carrying out of RCWP will require both financial and 
performance reporting to the Natural Resources Conservation Service by 
participating USDA and State or local agencies.
    (2) USDA participating agencies shall furnish NRCS with reports 
prescribed by the U.S. Treasury Department; Office of Management and 
Budget; Administrative Regulations of the U.S. Department of 
Agriculture; and other reports required by law, regulation, or 
agreement.
    (3) State or local administering agencies shall furnish financial 
status reports to NRCS on a quarterly basis as required by the grant 
agreement. The administering agency is also to provide an audit report 
upon request. The audit report is to be prepared in sufficient detail to 
allow NRCS to determine that funds have been used in compliance with 
applicable laws, regulations, and the grant agreement.



                   Subpart E_Monitoring and Evaluation



Sec. 634.50  Program and project monitoring and evaluation.

    (a) Comprehensive USDA/EPA joint water quality monitoring, 
evaluation, and analysis. (1) Representative RCWP project areas will be 
selected to evaluate the improvement in water quality in the project 
area and to make projections on a nationwide basis. Water-quality 
monitoring, evaluation, and analysis will be conducted to evaluate the 
overall cost and effectiveness of projects and BMPs to provide 
information on the impact of the program on improved water quality and 
for general RCWP program management.
    (2) Monitoring, evaluation, and analysis is a joint USDA/EPA 
responsibility. Subject to appropriation of funds, the Administrator, 
NRCS, and EPA are jointly to select the project areas to be monitored 
and evaluated based on a list of project areas recommended by the 
NRCWCC.
    (3) The Administrator, NRCS, and Administrator, EPA, are jointly to 
determine the criteria to be used for comprehensive water-quality 
monitoring, evaluation, and analysis in the selected project areas. A 
monitoring and evaluation plan is to be developed and agreed to by NRCS 
and EPA prior to initiating a project selected for monitoring and 
evaluation. The State water-quality agency and other Federal, State, and 
local agencies will be involved in the development of the plan for 
water-quality evaluation. The involvement of concerned agencies in

[[Page 473]]

implementing the plan will be determined at the time the plan is 
prepared.
    (4) The project areas selected for detailed analysis are to be 
representative of agricultural and silvicultural nonpoint source 
pollution problems, categories of agriculture and silvicutural nonpoint 
source pollutants, agricultural enterprises, and BMPs used in the RCWP.
    (5) Preference in the selection of project areas for comprehensive 
evaluation is to be given to those project areas for which long-term 
baseline information exists on land use, hydrologic data, and water 
quality.
    (6) Monitoring and evaluation of selected project areas is to begin 
sufficiently in advance of the installation of BMPs to document, in a 
statistically satisfactory manner, existing land-use practices and 
baseline water-quality problems.
    (7) The water quality monitoring and evaluation plan will provide 
sufficient basic information to adequately describe the land use, 
hydrologic water quality relationship. As a minimum, the plan will 
contain the following components:
    (i) Chemical and physical water quality monitoring,
    (ii) Biological monitoring,
    (iii) Appropriate hydrologic data,
    (iv) Soils properties and characteristics, topographic information,
    (v) Land use and farm inventory.
    (b) Program and project evaluation. (1) There will be a continuing 
evaluation of the Rural Clean Water Program to measure its effectiveness 
and for each project for which cost-sharing funds are provided.
    (2) Program and project evaluations will be conducted under the 
direction of the Assistant Secretary for Conservation, Research and 
Education, USDA, the Director of Economics, Policy Analysis, and Budget, 
USDA; and the Assistant Administrator for Water and Waste Management, 
EPA; or their representatives working through NRCWCC.
    (3) Evaluative reports for the program and each project area will be 
submitted annually to the Secretary of Agriculture and the 
Administrator, EPA.
    (c) Funding. (1) Research oriented activities will be from sources 
other than RCWP.
    (2) Funding for program and project monitoring and evaluation will 
be provided through RCWP and other authorizations.



PART 635_EQUITABLE RELIEF FROM INELIGIBILITY--Table of Contents




Sec.
635.1 Definitions and abbreviations.
635.2 Applicability.
635.3 Reliance on incorrect actions or information.
635.4 Failure to fully comply.
635.5 Forms of relief.
635.6 Equitable relief by State Conservationists.
635.7 Procedures for granting equitable relief.

    Authority: 7 U.S.C. 7996.

    Source: 69 FR 56347, Sept. 21, 2004, unless otherwise noted.



Sec. 635.1  Definitions and abbreviations.

    The following terms apply to this part:
    Covered program means a natural resource conservation program 
specified in Sec. 635.3.
    Chief means the Chief of the Natural Resources Conservation Service 
or the person delegated authority to act for the Chief.
    FSA means the Farm Service Agency of the United States Department of 
Agriculture.
    NRCS means the Natural Resources Conservation Service of the United 
States Department of Agriculture.
    OGC means the Office of the General Counsel of the United States 
Department of Agriculture.
    Secretary means the Secretary of the U.S. Department of Agriculture.
    State Conservationist means the NRCS employee authorized to direct 
and supervise NRCS activities in a State, the Caribbean Area, or the 
Pacific Basin area, or the State Conservationist's designee.

[[Page 474]]



Sec. 635.2  Applicability.

    (a) This part is applicable to all covered conservation programs 
administered by the Natural Resources Conservation Service, except for 
the Highly Erodible Land and Wetland Conservation provisions of Title 
XII, subtitles B and C of the Food Security Act of 1985, as amended, (16 
U.S.C. 3811 et seq.). Administration of this part shall be under the 
supervision of the Chief, except that such authority shall not limit the 
exercise of authority by State Conservationists of the Natural Resources 
Conservation Service provided in Sec. 635.6.
    (b) The equitable relief available under this part does not apply 
where the action for which relief is requested occurred before May 13, 
2002. In such cases, authority that was effective prior to May 13, 2002, 
shall be applied.
    (c) This part does not apply to a conservation program administered 
by the Farm Service Agency of the United States Department of 
Agriculture.



Sec. 635.3  Reliance on incorrect actions or information.

    (a) The Chief, or designee, may grant relief by extending benefits 
or payments in accordance with Sec. 635.5 when any participant that has 
been determined to be not in compliance with the requirements of a 
covered NRCS program, and therefore ineligible for a loan, payment, or 
other benefit under the covered program, if the participant, acting in 
good faith, relied upon the action or advice of an NRCS employee or 
representative of the United States Department of Agriculture, to the 
detriment of the participant.
    (b) This section applies only to a participant who relied upon the 
action of, or information provided by, an NRCS employee, or 
representative of USDA, and the participant acted, or failed to act, as 
a result of that action or information. This part does not apply to 
cases where the participant had sufficient reason to know that the 
action or information upon which they relied was improper or erroneous 
or where the participant acted in reliance on their own misunderstanding 
or misinterpretation of program provisions, notices or information.



Sec. 635.4  Failure to fully comply.

    (a) When a participant fails to fully comply with the terms and 
conditions of a covered program, the Chief, or designee, may grant 
relief in accordance with Sec. 635.5 if the participant made a good 
faith effort to comply fully with the requirements of the covered 
program.
    (b) This section only applies to participants who are determined by 
the Chief to have made a good faith effort to comply fully with the 
terms and conditions of the program and rendered substantial 
performance.
    (c) In determining whether a participant acted in good faith and 
rendered substantial performance under paragraph (b) of this section, 
the Chief, or designee, shall consider such factors as whether--
    (1) Performance of the primary conservation program requirements 
were completed; or
    (2) The actions of the participant resulted in minimal damages or 
failure that were minor in nature.



Sec. 635.5  Forms of relief.

    (a) The Chief, or designee, may authorize a participant in a covered 
program to:
    (1) Retain loans, payments, or other benefits received under the 
covered program;
    (2) Continue to receive loans, payments, and other benefits under 
the covered program;
    (3) Continue to participate, in whole or in part, under any contract 
executed under the covered program;
    (4) In the case of a conservation program, re-enroll all or part of 
the land covered by the program; and
    (5) Receive such other equitable relief as determined to be 
appropriate.
    (b) As a condition of receiving relief under this part, the 
participant may be required to remedy their failure to meet the program 
requirement or mitigate its affects.



Sec. 635.6  Equitable relief by State Conservationists.

    (a) General nature of the authority. Notwithstanding provisions in 
this part providing supervision and relief authority to other officials, 
the State

[[Page 475]]

Conservationist, without further review by other officials (other than 
the Secretary), may grant relief as set forth in Sec. 635.5 to a 
participant under the provisions of Sec. 635.3 and Sec. 635.4 so long 
as:
    (1) The program matter with respect to which the relief is sought is 
a program matter in a covered program which is operated within the State 
under the control of the State Conservationist;
    (2) The total amount of relief which will be provided to the 
participant (that is, to the individual or entity that applies for the 
relief) under this authority for errors during the fiscal year is less 
than $20,000 (included in that calculation, any loan amount or other 
benefit of any kind payable for the fiscal year);
    (3) The total amount of such relief which has been previously 
provided to the participant using this authority for errors in a fiscal 
year, as calculated in paragraph (a)(2) of this section, is not more 
than $5,000;
    (4) The total amount of loans, payments, and benefits of any kind 
for which relief is provided to similarly situated participants by a 
State Conservationist for errors for a fiscal year under the authority 
provided in this section, as calculated in paragraph (a)(2), is not more 
than $1,000,000.
    (b) Additional limits on the authority. The authority provided under 
this section does not extend to the administration of:
    (1) Payment limitations under 7 CFR part 1400;
    (2) Payment limitations under a conservation program administered by 
the Secretary; or
    (3) The highly erodible land and wetland conservation requirements 
under subtitles B or C of Title XII of the Food Security Act of 1985 (16 
U.S.C. 3811 et seq.).
    (c) Relief shall only be made under this part after consultation 
with, and the approval of, the Office of the General Counsel.
    (d) Secretary's reversal authority. A decision made under this part 
by the State Conservationist may be reversed only by the Secretary, who 
may not delegate that authority.
    (e) Relation to other authorities. The authority provided under this 
section is in addition to any other applicable authority that may allow 
relief.



Sec. 635.7  Procedures for granting equitable relief.

    (a) Application for equitable relief by covered program 
participants. For the purposes of this part, the following conservation 
programs administered by NRCS are identified as ``covered programs'':

(1) Agricultural Management Assistance (AMA);
(2) Conservation Security Program (CSP);
(3) Emergency Watershed Protection, Floodplain Easement Component (EWP-
    FPE);
(4) Environmental Quality Incentives Program (EQIP);
(5) Farm and Ranch Lands Protection Program (FRPP);
(6) Grassland Reserve Program (GRP);
(7) Resource Conservation and Development Program (RC&D);
(8) Water Bank Program (WBP);
(9) Watershed Protection and Flood Prevention Program, (WPFPP) (long-
    term contracts only);
(10) Wetlands Reserve Program (WRP);
(11) Wildlife Habitat Incentives Program (WHIP);
(12) Any other conservation program administered by NRCS which 
    subsequently incorporates these procedures within the program 
    regulations or policies.

    (b) Participants may request equitable relief from the Chief or the 
State Conservationist with respect to:
    (1) Reliance on the actions or advice of an authorized NRCS 
representative; or
    (2) Failure to fully comply with the program requirements but made a 
good faith effort to comply.
    (c) Only a participant directly affected by the non-compliance with 
the covered program requirements may seek equitable relief under Sec. 
635.6.
    (d) Requests for equitable relief must be made in writing, no later 
than 30 calendar days from the date of receipt of the notification of 
non-compliance with the requirements of the covered conservation 
program.

[[Page 476]]

    (e) Requests for equitable relief shall include the following 
information:
    (1) The reason why the participant was unable to comply with the 
requirements of the conservation program;
    (2) Details regarding how much of the required action had been 
completed;
    (3) Why the participant did not have sufficient reason to know that 
the action or information relied upon was improper or erroneous;
    (4) Whether the participant did not act in reliance on their own 
misunderstanding or misinterpretation of the conservation program 
provisions, notices, or information; and
    (5) Any other pertinent facts or supporting documentation.



PART 636_WILDLIFE HABITAT INCENTIVES PROGRAM--Table of Contents




Sec.
636.1 Applicability.
636.2 Administration.
636.3 Definitions.
636.4 Program requirements.
636.5 Establishing priority for enrollment in WHIP.
636.6 Cost-share payments.
636.7 The Wildlife Habitat Development Plan (WHDP).
636.8 Cost-share agreements.
636.9 Modifications.
636.10 Transfer of interest in a cost-share agreement.
636.11 Termination of cost-share agreements.
636.12 Violations and remedies.
636.13 Misrepresentation and scheme or device.
636.14 Offsets and assignments.
636.15 Appeals.

    Authority: 16 U.S.C. 3839bb-1.

    Source: 62 FR 49365, Sept. 19, 1997, unless otherwise noted.



Sec. 636.1  Applicability.

    (a) The purpose of the WHIP is to help participants develop habitat 
for upland wildlife, wetland wildlife, threatened and endangered 
species, fish, and other types of wildlife.
    (b) The regulations in this part set forth the requirements for the 
Wildlife Habitat Incentives Program (WHIP).
    (c) The Chief, NRCS may implement WHIP in any of the 50 states, the 
District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin 
Islands of the United States, American Samoa, and the Commonwealth of 
the Northern Mariana Islands.



Sec. 636.2  Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the Chief, NRCS.
    (b) The State Conservationist will consult with the State Technical 
Committee in the implementation of the program and in establishing 
program direction for the NRCS in the applicable State. The State 
Conservationist has the authority to accept or reject the State 
Technical Committee recommendation; however, the State Conservationist 
will give strong consideration to the State Technical Committee's 
recommendation.
    (c) NRCS may enter into cooperative agreements with Federal 
agencies, State and local agencies, conservation districts, local 
watershed groups, and private entities to assist with program 
implementation, including cost-share agreement execution, assistance, 
planning, and monitoring responsibilities.
    (d) NRCS may make payments pursuant to agreements with other 
Federal, State, or local agencies, conservation districts, local 
watershed groups, or private entities for program implementation, 
coordination of enrollment of cost-share agreements, or for other goals 
consistent with the program provided for in this part.
    (e) NRCS will provide the public with reasonable notice of 
opportunities to apply for participation in the program.
    (f) Nothing in this part shall preclude the Chief of NRCS, or a 
designee, from determining any question arising under this part or from 
reversing or modifying any determination made under this part.



Sec. 636.3  Definitions.

    Chief means the Chief of the Natural Resources Conservation Service 
or the person delegated authority to act for the Chief.
    Conservation district means a political subdivision of a State, 
Native American Tribe, or territory, organized pursuant to the State or 
territorial soil conservation district law, or Tribal law. The 
subdivision may be a conservation district, soil conservation

[[Page 477]]

district, soil and water conservation district, resource conservation 
district, natural resource district, land conservation committee, or 
similar legally constituted body.
    Conservation plan means a record of a participant's decisions, and 
supporting information, for treatment of a unit of land or water, and 
includes a schedule of operations, activities, and estimated 
expenditures needed to solve identified natural resource problems.
    Cost-share agreement means the document that specifies the 
obligations and the rights of any person who has been accepted for 
participation in the program.
    Cost-share payment means the payments under this part to develop 
wildlife habitat.
    Habitat development means the physical actions or practices 
undertaken to establish, improve, protect, enhance, or restore the 
present conditions of the land for the specific purpose of improving 
conditions for wildlife.
    Participant means an applicant who is a party to a WHIP cost-share 
agreement.
    Person means an individual, partnership, association, corporation, 
cooperative, estate, trust, joint venture, joint operation, or other 
business enterprise or other legal entity and, whenever applicable, a 
State, a political subdivision of a State, or any agency thereof.
    Practice means a specified treatment, such as a structural or land 
management measure, which is planned and applied according to NRCS 
standards and specifications.
    Recurring practices means practices repeated on the same area over 
the life of a cost-share agreement to achieve specific habitat 
attributes.
    State Conservationist means the NRCS employee authorized to direct 
and supervise NRCS activities in a State, the Caribbean Area, or the 
Pacific Basin Area.
    State Technical Committee means a committee established by the 
Secretary of the United States Department of Agriculture in a State 
pursuant to 16 U.S.C. 3861.
    Wildlife means birds, fishes, reptiles, amphibians, invertebrates, 
and mammals, along with all other animals.
    Wildlife habitat means the aquatic and terrestrial environments 
required for wildlife to complete their life cycles, including air, 
food, cover, water, and spatial requirements.



Sec. 636.4  Program requirements.

    (a) To participate in WHIP, a person must:
    (1) Develop and agree to comply with a WHDP, as described in Sec. 
636.7;
    (2) Enter into a cost-share agreement for the development of 
wildlife as described in Sec. 636.8;
    (3) Provide NRCS with written evidence of ownership or legal control 
for the life of the proposed cost-share agreement period; however, an 
exception may be made by the Chief:
    (i) In the case of land allotted by the Bureau of Indian Affairs, 
tribal land, or
    (ii) Other instances in which NRCS determines there is sufficient 
assurance of control;
    (4) Agree to provide all information to NRCS as determined to be 
necessary to assess the merits of a proposed project and to monitor the 
compliance of a participant with a cost-share agreement; and (5)Agree to 
grant to NRCS or its representatives access to the land for purposes 
related to application, assessment, monitoring, enforcement, or other 
actions required to implement this part.
    (b) Ineligible land. NRCS shall not provide cost-share assistance 
with respect to practices on land:
    (1) Enrolled in a program where wildlife habitat objectives have 
been sufficiently achieved through other forms of assistance or without 
assistance, as determined by NRCS.
    (2) With on-site or off-site conditions which NRCS determines would 
undermine the benefits of the habitat development or otherwise reduce 
its value;
    (3) Where NRCS determines that the wildlife habitat development 
benefits attainable are of lessor value than would occur on other lands; 
or
    (4) Owned by the United States, except where there is a direct 
Tribal, State, or private benefit; or
    (5) On which habitat for threatened or endangered species would be 
adversely affected.

[[Page 478]]

    (c) All other land except as provided in paragraph (b) of this 
section is eligible.



Sec. 636.5  Establishing priority for enrollment in WHIP.

    (a) In response to national and regional needs, the Chief may limit 
program implementation in any given year to specific geographic areas or 
to address specific habitat development needs of targeted species of 
special concern.
    (b) The State Conservationist, in consultation with the State 
Technical Committee, may limit implementation of WHIP to address unique 
species, habitats, or special geographic areas of the State. Subsequent 
cost-share agreement offers that would complement previous cost-share 
agreements due to geographic proximity of the lands involved or other 
relationships may receive priority consideration for participation.
    (c) NRCS will evaluate the applications and make enrollment 
decisions based on the wildlife habitat need using some or all of the 
following criteria:
    (1) Contribution to resolving an identified habitat problem of 
national, regional, or state importance;
    (2) Relationship to any established wildlife or conservation 
priority areas;
    (3) Duration of benefits to be obtained from the habitat development 
practices;
    (4) Self-sustaining nature of the habitat development practices;
    (5) Availability of other partnership matching funds or reduced 
funding request by the person applying for participation;
    (6) Estimated costs of wildlife habitat development activities; and
    (7) Other factors determined appropriate by NRCS to meet the 
objectives of the program.
    (d) Notwithstanding the criteria set forth in paragraph (c) of this 
section, the State Conservationist, in consultation with the State 
Technical Committee, may deny an application if it is not cost effective 
or does not sufficiently meet program requirements:



Sec. 636.6  Cost-share payments.

    (a) NRCS may share the cost with a participant for implementing the 
practices as provided in the WHDP; NRCS shall offer to pay no more than 
75 percent of the cost of establishing such practices. The cost-share 
payment to a participant shall be reduced proportionately below 75 
percent to the extent that direct Federal financial assistance is 
provided to the participant from sources other than NRCS, except for 
certain cases that merit additional cost-share assistance to achieve the 
intended goals of the program, as determined by the State 
Conservationist.
    (b) Cost-share payments may be made only upon a determination by the 
NRCS that an eligible practice or an identifiable unit of the practice 
has been established in compliance with appropriate standards and 
specifications. Identified practices may be implemented by the 
participant or other designee.
    (c) Cost-share payments may be made for the establishment and 
installation of additional eligible practices, or the maintenance or 
replacement of an eligible practice, but only if NRCS determines the 
practice is needed to meet the objectives of the program, or that the 
failure of the original practice was due to reasons beyond the control 
of the participant.



Sec. 636.7  The Wildlife Habitat Development Plan (WHDP).

    (a) The participant develops a WHDP with the assistance of NRCS or 
other public or private natural resource professionals, and the WHDP is 
approved by the participant, NRCS, and the local conservation district. 
A WHDP encompasses the parcel of land that has the wildlife habitat 
conditions that are of concern to the participant.
    (b) The WHDP forms the basis for the agreement and is incorporated 
therein. The WHDP includes a schedule for installation of the wildlife 
habitat development practices, maintenance, and related requirements to 
maintain the habitat for the life of the cost-share agreement.
    (c) The WHDP may be modified in accordance with Sec. 636.9.

[[Page 479]]



Sec. 636.8  Cost-share agreements.

    (a) To apply for WHIP cost-share assistance, a person must submit an 
application for participation in the WHIP at a USDA office or to an NRCS 
representative.
    (b) A WHIP cost-share agreement shall:
    (1) Incorporate all portions of a WHDP;
    (2) Be for a period of 5 to 10 years, unless provisions of paragraph 
(c) of this section apply;
    (3) Include all provisions as required by law or statute;
    (4) Specify the requirements for operation and maintenance of 
applied wildlife habitat development practices;
    (5) Include any participant reporting and recordkeeping requirements 
to determine compliance with the cost-share agreement and program;
    (6) Be signed by the participant. When the participant is not the 
owner, concurrence from the owner is required; and,
    (7) Include any other provision determined necessary or appropriate 
by the NRCS representative.
    (c) The Chief may allow a cost-share agreement period for less than 
five years in situations where wildlife habitat is threatened as a 
result of a disaster and emergency measures are necessary to address the 
potential for dramatic declines in one or more wildlife populations.
    (d) Notwithstanding any limitation of this part, NRCS may enter into 
a cost-share agreement or contract that:
    (1) Is for a term of at least 15 years;
    (2) Protects and restores plant and animal habitat; and
    (3) Provides cost-share payments in addition to amounts provided 
under Sec. 636.6 of this part.

[62 FR 49365, Sept. 19, 1997, as amended at 67 FR 48353, July 24, 2002]



Sec. 636.9  Modifications.

    (a) NRCS, with the concurrence of the conservation district, may 
approve modifications to a WHDP where such modifications are acceptable 
to the parties.
    (b) NRCS may approve modifications to the cost-share agreement where 
such modifications are acceptable to the parties.
    (c) Any modifications made under this section must meet WHIP program 
objectives, and must be in compliance with this part.



Sec. 636.10  Transfer of interest in a cost-share agreement.

    (a) (1) If the ownership or operation of the land changes during the 
term of the cost-share agreement, NRCS shall modify the cost-share 
agreement to reflect the new interested persons and new divisions of 
payments. NRCS shall make eligible cost-share payments upon presentation 
of an assignment of rights or other evidence that title had passed.
    (2) With respect to any and all payments owed to participants who 
wish to transfer ownership or control of land subject to a cost-share 
agreement, the division of payment shall be determined by the original 
party and that party's successor. In the event of a dispute or claim on 
the distribution of cost-share payments, NRCS may withhold payments 
without the accrual of interest pending a settlement or adjudication on 
the rights to the funds.
    (b) (1) If such new owners or operators are not willing to assume 
the responsibilities posed in an existing WHIP cost-share agreement, 
NRCS shall terminate the cost-share agreement and may require that all 
cost-share payments may be forfeited, refunded, or both.
    (2) The signatories to the cost-share agreement shall be jointly and 
severally responsible for refunding the cost-share payments pursuant to 
paragraph (b)(1) of this section.



Sec. 636.11  Termination of cost-share agreements.

    (a) The State Conservationist may, by mutual agreement with the 
parties to the cost-share agreement, consent to the termination of the 
contract where:
    (1) The parties to the cost-share agreement are unable to comply 
with the terms of the cost-share agreement as the result of conditions 
beyond their control;

[[Page 480]]

    (2) Compliance with the terms of the cost-share agreement would work 
a severe hardship on the parties to the contract; or,
    (3) Termination of the cost-share agreement would, as determined by 
the State Conservationist, be in the public interest.
    (b) If a cost-share agreement is terminated in accordance with the 
provisions of this section, the State Conservationist may allow the 
participants to retain any cost-share payments received under the cost-
share agreement in a porportion appropriate to the effort the 
participant has made to comply with the cost-share agreement, or, in 
cases of hardship, where forces beyond the participant's control 
prevented compliance with the cost-share agreement.



Sec. 636.12  Violations and remedies.

    (a) (1) If NRCS determines that a participant is in violation of a 
cost-share agreement or documents incorporated by reference into the 
cost-share agreement, NRCS may give the parties to the cost-share 
agreement reasonable notice and an opportunity to voluntarily correct 
the violation within 30 days of the date of the notice, or such 
additional time as NRCS may allow.
    (2) If the participant fails to cure the violation of a cost-share 
agreement within the period provided under paragraph (a)(1) of this 
section, NRCS may terminate the agreement and require the participant to 
refund all or part of any assistance earned under that cost-share 
agreement, plus interest, as well as require the participant to forfeit 
all rights for future payment under the agreement.
    (b) [Reserved]



Sec. 636.13  Misrepresentation and scheme or device.

    (a) A person who is determined by NRCS to have erroneously 
represented any fact affecting a program determination made in 
accordance with this part shall not be entitled to cost-share agreement 
payments and must refund all payments, plus interest as determined by 
NRCS.
    (b) A person who is determined to have knowingly:
    (1) Adopted any scheme or device that tends to defeat the purpose of 
the program;
    (2) Made any fraudulent representation; or,
    (3) Misrepresented any fact affecting a program determination shall 
refund to NRCS all payments, plus interest as determined by NRCS, with 
respect to all NRCS cost-share agreements. The person's interest in all 
NRCS cost-share agreements may be terminated.



Sec. 636.14  Offsets and assignments.

    (a) Except as provided in paragraph (b) of this section, any payment 
or portion thereof to any person shall be made without regard to 
questions of title under State law and without regard to any claim or 
lien against the land, or proceeds thereof, in favor of the owner or any 
other creditor except agencies of the U.S. Government. The regulations 
governing offsets and withholdings found in part 3 of this title shall 
be applicable to cost-share agreement payments.
    (b) Any person entitled to any cash payment under this program, may 
assign the right to receive such payments in whole or in part.



Sec. 636.15  Appeals.

    (a) Any person may obtain reconsideration and review of 
determinations affecting participation in this program in accordance 
with part 614 Part C of this title, except as provided in paragraph (b) 
of this section.
    (b) In accordance with the provisions of the Department of 
Agriculture Reorganization Act of 1994, Pub. L. 103-354 (7 U.S.C. 6901), 
the following decisions are not appealable:
    (1) Payment rates, payment limits, and cost-share percentages;
    (2) The designation of approved wildlife priority areas, habitats or 
practices;
    (3) NRCS program funding decisions;
    (4) Eligible conservation practices; and
    (5) Other matters of general applicability.
    (c) Before a person may seek judicial review of any action taken 
under this part, the person must exhaust all administrative appeal 
procedures set forth in paragraph (a) of this section.

[[Page 481]]



                         SUBCHAPTER E [RESERVED]



[[Page 482]]



                     SUBCHAPTER F_SUPPORT ACTIVITIES





PART 650_COMPLIANCE WITH NEPA--Table of Contents




             Subpart A_Procedures for NRCS-Assisted Programs

Sec.
650.1 Purpose.
650.2 Applicability.
650.3 Policy.
650.4 Definition of terms.
650.5 Environmental evaluation in planning.
650.6 Categorical exclusions.
650.7 When to prepare an EIS.
650.8 When to prepare an environmental assessment (EA).
650.9 NEPA and interagency planning.
650.10 Adoption of an EIS prepared by a cooperating agency.
650.11 Environmental documents.
650.12 NRCS decisionmaking.
650.13 Review and comment.

                Subpart B_Related Environmental Concerns

650.20 Reviewing and commenting on EIS's prepared by other agencies.
650.21 Working relations with the U.S. Environmental Protection Agency 
          (EPA) and related State environmental agencies.
650.22 Rare, threatened, and endangered species of plants and animals.
650.23 Natural areas.
650.24 Scenic beauty (visual resource).
650.25 Flood-plain management.



             Subpart A_Procedures for NRCS-Assisted Programs

    Authority: 42 U.S.C. 4321 et seq.; Executive Order 11514 (Rev.); 16 
U.S.C. 1001-1008; 7 U.S.C. 1010-1011; 16 U.S.C. 590 a-f, q.; 7 CFR 2.62, 
unless otherwise noted.

    Source: 44 FR 50579, Aug. 29, 1979, unless otherwise noted.



Sec. 650.1  Purpose.

    (a) This rule prescribes procedures by which NRCS is to implement 
the provisions of NEPA. The Natural Resources Conservation Service 
recognizes NEPA as the national charter for protection, restoration, and 
enhancement of the human environment. NEPA establishes policy, sets 
goals (Section 101), and provides means (Section 102) for carrying out 
this policy.
    (b) The procedures included in this rule supplement CEQ's NEPA 
regulations, 40 CFR parts 1500-1508. CEQ regulations that need no 
additional elaboration to address NRCS-assisted actions are not repeated 
in this rule, although the regulations are cited as references. The 
procedures include some overlap with CEQ regulations. This is done to 
highlight items of importance for NRCS. This does not supersede the 
existing body of NEPA regulations.
    (c) These procedures provide that--
    (1) Environmental information is to be available to citizens before 
decisions are made about actions that significantly affect the human 
environment;
    (2) NRCS-assisted actions are to be supported to the extent possible 
by accurate scientific analyses that are technically acceptable to NRCS;
    (3) NRCS-prepared NEPA documents are to be available for public 
scrutiny; and
    (4) Documents are to concentrate on the issues that are timely and 
significant to the action in question rather than amassing needless 
detail.
    (d) Procedures for implementing NEPA are designed to ensure that 
environmental consequences are considered in decisionmaking. They allow 
NRCS to assist individuals and nonfederal public entities to take 
actions that protect, enhance, and restore environmental quality.
    (e) These procedures make possible the early identification of 
actions that have significant effects on the human environment to avoid 
delays in decisionmaking.



Sec. 650.2  Applicability.

    This rule applies to all NRCS-assisted programs including the 
uninstalled parts of approved projects that are not covered by 
environmental documents prepared under previous rules for compliance 
with NEPA. It is effective on the date of publication of the final rule. 
NRCS is to consult with CEQ in the manner prescribed by 40 CFR 1506.11 
if it is necessary to take emergency actions.

[[Page 483]]



Sec. 650.3  Policy.

    (a) NRCS mission. The NRCS mission is to provide assistance that 
will allow use and management of ecological, cultural, natural, 
physical, social, and economic resources by striving for a balance 
between use, management, conservation, and preservation of the Nation's 
natural resource base. The NRCS mission is reemphasized and expanded to 
carry out the mandate of section 101(b) of NEPA, within other 
legislative constraints, in all its programs of Federal assistance. NRCS 
will continue to improve and coordinate its plans, functions, programs, 
and recommendations on resource use so that Americans, as stewards of 
the environment for succeeding generations--
    (1) Can maintain safe, healthful, productive, and esthetically and 
culturally pleasing surroundings that support diversity of individual 
choices; and
    (2) Are encouraged to attain the widest range of beneficial uses of 
soil, water, and related resources without degradation to the 
environment, risk to health or safety, or other undesirable and 
unintended consequences.
    (b) NRCS environmental policy. NRCS is to administer Federal 
assistance within the following overall environmental policies:
    (1) Provide assistance to Americans that will motivate them to 
maintain equilibrium among their ecological, cultural, natural, 
physical, social, and economic resources by striving for a balance 
between conserving and preserving the Nation's natural resource base.
    (2) Provide technical and financial assistance through a systematic 
interdisciplinary approach to planning and decisionmaking to insure a 
balance between the natural, physical, and social sciences.
    (3) Consider environmental quality equal to economic, social, and 
other factors in decisionmaking.
    (4) Insure that plans satisfy identified needs and at the same time 
minimize adverse effects of planned actions on the human environment 
through interdisciplinary planning before providing technical and 
financial assistance.
    (5) Counsel with highly qualified and experienced specialists from 
within and outside NRCS in many technical fields as needed.
    (6) Encourage broad public participation in defining environmental 
quality objectives and needs.
    (7) Identify and make provisions for detailed survey, recovery, 
protection, or preservation of unique cultural resources that otherwise 
may be irrevocably lost or destroyed by NRCS-assisted project actions, 
as required by Historic Preservation legislation and/or Executive Order.
    (8) Encourage local sponsors to review with interested publics the 
operation and maintenance programs of completed projects to insure that 
environmental quality is not degraded.
    (9) Advocate the retention of important farmlands and forestlands, 
prime rangeland, wetlands, or other lands designated by State or local 
governments. Whenever proposed conversions are caused or encouraged by 
actions or programs of a Federal agency, licensed by or require approval 
by a Federal agency, or are inconsistent with local or State government 
plans, provisions are to be sought to insure that such lands are not 
irreversibly converted to other uses unless other national interests 
override the importance of preservation or otherwise outweigh the 
environmental benefits derived from their protection. In addition, the 
preservation of farmland in general provides the benefits of open space, 
protection of scenery, wildlife habitat, and in some cases, recreation 
opportunities and controls on urban sprawl.
    (10) Advocate actions that reduce the risk of flood loss; minimize 
effects of floods on human safety, health, and welfare; and restore and 
preserve the natural and beneficial functions and values of flood 
plains.
    (11) Advocate and assist in the reclamation of abandoned surface-
mined lands and in planning for the extraction of coal and other 
nonrenewable resources to facilitate restoration of the land to its 
prior productivity as mining is completed.
    (12) Advocate the protection of valuable wetlands, threatened and 
endangered animal and plant species and

[[Page 484]]

their habitats, and designated ecosystems.
    (13) Advocate the conservation of natural and manmade scenic 
resources to insure that NRCS-assisted programs or activities protect 
and enhance the visual quality of the landscape.
    (14) Advocate and assist in actions to preserve and enhance the 
quality of the Nation's waters.

[44 FR 50579, Aug. 20, 1979; 44 FR 54981, Sept. 24, 1979]



Sec. 650.4  Definition of terms.

    Definitions of the following terms or phrases appear in 40 CFR part 
1508, CEQ regulations. These terms are important in the understanding 
and implementation of this rule. These definitions are not repeated in 
the interest of reducing duplication:

Categorical exclusion. (40 CFR 1508.4)
Cooperating agency. (40 CFR 1508.5)
Cumulative impact. (40 CFR 1508.7)
Environmental impact statement (EIS). (40 CFR 1508.11)
Human environment. (40 CFR 1508.14)
Lead agency. (40 CFR 1508.16)
Major Federal action. (40 CFR 1508.18)
Mitigation. (40 CFR 1508.20)
NEPA process. (40 CFR 1508.21)
Scope. (40 CFR 1508.25)
Scoping. (40 CFR 1501.7)
Tiering. (40 CFR 1508.28)

    (a) Channel realignment. Channel realignment includes the 
construction of a new channel or a new alignment and may include the 
clearing, snagging, widening, and/or deepening of the existing channel. 
(Channel Modification Guidelines, 43 FR 8276).
    (b) Environmental assessment (EA). (40 CFR 1508.9)
    (1) An environmental assessment is a concise public document for 
which a Federal agency is responsible that--
    (i) Briefly provides sufficient evidence and analysis for 
determining whether to prepare an environmental impact statement or a 
finding of no significant impact.
    (ii) Aids an agency's compliance with the Act when no environmental 
impact statement is necessary.
    (iii) Facilitates preparation of an environmental impact statement 
when one is necessary.
    (2) An environmental assessment includes brief discussions of the 
need for the proposal, alternatives as required by section of the 
environmental impacts of the proposed action and alternatives, and a 
list of agencies and persons consulted.
    (c) Environmental evaluation. The environmental evaluation (EE) 
(formerly referred to by NRCS as an environmental assessment) is the 
part of planning that inventories and estimates the potential effects on 
the human environment of alternative solutions to resource problems. A 
wide range of environmental data together with social and economic 
information is considered in determining whether a proposed action is a 
major Federal action significantly affecting the human environment. The 
environmental evaluation for a program, regulation, or individual action 
is used to determine the need for an environmental assessment or an 
environmental impact statement. It also aids in the consideration of 
alternatives and in the identification of available resources.
    (d) Federally-assisted actions. These actions are planned and 
carried out by individuals, groups, or local units of government largely 
on nonfederal land with technical and/or financial assistance provided 
by NRCS.
    (e) Interdisciplinary planning. NRCS uses an interdisciplinary 
environmental evaluation and planning approach in which specialists and 
groups having different technical expertise act as a team to jointly 
evaluate existing and future environmental quality. The 
interdisciplinary group considers structure and function of natural 
resource systems, complexity of problems, and the economic, social, and 
environmental effects of alternative actions. Public participation is an 
essential part of effective interdisciplinary planning. Even if an NRCS 
employee provides direct assistance to an individual land user, the 
basic data used is a result of interdisciplinary development of guide 
and planning criteria.

[[Page 485]]

    (f) Nonproject actions. Nonproject actions consist of technical and/
or financial assistance provided to an individual, group, or local unit 
of government by NRCS primarily through a cooperative agreement with a 
local conservation district, such as land treatment recommended in the 
Conservation Operations, Great Plains Conservation, Rural Abandoned 
Mine, and Rural Clean Water Programs. These actions may include 
consultations, advice, engineering, and other technical assistance that 
land users usually cannot accomplish by themselves. Nonproject technical 
and/or financial assistance may result in the land user installing field 
terraces, waterways, field leveling, onfarm drainage systems, farm 
ponds, pasture management, conservation tillage, critical area 
stablization and other conservation practices.
    (g) Notice of intent (NOI) (40 CFR 1508.22). A notice of intent is a 
brief statement inviting public reaction to the decision by the 
responsible Federal official to prepare an EIS for a major Federal 
action. The notice of intent is to be published in the Federal Register, 
circulated to interested agencies, groups, individuals, and published in 
one or more newspapers serving the area of the proposed action.
    (h) Project actions. A project action is a formally planned 
undertaking that is carried out within a specified area by sponsors for 
the benefit of the general public. Project sponsors are units of 
government having the legal authority and resources to install, operate, 
and/or maintain works of improvement.
    (i) Record of Decision. (ROD) (40 CFR 1505.2). A record of decision 
is a concise written rationale by the RFO regarding implementation of a 
proposed action requiring an environmental impact statement. This was 
previously defined by NRCS as a Statement of Findings (SOF).
    (j) Responsible Federal official (RFO). The NRCS Administrator is 
the responsible Federal official (RFO) for compliance with NEPA 
regarding proposed legislation, programs, legislative reports, 
regulations, and program EIS's. NRCS state conservationists (STC's) are 
the RFO's for compliance with the provisions of NEPA in other NRCS-
assisted actions.
    (k) Significantly. (40 CFR 1508.27) ``Significantly'' as used in 
NEPA requires considerations of both context and intensity:
    (1) Context. This means that the significance of an action must be 
analyzed in several contexts such as society as a whole (human, 
national), the affected region, the affected interests, and the 
locality. Significance varies with the setting of the proposed action. 
For instance, for a site-specific action, significance usually depends 
on the effects in the locale rather than in the world as a whole. Both 
short- and long-term effects are relevant.
    (2) Intensity. This refers to the severity of impact. Responsible 
officials must bear in mind that more than one agency may make decisions 
about partial aspects of a major action.

The following should be considered in evaluating intensity:
    (i) Impacts that may be both beneficial and adverse. A significant 
effect may exist even if the Federal agency believes that on balance the 
effect will be beneficial.
    (ii) The degree to which the proposed action affects public health 
or safety.
    (iii) Unique characteristics of the geographic area such as 
proximity to historic or cultural resources, park lands, prime 
farmlands, wetlands, wild and scenic rivers, or ecologically critical 
areas.
    (iv) The degree to which the effects on the quality of the human 
environment are likely to be highly controversial.
    (v) The degree to which the possible effects on the human 
environment are highly uncertain or involve unique or unknown risks.
    (vi) The degree to which the action may establish a precedent for 
future actions with significant effects or represents a decision in 
principle about a future consideration.
    (vii) Whether the action is related to other actions with 
individually insignificant but cumulatively significant impacts. 
Significance exists if it is reasonable to anticipate a cumulatively 
significant impact on the environment. Significance cannot be avoided by 
terming an action temporary or by

[[Page 486]]

breaking it down into small component parts.
    (viii) The degree to which the action may adversely affect 
districts, sites, highways, structures, or objects listed in or eligible 
for listing in the National Register of Historic Places or may cause 
loss or destruction of significant scientific, cultural, or historical 
resources.
    (ix) The degree to which the action may adversely affect an 
endangered or threatened species or its habitat that has been determined 
to be critical under the Endangered Species Act of 1973 as amended.
    (x) Whether the action threatens a violation of Federal, State, or 
local law or requirements imposed for the protection of the environment.
    (l) Finding of no significant impact (FNSI). (40 CFR 1508.13) 
``Finding of No Significant Impact'' means a document by a Federal 
agency briefly presenting the reasons why an action not otherwise 
excluded (Sec. 1508.4) will not have a significant effect on the human 
environment, and an environmental impact statement therefore will not be 
prepared. It shall include the environmental assessment or a summary of 
it and shall note any other environmental documents related to it (Sec. 
1501.7(a)(5)). If the assessment is included, the finding need not 
repeat any of the discussion in the assessment but may incorporate it by 
reference.

[44 FR 50579, Aug. 29, 1979; 44 FR 54981, Sept. 24, 1979]



Sec. 650.5  Environmental evaluation in planning.

    (a) General. Environmental evaluation (EE) integrates environmental 
concerns throughout the planning, installation, and operation of NRCS-
assisted projects. The EE applies to all assistance provided by NRCS, 
but planning intensity, public involvement, and documentation of actions 
vary according to the scope of the action. NRCS begins consideration of 
environmental concerns when information gathered during the 
environmental evaluation is used:
    (1) To identify environmental concerns that may be affected, gather 
baseline data, and predict effects of alternative courses of actions;
    (2) To provide data to applicants for use in establishing objectives 
commensurate with the scope and complexity of the proposed action;
    (3) To assist in the development of alternative courses of action; 
(40 CFR 1502.14). In NRCS-assisted project actions, nonstructural, water 
conservation, and other alternatives that are in keeping with the Water 
Resources Council's Principles and Standards are considered, if 
appropriate.
    (4) To perform other related investigations and analyses as needed, 
including economic evaluation, engineering investigations, etc.
    (5) To assist in the development of detailed plans for 
implementation and operation and maintenance.
    (b) Procedures. NRCS's Guide for Environmental Assessment issued in 
March 1977 and published in the Federal Register on August 8, 1977, 
provides guidance for conducting an environmental evaluation. (42 FR 
40123-40167).
    (c) Decision points. Figure 1 illustrates the decision points for 
compliance with NEPA in NRCS decisionmaking.

[[Page 487]]

[GRAPHIC] [TIFF OMITTED] TC03SE91.000



Sec. 650.6  Categorical exclusions.

    (a) Some NRCS programs or parts of programs do not normally create 
significant individual or cumulative impacts on the human environment. 
Therefore, an EA or EIS is not needed. These are data gathering and 
interpretation programs and include:
    (1) Soil Survey--7 CFR part 611;
    (2) Snow Survey and Water Supply Forecasts--7 CFR part 612;
    (3) Plant Materials for Conservation--7 CFR part 613;
    (4) Inventory and Monitoring--Catalog of Federal Domestic 
Assistance--10.908; and
    (5) River Basin Studies under section 6 of Pub. L. 83-566 as 
amended--7 CFR part 621.
    (b) The environmental evaluation performed by the RFO when any new 
action under these programs is planned

[[Page 488]]

is to identify extraordinary circumstances that might lead to 
significant individual or cumulative impacts. Actions that have 
potential for significant impacts on the human environment are not 
categorically excluded.



Sec. 650.7  When to prepare an EIS.

    The following are categories of NRCS action used to determine 
whether or not an EIS is to be prepared.
    (a) An EIS is required for:
    (1) Projects that include stream channel realignment or work to 
modify channel capacity by deepening or widening where significant 
aquatic or wildlife habitat exists. The EE will determine if the channel 
supports significant aquatic or wildlife habitat;
    (2) Projects requiring Congressional action;
    (3) Broad Federal assistance programs administered by NRCS when the 
environmental evaluation indicates there may be significant cumulative 
impacts on the human environment (Sec. 650.7(e)); and
    (4) Other major Federal actions that are determined after 
environmental evaluation to affect significantly the quality of the 
human environment (Sec. 650.7(b)). If it is difficult to determine 
whether there is a significant impact on the human environment, it may 
be necessary to complete the EE and prepare an EA in order to decide if 
an EIS is required.
    (b) The RFO is to determine the need for an EIS for each action, 
program, or regulation. An environmental evaluation, using a systematic 
interdisciplinary analysis and evaluation of data and information 
responding to the five provisions of Section 102(2)(C) of NEPA, will 
assist the RFO in deciding if the action requires the preparation of an 
EIS. In analyzing and evaluating environmental concerns, the RFO will 
answer the following questions:
    (1) Environmental impact. Will the proposed action significantly 
affect the quality of the human environment (40 CFR 1508.14)? For 
example, will it significantly alter or destroy valuable wetlands, 
important farmlands, cultural resources, or threatened and endangered 
species? Will it affect social values, water quality, fish and wildlife 
habitats, or wilderness and scenic areas?
    (2) Adverse environmental effects that cannot be avoided. What are 
the important environmental amenities that would be lost if the proposed 
action were implemented?
    (3) Alternatives. Are there alternatives that would achieve the 
planning objectives but avoid adverse environmental effects?
    (4) Short-term uses versus long-term productivity. Will the proposed 
actions, in combination with other actions, sacrifice the enhancement of 
significant long-term productivity as a tradeoff for short-term uses?
    (5) Commitment of resources. Will the proposed action irreversibly 
and irretrievably commit the use of resources such as important 
farmlands, wetlands, and fish and wildlife habitat?
    (c) Criteria for determining the need for a program EIS:
    (1) A program EIS is required if the environmental evaluation 
reveals that actions carried out under the program have individually 
insignificant but cumulatively significant environmental impacts.
    (2) A project EIS, in lieu of a program EIS, is required if the 
environmental evaluation reveals that actions carried out under the 
program will have both individually and cumulatively significant 
environmental impacts. (7 CFR Parts 620 through 623 and 640 through 
643).
    (d) The RFO, through the process of tiering, is to determine if a 
site-specific EA or EIS is required for an individually significant 
action that is included in a program EIS.



Sec. 650.8  When to prepare an environmental assessment (EA).

    An environmental assessment (EA) is to be prepared for:
    (a) Land and water resource projects that are not included in Sec. 
650.7(a) (1) through (4) for which State and local units of government 
receive Federal technical and financial assistance from NRCS (7 CFR 
parts 620 through 623; and 640 through 643); and
    (b) Other actions not included in a program EIS nor categorically 
excluded that the EE reveals may be a

[[Page 489]]

major Federal action significantly affecting the quality of the human 
environment.



Sec. 650.9  NEPA and interagency planning.

    (a) Lead agency. (1) NRCS is to be the lead agency for actions under 
programs it administers. If the actions affect more than one State, the 
NRCS Administrator is to designate one NRCS state conservationist as the 
RFO.
    (2) NRCS normally takes the role of lead agency in actions that 
share program responsibilities among USDA agencies if NRCS provides the 
majority of funds for the actions. If the lead agency role is in 
question, the role of NRCS and other USDA agencies is to be determined 
by the USDA Environmental Coordinator, Office of Environmental Quality 
Activities.
    (3) If NRCS and Federal agencies outside USDA cannot agree on which 
will be the lead agency and which will be the cooperating agencies, the 
procedures in 40 CFR 1501.5(e) are to be followed.
    (4) NRCS, as lead agency, is to coordinate the participation of all 
concerned agencies in developing the EIS according to the provisions of 
40 CFR 1501.6(a).
    (b) Cooperating agencies. (1) NRCS is to request, as appropriate, 
the assistance of cooperating agencies in preparing the environmental 
evaluation. This assistance will broaden the expertise in the planning 
and help to avoid future conflict. NRCS is to request assistance in 
determining the scope of issues to be addressed and identifying the 
significant issues related to a proposed action from Federal agencies 
that have jurisdiction by law or special expertise.
    (2) NRCS is to act as a cooperating agency if requested. NRCS may 
request to be designated as a cooperating agency if proposed actions may 
affect areas of NRCS expertise, such as prime farmlands, soils, erosion 
control, and agricultural sources of nonpoint pollution. NRCS, as a 
cooperating agency, is to comply with the requirements of 40 CFR 
1501.6(b) to the extent possible depending on funds, personnel, and 
priority. If insufficient funds or other resources prevent NRCS from 
participating fully as a cooperating agency, NRCS is to request the lead 
agency to provide funds or other resources which will allow full 
participation.
    (c) Scoping. See 40 CFR 1501.7 for a definition of scoping.
    (1) NRCS is to use scoping to identify and categorize significant 
environmental issues in its environmental evaluation. Formalized scoping 
is used to insure that an analytical EIS can be prepared that will 
reduce paperwork and avoid delay. Scoping allows NRCS to obtain the 
assistance and consultation of affected agencies that have special 
expertise or legal jurisdiction in the proposed action. If early 
environmental evaluation identifies a need for an EIS, NRCS is to 
publish a notice of intent (NOI) to prepare an EIS. The NOI is to 
request the assistance of all interested agencies, groups, and persons 
in determining the scope of the evaluation of the proposed action.
    (2) Normally a scoping meeting is held and Federal, State, or local 
agencies that have special expertise or legal jurisdiction in resource 
values that may be significantly affected are requested to participate. 
The scoping meeting will identify agencies that may become cooperating 
agencies.
    (3) In the scoping meeting, the range of actions, alternatives, and 
impacts to be evaluated and included in the EIS as defined in (40 CFR 
1508.25) are to be determined. Tiering (40 CFR 1508.28) may be used to 
define the relation of the proposed statement to other statements.
    (4) Periodic meetings of the cooperating agencies are to be held at 
important decisionmaking points to provide timely interagency, 
interdisciplinary participation.
    (5) Scoping is to include the items listed in 40 CFR 1501.7(a) and 
may also include any of the activities in 40 CFR 1501.7(b). Appropriate, 
timely requests and notification are to be made to promote public 
participation in scoping in accordance with paragraph (d) of this 
section.
    (6) The RFO through the scoping process will set time and page 
limits as prescribed in 40 CFR 1501.8. Time and page limits are 
established by NRCS in consultation with sponsors and others according 
to the projected availability

[[Page 490]]

of resources. The RFO is to make the applicant aware of the possible 
need for revising time and page limits because of changes in resources.
    (d) Public participation--(1) General. Public participation 
activities begin early in the EE and are to be appropriate to the 
proposed action. For example, extensive public participation activities 
are required in the implementation of new programs and project actions, 
but limited public participation is appropriate for nonproject technical 
and financial assistance programs on nonfederal land.
    (2) Early public involvement. The public is to be invited and 
encouraged to participate in the early stages of planning, including the 
consideration of the potential effects of NRCS-assisted actions on 
significant environmental resources such as wetlands, flood plains, 
cultural values, endangered species, important farmland.
    (3) Project activities. The following are general considerations for 
providing opportunities for public participation:
    (i) Identification of interested public. The interested public 
consisting of but not limited to individuals, groups, organizations, and 
government agencies are to be identified, sought out, and encouraged to 
participate in and contribute to interdisciplinary planning and 
environmental evaluation.
    (ii) Public notices. (40 CFR 1506.6) If the effects of an action are 
primarily of local concern, notice of each public meeting or hearing 
should be: Submitted to State and areawide clearinghouses pursuant to 
OMB Circular A-95 (revised); submitted to Indian tribes if they are 
interested; published in local newspapers; distributed through other 
local media; provided to potentially interested community organizations 
including small business associations; published in newsletters that may 
be expected to reach potentially interested persons; mailed directly to 
owners and occupants of nearby or affected property; and posted onsite 
and offsite in the area where the action is to be located.
    (iii) State statutes. If official action by the local units of 
government cooperating in the proposal is governed by State statute, the 
public notice and mailing requirement of the statute is to be followed. 
If the effects of an action are of national concern, notice is to be 
published in the Federal Register and mailed to national organizations 
reasonably expected to be interested.
    (iv) Public meetings. The RFO, after consultation with the sponsors, 
is to determine when public meetings or hearings are to be held. Public 
meetings may be in the form of a workshop, tour, open house, etc. Public 
involvement will include early discussion of flood-plain management and 
protection of wetlands, where appropriate. Environmental information is 
to be presented and discussed along with other appropriate information. 
To the extent practical, pertinent information should be made available 
before the meetings.
    (v) Documentation. The RFO is to maintain a reviewable record of 
public participation in the environmental evaluation process.
    (4) Nonproject activities. Public participation in the planning and 
application of conservation practices with individual land users is 
accomplished primarily through conservation districts. These districts 
are governed by boards of supervisors directors, commissioners, etc., 
who are elected and/or appointed to insure that soil, water, related 
resources, and environmental qualities in the district are maintained 
and improved. The public is to be encouraged to participate in the 
development of long-range district programs and district annual plans. 
The district keeps the public informed through public meetings, district 
newsletters, news stories, radio and television programs, and annual 
reports.



Sec. 650.10  Adoption of an EIS prepared by a cooperating agency.

    (a) If NRCS adopts an EIS prepared by another Federal or State 
agency, the RFO is to review the document to insure that it meets the 
requirements of the CEQ regulations and NRCS-NEPA procedures.
    (b) If the actions included in the EIS are substantially the same as 
those proposed by NRCS, the RFO is to recirculate the EIS as ``final.'' 
The final EIS is to include an appropriate explanation of the action. If 
these actions are not substantially the same, the EIS

[[Page 491]]

is to be supplemented and recirculated as a draft EIS. The RFO is to 
inform the preparing agency of the proposed action.
    (c) If the adopted EIS is not final, if it is the subject of a 
referral under 40 CFR part 1504, or if the statement's adequacy is in 
litigation, the RFO is to include an appropriate explanation in the EIS.
    (d) The RFO is to take appropriate action to inform the public and 
appropriate agencies of the proposed action.



Sec. 650.11  Environmental documents.

    (a) NRCS is to use the following documents in compliance with NEPA 
(see Sec. 650.4):
    (1) Environmental assessments (EA)
    (2) Environmental impact statements (EIS)
    (3) Notice of intent (NOI)
    (4) Finding of no significant impact (FNSI)
    (5) Record of decision (ROD)
    (b) The format and content of each document is to be appropriate to 
the action being considered and consistent with the CEQ regulations.
    (1) To reduce duplication, NRCS may combine environmental documents 
with other planning documents of the same proposal, as appropriate. For 
example, NRCS, in consultation with CEQ and the office of the Secretary 
of Agriculture, has determined that each EIS is to satisfy the 
requirements for a regulatory impact analysis as required by Executive 
Order 12044. This may necessitate modifying the recommended CEQ format. 
If documents are combined, the RFO is to include the information and 
sections required by the CEQ regulations (40 CFR 1502.10). The 
environmental impact statement should indicate those considerations, 
including factors not related to environmental quality, that are likely 
to be relevant to a decision.
    (2) The RFO is to establish the format and content of each document 
giving full consideration to the guidance and requirements of the CEQ 
regulations. The NRCS technical service center director is to provide 
guidance and concurrence on the format and content if the NRCS state 
conservationist is the RFO. The results of scoping are to determine the 
content of the EA or the EIS and the amount of detail needed to analyze 
the impacts.
    (3) In addition to the minimum requirements of the CEQ regulations 
(40 CFR 1502.10), environmental assessments and environmental impact 
statements are to include--
    (i) A brief description of public participation activities of 
agencies, groups, and individuals during the environmental evaluation;
    (ii) A description of the hazard potential of each alternative, 
including an explanation of the rationale for dam classification and the 
risk of dam failure from overtopping for other causes;
    (iii) Information identifying any approved regional plans for water 
resource management in the study area (40 CFR 1506.2(d)) and a statement 
on whether the proposed project is consistent with such plans;
    (iv) All Federal permits, licenses, and other entitlements that must 
be obtained (40 CFR 1502.25(b)); and
    (v) A brief description of major environmental problems, conflicts, 
and disagreements among groups and agencies and how they were resolved. 
Unresolved conflicts and the NRCS's proposal for resolving the 
disagreements before the project is implemented are to be summarized.
    (4) Letters of comment and responses. (40 CFR 1503.4, 1502.9(b)) 
Letters of comment that were received and the responses to these 
comments are to appended to the final EIS. Opposing views and other 
substantive comments that were not adequately discussed in the draft EIS 
are to be incorporated in the final EIS.
    (5) Appendix. The RFO may use an appendix to an EA or EIS. If an 
appendix is too voluminous to be circulated with the EIS, the RFO is to 
make it available on request. If an appendix is included it is to--
    (i) Meet the requirements of 40 CFR 1502.18;
    (ii) Identify any methodologies used (40 CFR 1502.24) and make 
explicit reference to other sources relied on for conclusions; and
    (iii) Briefly describe the relationship between the benefit-cost 
analysis and any analyses of unquantified environmental impacts, values, 
and amenities. ``For purposes of complying with the

[[Page 492]]

Act, the weighing of the merits or drawbacks of the various alternatives 
need not be displayed in a monetary cost benefit and should not be when 
these are important qualitative considerations.'' (40 CFR 1502.23).



Sec. 650.12  NRCS decisionmaking.

    (a) General. The purpose of these procedures is to insure that 
environmental information is provided to decision makers in a timely 
manner. The NEPA process is a part of NRCS decisionmaking. The RFO is to 
insure that the policies and purposes of NEPA and CEQ regulations are 
complied with in NRCS decisionmaking by:
    (1) Including in all decision documents and supporting environmental 
documents a discussion of all alternatives considered in the decision. 
Alternatives to be considered in reaching a decision will be available 
to the public.
    (2) Submitting relevant environmental documents, comments, and 
responses with other decision documents through the review process.
    (3) Including in the record of formal rulemaking or adjudicatory 
proceedings relevent environmental documents, comments and responses.
    (4) Providing for pre- and post-project monitoring (40 CFR 
1505.2(c), 1505.3) and evaluation in representative projects to insure 
that planning and evaluation procedures are performed according to sound 
criteria.
    (b) Decision points in NRCS-assisted projects. NRCS administers 
programs that may have a significant effect on the human environment. 
Program procedures incorporate provisions for compliance with NEPA and 
for providing environmental information to the public, other agencies, 
and decision makers in a timely manner. NRCS provides technical and 
financial assistance for projects under the Watershed Protection and 
Flood Prevention and the Resource Conservation and Development (RC&D) 
programs. These usually require the preparation of project EA's or 
EIS's. The major decisionmaking points and their relation to NEPA 
compliance are as follows:
    (1) For Watershed Protection and Flood Prevention projects:
    (i) Application for assistance by the sponsoring local organization 
(SLO).
    (ii) A preauthorization report identifying goals, alternatives, and 
effects of alternatives (including environmental impacts) prepared by 
the RFO and submitted to the applicant for decision. It is circulated to 
local, State, and Federal agencies and public comment is solicited. A 
decision is made to stop planning assistance or to develop a watershed 
plan.
    (iii) Granting of planning authorization by the Administrator. The 
RFO must provide an evaluation of the potential environmental impacts to 
obtain the authorization.
    (iv) A watershed agreement between the SLO and NRCS. The agreement 
is based on a completed watershed plan and associated environmental 
documents, which have been adequately reviewed within NRCS.
    (v) A project agreement between the SLO and the RFO executed after 
the NEPA process is complete and the watershed plan has been approved 
and final plans and specifications have been developed.
    (2) For RC&D measure plans:
    (i) A request for assistance (measure proposal) is reviewed by the 
RC&D council to insure that the proposal is in accordance with the RC&D 
area plan. The proposal is then referred to NRCS.
    (ii) A preliminary report is prepared by the RFO to identify goals, 
alternatives, and effects (including environmental impacts). The report 
is submitted to the sponsor for review. The sponsor may then apply to 
NRCS for planning assistance for measures considered in the preliminary 
report.
    (iii) An authorization for planning assistance is granted by the 
RFO.
    (iv) The RC&D measure plan is signed by the applicant and the RFO 
after the preparation and review of the measure plan and environmental 
documents.
    (v) A project agreement is signed between the applicant and the RFO 
after the NEPA process is complete, the measure plan has been approved, 
and final plans and specifications have been prepared.
    (c) Record of decision--(1) EIS's. The RFO is to prepare a concise 
record of decision (ROD) for actions requiring an

[[Page 493]]

EIS. The record of decision is to be prepared and signed by the RFO 
following the 30-day administrative action period initiated by the EPA's 
publication of the notice of availability of the final EIS in the 
Federal Register. It is to serve as the public record of decision as 
described in 40 CFR 1505.2 of the CEQ regulations. The ROD is to be 
distributed to all who provided substantive comments on the draft EIS 
and all others who request it. A notice of availability of the ROD will 
be published in the Federal Register and local newspaper(s) serving the 
project area. The RFO may choose to publish the entire ROD.
    (2) Environmental Assessments (EA). If the EA indicates that the 
proposed action is not a major Federal action significantly affecting 
the quality of the human environment, the RFO is to prepare a finding of 
no significant impact (FNSI).
    (3) Distribution and publication of the FNSI (Sec. 1506.6(b)). The 
RFO is to distribute the FNSI to interested agencies and individuals. 
Notice of its availability is to be published in the Federal Register 
and in one or more newspapers serving the area of the proposed action. 
Single copy requests for the document are to be filed without charge. A 
charge may be made for multiple copies. Implementing action is not to be 
initiated for 30 days after the notice of availability of the FNSI has 
been published in the Federal Register.
    (d) Changes in actions. When it appears that a project or other 
action needs to be changed, the RFO will perform an environmental 
evaluation of the authorized action before making a change.



Sec. 650.13  Review and comment.

    In addition to the requirements of 40 CFR 1503, 1506.10 and 1506.11, 
NRCS will take the following steps in distributing EIS's for review and 
comment:
    (a) Draft EIS's. Five copies of the draft EIS are to be filed by the 
RFO with the Office of Environmental Review, A-104, Environmental 
Protection Agency (EPA), Washington, D.C. At the same time, the RFO is 
to send copies of the draft EIS to the following:
    (1) Other Federal agencies. The regional office of EPA and other 
agencies that have jurisdiction by law or special expertise with respect 
to any environmental effect, other Federal agencies (including 
appropriate field and regional offices), and affected Indian tribes.
    (2) State and local agencies. OMB Circular No. A-95 (Revised), 
through its system of State and areawide clearinghouses, provides a 
means for obtaining the views of State and local environmental agencies 
that can assist in the preparation and review of EIS's
    (3) Organizations, groups, and individuals. A copy of the draft EIS 
is to be sent to the appropriate official of each organization or group 
and each individual of the interested public (Sec. 650.9(d)(3)(i)) and 
to others as requested. A charge may be made for multiple copy requests.
    (b) Time period for comment. The time period for review ends 45 days 
after the date EPA publishes the notice of public availability of the 
draft in the Federal Register. A 15-day-extension of time for review and 
comment is to be considered by the RFO when such requests are submitted 
in writing. If neither comments nor a request for an extension is 
received at the end of the 45-day period, it is to be presumed that the 
agency or party from whom comments were requested has no comments to 
make.
    (c) News releases. In addition to the notice of availability 
published in the Federal Register by EPA, the RFO is to announce the 
availability of the draft EIS in one or more newspapers serving the 
area.
    (d) Revising a draft EIS. If significant changes in the proposed 
action are made as a result of comments on the draft EIS, a revised 
draft EIS may be necessary. The revised draft EIS is to be recirculated 
for comment in the same manner as a draft EIS.
    (e) Final EIS's. After the review period for the draft EIS, the RFO 
is to prepare a final EIS, making adjustments where necessary by taking 
into consideration and responding to significant comments and opposing 
viewpoints received on the draft EIS. The following steps are to be 
taken in filing and distributing the final EIS:

[[Page 494]]

    (1) Letters of comment are to be appended to the final EIS. If 
numerous repetitive responses are received, summaries of the repetitive 
comments and a list of the groups or individuals who commented may be 
appended in lieu of the actual letter.
    (2) The RFO is to send five copies of the final EIS to EPA's Office 
of Environmental Review, and a copy of the final EIS to each State and 
Federal agency, organization, group, and individual who commented on the 
draft EIS. Single copy requests for copies of the final EIS will be 
provided without charge. A charge may be made for multiple copy 
requests.
    (3) During the 30-day administrative action period noted in Sec. 
650.12(c), NRCS will make its final EIS available to the public (40 CFR 
1506.10).
    (f) Supplements to EIS's. (1) If NRCS determines that it is 
necessary to clarify or amplify a point of concern raised after the 
final EIS is filed, appropriate clarification or amplification is to be 
sent to EPA with information copies furnished to those who received 
copies of the final EIS. The waiting periods do not apply.
    (2) If the RFO determines that the final EIS or supplement to the 
original EIS previously filed becomes inadequate because of a major 
change in the plan for the proposed action that significantly affects 
the quality of the human environment, a new EIS is to be prepared, 
filed, and distributed as described in this section.



                Subpart B_Related Environmental Concerns

    Authority: Pub. L. 86-523, 74 Stat. 220 as amended, Pub. L. 93-291, 
88 Stat. 174 (16 U.S.C. 469); Pub. L. 89-665, 80 Stat. 915 (16 U.S.C. 
470); Pub. L. 93-205, 87 Stat. 884 (16 U.S.C. 1531 et seq.); Secretary 
of Agriculture Memorandum 1695, May 28, 1970; 42 U.S.C. 4332(2)(C); E.O. 
11514, 16 U.S.C. 1001-1008; 7 U.S.C. 1010-1011; 16 U.S.C. 590 a-f, q; 7 
CFR 2.62.

    Source: 39 FR 43993, Dec. 20, 1974, unless otherwise noted.



Sec. 650.20  Reviewing and commenting on EIS's prepared by other agencies.

    (a) NRCS employees assigned to review and comment on EIS's prepared 
by other agencies are to be familiar with NRCS policies and guidelines 
contained in this part, and NEPA.
    (b) EIS's received for review by NRCS for which NRCS has expertise 
or interest shall be responded to promptly. Comments are to be objective 
with the intent to offer suggestions to help minimize adverse impacts of 
the proposed action to ensure the health and welfare of the agricultural 
community. Comments are to be based on knowledge readily available. 
Field office technical guides, soil surveys, field investigation 
reports, and other resource data and reference materials developed by 
NRCS and other agencies should be used and cited. It is not intended 
that special surveys or investigations be conducted to acquire 
additional information for use in preparing comments.
    (c) The NRCS reviewer should consider the following kinds of 
concerns--(1) The suitability or limitations of the soils for the 
proposed action. Would an alternative route, location, or layout 
minimize land use problems and adverse environmental impacts?
    (2) Provisions for control of erosion and management of water during 
construction. Are there resources downstream that would be affected by 
sediment from the construction area, and does the statement provide for 
adequate control measures? Will lack of erosion control cause air 
pollution? Is the stockpiling of topsoil for future use considered in 
the EIS?
    (3) Provisions for soil and water conservation managment measures on 
project lands, rights-of-way, access roads, and borrow areas. Does the 
statement indicate that enduring soil and water practices are to be 
installed and maintained?
    (4) The effect of water discharges from project lands or rights-of-
way onto other properties. Will discharges cause erosion or flooding on 
other lands? Will discharges affect water quality?
    (5) The effects of disruption of the natural drainage patterns and 
severance of private land units. Does the statement indicate that 
natural drainage patterns

[[Page 495]]

will be maintained? Will bridges, culverts, and other water control 
structures be located to ensure that adjacent lands are not flooded or 
otherwise restricted in use? Does the EIS describe the effects of 
severance on private land ownerships?
    (6) The impact on existing soil and water conservation management 
systems. To what extent will conservation systems be altered, severed, 
or suffer blocked outlets? Will land use or cover be affected?
    (7) Impacts on prime and unique farmland. Would an alternative 
location or route require less prime farmland? Does the EIS consider 
secondary effects on prime farmland? What benefits are foregone if prime 
farmland is taken?
    (8) Impacts on ecosystems. Does the EIS describe impacts on major 
plant communities, and terrestrial and aquatic ecosystems?
    (9) Impacts on NRCS-assisted projects. Does the statement reflect 
the effect of the proposed action on present or planned NRCS assisted 
projects?
    (d) EIS's referred to NRCS for departmental comments. EIS's referred 
by the USDA Coordinator for Environmental Quality Activities to the NRCS 
national office may designate NRCS as the lead agency for preparing 
comments for USDA. In this case, the NRCS national office determines 
whether inputs from STC's and other USDA agencies are needed. If so, 
STC's and other USDA agencies are requested to forward comments to the 
Environmental Services Division fo use in preparing the USDA response.
    (e) EIS's referred to NRCS for agency comments. EIS's received by 
the NRCS national office are screeened by the Director, Environmental 
Services Division to determine which office within NRCS will prepare 
comments. If the proposed action is within one State, the draft EIS will 
be forwarded to the appropriate STC and he will reply directly to the 
agency requesting the comments. If the proposed action involves more 
than one State, one STC will be designated to forward NRCS comments 
directly to the agency requesting the comments. In some cases, the 
action may be national or regional in scope, and require inputs from 
several offices within NRCS. In this instance, comments will be 
assembled in the Environmental Services Division for preparation of a 
response to the agency requesting comments. A copy of each response 
prepared by a STC should be sent to the Director, Environmental Services 
Division.
    (f) EIS's sent to NRCS offices other than the national office. If a 
STC receives an EIS from another agency, he is to respond to the 
initiating agency. A copy of his comments should be sent to the 
Director, Environmental Services Division.
    (1) EIS's addressed to NRCS area or field offices. If an EIS is 
received by a field or area office of NRCS, the STC will coordinate the 
response.
    (2) EIS's submitted to conservation districts. NRCS may furnish 
needed soil, water, and related resource information to the district for 
their use in preparing comments.
    (g) Distribution of NRCS comments on other agencies' draft EIS's. 
Five copies of review comments made by NRCS on draft EIS's prepared by 
other Federal agencies are to be sent to CEQ.
    (h) Third party requests for a copy of NRCS comments on another 
agency's EIS will be filled after NRCS has forwarded copies of its 
letter of comments to CEQ.

[42 FR 40118, Aug. 8, 1977]



Sec. 650.21  Working relations with the U.S. Environmental Protection 
Agency (EPA) and related State environmental agencies.

    (a) Background. The authorities and missions of NRCS, EPA, and state 
environmental agencies make it imperative that an effective cooperative 
and coordinative working relationship be developed and maintained in 
areas of mutual concern. These common areas include air quality, water 
quality, pesticides, waste recycling and disposal, environmental 
considerations in land use, Environmental Impact Statements (EIS's) and 
environmental considerations in the conservation and development of 
natural resources.
    (b) Policy. NRCS will work closely with EPA in accordance with the 
provisions of the EPA-USDA Memorandum of Understanding July 31, 1974, at 
all administrative levels and with related

[[Page 496]]

state agencies to meet statutory requirements and to achieve harmonious 
implementation of all actions of mutual concern directed to improving or 
maintaining the quality of the environment.
    (c) Responsibility--(1) NRCS national office. The Deputy 
Administrator for Field Services is responsible for overall coordination 
with EPA at the national office level. The Deputy Administrator for 
Water Resources is responsible for contacts with EPA in relation to 
activities of the Water Resources Council on water and related land 
resource planning and for coordinating work with EPA on EIS development.
    (2) Technical service center. The TSC director is responsible for 
contacts and coordination with EPA regional offices within the group of 
states served by the TSC.
    (3) NRCS state office. The state conservationist is responsible for 
contacts and coordination with regional representatives of EPA and state 
environmental agencies in matters of mutual concern within his state.
    (d) Coordination and implementation. (1) The NRCS national office 
will:
    (i) Within the framework of USDA agreements and guidelines, develop 
agreements for undertaking specific activities or projects of national 
significance and mutual advantage.
    (ii) Assist EPA as requested in developing EPA policy, guidelines, 
and standards.
    (iii) Consider EPA needs in soil survey and land, inventory, and 
monitoring activities.
    (iv) Maintain needed liaison and develop mutual guidelines with EPA 
on water resources work and in coordinating EIS's.
    (v) Advise EPA regarding soils, plant materials, and soil and water 
conservation techniques.
    (vi) Establish procedures for periodic review of NRCS national 
standards for treatment systems and practices for agricultural pollution 
abatement, including wind and water erosion and sediment control, 
transport of pesticides, organic matter and fertilizers, and burning of 
residues or clearing debris.
    (2) The TSC director will:
    (i) Within the framework of NRCS memorandums and guidelines 
coordinate with the EPA regional administrator(s) the development of 
needed agreements for undertaking specific activities or projects of 
multi state significance and mutual advantage.
    (3) The state conservationist will:
    (i) Obtain early input of EPA and interested state and local 
environmental agencies in the planning process for projects or measures 
within the state impacting on the environment.
    (ii) Coordinate preparations of NRCS practice standards and 
procedures for agricultural pollution abatement within the state with 
EPA and related state agencies.
    (iii) Encourage the development of a coordinated review and approval 
process within the state with EPA and appropriate state and local 
agencies including conservation districts for actions of mutual concern.
    (iv) Attempt to resolve all EPA areas of concern on NRCS assisted 
project-type actions within the state before a final EIS is prepared.



Sec. 650.22  Rare, threatened, and endangered species of plants and 
animals.

    (a) Background. (1) A variety of plant and animal species of the 
United States are so reduced in numbers that they are threatened with 
extinction. The disappearance of any of these would be a biological, 
cultural, and in some instances an economic loss. Their existence 
contributes to scientific knowledge and understanding, and their 
presence adds interest and variety to life.
    (2) The principal hazard to threatened and endangered species is the 
destruction or deterioration of their habitats by human activities such 
as industrialization, urbanization, agriculture, lumbering, recreation, 
and transportation. These activities of man will continue but the 
necessity of recognizing their adverse impacts and selecting 
alternatives that minimize or eliminate such impacts on threatened and 
endangered species is imperative.
    (3) The Endangered Species Act of 1973 (Pub. L. 93-205, 87 Stat. 884 
(16 U.S.C. 1531 et seq.)) provides a means whereby the ecosystems upon 
which endangered and threatened species depend may be maintained and a 
program

[[Page 497]]

for the conservation of such species. The Act also provides that, in 
addition to the Department of the Interior, ``All other federal 
departments and agencies shall, in consultation with and with the 
assistance of the Secretary (of Interior), utilize their authorities for 
the conservation of endangered species and threatened species listed 
pursuant to section 4 of this Act and by taking such action necessary to 
insure that actions authorized, funded, or carried out by them do not 
jeopardize the continued existence of such endangered species and 
threatened species or result in the destruction or modification of 
habitat of such species which is determined by the Secretary, after 
consultation as appropriate with the affected states, to be critical.'' 
The Act also:
    (i) Defines endangered species as any species in danger of 
extinction throughout all or a significant portion of its range and 
threatened species as any species likely to become an endangered species 
within the foreseeable future throughout all or a significant portion of 
its range. The Act uses the category ``threatened.'' The term ``rare'' 
is not used.
    (ii) Further defines species as including any subspecies of fish or 
wildlife or plants and any other group of fish and wildlife of the same 
species or smaller taxa in common spatial arrangements that interbreed 
when mature.
    (iii) Provides for the Secretary of the Interior to enter into 
cooperative agreements with states for the purpose of implementing state 
programs for the conservation of endangered and threatened fish and 
wildlife. This assistance may include financial grants.
    (iv) Provides national lists of endangered and threatened animal and 
plant species to be maintained by the Secretary of the Interior and 
published in the Federal Register. When resident fish and wildlife are 
added to the list, the affected states are to be consulted by the 
Secretary. The Secretary of the Smithsonian Institution is preparing a 
list of endangered or threatened plant species.
    (b) Policy. The Act gives NRCS additional direction for 
participation in the conservation and protection of endangered and 
threatened species. As the principal federal agency concerned with land 
use planning of privately owned rural land and with professional 
conservation employees headquartered in almost every county, NRCS is 
uniquely capable of playing a vital role. Additional training will be 
provided as needed to meet NRCS responsibilities. NRCS will assist in 
the conservation of threatened and endangered species and consistent 
with legal requirements avoid or prevent activities detrimental to such 
species. NRCS concern for these species will not be limited to those 
listed by the Secretary of the Interior and published in the Federal 
Register, but will include species designated by state agencies as rare, 
threatened, endangered, etc.
    (c) Responsibility--(1) NRCS national office. The Administrator will 
arrange for consultation and coordination of NRCS national office 
activities with the U.S. Fish and Wildlife Service, other federal 
agencies, and national organizations.
    (2) Technical service center. The TSC director will, within the 
group of states served by the TSC arrange for consultation and 
coordination with regional representatives of the U.S. Fish and Wildlife 
Service, other Federal agencies, and national and regional 
organizations.
    (3) NRCS state office. The state conservationist will arrange for 
consultation and coordination with the state fish and game or 
conservation agency, other state agencies, state organizations and 
foundations, conservation districts, and state representatives of 
federal agencies and national organizations.
    (d) Coordination and implementation. (1) The NRCS national office 
will:
    (i) Within the framework of national legislation, USDA agreements, 
and NRCS objectives, develop NRCS policies and directives for guiding 
agency efforts that will protect threatened and endangered species and 
for avoiding actions that jeopardize the continued existence of such 
species and their critical habitats.
    (ii) Maintain needed liaison and develop mutual understanding with 
the U.S. Fish and Wildlife Service and other concerned federal agencies.
    (iii) Establish procedures for periodic review of NRCS participation 
in the

[[Page 498]]

national effort to conserve these species.
    (2) The TSC director will: (i) Within the framework of NRCS policies 
and guidelines, arrange for needed liaison and understanding with 
regional counterparts of other federal agencies within the group of 
states served by the TSC and keep state conservationists informed of 
developments within such states.
    (ii) Provide guidance and assistance to state conservationists in 
carrying out NRCS policies and guidelines.
    (3) The state conservationist will develop procedures to establish 
working relationships with other concerned federal agencies, state fish 
and wildlife or conservation agencies, conservation districts, concerned 
scientists in state university systems and natural history museums, and 
other informed persons and organizations to offer assistance in:
    (i) Preparing or maintaining lists of the state's threatened and 
endangered species.
    (ii) Determining the geographic occurrence of endangered and 
threatened species, the nature of their habitat, and that portion of the 
habitat that is critical to the survival, maintenance, or increase of 
these species.
    (iii) Discussing the kinds of measures important to preserve their 
habitat.
    (iv) A monitoring program that would obtain advanced warning of 
actions or conditions that could further endanger these species, thereby 
enabling NRCS and others to take appropriate protective action.
    (v) Assisting recovery teams, as appropriate, in preparing species 
recovery plans of those endangered and threatened species included in 
Federal lists.
    (4) The state conservationist will also:
    (i) Keep NRCS area and field offices informed of species listed as 
being threatened or endangered, geographic area in which they are found, 
and information such as their numbers, preferred habitat, and critical 
factors.
    (ii) Review the status of threatened and endangered species each 
December and send a report of the review to the Administrator.
    (5) NRCS district conservationists within the geographic range of 
threatened and endangered species will examine conservation district 
programs and NRCS operations to evaluate their effects on these species, 
and recommend to district officials and the state conservationist any 
action needed for their protection.
    (6) NRCS field employees within the geographic range of threatened 
and endangered species will be continually alert to conditions, actions, 
or trends that may adversely affect the welfare of these species and 
report adverse situations to the state conservationist.



Sec. 650.23  Natural areas.

    (a) Background. (1) Natural areas are defined as land or water units 
where natural conditions are maintained insofar as possible. Natural 
conditions usually result from allowing ordinary physical and biological 
processes to operate with a minimum of human intervention. Manipulations 
may be required on natural areas to maintain or restore features that 
the areas were established to protect.
    (2) Natural areas may be designated areas of Federal, non-Federal 
government, or privately controlled land. Designation may be formal as 
provided for under federal regulations for areas of federal land to be 
administered as natural areas or by foundations or conservation 
organizations specifically created to acquire and maintain natural 
areas. Designation may be informal in the case of private landowners who 
designate a specific area as a natural area and manage it accordingly. 
Several professional societies concerned with renewable natural 
resources encourage establishment of natural areas withdrawn from 
economic uses and recognition of natural areas maintained and managed in 
economic enterprises.
    (3) Natural areas are established and maintained for a variety of 
purposes including:
    (i) Furthering science and education. Natural areas provide sites 
for research and outdoor classrooms for study of plant and animal 
communities in environments with particular ecological conditions.

[[Page 499]]

    (ii) Monitoring the surrounding environment. Natural areas serve as 
gauges against which to evaluate changes in land use, vegetation, animal 
life, air quality, or other environmental values.
    (iii) Providing recreation attractions. Natural areas are valued by 
many people for their scenic, wild, and undisturbed character but must 
be protected, as needed, to prevent disturbance or alteration of the 
resources.
    (iv) Preserving unique values. Natural areas may be established to 
protect scenic, biologic, geologic, or paleontologic features.
    (v) Serving as a genetic base for native plants and animals. Natural 
areas may be established to preserve examples of land and water 
ecosystems with their full range of genetic diversity of native plants 
and animals including threatened and endangered species.
    (b) Policy. NRCS will recognize natural areas, if so dedicated, as a 
land use, and will support the designation of appropriate natural areas.
    (c) Responsibility--(1) NRCS national office. The Administrator will 
designate a member of the national office staff to act as NRCS 
representative on the Federal Committee for Ecological Preserves and to 
provide appropriate liaison with other federal agencies and non-Federal 
groups concerned with natural areas.
    (2) Technical service center. The TSC director will designate a TSC 
plant sciences discipline leader to provide leadership, appropriate 
liaison, and assistance on natural areas to NRCS state offices.
    (3) NRCS state office. The state conservationist will designate an 
appropriate NRCS representative to work with other agencies and groups, 
and will coordinate assistance on natural areas needed by area and field 
offices.
    (d) Coordination and implementation. (1) NRCS technical assistance 
will be furnished to representatives of administering agencies, 
foundations, groups, and individuals when requested through conservation 
districts. Conservation district officers will be encouraged to 
recognize appropriate natural areas concepts and programs and to 
participate in them.
    (2) NRCS employees will report to state conservationists abuses and 
potential or actual damages to natural areas that may be found in the 
course of ordinary business.
    (3) NRCS will cooperate with professional societies, groups, and 
individuals in locating areas suitable for and needed as natural areas.
    (4) NRCS employees providing technical assistance to land users must 
inform them about the impact their decisions may have on adjacent or 
nearby natural areas. Land users will be encouraged to consult with 
concerned agencies, societies, and individuals to arrive at mutually 
satisfactory land use and treatment.
    (5) Recommended classification systems for characterizing areas 
designated as ecological preserves or as natural areas are contained in 
the following publications:

Soil Taxonomy, a Basic System of Soil Classification for Making and 
Interpreting Soil Surveys, USDA-NRCS Agricultural Handbook 436.
Forest Cover Types of North America Exclusive of Mexico, Report of the 
Committee on Forest Cover Types, Society of American Foresters, 1964.
Potential Natural Vegetation of Conterminous United States. A. W. 
Kuchler, American Geographical Society Special Publication 36, 1964.
Wetlands classification described by the U.S. Fish and Wildlife Service 
in its Circular 39.


NRCS will, to the extent feasible, use these classification systems when 
providing technical assistance on public and private natural areas and 
ecological preserves.
    (6) The NRCS published National List of Scientific Plant Names will 
be used when scientific names or name symbols are needed for automatic 
data processing.



Sec. 650.24  Scenic beauty (visual resource).

    (a) Background. Contributions to scenic beauty are a normal product 
of NRCS work. Strip-cropping, field borders, field windbreaks, and ponds 
are examples. Emphasis is given to those soil and water conservation 
measures that contribute to a productive and efficient agriculture and 
increase the attractiveness of rural America and are in line with goals 
and objectives of conservation districts. This is best accomplished by 
considering the landscape

[[Page 500]]

visual resource when providing planning assistance to individual 
landowners, groups, units of government, and watershed and resource 
conservation development project sponsors. NRCS responsibilities in 
recreation also offer opportunities to develop the scenic beauty of the 
rural landscape. Department of Agriculture Secretary's Memorandum 1695, 
May 28, 1970, ``Protecting and Improving The Quality of the 
Environment,'' includes scenic beauty as an objective of the 
Department's programs.
    (b) Policy. NRCS will: (1) Provide technical assistance with full 
consideration of alternative management and development systems that 
preserve scenic beauty or improve the visual resource; (2) emphasize the 
application of conservation practices having scenic beauty or visual 
resource values particularly in waste management systems; field borders, 
field windbreaks, wetland management, access roads, critical area 
treatment; design and management of ponds, stream margins, odd areas, 
and farmsteads; siting or positioning of structures and buildings to be 
in harmony with the landscape while reducing the potential for erosion; 
using native and other adaptable plants for conservation which enhance 
scenic beauty and create variety while linking beauty with utility; (3) 
promote personal pride in landowners in the installation, maintenance, 
and appearance of conservation practices and their properties; (4) 
select suitable areas for waste products and use of screens to hide 
``eyesore'' areas, and (5) encourage conservation districts to include 
practices which promote scenic beauty in their annual and long-range 
programs.
    (c) Responsibility. The Natural Resources Conservation Service will 
provide technical assistance through conservation districts to 
landowners, operators, communities, and state and local governments in 
developing programs relating to scenic beauty.
    (1) NRCS national office. The Administrator will:
    (i) Assign appropriate NRCS national office leadership to insure 
that enhancement of scenic beauty is included in national information, 
policy, guidelines, standards, guides to specifications for conservation 
practices without impairing basic soil and water conservation functions.
    (ii) Emphasize in plant material center management and in plant 
materials functions that locating and evaluating plants for forage, 
erosion control, and recreation or wildlife uses be carried out with 
full attention to visual resource value.
    (2) NRCS state office. The state conservationist will:
    (i) Assign appropriate staff mem ber(s) to provide leadership in 
carrying out scenic beauty policy and procedure within the state.
    (ii) Develop and keep current a landscape management plan to improve 
and maintain the appearance of all real properties under NRCS control, 
and provide appropriate assistance to owners and managers of properties 
leased or rented by NRCS.
    (iii) Give emphasis to preserving scenic beauty and contributing to 
the visual resource in the NRCS information program whenever 
opportunities exist.
    (d) Coordination and implementation. (1) The governing body of each 
conservation district will be encouraged to revise or update its 
district program to appropriately provide for beautification of the 
countryside through applicable land use changes and effective soil and 
water conservation treatment.
    (2) In providing assistance to watershed and resource conservation 
and development project sponsors and other resource planning groups for 
soil, water, and related resources, emphasis will be given to measures 
that preserve natural beauty or contribute to the quality of the visual 
resource.
    (3) Local organizations and groups interested in scenic beauty will 
be contacted and consulted for cooperation in and coordination with NRCS 
and conservation district efforts.



Sec. 650.25  Flood-plain management.

    Through proper planning, flood plains can be managed to reduce the 
threat to human life, health, and property in ways that are 
environmentally sensitive. Most flood plains are valuable for 
maintaining agricultural and forest products for food and fiber, fish 
and wildlife habitat, temporary floodwater storage, park and recreation

[[Page 501]]

areas, and for maintaining and improving environmental values. NRCS 
technical and financial assistance is provided to land users primarily 
on non-Federal land through local conservation districts and other State 
and local agencies. Through its programs, NRCS encourages sound flood-
plain management decisions by land users.
    (a) Policy--(1) General. NRCS provides leadership and takes action, 
where practicable, to conserve, preserve, and restore existing natural 
and beneficial values in base (100-year) flood plains as part of 
technical and financial assistance in the programs it administers. In 
addition, 500-year flood plains are taken into account where there are 
``critical actions'' such as schools, hospitals, nursing homes, 
utilities, and facilities producing or storing volatile, toxic, or 
water-reactive materials.
    (2) Technical assistance. NRCS provides leadership, through 
consultation and advice to conservation districts and land users, in the 
wise use, conservation, and preservation of all land, including flood 
plains. Handbooks, manuals, and internal memoranda set forth specific 
planning criteria for addressing flood-plain management in NRCS-assisted 
programs. The general procedures and guidelines in this part comply with 
Executive Order (E.O.) 11988, Floodplain Management, dated May 24, 1977, 
and are consistent with the Water Resources Council's Unified National 
Program for Floodplain Management.
    (3) Compatible land uses. The NRCS Administrator has determined that 
providing technical and financial assistance for the following land uses 
is compatible with E.O. 11988:
    (i) Agricultural flood plains that have been used for producing 
food, feed, forage, fiber, or oilseed for at least 3 of the 5 years 
before the request for assistance; and
    (ii) Agricultural production in accordance with official State or 
designated area water-quality plans.
    (4) Nonproject technical and financial assistance programs. The NRCS 
Administrator has determined that NRCS may not provide technical and 
financial assistance to land users if the results of such assisted 
actions are likely to have significant adverse effects on existing 
natural and beneficial values in the base flood plain and if NRCS 
determines that there are practicable alternatives outside the base 
flood plain. NRCS will make a case-by-case decision on whether to limit 
assistance whenever a land user proposes converting existing 
agricultural land to a significantly more intensive agricultural use 
that could have significant adverse effects on the natural and 
beneficial values or increase flood risk in the base flood plain. NRCS 
will carefully evaluate the potential extent of the adverse effects and 
any increased flood risk.
    (5) Project technical and financial assistance programs. In planning 
and installing land and water resource conservation projects, NRCS will 
avoid to the extent possible the long and short-term adverse effects of 
the occupancy and modification of base flood plains. In addition, NRCS 
also will avoid direct or indirect support of development in the base 
flood plain wherever there is a practicable alternative. As such, the 
environmental evaluation required for each project action (Sec. 650.5 
of this part) will include alternatives to avoid adverse effects and 
incompatible development in base flood plains. Public participation in 
planning is described in Sec. 650.6 of this part and will comply with 
section 2(a)(4) of E.O. 11988. Flood-plain management requires the 
integration of these concerns into NRCS's National Environmental Policy 
Act (NEPA) process for project assistance programs as described in 
Section 650 of this part.
    (6) Real property and facilities under NRCS ownership or control. 
NRCS owns or controls about 30 properties that are used primarily for 
the evaluation and development of plant materials for erosion control 
and fish and wildlife habitat plantings (7 CFR Part 613, Plant Materials 
Centers, 16 U.S.C. 590 a-e, f, and 7 U.S.C. 1010-1011). If NRCS real 
properties or facilities are located in the base flood plain, NRCS will 
require an environmental evaluation when new structures and facilities 
or major modifications are proposed. If it is determined that the only 
practicable alternative for siting the proposed action may adversely 
affect the base flood plain, NRCS will design or modify its

[[Page 502]]

action to minimize potential harm to or within the flood plain and will 
prepare and circulate a notice explaining why the action is proposed to 
be located in the base flood plain. Department of Housing and Urban 
Development (HUD) flood insurance maps, other available maps, 
information, or an onsite analysis will be used to determine whether the 
proposed NRCS action is in the base flood plain. Public participation in 
the action will be the same as described in Sec. 650.6 of this part.
    (b) Responsibility. NRCS provides technical and financial assistance 
to land users primarily through conservation districts, special purpose 
districts, and other State or local subdivisions of State government. 
Acceptance of this assistance is voluntary on the part of the land user. 
NRCS does not have authority to make land use decisions on non-Federal 
land. NRCS provides the land user with technical flood hazard data and 
information on flood-plain natural values. NRCS informs the land user 
how alternative land use decisions may affect the aquatic and terrestial 
ecosystems, human safety, property, and public welfare. Alternatives to 
flood-plain occupancy, modification, and development are discussed 
onsite with the land user by NRCS.
    (1) NRCS National Office. (Sec. 600.2 of this part). The NRCS 
Administrator, state conservationist, and district conservationist are 
the responsible Federal officials in NRCS for implementing the policies 
expressed in these rules. Any deviation from these rules must be 
approved by the Administrator. The Deputy Administrator for Programs has 
authority to oversee the application of policy in NRCS programs. 
Oversight assistance to state conservationists for flood-plain 
management will be provided by the NRCS technical service centers (Sec. 
600.3 of this part).
    (2) NRCS state offices. (Sec. 600.4 of this part). Each state 
conservationist is the responsible Federal official in all NRCS-assisted 
programs administered within the State. He or she is also responsible 
for administering the plant materials centers within the State. The 
state conservationist will assign a staff person who has basic knowledge 
of landforms, soils, water, and related plant and animal ecosystems to 
provide technical oversight to ensure that assistance to land users and 
project sponsors on the wise use, conservation, and preservation of 
flood plains is compatible with national policy. For NRCS-assisted 
project actions, the staff person assigned by the state conservationist 
will consult with the local jurisdictions, sponsoring local 
organizations, and land users, on the basis of an environmental 
evaluation, to determine what constitutes significant adverse effects or 
incompatible development in the base flood plain. The state 
conservationist is to prepare and circulate a written notice for NRCS-
assisted actions for which the only practicable alternative requires 
siting in a base flood plain and may result in adverse effects or 
incompatible development. The NRCS NEPA process will be used to 
integrate flood-plain management into project planning and consultations 
on land use decisions by land users and project sponsors.
    (3) NRCS field offices. The district conservationist (Sec. 600.6 of 
this part) is delegated the responsibility for providing technical 
assistance and approving financial assistance to land users in 
nonproject actions, where applicable, and for deciding what constitutes 
an adverse effect or incompatible development of a base flood plain. 
This assistance will be based on official NRCS policy, rules, 
guidelines, and procedures in NRCS handbooks, manuals, memoranda, etc. 
For NRCS-assisted nonproject actions, the district conservationist, on 
the basis of the environmental evaluation, will advise recipients of 
technical and financial assistance about what constitutes a significant 
adverse effect or incompatible development in the base flood plain.
    (c) Coordination and implementation. All planning by NRCS staffs is 
interdisciplinary and encompasses the six NEPA policy statements, the 
WRC Principles and Standards, and an equivalent of the eight-step 
decisionmaking process in the WRC's February 1978 Floodplain Management 
Guidelines. NRCS internal handbooks, manuals, and memoranda provide 
detailed information and guidance for NRCS planning and environmental 
evaluation.

[[Page 503]]

    (1) Steps for nonproject technical and financial assistance 
programs. (i) NRCS assistance programs are voluntary and are carried out 
through local conservation districts (State entities) primarily on non-
Federal, privately owned lands.
    (ii) After the land user decides the type, extent, and location of 
the intended action for which assistance is sought, the district 
conservationist will determine if the intended action is in the base 
flood plain by using HUD flood insurance maps, and other available maps 
and information or by making an onsite determination of the approximate 
level of the 100-year flood if maps or other usable information are 
lacking.
    (iii) If the district conservationist determines that the land 
user's proposed location is outside the base flood plain, and would not 
cause potential harm within the base flood plain, NRCS will continue to 
provide assistance, as needed.
    (iv) If the district conservationist determines that the land user's 
proposed action is within the base flood plain and would likely result 
in adverse effects, incompatible development, or an increased flood 
hazard, it is the responsibility of the district conservationist to 
determine and point out to the land user alternative methods of 
achieving the objective, as well as alternative locations outside the 
base flood plain. If the alternative locations are determined to be 
impractical, the district conservationist will decide whether to 
continue providing assistance. If the decision is to terminate 
assistance for the proposed action, the land user and the local 
conservation district, if one exists, will be notified in writing about 
the decision.
    (v) If the district conservationist decides to continue providing 
technical and financial assistance for a proposed action in the base 
flood plain, which is the only practicable alternative, NRCS may require 
that the proposed action be designed or modified so as to minimize 
potential harm to or within the flood plain. The district 
conservationist will prepare and circulate locally a written notice 
explaining why the action is proposed to be located in the base flood 
plain.
    (2) Steps for project assistance programs. (i) NRCS project 
assistance to local sponsoring organizations (conservation districts and 
other legal entities of State government) and land users is carried out 
primarily on non-Federal land in response to requests for assistance. 
NRCS helps the local sponsoring organizations prepare a plan for 
implementing the needed resource measures.
    (ii) NRCS uses an interdisciplinary environmental evaluation (Sec. 
650.6 of this part) as a basis for providing recommendations and 
alternatives to project sponsors. Flood-plain management is an integral 
part of every NRCS environmental evaluation. NRCS delineates the base 
flood plain by using detailed HUD flood insurance maps and other 
available data, as appropriate, and provides recommendations to sponsors 
on alternatives to avoid adverse effects and incompatible development in 
base flood plains. NRCS will develop, as needed, detailed 100-year and 
500-year flood-plain maps where there are none.
    (iii) NRCS's NEPA process (part 650 of this chapter) is used to 
integrate the spirit and intent of E.O. 11988 Sections 2(a) and 2(c) 
into agency planning and recommendations for land and water use 
decisions by local sponsoring organizations and land users.
    (iv) NRCS will terminate assistance to a local sponsoring 
organization in project programs if it becomes apparent that decisions 
by land users and local jurisdictions concerning flood-plain management 
would likely result in adverse effects or incompatible development and 
the environmental evaluation reveals that there are practicable 
alternatives to the proposed project that would not cause adverse 
effects on the base flood plain.
    (v) In carrying out the planning and installation of land and water 
resource conservation projects, NRCS will avoid, to the extent possible, 
the long-term and short-term adverse effects associated with the 
occupancy and modification of base flood plains. In addition, NRCS will 
also avoid direct or indirect support of development in the base flood 
plain wherever there is a

[[Page 504]]

practicable alternative. Where appropriate, NRCS will require design 
modifications to minimize harm to or within the base flood plain. NRCS 
will provide appropriate public notice and public participation in the 
continuing planning process in accordance with NRCS NEPA process.
    (vi) NRCS may require the local government to adopt and enforce 
appropriate flood plain regulations as a condition to receiving project 
financial assistance.
    (3) Actions on property and facilities under NRCS ownership or 
control. For real property and facilities owned by or under the control 
of NRCS, the following actions will be taken:
    (i) Locate new structures, facilities, etc., outside the base flood 
plain if there is a practicable alternate site.
    (ii) Require public participation in decisions to construct 
structures, facilities, etc., in flood plains that might result in 
adverse effects and incompatible development in such areas if no 
practicable alternatives exist.
    (iii) New construction or rehabilitation will be in accordance with 
the standards and criteria of the National Flood Insurance Program and 
will include floodproofing and other flood protection measures as 
appropriate.

[44 FR 44462, July 30, 1979]

                           PART 651 [RESERVED]



PART 652_TECHNICAL SERVICE PROVIDER ASSISTANCE--Table of Contents




                      Subpart A_General Provisions

Sec.
652.1 Applicability.
652.2 Definitions.
652.3 Administration.
652.4 Technical service standards.
652.5 Participant acquisition of technical services.
652.6 Department delivery of technical services.
652.7 Quality assurance.

                         Subpart B_Certification

652.21 Certification criteria and requirements.
652.22 Certification process for individuals.
652.23 Certification process for private-sector entities.
652.24 Certification process for public agencies.
652.25 Alternative application process for individual certification.
652.26 Certification renewal.

                        Subpart C_Decertification

652.31 Policy.
652.32 Causes for decertification.
652.33 Notice of proposed decertification.
652.34 Opportunity to contest decertification.
652.35 State Conservationist decision.
652.36 Appeal of decertification decision.
652.37 Period of decertification.
652.38 Scope of decertification.
652.39 Mitigating factors.
652.40 Effect of decertification.
652.41 Effect of filing deadlines.
652.42 Recertification.

    Authority: 16 U.S.C. 3842.

    Source: 69 FR 69472, Nov. 29, 2004, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 652.1  Applicability.

    (a) The regulations in this part set forth the policies, procedures, 
and requirements related to delivery of technical assistance by 
individuals and entities other than the Department, hereinafter referred 
to as technical service providers. The Food Security Act of 1985, as 
amended, requires the Secretary to deliver technical assistance to 
eligible participants for implementation of its Title XII Programs 
either directly or, at the option of the producer, through payment to 
the producer for an approved third party provider. This regulation 
defines how a participant acquires technical service from a third party 
technical service provider, sets forth a certification and 
decertification process, and establishes a method to make payments for 
technical services.
    (b) Technical service providers may provide technical assistance in 
the planning, design, installation, and check-out of conservation 
practices applied on private land or where allowed by conservation 
program rules on public land where there is a direct private land 
benefit.
    (c) The Chief, NRCS, may implement this part in any of the fifty 
states, District of Columbia, the Commonwealth

[[Page 505]]

of Puerto Rico, Guam, the Virgin Islands, American Samoa and the 
Commonwealth of the Northern Marianna Islands.



Sec. 652.2  Definitions.

    The following definitions apply to this part and all documents 
issued in accordance with this part, unless specified otherwise:
    Approved list means the list of individuals, private sector 
entities, or public agencies certified by NRCS to provide technical 
services to a participant.
    Certification means the action taken by NRCS to approve:
    (1) An individual as meeting the minimum NRCS criteria for providing 
technical service for conservation planning or a specific conservation 
practice or system; or
    (2) An entity or public agency as having an employee or employees 
that meet the minimum NRCS criteria for providing technical service for 
conservation planning or a specific conservation practice or system.
    Chief means the Chief of NRCS or designee.
    Conservation practice means a specified treatment, such as a 
structural or vegetative practice, or a land management practice, that 
is planned and applied according to NRCS standards and specifications.
    Contribution agreement means the instrument used to acquire 
technical services under the authority of 7 U.S.C. 6962a.
    Cooperative agreement means the same as that term is defined in the 
Federal Grants and Cooperative Agreement Act, 31 U.S.C. 6301 et seq.
    Department means the Natural Resources Conservation Service, the 
Farm Service Agency, or any other agency or instrumentality of the 
United States Department of Agriculture that is assigned responsibility 
for all or a part of a conservation program subject to this part.
    Entity means a corporation, joint stock company, association, 
cooperative, limited partnership, limited liability partnership, limited 
liability company, nonprofit organization, a member of a joint venture, 
or a member of a similar organization.
    Participant means a person who is eligible to receive technical or 
financial assistance under a conservation program covered by this rule.
    Procurement contract means the same as the term ``contract'' means 
under the Federal Grants and Cooperative Agreement Act, 31 U.S.C. 6301 
et seq.
    Program contract means the document that specifies the rights and 
obligations of any individual or entity that has been accepted for 
participation in a Title XII conservation program.
    Public agency means a unit or subdivision of Federal, State, local, 
or Tribal government, other than the Department.
    Recommending organization means a professional organization, 
association, licensing board or similar organization with which NRCS has 
entered into an agreement to recommend qualified individuals for NRCS 
certification as technical service providers for specific technical 
services.
    Secretary means the Secretary of the United States Department of 
Agriculture.
    State Conservationist means the NRCS employee authorized to direct 
and supervise NRCS activities in a State, the Caribbean Area, or the 
Pacific Basin Area.
    Technical service means the technical assistance provided by 
technical service providers, including conservation planning, and/or the 
design, layout, installation, and check-out of approved conservation 
practices.
    Technical service provider means an individual, entity, or public 
agency either:
    (1) Certified by NRCS and placed on the approved list to provide 
technical services to participants; or,
    (2) Selected by the Department to assist the Department in the 
implementation of conservation programs covered by this part through a 
procurement contract, contribution agreement, or cooperative agreement 
with the Department.
    Written agreement means the document that specifies the rights and 
obligations of any individual or entity that has been authorized by NRCS 
to receive conservation planning assistance without having a program 
contract.

[[Page 506]]



Sec. 652.3  Administration.

    (a) As provided in this part, the Department will provide technical 
assistance to participants directly, or at the option of the 
participant, through a technical service provider in accordance with the 
requirements of this part.
    (b) The Chief, NRCS, will direct and supervise the administration of 
the regulations in this part.
    (c) NRCS will:
    (1) Provide overall leadership and management for the development 
and administration of a technical service provider process;
    (2) Consult with the Farm Service Agency and other appropriate 
agencies and entities concerning the availability and utilization of 
technical service providers and the implementation of technical service;
    (3) Establish policies, procedures, guidance, and criteria for 
certification, recertification, decertification, certification renewal, 
and implementation of the use of technical service providers; and
    (4) Establish a process for verifying information provided to NRCS 
under this part.
    (d) The Department will not make payments under a program contract 
or written agreement with a participant for technical services provided 
by a technical service provider unless the technical service provider is 
certified by NRCS for the services provided and is identified on the 
approved list.
    (e) The Department may enter into procurement contracts, 
contribution agreements, cooperative agreements, or other appropriate 
instruments to assist the Department in providing technical assistance 
when implementing conservation programs covered by this part. The 
Department will ensure that such instruments contain the qualification 
and performance criteria necessary to ensure quality implementation of 
the goals and objectives of these conservation programs; therefore, when 
the Department obtains assistance from a technical service provider in 
this manner, the technical service provider is authorized to provide 
technical services and receive payment even if such technical service 
provider is not certified in accordance with subpart B nor identified on 
the approved list.
    (f) When a participant acquires technical services from a technical 
service provider, the Department is not a party to the agreement between 
the participant and the technical service provider. To ensure that 
quality implementation of the goals and objectives of the conservation 
programs are met, the technical service provider must be certified by 
NRCS in accordance with subpart B of this part and identified on the 
approved list. Upon request of NRCS, technical service providers are 
required to submit copies of all transcripts, licensing, and 
certification documentation.



Sec. 652.4  Technical service standards.

    (a) All technical services provided by technical service providers 
must meet USDA standards and specifications as set forth in Departmental 
manuals, handbooks, guides, and other references for soils mapping and 
natural resources information, conservation planning, conservation 
practice application, and other areas of technical assistance.
    (b) The Department will only pay a participant for technical 
services provided in accordance with established NRCS standards, 
specifications, and requirements. The Department must approve all new 
technologies and innovative practices, including interim standards and 
specifications, prior to a technical service provider initiating 
technical services for those technologies and practices.
    (c) A technical service provider must assume responsibility in 
writing for the particular technical services provided. Technical 
services provided by the technical service provider must:
    (1) Comply with all applicable Federal, State, Tribal, and local 
laws and requirements;
    (2) Meet applicable Department standards, specifications, and 
program requirements;
    (3) Be consistent with the particular conservation program goals and 
objectives for which the program contract was entered into by the 
Department and the participant; and
    (4) Incorporate alternatives that are both cost effective and 
appropriate to

[[Page 507]]

address the resource issues. Conservation alternatives will meet the 
objectives for the program and participant to whom assistance is 
provided.
    (d) Technical service providers are responsible for the technical 
services provided, including any costs, damages, claims, liabilities, 
and judgments arising from past, present, and future negligent or 
wrongful acts or omissions of the technical service provider in 
connection with the technical service provided.
    (e) The Department will not be in breach of any program contract or 
written agreement if it fails to implement conservation plans or 
practices or make payment for conservation plans or practices resulting 
from technical services that do not meet USDA standards and 
specifications or are not consistent with program requirements.
    (f) The participant is responsible for complying with the terms and 
conditions of the program contract or written agreement, which includes 
meeting USDA technical standards and specifications for any technical 
services provided by a technical service provider.
    (g) The technical service provider shall report in the NRCS 
conservation accomplishment tracking system the appropriate data 
elements associated with the technical services provided to the 
Department or participant.
    (h) To the extent allowed under State or Tribal law, technical 
service providers may utilize the services of subcontractors to provide 
specific technical services or expertise needed by the technical service 
provider, provided that the subcontractors are certified by NRCS in 
accordance with this part for the particular technical services to be 
provided and the technical services are provided in terms of their 
Certification Agreement. Payments will not be made for any technical 
services provided by uncertified subcontractors, except when such 
technical services are provided under the provisions of a procurement 
contract, cooperative agreement, or contribution agreement with the 
NRCS.



Sec. 652.5  Participant acquisition of technical services.

    (a) Participants may obtain technical assistance directly from the 
Department or, when available, from a technical service provider.
    (b) To acquire technical assistance directly from the Department, 
participants should contact their local USDA Service Center.
    (c) To acquire technical services from a technical service provider, 
participants must:
    (1) Enter into and comply with a program contract or a written 
agreement prior to acquiring technical services; and
    (2) Select a certified technical service provider from the approved 
list of technical service providers.
    (d) The Department may approve written agreements for technical 
assistance prior to program participation based on available funding and 
natural resource priorities as identified by the State Conservationist.
    (e) The technical assistance indicated in paragraph (d) may include 
the development of conservation plans suitable for subsequent 
incorporation into a program contract.
    (f) The Department will identify in the particular program contract 
or written agreement the payment provisions for technical service 
providers hired directly by the participant.
    (g) To obtain payment for technical services, participants must 
submit to the Department valid invoices, supporting documentation, and 
requests for payment. The Department will issue payment within 30 days 
of receiving these items. The Department may pay a participant for some 
or all of the costs associated with the technical services provided by a 
technical service provider hired by the participant or, upon receipt of 
an assignment of payment from the participant, make payment directly to 
the technical service provider.
    (h) Participants must authorize in writing to the Department the 
disclosure of their records on file with the Department that they wish 
to make available to specific technical service providers.
    (i) Payments for technical services will be made only one time for 
the

[[Page 508]]

same technical service provided unless, as determined by the Department, 
the emergence of new technologies or major changes in the participant's 
farming or ranching operations necessitate the need for additional 
technical services.
    (j) Payment rates for technical services acquired by participants. 
(1) NRCS will establish payment rates by calculating not-to-exceed rates 
for technical services. NRCS will calculate not-to-exceed rates using 
price data that it may acquire through various sources that it deems 
reliable.
    (2) Establishing not-to-exceed payment rates. (i) NRCS will analyze 
the pricing information using a standardized methodology.
    (ii) Not-to-exceed payment rates will be established nationally on a 
State by State basis for categories of technical services.
    (iii) NRCS will coordinate payment rates between adjacent States to 
ensure consistency where similar resource conditions and agricultural 
operations exist. Payment rates may vary to some degree between States 
due to differences in State laws, the cost of doing business, 
competition, and other variables.
    (iv) NRCS will review payment rates annually, or more frequently as 
needed, and adjust the rates based upon data from existing procurement 
contracts, Federal cost rates, and other appropriate sources.
    (v) NRCS may adjust payment rates, as needed, on a case-by-case 
basis, in response to unusual conditions or unforeseen circumstances in 
delivering technical services such as highly complex technical 
situations, emergency conditions, serious threats to human health or the 
environment, or major resource limitations. In these cases, NRCS will 
set a case-specific not-to-exceed payment rate based on the Department's 
determination of the scope, magnitude, and timeliness of the technical 
services needed.



Sec. 652.6  Department delivery of technical services.

    (a) The Department may enter into a procurement contract, 
contribution agreement, cooperative agreement, or other appropriate 
instrument to assist the Department in providing technical assistance 
when implementing the conservation programs covered by this part.
    (b) The Department will ensure that such legal instruments contain 
qualification and performance criteria necessary to ensure quality 
implementation of these conservation programs. When the Department 
obtains assistance from a technical service provider through a 
procurement contract, contribution agreement, cooperative agreement, or 
other similar instrument, the technical service provider is authorized 
to provide technical services and receive payment even if such technical 
service provider is not certified in accordance with subpart B of this 
part nor identified on the approved list.
    (c) The Department will implement procurement contracts, 
contribution agreements, cooperative agreements, and other appropriate 
instruments in accordance with applicable Federal acquisition or USDA 
Federal assistance rules and requirements for competency, quality, and 
selection, as appropriate.
    (d) A technical service provider may not receive payment twice for 
the same technical service, such as once from a participant through a 
program contract or written agreement and then again through a separate 
contract or agreement made directly with the Department.
    (e) The Department will, to the extent practicable, ensure that the 
amounts paid for technical service under this part are consistent across 
conservation program areas, unless specific conservation program 
requirements include additional tasks.



Sec. 652.7  Quality assurance.

    (a) NRCS will review, in consultation with the Farm Service Agency, 
as appropriate, the quality of the technical services provided by 
technical service providers. As a requirement of certification, 
technical service providers must develop and maintain documentation in 
accordance with Departmental manuals, handbooks, and technical guidance 
for the technical services provided, and furnish this documentation to 
NRCS and the participant when the

[[Page 509]]

particular technical service is completed. NRCS may utilize information 
obtained through its quality assurance process, documentation submitted 
by the technical service provider, and other relevant information in 
determining how to improve the quality of technical service, as well as 
determining whether to decertify a technical service provider under 
subpart C of this part.
    (b) Upon discovery of a deficiency in the provision of technical 
service through its quality assurance process or other means, NRCS will, 
to the greatest extent practicable, send a notice to the technical 
service provider detailing the deficiency and requesting remedial action 
by the technical service provider. Failure by the technical service 
provider to promptly remedy the deficiency, or the occurrence of 
repeated deficiencies in providing technical services, may trigger the 
decertification process set forth in subpart C of this part. A failure 
by NRCS to identify a deficiency does not affect any action under the 
decertification process. Technical service providers are solely 
responsible for providing technical services that meet all NRCS 
standards and specifications.



                         Subpart B_Certification



Sec. 652.21  Certification criteria and requirements.

    (a) To qualify for certification an individual must:
    (1) Have the required technical training, education, and experience 
to perform the level of technical assistance for which certification is 
sought;
    (2) Meet any applicable professional or business licensing or 
similar qualification standards established by State or Tribal law;
    (3) Demonstrate, through documentation of training or experience, 
familiarity with NRCS guidelines, criteria, standards, and 
specifications as set forth in the applicable NRCS manuals, handbooks, 
field office technical guides, and supplements thereto for the planning 
and applying of specific conservation practices and management systems 
for which certification is sought; and
    (4) Not be decertified in any State under subpart C of this part at 
the time of application for certification.
    (b) To qualify for certification an entity or public agency must be 
authorized to provide such services in the jurisdiction and have a 
certified individual providing, in accordance with this part, technical 
services on its behalf.
    (c) A technical service provider, as part of the certification by 
NRCS, must enter into a Certification Agreement with NRCS specifying the 
terms and conditions of the certification, including adherence to the 
requirements of this part, and acknowledging that failure to meet these 
requirements may result in ineligibility to receive payments from the 
Department, either directly or through the participant, for the 
technical services provided or may result in decertification.
    (d) NRCS will certify Technical Service Providers for a time period 
specified by NRCS in the Certification Agreement, not to exceed 3 years. 
Decertification and Renewal of Certification is administered in 
accordance with Sec. 652.26.
    (e) NRCS may, pursuant to 31 U.S.C. 9701, establish and collect fees 
for the certification of technical service providers.



Sec. 652.22  Certification process for individuals.

    (a) In order to be considered for certification as a technical 
service provider, an individual must:
    (1) Submit an Application for Certification to NRCS in accordance 
with this section;
    (2) Request certification through a recommending organization 
pursuant to Sec. 652.25; or
    (3) Request certification through an application submitted by a 
private-sector entity or public agency pursuant to Sec. 652.23 or Sec. 
652.24, as appropriate.
    (b) The application must contain the documentation demonstrating 
that the individual meets all requirements of paragraph (a) of Sec. 
652.21.
    (c) NRCS will, within 60 days of receipt of an application, make a 
determination on the application submitted by an individual under 
paragraph (a)(1) of this section and in accordance with

[[Page 510]]

paragraph (a) of Sec. 652.21. If all requirements are met, NRCS will:
    (1) Enter into a Certification Agreement and certify the applicant 
as qualified to provide technical services for a specific practice, 
category, or categories of technical service;
    (2) Place the applicant on the list of approved technical service 
providers when certified; and
    (3) Make available to the public the list of approved technical 
service providers by practice or category of technical services.
    (d) NRCS may decertify an individual in accordance with the 
decertification process set forth in subpart C of this part.



Sec. 652.23  Certification process for private-sector entities.

    (a) A private sector entity that applies for certification must 
identify, and provide supporting documentation, that it has the 
requisite professional and business licensure within the jurisdiction 
for which it seek certification, and that it employs at least one 
individual, authorized to act on its behalf that:
    (1) Has received certification on an individual basis in accordance 
with Sec. 652.22; or
    (2) Seeks certification on an individual basis as part of the 
private-sector entity's certification and ensures that the requirements 
set forth in Sec. 652.21(a) are contained within the private-sector 
entity's application to support such certification.
    (b) NRCS will determine pursuant to Sec. 652.22 whether the 
individual(s) identified in the private-sector entity's application 
meets the certification standards set forth in Sec. 652.21 for the 
specific services the entity wishes to provide.
    (c) NRCS will, within 60 days of receipt of an application, make a 
determination on the application submitted by an entity. If NRCS 
determines that all requirements for the private-sector entity and the 
identified individual(s) are met, NRCS will complete the actions 
described in paragraphs (c)(1) through (c)(3) of Sec. 652.22.
    (d) The Certification Agreement entered into with the private-sector 
entity shall:
    (1) Identify the certified individuals who are authorized to perform 
technical services on behalf of and under the auspices of the entity's 
certification;
    (2) Require that the entity has, at all times, an individual who is 
a certified technical service provider authorized to act on the entity's 
behalf;
    (3) Require that the entity promptly provide an amended 
Certification Agreement to NRCS for approval when the list of certified 
individuals performing technical services under its auspices changes;
    (4) Require that responsibility for any work performed by non-
certified individuals be assumed by a certified individual who is 
authorized to act on the entity's behalf; and
    (5) Require that the entity be legally responsible for the work 
performed by any individual working under the auspices of its 
certification.
    (e) NRCS may, in accordance with the decertification process set 
forth in this part, decertify the private sector entity, the certified 
individual(s) acting under the auspices of its certification, or both 
the private sector entity and the certified individual(s) acting under 
the auspices of its certification.



Sec. 652.24  Certification process for public agencies.

    (a) A public agency that applies for certification must identify, 
and provide supporting documentation, that it has the authority within 
the jurisdiction within which it seeks to provide technical services and 
an individual or individuals authorized to act on its behalf:
    (1) Has been certified as an individual in accordance with Sec. 
652.22; or
    (2) Seeks certification as an individual as part of the public 
agency's certification and sufficient information as set forth in Sec. 
652.21(a) is contained within the public agency's application to support 
such certification.
    (b) NRCS shall determine whether the individual identified in the 
public agency's application meets the certification standards set forth 
in Sec. 652.22.
    (c) NRCS will, within 60 days of receipt of an application, make a 
determination on the application submitted by a public agency. If NRCS 
determines

[[Page 511]]

that all requirements for the public agency and the identified 
individual(s) are met, NRCS will perform the actions described in 
paragraph (c)(1) through (c)(3) of Sec. 652.22. The Certification 
Agreement entered into with the public agency shall:
    (1) Identify the certified individuals that are authorized to 
perform technical services on behalf of and under the auspices of the 
public agency's certification;
    (2) Require that the public agency have, at all times, an individual 
that is a certified technical service provider and is an authorized 
official of the public agency;
    (3) Require that the public agency promptly provide to NRCS for NRCS 
approval an amended Certification Agreement when the list of certified 
individuals performing technical services under its auspices changes;
    (4) Require that responsibility for any work performed by non-
certified individuals be assumed by a certified individual that is 
authorized to act on the public agency's behalf; and
    (5) Require that the public agency be legally responsible for the 
work performed by any individual working under the auspices of its 
certification.
    (d) NRCS may, in accordance with the decertification process set 
forth in subpart C of this part, decertify the public agency, the 
certified individual(s) acting under its auspices, or both the public 
agency and the certified individual(s) acting under its auspices.



Sec. 652.25  Alternative application process for individual certification.

    (a) NRCS may enter into an agreement, including a memorandum of 
understanding or other appropriate instrument, with a recommending 
organization that NRCS determines has an adequate accreditation program 
in place to train, test, and evaluate candidates for competency in a 
particular area or areas of technical service delivery and whose 
accreditation program NRCS determines meets the certification criteria 
as set forth for the technical services to be provided.
    (b) Recommending organizations will, pursuant to an agreement 
entered into with NRCS:
    (1) Train, test, and evaluate candidates for competency in the area 
of technical service delivery;
    (2) Recommend to NRCS individuals who it determines meet the NRCS 
certification requirements of Sec. 652.21(a) for providing specific 
practices or categories of technical services;
    (3) Inform the recommended individuals that they must meet the 
requirements of this part, including entering into a Certification 
Agreement with NRCS, in order to provide technical services under this 
part;
    (4) Reassess individuals that request renewal of their certification 
pursuant to Sec. 652.26 through the recommendation of the organization; 
and
    (5) Notify NRCS of any concerns or problems that may affect the 
organization's recommendation concerning the individual's certification, 
recertification, certification renewal, or technical service delivery.
    (c) Pursuant to an agreement with NRCS, a recommending organization 
may provide to the appropriate NRCS official a current list of 
individuals identified by the recommending organization as meeting NRCS 
criteria as set forth in Sec. 652.21(a) for specific practices or 
categories of technical service and recommend that the NRCS official 
certify these individuals as technical service providers in accordance 
with this part.
    (d) NRCS will, within 60 days, make a determination on the 
recommendation for certification issued by the recommending 
organization. If NRCS determines that all requirements for certification 
are met by the recommended individual(s), NRCS will perform the actions 
described in paragraphs (c)(1) through (c)(3) of Sec. 652.22.
    (e) NRCS may terminate an agreement with a recommending organization 
if concerns or problems with its accreditation program, its 
recommendations for certification, or other requirements under the 
agreement arise.



Sec. 652.26  Certification renewal.

    (a) NRCS certifications are in effect for a time period specified by 
NRCS in the Certification Agreement, not to exceed 3 years and 
automatically expire

[[Page 512]]

unless they are renewed for an additional time period in accordance with 
this section.
    (b) A technical service provider may request renewal of an NRCS 
certification by:
    (1) Submitting a complete certification renewal application to NRCS 
or through a private sector entity, a public agency, or a recommending 
organization to NRCS at least 60 days prior to expiration of the current 
certification;
    (2) Providing verification on the renewal form that the requirements 
of this part are met; and
    (3) Agreeing to abide by the terms and conditions of a Certification 
Agreement.
    (c) All certification renewals are in effect for a time period 
specified by NRCS in the Certification Agreement, not to exceed three 
years and before expiration, may be renewed for subsequent time period 
in accordance with this section.



                        Subpart C_Decertification



Sec. 652.31  Policy.

    In order to protect the public interest, it is the policy of NRCS to 
maintain certification of those technical service providers who act 
responsibly in the provision of technical service, including meeting 
NRCS standards and specifications when providing technical service to 
participants. This section, which provides for the decertification of 
technical service providers, is an appropriate means to implement this 
policy.



Sec. 652.32  Causes for decertification.

    A State Conservationist, in whose State a technical service provider 
is certified to provide technical service, may decertify the technical 
service provider, in accordance with these provisions, if the technical 
service provider, or someone acting on behalf of the technical service 
provider:
    (a) Fails to meet NRCS standards and specifications in the provision 
of technical services;
    (b) Violates the terms of the Certification Agreement, including but 
not limited to, a demonstrated lack of understanding of, or an 
unwillingness or inability to implement, NRCS standards and 
specifications for a particular practice for which the technical service 
provider is certified, or the provision of technical services for which 
the technical service provider is not certified;
    (c) Engages in a scheme or device to defeat the purposes of this 
part, including, but not limited to, coercion, fraud, misrepresentation, 
or providing incorrect or misleading information; or
    (d) Commits any other action of a serious or compelling nature as 
determined by NRCS that demonstrates the technical service provider's 
inability to fulfill the terms of the Certification Agreement or provide 
technical services under this part.



Sec. 652.33  Notice of proposed decertification.

    The State Conservationist will send by certified mail, return 
receipt requested, to the technical service provider proposed for 
decertification a written Notice of Proposed Decertification, which will 
contain the cause(s) for decertification, as well as any documentation 
supporting decertification. In cases where a private sector entity or 
public agency is being notified of a proposed decertification, any 
certified individuals working under the auspices of such organization 
who are also being considered for decertification will receive a 
separate Notice of Decertification and will be afforded separate appeal 
rights following the process set forth below.



Sec. 652.34  Opportunity to contest decertification.

    To contest decertification, the technical service provider must 
submit in writing to the State Conservationist, within 20 calendar days 
from the date of receipt of the Notice of Proposed Decertification, the 
reasons why the State Conservationist should not decertify, including 
any mitigating factors as well as any supporting documentation.



Sec. 652.35  State Conservationist decision.

    Within 40 calendar days from the date of the notice of proposed 
decertification, the State Conservationist will issue a written 
determination. If the

[[Page 513]]

State Conservationist decides to decertify, the decision will set forth 
the reasons for decertification, the period of decertification, and the 
scope of decertification. If the State Conservationist decides not to 
decertify the technical service provider, the technical service provider 
will be given written notice of that determination. The decertification 
determination will be based on an administrative record, which will be 
comprised of: the Notice of Proposed Decertification and supporting 
documents, and, if submitted, the technical service provider's written 
response and supporting documentation. Both a copy of the decision and 
administrative record will be sent promptly by certified mail, return 
receipt requested, to the technical service provider.



Sec. 652.36  Appeal of decertification decisions.

    (a) Within 20 calendar days from the date of receipt of the State 
Conservationist's decertification determination, the technical service 
provider may appeal, in writing, to the Chief of NRCS. The written 
appeal must state the reasons for appeal and any arguments in support of 
those reasons. If the technical service provider fails to appeal, the 
decision of the State Conservationist is final.
    (b) Final decision. Within 30 calendar days of receipt of the 
technical service provider's written appeal, the Chief or his designee, 
will make a final determination, in writing, based upon the 
administrative record and any additional information submitted to the 
Chief by the technical service provider. The decision of the Chief, or 
his designee, is final and not subject to further administrative review. 
The Chief's determination will include the reasons for decertification, 
the period of decertification, and the scope of decertification.



Sec. 652.37  Period of decertification.

    The period of decertification will not exceed three years in 
duration and will be decided by the decertifying official, either the 
State Conservationist or Chief, as applicable, based upon their weighing 
of all relevant facts and the seriousness of the reasons for 
decertification, mitigating factors, if any, and the following general 
guidelines:
    (a) For failures in the provision of technical service for which 
there are no mitigating factors, e.g., no remedial action by the 
technical service provider, a maximum period of three years 
decertification;
    (b) For repeated failures in the provision of technical assistance 
for which there are mitigating factors, e.g., the technical service 
provider has taken remedial action to the satisfaction of NRCS, a 
maximum period of one to two years decertification; and
    (c) For a violation of Certification Agreement terms, e.g., failure 
to possess technical competency for a listed practice, a period of one 
year or less, if the technical service provider can master such 
competency within a year period.



Sec. 652.38  Scope of decertification.

    (a) When the technical service provider is a private sector entity 
or public agency, the decertifying official may decertify the entire 
organization, including all the individuals identified as authorized to 
provide technical services under the auspices of such organization. The 
decertifying official may also limit the scope of decertification, for 
example, to one or more specifically named individuals identified as 
authorized to provide technical services under the organization's 
auspices or to an organizational element of such private sector entity 
or public agency. The scope of decertification will be set forth in the 
decertification determination and will be based upon the facts of each 
decertification action, including whether actions of particular 
individuals can be imputed to the larger organization.
    (b) In cases where specific individuals are decertified only, an 
entity or public agency must file within 10 calendar days an amended 
Certification Agreement removing the decertified individual(s) from the 
Certification Agreement. In addition, the entity or public agency must 
demonstrate that, to the satisfaction of the State Conservationist, the 
entity or public agency has taken affirmative steps to ensure that the 
circumstances resulting in decertification have been addressed.

[[Page 514]]



Sec. 652.39  Mitigating factors.

    In considering whether to decertify, the period of decertification, 
and scope of decertification, the deciding official will take into 
consideration any mitigating factors. Examples of mitigating factors 
include, but are not limited to the following:
    (a) The technical service provider worked, in a timely manner, to 
correct any deficiencies in the provision of technical service;
    (b) The technical service provider took the initiative to bring any 
deficiency in the provision of their technical services to the attention 
of NRCS and sought NRCS advice to remediate the situation; and
    (c) The technical service provider took affirmative steps to prevent 
any failures in the provision of technical services from occurring in 
the future.



Sec. 652.40  Effect of decertification.

    (a) The Department will not make payment under a program contract 
for the technical services of a decertified technical service provider 
that were provided during the period of decertification. Likewise, NRCS 
will not procure, or otherwise enter into an agreement for, the services 
of a decertified technical service provider during the period of 
decertification.
    (b) National decertification list. NRCS shall maintain a current 
list of decertified technical service providers. NRCS shall remove 
decertified providers from the list of certified providers. Participants 
may not hire a decertified technical service provider. It is the 
participant's responsibility to check the decertified list before hiring 
a technical service provider. Decertification of a technical service 
provider in one State decertifies the technical service provider from 
providing technical services under current programs in all States, the 
Caribbean Area, and the Pacific Basin Area.



Sec. 652.41  Effect of filing deadlines.

    A technical service provider's failure to meet the filing deadlines 
under this subpart will result in the forfeiture of appeal rights. All 
filings must be received by NRCS no later than the close of business (5 
p.m.) the last day of the filing period.



Sec. 652.42  Recertification.

    A decertified technical service provider may apply to be re-
certified under the certification provisions of this part after the 
period of decertification has expired. A technical service provider may 
not utilize the certification renewal process in an attempt to be 
recertified after being decertified.



PART 653_TECHNICAL STANDARDS--Table of Contents




Sec.
653.1 General.
653.2 Technical standards and criteria.
653.3 Adaptation of technical standards.
653.4 Availability of technical standards.

    Authority: 7 CFR 2.62.

    Source: 43 FR 58079, Dec. 12, 1978, unless otherwise noted.



Sec. 653.1  General.

    The Natural Resources Conservation Service (NRCS) is responsible for 
the technical adequacy of conservation practices installed under all 
NRCS programs, and those practices applied under programs administered 
by the Agricultural Stabilization and Conservation Service (ASCS) where 
NRCS has the technical responsibility. NRCS technical or financial 
assistance will be provided when the practices are applied according to 
established technical standards.



Sec. 653.2  Technical standards and criteria.

    Technical standards and criteria have been established for all 
conservation practices. They provide the guidance and direction needed 
to assure that the practices meet the intended purpose and are of the 
quality needed to assure lasting for the design life. Standards and 
criteria are developed in consultation with universities, research 
institutions, and individual industrial and private firms and 
individuals. Research information and practical experience are used in 
setting standards. Changes and new technical standards and criteria are 
prepared in the same manner as set out above.

[[Page 515]]



Sec. 653.3  Adaptation of technical standards.

    Technical standards and criteria developed on a national basis may 
require special adaptation to meet local needs. These adaptations must 
be approved by the Administrator of the Natural Resources Conservation 
Service or his designee.



Sec. 653.4  Availability of technical standards.

    Information on technical standards used by NRCS is available at 
field, area, or State offices of NRCS.



PART 654_OPERATION AND MAINTENANCE--Table of Contents




                            Subpart A_General

Sec.
654.1 Purpose and scope.
654.2 Definitions.

             Subpart B_Federal Financially-Assisted Projects

654.10 Operation and maintenance agreement.
654.11 Sponsor(s)' responsibility.
654.12 Financing operations and maintenance.
654.13 Designating responsibility for operation and maintenance.
654.14 Duration of sponsor(s)' responsibility.
654.15 Operation and maintenance.
654.16 Property management.
654.17 Inspection.
654.18 Natural Resources Conservation Service responsibility.
654.19 Plan of operation and maintenance.
654.20 Violations of operation and maintenance agreement.

                    Subpart C_Conservation Operations

654.30 Responsibility for operation and maintenance.
654.31 Performing operation and maintenance.

                Subpart D_Emergency Watershed Protection

654.40 Responsibility for operation and maintenance.
654.41 Performance of operation and maintenance.

               Subpart E_Great Plains Conservation Program

654.50 Responsibility for operation and maintenance.

    Authority: Pub. L. 83-566, 68 Stat. 666, as amended (16 U.S.C. 1001-
1008). Sec. 1, Pub. L. 86-468, 74 Stat. 131, as amended (16 U.S.C. 
1006a); sec. 2, Pub. L. 78-534, 58 Stat. 889 (33 U.S.C. 701a-1); sec. 
13, Pub. L. 78-534, 58 Stat. 905; sec. 5, Pub. L. 93-251, 88 Stat. 15; 
Pub. L. 87-703, 76 Stat. 607 (7 U.S.C. 1010-1011); Pub. L. 74-46, 49 
Stat. 163 (16 U.S.C. 590a-f, q); Pub. L. 84-1021, 70 Stat. 1115, as 
amended (16 U.S.C. 590p(b)); sec. 216, Pub. L. 81-516, 64 Stat. 184 (33 
U.S.C. 701b-1); 7 CFR 2.62.

    Source: 42 FR 58159, Nov. 8, 1977, unless otherwise noted.



                            Subpart A_General



Sec. 654.1  Purpose and scope.

    (a) This part sets forth the operation and maintenance requirements 
pertaining to measures installed with Natural Resources Conservation 
Service (NRCS) assistance. This includes measures installed under the 
following programs:
    (1) Federal financially-assisted projects.
    (i) Watershed Protection and Flood Prevention (WP&FP). See part 622 
of this title.
    (ii) Flood Prevention (FP). See part 623 of this title.
    (iii) Specifically authorized projects.
    (iv) Resource Conservation and Development (RC&D).
    (2) Conservation Operations (CO).
    (3) Emergency Watershed Protection (EWP). See part 624 of this 
title.
    (4) Great Plains Conservation Program (GP). See part 631 of this 
title.
    (b) These regulations shall apply to all Federal financially-
assisted projects as set forth in subpart B for the duration of their 
respective operation and maintenance agreements. However, this does not 
relieve the sponsor(s) of any liability which may continue beyond the 
evaluated life of the measure under Federal, State, and local laws. 
Operation and maintenance agreements in effect prior to the effective 
date of these regulations are not affected by these regulations.

[[Page 516]]



Sec. 654.2  Definitions.

    Evaluated life. The time period for which project or measure 
benefits and costs have been evaluated. The evaluated life starts after 
the last project measure of the evaluation unit has been completed.
    Landuser. Those who individually or collectively use land as owner, 
lessee, occupier, or by other arrangements which give them conservation 
planning or implementation concern and responsibility for the land 
involved.
    Maintenance. The work and actions required to keep works of 
improvement in a condition to function for their intended purpose and 
the replacement of portions of project measures as specified in the O&M 
agreement.
    Operation. The administration, management, and performance of 
services needed to insure the continued proper functioning of completed 
project measures.
    Operation and maintenance agreement. A written agreement between the 
sponsor(s) and NRCS or other recipient(s) in which responsibilities and 
actions are established for the operation, maintenance, replacement, and 
inspection of project measures.
    Plan of operation and maintenance. A detailed program of action to 
provide for performing the operation and maintenance of a specific 
project measure.
    Project measures. An undertaking for watershed protection; flood 
prevention; the conservation, development, utilization, and disposal of 
water; the conservation and proper utilization of land; or a combination 
thereof. The undertaking may consist of vegetative, structural, or 
management measures or a combination thereof. Vegetative measures are 
those measures involving only seedbed preparation and/or the planting of 
vegetative material.
    Public recreation and/or fish and wildlife facility. A project 
measure or part thereof which (a) creates or improves the potential for 
public recreational use and enjoyment, or (b) materially contributes to 
the preservation, production, or harvest of fish and wildlife.
    Sponsor. An agency or organization with authority to provide local 
responsibility for a Federal financially-assisted local project under a 
program administered by NRCS.
    State Conservationist. The NRCS officer responsible for NRCS 
activities within a particular State, the Commonwealth of Puerto Rico, 
or the U.S. Virgin Islands.
    Structural measures. Structural measures are those measures that are 
excavated or constructed with concrete, earth, masonry, metal, rock, or 
other materials, and associated vegetation.



             Subpart B_Federal Financially-Assisted Projects



Sec. 654.10  Operation and maintenance agreement.

    A duly authorized official of the sponsor(s) must execute an O&M 
agreement with NRCS prior to NRCS furnishing financial assistance.



Sec. 654.11  Sponsor(s)' responsibility.

    (a) On non-Federal land, sponsor(s) are responsible for financing 
and performing without cost to the Federal Government, needed operation 
and maintenance (O&M) of project measures installed with Federal 
financial assistance.
    (b) The Federal agency administering Federal land involving project 
measures is responsible either for performing or requiring the 
performance of O&M on land administered by that agency. If project 
measures benefit both Federal and non-Federal land or interests, the O&M 
may be performed by the Federal agency, the sponsor(s), or both as 
mutually agreed by the Federal agency, sponsor(s), and NRCS. If O&M of 
project measures is performed by mutual agreement, the cost of O&M may 
be shared by the Federal agency and sponsor(s) as agreed.
    (c) The sponsor(s) shall obtain NRCS approval before modifying a 
project measure of changing land use to fulfill a different purpose.



Sec. 654.12  Financing operations and maintenance.

    Sources of funds needed to operate and maintain project measures for 
the duration of the O&M agreement shall be identified in the watershed 
or RC&D measure plan.

[[Page 517]]



Sec. 654.13  Designating responsibility for operation and maintenance.

    Those organizations or agencies responsible for the O&M of each 
project measure shall be identified in the watershed or RC&D measure 
plan.



Sec. 654.14  Duration of sponsor(s)' responsibility.

    (a) Sponsor(s)' responsibility for O&M of a completed project 
measure begins when a part of all of the contract installing such 
measure is completed and accepted from the contractor. If the 
installation of the project measure is performed by force account, 
division of work, or performance of work methods, the sponsor(s)' O&M 
responsibilities begin on the date the work or portion thereof is 
completed as determined by NRCS, except for completed work located on 
Federal lands which are subject to special-use permits. The O&M 
agreement shall specify that O&M will continue through: (1) The 
evaluated life of the project, or (2) the evaluated life of measures 
that are economically evaluated as a unit, or (3) the useful life of 
cost-shared measures that are for land conservation or land utilization. 
The sponsor(s)' duties and liabilities for the measures under other 
Federal and State laws are not affected by the expiration of the O&M 
agreement.
    (b) For project measures being installed in segments, the sponsor(s) 
shall be responsible for O&M of completed and accepted segments. 
However, the NRCS may share in the cost of repairing damages to a 
completed segment when the damage is attributed to the continuation of 
work on uncompleted segments of the measure or when due to the fact that 
the measure was only partially completed.



Sec. 654.15  Operation and maintenance.

    Sponsor(s) are to operate and maintain completed project measures 
in:
    (a) Compliance with applicable Federal, State, and local laws, 
regulations, and ordinances.
    (b) Compliance with any applicable conditions set forth in the 
instruments by which the landrights were acquired for installing, 
operating, and maintaining the project measures.
    (c) A manner that will not significantly degrade the environment and 
will permit project measures to serve the purpose for which they were 
installed as set forth in the watershed or RC&D measure plan.
    (d) Compliance with the time frames and O&M work items established 
in the plan of O&M and inspection reports.
    (e) Accordance with agreements with NRCS on admission charges and 
user fees for public recreation and/or fish and wildlife facility. 
Admission or user fees shall be charged only as necessary to produce 
revenues required to amortize the sponsor(s)' share of installation 
costs and to provide adequate O&M for that portion of the project 
measures pertaining to public recreation and/or fish and wildlife 
facility. Sponsor(s)' admission or user fee charges require prior NRCS 
approval throughout the life of the O&M agreement.
    (f) Accordance with the schedule for withdrawal of water in water 
impounding structures as specified in the watershed or RC&D measure plan 
or other legal documents.
    (g) A manner consistent with the project objectives.



Sec. 654.16  Property management.

    Sponsor(s) are to:
    (a) Use real property acquired in whole or in part with Federal 
funds as long as needed for the purpose for which it was acquired and in 
accordance with the O&M agreement. If real property acquired in whole or 
in part with Federal funds is no longer needed for the purpose for which 
it was acquired, the sponsor(s) shall obtain NRCS approval for future 
use or disposition.
    (b) Use nonexpendable personal property acquired in whole or in part 
with Federal funds as long as needed for the purpose for which it was 
acquired in accordance with the rules governing Federal grant property 
(34 CFR part 256).
    (c) Establish, adopt, and comply with a property management system 
which meets the standards governing Federal grant property.

[[Page 518]]



Sec. 654.17  Inspection.

    (a) Sponsor(s) are to make periodic and special inspections of 
installed project measures as provided in the plan of O&M. For 
structural measures, inspections are to be made at least annually and 
after each major storm or occurrence of any unusual condition that might 
adversely affect the project measures. At the discretion of the State 
Conservationist, NRCS may assist sponsor(s) with their inspections. NRCS 
or land-administering agencies may make independent inspections at any 
time during the period covered by the O&M agreement.
    (b) Sponsor(s) are to maintain a written record of each inspection 
and furnish NRCS and land-administering agencies a copy of that record. 
The record should indentify items inspected, O&M work that may be 
needed, a time frame to do the work, and the date of the inspection. The 
NRCS and land-administering agencies will provide the sponsor(s) a copy 
of a similar record of independent inspections.
    (c) The sponsor(s) shall perform the O&M work listed as needed in 
the inspection reports within the time frame established for each item 
of work. Failure to perform O&M work will be considered a violation of 
the O&M agreement and will be handled in accordance with Sec. 654.20.
    (d) Sponsor(s) are to maintain a written record of work performed 
which is listed in the inspection report and a record of other 
significant O&M activity. The record will identify the measure, item of 
work, cost of performance, and date completed.
    (e) Sponsor(s)' records relative to the project shall be made 
available to NRCS for examination.



Sec. 654.18  Natural Resources Conservation Service responsibility.

    The Natural Resources Conservation Service will assist the 
sponsor(s) in developing a watershed or RC&D measure plan which includes 
a description of O&M work and estimated cost, assist in the preparation 
of O&M agreements and plans of O&M, enter into O&M agreements with the 
sponsor(s), and notify the sponsor(s) of observed failures to comply 
with the O&M agreement.



Sec. 654.19  Plan of operation and maintenance.

    (a) The plan for O&M shall be incorporated into and made a part of 
the O&M agreement. A separate plan of O&M shall be prepared for each 
project measure that is expected to a have a unique O&M need. Two or 
more measures with similar O&M needs may be included in a single plan 
for O&M.
    (b) The plan of O&M shall include the known and anticipated items of 
O&M, an explanation of how the O&M activities may be carried out, a 
general time frame for making O&M inspections and for completing the 
needed O&M work, and the records and reports deemed appropriate by the 
sponsor(s) and NRCS.



Sec. 654.20  Violations of operation and maintenance agreement.

    (a) The State Conservationist shall investigate alleged sponsor 
violations of the O&M agreement. If the State Conservationist determines 
that a violation has occurred that may prevent the project measure from 
functioning as intended, create a health or safety hazard, or prevent 
the accrual of project benefits, he shall provide sponsor(s) written 
notification.
    (b) If the sponsor(s) fail to comply with the O&M agreement or fail 
to take corrective action, NRCS may notify authorities having 
appropriate jurisdiction, withhold further assistance to the project, 
require the sponsor(s) to reimburse the government for the NRCS share of 
the cost of the project, and/or pursue other action authorized by the 
O&M agreement or law.



                    Subpart C_Conservation Operations



Sec. 654.30  Responsibility for operation and maintenance.

    The land user is responsible for O&M of soil and water conservation 
measures installed with NRCS assistance provided through soil, water, 
and other conservation districts.



Sec. 654.31  Performing operation and maintenance.

    The method of performing O&M is to be at the option of the land 
user. The NRCS, working through districts, will

[[Page 519]]

furnish information and technical assistance as needed and requested to 
the extent NRCS resources permit.



                Subpart D_Emergency Watershed Protection



Sec. 654.40  Responsibility for operation and maintenance.

    (a) Non-Federal lands. The need for an O&M agreement will be 
determined by the State Conservationist. Where an O&M agreement is 
necessary, the sponsor(s) will provide the O&M and adopt standards for 
Federal grant property (34 CFR part 256). Where no O&M agreement is 
necessary, other arrangements will be made for complying with Federal 
property management.
    (b) Federal lands. The Federal agency administering the Federal land 
is responsible for operating and maintaining emergency measures 
installed on Federal land.



Sec. 654.41  Performance of operation and maintenance.

    (a) Arrangement. O&M is a prerequisite for approval of Federal 
emergency assistance when:
    (1) The emergency measure needs to be operated and maintained in 
order to serve its intended purpose, or
    (2) The emergency measure needs to be operated and maintained to 
insure that it will not become hazardous.
    (b) Time of operation and maintenance. The sponsor(s)' obligations 
for O&M begin when the measure is installed and extend for the duration 
of the time required for the emergency measure to serve the purpose for 
which it is installed.
    (c) Performance. Operation and maintenance is to be performed in a 
manner that will protect the environment and otherwise comply with NRCS, 
State, and local requirements. The method of performing O&M is at the 
option of the sponsor(s).



               Subpart E_Great Plains Conservation Program



Sec. 654.50  Responsibility for operation and maintenance.

    Responsibility for practices under the Great Plains Conservation 
Program are contained in Sec. 631.10 of this chapter.

                           PART 655 [RESERVED]



PART 656_PROCEDURES FOR THE PROTECTION OF ARCHEOLOGICAL AND HISTORICAL 
PROPERTIES ENCOUNTERED IN NRCS-ASSISTED PROGRAMS--Table of Contents




Sec.
656.1 Purpose.
656.2 Archeological and historical laws and Executive orders applicable 
          to NRCS-assisted programs.
656.3 Policy.
656.4-656.9 [Reserved]

    Authority: Pub. L. 86-523, 74 Stat. 220, as amended (16 U.S.C. 469 
et seq.); Pub. L. 89-665, 80 Stat. 915, as amended (16 U.S.C. 470 et 
seq.); 7 CFR 2.62.

    Source: 42 FR 36804, July 18, 1977, unless otherwise noted.



Sec. 656.1  Purpose.

    This part prescribes Natural Resources Conservation Service (NRCS) 
policy, procedures, and guidelines for the implementation of 
archeological and historical laws and appropriate executive orders for 
administering NRCS programs.



Sec. 656.2  Archeological and historical laws and Executive orders 
applicable to NRCS-assisted programs.

    (a) The Act of June 27, 1960, relating to the preservation of 
historical and archeological data, Pub. L. 86-523, 74 Stat. 220, as 
amended May 24, 1974; Pub. L. 93-291, 88 Stat. 174 (16 U.S.C. 469 et 
seq.), provides for the preservation of historical and archeological 
materials or data, including relics and specimens, that might otherwise 
be lost or destroyed as a result of any Federal or federally-assisted or 
licensed project, activity, or program.
    (b) The National Historic Preservation Act, Pub. L. 89-665, 80 Stat. 
915, as amended, (16 U.S.C. 470 et seq.), authorizes the Secretary of 
the Interior to maintain and expand a National Register of Historic 
Places (NRHP), including historic districts, sites, buildings, 
structures, and objects that are significant in American history, 
architecture, archeology, and culture. This law also

[[Page 520]]

establishes the Advisory Council on Historic Preservation (ACHP), to be 
appointed by the President. Section 106 of this Act (16 U.S.C. 470f), 
requires that prior to the approval of any Federal or federally-assisted 
or licensed undertaking, the Federal agency shall afford the ACHP a 
reasonable opportunity to comment, if properties listed in or eligible 
for listing in NRHP are affected.
    (c) Executive Order 11593 (36 FR 8921, 3 CFR 1971 Comp. P. 154), 
Protection and Enhancement of the Cultural Environment, provides that 
the Federal government shall furnish leadership in preserving, 
restoring, and maintaining the historical and cultural environment of 
the nation, and that Federal agencies shall administer the cultural 
properties under their control in a spirit of stewardship and 
trusteeship for future generations; initiate measures necessary to 
direct their policies, plans, and programs in such a way that federally 
owned sites, structures, and objects of historical, architectural, or 
archeological significance are preserved, restored, and maintained. 
Section 1(3) directs that agencies institute procedures to assure that 
Federal plans and programs contribute to the preservation and 
enhancement of non-federally owned sites, structures, and objects of 
historical, architectural, or archeological significance in consultation 
with the ACHP.



Sec. 656.3  Policy.

    (a) NRCS recognizes that significant historical, archeological, and 
architectural resources are an important part of our national heritage, 
the protection of which requires careful consideration in this agency's 
project planning and implementation process.
    (b) NRCS will take reasonable precautions to avoid damaging any 
significant historic, cultural, or natural aspects of our national 
heritage and will work with the National Park Service (NPS) and the 
Advisory Council on Historic Preservation (ACHP) in identifying and 
seeking to avoid or mitigate adverse effects of NRCS-assisted projects 
on the Nation's significant cultural resources. The procedures contained 
in this part have been developed to comply with sections 1(3) and 2(c) 
of Executive Order 11593.



Sec. Sec. 656.4-656.9  [Reserved]



PART 657_PRIME AND UNIQUE FARMLANDS--Table of Contents




                 Subpart A_Important Farmlands Inventory

Sec.
657.1 Purpose.
657.2 Policy.
657.3 Applicability.
657.4 NRCS responsibilities.
657.5 Identification of important farmlands.

    Authority: 7 U.S.C. 1010a; 16 U.S.C. 590a-590f; 42 U.S.C. 3271-3274.

    Source: 43 FR 4031, Jan. 31, 1978, unless otherwise noted.



                 Subpart A_Important Farmlands Inventory



Sec. 657.1  Purpose.

    NRCS is concerned about any action that tends to impair the 
productive capacity of American agriculture. The Nation needs to know 
the extent and location of the best land for producing food, feed, fiber 
forage, and oilseed crops. In addition to prime and unique farmlands, 
farmlands that are of statewide and local importance for producing these 
crops also need to be identified.



Sec. 657.2  Policy.

    It is NRCS policy to make and keep current an inventory of the prime 
farmland and unique farmland of the Nation. This inventory is to be 
carried out in cooperation with other interested agencies at the 
National, State, and local levels of government. The objective of the 
inventory is to identify the extent and location of important rural 
lands needed to produce food, feed, fiber, forage, and oilseed crops.



Sec. 657.3  Applicability.

    Inventories made under this memorandum do not constitute a 
designation of any land area to a specific land use. Such designations 
are the responsibility of appropriate local and State officials.



Sec. 657.4  NRCS responsibilities.

    (a) State Conservationist. Each NRCS State Conservationist is to:

[[Page 521]]

    (1) Provide leadership for inventories of important farmlands for 
the State, county, or other subdivision of the State. Each is to work 
with appropriate agencies of State government and others to establish 
priorities for making these inventories.
    (2) Identify the soil mapping units within the State that qualify as 
prime. In doing this, State Conservationists, in consultation with the 
cooperators of the National Cooperative Soil Survey, have the 
flexibility to make local deviation from the permeability criterion or 
to be more restrictive for other specific criteria in order to assure 
the most accurate identification of prime farmlands for a State. Each is 
to invite representatives of the Governor's office, agencies of the 
State government, and others to identify farmlands of statewide 
importance and unique farmlands that are to be inventoried within the 
framework of this memorandum.
    (3) Prepare a statewide list of:
    (i) Soil mapping units that meet the criteria for prime farmland;
    (ii) Soil mapping units that are farmlands of statewide importance 
if the criteria used were based on soil information; and
    (iii) Specific high-value food and fiber crops that are grown and, 
when combined with other favorable factors, qualify lands to meet the 
criteria for unique farmlands. Copies are to be furnished to NRCS Field 
Offices and to National Soil Survey Center. (see 7 CFR 600.2(c), 600.6)
    (4) Coordinate soil mapping units that qualify as prime farmlands 
with adjacent States, including Major Land Resource Area Offices (see 7 
CFR 600.4, 600.7) responsible for the soil series. Since farmlands of 
statewide importance and unique farmlands are designated by others at 
the State level, the soil mapping units and areas identified need not be 
coordinated among States.
    (5) Instruct NRCS District Conservationists to arrange local review 
of lands identified as prime, unique, and additional farmlands of 
statewide importance by Conservation Districts and representatives of 
local agencies. This review is to determine if additional farmland 
should be identified to meet local decisionmaking needs.
    (6) Make and publish each important farmland inventory on a base map 
of national map accuracy at an intermediate scale of 1:50,000 or 
1:100,000. State Conservationists who need base maps of other scales are 
to submit their requests with justification to the Chief for 
consideration.
    (b) National Soil Survey Center. The National Soil Survey Center is 
to provide requested technical assistance to State Conservationists and 
Major Land Resource Area Offices in inventorying prime and unique 
farmlands (see 7 CFR 600.2(c)(1), 600.4, 600.7). This includes reviewing 
statewide lists of soil mapping units that meet the criteria for prime 
farmlands and resolving coordination problems that may occur among 
States for specific soil series or soil mapping units.
    (c) National Office. The Deputy Chief for Soil Survey and Resource 
Assessment (see 7 CFR 600.2(b)(3)) is to provide national leadership in 
preparing guidelines for inventorying prime farmlands and for national 
statistics and reports of prime farmlands.

[43 FR 4031, Jan. 31, 1978, as amended at 65 FR 57538, Sept. 25, 2000]



Sec. 657.5  Identification of important farmlands.

    (a) Prime farmlands--(1) General. Prime farmland is land that has 
the best combination of physical and chemical characteristics for 
producing food, feed, forage, fiber, and oilseed crops, and is also 
available for these uses (the land could be cropland, pastureland, 
rangeland, forest land, or other land, but not urban built-up land or 
water). It has the soil quality, growing season, and moisture supply 
needed to economically produce sustained high yields of crops when 
treated and managed, including water management, according to acceptable 
farming methods. In general, prime farmlands have an adequate and 
dependable water supply from precipitation or irrigation, a favorable 
temperature and growing season, acceptable acidity or alkalinity, 
acceptable salt and sodium content, and few or no rocks. They are 
permeable to water and air. Prime farmlands are not excessively erodible 
or saturated with water for a long period of time, and they either do 
not flood

[[Page 522]]

frequently or are protected from flooding. Examples of soils that 
qualify as prime farmland are Palouse silt loam, 0 to 7 percent slopes; 
Brookston silty clay loam, drained; and Tama silty clay loam, 0 to 5 
percent slopes.
    (2) Specific criteria. Prime farmlands meet all the following 
criteria: Terms used in this section are defined in USDA publications: 
``Soil Taxonomy, Agriculture Handbook 436''; ``Soil Survey Manual, 
Agriculture Handbook 18''; ``Rainfall-erosion Losses From Cropland, 
Agriculture Handbook 282''; ``Wind Erosion Forces in the United States 
and Their Use in Predicting Soil Loss, Agriculture Handbook 346''; and 
``Saline and Alkali Soils, Agriculture Handbook 60.''
    (i) The soils have:
    (A) Aquic, udic, ustic, or xeric moisture regimes and sufficient 
available water capacity within a depth of 40 inches (1 meter), or in 
the root zone (root zone is the part of the soil that is penetrated or 
can be penetrated by plant roots) if the root zone is less than 40 
inches deep, to produce the commonly grown cultivated crops (cultivated 
crops include, but are not limited to, grain, forage, fiber, oilseed, 
sugar beets, sugarcane, vegetables, tobacco, orchard, vineyard, and bush 
fruit crops) adapted to the region in 7 or more years out of 10; or
    (B) Xeric or ustic moisture regimes in which the available water 
capacity is limited, but the area has a developed irrigation water 
supply that is dependable (a dependable water supply is one in which 
enough water is available for irrigation in 8 out of 10 years for the 
crops commonly grown) and of adequate quality; or,
    (C) Aridic or torric moisture regimes and the area has a developed 
irrigation water supply that is dependable and of adequate quality; and,
    (ii) The soils have a temperature regime that is frigid, mesic, 
thermic, or hyperthermic (pergelic and cryic regimes are excluded). 
These are soils that, at a depth of 20 inches (50 cm), have a mean 
annual temperature higher than 32[deg] F (0[deg] C). In addition, the 
mean summer temperature at this depth in soils with an O horizon is 
higher than 47[deg] F (8[deg] C); in soils that have no O horizon, the 
mean summer temperature is higher than 59[deg] F (15[deg] C); and,
    (iii) The soils have a pH between 4.5 and 8.4 in all horizons within 
a depth of 40 inches (1 meter) or in the root zone if the root zone is 
less than 40 inches deep; and,
    (iv) The soils either have no water table or have a water table that 
is maintained at a sufficient depth during the cropping season to allow 
cultivated crops common to the area to be grown; and,
    (v) The soils can be managed so that, in all horizons within a depth 
of 40 inches (1 meter) or in the root zone if the root zone is less than 
40 inches deep, during part of each year the conductivity of the 
saturation extract is less than 4 mmhos/cm and the exchangeable sodium 
percentage (ESP) is less than 15; and,
    (vi) The soils are not flooded frequently during the growing season 
(less often than once in 2 years); and,
    (vii) The product of K (erodibility factor) x percent slope is less 
than 2.0, and the product of I (soils erodibility) x C (climatic factor) 
does not exceed 60; and
    (viii) The soils have a permeability rate of at least 0.06 inch 
(0.15 cm) per hour in the upper 20 inches (50 cm) and the mean annual 
soil temperature at a depth of 20 inches (50 cm) is less than 59[deg] F 
(15[deg] C); the permeability rate is not a limiting factor if the mean 
annual soil temperature is 59[deg] F (15[deg] C) or higher; and,
    (ix) Less than 10 percent of the surface layer (upper 6 inches) in 
these soils consists of rock fragments coarser than 3 inches (7.6 cm).
    (b) Unique farmland--(1) General. Unique farmland is land other than 
prime farmland that is used for the production of specific high value 
food and fiber crops. It has the special combination of soil quality, 
location, growing season, and moisture supply needed to economically 
produce sustained high quality and/or high yields of a specific crop 
when treated and managed according to acceptable farming methods. 
Examples of such crops are citrus, tree nuts, olives, cranberries, 
fruit, and vegetables.
    (2) Specific characteristics of unique farmland. (i) Is used for a 
specific high-

[[Page 523]]

value food or fiber crop; (ii) Has a moisture supply that is adequate 
for the specific crop; the supply is from stored moisture, 
precipitation, or a developed-irrigation system; (iii) Combines 
favorable factors of soil quality, growing season, temperature, 
humidity, air drainage, elevation, aspect, or other conditions, such a 
nearness to market, that favor the growth of a specific food or fiber 
crop.
    (c) Additional farmland of statewide importance. This is land, in 
addition to prime and unique farmlands, that is of statewide importance 
for the production of food, feed, fiber, forage, and oil seed crops. 
Criteria for defining and delineating this land are to be determined by 
the appropriate State agency or agencies. Generally, additional 
farmlands of statewide importance include those that are nearly prime 
farmland and that economically produce high yields of crops when treated 
and managed according to acceptable farming methods. Some may produce as 
high a yield as prime farmlands if conditions are favorable. In some 
States, additonal farmlands of statewide importance may include tracts 
of land that have been designated for agriculture by State law.
    (d) Additional farmland of local importance. In some local areas 
there is concern for certain additional farmlands for the production of 
food, feed, fiber, forage, and oilseed crops, even though these lands 
are not identified as having national or statewide importance. Where 
appropriate, these lands are to be identified by the local agency or 
agencies concerned. In places, additional farmlands of local importance 
may include tracts of land that have been designated for agriculture by 
local ordinance.



PART 658_FARMLAND PROTECTION POLICY ACT--Table of Contents




Sec.
658.1 Purpose.
658.2 Definitions.
658.3 Applicability and exemptions.
658.4 Guidelines for use of criteria.
658.5 Criteria.
658.6 Technical assistance.
658.7 USDA assistance with Federal agencies' reviews of policies and 
          procedures.

    Authority: 7 U.S.C. 4201-4209.

    Source: 49 FR 27724, July 5, 1984, unless otherwise noted.



Sec. 658.1  Purpose.

    This part sets out the criteria developed by the Secretary of 
Agriculture, in cooperation with other Federal agencies, pursuant to 
section 1541(a) of the Farmland Protection Policy Act (FPPA or the Act) 
7 U.S.C. 4202(a). As required by section 1541(b) of the Act, 7 U.S.C. 
4202(b), Federal agencies are (a) to use the criteria to identify and 
take into account the adverse effects of their programs on the 
preservation of farmland, (b) to consider alternative actions, as 
appropriate, that could lessen adverse effects, and (c) to ensure that 
their programs, to the extent practicable, are compatible with State and 
units of local government and private programs and policies to protect 
farmland. Guidelines to assist agencies in using the criteria are 
included in this part. The Department of Agriculture (hereinafter USDA) 
may make available to States, units of local government, individuals, 
organizations, and other units of the Federal Government, information 
useful in restoring, maintaining, and improving the quantity and quality 
of farmland.



Sec. 658.2  Definitions.

    (a) Farmland means prime or unique farmlands as defined in section 
1540(c)(1) of the Act or farmland that is determined by the appropriate 
state or unit of local government agency or agencies with concurrence of 
the Secretary to be farmland of statewide of local importance. 
``Farmland'' does not include land already in or committed to urban 
development or water storage. Farmland ``already in'' urban development 
or water storage includes all such land with a density of 30 structures 
per 40-acre area. Farmland already in urban development also includes 
lands identified as ``urbanized area'' (UA) on the Census Bureau Map, or 
as urban area mapped with a ``tint overprint'' on the USGS topographical 
maps, or as ``urban-built-up'' on the USDA Important Farmland Maps. 
Areas shown as white on the USDA Important Farmland Maps are not 
``farmland'' and, therefore, are not subject to the Act.

[[Page 524]]

Farmland ``committed to urban development or water storage'' includes 
all such land that receives a combined score of 160 points or less from 
the land evaluation and site assessment criteria.
    (b) Federal agency means a department, agency, independent 
commission, or other unit of the Federal Government.
    (c) Federal program means those activities or responsibilities of a 
Federal agency that involve undertaking, financing, or assisting 
construction or improvement projects or acquiring, managing, or 
disposing of Federal lands and facilities.
    (1) The term ``Federal program'' does not include:
    (i) Federal permitting, licensing, or rate approval programs for 
activities on private or non-Federal lands; and
    (ii) Construction or improvement projects that were beyond the 
planning stage and were in either the active design or construction 
state on August 4, 1984.
    (2) For the purposes of this section, a project is considered to be 
``beyond the planning stage and in either the active design or 
construction state on August 4, 1984'' if, on or before that date, 
actual construction of the project had commenced or:
    (i) Acquisition of land or easements for the project had occurred or 
all required Federal agency planning documents and steps were completed 
and accepted, endorsed, or approved by the appropriate agency;
    (ii) A final environmental impact statement was filed with the 
Environmental Protection Agency or an environmental assessment was 
completed and a finding of no significant impact was executed by the 
appropriate agency official; and
    (iii) The engineering or architectural design had begun or such 
services had been secured by contract. The phrase ``undertaking, 
financing, or assisting construction or improvement projects'' includes 
providing loan guarantees or loan insurance for such projects and 
includes the acquisition, management and disposal of land or facilities 
that a Federal agency obtains as the result of foreclosure or other 
actions taken under a loan or other financial assistance provided by the 
agency directly and specifically for that property. For the purposes of 
this section, the phrase ``acquiring, managing, or disposing of Federal 
lands and facilities'' refers to lands and facilities that are acquired, 
managed, or used by a Federal agency specifically in support of a 
Federal activity or program, such as national parks, national forests, 
or military bases, and does not refer to lands and facilities that are 
acquired by a Federal agency as the incidental result of actions by the 
agency that give the agency temporary custody or ownership of the lands 
or facilities, such as acquisition pursuant to a lien for delinquent 
taxes, the exercise of conservatorship or receivership authority, or the 
exercise of civil or criminal law enforcement forfeiture or seizure 
authority.
    (d) State or local government policies or programs to protect 
farmland include: Zoning to protect farmland; agricultural land 
protection provisions of a comprehensive land use plan which has been 
adopted or reviewed in its entirety by the unit of local government in 
whose jurisdiction it is operative within 10 years preceding proposed 
implementation of the particular Federal program; completed purchase or 
acquisition of development rights; completed purchase or acquisition of 
conservation easements; prescribed procedures for assessing agricultural 
viability of sites proposed for conversion; completed agricultural 
districting and capital investments to protect farmland.
    (e) Private programs to protect farmland means programs for the 
protection of farmland which are pursuant to and consistent with State 
and local government policies or programs to protect farmland of the 
affected State and unit of local government, but which are operated by a 
nonprofit corporation, foundation, association, conservancy, district, 
or other not-for-profit organization existing under State or Federal 
laws. Private programs to protect farmland may include: (1) Acquiring 
and holding development rights in farmland and (2) facilitating the 
transfer of development rights of farmland.

[[Page 525]]

    (f) Site means the location(s) that would be converted by the 
proposed action(s).
    (g) Unit of local government means the government of a county, 
municipality, town, township, village, or other unit of general 
government below the State level, or a combination of units of local 
government acting through an areawide agency under a State law or an 
agreement for the formulation of regional development policies and 
plans.

[49 FR 27724, July 5, 1984, as amended at 59 FR 31117, June 17, 1994]



Sec. 658.3  Applicability and exemptions.

    (a) Section 1540(b) of the Act, 7 U.S.C. 4201(b), states that the 
purpose of the Act is to minimize the extent to which Federal programs 
contribute to the unnecessary and irreversible conversion of farmland to 
nonagricultural uses. Conversion of farmland to nonagricultural uses 
does not include the construction of on-farm structures necessary for 
farm operations. Federal agencies can obtain assistance from USDA in 
determining whether a proposed location or site meets the Act's 
definition of farmland. The USDA Natural Resources Conservation Service 
(NRCS) field office serving the area will provide the assistance. Many 
State or local government planning offices can also provide this 
assistance.
    (b) Acquisition or use of farmland by a Federal agency for national 
defense purposes is exempted by section 1547(b) of the Act, 7 U.S.C. 
4208(b).
    (c) The Act and these regulations do not authorize the Federal 
Government in any way to regulate the use of private or non-Federal 
land, or in any way affect the property rights of owners of such land. 
In cases where either a private party or a non-Federal unit of 
government applies for Federal assistance to convert farmland to a 
nonagricultural use, the Federal agency should use the criteria set 
forth in this part to identify and take into account any adverse effects 
on farmland of the assistance requested and develop alternative actions 
that would avoid or mitigate such adverse effects. If, after 
consideration of the adverse effects and suggested alternatives, the 
landowners want to proceed with conversion, the Federal agency, on the 
basis of the analysis set forth in Sec. 658.4 and any agency policies 
or procedures for implementing the Act, may provide or deny the 
requested assistance. Only assistance and actions that would convert 
farmland to nonagricultural uses are subject to this Act. Assistance and 
actions related to the purchase, maintenance, renovation, or replacement 
of existing structures and sites converted prior to the time of an 
application for assistance from a Federal agency, including assistance 
and actions related to the construction of minor new ancillary 
structures (such as garages or sheds), are not subject to the Act.
    (d) Section 1548 of the Act, as amended, 7 U.S.C. 4209, states that 
the Act shall not be deemed to provide a basis for any action, either 
legal or equitable, by any person or class of persons challenging a 
Federal project, program, or other activity that may affect farmland. 
Neither the Act nor this rule, therefore, shall afford any basis for 
such an action. However, as further provided in section 1548, the 
governor of an affected state, where a state policy or program exists to 
protect farmland, may bring an action in the Federal district court of 
the district where a Federal program is proposed to enforce the 
requirements of section 1541 of the Act, 7 U.S.C. 4202, and regulations 
issued pursuant to that section.

[49 FR 27724, July 5, 1984, as amended at 59 FR 31117, June 17, 1994]



Sec. 658.4  Guidelines for use of criteria.

    As stated above and as provided in the Act, each Federal agency 
shall use the criteria provided in Sec. 658.5 to identify and take into 
account the adverse effects of Federal programs on the protection of 
farmland. The agencies are to consider alternative actions, as 
appropriate, that could lessen such adverse effects, and assure that 
such Federal programs, to the extent practicable, are compatible with 
State, unit of local government and private programs and policies to 
protect farmland. The following are guidelines to assist the agencies in 
these tasks:
    (a) An agency may determine whether or not a site is farmland as 
defined in Sec. 658.2(a) or the agency may request that NRCS make such 
a determination. If an agency elects not to make its own

[[Page 526]]

determination, it should make a request to NRCS on Form AD-1006, the 
Farmland Conversion Impact Rating Form, available at NRCS offices, for 
determination of whether the site is farmland subject to the Act. If 
neither the entire site nor any part of it are subject to the Act, then 
the Act will not apply and NRCS will so notify the agency. If the site 
is determined by NRCS to be subject to the Act, then NRCS will measure 
the relative value of the site as farmland on a scale of 0 to 100 
according to the information sources listed in Sec. 658.5(a). NRCS will 
respond to these requests within 10 working days of their receipt except 
that in cases where a site visit or land evaluation system design is 
needed, NRCS will respond in 30 working days. In the event that NRCS 
fails to complete its response within the required period, if further 
delay would interfere with construction activities, the agency should 
proceed as though the site were not farmland.
    (b) The Form AD 1006, returned to the agency by NRCS will also 
include the following incidental information: The total amount of 
farmable land (the land in the unit of local government's jurisdiction 
that is capable of producing the commonly grown crop); the percentage of 
the jurisdiction that is farmland covered by the Act; the percentage of 
farmland in the jurisdiction that the project would convert; and the 
percentage of farmland in the local government's jurisdiction with the 
same or higher relative value than the land that the project would 
convert. These statistics will not be part of the criteria scoring 
process, but are intended simply to furnish additional background 
information to Federal agencies to aid them in considering the effects 
of their projects on farmland.
    (c) After the agency receives from NRCS the score of a site's 
relative value as described in Sec. 658.4(a) and then applies the site 
assessment criteria which are set forth in Sec. 658.5 (b) and (c), the 
agency will assign to the site a combined score of up to 260 points, 
composed of up to 100 points for relative value and up to 160 points for 
the site assessment. With this score the agency will be able to identify 
the effect of its programs on farmland, and make a determination as to 
the suitability of the site for protection as farmland. Once this score 
is computed, USDA recommends:
    (1) Sites with the highest combined scores be regarded as most 
suitable for protection under these criteria and sites with the lowest 
scores, as least suitable.
    (2) Sites receiving a total score of less than 160 need not be given 
further consideration for protection and no additional sites need to be 
evaluated.
    (3) Sites receiving scores totaling 160 or more be given 
increasingly higher levels of consideration for protection.
    (4) When making decisions on proposed actions for sites receiving 
scores totaling 160 or more, agency personnel consider:
    (i) Use of land that is not farmland or use of existing structures;
    (ii) Alternative sites, locations and designs that would serve the 
proposed purpose but convert either fewer acres of farmland or other 
farmland that has a lower relative value;
    (iii) Special siting requirements of the proposed project and the 
extent to which an alternative site fails to satisfy the special siting 
requirements as well as the originally selected site.
    (d) Federal agencies may elect to assign the site assessment 
criteria relative weightings other than those shown in Sec. 658.5 (b) 
and (c). If an agency elects to do so, USDA recommends that the agency 
adopt its alternative weighting system (1) through rulemaking in 
consultation with USDA, and (2) as a system to be used uniformly 
throughout the agency. USDA recommends that the weightings stated in 
Sec. 658.5 (b) and (c) be used until an agency issues a final rule to 
change the weightings.
    (e) It is advisable that evaluations and analyses of prospective 
farmland conversion impacts be made early in the planning process before 
a site or design is selected, and that, where possible, agencies make 
the FPPA evaluations part of the National Environmental Policy Act 
(NEPA) process. Under the agency's own NEPA regulations, some categories 
of projects may be excluded from NEPA which may still be covered under 
the FPPA. Section 1540(c)(4) of the Act exempts

[[Page 527]]

projects that were beyond the planning stage and were in either the 
active design or construction state on the effective date of the Act. 
Section 1547(b) exempts acquisition or use of farmland for national 
defense purposes. There are no other exemptions of projects by category 
in the Act.
    (f) Numerous States and units of local government are developing and 
adopting Land Evaluation and Site Assessment (LESA) systems to evaluate 
the productivity of agricultural land and its suitability for conversion 
to nonagricultural use. Therefore, States and units of local government 
may have already performed an evaluation using criteria similar to those 
contained in this rule applicable to Federal agencies. USDA recommends 
that where sites are to be evaluated within a jurisdiction having a 
State or local LESA system that has been approved by the governing body 
of such jurisdiction and has been placed on the NRCS State 
conservationist's list as one which meets the purpose of the FPPA in 
balance with other public policy objectives, Federal agencies use that 
system to make the evaluation.
    (g) To meet reporting requirements of section 1546 of the Act, 7 
U.S.C. 4207, and for data collection purposes, after the agency has made 
a final decision on a project in which one or more of the alternative 
sites contain farmland subject to the FPPA, the agency is requested to 
return a copy of the Form AD-1006, which indicates the final decision of 
the agency, to the NRCS field office.
    (h) Once a Federal agency has performed an analysis under the FPPA 
for the conversion of a site, that agency's, or a second Federal 
agency's determination with regard to additional assistance or actions 
on the same site do not require additional redundant FPPA analysis.

[49 FR 27724, July 5, 1984, as amended at 59 FR 31118, June 17, 1994]



Sec. 658.5  Criteria.

    This section states the criteria required by section 1541(a) of the 
Act, 7 U.S.C. 4202(a). The criteria were developed by the Secretary of 
Agriculture in cooperation with other Federal agencies. They are in two 
parts, (1) the land evaluation criterion, relative value, for which NRCS 
will provide the rating or score, and (2) the site assessment criteria, 
for which each Federal agency must develop its own ratings or scores. 
The criteria are as follows:
    (a) Land Evaluation Criterion--Relative Value. The land evaluation 
criterion is based on information from several sources including 
national cooperative soil surveys or other acceptable soil surveys, NRCS 
field office technical guides, soil potential ratings or soil 
productivity ratings, land capability classifications, and important 
farmland determinations. Based on this information, groups of soils 
within a local government's jurisdiction will be evaluated and assigned 
a score between 0 to 100, representing the relative value, for 
agricultural production, of the farmland to be converted by the project 
compared to other farmland in the same local government jurisdiction, 
This score will be the Relative Value Rating on Form AD 1006.
    (b) Site Assessment Criteria. Federal agencies are to use the 
following criteria to assess the suitability of each proposed site or 
design alternative for protection as farmland along with the score from 
the land evaluation criterion described in Sec. 658.5(a). Each 
criterion will be given a score on a scale of 0 to the maximum points 
shown. Conditions suggesting top, intermediate and bottom scores are 
indicated for each criterion. The agency would make scoring decisions in 
the context of each proposed site or alternative action by examining the 
site, the surrounding area, and the programs and policies of the State 
or local unit of government in which the site is located. Where one 
given location has more than one design alternative, each design should 
be considered as an alternative site. The site assessment criteria are:
    (1) How much land is in nonurban use within a radius of 1.0 mile 
from where the project is intended?

More than 90 percent--15 points
90 to 20 percent--14 to 1 point(s)
Less than 20 percent--0 points

    (2) How much of the perimeter of the site borders on land in 
nonurban use?

More than 90 percent--10 points

[[Page 528]]

90 to 20 percent--9 to 1 point(s)
Less than 20 percent--0 points

    (3) How much of the site has been farmed (managed for a scheduled 
harvest or timber activity) more than 5 of the last 10 years?
More than 90 percent--20 points
90 to 20 percent--19 to 1 points(s)
Less than 20 percent--0 points

    (4) Is the site subject to State or unit of local government 
policies or programs to protect farmland or covered by private programs 
to protect farmland?

Site is protected--20 points
Site is not protected--0 points

    (5) How close is the site to an urban built-up area?

The site is 2 miles or more from an urban built-up area--15 points
The site is more than 1 mile but less than 2 miles from an urban built-
up area--10 points
The site is less than 1 mile from, but is not adjacent to an urban 
built-up area--5 points
The site is adjacent to an urban built-up area--0 points

    (6) How close is the site to water lines, sewer lines and/or other 
local facilities and services whose capacities and design would promote 
nonagricultural use?

None of the services exist nearer than 3 miles from the site--15 points
Some of the services exist more than 1 but less than 3 miles from the 
site--10 points
All of the services exist within \1/2\ mile of the site--0 points

    (7) Is the farm unit(s) containing the site (before the project) as 
large as the average-size farming unit in the county? (Average farm 
sizes in each county are available from the NRCS field offices in each 
State. Data are from the latest available Census of Agriculture, Acreage 
of Farm Units in Operation with $1,000 or more in sales.)

As large or larger--10 points
Below average--deduct 1 point for each 5 percent below the average, down 
to 0 points if 50 percent or more below average--9 to 0 points

    (8) If this site is chosen for the project, how much of the 
remaining land on the farm will become non-farmable because of 
interference with land patterns?

Acreage equal to more than 25 percent of acres directly converted by the 
project--10 points
Acreage equal to between 25 and 5 percent of the acres directly 
converted by the project--9 to 1 point(s)
Acreage equal to less than 5 percent of the acres directly converted by 
the project--0 points

    (9) Does the site have available adequate supply of farm support 
services and markets, i.e., farm suppliers, equipment dealers, 
processing and storage facilities and farmer's markets?

All required services are available--5 points
Some required services are available--4 to 1 point(s)
No required services are available--0 points

    (10) Does the site have substantial and well-maintained on-farm 
investments such as barns, other storage buildings, fruit trees and 
vines, field terraces, drainage, irrigation, waterways, or other soil 
and water conservation measures?

High amount of on-farm investment--20 points
Moderate amount of on-farm investment--19 to 1 point(s)
No on-farm investment--0 points

    (11) Would the project at this site, by converting farmland to 
nonagricultural use, reduce the demand for farm support services so as 
to jeopardize the continued existence of these support services and 
thus, the viability of the farms remaining in the area?

Substantial reduction in demand for support services if the site is 
converted--10 points
Some reduction in demand for support services if the site is converted--
9 to 1 point(s)
No significant reduction in demand for support services if the site is 
converted--0 points

    (12) Is the kind and intensity of the proposed use of the site 
sufficiently incompatible with agriculture that it is likely to 
contribute to the eventual conversion of surrounding farmland to 
nonagricultural use?

Proposed project is incompatible with existing agricultural use of 
surrounding farmland--10 points
Proposed project is tolerable to existing agricultural use of 
surrounding farmland--9 to 1 point(s)

[[Page 529]]

Proposed project is fully compatible with existing agricultural use of 
surrounding farmland--0 points

    (c) Corridor-type Site Assessment Criteria. The following criteria 
are to be used for projects that have a linear or corridor-type site 
configuration connecting two distant points, and crossing several 
different tracts of land. These include utility lines, highways, 
railroads, stream improvements, and flood control systems. Federal 
agencies are to assess the suitability of each corridor-type site or 
design alternative for protection as farmland along with the land 
evaluation information described in Sec. 658.4(a). All criteria for 
corridor-type sites will be scored as shown in Sec. 658.5(b) for other 
sites, except as noted below:
    (1) Criteria 5 and 6 will not be considered.
    (2) Criterion 8 will be scored on a scale of 0 to 25 points, and 
criterion 11 will be scored on a scale of 0 to 25 points.



Sec. 658.6  Technical assistance.

    (a) Section 1543 of the Act, 7 U.S.C. 4204 states, ``The Secretary 
is encouraged to provide technical assistance to any State or unit of 
local government, or any nonprofit organization, as determined by the 
Secretary, that desires to develop programs or policies to limit the 
conversion of productive farmland to nonagricultural uses.'' In Sec. 
2.62, of 7 CFR part 2, subtitle A, NRCS is delegated leadership 
responsibility within USDA for the activities treated in this part.
    (b) In providing assistance to States, local units of government, 
and nonprofit organizations, USDA will make available maps and other 
soils information from the national cooperative soil survey through NRCS 
field offices.
    (c) Additional assistance, within available resources, may be 
obtained from local offices of other USDA agencies. The Agricultural 
Stabilization and Conservation Service and the Forest Service can 
provide aerial photographs, crop history data, and related information. 
A reasonable fee may be charged. In many States, the Cooperative 
Extension Service can provide help in understanding and identifying 
farmland protection issues and problems, resolving conflicts, developing 
alternatives, deciding on appropriate actions, and implementing those 
decisions.
    (d) Officials of State agencies, local units of government, 
nonprofit organizations, or regional, area, State-level, or field 
offices of Federal agencies may obtain assistance by contacting the 
office of the NRCS State conservationist. A list of Natural Resources 
Conservation Service State office locations appears in Appendix A, Sec. 
661.6 of this title. If further assistance is needed, requests should be 
made to the Assistant Secretary for Natural Resources and Environment, 
Office of the Secretary, Department of Agriculture, Washington, DC 
20250.



Sec. 658.7  USDA assistance with Federal agencies' reviews of policies 
and procedures.

    (a) Section 1542(a) of the Act, 7 U.S.C. 4203, states, ``Each 
department, agency, independent commission or other unit of the Federal 
Government, with the assistance of the Department of Agriculture, shall 
review current provisions of law, administrative rules and regulations, 
and policies and procedures applicable to it to determine whether any 
provision thereof will prevent such unit of the Federal Government from 
taking appropriate action to comply fully with the provisions of this 
subtitle.''
    (b) Section 1542(b) of the Act, 7 U.S.C. 4203, requires, as 
appropriate, each department, agency, independent commission, or other 
unit of the Federal Government, with the assistance of the Department of 
Agriculture, to develop proposals for action to bring its programs, 
authorities, and administrative activities into conformity with the 
purpose and policy of the Act.
    (c) USDA will provide certain assistance to other Federal agencies 
for the purposes specified in section 1542 of the Act, 7 U.S.C. 4203. If 
a Federal agency identifies or suggests changes in laws, administrative 
rules and regulations, policies, or procedures that may affect the 
agency's compliance with the Act, USDA can advise the agency of the 
probable effects of the changes on the protection of farmland. To 
request this assistance, officials of Federal agencies

[[Page 530]]

should correspond with the Chief, Natural Resources Conservation 
Service, P.O. Box 2890, Washington, DC 20013.
    (d) To meet the reporting requirements of section 1546 of the Act, 7 
U.S.C. 4207, and for data collection purposes, each Federal agency is 
requested to report to the Chief of the Natural Resources Conservation 
Service by November 15th of each year on progress made during the prior 
fiscal year to implement sections 1542 (a) and (b) of the Act, 7 U.S.C. 
4203 (a) and (b). Until an agency fully implements those sections, the 
agency should continue to make the annual report, but may omit the 
report upon full implementation. However, an agency is requested to file 
an annual report for any future year in which the agency has 
substantially changed its process for compliance with the Act.

[49 FR 27724, July 5, 1984, as amended at 59 FR 31118, June 17, 1994]

[[Page 531]]



                       SUBCHAPTER G_MISCELLANEOUS



                           PART 660 [RESERVED]



PART 661_PUBLIC INFORMATION AND RIGHT TO PRIVACY--Table of Contents




             Subpart A_Availability of Records and Materials

Sec.
661.1 General.
661.2 Public access and copying.
661.3 Requests for records.
661.4 Appeals.
661.5 Exempt records.

                       Subpart B_Right to Privacy

661.6 General.

Appendix A to Part 661--Availability of Information

    Authority: 5 U.S.C. 552, 552a; 7 CFR 1.1-1.16, 1.110-1.123.

    Source: 43 FR 34756, Aug. 7, 1978, unless otherwise noted.



             Subpart A_Availability of Records and Materials



Sec. 661.1  General.

    This part is issued in accordance with the regulations of the 
Secretary of Agriculture at 7 CFR 1.1 through 1.16 implementing the 
Freedom of Information Act, 5 U.S.C. 552. The Secretary's regulations, 
as implemented by the regulations in this part, govern the availability 
to the public of records of the Natural Resources Conservation Service 
and the rec ords for which the Natural Resources Conservation Service 
has custodial responsibility.



Sec. 661.2  Public access and copying.

    Natural Resources Conservation Service will make available for 
public inspection and copying those materials covered by 5 U.S.C. 
552(a)(2) as set out in the Secretary's regulations.



Sec. 661.3  Requests for records.

    Requests for records under 5 U.S.C. 552(a)(3) will be made in 
accordance with 7 CFR 1.3(a). The titles and mailing addresses of the 
officials in Natural Resources Conservation Service authorized to 
receive requests for records are shown in Appendix A of this subpart. 
Authority is hereby delegated to these officials to make determinations 
regarding such requests in accordance with 7 CFR 1.4(c).



Sec. 661.4  Appeals.

    Any person whose request for rec ords above is denied shall have the 
right to appeal that denial in accordance with 7 CFR 1.3(e). All appeals 
shall be addressed to: Administrator, Natural Resources Conservation 
Service, U.S. Department of Agriculture, P.O. Box 2890, Washington, DC 
20013.



Sec. 661.5  Exempt records.

    Records exempt under 5 U.S.C. 552(b) may be withheld in accordance 
with 7 CFR 1.11.



                       Subpart B_Right to Privacy



Sec. 661.6  General.

    Natural Resources Conservation Service implementation of the Privacy 
Act of 1974, 5 U.S.C. 552a is contained in the regulations of the 
Secretary, 7 CFR 1.110 through 1.123.

           Appendix A to Part 661--Availability of Information

    The following list pertaining to the availability of information are 
published in accordance with the requirement and pursuant to the 
authority of sections 552, 559 of Title 5, United States Code.

               Request for Examination or Copy of Records

                                 General

    Request for examination and copying of a record or for copies of 
records shall be made to the Deputy Administrator for Administration, 
Natural Resources Conservation Service, U.S. Department of Agriculture, 
P.O. Box 2890, Washington, DC 20013, or to the State Conservationist in 
any of the listed State offices.

      Natural Resources Conservation Service, State Office Location

State Conservationist, Wright Building, 138 South Gay St., P.O. Box 311, 
Auburn, Ala. 36830.

[[Page 532]]

State Conservationist, Suite 129, Professional Bldg., 2221 East Northern 
Lights Blvd., Anchorage, Alaska 99504.
State Conservationist, 230 North 1st Ave., Federal Bldg., Phoenix, Ariz. 
85025.
State Conservationist, Federal Bldg., Room 5029, 700 West Capitol St., 
P.O. Box 2323, Little Rock, Ark. 72203.
State Conservationist, 2828 Chiles Rd., Davis, Calif. 95616.
State Conservationist, Mansfield Professional Park, Route 44A, Storrs, 
Conn. 06268.
State Conservationist, Treadway Towers, Suite 2-4, 9 East Loockerman 
St., Dover, Del. 19901.
State Conservationist, Federal Bldg., P.O. Box 1208, Gainesville, Fla., 
32602.
State Conservationist, Federal Bldg., 355 East Hancock Ave., P.O. Box 
832, Athens, Ga. 30603.
State Conservationist, 300 Moana Blvd., Ala., Room 4316, P.O. Box 50004, 
Honolulu, Hawaii 96850.
State Conservationist, Room 313, 2490 West 26th Ave., P.O. Box 17107, 
Denver, Colo. 80217.
State Conservationist, Federal Bldg., 200 West Church St., P.O. Box 678, 
Champaign, Ill. 61820.
State Conservationist, Atkinson Square-West, Suite 220, 5610 
Crawfordsville Rd., Indianapolis, Ind. 46224.
State Conservationist, 823 Federal Bldg., 210 Walnut St., Des Moines, 
Iowa 50309.
State Conservationist, 760 South Broadway, P.O. Box 600, Salina, Kans. 
67401.
State Conservationist, 333 Waller Ave., Lexington, Ky. 40504.
State Conservationist, 3737 Government St., P.O. Box 1630, Alexandria, 
La. 71301.
State Conservationist, USDA Bldg., University of Maine, Orono, Maine 
04473.
State Conservationist, Hartwick Bldg., Room 522, 4321 Hartwick Rd., 
College Park, Md. 20740.
State Conservationist, 29 Cottage St., Amherst, Mass. 01002.
State Conservationist, Room 345, 304 North 8th St., Boise, Idaho 83702.
Staten Conservationist, Milner Bldg., Room 590, 210 South Lamar St., 
P.O. Box 610, Jackson, Miss. 39205.
State Conservationist, 555 Vandiver Dr., Columbia, Mo. 65201.
State Conservationist, Federal Bldg., P.O. Box 970, Bozeman, Mont. 
59715.
State Conservationist, Federal Bldg.,-U.S. Courthouse, Room 345, 
Lincoln, Nebr. 68508.
State Conservationist, U.S. Post Office Bldg., P.O. Box 4850, Reno, Nev. 
89505.
State Conservationist, Federal Bldg., Durham, N.H. 03824.
State Conservationist, 1370 Hamilton St., P.O. Box 219, Somerset, N.J. 
08873.
State Conservationist, 517 Gold Ave., SW., P.O. Box 2007, Albuquerque, 
N. Mex. 87103.
State Conservationist, U.S. Courthouse and Federal Bldg., 100 South 
Clinton St., Room 771, Syracuse, N.Y. 13260.
State Conservationist, 1405 South Harrison Rd., East Lansing, Mich. 
48823.
State Conservationist, 200 Federal Bldg. and U.S. Courthouse, 316 North 
Robert St., St. Paul, Minn. 55101.
State Conservationist, 200 North High St., Room 522, Columbus, Ohio 
43215.
State Conservationist, Agriculture Center Bldg., Farm Rd. and Brumley 
St., Stillwater, Okla. 74074.
State Conservationist, Federal Bldg., 1220 Southwest 3d Ave., Portland, 
Oreg. 97204.
State Conservationist, Federal Bldg., and Courthouse, Box 985 Federal 
Square Station, Harrisburg, Pa. 17108.
State Conservationist, Caribbean Area, Room 633 Federal Bldg., Chardon 
Ave., G.P.O. Box 4868, Hato Rey, P.R. 00936.
State Conservationist, 222 Quaker Lane, West Warwick, R.I. 02893.
State Conservationist, 240 Stoneridge Dr., Columbia, S.C. 29210.
State Conservationist, 200 4th St., SW., P.O. Box 1357, Huron, S. Dak. 
57350.
State Conservationist, Federal Office Bldg., 310 New Bern Ave., Fifth 
Floor-P.O. Box 27307, Raleigh, N.C. 27611.
State Conservationist, Federal Bldg., P.O. Box 1458, Bismarck, N. Dak. 
58501.
State Conservationist, Federal Bldg., 101 South Main St., P.O. Box 648, 
Temple, Tex. 76501.
State Conservationist, 4012 Federal Bldg., 125 South State St., Salt 
Lake City, Utah 84138.
State Conservationist, Burlington Square, Suite 205, Burlington, Vt. 
05401.
State Conservationist, Federal Bldg., Room 9201, 400 North 8th St., P.O. 
Box 10026, Richmond, Va. 23240.
State Conservationist, 360 U.S. Courthouse, West 920 Riverside Ave., 
Spokane, Wash. 99201.
State Conservationist, 75 High St., P.O. Box 865, Morgantown, W. Va. 
26505.
State Conservationist, 4601 Hammersley Rd., Madison, Wis. 53711.
State Conservationist, Federal Office Bldg., P.O. Box 2440, Casper, Wyo. 
82601.
State Conservationist, 675 U.S. Courthouse, Nashville, Tenn. 37203.

    Only those matters pertaining to the particular State and matters of 
general application will be available in each State office.

                        PARTS 662-699 [RESERVED]


[[Page 533]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 535]]



                    Table of CFR Titles and Chapters




                     (Revised as of January 1, 2006)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 100-199)
        II  Office of Management and Budget Circulars and Guidance 
                (200-299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements [Reserved]


                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--99)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Part 2100)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)

[[Page 536]]

        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Part 3201)
     XXIII  Department of Energy (Part 3301)
      XXIV  Federal Energy Regulatory Commission (Part 3401)
       XXV  Department of the Interior (Part 3501)
      XXVI  Department of Defense (Part 3601)
    XXVIII  Department of Justice (Part 3801)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Part 4301)
      XXXV  Office of Personnel Management (Part 4501)
        XL  Interstate Commerce Commission (Part 5001)
       XLI  Commodity Futures Trading Commission (Part 5101)
      XLII  Department of Labor (Part 5201)
     XLIII  National Science Foundation (Part 5301)
       XLV  Department of Health and Human Services (Part 5501)
      XLVI  Postal Rate Commission (Part 5601)
     XLVII  Federal Trade Commission (Part 5701)
    XLVIII  Nuclear Regulatory Commission (Part 5801)
         L  Department of Transportation (Part 6001)
       LII  Export-Import Bank of the United States (Part 6201)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Part 6401)
        LV  National Endowment for the Arts (Part 6501)
       LVI  National Endowment for the Humanities (Part 6601)
      LVII  General Services Administration (Part 6701)
     LVIII  Board of Governors of the Federal Reserve System (Part 
                6801)
       LIX  National Aeronautics and Space Administration (Part 
                6901)
        LX  United States Postal Service (Part 7001)
       LXI  National Labor Relations Board (Part 7101)
      LXII  Equal Employment Opportunity Commission (Part 7201)
     LXIII  Inter-American Foundation (Part 7301)
       LXV  Department of Housing and Urban Development (Part 
                7501)
      LXVI  National Archives and Records Administration (Part 
                7601)
     LXVII  Institute of Museum and Library Services (Part 7701)
      LXIX  Tennessee Valley Authority (Part 7901)
      LXXI  Consumer Product Safety Commission (Part 8101)
    LXXIII  Department of Agriculture (Part 8301)
     LXXIV  Federal Mine Safety and Health Review Commission (Part 
                8401)
     LXXVI  Federal Retirement Thrift Investment Board (Part 8601)

[[Page 537]]

    LXXVII  Office of Management and Budget (Part 8701)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Part 
                9701)
      XCIX  Department of Defense Human Resources Management and 
                Labor Relations Systems (Department of Defense--
                Office of Personnel Management) (Part 9901)

                      Title 6--Homeland Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 0--99)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)

[[Page 538]]

     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  Cooperative State Research, Education, and Extension 
                Service, Department of Agriculture (Parts 3400--
                3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

[[Page 539]]

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1303--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Part 1800)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board, Department of 
                Commerce (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board, 
                Department of Commerce (Parts 500--599)

[[Page 540]]

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

[[Page 541]]

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  Bureau of Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Bureau of Immigration and Customs Enforcement, 
                Department of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Employment Standards Administration, Department of 
                Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training, Department of Labor 
                (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

[[Page 542]]

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board Regulations (Parts 
                900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)

[[Page 543]]

        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Part 1200)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--899)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)

[[Page 544]]

        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

[[Page 545]]

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Minerals Management Service, Department of the 
                Interior (Parts 200--299)
       III  Board of Surface Mining and Reclamation Appeals, 
                Department of the Interior (Parts 300--399)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)

[[Page 546]]

    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Part 1501)

[[Page 547]]

       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                301--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Rate Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)

[[Page 548]]

       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System
       201  Federal Information Resources Management Regulation 
                (Parts 201-1--201-99) [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--499)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10010)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

[[Page 549]]

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)

[[Page 550]]

        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  United States Agency for International Development 
                (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees' 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        35  [Reserved]
        44  Federal Emergency Management Agency (Parts 4400--4499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)

[[Page 551]]

        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  General Services Administration Board of Contract 
                Appeals (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation (Parts 1400--1499)
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)

[[Page 552]]

        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR

[[Page 553]]





           Alphabetical List of Agencies Appearing in the CFR




                     (Revised as of January 1, 2006)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Advanced Research Projects Agency                 32, I
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development, United      22, II
     States
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            5, LXXIII
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Cooperative State Research, Education, and      7, XXXIV
       Extension Service
  Economic Research Service                       7, XXXVII
  Energy, Office of                               7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX

[[Page 554]]

Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               44, IV
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Fishery Conservation and Management             50, VI
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV, VI
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Cooperative State Research, Education, and        7, XXXIV
     Extension Service
Copyright Office                                  37, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    28, VIII
     for the District of Columbia
Customs and Border Protection Bureau              19, I
Defense Acquisition Regulations System            48, 2
Defense Contract Audit Agency                     32, I

[[Page 555]]

Defense Department                                5, XXVI; 32, Subtitle A; 
                                                  40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 1
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   5, LIV; 40, I, IV, VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                5, III, LXXVII; 14, VI; 
                                                  48, 99
  National Drug Control Policy, Office of         21, III

[[Page 556]]

  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
  Federal Acquisition Regulation                  48, 44
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority, and General    5, XIV; 22, XIV
     Counsel of the Federal Labor Relations 
     Authority
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Fishery Conservation and Management               50, VI
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105

[[Page 557]]

  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          5, XLV; 45, Subtitle A
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V; 42, I
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  6, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection Bureau            19, I
  Federal Emergency Management Agency             44, I
  Immigration and Customs Enforcement Bureau      19, IV
  Immigration and Naturalization                  8, I
  Transportation Security Administration          49, XII
Housing and Urban Development, Department of      5, LXV; 24, Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV
Immigration and Naturalization                    8, I
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V; 42, I
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII

[[Page 558]]

Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  Minerals Management Service                     30, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            43, Subtitle A
  Surface Mining and Reclamation Appeals, Board   30, III
       of
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Fishing and Related Activities      50, III
International Investment, Office of               31, VIII
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                5, XXVIII; 28, I, XI; 40, 
                                                  IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Benefits Review Board                           20, VII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I

[[Page 559]]

  Occupational Safety and Health Administration   29, XVII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
  Copyright Royalty Board                         37, III
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II
Micronesian Status Negotiations, Office for       32, XXVII
Mine Safety and Health Administration             30, I
Minerals Management Service                       30, II
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
National Aeronautics and Space Administration     5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   45, XII, XXV
National Archives and Records Administration      5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Bureau of Standards                      15, II
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Standards and Technology    15, II
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV, VI
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III
     Administration
National Transportation Safety Board              49, VIII
National Weather Service                          15, IX
Natural Resources Conservation Service            7, VI
Navajo and Hopi Indian Relocation, Office of      25, IV

[[Page 560]]

Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Rate Commission                            5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Regional Action Planning Commissions              13, V
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                17, II
Selective Service System                          32, XVI
Small Business Administration                     13, I
Smithsonian Institution                           36, V
Social Security Administration                    20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining and Reclamation Appeals, Board of  30, III
Surface Mining Reclamation and Enforcement,       30, VII
   Office of
[[Page 561]]

Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection Bureau            19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Law Enforcement Training Center         31, VII
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  International Investment, Office of             31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 563]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations that were 
made by documents published in the Federal Register since January 1, 
2001, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 2001, see the ``List of CFR Sections 
Affected 1949-1963, 1964-1972, 1973-1985, and 1986-2000'' published in 
11 separate volumes.

                                  2001

7 CFR
                                                                   66 FR
                                                                    Page
Chapter IV
400.700--400.713 (Subpart IV) Revised; interim.....................47951
457.151 Amended; heading and introductory text revised.............42730
    Corrected......................................................53076
Chapter V
510 Revised........................................................57841

                                  2002

7 CFR
                                                                   66 FR
                                                                    Page
Chapter IV
400.1--400.5 (Subpart A) Removed...................................16286
400.15--400.21 (Subpart B) Removed.................................16286
400.37--400.38 (Subpart D) Removed.................................16286
400.90--400.97 (Subpart J) Revised.................................13251
400.250--400.252 (Subpart N) Removed...............................16286
400.656 Removed....................................................16286
400.657 Removed....................................................16286
401 Removed........................................................16286
403 Removed........................................................16286
405 Removed........................................................16286
406 Removed........................................................16286
409 Removed........................................................16286
414 Removed........................................................16286
415 Removed........................................................16286
416 Removed........................................................16286
422 Removed........................................................16286
425 Removed........................................................16286
430 Removed........................................................16286
433 Removed........................................................16286
435 Removed........................................................16286
437 Removed........................................................16286
441 Removed........................................................16286
443 Removed........................................................16286
445 Removed........................................................16286
446 Removed........................................................16286
447 Removed........................................................16286
450 Removed........................................................16286
451 Removed........................................................16286
454 Removed........................................................16286
455 Removed........................................................16286
456 Removed........................................................16286
457.101 Introductory text revised; clause amended..................43526
457.103 Removed....................................................54085
457.108 Introductory text revised; clause amended; interim.........55690
457.113 Introductory text revised; clause amended; interim.........55690
457.116 Amended....................................................46095
    Introductory text corrected....................................52841
457.125 Introductory text revised; clause amended; interim.........55690
457.140 Introductory text revised; clause amended; interim.........55691
457.141 Introductory text revised; clause amended; interim.........55691
457.150 Introductory text revised; clause amended; interim.........55691
457.151 Corrected..................................................65030
457.161 Introductory text revised; clause amended..................43526
457.165 Added.......................................................3037
    Corrected.......................................................5925
458 Removed........................................................16286

[[Page 564]]

Chapter VI
610.31--610.32 (Subpart D) Added...................................68497
636 Authority citation revised.....................................48353
636.8 (d) added....................................................48353
652 Added; interim; eff. 3-1-03....................................70128

                                  2003

7 CFR
                                                                   68 FR
                                                                    Page
Chapter IV
400.90 Amended.....................................................37720
400.91 (a)(2) and (b)(2) revised...................................37720
400.92 (c) removed.................................................37720
400.93 (a) amended.................................................37720
400.95 (a) amended.................................................37720
400.96 (a) designation and (b) removed; introductory text revised; 
        (1), (2) and (3) redesignated as new (a), (b) and (c); new 
        (c) amended................................................37720
400.98 Added.......................................................37720
400.650--400.657 (Subpart T) Heading revised.......................37721
400.650 Amended....................................................37721
400.651 Amended....................................................37721
400.652 (a), (b) and (d) amended...................................37721
400.654 (a), (c)(6) and (d) amended................................37721
407 Heading revised................................................37721
407.9 Amended; introductory text revised...........................37721
457.8 Amended......................................................37723
    Corrected......................................................43457
457.101 Introductory text revised; clause amended..................34268
457.102 Heading revised; clause amended............................34272
Chapter V
500.20--500.25 (Subpart B) Revised.................................28690
Chapter VI
652 Comment period reopened........................................15335
    Authority citation revised.....................................40754
652.1 Amended; interim.............................................14134
652.4 (h) added; interim...........................................14134
652.5 (d) revised; (j) added; interim..............................14133
652.8 Added; interim...............................................40753
652.21 (f) and (g) revised; interim................................14134

                                  2004

7 CFR
                                                                   69 FR
                                                                    Page
Title 7 Nomenclature change........................................18803
400.29 Removed......................................................9520
400.51 Amended......................................................9520
400.57 Removed......................................................9520
400.65 Removed......................................................9520
400.66 Removed......................................................9520
400.127 Removed.....................................................9520
400.176 (b) revised................................................48730
400.210 Removed.....................................................9520
400.352 (b)(4) amended.............................................48730
400.413 Removed.....................................................9520
400.500 Removed.....................................................9520
400.676 Removed.....................................................9520
402.3 OMB number...................................................48730
402.4 Introductory text revised; clause amended....................48730
407 Heading revised................................................48731
407.2 (d) revised; (e) removed; (f), (g) and (h) redesignated as 
        (e), (f) and (g); new (e) amended..........................48731
407.6 Removed......................................................48731
407.7 Amended......................................................48731
407.9 Introductory text revised; clause amended....................48731
457.2 (d) revised..................................................48738
457.6 Removed......................................................48738
457.7 Amended......................................................48738
457.8 Clause amended........................................48739, 74405
457.108 Regulation at 67 FR 55690 confirmed........................23418
457.113 Regulation at 67 FR 55690 confirmed........................23418
457.114 Removed.....................................................9520
457.115 Removed.....................................................9520
457.125 Regulation at 67 FR 55690 confirmed........................23418
457.134 Amended....................................................63041
457.140 Regulation at 67 FR 55691 confirmed........................23418
457.141 Regulation at 67 FR 55691 confirmed........................23418
457.150 Regulation at 67 FR 55691 confirmed........................23418
457.158 Revised....................................................52591
    Corrected......................................................53500
    Amended........................................................62803
457.160 Amended....................................................44576
457.161 Regulation at 67 FR 43526 confirmed........................23418
457.166 Added......................................................52155
457.167 Added......................................................52163
    (d)(2)(ii), (iv) and (5) corrected.............................54179
    Amended........................................................63041

[[Page 565]]

                                  2005

7 CFR
                                                                   70 FR
                                                                    Page
Chapter IV
400.700--400.713 (Subpart V) Heading revised; interim..............41918
400.700 Existing text designated as (a); (b) added; interim........41918
    (a) revised....................................................44235
400.701 Amended; interim...........................................41918
    Amended........................................................44235
400.702 (d) added..................................................44236
400.703 Revised....................................................44236
400.705 Revised....................................................44236
400.706 Revised....................................................44238
400.707 (c) amended................................................44239
400.708 (a)(1) revised; (a)(2) amended.............................44239
400.709 Revised....................................................44239
400.711 Revised....................................................44240
400.712 (f) and (j) removed; (g) and (k) redesignated as (f) and 
        (j); (a) through (e), (h), (i), (l), (m) and new (j)(2) 
        revised; (g), (k), (n) and (j)(8) added; new (f) 
        introductory text, (5)(i)(A)(3), (B)(3), (C)(3), (D)(3), 
        (E)(3), (i)(B), (ii)(B), (6) introductory text through 
        (iii) and (j)(1)(i) amended................................44241
400.713 Revised....................................................44242
400.714 Added; interim.............................................41919
400.715 Added; interim.............................................41920
400.716 Added; interim.............................................41921
400.717 Added; interim.............................................41921
400.718 Added; interim.............................................41921
400.719 Added; interim.............................................41922
400.720 Added; interim.............................................41923
400.721 Added; interim.............................................41923
400.722 Added; interim.............................................41924
457.8 Corrected; CFR correction....................................67085
    Amended; interim...............................................71751
457.162 Amended....................................................37241
457.163 Amended....................................................37246
457.164 added......................................................37247
Chapter V
500 Revised........................................................55708
Chapter VI
624 Revised........................................................16926


                                  [all]