[Title 7 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2014 Edition]
[From the U.S. Government Publishing Office]


[[Page i]]

          
          
          Title 7

Agriculture


________________________

Parts 400 to 699

                         Revised as of January 1, 2014

          Containing a codification of documents of general 
          applicability and future effect

          As of January 1, 2014
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as 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                                           409
          Chapter VI--Natural Resources Conservation Service, 
          Department of Agriculture                                453
  Finding Aids:
      Table of CFR Titles and Chapters........................     631
      Alphabetical List of Agencies Appearing in the CFR......     651
      List of CFR Sections Affected...........................     661

[[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 27.

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

[[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

    The contents of the Federal Register are required to be judicially 
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

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, January 1, 2014), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
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Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
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.

PAST PROVISIONS OF THE CODE

    Provisions of the Code that are no longer in force and effect as of 
the revision date stated on the cover of each volume are not carried. 
Code users may find the text of provisions in effect on any given date 
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2001, consult the List of CFR Sections Affected compilations, published 
for 1949-1963, 1964-1972, 1973-1985, and 1986-2000.

``[RESERVED]'' TERMINOLOGY

    The term ``[Reserved]'' is used as a place holder within the Code of 
Federal Regulations. An agency may add regulatory information at a 
``[Reserved]'' location at any time. Occasionally ``[Reserved]'' is used 
editorially to indicate that a portion of the CFR was left vacant and 
not accidentally dropped due to a printing or computer error.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
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This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
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alphabetical list of agencies publishing in the CFR are also included in 
this volume.

[[Page vii]]

    An index to the text of ``Title 3--The President'' is carried within 
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INQUIRIES

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    Charles A. Barth,
    Director,
    Office of the Federal Register.
    January 1, 2014.

                                
                                      
                            

  

[[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, 1600-1759, 1760-1939, 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, 2014.

    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, III was Chief Editor. The Code 
of Federal Regulations publication program is under the direction of the 
Managing Editor, assisted by Ann Worley.



[[Page 1]]



                          TITLE 7--AGRICULTURE




                  (This book contains parts 400 to 699)

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

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

                                                                    Part

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....          75
403-406

[Reserved]

407             Area risk protection insurance regulations..          78
408-411

[Reserved]

412             Public information--Freedom of information..         119
413-456

[Reserved]

457             Common crop insurance regulations...........         120
458

[Reserved]

[[Page 7]]

               PART 400_GENERAL ADMINISTRATIVE REGULATIONS

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]

[[Page 8]]

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_Administrative Remedies for Non-Compliance

400.451  General.
400.452  Definitions.
400.453  Exhaustion of administrative remedies.
400.454  Disqualification and civil fines.
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.
400.459-400.500  [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 and Rates of 
                                 Premium

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.

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. 1506(l), 1506(o).

    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.

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.

[[Page 10]]

    (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 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

[[Page 11]]

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 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

[[Page 12]]

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.

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

[[Page 13]]

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 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

[[Page 14]]

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.
    (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

[[Page 15]]

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. 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 RO, FAOB or any other division 
within the Agency with decision making authority.
    Appellant. Any participant who requests an administrative review or 
mediation, or both, 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.
    FAOB. Financial and Accounting Operations Branch.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
Government corporation within USDA.
    FSA. The Farm Service Agency, an agency within USDA, or its 
successor agency.
    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,

[[Page 16]]

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.
    RO. The Regional 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; 
74 FR 8704, Feb. 26, 2009]

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 both, 
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 and 
mediation under this subpart, as applicable.
    (e) Notwithstanding any other provision, this subpart does not apply 
to any decision made by the Agency that is generally applicable to all 
similarly situated program participants. Such decisions are also not 
appealable to NAD. If the Agency determines that a decision is not 
appealable because it is a matter of general applicability, the 
participant must obtain a review by the Director of NAD in accordance 
with 7 CFR 11.6(a) of the Agency's determination that the decision is 
not appealable before the participant may file suit against the Agency.

[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003; 
74 FR 8704, Feb. 26, 2009]

[[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.
    (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; 
74 FR 8704, Feb. 26, 2009]

Sec. 400.94  Mediation.

    For adverse decisions only:
    (a) Appellants have the right to seek mediation or other forms of 
alternative dispute resolution in addition to 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.

[67 FR 13251, Mar. 22, 2002, as amended at 74 FR 8704, Feb. 26, 2009]

[[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]

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 statute 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]

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]

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]

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]

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

[53 FR 5, Jan. 4, 1988]

[[Page 25]]

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 calendar 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]

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]

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]

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]

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 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]

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

[[Page 26]]

any rights that the employee may have under the provisions of 5 U.S.C. 
5514.

[53 FR 5, Jan. 4, 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]

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

[53 FR 5, Jan. 4, 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

[[Page 27]]

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]

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.
    (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.

[[Page 28]]

    (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, 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.
    (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

[[Page 29]]

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, 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 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

[[Page 30]]

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.Such 
determinations will not be appealable to the Civilian 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 Civilian Board of Contract Appeals in accordance with 48 CFR part 
6102.

[65 FR 3782, Jan. 25, 2000, as amended at 72 FR 31438, June 7, 2007]

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%.
(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;

[[Page 31]]

    (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, 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.
    (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, 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.

[[Page 32]]

    (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, 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.
    (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

[[Page 33]]

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.

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;

[[Page 34]]

    (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;
    (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.

[[Page 35]]

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.
    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

[[Page 36]]

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 entities 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 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;

[[Page 37]]

    (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.
    (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

[[Page 38]]

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 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

[[Page 39]]

    (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, 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

[[Page 40]]

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 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.

[[Page 41]]

    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 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

[[Page 42]]

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
    (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_Administrative Remedies for Non-Compliance

    Authority: 7 U.S.C. 1506(l), 1506(o), and 7 U.S.C. 1515(h)

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

[[Page 43]]

Sec. 400.451  General.

    (a) FCIC has implemented a system of administrative remedies in its 
efforts to ensure program compliance and prevent fraud, waste, and abuse 
within the Federal crop insurance program. Such remedies include civil 
fines and disqualifications under the authority of section 515(h) of the 
Act (7 U.S.C. 1515(h)); government-wide suspension and debarment under 
the authority of 48 CFR part 9, 48 CFR part 409, and 7 CFR part 3017; 
and civil fines and assessments under the authority of the Program Fraud 
Civil Remedies Act (31 U.S.C. 3801-3812).
    (b) The provisions of this subpart apply to all participants in the 
Federal crop insurance program, including but not limited to producers, 
agents, loss adjusters, approved insurance providers and their employees 
or contractors, as well as any other persons who may provide information 
to a program participant and meet the elements for imposition of one or 
more administrative remedies contained in this subpart.
    (c) Any remedial action taken pursuant to this subpart is in 
addition to any other actions specifically provided in applicable crop 
insurance policies, contracts, reinsurance agreements, or other 
applicable statutes and regulations.
    (d) This rule is applicable to any violation occurring on and after 
January 20, 2009.
    (e) The purpose of the remedial actions authorized in this subpart 
are for the protection of the public interest from potential harm from 
persons who have abused the Federal crop insurance program, maintaining 
program integrity, and fostering public confidence in the program.

[73 FR 76887, Dec. 18, 2008]

Sec. 400.452  Definitions.

    For purposes of this subpart:
    Act. Has the same meaning as the term in section 1 of the Common 
Crop Insurance Policy Basic Provisions (7 CFR 457.8).
    Affiliate. Persons are affiliates of each other if, directly or 
indirectly, either one controls or has the power to control the other, 
or, a third person controls or has the power to control both. Indicia of 
control include, but are not limited to: interlocking management or 
ownership, identity of interests among family members, shared facilities 
and equipment, common use of employees, or a business entity organized 
following the disqualification, suspension or debarment of a person 
which has the same or similar management, ownership, or principal 
employees as the disqualified, suspended, debarred, ineligible, or 
voluntarily excluded person.
    Agency. The person authorized by an approved insurance provider, or 
its designee, to sell and service a crop insurance policy under the 
Federal crop insurance program.
    Agent. Has the same meaning as the term in 7 CFR 400.701.
    Agricultural commodity. Has the same meaning as the term in section 
1 of the Common Crop Insurance Policy Basic Provisions (7 CFR 457.8).
    Approved insurance provider. Has the same meaning as the term in 7 
CFR 400.701.
    Benefit. Any advantage, preference, privilege, or favorable 
consideration a person receives from another person in exchange for 
certain acts or considerations. A benefit may be monetary or non-
monetary.
    FCIC. Has the same meaning as the term in 7 CFR 400.701.
    Key employee. Any person with primary management or supervisory 
responsibilities or who has the ability to direct activities or make 
decisions regarding the crop insurance program.
    Knows or has reason to know. When a person, with respect to a claim 
or statement:
    (1)(i) Has actual knowledge that the claim or statement is false, 
fictitious, or fraudulent;
    (ii) Acts in deliberate ignorance of the truth or falsity of the 
claim or statement; or
    (iii) Acts in reckless disregard of the truth or falsity of the 
claim or statement; and
    (2) No proof of specific intent is required.
    Managing general agent. Has the same meaning as the term in 7 CFR 
400.701.
    Material. A violation that causes or has the potential to cause a 
monetary loss to the crop insurance program or

[[Page 44]]

it adversely affects program integrity, including but not limited to 
potential harm to the program's reputation or allowing persons to be 
eligible for benefits they would not otherwise be entitled.
    Participant. Any person who obtains any benefit that is derived in 
whole or in part from funds paid by FCIC to the approved insurance 
provider or premium paid by the producer. Participants include but are 
not limited to producers, agents, loss adjusters, agencies, managing 
general agencies, approved insurance providers, and any person 
associated with the approved insurance provider through employment, 
contract, or agreement.
    Person. An individual, partnership, association, corporation, 
estate, trust or other legal entity, any affiliate or principal thereof, 
and whenever applicable, a State or political subdivision or agency of a 
State. ``Person'' does not include the United States Government or any 
of its agencies.
    Policy. Has the same meaning as the term in section 1 of the Common 
Crop Insurance Policy Basic Provisions (7 CFR 457.8).
    Preponderance of the evidence. Proof by information that, when 
compared with the opposing evidence, leads to the conclusion that the 
fact at issue is probably more true than not.
    Principal. A person who is an officer, director, owner, partner, key 
employee, or other person within an entity with primary management or 
supervisory responsibilities over the entity's federal crop insurance 
activities; or a person who has a critical influence on or substantive 
control over the federal crop insurance activities of the entity.
    Producer. A person engaged in producing an agricultural commodity 
for a share of the insured crop, or the proceeds thereof.
    Provides. Means to make available, supply or furnish with. The term 
includes any transmission of the information from one person to another 
person. For example, a producer writes information on forms and gives it 
to the agent and the agent transmits that information to the insurance 
provider. In both instances, the information is ``provided'' for the 
purpose of this rule.
    Reinsurance agreement. Has the same meaning as the term in 7 CFR 
400.161, except that such agreement is only between FCIC and the 
approved insurance provider.
    Requirement of FCIC. Includes, but is not limited to, formal 
communications, such as a regulation, procedure, policy provision, 
reinsurance agreement, memorandum, bulletin, handbook, manual, finding, 
directive, or letter, signed or issued by a person authorized by FCIC to 
provide such communication on behalf of FCIC, that requires a particular 
participant or group of participants to take a specific action or to 
cease and desist from a taking a specific action (e-mails will not be 
considered formal communications although they may be used to transmit a 
formal communication). Formal communications that contain a remedy in 
such communication in the event of a violation of its terms and 
conditions will not be considered a requirement of FCIC unless such 
violation arises to the level where remedial action is appropriate. (For 
example, multiple violations of the same provision in separate policies 
or procedures or multiple violations of different provisions in the same 
policy or procedure.)
    Violation. Each act or omission by a person that satisfies all 
required elements for the imposition of a disqualification or a civil 
fine contained in Sec. 400.454.
    Willful and intentional. To provide false or inaccurate information 
with the knowledge that the information is false or inaccurate at the 
time the information is provided; the failure to correct the false or 
inaccurate information when its nature becomes known to the person who 
made it; or to commit an act or omission with the knowledge that the act 
or omission is not in compliance with a ``requirement of FCIC'' at the 
time the act or omission occurred. No showing of malicious intent is 
necessary.

[73 FR 76887, Dec. 18, 2008]

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

[[Page 45]]

Courts may be sought, unless review is specifically required by statute.

Sec. 400.454  Disqualification and civil fines.

    (a) Before any disqualification or civil fine is imposed, FCIC will 
provide the affected participants and other persons with notice and an 
opportunity for a hearing on the record in accordance with 7 CFR part 1, 
subpart H.
    (1) Proceedings will be initiated when the Manager of FCIC files a 
complaint with the Hearing Clerk, United States Department of 
Agriculture.
    (2) Disqualifications become effective:
    (i) On the date specified in the order issued by the Administrative 
Law Judge or Judicial Officer, as applicable, or if no date is specified 
in the order, the date that the order was issued.
    (ii) With respect to a settlement agreement with FCIC, the date 
contained in the settlement agreement or, if no date is specified, the 
date that such agreement is executed by FCIC.
    (3) Disqualification and civil fines may only be imposed if a 
preponderance of the evidence shows that the participant or other person 
has met the standards contained in Sec. 400.454(b). FCIC has the burden 
of proving that the standards in Sec. 400.454(b) have been met.
    (4) Disqualification and civil fines may be imposed regardless of 
whether FCIC or the approved insurance provider has suffered any 
monetary losses. However, if there is no monetary loss, disqualification 
will only be imposed if the violation is material in accordance with 
Sec. 400.454(c).
    (b) Disqualification and civil fines may be imposed on any 
participant or person who willfully and intentionally:
    (1) Provides any false or inaccurate information to FCIC or to any 
approved insurance provider with respect to a policy or plan of 
insurance authorized under the Act either through action or omission to 
act when there is knowledge that false or inaccurate information is or 
will be provided; or
    (2) Fails to comply with a requirement of FCIC.
    (c) When imposing any disqualification or civil fine:
    (1) The gravity of the violation must be considered when 
determining:
    (i) Whether to disqualify a participant or other person;
    (ii) The amount of time that a participant or other person should be 
disqualified;
    (iii) Whether to impose a civil fine; and
    (iv) The amount of a civil fine that should be imposed.
    (2) The gravity of the violation includes consideration of whether 
the violation was material and if it was material:
    (i) The number or frequency of incidents or duration of the 
violation;
    (ii) Whether there is a pattern or prior history of violation;
    (iii) Whether and to what extent the person planned, initiated, or 
carried out the violation;
    (iv) Whether the person has accepted responsibility for the 
violation and recognizes the seriousness of the misconduct that led to 
the cause for disqualification or civil fine;
    (v) Whether the person has paid all civil and administrative 
liabilities for the violation;
    (vi) Whether the person has cooperated fully with FCIC (In 
determining the extent of cooperation, FCIC may consider when the 
cooperation began and whether the person disclosed all pertinent 
information known to that person at the time);
    (vii) Whether the violation was pervasive within the organization;
    (viii) The kind of positions held by the persons involved in the 
violation;
    (ix) Whether the organization took prompt, appropriate corrective 
action or remedial measures, such as establishing ethics training and 
implementing programs to prevent recurrence;
    (x) Whether the principals of the organization tolerated the 
offense;
    (xi) Whether the person brought the violation to the attention of 
FCIC in a timely manner;
    (xii) Whether the organization had effective standards of conduct 
and internal control systems in place at the time the violation 
occurred;
    (xiii) Whether the organization has taken appropriate disciplinary 
action

[[Page 46]]

against the persons responsible for the violation;
    (xiv) Whether the organization had adequate time to eliminate the 
violation that led to the cause for disqualification or civil fine;
    (xv) Other factors that are appropriate to the circumstances of a 
particular case.
    (3) The maximum term of disqualification and civil fines will be 
imposed against:
    (i) Participants and other persons, except insurance providers who:
    (A) Commit multiple violations in the same crop year or over several 
crop years; or
    (B) Commit a single violation but such violation results in an 
overpayment of more than $100,000;
    (ii) Approved insurance providers who:
    (A) Commit a single violation resulting in an overpayment in excess 
of $100,000; and
    (B) Commit multiple acts of violations resulting in an overpayment 
in excess of $500,000; and
    (iii) Any participant or person who commits such other action or 
omission of so serious a nature that imposition of the maximum is 
appropriate.
    (d) With respect to the imputing of conduct:
    (1) The conduct of any officer, director, shareholder, partner, 
employee, or other individual associated with an organization, in 
violation of Sec. 400.454(b) may be imputed to that organization when 
such conduct occurred in connection with the individual's performance of 
duties for or on behalf of that organization, or with the organization's 
knowledge, approval or acquiescence. The organization's acceptance of 
the benefits derived from the violation is evidence of knowledge, 
approval or acquiescence.
    (2) The conduct of any organization in violation of Sec. 400.454(b) 
may be imputed to an individual, or from one individual to another 
individual, if the individual to whom the improper conduct is imputed 
either participated in, knows, or had reason to know of such conduct.
    (3) The conduct of one organization in violation of Sec. 400.454(b) 
may be imputed to another organization when such conduct occurred in 
connection with a partnership, joint venture, joint application, 
association or similar arrangement, or when the organization to whom the 
improper conduct is imputed has the power to direct, manage, control or 
influence the activities of the organization responsible for the 
improper conduct. Acceptance of the benefits derived from the conduct is 
evidence of knowledge, approval or acquiescence.
    (4) If such conduct is imputed, the person to whom the conduct is 
imputed to may be subject to the same disqualification and civil fines 
as the person from whom the conduct is imputed. The factors contained in 
Sec. 400.454(c)(2) will be taken into consideration with respect to the 
person to whom the conduct is being imputed.
    (e) With respect to disqualifications:
    (1) If a person is disqualified and that person is a:
    (i) Producer, the producer will be precluded from receiving any 
monetary or non-monetary benefit provided under all of the following 
authorities, or their successors:
    (A) The Act;
    (B) The Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
7333 et seq.) or any successor statute;
    (C) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.) or any 
successor statute;
    (D) The Commodity Credit Corporation Charter Act (15 U.S.C. 714 et 
seq.) or any successor statute;
    (E) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) 
or any successor statute;
    (F) Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et 
seq.) or any successor statute;
    (G) The Consolidated Farm and Rural Development Act (7 U.S.C. 1921, 
et seq.) or any successor statute; and
    (H) Any federal law that provides assistance to the producer of an 
agricultural commodity affected by a crop loss or decline in the prices 
of agricultural commodities.
    (ii) Participant or other person, other than a producer, such 
participant or person will be precluded from participating in any way in 
the Federal crop insurance program and receiving any

[[Page 47]]

monetary or non-monetary benefit under the Act.
    (2) With respect to the term of disqualification:
    (i) The minimum term will be not less than one year from the 
effective date determined in Sec. 400.454(a)(2);
    (ii) The maximum term will be not more than five years from the 
effective date determined in Sec. 400.454(a)(2); and
    (iii) Disqualification is to be imposed only in one-year increments, 
up to the maximum five years.
    (3) Once a disqualification becomes final, the name, address, and 
other identifying information of the participant or other person shall 
be entered into the Ineligible Tracking System (ITS) maintained by FCIC 
in accordance with 7 CFR part 400, subpart U, and this information along 
with a list of the programs that the person is disqualified from shall 
be promptly reported to the General Services Administration for listing 
in the Excluded Parties List System (EPLS) in accordance with 7 CFR part 
3017, subpart E.
    (i) It is a participant's responsibility to periodically review the 
ITS and EPLS to determine those participants and other persons who have 
been disqualified.
    (ii) No participant may conduct business with a disqualified 
participant or other person if such business directly relates to the 
Federal crop insurance program, or if, through the business 
relationship, the disqualified participant or other person will derive 
any monetary or non-monetary benefit from a program administered under 
the Act.
    (iii) If a participant or other person does business with a 
disqualified participant or other person, such participant may be 
subject to disqualification under this section.
    (iv) Continuing to make payments to a disqualified person to fulfill 
pre-existing contractual or statutory obligations after the business 
relationship is terminated will not be considered as doing business with 
a disqualified person unless such payment is used as a means to 
circumvent the disqualification process.
    (f) With respect to civil fines:
    (1) A civil fine may be imposed for each violation.
    (2) The amount of such civil fine shall not exceed the greater of:
    (i) The amount of monetary gain, or value of the benefit, obtained 
as a result of the false or inaccurate information provided, or the 
amount obtained as a result of noncompliance with a requirement of FCIC; 
or
    (ii) $10,000.
    (3) Civil fines are debts owed to FCIC.
    (i) A civil fine that is either imposed under with this subpart, or 
agreed to through an executed settlement agreement with FCIC, must be 
paid by the specified due date. If the due date is not specified in the 
order issued by the Administrative Law Judge or Judicial Officer, as 
applicable, or the settlement agreement, it shall be 30 days after the 
date the order was issued or the settlement agreement signed by FCIC.
    (ii) Any civil fine imposed under this section is in addition to any 
debt that may be owed to FCIC or to any approved insurance provider, 
such an overpaid indemnity, underpaid premium, or other amounts owed.
    (iii) FCIC, in its sole discretion, may reduce or otherwise settle 
any civil fine imposed under this section whenever it considers it 
appropriate or in the best interest of the USDA.
    (4) The ineligibility procedures established in 7 CFR part 400, 
subpart U are not applicable to ineligibility determinations made under 
this section for nonpayment of civil fines.
    (5) If a civil fine has been imposed and the person has not made 
timely payment for the total amount due, the person is ineligible to 
participate in the Federal crop insurance program until the amount due 
is paid in full.
    (g) With respect to any person that has been disqualified or is 
otherwise ineligible due to non-payment of civil fines in accordance 
with Sec. 400.454(f):
    (1) With respect to producers:
    (i) All existing insurance policies will automatically terminate as 
of the next termination date that occurs during the period of 
disqualification and while the civil fine remains unpaid;
    (ii) No new policies can be purchased, and no current policies can 
be renewed, between the date that the producer is disqualified and the 
date that the disqualification ends; and

[[Page 48]]

    (iii) New application for insurance cannot be made for any 
agricultural commodity until the next sales closing date after the 
period of disqualification has ended and the civil fine is paid in full.
    (2) With respect to all other persons:
    (i) Such person may not be involved in any function related to the 
Federal crop insurance program during the disqualification or 
ineligibility period (including the sale, service, adjustment, data 
transmission or storage, reinsurance, etc. of any crop insurance policy) 
or receive any monetary or non-monetary benefit from a program 
administered under the Act.
    (ii) If the person is an agent or insurance agency, the producers 
may cancel their policies sold and serviced by the disqualified agent 
and rewrite the policy with another agent. If the producer does not 
cancel and rewrite the policy with another agent, the approved insurance 
provider must assign the policies to a different agent or agency to 
service during the period of disqualification or ineligibility. Policies 
that have been assigned to another agent or agency by the insurance 
provider will revert back to the disqualified agent or agency after the 
period of disqualification has ended provided all civil fines are paid 
in full and the producer does not cancel and rewrite the policy with a 
different agent or agency;
    (iii) If the person is an approved insurance provider, the approved 
insurance provider shall not sell, or authorize to be sold, any new 
policies or may not renew, or authorize the renewal of, existing 
policies, as determined by FCIC, during the period of disqualification 
or ineligibility. Nothing in this provision affects the approved 
insurance provider's responsibilities with respect to the service of 
existing policies.
    (h) Imposition of disqualification or a civil fine under this 
section is in addition to any other administrative or legal remedies 
available under this section or other applicable law including, but not 
limited to, debarment and suspension.

[73 FR 76888, Dec. 18, 2008]

Sec. 400.455  Governmentwide debarment and suspension (procurement).

    (a) For all transactions undertaken pursuant to the Federal 
Acquisition Regulations, FCIC will proceed under 48 CFR part 9, subpart 
9.4 or 48 CFR part 409 when taking action to suspend or debar persons 
involved in such transactions, except that the authority to suspend or 
debar under these provisions will be reserved to the Manager of FCIC, or 
the Manager's designee.
    (b) Any person suspended or debarred under the provisions of 48 CFR 
part 9, subpart 9.4 or 48 CFR part 409 will not be eligible to contract 
with FCIC or the Risk Management Agency and will not be eligible to 
participate in or receive any benefit from any program under the Act 
during the period of ineligibility. This includes, but is not limited 
to, being employed by or contracting with any approved insurance 
provider that sells, services, or adjusts policies offered under the 
authority of the Act. FCIC may waive this provision if it is satisfied 
that the person who employs the suspended or debarred person has taken 
sufficient action to ensure that the suspended or debarred person will 
not be involved, in any way, with FCIC or receive any benefit from any 
program under the Act.

[73 FR 76890, Dec. 18, 2008]

Sec. 400.456  Governmentwide debarment and suspension (nonprocurement).

    (a) FCIC will proceed under 7 CFR part 3017 when taking action to 
suspend or debar persons involved in non-procurement transactions.
    (b) Any person suspended or debarred under the provisions of 7 CFR 
part 3017, will not be eligible to contract with FCIC or the Risk 
Management Agency and will not be eligible to participate in or receive 
any benefit from any program under the Act during the period of 
ineligibility. This includes, but is not limited to, being employed by 
or contracting with any approved insurance provider, or its contractors, 
that sell, service, or adjust policies either insured or reinsured by 
FCIC. FCIC

[[Page 49]]

may waive this provision if it is satisfied that the approved insurance 
provider or contractors have taken sufficient action to ensure that the 
suspended or debarred person will not be involved in any way with the 
Federal crop insurance program or receive any benefit from any program 
under the Act.
    (c) 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.

[73 FR 76890, Dec. 18, 2008]

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.
    (d) Civil penalties and assessments imposed pursuant to this section 
are in addition to any other remedies that may be prescribed by law or 
imposed under this subpart.

[58 FR 53110, Oct. 14, 1993, as amended at 73 FR 76891, Dec. 18, 2008]

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; or
    (2) Ineligibility for a delinquent debt owed to FCIC or the 
insurance company.

[60 FR 37324, July 20, 1995, as amended at 73 FR 76891, Dec. 18, 2008]

Sec. Sec. 400.459-400.500  [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. 1501 et 
seq.).
    Additional coverage. A level of coverage greater than catastrophic 
risk protection.
    Administrative fee. An amount the producer must pay for 
catastrophic,

[[Page 50]]

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 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.

[[Page 51]]

    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 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

[[Page 52]]

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]

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

[[Page 53]]

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 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

[[Page 54]]

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.
    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

[[Page 55]]

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.

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

[[Page 56]]

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 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

[[Page 57]]

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 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 and Rates of 
                                 Premium

    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.

    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.

[74 FR 8705, Feb. 26, 2009]

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

[[Page 58]]

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) 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.
    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.
    Board. The Board of Directors of FCIC.
    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.
    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, 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.

[[Page 59]]

    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.
    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.
    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

[[Page 60]]

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.
    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.
    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; 74 FR 8705, Feb. 26, 2009]

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]

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.

[[Page 61]]

    (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, 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:

[[Page 62]]

    (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;
    (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

[[Page 63]]

    (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 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

[[Page 64]]

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 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

[[Page 65]]

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 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

[[Page 66]]

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 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]

[[Page 67]]

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, 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;

[[Page 68]]

    (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
    (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]

[[Page 69]]

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
    (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),

[[Page 70]]

(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
    (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

[[Page 71]]

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 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

[[Page 72]]

    (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 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:

[[Page 73]]

    (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 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

[[Page 74]]

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 the 
marketplace 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]

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.
    (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:
    (i) 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;
    (ii) By facsimile at (202) 690-9911;
    (iii) By electronic mail at [email protected]; or
    (iv) By overnight delivery to the Associate Administrator, Risk 
Management Agency, United States Department of Agriculture, Stop 0801, 
Room 6092-S, 1400 Independence Avenue, SW., Washington DC 20250.
    (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;

[[Page 75]]

    (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; 
71 FR 2135, Jan. 13, 2006; 74 FR 66029, Dec. 14, 2009]

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]

            PART 402_CATASTROPHIC RISK PROTECTION ENDORSEMENT

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), 1506(o).

    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.

[[Page 76]]

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.

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                Catastrophic Risk Protection Endorsement

(This is a continuous endorsement)

    If a conflict exists among the policy, the order of priority is: (1) 
This Endorsement; (2) Special Provisions; (3) actuarial documents; (4) 
the Commodity Exchange Price Provisions, if applicable; and (5) any of 
the policies specified in section 2, with (1) controlling (2), etc.

                          Terms and Conditions

                             1. Definitions

    Insurance provider. A private insurance company that has been 
approved by FCIC to provide insurance coverage to producers 
participating in programs authorized by the Federal Crop Insurance Act.
    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 Common Crop Insurance Policy Basic Provisions (7 CFR 457.8) 
and applicable Crop Provisions (catastrophic risk protection coverage is 
not available under individual revenue plans of insurance such as 
Revenue Protection and Revenue Protection with Harvest Price Exclusion);
    (2) The Area Risk Protection Insurance Basic Provisions (7 CFR 
407.9) and applicable Crop Provisions (catastrophic risk protection 
coverage is not available under area revenue plans of insurance such as 
Area Revenue Protection or Area Revenue Protection with the Harvest 
Price Exclusion); or
    (3) Other crop policies only if catastrophic risk protection 
coverage is provided in the applicable crop 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 not applicable if you are insured under the Area 
Risk Protection Insurance Basic Provisions (7 CFR 407.9) and applicable 
Crop Provisions.
    (b) This section is in lieu of the unit provisions specified in the 
applicable crop policy. 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) Unless otherwise specified in the Special Provisions, 
catastrophic risk protection coverage will offer protection equal to:
    (1) Fifty percent (50%) of your approved yield indemnified at fifty-
five percent (55%) of the price election or projected price, as 
applicable, if you are insured under the Common Crop Insurance Policy 
Basic Provisions (7 CFR 457.8) and applicable Crop Provisions;
    (2) Sixty-five percent (65%) of the expected county yield 
indemnified at forty-five percent (45%) of the maximum protection per 
acre if you are insured under the Area Risk Protection Insurance Basic 
Provisions (7 CFR 407.9) and applicable Crop Provisions; or
    (3) A comparable coverage as established by FCIC for other crop 
policies only if catastrophic risk protection coverage is provided in 
the applicable crop policy.
    (b) 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 
fifty-five percent (55%) of the price election.
    (c) You may elect catastrophic coverage for any crop insured or 
reinsured by FCIC on either an individual yield and loss basis or an 
area yield and loss basis, if both options are offered as set out in the 
Special Provisions.

[[Page 77]]

                          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 us within 30 days after you have been 
billed, unless otherwise authorized in the Federal Crop Insurance Act 
(You will be billed by the date stated in the actuarial documents);
    (1) The administrative fee owed is $300 for each crop in the county 
unless otherwise specified in the Special Provisions.
    (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 specified in the applicable crop policy. The administrative fee 
will be waived if you request it and you meet the requirements contained 
in the annual premium provisions of the applicable crop policy.
    (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.

                             7. Insured Crop

    The crop insured is specified in the applicable crop policy; 
however, for policies other than those insured under the Area Risk 
Protection Insurance Basic Provisions, 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 designated as ``high-risk'' land 
by FCIC under catastrophic risk protection coverage, provided that you 
execute a High-Risk Land Exclusion Option and obtain a catastrophic risk 
protection coverage policy with the same insurance provider on or before 
the applicable sales closing date. You will be required to pay a 
separate administrative fee for both the additional coverage policy and 
the catastrophic risk protection coverage policy.

                          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

    If two or more insured crop types, varieties, or classes are insured 
within the same unit, and multiple price elections, projected prices, or 
amounts of insurance 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, projected prices, or amounts of insurance and then totaled to 
determine the total liability or dollar amount of production to be 
counted for the unit.

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                        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 for the crop year during which 
any such act or omission 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 this 
endorsement. 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.

[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; 73 FR 36408, June 27, 2008; 73 FR 70864, Nov. 24, 2008; 
78 FR 52835, Aug. 27, 2013]

                        PARTS 403-406 [RESERVED]

           PART 407_AREA RISK PROTECTION INSURANCE REGULATIONS

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  Area risk protection insurance policy.
407.10  Area risk protection insurance for barley.
407.11  Area risk protection insurance for corn.
407.12  Area risk protection insurance for cotton.
407.13  Area risk protection insurance for forage.
407.14  Area risk protection insurance for peanuts.
407.15  Area risk protection insurance for grain sorghum.
407.16  Area risk protection insurance for soybean.
407.17  Area risk protection insurance for wheat.

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

    Source: 78 FR 38507, June 26, 2013, unless otherwise noted.

Sec. 407.1  Applicability.

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

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. 1501-1524) (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 is offered through insurance providers reinsured 
by the 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 coverage contained in this part and part 402 of this 
chapter directly to the insured through the Department of Agriculture if 
the Secretary determines that the availability of local agents is not 
adequate. 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 FCIC that the multiple 
contracts of insurance were without the fault of the person.

[[Page 79]]

    (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 22).
    (f) A person whose contract with FCIC or with an insurance provider 
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 an insurance provider 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.

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 agent's office. 
Premium rates, amounts of protection, and coverage levels may be changed 
from year to year in accordance with the terms of the policy.
    (b) At the time the application for insurance is made, the person 
must elect 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 submitted to OMB for their review and approval.

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.

    (a) The insurance contract shall become effective upon the 
acceptance by FCIC or the insurance provider of a complete, duly 
executed application for insurance on a form prescribed or approved by 
FCIC.
    (b) The contract shall consist of the accepted application, Area 
Risk Protection Insurance Basic Provisions, Crop Provisions, Special 
Provisions, Actuarial Documents, and any amendments, endorsements, or 
options thereto.
    (c) Changes made in the contract shall not affect its continuity 
from year to year.
    (d) No indemnity shall be paid unless the person complies with all 
terms and conditions of the contract.
    (e) The forms required under this part and by the contract are 
available at the office of the insurance provider,

[[Page 80]]

or such other location as specified by FCIC, if applicable.

Sec. 407.8  The application and policy.

    (a) Application for insurance, developed in accordance with 
standards established 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.
    (1) No other person's interest in the crop may be insured under the 
application.
    (2) To obtain coverage, 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 insurance provider may reject, no longer accept 
applications, or cancel existing insurance contracts upon the FCIC's 
determination that the insurance risk is excessive. Such determination 
must be made not later than 15 days before the cancellation date for the 
crop and may be made on an area, county, state, or crop basis.

Sec. 407.9  Area risk protection insurance policy.

    This insurance is available for the 2014 and succeeding years.

[FCIC policies]

Department of Agriculture

Federal Crop Insurance Corporation

Area Risk Protection Insurance Policy

[Reinsured policies]

(Appropriate title for insurance provider)

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

[FCIC policies]
    Area Risk Protection Insurance (ARPI) provides protection against 
widespread loss of revenue or widespread loss of yield in a county. 
Individual farm revenues and yields are not considered under ARPI and it 
is possible that your individual farm may experience reduced revenue or 
reduced yield and you do not receive an indemnity under ARPI.
    This is an insurance policy issued by the FCIC, a United States 
government agency, under the provisions of the Federal Crop Insurance 
Act (7 U.S.C. 1501-1524) (Act). 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 modified in any way by 
us, your insurance agent or any employee of USDA. Procedures (handbooks, 
underwriting rules, manuals, memoranda, and bulletins), issued by us and 
published on the Risk Management Agency's (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 insured shown on the accepted application and ``we,'' 
``us,'' and ``our'' refer to FCIC. Unless the context indicates 
otherwise, the use of the plural form of a word includes the singular 
and the singular form of the word includes the plural.
    AGREEMENT TO INSURE: In return for the commitment to pay a 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 among the Act, the regulations published at 7 CFR chapter IV, 
and the procedures as issued by us, the order of priority is: (1) the 
Act; (2) the regulations; and (3) the procedures as 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. The order of priority among the policy is: 
(1) the Catastrophic Risk Protection Endorsement, as applicable; (2) 
Special Provisions; (3) actuarial documents; (4) the applicable 
Commodity Exchange Price Provisions; (5) the Crop Provisions; and (6) 
these Basic Provisions, with (1) controlling (2), etc.

[Reinsured policies]
    Area Risk Protection Insurance (ARPI) provides protection against 
widespread loss of revenue or widespread loss of yield in a county. 
Individual farm revenues and yields are not considered under ARPI and it 
is possible that your individual farm may experience reduced revenue or 
reduced

[[Page 81]]

yield and not receive an indemnity under ARPI.
    This insurance policy is reinsured by the FCIC under the provisions 
of Subtitle A of the Federal Crop Insurance Act (7 U.S.C. 1501-1524) 
(Act). 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. We 
will use the procedures (handbooks, underwriting rules, manuals, 
memoranda, and bulletins), as issued by FCIC and published on the Risk 
Management Agency (RMA's) 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, FCIC 
will become your insurer, make all decisions in accordance with the 
provisions of this policy, including any loss payments, and 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 insured 
shown on the accepted application and ``we,'' ``us,'' and ``our'' refer 
to the insurance provider providing insurance. Unless the context 
indicates otherwise, the use of the plural form of a word includes the 
singular and the singular form of the word includes the plural.
    AGREEMENT TO INSURE: In return for the commitment to pay a 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 among the Act, the regulations published at 7 CFR chapter IV, 
and the procedures as issued by FCIC, the order of priority is: (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. The order of priority among the policy is: 
(1) the Catastrophic Risk Protection Endorsement, as applicable; (2) 
Special Provisions; (3) actuarial documents; (4) Commodity Exchange 
Price Provisions; (5) the Crop Provisions; and (6) these Basic 
Provisions, with (1) controlling (2), etc.

Terms and Conditions

Basic Provisions

                             1. Definitions

    Abandon. Failure to continue to care for the crop, or providing care 
so insignificant as to provide no benefit to the crop.
    Acreage report. A report required by section 8 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 actuarial 
documents by which you are required to submit your acreage report.
    Act. Subtitle A of the Federal Crop Insurance Act (7 U.S.C. 1501-
1524).
    Actuarial documents. The part of the policy that contains 
information for the crop year which is available for public inspection 
in your agent's office and published on RMA's Web site, http://
www.rma.usda.gov/, and which shows available plans of insurance, 
coverage levels, information needed to determine amounts of insurance, 
prices, premium rates, premium adjustment percentages, type (commodity 
types, classes, subclasses, intended uses), practice (irrigated 
practices, cropping practices, organic practices, intervals), 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 of these provisions, the Catastrophic Risk Protection 
Endorsement, or the Special Provisions, as applicable.
    Agricultural experts. Persons who are employed by the Cooperative 
Extension

[[Page 82]]

System 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. Persons 
who have a personal or financial interest in you or the crop will not 
qualify as an agricultural expert. For example, contracting with a 
person for consulting would be considered to have a financial interest 
and a person who is a neighbor would be considered to have a personal 
interest.
    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.
    Area. The general geographical region in which the insured acreage 
is located, designated generally as a county but may be a smaller or 
larger geographical area as specified in the actuarial documents.
    Area Revenue Protection. A plan of insurance that provides 
protection against loss of revenue due to a county level production 
loss, a price decline, or a combination of both. This plan also includes 
upside harvest price protection, which increases your policy protection 
at the end of the insurance period if the harvest price is greater than 
the projected price and if there is a production loss.
    Area Revenue Protection with the Harvest Price Exclusion. A plan of 
insurance that provides protection against loss of revenue due to a 
county level production loss, price decline, or a combination of both. 
This plan does not provide upside harvest price protection.
    Area Risk Protection Insurance (ARPI). Insurance coverage based on 
an area, not an individual, yield or revenue amount. There are three 
plans of insurance available under ARPI: Area Revenue Protection, Area 
Revenue Protection with the Harvest Price Exclusion, and Area Yield 
Protection.
    Area Yield Protection. A plan of insurance that provides protection 
against loss of yield due to a county level production loss. This plan 
does not provide protection against loss of revenue or upside harvest 
price protection.
    Assignment of indemnity. A transfer of policy rights, made on our 
form, and effective when approved by us in writing, whereby you assign 
your right to an indemnity payment for the crop year only to creditors 
or other persons to whom you have a financial debt or other pecuniary 
obligation.
    Buffer zone. A parcel of land, as designated in your organic plan, 
that separates commodities grown under organic practices from 
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 (CAT). Coverage equivalent to 65 
percent of yield coverage and 45 percent of price coverage, unless 
otherwise specified in the Special Provisions, and is the minimum level 
of coverage offered by FCIC, as specified in the actuarial documents for 
the crop, type, and practice. CAT is not available with Area Revenue 
Protection or Area Revenue Protection with the Harvest Price Exclusion.
    Catastrophic Risk Protection Endorsement. The part of the crop 
insurance policy that contains provisions of insurance that are specific 
to CAT.
    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.
    Class. A specific subgroup of commodity type.
    Code of Federal Regulations (CFR). The codification of general 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

[[Page 83]]

text of the CFR is available in electronic format at http://
ecfr.gpoaccess.gov/.
    Commodity. An agricultural good or product that has economic value.
    Commodity Exchange Price Provisions (CEPP). A part of the policy 
that is used for crops for which ARPI is available, unless otherwise 
specified. This document includes the information necessary to derive 
the projected and harvest price for the insured crop, as applicable.
    Commodity type. A specific subgroup of a commodity having a 
characteristic or set of characteristics distinguishable from other 
subgroups of the same commodity.
    Consent. Approval in writing by us allowing you to take a specific 
action.
    Contract. (See ``Policy'')
    Contract change date. The calendar date, as specified in the Crop 
Provisions, by which changes to the policy, if any, will be made 
available in accordance with section 3 of these Basic Provisions.
    Conventional farming practice. A system or process that is necessary 
to produce a commodity, excluding organic farming practices.
    Cooperative Extension System. A nationwide network consisting of a 
state office located at each state's land-grant university, and local or 
regional offices. These offices are staffed by one or more agricultural 
experts who work in cooperation with the National Institute of Food and 
Agriculture, and who provide information to agricultural producers and 
others.
    County. Any county, parish, political subdivision of a state, or 
other area specified on the actuarial documents shown on your accepted 
application, including acreage in a field that extends into an adjoining 
county if the county boundary is not readily discernible.
    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.
    Credible data. Data of sufficient quality and quantity to be 
representative of the county.
    Crop. The insurable commodity as defined in the Crop Provisions.
    Cropping practice. A method of using a combination of inputs such as 
fertilizer, herbicide, and pesticide, and operations such as planting, 
cultivation, etc. to produce the insured crop. The insurable cropping 
practices are specified 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 within which the insured crop is normally 
grown and designated by the calendar year in which the crop is normally 
harvested.
    Days. Calendar days.
    Delinquent debt. Has the same meaning as the term defined in 7 CFR 
part 400, subpart U.
    Dollar amount of insurance per acre. The guarantee calculated by 
multiplying the expected county yield by the projected price and by the 
protection factor. Your dollar amount of insurance per acre is shown on 
your Summary of Protection. Following release of the harvest price, your 
dollar amount of insurance may increase if Area Revenue Protection was 
purchased and the harvest price is greater than the projected price.
    Double crop. Producing two or more crops for harvest on the same 
acreage in the same crop year.
    Expected county revenue. The expected county yield multiplied by the 
projected price.
    Expected county yield. The yield, established in accordance with 
section 15, contained in the actuarial documents on which your coverage 
for the crop year is based.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
corporation within USDA.
    Final county revenue. The revenue determined by multiplying the 
final county yield by the harvest price with the result used to 
determine whether an indemnity will be due for Area Revenue Protection 
and Area Revenue Protection with the Harvest Price Exclusion, and 
released by FCIC at a time specified in the Crop Provisions.
    Final county yield. The yield, established in accordance with 
section 15,

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for each insured crop, type, and practice, used to determine whether an 
indemnity will be due for Area Yield Protection, and released by FCIC at 
a time specified in the Crop Provisions.
    Final planting date. The date contained in the actuarial documents 
for the insured crop by which the crop must be planted in order to be 
insured.
    Final policy protection. For Area Revenue Protection only, the 
amount calculated in accordance with section 12(e).
    First insured crop. With respect to a single crop year and any 
specific crop acreage, the first instance that a 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 number. The number assigned to the farm by the local FSA 
office.
    Generally recognized. When agricultural experts or organic 
agricultural experts, 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, type, and practice 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 organic agricultural experts 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.''
    Harvest price. A price determined in accordance with the CEPP and 
used to determine the final county revenue.
    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 interest. Your percentage of the insured crop that is at 
financial risk.
    Insurable loss. Damage for which coverage is provided under the 
terms of your policy, and for which you accept an indemnity payment.
    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.
    Insured. The named person as shown on the application accepted by 
us. This term does not extend to any other person having an insurable 
interest in the crop (e.g., 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.
    Intended use. The expected end use or disposition of the commodity 
at the time the commodity is reported.
    Interval. A period of time designated in the actuarial documents.
    Irrigated practice. A method of producing a crop by which water, 
from an adequate water source, is artificially applied in sufficient 
amounts by appropriate and adequate irrigation equipment and facilities 
and at the proper times necessary to produce at least the (1) yield 
expected for the area; (2) yield used to establish the production 
guarantee or amount of insurance/coverage on the irrigated acreage 
planted to the commodity; or (3) producer's established approved yield, 
as applicable. Acreage adjacent to water, such as but not limited to a 
pond, lake, river, stream, creek or brook, shall not be considered 
irrigated based solely on the proximity to the water. The insurable 
irrigation practices are specified in the actuarial documents.
    Liability. (See ``Policy protection.'')

[[Page 85]]

    Limited resource farmer. Has the same meaning as the term defined by 
USDA at http://www.lrftool.sc.egov.usda.gov or a successor Web site.
    Loss limit factor. Unless otherwise specified in the Special 
Provisions a factor of .18 is used to calculate the payment factor. This 
factor represents the percentage of the expected county yield or 
expected county revenue at which no additional indemnity amount is 
payable. For example, if the expected county yield is 100 bushels and 
the final county yield is 18 bushels, then no additional indemnity is 
due even if the yield falls below 18 bushels. The total indemnity will 
never be more than 100 percent of the final policy protection.
    NASS. National Agricultural Statistics Service, an agency within 
USDA, or its successor, that publishes the official United States 
Government yield estimates.
    Native sod. Acreage that has no record of being tilled (determined 
in accordance with FSA or other verifiable records acceptable to us) for 
the production of an annual crop on or before May 22, 2008, and on which 
the plant cover is composed principally of native grasses, grass-like 
plants, forbs, or shrubs suitable for grazing and browsing.
    Offset. The act of deducting one amount from another amount.
    Organic agricultural experts. Persons who are employed by the 
following organizations: Appropriate Technology Transfer for Rural 
Areas, Sustainable Agriculture Research and Education or the Cooperative 
Extension System, 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 crop. A commodity that is organically produced consistent 
with section 2103 of the Organic Foods Act of 1990 (7 U.S.C. 6502).
    Organic farming practice. A system of plant production practices 
used to produce an organic crop that is 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 practice. The insurable organic farming practices specified 
in the actuarial documents.
    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.
    Payment factor. A factor no greater than 1.0 used to determine the 
amount of indemnity to be paid in accordance with section 12(g).
    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. Except as otherwise specified in the Special 
Provisions, 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 in accordance with good farming practices 
for the area.
    Policy. The agreement between you and us to insure a commodity and 
consisting of the accepted application, these Basic Provisions, the Crop 
Provisions, the Special Provisions, the CEPP, other applicable 
endorsements or options, the actuarial documents for the insured 
commodity, the CAT Endorsement, if applicable, and the applicable 
regulations published in 7 CFR chapter IV. Insurance for each commodity 
in each county will constitute a separate policy.
    Policy protection. The liability amount calculated in accordance 
with section 6(f) unless otherwise specified in the Special Provisions.
    Practice. Production methodologies used to produce the insured crop 
consisting of unique combinations of irrigated practice, cropping 
practice, organic practice, and interval as shown

[[Page 86]]

on the actuarial documents as insurable.
    Prairie Pothole National Priority Area. Consists of specific 
counties within the States of Iowa, Minnesota, Montana, North Dakota, 
South Dakota, or any other county as specified on the RMA's Web site at 
http://www.rma.usda.gov/, or a successor Web site, or the Farm Service 
Agency, Agricultural Resource Conservation Program 2-CRP (Revision 4), 
dated April 28, 2008, or a subsequent publication.
    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 actuarial documents.
    Production report. A written record showing your annual production 
in accordance with section 8. The report contains yield information for 
the current year, including acreage and production. This report must be 
supported by written verifiable records from a warehouseman or buyer of 
the insured crop, by measurement of farm-stored production, or by other 
records of production approved by us in accordance with FCIC approved 
procedures.
    Production reporting date. The date contained in the actuarial 
documents by which you are required to submit your production report.
    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.
    Projected price. A price for each crop, type, and practice as shown 
in the actuarial documents, as applicable, determined in accordance with 
the CEPP, Special Provisions or the Crop Provisions, as applicable.
    Protection factor (PF). The percentage you choose that is used to 
calculate the dollar amount of insurance per acre and policy protection.
    Replanted crop. The same commodity replanted on the same acreage as 
the first insured crop for harvest in the same crop year. ARPI does not 
have a replant provision, therefore, it is only used for first and 
second crop determinations.
    RMA. Risk Management Agency, an agency within USDA.
    RMA's Web site. A Web site hosted by RMA and located at http://
www.rma.usda.gov/ or a successor Web site.
    Sales closing date. The date contained in the actuarial documents by 
which an application must be filed and 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 commodity for harvest following a first insured crop on 
the same acreage. The second crop may be the same or a different 
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 insurable interest in the insured crop as an owner, 
operator, or tenant.
    Special Provisions. The part of the policy that contains specific 
provisions of insurance for each insured crop that may vary by 
geographic area, and is available for public inspection in your agent's 
office and published on RMA's Web site.
    State. The state shown on your accepted application.
    Subclass. A specific subgroup of class.
    Subsidy. The portion of the total premium that FCIC will pay in 
accordance with the Act.
    Subsidy factor. The percentage of the total premium paid by FCIC as 
a subsidy.
    Substantial beneficial interest. An interest held by any person of 
at least 10

[[Page 87]]

percent in you (e.g., 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). The spouse of any individual applicant or individual 
insured will be presumed 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 the applicable state 
dissolution of marriage laws. 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.
    Summary of protection. Our statement to you specifying the insured 
crop, dollar amount of insurance per acre, policy protection, premium 
and other information obtained from your accepted application, acreage 
report, and the actuarial documents.
    Sustainable farming practice. A system or process for producing a 
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.
    Tilled. The termination of existing plants by plowing, disking, 
burning, application of chemicals, or by other means to prepare acreage 
for the production of an annual crop.
    Total premium. The amount of premium before subsidy, calculated in 
accordance with section 7(e)(1).
    Transitional acreage. Acreage on which organic farming practices are 
being followed that does not yet qualify to be designated as organic 
acreage.
    Trigger revenue. The revenue amount calculated in accordance with 
section 12(b).
    Trigger yield. The yield amount calculated in accordance with 
section 12(c).
    Type. Categories of the insured crop consisting of unique 
combinations of commodity type, class, subclass, and intended use as 
shown on the actuarial documents as insurable.
    Upside harvest price protection. Coverage provided automatically 
under the Area Revenue Protection plan of insurance. This coverage 
increases your final policy protection when the harvest price is greater 
than the projected price. This coverage is not available under either 
the Area Revenue Protection with the Harvest Price Exclusion or the Area 
Yield Protection plans of insurance.
    USDA. United States Department of Agriculture.
    Verifiable records. Has the same meaning as the term defined in 7 
CFR part 400, subpart G.
    Void. When the policy is considered not to have existed for a crop 
year.
    Volatility factor. A measure of variation of price over time found 
in the actuarial documents.

            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. In accordance with 
section 3, FCIC may change the coverage provided from year to year.

[[Page 88]]

    (b) The following information must be included on your application 
for insurance or your application will not be accepted and no coverage 
will be provided:
    (1) Your election of Area Revenue Protection, Area Revenue 
Protection with the Harvest Price Exclusion, or Area Yield Protection;
    (2) The crop with all type and practice combinations insured as 
shown on the actuarial documents;
    (3) Your elected coverage level;
    (4) Your elected protection factor;
    (5) Identification numbers for you as follows:
    (i) You must include your social security number (SSN) if you are an 
individual (if you are an individual applicant operating as a business, 
you must provide an employer identification number (EIN) and you must 
also provide your SSN); or
    (ii) You must include your EIN if you are a person other than an 
individual;
    (6) Identification numbers for all persons who have a substantial 
beneficial interest in you:
    (i) The SSN for individuals; or
    (ii) The EIN for persons other than individuals and the SSNs for all 
individuals that comprise the person with the EIN if such individuals 
also have a substantial beneficial interest in you; and
    (7) All other information required on the application to insure the 
crop.
    (c) With respect to SSNs or EINs required on your application:
    (1) Your application will not be accepted and no insurance will be 
provided for the year of application if the application does not contain 
your SSN or EIN. If your application contains an incorrect SSN or EIN 
for you, your application will be considered not to have been accepted, 
no insurance will be provided for the year of application and for any 
subsequent crop years, as applicable, and such policies will be void if:
    (i) Such number is not corrected by you; or
    (ii) You correct the SSN or EIN but:
    (A) You cannot prove that any error was inadvertent (Simply stating 
the error was inadvertent is not sufficient to prove the error was 
inadvertent); or
    (B) It is determined that the incorrect number would have allowed 
you to obtain disproportionate benefits under the crop insurance 
program, you are determined to be ineligible for insurance or you could 
avoid an obligation or requirement under any State or Federal law;
    (2) With respect to persons with a substantial beneficial interest 
in you:
    (i) The insurance coverage for all crops included on your 
application will be reduced proportionately by the percentage interest 
in you of persons with a substantial beneficial interest in you 
(presumed to be 50 percent for spouses of individuals) if the SSNs or 
EINs of such persons are included on your application, the SSNs or EINs 
are correct, and the persons with a substantial beneficial interest in 
you are ineligible for insurance;
    (ii) Your policies for all crops included on your application, and 
for all applicable crop years, will be void if the SSN or EIN of any 
person with a substantial beneficial interest in you is incorrect or is 
not included on your application and:
    (A) Such number is not corrected or provided by you, as applicable;
    (B) You cannot prove that any error or omission was inadvertent 
(Simply stating the error or omission was inadvertent is not sufficient 
to prove the error or omission was inadvertent); or
    (C) Even after the correct SSN or EIN is provided by you, it is 
determined that the incorrect or omitted SSN or EIN would have allowed 
you to obtain disproportionate benefits under the crop insurance 
program, the person with a substantial beneficial interest in you is 
determined to be ineligible for insurance, or you or the person with a 
substantial beneficial interest in you could avoid an obligation or 
requirement under any State or Federal law; or
    (iii) Except as provided in sections 2(c)(2)(ii)(B) and (C), your 
policies will not be voided if you subsequently provide the correct SSN 
or EIN for persons with a substantial beneficial interest in you and the 
persons are eligible for insurance;
    (d) When any of your policies are void under section 2(c):
    (1) You must repay any indemnity that may have been paid for all 
applicable crops and crop years;

[[Page 89]]

    (2) Even though the policies are void, you will still be required to 
pay an amount equal to 20 percent of the premium that you would 
otherwise be required to pay; and
    (3) If you previously paid premium or administrative fees, any 
amount in excess of the amount required in section 2(d)(2) will be 
returned to you.
    (e) Notwithstanding any of the provisions in this section, you may 
be subject to civil, criminal or administrative sanctions if you certify 
to an incorrect SSN or EIN or any other information under this policy.
    (f) If any of the information regarding persons with a substantial 
beneficial interest in you, changes:
    (1) After the sales closing date for the previous crop year, you 
must revise your application by the sales closing date for the current 
crop year to reflect the correct information; or
    (2) Less than 30 days before the sales closing date for the current 
crop year, you must revise your application by the sales closing date 
for the next crop year;
    (3) And you fail to provide the required revisions, the provisions 
in section 2(c)(2) will apply; and
    (g) If you are, or a person with a substantial beneficial interest 
in you is, not eligible to obtain an SSN or EIN, whichever is required, 
you must request an assigned number for the purposes of this policy from 
us:
    (1) A number will be provided only if you can demonstrate you are, 
or a person with a substantial beneficial interest in you is, eligible 
to receive Federal benefits;
    (2) If a number cannot be provided for you in accordance with 
section (2)(g)(1), your application will not be accepted; or
    (3) If a number cannot be provided for any person with a substantial 
beneficial interest in you in accordance with section 2(g)(1), the 
amount of coverage for all crops on the application will be reduced 
proportionately by the percentage interest of such person in you.
    (h) After acceptance of the application, you may not cancel this 
policy for the initial crop year unless you choose to insure the entire 
crop under another Federally reinsured plan of insurance with the same 
insurance provider on or before the sales closing date. After the first 
year, the policy will continue in force for each succeeding crop year 
unless canceled, voided or terminated as provided in this section.
    (i) 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.
    (j) 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 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 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 final county yield 
for the applicable crop year.
    (k) 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(k)(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(k)(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 overpaid indemnity and any other amounts due, including 
but not limited to, premium billed with a due date after the termination 
date for the crop year in which premium is earned, 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 written payment agreement if 
you fail to pay the amount owed by any payment

[[Page 90]]

date in any agreement to pay the debt; or
    (D) The termination date the policy was or would have been 
terminated under section 2(k)(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(k)(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 2(j), unless 
your policy was terminated in accordance with sections 2(k)(2)(i)(A), 
(B), (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 premium billing date for 
the crop year (For policies for which the sales closing date is prior to 
the termination date, such policies will terminate for the current crop 
year even if insurance attached prior to the termination date. Such 
termination will be considered effective as of the sales closing date 
and no insurance will be considered to have attached for the crop year 
and no indemnity will be owed);
    (B) For a policy with other amounts due, including but not limited 
to, premium billed with a due date after the termination date for the 
crop year in which premium is earned, the termination date immediately 
following the date you have a delinquent debt (For policies for which 
the sales closing date is prior to the termination date, such policies 
will terminate for the current crop year even if insurance attached 
prior to the termination date. Such termination will be considered 
effective as of the sales closing date and no insurance will be 
considered to have attached for the crop year and no indemnity will be 
owed);
    (C) For all other policies that are issued by us under the authority 
of the Act, the termination date that coincides with the termination 
date for the policy with the delinquent debt, or if there is no 
coincidental termination date, the termination date immediately 
following the date you become ineligible;
    (D) For execution of a written payment agreement 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 (for 
this purpose only, the crop year will start the day after the 
termination date and end on the next termination date, e.g., if the 
termination date is November 30 and you fail to make a payment on 
November 15, 2011, your policy will terminate on November 30, 2010, for 
the 2011 crop year); or
    (E) For dismissal of a bankruptcy petition before discharge, the 
termination date the policy was or would have been terminated under 
section 2(k)(2)(i)(A), (B), (C).
    (ii) For all policies terminated under section 2(k)(2)(i)(A), (B), 
(D), or (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 a written payment agreement and make payments in 
accordance with the agreement (we will not enter into a written payment 
agreement with you if you have previously failed to make a scheduled 
payment under the terms of any other payment agreement 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(k)(2)(i).)
    (4) If you are determined to be ineligible under section 2(k), 
persons with a substantial beneficial interest in you may also be 
ineligible until you become eligible again.

[[Page 91]]

    (l) In cases where there has been a death, disappearance, judicially 
declared incompetence, or dissolution of any insured person:
    (1) If any married insured dies, disappears, or is judicially 
declared incompetent, the insured on the policy will automatically 
convert to the name of the spouse if:
    (i) The spouse was included on the policy as having a substantial 
beneficial interest in the insured; and
    (ii) The spouse has a share of the crop.
    (2) The provisions in section 2(l)(3) will only be applicable if:
    (i) Any partner, member, shareholder, etc., of an insured entity 
dies, disappears, or is judicially declared incompetent, and such event 
automatically dissolves the entity; or
    (ii) An individual whose estate is left to a beneficiary other than 
a spouse or left to the spouse and the criteria in section 2(l)(1) are 
not met, dies, disappears, or is judicially declared incompetent.
    (3) If the death, disappearance, or judicially declared incompetence 
occurred:
    (i) More than 30 days before the cancellation date, the policy is 
automatically canceled as of the cancellation date and a new application 
must be submitted; or
    (ii) Thirty days or less before the cancellation date, or on after 
the cancellation date, the policy will continue in effect through the 
crop year immediately following the cancellation date and be 
automatically canceled as of the cancellation date immediately following 
the end of the insurance period for the crop year, unless canceled by 
the cancellation date prior to the start of the insurance period:
    (A) A new application for insurance must be submitted on or before 
the sales closing date for coverage for the subsequent crop year; and
    (B) Any indemnity will be paid to the person or persons determined 
to be beneficially entitled to the payment provided such person or 
persons comply with all policy provisions and timely pays the premium.
    (4) If any insured entity is dissolved for reasons other than death, 
disappearance, or judicially declared incompetence:
    (i) Before the cancellation date, the policy is automatically 
canceled as of the cancellation date and a new application must be 
submitted; or
    (ii) On or after the cancellation date, the policy will continue in 
effect through the crop year immediately following the cancellation date 
and be automatically canceled as of the cancellation date immediately 
following the end of the insurance period for the crop year, unless 
canceled by the cancellation date prior to the start of the insurance 
period.
    (A) A new application for insurance must be submitted on or before 
the sales closing date for coverage for the subsequent crop year; and
    (B) Any indemnity will be paid to the person or persons determined 
to be beneficially entitled to the payment provided such person or 
persons comply with all policy provisions and timely pays the premium.
    (5) If section 2(k)(2) or (4) applies, a remaining member of the 
insured person or the beneficiary is required to report to us the death, 
disappearance, judicial incompetence, or other event that causes 
dissolution of the entity not later than the next cancellation date, 
except if section 2(k)(3)(ii) applies, notice must be provided by the 
cancellation date for the next crop year.
    (m) We may cancel your policy if no premium is earned for 3 
consecutive years.
    (n) The cancellation and termination dates are contained in the Crop 
Provisions.
    (o) 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 8(g), 
and any other consequences, including administrative, criminal or civil 
sanctions, if any information has been misreported.

[[Page 92]]

    (p) If voidance, 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 
your policy is voided due to a conviction of the controlled substance 
provisions of the Food Security Act of 1985 or Title 21, a new 
application must be filed for the crop.
    (1) Insurance coverage will not be provided if you are ineligible 
under the contract or under any Federal statute or regulation.
    (2) Since applications for crop insurance cannot be accepted after 
the sales closing date, if you make any payment, or you otherwise become 
eligible, after the sales closing date, you cannot apply for insurance 
until the next crop year. For example, for the 2012 crop year, if crop 
A, with a termination date of October 31, 2012, and crop B, with a 
termination date of March 15, 2013, 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, 2012, and crop A's policy is terminated as 
of that date. Crop B's policy does not terminate until March 15, 2013, 
and an indemnity for the 2012 crop year may still be owed. 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.

                           3. Contract Changes

    (a) We may change the terms and conditions of this policy from year 
to year.
    (b) Any changes in policy provisions, the CEPP, amounts of 
insurance, expected county yields, premium rates, and program dates can 
be viewed on RMA's 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 obvious errors (e.g., the 
expected county revenue for a county was announced at $2,500 per acre 
instead of $250 per acre).
    (c) After the contract change date, all changes specified in section 
3(b) will also be available upon request from your crop insurance agent.
    (d) Not later than 30 days prior to the cancellation date for the 
insured crop you will be provided, in accordance with section 20, a copy 
of the changes to the Basic Provisions, Crop Provisions, CEPP, if 
applicable, and Special Provisions.
    (e) Acceptance of all the changes will be conclusively presumed in 
the absence of notice from you to change or cancel your insurance 
coverage.

                             4. 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;
    (2) That is a type not generally recognized for the area;
    (3) For which the information necessary for insurance (projected 
price, expected county yield, premium rate, etc.) is not included in the 
actuarial documents;
    (4) That is a volunteer crop;
    (5) 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);
    (6) That is planted for experimental purposes; or
    (7) 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 specific 
crop, type, or practice is not insurable, it does not mean all other 
crops, types, or practices are insurable. To be insurable, the use of 
such crop, type, or

[[Page 93]]

practice must be a good faming practice, have been widely used in the 
county, and meet all the conditions in the Basic Provisions, the Crop 
Provisions, Special Provisions, and the actuarial documents.

                          5. Insurable Acreage

    (a) Except as provided in section 5(c), the insurable acreage is all 
of the acreage of the insured crop for which a premium rate is provided 
by the actuarial documents, in which you have a share, and which is 
planted in the county listed on your accepted application. The dollar 
amount of insurance per acre, amount of premium, and indemnity will be 
calculated separately for each crop, type, and practice shown on the 
actuarial documents.
    (1) The acreage must have been planted and harvested (grazing is not 
considered harvested for the purposes of this section) or insured 
(excluding pasture, rangeland, and forage, vegetation and rainfall 
insurance or any other specific policy listed in the Special Provisions) 
in at least one of the three previous crop years unless:
    (i) Such acreage was not planted:
    (A) In at least two of the three previous crop years to comply with 
any other USDA program;
    (B) Due to the crop rotation, the acreage would not have been 
planted in the previous three years (e.g., a crop rotation of corn, 
soybeans, and alfalfa; and the alfalfa remained for four years before 
the acreage was planted to corn again); or
    (C) Because a perennial crop was on the acreage in at least two of 
the previous three crop years;
    (ii) Such acreage constitutes five percent or less of the insured 
planted acreage of the crop, type and practice as shown on the actuarial 
documents in the county;
    (iii) Such acreage was not planted or harvested because it was 
pasture or rangeland and the crop to be insured is also pasture or 
rangeland; or
    (iv) The Crop Provisions or Special Provisions specifically allow 
insurance for such acreage.
    (b) Only the acreage planted to the insured crop on or before the 
final planting date, as shown in the actuarial documents, and reported 
by the acreage reporting date and physically located in the county shown 
on your accepted application will be insured.
    (c) We will not insure any acreage (and any uninsured acreage and 
production from uninsured acreage will not be included for the purposes 
of establishing the final county yield):
    (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 we determine you have failed to follow good farming 
practices for the insured crop;
    (3) 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);
    (4) 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 13 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 (e.g., 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 ARPI, 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 ARPI, or before planting the second crop if it is insured 
under any other policy;
    (ii) If the first insured crop is not insured under ARPI, at the 
time the first insured crop acreage is released by us

[[Page 94]]

or another insurance provider who insures the first insured crop (if no 
acreage in the first insured crop unit is released, this election must 
be made by the earlier of acreage reporting date for the second crop or 
when you sign the claim for the first insured crop);
    (iii) If you fail to provide a notice as specified in section 
5(c)(5)(i) or 5(c)(5)(ii), 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;
    (iv) 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
    (v) You must report the crop acreage that will not be insured on the 
applicable acreage report; and
    (5) 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 organic agricultural experts 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 the same crop year in at least two of the last four 
years in which the insured crop was grown on the acreage; 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 5(c)(5)(i).
    (d) If the Governor of a State designated within the Prairie Pothole 
National Priority Area elects to make section 508(o) of the Act 
effective for the State, any native sod acreage greater than five acres 
located in a county contained within the Prairie Pothole National 
Priority Area that has been tilled after May 22, 2008, is not insurable 
for the first five crop years of planting following the date the native 
sod acreage is tilled.
    (1) If the Governor makes this election after you have received an 
indemnity or other payment for native sod acreage, you will be required 
to repay the amount received and any premium for such acreage will be 
refunded to you.
    (2) If we determine you have tilled less than five acres of native 
sod a year for more than one crop year, we will add all the native sod 
acreage tilled after May 22, 2008, and all such acreage will be 
ineligible for insurance for the first five crop years of planting 
following the date the cumulative native sod acreage tilled exceeds five 
acres.
    6. Coverage, Coverage Levels, Protection Factor, and Policy 
Protection
    (a) For all acreage of the insured crop in the county, you must 
select the same plan of insurance (e.g., all Area Revenue Protection, 
all Area Revenue Protection with the Harvest Price Exclusion, or all 
Area Yield Protection), if such plans are available on the actuarial 
documents.
    (b) You must choose a protection factor:
    (1) Unless otherwise specified in the Special Provisions from a 
range of 80 percent to 120 percent;
    (2) As a whole percentage from amounts specified; and
    (3) For each crop, type, and practice (you may choose a different 
protection factor for each crop, type, and practice).
    (c) You may select any coverage level shown on the actuarial 
documents for each crop, type, and practice.
    (1) For Area Revenue Protection and Area Revenue Protection with the 
Harvest Price Exclusion:
    (i) CAT level of coverage is not available; and

[[Page 95]]

    (ii) With respect to additional level of coverage, you may select 
any coverage level specified in the actuarial documents for each crop, 
type, and practice. For example: You may choose a 75 percent coverage 
level for one crop, type, and practice (such as corn irrigated practice) 
and a 90 percent coverage level for another crop, type, and practice 
(corn non-irrigated practice).
    (2) For Area Yield Protection:
    (i) CAT level of coverage is available, and you may select the CAT 
level of coverage for any crop, type, and practice;
    (ii) With respect to additional level of coverage, you may select 
any coverage level specified in the actuarial documents for each crop, 
type, and practice. For example: You may choose a 75 percent coverage 
level for one crop, type, and practice (corn irrigated practice) and a 
90 percent coverage level for another crop, type, and practice (corn 
non-irrigated practice); and
    (iii) You may have CAT level of coverage on one type and practice 
shown on the actuarial documents for the crop, and additional coverage 
on another type and practice for the same crop. You may also have 
different additional levels of coverage by type and practice.
    (d) You may change the plan of insurance, protection factor, or 
coverage level, for the following crop year by giving written notice to 
us not later than the sales closing date for the insured crop.
    (e) Since this is a continuous policy, if you do not select a new 
plan of insurance, protection factor, and coverage level on or before 
the sales closing date, we will assign the same plan of insurance, 
protection factor, and coverage level as the previous year.
    (f) Policy protection for ARPI plans of insurance is calculated as 
follows:
    (1) Multiply the dollar amount of insurance per acre for each crop, 
type, and practice by the number of acres insured for such crop, type 
and practice; and
    (2) Multiply the result of paragraph (1) by your share.
    (g) If the projected price cannot be calculated for the current crop 
year under the provisions contained in the CEPP and you previously chose 
Area Revenue Protection or Area Revenue Protection with the Harvest 
Price Exclusion:
    (1) Area Revenue Protection and Area Revenue Protection with the 
Harvest Price Exclusion will not be provided and you will automatically 
be covered under the Area Yield Protection plan of insurance for the 
current crop year unless you cancel your coverage by the cancellation 
date or change your plan of insurance by the sales closing date;
    (2) Notice of availability of the projected price will be provided 
on RMA's Web site by the date specified in the applicable projected 
price definition contained in the CEPP;
    (3) The projected price will be determined by FCIC and will be 
released by the date specified in the applicable projected price 
definition contained in the CEPP; and
    (4) Your coverage will automatically revert back to Area Revenue 
Protection or Area Revenue Protection with the Harvest Price Exclusion, 
whichever is applicable, for the next crop year that revenue protection 
is available unless you cancel your coverage by the cancellation date or 
change your plan of insurance by the sales closing date.

                7. Annual Premium and Administrative Fees

    (a) The administrative fee:
    (1) For CAT level of coverage will be an amount specified in the CAT 
Endorsement or the Special Provisions, as applicable;
    (2) For additional levels of coverage is $30, or an amount specified 
in the Special Provisions, as applicable;
    (3) Is payable to us on the premium billing date for the crop;
    (4) Must be paid no later than the time premium is due or the amount 
will be considered a delinquent debt;
    (5) If you select coverage in accordance with section 6(c)(2)(iii):
    (i) Will be charged for both CAT and additional level of coverage if 
a producer elects both for the crop in the county; but
    (ii) Will not be more than one additional and one CAT administrative 
fee no matter how many different coverage levels you choose for 
different type and

[[Page 96]]

practice combinations you insure for the crop in the county;
    (6) 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;
    (7) 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, civil and 
administrative sanctions; and
    (8) If not paid when due, may make you ineligible for crop insurance 
and certain other USDA benefits.
    (b) The premium is based on the policy protection calculated in 
section 6(f).
    (c) The information needed to determine the premium rate and any 
premium adjustment percentages that may apply are contained in the 
actuarial documents.
    (d) To calculate the premium and subsidy amounts for ARPI plans of 
insurance:
    (1) Multiply your policy protection from section 6(f) by the 
applicable premium rate and any premium adjustment percentages that may 
apply;
    (2) Multiply the result of paragraph (1) by the applicable subsidy 
factor (This is the amount of premium FCIC will pay);
    (3) Subtract the result of paragraph (2) from the result of 
paragraph (1) to calculate the amount of premium you will pay.
    (e) The amount of premium calculated in accordance with section 
7(d)(3) is earned and payable at the time coverage begins. You will be 
billed for such premium and applicable administrative fees not earlier 
than the premium billing date specified in the actuarial documents.
    (f) If the amount of premium calculated in accordance with section 
7(d)(3) and administrative fees you are required to pay for any acreage 
exceeds the amount of policy protection 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).
    (g) Premium or administrative fees owed by you will be offset from 
an indemnity due you in accordance with section 2(j).

                   8. Report of Acreage and Production

    (a) An annual acreage report must be submitted to us on our form for 
each insured crop (separate lines for each type and practice) in the 
county on or before the acreage reporting date contained in the 
actuarial documents.
    (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) The amount of acreage of the crop in the county (insurable and 
not insurable) in which you have a share, the last date any acreage of 
the insured crop was planted, and the number of acres planted by such 
date (Acreage initially planted after the final planting date must be 
reported as uninsurable);
    (2) Your share at the time coverage begins;
    (3) The practice;
    (4) The type; and
    (5) The land identifier for the crop acreage (e.g., legal 
description, FSA farm number or common land unit number if provided to 
you by FSA, etc.) as required on our form.
    (d) We will not insure any acreage of the insured crop planted after 
the final planting date.
    (e) Regarding the ability to revise an acreage report you have 
submitted to us:
    (1) You cannot revise any information pertaining to the planted 
acreage after the acreage reporting date without our consent;
    (2) Consent may only be provided if the information on the acreage 
report is clearly transposed, or you provide adequate evidence that we 
have or

[[Page 97]]

someone from USDA has committed an error regarding the information on 
your acreage report; and
    (3) The provisions in section 8(e)(1) and (2) also pertain to land 
acquired after the acreage reporting date, and we may choose to insure 
or not insure the acreage, provided the crop meets the requirements in 
section 5 and section 8. This requirement does not apply to any acreage 
acquired through a transfer of coverage in accordance with section 17.
    (f) Except as provided in section 8(h), your premium and indemnity, 
if any, will be based on your insured acreage and share on your acreage 
report or section 8(e), if applicable.
    (g) 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 8.
    (h) 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) Except as provided in section 8(h)(2), if you submit information 
on any report that is different than what is determined to be correct 
and the information reported on the acreage report results in:
    (i) A lower liability than the actual, correct liability determined, 
the policy protection will be reduced to an amount consistent with the 
information reported on the acreage report; or
    (ii) A higher liability than the actual, correct liability 
determined, the information contained in the acreage report will be 
revised to be consistent with the correct information.
    (2) If your share is misreported and the share is:
    (i) Under-reported at the time of the acreage report, any claim will 
be determined using the share you reported; or
    (ii) Over-reported at the time of the acreage report, any claim will 
be determined using the share we determine to be correct.
    (i) 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.
    (j) You may request an acreage measurement from FSA or a business 
that provides such measurement service prior to the acreage reporting 
date, submit documentation of such request and an acreage report with 
estimated acreage by the acreage reporting date, and if the acreage 
measurement shows the estimated acreage was incorrect, we will revise 
your acreage report to reflect the correct acreage:
    (1) If an acreage measurement is only requested for a portion of the 
insured crop, type, and practice, you must separately designate the 
acreage for which an acreage measurement has been requested;
    (2) If an acreage measurement is not provided to us by the time the 
final county revenue or final county yield, as applicable, is 
calculated, we may:
    (i) Elect to measure the acreage, and finalize your claim in 
accordance with applicable policy provisions;
    (ii) Defer finalization of the claim until the measurement is 
completed with the understanding that if you fail to provide the 
measurement prior to the termination date, your claim will not be paid; 
or
    (iii) Finalize the claim in accordance with applicable policy 
provisions after you provide the acreage measurement to us; and
    (3) Premium will still be due in accordance with sections 2(k) and 7 
(If the acreage is not measured as specified in section 8(j) and the 
acreage measurement is not provided to us at least 15 days prior to the 
premium billing date, your premium will be based on the estimated 
acreage and will be revised, if necessary, when the acreage measurement 
is provided);
    (4) If the acreage measurement is not provided by the termination 
date, you will be precluded from providing any

[[Page 98]]

estimated acreage for all subsequent crop years;
    (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 
sections 8(g) and 8(j), the information on the initial acreage report 
will not be considered misreported for the purposes of section 8(h).
    (k) If you do not submit an acreage report by the acreage reporting 
date, or if you fail to report all acreage, we may elect to determine 
the insurable acreage, by crop, type, practice, and share, or to deny 
liability on such acreage. If we deny liability for the unreported 
acreage, no premium will be due on such acreage and no indemnity will be 
paid.
    (l) An annual production report must be submitted, unless otherwise 
specified in the Special Provisions, to us on our form for each insured 
crop (separate lines for each type and practice) in the county by the 
production reporting date specified in the actuarial documents.
    (m) Unless otherwise authorized by FCIC, if you do not submit a 
production report to us by the production reporting date specified in 
the actuarial documents, your protection factor for your policy in the 
following crop year will be limited to the lowest protection factor 
available.
    (n) You must certify to the accuracy of the information on your 
production report and if you fail to accurately report your production, 
you will be subject to the provisions in 8(m), unless the information is 
corrected:
    (1) On or before the production reporting date; or
    (2) Because the incorrect information was the result of our error or 
the error of someone from USDA.
    (o) If you do not have records to support the information on your 
production report, you will be subject to the provisions in 8(m).
    (p) At any time we discover you have misreported any material 
information on your production report, you will be subject to the 
provisions in 8(m).
    (q) If you do not submit a production report or you misreported your 
production report and you switch to another plan of insurance in the 
following crop year, you will be subject to having a yield assigned in 
accordance with FCIC procedures.
    (r) Errors in reporting acreage, share, and other information 
required in this section, may be corrected by us at the time we become 
aware of such errors. However, the provisions regarding incorrect 
information in this section will apply.

                            9. Share Insured

    (a) Insurance will attach:
    (1) Only if the person completing the application has a share in the 
insured crop; and
    (2) Only to that person's share, except that insurance may attach to 
another person's share of the insured crop if the other person has a 
share of the crop and:
    (i) The application clearly states the insurance is requested for a 
person other than an individual (e.g., a partnership or a joint 
venture); or
    (ii) The application clearly states you as a landlord will insure 
your tenant's share, or you as a tenant will insure your landlord's 
share. If you as a landlord will insure your tenant's share, or you as a 
tenant will insure your landlord's share, you must provide evidence of 
the other party's approval (lease, power of attorney, etc.) and such 
evidence will be retained by us:
    (A) You also must clearly set forth the percentage shares of each 
person on the acreage report; and
    (B) For each landlord or tenant, you must report the landlord's or 
tenant's SSN, EIN, or other identification number we assigned for the 
purposes of this policy, as applicable.
    (b) With respect to your share:
    (1) We will consider included in your share under your policy, any 
acreage or interest reported by or for:
    (i) Your spouse, unless such spouse can prove he/she has a separate 
farming operation, which includes, but is

[[Page 99]]

not limited to, separate land (transfers of acreage from one spouse to 
another is not considered separate land), separate capital, separate 
inputs, separate accounting, and separate maintenance of proceeds; or
    (ii) Your child who resides in your household or any other member of 
your household, unless such child or other member of the household can 
demonstrate such person has a separate share in the crop (Children who 
do not reside in your household are not included in your share); and
    (2) If it is determined that the spouse, child or other member of 
the household has a separate policy but does not have a separate farming 
operation or share of the crop, as applicable:
    (i) The policy for the spouse or child or other member of the 
household will be void and the policy remaining in effect will be 
determined in accordance with section 18(c)(1) and (2);
    (ii) The acreage or share reported under the policy that is voided 
will be included under the remaining policy; and
    (iii) No premium will be due and no indemnity will be paid for the 
voided policy.
    (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.

                          10. Insurance Period

    Unless specified otherwise in the Crop Provisions, coverage begins 
at the later of:
    (a) 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); or
    (b) The date the insured crop is planted.

                           11. Causes of Loss

    (a) ARPI provides protection against loss of revenue or against loss 
of yield in a county resulting from natural causes of loss that cause 
the final county yield or the final county revenue to be less than the 
trigger yield or the trigger revenue.
    (b) Failure to follow good farming practices, or planting or 
producing a crop using a practice that has not been widely recognized as 
used to establish the expected county yield, is not an insurable cause 
of loss under ARPI.

  12. Triggers, Final Policy Protection, Payment Factor, and Indemnity 
                              Calculations

    (a) Individual farm revenues and yields are not considered when 
calculating losses under ARPI. It is possible that your individual farm 
may experience reduced revenue or reduced yield and you do not receive 
an indemnity under ARPI.
    (b) To calculate the trigger revenue:
    (1) For Area Revenue Protection, multiply the expected county yield 
by the greater of the projected or harvest price and by the coverage 
level.
    (2) For Area Revenue Protection with the Harvest Price Exclusion, 
multiply the expected county yield by the projected price and by the 
coverage level.
    (c) To calculate the Trigger Yield for Area Yield Protection, 
multiply the expected county yield by the coverage level.
    (d) If the harvest price cannot be calculated for the current crop 
year under the provisions contained in the CEPP:
    (1) Revenue protection will continue to be available; and
    (2) The harvest price will be determined and announced by FCIC.
    (e) The final policy protection for:
    (1) Area Revenue Protection is calculated by:
    (i) Multiplying the expected county yield by the greater of the 
harvest price or the projected price;
    (ii) Multiplying the result of subparagraph (i) by your protection 
factor; and
    (iii) Multiplying the result of subparagraph (ii) by your acres and 
by your share.
    (2) Area Revenue Protection with the Harvest Price Exclusion and 
Area Yield

[[Page 100]]

Protection are equal to the policy protection and are calculated by:
    (i) Multiplying the expected county yield by the projected price;
    (ii) Multiplying the result of subparagraph (i) by your protection 
factor; and
    (iii) Multiplying the result of subparagraph (ii) by your acres and 
by your share.
    (f) An indemnity is due for:
    (1) Area Revenue Protection and Area Revenue Protection with the 
Harvest Price Exclusion if the final county revenue is less than the 
trigger revenue.
    (2) Area Yield Protection if the final county yield is less than the 
trigger yield.
    (g) The payment factor is calculated for:
    (1) Area Revenue Protection by:
    (i) Subtracting the final county revenue from the trigger revenue to 
determine the amount of loss;
    (ii) Multiplying the expected county yield by the greater of the 
projected or harvest price and by the loss limit factor;
    (iii) Subtracting the result of subparagraph (ii) from the trigger 
revenue; and
    (iv) Dividing the result of subparagraph (i) by the result of 
subparagraph (iii) to obtain the payment factor.
    (2) Area Revenue Protection with the Harvest Price Exclusion by:
    (i) Subtracting the final county revenue from the trigger revenue to 
determine the amount of loss;
    (ii) Multiplying the expected county yield by the projected price 
and by the loss limit factor;
    (iii) Subtracting the result of subparagraph (ii) from the trigger 
revenue; and
    (iv) Dividing the result of subparagraph (i) by the result of 
subparagraph (iii) to obtain the payment factor.
    (3) Area Yield Protection by:
    (i) Subtracting the final county yield from the trigger yield to 
determine the amount of loss;
    (ii) Multiplying the expected county yield by the loss limit factor;
    (iii) Subtracting the result of subparagraph (ii) from the trigger 
yield; and
    (iv) Dividing the result of subparagraph (i) by the result of 
subparagraph (iii) to obtain the payment factor.
    (h) Indemnities for all three ARPI plans of insurance are calculated 
by multiplying the final policy protection by the payment factor.
    (i) Indemnities for all three ARPI plans of insurance are calculated 
following release of the final county yield and harvest price as 
specified in the Crop Provisions.

                  13. Indemnity and Premium Limitations

    (a) With respect to acreage where you are due an indemnity for your 
first insured crop in the crop year, except in the case of double 
cropping described in section 13(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 13(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 13(a)(2)(ii).
    (b) In lieu of the priority contained in the Agreement to Insure 
section, which states that the Crop Provisions have priority over the 
Basic Provisions, the reduction in the amount of

[[Page 101]]

indemnity and premium specified in section 13(a) of these Basic 
Provisions, as applicable, will apply to any premium owed or indemnity 
paid in accordance with the Crop Provisions, and any applicable 
endorsement. This will apply:
    (1) Even if another person plants the second crop on any acreage 
where the first insured crop was planted; or
    (2) 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 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 organic agricultural experts 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 13(c).
    (1) If the records you provided are from acreage you double cropped 
in at least two of the last four crop years, you may apply your history 
of double cropping to any acreage of the insured crop in the county 
(e.g., if you have double cropped 100 acres of wheat and soybeans in the 
county and you acquire an additional 100 acres in the county, you can 
apply that history of double cropped acreage to any of the 200 acres in 
the county as long as it does not exceed 100 acres); or
    (2) If the records you provided are from acreage that another 
producer double cropped in at least two of the last four crop years, you 
may only use the history of double cropping for the same physical acres 
from which double cropping records were provided (e.g., if a neighbor 
has double cropped 100 acres of wheat and soybeans in the county and you 
acquire your neighbor's 100 double cropped acres and an additional 100 
acres in the county, you can only apply your neighbor's history of 
double cropped acreage to the same 100 acres that your neighbor double 
cropped).
    (e) 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.

                      14. Organic Farming Practices

    (a) Insurance will be provided for a crop grown using an organic 
farming practice for only those acres of the crop that meet the 
requirements for an organic crop on the acreage reporting date.
    (b) If an organic type or practice is shown on the actuarial 
documents, the projected price, dollar amount of insurance, policy 
protection, premium rate, etc., for such organic crop, type and practice 
will be used unless otherwise

[[Page 102]]

specified in the actuarial documents. If an organic type or practice is 
not shown on the actuarial documents, the projected price, dollar amount 
of insurance, policy protection, premium rate, etc., for the non-organic 
crop, type and practice will be used.
    (c) If insurance is provided for an organic farming practice as 
specified in section 14(a) and (b), 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.
    (d) 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 
14(d)(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, buffer zone, and 
acreage not maintained under organic management.

                               15. Yields

    (a) The data source used for the county yields will be based on the 
best available data and will be specified in the actuarial documents.
    (b) Except as otherwise provided in this section, the data source 
used to establish the expected county yield will be the data source used 
to establish the final county yield.
    (c) If the data source used to establish the expected county yield 
is not able to provide credible data to establish the final county yield 
because the data is no longer available, credible, or reflect changes 
that may have occurred after the yield was established;
    (1) FCIC will determine the final county yield based on the most 
accurate data available from subsection (g), as determined by FCIC; or
    (2) To the extent that practices used during the crop year change 
from those upon which the expected county yield is based, the final 
county yield may be adjusted to reflect the yield that would have 
resulted but for the change in practice. For example, if the county is 
traditionally 90 percent irrigated and 10 percent non-irrigated, but 
this year the county is now 50 percent irrigated and 50 percent non-
irrigated, the final county yield will be adjusted to an amount as if 
the county had 90 percent irrigated acreage.
    (d) If the final county yield is established from a data source 
other than that used to establish the expected county yield, FCIC will 
provide notice of the data source and the reason for the change at the 
time the final county yield is published.
    (e) If yields are based on NASS data, the final county yield will be 
the most current NASS yield at the time FCIC determines the yield in 
accordance with the payment dates section of the applicable Crop 
Provisions.
    (f) The final county yield determined by FCIC is considered final 
for the purposes of establishing whether an indemnity is due and will 
not be revised for any reason.
    (g) Yields used under this insurance program for a crop, may be 
based on:
    (1) Data collected by NASS, if elected by FCIC, regardless of 
whether such data is published or unpublished; or
    (2) Crop insurance data, other USDA data, or other data sources, if 
elected by FCIC.

                       16. Assignment of Indemnity

    (a) You may assign your right to an indemnity for the crop year only 
to creditors or other persons to whom you have a financial debt or other 
pecuniary obligation. You may be required to provide proof of the debt 
or other pecuniary obligation before we will accept the assignment of 
indemnity.
    (b) All assignments must be on our form and must be provided to us. 
Each assignment form may contain more than one creditor or other person 
to whom you have a financial debt or other pecuniary obligation.

[[Page 103]]

    (c) Unless you have provided us with a properly executed assignment 
of indemnity, we will not make any payment to a lienholder or other 
person to whom you have a financial debt or other pecuniary obligation 
even if you may have a lien or other assignment recorded elsewhere. 
Under no circumstances will we be liable:
    (1) To any lienholder or other person to whom you have a financial 
debt or other pecuniary obligation where you have failed to include such 
lienholder or person on a properly executed assignment of indemnity 
provided to us; or
    (2) To pay to all lienholders or other persons to whom you have a 
financial debt or other pecuniary obligation any amount greater than the 
total amount of indemnity owed under the policy.
    (d) If we have received the properly executed assignment of 
indemnity form:
    (1) Only one payment will be issued jointly in the names of all 
assignees and you; and
    (2) Any assignee will have the right to submit all notices and forms 
as required by the policy.

             17. 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.
    (a) We will not be liable for any more than the liability determined 
in accordance with your policy that existed before the transfer 
occurred.
    (b) The transfer of coverage rights must be on our form and will not 
be effective until approved by us in writing.
    (c) Both you and the transferee are jointly and severally liable for 
the payment of the premium and administrative fees.
    (d) The transferee has all rights and responsibilities under this 
policy consistent with the transferee's interest.

                           18. Other Insurance

    (a) 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.
    (b) 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.
    (c) 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 CAT 
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 CAT 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.

                          19. Crops as Payment

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

                               20. 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.
    (1) Notices required to be given immediately may be by telephone or 
in person and confirmed in writing.
    (2) The time the notice is provided will be determined by the time 
of our receipt of the written notice.
    (3) If the date by which you are required to submit a report or 
notice

[[Page 104]]

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 policy provisions, notices, and communications required to 
be sent by us to you will be:
    (1) Provided by electronic means, unless:
    (i) We do not have the ability to transmit such information to you 
by electronic means; or
    (ii) You elect to receive a paper copy of such information;
    (2) Sent to the location specified in your records with your crop 
insurance agent; and
    (3) Will be conclusively presumed to have been received by you.

      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 (authorized employee of USDA), 
have the right to examine the insured crop and all records related to 
the insured crop and this policy, 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 authorized employee of USDA, complete records pertaining to the 
planting, acres, share, replanting, inputs, production, harvesting and 
disposition of the insured crop for a period of three years after the 
end of the crop year or three years after the date of final payment of 
indemnity, whichever is later. This requirement also applies to all such 
records for acreage that is not insured.
    (c) We, or any authorized employee of USDA, 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, acres, share, 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 authorized employee of USDA 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 all such records will result in a determination that no 
indemnity is due for the crop year in which such failure occurred.

[FCIC Policies]

                           22. 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 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 
actuarial documents, provided a minimum of 30 days have passed from the 
premium billing date.
    (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;

[[Page 105]]

    (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.
    (e) 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.

[Reinsured policies]

                           22. 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.
    (1) 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 actuarial 
documents, provided a minimum of 30 days have passed from the premium 
billing date.
    (2) 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 for any CAT policy and we will collect any 
unpaid administrative fees and any interest owed thereon for additional 
coverage policies.
    (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.
    (1) 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.
    (2) 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.

[FCIC Policies]

   23. Appeal, Reconsideration, and Administrative and Judicial Review

    (a) All determinations required by the policy will be made by us. 
All expected county yields and final county yields are calculated by us 
in accordance with section 15. However, calculations of expected county 
yields and final county yields are matters of general applicability.
    (1) Any matter of general applicability is not subject to appeal 
under 7 CFR part 400, subpart J or 7 CFR part 11.
    (2) Your only remedy is judicial review but if you want to seek 
judicial review of any determination by us that is a matter of general 
applicability,

[[Page 106]]

you must request a determination of non-appealability from the Director 
of the National Appeals Division in accordance with 7 CFR 11.6 before 
seeking judicial review.
    (3) The timeframe to request a determination of non-appealability 
from the Director of the National Appeals Division is not later than 30 
days after the date the yields are published on the RMA Web site.
    (b) If you disagree with our determinations:
    (1) Except for determinations specified in section 23(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 23(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 policies]

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

    (a) All expected county yields and final county yields are 
calculated by FCIC in accordance with section 15. However, calculations 
of expected county yields and final county yields are matters of general 
applicability.
    (1) Any matter of general applicability is not subject to appeal 
under 7 CFR part 400, subpart J or 7 CFR part 11.
    (2) Your only remedy is judicial review but if you want to seek 
judicial review of any FCIC determination that is a matter of general 
applicability, you must request a determination of non-appealability 
from the Director of the National Appeals Division in accordance with 7 
CFR 11.6 before seeking judicial review.
    (3) The timeframe to request a determination of non-appealability 
from the Director of the National Appeals Division is not later than 30 
days after the date the yields are published on RMA's Web site.
    (b) With respect to good farming practices:
    (1) We will make preliminary decisions regarding what constitutes a 
good farming practice.
    (2) If you disagree with our decision of what constitutes a good 
farming practice, you must request a determination from FCIC of what 
constitutes a good farming practice.
    (3) If you do not agree with any determination made by FCIC 
regarding what constitutes a good farming practice:
    (i) 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; or
    (ii) You may file suit against FCIC as follows:
    (A) You are not required to request reconsideration from FCIC before 
filing suit;
    (B) Any suit must be brought against FCIC in the United States 
district court for the district in which the insured acreage is located; 
and
    (C) Suit must be filed against FCIC not later than one year after 
the date:

[[Page 107]]

    (1) Of the determination made by FCIC regarding what constitutes a 
good farming practice; or
    (2) Reconsideration is completed, if reconsideration was requested 
under section 23(b)(2)(i).
    (c) If you elect to bring suit against FCIC after seeking a 
Director's Review in accordance with section 23(a), such suit must be 
filed against FCIC in the United States district court for the district 
in which the insured acreage is located not later than one year after 
the date of the decision rendered by the Director. Under no 
circumstances can you recover any punitive, compensatory or any other 
damages from FCIC.
    (d) With respect to any other determination under this policy:
    (1) If you and we fail to agree on any determination not covered by 
sections 23(a) and (c), the disagreement may be resolved through 
mediation. To resolve any dispute through mediation, you and we must 
both:
    (i) Agree to mediate the dispute;
    (ii) Agree on a mediator; and
    (iii) Be present or have a designated representative who has 
authority to settle the case present, at the mediation.
    (2) 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), unless otherwise stated in this subsection or 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.
    (3) 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 determination that is a matter of general applicability. However, 
before such interpretation may be challenged in the courts, you must 
request a determination of non-appealability from the Director of the 
National Appeals Division not later than 30 days after the date the 
interpretation was published on RMA's Web site.
    (4) 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.
    (i) The statement must also include any amounts awarded for 
interest.
    (ii) Failure of the arbitrator to provide such written statement 
will result in the nullification of all determinations of the 
arbitrator.
    (iii) 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.
    (5) Regardless of whether mediation is elected:
    (i) 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;
    (ii) If you fail to initiate arbitration in accordance with section 
23(d)(5)(i) and complete the process, you will not be able to resolve 
the dispute through judicial review;
    (iii) If arbitration has been initiated in accordance with section 
23(d)(5)(i) 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
    (iv) 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

[[Page 108]]

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 on all parties.
    (6) Any decision rendered in arbitration is binding on you and us 
unless judicial review is sought in accordance with section 
23(d)(5)(iii). Notwithstanding any provision in the rules of the AAA, 
you and we have the right to judicial review of any decision rendered in 
arbitration.
    (e) 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 27. If there are conflicts between any rules of the AAA and 
the provisions of your policy, the provisions of your policy will 
control.
    (f) Except as provided in section 23(g), 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 24.
    (g) In a judicial review only, you may recover attorney 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 for Compliance/Stop 0806, 1400 
Independence Avenue, SW., Washington, DC 20250-0806.

                        24. 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 final county 
yield or final county revenue release date as specified in the 
applicable Crop Provision.
    (a) 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.
    (b) 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.

                        25. 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.

                   26. 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.
    (a) Your insurance policy will be canceled if you are determined, by 
the appropriate Agency, to be in violation of these provisions.
    (b) 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 equal to 20 percent 
of the premium paid or to be paid by you.

              27. 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,

[[Page 109]]

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.

              28. 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.
    (b) Even though the policy is void, you will still be required to 
pay 20 percent of the premium that you would otherwise be required to 
pay 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.
    (e) If you willfully and intentionally provide false or inaccurate 
information to us or FCIC, or you fail to comply with a requirement of 
FCIC, in accordance with 7 CFR part 400, subpart R, FCIC may impose on 
you:
    (1) A civil fine for each violation in an amount not to exceed the 
greater of:
    (i) The amount of the pecuniary gain obtained as a result of the 
false or inaccurate information provided or the noncompliance with a 
requirement of this title; or
    (ii) $10,000; and
    (2) A disqualification for a period of up to 5 years from receiving 
any monetary or nonmonetary benefit provided under each of the 
following:
    (i) Any crop insurance policy offered under the Act;
    (ii) The Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
7333 et seq.);
    (iii) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.);
    (iv) The Commodity Credit Corporation Charter Act (15 U.S.C. 714 et 
seq.);
    (v) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.);
    (vi) Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et 
seq.);
    (vii) The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 
et seq.); and
    (viii) Any federal law that provides assistance to a producer of a 
commodity affected by a crop loss or a decline in the prices of 
commodities.

                          29. Multiple Benefits

    (a) If you are eligible to receive an indemnity under an additional 
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) Any amount received for the same loss from any USDA program, in 
addition to the crop insurance payment, will not exceed the difference 
between the crop insurance payment and the amount of the loss, unless 
otherwise provided by law. The amount of loss is the difference between 
the total value of the insured crop before the loss and the total value 
of the insured crop after the loss.
    (c) FSA or another USDA agency, as applicable, will determine and 
pay the additional amount due you for any applicable USDA program, after 
first considering the amount of any crop insurance indemnity.

                              30. Examples

    The following are examples of the calculation of the premium, amount 
of insurance and indemnity for each of the three plans of insurance 
under ARPI. Your information will likely be different and you should 
consult the actuarial documents in your county and the policy 
information. The following facts are for illustration purposes only and 
apply to each of the examples.

[[Page 110]]

    Producer A farms 100 acres in county X and has a 100 percent share, 
or 1.000, in those acres. From the actuarial documents in county X, 
Producer A elects the 75 percent coverage level and a protection factor 
of 110 percent or 1.10. The actuarial documents in county X also show 
that the expected county yield is 141.4 bushels per acre, the projected 
price is $4.00, and the expected county revenue is $565.60. The subsidy 
factor for the 75 percent coverage level is .55 for revenue coverage and 
.59 for yield coverage. The loss limit factor is 18 percent or .18. At 
the end of the insurance period, for county X, FCIC releases a harvest 
price of $4.57 and a final county yield for county X of 75.0 bushels.
    The premium rate is based on the published volatility factor and for 
this example is .0166 for Area Revenue Protection, .0146 for Area 
Revenue Protection with Harvest Price Exclusion, and .0116 for Area 
Yield Protection.
    Area Revenue Protection example:

        Step 1: Calculate the Dollar Amount of Insurance per Acre

Formula: Expected county yield times projected price times protection 
    factor equals dollar amount of insurance
141.4 bushels x $4.00 x 1.1 = $622.16 dollar amount of insurance per 
acre

                 Step 2: Calculate the Policy Protection

Formula: Dollar amount of insurance per acre times acres times share 
    equals policy protection
$622.16 x 100.0 x 1.000 = $62,216 policy protection

                   Step 3: Calculate the Total Premium

Formula: Policy protection times premium rate equals total premium
$62,216 x .0166 = $1,033 total premium

                  Step 4: Calculate the Subsidy amount

Formula: Total premium times subsidy factor equals subsidy
$1,033 x .55 = $568 subsidy

                 Step 5: Calculate the Producer Premium

Formula: Total premium minus subsidy equals producer premium
$1,033 - $568 = $465 producer premium

              Step 6: Calculate the Final Policy Protection

Formula: Expected county yield times (greater of projected price or 
    harvest price) times protection factor times acres times share 
    equals Final Policy Protection
141.4 bushels x $4.57 x 1.10 x 100.0 x 1.000 = $71,082 final policy 
protection

               Step 7: Calculate the Final County Revenue

Formula: Final county yield times harvest price equals final county 
    revenue
75.0 bushels x $4.57 = $342.75 final county revenue

                  Step 8: Calculate the Trigger Revenue

Formula: Expected county yield times (greater of projected price or 
    harvest price) times coverage level equals trigger revenue
141.4 bushels x $4.57 x .75 = $484.65 trigger revenue

                  Step 9: Calculate the Payment Factor

Formula: (Trigger revenue minus final county revenue) divided by 
    (trigger revenue minus (expected county yield times the greater of 
    projected or harvest price times loss limit factor)) equals payment 
    factor
($484.65 - $342.75) / ($484.65-(141.4 x $4.57 x .18)) = .385 payment 
factor

                    Step 10: Calculate the Indemnity

Formula: Final policy protection times payment factor equals indemnity
$71,082 x .385 = $27,367 indemnity
    Area Revenue Protection with Harvest Price Exclusion example:

        Step 1: Calculate the Dollar Amount of Insurance per Acre

Formula: Expected county yield times projected price times protection 
    factor equals dollar amount of insurance
141.4 bushels x $4.00 x 1.10 = $622.16 dollar amount of insurance per 
acre

                 Step 2: Calculate the Policy Protection

Formula: Dollar amount of insurance per acre times acres times share 
    equals policy protection
$622.16 x 100.0 x 1.000 = $62,216 policy protection

[[Page 111]]

                   Step 3: Calculate the Total Premium

Formula: Policy protection times rate equals total premium
$62,216 x .0146 rate = $908 total premium

                  Step 4: Calculate the Subsidy Amount

Formula: Total premium times subsidy factor equals subsidy
$908 x .55 = $499 subsidy

                 Step 5: Calculate the Producer Premium

Formula: Total premium minus subsidy equals producer premium
$908 - $499 = $409 producer premium

              Step 6: Calculate the Final Policy Protection

Use the policy protection amount calculated at the beginning of the 
    insurance period in Step 2
$62,216 policy protection

               Step 7: Calculate the Final County Revenue

Formula: Final county yield times harvest price equals final county 
    revenue
75.0 bushels x $4.57 = $342.75 final county revenue

                  Step 8: Calculate the Trigger Revenue

Formula: Expected county yield times projected price times coverage 
    level equals trigger revenue
141.4 bushels x $4.00 x .75 = $424.20 trigger revenue

                  Step 9: Calculate the Payment Factor

Formula: (Trigger revenue minus final county revenue) divided by 
    (trigger revenue minus (expected county yield times projected price 
    times loss limit factor)) equals payment factor
($424.20 - $342.75) / ($424.20 - (141.4 x $4.00 x .18)) = .253

                    Step 10: Calculate the Indemnity

Formula: Final policy protection times payment factor equals indemnity
$62,216 x .253 = $15741 indemnity

                     Area Yield Protection example:

        Step 1: Calculate the Dollar Amount of Insurance per Acre

Formula: Expected county yield times projected price times protection 
    factor equals dollar amount of insurance
141.4 bushels x $4.00 x 1.10 = $622.16 dollar amount of insurance per 
acre

                 Step 2: Calculate the Policy Protection

Formula: Dollar amount of insurance per acre times acres times share = 
    policy protection
$622.16 x 100.0 x 1.000 = $62,216 policy protection

                   Step 3: Calculate the Total Premium

Formula: policy protection times premium rate equals total premium
$62,216 x .0116 rate = $722 total premium

                  Step 4: Calculate the Subsidy amount

Formula: Total premium times subsidy factor equals subsidy
$722 x .59 subsidy factor = $426 subsidy

                 Step 5: Calculate the Producer Premium

Formula: Total premium minus subsidy equals producer premium
$722 - $426 = $296 producer premium

              Step 6: Calculate the Final Policy Protection

Use the policy protection amount calculated at the beginning of the 
    insurance period in Step 2
$62,216 policy protection

                   Step 7: Calculate the Trigger Yield

Formula: Expected county yield times coverage level equals trigger yield
141.4 bushels times .75 = 106.1 bushels

                  Step 8: Calculate the Payment Factor

Formula: (Trigger yield minus final county yield) divided by (trigger 
    yield minus (expected county yield times loss limit factor)) equals 
    payment factor
(106.1 bushels - 75.0 bushels) / (106.1 bushels - (141.4 bushels x .18)) 
= .386

[[Page 112]]

                     Step 9: Calculate the Indemnity

Formula: Final policy protection times payment factor equals indemnity
$62,216 times .386 = $24,015 Indemnity

Sec. 407.10  Area risk protection insurance for barley.

    The barley crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

                 UNITED STATES DEPARTMENT OF AGRICULTURE

                   Federal Crop Insurance Corporation

                     Area Risk Protection Insurance

                    Barley Crop Insurance Provisions

                             1. Definitions

    Harvest. Combining or threshing the barley for grain.
    Planted acreage. In addition to the definition contained in the Area 
Risk Protection Insurance Basic Provisions, 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. Insured Crop

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

                            3. Payment Dates

    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and final county yields will be determined prior to 
April 1 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 1 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Kit Carson, Lincoln, Elbert, El Paso, Pueblo, Las    September 30.............  June 30.
 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 Counties,     October 31...............  June 30.
 Nevada.
All Colorado counties except Kit Carson, Lincoln,    March 15.................  November 30.
 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.
----------------------------------------------------------------------------------------------------------------


[[Page 113]]

Sec. 407.11  Area risk protection insurance for corn.

    The corn crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

                 UNITED STATES DEPARTMENT OF AGRICULTURE

                   Federal Crop Insurance Corporation

                     Area Risk Protection Insurance

                     Corn Crop Insurance Provisions

                             1. Definitions

    Harvest. Combining or picking corn for grain or cutting for hay, 
silage, fodder, or earlage.
    Planted acreage. In addition to the definition contained in the Area 
Risk Protection Insurance Basic Provisions, corn seed that is broadcast 
and subsequently mechanically incorporated will not be considered 
planted.

                             2. Insured Crop

    (a) The insured crop will be all field corn that is:
    (1) Yellow dent or white corn, including mixed yellow and white, 
waxy or high-lysine corn, high-oil corn blends containing mixtures of at 
least 90 percent high yielding yellow dent female plants with high-oil 
male pollinator plants, or commercial varieties of high-protein hybrids.
    (2) Grown on insurable acreage in the county listed on the accepted 
application;
    (3) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (4) Planted with the intent to be harvested; and
    (5) Not planted into an established grass or legume or interplanted 
with another crop.
    (b) Corn other than that specified in section 2(a)(1) including but 
not limited to high-amylose, high-oil or high-protein (except as 
authorized in section 2(a)(1)), flint, flour, hybrid seed corn, Indian, 
or blue corn, or a variety genetically adapted to provide forage for 
wildlife or any other open pollinated corn may be insurable under this 
policy if specified in the Special Provisions:
    (1) The insurability requirements in 2(a) apply to this other corn 
and additional requirements for insurability may be stated for this 
other corn in the Special Provisions; and
    (2) This other corn will be insured using the yields, rates, and 
prices for field corn unless otherwise specified in the actuarial 
documents.

                            3. Payment Dates

    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and final county yields will be determined prior to 
April 16 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 16 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, Wilson,    January 31...............  November 30.
 Karnes, Goliad, Victoria, and Jackson Counties,
 Texas, and all Texas counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, Loving,        February 15..............  November 30.
 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; Florida;     February 28..............  November 30.
 Georgia; Louisiana; Mississippi; Nevada; North
 Carolina; South Carolina.
All other Texas counties and all other states......  March 15.................  November 30.
----------------------------------------------------------------------------------------------------------------


[[Page 114]]

Sec. 407.12  Area risk protection insurance for cotton.

    The cotton crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

                 UNITED STATES DEPARTMENT OF AGRICULTURE

                   Federal Crop Insurance Corporation

                     Area Risk Protection Insurance

                    Cotton Crop Insurance Provisions

                             1. Definitions

    Harvest. Removal of the seed cotton from the stalk.
    Planted acreage. In addition to the definition contained in the Area 
Risk Protection Insurance Basic Provisions, cotton seed broadcast and 
subsequently mechanically incorporated will not be considered planted.

                             2. Insured Crop

    (a) The insured crop will be all upland cotton:
    (1) Grown on insurable acreage in the county listed on the accepted 
application;
    (2) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (3) Planted with the intent to be harvested.
    (b) That is not (unless allowed by the Special Provisions):
    (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.
    (c) Cotton other than upland cotton may be insurable under this 
policy if specified in the Special Provisions:
    (1) The insurability requirements in 2(a) apply to other cotton and 
additional requirements for insurability may be stated for other cotton 
in the Special Provisions; and
    (2) Other cotton will be insured using the yields, rates, and prices 
for cotton unless otherwise specified in the actuarial documents.

                            3. Payment Dates

    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and final county yields will be determined prior to July 
16 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to August 15 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, Wilson,    January 31...............  November 30.
 Karnes, Goliad, Victoria, and Jackson Counties,
 Texas, and all Texas counties lying south thereof.
Alabama; Arizona; Arkansas; California; Florida;     February 28..............  November 30.
 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 States......  March 15.................  November 30.
----------------------------------------------------------------------------------------------------------------


[[Page 115]]

Sec. 407.13  Area risk protection insurance for forage.

    The forage crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

                 UNITED STATES DEPARTMENT OF AGRICULTURE

                   Federal Crop Insurance Corporation

                     Area Risk Protection Insurance

                    Forage Crop Insurance Provisions

                             1. Definitions

    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 the forage from the field, and rotational 
grazing.
    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. Insured Crop

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

                          3. Insurable Acreage

    In addition to section 5 of the Area Risk Protection Insurance Basic 
Provisions, acreage seeded to forage after July 1 of the previous crop 
year will not be insurable.

                            4. Payment Dates

    (a) Unless otherwise specified in the Special Provisions the final 
county yields will be determined prior to May 1 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 31 
following the crop year and following the determination of the final 
county yield.

                            5. Program Dates

    November 30 is the cancellation and termination date for all states, 
or as specified in the Special Provisions. The contract change date is 
August 31 for all states, or as specified in the Special Provisions.

                            6. Annual Premium

    In lieu of section 7(e) of the Area Risk Protection Insurance Basic 
Provisions, 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 actuarial documents. The premium will be determined based on the 
rate shown on the actuarial documents.

Sec. 407.14  Area risk protection insurance for peanuts

    The peanut crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

                 UNITED STATES DEPARTMENT OF AGRICULTURE

                   Federal Crop Insurance Corporation

                     Area Risk Protection Insurance

                    Peanut Crop Insurance Provisions

                             1. Definitions

    Harvest. The completion of digging and threshing and removal of 
peanuts from the field.
    Planted acreage. In addition to the definition contained in the Area 
Risk Protection Insurance Basic Provisions, peanuts must initially be 
planted in a row pattern which permits mechanical cultivation, or that 
allows the peanuts to be cared for in a manner recognized by 
agricultural experts as a good farming practice. Acreage planted in any 
other manner will not be insurable unless otherwise provided by the 
Special Provisions.

[[Page 116]]

                             2. Insured Crop

    (a) The insured crop will be all peanuts:
    (1) Grown on insurable acreage in the county listed on the accepted 
application;
    (2) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (3) Planted with the intent to be harvested as peanuts; and
    (4) Not planted into an established grass or legume or interplanted 
with another crop.

                            3. Payment Dates

    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and or final county yields will be determined prior to 
June 16 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to July 16 and 
following the determination of the final county revenue or the final 
county yield, as applicable.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak, McMullen,  January 15...............  November 30.
 La Salle, and Dimmit Counties, Texas and all Texas
 Counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, Loving,        February 28..............  November 30.
 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; and all other states
 except New Mexico, Oklahoma, and Virginia.
New Mexico; Oklahoma; Virginia; and all other Texas  March 15.................  November 30.
 Counties.
----------------------------------------------------------------------------------------------------------------

Sec. 407.15  Area risk protection insurance for grain sorghum.

    The grain sorghum crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

                 UNITED STATES DEPARTMENT OF AGRICULTURE

                   Federal Crop Insurance Corporation

                     Area Risk Protection Insurance

                 Grain Sorghum Crop Insurance Provisions

                             1. Definitions

    Harvest. Combining or threshing the sorghum for grain or cutting for 
hay, silage, or fodder.
    Planted acreage. In addition to the definition contained in the Area 
Risk Protection Insurance Basic Provisions, sorghum seed broadcast and 
subsequently mechanically incorporated will not be considered planted.

                             2. Insured Crop

    (a) The insured crop will be all sorghum excluding hybrid sorghum 
seed:
    (1) Grown on insurable acreage in the county listed on the accepted 
application;
    (2) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (3) Planted with the intent to be harvested; and
    (4) Not planted into an established grass or legume or interplanted 
with another crop.
    (b) Other sorghum including hybrid sorghum seed may be insurable 
under this policy if specified in the Special Provisions:
    (1) The insurability requirements in 2(a) apply to these other 
sorghum and additional requirements for insurability may be stated for 
these crops in the Special Provisions; and
    (2) This other sorghum will be insured using the yields, rates, and 
prices for sorghum unless otherwise specified in the actuarial 
documents.

                            3. Payment Dates

    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and final county yields will be determined prior to 
April 16 following the crop year.

[[Page 117]]

    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 16 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, Wilson,    January 31...............  November 30.
 Karnes, Goliad, Victoria, and Jackson Counties,
 Texas, and all Texas counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, Loving,        February 15..............  November 30.
 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; Florida;     February 28..............  November 30.
 Georgia; Louisiana; Mississippi; Nevada; North
 Carolina; and South Carolina.
All other Texas counties and all other states......  March 15.................  November 30.
----------------------------------------------------------------------------------------------------------------

Sec. 407.16  Area risk protection insurance for soybean.

    The soybean crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

                 UNITED STATES DEPARTMENT OF AGRICULTURE

                   Federal Crop Insurance Corporation

                     Area Risk Protection Insurance

                    Soybean Crop Insurance Provisions

                             1. Definitions

    Harvest. Combining or threshing the soybeans.
    Planted acreage. In addition to the definition contained in the Area 
Risk Protection Insurance Basic Provisions, 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, unless 
specified otherwise in the Special Provisions.

                             2. Insured Crop

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

                            3. Payment Dates

    (a) Unless otherwise specified in the Special Provisions final 
county revenues and final county yields will be determined prior to 
April 16 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 16 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak, McMullen,  January 31...............  November 30.
 La Salle, and Dimmit Counties, Texas and all Texas
 counties lying south thereof.

[[Page 118]]

 
Alabama; Arizona; Arkansas; California; Florida;     February 28..............  November 30.
 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 states......  March 15.................  November 30.
----------------------------------------------------------------------------------------------------------------

Sec. 407.17  Area risk protection insurance for wheat.

    The wheat crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

                 UNITED STATES DEPARTMENT OF AGRICULTURE

                   Federal Crop Insurance Corporation

                     Area Risk Protection Insurance

                     Wheat Crop Insurance Provisions

                             1. Definitions

    Harvest. Combining or threshing the wheat for grain.
    Planted acreage. In addition to the definition contained in the Area 
Risk Protection Insurance Basic Provisions, 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. Insured Crop

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

                            3. Payment Dates

    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and final county yields will be determined prior to 
April 1 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 1 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.

                            4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
All Colorado counties except Alamosa, Conejos,       September 30.............  June 30.
 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

[[Page 119]]

 
Alaska; Alamosa, Conejos, Costilla, Rio Grande, and  March 15.................  November 30.
 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

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):
    (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

[[Page 120]]

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

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 price and quality endorsement.
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]
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  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.

[[Page 121]]

457.153  Peach crop insurance provisions.
457.154  Processing sweet corn crop insurance provisions.
457.155  Processing bean crop insurance provisions.
457.156-457.157  [Reserved]
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.
457.168  Mustard crop insurance provisions.
457.169  Mint crop insurance provisions.
457.170  Cultivated wild rice crop insurance provisions.
457.171  Cabbage crop insurance provisions.
457.172  Coverage Enhancement Option.
457.173  Florida Avocado crop insurance provisions.

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

    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 
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.

[[Page 122]]

    (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 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

[[Page 123]]

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 county or of any individual 
application upon FCIC's determination that the insurance risk is 
excessive.
    (c) If the producer had a Crop Revenue Coverage, Revenue Assurance, 
Income Protection, or Indexed Income Protection crop insurance policy in 
effect for the 2010 crop year and has not canceled or changed such 
coverage in accordance with such policy, revenue protection will 
continue in effect under the Common Crop Insurance Policy Basic 
Provisions and no new application is required. Revenue protection will 
be at the same coverage level, 100 percent of price, with any applicable 
options, endorsements, and enterprise or whole-farm unit structures that 
were in effect the previous year still in effect, as long as all 
qualifications are met and such coverage remains available.
    (1) If the producer had revenue coverage under the Revenue Assurance 
crop insurance policy for the 2010 crop year and:
    (i) The producer had the fall harvest price option, for the 2011 
crop year the producer will have revenue protection under the Common 
Crop Insurance Policy Basic Provisions based on the greater of the 
projected price or the harvest price; or
    (ii) The producer did not have the fall harvest price option, for 
the 2011 crop year the producer will have revenue protection under the 
Common Crop Insurance Policy Basic Provisions and the harvest price 
exclusion.
    (2) If the producer had revenue coverage under the Income Protection 
or Indexed Income Protection crop insurance policy for the 2010 crop 
year, for the 2011 crop year the producer will have revenue protection 
under the Common Crop Insurance Policy Basic Provisions and the harvest 
price exclusion.
    (3) If the producer has revenue protection under paragraph (c) of 
this section, the producer may exclude coverage for hail and fire if the 
requirements are met.
    (d) If the producer had coverage under an Actual Production History 
crop insurance policy for a crop under the Common Crop Insurance Policy 
Basic Provisions for the 2010 crop year, and that crop now has revenue 
protection available, the producer will have yield protection for the 
crop under the Common Crop Insurance Policy Basic Provisions in effect 
for the 2011 crop year at the same coverage level, and percentage of 
price, any applicable options or endorsements, and enterprise unit 
structures that were in effect the previous year continue in effect, as 
long as all qualifications are met and such coverage remains available.
    (e) If the producer had coverage under Actual Production History or 
another crop insurance policy for a crop under the Common Crop Insurance 
Policy Basic Provisions for the 2010 crop year and that crop does not 
have revenue protection available for the 2011 crop year, the producer 
will continue with the same crop insurance policy (e.g., Actual 
Production History or amount of insurance) until canceled or terminated.
    (f) With respect to any crop insurance policy specified in 
paragraphs (c) through (e) of this section:
    (1) The producer may change their coverage (coverage level, percent 
of price, etc.) in accordance with section 3 of the Common Crop 
Insurance Policy Basic Provisions or the producer may cancel such 
coverage in accordance with section 2 of the Common Crop Insurance 
Policy Basic Provisions. If the producer changes their crop insurance 
policy (e.g., Actual Production History, yield protection, revenue 
protection, amount of insurance, etc.) for any crop year, the producer 
must elect the coverage level, percentage of price, any applicable 
options, endorsements, and unit structure (enterprise or whole-farm) 
that will be in effect under the new crop insurance policy.
    (2) If a producer has a properly executed Power of Attorney on file 
with the insurance provider, such Power of Attorney will remain in 
effect under the Common Crop Insurance Policy Basic Provisions until it 
is terminated.
    (3) If the producer has a current written agreement in effect for 
the crop for multiple crop years, such written

[[Page 124]]

agreement will remain in effect if the terms of the written agreement 
are still applicable, the conditions under which the written agreement 
was provided have not changed, and the crop insurance policy remains 
with the same insurance provider.

                        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's 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: (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 Commodity Exchange Price Provisions, as 
applicable; (4) the Crop Provisions; and (5) 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's 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 
``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: (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 Commodity Exchange Price Provisions, as applicable; (4) the Crop 
Provisions; and (5) 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

[[Page 125]]

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 information for the crop year which is 
available for public inspection in your agent's office and published on 
RMA's Web site and which shows available crop insurance policies, 
coverage levels, information needed to determine amounts of insurance, 
prices, 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 
Extension System 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 in writing, whereby you assign 
your right to an indemnity payment for the crop year only to creditors 
or other persons to whom you have a financial debt or other pecuniary 
obligation.
    Average yield. The yield calculated by totaling the yearly actual 
yields, assigned yields in accordance with sections 3(f)(1) (failure to 
provide production report), 3(h)(1) (excessive yields), and 3(i) (second 
crop planted without double cropping history on prevented planting 
acreage), and adjusted or unadjusted transitional yields, and dividing 
the total by the number of yields contained in the database.
    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

[[Page 126]]

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. Catastrophic risk protection is not available with revenue 
protection.
    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 that contains the 
information necessary to pay the indemnity, as specified in the 
applicable FCIC issued procedures, and complies with the requirements in 
section 14.
    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.
    Commodity Exchange Price Provisions (CEPP). A part of the policy 
that is used for all crops for which revenue protection is available, 
regardless of whether you elect revenue protection or yield protection 
for such crops. This document includes the information necessary to 
derive the projected price and the harvest price for the insured crop, 
as applicable.
    Consent. Approval in writing by us allowing you to take a specific 
action.
    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 that is necessary 
to produce an agricultural commodity, excluding organic farming 
practices.
    Cooperative Extension System. A nationwide network consisting of a 
State office located at each State's land-grant university, and local or 
regional offices. These offices are staffed by one or more agricultural 
experts, who work in cooperation with the Cooperative State Research, 
Education and Extension Service, and who provide information to 
agricultural producers and others.
    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 elected a 65 
percent coverage level, your deductible would be 35 percent (100% - 65% 
= 35%).
    Delinquent debt. Has the same meaning as the term defined in 7 CFR 
part 400, subpart U.
    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

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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 same insured crop in 
the county in which you have a share on the date coverage begins for the 
crop year, provided the requirements of section 34 are met.
    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 organic 
agricultural experts, 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 organic agricultural expertsfor 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.''
    Harvest price. A price determined in accordance with the Commodity 
Exchange Price Provisions and used to value production to count for 
revenue protection.
    Harvest price exclusion. Revenue protection with the use of the 
harvest price excluded when determining your revenue protection 
guarantee. This election is continuous unless canceled by the 
cancellation date.
    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 interest. Your percentage of the insured crop that is at 
financial risk.
    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.
    Intended acreage report. A report of the acreage you intend to 
plant, by crop, for the current crop year and used solely for the 
purpose of establishing eligible prevented planting acreage, as required 
in section 17.
    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. Your total amount of insurance, value of your production 
guarantee, or revenue protection guarantee for the unit determined in 
accordance with the Settlement of Claim provisions of the applicable 
Crop Provisions.
    Limited resource farmer. Has the same meaning as the term defined by 
USDA at http://www.lrftool.sc.egov.usda.gov/LRP-D.htm.
    Native sod. Acreage that has no record of being tilled (determined 
in accordance with

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FSA or other verifiable records acceptable to us) for the production of 
an annual crop on or before May 22, 2008, and on which the plant cover 
is composed principally of native grasses, grass-like plants, forbs, or 
shrubs suitable for grazing and browsing.
    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 experts. Persons who are employed by the 
following organizations: Appropriate Technology Transfer for Rural 
Areas, Sustainable Agriculture Research and Education or the Cooperative 
Extension System, 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 crop. An agricultural commodity that is organically produced 
consistent with section 2103 of the Organic Foods Production Act of 1990 
(7 U.S.C. 6502).
    Organic farming practice. A system of plant production practices 
used to produce an organic crop that is 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, the Commodity 
Exchange Price Provisions, if applicable, 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.
    Prairie Pothole National Priority Area. Consists of specific 
counties within the States of Iowa, Minnesota, Montana, North Dakota or 
South Dakota as specified on the RMA's Web site at http://
www.rma.usda.gov/, or a successor Web site, or the Farm Service Agency, 
Agricultural Resource Conservation Program 2-CRP (Revision 4), dated 
April 28, 2008, or a subsequent publication.
    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 by the final 
planting date designated in the Special Provisions for the insured crop 
in the county, or within any applicable late planting period, due to an 
insured cause of loss that is general to the surrounding area and that 
prevents other producers from planting acreage with similar 
characteristics. Failure to plant because of uninsured causes such as 
lack of proper equipment or labor to plant the acreage, or use of a 
particular production method, is not considered prevented planting.
    Price election. The amounts contained in the Special Provisions, or 
in 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. A price election is 
not applicable for crops for which revenue protection is available.
    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 in

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accordance with section 3. The report contains yield information for 
previous years, including planted acreage and production. This report 
must be supported by written verifiable records from a warehouseman or 
buyer of the insured crop, by measurement of farm-stored production, or 
by other records of production approved by us on an individual case 
basis in accordance with FCIC approved procedures.
    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.
    Projected price. The price for each crop determined in accordance 
with the Commodity Exchange Price Provisions. The applicable projected 
price is used for each crop for which revenue protection is available, 
regardless of whether you elect to obtain revenue protection or yield 
protection for such crop.
    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.
    Revenue protection. A plan of insurance that provides protection 
against loss of revenue due to a production loss, price decline or 
increase, or a combination of both. If the harvest price exclusion is 
elected, the insurance coverage provides protection only against loss of 
revenue due to a production loss, price decline, or a combination of 
both.
    Revenue protection guarantee (per acre). For revenue protection 
only, the amount determined by multiplying the production guarantee (per 
acre) by the greater of your projected price or your harvest price. If 
the harvest price exclusion is elected, the production guarantee (per 
acre) is only multiplied by your projected price.
    RMA's Web site. A Web site hosted by RMA and located at http://
www.rma.usda.gov/or a successor Web site.
    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.
    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.
    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.
    Share. Your insurable 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 (e.g., 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

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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). The spouse of any individual 
applicant or individual insured will be presumed 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 the 
applicable State dissolution of marriage laws. 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.
    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.
    Tilled. The termination of existing plants by plowing, disking, 
burning, application of chemicals, or by other means to prepare acreage 
for the production of an annual crop.
    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.
    Verifiable records. Has the same meaning as the term defined in 7 
CFR part 400, subpart G.
    Void. When the policy is considered not to have existed for a crop 
year.
    Whole-farm unit. All insurable acreage of all the insured crops 
planted in the county in which you have a share on the date coverage 
begins for each crop for the crop year and for which the whole-farm unit 
structure is available in accordance with section 34.
    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).
    Yield protection. A plan of insurance that only provides protection 
against a production loss and is available only for crops for which 
revenue protection is available.
    Yield protection guarantee (per acre). When yield protection is 
selected for a crop that has revenue protection available, the amount 
determined by multiplying the production guarantee by your projected 
price.

            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. In accordance with 
section 4, FCIC may change the coverage provided from year to year.
    (b) With respect to your application for insurance:
    (1) You must include your social security number (SSN) if you are an 
individual (if you are an individual applicant operating as a business, 
you may provide an employer identification number (EIN) but you must 
also provide your SSN); or
    (2) You must include your EIN if you are a person other than an 
individual;
    (3) In addition to the requirements of section 2(b)(1) or (2), you 
must include the following for all persons who have a substantial 
beneficial interest in you:
    (i) The SSN for individuals; or
    (ii) The EIN for persons other than individuals and the SSNs for all 
individuals that comprise the person with the EIN if such individuals 
also have a substantial beneficial interest in you;
    (4) You must include:
    (i) Your election of revenue protection, yield protection, or other 
available plan of insurance; coverage level; percentage of price 
election or percentage of projected price, as applicable; crop, type, 
variety, or class; and any other material information required on the 
application to insure the crop; and
    (ii) All the information required in section 2(b)(4)(i) or your 
application will not be accepted and no coverage will be provided;
    (5) Your application will not be accepted and no insurance will be 
provided for the year of application if the application does not contain 
your SSN or EIN. If your application contains an incorrect SSN or EIN 
for you, your application will be considered not to have been accepted, 
no insurance will be provided for the year of application and for any 
subsequent crop years, as applicable, and such policies will be void if:
    (i) Such number is not corrected by you; or
    (ii) You correct the SSN or EIN but:

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    (A) You cannot prove that any error was inadvertent (Simply stating 
the error was inadvertent is not sufficient to prove the error was 
inadvertent); or
    (B) It is determined that the incorrect number would have allowed 
you to obtain disproportionate benefits under the crop insurance 
program, you are determined to be ineligible for insurance or you could 
avoid an obligation or requirement under any State or Federal law;
    (6) With respect to persons with a substantial beneficial interest 
in you:
    (i) The insurance coverage for all crops included on your 
application will be reduced proportionately by the percentage interest 
in you of persons with a substantial beneficial interest in you 
(presumed to be 50 percent for spouses of individuals) if the SSNs or 
EINs of such persons are included on your application, the SSNs or EINs 
are correct, and the persons with a substantial beneficial interest in 
you are ineligible for insurance;
    (ii) Your policies for all crops included on your application, and 
for all applicable crop years, will be void if the SSN or EIN of any 
person with a substantial beneficial interest in you is incorrect or is 
not included on your application and:
    (A) Such number is not corrected or provided by you, as applicable;
    (B) You cannot prove that any error or omission was inadvertent 
(Simply stating the error or omission was inadvertent is not sufficient 
to prove the error or omission was inadvertent); or
    (C) Even after the correct SSN or EIN is provided by you, it is 
determined that the incorrect or omitted SSN or EIN would have allowed 
you to obtain disproportionate benefits under the crop insurance 
program, the person with a substantial beneficial interest in you is 
determined to be ineligible for insurance, or you or the person with a 
substantial beneficial interest in you could avoid an obligation or 
requirement under any State or Federal law; or
    (iii) Except as provided in sections 2(b)(6)(ii)(B) and (C), your 
policies will not be voided if you subsequently provide the correct SSN 
or EIN for persons with a substantial beneficial interest in you and the 
persons are eligible for insurance;
    (7) When any of your policies are void under sections 2(b)(5) or 
(6):
    (i) You must repay any indemnity, prevented planting payment or 
replant payment that may have been paid for all applicable crops and 
crop years;
    (ii) Even though the policies are void, you will still be required 
to pay an amount equal to 20 percent of the premium that you would 
otherwise be required to pay; and
    (iii) If you previously paid premium or administrative fees, any 
amount in excess of the amount required in section 2(b)(7)(ii) will be 
returned to you;
    (8) Notwithstanding any of the provisions in this section, if you 
certify to an incorrect SSN or EIN, or receive an indemnity, prevented 
planting payment or replant payment and the SSN or EIN was not correct, 
you may be subject to civil, criminal or administrative sanctions;
    (9) If any of the information regarding persons with a substantial 
beneficial interest in you changes after the sales closing date for the 
previous crop year, you must revise your application by the sales 
closing date for the current crop year to reflect the correct 
information. However, if such information changed less than 30 days 
before the sales closing date for the current crop year, you must revise 
your application by the sales closing date for the next crop year. If 
you fail to provide the required revisions, the provisions in section 
2(b)(6) will apply; and
    (10) If you are, or a person with a substantial beneficial interest 
in you is, not eligible to obtain a SSN or EIN, whichever is required, 
you must request an assigned number for the purposes of this policy from 
us:
    (i) A number will be provided only if you can demonstrate you are, 
or a person with a substantial beneficial interest in you is, eligible 
to receive Federal benefits;
    (ii) If a number cannot be provided for you in accordance with 
section 2(b)(10)(i), your application will not be accepted; or
    (iii) If a number cannot be provided for any person with a 
substantial beneficial interest in you in accordance with section 
2(b)(10)(i), the amount of coverage for all crops on the application 
will be reduced proportionately by the percentage interest of such 
person in you.
    (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(e) (Your 
Duties).
    (f) A delinquent debt for any policy will make you ineligible to 
obtain crop insurance

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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 written 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)(A), (B), (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 (For policies for which the sales closing date is prior to the 
termination date, such policies will terminate for the current crop year 
even if insurance attached prior to the termination date. Such 
termination will be considered effective as of the sales closing date 
and no insurance will be considered to have attached for the crop year 
and no indemnity, prevented planting or replant payment will be owed);
    (B) For a policy with other amounts due, the termination date 
immediately following the date you have a delinquent debt (For policies 
for which the sales closing date is prior to the termination date, such 
policies will terminate for the current crop year even if insurance 
attached prior to the termination date. Such termination will be 
considered effective as of the sales closing date and no insurance will 
be considered to have attached for the crop year and no indemnity, 
prevented planting or replant payment will be owed);
    (C) For all other policies that are issued by us under the authority 
of the Act, the termination date that coincides with the termination 
date for the policy with the delinquent debt or, if there is no 
coincidental termination date, the termination date immediately 
following the date you become ineligible;
    (D) For execution of a written payment agreement 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 (for 
this purpose only, the crop year will start the day after the 
termination date and end on the next termination date, e.g., if the 
termination date is November 30 and you fail to make a payment on 
November 15, 2011, your policy will terminate on November 30, 2010, for 
the 2011 crop year); 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)(A), (B), 
(D), or (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 a written payment agreement and make payments in 
accordance with the agreement (We will not enter into a written payment 
agreement with you if you have previously failed to make a scheduled 
payment under the terms of any other payment agreement 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 2011 crop year, if crop A, with a 
termination date of October 31, 2010, and crop B, with a termination 
date

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of March 15, 2011, 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, 2010, and crop A's policy is terminated as of that date. 
Crop B's policy does not terminate until March 15, 2011, and an 
indemnity for the 2010 crop year may still be owed. If you enter into a 
written payment agreement on September 25, 2011, the earliest date by 
which you can obtain crop insurance for crop A is to apply for crop 
insurance by the October 31, 2011, sales closing date and for crop B is 
to apply for crop insurance by the March 15, 2012, sales closing date. 
If you fail to make a payment that was scheduled to be made on April 1, 
2012, your policy will terminate as of October 31, 2011, for crop A, and 
March 15, 2012, for crop B, and no indemnity, prevented planting payment 
or replant 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) In cases where there has been a death, disappearance, judicially 
declared incompetence, or dissolution of any insured person:
    (1) If any married individual insured dies, disappears, or is 
judicially declared incompetent, the named insured on the policy will 
automatically convert to the name of the spouse if:
    (i) The spouse was included on the policy as having a substantial 
beneficial interest in the named insured; and
    (ii) The spouse has a share of the crop.
    (2) The provisions in section 2(g)(3) will be applicable if:
    (i) Any partner, member, shareholder, etc., of an insured entity 
dies, disappears, or is judicially declared incompetent, and such event 
automatically dissolves the entity; or
    (ii) An individual, whose estate is left to a beneficiary other than 
a spouse or left to the spouse and the criteria in section 2(g)(1) are 
not met, dies, disappears, or is judicially declared incompetent.
    (3) If section 2(g)(2) applies and the death, disappearance, or 
judicially declared incompetence occurred:
    (i) More than 30 days before the cancellation date, the policy is 
automatically canceled as of the cancellation date and a new application 
must be submitted; or
    (ii) Thirty days or less before the cancellation date, or after the 
cancellation date, the policy will continue in effect through the crop 
year immediately following the cancellation date and be automatically 
canceled as of the cancellation date immediately following the end of 
the insurance period for the crop year, unless canceled by the 
cancellation date prior to the start of the insurance period:
    (A) A new application for insurance must be submitted prior to the 
sales closing date for coverage for the subsequent crop year; and
    (B) Any indemnity, replant payment or prevented planting payment 
will be paid to the person or persons determined to be beneficially 
entitled to the payment and such person or persons must comply with all 
policy provisions and pay the premium.
    (4) If any insured entity is dissolved for reasons other than death, 
disappearance, or judicially declared incompetence:
    (i) Before the cancellation date, the policy is automatically 
canceled as of the cancellation date and a new application must be 
submitted; or
    (ii) On or after the cancellation date, the policy will continue in 
effect through the crop year immediately following the cancellation date 
and be automatically canceled as of the cancellation date immediately 
following the end of the insurance period for the crop year, unless 
canceled by the cancellation date prior to the start of the insurance 
period:
    (A) A new application for insurance must be submitted prior to the 
sales closing date for coverage for the subsequent crop year; and
    (B) Any indemnity, replant payment or prevented planting payment 
will be paid to the person or persons determined to be beneficially 
entitled to the payment and such person or persons must comply with all 
policy provisions and pay the premium.
    (5) If section 2(g)(2) or (4) applies, a remaining member of the 
insured person or the beneficiary is required to report to us the death, 
disappearance, judicial incompetence, or other event that causes 
dissolution not later than the next cancellation date, except if section 
2(g)(3)(ii) applies, notice must be provided by the cancellation date 
for the next crop year. If notice is not provided timely, the provisions 
of section 2(g)(2) or (4) will apply retroactive to the date such notice 
should have been provided and any payments made after the date the 
policy should have been canceled must be returned.
    (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,

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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 other 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) With respect to the insurance choices:
    (1) For all acreage of the insured crop in the county, unless one of 
the conditions in section 3(b)(2) exists, you must select the same:
    (i) Plan of insurance (e.g., yield protection, revenue protection, 
actual production history, amount of insurance, etc.);
    (ii) Level of coverage (all catastrophic risk protection or the same 
level of additional coverage); and
    (iii) Percentage of the available price election, or projected price 
for yield protection. For revenue protection, the percentage of price is 
specified in section 3(c)(2). If different prices are provided by type 
or variety, insurance will be based on the price provided for each type 
or variety and the same price percentage will apply to all types or 
varieties.
    (2) You do not have to select the same plan of insurance, level of 
coverage or percentage of available price election or projected price 
if:
    (i) 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; or
    (ii) You have additional coverage for the crop in the county and the 
acreage has been designated as ``high-risk'' by FCIC. In such case, you 
will be able to exclude coverage for the high-risk land under the 
additional coverage policy and insure such acreage under a separate 
Catastrophic Risk Protection Endorsement, provided the Catastrophic Risk 
Protection Endorsement is obtained from the same insurance provider from 
which the additional coverage was obtained. If you have revenue 
protection and exclude high-risk land, the catastrophic risk protection 
coverage will be yield protection only for the excluded high-risk land.
    (c) With respect to revenue protection, if available for the crop:
    (1) You may change to another plan of insurance and change your 
coverage level or elect the harvest price exclusion by giving written 
notice to us not later than the sales closing date for the insured crop;
    (2) Your projected price and harvest price will be 100 percent of 
the projected price and harvest price issued by FCIC;
    (3) If the harvest price exclusion is:
    (i) Not elected, your projected price is used to initially determine 
the revenue protection guarantee (per acre), and if the harvest price is 
greater than the projected price, the revenue protection guarantee (per 
acre) will be recomputed using your harvest price; or
    (ii) Elected, your projected price is used to compute your revenue 
protection guarantee (per acre);
    (4) Your projected price is used to calculate your premium, any 
replant payment, and any prevented planting payment; and
    (5) If the projected price or harvest price cannot be calculated for 
the current crop year under the provisions contained in the Commodity 
Exchange Price Provisions:
    (i) For the projected price:
    (A) Revenue protection will not be provided and you will 
automatically be covered under the yield protection plan of insurance 
for the current crop year unless you cancel your coverage by the 
cancellation date or change your plan of insurance by the sales closing 
date;
    (B) Notice will be provided on RMA's Web site by the date specified 
in the applicable projected price definition contained in the Commodity 
Exchange Price Provisions;
    (C) The projected price will be determined by FCIC and will be 
released by the date specified in the applicable projected price 
definition contained in the Commodity Exchange Price Provisions; and
    (D) Your coverage will automatically revert to revenue protection 
for the next crop year that revenue protection is available unless you 
cancel your coverage by the cancellation date or change your coverage by 
the sales closing date; or
    (ii) For the harvest price:
    (A) Revenue protection will continue to be available; and
    (B) The harvest price will be determined and announced by FCIC.
    (d) With respect to yield protection, if available for the crop:
    (1) You may change to another plan of insurance and change your 
percentage of price and your coverage level by giving written notice to 
us not later than the sales closing date for the insured crop;
    (2) The percentage of the projected price selected by you multiplied 
by the projected

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price issued by FCIC is your projected price that is used to compute the 
value of your production guarantee (per acre) and the value of the 
production to count; and
    (3) Since the projected price may change each year, if you do not 
select a new percentage of the projected price on or before the sales 
closing date, we will assign a percentage which bears the same 
relationship to the percentage that was in effect for the preceding year 
(e.g., if you selected 100 percent of the projected price for the 
previous crop year and you do not select a new percentage for the 
current crop year, we will assign 100 percent for the current crop 
year).
    (e) With respect to all plans of insurance other than revenue 
protection and yield protection (e.g., APH, dollar amount plans of 
insurance, etc.):
    (1) 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.
    (i) You must select the additional price election or amount of 
insurance on or before the sales closing date for the insured crop.
    (ii) These additional price elections or amounts of insurance will 
not be less than those available on the contract change date.
    (iii) If you elect the additional price election or amount of 
insurance, any claim settlement and amount of premium will be based on 
your additional price election or amount of insurance.
    (2) You may change to another plan of insurance or change your 
coverage level, amount of insurance or percentage of the price election, 
as applicable, for the following crop year by giving written notice to 
us not later than the sales closing date for the insured crop.
    (3) Your amount of insurance will be the amount of insurance issued 
by FCIC multiplied by the coverage level percentage you elected. Your 
price election will be the price election issued by FCIC multiplied by 
the percentage of price you elected.
    (4) Since the amount of insurance or price election may change each 
year, if you do not select a new amount of insurance or percentage of 
the price election on or before the sales closing date, we will assign 
an amount of insurance or percentage of the price election which bears 
the same relationship to the amount of insurance or percentage of the 
price election that was in effect for the preceding year (e.g., if you 
selected 100 percent of the price election for the previous crop year 
and you do not select a new percentage of the price election for the 
current crop year, we will assign 100 percent of the price election for 
the current crop year).
    (f) You must report all production of the crop (insured and 
uninsured) 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 or as specified in section 
18:
    (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.
    (g) It is your responsibility to accurately report all information 
that is used to determine your approved yield.
    (1) You must certify to the accuracy of this information on your 
production report.
    (2) If you fail to accurately report any information or if you do 
not provide any required records, you will be subject to the provisions 
regarding misreporting contained in section 6(g), unless the information 
is corrected:
    (i) On or before the production reporting date; or
    (ii) Because the incorrect information was the result of our error 
or the error of someone from USDA.
    (3) 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(f)(1) and 7 CFR part 400, subpart G 
for those crop years for which you do not have such records.
    (4) At any time we discover you have misreported any material 
information used to determine your approved yield or your approved yield 
is not correct, the following actions will be taken, as applicable:
    (i) We will correct your approved yield for the crop year such 
information is not correct, and all subsequent crop years;
    (ii) We will correct the unit structure, if necessary;

[[Page 136]]

    (iii) Any overpaid or underpaid indemnity or premium must be repaid; 
and
    (iv) You will be subject to the provisions regarding misreporting 
contained in section 6(g)(1), unless the incorrect information was the 
result of our error or the error of someone from USDA.
    (h) In addition to any consequences in section 3(g), 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(f)(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);
    (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;
    (ii) The current year's insurable 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); and
    (iii) We determine there is no valid agronomic basis to support the 
approved yield; 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.
    (i) 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(i)(1) to the amount of 
appraised or harvested production for all of the insured planted 
acreage; and
    (3) Dividing the total in section 3(i)(2) by the total number of 
acres in the unit.
    (j) 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. If you elected a 
whole-farm unit, you may exclude hail and fire coverage only if allowed 
by the Special Provisions.
    (k) 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, price elections or the Commodity Exchange Price 
Provisions, if applicable, can be viewed on RMA's Web site not later 
than the contract change date contained in the Crop Provisions (except 
as allowed herein or as specified in section 3). We may only revise this 
information after the

[[Page 137]]

contract change date to correct clear errors (e.g., the price for oats 
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, Crop Provisions, Commodity Exchange Price Provisions, if 
applicable, and Special Provisions not later than 30 days prior to the 
cancellation date for the insured crop. If available from us, you may 
elect to receive these documents and changes electronically. 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 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) The amount of acreage of the crop in the county (insurable and 
not insurable) in which you have a share and the date the insured crop 
was planted on the unit as follows:
    (i) The last date any timely planted acreage was planted and the 
number of acres planted by such date; and
    (ii) The date of planting and the number of acres planted per day 
for acreage planted during the late planting period (If you fail to 
report the number of acres planted on a daily basis, all acreage planted 
in the late planting period will be presumed to have been planted on the 
last day planting took place in the late planting period for the 
purposes of section 16);
    (2) Your share at the time coverage begins;
    (3) The practice;
    (4) The type; and
    (5) The land identifier for the crop acreage (e.g., legal 
description, FSA farm serial number or common land unit number if 
provided to you by FSA, etc.) as required on our form.
    (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:
    (i) On or before the acreage reporting date, you can change any 
information on any initially submitted acreage report, except as 
provided in section 6(d)(2)(iii) (e.g., you can correct the reported 
share, add acreage of the insured crop that was prevented from being 
planted, etc.);
    (ii) After the acreage reporting date, you cannot revise any 
information on the acreage report (e.g., if you have failed to report 
prevented planting acreage on or before the acreage reporting date, you 
cannot revise it after the acreage reporting date to include prevented 
planting acreage) but we will revise information that is clearly 
transposed or if you provide adequate evidence that we or someone from 
USDA have committed an error regarding the information on your acreage 
report; and
    (iii) You cannot revise your initially submitted acreage report at 
any time to change

[[Page 138]]

the insured crop, or type, that was reported as prevented from being 
planted;
    (3) You may request an acreage measurement from FSA or a business 
that provides such measurement service prior to the acreage reporting 
date, submit documentation of such request and an acreage report with 
estimated acreage by the acreage reporting date, and if the acreage 
measurement shows the estimated acreage was incorrect, we will revise 
your acreage report to reflect the correct acreage:
    (i) If an acreage measurement is only requested for a portion of the 
acreage within a unit, you must separately designate the acreage for 
which an acreage measurement has been requested;
    (ii) If an acreage measurement is not provided to us by the time we 
receive a notice of loss, we may:
    (A) Defer finalization of the claim until the measurement is 
completed, and:
    (1) Make all necessary loss determinations, except the acreage 
measurement; and
    (2) Finalize the claim in accordance with applicable policy 
provisions after you provide the acreage measurement to us (If you fail 
to provide the measurement, your claim will not be paid); or
    (B) Elect to measure the acreage, and:
    (1) Finalize your claim in accordance with applicable policy 
provisions; and
    (2) Estimated acreage under this section will not be accepted from 
you for any subsequent acreage report; and
    (iii) Premium will still be due in accordance with sections 2(e) and 
7. If the acreage is not measured as specified in section 6(d)(3)(ii) 
and the acreage measurement is not provided to us at least 15 days prior 
to the premium billing date, your premium will be based on the estimated 
acreage and will be revised, if necessary, when the acreage measurement 
is provided. If the acreage measurement is not provided by the 
termination date, you will be precluded from providing any estimated 
acreage for all subsequent crop years.
    (4) 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
    (5) If the acreage report has been revised in accordance with 
section 6(d)(1), (2), or (3), 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) Except as provided in section 6(g)(2), 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
    (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) If your share is misreported and the share is:
    (i) Under-reported, any claim will be determined using the share you 
reported; or
    (ii) Over-reported, any claim will be determined using the share we 
determine to be correct.
    (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.

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                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 your price 
election or your projected price, as applicable, 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 your 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 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) 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, amount of insurance, projected price and harvest price, as 
applicable, premium rate, etc.) is not included in the actuarial 
documents, unless such information is provided by a written agreement in 
accordance with section 18;
    (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) All acreage planted to the insured crop in the county in which 
you have a share:
    (1) Except as provided in section 9(a)(2), is insurable if the 
acreage has been planted and harvested or insured (including insured 
acreage that was prevented from being planted) in any one of the three 
previous crop years.

[[Page 140]]

Acreage that has not been planted and harvested (grazing is not 
considered harvested for the purposes of section 9(a)(1)) or insured in 
at least one of the three previous crop years may still be insurable if:
    (i) Such acreage was not planted:
    (A) In at least two of the three previous crop years to comply with 
any other USDA program;
    (B) Due to the crop rotation, the acreage would not have been 
planted in the previous three years (e.g., a crop rotation of corn, 
soybeans, and 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 on the acreage 
in at least two of the previous three crop years;
    (ii) Such acreage constitutes five percent or less of the insured 
planted acreage in the unit;
    (iii) Such acreage was not planted or harvested because it was 
pasture or rangeland, the crop to be insured is also pasture or 
rangeland, and the Crop Provisions, Special Provisions, or a written 
agreement specifically allow insurance for such acreage; or
    (iv) The Crop Provisions, Special Provisions, or a written agreement 
specifically allow insurance for such acreage; or
    (2) Is not insurable if:
    (i) The only crop that has been planted and harvested on the acreage 
in the three previous crop years is a cover, hay (except wheat harvested 
for hay) or forage crop (except insurable silage). However, such acreage 
may be insurable only if:
    (A) The crop to be insured is a hay or forage crop and the Crop 
Provisions, Special Provisions, or a written agreement specifically 
allow insurance for such acreage; or
    (B) The hay or forage crop was part of a crop rotation;
    (ii) The acreage has been strip-mined. However, such acreage may be 
insurable only if:
    (A) An agricultural commodity, other than a cover, hay (except wheat 
harvested for hay), or forage crop (except insurable silage) has been 
harvested from the acreage for at least five crop years after the strip-
mined land was reclaimed; or
    (B) A written agreement specifically allows insurance for such 
acreage;
    (iii) The actuarial documents do not provide the information 
necessary to determine the premium rate, unless insurance is allowed by 
a written agreement;
    (iv) The insured crop is damaged and it is practical to replant the 
insured crop, but the insured crop is not replanted;
    (v) The acreage is interplanted, unless insurance is allowed by the 
Crop Provisions;
    (vi) The acreage is otherwise restricted by the Crop Provisions or 
Special Provisions;
    (vii) The acreage is planted in any manner other than as specified 
in the policy provisions for the crop unless a written agreement 
specifically allows insurance for such planting;
    (viii) The acreage is 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 (e.g., 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:
    (A) 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 or successor provisions (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;
    (B) 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
    (C) You must report the crop acreage that will not be insured on the 
applicable acreage report; or
    (ix) The acreage is 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 organic agricultural experts 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:
    (A) You must provide records acceptable to us that show:
    (1) 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

[[Page 141]]

    (2) The applicable acreage has had three or more crops produced and 
harvested on it in the same crop year in at least two of the last four 
years in which the insured crop was grown on the acreage; and
    (B) 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)(2)(ix)(A).
    (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 a premium rate is not provided for an irrigated practice, 
you may either report and insure the irrigated acreage as ``non-
irrigated,'' or report the irrigated acreage as not insured (If you 
elect to insure such acreage under a non-irrigated practice, your 
irrigated yield will only be used to determine your approved yield if 
you continue to use a good irrigation practice. If you do not use a good 
irrigation practice, you will receive a yield determined in accordance 
with section 3(h)(3)).
    (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.
    (e) Notwithstanding the provisions in section 9(a)(1), if the 
Governor of a State designated within the Prairie Pothole National 
Priority Area elects to make section 508(o) of the Act effective for the 
State, any native sod acreage greater than five acres located in a 
county contained within the Prairie Pothole National Priority Area that 
has been tilled after May 22, 2008, is not insurable for the first five 
crop years of planting following the date the native sod acreage is 
tilled.
    (1) If the Governor makes this election after you have received an 
indemnity or other payment for native sod acreage, you will be required 
to repay the amount received and any premium for such acreage will be 
refunded to you.
    (2) If we determine you have tilled less than five acres of native 
sod a year for more than one crop year, we will add all the native sod 
acreage tilled after May 22, 2008, and all such acreage will be 
ineligible for insurance for the first five crop years of planting 
following the date the cumulative native sod acreage tilled exceeds five 
acres.

                            10. Share Insured

    (a) Insurance will attach:
    (1) Only if the person completing the application has a share in the 
insured crop; and
    (2) Only to that person's share, except that insurance may attach to 
another person's share of the insured crop if the other person has a 
share of the crop and:
    (i) The application clearly states the insurance is requested for a 
person other than an individual (e.g., a partnership or a joint 
venture); or
    (ii) The application clearly states you as a landlord will insure 
your tenant's share, or you as a tenant will insure your landlord's 
share. If you as a landlord will insure your tenant's share, or you as a 
tenant will insure your landlord's share, you must provide evidence of 
the other party's approval (lease, power of attorney, etc.) and such 
evidence will be retained by us:
    (A) You also must clearly set forth the percentage shares of each 
person on the acreage report; and
    (B) For each landlord or tenant, you must report the landlord's or 
tenant's social security number, employer identification number, or 
other identification number we assigned for the purposes of this policy, 
as applicable.
    (b) With respect to your share:
    (1) We will consider to be included in your share under your policy, 
any acreage or interest reported by or for:
    (i) Your spouse, unless such spouse can prove he/she has a separate 
farming operation, which includes, but is not limited to, separate land 
(transfers of acreage from one spouse to another is not considered 
separate land), separate capital, separate inputs, separate accounting, 
and separate maintenance of proceeds; or
    (ii) Your child who resides in your household or any other member of 
your household, unless such child or other member of the household can 
demonstrate such person has a separate share in the crop (Children who 
do not reside in your household are not included in your share); and
    (2) If it is determined that the spouse, child or other member of 
the household has a separate policy but does not have a separate farming 
operation or share of the crop, as applicable:
    (i) The policy for one spouse or child or other member of the 
household will be void and the policy remaining in effect will be 
determined in accordance with section 22(a)(1) and (2);
    (ii) The acreage or share reported under the policy that is voided 
will be included under the remaining policy; and
    (iii) No premium will be due and no indemnity will be paid for the 
voided policy.
    (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.,)

[[Page 142]]

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 on each unit or part of a unit at the earliest of:
    (1) Total destruction of the insured crop;
    (2) Harvest of the insured crop;
    (3) Final adjustment of a loss on a unit;
    (4) The calendar date contained in the Crop Provisions or Special 
Provisions for the end of the insurance period;
    (5) Abandonment of the insured crop; or
    (6) As otherwise specified in the Crop Provisions.
    (c) Except as provided in the Crop Provisions or applicable 
endorsement, in addition to the requirements of section 11(b), coverage 
ends on any acreage within a unit once any event specified in section 
11(b) occurs on that acreage. Coverage only remains in effect on acreage 
that has not been affected by an event specified in section 11(b).

                           12. Causes of Loss

    Insurance is provided only to protect against unavoidable, naturally 
occurring events. A list of the covered naturally occurring events is 
contained in the applicable Crop Provisions. All other causes of loss, 
including but not limited to the following, are not covered:
    (a) Any act by any person that affects the yield, quality or price 
of the insured crop (e.g., chemical drift, fire, terrorism, etc.);
    (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 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, 
or the inability to prepare the land for irrigation using your 
established irrigation method (e.g., furrow irrigation), unless the 
failure, breakdown or inability is due to a cause of loss specified in 
the Crop Provisions.
    (1) 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.
    (2) 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). If the crops to be replanted are in a whole-farm 
unit, the 20 acres or 20 percent requirement is to be applied separately 
to each crop to be replanted in the whole-farm unit.
    (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:
    (1) The lesser of your actual cost for replanting or the amount 
specified in the Crop Provisions or Special Provisions; or
    (2) If the Crop Provisions or Special Provisions specify that your 
actual cost will not be used to determine your replant payment,

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the amount determined in accordance with the Crop Provisions or Special 
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 the case of damage or loss of production or revenue to any 
insured crop, you must protect the crop from further damage by providing 
sufficient care.
    (b) Notice provisions:
    (1) For a planted crop, when there is damage or loss of production, 
you must give us notice, by unit, within 72 hours of your initial 
discovery of damage or loss of production (but not later than 15 days 
after the end of the insurance period, even if you have not harvested 
the crop).
    (2) For crops for which revenue protection is elected, if there is 
no damage or loss of production, you must give us notice not later than 
45 days after the latest date the harvest price is released for any crop 
in the unit where there is a revenue loss.
    (3) In the event you are prevented from planting an insured crop 
that has prevented planting coverage, you must notify us within 72 hours 
after:
    (i) 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
    (ii) You determine you will not be able to plant the insured crop 
within any applicable late planting period.
    (4) 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.
    (5) If you fail to comply with these notice requirements, any loss 
or prevented planting claim will be considered solely due to an 
uninsured cause of loss for the acreage for which such failure occurred, 
unless we determine that we have the ability to accurately adjust the 
loss. If we determine that we do not have the ability to accurately 
adjust the loss:
    (i) For any prevented planting claim, no prevented planting coverage 
will be provided and no premium will be owed or prevented planting 
payment will be paid; or
    (ii) For any claim for indemnity, no indemnity will be paid but you 
will still be required to pay all premiums owed.
    (c) Representative samples:
    (1) If representative samples are required by the Crop Provisions, 
you must leave representative samples of the unharvested crop intact:
    (i) If you report damage less than 15 days before the time you will 
begin harvest or during harvest of the damaged unit; or
    (ii) At any time when required by us.
    (2) The samples must be left intact until we inspect them or until 
15 days after completion of harvest on the remainder of the unit, 
whichever is earlier.
    (3) 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 rows, if the crop is 
planted in rows, or if the crop is not planted in rows, the longest 
dimension of the field.
    (4) 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.
    (d) Consent:
    (1) You must obtain consent from us before, and notify us after you:
    (i) Destroy any of the insured crop that is not harvested;
    (ii) Put the insured crop to an alternative use;
    (iii) Put the acreage to another use; or
    (iv) Abandon any portion of the insured crop.
    (2) We will not give consent for any of the actions in section 
14(d)(1)(i) through (iv) if it is practical to replant the crop or until 
we have made an appraisal of the potential production of the crop.
    (3) Failure to obtain our consent will result in the assignment of 
an amount of production or value to count in accordance with the 
Settlement of Claim provisions of the applicable Crop Provisions.
    (e) Claims:
    (1) Except as otherwise provided in your policy, you must submit a 
claim declaring the amount of your loss by the dates shown in section 
14(e)(3), unless you:
    (i) Request an extension in writing by such date and we agree to 
such request (Extensions will only be granted if the amount of the loss 
can not be determined within such time period because the information 
needed to determine the amount of the loss is not available); or
    (ii) Have harvested farm-stored grain production and elect, in 
writing, to delay measurement of your farm-stored production and 
settlement of any potential associated claim for indemnity (Extensions 
will be granted for this purpose up to 180 days after the end of the 
insurance period).
    (A) For policies that require APH, if such extension continues 
beyond the date you are required to submit your production report, you 
will be assigned the previous year's approved yield as a temporary yield 
in accordance with applicable procedures.
    (B) Any extension does not extend any date specified in the policy 
by which premiums, administrative fees, or other debts owed must be 
paid.

[[Page 144]]

    (C) Damage that occurs after the end of the insurance period (for 
example, while the harvested crop production is in storage) is not 
covered; and
    (2) Failure to timely submit a claim or provide the required 
information necessary to determine the amount of the claim will result 
in no indemnity, prevented planting payment or replant payment:
    (i) Even though no indemnity or replant payment is due, you will 
still be required to pay the premium due under the policy for the unit; 
or
    (ii) Failure to timely submit a prevented planting claim will result 
in no prevented planting coverage and no premium will be due.
    (3) You must submit a claim not later than:
    (i) For policies other than revenue protection, 60 days after the 
date the insurance period ends for all acreage in the unit (When there 
is acreage in the unit where the insurance period ended on different 
dates, it is the last date the insurance period ends on the unit. For 
example, if a unit has corn acreage that was put to another use on July 
15 and corn acreage where harvest was completed on September 30, the 
claim must be submitted not later than 60 days after September 30); or
    (ii) For revenue protection, the later of:
    (A) 60 days after the last date the harvest price is released for 
any crop in the unit; or
    (B) The date determined in accordance with section 14(e)(3)(i).
    (4) To receive any indemnity (or receive the rest of an indemnity in 
the case of acreage that is planted to a second crop), prevented 
planting payment or replant payment, you must, if applicable:
    (i) Provide:
    (A) A complete harvesting, production, and marketing record of each 
insured crop by unit including separate records showing the same 
information for production from any acreage not insured.
    (B) Records as indicated below if you insure any acreage that may be 
subject to an indemnity reduction as specified in section 15(e)(2):
    (1) Separate records of production from such acreage for all insured 
crops planted on the acreage (e.g., 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 separate records for such 
acreage, we will allocate the production of each crop to the acreage in 
proportion to our liability for the acreage; or
    (2) If there is no loss on the unit that includes acreage of the 
second crop, no separate records need to be submitted for the second 
crop and you can receive the rest of the indemnity for the first insured 
crop.
    (C) Any other information we may require to settle the claim.
    (ii) Cooperate with us in the investigation or settlement of the 
claim, and, as often as we reasonably require:
    (A) Show us the damaged crop;
    (B) Allow us to remove samples of the insured crop; and
    (C) Provide us with records and documents we request and permit us 
to make copies.
    (iii) Establish:
    (A) The total production or value received for the insured crop on 
the unit;
    (B) That any loss occurred during the insurance period;
    (C) That the loss was caused by one or more of the insured causes 
specified in the Crop Provisions; and
    (D) That you have complied with all provisions of this policy.
    (iv) Upon our request, or that of any USDA employee authorized to 
conduct investigations of the crop insurance program, submit to an 
examination under oath.
    (5) Failure to comply with any requirement contained in section 
14(e)(4) will result in denial of the claim and any premium will still 
be owed, unless the claim denied is for prevented planting.
    Our Duties--
    (f) 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.
    (g) 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.
    (h) 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.
    (i) We recognize and apply the loss adjustment procedures 
established or approved by the Federal Crop Insurance Corporation.
    (j) For revenue protection, we may make preliminary indemnity 
payments for crop

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production losses prior to the release of the harvest price if you have 
not elected the harvest price exclusion.
    (1) First, we may pay an initial indemnity based upon your projected 
price, in accordance with the applicable Crop Provisions provided that 
your production to count and share have been established; and
    (2) Second, after the harvest price is released, and if it is not 
equal to the projected price, we will recalculate the indemnity payment 
and pay any additional indemnity that may be due.

    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 (If 
you fail to provide verifiable records of harvested production, no 
indemnity will be paid and you will be required to return any previously 
paid indemnity for the unit that was based on an appraised amount of 
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:
    (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 our form used to exclude fire and hail.
    (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:

[[Page 146]]

    (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 cultural experts 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;
    (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).
    (1) If the records you provided are from acreage you double cropped 
in at least two of the last four crop years, you may apply your history 
of double cropping to any acreage of the insured crop in the county 
(e.g., if you have double cropped 100 acres of wheat and soybeans in the 
county and you acquire an additional 100 acres in the county, you can 
apply that history of double cropped acreage to any of the 200 acres in 
the county as long as it does not exceed 100 acres); or
    (2) If the records you provided are from acreage that another 
producer double cropped in at least two of the last four crop years, you 
may only use the history of double cropping for the same physical acres 
from which double cropping records were provided (e.g., if a neighbor 
has double cropped 100 acres of wheat and soybeans in the county and you 
acquire your neighbor's 100 double cropped acres and an additional 100 
acres in the county, you can only apply your neighbor's history of 
double cropped acreage to the same 100 acres that your neighbor double 
cropped).
    (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

[[Page 147]]

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 are prevented from planting the insured crop on insurable 
acreage by an insured cause of loss 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 on your acreage report any insurable acreage of the 
insured crop that was prevented from being planted; and
    (3) You did not plant the insured crop during or after the late 
planting period. Acreage planted to the insured crop during or after the 
late planting period is covered under the late planting provisions.
    (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 cannot increase your elected or assigned prevented planting 
coverage level for any crop year if a cause of loss that could prevent 
planting (even though it is not known whether such cause will actually 
prevent planting) has occurred during the prevented planting insurance 
period specified in section 17(a)(1)(i) or (ii) and prior to your 
request 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 the 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) Prevented planting coverage will be provided against:
    (1) Drought, failure of the irrigation water supply, failure or 
breakdown of irrigation equipment or facilities, or the inability to 
prepare the land for irrigation using your established irrigation 
method, due to an insured cause of loss only if, on the final planting 
date (or within the late planting period if you elect to try to plant 
the crop), you provide documentation acceptable to us to establish:
    (i) 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. 
The documentation for prolonged period of dry weather 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
    (ii) For irrigated acreage:
    (A) Due to an insured cause of loss, there is not a reasonable 
expectation of having adequate water to carry out an irrigated practice 
or you are unable to prepare the land for irrigation using your 
established irrigation method:
    (1) If you knew or had reason to know on the final planting date or 
during the late planting period that your water will be reduced, no 
reasonable expectation exists; and
    (2) Available water resources will be verified using information 
from State Departments of Water Resources, U.S. Bureau of Reclamation, 
Natural Resources Conservation Service or other sources whose

[[Page 148]]

business includes collection of water data or regulation of water 
resources; or
    (B) The irrigation equipment or facilities have failed or broken 
down if such failure or breakdown is due to an insured cause of loss 
specified in section 12(d).
    (2) Causes other than drought, failure of the irrigation water 
supply, failure or breakdown of the irrigation equipment or facilities, 
or your inability to prepare the land for irrigation using your 
established irrigation method, provided the cause of loss is specified 
in the Crop Provisions. However, if it is possible for you to plant on 
or prior to the final planting date when other producers in the area are 
planting and you fail to plant, no prevented planting payment will be 
made.
    (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 as follows:
    (i) If you have planted any crop in the county for which prevented 
planting insurance was available (you will be considered to have planted 
if your APH database contains actual planted acres) or have received a 
prevented planting insurance guarantee in any one or more of the four 
most recent crop years, and the insured crop is not required to be 
contracted with a processor to be insured:
    (A) The number of eligible acres will be the maximum number of acres 
certified for APH purposes, or insured acres reported, for the crop in 
any one of the four most recent crop years (not including reported 
prevented planting acreage that was planted to a second crop unless you 
meet the double cropping requirements in section 17(f)(4)).
    (B) If you acquire additional land for the current crop year, the 
number of eligible acres determined in section 17(e)(1)(i)(A) for a crop 
may be increased by multiplying it by the ratio of the total cropland 
acres that you are farming this year (if greater) to the total cropland 
acres that you farmed in the previous year, provided that:
    (1) You submit proof to us that you acquired additional acreage for 
the current crop year by any of the methods specified in section 
17(f)(12);
    (2) The additional acreage was acquired in time to plant it for the 
current crop year using good farming practices; and
    (3) No cause of loss has occurred at the time you acquire the 
acreage that may prevent planting (except acreage you lease the previous 
year and continue to lease in the current crop year).
    (C) If you add adequate irrigation facilities to your existing non-
irrigated acreage or if you acquire additional land for the current crop 
year that has adequate irrigation facilities, the number of eligible 
acres determined in section 17(e)(1)(i)(A) for irrigated acreage of a 
crop may be increased by multiplying it by the ratio of the total 
irrigated acres that you are farming this year (if greater) to the total 
irrigated acres that you farmed in the previous year, provided the 
conditions in sections 17(e)(1)(i)(B)(1), (2) and (3) are met. If there 
were no irrigated acres in the previous year, the eligible irrigated 
acres for a crop will be limited to the lesser of the number of eligible 
non-irrigated acres of the crop or the number of acres on which adequate 
irrigation facilities were added.
    (ii) If you have not planted any crop in the county for which 
prevented planting insurance was available (you will be considered to 
have planted if your APH database contains actual planted acres) or have 
not received a prevented planting insurance guarantee in all of the four 
most recent crop years, and the insured crop is not required to be 
contracted with a processor to be insured:
    (A) The number of eligible acres will be:
    (1) The number of acres specified on your intended acreage report, 
which must be submitted to us by the sales closing date for all crops 
you insure for the crop year and that is accepted by us; or
    (2) The number of acres specified on your intended acreage report, 
which must be submitted to us within 10 days of the time you acquire the 
acreage and that is accepted by us, if, on the sales closing date, you 
do not have any acreage in a county and you subsequently acquire acreage 
through a method described in section 17(f)(12) in time to plant it 
using good farming practices.
    (B) The total number of acres listed on the intended acreage report 
may not exceed the number of acres of cropland in your farming operation 
at the time you submit the intended acreage report.
    (C) If you acquire additional acreage after we accept your intended 
acreage report, the number of acres determined in section 
17(e)(1)(ii)(A) may be increased in accordance with section 
17(e)(1)(i)(B) and (C).
    (D) Prevented planting coverage will not be provided for any acreage 
included on the intended acreage report or any increased amount of 
acreage determined in accordance with section 17(e)(1)(ii)(C) if a cause 
of loss that may prevent planting occurred before the acreage was 
acquired, as determined by us.
    (iii) For any crop that must be contracted with a processor to be 
insured:
    (A) The number of eligible acres will be:
    (1) The number of acres of the crop specified in the processor 
contract, if the contract specifies a number of acres contracted for the 
crop year;

[[Page 149]]

    (2) 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 (for the 
purposes of establishing the number of prevented planting acres, any 
reductions applied to the transitional yield for failure to certify 
acreage and production for four prior years will not be used); or
    (3) Notwithstanding sections 17(e)(1)(iii)(A)(1) and (2), 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.
    (B) 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 will determine the number of eligible 
acres based on the number of acres or amount of production you had 
contracted in the county 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 will be based on the contract price in place for 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.
    (2) Any eligible acreage determined in accordance with 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 (If the crop is in 
a whole-farm unit, the 20 acre or 20 percent requirement will be applied 
separately to each crop in the whole-farm unit). 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 unless:
    (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 (e.g., where 
rotation requirements would not be met or you already planted the total 
number of acres specified in the processor contact);
    (2) For which the actuarial documents do not provide the information 
needed to determine the 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, excluding share 
arrangements, unless:
    (i) It is a practice that is generally recognized by agricultural 
experts or organic agricultural experts in the area to plant the insured 
crop for harvest following harvest of the first insured crop, and 
additional coverage insurance offered under the authority of the Act is 
available in the county for both crops in the same crop year;
    (ii) For the insured crop that is prevented from being planted, you 
provide records acceptable to us of acreage and production that show, in 
at least two of the last four crop years:
    (A) You have double cropped acreage on which the insured crop that 
is prevented from being planted in the current crop year was grown (You 
may apply your history of double cropping to any acreage of the insured 
crop in the county (e.g., if you have double cropped 100 acres of wheat 
and soybeans in the county and you acquire an additional 100 acres in 
the county, you can apply that history of double cropped acreage to any 
of the 200 acres in the county as long as it does not exceed 100 
acres)); or
    (B) The acreage you are prevented from planting in the current crop 
year was double cropped with the insured crop that is prevented from 
being planted (You may only use the history of double cropping for the 
same physical acres from which double cropping records were provided 
(e.g., if a neighbor has double cropped 100 acres of wheat and soybeans 
in the county and you acquire your neighbor's 100 double cropped acres 
and an

[[Page 150]]

additional 100 acres in the county, you can only apply your neighbor's 
history of double cropped acreage to the same 100 acres that your 
neighbor double cropped)); and
    (iii) The amount of acreage you are double cropping in the current 
crop year does not exceed the number of acres for which you provided the 
records required in section 17(f)(4)(ii);
    (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 the 
acreage would have remained fallow for crop rotation purposes or on 
which any pasture or forage crop is in place on the acreage during the 
time planting of the insured crop generally occurs in the area. Cover 
plants that are seeded, transplanted, or that volunteer:
    (i) More than 12 months prior to the final planting date for the 
insured crop that was prevented from being planted will be considered 
pasture or a forage crop that is in place (e.g., the cover crop is 
planted 15 months prior to the final planting date and remains in place 
during the time the insured crop would normally be planted); or
    (ii) Less than 12 months prior to the final planting date for the 
insured crop that was prevented from being planted will not be 
considered pasture or a forage crop that is in place;
    (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 
(including, but not limited to, sufficient equipment and manpower) 
available to plant and produce a crop with the expectation of producing 
at least the yield used to determine your production guarantee or amount 
of insurance. Evidence that you previously had planted the crop on the 
unit will be considered adequate proof unless:
    (i) There has been a change in the availability of inputs since the 
crop was last planted that could affect your ability to plant and 
produce the insured crop;
    (ii) We determine you have insufficient inputs to plant the total 
number of insured crop acres (e.g., you will not receive a prevented 
planting payment if you have sufficient inputs to plant only 80 acres 
but you have already planted 80 acres and are claiming prevented 
planting on an additional 100 acres); or
    (iii) Your planting practices or rotational requirements show 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:
    (i) Types for which separate projected prices or price elections, as 
applicable, 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 (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)(ii) 
or (iii); and
    (ii) 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 may 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), we will use acreage from 
another

[[Page 151]]

crop insured for the current crop year for which you have remaining 
eligible prevented planting acreage.
    (1) The crop first used for this purpose will be the insured crop 
that would have a prevented planting payment most similar to the payment 
for the crop that was prevented from being planted.
    (i) If there are still insufficient eligible prevented planting 
acres, the next crop used will be the insured crop that would have the 
next closest prevented planting payment.
    (ii) In the event payment amounts based on other crops are an equal 
amount above and below the payment amount for the crop that was 
prevented from being planted, eligible acres for the crop with the 
higher payment amount will be used first.
    (2) The prevented planting payment and premium will be based on:
    (i) The crop that was prevented from being planted if the insured 
crop with remaining eligible acreage would have resulted in a higher 
prevented planting payment than would have been paid for the crop that 
was prevented from being planted; or
    (ii) The crop from which eligible acres are being used if the 
insured crop with remaining eligible acreage will result in a lower 
prevented planting payment than would have been paid for the crop that 
was prevented from being planted.
    (3) For example, assume you were prevented from planting 200 acres 
of corn and you 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 and 90 acres of grain sorghum eligibility that would result in a 
$30 per acre payment. Your prevented planting coverage will be based on 
100 acres of corn ($40 per acre), 90 acres of grain sorghum ($30 per 
acre), and an additional 10 acres of corn (using potato eligible acres 
and paid as corn at $40 per acre). Your prevented planting payment would 
be $7,100 ($4,000 + $2,700 + $400).
    (4) Prevented planting coverage will be allowed as specified in 
section 17(h) only if the crop that was prevented from being planted 
meets all the policy provisions, except for having an adequate base of 
eligible prevented planting acreage. Payment may be made based on crops 
other than those that 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 whose 
eligible acres are being used.
    (5) An additional administrative fee will not be due as a result of 
using eligible prevented planting acreage as specified in section 17(h).
    (i) The prevented planting payment for any eligible acreage within a 
unit will be determined by:
    (1) Multiplying 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, by:
    (i) Your amount of insurance per acre; or
    (ii) The amount determined by multiplying the production guarantee 
(per acre) for timely planted acreage of the insured crop (or type, if 
applicable) by your price election or your projected price, whichever is 
applicable;
    (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 (including 
renewal of a 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, the crop; 
practice, type or variety; guarantee; premium rate; and projected price, 
harvest price, price election or amount of insurance, as applicable, or 
the information needed to determine such variable terms. If the written 
agreement is for a county:
    (1) That has a price election or amount of insurance stated in the 
Special Provisions, or an addendum thereto, for the crop, practice, type 
or variety, the written agreement will contain the price election or 
amount of insurance stated in the Special Provisions, or an addendum 
thereto, for the crop, practice, type or variety;
    (2) That does not have price elections or amounts of insurance 
stated in the Special Provisions, or an addendum thereto, for the crop, 
practice, type or variety, the written agreement will contain a price 
election or amount of insurance that does not exceed the price election 
or amount of insurance contained in the Special Provisions, or an 
addendum thereto, for the county that is used to establish the other 
terms of the written agreement, unless otherwise authorized by the Crop 
Provisions;
    (3) For which revenue protection is not available for the crop, but 
revenue protection is available in the State for the crop, the written 
agreement will contain the information used to establish the projected 
price

[[Page 152]]

and harvest price, as applicable, for that State; or
    (4) In a State for which revenue protection is not available for the 
crop, but revenue protection is available for the crop in another State, 
the written agreement is available for yield protection only, and will 
contain the information needed to determine the projected price for the 
crop from another State as determined 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 canceled 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 on or before the sales closing date (e.g., 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 is requested:
    (i) On or before the acreage reporting date to:
    (A) Insure unrated land, or an unrated practice, type or variety of 
a crop; although, if required by FCIC, such written agreements may be 
approved only after appraisal of the acreage by us and:
    (1) The crop's potential is equal to or exceeds 90 percent of the 
yield used to determine your production guarantee or amount of 
insurance; and
    (2) You sign the written agreement no later than the date the first 
field is appraised or by the expiration date for you to accept the 
offer, whichever comes first; 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, 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;
    (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; or
    (3) For adding land or a crop to either an existing written 
agreement or a request for a written agreement, provided the request is 
submitted by the applicable deadline specified in section 18;
    (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 in which the crop was planted during 
the base period and verifiable records of actual yields if required by 
FCIC;
    (iii) Evidence from agricultural experts or organic agricultural 
experts, 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) and the FSA farm serial number including

[[Page 153]]

tract and field numbers, if available. The submission must also include 
an FSA aerial photograph, or field boundaries derived by a Geographic 
Information System or Global Positioning System, 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) For a crop you have previously planted in the county or area for 
at least three years:
    (A) A completed APH form signed by you (only for crop policies that 
require APH) based on verifiable production records for at least the 
three most recent crop years in which the crop was planted; and
    (B) Verifiable production records for at least the three most recent 
crop years in which the crop was planted:
    (1) The verifiable production records do not necessarily have to be 
from the same physical acreage for which you are requesting a written 
agreement; and
    (2) Verifiable production records do not have to be submitted if you 
have insured the crop in the county or area for at least the previous 
three crop years and have certified the yields on the applicable 
production reports or the yields are based on your insurance claim 
(although you are not required to submit production records, you still 
must maintain production records in accordance with section 21);
    (ii) For a crop you have not previously planted in the county or 
area for at least three years:
    (A) A completed APH form signed by you (only for crop policies that 
require APH) based on verifiable production records for at least the 
three most recent crop years for a similar crop from acreage:
    (1) In the county; or
    (2) In the area if you have not produced the crop in the county; and
    (B) Verifiable production records for at least the three most recent 
crop years in which the similar crop was planted:
    (1) The verifiable production records for the similar crop do not 
necessarily have to be from the same physical acreage for which you are 
requesting a written agreement; and
    (2) Verifiable production records do not have to be submitted if you 
have insured the similar crop for at least the three previous crop years 
and have certified the yields on the applicable production reports or 
the yields are based on your insurance claim (although you are not 
required to submit production records, you still must maintain 
production records in accordance with section 21);
    (C) If you have at least one year of production records, but less 
than three years of production records, for the crop in the county or 
area but have production records for a similar crop in the county or 
area such that the combination of both sets of records results in at 
least three years of production records, you must provide the 
information required in sections 18(f)(2)(i)(A) & (B) for the years you 
grew the crop in the county or area and the information required in 
sections 18(f)(2)(ii)(A) & (B) regarding the similar crop for the 
remaining years; and
    (D) A similar crop to the crop for which a written agreement is 
being requested must:
    (1) 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;
    (2) Have substantially the same growing season (i.e., normally 
planted around the same dates and harvested around the same dates);
    (3) Require comparable agronomic conditions (e.g., comparable needs 
for water, soil, etc.); and
    (4) Be subject to substantially the same risks (frequency and 
severity of loss would be expected to be comparable from the same cause 
of loss);
    (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 applicable 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 for a written agreement (The request for a 
written agreement may be accepted if any missing information is 
available from other acceptable sources);
    (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

[[Page 154]]

applicable deadline specified in sections 18(a) or (e); or
    (4) The request is not authorized by the policy;
    (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 organic agricultural experts determine 
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 delivered to 
us, or postmarked, not later than the expiration date for you to accept 
the offer;
    (3) We accept the written agreement offer; and
    (4) The crop meets the minimum appraisal amount specified in section 
18(e)(2)(i)(A)(1), if applicable;
    (j) Multi-year 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(a), unless otherwise specified by FCIC;
    (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); and
    (o) If you disagree with any determination made by FCIC under 
section 18, you may obtain administrative review in accordance with 7 
CFR part 400, subpart J or appeal in accordance with 7 CFR part 11, 
unless you have failed to comply with the provisions contained in 
section 18(g) or section 18(i)(2) or (4).

                          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:
    (1) Except for determinations specified in section 18(g), section 
18(i)(2) or section 20(b)(2) or (3), 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);
    (2) Regarding whether you have used good farming practices 
(excluding determinations

[[Page 155]]

of the amount of assigned production for uninsured causes for your 
failure to use good farming practices), you may 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, you must use the appeal or administration review 
process; or
    (3) Any determination made by us that is a matter of general 
applicability is not subject to administrative review under 7 CFR part 
400, subpart J or appeal under 7 CFR part 11. If you want to seek 
judicial review of any determination that is a matter of general 
applicability, you must request a determination of non-appealability 
from the Director of the National Appeals Division in accordance with 7 
CFR part 11.6 prior to seeking judicial review.
    (c) If you fail to exhaust your right to appeal, you will not be 
able to resolve the dispute through judicial review.
    (d) You are not required to exhaust your right to reconsideration 
prior to seeking judicial review. If you do not request reconsideration 
and you elect to file suit, such suit must be brought in accordance with 
section 20(e)(2) and must be filed not later than one year after the 
date the determination regarding whether you used good farming practices 
was made.
    (e) 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.
    (f) 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) or (e), the disagreement may be 
resolved through mediation in accordance with section 20(g). If 
resolution cannot be reached through mediation, or you and we do not 
agree to mediation, the disagreement must be resolved through 
arbitration in accordance with the rules of the American Arbitration 
Association (AAA), except as provided in sections 20(c) and (f), and 
unless rules are established by FCIC for this purpose. Any mediator or 
arbitrator with a familial, financial or other business relationship to 
you or us, or our agent or loss adjuster, is disqualified from hearing 
the dispute.
    (1) All disputes involving determinations made by us, except those 
specified in section 20(d) or (e), are subject to mediation or 
arbitration. However, if the dispute in any way involves a policy or 
procedure interpretation, regarding whether a specific policy provision 
or procedure is applicable to the situation, how it is applicable, or 
the meaning of any policy provision or procedure, either you or we must 
obtain an interpretation from FCIC in accordance with 7 CFR part 400, 
subpart X or such other procedures as established by FCIC.
    (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 determination that is a matter of general applicability.
    (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,

[[Page 156]]

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) With respect to good farming practices:
    (1) We will make decisions regarding what constitutes a good farming 
practice and determinations of assigned production for uninsured causes 
for your failure to use good farming practices.
    (i) If you disagree with our decision of what constitutes a good 
farming practice, you must request a determination from FCIC of what 
constitutes a good farming practice before filing any suit against FCIC.
    (ii) If you disagree with our determination of the amount of 
assigned production, you must use the arbitration or mediation process 
contained in this section.
    (iii) You may not sue us for our decisions regarding whether good 
farming practices were used by you.
    (2) FCIC will make determinations regarding what constitutes a good 
farming practice. If you do not agree with any determination made by 
FCIC:
    (i) 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; or
    (ii) You may file suit against FCIC.
    (A) You are not required to request reconsideration from FCIC before 
filing suit.
    (B) Any suit must be brought against FCIC in the United States 
district court for the district in which the insured acreage is located.
    (C) Suit must be filed against FCIC not later than one year after 
the date:
    (1) Of the determination; or
    (2) Reconsideration is completed, if reconsideration was requested 
under section 20(d)(2)(i).
    (e) Except as provided in sections 18(n) or (o), or 20(d) or (k), if 
you disagree with any other determination made by FCIC or any claim 
where FCIC is directly involved in the claims process or directs us in 
the resolution of the claim, 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).
    (1) 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.
    (2) Such suit must be brought in the United States district court 
for the district in which the insured acreage is located.
    (3) 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).
    (k) Any determination made by FCIC that is a matter of general 
applicability is not subject to administrative review under 7 CFR part 
400, subpart J or appeal under 7 CFR part 11. If you want to seek 
judicial review of any FCIC determination that is a matter of general 
applicability, you must request a determination of non-appealability 
from the Director of the National Appeals

[[Page 157]]

Division in accordance with 7 CFR 11.6 before seeking judicial review.

      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);
    (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 calendar date for the end of the insurance 
period for the crop year for which you initially certified such records, 
unless such records have already been provided to us (e.g., if you are a 
new insured and you certify 2007 through 2010 crop year production 
records in 2011 to determine your approved yield for the 2011 crop year, 
you must retain all records from the 2007 through 2010 crop years 
through the 2014 crop year. If you subsequently certify records of the 
2011 crop year in 2012 to determine your approved yield for the 2012 
crop year, you must retain the 2011 crop year records through the 2015 
crop year and so forth for each subsequent year of production records 
certified); and
    (3) While you are not required to maintain records beyond the record 
retention period specified in section 21(b)(2), at any time, if we or 
FCIC have evidence that you, or anyone assisting you, knowingly 
misreported any information related to any yield you have certified, we 
or FCIC will replace all yields in your APH database determined to be 
incorrect with the lesser of an assigned yield determined in accordance 
with section 3 or the yield determined to be correct:
    (i) If an overpayment has been made to you, you will be required to 
repay the overpaid amount; and
    (ii) Replacement of yields in accordance with section 21(b)(3) does 
not exempt you from other sanctions applicable under the terms of the 
policy or any applicable law.
    (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, 
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(f)(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

[[Page 158]]

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 section 22(b), the amount of loss from fire 
will be the difference between the total value of the insured crop 
before the fire and the total value of the insured crop after the fire. 
This amount will be determined in accordance with the provisions in 
section 35.

                   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 an 
amount for expenses and handling equal to 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 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.

[[Page 159]]

                         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 for 
any catastrophic risk protection policy and we will collect any unpaid 
administrative fees and any interest owed thereon for additional 
coverage policies.
    (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.
    (b) Even though the policy is void, you will still be required to 
pay 20 percent of the premium that you would otherwise be required to 
pay 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.
    (e) If you willfully and intentionally provide false or inaccurate 
information to us or FCIC or you fail to comply with a requirement of 
FCIC, in accordance with 7 CFR part 400, subpart R, FCIC may impose on 
you:
    (1) A civil fine for each violation in an amount not to exceed the 
greater of:
    (i) The amount of the pecuniary gain obtained as a result of the 
false or inaccurate information provided or the noncompliance with a 
requirement of FCIC; or
    (ii) $10,000; and
    (2) A disqualification for a period of up to 5 years from receiving 
any monetary or non-monetary benefit provided under each of the 
following:
    (i) Any crop insurance policy offered under the Act;
    (ii) The Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
7333 et seq.);
    (iii) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.);
    (iv) The Commodity Credit Corporation Charter Act (15 U.S.C. 714 et 
seq.);
    (v) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.);
    (vi) Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et 
seq.);
    (vii) The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 
et seq.); and

[[Page 160]]

    (viii) Any federal law that provides assistance to a producer of an 
agricultural commodity affected by a crop loss or a decline in the 
prices of agricultural commodities.

             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

    (a) You may assign your right to an indemnity for the crop year only 
to creditors or other persons to whom you have a financial debt or other 
pecuniary obligation. You may be required to provide proof of the debt 
or other pecuniary obligation before we will accept the assignment of 
indemnity.
    (b) All assignments must be on our form and must be provided to us. 
Each assignment form may contain more than one creditor or other person 
to whom you have a financial debt or other pecuniary obligation.
    (c) Unless you have provided us with a properly executed assignment 
of indemnity, we will not make any payment to a lienholder or other 
person to whom you have a financial debt or other pecuniary obligation 
even if you may have a lien or other assignment recorded elsewhere. 
Under no circumstances will we be liable:
    (1) To any lienholder or other person to whom you have a financial 
debt or other pecuniary obligation where you have failed to include such 
lienholder or person on a properly executed assignment of indemnity 
provided to us; or
    (2) To pay to all lienholders or other persons to whom you have a 
financial debt or other pecuniary obligation any amount greater than the 
total amount of indemnity owed under the policy.
    (d) If we have received the properly executed assignment of 
indemnity form:
    (1) Only one payment will be issued jointly in the names of all 
assignees and you; and
    (2) Any assignee will have the right to submit all loss notices and 
forms as required by the policy.
    (e) If you have suffered a loss from an insurable cause and fail to 
file a claim for indemnity within the period specified in section 14(e), 
the assignee may submit the claim for indemnity not later than 30 days 
after the period for filing a claim 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. [Reserved]

              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. Units

    (a) You may elect an enterprise unit or whole-farm unit in 
accordance with the following:
    (1) For crops for which revenue protection is available, you may 
elect:
    (i) An enterprise unit if you elected revenue protection or yield 
protection; or
    (ii) A whole-farm unit if you elected:
    (A) Revenue protection and revenue protection is provided unless 
limited by the Special Provisions; or
    (B) Yield protection only if whole-farm units are allowed by the 
Special Provisions;

[[Page 161]]

    (2) For crops for which revenue protection is not available, 
enterprise units or whole-farm units are available only if allowed by 
the Special Provisions;
    (3) You must make such election on or before the earliest sales 
closing date for the insured crops in the unit and report such unit 
structure on your acreage report:
    (i) For counties in which the actuarial documents specify a fall or 
winter sales closing date and a spring sales closing date, you may 
change your unit election on or before the spring sales closing date 
(earliest spring sales closing date for crops in the unit if electing a 
whole-farm unit) if you do not have any insured fall planted acreage of 
the insured crop;
    (ii) Your unit selection will remain in effect from year to year 
unless you notify us in writing by the earliest sales closing date for 
the crop year for which you wish to change this election; and
    (iii) These units may not be further divided except as specified 
herein;
    (4) For an enterprise unit:
    (i) To qualify, an enterprise unit must contain all of the insurable 
acreage of the same insured crop in:
    (A) Two or more sections, if sections are the basis for optional 
units where the insured acreage is located;
    (B) Two or more section equivalents determined in accordance with 
FCIC issued procedures, if section equivalents are the basis for 
optional units where the insured acreage is located or are applicable to 
the insured acreage;
    (C) Two or more FSA farm serial numbers, if FSA farm serial numbers 
are the basis for optional units where the insured acreage is located;
    (D) Any combination of two or more sections, section equivalents, or 
FSA farm serial numbers, if more than one of these are the basis for 
optional units where the acreage is located or are applicable to the 
insured acreage (e.g., if a portion of your acreage is located where 
sections are the basis for optional units and another portion of your 
acreage is located where FSA farm serial numbers are the basis for 
optional units, you may qualify for an enterprise unit based on a 
combination of these two parcels);
    (E) One section, section equivalent, or FSA farm serial number that 
contains at least 660 planted acres of the insured crop. You may qualify 
under this paragraph based only on the type of parcel that is utilized 
to establish optional units where your insured acreage is located (e.g., 
if having two or more sections is the basis for optional units where the 
insured acreage is located, you may qualify for an enterprise unit if 
you have at least 660 planted acres of the insured crop in one section); 
or
    (F) Two or more units established by written agreement; and
    (ii) At least two of the sections, section equivalents, FSA farm 
serial numbers, or units established by written agreement in section 
34(a)(4)(i)(A), (B), (C), (D), or (F) must each have planted acreage 
that constitutes at least the lesser of 20 acres or 20 percent of the 
insured crop acreage in the enterprise unit. If there is planted acreage 
in more than two sections, section equivalents, FSA farm serial numbers 
or units established by written agreement in section 34(a)(4)(i)(A), 
(B), (C), (D), or (F), these can be aggregated to form at least two 
parcels to meet this requirement. For example, if sections are the basis 
for optional units where the insured acreage is located and you have 80 
planted acres in section one, 10 planted acres in section two, and 10 
planted acres in section three, you may aggregate sections two and three 
to meet this requirement.
    (iii) The crop must be insured under revenue protection or yield 
protection, unless otherwise specified in the Special Provisions;
    (iv) If you want to change your unit structure from enterprise units 
to basic or optional units in any subsequent crop year, you must 
maintain separate records of acreage and production:
    (A) For each basic unit, to be eligible to use records to establish 
the production guarantee for the basic unit; or
    (B) For optional units, to qualify for optional units and to be 
eligible to use such records to establish the production guarantee for 
the optional units;
    (v) If you do not comply with the production reporting provisions in 
section 3(f) for the enterprise unit, your yield for the enterprise unit 
will be determined in accordance with section 3(f)(1);
    (vi) You must separately designate on the acreage report each 
section or other basis in section 34(a)(4)(i) you used to qualify for an 
enterprise unit; and
    (vii) If we discover you do not qualify for an enterprise unit and 
such discovery is made:
    (A) On or before the acreage reporting date, your unit division will 
be based on the basic or optional units, whichever you report on your 
acreage report and qualify for; or
    (B) At any time after the acreage reporting date, we will assign the 
basic unit structure; and
    (5) For a whole-farm unit:
    (i) To qualify:
    (A) All crops in the whole-farm unit must be insured:
    (1) Under revenue protection (if you elected the harvest price 
exclusion for any crop, you must elect it for all crops in the whole-
farm unit), unless the Special Provisions allow whole-farm units for 
another plan of insurance and you insure all crops in the whole-farm 
unit under such plan (e.g., if you plant corn and soybeans for which you 
have elected revenue protection and you plant

[[Page 162]]

canola for which you have elected yield protection, the corn, soybeans 
and canola would be assigned the unit structure in accordance with 
section 34(a)(5)(v));
    (2) With us (e.g., if you insure your corn and canola with us and 
your soybeans with a different insurance provider, the corn, soybeans 
and canola would be assigned the unit structure in accordance with 
section 34(a)(5)(v)); and
    (3) At the same coverage level (e.g., if you elect to insure your 
corn and canola at the 65 percent coverage level and your soybeans at 
the 75 percent coverage level, the corn, soybeans and canola would be 
assigned the unit structure in accordance with section 34(a)(5)(v));
    (B) A whole-farm unit must contain all of the insurable acreage of 
at least two crops; and
    (C) At least two of the insured crops must each have planted acreage 
that constitutes 10 percent or more of the total planted acreage 
liability of all insured crops in the whole-farm unit (For crops for 
which revenue protection is available, liability will be based on the 
applicable projected price only for the purpose of section 
34(a)(5)(i)(C));
    (ii) You will be required to pay separate administrative fees for 
each crop included in the whole-farm unit;
    (iii) You must separately designate on the acreage report each basic 
unit for each crop in the whole-farm unit;
    (iv) If you want to change your unit structure from a whole-farm 
unit to basic or optional units in any subsequent crop year, you must 
maintain separate records of acreage and production:
    (A) For each basic unit, to be eligible to use such records to 
establish the production guarantee for the basic units; or
    (B) For optional units, to qualify for optional units and to be 
eligible to use such records to establish the production guarantee for 
the optional units; and
    (v) If we discover you do not qualify for a whole-farm unit for at 
least one insured crop because, even though you elected revenue 
protection for all your crops:
    (A) You do not meet all of the other requirements in section 
34(a)(5)(i), and such discovery is made:
    (1) On or before the acreage reporting date, your unit division for 
all crops for which you elected a whole-farm unit will be based on basic 
or optional units, whichever you report on your acreage report and 
qualify for; or
    (2) At any time after the acreage reporting date, we will assign the 
basic unit structure for all crops for which you elected a whole-farm 
unit; or
    (B) It was not possible to establish a projected price for at least 
one of your crops, your unit division will be based on the unit 
structure you report on your acreage report and qualify for only for the 
crop for which a projected price could not be established, unless the 
remaining crops in the unit would no longer qualify for a whole-farm 
unit, in such case your unit division for the remaining crops will be 
based on the unit structure you report on your acreage report and 
qualify for.
    (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); and
    (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.
    (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 where the boundaries are readily 
discernible:
    (i) In the absence of sections, we may consider parcels of land 
legally identified by other methods of measure, such as Spanish grants, 
provided the boundaries are readily discernible, if such parcels can be 
considered as the equivalent of sections for unit purposes in accordance 
with FCIC issued procedures; or
    (ii) In the absence of sections as described in section 34(c)(1) or 
other methods of measure used to establish section equivalents as 
described in section 34(c)(1)(i), optional units may be established if 
each optional unit is located in a separate FSA farm serial number in 
accordance with FCIC issued procedure;
    (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,

[[Page 163]]

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 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 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) Any amount received for the same loss from any USDA program, in 
addition to the crop insurance payment, will not exceed the difference 
between the crop insurance payment and the actual amount of the loss, 
unless otherwise provided by law. The amount of the actual loss is the 
difference between the total value of the insured crop before the loss 
and the total value of the insured crop after the loss.
    (1) For crops for which revenue protection is not available:
    (i) If you have an approved yield, the total value of the crop 
before the loss is your approved yield times the highest price election 
for the crop; and
    (ii) If you have an approved yield, the total value of the crop 
after the loss is your production to count times the highest price 
election for the crop; or
    (iii) If you have an amount of insurance, the total value of the 
crop before the loss is the highest amount of insurance available for 
the crop; and
    (iv) If you have an amount of insurance, the total value of the crop 
after the loss is your production to count times the price contained in 
the Crop Provisions for valuing production to count.
    (2) For crops for which revenue protection is available and:
    (i) You elect yield protection:
    (A) The total value of the crop before the loss is your approved 
yield times the applicable projected price (at the 100 percent price 
level) for the crop; and
    (B) The total value of the crop after the loss is your production to 
count times the applicable projected price (at the 100 percent price 
level) for the crop; or
    (ii) You elect revenue protection:
    (A) The total value of the crop before the loss is your approved 
yield times the higher of the applicable projected price or harvest 
price for the crop (If you have elected the harvest price exclusion, the 
applicable projected price for the crop will be used); and
    (B) The total value of the crop after the loss is your production to 
count times the harvest price for the crop.
    (c) FSA or another USDA agency, as applicable, 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 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 canceled 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 transitional yield for the crop year in 
which the yield is being replaced (For

[[Page 164]]

example, if you elect to exclude a 2001 crop year actual yield, the 
transitional 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 
transitional 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 canceled 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, 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]

    Editorial Note: For Federal Register citations affecting Sec. 457.8, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and at www.fdsys.gov.

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. Sec. 457.10-457.100  [Reserved]

Sec. 457.101  Small grains crop insurance.

    The small grains crop insurance provisions for the 2011 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                      Small Grains Crop Provisions

                             1. Definitions

    Adequate stand. A population of live plants per unit of acreage 
which will produce at

[[Page 165]]

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 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. As defined in the Basic Provisions, except that 
the references to ``final planting date'' contained in the definition in 
the Basic Provisions are replaced with the ``latest final planting 
date.''
    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

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) Revenue protection is not available for your oats, rye, flax, or 
buckwheat. Therefore, if you elect to insure such crops by the sales 
closing date, they will only be protected against a loss in yield;

[[Page 166]]

    (b) Revenue protection is available for wheat and barley. Therefore, 
if you elect to insure your wheat or barley:
    (1) You must elect to insure your wheat or barley with either 
revenue protection or yield protection by the sales closing date; and
    (2) In counties with both fall and spring sales closing dates for 
the insured crop:
    (i) If you do not have any insured fall planted acreage of the 
insured crop, you may change your coverage level, or your percentage of 
projected price (if you have yield protection), or elect revenue 
protection or yield protection, until the spring sales closing date; or
    (ii) If you have any insured fall planted acreage of the insured 
crop, you may not change your coverage level, or your percentage of 
projected price (if you have yield protection), or elect revenue 
protection or yield protection, 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 as follows, unless 
otherwise specified in the Special Provisions:

----------------------------------------------------------------------------------------------------------------
         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, Humboldt, Wright,
     Franklin, Butler, Black Hawk,
     Buchanan, Delaware, Dubuque and all
     Iowa counties north thereof; all
     Nebraska counties except Box Butte,
     Dawes, and Sheridan; 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,
     Humboldt, Wright, Franklin, Butler,
     Black Hawk, Buchanan, Delaware, and
     Dubuque Counties, Iowa, and all
     Iowa counties north thereof;
     Massachusetts; all Montana counties
     except Daniels, Roosevelt,
     Sheridan, and Valley; Box Butte,
     Dawes, and Sheridan Counties,
     Nebraska; New York; Oregon; Rhode
     Island; all South Dakota counties
     except Corson, Walworth, Edmunds,
     Faulk, Spink, Beadle, Kingsbury,
     Miner, McCook, Minnehaha 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; and 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, Roosevelt, Sheridan, and
     Valley Counties, Montana; New
     Hampshire; North Dakota; Corson,
     Walworth, Edmunds, Faulk, Spink,
     Beadle, Kingsbury, Miner, McCook,
     and Minnehaha 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.

[[Page 167]]

 
    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:
    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 a written agreement 
allows insurance for such mixture. The production from such mixture will 
be considered as the predominate grain on a weight basis); and
    (3) That is not, unless insurance is allowed by a written agreement:
    (i) Interplanted with another crop except as allowed in section 
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.
    (b) Buckwheat will be insured only if it is produced under a 
contract with a business enterprise equipped with facilities appropriate 
to handle and store buckwheat production. The contract must be executed 
by you and the business enterprise, in effect for the crop year, and a 
copy provided to us no later than the acreage reporting date. To be 
considered a contract, the executed document must contain:
    (1) A requirement that you plant, grow and deliver buckwheat to the 
business enterprise;
    (2) The amount of production that will be accepted or a statement 
that all production from a specified number of acres will be accepted;
    (3) The price to be paid for the contracted production or a method 
to determine such price; and
    (4) Other such terms that establish the obligations of each party to 
the contract.
    (c) If you anticipate destroying any acreage prior to harvest you:

[[Page 168]]

    (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.
    (d) In counties for which the actuarial table provides premium rates 
for the Wheat or Barley Winter Coverage Endorsement (7 CFR 457.102), 
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.
    (e) 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 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 accordance with section 11 of the Basic Provisions, and subject 
to any provisions provided by the Wheat or Barley Winter Coverage 
Endorsement (if elected by you):
    (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:
    (A) 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.
    (B) 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, projected price, and harvest price applicable to the spring 
type will be used. In this case, the acreage will be considered to be 
initially planted to the spring type.
    (C) Notwithstanding sections 7(a)(2)(iii)(A) and (B), 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 
endorsement.
    (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.

[[Page 169]]

    (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 determine, in writing, that the acreage has 
an adequate stand in the spring to produce the yield used to determine 
your production guarantee. However, if we fail to inspect the acreage by 
the spring final planting date, insurance will attach as specified in 
section 7(a)(2)(v)(C).
    (A) Your request for coverage must include the location and number 
of acres of fall planted barley or wheat.
    (B) The fall planted barley or fall planted wheat will be insured as 
a spring type for the purpose of the production guarantee, premium, 
projected price, and harvest price, if applicable.
    (C) 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.
    (D) 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.
    (E) If fall planted acreage is not to be insured it must be recorded 
on the acreage report as uninsured fall planted acreage.
    (b) The calendar date for the end of the insurance period is the 
following applicable date:
    (1) September 25 in Alaska;
    (2) July 31 in Alabama, Arizona, Arkansas, Connecticut, Delaware, 
Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, New 
Jersey, North Carolina, South Carolina and Tennessee; or
    (3) October 31 in all other states.

                            8. Causes of Loss

    In addition to the provisions under section 12 of the Basic 
Provisions, any loss covered by this policy must occur within the 
insurance period.
    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;
    (h) Failure of the irrigation water supply due to a cause of loss 
specified in sections 8(a) through (g) that also occurs during the 
insurance period; or
    (i) For revenue protection, a change in the harvest price from the 
projected price, unless FCIC can prove the price change was the direct 
result of an uninsured cause of loss specified in section 12(a) of the 
Basic Provisions.

                         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 is 
considered appropriate by agricultural experts for the insured crop, 
type and practice.
    (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) Unless otherwise specified in the Special Provisions, the amount 
of the replanting payment per acre will be:
    (1) The lesser of 20 percent of the production guarantee or the 
number of bushels for the applicable crop specified below:
    (i) Two bushels for flax or buckwheat;
    (ii) Four bushels for wheat; or
    (iii) Five bushels for barley or oats;
    (2) Multiplied by:
    (i) Your price election for oats, flax or buckwheat; or

[[Page 170]]

    (ii) Your projected price for wheat or barley; and
    (3) Multiplied by your share.
    (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 your price election 
or your projected price, as applicable, and your production guarantee 
for the crop type that is replanted and insured. For example, if damaged 
spring wheat is replanted to durum wheat, your projected price 
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 your production 
guarantee and your price election or your projected price, as 
applicable, 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; 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

    Representative samples are required in accordance with section 14 of 
the Basic Provisions.

                         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 number of insured acres of each insured crop or 
type, as applicable by your respective:
    (i) Yield protection guarantee (per acre) if you elected yield 
protection for barley or wheat;
    (ii) Production guarantee (per acre) and your price election for 
oats, rye, flax, or buckwheat; or
    (iii) Revenue protection guarantee (per acre) if you elected revenue 
protection for barley or wheat;
    (2) Totaling the results of section 11(b)(1)(i), (ii), or (iii), 
whichever is applicable;
    (3) Multiplying the production to count of each insured crop or 
type, as applicable, by your respective:
    (i) Projected price for wheat or barley if you elected yield 
protection;
    (ii) Price election for oats, rye, flax, or buckwheat; or
    (iii) Harvest price if you elected revenue protection;
    (4) Totaling the results of section 11(b)(3)(i), (ii), or (iii), 
whichever is applicable;
    (5) Subtracting the result of section 11(b)(4) from the result of 
section 11(b)(2); and
    (6) Multiplying the result of section 11(b)(5) by your share.
    For example:
    You have 100 percent share in 50 acres of wheat in the unit with a 
production guarantee (per acre) of 45 bushels, your projected price is 
$3.40, your harvest price is $3.45, and your production to count is 
2,000 bushels.
    If you elected yield protection:
    (1) 50 acres x (45 bushel production guarantee x $3.40 projected 
price) = $7,650.00 value of the production guarantee
    (3) 2,000 bushel production to count x $3.40 projected price = 
$6,800.00 value of the production to count
    (5) $7,650.00-$6,800.00 = $850.00
    (6) $850.00 x 1.000 share = $850.00 indemnity; or
    If you elected revenue protection:
    (1) 50 acres x (45 bushel production guarantee x $3.45 harvest 
price) = $7,762.50 revenue protection guarantee
    (3) 2,000 bushel production to count x $3.45 harvest price = 
$6,900.00 value of the production to count
    (5) $7,762.50-$6,900.00 = $862.50
    (6) $862.50 x 1.000 share = $863.00 indemnity.
    (c) The total production to count (in bushels) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) For oats, rye, flax, or buckwheat, and barley or wheat under 
yield protection, not less than the production guarantee (per acre), and 
for barley or wheat under revenue protection, not less than the amount 
of production that when multiplied by the harvest price equals the 
revenue protection guarantee (per acre) 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

[[Page 171]]

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
    (2) All harvested production from the insurable acreage.
    (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. 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

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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 for timely planted acreage. If you have additional 
coverage 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; 75 FR 15875, Mar. 30, 2010]

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)


[[Page 173]]


    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 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

[[Page 174]]

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, 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 2011 and succeeding 
crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                         Cotton Crop Provisions

                             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.

[[Page 175]]

    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 (per acre). In lieu of the definition contained 
in the Basic Provisions, 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 of the Basic 
Provisions, you must elect to insure your cotton with either revenue 
protection or yield protection by the sales closing date.

                           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:

------------------------------------------------------------------------
                                                    Cancellation and
               State and county                     termination dates
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,       January 31.
 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, 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, 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 of the Basic Provisions, 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; or
    (3) Interplanted with another spring planted crop.

                          6. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions:
    (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 of the Basic 
Provisions, 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 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss which occur within the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;

[[Page 176]]

    (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;
    (h) Failure of the irrigation water supply due to a cause of loss 
specified in sections 8(a) through (g) that also occurs during the 
insurance period; or
    (i) For revenue protection, a change in the harvest price from the 
projected price, unless FCIC can prove the price change was the direct 
result of an uninsured cause of loss specified in section 12(a) of the 
Basic Provisions.

                9. Duties in the Event of Damage or Loss

    (a) In addition to your duties under section 14 of the Basic 
Provisions, in the event of damage or loss, the cotton stalks must 
remain intact for our inspection. 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.
    (b) Representative samples are required in accordance with section 
14 of the Basic Provisions.

                         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 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 number of insured acres by your respective:
    (i) Yield protection guarantee (per acre) if you elected yield 
protection; or
    (ii) Revenue protection guarantee (per acre) if you elected revenue 
protection;
    (2) Totaling the results of section 10(b)(1)(i) or 10(b)(1)(ii), 
whichever is applicable;
    (3) Multiplying the production to count by your:
    (i) Projected price if you elected yield protection; or
    (ii) Harvest price if you elected revenue protection;
    (4) Totaling the results of section 10(b)(3)(i) or 10(b)(3)(ii), 
whichever is applicable;
    (5) Subtracting the result of section 10(b)(4) from the result of 
section 10(b)(2); and
    (6) Multiplying the result of section 10(b)(5) by your share.
    For example:
    You have 100 percent share in 50 acres of cotton in the unit with a 
production guarantee (per acre) of 525 pounds, your projected price is 
$.65, your harvest price is $.70, and your production to count is 25,000 
pounds.
    If you elected yield protection:
    (1) 50 acres x (525 pound production guarantee x $.65 projected 
price) = $17,062.50 value of the production guarantee
    (3) 25,000 pound production to count x $.65 projected price = 
$16,250.00 value of production to count
    (5) $17,062.50-$16,250.00 = $812.50
    (6) $812.50 x 1.000 share = $813.00 indemnity; or
    If you elected revenue protection:
    (1) 50 acres x (525 pound production guarantee x $.70 harvest price) 
= $18,375.00 revenue protection guarantee
    (3) 25,000 pound production to count x $.70 harvest price = 
$17,500.00 value of the production to count
    (5) $18,375.00-$17,500.00 = $875.00
    (6) $875.00 x 1.000 share = $875.00 indemnity.
    (c) The total production to count (in pounds) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) For yield protection, not less than the production guarantee and 
for revenue protection, not less than the amount of production that when 
multiplied by the harvest price equals the revenue protection guarantee 
(per acre) 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 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

[[Page 177]]

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 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 85 percent 
of price quotation ``B.''
    (1) Price B is defined as the Upland Cotton National Average Loan 
Rate determined by FSA, or as specified in the Special Provisions.
    (2) Price A is defined as the loan value per pound for the bale 
determined in accordance with the FSA Schedule of Premiums and Discounts 
for the applicable crop year, or as specified in the Special Provisions.
    (3) If eligible for adjustment, the amount of production to count 
will be determined by multiplying the number of pounds of such 
production by the factor derived from dividing price quotation ``A'' by 
85 percent 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 additional 
coverage 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; 75 FR 
15878, 15879, Mar. 30, 2010; 75 FR 59057, Sept. 27, 2010]

Sec. 457.105  Extra long staple cotton crop insurance provisions.

    The extra long staple cotton crop insurance provisions for the 2014 
and succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                       ELS Cotton Crop Provisions

                             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:
    (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 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.

[[Page 178]]

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

                             5. Insured Crop

    In accordance with section 8 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 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 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 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 of the Basic 
Provisions, 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. 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.
    (b) Representative samples are required in accordance with section 
14 of the Basic Provisions.

                         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 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;

[[Page 179]]

    (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 Price A is less than 85 percent of Price B.
    (1) Price B is defined as the Extra Long Staple Cotton National 
Average Loan Rate determined by FSA, or as specified in the Special 
Provisions.
    (2) Price A is defined as the loan value per pound for the bale 
determined in accordance with the FSA Schedule of Premiums and Discounts 
for the applicable crop year, or as specified in the Special Provisions.
    (3) 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 A by 85 
percent of Price 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) Mature AUP cotton harvested or appraised from acreage originally 
planted to ELS cotton in the same growing season will be reduced by the 
factor obtained by dividing the price per pound for AUP cotton by the 
price per pound for ELS cotton. The prices used for AUP and ELS cotton 
will be calculated using the Upland Cotton National Average Loan Rate 
determined by FSA and the Extra Long Staple Cotton National Average Loan 
Rate determined by FSA, or as specified in the Special Provisions.

                           11. Late Planting.

    (a) A late planting period is applicable to ELS cotton, if allowed 
by the Special Provisions.
    (b) If the Special Provisions do not provide for a late planting 
period, 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; 76 FR 
32068, June 3, 2011; 78 FR 70487, Nov. 26, 2013]

Sec. 457.106  Texas citrus tree crop insurance provisions.

    The Texas Citrus Tree Crop Insurance Provisions for the 2011 and 
succeeding crop years are as follows:

[[Page 180]]

                 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

                             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 National Institute of Food and Agriculture 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(b) (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 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

[[Page 181]]

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.

                            6. Annual Premium

    In addition to the provisions of section 7 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

[[Page 182]]

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.

                         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.

[[Page 183]]

    (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; 75 FR 15879, Mar. 30, 2010; 76 FR 4804, Jan. 
27, 2011]

Sec. 457.107  Florida citrus fruit crop insurance provisions.

    The Florida Citrus Fruit Crop Insurance Provisions for the 2014 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: Florida Citrus Fruit Crop Insurance 
                               Provisions

                             1. Definitions

    Age class. Trees in the unit are grouped by age, with each insurable 
age group of a particular citrus fruit commodity, commodity type, and 
intended use receiving a Reference Maximum Dollar Amount shown in the 
actuarial documents that is used to calculate the amount of insurance 
for the unit.
    Amount of insurance (per acre). The dollar amount determined by 
multiplying the Reference Maximum Dollar Amount shown on the actuarial 
documents for each applicable combination of commodity type, intended 
use, and age class of trees, within a citrus fruit commodity, times the 
coverage level percent that you elect, times your share.
    Box. A standard field box as prescribed in the State of Florida 
Citrus Fruit Laws or contained in standards issued by FCIC.
    Buckhorn. To prune any limb at a diameter of at least three inches 
for citrus.
    Citrus fruit commodity. Citrus fruit as follows:
    (1) Oranges;
    (2) Grapefruit;
    (3) Tangelos;
    (4) Mandarins/Tangerines;
    (5) Tangors;
    (6) Lemons;
    (7) Limes; and
    (8) Any other citrus fruit commodity designated in the actuarial 
documents.
    Citrus fruit group. A designation in the Special Provisions used to 
identify combinations of commodity types and intended uses within a 
citrus fruit commodity that may be grouped together for the purposes of 
electing coverage levels and identifying the insured crop.
    Commodity type. A specific subgroup of a commodity having a 
characteristic or set of characteristics distinguishable from other 
subgroups of the same commodity.
    Excess wind. A natural movement of air that has sustained speeds 
exceeding 58 miles per hour (50 knots) recorded at the U.S. National 
Weather Service (NWS) reporting station (reported as MAX SUST (KT)), the 
Florida Automated Weather Network (FAWN) reporting station (reported as 
10m Wind (mph)), or any other weather reporting station identified in 
the Special Provisions operating nearest to the insured acreage at the 
time of damage.
    Freeze. The formation of ice in the cells of the fruit caused by low 
air temperatures.
    Harvest. The severance of mature citrus fruit from the tree by 
pulling, picking, shaking, or any other means, or collecting the 
marketable citrus fruit from the ground.
    Hurricane. A windstorm classified by the U.S. Weather Service as a 
hurricane.
    Intended use. The producer's expected end use or disposition of the 
commodity at the time the commodity is reported. Insurable intended uses 
will be specified in the Special Provisions.
    Interstock. The area of the tree that is grafted to a rootstock. For 
example, the rootstock may be Sour Orange, and the interstock 
grapefruit, and the grafted scion Valencia orange.
    Potential production. The amount, converted to boxes, of citrus 
fruit that would have been produced had damage not occurred.
    (a) Including citrus fruit that:
    (1) Was harvested before damage occurred;
    (2) Remained on the tree after damage occurred;
    (3) Except as provided in (b), was missing, damaged, or destroyed 
from either an insured or uninsured cause;
    (4) Was marketed or could be marketed as fresh citrus fruit;
    (5) Was harvested prior to inspection by us; or
    (6) Was harvested within 7 days after a freeze;
    (b) Not including citrus fruit that:
    (1) Was missing, damaged, or destroyed before insurance attached for 
any crop year;
    (2) Was damaged or destroyed 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.
    Scion. A detached living portion of a plant joined to a stock in 
grafting.
    Top worked. A buckhorned citrus tree with a new scion grafted onto 
the interstock.

[[Page 184]]

    Unmarketable. Citrus fruit that cannot be processed into products 
for human consumption.

                            2. Unit Division

    (a) Basic units will be established in accordance with section 1 of 
the Basic Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.
    (c) In addition to 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 coverage level for each citrus fruit 
group that you elect to insure. If different amounts of insurance are 
available for commodity types within a citrus fruit group, you must 
select the same coverage level for each commodity type. For example, if 
you choose the 75 percent coverage level for one commodity type, you 
must also choose the 75 percent coverage level for all other commodity 
types within that citrus fruit group.
    (b) The production reporting requirements contained in section 3 of 
the Basic Provisions are not applicable.
    (c) You must report, by the acreage reporting date designated in the 
actuarial documents:
    (1) Any event or action that could reduce the yield per acre of the 
insured citrus fruit commodity (including but not limited to removal of 
trees, any damage, disease, change in cultural practices, or any other 
circumstance that may reduce the productive capacity of the trees) and 
the number of affected acres;
    (2) The number of trees on insurable and uninsurable acreage, 
including interplanted trees;
    (3) The age of the trees and the planting pattern; and
    (4) Any other information we request in order to establish your 
amount of insurance.
    (d) We will reduce insurable acreage or the amount of insurance or 
both, as necessary:
    (1) Based on our estimate of the effect of the interplanted trees on 
the insured commodity type;
    (2) Following a decrease in plant stand;
    (3) If cultural practices are performed that may reduce the 
productive capacity of the trees;
    (4) If disease or damage occurs to the trees that may reduce the 
productive capacity of the trees; or
    (5) Any other circumstance that may reduce the productive capacity 
of the trees or that may reduce the yield per acre from previous levels.
    (e) If you fail to notify us of any circumstance that may reduce the 
acreage, the productive capacity of the trees, or the yield per acre 
from previous levels, we will reduce the acreage or amount of insurance 
or both as necessary any time we become aware of the circumstance.
    (f) For carryover policies:
    (1) Any changes to your coverage must be requested on or before the 
sales closing date;
    (2) Requested changes will take effect on May 1, the first day of 
the crop year, unless we reject the requested increase based on our 
inspection, or because a loss occurs on or before April 30 (Rejection 
can occur at any time we discover loss has occurred on or before April 
30); and
    (3) If the increase is rejected, coverage will remain at the same 
level as the previous crop year.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is January 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 April 30.

                             6. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the 
insured crop will be all acreage of each citrus fruit group 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 of 
the Basic Provisions, we do not insure any citrus fruit:
    (1) That cannot be expected to mature each crop year within the 
normal maturity period for the commodity type;
    (2) Produced by citrus 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 (In 
order for the year of set out to be considered as a growing season, 
citrus trees must be set out on or before April 15 of the calendar 
year);
    (3) Of ``Meyer Lemons,'' ``Sour Oranges,'' or ``Clementines'';
    (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 the

[[Page 185]]

sales closing date or the time you submit the application for 
insurance);
    (5) That is produced on citrus trees that have been topworked until 
the third crop year after topworking. The Special Provisions will 
specify the appropriate rate class for trees insurable following 
topworking, but that have not reached full production; or
    (6) Of any commodity type not specified as insurable in the Special 
Provisions.
    (c) Prior to the date insurance attaches, and upon our approval, you 
may elect to insure or exclude from insurance any insurable citrus 
acreage that has a potential production of less than 100 boxes per acre. 
If you elect to:
    (1) Insure such acreage, we will consider the potential production 
to be 100 boxes per acre when determining the amount of loss; or
    (2) Exclude such acreage, we will disregard the acreage for all 
purposes related to this policy.
    (d) In addition to the provisions in section 6 of the Basic 
Provisions, if you fail to notify us of your election to insure or 
exclude citrus 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.
    (e) Potential production will be determined during loss adjustment.
    (f) For citrus fruit for which fresh fruit coverage is available as 
designated in the actuarial documents:
    (1) Management records must be available upon request to verify good 
fresh citrus fruit production practices were followed from the beginning 
of bloom stage until harvest; and
    (2) Unless otherwise provided in the Special Provisions:
    (i) Acceptable fresh fruit sales records must be provided upon 
request from at least one of the previous three crop years; or
    (ii) For fresh fruit acreage new to the operation or for acreage in 
the initial year of fresh fruit production, a current year fresh fruit 
marketing contract must be provided to us upon request.

                          7. Insurable Acreage

    (a) In lieu of the provisions in section 9 of the Basic Provisions 
that prohibit insurance attaching to interplanted acreage:
    (1) Citrus fruit from trees interplanted with another commodity type 
or another agricultural commodity is insurable unless we inspect the 
acreage and determine it does not meet the requirements contained in 
your policy.
    (2) If the citrus fruit is from trees interplanted with another 
commodity type or another agricultural commodity, acreage will be 
prorated according to the percentage of the acres occupied by each of 
the interplanted commodity types or agricultural commodities. For 
example, if grapefruit have been interplanted with oranges on 100 acres 
and the grapefruit trees are on 50 percent of the acreage, grapefruit 
will be considered planted on 50 acres and oranges will be considered 
planted on 50 acres.
    (3) The combination of the citrus fruit acreage and the interplanted 
acreage cannot exceed the physical amount of acreage.
    (b) In addition to section 9 of the Basic Provisions, any acreage of 
citrus fruit that has been abandoned is not insurable.

                           8. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) Coverage begins on May 1 of each crop year, unless:
    (i) For new or carryover policies, as applicable, we inspect the 
acreage and determine it does not meet the requirements for insurability 
contained in your policy (You must provide any information we require, 
so we may determine the condition of the acreage to be insured); or
    (ii) For carryover policies, you report additional citrus acreage, 
or a greater share, such that the amount of insurance will increase by 
more than 10 percent and we notify you all or a part of your citrus 
acreage is not insurable.
    (2) The calendar date for the end of the insurance period for each 
crop year, unless specified otherwise in the Special Provisions, is:
    (i) February 7 for navel oranges, Orlando tangelos and tangerines;
    (ii) February 28 for early-season oranges and all other tangelos;
    (iii) March 31 for mid-season oranges and temples;
    (iv) April 30 for lemons and limes;
    (v) May 15 for murcotts; and
    (vi) June 30 for grapefruit and late-season oranges.
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
    (1) Acreage acquired after the acreage reporting date for the crop 
year is not insurable unless a transfer of coverage and right to 
indemnity is executed in accordance with section 28 of the Basic 
Provisions.
    (2) If you relinquish your insurable share on any insurable acreage 
of citrus fruit on or before the acreage reporting date of the crop 
year, insurance will not attach, no premium will be due, and no 
indemnity payable, for such acreage for that 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

[[Page 186]]

of loss to citrus fruit 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;
    (5) Tornado;
    (6) Excess wind; or
    (7) Diseases, but only if specified in the Special Provisions.
    (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) 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) If any citrus fruit within a unit is damaged by an insurable 
cause of loss, 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 each applicable combination of commodity type, intended use, 
and age class of trees in the unit and multiplying that result by your 
share;
    (2) Calculating the average percent of damage to the fruit within 
each respective combination of commodity type, intended use, and age 
class of trees, rounded to the nearest tenth of a percent (0.1%) (To 
determine the percent of damage, the amount of citrus fruit damaged from 
an insured cause must be converted to boxes and divided by the potential 
production);
    (3) Subtracting the deductible from the result of section 10(b)(2);
    (4) If the result of section 10(b)(3) is positive, dividing this 
result by the coverage level percentage (If the result of section 
10(b)(3) is negative, no indemnity will be due);
    (5) Multiplying the result of section 10(b)(4) by the amount of 
insurance for the unit for the respective combination of commodity type, 
intended use, and age class of trees, to determine the value of all 
damage; and
    (6) Totaling all such results of section 10(b)(5) for all applicable 
combinations of commodity types, intended uses, and age classes of trees 
in the unit and subtracting any indemnities paid for the current crop 
year to determine the amount payable for the unit. For example, assume a 
55-acre unit sustains late season damage. No previous damage has 
occurred on the unit during the crop year and no fruit has been 
harvested. The producer elected the 75 percent coverage level and has a 
100 percent share. The amount of insurance is $1,180 per acre, based on 
the 75 percent coverage level, for the commodity type, intended use, and 
age class of trees. The amount of potential production is 24,530 boxes 
and the amount of damaged production is 17,171 boxes. The loss would be 
calculated as follows:
    1. 55 acres x $1,180 = $64,900 amount of insurance for the unit;
    2. 17,171 / 24,530 = 70 percent average percent of damage;
    3. 70 percent damage -25 percent deductible (100 percent -75 
percent) = 45 percent;
    4. 45 percent / 75 percent = 60 percent adjusted damage; and
    5. 60 percent x $64,900 = $38,940 indemnity.
    (c) Any individual citrus fruit will be considered 100 percent 
damaged, if due to an insurable cause of loss it is:
    (1) On the ground and unmarketable; or
    (2) Unmarketable because it is immature, unwholesome, decomposed, 
adulterated, or otherwise unfit for human consumption.
    (d) Any citrus fruit that can be processed into products for human 
consumption will be considered marketable. The percent of damage for the 
marketable citrus fruit (excluding citrus fruit sold as fresh or damaged 
due to uninsured causes) will be determined by:
    (1) Subtracting the juice content of the marketable citrus fruit 
(excluding citrus fruit sold as fresh or damaged due to uninsured 
causes) from:
    (i) 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
    (ii) The default juice content provided in the Special Provisions, 
if at least three years of acceptable juice records are not furnished or 
the citrus fruit is insured as fresh;
    (2) Subtracting the juice content of the marketable citrus fruit 
(excluding citrus fruit sold as fresh or damaged due to uninsured 
causes) from the official weight per box for the applicable commodity 
type provided in the Special Provisions;
    (3) Dividing the result of section 10(d)(1) by the result of 
10(d)(2);
    (4) Dividing the official weight per box for the applicable 
commodity type provided in the Special Provisions by:

[[Page 187]]

    (i) 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
    (ii) The default juice content provided in the Special Provisions, 
if at least three years of acceptable juice records are not furnished or 
the citrus fruit is insured as fresh; and
    (5) Multiplying the result of section 10(d)(3) by the result of 
10(d)(4); and
    (6) For citrus fruit insured as fresh that has a Fresh Fruit Factor 
listed in the Special Provisions, making an additional adjustment to the 
percent of damage by:
    (i) Subtracting the result of section 10(d)(5) from 1;
    (ii) Multiplying the result of section 10(d)(6)(i) by the applicable 
Fresh Fruit Factor located in the Special Provisions; and
    (iii) Adding the result of section 10(d)(6)(ii) to the result of 
section 10(d)(5).
    (e) Notwithstanding section 10(d), for citrus fruit insured as 
fresh, unless otherwise provided in the Special Provisions, any 
individual citrus fruit not meeting the applicable United States 
Standards for packing as fresh fruit due to an insured cause of loss 
will be considered 100 percent damaged, except that the percent of 
damage for any production sold for an alternative use will be adjusted 
in accordance with section 10(d).

                     11. Late and Prevented Planting

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

[73 FR 7196, Feb. 7, 2008; 73 FR 10973, Feb. 29, 2008, as amended at 77 
FR 75519, Dec. 21, 2012; 78 FR 4305, Jan. 22, 2013; 78 FR 22411, Apr. 
16, 2013]

Sec. 457.108  Sunflower seed crop insurance provisions.

    The sunflower seed crop insurance provisions for the 2011 and 
succeeding crop years are as follows:

                        Department of Agriculture

                   Federal Crop Insurance Corporation

                     Sunflower Seed Crop Provisions

                             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. 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 of the Basic 
Provisions, you must elect to insure your sunflowers with either revenue 
protection or yield protection by the sales closing date.

                           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 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 of the Basic Provisions:
    (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 of the Basic 
Provisions, the calendar date for the end of the insurance period is 
November 30, immediately following planting.

[[Page 188]]

                            8. 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 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;
    (h) Failure of the irrigation water supply due to a cause of loss 
specified in sections 8(a) through (g) that also occurs during the 
insurance period; or
    (i) For revenue protection, a change in the harvest price from the 
projected price, unless FCIC can prove the price change was the direct 
result of an uninsured cause of loss specified in section 12(a) of the 
Basic Provisions.

                         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) Except as specified in section 9(a)(1), you must comply with all 
requirements regarding replanting payments contained in section 13 of 
the Basic Provisions; and
    (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.
    (b) Unless otherwise specified in the Special Provisions, the amount 
of the replanting payment per acre will be the lesser of 20 percent of 
the production guarantee or 175 pounds, multiplied by your projected 
price, multiplied by your share.
    (c) When the crop 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.
    (d) If the acreage is replanted to an insured crop type that is 
different than the insured crop type originally planted on the acreage:
    (1) The production guarantee, premium, and projected price and 
harvest price, as applicable, will be adjusted based on the replanted 
type;
    (2) Replanting payments will be calculated using your projected 
price and production guarantee for the crop type that is replanted and 
insured; and
    (3) A revised acreage report will be required to reflect the 
replanted type, as applicable.

                10. Duties in the Event of Damage or Loss

    Representative samples are required in accordance with section 14 of 
the Basic Provisions.

                         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 number of insured acres by your respective:
    (i) Yield protection guarantee (per acre) if you elected yield 
protection; or
    (ii) Revenue protection guarantee (per acre) if you elected revenue 
protection;
    (2) Totaling the results of section 11(b)(1)(i) or 11(b)(1)(ii), 
whichever is applicable;
    (3) Multiplying the production to count by your:
    (i) Projected price if you elected yield protection; or
    (ii) Harvest price if you elected revenue protection;
    (4) Totaling the results of section 11(b)(3)(i) or 11(b)(3)(ii), 
whichever is applicable;
    (5) Subtracting the result of section 11(b)(4) from the result of 
section 11(b)(2); and
    (6) Multiplying the result of section 11(b)(5) by your share.
    For example:
    You have 100 percent share in 50 acres of sunflowers in the unit 
with a production guarantee (per acre) of 1,250 pounds, your projected 
price is $.11, your harvest price is $.12, and your production to count 
is 54,000 pounds.
    If you elected yield protection:
    (1) 50 acres x (1,250 pound production guarantee x $.11 projected 
price) = $6,875.00 value of the production guarantee
    (3) 54,000 pound production to count x $.11 projected price = 
$5,940.00 value of production to count
    (5) $6,875.00 - $5,940.00 = $935.00
    (6) $935.00 x 1.000 share = $935.00 indemnity; or
    If you elected revenue protection:
    (1) 50 acres x (1,250 pound production guarantee x $.12 harvest 
price) = $7,500.00 revenue protection guarantee

[[Page 189]]

    (3) 54,000 pound production to count x $.12 harvest price = 
$6,480.00 value of the production to count
    (5) $7,500.00 - $6,480.00 = $1,020.00
    (6) $1,020.00 x 1.000 share = $1,020.00 indemnity.
    (c) The total production to count (in pounds) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) For yield protection, not less than the production guarantee, 
and for revenue protection, not less than the amount of production that 
when multiplied by the harvest price equals the revenue protection 
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 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;
    (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 sections 11(d)(2) and (3), will be reduced 
in accordance with quality adjustment factor provisions 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.

[[Page 190]]

                         12. Prevented Planting

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have additional 
coverage and pay an additional premium, you may increase your 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; 75 FR 15879, 15880, Mar. 30, 2010]

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.
    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.

[[Page 191]]

                            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 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:

 
------------------------------------------------------------------------
                                                             Termination
       State and County              Cancellation date           date
------------------------------------------------------------------------
Arizona; and Imperial County,  August 31...................  August 31.
 California.
All California counties,       July 15.....................  November
 except Imperial, Lassen,                                       30.
 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

[[Page 192]]

    (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.

                           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;

[[Page 193]]

    (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 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.

[[Page 194]]

    (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.

                            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

[[Page 195]]

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 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.

[[Page 196]]

    (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 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 2011 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

                             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

[[Page 197]]

for in the Special Provisions. The requirements of section 34(b)(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
    (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.

[[Page 198]]

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.
    (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

[[Page 199]]

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;
    (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

[[Page 200]]

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, as amended at 62 
FR 65167, Dec. 10, 1997; 65 FR 47837, Aug. 4, 2000; 75 FR 15880, 15881, 
Mar. 30, 2010]

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:

                 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.

[[Page 201]]

    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.
    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.

[[Page 202]]

  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.

                             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.

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                           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 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:

[[Page 204]]

    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''
    (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

[[Page 205]]

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 2011 and 
succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                      Coarse Grains Crop Provisions

                             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, 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, 
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 as 
silage) determined by multiplying the approved yield per acre 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

    In addition to the requirements of section 3 of the Basic 
Provisions, you must elect to insure your corn, grain sorghum, or 
soybeans with either revenue protection or yield protection by the sales 
closing date.

                           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:

------------------------------------------------------------------------
                                                    Cancellation and
               State and county                     termination dates
------------------------------------------------------------------------
(a) For corn and grain sorghum:
  Val Verde, Edwards, Kerr, Kendall, Bexar,     January 31.
   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,     January 31.
   McMullen, LaSalle, and Dimmit Counties,
   Texas and all Texas counties lying south
   thereof.

[[Page 206]]

 
  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 of the Basic Provisions, 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 section 
5(b)(1); or
    (ii) Planted into an established grass or legume.
    (b) For corn only, in addition to the provisions of section 5(a), 
the corn crop insured will be all corn that is:
    (1) Planted for harvest either as grain or as silage (see section 
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, high-oil corn blends containing mixtures of at 
least 90 percent high yielding yellow dent female plants with high-oil 
male pollinator plants, or commercial varieties of high-protein hybrids, 
and excluding:
    (i) High-amylose, high-oil or high-protein (except as authorized in 
section 5(b)(2)), 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 section 
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 section 
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 agree 
that it is not practical to replant.

                           7. 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) 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.

[[Page 207]]

 
(b) For corn insured as silage:
  (1) Connecticut, Delaware, Idaho, Maine,      October 20.
   Maryland, Massachusetts, New Hampshire, New
   Jersey, New York, North Carolina, Oregon,
   Pennsylvania, Rhode Island, Vermont,
   Virginia, Washington, and West Virginia.
  (2) All other states........................  September 30.
(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 of the Basic 
Provisions, 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;
    (h) Failure of the irrigation water supply due to a cause of loss 
specified in sections 8(a) through (g) that also occurs during the 
insurance period; or
    (i) For revenue protection, a change in the harvest price from the 
projected price, unless FCIC can prove the price change was the direct 
result of an uninsured cause of loss specified in section 12(a) of the 
Basic Provisions.

                         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) Except as specified in section 9(a)(1), you must comply with all 
requirements regarding replanting payments contained in section 13 of 
the Basic Provisions; and
    (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.
    (b) Unless otherwise specified in the Special Provisions, the amount 
of the replanting payment per acre will be the lesser of 20 percent of 
the production guarantee or the number of bushels (tons for corn insured 
as silage) for the applicable crop specified below, multiplied by your 
projected price, multiplied by your share:
    (1) 8 bushels for corn grain;
    (2) 1 ton for corn silage;
    (3) 7 bushels for grain sorghum; and
    (4) 3 bushels for soybeans.
    (c) 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.
    (d) If the acreage is replanted to an insured crop type that is 
different than the insured crop type originally planted on the acreage:
    (1) The production guarantee, premium, and projected price and 
harvest price, as applicable, will be adjusted based on the replanted 
type;
    (2) Replanting payments will be calculated using your projected 
price and production guarantee for the crop type that is replanted and 
insured; and
    (3) A revised acreage report will be required to reflect the 
replanted type, as applicable.

                10. Duties in the Event of Damage or Loss

    (a) Representative samples are required in accordance with section 
14 of the Basic Provisions.
    (b) For any corn unit that has separate dates for the end of the 
insurance period (grain and silage), in lieu of the requirement 
contained in section 14 of the Basic Provisions to provide notice within 
72 hours of your initial discovery of damage (but not later than 15 days 
after the end of the insurance period), you must provide notice within 
72 hours of your initial discovery of damage (but not later than 15 days 
after the latest end of the insurance period applicable to the unit).
    (c) If you will harvest any acreage in a manner other than as you 
reported it for coverage (e.g., you reported planting it to harvest as 
grain but will harvest the acreage for silage, or you reported planting 
it to harvest as silage but will harvest the acreage for grain), you 
must notify us before harvest begins. Failure to timely provide notice 
will result in production to count determined in accordance with section 
11(c)(1)(i)(E).

                         11. Settlement of Claim

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

[[Page 208]]

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 number of insured acres of each insured crop or 
type, as applicable, by your respective:
    (i) Yield protection guarantee (per acre) if you elected yield 
protection; or
    (ii) Revenue protection guarantee (per acre) if you elected revenue 
protection;
    (2) Totaling the results of section 11(b)(1)(i) or 11(b)(1)(ii), 
whichever is applicable;
    (3) Multiplying the production to count of each insured crop or 
type, as applicable, by your respective:
    (i) Projected price if you elected yield protection; or
    (ii) Harvest price if you elected revenue protection;
    (4) Totaling the results of section 11(b)(3)(i) or 11(b)(3)(ii), 
whichever is applicable;
    (5) Subtracting the result of section 11(b)(4) from the result of 
section 11(b)(2); and
    (6) Multiplying the result of section 11(b)(5) by your share.
    For example:
    You have 100 percent share in 50 acres of corn in the unit with a 
production guarantee (per acre) of 115 bushels, your projected price is 
$2.25, your harvest price is $2.20, and your production to count is 
5,000 bushels.
    If you elected yield protection:
    (1) 50 acres x (115 bushel production guarantee x $2.25 projected 
price) = $12,937.50 value of the production guarantee
    (3) 5,000 bushel production to count x $2.25 projected price = 
$11,250.00 value of the production to count
    (5) $12,937.50 - $11,250.00 = $1,687.50
    (6) $1,687.50 x 1.000 share = $1,688.00 indemnity; or
    If you elected revenue protection:
    (1) 50 acres x (115 bushel production guarantee x $2.25 projected 
price) = $12,937.50 revenue protection guarantee
    (3) 5,000 bushel production to count x $2.20 harvest price = 
$11,000.00 value of the production to count
    (5) $12,937.50 - $11,000.00 = $1,937.50
    (6) $1,937.50 x 1.000 share = $1,938.00 indemnity.
    (c) The total production to count (in bushels for corn insured as 
grain or in tons for corn insured as silage) from all insurable acreage 
on the unit will include:
    (1) All appraised production as follows:
    (i) For yield protection, not less than the production guarantee, or 
for revenue protection, not less than the amount of production that when 
multiplied by the harvest price equals the revenue protection guarantee 
(per acre) 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) For which you fail to give us notice before harvest begins if 
you report planting the corn to harvest as grain but harvest it as 
silage or you report planting the corn to harvest as silage but harvest 
it as grain.
    (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 you will 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 coarse grain production (excluding corn insured 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 as silage will be adjusted for 
excess moisture and quality only as specified in section 11(e).
    (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%));

[[Page 209]]

    (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 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 sections 11(d) (2) and (3), will be reduced by the 
quality adjustment factor contained in the Special Provisions.
    (e) For corn insured 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 the calendar 
date for the end of the insurance period as specified in section 7(b), 
we may increase the silage production to count to a 65 percent moisture 
equivalent to reflect the normal moisture content of silage harvested 
during the normal silage harvesting period.
    (f) 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 additional 
coverage 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; 75 FR 15881, 15882, 
15883, Mar. 30, 2010]

Sec. Sec. 457.114-457.115  [Reserved]

Sec. 457.116  Sugarcane crop insurance provisions.

    The Sugarcane Crop Insurance Provisions for the 2011 and succeeding 
crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                        Sugarcane Crop Provisions

                             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.

[[Page 210]]

    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.

  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(f) 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)(2)(iv) 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.

[[Page 211]]

 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.
    (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

[[Page 212]]

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 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; 75 FR 15883, Mar. 
30, 20100]

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

[[Page 213]]

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.

                           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;

[[Page 214]]

    (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;
    (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;

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    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 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 price and quality endorsement.

    The malting barley price and quality endorsement provisions for the 
2011 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:
    Small Grains Crop Insurance Malting Barley Price and Quality 
Endorsement

    (This is a continuous endorsement. Refer to section 2 of the Basic 
Provisions.)
In return for your payment of premium for the coverage contained herein, 
this endorsement will be attached to and made part of the Basic 
Provisions and Small Grains Crop Provisions, subject to the terms and 
conditions described herein.

                             1. Definitions

    Additional value price. The value per bushel determined in 
accordance with section 3 of Option A or section 3 of Option B, as 
applicable.
    Approved malting variety. A variety of barley specified in the 
Special Provisions.
    Brewery. A facility where malt beverages are commercially produced 
for human consumption.
    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.
    Crop year. In addition to the definition in the Basic Provisions and 
only for APH purposes under the terms of this endorsement, the period 
within which the crop is actually grown and designated by the calendar 
year in which the insured crop is normally harvested.
    Licensed grain grader. A person authorized by the U.S. Department of 
Agriculture to inspect and grade barley in accordance with the U.S. 
Standards for malt barley.
    Malt. A substance produced by germinating barley under controlled 
conditions and then drying it.
    Malt extract. A substance made by adding warm water to ground malt 
and separating the liquid from the solid. In some cases, the

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liquid extract may be condensed or evaporated to a syrup or powder.
    Malting barley contract. An agreement in writing:
    (a) Between the producer and a brewery or a business enterprise that 
produces or sells malt or malt extract to a brewery, or a business 
enterprise owned by such brewery or business;
    (b) That specifies the amount of contracted production, the purchase 
price or a method to determine such price; and
    (c) That establishes the obligations of each party to the agreement.
    Malting barley price agreement. An agreement that meets all 
conditions required for a malting barley contract except that it is 
executed with a business enterprise that is not described in the 
definition of a malting barley contract, but that normally contracts to 
purchase malting barley production and has facilities appropriate to 
handle and store malting barley production.
    Objective test. A determination made by a qualified person using 
standardized equipment that is widely used in the malting industry that 
follows a procedure approved by the:
    (a) American Society of Brewing Chemists when determining percent 
germination;
    (b) Federal Grain Inspection Service when determining quality 
factors other than percent germination; or
    (c) Food and Drug Administration (FDA) when determining 
concentrations of mycotoxins or other substances or conditions 
identified by the FDA as being injurious to human or animal health.
    Subjective test. A determination:
    (a) Made by a person using olfactory, visual, touch or feel, 
masticatory, or other senses unless performed by a licensed grain 
grader;
    (b) That uses non-standardized equipment; or
    (c) 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.
    2. This endorsement provides coverage for malting barley production 
and quality losses at a price per bushel greater than that offered under 
the Small Grains Crop Provisions.
    3. You must have the Basic Provisions and the Small Grains Crop 
Provisions in force to elect to insure malting barley under this 
endorsement.
    4. You must elect either Option A or Option B on or before the sales 
closing date:
    (a) No coverage will be provided under:
    (1) Either Option A or Option B of this endorsement if you fail to 
elect 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; 
or
    (2) Option B of this endorsement if you have not met the production 
requirements specified in section 1(a) of Option B (in such case, you 
will only have coverage under the Small Grains Crop Provisions unless 
you elect coverage under Option A on or before the sales closing date);
    (b) 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;
    (c) Your election (Option A or Option B) will continue from year to 
year unless you cancel or change your election on or before the sales 
closing date, or your coverage is otherwise canceled or terminated under 
the terms of your policy; and
    (d) In counties with both fall and spring sales closing dates, you 
may elect this endorsement until the spring sales closing date only if 
you do not have any fall planted acreage of approved malting barley 
varieties.
    5. All acreage in the county planted to approved malting varieties 
that is insurable under the Small Grains Crop Provisions for feed barley 
and your elected Option will be insured under this endorsement, except 
any acreage on which you produce seed under the terms of the seed 
contract.
    6. In lieu of the definitions and provisions regarding units and 
unit division in the Basic Provisions and the Small Grains Crop 
Provisions, all malting barley acreage in the county insured under this 
endorsement will be considered as one basic unit regardless of whether 
such acreage is owned, rented for cash, or rented for a share of the 
crop. Your shares in the malting barley acreage insured under this 
endorsement must be designated separately on the acreage report. For 
example, if you have 100 percent share in 50 acres and 75 percent share 
in 10 acres you must list the 50 acres separately from the 10 acres on 
your acreage report and include the percent share for each.
    7. You must select a percentage of the additional value price on or 
before the sales closing date (you can select only one percentage even 
if more than one additional value price is applicable, and this 
percentage must be 100 percent or less). In the event you choose a 
percentage less than 100 percent of the additional value price, we will 
multiply that percentage by the additional value price specified in 
Option A or Option B, as applicable, to determine the additional value 
price applicable to this endorsement.
    8. The additional premium amount for this coverage will be 
determined by multiplying your malting barley production guarantee (per 
acre) by your additional value price, by the premium rate, by the 
acreage planted to approved malting barley varieties, by your share at 
the time coverage begins. The premium rate you pay will be adjusted by a 
malting barley factor contained in the actuarial documents, as 
applicable.

[[Page 217]]

    9. In addition to the reporting requirements contained in section 6 
of the Basic Provisions, you must provide all the information required 
by the Option you elect.
    10. In accordance with section 14 of the Basic Provisions:
    (a) We will settle your claim within 30 days if all production:
    (1) Meets the quality criteria specified in section 14(a)(2) of this 
endorsement; or
    (2) Grades U.S. No. 4 or worse in accordance with the grades and 
grade requirements for the subclasses six-rowed and two-rowed barley, or 
for the class barley in accordance with the Official United States 
Standards for Grain; and
    (3) Is not accepted by a buyer for malting purposes; or
    (b) Whenever any production fails one or more of the quality 
criteria specified in section 14(a)(2) of this endorsement and grades 
U.S. No. 3 or better, we will not agree upon the amount of loss until 
the earlier of:
    (1) The date you sell, feed, donate, or otherwise utilize such 
production for any purpose; or
    (2) May 31 of the calendar year immediately following the calendar 
year in which the insured malting barley is normally harvested. If you 
still retain any insured production on or after this date, we will:
    (i) Defer completion of your claim if you agree to such deferment; 
or
    (ii) If you do not agree to defer your claim, we will complete your 
claim; however, no adjustment for quality deficiencies will be made and 
all remaining unsold insured production will be considered to have met 
the quality standards specified in this endorsement.
    11. This endorsement for malting barley does not provide prevented 
planting coverage. Such coverage is only provided in accordance with the 
provisions of the Small Grains Crop Provisions for feed barley.
    12. 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 under section 14. Failure to keep 
production separate as required herein will result in denial of your 
claim for indemnity.
    13. In the event of loss or damage covered by this endorsement, we 
will settle your claim by:
    (a) Multiplying the insured acreage by your malting barley 
production guarantee (per acre) determined in accordance with section 2 
of Option A or Option B, as applicable;
    (b) Multiplying the result in section 13(a) by your respective 
additional value price per bushel;
    (c) Multiplying the number of bushels of production to count 
determined in accordance with section 14 by your additional value price 
per bushel (If more than one additional value price is applicable, the 
highest additional value price will be used until the number of bushels 
covered at the higher additional value price is reached and the 
remainder of the production will be multiplied by the lower additional 
value price. For example, if variety A is grown under a malting barley 
price agreement and 1000 bushels of variety A are insured using an 
additional value price of $0.68 per bushel but only 500 bushels of 
variety A are produced, the 500 bushels would be valued at $0.68 per 
bushel and all other production of other varieties will be valued at the 
lower additional value price unless such production is acceptable under 
the terms of the malting barley price agreement, in which case 500 
bushels of the other varieties would also be valued at $0.68 per 
bushel);
    (d) Subtracting the result of section 13(c) from the result in 
section 13(b); and
    (e) Multiplying the result of section 13(d) by your share.
    14. The amount of production to be counted 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), (ii) and (iv) of the Small Grains Crop Provisions;
    (2) Harvested production and unharvested production that meets, or 
would meet if properly handled, either the acceptable percentage or 
parts per million standard contained in any applicable malting barley 
contract or malting barley price agreement for protein, plump kernels, 
thin kernels, germination, blight damaged, injured by mold, mold 
damaged, injured by sprout, injured by frost, frost damaged, and 
mycotoxins or other substances or conditions identified by the Food and 
Drug Administration or other public health organizations of the United 
States as being injurious to human health, or the following quality 
standards (additional or different quality standards may be specified or 
made available in the Special Provisions), whichever is less stringent:

----------------------------------------------------------------------------------------------------------------
                                       Six-rowed Malting
                                             Barley                       Two-rowed Malting Barley
----------------------------------------------------------------------------------------------------------------
Protein (dry basis)................  14.0% maximum........  13.5% 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.

[[Page 218]]

 
Injured by sprout..................  1.0% maximum.........  1.0% maximum.
Injured by frost...................  5.0% maximum.........  5.0% maximum.
Frost damaged......................  0.4% maximum.........  0.4% maximum.
Mycotoxins.........................  2.0 ppm maximum......  2.0 ppm maximum.
----------------------------------------------------------------------------------------------------------------

    (3) Harvested production that does not meet the quality standards 
contained in section 14(a)(2), but is accepted by a buyer. If the price 
received is less than the total of the additional value price and the 
feed barley projected price announced by FCIC, the production to count 
may be reduced or the values used to settle the claim may be adjusted in 
accordance with sections 14(b), (c), and (d).
    (b) For the quantity of production that qualifies under section 
14(a)(3), the amount of production to count will be determined by:
    (1) Subtracting the projected price for feed barley from the sale 
price per bushel of the damaged production (If the sale price is less 
than the market value of the damaged production, the sale price will be 
the market value);
    (2) Subtracting the weighted average cost per bushel for 
conditioning the production, if any, (not to exceed the discount you 
would have received had you sold the barley without conditioning, for 
example, if the price per bushel of the production without conditioning 
is $2.80 and the price for such production after conditioning is $2.90, 
the discount is $0.10 and the cost of conditioning can not exceed $0.10 
per bushel) from the result of section 14(b)(1);
    (3) Dividing the result of section 14(b)(1) or (2), as applicable, 
by 100 percent of the additional value price (The weighted average 
additional value price will be used in the event more than one 
additional value price is applicable, for example, if 1000 bushels of 
variety A are insured with an additional value price of $0.68 and 500 
bushels are insured with an additional value price of $0.40, the 
weighted average additional value price would be $0.59); and
    (4) Multiplying the result of section 14(b)(3) (if less than zero, 
no production will be counted; or, if more than 1.000, no adjustment 
will be made) by the number of bushels of damaged production.
    (c) No reduction in the amount of production to count will be 
allowed for:
    (1) Moisture content;
    (2) Damage due to uninsured causes;
    (3) Costs or reduced value associated with drying, handling, 
processing, or quality factors other than those contained in section 
14(a)(2); or
    (4) Any other costs associated with normal handling and marketing of 
malting barley.
    (d) 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.

  OPTION A (FOR MALTING BARLEY PRODUCTION, REGARDLESS OF WHETHER GROWN 
           UNDER A MALTING BARLEY CONTRACT OR PRICE AGREEMENT)

    1. To be eligible for coverage under this option:
    (a) You must provide us with 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 2011 crop year, records must be 
provided for the 2006 through the 2009 crop years, if malting barley 
varieties were planted in each of those crop years);
    (1) Failure to provide acceptable records or reports as required 
herein will make you ineligible for coverage under this endorsement; and
    (2) You must provide these records to us no later than the 
production reporting date specified in the Basic Provisions; and
    (b) If you produce malting barley under a malting barley contract or 
malting barley price agreement, you must provide us with a copy of your 
current crop year contract or agreement on or before the acreage 
reporting date if you want the additional value price based on such 
contract or price agreement. All terms and conditions of the contract or 
agreement, including the contract price or future contract price, must 
be specified in the contract or agreement and be effective on or before 
the acreage reporting date.
    2. Your malting barley production guarantee (per acre) will be the 
lesser of:
    (a) The production guarantee (per acre) for feed barley for acreage 
planted to approved malting varieties calculated in accordance with the 
Basic Provisions; or
    (b) A yield per acre calculated by:
    (1) Dividing the number of bushels of malting barley sold each year 
by the number of acres planted to approved malting barley varieties in 
each respective year;
    (2) Adding the results of section 2(b)(1);

[[Page 219]]

    (3) Dividing the result of section 2(b)(2) by the number of years 
approved malting barley varieties were planted; and
    (4) Multiplying the result of section 2(b)(3) by your coverage 
level.
    3. The additional value price per bushel will be determined as 
follows:
    (a) For production grown under a malting barley contract or a 
malting barley price agreement, the additional value price per bushel 
will be the following amount, as applicable:
    (1) The sale price per bushel established in the malting barley 
contract or malting barley price agreement (not including discounts or 
incentives that may apply) minus the projected price for barley;
    (2) The amount per bushel for malting barley (not including 
discounts or incentives that may apply) above a feed barley price that 
is determined at a later date, provided the method of determining the 
price is specified in the malting barley contract or malting barley 
price agreement; or
    (3) If your malting barley contract or malting barley price 
agreement has a variable price option, you must select a price or a 
method of determining a price that will be treated as the sale price and 
your additional value price per bushel will be calculated under section 
3(a)(1) or (2), as applicable.
    (b) The additional value price per bushel designated in the 
actuarial documents will be used if:
    (1) Production is not grown under a malting barley contract or 
malting barley price agreement; or
    (2) The malting barley contract or malting barley price agreement is 
not provided to us by the acreage reporting date.
    (c) Under no circumstances will the additional value price exceed 
$1.25 per bushel.
    (d) The number of bushels eligible for coverage using an additional 
value price determined in section 3(a) will be the lesser of:
    (1) The amount determined by multiplying the number of acres planted 
to an approved malting barley variety by your malting barley production 
guarantee (per acre) determined in accordance with section 2; or
    (2) The amount determined by multiplying the number of bushels 
specified in the malting barley contract or malting barley price 
agreement by your coverage level.
    (e) Under no circumstances will the number of bushels determined in 
section 3(d) that will receive an additional value price determined in 
accordance with section 3(a) exceed the amount determined by multiplying 
125 percent of the greatest number of acres that you certified for 
malting barley APH purposes in any crop year contained in your malting 
barley APH database by your malting barley production guarantee (per 
acre) determined in accordance with section 2. Any bushels in excess of 
this amount will be insured using the additional value price designated 
in the actuarial documents.

                             4. Loss Example

    In accordance with section 13, your loss will be calculated as 
follows:
    (a) Assume the following:
    (1) A producer has:
    (i) 400 acres of barley insured under the Small Grains Crop 
Provisions, of which 200 acres are planted to feed barley and 200 acres 
are planted to an approved malting barley variety;
    (ii) 100 percent share;
    (iii) A feed barley approved yield of 55 bushels per acre;
    (iv) A malting barley approved yield, based on malting barley sales 
records and the number of acres planted to approved malting barley 
varieties, of 52 bushels per acre;
    (v) Selected the 75 percent coverage level; and
    (vi) Provided a malting barley price agreement by the acreage 
reporting date for the sale of 5,720 bushels at $2.72 per bushel;
    (2) The projected price for feed barley is $1.92 per bushel;
    (3) The additional value price per bushel from the actuarial 
documents is $0.40;
    (4) In accordance with section 3(a)(1), the additional value price 
per bushel for production grown under a malting barley price agreement 
is $0.80 ($2.72 malting barley price agreement price minus $1.92 
projected price); and
    (5) The total production from the 200 acres of malting barley is 
7,250 bushels, all of which fails to meet the quality standards 
specified in section 14(a) and in the malting barley price agreement:
    (i) 4,750 bushels are sold for $2.31 per bushel; and
    (ii) After conditioning at a cost of $0.05 per bushel, an additional 
2,500 bushels are sold for $2.20 per bushel;
    (b) The amount of insurance protection is determined as follows:
    (1) 4,290 bushels eligible for coverage using the additional value 
price from the malting barley price agreement [the lesser of 4,290 
bushels (5,720 bushels grown under a malting barley price agreement x 
.75 coverage level) or 7,800 bushels (200 acres planted to approved 
malting barley varieties x 39.0 bushel per acre (52 bushels per acre 
malting barley approved yield x .75 coverage level) malting barley 
production guarantee)] x $0.80 additional value price = $3,432.00 amount 
of insurance protection for the bushels grown under the malting barley 
price agreement;
    (2) 3,510 bushels eligible for coverage using the additional value 
price from the actuarial documents (7,800 bushel total malting barley 
production guarantee - 4,290 bushels covered using the additional value 
price from the

[[Page 220]]

malting barley price agreement) x $0.40 additional value price = 
$1,404.00 amount of insurance protection for the bushels not grown under 
a malting barley price agreement; and
    (3) $3,432.00 + $1,404.00 = $4,836.00 total amount of insurance 
protection for the unit;
    (c) In accordance with section 14, the total amount of production to 
count is determined as follows:
    (1) Damaged production that is not reconditioned:
    (i) $2.31 price per bushel - $1.92 projected price for feed barley = 
$0.39;
    (ii) $0.39 / $0.62 weighted average additional value price 
($4,836.00 total insurance protection / 7,800 bushel production 
guarantee = $0.62 weighted average additional value price) = 0.63; and
    (iii) 0.63 x 4,750 bushels of damaged production sold at $2.31 = 
2,993 bushels of production to count;
    (2) Damaged production that is reconditioned:
    (i) $2.20 price per bushel - $1.92 projected price for feed barley = 
$0.28;
    (ii) $0.28 - $0.05 reconditioning cost = $0.23;
    (iii) $0.23 / $0.62 weighted average additional value price = 0.37; 
and
    (iv) 0.37 x 2,500 bushels of damaged production sold at $2.20 = 925 
bushels of production to count; and
    (3) Total production to count is 3,918 bushels (2,993 + 925);
    (d) The value of production to count is $3,134.00 (3,918 bushels x 
$0.80 additional value price (all production to count is valued at the 
higher additional value price since the amount of production to count 
did not exceed the number of bushels covered at the higher additional 
value price)); and
    (e) The indemnity amount is $1,702.00 ($4,836.00 total amount of 
insurance protection for the unit - $3,134.00 value of production to 
count).

   OPTION B (FOR PRODUCTION GROWN UNDER MALTING BARLEY CONTRACTS ONLY)

    1. To be eligible for coverage under this option:
    (a) On or before the sales closing date, for at least one of the 
three crop years you planted malting barley immediately preceding the 
previous crop year:
    (1) You must have had a malting barley contract and produced and 
sold at least 75 percent of the contracted amount for the crop year such 
contract was applicable, or such other amount specified in the Special 
Provisions (e.g., if you wish to insure 2011 crop year malting barley 
and you had a malting barley contract to produce 10,000 bushels in 2009, 
you must have produced and sold at least 7,500 bushels of 2009 crop year 
malting barley production); and
    (2) You must provide us a copy of your prior malting barley contract 
and acceptable records of sales of malting barley required to establish 
compliance with section 1(a)(1) of Option B;
    (b) The maximum amount of production that may be insured under 
Option B will be limited to the lesser of the amount of malting barley 
contained in the current crop year's malting barley contract or 200 
percent of the amount contracted for the crop year used to demonstrate 
compliance with section 1(a)(1) of Option B; and
    (c) On or before the acreage reporting date, you must provide us 
with a copy of your malting barley contract for the current crop year:
    (1) All terms and conditions of the contract, including the contract 
price or method to determine the price, must be specified in the 
contract and be effective on or before the acreage reporting date;
    (2) 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 Option B, or deny liability; and
    (3) Only contracted production or acreage is covered by Option B.
    2. Your malting barley production guarantee (per acre) will be the 
lesser of:
    (a) The production guarantee (per acre) for feed barley for acreage 
planted to approved malting barley varieties calculated in accordance 
with the Basic Provisions; or
    (b) A yield per acre calculated 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 of section 2(b)(1) by the coverage level 
percentage you elected under the Small Grains Crop Provisions.
    3. The additional value price per bushel will be the following 
amount, as applicable:
    (a) The sale price per bushel established in the malting barley 
contract (without regard to discounts or incentives that may apply) 
minus the projected price for feed barley;
    (b) The amount per bushel for malting barley (not including 
discounts or incentives that may apply) above a feed barley price that 
is determined at a later date, provided the method of determining the 
price is specified in the malting barley contract; or
    (c) If your malting barley contract has a variable premium price 
option, you must select a price or a method of determining a price that 
will be treated as the sale price and your additional value price per 
bushel will be calculated under section 3(a) or (b), as applicable; and
    (d) Under no circumstances will the additional value price per 
bushel exceed $2.00 per bushel.
    4. Loss Example.
    In accordance with section 13, your loss will be calculated as 
follows:
    (a) Assume the following:

[[Page 221]]

    (1) A producer has:
    (i) 400 acres of barley insured under the Small Grains Crop 
Provisions, of which 200 acres are planted to feed barley and 200 acres 
are planted to an approved malting barley variety;
    (ii) 100 percent share;
    (iii) A feed barley approved yield of 55 bushels per acre;
    (iv) A malting barley approved yield, based on contracted production 
and the number of acres planted to approved malting barley varieties of 
52 bushels per acre;
    (v) Selected the 75 percent coverage level; and
    (vi) A malting barley contract for the sale of 10,000 bushels of 
malting barley at $2.60 per bushel;
    (2) The projected price for feed barley is $1.92 per bushel;
    (3) In accordance with section 3, the additional value price per 
bushel for production grown under the malting barley contract is $0.68 
($2.60 malting barley contract price minus $1.92 projected price); and
    (4) The total production from the 200 acres of malting barley is 
7,250 bushels, all of which fails to meet the quality standards 
specified in section 14(a) and in the malting barley contract:
    (i) 4,750 bushels are sold for $2.31 per bushel; and
    (ii) After conditioning at a cost of $0.05 per bushel, an additional 
2,500 bushels are sold for $2.20 per bushel;
    (b) In accordance with section 2, the amount of insurance protection 
is determined as follows:
    (1) The lesser of 41.3 bushels per acre production guarantee (55 
bushels x 75 percent coverage level) for feed barley or 37.5 bushels per 
acre (10,000 bushels contracted / 200 acres = 50.0 bushels per acre and 
50.0 x 75 percent coverage level = 37.5);
    (2) 37.5 bushels per acre x 200 acres = 7,500 bushels total malting 
barley production guarantee; and
    (3) 7,500 bushels x $0.68 additional value price = $5,100.00 total 
amount of insurance for the unit;
    (c) In accordance with section 14, the total amount of production to 
count is determined as follows:
    (1) Damaged production that is not reconditioned:
    (i) $2.31 price per bushel - $1.92 projected price for feed barley = 
$0.39;
    (ii) $0.39 / $0.68 additional value price = 0.57; and
    (iii) 0.57 x 4,750 bushels of damaged production sold at $2.31 = 
2,708 bushels of production to count;
    (2) Damaged production that is reconditioned:
    (i) $2.20 price per bushel-$1.92 projected price for feed barley = 
$0.28;
    (ii) $0.28-$0.05 reconditioning cost = $0.23;
    (iii) $0.23 / $0.68 additional value price = 0.34; and
    (iv) 0.34 x 2,500 bushels of damaged production sold at $2.20 = 850 
bushels of production to count; and
    (3) Total production to count is 3,558 bushels (2,708 + 850);
    (d) The value of production to count is $2,419.00 (3,558 bushels x 
$0.68 additional value price); and
    (e) The indemnity amount is $2,681.00 ($5,100.00 total amount of 
insurance protection for the unit - $2,419.00 value of production to 
count).

[75 FR 15883, Mar. 30, 2010]

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.

                             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.

[[Page 222]]

    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
    (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),

[[Page 223]]

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 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):

[[Page 224]]

    (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;
    (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.

[[Page 225]]

    (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 2015 
and succeeding crop years are as follows:

                 United States Department of Agriculture

                   Federal Crop Insurance Corporation

                Arizona-California Citrus Crop Provisions

                             1. Definitions

    Carton. The standard container for marketing the fresh packed citrus 
fruit commodity, as shown below, unless otherwise provided in the 
Special Provisions. 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, unless otherwise provided in the Special Provisions.

------------------------------------------------------------------------
                                       Citrus fruit
          Container size                commodity            Pounds
------------------------------------------------------------------------
Container 58............  Oranges............                38
Container 58............  Lemons.............                40
Container 59............  Grapefruit.........                32
Container 63............  Mandarins/                         25
                                    Tangerines.
Container 63............  Tangelos...........                25
------------------------------------------------------------------------

    Citrus fruit commodity. Citrus fruit as follows:
    (1) Oranges;
    (2) Lemons;
    (3) Grapefruit;
    (4) Mandarins/Tangerines;
    (5) Tangelos; and
    (6) Any other citrus fruit commodity designated in the actuarial 
documents.
    Citrus fruit group. A designation in the Special Provisions used to 
identify commodity types within a citrus fruit commodity that may be 
grouped together for the purposes of electing coverage levels and 
identifying the insured crop.
    Commodity type. A specific subgroup of a citrus fruit commodity 
having a characteristic or set of characteristics distinguishable from 
other subgroups of the same citrus fruit commodity.
    Crop year. The period beginning with the date insurance attaches to 
the insured 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 insured crop.
    Graft. To unite a bud or scion with a rootstock or interstock in 
accordance with recommended practices to form a living union.
    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 agricultural commodities 
are planted in any form of alternating or mixed pattern.
    Interstock. The area of the tree that is grafted to the rootstock.

[[Page 226]]

    Rootstock. The root and stem portion of a tree to which a scion can 
be grafted.
    Scaffold limb. A major limb attached directly to the trunk.
    Scion. A detached living portion of a plant joined to a rootstock or 
interstock in grafting.
    Set out. Transplanting a tree into the grove.
    Topwork. Grafting a scion onto a pruned scaffold limb.

                            2. Unit Division

    (a) Basic units will be established in accordance with section 1 of 
the Basic 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. Unless otherwise allowed 
by written agreement, optional units may only be established if each 
optional unit meets one or more of the following:
    (1) The optional unit is located on non-contiguous land; and
    (2) In addition to or instead of establishing optional units by non-
contiguous land, optional units may be established by commodity type if 
allowed by the Special Provisions.

  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 and coverage level 
for each citrus fruit group you elect to insure. The price election you 
choose for each citrus fruit group need not bear the same percentage 
relationship to the maximum price offered by us for each citrus fruit 
group. For example, if you choose one hundred percent (100%) of the 
maximum price election for the citrus fruit group for Valencia oranges, 
you may choose seventy-five percent (75%) of the maximum price election 
for the citrus fruit group for Navel oranges. However, if separate price 
elections are available by commodity type within each citrus fruit 
group, the price elections you choose for each commodity type must have 
the same percentage relationship to the maximum price offered by us for 
each commodity type within the citrus fruit group.
    (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 2015 crop year production report, you will provide your 2013 crop 
year production.
    (c) In addition, you must report, by the production reporting date 
designated in section 3 of the Basic Provisions (Sec. 457.8), by 
commodity 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 agricultural commodity and any time the planting 
pattern of such acreage is changed:
    (i) The age of the interplanted agricultural commodity and commodity 
type, if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    (d) We will reduce the yield used to establish your production 
guarantee as necessary, based on our estimate of the effect of any 
situation listed in section 3(c) that may occur. If you fail to notify 
us of any situation in section 3(c), we will reduce your production 
guarantee as necessary, at any time we become aware of the circumstance. 
If the situation in 3(c) occurred:
    (1) Before the beginning of the insurance period, the yield used to 
establish your production guarantee will be reduced for the current crop 
year regardless of whether the situation was due to an insured or 
uninsured cause of loss;
    (2) After the beginning of the insurance period and you notify us by 
the production reporting date, the yield used to establish your 
production guarantee will be reduced for the current crop year only if 
the potential reduction in the yield used to establish your production 
guarantee is due to an uninsured cause of loss; or
    (3) After the beginning of the insurance period and you fail to 
notify us by the production reporting date, an amount equal to the 
reduction in the yield will be added to the production to count 
calculated in section 11(c) due to uninsured causes. We may reduce the 
yield used to establish your production guarantee for the subsequent 
crop year to reflect any reduction in the productive capacity of the 
trees.

                           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 November 20.

[[Page 227]]

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions, the insured 
crop will be all the acreage in the county of each citrus fruit group 
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 grown on rootstock and trees 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, unless otherwise provided in the Special Provisions or if 
we inspect and approve a written agreement to insure such acreage, is 
grown on trees that have reached at least:
    (1) The sixth growing season after being set out; or
    (2) The fifth growing season after topwork or grafting, if topwork 
or grafting occurs after set out.

                          7. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions that 
prohibit insurance attaching to interplanted acreage, citrus 
interplanted with another perennial agricultural commodity is 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 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 insured 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:
    (A) Navel oranges; and
    (B) Lemons in the Southern California counties of Imperial, Orange, 
Riverside, San Bernardino, San Diego, and Ventura;
    (ii) November 20 for Valencia oranges; and
    (iii) July 31 for lemons in all other counties and for all other 
citrus fruit commodities.
    (b) In addition to the provisions of section 11 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 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;
    (6) Failure of irrigation water supply, if caused by an insured 
peril that occurs during the insurance period;
    (7) Insects, but not damage due to insufficient or improper 
application of pest control measures; or
    (8) Plant disease, but not damage due to insufficient or improper 
application of disease control measures.
    (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 the inability to market the citrus 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

    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, you must leave representative samples. In lieu of section 
14(c)(3) of the Basic Provisions, we will determine which trees must 
remain unharvested as your representative sample so that we may inspect 
them in accordance with procedures.

[[Page 228]]

    (b) In addition to the requirements of section 14 of the Basic 
Provisions (Sec. 457.8), the following will apply:
    (1) 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.
    (2) 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 have an opportunity 
to inspect unharvested trees. You must not sell or dispose of the 
damaged insured 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
    (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 commodity type by its 
respective production guarantee;
    (2) Multiplying the results of section 11(b)(1) by the respective 
price election for each commodity type;
    (3) Totaling the results of section 11(b)(2);
    (4) Multiplying the total production to be counted of each commodity 
type (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 insured 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 insured 
crop, in which case we will use the harvested production. If you do not 
continue to care for the insured 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 you elect the frost protection option and we determine that 
frost protection equipment, as specified in the Special Provisions, 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; 
78 FR 46253, July 31, 2013]

[[Page 229]]

Sec. 457.122  Walnut crop insurance provisions.

    The Walnut Crop Insurance Provisions for the 2008 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 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

[[Page 230]]

(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 seventh growing season after being set out, unless 
otherwise provided in the Special Provisions.
    (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. 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,

[[Page 231]]

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 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; 72 FR 10909, Mar. 12, 2007]

Sec. 457.123  Almond crop insurance provisions.

    The Almond Crop Insurance Provisions for the 2008 and succeeding 
crop years are as follows:

FCIC Policies

[[Page 232]]

                        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.

  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 sixth growing season after being set out, unless otherwise 
provided in the Special Provisions.

[[Page 233]]

                          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 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:

[[Page 234]]

    (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:
    (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; 72 FR 10909, Mar. 12, 2007]

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.

[[Page 235]]

    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
    (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.

[[Page 236]]

    (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 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

[[Page 237]]

    (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:
    (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

[[Page 238]]

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.
    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

[[Page 239]]

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 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,

[[Page 240]]

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 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]

[[Page 241]]

Sec. 457.126  Popcorn crop insurance provisions.

    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 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.

[[Page 242]]

                  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 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

[[Page 243]]

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
    (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

[[Page 244]]

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 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,

[[Page 245]]

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 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.
------------------------------------------------------------------------


[[Page 246]]

    (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.
------------------------------------------------------------------------

                          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.

[[Page 247]]

                          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;
    (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

[[Page 248]]

    (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:
    (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 2008 
and succeeding crop years for all counties with a contract change date 
on or after the effective date of this rule and for the 2009 and 
succeeding crop years for all counties with a contract change date prior 
to the effective date of this rule, 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

                             1. Definitions

    Allowable cost. The dollar amount per container for harvesting, 
packing, and handling as shown in the Special Provisions.
    Amount of insurance (per acre). The dollar amount of coverage per 
acre obtained by multiplying the reference maximum dollar amount shown 
on the actuarial documents by the coverage level percentage you elect.
    Average net value per container. The dollar amount obtained by 
totaling the net values of all containers of sweet corn sold and 
dividing the result by the total number of containers of all sweet corn 
sold.
    Container. The unit of measurement for the insured crop as specified 
in the Special Provisions.
    Crop year. In lieu of the definition of ``crop year'' contained in 
section 1 of the Basic Provisions, for counties with fall, winter, and 
spring planting periods or counties with fall and spring planting 
periods, the 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. For 
counties with only spring planting periods, the period of time that 
begins on the earliest planting period for spring 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

[[Page 249]]

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. Separation of ears of sweet corn from the plant by hand or 
machine.
    Marketable sweet corn. Sweet corn that is sold for any purpose or 
grades U.S. No. 1 or better in accordance with the requirements of the 
United States Standards for Grades of Sweet Corn.
    Minimum value. The dollar amount per container shown in the Special 
Provisions we will use to value marketable production to count.
    Net value. The dollar value of packed and sold sweet corn obtained 
by subtracting the allowable cost and any additional charges specified 
in the Special Provisions from the gross value per container of sweet 
corn sold. This result may not be less than zero.
    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 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 in section 1 of the 
Basic Provisions, 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 basic unit, as defined in section 1 of the Basic Provisions, will 
also be established for each planting period.

              3. Amounts of Insurance and Production Stages

    (a) In addition to the requirements of section 3 of the Basic 
Provisions, 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 of 
the Basic Provisions do not apply to sweet corn.
    (d) If specified in the Special Provisions, we will limit your 
amount of insurance per acre if you have not produced the minimum amount 
of production of sweet corn contained in the Special Provisions in at 
least one of the three most recent crop years.
    (e) 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.
------------------------------------------------------------------------

    (f) The indemnity payable for any acreage of sweet corn will be 
based on the stage the plants had achieved when damage occurred. 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 have an amount of insurance based on the first stage for the 
purposes of establishing an indemnity even if you continue to care for 
the damaged sweet corn.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date shown

[[Page 250]]

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, 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 of the Basic 
Provisions, 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 
of the Basic Provisions, 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 by any 
applicable premium adjustment factors contained in the actuarial 
documents.

                             8. Insured Crop

    In accordance with section 8 of the Basic Provisions, 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, unless otherwise provided in the 
Special Provisions or by written agreement.

                          9. Insurable Acreage

    In addition to the provisions of section 9 of the Basic Provisions 
any acreage of sweet corn damaged during the planting period in which 
initial planting took place:
    (a) Must be replanted if:
    (1) Less than 75 percent of the plant stand remains;
    (2) It is practical to replant; and
    (3) The final day of the planting period has not passed at the time 
the crop was damaged.
    (b) Whenever sweet corn is initially planted during the fall or 
winter planting periods and the final planting date for the planting 
period has passed, but it is considered practical to replant, you may 
elect:
    (1) 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; or
    (2) 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 of the Basic Provisions, 
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, unless 
otherwise provided in the Special Provisions.

[[Page 251]]

                           11. 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) Wildlife;
    (4) Volcanic eruption;
    (5) Earthquake;
    (6) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (7) Plant disease, but not damage due to insufficient or improper 
application of disease control measures; or
    (8) 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 of the 
Basic Provisions, we will not insure against damage or loss due to:
    (1) Failure to harvest in a timely manner unless harvest is 
prevented by one of the insurable causes of loss specified in section 
11(a); or
    (2) Failure to market the sweet corn unless such failure is due to 
actual physical damage caused by an insured cause of loss as specified 
in section 11(a). 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. Replanting Payments

    (a) In accordance with section 13 of the Basic Provisions, 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 of the Basic 
Provisions, limiting 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 of the Basic 
Provisions, if you intend to claim an indemnity on any unit:
    (a) You also must give us notice not later than 72 hours after the 
earliest of:
    (1) The time you discontinue harvest of any acreage on the unit;
    (2) The date harvest normally would start if any acreage on the unit 
will not be harvested; or
    (3) The calendar date for the end of the insurance period.
    (b) If insurance is permitted by the Special Provisions or by 
written agreement on acreage with production that will be sold by direct 
marketing, 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 the value of your production to 
count for production that is sold by direct marketing. If damage occurs 
after this appraisal, we will conduct an additional appraisal if you 
notify us that additional damage has occurred. These appraisals, and/or 
any acceptable production records provided by you, will be used to 
determine the value of your production to count.
    (c) 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 dollar amount of insurance (per acre) for the 
applicable stage if such failure results in our inability to accurately 
determine the value of production.

                         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(e));
    (3) Totalling 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 fifty-five percent; and
    (5) Multiplying the result of section 14(b)(4) by your share.

------------------------------------------------------------------------
 
-------------------------------------------------------------------------
For example:

[[Page 252]]

 
    You have a 100 percent share in 65.3 acres of fresh market sweet
     corn in the unit (15.0 acres in stage 1 and 50.3 acres in the final
     stage), with a dollar amount of insurance of $600 per acre. The
     15.0 acre field was damaged by flood and appraisals of the crop
     determined there was no potential production to be counted. From
     the 50.3 acre field, you are only able to harvest 5,627 containers
     of sweet corn. The net value of all sweet corn production sold
     ($3.11 per container) is greater than the Minimum Value per
     container ($2.50). The 5,627 containers sold x $3.11 average net
     value per container = $17,500 value of your production to count.
     Your indemnity would be calculated as follows:
 
        1  15.0 acres x $600 amount of insurance = $9,000 and
          50.3 acres x $600 amount of insurance = $30,180;
        2  $9,000 x .65 (percent for stage 1) = $5,850 and
          $30,180 x 1.00 (percent for final stage) = $30,180;
        3  $5,850 + $30,180 = $36,030 amount of insurance for the unit;
        4  $36,030-$17,500 value of production to count = $18,530 loss;
        5  $18,530 x 100 percent share = $18,530 indemnity payment.
------------------------------------------------------------------------

    (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;
    (iv) For which you fail to provide acceptable production records; or
    (v) From which insurable production is sold by direct marketing and 
you fail to meet the requirements contained in section 13(b) of these 
Crop Provisions;
    (2) The value of the following appraised sweet corn production will 
not be less than the dollar amount obtained by multiplying the number of 
containers of appraised sweet corn by the minimum value for the planting 
period:
    (i) Unharvested marketable sweet corn production (unharvested 
production that is damaged or defective due to insurable causes and is 
not marketable will not be counted as production to count unless such 
production is later harvested and sold for any purpose);
    (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 value of all harvested production of sweet corn from the 
insurable acreage, except production that is sold by direct marketing as 
specified in section (c)(4) below:
    (i) For sold production, will be the greater of:
    (A) The dollar amount obtained by multiplying the total number of 
containers of sweet corn sold by the minimum value; or
    (B) The dollar amount obtained by multiplying the average net value 
per container from all sweet corn sold by the total number of all 
containers of sweet corn sold.
    (ii) For marketable sweet corn production that is not sold, will be 
the dollar amount obtained by multiplying the number of containers of 
such sweet corn by the minimum value 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 to count unless such 
production is sold.
    (4) If all the requirements of insurability are met, the value of 
insurable production that is sold by direct marketing will be the 
greater of:
    (i) The actual value received by you for direct marketed production; 
or
    (ii) The dollar amount obtained by multiplying the total number of 
containers of appraised sweet corn sold by direct marketing by the 
minimum value.

                     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

[[Page 253]]

the initial crop year in which you wish to insure 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.
    (b) In lieu of the provisions contained in section 14(c)(3) of these 
Crop Provisions, the total value of harvested production that is not 
sold by direct marketing will be determined as follows:
    (1) The dollar amount obtained by multiplying the average net value 
per container from all sweet corn sold (this result may not be less than 
the minimum value option amount if such amount is provided in the 
Special Provisions) by the total number of all containers of sweet corn 
sold;
    (2) For marketable sweet corn production that is not sold, the value 
of such production will be the dollar amount obtained by multiplying the 
total number of containers of such sweet corn by the minimum value for 
the planting period. Harvested production that is damaged or defective 
due to insurable causes and is not marketable will not be included as 
production to count.
    (c) If all the requirements of insurability are met, the value of 
insurable production that is sold by direct marketing will be the 
greater of:
    (1) The actual value received by you for direct marketed production; 
or
    (2) The dollar amount obtained by multiplying the total number of 
containers of sweet corn sold by direct marketing by the minimum value.
    (d) 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; 72 FR 54523, Sept. 26, 2007; 72 FR 62767, Nov. 
7, 2007]

Sec. 457.130  Macadamia tree crop insurance provisions.

    The macadamia tree crop insurance provisions for the 2011 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

                             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 National Institute of Food and Agriculture 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(b)(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):

[[Page 254]]

    (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.
    (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

[[Page 255]]

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;
    (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; 75 
FR 15887, Mar. 30, 2010; 76 FR 4804, Jan. 27, 2011]

Sec. 457.131  Macadamia nut crop insurance provisions.

    The macadamia nut crop insurance provisions for the 2012 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

                             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

[[Page 256]]

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 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(b)(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.

[[Page 257]]

                  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 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

[[Page 258]]

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. 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; 75 
FR 15887, Mar. 30, 2010; 75 FR 59057, Sept. 27, 2010]

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.

[[Page 259]]

                             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 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

[[Page 260]]

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 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

[[Page 261]]

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]

Sec. 457.133  Prune crop insurance provisions.

    The Prune Crop Insurance Provisions for the 2013 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

                             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.
    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 grade 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.
    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 type, in which case you may select one 
price election for each 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 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 type, 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 any such 
situation listed in section 3(b) that may occur. If you fail to notify 
us of any situation in section 3(b), we will reduce the yield used to 
establish your production guarantee at any time we become aware of the 
circumstance. If the situation in section 3(b) occurred:

[[Page 262]]

    (1) Before the beginning of the insurance period, the yield used to 
establish your production guarantee will be reduced for the current crop 
year regardless of whether the situation was due to an insured or 
uninsured cause of loss;
    (2) After the beginning of the insurance period and you notify us by 
the production reporting date, the yield used to establish your 
production guarantee will be reduced for the current crop year only if 
the potential reduction in the yield used to establish your production 
guarantee is due to an uninsured cause of loss; or
    (3) After the beginning of the insurance period and you fail to 
notify us by the production reporting date, an amount equal to the 
reduction in the yield will be added to the production to count 
calculated in section 11(c) due to uninsured causes when determining any 
indemnity. We may reduce the yield used to establish your production 
guarantee for the subsequent crop year to reflect any reduction in the 
productive capacity of the trees.
    (d) 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 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 trees that:
    (1) Are listed as insurable types in the Special Provisions;
    (2) Are grown on rootstock that is adapted to the area;
    (3) Are irrigated (except where otherwise provided in the Special 
Provisions);
    (4) Are grown in an orchard that, if inspected, is considered 
acceptable by us; and
    (5) 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) For the year of application, coverage begins on March 1. For 
each subsequent crop year 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.
    (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) 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:

[[Page 263]]

    (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;
    (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;
    (7) Insects, but not damage due to insufficient or improper 
application of pest control measures; or
    (8) Plant disease, but not damage due to insufficient or improper 
application of disease control measures.
    (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 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

    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, you must leave representative samples in accordance with our 
procedures.
    (b) In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (1) You must notify us within 3 days of the date harvest should have 
started if the crop will not be harvested.
    (2) 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.
    (3) 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.
    (4) 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 type, if applicable, by 
its respective production guarantee;
    (2) Multiplying the result of 11(b)(1) by the respective price 
election for each type, if applicable;
    (3) Totaling the results of section 11(b)(2);
    (4) Multiplying the total production to count (see section 11(c)), 
of each type, if applicable, by its 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)(3); and
    (7) Multiplying the result of section 11(b)(6) by your share.
    Example 1: You select 75 percent coverage level, 100 percent of the 
price election, and have a 100 percent share in 50.0 acres of type A 
prunes in the unit. The production guarantee is 2.5 tons per acre and 
your price election is $630.00 per ton. You harvest 10.0 tons. Your 
indemnity would be calculated as follows:
    (1) 50.0 acres x 2.5 tons = 125.0-ton production guarantee;
    (2) 125.0-ton guarantee x $630.00 price election = $78,750 value of 
production guarantee;
    (4) 10.0 tons x $630.00 price election = $6,300 value of production 
to count;
    (6) $78,750-$6,300 = $72,450 loss; and
    (7) $72,450 x 1.000 share = $72,450 indemnity payment.

    Example 2: In addition to the information in the first example, you 
have an additional 50.0 acres of type B prunes with 100 percent share in 
the same unit. The production guarantee is 2.0 tons per acre and the 
price election is $550.00 per ton. You harvest 5.0 tons. Your total 
indemnity for both types A and B would be calculated as follows:
    (1) 50.0 acres x 2.5 tons = 125.0-ton production guarantee for type 
A and 50.0 acres x 2.0 tons = 100.0-ton production guarantee for type B;
    (2) 125.0-ton guarantee x $630.00 price election = $78,750 value of 
production guarantee for type A and 100.0-ton guarantee x $550.00

[[Page 264]]

price election = $55,000 value production guarantee for type B;
    (3) $78,750 + $55,000 = $133,750 total value of production 
guarantee;
    (4) 10.0 tons x $630.00 price election = $6,300 value of production 
to count for type A and 5.0 tons x $550.00 price election = $2,750 value 
of production to count for type B;
    (5) $6,300 + $2,750 = $9,050 total value of production to count;
    (6) $133,750-$9,050 = $124,700 loss; and
    (7) $124,700 loss x 1.000 share = $124,700 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) 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 that meets the definition of standard 
prunes; 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 that:
    (i) Meets the definition of standard prunes;
    (ii) Is intended for use as fresh fruit;
    (iii) Is sold as standard prunes; or
    (iv) Is damaged due to uninsured causes.
    (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.

                     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; 77 FR 59048, Sept. 26, 2012]

Sec. 457.134  Peanut crop insurance provisions.

    The Peanut Crop Insurance Provisions for the 2007 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.

                             1. Definitions

    Base contract price. The price for farmers' stock peanuts stipulated 
in the sheller contract, without regard to discounts or incentives that 
may apply, not to exceed the price election times the price factor 
specified in the Special Provisions.
    Farmers' stock peanuts. Picked or threshed peanuts produced in the 
United States, 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 customarily 
marketed by producers.
    Green peanuts. Peanuts that are harvested and marketed prior to 
maturity without drying or removal of moisture either by natural or 
artificial means.
    Handler. A person who is a sheller, a buying point, a marketing 
association, or has a contract with a sheller or a marketing association 
to accept all of the peanuts marketed through the marketing association 
for the crop year. The handler acquires peanuts for resale, domestic 
consumption, processing, exportation, or crushing through a business 
involved in buying and selling peanuts or peanut products.
    Harvest. The completion of digging and threshing and removal of 
peanuts from the field.
    Marketing association. A cooperative approved by the Secretary of 
the United States Department of Agriculture to administer payment 
programs for peanuts.
    Planted acreage. In addition to the requirement in the definition in 
the Basic Provisions, peanuts must initially be planted in a row pattern 
which permits mechanical cultivation, or that allows the peanuts to be 
cared for in a manner recognized by agricultural experts as a good 
farming practice. Acreage planted in any other manner will not be 
insurable unless otherwise provided by the Special Provisions or by 
written agreement.
    Price election. In addition to the definition in the Basic 
Provisions, the price election for peanuts insured in accordance with a 
sheller

[[Page 265]]

contract will be the base contract price specified in the sheller 
contract.
    Price factor. The factor specified in the Special Provisions that 
places limits on the base contract price.
    Sheller. Any business enterprise regularly engaged in processing 
peanuts for human consumption; that possesses all licenses and permits 
for processing peanuts 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 peanuts within a 
reasonable amount of time after harvest.
    Sheller contract. A written agreement between the producer and a 
sheller, or the producer and a handler, containing at a minimum:
    (a) The producer's commitment to plant and grow peanuts, and to 
deliver the peanut production to the sheller or handler;
    (b) The sheller's or handler's commitment to purchase all the 
production stated in the sheller contract (an option to purchase is not 
a commitment); and
    (c) A base contract price.
    If the agreement fails to contain any of these terms, it will not be 
considered a sheller contract.

                            2. Unit Division

    In accordance with the Basic Provisions, basic and optional units 
are applicable, unless limited 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) The price election percentage you choose for peanuts which are 
not insured in accordance with a sheller contract (may also include 
peanuts in excess of the amount required to fulfill your sheller 
contract) and for peanuts insured in accordance with a sheller contract 
must have the same percentage relationship to the maximum price election 
offered by us for peanuts not insured in accordance with a sheller 
contract. For example, if you choose 100 percent of the maximum price 
election for peanuts not insured in accordance with a sheller contract, 
you must also choose 100 percent of the applicable price election for 
peanuts insured in accordance with a sheller contract.
    (b) You may not insure more pounds of peanuts than your production 
guarantee (per acre) multiplied by the number of acres that will be 
planted to peanuts. For the purposes of determining the guarantee, 
premiums, indemnities, replant payments, and prevented planting 
payments:
    (1) Where all production of peanuts is grown under one or more 
sheller contracts, you may elect a price election to cover all insurable 
peanuts that is the base contract price contained in such sheller 
contracts or the price contained in the Special Provisions.
    (2) Where some peanuts are grown under one or more sheller contracts 
but some peanuts are not grown under a sheller contract, you may elect:
    (i) The price election contained in the Special Provisions to cover 
all insurable peanuts; or
    (ii) The price election using the base contract price for peanuts 
grown under a sheller contract and the price contained in the Special 
Provisions for peanuts not grown under a sheller contract.
    (3) Where none of the peanuts are grown under a sheller contract, 
the price election will be the price contained in the Special 
Provisions.
    (c) Any peanuts excluded from the sheller contract at any time 
during the crop year will be insured at the price election specified in 
the Special 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:

------------------------------------------------------------------------
            State and county                           Dates
------------------------------------------------------------------------
Jackson, Victoria, Golliad, Bee, Live     January 15.
 Oak, McMullen, La Salle, and Dimmit
 Counties, Texas and all Texas Counties
 lying south, thereof.
El Paso, Hudspeth, Culberson, Reeves,     February 28.
 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.
 other Texas counties.
------------------------------------------------------------------------

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions, you must provide a copy of all sheller contracts to us on or 
before the acreage reporting date if you wish to insure your peanuts in 
accordance with your sheller contract.

[[Page 266]]

                              7. [Reserved]

                             8. Insured Crop

    (a) 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:
    (1) In which you have a share;
    (2) That are planted for the purpose of marketing as farmers' stock 
peanuts;
    (3) That are a type of peanut designated in the Special Provisions 
as being insurable;
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Planted for the purpose of harvesting as green peanuts;
    (ii) Interplanted with another crop; or
    (iii) Planted into an established grass or legume; and
    (5) Whether or not the peanuts are grown in accordance with a 
sheller contract (if not grown in accordance with the sheller contract, 
the peanuts will be valued at the price election issued by FCIC for the 
purposes of determining the production guarantee, premium, and 
indemnity).
    (b) You will be considered to have a share in the insured crop if, 
under the sheller contract, you retain control of the acreage on which 
the peanuts are grown, you are at risk of a production loss, and the 
sheller contract provides for delivery of the peanuts to the sheller or 
handler and for a stipulated base contract price.
    (c) A peanut producer who is also a sheller or handler 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 sheller or handler must execute and adopt a resolution 
that contains the same terms as a sheller contract. Such resolution will 
be considered a sheller contract under this policy; and
    (3) Our inspection reveals that the processing facilities comply 
with the definition of a sheller 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 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.

                           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) 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) Except as specified in section 12(a)(1), you must comply with 
all requirements regarding replanting payments contained in section 13 
of the Basic Provisions; and
    (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 and it is practical 
to replant.
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of:
    (1) 20.0 percent of the production guarantee, multiplied by your 
price election, multiplied by your share; or
    (2) $80.00 multiplied by your insured share.
    (c) If there are different base contract prices or you also have 
insurable peanuts not grown under a contract:
    (1) If the sheller contracts are for different types of peanuts or 
one type of peanut is grown under a sheller contract and another

[[Page 267]]

is not, replanting payments will be valued using the price election 
elected by you for the planted acreage, as applicable (For an example, 
you have two sheller contracts and the base contract price is $0.23 per 
pound for Runner type peanuts, then $0.23 per pound will be used for the 
value of any replanted Runner type peanut acreage. If the base contract 
price is $0.21 per pound for Spanish type peanuts, then $0.21 per pound 
will be used for the value of any replanted Spanish type peanut acreage.
    (2) If the sheller contracts are for the same type of peanuts but 
they have different base contract prices:
    (i) If the peanuts under each sheller contract are insured in 
separate optional units, each respective price election from each 
sheller contract will apply to each respective unit; or
    (ii) If all or some of peanuts under both sheller contracts are 
insured in the same unit, then the replanted acreage will be prorated to 
each contract based on the number of acres needed to fulfill each 
contract (For example, if there are 20 acres in the unit and 10 were 
replanted, the production guarantee per acre for the unit is 2,000 
pounds per acre, and the contract for $0.23 was for 25,000 pounds and 
the contract for $0.21 was for 15,000 pounds, then the acreage under the 
$0.23 contract constitutes 62.5 percent of the acreage in the unit 
(25,000/40,000) and the other sheller contract 37.5 percent of the 
acreage (15,000/40,000). Of the 10 acres replanted, 6.25 acres (10 x 
.625) would be paid at the $0.23 price election and 3.75 acres (10 x 
.375) would be paid at the $0.21 price election).
    (3) If the peanuts are not grown under a contract, the replanting 
payments will be valued using the price election as specified in the 
Special Provisions. If the unit has peanuts grown under a sheller 
contract and peanuts not grown under a sheller contract, the replanted 
acreage must be prorated between the contract and non-contract acreage 
by determining the acreage grown under a contract and the remaining 
acreage in the unit (For example, if there are 20 acres in the unit and 
10 were replanted, the production guarantee per acre for the unit is 
2,000 pounds per acre, there is a sheller contract for $0.23 for 25,000 
pounds, the remaining peanuts are not grown under a sheller contract, 
and the price election in the Special Provisions is for $0.20. The 
peanuts under the sheller contract constitute 62.5 percent (25,000/
40,000) of the acreage in the unit and remaining peanuts constitute 37.5 
percent (40,000-25,000/40,000) of the acreage. Of the 10 acres 
replanted, 6.25 acres (10 x .625) would be paid with the liability based 
on the $0.23 price election and 3.75 acres (10 x .375) would be paid 
with the liability based on the $0.20 price election).
    (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 your price election 
and production guarantee for the crop type that is replanted and 
insured. A revised acreage report will be required to reflect the 
replanted type, if applicable.

                13. Duties in the Event of Damage or Loss

    Representative samples are required in accordance with section 14 of 
the Basic Provisions.

                         14. 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 for 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 number of insured acres by the respective 
production guarantee (per acre) for peanuts insured under a sheller 
contract or not insured under a sheller contract, as applicable;
    (2) Multiplying each result of section 14(b)(1) by the applicable 
price election for peanuts insured at the base contract price or the 
price election specified in the Special Provisions, as applicable;
    (3) Totaling the results of section 14(b)(2);
    (4) Multiplying the production to count by the respective price 
election (If you have one or more sheller contracts, we will value your 
production to count by using your highest price election first and will 
continue in decreasing order to your lowest price election based on the 
amount of peanuts insured at each price election);
    (5) Totaling the results of section 14(b)(4);
    (6) Subtracting the result of section 14(b)(5) from the result of 
section 14(b)(3); and
    (7) Multiplying the result in section 14(b)(6) by your share.
    Example 1 (without a sheller contract):
    You have 100 percent share in 25 acres of Valencia peanuts in the 
unit, with a production guarantee (per acre) of 2,000 pounds, the price 
election specified in the Special Provisions is $0.17 per pound, and 
your production to count is 43,000 pounds.
    (1) 25 acres x 2,000 pounds = 50,000 pound guarantee;
    (2) 50,000 pound guarantee x $0.17 price election specified in the 
Special Provisions = $8,500.00 guarantee;

[[Page 268]]

    (3) 43,000 pounds of production to count x $0.17 price election 
specified in the Special Provisions = $7,310.00;
    (4) $8,500.00 guarantee-$7,310.00 = $1,190.00; and
    (5) $1,190.00 x 1.000 = $1,190.00; Indemnity = $1,190.00.
    Example 2 (with a sheller contract):
    You have 100 percent share in 25 acres of Valencia peanuts in the 
unit, with a production guarantee (per acre) of 2,000 pounds. You have 
two sheller contracts, the first is for 25,000 pounds, price election 
(contract) is $0.23 per pound, and the second is for 10,000 pounds, 
price election (contract) is $0.21 per pound. The price election (non-
contract) specified in the Special Provisions is $0.17 per pound, and 
your production to count is 43,000 pounds.
    (1) 25 acres x 2,000 pounds = 50,000 pound guarantee;
    (2) 25,000 pounds contracted x $0.23 price election (contract) = 
$5,750.00;
    10,000 pounds contracted x $0.21 price election (contract) = 
$2,100.00;
    50,000 pound guarantee-25,000 pounds contracted-10,000 pounds 
contracted = 15,000 pounds not contracted;
    15,000 pounds not contracted x $0.17 price election (non-contract) 
specified in the Special Provisions = $2,550.00;
    (3) $5,750.00 + $2,100.00 + $2,550.00 = $10,400.00 guarantee;
    (4) 43,000 pounds of production to count:
    25,000 pounds contracted x $0.23 price election (contract) = 
$5,750.00;
    10,000 pounds contracted x $0.21 price election (contract) = 
$2,100.00;
    43,000 pounds of production to count-25,000 pounds contracted (at 
$0.23 per pound)-10,000 pounds contracted (at $0.21 per pound) = 8,000 
pounds;
    8,000 pounds x $0.17 price election (non-contract) specified in the 
Special Provisions = $1,360.00;
    (5) $5,750.00 + $2,100.00 + $1,360.00 = $9,210.00;
    (6) $10,400.00 guarantee-$9,210.00 = $1,190.00; and
    (7) $1,190.00 x 1.000 = $1,190.00;
    Indemnity = $1,190.00.
    (c) The total production to count (in pounds) from all insurable 
acreage on the unit will include all appraised and harvested production.
    (d) 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(e));
    (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 the 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.
    (e) Mature peanuts may be adjusted for quality when production has 
been damaged by an insured cause of loss.
    (1) To enable us to determine the number of pounds, price per pound, 
and the quality of production for any peanuts that qualify for quality 
adjustment, we must be given the opportunity to have such peanuts 
inspected and graded before you dispose of them.
    (2) 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 number of pounds, price per pound, and quality of such 
peanuts.
    (3) Such production to count will be reduced if the price per pound 
received for damaged peanuts is less than 85 percent of the price 
election by:
    (i) Dividing the price per pound for the damaged peanuts, as 
determined by us in accordance with section 14(e)(1), received for the 
insured type of peanuts by the applicable price election; and
    (ii) Multiplying this result by the number of pounds of such 
production.

[[Page 269]]

                         15. Prevented Planting

    (a) Your prevented planting coverage will be 50 percent of your 
production guarantee for timely planted acreage. If you have 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.
    (b) In addition to the provisions of section 17(i) of the Basic 
Provisions, if there are different base contract prices or you also have 
insurable peanuts not grown under a contract:
    (1) If the sheller contracts are for different types of peanuts or 
one type of peanut is grown under a sheller contract and another is not, 
the liability will be determined using the price election elected by you 
for planted acreage, as applicable (For an example, you have two sheller 
contracts and the base contract price is $0.23 per pound for Runner type 
peanuts, then $0.23 per pound will be used for the value of any 
prevented planting Runner type peanut acreage. If the base contract 
price is $0.21 per pound for Spanish type peanuts, then $0.21 per pound 
will be used for the value of any prevented planting Spanish type peanut 
acreage.
    (2) If the sheller contracts are for the same type of peanuts but 
they have different base contract prices:
    (i) If the peanuts grown under each sheller contract are insured in 
separate optional units, the liability will be determined using each 
respective price election for the prevented planting acreage in each 
respective unit; or
    (ii) If all or some of the peanuts grown under the sheller contracts 
are insured in the same unit, then the liability for each contract must 
be determined separately using the respective price election and the 
number of eligible prevented planting acres to which the liability 
applies and will be determined by prorating prevented planting acreage 
to each contract based on the number of acres needed to fulfill each 
contract (For example, if there are 20 acres in the unit and 10 were 
prevented from planting, the production guarantee per acre for the unit 
is 2,000 pounds per acre, and the contract for $0.23 was for 25,000 
pounds and the contract for $0.21 was for 15,000 pounds, then the 
acreage under the $0.23 contract constitutes 62.5 percent (25,000/
40,000) of the acreage in the unit and the other contract 37.5 percent 
(15,000/40,000) of the acreage. Of the 10 acres prevented from planting, 
6.25 acres (10 x .625) would be paid with the liability based on the 
$0.23 price election and 3.75 acres (10 x .375) would be paid with the 
liability based on the $0.21 price election).
    (3) If the peanuts are not grown under a contract, the liability for 
such peanuts will be based on the price election as specified in the 
Special Provisions. If the unit has peanuts grown under a sheller 
contract and peanuts not grown under a sheller contract, the eligible 
prevented planting acreage must be determined by determining the acreage 
grown under a contract and the remaining acreage in the unit (For 
example, if there are 20 acres in the unit and 10 were prevented from 
planting, the production guarantee per acre for the unit is 2,000 pounds 
per acre, there is a sheller contract for $0.23 for 25,000 pounds, the 
remaining peanuts are not grown under a sheller contract, and the price 
election in the Special Provisions is for $0.20. The peanuts under the 
sheller contract constitute 62.5 percent (25,000/40,000) of the acreage 
in the unit and remaining peanuts constitute 37.5 percent (40,000-
25,000/40,000) of the acreage. Of the 10 acres prevented from planting, 
6.25 acres (10 x .625) would be paid with the liability based on the 
$0.23 price election and 3.75 acres (10 x .375) would be paid with the 
liability based on the $0.20 price election).

[71 FR 55997, Sept. 26, 2006]

Sec. 457.135  Onion crop insurance provisions.

    The onion crop insurance provisions for the 2013 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

                             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. Onions planted by placing onion seed by machine or by 
hand at the correct depth, into a seedbed that has been

[[Page 270]]

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. Onions 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 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, including sets, must be direct seeded in rows 
or transplanted in rows.
    Processor. Any business enterprise regularly engaged in buying and 
processing onions, that possesses all licenses and permits for 
processing onions 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 onions 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 onions of the types 
designated in the Special Provisions and to deliver the onion production 
to the processor;
    (b) The processor's commitment to purchase all the production from a 
specified number of acres or the specified quantity of onion production 
stated in the processor contract; and
    (c) The price that will be paid for the production.
    Production guarantee (per acre).
    (a) First stage production guarantee--Forty-five percent (45%) of 
the final stage production guarantee for direct seeded and 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 (60%) 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.
    Sets. Onion bulbs that are planted by hand or by machine.
    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 color than non-
storage onions. They are more pungent, have a lower sugar content, and 
can 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 broken.
    Transplanted. Onions planted by placing of the onion plant or sets, 
by machine or by hand at the correct depth, into a seedbed that has been 
properly prepared for the planting method and production practice.

                            2. Unit Division.

    In addition to the requirements of section 34 of the Basic 
Provisions, optional units may be established by type, if separate types 
are designated in the Special Provisions.

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

    (a) In addition to the requirements of section 3 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. 
At least 75 percent (75%) of the plants on such acreage must be at the 
same stage to qualify for the first and second stages. 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:

[[Page 271]]

    (i) For direct seeded storage and non-storage onions, from the 
emergence of the fourth leaf until eligible for the final stage; and
    (ii) For transplanted storage and non-storage onions, from the 31st 
day after transplanting of onion plants or sets until eligible for the 
final stage.
    (3) Final stage extends from the completion of topping and lifting 
or digging on the acreage until the end of the insurance period.
    (c) Any acreage of onions damaged in the first or second stage, to 
the extent that the majority of producers in the area would not normally 
further care for the onions, will have a production guarantee for 
indemnity purposes, based on the stage in which the damage occurred, 
even if you continue to care for the damaged onions.

                          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 an 
August 31, September 30, or November 30 cancellation date;
    (b) November 30 preceding the cancellation date for counties with a 
February 1 cancellation date; or
    (c) As designated in the Special Provisions.

                 5. Cancellation and Termination Dates.

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are as follows, unless otherwise 
designated in the Special Provisions:

----------------------------------------------------------------------------------------------------------------
          State & County                      Cancellation date                       Termination date
----------------------------------------------------------------------------------------------------------------
Arizona; Georgia; Kinney, Uvalde,  August 31.............................  August 31.
 Medina, Bexar, Wilson, Karnes,
 Bee, and San Patricio Counties,
 Texas, and all Texas Counties
 lying south thereof.
Umatilla County, Oregon; and       August 31.............................  September 30.
 Walla Walla County, Washington.
All California Counties, except    September 30..........................  September 30.
 Lassen, Modoc, Shasta and
 Siskiyou.
Hawaii...........................  September 30..........................  November 30.
All other states and counties....  February 1............................  February 1.
----------------------------------------------------------------------------------------------------------------

                          6. Report of Acreage.

    In addition to the provisions of section 6 of the Basic Provisions, 
if the Special Provisions require a processor contract to insure your 
onions, you must provide a copy of all your processor contracts to us on 
or before the acreage reporting date.

                            7. Annual Premium

    In lieu of the provisions of section 7(c) 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.

                             8. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the storage and non-storage onions (excluding green 
(bunch) or seed onions, chives, garlic, leeks, shallots, 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.

                          9. Insurable Acreage

    In addition to the provisions of section 9 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 designated 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.

                          10. Insurance Period

    (a) In accordance with the provisions of section 11 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 16 of the Basic Provisions.
    (b) In accordance with the provisions of section 11 of the Basic 
Provisions, unless

[[Page 272]]

otherwise designated in the Special Provisions, the insurance period 
ends at the earliest of:
    (1) The calendar date for the end of the insurance period as 
follows:
    (i) May 20 for 1015 Super Sweets, and any other non-storage onions 
in Cameron, Hidalgo, Starr, and Willacy Counties, Texas;
    (ii) June 1 for Vidalia, and any other non-storage onions planted in 
the state of Georgia;
    (iii) June 30 for all storage and non-storage onions in Arizona;
    (iv) July 15 for 1015 Super Sweets, and any other non-storage onions 
for all Texas counties except Cameron, Hidalgo, Starr, and Willacy;
    (v) July 31 for fall planted non-storage onions in Oregon and 
Washington;
    (vi) August 31 for all non-storage onions not otherwise specified; 
and
    (vii) October 15 for all storage onions not otherwise specified; or
    (2) In addition to the requirements of section 11(b) of the Basic 
Provisions, fourteen days after lifting or digging.

                           11. 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 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 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.

                         12. Replanting Payment

    (a) In accordance with section 13 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.

                13. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, any representative samples of the crop that may be required 
must be at least 10 feet wide and extend the entire length of each field 
in the unit. The samples must not be topped, lifted, dug, 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.

                         14. 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 14(b)(1) by the respective 
price election;
    (3) Totaling the results in section 14(b)(2);
    (4) Multiplying the total production to be counted (see section 
14(c)) by the respective price elections you chose;
    (5) Totaling the results of section 14(b)(4);

[[Page 273]]

    (6) Subtracting the result in section 14(b)(5) from the result in 
14(b)(3); and
    (7) Multiplying the result in section 14(b)(6) by your share.
    For Example:
    You have a 100 percent share in 100 acres of a unit of transplanted 
storage onions with a production guarantee of 200 hundredweight per 
acre, and you select 100 percent of the price election of $8.00 per 
hundredweight. Your crop suffers a covered cause of loss on 25 acres 
during the second stage which has a second stage production guarantee of 
60 percent of the final stage production guarantee which equals 120 
hundredweight per acre. The appraised production on the 25 acres was 
2,500 hundredweight of onion production. Your harvested onion production 
on the remaining 75 acres is 16,000 hundredweight of harvested 
production to count. Your indemnity will be calculated as follows:
    (1) 25 acres x 120 hundredweight (200 x .60) second stage production 
guarantee = 3,000 hundredweight, and 75 acres x 200 hundredweight final 
stage production guarantee = 15,000 hundredweight;
    (2) 3,000 hundredweight second stage production guarantee x $8.00 
price election = $24,000 value of second stage production guarantee, and 
15,000 hundredweight final stage production guarantee x $8.00 price 
election = $120,000 value of final stage production guarantee;
    (3) $24,000 value of second stage production guarantee + $120,000 
value of final stage production guarantee = $144,000 total value of 
production guarantee;
    (4) 500 hundredweight second stage production to count (from step 4 
of the section 14(c)(1)(iv) example) x $8.00 price election = $4,000 
value of second stage production to count, and 16,000 hundredweight 
final stage production to count x 8.00 price election = $128,000 value 
of final stage production to count;
    (5) $4,000 value of second stage production to count + $128,000 
value of final stage production to count = $132,000 total value of 
production to count;
    (6) $144,000 total value of production guarantee -$132,000 total 
value of production to count = $12,000 value of loss; and
    (7) $12,000 x 100 percent share = $12,000 indemnity payment.
    (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 13;
    (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 14(d));
    (iv) For acreage that does not qualify for the final stage 
production guarantee, and is not subject to section 14 (c)(1)(i) and 
(ii), the appraised production is reduced by the difference between the 
first or second stage (as applicable) and the final stage production 
guarantee; and
    For Example:
    You have 100 acres of a unit of transplanted storage onions with a 
production guarantee of 200 hundredweight per acre. Your crop suffers a 
covered cause of loss on 25 acres during the second stage which has a 
second stage production guarantee of 60 percent of the final stage 
production guarantee. The appraised production on the 25 acres was 2,500 
hundredweight of onion production. Your second stage production to count 
on the 25 acres will be calculated as follows:
    (1) 25 acres x 200 hundredweight final stage production guarantee = 
5,000 hundredweight final stage production guarantee,
    (2) 5,000 hundredweight final stage production guarantee x 60 
percent second stage production guarantee = 3,000 hundredweight second 
stage production guarantee,
    (3) 5,000 hundredweight final stage production guarantee -3,000 
hundredweight second stage production guarantee = 2,000 hundredweight 
difference between second stage and final stage production guarantee, 
and
    (4) 2,500 hundredweight appraised -2,000 hundredweight difference = 
500 hundredweight second stage production to count (for step 4 of the 
section 14(b) example).
    (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

[[Page 274]]

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.

                         15. Prevented Planting

    Your prevented planting coverage will be 35 percent (35%) of your 
final stage production guarantee for 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; 75 FR 15887, Mar. 30, 2010; 77 FR 13965, Mar. 
8, 2012]

Sec. 457.136  Tobacco crop insurance provisions.

    The Tobacco Crop Insurance Provisions for the 2010 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:
Tobacco Crop Insurance Provisions

                             1. Definitions.

    Average value. For appraised production, the value of such 
production divided by the appraised pounds for the tobacco types. For 
harvested production, the value of such production divided by the 
harvested pounds for the tobacco type.
    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 indentified by a single FSA farm serial number at 
the time insurance first attaches under these provisions for the crop 
year.
    Harvest. Cutting or priming and removing all insured tobacco from 
the unit.
    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.
    Planted acreage. In addition to the definition contained in the 
Basic provisions, 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 one or more leaves 
are removed from the stalk as they mature.
    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.
    Tobacco types. Insurable tobacco as shown on the Special Provisions 
of Insurance.

                            2. Unit Division.

    A basic unit will be determined in accordance with the definition of 
basic unit contained in section 1 of these Crop Provisions. Optional and 
enterprise units may be allowed by the Special Provisions of Insurance.

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

    In addition to the requirements of section 3 of the Basic 
Provisions, you must select only one price election percentage and 
coverage level for each tobacco type designated in the Special 
Provisions of Insurance that you elect to insure.

                          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 provide a copy of any written lease agreement, if 
applicable, between you and any landlord or tenant. The written lease 
agreement must:

[[Page 275]]

    (1) Identify all other persons sharing in the crop; and
    (2) Be submitted to us on or before the acreage reporting date.

                            7. Insured Crop.

    (a) In accordance with section 8 of the Basic Provisions, the 
insured crop will be each tobacco type you elect to insure and for which 
a premium rate is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That meets all rotation requirements on the Special Provisions 
of Insurance.
    (b) You will be considered to have a share in the insured crop if 
you retain control of the acreage on which the tobacco is grown and you 
are at risk of loss.

                          8. Insurable Acreage.

    In addition to the provisions of section 9 of the Basic Provisions, 
we will not insure any acreage that is:
    (a) 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 of Insurance or by written 
agreement; or
    (b) Damaged before the final planting date to the extent that the 
majority of producers in the area would normally not further care for 
the tobacco crop, unless such crop is replanted or we agree that 
replanting is not practical.

                          9. Insurance Period.

    In lieu of the provisions of section 11 of the Basic Provisions, 
coverage ends at the earlier of:
    (a) Total destruction of the tobacco on the unit;
    (b) Removal of the tobacco from the unit where grown, except for 
curing, grading, and packing;
    (c) Abandonment of the crop on the unit;
    (d) Final adjustment of the loss on the unit; or
    (e) The calendar date for the end of the insurance period, which is 
the date immediately following planting and designated by tobacco types 
and states (or as otherwise stated on the Special Provisions of 
Insurance) as follows:
    (i) Flue cured--November 30 in North Carolina and Virginia;
    (ii) Flue cured--October 31 in Alabama, Florida, Georgia, and South 
Carolina;
    (iii) Burley--February 28 in all states;
    (iv) Dark air cured--March 15 in Kentucky, Tennessee, and Virginia;
    (v) Fire cured--April 15 in Kentucky, Tennessee, and Virginia;
    (vi) Cigar Binder, Cigar Filler, and Cigar Wrapper--April 30 in 
Connecticut, Massachusetts, Pennsylvania, and Wisconsin; and
    (vii) Maryland type--May 15 in Maryland and Pennsylvania.

                           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 due to a cause of loss 
specified in sections 10(a) through (g) that also occurs during the 
insurance period.

               11. Duties In The Event of Damage or Loss.

    (a) In accordance with section 14 of the Basic Provisions, you must 
maintain representative samples of each unharvested tobacco crop (type) 
for our inspection. The representative samples 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 you have filed a notice of damage, you must leave all tobacco 
stalks and stubble in the unit 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.

                        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 number of insured acres by your applicable 
production guarantee (per acre);
    (2) Multiplying the result of section 12(b)(1) by your price 
election;
    (3) Multiplying the total production to count determined in section 
12(c) by your price election;
    (4) Subtracting the result of section 12(b)(3) from the result of 
section 12(b)(2); and

[[Page 276]]

    (5) Multiplying the result of section 12(b)(4) by your share.
    For example:
    You have 100 percent share in a unit to produce 3,000 pounds of 
Burley tobacco, a production guarantee of 1,950 pounds (APH yield of 
3,000 pounds x .65 coverage level), you plant 1.0 acre, your price 
election is $1.50 per pound, and your production to count is 500 pounds. 
Your indemnity would be calculated as follows:
    (1) 1.0 acre x 1,950 pounds production guarantee = 1,950 pounds;
    (2) 1,950 pounds x $1.50 price election = $2,925.00 value of the 
production guarantee;
    (3) 500 pounds production to count x $1.50 price election = $750.00 
value of the production to count;
    (4) $2,925.00 value of the production guarantee--$750.00 value of 
the production to count = $2,175.00; and
    (5) $2,175.00 x 1.000 share = $2,175.00 indemnity.
    (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;
    (D) For which you fail to provide records of production, that are 
acceptable to us; or
    (E) For any type of tobacco when the stalks and stubble have been 
destroyed without our consent under section 11(b);
    (ii) Production lost due to uninsured causes.
    (iii) Potential production on insured acreage 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 insurable acreage.
    (d) Once we agree the current year's tobacco has no average value 
due to an insured cause of loss, 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 applicable 
price election.
    (e) In lieu of section 15(b) of the Basic Provisions, if we have 
conducted an appraisal of your insured crop and we determine that the 
harvested production you report is inconsistent with the appraised 
production and you cannot prove that an insurable cause of loss occurred 
between the appraisal and the end of the insurance period that can 
account for the reduction in production, your claim will be settled 
based on the appraised production on insured acreage, even if you have 
harvested the acreage. If we settle your claim based on your appraised 
production, section 12(f) regarding quality adjustment is not 
applicable.
    (f) Mature tobacco may be adjusted for quality deficiencies when 
production has been damaged by insurable causes.
    (1) You must contact us before any tobacco is disposed of so we can 
inspect the tobacco to determine the extent of the damage.
    (2) Our inspection will be used to determine whether the average 
value is reasonable. Based on amount of damage determined during the 
inspection, if the average value is:
    (i) Reasonable, such average value will be used to determine the 
quality adjustment in section 12(f)(5);
    (ii) Unreasonable, we may adjust the average value used to calculate 
the quality adjustment in section 12(f)(5).
    (3) If you dispose of any production without giving us the 
opportunity to have the tobacco inspected, you will not receive a 
quality adjustment for such tobacco, regardless of the average value of 
the production.
    (4) Production to count will only be reduced if the average value 
for damaged tobacco is less than 75 percent of your tobacco price 
election. You must provide us with records that are acceptable to us 
which clearly shows the number of pounds, price per pound, and the 
quality of such tobacco.
    (5) Any reduction in the production to count will be determined by:
    (i) Dividing the average value per pound as determined by us in 
accordance with section 12(f)(2) of these Crop Provisions by your 
applicable price election; and
    (ii) Multiplying this result by the number of pounds of damaged 
production.

                            13. Late Planting

    In lieu of late planting provisions in the Basic Provisions 
regarding acreage initially

[[Page 277]]

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 acreage planted during 
the late planting period will be reduced by:
    (1) One percent per day for the 1st through the 10th day; and
    (2) Two percent per day 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

    Your prevented planting coverage will be 35 percent of your 
production guarantee for timely planted acreage. Additional prevented 
planting coverage levels are not available for tobacco.

[74 FR 13059, Mar. 26, 2009]

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 National Institute of Food and 
Agriculture 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 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

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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:
    (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.

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    (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.

                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

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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;
    (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

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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; 
76 FR 4804, Jan. 27, 2011]

Sec. 457.138  Grape crop insurance provisions.

    The grape crop insurance provisions for the 2010 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:

                          Grape Crop Provisions

                             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. Removing the mature 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 grape plants in the vineyard.
    Ton. Two thousand (2,000) pounds avoirdupois.
    Type. A category of grapes (one or more varieties) identified as a 
type in the Special Provisions.
    Variety. A kind of grape that is distinguished from any other by 
unique characteristics such as, but not limited to, size, color, skin 
thickness, acidity, flavors and aromas. In Arizona and California each 
variety is identified as a separate type in the Special Provisions 
except for type 095 (other varieties). Type 095 is used to designate 
varieties not listed as a separate type.

                            2. Unit Division

    (a) In Arizona and California only:
    (1) A basic unit as defined in section 1 of the Basic Provisions 
will be divided into additional basic units by each variety that you 
insure; and
    (2) 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. Unless 
otherwise allowed by written agreement, optional units may only be 
established if each optional unit is located on non-contiguous land or 
grown and insured under an organic farming practice.

[[Page 282]]

    (b) In all states except Arizona and 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 and 
for acreage grown and insured under an organic farming practice 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 type when separate types are 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) In Arizona and California, you may select only one coverage 
level and price election for each grape variety you elect to insure in 
the county.
    (b) In all states except Arizona and California, you may select only 
one coverage level and price election for each grape type in the county 
as specified in the Special Provisions. The coverage level you choose 
for each grape type is not required to have the same percentage 
relationship. The price election you choose for each type is not 
required to have the same percentage relationship to the maximum price 
election offered by us for each type. For example, if you choose 75 
percent coverage level and 100 percent of the maximum price election for 
one type, you may choose 65 percent coverage level and 75 percent of the 
maximum price election for another type. If you elect the Catastrophic 
Risk Protection (CAT) level of insurance for any grape type, the CAT 
level of coverage will be applicable to all insured grape acreage in the 
county.
    (c) In all states except Arizona and California, if you acquire a 
share in any grape acreage after you submit your application, such 
acreage is insurable under the terms of the policy and you did not 
include the grape type on your application, we will assign the 
following:
    (1) A coverage level equal to the lowest coverage level you selected 
for any other grape type: and
    (2) A price election percentage equal to the type with the lowest 
coverage level you selected, if you elected additional coverage; or 55 
percent of the maximum price election, if you elected CAT.
    (d) In addition to the definition of ``price election'' contained in 
section 1 of the Basic Provisions, a price election based on the price 
contained in your grape contract is allowed if provided by the Special 
Provisions. In the event any contract requires the use of a cultural 
practice that will reduce the amount of production from any insured 
acreage, your approved yield will be adjusted in accordance with section 
3(f) and (g) to reflect the reduced production potential.
    (e) In Arizona and 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 grape variety in 
the years for which production records are provided.
    (f) You must report by the production reporting date designated in 
section 3 of the Basic Provisions, by type or variety, 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 any time the planting pattern of such 
acreage is changed:
    (i) The age of the interplanted crop, and the grape type or variety, 
if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    (g) We will reduce the yield used to establish your production 
guarantee, based on our estimate of the effect on yield potential of any 
of the items listed in section 3(f)(1) through (4). 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.
    (h) Your request to increase the coverage level or price election 
percentage will not be accepted if a cause of loss that could or would 
reduce the yield of the insured crop is evident when your request is 
made.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is October 31 preceding the cancellation date for Arizona 
and 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 in Arizona and 
California, and November 20 for all other states.

[[Page 283]]

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions, you must report your acreage:
    (a) In Arizona and California, by each grape variety you insure; or
    (b) In all other states, by each grape type.

                             7. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be any insurable variety that you elect to insure in 
Arizona and California, or in all other states all insurable types, 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 (if such 
grapes are put to another use (i.e. table grapes), the production to 
count will be in accordance with section 12(c)(2(ii));
    (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 at least two tons of grapes per 
acre (or as otherwise provided in the Special Provisions) in at least 
one of the three crop years immediately preceding the insured crop year, 
unless we inspect and allow insurance on acreage that has not produced 
this amount.

                          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, 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 of the Basic 
Provisions:
    (1) For the year of application, coverage begins on February 1 in 
Arizona and California, and November 21 in all other states. 
Notwithstanding the previous sentence, if your application is received 
by us after January 12 but prior to February 1 in Arizona or 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 vineyard.
    (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 to a different 
insurance provider for a subsequent crop year will not be considered a 
break in continuous coverage.
    (3) If in accordance with the terms of the policy, your grape policy 
is cancelled or terminated for any crop year 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.
    (4) The calendar date for the end of the insurance period for each 
crop year is as follows, unless otherwise specified in the Special 
Provisions:
    (i) October 10 in Mississippi and Texas;
    (ii) November 10 in Arizona, California, Idaho, Oregon and 
Washington; and
    (iii) November 20 in all other states.
    (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 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 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 vineyard;
    (3) Insects, except as excluded in 10(b)(1), but not damage due to 
insufficient or improper application of pest control measures;

[[Page 284]]

    (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
    (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 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 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 type or variety;
    (3) Totaling the results in section 12(b)(2);
    (4) Multiplying the total production to count of each type or 
variety, 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:
    (i) 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.
    (ii) Grapes grown for wine, juice, raisins or canning and put to 
another use, will be counted as production to count on a tonnage basis. 
No quality adjustment other than that specifically provided for in your 
policy is available.
    (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

[[Page 285]]

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 value 
per ton for undamaged grapes (the value of undamaged grapes will be the 
lesser of the average market price or the maximum price election for 
such grapes); 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; 74 FR 32055, July 
7, 2009]

Sec. 457.139  Fresh market tomato (dollar plan) crop insurance 
          provisions.

    The fresh market tomato (dollar plan) crop insurance provisions for 
the 2013 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

                             1. Definitions

    Acre. 43,560 square feet of planted acreage when row widths do not 
exceed six feet. If row widths exceed six feet, the land area on which 
at least 7,260 linear feet of rows are planted.
    Allowable cost. The dollar amount per carton for harvesting, 
packing, and handling as stated in the Special Provisions.
    Amount of insurance per acre. The dollar amount of insurance per 
acre obtained by multiplying the reference maximum dollar amount shown 
in the actuarial documents by the coverage level percentage you elect.
    Carton. Twenty-five (25) pounds of the insured crop.
    Crop year. In lieu of the definition contained in 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. The sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a registered 
handler, 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.
    Fresh market tomatoes. Field grown mature green or ripe fresh market 
tomatoes that meet the Agricultural Marketing Service United States 
Standards for Grades of Fresh Tomatoes; and the applicable Federal 
Marketing Order and Florida Tomato Committee Regulations, or their 
successors.
    Harvest. The picking of fresh market tomatoes from the plants, 
excluding tomatoes salvaged by penhookers.
    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.
    Minimum value. The dollar amount per carton shown in the Special 
Provisions we will use to value appraised and unsold harvested 
production to count.
    Penhookers. Individuals who purchase the right to salvage tomatoes 
remaining in the field after commercial harvests are completed.
    Plant stand. The number of live plants per acre prior to the 
occurrence of an insured cause of loss.
    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 field grown mature 
green or ripe fresh market tomatoes that the tomato plants will or would 
have produced per acre assuming

[[Page 286]]

normal growing conditions and practices by the end of the insurance 
period.
    Price received. The gross dollar amount per carton received by the 
producer before deductions of allowable costs.
    Registered handler. A person or entity officially certified by the 
Florida Tomato Committee, or successor entity, to inspect and enforce 
all the handling regulations for fresh market tomatoes, and report the 
required packout data to the Florida Tomato Committee.
    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.
    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 of the Basic 
Provisions 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 of 
the Basic Provisions do not apply to fresh market dollar plan tomatoes.
    (d) The amounts of insurance per acre are progressive by stages as 
follows:

----------------------------------------------------------------------------------------------------------------
                                                        Percent of the
                                                          amount of
                        Stage                           insurance per         Length of time if transplanted
                                                        acre that you
                                                           selected
----------------------------------------------------------------------------------------------------------------
1...................................................                 50  From planting through the 29th day
                                                                          after planting.
2...................................................                 75  From the 30th day after planting until
                                                                          the beginning of stage 3.
3...................................................                 90  From the 60th day after planting until
                                                                          the beginning of the final stage.
Final...............................................                100  Begins the earlier of 75 days after
                                                                          planting, or the beginning of harvest.
----------------------------------------------------------------------------------------------------------------

    (e) Any acreage of fresh market 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 the crop, the indemnity 
payable for such acreage will be based on the stage the plants had 
achieved when the insured damage occurred, even if the producer 
continues to care for the damaged tomatoes.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is April 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 July 31.

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions, 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 
of the Basic Provisions, the annual premium amount for each cultural 
practice (e.g., fall transplanted irrigated) is determined by 
multiplying the final stage amount of insurance per acre by the premium 
rate for the cultural practice as

[[Page 287]]

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 of the Basic Provisions, the crop 
insured will be all the field grown mature green or ripe fresh market 
tomato types in the county as specified in the Special Provisions for 
which a premium rate is provided in 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) Direct seeded fresh market tomatoes, unless insured by written 
agreement.

                          9. Insurable Acreage

    (a) In lieu of the provisions of section 9 of the Basic Provisions, 
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 of the Basic 
Provisions:
    (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.
    (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 met, 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, strawberries or tobacco have been grown and the soil 
was not fumigated or otherwise properly treated before planting the 
insured tomatoes.

                          10. Insurance Period

    In lieu of section 11 of the Basic Provisions, 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 on each unit 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 on the unit; or
    (f) The calendar date for the end of the insurance period that is 
125 days after the date of transplanting or replanting with transplants.

                           11. 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) 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 of the 
Basic Provisions, 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 harvest in a timely manner or failure to sell the 
tomatoes, unless such failure is due to actual physical damage caused by 
an insured cause of loss that occurs during the insurance period. For 
example, we will not pay an indemnity if you are

[[Page 288]]

unable to sell the insured crop due to quarantine, boycott, or refusal 
of any person to accept production.

                         12. Replanting Payments

    (a) In accordance with section 13 of the Basic Provisions, 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.
    (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 of the Basic 
Provisions, 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 of the Basic 
Provisions, 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 count determined in 
accordance with section 14(c) by the percentage contained in the Special 
Provisions.
    (5) Multiplying the result of section 14(b)(4) by your share.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
For Example: You have a 100 percent share in 10.0 acres of fresh market
 tomatoes. You select a 70% coverage level of the reference maximum
 dollar amount of $7,500 per acre. The average price received is $10.00
 per carton of tomatoes. Allowable costs are $4.25 per carton. Minimum
 value is $5.00 per carton. Your total sold production is 5,000 cartons
 (5,000 / 10.0 = 500 cartons per acre) and you have an additional 1,000
 cartons of unsold harvested production (1,000 / 10.0 = 100 cartons per
 acre). Your loss occurred in the final stage of production. Your total
 indemnity is calculated as follows:
------------------------------------------------------------------------
                               $7,500 x 70% = dollar              $5,250
                                amount of insurance
                                per acre.
    14(c)(3).................  500 cartons x $5.75 =               2,875
                                value of sold
                                production ($10
                                selling price minus
                                $4.25 allowable cost).
    14(c)(4).................  100 cartons of unsold                +500
                                harvested production x
                                $5 minimum value per
                                carton.
                               Total value of                      3,375
                                production to count.
    14(b)(5).................  Indemnity per acre =                1,875
                                ($5,250 - $3,375) x
                                100% share.
                               $1,875 x 10.0 acres =              18,750
                                $18,750 total
                                indemnity payment.
------------------------------------------------------------------------

    (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 fresh market tomato acreage that has 
not been harvested the required number of times as specified in the 
Special Provisions.
    (ii) Unharvested mature green tomatoes (unharvested production that 
is damaged or

[[Page 289]]

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 sold 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 fresh market tomatoes in the load (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 fresh market tomatoes harvested.
    (4) The total value of all unsold harvested production will be 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 an insured cause of loss and is not sold will not be 
counted as production to count.
    (5) Any penhooker salvage value paid to you will be added to the 
total dollar value of 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 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) and 
14(c)(4) of these Crop Provisions, the total value of harvested 
production will be determined as follows:
    (1) For sold harvested production, the dollar amount obtained by 
subtracting the allowable cost contained in the Special Provisions from 
the price received for each carton of fresh market tomatoes in the load 
(this result may not be less than the minimum value option price 
contained in the Special Provisions for any carton of tomatoes sold), 
and multiplying this result by the number of cartons of fresh market 
tomatoes sold; and
    (2) For unsold harvested production, the dollar amount obtained by 
multiplying the number of cartons of such fresh market 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 an insured cause of loss and is not sold will not be counted as 
production to count.
    (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.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Example with Minimum Value Option: You have a 100 percent share in 10.0
 acres of fresh market tomatoes. You select a 70% coverage level of the
 reference maximum dollar amount of $7,500 per acre. The average price
 received is $6.00 per carton of tomatoes. Allowable costs are $4.25 per
 carton. Minimum value is $5.00 per carton. The Minimum Value Option
 price is $2.00 per carton. Your total sold production is 5,000 cartons
 (5,000 / 10.0 = 500 cartons per acre) and you have an additional 1,000
 cartons of unsold harvested production (1,000 / 10.0 = 100 cartons per
 acre). Your loss occurred in the final stage of production. Your total
 indemnity is calculated as follows:
------------------------------------------------------------------------
                               $7,500 x 70% = dollar              $5,250
                                amount of insurance
                                per acre.
    16(b)(1).................  500 cartons x $2 =                  1,000
                                value of sold
                                production ($6 price
                                received minus $4.25
                                allowable costs =
                                $1.75. $2.00 minimum
                                value option price is
                                greater than $1.75).
    16(b)(2).................  100 cartons of unsold                 500
                                harvested production x
                                $5 minimum value per
                                carton.
                               Total value of                      1,500
                                production to count.

[[Page 290]]

 
    16(b)....................  Indemnity per acre =                3,750
                                $5,250 - $1,500 =
                                $3,750 x 100% share.
                               $3,750 x 10.0 acres =              37,500
                                $37,500 total
                                indemnity payment.
------------------------------------------------------------------------


[62 FR 14777, Mar. 28, 1997; 62 FR 63634, Dec. 2, 1997, as amended at 62 
FR 65174, Dec. 10, 1997; 77 FR 22469, Apr. 16, 2012]

Sec. 457.140  Dry pea crop insurance provisions.

    The dry pea crop insurance provisions for the 2011 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

                             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 contract price. The price per pound stipulated in the 
processor/seed company 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 
processor/seed company.
    Combining. A mechanical process that separates the peas from the 
pods and other vegetative matter and places 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. Peas (Pisum sativum L.) grown under the terms of 
a processor/seed company contract for the purpose of producing seed to 
be used in planting a future year's crop.
    Dry peas. Peas (Pisum sativum L.), Austrian Peas (Pisum sativum spp 
arvense), Lentils (Lens culinaris Medik.), Chickpeas (Cicer arietinum 
L.), and other types as listed on the Special Provisions.
    Harvest. Combining of dry peas. Dry peas that are swathed prior to 
combining are not considered harvested.
    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 States 
Standards for Whole Dry Peas, Split Peas and Lentils will not be 
considered, unless otherwise specified in the Special Provisions.
    Nurse crop (companion crop). A crop planted into the same acreage as 
another crop to improve the growing conditions for the crop with which 
it is grown, and that is intended to be harvested separately.
    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:
    (a) Contract seed peas unless the processor/seed company will accept 
the production under the terms of the processor/seed company contract.
    (b) Fall-planted dry peas more than 25 days after the final planting 
date for the corresponding spring-planted type of dry peas.
    (c) All other dry peas more than 25 days after the final planting 
date unless replanting is generally occurring in the area.
    Price election. In addition to the provisions of the definition 
contained in the Basic Provisions, the price election for contract seed 
peas will be the percentage you elect (not to exceed 100 percent) of the 
base contract price and used for the purposes of determining premium and 
indemnity for contract seed peas under this policy.
    Processor/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.
    Processor/seed company contract. A written agreement between the 
producer and the processor/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 processor/seed company;

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    (b) The processor/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.
    Swathed. Severance of the stem and pods from the ground without 
removal of the seeds from the pods and placing them into windrows.
    Type. A category of dry peas identified as a type in the Special 
Provisions.
    Windrow. Dry peas where the plants are cut and placed in a row.

                            2. Unit Division

    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, separate optional units may be 
established for each dry pea type as specified on the Special 
Provisions. Contract seed peas and dry pea types not grown under a 
processor/seed company contract may qualify for separate optional units 
even if they share a common variety provided each dry pea type is grown 
on separate acreage and the production is kept separate.

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

    (a) In accordance with the requirements of section 3(b) of the Basic 
Provisions, you may select only one coverage level for each type listed 
on the Special Provisions. However, if you elect the Catastrophic Risk 
Protection (CAT) level of insurance for any dry pea type, the CAT level 
of coverage will be applicable to all insured dry pea acreage in the 
county.
    (b) In addition to the requirements of section 3 of the Basic 
Provisions:
    (1) If the Special Provisions do not designate separate price 
elections by type, you may select only one price election for all dry 
peas in the county insured under this policy.
    (2) If the Special Provisions designate separate price elections by 
type, you may select one price election for each dry pea type so 
designated in the Special Provisions even if the prices for each type 
are the same. 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 75 percent of 
the maximum price election for another type.
    (c) In addition to the requirements of section 3 of the Basic 
Provisions, in counties with both a fall and spring sales closing date 
for the insured crop:
    (1) If you do not have any insured fall-planted dry pea acreage 
covered under the Winter Coverage Option, you may change your coverage 
level or percentage of price election until the spring sales closing 
date; or
    (2) If you have any insured fall-planted dry pea acreage covered 
under the Winter Coverage Option, you may not change your coverage level 
or percentage of price election after the fall sales closing date.
    (d) If a dry pea type is added after the sales closing date, we will 
assign:
    (1) A coverage level equal to the lowest coverage level you selected 
for any other dry pea types; and
    (2) A price election percentage equal to:
    (i) 100 percent of the price election if you elected additional 
coverage; and
    (ii) 55 percent of the price election if you elected catastrophic 
level of coverage.

                           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 processor/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 for which a premium 
rate is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That are planted for harvesting once maturity is reached as:
    (i) Dry peas; or
    (ii) Contract seed peas, if the processor/seed company contract is 
executed on or before the acreage reporting; 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;
    (iii) Planted as a nurse crop; or
    (iv) Planted to plow down, graze, harvest as hay, or otherwise not 
harvest as a mature dry pea crop.
    (b) You will be considered to have a share in the insured crop if, 
under the processor/seed company contract, you retain control of

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the acreage on which the dry peas are grown, you are at risk of loss 
(i.e., if there is a reduction in quantity or quality of your dry pea 
production, you will receive less income under the contract), and the 
processor/seed company contract is in effect for the entire insurance 
period.
    (c) In counties for which the actuarial documents provide premium 
rates for the Winter Coverage Option (see section 15), coverage is 
available for dry peas between the time coverage begins and the spring 
final planting date. Coverage under the option is effective only if you 
qualify under the terms of the option and you elect the option by the 
sales closing date.

                          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 producers in the surrounding area 
would normally not further care for the crop, must be replanted unless 
we agree that it is not practical to replant.
    (c) Whenever the Special Provisions designate both fall and spring 
final planting dates:
    (1) Any fall-planted dry peas 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 fall-
planted type of dry peas to maintain insurance based on the fall-planted 
type unless we agree that replanting is not practical. If it is not 
practical to replant to a fall-planted type of dry peas but it is 
practical to replant to a spring-planted type, you must replant to a 
spring-planted type to keep your insurance coverage based on the fall-
planted type in force.
    (2) Any fall-planted dry pea acreage that is replanted to a spring-
planted type when it was practical to replant the fall-planted type will 
be insured as the spring-planted type and the production guarantee, 
premium and price election applicable to the spring-planted type will be 
used. In this case, the acreage will be considered to be initially 
planted to the spring-planted type.
    (3) Notwithstanding section 8(d)(1) and (2), if you have elected 
coverage under the Winter Coverage Option (if available in the county), 
insurance will be in accordance with the option.
    (d) Whenever the Special Provisions designate only a spring final 
planting date, any acreage of a fall-planted dry pea crop 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.
    (1) The fall-planted dry pea crop will be insured as a spring-
planted type for the purpose of the production guarantee, premium and 
price election.
    (2) 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 prior to the spring final planting 
date.
    (3) Any acreage of such fall-planted dry peas 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-planted type of dry pea 
unless we agree it is not practical to replant. No replanting payment 
will be made.
    (4) If fall-planted acreage is not to be insured it must be recorded 
on the acreage report as uninsured fall-planted acreage.

                           9. Insurance Period

    9. Insurance Period.
    In accordance with the provisions of section 11 of the Basic 
Provisions, and subject to the provisions provided by the Winter 
Coverage Option (see section 15) if you elect such option, the insurance 
period is as follows:
    (a) Coverage for fall-planted dry peas not covered by the Winter 
Coverage Option will begin on the earlier of April 15 or the date we 
agree to accept the acreage for insurance, but not before March 1, 
unless otherwise specified on the Special Provisions.
    (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 is normally 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.

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                         11. 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 11(a)(1)) and in the Winter Coverage Option (see 
section 15), if applicable;
    (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) When the Winter Coverage Option is in effect for the acreage, 
damage must occur after the fall final planting date in those counties 
where both a fall and spring final planting date are designated;
    (6) Replanting payments are not available for damaged fall planted 
dry pea acreage if you have not elected to cover such acreage under the 
Winter Coverage Option; and
    (7) 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) The maximum amount of the replanting payment per acre will be 
the lesser of 20.0 percent of the production guarantee or 200 pounds, 
multiplied by your price election, multiplied by your share, unless 
otherwise stated in the Special Provisions.
    (c) 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.
    (d) Replanting payments will be calculated using the price election 
and production guarantee for the dry pea type that is replanted and 
insured. For example, if damaged smooth green and yellow pea acreage is 
replanted to lentils, the price election and production guarantee 
applicable to lentils 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 fall-planted type of dry peas replanted to a spring-
planted type that retains insurance based on the production guarantee 
and price election for the fall-planted type; and
    (2) Any acreage replanted at a reduced seeding rate into a partially 
damaged stand of the insured crop.

                12. Duties in the Event of Damage or Loss

    Representative samples are required in accordance with section 14 of 
the Basic Provisions.

                         13. 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 units, we will combine all optional units for which 
acceptable records of production were not provided; or
    (2) 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 dry 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 13(b)(1) by the respective 
price election;
    (3) Totaling the results of section 13(b)(2);
    (4) Multiplying the insured acreage of each contract seed pea 
variety by its respective production guarantee;
    (5) Multiplying each result of section 13(b)(4) by the applicable 
base contract price;
    (6) Multiplying each result of section 13(b)(5) by your selected 
price election percentage;
    (7) Totaling the results of section 13(b)(6);
    (8) Totaling the results of section 13(b)(3) and section 13(b)(7);
    (9) Multiplying the total production to be counted of each dry pea 
type, excluding contract seed peas, if applicable (see section 13(d)), 
by the respective price elections;
    (10) Totaling the value of all contract seed pea production (see 
section 13(c));
    (11) Totaling the results of section 13(b)(9) and section 13(b)(10);
    (12) Subtracting the result of section 13(b)(11) from the result in 
section 12(b)(8); and
    (13) Multiplying the result of section 13(b)12 by your share.
    For example:
    In this example, you have not elected optional units by type. You 
have a 100 percent share in 100 acres of spring-planted smooth green dry 
edible peas in the unit, with a 70 percent guarantee of 4,000 pounds per 
acre and a price election of $0.09 per pound. Your selected price 
election percentage is 100 percent. You are only able to harvest 200,000

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pounds. Your indemnity would be calculated as follows:
    (1) 100 acres x 4,000 pounds = 400,000-pound guarantee;
    (2) 400,000-pound guarantee x $0.09 price election = $36,000.00 
value of guarantee;
    (9) 200,000-pound production to count x $0.09 price election = 
$18,000.00 value of production to count;
    (12) $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 share = $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 65 percent guarantee of 5,000 pounds per acre 
and a base contract 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-pound guarantee for the 
spring-planted smooth green dry edible pea type;
    (2) 400,000-pound guarantee x $0.09 price election = $36,000.00 
value of guarantee for the spring-planted smooth green dry edible pea 
type;
    (4) 100 acres x 5,000 pounds = 500,000-pound production to count for 
the contract seed pea type;
    (5) 500,000-pound guarantee x $0.40 base contract 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-pound production to count x $0.09 price election = 
$18,000.00 value of production to count for the spring-planted smooth 
green dry edible pea type;
    (10) 450,000-pound production to count 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 share = $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 mature production meeting the objective, measurable minimum 
quality requirements (e.g., size, germination percentage) contained in 
the processor/seed company contract, and for mature production that does 
not meet such requirements due to uninsured causes:
    (i) Multiplying the local market price or base contract 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 objective, measurable 
minimum quality requirements (e.g., size, germination percentage) 
contained in the processor/seed company 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 dry 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 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 
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.

[[Page 295]]

    (e) Mature dry pea production that does not qualify as contract seed 
peas under the policy terms or does not meet the objective, measurable 
minimum quality requirements (e.g., size, germination percentage) 
contained in the processor/seed company contract, may be adjusted for 
quality deficiencies.
    (1) Production will be eligible for quality adjustment in accordance 
with the following, unless otherwise specified in the Special 
Provisions:
    (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 13(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.

                         14. Prevented Planting

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have 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.

                       15. Winter Coverage Option

    (a) In the event of a conflict between this section and sections 1 
through 14 of these Crop Provisions, this section will control.
    (b) You must have purchased additional coverage under the Dry Pea 
Crop Provisions in order to select this option.
    (c) In return for payment of the additional premium designated in 
the actuarial documents, this option is available in counties for which 
the actuarial documents provide premium rates for the Winter Coverage 
Option.
    (d) This option is available only in counties for which the Special 
Provisions designate both a fall final planting date and a spring final 
planting date.

[[Page 296]]

    (e) You must select this option on your application for insurance, 
or on a form approved by us, on or before the sales closing date for the 
initial year in which you wish to insure dry peas under this option.
    (1) Failure to do so means you have rejected this coverage for the 
dry pea crop planted in the fall and this option is void.
    (2) This option will continue in effect until canceled or coverage 
under the Dry Pea Crop Provisions is canceled or terminated.
    (3) This option 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 section 15(g) preceding the crop year for 
which the cancellation of this option is to be effective.
    (4) You may change your coverage level or percentage of price 
election for dry pea types until the spring sales closing date if you 
have selected this option, but do not have any insured fall planted 
acreage or your fall planted acreage is not eligible for this option.
    (f) Coverage under this option 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.
    (g) If you elect this option for dry peas initially planted in the 
fall, the following dates will be applicable to all your fall-planted 
and spring-planted dry peas in the county:
    (1) Contract change date is June 30 preceding the cancellation date;
    (2) Cancellation date is September 30; and
    (3) Termination date is November 30. For a policy with amounts due, 
when the sales closing date is prior to the previous crop year 
termination date, such policies will terminate for the current crop year 
even if insurance attached prior to the termination date. Such 
termination will be considered effective as of the sales closing date 
and no insurance will be considered to have attached for the crop year 
and no indemnity, prevented planting or replant payment will be owed.
    (h) All notices of damage must be provided to us not later than 15 
days after the spring final planting date designated in the Special 
Provisions.
    (i) All insurable acreage of each fall planted dry pea type covered 
under this option must be insured.
    (j) The amount of any indemnity paid under the terms of this option 
will be subject to any reduction specified in the Basic Provisions for 
multiple crop benefits in the same crop year.
    (k) Whenever any acreage of dry peas planted in the fall 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:
    (1) Continue to care for the damaged dry peas. By doing so, coverage 
will continue under the terms of the Basic Provisions, these Crop 
Provisions and this option;
    (2) Replant the acreage to an appropriate type of insured dry peas, 
if it is practical, and receive a replanting payment in accordance with 
the terms of section 11. By doing so, coverage will continue under the 
terms of the Basic Provisions, these Crop Provisions and this option, 
and the production guarantee for the dry pea type planted in the fall 
will remain in effect; or
    (3) Destroy the remaining crop on such acreage:
    (i) By destroying the remaining crop, you agree to accept an 
appraised amount of production determined in accordance with section 
13(d)(1) of these Crop 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 13.
    (ii) You may use such acreage for any purpose, including planting 
and separately insuring any other crop if such insurance is available.
    (iii) If you elect to plant and elect to insure spring-planted dry 
pea acreage of the same dry pea type (you must elect whether or not you 
want insurance on the spring-planted acreage of the same dry pea type at 
the time we release the fall-planted acreage), you must pay additional 
premium for insurance. Such acreage will be insured in accordance with 
the policy provisions that are applicable to acreage that is initially 
planted in the spring to the same dry pea type, and you must:
    (A) Plant the spring-planted acreage 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 fall-planted dry pea 
acreage; and
    (B) Store or market the production in a manner which permits us to 
verify the amount of spring-planted production separately from any fall-
planted production. In the event you are unable to provide records of 
production that are acceptable to us, the spring-planted acreage will be 
considered to be a part of the original fall-planted unit.

[62 FR 65744, Dec. 16, 1997, as amended at 63 FR 36157, July 2, 1998; 67 
FR 55691, Aug. 30, 2002; 73 FR 51582, Sept. 4, 2008; 75 FR 15888, Mar. 
30, 2010]

[[Page 297]]

Sec. 457.141  Rice crop insurance provisions.

    The rice crop insurance provisions for the 2011 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

                             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 acreage. In addition to the definition in section 1 of the 
Basic Provisions, land on which there is uniform placement of an 
adequate amount of rice seed into a prepared seedbed by one of the 
following methods (Acreage seeded in any other manner will not be 
insurable unless otherwise provided by the Special Provisions or by 
written agreement):
    (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.
    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 of the Basic 
Provisions, you must elect to insure your rice with either revenue 
protection or yield protection by the 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.

                  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                           date
------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak,  January 31.
 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.
------------------------------------------------------------------------

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the rice in the county for which a premium rate is 
provided by the actuarial documents or by written agreement:
    (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 of the Basic Provisions:
    (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

[[Page 298]]

    (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 of the Basic 
Provisions, 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 of the Basic 
Provisions, 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;
    (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; or
    (9) For revenue protection, a change in the harvest price from the 
projected price, unless FCIC can prove the price change was the direct 
result of an uninsured cause of loss specified in section 12(a) of the 
Basic Provisions.
    (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 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) Except as specified in section 10(a)(1), you must comply with 
all requirements regarding replanting payments contained in section 13 
of the Basic Provisions;
    (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; and
    (4) The replanted crop 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) Unless otherwise specified in the Special Provisions, the amount 
of the replanting payment per acre will be the lesser of 20 percent of 
the production guarantee or 400 pounds, multiplied by your projected 
price, multiplied by your share.
    (c) 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.

                11. Duties in the Event of Damage or Loss

    Representative samples are required in accordance with section 14 of 
the Basic Provisions.

                         12. 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 number of insured acres by your respective:
    (i) Yield protection guarantee (per acre) if you elected yield 
protection; or
    (ii) Revenue protection guarantee (per acre) if you elected revenue 
protection;
    (2) Totaling the results of section 12(b)(1)(i) or 12(b)(1)(ii), 
whichever is applicable;
    (3) Multiplying the production to count by your:
    (i) Projected price if you elected yield protection; or
    (ii) Harvest price if you elected revenue protection;
    (4) Totaling the results of section 12(b)(3)(i) or 12(b)(3)(ii), 
whichever is applicable;
    (5) Subtracting the result of section 12(b)(4) from the result of 
section 12(b)(2); and
    (6) Multiplying the result of section 12(b)(5) by your share.
    For example:
    You have 100 percent share in 50 acres of rice in the unit with a 
production guarantee (per acre) of 3,750 pounds, your projected price is 
$.0750, your harvest price is $.0700, and your production to count is 
150,000 pounds.
    If you elected yield protection:

[[Page 299]]

    (1) 50 acres x (3,750 pound production guarantee x $.0750 projected 
price) = $14,062.50 value of the production guarantee
    (3) 150,000 pound production to count x $.0750 projected price = 
$11,250.00 value of the production to count
    (5) $14,062.50 - $11,250.00 = $2,812.50
    (6) $2,812.50 x 1.000 share = $2,813.00 indemnity; or
    If you elected revenue protection:
    (1) 50 acres x (3,750 pound production guarantee x $.0750 projected 
price) = $14,062.50 revenue protection guarantee
    (3) 150,000 pound production to count x $.0700 harvest price = 
$10,500.00 value of the production to count
    (5) $14,062.50 - $10,500.00 = $3,562.50
    (6) $3,562.50 x 1.000 share = $3,563.00 indemnity.
    (c) The total production to count (in pounds) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) For yield protection, not less than the production guarantee and 
for revenue protection, not less than the amount of production that when 
multiplied by the harvest price equals the revenue protection guarantee 
(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) 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

[[Page 300]]

    (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
    (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 additional 
coverage 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; 75 FR 15888, 
15889, Mar. 30, 2010]

Sec. 457.142  Northern potato crop insurance provisions.

    The Northern Potato Crop Insurance Provisions for the 2008 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; Kansas; Maine; Massachusetts; Michigan; Minnesota; Montana; 
Nebraska; Nevada; San Juan County, New Mexico; New York; North Dakota; 
Ohio; Oregon; Pennsylvania; Rhode Island; South Dakota; Utah; 
Washington; Wisconsin; and Wyoming; and any other states or counties if 
allowed by the Special Provisions.

                             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 that were entered into the potato certified 
seed program and that meet all requirements for production to be used to 
produce a seed crop for the next crop year or a potato crop for harvest 
for commercial uses in the next crop year.
    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

[[Page 301]]

Department of Agriculture, in accordance with the United States 
Standards for Grades of Potatoes. The United States standards used to 
determine the quality (grade) deficiencies will be: For potatoes 
produced for chipping, the United States Standards for Grades of 
Potatoes for Chipping; for potatoes produced for processing, the United 
States Standards for Grades of Potatoes for Processing; for potatoes 
produced for seed, the United States Standards for Grades of Seed 
Potatoes; and for all other potatoes, the United States Standards for 
Grades of Potatoes. The quantity and number of samples required will be 
determined in accordance with procedure issued by FCIC.
    Harvest. Lifting potatoes from within the soil to the soil surface.
    Hundredweight. One hundred (100) pounds avoirdupois.
    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.
    Potato certified seed program. The state program administered by a 
public agency responsible for the seed certification process within the 
state in which the seed is produced.
    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 90 percent 
of your price election. This requirement is not applicable to the 
certified seed endorsement price election.
    (c) The price election for unharvested acreage will apply to any 
acreage of potatoes damaged to the extent that similarly situated 
producers in the area would not normally care for the potatoes even if 
you choose to continue to care for or harvest them. Potatoes that are 
lifted to the soil surface and not removed from the field will also 
receive the price election for unharvested 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

[[Page 302]]

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;
    (c) October 15 in Colorado; Indiana; Iowa; Michigan; Minnesota; 
Montana; Nevada; North Dakota; South Dakota; Utah; and Wisconsin;
    (d) October 20 in Maine;
    (e) October 25 in Kansas; and
    (f) October 31 in Humboldt, Modoc, and Siskiyou Counties, 
California; Connecticut; Idaho; Massachusetts; San Juan County, New 
Mexico; 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 $3.60 per hundredweight. (The price 
election for unharvested acreage is 90.0 percent of your elected price 
election ($4.00 x 0.90 = $3.60.)) 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;

[[Page 303]]

    (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 $3.60 price election = $54,000.00 
value of guarantee for the unharvested acreage;
    (3) $60,000.00 + $54,000.00 = $114,000.00 total value of guarantee;
    (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 $3.60 = $12,600.00 value of production to count for the unharvested 
acreage;
    (5) $40,000.00 + $12,600.00 = $52,600.00 total value of production 
to count;
    (6) $114,000.00 - $52,600.00 = $61,400.00 loss; and
    (7) $61,400.00 loss x 100 percent = $61,400.00 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, including unharvested production on 
insured acreage you intend to put to another use or abandon, or acreage 
damaged by insurable causes and for which you cease to provide further 
care, 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 cease providing care for the crop. 
This unharvested production may be adjusted in accordance with sections 
11(e), (f), and (g); and the value of all unharvested production will be 
calculated using the reduced price election determined in section 2(b). 
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 completed no later than 21 days after the 
end of the insurance period (if the Northern Potato Storage Coverage 
Endorsement is applicable, samples must be obtained within 60 days after 
the end of the insurance period and quality (grade) determinations must 
be completed with 21 days of sampling); and
    (3) Prior to any grade inspection, you must notify us of the 
intended use of the potatoes so the appropriate United States standards 
will be applied (We may request previous sales records to verify your 
claimed intended use or base the intended use on the type of potato 
grown if such potatoes are not usually grown for the intended use you 
reported).
    (f) Potato production to count 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 to count that is eligible for quality 
adjustment, as specified in

[[Page 304]]

section 11(e), with 5.1 percent damage or more (by weight) will be 
determined as follows:
    (1) If a price is agreed upon between you and a buyer within 21 days 
(60 days if the Northern Potato Storage Coverage endorsement is 
applicable), after the end of the insurance period, or the production is 
delivered to a buyer within 21 days (60 days if the Northern Potato 
Storage Coverage Endorsement is applicable), after the end of the 
insurance period, the amount of production will be determined by:
    (i) Dividing the price per hundredweight received or that will be 
received by the highest price election designated in the Special 
Provisions or addendum thereto for the insured potato type (if the 
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); and
    (ii) Multiplying the result (not to exceed 1.0) by the number of 
hundredweight of sold or to be sold production (We may verify this after 
the production has actually been sold); or
    (2) If a price is not agreed upon between you and a buyer and the 
production is not delivered within 21 days (60 days if the Northern 
Storage Coverage Endorsement is applicable) after the end of the 
insurance period, and that remain in storage 22 or more days (61 or more 
days if the Northern Potato Storage Coverage Endorsement is applicable), 
after the end of the insurance period, the amount of production will be 
the greater of:
    (i) The amount determined by:
    (A) Dividing the price per hundredweight that is received, or will 
be received after the end of the applicable insurance period, by the 
highest price election designated in the Special Provisions or addendum 
thereto for the insured potato type (if the 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); and
    (B) Multiplying the result of section 11(g)(2)(i)(A) (not to exceed 
1.0) by the number of hundredweight of sold or to be sold production (We 
may verify this after the production has actually been sold); or
    (ii) The amount of production determined by:
    (A) Reducing any harvested or appraised production:
    (1) By 0.1 percent for each 0.1 percent damage through 5.0 percent;
    (2) By 0.5 percent for each 0.1 percent of damage from 5.1 percent 
through 6.0 percent;
    (3) By 1.0 percent for each 0.1 percent of damage from 6.1 through 
13.5 percent; or
    (B) Including 15 percent of the production when damage is in excess 
of 13.5 percent.
    (iii) For any production discarded:
    (A) Within 21 days (60 days if the Northern Potato Storage Coverage 
Endorsement is applicable), after the end of the insurance period, the 
amount of production to count will be:
    (1) Zero if we determine the production could not have been sold; or
    (2) Determined in accordance with section 11(g)(2)(ii) if we 
determine the production could have been sold; or
    (B) Later than 21 days (60 days if the Northern Potato Storage 
Coverage Endorsement is applicable), after the end of the insurance 
period, the amount of production to count will be adjusted in accordance 
with section 11(g)(2)(ii).

                         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, as amended at 72 FR 61282, Oct. 30, 2007]

Sec. 457.143  Northern potato crop insurance--quality endorsement.

    The Northern Potato Crop Insurance Quality Endorsement Provisions 
for the 2008 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 Quality Endorsement

                             1. Definitions

    Percentage factor. 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 4 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 so that such a 
combination would be

[[Page 305]]

the functional equivalent of 4 years of records.
    2. 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.
    3. 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.
    4. 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.
    5. We will adjust the production to count determined in accordance 
with section 15 of the Basic Provisions and section 11 of the Northern 
Potato Crop Provisions for potatoes that do not meet U.S. No. 2 grade 
requirements from unharvested acreage or harvested acreage that is 
stored or is marketed after a grade inspection due to:
    (a) Internal defects as long as the number of potatoes with such 
defects are in excess of the tolerances allowed for the U.S. No. 2 grade 
potatoes on a lot basis and are not separable from undamaged production 
using methods used by the packers or processors to whom you normally 
deliver your potato production as follows:
    (1) If a price is agreed upon between you and a buyer within 21 days 
(60 days if the Northern Potato Storage Coverage Endorsement is 
applicable) after the end of the insurance period, or the production is 
delivered to a buyer within 21 days (60 days if the Northern Potato 
Storage Coverage Endorsement is applicable) after the end of the 
insurance period, the amount of production will be determined by 
(adjustment under section 5(a)(1) or 5(a)(2)(i) will not be performed if 
it already has been performed under the terms of section 11(g) of the 
Northern Potato Crop Provisions):
    (i) Dividing the price received or that will be received per 
hundredweight by the highest price election designated in the Special 
Provisions or addendum thereto for the insured potato type (if the 
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); and
    (ii) Multiplying the result (not to exceed 1.0) by the number of 
hundredweight of sold or to be sold production (We may verify this after 
the production has actually been sold); or
    (2) If a price is not agreed upon between you and a buyer and the 
production is not delivered within 21 days (60 days if the Northern 
Potato Storage Coverage Endorsement is applicable) after the end of the 
insurance period, and the potatoes remain in storage 22 or more days (61 
or more days if the Northern Potato Storage Coverage Endorsement is 
applicable), after the end of the insurance period, the amount of 
production will be the greater of:
    (i) The amount of production determined by:
    (A) Dividing the price per hundredweight that is received, or will 
be received after the end of the applicable insurance period, by the 
highest price election designated in the Special Provisions or addendum 
thereto for the insured potato type (if the 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); and
    (B) Multiplying the result of section 5(a)(2)(i)(A) (not to exceed 
1.0) by the number of hundredweight of sold or to be sold production (We 
may verify this after the production has actually been sold); or
    (ii) The amount of production determined as follows:
    (A) The combined weight of sampled potatoes grading U.S. No. 2 or 
better (the amount of potatoes grading U.S. No. 2 will be based on a 
grade inspection completed no later than 21 days after the end of the 
insurance period (if the Northern Potato Storage Coverage Endorsement is 
applicable), samples must be obtained within 60 days after the end of 
the insurance period and a grade inspection completed within 21 days of 
sampling) and are damaged by freeze or tuber rot will be divided by the 
total sample weight;
    (B) The percentage determined in section 5(a)(2)(ii)(A) will be 
divided by the applicable percentage factor; and
    (C) The result of section 5(a)(2)(ii)(B) will be multiplied by the 
amount of production to count determined in accordance with section 15 
of the Basic Provisions and section 11 of the Northern Potato Crop 
Provisions.
    (b) Factors other than those specified in section 5(a), in 
accordance with section 5(a)(2)(ii).
    6. For any production that qualifies for adjustment in accordance 
with section 5(a) and that is discarded:
    (a) Within 21 days (60 days if the Northern Potato Storage Coverage 
Endorsement is applicable), after the end of the insurance period, the 
amount of production to count will be:

[[Page 306]]

    (1) Zero if we determine the production could not have been sold; or
    (2) Determined in accordance with section 5(a)(2)(ii) if we 
determine the production could have been sold; or
    (b) Later than 21 days (60 days if the Northern Potato Storage 
Coverage Endorsement is applicable), after the end of the insurance 
period, the amount of production to count will be adjusted in accordance 
with section 5(a)(2)(ii).
    7. 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.
    8. Production to count for potatoes destroyed, stored or marketed 
without a grade inspection will be 100 percent of the gross weight of 
such potatoes.
    9. All determinations must be based upon a grade inspection.
    10. The actuarial documents may provide ``U.S. No. 1 grade'' in 
place of ``U.S. No. 2 grade'' as used in this endorsement.
    (a) If both U.S. No.1 and U.S. No. 2 grades are available in the 
actuarial documents, you may elect U.S. No. 1 or 2 grade by potato type 
or group, if separate types or groups are specified in the Special 
Provisions.
    (b) If both fresh and processing types are specified in the 
actuarial documents, you cannot elect the fresh type for any potatoes 
grown for processing or chipping.

[62 FR 65335, Dec. 12, 1997, as amended at 72 FR 61283, Oct. 30, 2007]

Sec. 457.144  Northern potato crop insurance--processing quality 
          endorsement.

    The Northern Potato Crop Insurance Processing Quality Endorsement 
Provisions for the 2008 and succeeding crop years are as follows:

                             1. Definitions

    Broker. Any business enterprise regularly engaged in the buying and 
selling of processing potatoes, that possesses all licenses and permits 
as required by the state in which it operates, and when required, has 
the necessary facilities or the contractual access to such facilities, 
with enough equipment to accept and transfer processing potatoes to the 
broker within a reasonable amount of time after harvest or the typical 
storage period.
    Percentage factor. The term as defined in the Northern Potato 
Quality Endorsement.
    Processor. Any business enterprise regularly engaged in processing 
potatoes for human consumption, that possesses all licenses and permits 
for processing potatoes 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 processing potatoes grown 
under a processing contract within a reasonable amount of time after 
harvest or the typical storage period.
    Processor contract. A written agreement between the producer and 
processor, or between a producer and a broker, containing at a minimum:
    (a) The producer's commitment to plant and grow processing potatoes, 
and to deliver the potato production to the processor or broker;
    (b) The processor's or broker's commitment to purchase all the 
production stated in the processing contract; and
    (c) A price or pricing mechanism to determine the value of delivered 
production.
    2. To be eligible for coverage under this endorsement, you must have 
a:
    (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:
    (1) Cancellation of your Northern Potato Quality Endorsement will 
automatically result in cancellation of this endorsement;
    (2) This endorsement 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: and
    (b) Processor contract executed with a processor or broker for the 
potato types insured under this endorsement that is applicable for the 
crop year:
    (1) A copy of the processor contract must be submitted to us on or 
before the acreage reporting date for potatoes; and
    (2) Failure to timely provide the processor contract will result in 
no coverage under this endorsement and coverage will be provided only 
under the terms of the Northern Potato Crop Provisions and Northern 
Potato Quality Endorsement.
    3. 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 Northern Potato Quality 
Endorsement subject to the terms and conditions described herein. In the 
event of a conflict between the Northern Potato Crop Provisions or 
Northern Potato Quality Endorsement and this endorsement, this 
endorsement will control.
    4. All terms of the Northern Potato Quality Endorsement not modified 
by this endorsement will be applicable to acreage covered under this 
endorsement.
    5. If you elect this endorsement, all insurable acreage of 
production under contract with the processor or broker must be insured 
under this endorsement; however:

[[Page 307]]

    (a) When the processor contract requires the processor or broker to 
purchase a stated amount of production, rather than all of the 
production from a stated number of acres, the insurable acres will be 
determined by dividing the stated amount of production by the approved 
yield for the acreage; and
    (b) The number of acres insured under this endorsement will not 
exceed the actual number of acres planted to the potato types needed to 
fulfill the contract.
    6. Potato lots may be adjusted in accordance with section 8 if such 
potatoes:
    (a) Fail to meet the standards in section 7(a), (b), (c), or (d), or 
a standard contained in the processor contract, for the same quality 
factors specified in section 7(a), (b), (c), or (d), if such standard is 
less stringent;
    (b) Have a value less than the maximum price election; and
    (c) Fail to meet the applicable standards and are not separable from 
undamaged production using methods used by processors to whom you 
normally deliver your potato production.
    7. To qualify for a quality reduction under this endorsement, the 
potatoes must:
    (a) Fail to meet the applicable U.S. No. 2 grade requirements due to 
internal defects as long as the number of potatoes with such defects are 
in excess of the tolerance allowed for U.S. No. 2 grade potatoes;
    (b) Have a specific gravity lower than 1.074;
    (c) Have a fry color of No. 3 or darker due to either sugar 
exceeding 10 percent or sugar ends exceeding 19 percent; or
    (d) Have an Agtron rating lower than 58.
    8. In lieu of the provisions contained in section 5 of the Northern 
Potato Quality Endorsement, production to count determined in accordance 
with section 15 of the Basic Provisions and section 11 of the Northern 
Potato Crop Provisions, from unharvested acreage or harvested acreage 
that is stored or is marketed after a grade inspection determined in 
section 10, will be adjusted in accordance with sections 8(a) or 8(b), 
whichever is applicable, (adjustment under section 8(a) or 8(b)(1) will 
not be performed if it already has been performed under the terms of 
section 11(g) of the Northern Potato Crop Provisions):
    (a) If a price is agreed upon between you and a buyer within 21 days 
(60 days if the Northern Potato Storage Coverage Endorsement is 
applicable) after the end of the insurance period, or the production is 
delivered to a buyer within 21 days (60 days if the Northern Potato 
Storage Coverage Endorsement is applicable), after the end of the 
insurance period, the amount of production will be determined by:
    (1) Dividing the price per hundredweight received or that will be 
received by the highest price election designated in the Special 
Provisions or addendum thereto for the insured potato type (If the 
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); and
    (2) Multiplying the result of section 8(a)(1) (not to exceed 1.0) by 
the number of hundredweight of sold or to be sold production (We may 
verify this after the production has actually been sold); or
    (b) If a price is not agreed upon between you and a buyer and the 
production is not delivered within 21 days (60 days if the Northern 
Potato Storage Coverage Endorsement is applicable), after the end of the 
insurance period, and the production remains in storage 22 or more days 
(61 or more days if the Northern Potato Storage Coverage Endorsement is 
applicable), after the end of the insurance period, the amount of 
production will be the greater of:
    (1) The amount of production determined by:
    (i) Dividing the price per hundredweight that is received, or that 
will later be received after the end of the applicable insurance period, 
by the highest price election designated in the Special Provisions or 
addendum thereto for the insured potato type (if the 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); and
    (ii) Multiplying the result of section 8(b)(1)(i) (not to exceed 
1.0) by the number of hundredweight of sold or to be sold production (We 
may verify this after the production has actually been sold); or
    (2) The amount of production determined as follows:
    (i) The combined weight of sampled potatoes that grade U.S. No. 2 or 
better (the amount of potatoes grading U.S. No. 2 or better will be 
based on a grade inspection completed no later than 21 days after the 
end of the insurance period, if the Northern Potato Storage Coverage 
Endorsement is applicable; samples must be obtained within 60 days after 
the end of the insurance period and grade inspection completed within 21 
days of sampling) and are damaged by freeze or tuber rot will be divided 
by the total sample weight;
    (A) The percentage determined in section 8(b)(2)(i) will be divided 
by the applicable percentage factor; and
    (B) The result of section 8(b)(2)(i)(A) will be multiplied by the 
amount of production to count determined in accordance with section 15 
of the Basic Provisions and section 11 of the Northern Potato Crop 
Provisions.
    (c) The production to count for potatoes that have a value less than 
the maximum price election due to factors other than those

[[Page 308]]

specified in section 7 will be adjusted in accordance with section 
8(b)(2).
    9. For any production that qualifies for adjustment in accordance 
with section 7 and that is discarded:
    (a) Within 21 days (60 days if the Northern Potato Storage Coverage 
Endorsement is applicable), after the end of the insurance period, the 
amount of production to count will be:
    (1) Zero if we determine the production could not have been sold; or
    (2) Determined in accordance with section 8(b)(2) if we determine 
the production could have been sold; or
    (b) Later than 21 days (60 days if the Northern Potato Storage 
Coverage Endorsement is applicable), after the end of the insurance 
period, the amount of production to count will be adjusted in accordance 
with section 8(b)(2).
    10. All quality determinations must be based upon a grade inspection 
using the United States Standards for Grades of Potatoes for Processing 
or the United States Standards for Grades of Potatoes for Chipping.
    11. The actuarial documents may provide ``U.S. No. 1 grade'' in 
place of ``U.S. No. 2 grade'' as used in this endorsement. If both U.S. 
No. 1 and 2 grades are available in the actuarial documents, you may 
elect U.S. No. 1 or 2 grade by potato type or group, if separate types 
or groups are specified in the Special Provisions.

[72 FR 61284, Oct. 30, 2007]

Sec. 457.145  Potato crop insurance--certified seed endorsement.

    The Potato Crop Insurance Certified Seed Endorsement Provisions for 
the 2008 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 accordance with section 8, since your insurance 
period is not extended in this endorsement, any additional premium paid 
for coverage under the Northern Potato Storage Coverage Endorsement will 
not apply to the additional coverage provided under the terms of this 
endorsement. 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 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 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 4 below.
    4. 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:
    (a) Multiply the average number of your acres entered into and 
passing certification in the potato certified seed program the 3 
previous calendar years by 1.25 and divide this result by the number of 
acres grown by you for certified seed in the current crop year; and
    (b) Multiply the result of section 4(a) (not to exceed 1.0) by the 
production guarantee for certified seed for the current crop year.
    5. 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.
    6. All potatoes insured for certified seed production must be 
produced and managed in accordance with the regulations, standards, 
practices, and procedures required for certification under the potato 
certified seed program. Any production that does not qualify as 
certified seed because of varietal mixing or your failure to meet any 
requirements under the potato certified seed program will be considered 
as lost due to uninsured causes.
    7. 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:

[[Page 309]]

    (a) Multiplying the insured acreage by its respective certified seed 
production guarantee;
    (b) Multiplying each result in section 7(a) by the dollar amount per 
hundredweight contained in the Special Provisions for production covered 
under this endorsement;
    (c) Totaling the results of section 7(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 7(d) from the result of 
section 7(c); and
    (f) Multiplying the result of section 7(e) by your share.
    8. 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. In lieu of the provisions in section 14(c) of the 
Basic Provisions specifying that any claim for indemnity must be filed 
not later than 60 days after the end of the insurance period, your claim 
for indemnity must be filed by the later of:
    (a) Sixty (60) days after the end of the insurance period; or
    (b) Thirty (30) days after you receive notice from the state 
certifying agency that production has failed certification.
    9. 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 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.
    10. Failure to meet any requirements for seed to be used to produce 
a subsequent seed crop will not be covered. All the production that 
meets requirements for certified seed used to produce a commercial crop 
will be included in production to count.

[62 FR 65337, Dec. 12, 1997, as amended at 64 FR 71271, Dec. 21, 1999; 
72 FR 61286, Oct. 30, 2007]

Sec. 457.146  Northern potato crop insurance--storage coverage 
          endorsement.

    The Northern Potato Crop Insurance Storage Coverage Endorsement 
Provisions for the 2008 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 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

[[Page 310]]

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. In lieu of section 9(b)(1) of the Northern Potato Crop 
Provisions, the extended coverage provided by this endorsement will be 
applicable but 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) The potatoes damaged by an insurance cause of loss fail to meet 
any of the following standards or a less stringent standard for the same 
quality factors specified below, contained in the processor contract, if 
applicable, (this coverage is applicable only to production covered 
under the Northern Potato Processing Quality Endorsement):
    (i) A specific gravity lower than 1.074;
    (ii) A fry color of No. 3 or darker due to either sugar exceeding 10 
percent or sugar ends exceeding 19 percent; or
    (iii) An Agtron rating lower than 58.
    (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 with any of the quality 
deficiencies specified in section 5(a) is determined based on samples 
obtained no later than 60 days after the end of the insurance period and 
the potatoes are evaluated and quality (grade) determinations are made 
by us, a laboratory approved by us, a potato grader licensed or 
certified by the applicable State or the United States Department of 
Agriculture, or us, in accordance with the United States Standards for 
Grades of Potatoes:
    (1) Samples of damaged production must be obtained by us or a party 
approved by us prior to the sale or disposal of any lot of potatoes; and
    (2) If production is not sold or disposed of within 60 days after 
the end of the insurance period, samples must be obtained within 60 days 
after the end of the insurance period and a quality (grade) 
determination must be completed within 21 days of sampling.

[62 FR 65337, Dec. 12, 1997, as amended at 72 FR 61286, Oct. 30, 2007]

Sec. 457.147  Central and Southern potato crop insurance provisions.

    The Central and Southern Potato Crop Insurance Provisions for the 
2009 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; all New Mexico 
counties except San Juan; North Carolina; Oklahoma; Texas; and Virginia; 
and other states or counties if allowed by the Special Provisions.

                             1. Definitions

    Certified seed. Potatoes that were entered into the potato certified 
seed program and that meet all requirements for production to be used to 
produce a seed crop for the next

[[Page 311]]

crop year or a potato crop for harvest for commercial uses in the next 
crop year.
    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. The United States standards used to determine the quality 
(grade) deficiencies will be: For potatoes produced for chipping, the 
United States Standards for Grades of Potatoes for Chipping; for 
potatoes produced for processing, the United States Standards for Grades 
of Potatoes for Processing; for potatoes produced for seed, the United 
States Standards for Grades of Seed Potatoes; and for all other 
potatoes, the United States Standards for Grades of Potatoes. The 
quantity and number of samples required will be determined in accordance 
with procedure issued by FCIC.
    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.
    Potato certified seed program. The state program administered by a 
public agency responsible for the seed certification process within the 
state in which the seed is produced.
    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 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 90 percent 
of your price election.
    (c) The price election for unharvested acreage will apply to any 
acreage of potatoes damaged to the extent that similarly situated 
producers in the area would not normally care for the potatoes even if 
you choose to continue to care for or harvest them. Potatoes that are 
lifted to the soil surface and not removed from the field will also 
receive the price election for unharvested 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, December 31, or January 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:

[[Page 312]]



------------------------------------------------------------------------
           State and county                          Dates
------------------------------------------------------------------------
Pinellas, Hillsborough, Polk,          September 30.
 Osceola, and Brevard Counties,
 Florida, and all Florida counties
 lying south thereof.
Arizona; all California counties; and  November 30.
 all Texas counties except Bailey,
 Castro, Dallam, Deaf Smith, Floyd,
 Gaines, Hale, Hartley, Haskell,
 Knox, Lamb, Parmer, Swisher, and
 Yoakum.
Alabama; Georgia; Missouri; and All    December 31.
 Florida Counties except Pinellas,
 Hillsborough, Polk, Osceola, and
 Brevard Counties, Florida, and all
 Florida counties to the south
 thereof.
Delaware; Maryland; New Jersey; North  January 31.
 Carolina; and Virginia.
Oklahoma; and Haskell and Knox         February 28.
 Counties, Texas.
Bailey, Castro, Dallam, Deaf Smith,    March 15.
 Floyd, Gaines, Hale, Hartley, Lamb,
 Parmer, Swisher, and Yoakum
 counties, Texas; and all New Mexico
 counties except San Juan County.
------------------------------------------------------------------------

                            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; 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.
    (c) August 15 in North Carolina; Oklahoma; and Haskell and Knox 
Counties, Texas.
    (d) August 31 in Virginia.
    (e) In Alabama; California; Florida; and Georgia; the dates 
established by the Special Provisions for each planting period; and
    (f) October 15 in Bailey, Castro, Dallam, Deaf Smith, Floyd, Gaines, 
Hale, Hartley, Lamb, Parmer, Swisher, and Yoakum Counties, Texas; 
Delaware; Maryland; New Jersey; and all counties in New Mexico except 
San Juan.

                           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 or 
becomes evident in storage; or
    (2) Causes, such as freeze after certain dates, as limited by the 
Special Provisions.

[[Page 313]]

                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;
    (5) $60,000.00 - $40,000.00 = $20,000.00 loss; and
    (6) $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 $3.60 per hundredweight. (The price 
election for unharvested acreage is 90.0 percent of your elected price 
election ($4.00 x 0.90 = $3.60.)) 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 harvested acreage, and
    15,000 hundredweight guarantee x $3.60 price election = $54,000.00 
value of guarantee for the unharvested acreage;
    (3) $60,000.00 + $54,000.00 = $114,000.00 total value of guarantee;
    (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 $3.60 = $12,600.00 value of production to count for the unharvested 
acreage;
    (5) $40,000.00 + $12,600.00 = $52,600.00 total value of production 
to count;
    (6) $114,000.00 - $52,600.00 = $61,400.00 loss; and
    (7) $61,400.00 loss x 100 percent = $61,400.00 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

[[Page 314]]

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, including unharvested production on 
insured acreage you intend to put to another use or abandon, or acreage 
damaged by insurable causes and for which you cease to provide further 
care, 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 cease providing care for the crop. 
This unharvested production may be adjusted in accordance with sections 
12(e), and the value of all unharvested production will be calculated 
using the reduced price election determined in section 3(b). 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) Only marketable lots of mature potatoes will be production to 
count for loss adjustment purposes, except for production specified in 
12(e)(1):
    (1) Production not meeting the standards for grading U.S. No. 2 due 
to external defects will be determined on an individual basis for all 
harvested and unharvested potatoes if we determine it is or would be 
practical to separate the damaged production;
    (2) All determinations must be based upon a grade inspection; and
    (3) Prior to any grade inspection, you must notify us of the 
intended use of the potatoes so the appropriate United States Standard 
will be applied (We may request previous sales records to verify your 
claimed intended use or base the intended use on the type of potato 
grown if such potatoes are not usually grown for the intended use you 
reported).
    (4) 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 lots meet 
the standards for grading U.S. No. 2 grade or better on a sample basis.
    (5) 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.
    (6) Unless included in section 12(e)(4) or (5), 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;
    (ii) Does not meet the standards for grading U.S. No. 2 grade or 
better due to internal defects; or
    (iii) Does not meet the standards for grading U.S. No. 2 grade or 
better due to external defects, 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, as amended at 72 FR 61287, Oct. 30, 2007]

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

[[Page 315]]

                        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.
    (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.

[[Page 316]]

    (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:
    (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

[[Page 317]]

    (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 
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:

[[Page 318]]

    (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:
    (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.

[[Page 319]]

    (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 2010 and 
succeeding crop years are as follows:
    For:

                        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

                             1. Definitions

    Adapted. Varieties that are recognized by the National Institute of 
Food and Agriculture 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.
    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. Removing the mature 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.
    Lug.
    (1) Twenty (20) pounds of table grapes in the Coachella Valley, 
California district, and all other States.
    (2) Twenty-one (21) pounds in all other California districts.
    (3) Or as otherwise specified in the Special Provisions.
    Set out. Physically planting the grape plants 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.
    Type. A category of grapes (one or more varieties) identified as a 
type in the Special Provisions.
    USDA grade standard. (1) United States standard used to determine 
the minimum quality grade will be:
    (i) The United States Standards for Grades of Table Grapes (European 
or Vinifera Type);
    (ii) The United States Standards for Grades of American (Eastern 
Type Bunch Grapes); and
    (iii) The United States Standards for Grades of Muscadine (Vitis 
rotundifolia) Grapes.
    (2) The quantity and number of samples required will be determined 
in accordance with procedure issued by FCIC or as provided on the 
Special Provisions of Insurance.
    Variety. A kind of grape that is distinguished from any other by 
unique characteristics such as, but not limited to, size, color, skin 
thickness, acidity, flavors and aromas. In Arizona and California each 
variety is identified as a separate type in the Special Provisions 
except for type 095 (other varieties). Type 095 is used to designate 
varieties not listed as a separate type.

                            2. Unit Division

    (a) In Arizona and California only:
    (1) A basic unit as defined in section 1 of the Basic Provisions 
will be divided into additional basic units by each table grape variety 
that you insure; and
    (2) 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. Unless 
otherwise allowed by written agreement, optional units may only be 
established if each optional unit is located on non-contiguous land or 
grown and insured under an organic farming practice.
    (b) In all states except Arizona and 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 and 
for acreage grown and insured under an organic farming practice 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 type when separate types are 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) In Arizona and California, you may select only one coverage 
level and price election for each table grape variety you elect to 
insure in the county.

[[Page 320]]

    (b) In all states except Arizona and California, you may select only 
one coverage level and price election for each table grape type in the 
county as specified in the Special Provisions. The coverage level you 
choose for each table grape type is not required to have same percentage 
relationship. The price election you choose for each type is not 
required to have the same percentage relationship to the maximum price 
election offered by us for each type. For example, if you choose 75 
percent coverage level and 100 percent of the maximum price election for 
one type, you may choose 65 percent coverage level and 75 percent of the 
maximum price election for another type. If you elect the Catastrophic 
Risk Protection (CAT) level of insurance for any grape type, the CAT 
level of coverage will be applicable to all insured grape acreage in the 
county.
    (c) In all states except Arizona and California, if you acquire a 
share in any grape acreage after you submit your application, such 
acreage is insurable under the terms of the policy and you did not 
include the grape type on your application, we will assign the 
following:
    (1) A coverage level equal to the lowest coverage level you selected 
for any other grape type: and
    (2) A price election percentage equal to the type with the lowest 
coverage level you selected, if you elected additional coverage; or 55 
percent of the maximum price election, if you elected CAT.
    (d) You must report by the production reporting date designated in 
section 3 of the Basic Provisions, by type or variety 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 any time the planting pattern of such 
acreage is changed:
    (i) The age of the interplanted crop, and the table grape type or 
variety, if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    (e) We will reduce the yield used to establish your production 
guarantee, based on our estimate of the effect on yield potential of any 
of the items listed in section 3(d)(1) through (4). 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) Your request to increase the coverage level or price election 
percentage will not be accepted if a cause of loss that could or would 
reduce the yield of the insured crop is evident when your request is 
made.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is October 31 preceding the cancellation date for Arizona 
and 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 in Arizona and 
California, and November 20 for all other states.

                          6. Report of Acreage

    In addition to the requirements of section 6 of the Basic 
Provisions, you must report your acreage:
    (a) In Arizona and California, by each table grape variety you 
insure; or
    (b) In all other states, by each table grape type.

                             7. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be any insurable variety of table grapes that you elect to 
insure in Arizona and California, or in all other states all insurable 
types, 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 table grapes;
    (c) That are adapted to the area;
    (d) That are grown in a vineyard that, if inspected, is considered 
acceptable by us;
    (e) That, after being set out or grafted, have reached the number of 
growing seasons designated by the Special Provisions; or
    (f) That have produced an average of at least 150 lugs of table 
grapes per acre (or as otherwise provided in the Special Provisions) in 
at least one of the three crop years immediately preceding the insured 
crop year, unless we inspect and allow insurance on acreage that has not 
produced this amount.

                          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, 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.

[[Page 321]]

                           9. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions
    (1) For the year of application, coverage begins on February 1 in 
Arizona and California, and November 21 in all other states. 
Notwithstanding the previous sentence, if your application is received 
by us after January 12 but prior to February 1 in Arizona or 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 vineyard.
    (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 to a different 
insurance provider for a subsequent crop year will not be considered a 
break in continuous coverage.
    (3) If in accordance with the terms of the policy, your table grape 
policy is cancelled or terminated for any crop year 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.
    (4) The calendar date for the end of insurance period for each crop 
year is the date specified 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 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 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 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.

                           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, 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 of the 
Basic Provisions, we will not insure against damage or loss of 
production due to:
    (1) Phylloxera, regardless of cause; or
    (2) Inability to market the table grapes for any reason other than 
the 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 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 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 and you 
previously gave notice in accordance with section 14 of the

[[Page 322]]

Basic Provisions, 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 
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 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 each result in section 12(b)(1) by the respective 
price election you selected for each type or variety;
    (3) Totaling the results in section 12(b)(2);
    (4) Multiplying the total production to count of each type or 
variety, if applicable, (see section 12(c)) by the respective price 
election you selected;
    (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
    (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 state quality standards, if specified in the Special 
Provisions, or the appropriate USDA grade standard (if no state standard 
is specified); 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; 74 FR 32057, July 7, 2009; 74 FR 35113, July 
20, 2009; 76 FR 4804, Jan. 27, 2011]

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)

[[Page 323]]

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 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

[[Page 324]]

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:

----------------------------------------------------------------------------------------------------------------
                   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,

[[Page 325]]

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 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

[[Page 326]]

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 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.

[[Page 327]]

    (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;
    (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 National 
Institute of Food and Agriculture 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

[[Page 328]]

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) 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:

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    (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;
    (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

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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;
    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; 76 FR 
4804, Jan. 27, 2011]

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

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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.
    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

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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.

  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

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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.

                           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

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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 
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

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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 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 2013 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

                             1. Definitions

    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.
    Fresh peach production. Peach production from insurable acreage 
that:
    (1) Is sold, or could be sold, for human consumption without 
undergoing any change in the basic form, such as peeling, juicing, 
crushing, etc.
    (2) Grades at least U.S. Extra No. 1 or better, and consisting of a 
2\1/4\ inch minimum diameter, unless otherwise specified in the Special 
Provisions.
    (3) Is from acreage that is designated as fresh peaches on the 
acreage report;
    (4) Follows the recommended cultural practices generally in use for 
fresh peach acreage in the area in a manner generally recognized by 
agricultural experts;
    (5) Is from acreage that you certify, and if requested by us, 
provide verifiable records to support, that at least 50 percent of the 
total production from acreage reported as fresh peach acreage was sold 
as fresh peaches in one or more of the four most recent crop years; and
    (6) Is sold or could have been sold for a price that is not less 
than the applicable fresh peach price election for the applicable crop 
year in the actuarial documents. If the fresh peach production is sold 
or could have been sold for a price less than the applicable fresh peach 
price election for the applicable crop year in the actuarial documents, 
you must provide verifiable records to show that the price received was 
at least the amount paid by buyers for fresh peaches in the area in 
which you sell your peaches.

[[Page 336]]

    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.
    Post production cost. The costs, as specified in the Special 
Provisions, associated with activities that occur during harvesting, 
packing, transportation, and marketing, as determined by FCIC using 
regional peach price data of peach production budgets from regional 
respective universities extension, other USDA agencies, and other third 
party resources.
    Processing peach production. Peach production from insurable acreage 
that is:
    (i) Sold, or could be sold, for the purpose of undergoing a change 
to its basic structure such as peeling, juicing, crushing, etc.; or
    (ii) From acreage designated as processing peaches on the acreage 
report.
    Set out. Transplanting the tree into the orchard.

                            2. Unit Division.

    In addition to the requirements contained in section 34 of the Basic 
Provisions, optional units may be established if each optional unit is:
    (a) Located on non-contiguous land; or
    (b) By fresh and processing as 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 
(Sec. 457.8):
    (a) You may select a separate coverage level for all fresh peach 
acreage and for all processing peach acreage. For example, if you choose 
the 55 percent coverage level for all fresh peach acreage, you may 
choose the 75 percent coverage level for all processing peach acreage.
    (1) Notwithstanding paragraph (a) of this section, if you elect the 
Catastrophic Risk Protection (CAT) level of coverage for fresh peach 
acreage or processing peach acreage, the CAT level of coverage will be 
applicable to all insured peach acreage in the county of both fresh and 
processing peaches.
    (2) If you only have fresh peach acreage designated on your acreage 
report and processing peach acreage is added after the sales closing 
date, we will assign a coverage level equal to the coverage level you 
selected for your fresh peach acreage.
    (3) If you only have processing peach acreage designated on your 
acreage report and fresh peach acreage is added after the sales closing 
date, we will assign a coverage level equal to the coverage level you 
selected for your processing peach acreage.
    (b) 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 fresh and processing peaches. If 
the Special Provisions allow different price elections, you may select a 
separate price election for all your fresh peaches and for all your 
processing peaches. If the Special Provisions do not allow for different 
price elections, the price elections you choose for fresh peaches and 
processing peaches must have the same percentage relationship to the 
maximum price offered by us for fresh and processing peaches. For 
example, if you choose 100 percent of the maximum price election for 
fresh peaches, you must choose 100 percent of the maximum price election 
for processing peaches.
    (c) You must report, not later than the production reporting date 
designated in section 3 of the Basic Provisions, separately by fresh and 
processing peach acreage, as applicable:
    (1) Any event or action that could impact the yield potential of the 
insured crop including, interplanting of a perennial crop, removal of 
trees, any tree damage, change in practices, or any other circumstance 
that may reduce the expected 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 trees, variety, 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;
    (iii) The planting pattern; and
    (iv) Any other reasonable and pertinent information that we request 
in order to establish your approved yield.
    (d) We will reduce the yield used to establish your production 
guarantee, as necessary, based on our estimate of the effect of any 
situation listed in sections 3(c)(1) through (4). If the situation 
occurred:
    (1) Before the beginning of the insurance period, we will reduce the 
yield used to establish your production guarantee for the current crop 
year as necessary. If you fail to notify us of any circumstance that may 
reduce your yields from previous levels, we

[[Page 337]]

will reduce your production guarantee at any time we become aware of the 
circumstance;
    (2) Or may occur after the beginning of the insurance period and you 
notify us by the production reporting date, the yield used to establish 
your production guarantee is due to an uninsured cause of loss;
    (3) Or may occur after the beginning of the insurance period and you 
fail to notify us by the production reporting date, production lost due 
to uninsured causes equal to the amount of the reduction in yield used 
to establish your production guarantee will be applied in determining 
any indemnity (see section 12(c)(1)(ii). We will reduce the yield used 
to establish your production guarantee for the subsequent crop year.
    (e) 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 (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 November 20.

                          6. Report of Acreage.

    In addition to the requirements contained in section 6 of the Basic 
Provisions, you must report and designate all acreage of peaches as 
fresh or processing peaches by the acreage reporting date. Any acreage 
not meeting all the requirements to qualify for fresh peach production 
must be designated on the acreage report as processing peach production.

                             7. Insured Crop

    In accordance with section 8 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 varieties of peaches that are 
grown for the production of Fresh or Processing Peaches.
    (d) That are grown in an orchard that, if inspected, is considered 
acceptable by us;
    (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; and
    (f) That are grown for:
    (1) Fresh peach production; or
    (2) Processing peach production.

                          8. 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, 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.

                           9. Insurance Period

    (a) In accordance with the provisions of section 11 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 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 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 section 9(a)(1) of this section, for each 
subsequent crop year that the policy remains continuously in force,

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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.

                           10. 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 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 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.

                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 in accordance with our 
procedures.
    (b) In addition to the requirements of section 14 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:
    (1) 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.
    (2) 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.
    (3) 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.
    (4) 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 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 fresh and processing 
peaches, as applicable, by the respective production guarantee;
    (2) Multiplying each result in section 12(b)(1) by the respective 
price election;
    (3) Totaling the results in section 12(b)(2);
    (4) Multiplying the total production of fresh and processing peaches 
to be counted, as applicable (see subsection 12(c)) by the respective 
price election;
    (5) Totaling the results in section 12(b)(4);
    (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.

    Example: You have a 100 percent share in one basic unit with 10 
acres of fresh peaches and 5 acres of processing peaches designated on 
your acreage report, with a 300 bushel per acre production guarantee for 
both fresh and

[[Page 339]]

processing peaches, and you select 100 percent of the price election of 
$15.50 per bushel for fresh peaches and $6.50 per bushel for processing 
peaches. You harvest 2,500 bushels of fresh peaches and 500 bushels of 
processing peaches. Your indemnity will be calculated as follows:
    (A) 10 acres x 300 bushels = 3,000-bushel production guarantee of 
fresh peaches;
    5 acres x 300 bushels = 1,500-bushel production guarantee of 
processing peaches;
    (B) 3,000-bushel production guarantee x $15.50 price election = 
$46,500 value of the production guarantee for fresh peaches; 1,500-
bushel production guarantee x $6.50 price election = $9,750 value of the 
production guarantee for processing peaches;
    (C) $46,500 value of the production guarantee for fresh peaches + 
$9,750 value of the production guarantee for processing peaches = 
$56,250 total value of the production guarantee;
    (D) 2,500 bushels of fresh peach production to count x $15.50 price 
election = $38,750 value of the fresh peach production to count; 500 
bushels of processing peach production to count x $6.50 price election = 
$3,250 value of the processing peach production to count;
    (E) $38,750 value of the fresh peach production to count + $3,250 
value of the processing peach production to count = $42,000 total value 
of the production to count;
    (F) $56,250 total value of the production guarantee--$42,000 total 
value of the production to count = $14,250 value of loss; and
    (G) $14,250 value of loss x 100 percent share = $14,250 indemnity 
payment.
    [End of Example]

    (c) The total production to count (in 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) From which production 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 peach production that would be marketable if 
harvested;
    (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 marketable peach 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) For fresh peaches by:
    (A) Dividing the value of the damaged peaches minus the post 
production cost specified in the Special Provisions, by the fresh peach 
price election; and
    (B) Multiplying the result of section 12(c)(3)(i)(A) (not to exceed 
1.00) by the number of bushels of the damaged fresh peaches.
    (ii) For processing peaches by:
    (A) Dividing the value of the damaged peaches minus the post 
production cost specified in the Special Provisions, by the processing 
peach price election; and
    (B) Multiplying the result of section 12(c)(3)(ii)(A) (not to exceed 
1.00) by the number of bushels of the damaged processing peaches.
    (4) Peaches that cannot be marketed due to insurable causes will not 
be considered production to count.

                     13. 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; 77 FR 52592, Aug. 31, 2012]

Sec. 457.154  Processing sweet corn crop insurance provisions.

    The Processing Sweet Corn Crop Insurance Provisions for the 2014 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)

[[Page 340]]

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 National Institute of Food and 
Agriculture 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 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.
    Price election. In lieu of the definition of price election in the 
Basic Provisions, the price election will be the base contract price 
stated in your processor contract.
    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 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, unless the 
contracts are for different types. Your base contract price will be the 
weighted average of all applicable base contract prices.
    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 percentage for all the 
processing sweet corn in the county insured under this policy. 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 insurance guarantee per acre is expressed as tons of 
unhusked ear weight. Any

[[Page 341]]

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;
    (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;

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    (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.

                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;

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    (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 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, as amended at 76 FR 4804, Jan. 27, 2011; 78 
FR 55173, Sept. 10, 2013]

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.

[[Page 344]]

                             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 National Institute of Food and 
Agriculture 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 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

[[Page 345]]

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:
    (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

[[Page 346]]

    (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
    (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

[[Page 347]]

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;
    (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; 
76 FR 4805, Jan. 27, 2011]

Sec. Sec. 457.156-457.157  [Reserved]

Sec. 457.158  Apple crop insurance provisions.

    The apple crop insurance provisions for the 2011 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 348]]

                     Apple Crop Insurance Provisions

                             1. Definitions

    Apple production. All fresh apple production and processing apple 
production from 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 
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 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 apple production. (1) Apples:
    (i) That are sold, or could be sold, for human consumption without 
undergoing any change in the basic form, such as peeling, juicing, 
crushing, etc.;
    (ii) From acreage that is designated as fresh apples on the acreage 
report;
    (iii) That follow the recommended cultural practices generally in 
use for fresh apple acreage in the area in a manner generally recognized 
by agricultural experts; and
    (iv) From acreage that you certify, and, if requested by us provide 
verifiable records to support, that at least 50 percent of the 
production from acreage reported as fresh apple acreage from each unit, 
was sold as fresh apples in one or more of the four most recent crop 
years.
    (2) Acreage with production not meeting all the requirements above 
must be designated on the acreage report as processing apple production.
    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.
    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 apple production. Apples from insurable acreage failing 
to meet the insurability requirements for fresh apple production that 
are:
    (1) Sold, or could be sold for the purpose of undergoing a change to 
the basic structure such as peeling, juicing, crushing, etc.; or
    (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. A category of apples as designated 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 type as 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 coverage level for all fresh apple 
acreage and only one coverage level for all processing apple acreage. 
For example, if you choose the 55 percent coverage level for all your 
fresh apple acreage (i.e., fresh, varietal group types), you may choose 
the 75 percent coverage level for all your processing apple acreage. 
However, if you elect the Catastrophic Risk Protection (CAT) level of 
insurance for fresh apple acreage or processing apple acreage, the CAT 
level of coverage will be applicable to all insured apple acreage in the 
county. If you only have fresh apple acreage designated on your acreage 
report and processing apple acreage is added after the sales closing 
date,

[[Page 349]]

we will assign a coverage level equal to the coverage level you selected 
for your fresh apple acreage. If you only have processing apple acreage 
designated on your acreage report and fresh apple acreage is added after 
the sales closing date, we will assign a coverage level equal to the 
coverage level you selected for your processing apple acreage.
    (b) 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.
    (c) You must report, by the production reporting date designated in 
section 3 of the Basic Provisions, by type, if applicable:
    (1) Any event or action that could impact the yield potential of the 
insured crop including interplanted perennial crop, removal of trees, 
any damage, change in practices, or any other circumstance that may 
reduce the expected 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.
    (d) We will reduce the yield used to establish your production 
guarantee, as necessary, based on our estimate of the effect of any 
situation listed in sections 3(c)(1) through (c)(4). If the situation 
occurred:
    (1) Before the beginning of the insurance period, the yield used to 
establish your production guarantee will be reduced for the current crop 
year regardless of whether the situation was due to an insured or 
uninsured cause of loss. If you fail to notify us of any circumstance 
that may reduce your yields from previous levels, we will reduce the 
yield used to establish your production guarantee at any time we become 
aware of the circumstance;
    (2) Or may occur after the beginning of the insurance period and you 
notify us by the production reporting date, the yield used to establish 
your production guarantee will be reduced for the current crop year only 
if the potential reduction in the yield used to establish your 
production guarantee is due to an uninsured cause of loss; or
    (3) Or may occur after the beginning of the insurance period and you 
fail to notify us by the production reporting date, production lost due 
to uninsured causes equal to the amount of the reduction in the yield 
used to establish your production guarantee will be applied in 
determining any indemnity (see section 12(c)(1)(ii)). We will reduce the 
yield used to establish your production guarantee for the subsequent 
crop year.

                           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, in accordance with the terms of the policy, your apple 
policy is canceled or terminated by us for any crop year after insurance 
attached for that crop year, but on or before the cancellation and 
termination dates, whichever is later, insurance will be considered not 
to have 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. Any acreage not qualifying for fresh apple 
production is not eligible for the Optional Coverage for Fresh Fruit 
Quality Adjustment option contained in section 14 of these Crop 
Provisions. If you designate fresh apple acreage on the acreage report, 
you are certifying at least 50 percent of the production from acreage 
reported as fresh apple acreage, by unit, was sold as fresh apples in 
one or more of the four most recent crop years in accordance with the 
definition of ``fresh apple production'' and that you have the records 
to support such production.

[[Page 350]]

                             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;
    (2) 150 bushels of apples per acre in Area B; or
    (3) 200 bushels of apples per acre in Area C;
    (c) That are grown in an orchard that, if inspected, is considered 
acceptable by us; and
    (d) That are grown for:
    (1) Fresh apple production; or
    (2) Processing apple production.

                          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, coverage begins on February 1 of 
the calendar year the insured crop normally blooms in California and 
November 21 of the calendar year prior to the calendar year the insured 
crop normally blooms in all other States. Notwithstanding the previous 
sentence, 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

[[Page 351]]

    (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.

                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 in accordance with our 
procedures.
    (b) In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (1) You must notify us at least 3 days prior to the date harvest 
should have started if the crop will not be harvested.
    (2) 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.
    (3) 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 and by the percent of 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 and by the 
percent of 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.
    Basic Coverage Example:

    You have a 100 percent share in one basic unit with 10 acres of 
fresh apples and 5 acres of processing apples designated on your acreage 
report, with a 600 bushel per acre production guarantee for both fresh 
and processing apples, and you select 100 percent of the price election 
on a price election of $9.10 per bushel for fresh apples and $2.50 per 
bushel for processing apples. You harvest 5,000 bushels of fresh apples 
and 1,000 bushels of processing apples, all grading U.S. No. 1 
Processing or better. Your indemnity will be calculated as follows:
    A. 10 acres x 600 bushels = 6,000-bushel production guarantee of 
fresh apples;
    5 acres x 600 bushels = 3,000-bushel production guarantee of 
processing apples;
    B. 6,000-bushel production guarantee x $9.10 price election x 100 
percent of price election = $54,600 value of production guarantee for 
fresh apples;
    3,000-bushel production guarantee x $2.50 price election x 100 
percent of price election = $7,500 value of production guarantee for 
processing apples;
    C. $54,600 value of production guarantee for fresh apples + $7,500 
value of production guarantee for processing apples = $62,100.00 total 
value of the production guarantee;
    D. 5,000 bushels of fresh apple production to count x $9.10 price 
election x 100 percent of price election = $45,500 value of fresh apple 
production to count;
    1,000 bushels of processing apple production to count x $2.50 price 
election x 100 percent of price election = $2,500 value of processing 
apple production to count;
    E. $45,500 value of fresh apple production to count + $2,500 value 
of processing apple production to count = $48,000 total value of 
production to count;

[[Page 352]]

    F. $62,100 total value of the production guarantee - $48,000 total 
value of production to count = $14,100.00 value of loss; and
    G. $14,100 value of loss x 100 percent share = $14,100 indemnity 
payment.

                            [End of Example]

    (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.
    (d) Any apple production not graded or appraised prior to the 
earlier of the time apples are placed in storage or the date the apples 
are delivered to a packer, processor, or other handler will not be 
considered damaged apple production and will be considered production to 
count.

                     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. Insureds who 
select this option cannot receive less than the indemnity due under 
section 12.
    (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 apple production 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 apple production is not eligible for coverage under this 
option.
    (4) In lieu of sections 12(c)(1)(iii), (iv) and (2), the production 
to count will include all appraised and harvested production from all of 
the fresh apple acreage in the unit, adjusted in accordance with this 
option.
    (5) If appraised or harvested fresh apple production for the block 
or unit, as applicable, is damaged to the extent that more than 20 
percent of the apple production does not grade U.S. Fancy or better the 
following adjustments to the production to count 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 
one 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 one 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 one 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 or better, all such 
sold production will be included as production to count under this 
option.
    (c) Any apple production not graded or appraised prior to the 
earlier of the time apples are placed in storage or the date the apples 
are delivered to a packer, processor, or other handler will not be 
considered damaged apple production and will be considered production to 
count under this option.

[[Page 353]]

    (d) Any adjustments that reduce your production to count under this 
option will not be applicable when determining production to count for 
APH purposes.

      Optional Coverage for Fresh Fruit Quality Adjustment Example:

    You have a 100 percent share in 10 acres of fresh apples designated 
on your acreage report, with a 600 bushel per acre guarantee, and you 
select 100 percent of the price election on a price election of $9.10 
per bushel. You harvest 5,000 bushels of apples from your designated 
fresh apple acreage, but only 2,650 of those bushels grade U.S. Fancy or 
better. Assuming you do not sell any of your fresh apple production as 
U.S. Fancy or better, your indemnity would be calculated as follows:
    A. 10 acres x 600 bushels per acre = 6,000-bushel production 
guarantee of fresh apples;
    B. 6,000-bushel production guarantee of fresh apples x $9.10 price 
election x 100 percent of price election = $54,600 value of production 
guarantee for fresh apple acreage;
    C. The value of the fresh apple production to count is determined as 
follows:
    i. 5,000 bushels harvested - 2,650 bushels that graded U.S. Fancy or 
better = 2,350 bushels of fresh apple production not grading U.S. Fancy 
or better;
    ii. 2,350/5,000 = 47 percent of fresh apple production not grading 
U.S. Fancy or better;
    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 = 21 percent;
    v. 40 percent + 21 percent = 61 percent;
    vi. 5,000 bushels harvested x .61 (61 percent) = 3,050 bushels of 
fresh apple production not grading U.S. Fancy or better;
    vii. 5,000 bushels harvested - 3,050 bushels of fresh apple 
production not grading U.S. Fancy or better = 1,950 bushels of adjusted 
fresh apple production to count;
    viii. 1,950 bushels of adjusted fresh apples production to count x 
$9.10 price election x 100 percent of price election = $17,745 value of 
fresh apple production to count;
    D. $54,600 value of production guarantee for fresh apples - $17,745 
value of fresh apple production to count = $36,855 value of loss;
    E. $36,855 value of loss x 100 percent share = $36,855 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; 75 FR 52231, Aug. 25, 2010]

Sec. 457.159  Stonefruit crop insurance provisions.

    The Stonefruit Crop Insurance Provisions for the 2011 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

                             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.
    Grade standards. The United States Standards for Grades of Peaches, 
the United States Standards for Grades of Nectarines, the United States 
Standards for Grades of Apricots, and the United States Standards for 
Grades of Fresh Plums and Prunes, or other such standards specified in 
the Special Provisions.
    Graft. To unite a shoot or bud with a rootstock in accordance with 
recommended practices to form a living union.
    Harvest. The physical removal of mature stonefruit from the tree 
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, or as specified in 
the Special Provisions:

------------------------------------------------------------------------
                                                                 Pounds
                             Crop                               per lug
------------------------------------------------------------------------
Fresh Apricots...............................................         24
Fresh Nectarines.............................................         25
Fresh Freestone Peaches......................................         25
Fresh Plums..................................................         28
------------------------------------------------------------------------

    Weight for Processing Apricots, Processing Cling Peaches, and 
Processing Freestone Peaches is specified in tons.
    Marketable. Stonefruit production that meets or exceeds the quality 
standards for U.S. No. 1 in accordance with the applicable

[[Page 354]]

grade standards or other standards as specified in the Special 
Provisions, or if stonefruit production fails to meet the applicable 
grade standards, stonefruit production that is accepted by a packer, 
processor or other handler.
    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) Fresh Plums;
    (e) Processing Apricots;
    (f) Processing Cling Peaches;
    (g) Processing Freestone Peaches; and
    (h) Other crops listed in the Special Provisions.
    Ton. Two thousand (2,000) pounds avoirdupois.
    Type. A category of a stonefruit crop with similar characteristics 
that are grouped for insurance purposes, as listed in the Special 
Provisions.

                            2. Unit Division

    In lieu of 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: Optional units may be established by 
type 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 of a crop, 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 of cling peach, 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, 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 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 any 
situation listed in sections 3(b)(1) through (b)(4). If the situation 
occurred:
    (1) Before the beginning of the insurance period, the yield used to 
establish your production guarantee will be reduced for the current crop 
year regardless of whether the situation was due to an insured or 
uninsured cause of loss. If you fail to notify us of any circumstance 
that may reduce your yields from previous levels, we will reduce the 
yield used to establish your production guarantee at any time we become 
aware of the circumstance;
    (2) Or may occur after the beginning of the insurance period and you 
notify us by the production reporting date, the yield used to establish 
your production guarantee will be reduced for the current crop year only 
if the potential reduction in the yield used to establish your 
production guarantee is due to an uninsured cause of loss; or
    (3) Or may occur after the beginning of the insurance period and you 
fail to notify us by the production reporting date, production lost due 
to uninsured causes equal to the amount of the reduction in yield used 
to establish your production guarantee will be applied in determining 
any indemnity (see section 11(c)(1)(ii)). We will reduce the yield used 
to establish your production guarantee for the subsequent crop year.

                           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, or as specified in the Special 
Provisions.

[[Page 355]]

                 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, or as specified in the Special 
Provisions.

                             6. Insured Crop

    In accordance with section 8 of the Basic Provisions, the crop 
insured will be all acreage 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 or have 
subsequently become commercially available;
    (2) Are adapted to the area;
    (3) Are grown on root stock that is adapted to the area;
    (4) Are in compliance with the applicable State's Tree Fruit 
Agreement or related crop advisory board for the state (for each insured 
crop and type), when such regulations exist;
    (5) 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 
one of the four most recent actual production history crop years, unless 
we inspect such acreage and give our approval in writing;
    (6) Have, after being set out or grafted, reached at least the fifth 
growing season. However, we may give our approval in writing to insure 
acreage that has not reached this age if it meets the requirements of 
6(b)(5); and
    (7) Are grown in an orchard that, if inspected, is considered 
acceptable by us.

                          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 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;
    (iii) In all states except California, September 30 for all fresh 
plums;
    (iv) In California only, October 20 for all fresh plums; or
    (v) 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) 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;

[[Page 356]]

    (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.

                         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 by its respective 
production guarantee;
    (2) Multiplying each result of section 11(b)(1) by the respective 
price election for the type and by the percent of the price election;
    (3) Totaling the results of section 11(b)(2) (if there is only one 
type, 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, by the respective price election and by the percent of 
the 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)(3) (if there is only one type, 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.
    Scenario 1:
    You select 75 percent coverage level and 100 percent of the price 
election on 50.0 acres of Type A stonefruit with 100 percent share in 
the unit. The production guarantee is 500.0 lugs per acre and the price 
election is $6.00 per lug. You harvest 5,000 lugs. Your indemnity would 
be calculated as follows:
    (1) 50.0 acres x 500.0 lugs = 25,000-lug production guarantee;
    (2) 25,000 lugs x $6.00 price election x 100 percent of the price 
election = $150,000 value of production guarantee;
    (4) 5,000 harvested lugs x $6.00 price election x 100 percent of the 
price election = $30,000 value of production to count;
    (6) $150,000-$30,000 = $120,000 loss; and
    (7) 120,000 x 1.000 share = $120,000 indemnity payment.
    Scenario 2:
    In addition to the above information in Scenario 1, you have an 
additional 50.0 acres of Type B stonefruit with 100 percent share in the 
unit. The production guarantee is 300.0 lugs per acre and the price 
election is $3.00 per lug. You harvest 3,000 lugs. Your indemnity would 
be calculated as follows:
    (1) 50.0 acres x 500.0 lugs Type A = 25,000-lug guarantee; and 50.0 
acres x 300.0 lugs Type B = 15,000-lug guarantee;
    (2) 25,000 lugs x $6.00 price election x 100 percent of the price 
election = $150,000 value

[[Page 357]]

of guarantee for Type A; and 15,000 lugs x $3.00 price election x 100 
percent of the price election = $45,000 value of guarantee for Type B;
    (3) $150,000 + $45,000 = $195,000 total value of production 
guarantee;
    (4) 5,000 harvested lugs Type A x $6.00 price election x 100 percent 
of the price election = $30,000 value of production to count; and 3,000 
harvested lugs Type B x $3.00 price election x 100 percent of the price 
election = $9,000 value of production to count;
    (5) $30,000 + $9,000 = $39,000 total value of production to count;
    (6) $195,000-$39,000 = $156,000 total loss; and
    (7) $156,000 loss x 1.000 share = $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 grade standards, or fails to meet 
the applicable grade standards but is or could be sold for any use other 
than fresh packed stonefruit.
    (4) Harvested fresh or processing stonefruit production 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 value per lug or ton of marketable 
production by the highest price election for the same type and 
multiplying the result (not to exceed 1.00) by the quantity of such 
production; or
    (ii) For all other fresh stonefruit, by multiplying the number of 
tons that could be marketed by the value per ton and dividing that 
result by the highest price election available for the same 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; 75 
FR 44717, July 29, 2010]

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.

[[Page 358]]

    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 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.

[[Page 359]]

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:
    (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

[[Page 360]]

    (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.

                         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

[[Page 361]]

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.
    (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).

[[Page 362]]

    (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 2011 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

                             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.
    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:
    (a) You must elect to insure your canola and rapeseed with either 
revenue protection or yield protection by the sales closing date; and
    (b) In counties with both fall and spring sales closing dates for 
the insured crop:
    (1) If you do not have any insured fall planted acreage of the 
insured crop, you may change your coverage level, or your percentage of 
projected price (if you have yield protection), or elect revenue 
protection or yield protection, until the spring sales closing date; or
    (2) If you have any insured fall planted acreage of the insured 
crop, you may not change your coverage level, or your percentage of 
projected price (if you have yield protection), or elect revenue 
protection or yield protection, 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

    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 Alabama and 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.
------------------------------------------------------------------------


[[Page 363]]

                             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) We will not insure any acreage that does not meet the rotation 
requirements contained in the Special Provisions;
    (b) Whenever the Special Provisions designate only a fall final 
planting date, any acreage of canola or rapeseed 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 fall type 
of the insured crop unless we agree that replanting is not practical;
    (c) Whenever the Special Provisions designate both fall and spring 
final planting dates:
    (1) Any fall canola or rapeseed 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 fall type 
of the insured crop to maintain insurance based on the fall type unless 
we agree that replanting is not practical. If it is not practical to 
replant to the fall type of canola or rapeseed but is practical to 
replant to a spring type, you must replant to a spring type to keep your 
insurance based on the fall type in force; and
    (2) Any fall canola or rapeseed acreage that is replanted to a 
spring type of the same crop when it was practical to replant the fall 
type will be insured as the spring type and the production guarantee, 
premium, projected price, and harvest price applicable to the spring 
type will be used. In this case, the acreage will be considered to be 
initially planted to the spring type; and
    (d) Whenever the Special Provisions designate a spring final 
planting date, any acreage of spring canola or rapeseed 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; or
    (e) Whenever the Special Provisions designate only a spring final 
planting date, any acreage of fall planted canola or rapeseed is not 
insured unless you request such coverage on or before the spring sales 
closing date, and we determine in writing that the acreage has an 
adequate stand in the spring to produce the yield used to determine your 
production guarantee. However, if we fail to inspect the acreage by the 
spring final planting date, insurance will attach as specified in 
section 7(e)(3):
    (1) Your request for coverage must include the location and number 
of acres of fall planted canola or rapeseed;
    (2) The fall planted canola or rapeseed will be insured as a spring 
type for the purpose of the production guarantee, premium, projected 
price, and harvest price, if applicable;
    (3) 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;
    (4) Any acreage of such fall planted canola or rapeseed 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; and
    (5) If fall planted acreage is not to be insured it must be recorded 
on the acreage report as uninsured fall planted acreage.

                           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 
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;
    (h) Failure of the irrigation water supply due to a cause of loss 
specified in sections 9(a) through (g) that also occurs during the 
insurance period; or
    (i) For revenue protection, a change in the harvest price from the 
projected price, unless FCIC can prove the price change was the direct 
result of an uninsured cause of loss specified in section 12(a) of the 
Basic Provisions.

[[Page 364]]

                         10. Replanting Payment

    (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) Except as specified in section 10(a)(1), you must comply with 
all requirements regarding replanting payments contained in section 13 
of the Basic Provisions;
    (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; and
    (4) The replanted crop must be seeded at a rate sufficient to 
achieve a total (undamaged and new seeding) plant population that is 
considered appropriate by agricultural experts for the insured crop, 
type and practice.
    (b) Unless otherwise specified in the Special Provisions, the amount 
of the replanting payment per acre will be the lesser of 20 percent of 
the production guarantee or 175 pounds, multiplied by your projected 
price, multiplied by your share.
    (c) 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.
    (d) If the acreage is replanted to an insured crop type that is 
different than the insured crop type originally planted on the acreage:
    (1) The production guarantee, premium, and projected price and 
harvest price, as applicable, will be adjusted based on the replanted 
type;
    (2) Replanting payments will be calculated using your projected 
price and production guarantee for the crop type that is replanted and 
insured; and
    (3) A revised acreage report will be required to reflect the 
replanted type, as applicable.

                11. Duties in the Event of Damage or Loss

    Representative samples are required in accordance with section 14 of 
the Basic Provisions.

                         12. 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 number of insured acres of each type, as 
applicable, by your respective:
    (i) Yield protection guarantee (per acre) if you elected yield 
protection; or
    (ii) Revenue protection guarantee (per acre) if you elected revenue 
protection;
    (2) Totaling the results of section 12(b)(1)(i) or 12(b)(1)(ii), 
whichever is applicable;
    (3) Multiplying the production to count of each type, as applicable, 
by your respective:
    (i) Projected price if you elected yield protection; or
    (ii) Harvest price if you elected revenue protection;
    (4) Totaling the results of section 12(b)(3)(i) or 12(b)(3)(ii), 
whichever is applicable;
    (5) Subtracting the result of section 12(b)(4) from the result of 
section 12(b)(2); and
    (6) Multiplying the result of section 12(b)(5) by your share.
    For example:
    You have 100 percent share in 50 acres of canola in the unit with a 
production guarantee (per acre) of 650 pounds, your projected price is 
$.1220, your harvest price is $.1110, and your production to count is 
31,000 pounds.
    If you elected yield protection:
    (1) 50 acres x (650 pound production guarantee x $.1220 projected 
price) = $3,965.00 value of the production guarantee
    (3) 31,000 pound production to count x $.1220 projected price = 
$3,782.00 value of the production to count
    (5) $3,965.00-$3,782.00 = $183.00
    (6) $183.00 x 1.000 share = $183.00 indemnity; or
    If you elected revenue protection:
    (1) 50 acres x (650 pound production guarantee x $.1220 projected 
price) = $3,965.00 revenue protection guarantee
    (3) 31,000 pound production to count x $.1110 harvest price = 
$3,441.00 value of the production to count
    (5) $3,965.00-$3,441.00 = $524.00
    (6) $524.00 x 1.000 share = $524.00 indemnity.
    (c) The total production to count (pounds) from all insurable 
acreage on the unit will include:
    (1) All appraised production as follows:
    (i) For yield protection, not less than the production guarantee and 
for revenue protection, not less than the amount of production that when 
multiplied by the harvest price equals the revenue protection 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 acceptable production records;

[[Page 365]]

    (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;
    (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 in accordance 
with the quality adjustment factors 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 an unadjusted weight 
basis.

                            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

    Your prevented planting coverage will be 60 percent of your 
production guarantee for timely planted acreage. If you have additional 
coverage and pay an additional premium, you may increase your prevented 
planting coverage to a level specified in the actuarial documents.

[62 FR 65997, Dec. 17, 1997, as amended at 67 FR 43526, June 28, 2002; 
75 FR 15889, Mar. 30, 2010]

[[Page 366]]

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 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

[[Page 367]]

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, 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, 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.

[[Page 368]]

    (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.

                                 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

[[Page 369]]

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.
    (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

[[Page 370]]

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;
    (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,

[[Page 371]]

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
    (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

[[Page 372]]

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) 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

[[Page 373]]

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 FR 37241, June 28, 2005; 71 FR 74456, Dec. 12, 2006]

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.
    (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

[[Page 374]]

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 amount 
of insurance established 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; 71 FR 74456, Dec. 12, 2006]

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 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

[[Page 375]]

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 2008 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

                             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 contained in the 
Basic Provisions, 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 contained in the 
Basic Provisions, 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 this definition 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 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

[[Page 376]]

the insurance period is the date immediately following planting (unless 
otherwise specified in the Special Provisions) as follows:
    (a) October 10 for North Dakota, South Dakota, and Wyoming; and
    (b) October 31 for all other states.

                            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 due to a cause of loss 
specified in sections 8(a) through (g) that also 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 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.
    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 bushel guarantee - 800 bushel production to count = 700 
bushel loss;
    (3) 700 bushels 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

[[Page 377]]

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 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 bushels, 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.

                            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 per day for the first through the tenth day; and
    (b) Three percent per day 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 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.

[67 FR 3037, Jan. 23, 2002, as amended at 67 FR 5925, Feb. 8, 2002; 72 
FR 48229, Aug. 23, 2007]

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)

[[Page 378]]

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.
    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

[[Page 379]]

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.

                           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,

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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 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

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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:
    (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 2014 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.
    Approved average revenue per acre. The total of your average gross 
sales per acre based on the most recent consecutive four years of sales 
records building to six 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 six 
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 the two most recent consecutive years of your 
gross sales per acre and two years of the T-revenue; or
    (2) If you do not provide any gross sales records, the T-revenue.
    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 crop year your gross sales were $100,000 and 
your net acres of pecans were 100, then your average gross sales per 
acre for the crop year would be $1,000.
    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 a 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.
    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.

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    Interplanted. Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Market price. The market price is:
    (1) The average of the AMS prices for the nearest location for 
similar quality, quantity, and variety of in-shell 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, unless otherwise provided in the Special Provisions. 
For example, if you harvest production on November 14 but do not sell 
the production, 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; or
    (2) If AMS prices are not published for the week, 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).
    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.
    Top work. To graft scions of one pecan variety onto the tree or 
branch of another pecan variety.
    Transitional revenue (T-revenue). A value determined by FCIC and 
published in the actuarial documents.
    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.

    Except as provided in these Crop Provisions, for both years of the 
two-year coverage module a unit will be:
    (a) In addition to the requirements of section 34(a)(4) of the Basic 
Provisions, an enterprise unit if the insured crop is located on at 
least two parcels of non-contiguous land and at least two of the parcels 
must contain at least the lesser of 20 acres or 20 percent of the 
insured crop acreage in the enterprise unit;
    (b) A basic unit as defined in section 1 of the Basic Provisions; or
    (c) In lieu of the requirements contained in sections 34(b) and (c) 
of the Basic Provisions, basic units may be divided into optional units 
if, for each optional unit, the following criteria are met:
    (1) Each optional unit you select must be located on non-contiguous 
land;
    (2) Separate records of production are provided for at least the 
most recent consecutive two crop years. The records will be used to 
verify that trees from each unit meet the minimum production requirement 
contained in section 8(d) and to establish the approved average revenue 
per acre for the optional units selected; and
    (3) Optional units are selected and identified on the acreage report 
by the acreage reporting date of the first year of the two-year coverage 
module. 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. 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) You fail to provide acceptable records necessary to determine a 
loss for optional units. This will result in optional units being 
adjusted or combined to reflect the actual unit structure at the time of 
discovery. Your

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amount of insurance per acre will be recalculated for the current crop 
year and the subsequent crop year of the two-year coverage module 
(provided another year remains in the two-year coverage module).
    (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 T-revenue 
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.
    (4) Your gross sales amount is assigned in accordance with section 
3(f).
    (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 fail to 
report and you will not be eligible for optional units for both years of 
the two-year coverage module. The gross sales amount assigned by us will 
be not greater than the T-revenue 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 RMA's Web site 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. If 
available from us, you may elect to receive these documents and changes 
electronically. 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

[[Page 384]]

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:
    (1) Any damage to trees, removal of trees, change in practices, 
sequential thinning 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.
    (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 produced at least 600 pounds 
of pecans in-shell per acre (or an amount provided in the Special 
Provisions) in at least one of the previous four crop years, unless we 
inspect and allow insurance by written agreement. This amount of 
production must be achieved subsequent to any top work that occurs 
within a unit;
    (e) That are grown on varieties or a grouping of varieties within a 
unit that are not designated as uninsurable in the Special Provisions;
    (f) That are in an orchard that consists of a minimum of one (1) 
contiguous acre, unless allowed by written agreement; and
    (g) 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.

[[Page 385]]

    (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 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.

[[Page 386]]

    (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. In the event you 
are unable to provide separate acceptable records for any:
    (1) Optional unit, we will combine all optional units for which such 
records were not provided and this will be the unit structure the 
current crop year and the subsequent crop year of the two-year coverage 
module (provided another year remains in the two-year coverage module); 
or
    (2) Basic unit, we will allocate commingled production or revenue to 
each basic unit in proportion to our liability on the harvested acreage 
for each unit.
    (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;
    (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 price received for each day the pecans were sold. 
(If the price received is not verifiable by sales receipts or if the 
pecan production was direct marketed, the market price will be used. 
Unless otherwise provided in the Special Provisions, and excluding 
pecans sold under contract, the price received will be not less than 95 
percent of the lowest AMS price for the nearest location for similar 
quality, quantity, and variety of in-shell pecans published during the 
week you sell your pecans. If AMS prices are not published for the week 
the pecans were sold, the price received will be not less than 95 
percent of the lowest price per pound for in-shell pecans of the same 
variety or varieties insured offered by buyers in the area you normally 
market the pecans or the area nearest to you if prices are not available 
in your immediate area on the day you sell your pecans.);
    (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     gross
                  Year                     Acres      pounds   sales per
                                                     per acre     acre
------------------------------------------------------------------------
4......................................        100        750     $1,050
3......................................        100        625       $625
2......................................        100       1250       $750
1......................................        100        200       $250
------------------------------------------------------------------------
Total Average Gross Sales Per Acre = $2,675
------------------------------------------------------------------------

    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 pecan trees in the unit experienced damage to blooms due to a 
late freeze causing low production. You produced, harvested,

[[Page 387]]

and sold 300 pounds per acre of pecans from 70 acres and received an 
actual price of $0.75 per pound. On the other 30 acres, the pecans 
suffered damage due to drought. You elected not to harvest the other 30 
acres of pecans. The 30 acres were appraised at 100 pounds per acre and 
on the day of the appraisal the average AMS price was $0.65. The total 
dollar value of production to count is (300 pounds of pecans x 70 net 
acres x $0.75) + (100 pounds x 30 net acres x $0.65) = $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; 78 FR 13459, Feb. 28, 2013; 78 FR 33691, 
June 5, 2013]

Sec. 457.168  Mustard crop insurance provisions.

    The Mustard Crop Insurance Provisions for the 2009 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:
Mustard Crop Insurance Provisions.

                             1. Definitions

    Base contract price. The price per pound (U.S. dollars) stipulated 
in the processor contract (without regard to discounts or incentives) 
that will be used to determine your price election.
    Harvest. Combining or threshing for seed. A crop that is swathed 
prior to combining is not considered harvested.
    Mustard. A crop of the family Cruciferae.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, mustard seed must be planted in rows. Acreage planted 
in any other manner will not be insurable unless otherwise provided by 
the Special Provisions, actuarial documents, or by written agreement.
    Processor. Any business enterprise regularly engaged in buying and 
processing mustard, that possesses all licenses and permits for 
processing mustard 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 mustard 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 mustard of the types 
specified in the Special Provisions and to deliver the 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 (U.S. dollars).
    Salvage price. The cash price per pound (U.S. dollars) for mustard 
qualifying for quality adjustment in accordance with section 13 of these 
Crop Provisions.
    Swathed. Severance of the stem and seed pods from the ground and 
placing into windrows without removal of the seed from the pod.
    Type. A category of mustard identified as a type in the Special 
Provisions.
    Windrow. Mustard that is swathed and placed in a row.

                            2. Unit Division

    In addition to the requirements of section 34 of the Basic 
Provisions, optional units may also be established by type, if types are 
designated on the Special Provisions.

  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 base contract price percentage for 
all the mustard in the county insured under this policy unless the 
Special Provisions allow different base contract prices by type.
    (b) If base contract prices are allowed by type, you can select one 
base contract price for each type designated in the Special Provisions. 
The base contract prices you choose must have the same percentage 
relationship to the base contract price (maximum price) offered for each 
type. For example, if you

[[Page 388]]

choose 100 percent of the maximum price for a specific type, you must 
also choose 100 percent of the maximum price for all other types.
    (c) If there are multiple base contract prices within the same unit, 
each will be considered a separate price election that will be 
multiplied by the number of insurable acres under applicable processor 
contract. These amounts will be totaled to determine the premium, 
liability, and indemnity for the unit.
    (d) To determine the total production guarantee, apply the lesser of 
the:
    (1) Contracted acres multiplied by the production guarantee (per 
acre);
    (2) Planted acres multiplied by the production guarantee (per acre);
    (3) Total production stated in the contract; or
    (4) For acreage and production contracts only, the contracted acres 
multiplied by the contracted production (per acre).

                           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 in 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 mustard in the county for which a premium rate is 
provided by the actuarial table:
    (1) In which you have a share;
    (2) That is planted for harvest as seed;
    (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; or
    (iii) Planted following the harvest of any other crop in the same 
crop year.
    (b) You will be considered to have a share in the insured crop if, 
under the processor contract, you retain control of the acres on which 
the mustard is grown, your income from the insured crop is dependent on 
the amount of production delivered, and the processor contract provides 
for delivery of the mustard under specified conditions and at a 
stipulated base contract price.
    (c) A commercial mustard 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 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.
    (b) We will not insure any acreage that does not meet the rotation 
requirements, if applicable, contained in the Special Provisions.
    (c) Insurable acreage will be:
    (1) For acreage only based processor contracts and acreage and 
production based processor contracts which specify a maximum number of 
acres, the lesser of:
    (i) The planted acres; or
    (ii) The maximum number of acres specified in the contract;
    (2) For production only based processor contracts, the lesser of:
    (i) The number of acres determined by dividing the production stated 
in the processor contract by the approved yield; or
    (ii) The planted acres.

                           9. 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 unless otherwise 
stated 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 which occur during the insurance period:
    (a) Adverse weather conditions;
    (b) Fire;

[[Page 389]]

    (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; and
    (h) Failure of the irrigation water supply, if applicable, caused by 
a cause of loss specified in section 10(a) through (g) that occurs 
during the insurance period.

                         11. 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 the remaining stand will not 
produce at least 90 percent of the production guarantee for the acreage, 
and it is practical to replant or we require you to replant in 
accordance with section 8(a).
    (b) The maximum amount of the replanting payment per acre will be 
the lesser of 20 percent of the production guarantee (per acre) or 175 
pounds, multiplied by the base contract price applicable to the acreage 
to be replanted, multiplied by your insured share.
    (c) When the mustard 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 that is attributable to 
your share. 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 that we 
may require 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.
    (1) In the event you are unable to provide separate acceptable 
production records:
    (i) For any optional units, we will combine all optional units for 
which acceptable production records were not provided; or
    (ii) 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.
    (2) For any processor contract that stipulates only the amount of 
production to be delivered, and not withstanding 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 
contract(s) forming the basis of the insurance guarantee
    (b) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insurable acreage of each type, if applicable, 
determined in accordance with section 8(c), by its respective production 
guarantee (per acre);
    (2) Multiplying each result in section 13(b)(1) by the respective 
base contract price for each type, if applicable;
    (3) Totaling the results in section 13(b)(2);
    (4) Multiplying the production to be counted for each type, if 
applicable (see section 13(c), by its respective base contract price (If 
you have multiple processor contracts with varying base contract prices 
within the same unit, we will value your production to count by using 
your highest base contract price first and will continue in decreasing 
order to your lowest base contract price based on the amount of 
production insured at each base contract price);
    (5) Totaling the results in section 13(b)(4);
    (6) Subtracting the total in section 13(b)(5) from the total in 
section 13(b)(3); and
    (7) Multiplying the result in section 13(b)(6) by your share.
    Example  1 (with one base contract price for the unit):
    You have 100 percent share in 20 acres of mustard in a unit with a 
650-pound production guarantee (per acre) and a base contract price of 
$0.15 per pound. Due to insurable causes, you are only able to harvest 
10,000 pounds and there is no appraised production. Your indemnity would 
be calculated as follows:
    (1) 20 acres x 650 pounds = 13,000 pound production guarantee;
    (2) 13,000 pounds x $0.15 base contract price = $1,950 value of 
guarantee;
    (3) $1,950 total value of guarantee;
    (4) 10,000 pounds x $0.15 base contract price = $1,500 value of 
production to count;
    (5) $1,500 total value of production to count;
    (6) $1,950-$1,500 = $450 loss; and
    (7) $450 x 100 percent = $450 indemnity payment.
    Example  2 (with two base contract prices for the same 
unit):
    You have 100 percent share in 20 acres of mustard in a unit with a 
650-pound production guarantee (per acre), 10 acres with a base contract 
price of $0.15 per pound, and 10 acres with a base contract price of 
$0.10 per pound. Due to insurable causes, you are only able to harvest 
8,500 pounds and there is no appraised production. Your indemnity would 
be calculated as follows:
    (1) 10 acres x 650 pounds = 6,500-pound production guarantee x $0.15 
base contract price = $975 value guarantee;

[[Page 390]]

    (2) 10 acres x 650 pounds = 6,500-pound production guarantee x $0.10 
base contract price = $650 value guarantee;
    (3) $975 + $650 = $1,625 total value guarantee;
    (4) 6,500 pounds of production to count x $0.15 base contract price 
(higher base contract price) = $975 value of production to count;
    (5) 2,000 pounds of production to count x $0.10 base contract price 
(lower base contract price) = $200 value of production to count;
    (6) $975 + $200 = $1,175 total value of production to count;
    (7) $1,625 total value guarantee--$1,175 total value of production 
to count = $450 loss; and
    (8) $450 x 100 percent = $450 indemnity payment.
    (c) The total production to count (in pounds) from all insurable 
acreage in 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 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 13(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;
    (2) All harvested production from the insurable acreage; and
    (3) Any other uninsurable mustard production that is delivered to 
fulfill the processor contract.
    (d) Mature mustard 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) Mustard production will be reduced by 0.12 percent for each 0.1 
percentage point of moisture in excess of 10.0 percent. We may obtain 
samples of the production to determine the moisture content.
    (2) Mustard production will be eligible for quality adjustment only 
if:
    (i) Deficiencies in quality result in the mustard not meeting the 
requirements for acceptance under the processor contract because of 
damaged seeds (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 mustard 
production only if:
    (i) The deficiencies, substances, or conditions specified in section 
13(d)(2) resulted from a cause of loss specified in section 10 that 
occurs within the insurance period; and
    (ii) The deficiencies, substances, or conditions specified in 
section 13(d)(2) result in a salvage price less than the base contract 
price; and
    (iii) All determinations of these deficiencies, substances, or 
conditions specified in section 13(d)(2) are made using samples of the 
production obtained by us, by the processor identified in the processor 
contract for the insured acreage, or by a disinterested third party 
approved by us; and
    (iv) The samples are analyzed by a grader in accordance with the 
Directive for Inspection of Mustard Seed, provided by the Federal Grain 
Inspection Service or such other directive or standards that may be 
issued by FCIC.
    (4) Mustard production that is eligible for quality adjustment, as 
specified in sections 13(d)(2) and (3), will be reduced by multiplying 
the quality adjustment factors contained in the Special Provisions (if 
quality adjustment factors are not contained in the Special Provisions, 
the quality adjustment factor is determined by dividing the salvage 
price by the base contract price (not to exceed 1.000)) by the number of 
pounds remaining after any reduction due to excessive moisture (the 
moisture-adjusted gross pounds) of the damaged or conditioned 
production.

[[Page 391]]

    (i) The salvage 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:
    (A) Discounts used to establish the salvage price will be limited to 
those that are usual, customary, and reasonable.
    (B) The salvage price will not include any reductions for:
    (1) Moisture content;
    (2) Damage due to uninsured causes;
    (3) Drying, handling, processing, or any other costs associated with 
normal harvesting, handling, and marketing of the mustard; except, if 
the salvage price can be increased by conditioning, we may reduce the 
salvage price, after the production has been conditioned, by the cost of 
conditioning but not lower than the salvage price before conditioning; 
and
    (ii) We may obtain salvage prices from any buyer of our choice. If 
we obtain salvage prices from one or more buyers located outside your 
local market area, we will reduce such price by the additional costs 
required to deliver the mustard to those buyers.
    (iii) Factors not associated with grading under the Directive for 
Inspection of Mustard Seed, provided by the Federal Grain Inspection 
Service or such other directive or standards that may be issued by FCIC 
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.

                            14. Late Planting

    In lieu of section 16(a) of the Basic Provisions, the production 
guarantee (per acre) 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.

                         15. 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 (per acre) for timely planted acreage. When a 
portion of the insurable acreage within the unit is prevented from being 
planted, and there is more than one base contract price applicable to 
acreage in the unit, the lowest base contract price will be used in 
calculating any prevented planting payment. 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.

[73 FR 11320, Mar. 3, 2008; 73 FR 17243, Apr. 1, 2008]

Sec. 457.169  Mint crop insurance provisions.

    The Mint Crop Insurance Provisions for the 2008 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:

Mint Crop Insurance Provisions

                             1. Definitions

    Adequate Stand. A population of live mint plants that equals or 
exceeds the minimum required number of plants or percentage of ground 
cover, as specified in the Special Provisions.
    Appraisal. A method of determining potential production by 
harvesting and distilling a representative sample of the mint crop.
    Cover crop. A small grain crop seeded into mint acreage to reduce 
soil erosion and wind damage.
    Cutting. Severance of the upper part of the mint plant from its 
stalk and roots.
    Distillation. A process of extracting mint oil from harvested mint 
plants by heating and condensing.
    Existing mint. Mint planted for harvest during a previous crop year.
    Ground cover. Mint plants, including mint foliage and stolons, grown 
on insured acreage.
    Harvest. Removal of mint from the windrow.
    Mint. A perennial spearmint or peppermint plant of the family 
Labiatae and the genus Mentha grown for distillation of mint oil.
    Mint oil. Oil produced by the distillation of harvested mint plants.
    New mint. Mint planted for harvest for the first time.
    Planted acreage. In addition to the definition in the Basic 
Provisions, land in which mint stolons have been placed in a manner 
appropriate for the planting method and at the correct depth into a 
seedbed that has been properly prepared.
    Pound. 16 ounces avoirdupois.
    Sales closing date. In lieu of the definition contained in the Basic 
Provisions, if you select the Winter Coverage Option, application for 
the Winter Coverage Option will include application for the spring 
insurance period

[[Page 392]]

and must be submitted by the sales closing date for the Winter Coverage 
Option contained in the Special Provisions. Coverage may not be changed 
between the end of the Winter Coverage Option insurance period and the 
beginning of the spring insurance period. If you do not elect the Winter 
Coverage Option, application must be made by the spring sales closing 
date contained in the Special Provisions and all policy changes must be 
made by that date. If you later elect the Winter Coverage Option, you 
may select your coverage under the Winter Coverage Option.
    Stolon. A stem at or just below the surface of the ground that 
produces new mint plants at its tips or nodes.
    Type. A category of mint identified as a type in the Special 
Provisions.
    Windrow. Mint that is cut and placed in a row.

                            2. Unit Division

    A basic unit, as defined in section 1 of the Basic Provisions, will 
be divided into additional basic units by each mint type designated in 
the Special Provisions.

  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 only select one price election for all the mint in 
the county insured under this policy unless the actuarial documents 
provide different price elections by type, in which case you may only 
select one price election for each type designated in the actuarial 
documents. 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 specific type, you must also choose 100 percent 
of the maximum price election for other types.
    (b) In addition to the provisions in section 3 of the Basic 
Provisions, you must report:
    (1) The total amount of mint oil produced from insurable acreage for 
all cuttings for each unit;
    (2) Any damage to or removal of mint plants or stolons; any change 
in practices; or any other circumstance that may reduce the expected 
yield below the yield upon which the production guarantee is based, and 
the number of affected acres;
    (3) The stand age;
    (4) The date existing mint acreage was planted;
    (5) The date new mint acreage was initially planted; and
    (6) The type of mint.
    (c) If you fail to notify us of any circumstance that may reduce 
your yields or insurable acres from previous levels, we will reduce your 
production guarantee and insurable acres at any time we become aware of 
the circumstance based on our estimate of the effect of damage to or 
removal of mint plants or stolons; stand age; change in practices; and 
any other circumstance that may affect the yield potential or insurable 
acres of the insured crop.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is June 30 preceding the cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation date is September 30 and the termination date is November 
30. If your policy is terminated after insurance has attached for the 
subsequent crop year, coverage will be deemed not to have attached to 
the acreage for the subsequent crop year.

                             6. Insured Crop

    (a) In accordance with the provisions of section 8 of the Basic 
Provisions, the crop insured will be all mint types 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 and distillation for mint oil;
    (3) That have an adequate stand by the date coverage begins; and
    (4) That have been:
    (i) Inspected and accepted by us for the first crop year you are 
insured; or
    (ii) Certified by you as having an adequate stand on the date 
coverage begins after the first crop year you are insured unless an 
inspection is required under section 8(b).
    (b) In lieu of the provisions of section 8 of the Basic Provisions 
that prohibit insurance of a second crop harvested following the same 
crop in the same crop year, multiple harvests of mint on the same 
acreage will be considered as one mint crop.
    (c) In addition to the coverages provided in these Crop Provisions, 
you may also elect the Winter Coverage Option in accordance with section 
13.

                          7. Insurable Acreage

    (a) Mint interplanted with a cover crop will not be considered 
interplanted for the purposes of section 9 of the Basic Provisions if 
the cover crop is destroyed prior to its maturity and is not harvested 
as grain.
    (b) In addition to the provisions of section 9 of the Basic 
Provisions, unless allowed by written agreement, we will not insure any 
acreage that:
    (1) Does not meet rotation requirements contained in the Special 
Provisions; or

[[Page 393]]

    (2) Exceeds existing mint age limitations contained in the Special 
Provisions.

                           8. Insurance Period

    In lieu of the provisions of section 11 of the Basic Provisions:
    (a) Coverage begins on each unit or part of a unit for acreage with 
an adequate stand on the following calendar dates:
    (1) June 16 in Indiana, Montana, and Wisconsin;
    (2) May 16 in Washington; and
    (3) For all other states, the date as provided in the Special 
Provisions.
    (b) For the year of application, for when you have reported planting 
mint during the Winter Coverage Option insurance period, or for any 
insurance period following the payment of an indemnity or a reported 
loss where the crop was determined to not have an adequate stand, we 
will inspect all mint acreage within the two-week period before coverage 
begins (If you have elected the Winter Coverage Option, such inspection 
will occur not later than November 15).
    (1) Insurance will attach on the date coverage begins, as specified 
in section 8(a), unless we inspect the acreage during the two-week 
period and determine it does not meet insurability requirements as 
specified in section 2 of the Basic Provisions, the application, or 
these Crop Provisions.
    (2) You must provide any information we require for the crop or to 
determine the condition of the crop.
    (c) Coverage ends for each unit or part of a unit at the earliest 
of:
    (1) Total destruction of the insured crop on the unit;
    (2) Final adjustment of a loss;
    (3) The final cutting for the crop year;
    (4) Abandonment of the crop; or
    (5) The following calendar date:
    (i) September 30 in Indiana and Wisconsin;
    (ii) October 15 in Montana;
    (iii) October 31 in Washington; and
    (iv) For all other states, the date as provided in the Special 
Provisions.

                            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;
    (3) Insects or plant disease (except Verticillium Wilt disease), but 
not damage due to insufficient or improper application of control 
measures;
    (4) Wildlife;
    (5) Earthquake;
    (6) Volcanic eruption; or
    (7) Failure of the irrigation water supply, if caused by an insured 
cause of loss listed in sections 9(a)(1) through (6) 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 any loss of production 
that:
    (1) Occurs after harvest;
    (2) Is due to your failure to distill the crop, unless such failure 
is due to actual physical damage to the crop caused by an insured cause 
of loss that occurs during the insurance period; or
    (3) Is due to Verticillium Wilt disease.

                10. Duties In The Event of Damage or Loss

    In addition to your duties contained in section 14 of the Basic 
Provisions, if you discover that any insured mint is damaged, or if you 
intend to claim an indemnity on any unit:
    (a) You must give us notice of probable loss at least 15 days before 
the beginning of any cutting or immediately if probable loss is 
discovered after cutting has begun or when cutting should have begun; 
and
    (b) You must timely harvest and completely distill a sample of the 
crop on any acreage you do not intend to harvest, as designated by us, 
to determine if an indemnity is due.

                         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) We may defer appraisals until the crop reaches maturity or the 
date mint harvest is general in the area.
    (c) 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 11(c)(1) by the respective 
price election for each type, if applicable;
    (3) Totaling the results of section 11(c)(2);
    (4) Multiplying the total production to be counted (see section 
11(d)) of each type, if applicable, by its respective price election;
    (5) Totaling the results of section 11(c)(4);
    (6) Subtracting the result in section 11(c)(5) from the result of 
section 11(c)(3); and
    (7) Multiplying the result in section 11(c)(6) by your share.
    For example:
    Assume that you have a 100 percent share in 100 acres of peppermint 
in the unit, with a production guarantee of 50 pounds of oil

[[Page 394]]

per acre and a price election of $12 per pound. Because an insured cause 
of loss has reduced production, you only harvest and distill 2,500 
pounds of peppermint oil. Your indemnity would be calculated as follows:
    (1) 100 acres x 50 pounds = 5,000 pound production guarantee;
    (2) 5,000 pound production guarantee x $12 price election = $60,000 
value of production guarantee;
    (3) 2,500 pounds production to count x $12 price election = $30,000 
value of production to count;
    (4) $60,000 - $30,000 = $30,000 loss; and
    (5) $30,000 x 100 percent share = $30,000 indemnity payment.
    (d) The total production to count (in pounds of oil) 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) For which you fail to meet the requirements contained in section 
10 of these Crop Provisions;
    (D) That is damaged solely by uninsured causes; or
    (E) For which you fail to provide production records that are 
acceptable to us;
    (ii) All production lost due to uninsured causes;
    (iii) All unharvested production;
    (iv) All potential production on insured acreage that you intend to 
put to another use or abandon with our consent:
    (A) If you do not elect to continue to care for the crop, we may 
give you our 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, the amount of production to count will 
be not less than the production guarantee per acre); 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 
the appraised production at the time the crop reaches maturity.
    (2) All harvested production from the insurable acreage.
    (e) Harvested production must be distilled to determine production 
to count.
    (f) Any oil distilled from plants growing in the mint will be 
counted as mint oil on a weight basis.
    (g) You are responsible for the cost of distilling samples for loss 
adjustment purposes.

                     12. Late and Prevented Planting

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

                       13. Winter Coverage Option

    (a) The provisions of this option are continuous and will be 
attached to and made part of your insurance policy if:
    (1) You elect the Winter Coverage Option on your application, or on 
a form approved by us, on or before the fall sales closing date for the 
crop year in which you wish to insure mint 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) This option provides a production guarantee equal to 60 percent 
of the production guarantee determined under section 3 of these Crop 
Provisions.
    (c) If you elect this option, all of the insurable acreage in the 
county will be insured by this option.
    (d) In addition to the requirements of section 6 of the Basic 
Provisions, any acreage of new mint planted after the applicable acreage 
reporting date must be certified by you and reported to us within two 
weeks of planting.
    (e) In lieu of section 6(a) of these Crop Provisions, the crop 
insured will be all mint types 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 and distillation as mint oil;
    (3) That have an adequate stand on the date coverage begins (newly 
planted mint types must be reported in accordance with section 8(b) but 
they must be reported as uninsured unless they have an adequate stand by 
the date coverage begins); and
    (4) That has been:
    (i) Inspected and accepted by us for the first crop year you are 
insured (We will inspect all mint acreage and will notify you of the 
acceptance or rejection of your application not later than November 15. 
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 
the Basic Provisions, the application, or these Crop Provisions);
    (ii) Inspected and accepted by us not later than November 15 for the 
crop year following the payment of an indemnity or a reported loss 
unless the crop was determined to have an adequate stand (If we 
determined there was an adequate stand after the loss was reported, no 
inspection is necessary); or
    (iii) Certified by you as having an adequate stand on the date 
coverage begins unless an inspection is required under section 
13(e)(4)(ii).

[[Page 395]]

    (f) Coverage under this option begins:
    (1) On existing mint acreage with an adequate stand at 12:01 a.m. on 
the calendar date listed below:
    (i) October 1 in Indiana and Wisconsin;
    (ii) October 16 in Montana;
    (iii) November 1 in Washington; and
    (iv) For all other states, the date as provided in the Special 
Provisions.
    (2) On new mint acreage, that has an adequate stand by the date 
coverage begins as specified in section 13(f)(1).
    (g) Coverage under this option ends on the unit or part of the unit 
at 11:59 p.m. on the calendar date listed below:
    (1) June 15 in Indiana, Montana, and Wisconsin;
    (2) May 15 in Washington; and
    (3) For all other states, the date as provided in the Special 
Provisions.
    (h) In lieu of section 10(a) of these Crop Provisions, you must give 
notice of probable loss within 72 hours after you discover any insured 
mint is damaged and does not have an adequate stand, but no later than 
the date coverage ends for this option.
    (i) In addition to the requirements of section 10 of these Crop 
Provisions, you must give us notice if you want our consent to put any 
mint acreage to another use before a determination can be made if there 
is an adequate stand on the acreage. We will inspect the acreage and you 
must agree in writing no payment or indemnity will be made for the 
acreage put to another use. The total production to be counted for 
acreage put to another use with our consent in accordance with this 
section will not be less than the approved yield.
    (j) In addition to section 11(a) of these Crop Provisions we will 
make a Winter Coverage Option payment only on acreage that had an 
adequate stand on the date that insurance attached if the adequate stand 
was lost due to an insured cause of loss occurring within the Winter 
Coverage Option insurance period and the acreage consists of at least 20 
acres or 20 percent of the insurable planted acres in the unit.
    (k) In lieu of section 11(b) of these Crop Provisions, we may defer 
appraisals until the date coverage ends under this option.
    (l) In lieu of section 11(c) of these Crop Provisions, in the event 
of loss or damage covered by this policy, we will settle your claim by:
    (1) Multiplying 60 percent by your production guarantee per acre;
    (2) Multiplying the result in section 13(l)(1) by the number of 
acres that do not have an adequate stand;
    (3) Multiplying the result in section 13(l)(2) by the price 
election; and
    (4) Multiplying the result in section 13(l)(3) by your share.
    For example:
    Assume that you have a 100 percent share in 100 acres of mint with a 
production guarantee of 50 pounds of oil per acre and a price election 
of $12 per pound. Also assume that you do not have an adequate stand on 
50 acres by the date coverage ends for this option because an insured 
cause has damaged the stand. Your Winter Coverage Option payment would 
be calculated as follows:
    (1) 60 percent x 50 pound production guarantee = 30 pound production 
guarantee per acre;
    (2) 30 pound production guarantee per acre x 50 acres without an 
adequate stand = 1,500 pounds;
    (3) 1,500 pounds x $12 price election = $18,000; and
    (4) $18,000 x 100 percent share = $18,000 Winter Coverage Option 
payment.
    (m) In lieu of section 11(d) of these Crop Provisions, the 
population of live mint plants to be counted from insurable acreage on 
the unit will be not less than the population of live mint plants in an 
adequate stand for acreage:
    (1) That is abandoned;
    (2) That is put to another use without our consent;
    (3) For which you fail to meet the requirements contained in section 
13(h); or
    (4) That is damaged solely by uninsured causes.
    (n) Acreage for which a Winter Coverage Option payment has been made 
is no longer insurable under the Crop Provisions for the current crop 
year. Any mint production subsequently harvested from uninsured acreage 
for the crop year and not kept separate from production from insured 
acreage will be considered production to count.
    (o) Acreage for which a Winter Coverage Option payment has been made 
will receive an amount of production of zero when computing subsequent 
year's approved yield.
    (p) Sections 11(e), (f), and (g) of these Crop Provisions do not 
apply to this option.

[72 FR 24527, May 3, 2007, as amended at 72 FR 29055, May 24, 2007]

Sec. 457.170  Cultivated wild rice crop insurance provisions.

    The Cultivated Wild Rice Crop Insurance Provisions for the 2009 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: Cultivated Wild Rice Crop 
Provisions.

[[Page 396]]

                             1. Definitions

    Approved laboratory. A testing facility approved by us to determine 
the recovery percentage from samples of cultivated wild rice.
    Cultivated Wild Rice. A member of the grass family Zizania Palustris 
L., adapted for growing in man-made flood irrigated fields known as 
paddies.
    Finished weight.
    (a) The green weight delivered to a processor multiplied by the 
determined recovery percentage;
    (b) The green weight stored for seed multiplied by either the 
determined recovery percentage or the standard recovery percentage in 
accordance with section 11(d); or
    (c) The appraised green weight multiplied by either the determined 
recovery percentage or the standard recovery percentage in accordance 
with section 11(d).
    Flood irrigation. Intentionally covering the planted acreage with 
water and maintaining it at a proper depth throughout the growing 
season.
    Green weight. The total weight in pounds of the green cultivated 
wild rice production that was appraised, delivered to a processor, or 
stored for seed.
    Harvest. Combining or threshing the cultivated wild rice for grain 
or seed.
    Initially planted. The first occurrence of planting the insured crop 
on insurable acreage for the crop year.
    Planted acreage. In addition to the definition contained in the 
Basic Provisions, land on which an adequate amount of seed is initially 
spread onto the soil surface by any appropriate method (including 
shattering for the second and succeeding years) and subsequently is 
mechanically incorporated into the soil at the proper depth, will be 
considered planted, unless otherwise provided by the Special Provisions 
or actuarial documents.
    Processor. A business that converts green weight to a product ready 
for commercial sale using appropriate equipment and methods such as 
separating immature kernels, fermenting or curing, parching, de-hulling, 
and scarifying.
    Recovery percentage. The ratio of finished weight to green weight of 
the cultivated wild rice. As specified in section 11(d), the recovery 
percentage is either:
    (a) The determined recovery percentage for a sample as determined by 
an approved laboratory; or
    (b) The standard recovery percentage provided in the Special 
Provisions.
    Shatter. The act of mature seeds naturally falling to the ground 
from a cultivated wild rice plant.

                            2. Unit Division

    Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.

  3. Insurance Guarantee, 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 percentage of the maximum price election 
for all the cultivated wild rice insured under this policy in the 
county.
    (b) The insurance guarantee per acre is expressed as pounds of 
finished weight.

                           4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is:
    (a) November 30 preceding the cancellation date for counties with a 
February 28 cancellation date; and
    (b) June 30 preceding the cancellation date for counties with a 
September 30 cancellation date.

                  5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
            State               Cancellation date     Termination date
------------------------------------------------------------------------
Mendocino, Glenn, Butte, and  February 28.........  February 28.
 Sierra Counties,
 California; and all
 California Counties south
 thereof.
Minnesota; All Other          September 30........  November 30.
 California Counties; and
 All Other States.
------------------------------------------------------------------------

                             6. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the cultivated wild rice in the county grown on 
insurable acreage 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; and
    (3) That is grown in man-made flood irrigated fields.
    (b) Section 8(b)(3) of the Basic Provisions is not applicable to the 
cultivated wild rice seed that naturally shatters and is subsequently 
mechanically incorporated into the soil.

[[Page 397]]

                           7. Insurance Period

    In accordance with section 11 of the Basic Provisions, the calendar 
date for the end of the insurance period is:
    (a) For Minnesota, September 30 of the calendar year the crop is 
normally harvested;
    (b) For California, October 15 of the calendar year the crop is 
normally harvested; and
    (c) For all other states, the date provided in the Special 
Provisions.

                            8. Causes of Loss

    (a) In accordance with 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 8(a)(1) through (7) that occurs during the 
insurance period, drought, or the intrusion of saline water.
    (b) In addition to the causes not insured against in section 12 of 
the Basic Provisions, we will not insure against any loss of production 
due to:
    (1) The crop not being timely harvested unless such delay in 
harvesting is solely and directly due to adverse weather conditions 
which preclude harvesting equipment from entering and moving about the 
field; or
    (2) The application of saline water, except as specified in section 
8(a) of these crop provisions.

                         9. Replanting Payments

    The provisions of section 13 of the Basic Provisions are not 
applicable.

                10. Duties in the Event of Damage or Loss

    Representative samples are required in accordance with section 14 of 
the Basic Provisions.

                         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 such 
production records 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 its respective production 
guarantee;
    (2) Multiplying the 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, (see section 
11(c) through (d)) 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)(3); and
    (7) Multiplying the result of section 11(b)(6) by your share.
    For example:
    You have a 100 percent share in 100 acres of cultivated wild rice in 
the unit, with a guarantee of 400 pounds per acre and a price election 
of $1.00 per pound. You are only able to harvest 20,000 pounds. Your 
indemnity would be calculated as follows:
    (1) 100 acres x 400 pounds = 40,000 pound guarantee;
    (2) 40,000 pounds x $1.00 per pound price election = $40,000 value 
of guarantee;
    (3) 20,000 pounds x $1.00 per pound price election = $20,000 value 
of production to count;
    (4) $40,000 - $20,000 = $20,000 loss; and
    (5) $20,000 x 100 percent share = $20,000 indemnity payment.
    (c) The total production to count (finished 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) 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 green weight 
production must be adjusted 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,

[[Page 398]]

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 green weight will be multiplied by the recovery 
percentage subject to the following:
    (1) We may obtain samples of the production to determine the 
recovery percentage.
    (2) The determined recovery percentage will be used to calculate 
your loss only if:
    (i) All determined recovery percentages are established using 
samples of green weight production obtained by us or by the processor 
for sold or processed production; and
    (ii) The samples are analyzed by an approved laboratory.
    (3) If the conditions of section 11(d)(2) are not met, the standard 
recovery percentage will be used.

                            12. Late Planting

    The provisions of section 16 of the Basic Provisions are not 
applicable.

                         13. Prevented Planting

    The provisions of section 17 of the Basic Provisions are not 
applicable.

[73 FR 11316, Mar. 3, 2008]

Sec. 457.171  Cabbage crop insurance provisions.

    The Cabbage Crop Insurance Provisions for the 2011 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: Cabbage Crop Insurance Provisions.

                             1. Definitions

    Cabbage. Plants of the family Brassicaceae and the genus Brassica, 
grown for their compact heads and used for human consumption.
    Crop Year. In lieu of the definition contained in section 1 of the 
Basic Provisions, a period of time that begins on the first day of the 
earliest planting period and continues through the last day of the 
insurance period for the latest planting period. The crop year is 
designated by the calendar year in which the cabbage planted in the 
latest planting period is normally harvested.
    Damaged cabbage production. Fresh market cabbage that fails to grade 
U.S. Commercial or better in accordance with the United States Standards 
for Grades of Cabbage, or processing cabbage that fails to grade U.S. 
No. 2 or better in accordance with the United States Standards for 
Grades of Cabbage for Processing 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, 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. Cutting of the cabbage plant to sever the head from the 
stalk.
    Hundredweight. One hundred pounds avoirdupois.
    Inspected transplants. Cabbage plants that have been found to meet 
the standards of the public agency responsible for the inspection 
process within the State in which they are grown.
    Marketable cabbage. Cabbage that is sold or grades at least:
    (a) U.S. Commercial for fresh market cabbage; or
    (b) U.S. No. 2 for processing cabbage.
    Planted acreage. In addition to the definition contained in section 
1 of the Basic Provisions, cabbage plants and seeds must initially be 
planted in rows wide enough to permit mechanical cultivation. Cabbage 
planted or seeds planted in any other manner will not be insurable 
unless otherwise provided by the Special Provisions, actuarial 
documents, or by written agreement.
    Processor. Any business enterprise regularly engaged in processing 
cabbage for human consumption, that possesses all licenses and permits 
for processing cabbage 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 cabbage 
within a reasonable amount of time after harvest.
    Processor contract. A written contract between the producer and the 
processor, containing at a minimum:
    (a) The producer's commitment to plant and grow cabbage, and to sell 
and deliver the cabbage production to the processor;
    (b) The processor's commitment to purchase all the production stated 
in the processor contract; and

[[Page 399]]

    (c) A price per hundredweight that will be paid for the production.
    Timely planted. In lieu of the definition contained in section 1 of 
the Basic Provisions, cabbage planted during a planting period 
designated in the Special Provisions.
    Type. A category of cabbage as designated 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 planting period if 
separate planting periods are designated in the Special Provisions.
    (b) In addition to the requirements of section 34 of the Basic 
Provisions, optional units may also be established by type if separate 
types are designated 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 for all the cabbage 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 cabbage type designated in the Special 
Provisions.
    (b) The price elections you choose for each type must bear the same 
percentage relationship to the maximum price election offered by us for 
each type. For example, if you selected 100 percent of the maximum price 
election for one type, you must also select 100 percent of the maximum 
price election for all other types.

                           4. Contract Changes

    In accordance with the provisions of section 4 of the Basic 
Provisions, the contract change dates are the following calendar dates 
preceding the cancellation dates:
    (a) April 30 in Florida; Brooks, Colquitt, Tift, and Toombs 
Counties, Georgia; and Texas;
    (b) November 30 in Alaska; Rabun County, Georgia; Illinois; 
Michigan; New York; North Carolina; Ohio; Oregon; Pennsylvania; 
Virginia; Washington; and Wisconsin; or
    (c) As designated in the Special Provisions for all other states and 
counties.

                  5. Cancellation and Termination Dates

    In accordance with the provisions of section 2 of the Basic 
Provisions, the cancellation and termination dates are:

------------------------------------------------------------------------
         State and counties           Cancellation and termination dates
------------------------------------------------------------------------
Brooks, Colquitt, Tift, and Toombs    July 1.
 Counties, Georgia; Texas.
Florida.............................  August 15.
Oregon, Washington..................  February 1.
Rabun County, Georgia; North          February 28.
 Carolina.
Alaska, Illinois, Michigan, New       March 15.
 York, Ohio, Pennsylvania, Virginia,
 and Wisconsin.
All other states and counties.......  As designated in the Special
                                       Provisions.
------------------------------------------------------------------------

                          6. Report of Acreage

    In addition to the provisions of section 6 of the Basic Provisions, 
to insure your processing cabbage, you must provide a copy of all your 
processor contracts to us on or before the acreage reporting date.

                             7. Insured Crop

    (a) In accordance with the provisions of section 8 of the Basic 
Provisions, the crop insured will be all the cabbage types in the county 
for which a premium rate is provided by the actuarial documents, in 
which you have a share, and that are:
    (1) Planted with inspected transplants, if such transplants are 
required by the Special Provisions;
    (2) If direct seeded, planted with hybrid seed unless otherwise 
permitted by the Special Provisions;
    (3) Planted within the planting periods as designated in the Special 
Provisions;
    (4) Planted to be:
    (i) Harvested and sold as fresh cabbage; or
    (ii) Grown and sold as processing cabbage 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
    (5) Unless allowed by the Special Provisions:
    (i) Not interplanted with another crop; and
    (ii) Not sold by direct marketing.
    (b) Under the processor contract, you will be considered to have a 
share in the insured crop to the extent you retain control of the 
acreage on which the cabbage is grown, your income from the insured crop 
is dependent on the amount of production delivered, and the processor 
contract provides for delivery of the cabbage under specified conditions 
and at a stipulated price.
    (c) A processing cabbage producer who is also a processor may 
establish an insurable interest if the following additional requirements 
are met:

[[Page 400]]

    (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 ``processor'' contained in 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 contained in the Special Provisions.
    (b) Any acreage of the insured crop damaged before the end of the 
planting period, to the extent that a 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.
    (c) For processing cabbage, insurable acreage will be:
    (1) For acreage only based processor contracts, and acreage and 
production based processor contracts which specify a maximum number of 
acres, the lesser of:
    (i) The planted acres; or
    (ii) The maximum number of acres specified in the contract;
    (2) For production only based processor contracts, the lesser of:
    (i) The number of acres determined by dividing the production stated 
in the processor contract by the approved yield; or
    (ii) The planted acres.

                           9. Insurance Period

    (a) In lieu of the provisions of section 11 of the Basic Provisions, 
coverage begins on each unit or part of a unit the later of:
    (1) The date we accept your application; or
    (2) When the cabbage is planted in each planting period.
    (b) In addition to the provisions of section 11 of the Basic 
Provisions, the end of the insurance period will be the earlier of:
    (1) The date the crop should have been harvested; or
    (2) The following applicable calendar date after planting;
    (i) Alaska: October 1;
    (ii) Florida:
    (A) February 15 for the fall planting period;
    (B) April 15 for the winter planting period; and
    (C) May 31 for the spring planting period;
    (iii) Brooks, Colquitt, Tift, and Toombs Counties, Georgia:
    (A) January 15 for the fall planting period; and
    (B) June 15 for the spring planting period;
    (iv) Rabun County, Georgia:
    (A) September 15 for the spring planting period; and
    (B) October 31 for the summer planting period;
    (v) Illinois, Michigan, New York, Ohio, and Pennsylvania:
    (A) September 30 for the spring planting period; and
    (B) November 25 for the summer planting period;
    (vi) North Carolina:
    (A) July 10 for the spring planting period; and
    (B) December 31 for the fall planting period;
    (vii) Oregon: December 31;
    (viii) Texas:
    (A) December 31 for the summer planting period;
    (B) February 15 for the fall planting period; and
    (C) April 30 for the winter planting period;
    (ix) Virginia:
    (A) July 31 for the early spring planting period;
    (B) September 15 for the spring planting period; and
    (C) November 15 for the summer planting period;
    (x) Washington: December 31;
    (xi) Wisconsin: November 5; and
    (xii) All other states and counties as provided in the Special 
Provisions.

                           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) Wildlife;
    (4) Insects or plant disease, but not damage due to insufficient or 
improper application of control measures;
    (5) Earthquake;
    (6) Volcanic eruption; or
    (7) Failure of the irrigation water supply, if caused by a cause of 
loss specified in sections 10(a)(1) through (6) 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 market the cabbage for any reason other than actual 
physical damage from an insured cause of loss that occurs during the 
insurance period (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, etc.); or

[[Page 401]]

    (2) Damage that occurs or becomes evident after the end of the 
insurance period, including, but not limited to, damage that occurs or 
becomes evident after the cabbage has been placed in storage.

                         11. Replanting Payments

    (a) In accordance with the provisions of 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) No replanting payment will be made on acreage planted prior to 
the initial planting date or after the end of the final planting period 
as designated by the Special Provisions.
    (c) In accordance with the provisions of section 13(c) of the Basic 
Provisions, the maximum amount of the replanting payment per acre is the 
number of hundredweight specified in the Special Provisions multiplied 
by your price election, multiplied by your insured share. The fresh 
market cabbage price election will be used to determine processing 
cabbage replanting payments in counties where both fresh market and 
processing cabbage are insurable.
    (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 attributable to your 
share. The premium will not be reduced.
    (e) In lieu of the provisions contained in section 13 of the Basic 
Provisions that limit a replanting payment to one each crop year, only 
one replanting payment will be made for acreage replanted during each 
planting period within the crop year, if separate planting periods are 
allowed by the Special Provisions.

                12. Duties In The Event of Damage or Loss

    (a) Failure to meet the requirements of this section 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) In lieu of the provisions of section 14(b)(1) of the Basic 
Provisions, so that we may inspect the insured crop, you must give us 
notice within 72 hours of your initial discovery of damage if such 
discovery occurs more than 15 days prior to harvest of the acreage.
    (c) In addition to the provisions of section 14 of the Basic 
Provisions, so that we may inspect the insured crop, you must give us 
notice:
    (1) Immediately if damage is discovered 15 days or less prior to the 
beginning of harvest or during harvest.
    (2) At least 15 days prior to the beginning of harvest, if direct 
marketing of the insured crop is allowed by the Special Provisions, and 
you intend to direct market any of the crop.
    (3) At least 15 days before the earlier of:
    (i) The date harvest would normally start if any acreage on the unit 
will not be harvested; or
    (ii) The beginning of harvest, if any production will be harvested 
for a use other than as indicated on the acreage report.
    (d) After you have provided the applicable notice required by 
sections 12(b) and (c), we will conduct an appraisal to determine your 
production to count for the purposes of section 13(d).
    (1) Except as provided in section 12(e), you must not dispose of or 
sell the damaged crop, or store the insured crop, until after we have 
appraised it and given you written consent to do so.
    (2) If additional damage occurs after this appraisal, except for 
stored cabbage, we will conduct another appraisal.
    (3) These appraisals, and any acceptable records provided by you, 
will be used to determine your production to count in accordance with 
section 13(d).
    (e) In accordance with the requirements of section 14(c) of the 
Basic Provisions, if you initially discover damage to any insured 
cabbage 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 3 rows 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 completion of harvest on the 
unit.

                         13. Settlement of Claim

    (a) We will determine your loss on a unit basis.
    (1) In the event you are unable to provide separate acceptable 
production records:
    (i) For any optional units, we will combine all optional units for 
which such production records were not provided; and
    (ii) 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.
    (2) For any processor contract that stipulates only the amount of 
production to be delivered, and 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 you produced a crop sufficient to fulfill the processor 
contract(s) forming the basis of the insurance guarantee;
    (b) The extent of any damaged cabbage production must be determined 
not later than the date the cabbage is placed in storage if the 
production is stored prior to sale,

[[Page 402]]

or the date the cabbage is delivered to a buyer, wholesaler, packer, 
processor, or other handler if production is not stored.
    (c) In the event of loss or damage covered by this policy, we will 
settle your claim by:
    (1) Multiplying the insurable acreage by its respective production 
guarantee (per acre), by type if applicable;
    (2) Multiplying each result in section 13(c)(1) by the respective 
price election, by type if applicable;
    (3) Totaling the results in section 13(c)(2);
    (4) Multiplying the total production to count of each type, if 
applicable (see section 13)(d)), by its respective price election;
    (5) Totaling the results in section 13(c)(4);
    (6) Subtracting the results in section 13(c)(5) from the results of 
section 13(c)(3); and
    (7) Multiplying the result in section 13(c)(6) by your share.
    For example:
    For a basic unit you have 100 percent share in 100 acres of cabbage, 
50 acres for fresh market and 50 acres for processing as sauerkraut, 
with a production guarantee (per acre) of 400 hundredweight per acre for 
fresh market and 400 hundredweight per acre for processing as sauerkraut 
and a price election of $5.00 per hundredweight for fresh market and 
$1.90 per hundredweight for processing as sauerkraut. You are only able 
to harvest 9,000 hundredweight of fresh market cabbage and 9,000 
hundredweight of cabbage for sauerkraut because an insured cause of loss 
has reduced production. Your total indemnity would be calculated as 
follows:
    (1) 50 acres x 400 hundredweight = 20,000 hundredweight guarantee 
for the fresh market acreage.
      50 acres x 400 hundredweight = 20,000 hundredweight guarantee for 
the processing as sauerkraut acreage.
    (2) 20,000 hundredweight guarantee x $5.00 price election = $100,000 
value of guarantee for the fresh market cabbage.
      20,000 hundredweight guarantee x $1.90 price election = $38,000 
value of guarantee for processing as sauerkraut.
    (3) $100,000 + $38,000 = $138,000 total value of guarantee.
    (4) 9,000 hundredweight x $5.00 price election = $45,000 value of 
production to count for the fresh market acreage.
      9,000 hundredweight x $1.90 price election = $17,100 value of 
production to count for the acreage for processing as sauerkraut.
    (5) $45,000 + $17,100 = $62,100 total value of production to count.
    (6) $138,000 -$62,100 = $75,900 loss.
    (7) $75,900 x 100 percent share = $75,900 indemnity payment.
    (d) The total production to count (in hundredweight) of marketable 
cabbage 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 meet the requirements contained in section 
12;
    (C) That is 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) All production lost due to uninsured causes;
    (iii) All unharvested marketable production;
    (iv) All 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.
    (e) Mature production that is considered damaged cabbage production 
but is sold will be adjusted for quality as follows:
    (1) Dividing the amount received per hundredweight of such damaged 
cabbage production by the applicable price election; and
    (2) Multiplying the result by the number of hundredweight of damaged 
cabbage production.

                     14. Late and Prevented Planting

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

[74 FR 8709, Feb. 26, 2009, as amended at 74 FR 26281, June 2, 2009; 75 
FR 15891, Mar. 30, 2010]

[[Page 403]]

Sec. 457.172  Coverage Enhancement Option.

    The Coverage Enhancement Option for the 2009 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: Coverage Enhancement Option.
    Both FCIC and reinsured policies:

                       Coverage Enhancement Option

                             1. Definitions

    CEO coverage level. The coverage level percentage contained in the 
actuarial documents where the Coverage Enhancement Option (CEO) is 
available and selected by you. This percentage is applicable under the 
combined MPCI/CEO policy when losses under the MPCI policy exceed the 
deductible and an indemnity is owed.
    CEO dollar amount of insurance. The value of the additional 
insurance coverage for each unit provided by the CEO, which is 
determined by multiplying the CEO coverage level by the total value of 
the insured crop by unit and subtracting the MPCI dollar amount of 
insurance.
    MPCI. Multiple Peril Crop Insurance, the plan of insurance offered 
by the Federal Crop Insurance Corporation as published at 7 CFR part 
457.
    MPCI coverage level. The coverage level percentage you selected in 
the underlying MPCI policy to which CEO is attached.
    MPCI dollar amount of insurance. The value of the insurance coverage 
for each unit provided under the MPCI policy (the amount of insurance 
selected by you for dollar or similar plans of insurance, multiplied by 
the number of acres in the unit if such amount of insurance is on a per 
acre basis, or the amount determined by multiplying your production 
guarantee (per acre), times the price election, times the number of 
acres in the unit).
    MPCI indemnity. The indemnity determined for each unit under the 
MPCI policy to which CEO is attached, not including replant and 
prevented planting payments or any indemnity payable under CEO.
    MPCI indemnity factor. A factor determined by dividing the MPCI 
indemnity by the MPCI dollar amount of insurance for each unit. This 
factor is used to ensure that the indemnity paid under the CEO is 
proportional to the amount of loss and indemnity paid under the MPCI 
policy.
    Total value of the insured crop by unit. The value of the crop that 
is determined by dividing the MPCI dollar amount of insurance for each 
unit by the MPCI coverage level.
    2. CEO is only available for insured crops where the actuarial 
documents contain a CEO coverage level. If there is a conflict between 
the terms of CEO and any other provision of your policy, the terms of 
the CEO will control.
    3. To be eligible for CEO coverage on the insured crop, you must:
    (a) Have an MPCI policy in force for the insured crop (or for citrus 
fruit, citrus trees, and stone fruit or other crops, as applicable, the 
insured type) and comply with all terms and conditions of such policy.
    (b) Elect CEO in writing and choose a CEO coverage level (at least 5 
percent higher than the MPCI coverage level), by the sales closing date 
for the insured crop.
    (c) Elect a level of coverage greater than the Catastrophic Risk 
Protection (CAT) coverage level and a 100 percent price election. CEO is 
not available for the CAT level of coverage.
    4. CEO is continuous and will remain in effect for as long as you 
continue to have a MPCI policy in effect for the insured crop, the 
actuarial documents contain a CEO coverage level, or until it is 
canceled by you or terminated by us on or before the cancellation or 
termination date, as applicable.
    5. The premium for your policy will be determined by:
    (a) Totaling the MPCI dollar amount of insurance and the CEO dollar 
amount of insurance; and
    (b) Multiplying the result of section 5(a) by the premium rate for 
the insured crop applicable to your MPCI coverage level
    6. With respect to the coverage provided under CEO:
    (a) All acreage of the insured crop insured under your MPCI policy 
will be covered under the CEO;
    (b) The amount of any replant or prevented planting payment that is 
payable under the MPCI policy will not be affected by the CEO;
    (c) An indemnity will be payable under the CEO only after the 
underlying MPCI deductible is met and an MPCI indemnity is paid; and
    (d) The total indemnity for each unit (MPCI coverage plus CEO) 
cannot exceed the combination of both the MPCI and CEO dollar amounts of 
insurance.
    7. If you elect CEO and a MPCI indemnity is paid on any unit, CEO 
will pay a portion of the loss not paid under the deductible of the MPCI 
policy depending on the CEO coverage level you select (For example, if 
you selected a 50 percent MPCI coverage level, selected an 85 percent 
CEO coverage level, and had 60 percent loss of the insured crop, the 
total amount of indemnity paid under both the MPCI policy and the CEO 
would be equal to approximately 51 percent of the total value of the 
insured crop by unit). See the example in section 8.

[[Page 404]]

    8. In addition to the settlement of claim section for the applicable 
Crop Provisions, your indemnity will be computed for each unit as 
follows:
    (a) Determine the MPCI indemnity factor;
    (b) Determine the total value of the insured crop by unit;
    (c) Determine the CEO dollar amount of insurance; and
    (d) Multiply the MPCI indemnity factor times the CEO dollar amount 
of insurance to determine the indemnity under the CEO.

    Example: Assume a policy with one unit; an MPCI coverage level of 50 
percent and a CEO coverage level of 85 percent; 100% share; a $120,000 
MPCI dollar amount of insurance; and a $72,000 payable indemnity under 
the MPCI portion of the policy.

    Your indemnity would be calculated as follows:
    (a) $72,000 MPCI loss / by $120,000 MPCI dollar amount of insurance 
= .60 MPCI indemnity factor;
    (b) $120,000 MPCI dollar amount of insurance, divided by the MPCI 
coverage level of .50 results in $240,000 total value of the insured 
crop by unit;
    (c) $240,000 total value of the insured crop by unit multiplied by 
the CEO coverage level .85, equals $204,000, and subtracting $120,000 
MPCI dollar amount of insurance equals $84,000 CEO dollar amount of 
insurance;
    (d) .60 MPCI indemnity factor x $84,000 CEO dollar amount of 
insurance = $50,400 unit indemnity under the CEO.

    Note: The total unit indemnity is $122,400 ($72,000 MPCI indemnity 
plus $50,400 CEO indemnity).

[73 FR 43610, July 28, 2008, as amended at 73 FR 80295, Dec. 31, 2008]

Sec. 457.173  Florida Avocado crop insurance provisions.

    The Florida Avocado Crop Insurance Provisions for the 2011 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: Florida Avocado Crop Insurance 
Provisions.
    1. Definitions.
    Bushel. A unit of measure equal to 55 pounds of avocados, unless 
otherwise specified in the Special Provisions.
    Buckhorn. To prune any limb at a diameter of at least four inches.
    Crop year. A period beginning with the date insurance attaches to 
the avocado crop and extending through the normal harvest time. The crop 
year is designated by the calendar year after insurance attaches.
    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 fields for the 
purpose of picking all or a portion of the crop.
    Harvest. Picking of the avocados from the trees or ground by hand or 
machine.
    Pound. A unit of weight equal to sixteen ounces avoirdupois.
    Set out. Transplanting a tree into the grove.
    Type. Either early varieties or late varieties of avocados, as 
specified in the Special Provisions.
    2. Unit Division.
    Provisions in 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 are not applicable. Optional units 
may be established by type when provided for 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 coverage level for all the avocados in 
the county insured under this policy unless the Special Provisions 
provide that you may select a different coverage level for each avocado 
type designated in the Special Provisions. However, if you elect the 
Catastrophic Risk Protection (CAT) level of coverage, the CAT level of 
coverage will be applicable to all types of avocados you produce in the 
county.
    (b) You may select only one price election for all the avocados 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 avocado 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 choose 100 percent of the maximum price 
election for the other type. However, if you elect the CAT level of 
coverage, the price election percentage will be equal to 55 percent of 
the applicable price election for each type of avocado you produce in 
the county.
    (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, trees that have been buckhorned, 
change in grove practices, or any other circumstance that may reduce the 
expected yield per acre to

[[Page 405]]

less than the yield upon which the production guarantee per acre is 
based, and the number of affected acres;
    (2) The number of trees on insurable and uninsurable acreage;
    (3) The age of the trees;
    (4) Any acreage that is excluded under section 6 of these Crop 
Provisions; and
    (5) For acreage interplanted with another crop:
    (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 production guarantee per acre.
    (d) We will reduce the yield used to establish your production 
guarantee as necessary, based on the effect of interplanting a perennial 
crop; removal of trees; trees that have been buckhorned; damage; or a 
change in practices on the yield potential of the insured crop. If you 
fail to notify us of any circumstance as set out in paragraph (c) of 
this section, 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 August 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 the first November 30th after 
insurance attaches.
    6. Insured Crop.
    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the commercially grown avocado types for which a 
premium rate is provided by the actuarial documents for the county:
    (1) In which you have a share;
    (2) That are grown for harvest as avocados; and
    (3) That are grown on trees that, if inspected, are considered 
acceptable to us.
    (b) In addition to the avocados not insurable in section 8 of the 
Basic Provisions, we do not insure any avocados produced on trees that 
have not:
    (1) Reached the fourth growing season after set out; and
    (2) Produced the minimum production per acre as specified in the 
Special Provisions in at least one of the previous three crop years.
    7. Insurable Acreage.
    In lieu of the provisions in section 9 of the Basic Provisions that 
prohibits insurance attaching to a crop planted with another crop, 
avocados interplanted with another perennial crop are insurable unless 
we inspect the acreage and determine it does not meet the requirements 
of insurability contained in these Crop Provisions.
    8. Insurance Period.
    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) For the year of application:
    (i) If you apply for coverage on or before November 21st, coverage 
begins for the crop year on December 1 of the calendar year; or
    (ii) If you apply for coverage after November 21 but prior to 
December 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 
the requirements for insurability contained in your policy.
    (iii) You must provide any information we require so we may 
determine the condition of the grove to be insured.
    (2) For continuous policies, coverage begins for the crop year on 
December 1 of the calendar 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, unless 
otherwise specified in the Special Provisions, is:
    (i) The first November 30th after insurance attaches for early 
varieties of avocados.
    (ii) The second March 31st after insurance attaches for late 
varieties of avocados.
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
    (1) If you acquire an insurable share in any insurable acreage of 
avocados 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 acreage of 
avocados 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 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, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the grove;

[[Page 406]]

    (3) Wildlife, unless control measures have not been taken;
    (4) Earthquake;
    (5) Volcanic eruption;
    (6) Failure of the irrigation water supply caused by an insured 
peril specified in section 9(a)(1) through (5) that occurs during the 
insurance period.
    (7) Insects, but not damage due to insufficient or improper 
application of pest control measures; and
    (8) Plant disease, but not due to insufficient or improper 
application of disease control measures.
    (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) Theft; or
    (2) Inability to market the avocados 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, etc.
    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 at least 15 days before any production from 
any unit will be sold by direct marketing.
    (1) We will conduct a preharvest appraisal that will be used to 
determine your production. If damage occurs after the preharvest 
appraisal, and you can provide acceptable records to us that account for 
all production removed from the unit after our appraisal, we will 
conduct an additional appraisal that will be used to determine your 
production.
    (2) Failure to give timely notice that production will be sold by 
direct marketing will result in an appraised production to count of not 
less than the production guarantee per acre if such failure results in 
an inability to make an accurate appraisal.
    (b) If you intend to claim an indemnity on any unit, you must notify 
us 15 days prior to the beginning of harvest or immediately if damage is 
discovered during harvest so that we may inspect the damaged production.
    (1) You must not destroy the damaged crop until after we have given 
you written consent to do so.
    (2) If you fail to meet the requirements of this subsection, 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 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 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 (see section 
11(c)) by type, if applicable, 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.
    For example:
    You have a 100 percent share in 50 acres of early variety A in the 
unit, with a guarantee of 140 bushels per acre and a price election of 
$16.00 per bushel. You are only able to harvest 6,000 bushels due to an 
insured cause of loss. Your indemnity would be calculated as follows:
    (1) 50 acres x 140 bushels = 7,000 bushel guarantee;
    (2) 7,000 bushels x $16.00 price election = $112,000.00 value of 
guarantee;
    (4) 6,000 bushels x $16.00 price election = $96,000.00 value of 
production to count;
    (6) $112,000.00 - $96,000.00 = $16,000 loss; and
    (7) $16,000 x 100 percent = $16,000 indemnity.
    (c) The total production 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 sold by direct marketing if you fail to meet the 
requirements contained in section 10 of these Crop Provisions;
    (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

[[Page 407]]

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
    (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.

[75 FR 15607, Mar. 30, 2010]

                           PART 458 [RESERVED]

[[Page 409]]



   CHAPTER V--AGRICULTURAL RESEARCH SERVICE, DEPARTMENT OF AGRICULTURE




  --------------------------------------------------------------------
Part                                                                Page
500             National Arboretum..........................         411
501             Conduct on U.S. Meat Animal Research Center, 
                    Clay Center, Nebraska...................         416
502             Conduct on Beltsville Agriculture Research 
                    Center Property, Beltsville, Maryland...         419
503             Conduct on Plum Island Animal Disease Center         421
504             User fees...................................         423
505             National Agricultural Library fees for loans 
                    and copying.............................         423
510             Public information..........................         424
520             Procedures for implementing National 
                    Environmental Policy Act................         425
550             General administrative policy for non-
                    assistance cooperative agreements.......         428

[[Page 411]]

                       PART 500_NATIONAL ARBORETUM

          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 412]]

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 413]]

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 414]]

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 415]]

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 416]]

 
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

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 417]]

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 418]]

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 419]]

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

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 420]]

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 421]]

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

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 422]]

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 423]]

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

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

Sec.
505.1  Scope and purpose.

[[Page 424]]

505.2  Fees for loans, copying, and reproduction of materials in library 
          collections.
505.3-505.5  [Reserved]
505.6  Payment of fees.

    Authority: 5 U.S.C. 301; 7 U.S.C. 3125a.

    Source: 77 FR 3069, Jan. 23, 2012, unless otherwise noted.

Sec. 505.1  Scope and purpose.

    These regulations establish fees for loans, copying, 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, copying, and reproduction of materials in 
          library collections.

    (a) NAL will provide interlibrary loan service (including loans of 
original materials from its collections and copies of portions of 
documents with copyright compliance) and charge fees for such service to 
other non-Federal and non-USDA libraries and institutions. Loans will be 
provided within the United States and Canada only. Copies will be 
provided within the United States and internationally.
    (b) Interlibrary loan service will be provided at a flat fee of $18 
per request for libraries paying electronically through the Online 
Computer Library Center's (OCLC) Interlibrary Loan Fee Management (IFM) 
program and at a flat rate of $25 per request for libraries paying by 
other methods.
    (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 
replacement 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) 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.

Sec. Sec. 505.3-505.5  [Reserved]

Sec. 505.6  Payment of fees.

    NAL charges for interlibrary loans through OCLC's IFM Program (an 
electronic debit/credit payment program for libraries using OCLC's 
resource sharing service) or by invoice through the National Technical 
Information Service (NTIS) of the United States Department of Commerce. 
Payment for invoiced services will be made by check, money order, or 
credit card in U.S. funds directly to NTIS upon receipt of invoice from 
NTIS. NAL encourages users to establish deposit accounts with NTIS for 
payment of interlibrary loan fees. Subject to a reduction for the actual 
costs of performing the invoicing service by NTIS, all funds will be 
returned to NAL for credit to the appropriations account charged with 
the cost of processing the interlibrary loan request.

                       PART 510_PUBLIC INFORMATION

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,

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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, ARS, U.S. 
Department of Agriculture, Washington, DC 20250.

 PART 520_PROCEDURES FOR IMPLEMENTING NATIONAL ENVIRONMENTAL POLICY ACT

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

[[Page 426]]

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).
    (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 Deputy Administrator for Natural Resources 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.

[51 FR 34191, Sept. 25, 1986, as amended at 77 FR 40250, July 9, 2012]

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;

[[Page 427]]

    (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 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

[[Page 428]]

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.

 PART 550_GENERAL ADMINISTRATIVE POLICY FOR NON-ASSISTANCE COOPERATIVE 
                               AGREEMENTS

                            Subpart A_General

Sec.
550.1  Purpose and scope.
550.2  Definitions.
550.3  Applicability.
550.4  Eligibility.
550.5  Competition.
550.6  Duration.
550.7  Exceptions.
550.8  Conflicting policies and deviations.
550.9  Other applicable regulations.
550.10  Special Award Conditions.

                    Subpart B_Formation of Agreements

550.11  Purpose.
550.12  Statutory authorization required (REE Agency).
550.13  Mutuality of interest.
550.14  Indirect costs/tuition remission.
550.15  Resource contribution.
550.16  Project development.
550.17  Peer review.
550.18  Assurances/certifications.

                   Subpart C_Management of Agreements

                          Financial Management

550.19  Purpose.
550.20  Standards for financial management systems.
550.21  Funding availability.
550.22  Payment.
550.23  Program income.
550.24  Non-Federal audits.
550.25  Allowable costs.

                           Program Management

550.26  Monitoring program performance.
550.27  Prior approvals.
550.28  Publications and acknowledgement of support.
550.29  Press releases.
550.30  Advertising.
550.31  Questionnaires and survey plans.
550.32  Project supervision and responsibilities.
550.33  Administrative supervision.
550.34  Research misconduct.
550.35  Rules of the workplace.

                      Equipment/Property Standards

550.36  Purpose of equipment/property standards.
550.37  Title to equipment.
550.38  Equipment.
550.39  Equipment replacement insurance.
550.40  Supplies and other expendable property.
550.41  Federally owned property.
550.42  Intangible property.

                          Procurement Standards

550.43  Purpose of procurement standards.
550.44  Cooperator responsibilities.
550.45  Standards of conduct.
550.46  Competition.
550.47  Cost and price analysis.
550.48  Procurement records.
550.49  Contract administration.
550.50  Contract provisions.

                           Reports and Records

550.51  Purpose of reports and records.
550.52  Reporting program performance.
550.53  Financial reporting.
550.54  Invention disclosure and utilization reporting.
550.55  Retention and access requirements for records.

                 Suspension, Termination and Enforcement

550.56  Purpose of suspension, termination, and enforcement.
550.57  Suspension and termination.
550.58  Enforcement.

                           Subpart D_Close Out

550.59  Purpose.

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550.60  Closeout procedures.
550.61  Subsequent adjustments and continuing responsibilities.
550.62  Collection of amounts due.

    Authority: Section 1472(b) of the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 
3318(b)).

    Source: 73 FR 54292, Sept. 19, 2008, unless otherwise noted.

                            Subpart A_General

Sec. 550.1  Purpose and scope.

    This part establishes REE-wide standards of USDA's award and 
administration of non-assistance cooperative agreements executed under 
the authority of Section 1472(b) of the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 
3318(b)). These agreements are neither procurement nor assistance in 
nature, and therefore, are not subject to the Federal Grant and 
Cooperative Agreements Act of 1977. Accordingly, proper use of these 
cooperative agreements will promote and facilitate partnerships between 
the REE Agency and the Cooperator in support of research, extension and 
education projects of mutual benefit to each party.

Sec. 550.2  Definitions.

    Accrued expenditures means the charges incurred by the Cooperator 
during a given period requiring the provision of funds for:
    (1) Goods and other tangible property received;
    (2) Services performed by employees, contractors, subrecipients, and 
other payees; and
    (3) Other amounts becoming owed under programs for which no current 
services or performance is required.
    Acquisition cost of equipment means the net invoice price of the 
equipment, including the cost of modifications, attachments, 
accessories, or auxiliary apparatus necessary to make the property 
usable for the purpose for which it was acquired. Other charges, such as 
the cost of installation, transportation, taxes, duty or protective in-
transit insurance, shall be included or excluded from the unit 
acquisition cost in accordance with the Cooperator's regular accounting 
practices.
    Advance means a payment made to a Cooperator upon its request either 
before outlays are made by the Cooperator or through the use of 
predetermined payment schedules.
    Authorized Departmental Officer (ADO) means the REE Agency's 
official delegated authority to negotiate, award, administer, suspend, 
and terminate non-assistance cooperative agreements.
    Authorized Departmental Officer's Designated Representative (ADODR) 
means the REE Agency's technical representative, acting within the scope 
of delegated authority, who is responsible for participating with the 
Cooperator in the accomplishment of a cooperative agreement's objectives 
and monitoring and evaluating the Cooperator's performance.
    Award means a non-assistance cooperative agreement which provides 
money or in-kind services or property in lieu of money, to an eligible 
Cooperator. The term does not include: Financial assistance awards in 
the form of grants, cooperative agreements, loans, loan guarantees, 
interest subsidies, or insurance; direct payments of any kind to 
individuals; and contracts which are required to be entered into and 
administered under procurement laws and regulations.
    CFR means the Code of Federal Regulations.
    Closeout means the process by which a REE Agency determines that all 
applicable administrative actions and all required work under the 
agreement has been completed by the Cooperator and REE Agency.
    Contract means a procurement contract entered into by the cooperator 
or a subcontractor of the cooperator pursuant to the cooperative 
agreement.
    Cooperator means any State agricultural experiment station, State 
cooperative extension service, all colleges and universities, other 
research or education institutions and organizations, Federal and 
private agencies and organizations, individuals, and any other party, 
either foreign or domestic, receiving an award from a REE Agency.

[[Page 430]]

    Disallowed costs means those charges incurred under the cooperative 
agreement that REE determines to be unallowable, in accordance with the 
applicable Federal cost principles or other terms and conditions 
contained in the cooperative agreement.
    Electronic Funds Transfer (EFT) means electronic payment methods 
used to transfer funds to a Cooperator's bank account (including HHS/
PMS).
    Equipment means tangible nonexpendable personal property contributed 
or acquired by either an REE Agency or by the Cooperator, having a 
useful life of more than one year and an acquisition cost of $5000 or 
more per unit. However, consistent with Cooperator policy, lower limits 
may be established.
    Funding period means the period of time when Federal funding is 
available for obligation by the Cooperator.
    HHS-PMS means the Department of Health and Human Services/Payment 
Management System (also see EFT).
    i-Edison (Interagency Edison) is a database, which provides Federal 
grantee/Cooperator organizations and participating Federal agencies with 
the technology to electronically manage extramural invention portfolios 
in compliance with Federal reporting requirements.
    Intangible property means, trademarks, copyrights, patents and 
patent applications.
    Obligations means the amounts of orders placed, contracts and grants 
awarded, services received and similar transactions during a given 
period that require payment by the Cooperator during the same or a 
future period.
    OMB means the Office of Management and Budget.
    Outlays or expenditures means charges made to the project or 
program. Outlays and expenditures also include cash disbursements for 
direct charges for goods and services, the amount of indirect expense 
incurred, the value of in-kind contributions applied, and the net 
increase (or decrease) in the amounts owed by the Cooperator for goods 
and other property received, for services performed by employees, 
contractors, subrecipients, and other payees and other amounts becoming 
owed under programs for which no current services or performance are 
required.
    Peer Review is a process utilized by REE Agencies to:
    (1) Determine if agency sponsored research projects have scientific 
merit and program relevance;
    (2) Provide peer input and make improvements to project design and 
technical approaches;
    (3) Provide insight on how to conduct the highest quality research 
in support of Agency missions and programs.
    Personal property means property of any kind except real property. 
It may be tangible, having physical existence, or intangible, having no 
physical existence, such as copyrights, patents, or securities.
    Principle Investigator (PI) means the individual, designated by the 
Cooperator, responsible for directing and monitoring the performance, 
the day-to-day activities, and the scientific and technical aspects of 
the Cooperator's portion of a REE funded project. The PI works jointly 
with the ADODR in the development of project objectives and all other 
technical and performance related aspects of the program or project. See 
additional responsibilities of PI in Sec. 550.32.
    Prior approval means written approval by an ADO evidencing prior 
consent.
    Program income means gross income earned by the Cooperator that is 
directly generated by a supported activity or earned as a result of the 
award. Program income includes, but is not limited to, income from fees 
for services performed, the use or rental of real or personal property 
acquired under federally funded projects, the sale of commodities or 
items fabricated under an award, and license fees and royalties on 
patents and copyrights. Program income does not include the receipt of 
principal on loans, rebates, credits, discounts, etc., or interest 
earned on any of them, or interest earned on advances of Federal funds.
    Project costs means all allowable costs, incurred by the Cooperator 
and the REE Agency toward the completion of the project.
    Project period means the period established in the cooperative 
agreement

[[Page 431]]

during which Federal contributions begin and end.
    Property means, unless otherwise stated, personal property, 
equipment, intangible property.
    Publications mean all types of paper based media including 
electronic and audio media.
    Real property means land, including land improvements, structures 
and appurtenances thereto, but excludes movable machinery and equipment.
    REE Agency means the USDA Agency that enters into a cooperative 
agreement with the cooperator.
    State Cooperative Institutions are defined in statute as 
institutions designated or receiving funds pursuant to:
    (1) The First Morrill Act--The Land Grant Institutions.
    (2) The Second Morrill Act--The 1890 Institutions.
    (3) The Hatch Act of 1887--The State Agricultural Experiment 
Stations.
    (4) The Smith-Lever Act--The State Extension Services.
    (5) The McIntire-Stennis Act of 1962--The Cooperating Forestry 
Schools.
    (6) Public Law 95-113, Section 1430--A college or university having 
an accredited college of veterinary medicine or a department of 
veterinary science or animal pathology or similar unit conducting animal 
health and disease research in a State Agricultural Experiment Station.
    (7) Public Law 97-98, Section 1475b--Colleges, universities, and 
Federal laboratories having a demonstrated capacity in aquaculture 
research.
    (8) Public Law 97-98, Section 1480--Colleges, universities, and 
Federal laboratories having a demonstrated capacity of rangeland 
research.
    (9) Equity in Educational Land--Grant Status Act of 1994 (7 U.S.C. 
301 note) 1994 Institutions.
    Subaward means an award in the form of money or in-kind services or 
property in lieu of money, made under an award by a Cooperator to an 
eligible subrecipient or by a subrecipient to a lower tier subrecipient.
    Subrecipient means the legal entity to which a subaward is made and 
which is accountable to the Cooperator for the use of the funds 
provided. The term may include foreign or international organizations 
(such as agencies of the United Nations) at the discretion of the REE 
Agency.
    Supplies means all personal property excluding equipment, intangible 
property, as defined in this section, and inventions of a contractor 
conceived or first actually reduced to practice in the performance of 
work under a funding agreement (``subject inventions''), as defined in 
37 CFR part 401, ``Rights to Inventions Made by Nonprofit Organizations 
and Small Business Firms Under Government Grants, Contracts, and 
Cooperative Agreements.''
    Suspension means an action by a REE Agency that temporarily 
withdraws Federal sponsorship under an award, pending corrective action 
by the Cooperator or pending a decision to terminate the award by the 
REE Agency. Suspension of an award is a separate action from suspension 
under Federal Agency regulations implementing Executive Orders 12549 and 
12689, ``Debarment and Suspension.''
    Termination means the cancellation of Federal sponsorship, in whole 
or in part, under an agreement at any time prior to the date of 
completion.
    Unliquidated obligations are the amount of obligations incurred by 
the Cooperator for which an outlay has not been recorded.
    Unobligated balance means the portion of the funds authorized by the 
REE Agency that has not been obligated by the Cooperator and is 
determined by deducting the cumulative obligations from the cumulative 
funds authorized.
    Unrecovered indirect cost means the difference between the amount 
awarded and the amount, which could have been awarded under the 
Cooperator's approved negotiated indirect cost rate.
    U.S.C. means the United States Code.
    USDA means the United States Department of Agriculture.

Sec. 550.3  Applicability.

    This part applies to all REE non-assistance cooperative agreements 
awarded under the authority of 7 U.S.C. 3318(b).

Sec. 550.4  Eligibility.

    REE agencies may enter into non-assistance cooperative agreements 
with State agricultural experiment stations,

[[Page 432]]

State cooperative extension services, all colleges and universities, 
other research or education institutions and organizations, Federal and 
private agencies and organizations, individuals, and any other party, 
either foreign or domestic, to further research, extension, or teaching 
programs in the food and agricultural sciences. (7 U.S.C. 3318(b)(1)).

Sec. 550.5  Competition.

    REE agencies may enter into non-assistance cooperative agreements, 
as authorized by this part, without regard to any requirements for 
competition. (7 U.S.C. 3318(e)).

Sec. 550.6  Duration.

    REE may enter into non-assistance cooperative agreements for a 
period not to exceed five years.

Sec. 550.7  Exceptions.

    This Part does not apply to:
    (a) USDA Federal Financial Assistance agreements subject to 7 CFR 
3015, 3016, or 3019.
    (b) Procurement contracts or other agreements subject to the Federal 
Acquisition Regulation (FAR) or the Agriculture Acquisition Regulation 
(AgAR); on Agreements providing loans or insurance directly to an 
individual.

Sec. 550.8  Conflicting policies and deviations.

    This part supersedes and takes precedence over any individual REE 
regulations and directives dealing with the award and administration of 
non-assistance cooperative agreements entered into under the delegated 
authority of 7 U.S.C. 3318(b). This part may only be superseded, in 
whole or in part, by either a specifically worded statutory provision or 
a waiver authorized by the USDA-REE-Administrative and Financial 
Management (AFM)-Extramural Agreements Division (EAD) or any successor 
organization. Responsibility for developing, interpreting, and updating 
this part is assigned to the USDA-REE-AFM-EAD or any successor 
organization.

Sec. 550.9  Other applicable regulations.

    Related issuances are in other parts of the CFR and the U.S.C. as 
follows:
    (a) 7 CFR Part 3017 ``Governmentwide Debarment and Suspension'';
    (b) 7 CFR Part 3018 ``New Restrictions on Lobbying'';
    (c) 7 CFR Part 3052 ``Audits of States, Local Governments, and 
Nonprofit Organizations'';
    (d) 7 CFR 3015.175 (b) ``Copyrights'';
    (e) 37 CFR 401.14 ``Standard Patent Rights Clause'';
    (f) 15 U.S.C. 205a et seq. ``The Metric Conversion Act, as amended 
by the Omnibus Trade and Competitiveness Act'';
    (g) 42 U.S.C. 6962 ``Resource Conservation and Recovery Act 
(RCRA)''.

Sec. 550.10  Special Award Conditions.

    (a) REE Agencies may impose special conditions and/or additional 
requirements to a non-assistance agreement if a Cooperator:
    (1) Has a history of poor performance,
    (2) Is not financially stable,
    (3) Has a management system that does not meet the standards 
prescribed in this Part,
    (4) Has not conformed to the terms and conditions of a previous 
award, or
    (5) Is not otherwise responsible.
    (b) Special conditions and/or additional requirements may be added 
to an award provided that the Cooperator is notified in writing as to: 
the nature of the additional requirements, the reason why the additional 
requirements are being imposed, the nature of the corrective action 
needed, the time allowed for completing the corrective actions, and the 
method for requesting reconsideration of the additional requirements 
imposed. Any special conditions shall be promptly removed once the 
conditions that prompted them have been corrected.

                    Subpart B_Formation of Agreements

Sec. 550.11  Purpose.

    Sections 550.12 through 550.18 prescribe instructions and other pre-
award matters to be used in establishing a non-assistance cooperative 
agreement.

Sec. 550.12  Statutory authorization required (REE Agency).

    REE Agencies must have programmatic statutory authority for the

[[Page 433]]

proposed project prior to entering into any non-assistance cooperative 
agreement.

Sec. 550.13  Mutuality of interest.

    The REE Agency shall document both parties interest in the project. 
Mutual interest exists when both parties benefit in the same qualitative 
way from the objectives of the agreement. If one party to the agreement 
would independently have an interest in the project, which is shared by 
the other party, and both parties pool resources to obtain the end 
result of the project, mutual interest exists.

Sec. 550.14  Indirect cost/tuition remission.

    (a) Indirect cost--(1) State Cooperative Institutions. Payment of 
indirect costs to State Cooperative Institutions in connection with non-
assistance cooperative agreements awarded under the authority of 7 
U.S.C. 3318(b) is prohibited. This prohibition does not apply to funds 
for international agricultural programs conducted by a State cooperative 
institution and administered by the Secretary or to funds provided by a 
Federal agency for such cooperative program or project through a fund 
transfer, advance or reimbursement. (7 U.S.C. 3319.)
    (2) Non-profit organizations. Payment of indirect costs to non-
profit institutions in connection with USDA cooperative agreement, under 
the authority of 7 U.S.C. 3318(b), is limited to 10 percent of the total 
direct cost of the project. (Annual Appropriations Bill for Agriculture 
and Related agencies, General Provisions.)
    (3) All other cooperating organizations. With the exception of 
paragraphs (a)(1) and (2) of this section, payment of indirect costs is 
allowable in connection with REE non-assistance cooperative agreements. 
Reimbursement of indirect costs is limited to the percentage(s) 
established in the Cooperator's negotiated indirect cost rate schedule.
    (4) In any case, the REE Agency shall not reimburse indirect costs 
prior to receipt of the Cooperator's negotiated indirect cost rate 
schedule.
    (b) Tuition remission--(1) State Cooperative Institutions. 
Reimbursement of tuition expenses to State Cooperative Institutions in 
connection with REE non-assistance cooperative agreements is prohibited. 
(7 U.S.C. 3319)
    (2) All other cooperating organizations. Except for paragraph (b)(1) 
of this section, tuition remission is an allowable expense as determined 
in accordance with the cost principles applicable to the Cooperator. REE 
agencies shall negotiate and approve such payments as related to the 
scope and objectives of the non-assistance agreement.

Sec. 550.15  Resource contribution.

    Each party must contribute resources towards the successful 
completion of the project. Required resource contributions must be 
substantial enough to substantiate a true stake in the project as 
determined by the ADO.
    (a) REE Agency's contribution. The REE Agency's contribution must 
consist of the total in-house costs to the REE Agency and the total 
amount to be reimbursed by the REE Agency to the Cooperator for all 
allowable costs agreed to in advance as reflected in the cooperative 
agreement.
    (b) Cooperator's contribution. (1) The Cooperator's contribution 
must be no less than 20 percent of the total of the resource 
contributions under the cooperative agreement. Resource contributions of 
the Cooperator must consist of a sufficient amount of itemized direct 
costs to substantiate a true stake in the project as determined by the 
ADO. The Cooperator's contribution must be maintained at 20 percent of 
Federal funding throughout the life of the cooperative agreement.
    (2) Cooperators share of contributions may consist of ``in-kind'' 
contributions and may also include unrecoverable indirect costs. Such 
costs may be accepted as part of the Cooperator's resource contribution 
when all of the following criteria are met:
    (i) Costs are verifiable from the Cooperator's records.
    (ii) Costs are not included as contributions for any other federally 
assisted project or program.
    (iii) Costs are necessary and reasonable for proper and efficient 
accomplishment of project or program objectives.
    (iv) Costs are allowable under the applicable cost principles.

[[Page 434]]

    (v) Costs are not paid by the Federal Government under another 
award, except where authorized by Federal statute to be used for cost 
sharing or matching.
    (vi) Costs conform to other provisions of this Part, as applicable.
    (3) Volunteer services furnished by professional and technical 
personnel, consultants, and other skilled and unskilled labor may be 
counted as resource contributions if the service is an integral and 
necessary part of an approved project or program. Rates for volunteer 
services shall be consistent with those paid for similar work in the 
Cooperator's organization. In those instances in which the required 
skills are not found in the Cooperator organization, rates shall be 
consistent with those paid for similar work in the labor market in which 
the Cooperator competes for the kind of services involved. In either 
case, paid fringe benefits that are reasonable, allowable, and allocable 
may be included in the valuation.
    (4) When an employer other than the Cooperator furnishes the 
services of an employee, these services shall be valued at the 
employee's regular rate of pay (plus an amount of fringe benefits that 
are reasonable, allowable, and allocable, but exclusive of overhead 
costs), provided these services are in the same skill for which the 
employee is normally paid.
    (5) Donated supplies may include such items as expendable equipment, 
office supplies, laboratory supplies or workshop and classroom supplies. 
Value assessed to donated supplies included in the cost sharing or 
matching share shall be reasonable and shall not exceed the fair market 
value of the property at the time of the donation.
    (6) The value of donated property shall be determined in accordance 
with the usual accounting policies of the Cooperator, with the following 
qualifications.
    (i) The value of donated land and buildings shall not exceed its 
fair market value at the time of donation to the Cooperator as 
established by an independent appraiser (e.g., certified real property 
appraiser or General Services Administration representative) and 
certified by a responsible official of the Cooperator.
    (ii) The value of donated equipment shall not exceed the fair market 
value of equipment of the same age and condition at the time of 
donation.
    (iii) The value of donated space shall not exceed the fair rental 
value of comparable space as established by an independent appraisal of 
comparable space and facilities in a privately owned building in the 
same locality.
    (iv) The value of loaned equipment shall not exceed its fair rental 
value.
    (v) The following requirements pertain to the Cooperator's 
supporting records for in-kind contributions from third parties.
    (A) Volunteer services shall be documented and, to the extent 
feasible, supported by the same methods used by the Cooperator for its 
own employees.
    (B) The basis for determining the valuation for personal service, 
material, equipment, buildings, and land shall be documented.

Sec. 550.16  Project development.

    REE provides partial funding to Cooperators to support research 
projects that contribute to REE program objectives and help carry out 
the REE mission. The Cooperator's PI and the REE Agency's ADODR shall 
jointly develop the following documentation:
    (a) Project plan. A plan that shall be jointly developed by the REE 
ADODR and the Cooperator that is compliant with an REE program 
requirement. The project plan will utilize the REE provided format for 
external peer review.
    (b) Statement of work. A detailed statement of work shall be jointly 
planned, developed and prepared by the Cooperator's PI and the awarding 
Agency's ADODR consisting of the following:
    (1) Objective
    (2) Approach
    (3) Statement of Mutual Interest
    (4) Performance Responsibilities
    (5) Mutual Agreements
    (c) Budget. A plan that shall be jointly developed by the REE ADODR 
and the Cooperator PI outlining the following resource contributions:
    (1) Total amount to be reimbursed by the REE Agency to the 
Cooperator. (Direct and Indirect Costs as applicable)

[[Page 435]]

    (2) Total in-house costs to the REE Agency. (Direct and indirect 
costs)
    (3) Total in-house costs to the Cooperator. (Direct and indirect 
costs)

Sec. 550.17  Peer review.

    Upon request of the REE Agency, cooperators may be requested to 
provide documentation in support of peer review activities and 
cooperator personnel may be requested to participate in peer review 
forums to assist the REE Agency in their reviews.

Sec. 550.18  Assurances/certifications.

    (a) Governmentwide Debarment and Suspension (Non procurement)--7 CFR 
3017;
    (b) Governmentwide requirements for Drug-Free Workplace--7 CFR 3021;
    (c) Non-discrimination. The Cooperator assures compliance with the 
following requirement: No person in the United States shall, on the 
grounds of race, color, national origin, sex, age, religion, political 
beliefs, or disability, be excluded from participation in, be denied the 
benefits of, or be otherwise subjected to discrimination under any 
project or activity under a non-assistance cooperative agreement.
    (d) Protection of human subjects requirements. The Cooperator 
assures compliance with the following provisions regarding the rights 
and welfare of human subjects:
    (1) The Cooperator is responsible for safeguarding the rights and 
welfare of any human subjects involved in research, development, and 
related activities supported by this Agreement. The Cooperator may 
conduct research involving human subjects only as prescribed in the 
statement of work and as approved by the Cooperator's Cognizant 
Institutional Review Board. Prior to conducting such research, the 
Cooperator shall obtain and document a legally sufficient informed 
consent from each human subject involved. No such informed consent shall 
include any exculpatory language through which the subject is made to 
waive, or to appear to waive, any of his or her legal rights, including 
any release of the Cooperator or its agents from liability for 
negligence.
    (2) The Cooperator agrees to comply with U.S. Department of Health 
and Human Services' regulations regarding human subjects, appearing in 
45 CFR part 46 (as amended).
    (3) It will comply with REE policy, which is to assure that the 
risks do not outweigh either potential benefits to the subjects or the 
expected value of the knowledge sought.
    (4) Selection of subject or groups of subjects shall be made without 
regard to sex, race, color, religion, or national origin unless these 
characteristics are factors to be studied.
    (e) Animal Welfare Act requirements. The Cooperator assures 
compliance with the Animal Welfare Act, as amended, 7 U.S.C. 2131, et 
seq., and the regulations promulgated thereunder by the Secretary of 
Agriculture (9 CFR, subchapter A) pertaining to the care, handling, and 
treatment of warm-blooded animals held or used for research, teaching, 
or other activities supported by Federal funds. The Cooperator may 
request registration of facilities and a current listing of licensed 
dealers from the Regional Office of the Animal and Plant Health 
Inspection Service (APHIS), USDA, for the Region in which their facility 
is located. The location of the appropriate APHIS Regional Office, as 
well as information concerning this requirement, may be obtained by 
contacting the Senior Staff Officer, Animal Care Staff, USDA/APHIS,4700 
River Road, Riverdale, Maryland 20737.
    (f) Recombinant DNA research requirements. The Cooperator assures 
that it will assume primary responsibility for implementing proper 
conduct on recombinant DNA research and it will comply with the National 
Institute of Health Guidelines for Recombinant DNA Research, as revised.
    (1) If the Cooperator wishes to send or receive registered 
recombinant DNA material which is subject to quarantine laws, permits to 
transfer this material into the U.S. or across state lines may be 
obtained by contacting USDA/APHIS/PPQ, Scientific Services--
Biotechnology Permits, 4700 River Road, Unit 133, Riverdale, Maryland 
20737. In the event that the Cooperator has not established the 
necessary biosafety committee, a request for guidance or assistance may 
be made to the USDA Recombinant DNA Research Officer.

[[Page 436]]

    (2) [Reserved]
    (g) Agriculture Bioterrorism Protection Act requirements. The 
Cooperator assures compliance with the Agriculture Bioterrorism 
Protection Act of 2002, as implemented at 7 CFR part 331 and 9 CFR part 
121, by agreeing that it will not possess, use, or transfer any select 
agent or toxin without a certificate of registration issued by the 
Agency.

                   Subpart C_Management of Agreements

                          Financial Management

Sec. 550.19  Purpose.

    Sections 550.20 through 550.25 of this subpart prescribe standards 
for financial management systems and program management requirements.

Sec. 550.20  Standards for financial management systems.

    (a) REE agencies shall require Cooperators to relate financial data 
to performance data.
    (b) Cooperators' financial management systems shall provide for the 
following:
    (1) Accurate, current, and complete disclosure of the financial 
results of each REE sponsored project or program in accordance with the 
reporting requirements set forth in Sec. 550.53 of this part. REE 
requires financial reporting on an accrual basis; however, the 
Cooperator shall not be required to establish an accrual accounting 
system. These Cooperators shall develop such accrual data through best 
estimate for their reports on the basis of an analysis of the 
documentation on hand.
    (2) Records that identify the source and application of funds for 
federally sponsored activities. These records shall contain information 
pertaining to Federal awards, authorizations, obligations, unobligated 
balances, assets, outlays, income and interest.
    (3) Effective control over and accountability for all funds, 
property and other assets. Cooperators shall adequately safeguard all 
such assets and assure they are used solely for authorized purposes.
    (4) Comparison of outlays with budget amounts for each award. 
Whenever appropriate, financial information should be related to 
performance and unit cost data.
    (5) Written procedures to minimize the time elapsing between the 
transfer of funds to the Cooperator from the U.S. Treasury and the 
issuance or redemption of a check, warrant or payment by other means for 
program purposes by the Cooperator. To the extent that the provisions of 
the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern, 
payment methods of State agencies, instrumentalities, and fiscal agents 
shall be consistent with CMIA Treasury-State Agreements or the CMIA 
default procedures codified at 31 CFR part 205, ``Rules and procedures 
for efficient Federal State funds transfer.''
    (6) Written procedures for determining the reasonableness, 
allocability and allowability of costs in accordance with the provisions 
of the applicable Federal cost principles and the terms and conditions 
of the award.
    (7) Accounting records including cost accounting records that are 
supported by source documentation.
    (c) Where bonds are required in the situations described above, the 
bonds shall be obtained from companies holding certificates of authority 
as acceptable sureties, as prescribed in31 CFR part 223, ``Surety 
Companies Doing Business with the United States.''

Sec. 550.21  Funding availability.

    The funding period will begin on the date of final signature, unless 
otherwise stated on the agreement, and continue for the project period 
specified on the cover page of the cooperative agreement.

Sec. 550.22  Payment.

    (a) Payment methods shall minimize the time elapsing between the 
transfer of funds from the U.S. Treasury and the issuance or redemption 
of a check, warrant, or payment by other means by the Cooperators. 
Payment methods of State agencies or instrumentalities shall be 
consistent with Treasury-State CMIA agreements or default procedures 
codified at 31 CFR part 205.
    (b) Reimbursement is the preferred method of payment. All payments 
to the Cooperator shall be made via EFT.

[[Page 437]]

    (1) When the reimbursement method is used, the REE Agency shall make 
payment within 30 days after receipt of the billing, unless the billing 
is improper.
    (2) Cooperators shall be authorized to submit requests for payment 
not more than quarterly and not less frequently than annually.
    (3) Content of Invoice.
    At a minimum, the Cooperator's invoice shall state the following:
    (i) The name and address of the Cooperator;
    (ii) The name and address of the PI;
    (iii) The name and address of the financial officer to whom payments 
shall be sent;
    (iv) A reference to the cooperative agreement number;
    (v) The invoice date;
    (vi) The time period covered by the invoice; and
    (vii) Total dollar amount itemized by budget categories (labor, 
direct costs, and indirect costs, etc.).
    (4) To facilitate the EFT process, the Cooperator shall provide the 
following information:
    (i) The name, addresses, and telephone number of the financial 
institution receiving payment;
    (ii) The routing transit number of the financial institution 
receiving payment;
    (iii) The account to which funds are to be deposited; and
    (iv) The type of depositor account (checking or savings).
    (c) If the REE Agency has determined that reimbursement is not 
feasible because the Cooperator lacks sufficient working capital, the 
REE Agency may provide cash on an advance basis provided the Cooperator 
maintains or demonstrates the willingness to maintain: Written 
procedures that minimize the time elapsing between the transfer of funds 
and disbursement by the Cooperator, and financial management systems 
that meet the standards for fund control and accountability as 
established in Sec. 550.20. Under this procedure, the REE Agency shall 
advance cash to the Cooperator to cover its estimated disbursement needs 
for an initial period. The timing and amount of cash advances shall be 
as close as is administratively feasible to the actual disbursements by 
the Cooperator organization for direct program or project costs and the 
proportionate share of any allowable indirect costs.
    (1) Advance payment mechanisms include, but are not limited to, 
Treasury check and electronic funds transfer.
    (2) Advance payment mechanisms are subject to the requirements of 31 
CFR part 205.
    (3) Requests for advance payment shall be submitted on SF-270, 
``Request for Advance or Reimbursement.'' This form is not to be used 
when advance payments are made to the Cooperator automatically through 
the use of a predetermined payment schedule or if precluded by special 
REE Agency instructions for electronic funds transfer.
    (4) Cooperators shall maintain advances of Federal funds in interest 
bearing accounts, unless Sec. 550.22(c)(4)(i), (ii), or (iii) applies.
    (i) The Cooperator receives less than $120,000 in Federal awards per 
year.
    (ii) The best reasonably available interest bearing account would 
not be expected to earn interest in excess of $250 per year on Federal 
cash balances.
    (iii) The depository would require an average or minimum balance so 
high that it would not be feasible within the expected Federal and non-
Federal cash resources.
    (5) For those entities where CMIA and its implementing regulations 
do not apply, interest earned on Federal advances deposited in interest 
bearing accounts shall be remitted annually to Department of Health and 
Human Services, Payment Management System, Rockville, MD 20852. The 
Cooperator for administrative expense may retain interest amounts up to 
$250 per year. State universities and hospitals shall comply with CMIA, 
as it pertains to interest. If an entity subject to CMIA uses its own 
funds to pay pre-award costs for discretionary awards without prior 
written approval from the REE Agency, it waives its right to recover the 
interest under CMIA. Thereafter, the REE Agency shall reimburse the 
Cooperator for its actual cash disbursements.
    (6) Whenever possible, advances shall be consolidated to cover 
anticipated cash needs for all awards made by the REE Agency to the 
Cooperator. The

[[Page 438]]

working capital advance method of payment shall not be used for 
Cooperators unwilling or unable to provide timely advances to their 
subrecipient to meet the subrecipient's actual cash disbursements.
    (d) To the extent available, Cooperators shall disburse funds 
available from repayments to and interest earned on program income, 
rebates, refunds, contract settlements, audit recoveries and interest 
earned on such funds before requesting additional cash payments.
    (e) Unless otherwise required by statute, REE Agencies shall not 
withhold payments for proper charges made by Cooperators at any time 
during the project period unless the conditions of paragraphs (e)(1) or 
(2) of this section apply.
    (1) A Cooperator has failed to comply with the project objectives, 
the terms and conditions of the award, or REE reporting requirements.
    (2) The Cooperator owes a debt to the United States which is subject 
to offset pursuant to 7 CFR part 3 and Federal Clause Collection 
Standard; 31 CFR parts 901 through 904.
    (f) Standards governing the use of banks and other institutions as 
depositories of funds advanced or reimbursed under awards are as 
follows:
    (1) Except for situations described in Sec. 550.22(f)(2), REE 
Agencies shall not require separate depository accounts for funds 
provided to a Cooperator or establish any eligibility requirements for 
depositories for funds provided to a Cooperator. However, Cooperators 
must be able to account for the receipt, obligation and expenditure of 
funds.
    (2) Advances of Federal funds shall be deposited and maintained in 
insured accounts whenever possible.

Sec. 550.23  Program income.

    (a) REE Agencies shall apply the standards set forth in this section 
in requiring Cooperator organizations to account for program income 
related to projects financed in whole or in part with Federal funds.
    (b) Except as provided in Sec. 550.23(f), program income earned 
during the project period shall be retained by the Cooperator and shall 
be added to funds committed to the project by the REE Agency and 
Cooperator and used to further eligible project or program objectives.
    (c) Cooperators shall have no obligation to the Federal Government 
regarding program income earned after the end of the project period.
    (d) Costs incident to the generation of program income may be 
deducted from gross income to determine program income, provided these 
costs have not been charged to the award.
    (e) Proceeds from the sale of property shall be handled in 
accordance with the requirements of the Property Standards (See 
Sec. Sec. 550.36 through 550.42).
    (f) Cooperators shall have no obligation to the Federal Government 
with respect to program income earned from license fees and royalties 
for copyrighted material, patents, patent applications, trademarks, and 
inventions produced under an award. However, Patent and Trademark 
Amendments (35 U.S.C. Chapter 25) apply to inventions made under an 
experimental, developmental, or research award.

Sec. 550.24  Non-Federal audits.

    (a) Cooperators and subrecipients that are institutions of higher 
education or other non-profit organizations (including hospitals) shall 
be subject to the audit requirements contained in the Single Audit Act 
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, 
``Audits of States, Local Governments, and Non-Profit Organizations.''
    (b) State and local governments shall be subject to the audit 
requirements contained in the Single Audit Act Amendments of 1996 (31 
U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of States, 
Local Governments, and Non-Profit Organizations.''
    (c) For-profit hospitals not covered by the audit provisions of 
revised OMB Circular A-133 shall be subject to the audit requirements of 
the REE agencies.
    (d) Commercial organizations shall be subject to the audit 
requirements of the REE Agency or the prime recipient as incorporated 
into the award document.

[[Page 439]]

Sec. 550.25  Allowable costs.

    For each kind of Cooperator, there is a set of Federal principles 
for determining allowable costs. Allowability of costs shall be 
determined in accordance with the cost principles applicable to the 
entity incurring the costs. Thus, allowability of costs incurred by 
State, local or federally recognized Indian tribal governments is 
determined in accordance with the provisions of OMB Circular A-87, 
``Cost Principles for State, Local, and Indian Tribal Governments'' 
codified at 2 CFR part 225. The allowability of costs incurred by non-
profit organizations is determined in accordance with the provisions of 
OMB Circular A-122, ``Cost Principles for Non-Profit Organizations'' 
codified at 2 CFR part 230. The allowability of costs incurred by 
institutions of higher education is determined in accordance with the 
provisions of OMB Circular A-21, ``Cost Principles for Educational 
Institutions'' codified at 2 CFR 220. The allowability of costs incurred 
by hospitals is determined in accordance with the provisions of subpart 
E of 45 CFR part 74. The allowability of costs incurred by commercial 
organizations and those non-profit organizations listed in appendix C to 
Circular A-122 (2 CFR part 230) is determined in accordance with the 
contract cost principles and procedures of the Federal Acquisition 
Regulation (FAR) at 48 CFR part 31.

                           Program Management

Sec. 550.26  Monitoring program performance.

    (a) Cooperators are responsible for managing the day-to-day 
operations of REE nonassistance awards using their established controls 
and policies, as long as they are consistent with REE requirements. 
However, in order to fulfill their role in regard to the stewardship of 
Federal funds, REE Agencies monitor their agreements to identify 
potential problems and areas where technical assistance might be 
necessary. This active monitoring is accomplished through review of 
reports and correspondence from the cooperator, audit reports, site 
visits, and other information available to the REE Agency. It is the 
responsibility of the Cooperator to ensure that the project is being 
performed in compliance with the terms and conditions of the award.
    (b) Monitoring of a project or activity will continue for as long as 
the REE Agency retains a financial interest in the project or activity. 
REE agencies reserve the right to monitor a project after it has been 
administratively closed out and no longer providing active support in 
order to resolve issues of accountability and other administrative 
requirements. Additional requirements regarding reporting and program 
performance can be found in Sec. Sec. 550.51 through 550.55 of this 
part.
    (c) The REE Agency reserves the right to perform site visits at 
Cooperator locations. Access to project or program records shall be 
provided in accordance with the provisions of Sec. 550.55.

Sec. 550.27  Prior approvals.

    (a) The budget is the financial expression of the project or program 
as approved during the award process. REE agencies require that all 
Federal costs be itemized on the approved budget. The budget shall be 
related to performance for program evaluation purposes.
    (b) Cooperators are required to report deviations from budget and 
program plans, and request prior approvals for budget and program plan 
revisions.
    (c) Cooperators shall request prior approvals from REE Agencies for 
one or more of the following program or budget related reasons.
    (1) Incur pre-award costs up to 90 days prior to award date. All 
pre-award costs are incurred at the Cooperator's risk (i.e., the REE 
Agency is under no obligation to reimburse such costs if for any reason 
the Cooperator does not receive an award or if the award is less than 
anticipated and inadequate to cover such costs).
    (2) Change in the scope or the objective of the project or program 
(even if there is no associated budget revision requiring prior written 
approval).
    (3) The absence for more than three months, or a 25 percent 
reduction in time devoted to the project, by the approved project 
director or principal investigator.

[[Page 440]]

    (4) Extensions of time, within statutory limitations, to complete 
project objectives. This extension may not be requested merely for the 
purpose of using unobligated balances. The Cooperator shall request the 
extension in writing with supporting reasons.
    (5) The transfer of amounts budgeted for indirect costs to absorb 
increases in direct costs, or vice versa.
    (6) The inclusion of costs that require prior approval in accordance 
with OMB Circular A-21, ``Cost Principles for Educational 
Institutions,'' (2 CFR part 220), OMB Circular A-122, ``Cost Principles 
for Non-Profit Organizations'' (2 CFR part 230) or 45 CFR part 74 
appendix E, or 48 CFR part 31, ``Contract Cost Principles and 
Procedures,'' as applicable.
    (7) Unless described in the agreement and funded in the approved 
awards, the subaward, transfer or contracting out of any work under an 
award. This provision does not apply to the purchase of supplies, 
material, equipment or general support services.
    (d) When requesting approval for budget revisions, Cooperators shall 
use the budget form used in the cooperative agreement.
    (e) Within 30 calendar days from the date of receipt of the request 
for budget revisions, the ADO shall review the request and notify the 
Cooperator whether the budget revisions have been approved.

Sec. 550.28  Publications and acknowledgment of support.

    (a) Publications. REE Agencies and the Federal Government shall 
enjoy a royalty-free, nonexclusive, and irrevocable right to reproduce, 
publish or otherwise use, and to authorize others to use, any materials 
developed in conjunction with a nonassistance cooperative agreement or 
contract under such an agreement.
    (b)(1) Cooperators shall acknowledge ARS, Economics Research Service 
(ERS), National Agricultural Statistics Service (NASS), and the National 
Institute of Food and Agriculture (NIFA) support, whether cash or in-
kind, in any publications written or published with Federal support and, 
if feasible, on any publication reporting the results of, or describing, 
a Federally supported activity as follows:
    ``This material is based upon work supported by the U.S. Department 
of Agriculture, ---- (insert Agency name) ---- under Agreement No. 
(Cooperator should enter the applicable agreement number here).''
    (2) All such material must also contain the following disclaimer 
unless the publication is formally cleared by the awarding agency:
    ``Any opinions, findings, conclusion, or recommendations expressed 
in this publication are those of the author(s) and do not necessarily 
reflect the view of the U.S. Department of Agriculture.''
    (3) Any public or technical information related to work carried out 
under a non assistance cooperative agreement shall be submitted by the 
developing party to the other for advice and comment. Information 
released to the public shall describe the contributions of both parties 
to the work effort. In the event of a dispute, a separate publication 
may be made with effective statements of acknowledgment and disclaimer.
    (c) Media. Cooperators shall acknowledge awarding Agency support, as 
indicated in Sec. 550.28(b) above, in any form of media (print, DVD, 
audio production, etc.) produced with Federal support that has a direct 
production cost to the Cooperator of over $5,000. Unless the terms of 
the Federal award provide otherwise, this requirement does not apply to:
    (1) Media produced under mandatory or formula grants or under sub 
awards.
    (2) Media produced as research instruments or for documenting 
experimentation or findings and intended for presentation or 
distribution to a USDA/REE audience.

[73 FR 54292, Sept. 19, 2008, as amended at 76 FR 4805, Jan. 27, 2011]

Sec. 550.29  Press releases.

    Press releases or other forms of public notification will be 
submitted to the REE agency for review prior to release to the public. 
The REE Agency will be given the opportunity to review, in advance, all 
written press releases and any other written information to be released 
to the public by the

[[Page 441]]

Cooperator, and require changes as deemed necessary, if the material 
mentions by name the REE Agency or the USDA, or any USDA employee or 
research unit or location.

Sec. 550.30  Advertising.

    The Cooperator will not refer in any manner to the USDA or agencies 
thereof in connection with the use of the results of the project without 
prior specific written authorization by the awarding Agency. Information 
obtained as a result of the project will be made available to the public 
in printed or other forms by the awarding Agency at its discretion. The 
Cooperator will be given due credit for its cooperation in the project. 
Prior approval is required.

Sec. 550.31  Questionnaires and survey plans.

    The Cooperator is required to submit to the REE Agency copies of 
questionnaires and other forms for clearance in accordance with the 
Paperwork Reduction Act of 1980 and 5 CFR part 1320.

Sec. 550.32  Project supervision and responsibilities.

    (a) The Cooperator is responsible and accountable for the 
performance and conduct of all Cooperator employees assigned to the 
project. The REE Agency does not have authority to supervise Cooperator 
employees or engage in the employer employee relationship.
    (b) The PI shall:
    (1) Work jointly with the ADODR in the development of the project 
statement of work;
    (2) Work jointly with the ADODR in the development of the project 
budget;
    (3) Report, and obtain approval for, any change in the project 
budget;
    (4) Report, and obtain approval for, any change in the scope or 
objectives of the project;
    (5) Assure that technical project performance and financial status 
reports are submitted on a timely basis in accordance with the terms and 
conditions of the award;
    (6) Advise the ADODR of any issues that may affect the timely 
completion of the project;
    (7) Assure that the Cooperator meets its commitments under the terms 
and conditions of the non-assistance agreement;
    (8) Assure that appropriate acknowledgements of support are included 
in all publications, in accordance with Sec. 550.28 of this part.
    (9) Assure that inventions are appropriately reported in accordance 
with Sec. 550.54 of this part; and
    (10) Upon request, provide the REE Agency with a project plan for 
use for external peer review.

Sec. 550.33  Administrative supervision.

    REE employees are prohibited from engaging in matters related to 
cooperator employer/employee relations such as personnel, performance 
and time management issues. The cooperator is solely responsible for the 
administrative supervision of its employees.

Sec. 550.34  Research misconduct.

    (a) The Cooperator bears the primary responsibility for prevention 
and detection of research misconduct and for the inquiry, investigation 
and adjudication of research misconduct alleged to have occurred in 
association with their own institution.
    (b) The Cooperator shall:
    (1) maintain procedures for responding to allegations or instances 
of research misconduct that has the following components:
    (i) Objectivity;
    (ii) Due process;
    (iii) Whistle blower protection;
    (iv) Confidentiality;
    (v) Timely resolution;
    (2) Promptly conduct an inquiry into any allegation of research 
misconduct;
    (3) Conduct an investigation if an inquiry determines that the 
allegation or apparent instance of research misconduct has substance;
    (4) Provide appropriate separation of responsibilities between those 
responsible for inquiry and investigation, and those responsible for 
adjudication;
    (5) Advise REE Agency of outcome at end of inquiries and 
investigations into allegations or instances of research misconduct; and
    (6) Upon request, provide the REE Agency, upon request, hard copy 
(or website address) of their policies and

[[Page 442]]

procedures related to research misconduct.
    (c) Research misconduct or allegations of research misconduct shall 
be reported to the USDA Research Integrity Officer (RIO) and/or to the 
USDA, Office of Inspector General (OIG) Hotline.
    (1) The USDA RIO can be reached at: USDA Research Integrity Officer, 
214-W Whitten Building, Washington, DC 20250, Telephone: 202-720-5923, 
Email: [email protected].
    (2) The USDA OIG Hotline can be reached on: 1-800-424-9121.

Sec. 550.35  Rules of the workplace.

    Cooperator employees, while engaged in work at the REE Agency's 
facilities, will abide by the Agency's standard operating procedures 
regarding the maintenance of laboratory notebooks, dissemination of 
information, equipment operation standards, hours of work, conduct, and 
other incidental matters stated in the rules and regulations of the 
Agency.

                      Equipment/Property Standards

Sec. 550.36  Purpose of equipment/property standards.

    Sections 550.37 through 550.42 of this part set forth uniform 
standards governing management and disposition of property furnished by 
the Federal Government or acquired by the Cooperator with funds provided 
by the Federal Government. The Cooperator may use its own property 
management standards and procedures provided it observes other 
applicable provisions of this Part.

Sec. 550.37  Title to equipment.

    (a) As authorized by 7 U.S.C. 3318(d), title to expendable and 
nonexpendable equipment, supplies, and other tangible personal property 
purchased with Federal funding in connection with a non assistance 
cooperative agreement shall vest in the Cooperator from date of 
acquisition unless otherwise stated in the cooperative agreement.
    (b) Notwithstanding any other provision of this rule the REE Agency 
may, at its discretion, retain title to equipment described in paragraph 
(a) of this section that is or may be purchased with Federal funds when 
the REE agency determines that it is in the best interest of the Federal 
Government.

Sec. 550.38  Equipment.

    (a) The Cooperator shall not use equipment acquired with Federal 
funds to provide services to non-Federal outside organizations for a fee 
that is less than private companies charge for equivalent services, 
unless specifically authorized by Federal statute, for as long as the 
Federal Government retains an interest in the equipment.
    (b) The Cooperator shall use the equipment in the project or program 
for which it was acquired as long as needed, whether or not the project 
or program continues to be supported by Federal funds and shall not 
encumber the property without approval of the REE Agency. When no longer 
needed for the original project or program, the Cooperator shall use the 
equipment in connection with its other federally-sponsored activities, 
in the following order of priority:
    (1) Activities sponsored by the REE Agency which funded the original 
project, then
    (2) Activities sponsored by other Federal awarding agencies.
    (c) During the time that equipment is used on the project or program 
for which it was acquired, the Cooperator shall make it available for 
use on other projects or programs if such other use will not interfere 
with the work on the project or program for which the equipment was 
originally acquired as may be determined by the REE Agency. First 
preference for such other use shall be given to other projects or 
programs sponsored by the REE Agency that financed the equipment; second 
preference shall be given to projects or programs sponsored by other 
Federal awarding agencies. If equipment is owned by the Federal 
Government, use on other activities not sponsored by the Federal 
Government shall be permissible if authorized by the REE Agency. User 
charges shall be treated as program income.
    (d) When acquiring replacement equipment, unless otherwise directed 
by the REE Agency, the Cooperator shall use the equipment to be replaced 
as trade-in or sell the equipment and

[[Page 443]]

use the proceeds to offset the costs of the replacement equipment 
subject to the approval of the REE Agency.
    (e) The Cooperator's property management standards for equipment 
acquired with Federal funds and federally owned equipment shall include 
all of the following.
    (1) Equipment records shall be maintained accurately and shall 
include the following information:
    (i) A description of the equipment;
    (ii) Manufacturer's serial number, model number, Federal stock 
number, national stock number, or other identification number;
    (iii) Source of the equipment, including the award number;
    (iv) Whether title vests in the Cooperator or the Federal 
Government;
    (v) Acquisition date (or date received, if the equipment was 
furnished by the Federal Government) and cost;
    (vi) Information from which one can calculate the percentage of 
Federal participation in the cost of the equipment (not applicable to 
equipment furnished by the Federal Government);
    (vii) Location and condition of the equipment and the date the 
information was reported;
    (viii) Unit acquisition cost; and
    (ix) Ultimate disposition data, including date of disposal and sales 
price or the method used to determine current fair market value where a 
Cooperator compensates the REE Agency for its share.
    (2) Equipment owned by the Federal Government shall be identified to 
indicate Federal ownership.
    (3) A physical inventory of equipment shall be taken and the results 
reconciled with the equipment records at least once every two years and 
a copy provided to the ADO responsible for the agreement. Any 
differences between quantities determined by the physical inspection and 
those shown in the accounting records shall be investigated to determine 
the causes of the difference. The Cooperator shall, in connection with 
the inventory, verify the existence, current utilization, and continued 
need for the equipment.
    (4) A control system shall be in effect to insure adequate 
safeguards to prevent loss, damage, or theft of the equipment. Any loss, 
damage, or theft of equipment shall be investigated and fully 
documented. If the Federal Government owns the equipment, the Cooperator 
shall promptly notify the REE Agency.
    (5) Adequate maintenance procedures shall be implemented to keep the 
equipment in good condition.
    (6) Where the Cooperator is authorized or required to sell the 
equipment, proper sales procedures shall be established which provide 
for competition to the extent practicable and result in the highest 
possible return.
    (f) When the Cooperator no longer needs the equipment, the equipment 
shall be used for other activities in accordance with the following 
standards. For equipment with a current per unit fair market value of 
$5,000 or more, the Cooperator may retain the equipment for other uses 
provided that compensation is made to the original REE Agency or its 
successor. The amount of compensation shall be computed by applying the 
percentage of Federal participation in the cost of the original project 
or program to the current fair market value of the equipment. If the 
Cooperator has no need for the equipment, the Cooperator shall request 
disposition instructions from the REE Agency. The REE Agency shall 
determine whether the equipment can be used to meet the Agency's 
requirements. If no requirement exists within that Agency, the 
availability of the equipment shall be reported to the General Services 
Administration (GSA) by the REE Agency to determine whether a 
requirement for the equipment exists in other Federal agencies. The REE 
Agency shall issue instructions to the Cooperator no later than 120 
calendar days after the Cooperator's request and the following 
procedures shall govern.
    (1) If so instructed or if disposition instructions are not issued 
within 120 calendar days after the Cooperator's request, the Cooperator 
shall sell the equipment and reimburse the REE Agency an amount computed 
by applying to the sales proceeds the percentage of Federal 
participation in the cost of the original project or program. However, 
the Cooperator shall be permitted to deduct and retain from the Federal 
share $500 or ten percent of the

[[Page 444]]

proceeds, whichever is less, for the Cooperator's selling and handling 
expenses.
    (2) If the Cooperator is instructed to ship the equipment elsewhere, 
the Cooperator shall be reimbursed by the Federal Government by an 
amount which is computed by applying the percentage of the Cooperator's 
participation in the cost of the original project or program to the 
current fair market value of the equipment, plus any reasonable shipping 
or interim storage costs incurred.
    (3) If the Cooperator is instructed to otherwise dispose of the 
equipment, the Cooperator shall be reimbursed by the REE Agency for such 
costs incurred in its disposition.
    (4) The REE Agency may reserve the right to transfer the title to 
the Federal Government or to a third party named by the Federal 
Government when such third party is otherwise eligible under existing 
statutes. Such transfer shall be subject to the following standards.
    (i) The equipment shall be appropriately identified in the award or 
otherwise made known to the Cooperator in writing.
    (ii) The REE Agency shall issue disposition instructions within 120 
calendar days after receipt of a final inventory. The final inventory 
shall list all equipment acquired with federal funds and federally owned 
equipment. If the REE Agency fails to issue disposition instructions 
within the 120 calendar days, the Cooperator shall apply the standards 
of this section, as appropriate.
    (iii) When the REE Agency exercises its right to take title, the 
equipment shall be subject to the provisions for federally owned 
equipment.

Sec. 550.39  Equipment replacement insurance.

    If required by the terms and conditions of the award, the Cooperator 
shall provide adequate insurance coverage for replacement of equipment 
acquired with Federal funds in the event of loss or damage to such 
equipment.

Sec. 550.40  Supplies and other expendable property.

    (a) Title to supplies and other expendable property shall vest in 
the Cooperator upon acquisition. If there is a residual inventory of 
unused supplies exceeding $5,000 in total aggregate value upon 
termination or completion of the project or program and the supplies are 
not needed for any other federally-sponsored project or program, the 
Cooperator shall retain the supplies for use on non-Federal sponsored 
activities or sell them, but shall, in either case, compensate the 
Federal Government for its share. The amount of compensation shall be 
computed in the same manner as for equipment.
    (b) The Cooperator shall not use supplies acquired with Federal 
funds to provide services to non-Federal outside organizations for a fee 
that is less than private companies charge for equivalent services, 
unless specifically authorized by Federal statute as long as the Federal 
Government retains an interest in the supplies.

Sec. 550.41  Federally-owned property.

    (a) Title to federally-owned property remains vested in the Federal 
Government. Cooperators shall submit annually an inventory listing of 
federally-owned property in their custody to the REE Agency. Upon 
completion of the award or when the property is no longer needed, the 
Cooperator shall report the property to the REE Agency for further 
Federal Agency utilization.
    (b) If the REE Agency has no further need for the property, it shall 
be declared excess and reported to the GSA, unless the REE Agency has 
statutory authority to dispose of the property by alternative methods 
(e.g., the authority provided by the Federal Technology Transfer Act (15 
U.S.C. 3710 (i)) to donate research equipment to educational and non-
profit organizations in accordance with Executive Order 12999, 
``Education technology: ensuring Opportunity for all children in the 
next century.'' Appropriate instructions shall be issued to the 
Cooperator by the REE Agency.

Sec. 550.42  Intangible property.

    (a) The Cooperator may copyright any work that is subject to 
copyright

[[Page 445]]

and was developed, by the Cooperator, or jointly by the Federal 
Government and the Cooperator, or for which ownership was purchased, 
under a cooperative agreement. REE Agencies reserve a royalty-free, 
nonexclusive and irrevocable right to reproduce, publish, or otherwise 
use the work for Federal purposes, and to authorize others to do so for 
Federal purposes.
    (b) Cooperators are subject to applicable regulations governing 
patents and inventions, including government-wide regulations issued by 
the Department of Commerce at 37 CFR part 401, ``Rights to Inventions 
Made by Nonprofit Organizations and Small Business Firms Under 
Government Grants, Contracts and Cooperative Agreements.''
    (c) The REE Agency has the right to:
    (1) Obtain, reproduce, publish or otherwise use the data first 
produced under a cooperative agreement; and
    (2) Authorize others to receive, reproduce, publish, or otherwise 
use such data for Federal purposes.
    (d)(1) In addition, in response to a Freedom of Information Act 
(FOIA) request for research data relating to published research findings 
produced under a cooperative agreement that were used by the Federal 
Government in developing an Agency action that has the force and effect 
of law, the REE Agency shall request, and the Cooperator shall provide, 
within a reasonable time, the research data so that they can be made 
available to the public through the procedures established under the 
FOIA. If the REE Agency obtains the research data solely in response to 
a FOIA request, the Agency may charge the requester a reasonable fee 
equaling the full incremental cost of obtaining the research data. This 
fee should reflect costs incurred by the Agency, the Cooperator, and 
applicable subrecipients. This fee is in addition to any fees the Agency 
may assess under the FOIA (5 U.S.C. 552(a)(4)(A)).
    (2) The following definitions apply for purposes of paragraph (d) of 
this section:
    (i) Research data is defined as the recorded factual material 
commonly accepted in the scientific community as necessary to validate 
research findings, but not any of the following: preliminary analyses, 
drafts of scientific papers, plans for future research, peer reviews, or 
communications with colleagues. This ``recorded'' material excludes 
physical objects (e.g., laboratory samples). Research data also do not 
include:
    (A) Trade secrets, commercial information, materials necessary to be 
held confidential by a researcher until they are published, or similar 
information which is protected under law; and
    (B) Personnel and medical information and similar information the 
disclosure of which would constitute a clearly unwarranted invasion of 
personal privacy, such as information that could be used to identify a 
particular person in a research study.
    (ii) Published is defined as either when:
    (A) Research findings are published in a peer-reviewed scientific or 
technical journal;
    (B) A Federal Agency publicly and officially cites the research 
findings in support of an Agency action that has the force and effect of 
law; or
    (C) Used by the Federal Government in developing an Agency action 
that has the force and effect of law is defined as when an Agency 
publicly and officially cites the research findings in support of an 
Agency action that has the force and effect of law.
    (e) All rights, title, and interest in any Subject Invention made 
solely by employee(s) of the REE Agency shall be owned by the REE 
Agency. All rights, title, and interest in any Subject Invention made 
solely by at least one (1) employee of the REE Agency and at least one 
(1) employee of the Cooperator shall be jointly owned by the Agency and 
the Cooperator, subject to the provisions of 37 CFR part 401.
    (f) REE Agencies shall have a nonexclusive, nontransferable, 
irrevocable, paid-up license to practice or have practiced for or on 
behalf of the United States the subject invention throughout the world.

[[Page 446]]

                          Procurement Standards

Sec. 550.43  Purpose of procurement standards.

    Sections 44 through 50 set forth standards for use by Cooperators in 
establishing procedures for the procurement of supplies and other 
expendable property, equipment and other services with Federal funds. 
These standards are furnished to ensure that such materials and services 
are obtained in an effective manner and in compliance with the 
provisions of applicable Federal statutes and executive orders. No 
additional procurement standards or requirements shall be imposed by the 
Federal awarding agencies upon Cooperators, unless specifically required 
by Federal statute or executive order or approved by OMB.

Sec. 550.44  Cooperator responsibilities.

    The standards contained in this section do not relieve the 
Cooperator of the contractual responsibilities arising under its 
contract(s). The Cooperator is the responsible authority, without 
recourse to the REE Agency, regarding the settlement and satisfaction of 
all contractual and administrative issues arising out of procurements 
entered into in support of a nonassistance agreement. This includes 
disputes, claims, award protests, source evaluation or other matters of 
a contractual nature. Matters concerning violation of statute are to be 
referred to such Federal, State or local authority, as may have proper 
jurisdiction.

Sec. 550.45  Standards of conduct.

    The Cooperator shall maintain written standards of conduct governing 
the performance of its employees engaged in the award and administration 
of contracts. No employee, officer, or agent shall participate in the 
selection, award, or administration of a contract supported by Federal 
funds if a real or apparent conflict of interest would be involved. Such 
a conflict would arise when the employee, officer, or agent, any member 
of his or her immediate family, his or her partner, or an organization 
which employs or is about to employ any of the parties indicated herein, 
has a financial or other interest in the firm selected for an award. The 
officers, employees, and agents of the Cooperator shall neither solicit 
nor accept gratuities, favors, or anything of monetary value from 
contractors, or parties to subagreements. However, Cooperators may set 
standards for situations in which the financial interest is not 
substantial or the gift is an unsolicited item of nominal value. The 
standards of conduct shall provide for disciplinary actions to be 
applied for violations of such standards by officers, employees, or 
agents of the Cooperator.

Sec. 550.46  Competition.

    (a) All procurement transactions shall be conducted in a manner to 
provide, to the maximum extent practical, open and free competition. The 
Cooperator shall be alert to organizational conflicts of interest as 
well as noncompetitive practices among contractors that may restrict or 
eliminate competition or otherwise restrain trade. In order to ensure 
objective contractor performance and eliminate unfair competitive 
advantage, contractors that develop or draft specifications, 
requirements, statements of work, invitations for bids and/or requests 
for proposals shall be excluded from competing for such procurements. 
Awards shall be made to the bidder or offeror whose bid or offer is 
responsive to the solicitation and is most advantageous to the 
Cooperator, price, quality and other factors considered. Solicitations 
shall clearly set forth all requirements that the bidder or offer shall 
fulfill in order for the bid or offer to be evaluated by the Cooperator. 
Any and all bids or offers may be rejected when it is in the 
Cooperator's interest to do so.
    (b) Contracts shall be made only with responsible contractors who 
possess the potential ability to perform successfully under the terms 
and conditions of the proposed procurement. Consideration shall be given 
to such matters as contractor integrity, record of past performance, 
financial and technical resources or accessibility to other necessary 
resources. In certain circumstances, contracts with certain parties are 
restricted by agencies' implementation of Executive Orders 12549

[[Page 447]]

and 12689, ``Debarment and Suspension.''
    (c) Recipients shall, on request, make available for the REE Agency, 
pre-award review and procurement documents, such as request for 
proposals or invitations for bids, independent cost estimates, etc.

Sec. 550.47  Cost and price analysis.

    Some form of cost or price analysis shall be made and documented in 
the procurement files in connection with every procurement action. Price 
analysis may be accomplished in various ways, including the comparison 
of price quotations submitted, market prices and similar indicia, 
together with discounts. Cost analysis is the review and evaluation of 
each element of cost to determine reasonableness, allocability and 
allowability.

Sec. 550.48  Procurement records.

    Procurement records and files for purchases in excess of the small 
purchase threshold shall include the following at a minimum:
    (a) Basis for contractor selection;
    (b) Justification for lack of competition when competitive bids or 
offers are not obtained; and
    (c) Basis for award cost or price.

Sec. 550.49  Contract administration.

    A system for contract administration shall be maintained to ensure 
contractor conformance with the terms, conditions and specifications of 
the contract and to ensure adequate and timely followup of all 
purchases. Recipients shall evaluate contractor performance and 
document, as appropriate, whether contractors have met the terms, 
conditions and specifications of the contract.

Sec. 550.50  Contract provisions.

    The recipient shall include, in addition to provisions to define a 
sound and complete agreement, the following provisions in all contracts. 
The following provisions shall also be applied to subcontracts.
    (a) Contracts in excess of the simplified acquisition threshold 
shall contain contractual provisions or conditions that allow for 
administrative, contractual, or legal remedies in instances in which a 
contractor violates or breaches the contract terms, and provide for such 
remedial actions as may be appropriate.
    (b) All contracts in excess of the simplified acquisition threshold 
shall contain suitable provisions for termination by the cooperator, 
including the manner by which termination shall be effected and the 
basis for settlement. In addition, such contracts shall describe 
conditions under which the contract may be terminated for default as 
well as conditions where the contract may be terminated because of 
circumstances beyond the control of the contractor.
    (c) All negotiated contracts (except those for less than the 
simplified acquisition threshold) awarded by recipients shall include a 
provision to the effect that the recipient, the REE Agency, the 
Comptroller General of the United States, or any of their duly 
authorized representatives, shall have access to any books, documents, 
papers and records of the contractor which are directly pertinent to a 
specific program for the purpose of making audits, examinations, 
excerpts and transcriptions.
    (d) All contracts, including small purchases, awarded by recipients 
and their contractors shall contain the procurement provisions of 
appendix A, 2 CFR part 215, as applicable.

                           Reports and Records

Sec. 550.51  Purpose of reports and records.

    Sections 550.52 through 550.55 set forth the procedures for 
monitoring and reporting on the Cooperator's financial and program 
performance and the necessary reporting format. They also set forth 
record retention requirements, and property and equipment inventory 
reporting requirements.

Sec. 550.52  Reporting program performance.

    (a) The REE Agency shall prescribe the frequency with which 
performance reports shall be submitted. Performance reports shall not be 
required more frequently than quarterly or, less frequently than 
annually. Annual reports shall be due 90 calendar days after the

[[Page 448]]

grant year; quarterly or semi-annual reports shall be due 30 days after 
the reporting period. The REE Agency may require annual reports before 
the anniversary dates of multiple year agreements in lieu of these 
requirements. The final performance reports are due 90 calendar days 
after the expiration or termination of the period of agreement.
    (b) When required, performance reports shall contain, for each 
award, detailed information on each of the following.
    (1) A comparison of actual accomplishments with the goals and 
objectives established for the period and the findings of the 
investigator. Whenever appropriate and the output of programs or 
projects can be readily quantified, such quantitative data should be 
related to cost data for computation of unit costs.
    (2) Reasons why established goals were not met, if appropriate.
    (3) Other pertinent information including, when appropriate, 
analysis and explanation of cost overruns or high unit costs.
    (c) Cooperators shall not be required to submit more than the 
original and two copies of performance reports.
    (d) Cooperators shall immediately notify the REE Agency of 
developments that have a significant impact on the award-supported 
activities. Also, notification shall be given in the case of problems, 
delays, or adverse conditions which materially impair the ability to 
meet the objectives of the award. This notification shall include a 
statement of the action taken or contemplated, and any assistance needed 
to resolve the situation.

Sec. 550.53  Financial reporting.

    Financial Status Report.
    (a) Each REE Agency shall require Cooperators to report the status 
of funds as approved in the budget for the cooperative agreement. A 
financial status report shall consist of the following information:
    (1) The name and address of the Cooperator.
    (2) The name and address of the PI.
    (3) The name, address, and signature of the financial officer 
submitting the report.
    (4) A reference to the cooperative agreement.
    (5) Period covered by the report.
    (6) An itemization of actual dollar amounts expended on the project 
during the reporting period (in line with the approved budget) and 
cumulative totals expended for each budget category from the starting 
date of the cooperative agreement.
    (b) The REE Agency shall determine the frequency of the Financial 
Status Report for each project or program, considering the size and 
complexity of the particular project or program. However, the report 
shall not be required more frequently than quarterly or less frequently 
than annually. A final report shall be required at the completion of the 
agreement.
    (c) The REE Agency shall require Cooperators to submit the financial 
status report (an original and no more than two copies) no later than 30 
days after the end of each specified reporting period for quarterly and 
semi-annual reports, and 90 calendar days for annual and final reports. 
Extensions of reporting due dates may be approved by the REE Agency upon 
request of the Cooperator.

Sec. 550.54  Invention disclosure and utilization reporting.

    (a) The Cooperator shall report Invention Disclosures and 
Utilization information electronically via i-Edison Web Interface at: 
www.iedison.gov.
    (b) If access to InterAgency Edison is unavailable, the invention 
disclosure should be sent directly to: Division of Extramural Intentions 
and Technology Resources, 6705 Rockledge Drive, (RKL 1), Suite 310, MSC 
7980, Bethesda, Maryland 20892-7750.

Sec. 550.55  Retention and access requirements for records.

    (a) This section sets forth requirements for record retention and 
access to records for awards to Cooperators. REE agencies shall not 
impose any other record retention or access requirements upon 
Cooperators, excepting as set out in Sec. 550.42(d).
    (b) Financial records, supporting documents, statistical records, 
and all other records pertinent to an award shall be retained for a 
period of 3 years

[[Page 449]]

from the date of submission of the final expenditure report or, for 
awards that are renewed quarterly or annually, from the date of the 
submission of the quarterly or annual financial report, as authorized by 
the REE Agency. The only exceptions are the following:
    (1) If any litigation, claim, or audit is started before the 
expiration of the 3-year period, the records shall be retained until all 
litigation, claims or audit findings involving the records have been 
resolved and final action taken;
    (2) Records for real property and equipment acquired with Federal 
funds shall be retained for 3 years after final disposition;
    (3) When records are transferred to or maintained by the REE Agency, 
the 3-year retention requirement is not applicable to the Cooperator;
    (4) Indirect cost rate proposals, cost allocations plans, etc., as 
specified in paragraph (f) of this section.
    (c) Copies of original records may be substituted for the original 
records if authorized by the REE Agency.
    (d) The REE Agency shall request transfer of certain records to its 
custody from Cooperators when it determines that the records possess 
long-term retention value. However, in order to avoid duplicate record 
keeping, a REE Agency may make arrangements for Cooperators to retain 
any records that are continuously needed for joint use.
    (e) The REE Agency, the Inspector General, Comptroller General of 
the United States, or any of their duly authorized representatives, have 
the right of timely and unrestricted access to any books, documents, 
papers, or other records of Cooperators that are pertinent to the 
awards, in order to make audits, examinations, excerpts, transcripts and 
copies of such documents. This right also includes timely and reasonable 
access to a Cooperator's personnel for the purpose of interview and 
discussion related to such documents. The rights of access in this 
paragraph are not limited to the required retention period, but shall 
last as long as records are retained.
    (f) No Cooperator shall disclose its records that are pertinent to 
an award until the Cooperator provides notice of the intended disclosure 
with copies of the relevant records to the REE Agency.
    (g) Indirect cost rate proposals, cost allocations plans, etc. 
Paragraphs (g)(1) and (g)(2) of this section apply to the following 
types of documents, and their supporting records: Indirect cost rate 
computations or proposals, cost allocation plans, and any similar 
accounting computations of the rate at which a particular group of costs 
is chargeable (such as computer usage charge back rates or composite 
fringe benefit rates).
    (1) If submitted for negotiation. If the Cooperator submits to the 
REE Agency or the subrecipient submits to the Cooperator the proposal, 
plan, or other computation to form the basis for negotiation of the 
rate, then the 3-year retention period for its supporting records starts 
on the date of such submission.
    (2) If not submitted for negotiation. If the Cooperator is not 
required to submit to the REE Agency or the subrecipient is not required 
to submit to the Cooperator the proposal, plan, or other computation for 
negotiation purposes, then the 3-year retention period for the proposal, 
plan, or other computation and its supporting records starts at the end 
of the fiscal year (or other accounting period) covered by the proposal, 
plan, or other computation.

                Suspension, Termination, and Enforcement

Sec. 550.56  Purpose of suspension, termination, and enforcement.

    Sections Sec. Sec. 550.57 and 550.58 of this part set forth uniform 
suspension, termination, and enforcement procedures.

Sec. 550.57  Suspension and termination.

    Awards may be suspended or terminated in whole or in part if 
paragraphs (a), (b), or (c) of this section apply.
    (a) The REE Agency may terminate the award, if a Cooperator 
materially fails to comply with the provisions of this rule or the terms 
and conditions of an award.
    (b) The REE Agency with the consent of the Cooperator, in which case 
the

[[Page 450]]

two parties shall agree upon the termination conditions, including the 
effective date and, in the case of partial termination, the portion to 
be terminated.
    (c) If costs are allowed under an award, the responsibilities of the 
Cooperator referred to in Sec. 550.32, including those for property 
management as applicable, shall be considered in the termination of the 
award, and provision shall be made for continuing responsibilities of 
the Cooperator after termination, as appropriate.

Sec. 550.58  Enforcement.

    (a) Remedies for noncompliance. If a Cooperator materially fails to 
comply with the terms and conditions of an award, whether stated in a 
Federal statute, regulation, assurance, application, or notice of award, 
the REE Agency may, in addition to imposing any of the special 
conditions outlined in Sec. 550.10, take one or more of the following 
actions.
    (1) Temporarily withhold cash payments pending correction of the 
deficiency by the Cooperator or more severe enforcement action by the 
REE Agency.
    (2) Disallow all or part of the cost of the activity or action not 
in compliance.
    (3) Wholly or partly suspend or terminate the current award.
    (4) Withhold further awards for the project or program.
    (5) Take other remedies that may be legally available.
    (b) Effects of suspension and termination. Costs of a Cooperator 
resulting from obligations incurred by the Cooperator during a 
suspension or after termination of an award are not allowable unless the 
REE Agency expressly authorizes them in the notice of suspension or 
termination or thereafter. Other Cooperator costs during suspension or 
after termination which are necessary and not reasonably avoidable are 
allowable if paragraphs (b)(1) and (2) of this section apply.
    (1) The costs result from obligations which were properly incurred 
by the Cooperator before the effective date of suspension or 
termination, are not in anticipation of it, and in the case of a 
termination, are non-cancellable.
    (2) The costs would be allowable if the award were not suspended or 
expired normally at the end of the funding period in which the 
termination takes effect.
    (3) Relationship to debarment and suspension. The enforcement 
remedies identified in this section, including suspension and 
termination, do not preclude a Cooperator from being subject to 
debarment and suspension under Executive Orders 12549 and 12689 and USDA 
implementing regulations (7 CFR part 3017).

                           Subpart D_Close Out

Sec. 550.59  Purpose.

    Sections 550.60 through 550.62 of this part contain closeout 
procedures and other procedures for subsequent disallowances and 
adjustments.

Sec. 550.60  Closeout procedures.

    (a) Cooperators shall submit, within 90 calendar days after the date 
of completion of the award, all financial, performance, and other 
reports as required by the terms and conditions of the award. The REE 
Agency may approve extensions to the reporting period when requested by 
the Cooperator.
    (b) Unless the REE Agency authorizes an extension, a Cooperator 
shall liquidate all obligations incurred under the award not later than 
90 calendar days after the funding period or the date of completion as 
specified in the terms and conditions of the award or in Agency 
implementing instructions.
    (c) The REE Agency shall make prompt payments to a Cooperator for 
allowable reimbursable costs under the award being closed out.
    (d) The Cooperator shall promptly refund any balance of unobligated 
cash advanced or paid by the REE Agency that it is not authorized to 
retain for use in other projects. OMB Circular A-129 governs unreturned 
amounts that become delinquent debts.
    (e) When authorized by the terms and conditions of the award, the 
REE Agency shall make a settlement for any upward or downward 
adjustments to the Federal share of costs after closeout reports are 
received.
    (f) The Cooperator shall account for any personal property acquired 
with

[[Page 451]]

Federal funds or received from the Federal Government in accordance with 
Sec. Sec. 550.36 through 550.42.
    (g) In the event a final audit has not been performed prior to the 
closeout of an award, the REE Agency shall retain the right to recover 
an appropriate amount after fully considering the recommendations on 
disallowed costs resulting from the final audit.

Sec. 550.61  Subsequent adjustments and continuing responsibilities.

    The closeout of an award does not affect any of the following:
    (a) The right of the REE Agency to disallow costs and recover funds 
on the basis of a later audit or other review.
    (b) The obligation of the Cooperator to return any funds due as a 
result of later refunds, corrections, or other transactions.
    (c) Audit requirements in Sec. 550.24.
    (d) Property management requirements in Sec. Sec. 550.36 through 
550.42.
    (e) Records retention as required in Sec. 550.56.

Sec. 550.62  Collection of amounts due.

    (a) Any funds paid to a Cooperator in excess of the amount to which 
the Cooperator is finally determined to be entitled under the terms and 
conditions of the award constitute a debt to the Federal Government. If 
not paid within a reasonable period after the demand for payment, the 
REE Agency may in accordance with 7 CFR part 3, reduce the debt by--
    (1) Making an administrative offset against other requests for 
reimbursements, or
    (2) Withholding advance payments otherwise due to the Cooperator, or
    (3) Taking other action permitted by statute.
    (b) Except as otherwise provided by law, the REE Agency shall charge 
interest on an overdue debt in accordance with 31 CFR part 900, 
``Federal Claims Collection Standards.''

[[Page 453]]



   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................................         455
601             Functions...................................         458
                  SUBCHAPTER B--CONSERVATION OPERATIONS
610             Technical assistance........................         462
611             Soil surveys................................         469
612             Snow surveys and water supply forecasts.....         470
613             Plant materials centers.....................         472
614             NRCS appeal procedures......................         474
                      SUBCHAPTER C--WATER RESOURCES
621             River basin investigations and surveys......         481
622             Watershed projects..........................         485
623             Emergency Wetlands Reserve Program..........         488
624             Emergency watershed protection..............         496
625             Healthy Forests Reserve Program.............         502
                   SUBCHAPTER D--LONG TERM CONTRACTING
630             Long term contracting.......................         516
631             Great Plains Conservation Program...........         516
632             Rural Abandoned Mine Program................         520
633             Water Bank Program..........................         532
634             Rural Clean Water Program...................         538
635             Equitable relief from ineligibility.........         558

[[Page 454]]

636             Wildlife Habitat Incentive Program..........         561
                         SUBCHAPTER E [RESERVED]
                    SUBCHAPTER F--SUPPORT ACTIVITIES
650             Compliance with NEPA........................         573
651

[Reserved]

652             Technical service provider assistance.......         598
653             Technical standards.........................         608
654             Operation and maintenance...................         609
655

[Reserved]

656             Procedures for the protection of 
                    archeological and historical properties 
                    encountered in NRCS-assisted programs...         613
657             Prime and unique farmlands..................         614
658             Farmland Protection Policy Act..............         617
                       SUBCHAPTER G--MISCELLANEOUS
660

[Reserved]

661             Public information and right to privacy.....         625
662             Regional equity.............................         626
663-699

[Reserved]

[[Page 455]]

                          SUBCHAPTER A_GENERAL

                          PART 600_ORGANIZATION

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, DC; 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 456]]

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 457]]

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 458]]

a leader who is designated by the State conservationist.

                           PART 601_FUNCTIONS

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 459]]

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 460]]

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 461]]

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.

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                  SUBCHAPTER B_CONSERVATION OPERATIONS

                      PART 610_TECHNICAL ASSISTANCE

                    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  Subcommittees and Local Working Groups.

             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.

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    (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,

[[Page 464]]

    (3) Providing assistance 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 465]]

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. 3801 et seq., set forth in 7 CFR part 12; and
    (2) Develop new or revised conservation plans.

[[Page 466]]

                  Subpart C_State Technical Committees

    Source: 74 FR 66912, Dec. 17, 2009, 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. The Natural Resources 
Conservation Service (NRCS) will establish in each State a Technical 
Committee to assist in making recommendations relating to the 
implementation and technical aspects of natural resource conservation 
activities and programs. The Department of Agriculture (USDA) will use 
State Technical Committees in an advisory capacity in the administration 
of certain conservation programs and initiatives. Pursuant to 16 U.S.C. 
3862(d), these State Technical Committees and Local Working Groups 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 will include agricultural producers, 
nonindustrial private forest land owners, and other professionals who 
represent a variety of disciplines in soil, water, wetlands, plant, and 
wildlife sciences. The State Conservationist in each State will serve as 
chairperson. The State Technical Committee for each State will include 
representatives from among the following, if willing to serve:
    (1) NRCS, USDA;
    (2) Farm Service Agency, USDA;
    (3) State Farm Service Agency Committee, USDA;
    (4) Forest Service, USDA;
    (5) National Institute of Food and Agriculture, USDA;
    (6) Each of the Federally recognized Indian Tribes in the State;
    (7) State departments and agencies within the State, including the:
    (i) Fish and wildlife agency;
    (ii) Forestry agency;
    (iii) Water resources agency;
    (iv) Department of agriculture;
    (v) Association of soil and water conservation districts; and
    (vi) Soil and water conservation agency;
    (8) Agricultural producers representing the variety of crops and 
livestock or poultry raised within the State;
    (9) Owners of nonindustrial private forest land;
    (10) Nonprofit organizations, within the meaning of section 
501(c)(3) of the Internal Revenue Code of 1986, with demonstrable 
conservation expertise and experience working with agriculture producers 
in the State; and
    (11) Agribusiness.
    (b) The State Conservationist will invite other relevant Federal, 
State, and regional agencies, organizations, and persons knowledgeable 
about economic and environmental impacts of natural resource 
conservation techniques and programs to participate as needed.
    (c) To ensure that recommendations of State Technical Committees 
take into account the needs of the diverse groups served by USDA, 
membership will include, to the extent practicable, individuals with 
demonstrated ability to represent the conservation and related technical 
concerns of particular historically underserved groups and individuals; 
i.e., minorities, women, persons with disabilities, socially and 
economically disadvantaged groups, and beginning farmers and ranchers.
    (d) In accordance with the guidelines in paragraphs (a), (b), and 
(c) of this section, it is the responsibility of the State 
Conservationist to seek a balanced representation of interests among the 
membership on the State Technical Committee. Individuals or groups 
wanting to participate on a State Technical Committee within a specific 
State may submit a request to the State Conservationist that explains 
their interest and outlines their credentials which they believe are 
relevant to becoming a member. Decisions regarding membership are at the 
discretion of the State Conservationist. State Conservationist decisions 
on membership are final and not appealable to any other individual or 
group within USDA.

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Sec. 610.23  State Technical Committee meetings.

    (a) The State Conservationist, as Chairperson, schedules and 
conducts the meetings, although a meeting may be requested by any USDA 
agency or State Technical Committee member.
    (b) NRCS will establish and maintain national standard operating 
procedures governing the operation of State Technical Committees and 
Local Working Groups in its directive system. The standard operating 
procedures will outline items such as: The best practice approach to 
establishing, organizing, and effectively utilizing State Technical 
Committees and Local Working Groups; direction on publication of State 
Technical Committee and Local Working Group meeting notices and agendas; 
State Technical Committee meeting summaries; how to provide feedback on 
State Conservationist decisions regarding State Technical Committee 
recommendations; and other items as determined by the Chief.
    (c) In addition to the standard operating procedures established 
under paragraph (b) of this section, the State Conservationist will 
provide public notice and allow public attendance at State Technical 
Committee and Local Working Group meetings. The State Conservationist 
will publish a meeting notice no later than 14 calendar days prior to a 
State Technical Committee 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, as determined by the State 
Conservationist. The State Conservationist will publish this notice in 
at least one or more newspaper(s), including recommended Tribal 
publications, to attain statewide circulation.

Sec. 610.24  Responsibilities of State Technical Committees.

    (a) Each State Technical Committee established under this subpart 
will meet on a regular basis, as determined by the State 
Conservationist, to provide information, analysis, and recommendations 
to appropriate officials of USDA who are charged with implementing and 
establishing priorities and criteria for natural resources conservation 
activities and programs under Title XII of the Food Security Act of 1985 
including, but not limited to, the Conservation Reserve Program, 
Wetlands Reserve Program, Conservation Security Program, Conservation 
Stewardship Program, Farm and Ranch Lands Protection Program, Grassland 
Reserve Program, Environmental Quality Incentives Program, Conservation 
Innovation Grants, Cooperative Conservation Partnership Initiative, 
Agricultural Water Enhancement Program, Conservation of Private Grazing 
Land, Wildlife Habitat Incentive Program, Grassroots Source Water 
Protection Program, Great Lakes Basin Program, Chesapeake Bay Watershed 
Initiative, and the Voluntary Public Access and Habitat Incentive 
Program. The members of the State Technical Committee may also provide 
input on other natural resource conservation programs and issues as may 
be requested by the State Conservationist or other USDA agency heads at 
the State level as long as they are within the programs authorized by 
Title XII. Such recommendations may include, but are not limited to, 
recommendations on:
    (1) The criteria to be used in prioritizing program applications;
    (2) The State-specific application criteria;
    (3) Priority natural resource concerns in the State;
    (4) Emerging natural resource concerns and program needs; and
    (5) Conservation practice standards and specifications.
    (b) The role of the State Technical Committee is advisory in nature, 
and the committee will have no implementation or enforcement authority. 
The implementing agency reserves the authority to accept or reject the 
committee's recommendations. However, the implementing USDA agency will 
give strong consideration to the State Technical Committee's 
recommendations.
    (c) State Technical Committees will review whether Local Working 
Groups are addressing State priorities.

Sec. 610.25  Subcommittees and Local Working Groups.

    (a) Subcommittees. In some situations, specialized subcommittees, 
made up of

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State Technical Committee members, may be needed to analyze and examine 
specific issues. The State Conservationist may assemble certain members, 
including members of Local Working Groups and other knowledgeable 
individuals, to discuss, examine, and focus on a particular technical or 
programmatic topic. The subcommittee may seek public participation, but 
it is not required to do so. Nevertheless, recommendations resulting 
from these subcommittee sessions, other than sessions of Local Working 
Groups, will be made only in a general session of the State Technical 
Committee where the public is notified and invited to attend. Decisions 
resulting from recommendations of Local Working Groups will be 
communicated to NRCS in accordance with the standard operating 
procedures described in Sec. 610.23(b).
    (b) Local Working Groups. (1) Local Working Groups will be composed 
of conservation district officials, agricultural producers representing 
the variety of crops and livestock or poultry raised within the local 
area, nonindustrial private forest land owners, and other professionals 
representing relevant agricultural and conservation interests and a 
variety of disciplines in the soil, water, plant, wetland, and wildlife 
sciences who are familiar with private land agricultural and natural 
resource issues in the local community;
    (2) Local Working Groups will provide recommendations on local 
natural resource priorities and criteria for conservation activities and 
programs; and
    (3) Local Working Groups will follow the standard operating 
procedures described in Sec. 610.23(b).

             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:
    (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;

[[Page 469]]

    (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

                            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 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

[[Page 470]]

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

Sec.
612.1  Purpose and scope.
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.

[[Page 471]]

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.

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.

[[Page 472]]

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

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  PMCs.

    Authority: 16 U.S.C. 590a-590f, 5908; 7 U.S.C. 1010-1011.

    Source: 73 FR 51351, Sept. 3, 2008, unless otherwise noted.

Sec. 613.1  Purpose.

    This part provides NRCS policy on the operation of PMCs. The Centers 
have responsibilities for assembling, testing, releasing, and providing 
for the commercial production and use of plant materials and plant 
materials technology 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 
and plant materials technology needed for broad programs of resource 
conservation and development for agriculture, wildlife, urban, 
recreation, and other land uses and environmental needs. It is the 
policy of NRCS to conduct plant materials work in cooperation with other 
agencies of the 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 to address 
conservation needs. 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, 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 the grazing season on 
dryland pastures and rangelands;
    (7) Managing 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

[[Page 473]]

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, including threatened and 
endangered and pollinator species;
    (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;
    (13) Selecting plants that mitigate odor, Particulate Matter (PM)-
10, and PM-2.5;
    (14) Testing plants for biofuels and other energy-related 
activities; and
    (15) Evaluating plants and techniques to combat invasive plant 
species and for reestablishment of desirable species after eradication.

Sec. 613.3  NRCS responsibilities in plant materials.

    NRCS operates or enters into agreements with State universities or 
other State organizations to operate PMCs. NRCS also cooperates, both 
formally and informally, with other Federal, State, county, and 
nonprofit agencies or organizations on the selection of plants and 
evaluation of plant technology to increase the capabilities of PMCs. 
NRCS employs specialists for testing and selecting plant materials for 
conservation uses and the development of plant materials technology. 
NRCS' responsibilities are to:
    (a) Identify the resource conservation needs and cultural management 
methods for environmental protection and enhancement.
    (b) Assemble and comparatively evaluate plant materials at PMCs 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 for allocation to conservation districts, 
experiment stations, other Federal and State research agencies, State 
seed certifying organizations and directly to commercial growers (if 
other options do not exist) that will use the material to establish seed 
fields, seed orchards, or vegetative plantings for large-scale increase.
    (f) Encourage and assist conservation districts, commercial seed 
producers, and commercial and State nurseries to produce needed plant 
materials for conservation uses.
    (g) Encourage the use of improved plant materials and plant 
materials technology 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  PMCs.

    (a) The Norman A. Berg National PMC. The Norman A. Berg National PMC 
at Beltsville, Maryland, focuses on national initiatives and provides 
coordination for plant materials work across all 50 States. In addition, 
the center provides plants and plant technology to address resource 
concerns in the mid-Atlantic region.
    (b) Other PMCs. There are 26 other PMCs. Each serves several major 
land resource areas. NRCS operates 24 of these Centers, and 2 by 
cooperating agencies, as follows:
    (1) Operated by NRCS: Tucson, AZ, Booneville, AR, Lockeford, CA, 
Brooksville, FL, Americus, GA, Molokai, HI, Aberdeen, ID, Manhattan, KS, 
Galliano, LA, East Lansing, MI, Coffeeville, MS, Elsberry, MO, Bridger,

[[Page 474]]

MT, Fallon, NV, Cape May Courthouse, NJ, Los Lunas, NM, Big Flats, NY, 
Bismarck, ND, Corvallis, OR, Kingsville, TX, Knox City, TX, Nacogdoches, 
TX, Pullman, WA, and Alderson, WV.
    (2) Operated by cooperating agencies with financial and technical 
assistance from NRCS: Meeker, CO--White River and Douglas Creek Soil 
Conservation Districts with partial funding from NRCS.
    (3) Operated by cooperating agencies with technical assistance from 
NRCS: Palmer, AK--State of Alaska, Department of Natural Resources.

                     PART 614_NRCS APPEAL PROCEDURES

Sec.
614.1  General.
614.2  Definitions.
614.3  Decisions subject to informal appeal procedures.
614.4  Decisions not subject to informal appeal procedures.
614.5  Reservation of authority.
614.6  Agency records and decision notices.
614.7  Preliminary technical determinations.
614.8  Final technical determinations.
614.9  Program decisions.
614.10  Appeals before the Farm Service Agency county committee.
614.11  Mediation.
614.12  Transcripts.
614.13  Appealability review.
614.14  Computation of time.
614.15  Implementation of final NAD decisions.
614.16  Participation of third parties in NRCS proceedings.
614.17  Judicial review.

    Authority: 5 U.S.C. 301; 7 U.S.C. 6932 and 6995; and 16 U.S.C. 
3822(a).

    Source: 77 FR 34190, June 11, 2012, unless otherwise noted.

Sec. 614.1  General.

    This part sets forth the informal appeal procedures under which a 
participant may appeal adverse technical determinations or program 
decisions made by officials of the Natural Resources Conservation 
Service (NRCS), an agency under the Department of Agriculture (USDA). 
These regulations reflect NRCS policy to resolve at the agency level, to 
the greatest extent possible, disputes arising from adverse technical 
determinations and program decisions made by NRCS. Once a decision is 
rendered final by NRCS, participants may appeal to the National Appeals 
Division (NAD) as provided for under 7 CFR part 11, or to the Farm 
Service Agency (FSA) county committee pursuant to 7 CFR part 780 for 
decisions rendered under Title XII of the Food Security Act of 1985, as 
amended, 16 U.S.C. 3801 et seq. (Title XII).

Sec. 614.2  Definitions.

    The following definitions are applicable for the purposes of this 
part:
    Adverse decision means the final technical determination or the 
program decision issued by NRCS that is adverse to the individual 
participant and not a matter of general applicability.
    Agency means NRCS and its employees.
    Agency exhibit means those documents or materials that are used 
during the hearing to further explain, differentiate, or distinguish a 
point, concept, or criteria in an appeal but that were not those 
materials or documents that the agency relied upon in making the adverse 
decision. Agency exhibits are labeled alphabetically A, B, C, etc., with 
total pages in each exhibit numbered.
    Agency record means all documents and materials, including documents 
submitted by the participant and those generated by NRCS, which the 
agency relies upon and bases its program decision or technical 
determination. The agency record will include all documents relevant to 
the adverse decision. NRCS maintains the agency record and will, upon 
request or appeal, make available a copy of the agency record for a 
specific adverse decision to the participant(s) involved in the dispute. 
Agency record documents are labeled numerically 1, 2, 3, etc., in the 
lower right hand of the document.
    Appeal means a written request by a participant asking for review 
(including mediation) of an adverse NRCS technical determination or 
program decision under this part. An appeal must set out the reason(s) 
for appeal and include any supporting documentation. An appeal is 
considered filed when the participant's request has been received by the 
accepting official as indicated in the adverse decision notice.

[[Page 475]]

    Chief means the Chief of NRCS or his or her designee.
    Commodity Credit Corporation means a wholly owned government 
corporation within USDA.
    Conservation district means any district or unit of State or local 
government developed under State 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 and water conservation district, natural resource 
district, conservation committee, or similar name.
    County committee means a 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)).
    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.
    Final technical determination means a preliminary technical 
determination issued under the Highly Erodible Land and Wetland 
Conservation (HELC/WC) provisions found in 7 CFR part 12 that have 
become final, and thus, appealable under sections 8 or 10 of this final 
rule.
    Hearing means an informal appeal proceeding, either before the NRCS 
State Conservationist or the FSA county committee that affords a 
participant opportunity to present testimony and documentary evidence to 
show why an adverse program decision is in error and why the adverse 
decision should be reversed.
    Mediation means a process in which a neutral third party, the 
mediator, meets with the disputing parties, usually the participant and 
the agency. Through mediation, the parties have the opportunity to work 
together with the assistance of the mediator to: Improve communications, 
understand the relevant issues, develop and explore alternatives, and 
reach a mutually satisfactory resolution.
    Mediator means a neutral third party who serves as an impartial 
facilitator between two or more parties to assist them in resolving a 
dispute. The mediator does not take sides or render decisions on the 
merits of the dispute. The mediator assists the parties in identifying 
areas of agreement and encourages the parties to explore potential 
options toward resolution.
    Participant means any individual or entity who has applied for, or 
whose right to participate in or receive, a payment or other benefit in 
accordance with any program administered by NRCS to which the 
regulations in this part apply and is affected by a decision of NRCS. 
The term does not include those individuals or entities excluded in the 
definition of participant published at 7 CFR 11.1.
    Preliminary technical determination means the initial written 
decision by NRCS for a technical matter under HELC/WC which has not 
become final under this part.
    Program decision means a written decision by NRCS concerning 
eligibility for program benefits, program administration, or program 
implementation and based upon applicable regulations and program 
instructions and not a technical determination made solely for the HELC/
WC provisions. Program decisions may include technical matters relative 
to the specific conservation program. These are final decisions upon 
receipt by the program participant.
    Qualified mediator means a mediator who is accredited under State 
law in those States that have a mediation program certified by USDA 
pursuant to 7 CFR part 785, or in those States that do not have a 
mediation program certified by USDA, an individual who has attended a 
minimum of 40 hours of core mediator knowledge and skills training and, 
to remain in a qualified mediator status, completes a minimum of 20 
hours of additional training or education during each 2-year period. 
Such training or education must be approved by USDA, an accredited 
college or university, or one of the following organizations: State Bar, 
a State mediation association, a State approved mediation program, or a 
society of dispute resolution professionals.
    Reconsideration means a subsequent consideration of a preliminary 
technical determination by the designated

[[Page 476]]

conservationist or the State Conservationist.
    Secretary means the Secretary of Agriculture.
    State Conservationist means the NRCS official, or his or her 
designee, in charge of NRCS operations within a State.
    Title XII means Title XII of the Food Security Act of 1985, as 
amended, 16 U.S.C. 3801 et seq.
    Verbatim transcript means the official, written record of 
proceedings of a hearing on a decision appealable under this part.

Sec. 614.3  Decisions subject to informal appeal procedures.

    (a) This part applies to NRCS adverse program decisions and 
technical determinations made with respect to:
    (1) Conservation programs and regulatory requirements authorized 
under Title XII, including:
    (i) Conservation Security Program;
    (ii) Conservation Stewardship Program;
    (iii) Conservation Reserve Program and the Conservation Reserve 
Enhancement Program;
    (iv) Environmental Quality Incentives Program, including the 
following:
    (A) Agricultural Water Enhancement Program,
    (B) Conservation Activity Plans,
    (C) Colorado River Basin Salinity Control,
    (D) Conservation Innovation Grants,
    (E) Ground and Surface Water Conservation Program,
    (F) Klamath Basin Program, and
    (G) Organic Program Initiative;
    (v) Farm and Ranch Land Protection Program;
    (vi) Grassland Reserve Program;
    (vii) Highly Erodible Land Conservation;
    (viii) Wetland Conservation;
    (ix) Wetlands Reserve Program and Wetlands Reserve Enhancement 
Program; and
    (x) Wildlife Habitat Incentive Program.
    (2) Non-Title XII conservation programs or provisions, including:
    (i) Agriculture Management Assistance Program;
    (ii) Emergency Watershed Protection Program including Flood Plain 
Easements;
    (iii) Great Lakes Restoration Initiative;
    (iv) Healthy Forest Reserve Program;
    (v) Water Bank Program;
    (vi) Watershed Protection and Flood Prevention Program; and
    (3) Any other program to which this part is made applicable.
    (b) With respect to matters identified in paragraph (a) of this 
section, participants may appeal adverse decisions concerning:
    (1) Denial of participation in a program;
    (2) Compliance with program requirements;
    (3) Issuance of payments or other program benefits to a participant 
in a program;
    (4) Technical determinations made under Title XII HELC/WC 
provisions;
    (5) Technical determinations or program decisions that affect a 
participant's eligibility for USDA program benefits;
    (6) The failure of an NRCS official issue a technical determination 
or program decision subject to this part (``failure to act''); and
    (7) Incorrect application of general policies, statutory or 
regulatory requirements.
    (c)(1) Only a participant directly affected by a program decision or 
a technical determination made by NRCS may invoke the informal appeal 
procedures contained in this part.
    (2) In order for the appeal request to be effective, the participant 
must personally make a written request for appeal that is signed by the 
participant identified in paragraph (c)(1) no later than 30 days after 
receipt of the adverse decision.
    (d) Appeals of adverse final technical determinations and program 
decisions subject to this part are also covered by the NAD rules of 
procedure, set forth at 7 CFR part 11, and by the FSA county committee 
appeals process, set forth at 7 CFR parts 11 and 780 for informal 
appeals of Title XII decisions.

[[Page 477]]

Sec. 614.4  Decisions not subject to informal appeal procedures.

    (a) Decisions that are not appealable under this part include:
    (1) Any general program provision, program policy, or any statutory 
or regulatory requirement that is applicable to all similarly situated 
participants, such as:
    (i) Program application ranking criteria;
    (ii) Program application screening criteria;
    (iii) Published soil surveys; or
    (iv) Conservation practice technical standards included in the local 
field office technical guide or the electronic FOTG (eFOTG).
    (2) Mathematical or scientific formulas established under a statute 
or program regulation and a program decision or technical determination 
based solely on the application of those formulas;
    (3) Decisions made pursuant to statutory provisions or implementing 
regulations that expressly make agency program decisions or technical 
determinations final;
    (4) Decisions that are based on technical information provided by 
another Federal or State agency, e.g., lists of endangered and 
threatened species;
    (5) Corrections by NRCS of errors in data entered on program 
contracts, easement documents, loan agreements, and other program 
documents; or
    (6) Decisions issued by the Office of the General Counsel, in the 
exercise of authority delegated to it by the Attorney General, 
concerning the application of real property title standards issued by 
the Attorney General.
    (b) Complaints involving discrimination in program delivery are not 
appealable under this part and are handled under the existing USDA civil 
rights rules and regulations.
    (c) Appeals related to contractual issues that are subject to the 
jurisdiction of the Civilian Board of Contract Appeals are not 
appealable under the procedures within this part.
    (d) Where NRCS is unable to fund an application for program 
participation due to a lack of funds. The agency may not deny appeal of 
the underlying computations used to rank and prioritize the application.

Sec. 614.5  Reservation of authority.

    The Secretary of Agriculture, Chief of NRCS, if applicable, or 
designee, reserves the right to make a determination at any time on any 
question arising under the programs covered under this regulation within 
their respective authority, including reversing or modifying in writing, 
with sufficient reason given therefore, any program decision or 
technical determination made by an NRCS official.

Sec. 614.6  Agency records and decision notices.

    (a) All NRCS decisions under this part are based upon an agency 
record. NRCS will supplement the agency record, as appropriate, during 
the informal appeals process.
    (b) NRCS notifies participants of the agency's preliminary and final 
technical determinations and program decisions through decision notices. 
By certified mail, return receipt requested, NRCS will send to the 
participant a decision notice within 10 working days of rendering a 
technical determination or program decision. In lieu of certified mail, 
NRCS may hand deliver notices to participants with written 
acknowledgment of delivery by the participant. Each decision notice 
contains the following:
    (1) The factual basis for the technical determination or program;
    (2) The regulatory, statutory, or policy basis for the technical 
determination or program decision; and
    (3) Information regarding any informal appeal rights available under 
this part; the process for requesting such appeal; and the procedure for 
requesting further review before the FSA county committee pursuant to 7 
CFR part 780 or NAD pursuant to 7 CFR part 11.

Sec. 614.7  Preliminary technical determinations.

    (a) A preliminary technical determination is limited to those 
determinations made pursuant to the HELC/WC provisions (16 U.S.C. 3801, 
et seq.) and becomes final 30 days after the participant receives the 
decision, unless the participant files an appeal with the appropriate 
NRCS official as indicated in the decision notice requesting:

[[Page 478]]

    (1) Reconsideration with a field visit, office visit, or other 
designated location meeting site in accordance with paragraphs (b) and 
(c) of this section; or
    (2) Mediation as set forth in Sec. 614.11.
    (b)(1) If the participant requests reconsideration with a field 
visit, office visit, or other location visit, the designated 
conservationist, participant, and at the option of the conservation 
district, a district representative will make a field or office visit 
for the purpose of gathering additional information and discussing the 
facts relating to the preliminary technical determination. The 
participant may also provide any additional documentation to the 
designated conservationist.
    (2) Within 15 days of the field or office visit, the designated 
conservationist, based upon the agency record as supplemented by the 
field visit and any participant submissions, will reconsider his or her 
preliminary technical determination.
    (3) If the reconsidered determination is no longer adverse to the 
participant, the designated conservationist will issue the reconsidered 
determination as a final technical determination.
    (4) If the preliminary technical determination remains adverse, then 
the designated conservationist will forward the revised decision and 
agency record to the State Conservationist for a final determination 
pursuant to paragraph (c) of this section, unless further appeal is 
waived in writing by the participant in accordance with paragraph (d) of 
this section.
    (c) The State Conservationist will issue a final technical 
determination to the participant as soon as is practicable after 
receiving the reconsideration and agency record from the designated 
conservationist. The technical determination issued by the State 
Conservationist becomes a final NRCS technical determination upon 
receipt by the participant. Receipt triggers the running of the 30-day 
timeframe to appeal to NAD, or if applicable, to the FSA county 
committee.
    (d) In order to address application needs or resource issues on the 
ground immediately (expedited finality), a participant may waive, in 
writing to the State Conservationist, the reconsideration rights stated 
in paragraph (a) of this section so that a preliminary technical 
decision becomes final before the expiration of the 30-day appeal 
period.

Sec. 614.8  Final technical determinations.

    (a) Preliminary HELC/WC technical determinations become final and 
appealable:
    (1) Thirty days after receipt of the preliminary technical decision 
by the participant unless the determination is appealed in a timely 
manner as provided for in this regulation.
    (2) Thirty calendar days after the beginning of a mediation session 
if a mutual agreement has not been reached by the parties; or
    (3) Upon receipt by the participant of the final technical 
determination issued on reconsideration as provided in Sec. 614.7(c).
    (b) The participant may appeal the final technical determination 
issued under the HELC/WC provisions to:
    (1) The FSA county committee pursuant to 7 CFR part 780; or
    (2) NAD pursuant to 7 CFR part 11.

Sec. 614.9  Program decisions.

    (a) Program decisions are final upon receipt of the program decision 
notice by the participant. Program decisions include all decisions 
issued by NRCS for programs that NRCS administers separate from the 
HELC/WC provisions. The participant has the following options for appeal 
of the program decision:
    (1) An informal hearing before NRCS as provided for in paragraph (b) 
through paragraph (d) of this section;
    (2) Mediation as provided for in Sec. 614.11;
    (3) An informal hearing before the FSA county committee pursuant to 
7 CFR part 780 if the program decision is made under Title XII; or
    (4) A hearing before NAD pursuant to 7 CFR part 11.
    (b) A program participant must file an appeal request for a hearing 
with the appropriate State Conservationist as indicated in the decision 
notice within 30 calendar days from the date the participant received 
the program decision.

[[Page 479]]

    (c) The State Conservationist may accept a hearing request that is 
untimely filed under paragraph (b) of this section if the State 
Conservationist determines that circumstances warrant such an action.
    (d) The State Conservationist will hold a hearing no later than 30 
days from the date the appeal request was received. The State 
Conservationist will issue a written final decision no later than 30 
days from the close of the hearing.
    (e) NRCS will provide notice of the right to appeal to NAD on 
program decisions when equitable relief is denied by the Chief or the 
State Conservationist.

Sec. 614.10  Appeals before the Farm Service Agency county committee.

    (a) In accordance with 7 CFR part 780, a participant may appeal a 
final technical determination or a program decision to the FSA county 
committee for those decisions made under Title XII.
    (b) When the FSA county committee hearing the appeal requests review 
the technical determination by the applicable State Conservationist 
prior to issuing their decision, the State Conservationist will:
    (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 concerning the technical determination.
    (c) After the actions set forth in paragraphs (b)(1) through (3) of 
this section are completed, provide the FSA county committee with a 
written technical determination in the form required by Sec. 614.6(b)(1) 
through (2) as well as a copy of the agency record.

Sec. 614.11  Mediation.

    (a) A participant who wishes to pursue mediation must file a request 
for mediation under this part with the official designated in the 
decision notice no later than 30 days after the date on which the 
decision notice was received. Participants in mediation are normally 
required to pay fees established by the mediation program.
    (b) A dispute will be meditated by a qualified mediator as defined 
at Sec. 614.2(n).
    (c) The parties will have 30 days from the date of the first 
mediation session to reach a settlement agreement. This date can be 
extended upon agreement of the parties. The mediator will notify the 
State Conservationist whether the parties have reached an agreement.
    (d) Settlement agreement reached during, or as a result of, the 
mediation process must be in writing, signed by all parties to the 
mediation, and comply with the statutory and regulatory provisions and 
policies governing the program. In addition, the participant must waive 
all appeal and judicial rights as to the issues resolved by the 
settlement agreement.
    (e) At the outset of mediation, the parties must agree to mediate in 
good faith. NRCS demonstrates good faith in the mediation process by, 
among other things:
    (1) Designating an NRCS representative in the mediation;
    (2) Making pertinent records available for review and discussion 
during the mediation; and
    (3) To the extent the NRCS representative does not have authority to 
bind the agency, directing the NRCS representative to forward, in a 
timely manner, any written agreement proposed in mediation to the 
appropriate NRCS official for consideration.
    (f) Mediator impartiality. (1) No person may serve as mediator in an 
adverse program dispute who has previously served as an advocate or 
representative for any party in the mediation.
    (2) No person serving as mediator in an adverse program dispute may 
thereafter serve as an advocate for a participant in any other 
proceeding arising from or related to the mediated dispute including, 
without limitation, representation of a mediation participant before an 
administrative appeals entity of USDA or any other Federal agency.
    (g) Confidentiality. Mediation is a confidential process except for 
those limited exceptions permitted by the Administrative Dispute 
Resolution Act

[[Page 480]]

at 5 U.S.C. 574. As a condition of participation, the participants and 
any interested parties joining the mediation must agree to the 
confidentiality of the mediation process. The mediator will not testify 
in administrative or judicial proceedings concerning the issues 
discussed in mediation, nor submit any report or record of the mediation 
discussions, other than the mediation agreement or the mediation report, 
except as required by law.

Sec. 614.12  Transcripts.

    (a) No recordings will be made of any informal hearing conducted 
under Sec. 614.9. In order to obtain an official record of a hearing, a 
participant may obtain a verbatim transcript as provided in paragraph 
(b) of this section.
    (b) Any party to an informal hearing appeal under Sec. 614.9 may 
request that a verbatim transcript is made of the hearing proceedings 
and that such transcript is made the official record of the hearing. The 
party requesting a verbatim transcript must pay for the transcription 
service and provide a copy of the transcript to NRCS at no charge.

Sec. 614.13  Appealability review.

    If NRCS states that a decision is not adverse to the individual 
participant, and thus, no right to appeal exists, NRCS will notify the 
participant that he may seek review of that determination from the NAD 
Director.

Sec. 614.14  Computation of time.

    (a) The word ``days'' as used in this final rule means calendar 
days, unless specifically stated otherwise.
    (b) Deadlines for any action under this part, including deadlines 
for filing and decisions which fall on a Saturday, Sunday, Federal 
holiday, or other day on which the relevant NRCS office is closed during 
normal business hours, will be extended to close of business the next 
working day.

Sec. 614.15  Implementation of final NAD determinations.

    (a) No later than 30 days after a NAD determination becomes a final 
administrative decision of USDA, NRCS will implement the determination.
    (b) Biannually, NRCS must file a report on the status of 
implementation of final administrative determinations in accordance with 
section 14009 of the 2008 Farm Bill.

Sec. 614.16  Participation of third parties in NRCS proceedings.

    When an appeal is filed under this part, NRCS will notify any third 
party whose interests may be affected of the right to participate as an 
appellant in the appeal. If the third party declines to participate, 
then NRCS' decision will be binding as to that third party as if the 
party had participated. If a formal hearing is conducted by NAD, third 
party issues will be decided by NAD.

Sec. 614.17  Judicial review.

    A participant must receive a final determination from NAD pursuant 
to 7 CFR part 11 prior to seeking judicial review in any U.S. District 
Court of competent jurisdiction.

[[Page 481]]

                      SUBCHAPTER C_WATER RESOURCES

             PART 621_RIVER BASIN INVESTIGATIONS AND SURVEYS

                            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 482]]

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 483]]

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 484]]

    (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 485]]

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

                            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 486]]

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 487]]

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 488]]

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.
    (d) Sponsors who receive financial assistance awarded after October 
1, 2010, must comply with applicable registration and reporting 
requirements of the Federal Funding Accountability and Transparency Act 
of 2006 (Pub. L. 109-282, as amended), and 2 CFR parts 25 and 170.

[49 FR 6078, Feb. 17, 1984, as amended at 76 FR 19684, Apr. 8, 2011]

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

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

[[Page 489]]

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 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

[[Page 490]]

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, 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

[[Page 491]]

    (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:
    (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.

[[Page 492]]

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.
    (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:

[[Page 493]]

    (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.
    (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

[[Page 494]]

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: (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

[[Page 495]]

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 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

[[Page 496]]

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 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

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

[[Page 497]]

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 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

[[Page 498]]

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 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;
    (iii) Agree to provide for any required operation and maintenance of 
the completed emergency measures; and
    (iv) Comply with applicable registration and reporting requirements 
of the Federal Funding Accountability and Transparency Act of 2006 (Pub. 
L. 109-282, as amended), and 2 CFR parts 25 and 170.
    (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

[[Page 499]]

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 
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

[[Page 500]]

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 any reason, including economic and environmental factors or 
technical feasibility.

[70 FR 16926, Apr. 4, 2005, as amended at 76 FR 19684, Apr. 8, 2011]

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,

[[Page 501]]

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;
    (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:

[[Page 502]]

    (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, 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.

                PART 625_HEALTHY FORESTS RESERVE PROGRAM

Sec.
625.1  Purpose and scope.
625.2  Definitions.
625.3  Administration.
625.4  Program requirements.
625.5  Application procedures.
625.6  Establishing priority for enrollment in HFRP.
625.7  Enrollment of easements, contracts, and agreements.
625.8  Compensation for easements and 30-year contracts.
625.9  10-year restoration cost-share agreements.
625.10  Cost-share payments.
625.11  Easement participation requirements.
625.12  30-year contracts.
625.13  The HFRP restoration plan development and Landowner Protections.
625.14  Modification of the HFRP restoration plan.
625.15  Transfer of land.
625.16  Violations and remedies.
625.17  Payments not subject to claims.
625.18  Assignments.
625.19  Appeals.
625.20  Scheme and device.

    Authority: 16 U.S.C. 6571-6578.

    Source: 75 FR 6546, Feb. 10, 2010, unless otherwise noted.

[[Page 503]]

Sec. 625.1  Purpose and scope.

    (a) The purpose of the Healthy Forests Reserve Program (HFRP) is to 
assist landowners, on a voluntary basis, in restoring, enhancing, and 
protecting forestland resources on private lands through easements, 30-
year contracts, and 10-year cost-share agreements.
    (b) The objectives of HFRP are to:
    (1) Promote the recovery of endangered and threatened species under 
the Endangered Species Act of 1973 (ESA);
    (2) Improve plant and animal biodiversity; and
    (3) Enhance carbon sequestration.
    (c) The regulations in this part set forth the policies, procedures, 
and requirements for the HFRP as administered by the Natural Resources 
Conservation Service (NRCS) for program implementation and processing 
applications for enrollment.
    (d) The Chief may implement HFRP in any of the 50 States, District 
of Columbia, Commonwealth of Puerto Rico, Guam, Virgin Islands, American 
Samoa, and the Commonwealth of the Northern Mariana Islands.

Sec. 625.2  Definitions.

    The following definitions will be applicable to this part:
    30-year Contract means a contract that is limited to acreage owned 
by Indian tribes. The 30-year contract is not eligible for use on tribal 
lands held in trust or subject to Federal restrictions against 
alienation.
    Acreage Owned by Indian Tribes means lands to which the title is 
held by individual Indians and Indian tribes. This term does not include 
land held in trust by the United States or lands where the fee title 
contains restraints against alienation.
    Biodiversity (Biological Diversity) means the variety and 
variability among living organisms and the ecological complexes in which 
they live.
    Candidate Conservation Agreement with Assurances (CCAA) means a 
voluntary arrangement between the U.S. Fish and Wildlife Service (FWS) 
or the National Marine Fisheries Service (NMFS), and cooperating non-
Federal landowners under the authority of section 10(a)(1) of the 
Endangered Species Act of 1973, 16 U.S.C. 1539(a)(1). Under the CCAA and 
an associated enhancement of survival permit, the non-Federal landowner 
implements actions that are consistent with the conditions of the 
permit. CCAA with FWS are also subject to regulations at 50 CFR 17.22(d) 
for endangered species or 50 CFR 17.32(d) for threatened species, or 
applicable subsequent regulations.
    Carbon sequestration means the long-term storage of carbon in soil 
(as soil organic matter) or in plant material (such as in trees).
    Chief means the Chief of the Department of Agriculture (USDA) NRCS, 
or designee.
    Confer means to discuss for the purpose of providing information; to 
offer an opinion for consideration; or to meet for discussion, while 
reserving final decision-making authority with NRCS.
    Conservation practice means one or more conservation improvements 
and activities, including structural practices, land management 
practices, vegetative practices, forest management, and other 
improvements that benefit the eligible land and optimize environmental 
benefits, planned and applied according to NRCS standards and 
specifications.
    Conservation treatment means any and all conservation practices, 
measures, activities, and works of improvement that have the purpose of 
alleviating resource concerns, solving or reducing the severity of 
natural resource use problems, or taking advantage of resource 
opportunities, including the restoration, enhancement, maintenance, or 
management of habitat conditions for HFRP purposes.
    Coordination means to obtain input and involvement from others while 
reserving final decision-making authority with NRCS.
    Cost-share agreement means a legal document that specifies the 
rights and obligations of any participant accepted into the program. A 
HFRP cost-share agreement is a binding agreement for the transfer of 
assistance from USDA to the participant to share in the costs of 
applying conservation. A cost-share agreement under HFRP has a duration 
of 10-years.

[[Page 504]]

    Cost-share payment means the payment made by NRCS to a program 
participant or vendor to achieve the restoration, enhancement, and 
protection goals of enrolled land in accordance with the HFRP 
restoration plan.
    Easement means a conservation easement, which is an interest in land 
defined and delineated in a deed whereby the landowner conveys certain 
rights, title, and interests in a property to the United States for the 
purpose of protecting the forest ecosystem and the conservation values 
of the property.
    Easement area means the land encumbered by an easement.
    Easement payment means the consideration paid to a landowner for an 
easement conveyed to the United States under the HFRP.
    Fish and Wildlife Service is an agency of the Department of 
Interior.
    Forest Service is an agency of USDA.
    Forest ecosystem means a dynamic set of living organisms, including 
plants, animals, and microorganisms interacting among themselves and 
with the environment in which they live. A forest ecosystem is 
characterized by predominance of trees, and by the fauna, flora, and 
ecological cycles (energy, water, carbon, and nutrients).
    HFRP restoration plan means the document that identifies the 
conservation treatments that are scheduled for application to land 
enrolled in HFRP in accordance with NRCS standards and specifications.
    Indian tribe means any Indian tribe, band, Nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant to 
the Alaska Native Claims Settlement Act (85 Stat. 688, 43 U.S.C. 1601 et 
seq.), which is recognized as eligible for the special programs and 
services provided by the United States to Indians because of their 
status as Indians.
    Landowner means an individual or entity having legal ownership of 
land. The term landowner may also include all forms of collective 
ownership including joint tenants, tenants in common, and life tenants.
    Landowner protections means protections and assurances made 
available by NRCS to HFRP participants, when requested, and whose 
voluntary conservation activities result in a net conservation benefit 
for listed, candidate, or other species and meet other requirements of 
the program. These Landowner Protections are subject to a HFRP 
restoration plan and associated cost-share agreement, 30-year contract, 
or easement being properly implemented. Landowner protections made 
available by the Secretary of Agriculture to HFRP participants may 
include an incidental take authorization received by NRCS from FWS or 
NMFS, or may be provided by a Safe Harbor Agreement (SHA) or CCAA 
directly between the HFRP participant and FWS or NMFS, as appropriate.
    Liquidated damages means a sum of money stipulated in the HFRP 
restoration agreement that the participant agrees to pay NRCS if the 
participant fails to adequately complete the terms of the restoration 
agreement. The sum represents an estimate of the expenses incurred by 
NRCS to service the restoration agreement, and reflects the difficulties 
of proof of loss and the inconvenience or non-feasibility of otherwise 
obtaining an adequate remedy.
    Maintenance means work performed to keep the applied conservation 
practice functioning for the intended purpose during its life span. 
Maintenance includes work to prevent deterioration of the practice, 
repairing damage, or replacement of the practice to its original 
condition if one or more components fail.
    Measure means one or more specific actions that is not a 
conservation practice, but has the effect of alleviating problems or 
improving the treatment of the resources.
    National Marine Fisheries Service is an agency of the United States 
Department of Commerce.
    Natural Resources Conservation Service is an agency of USDA which 
has the responsibility for administering HFRP.
    Participant means a person, entity, or Indian tribe who is a party 
to a 10-year cost share agreement, 30-year contract, or an agreement to 
purchase an easement.
    Private land means land that is not owned by a local, State, or 
Federal governmental entity, and includes land

[[Page 505]]

that meets the definition of ``acreage owned by Indian tribes.''
    Restoration means implementing any conservation practice 
(vegetative, management, or structural) or measure that improves forest 
ecosystem values and functions (native and natural plant communities).
    Restoration agreement means a cost-share agreement between the 
program participant and NRCS to restore, enhance, and protect the 
functions and values of a forest ecosystem for the purposes of HFRP 
under either an easement, 30-year contract, or a 10-year cost-share 
agreement enrollment option.
    Safe Harbor Agreement means a voluntary arrangement between FWS or 
NMFS and cooperating non-Federal landowners under the authority of 
section 10(a)(1) of the Endangered Species Act of 1973, 16 U.S.C. 
1539(a)(1). Under the SHA and an associated enhancement of survival 
permit, the private property owner implements actions that are 
consistent with the conditions of the permit. SHAs with FWS are also 
subject to regulations at 50 CFR 17.22(c) for endangered species or 50 
CFR 17.32(c) for threatened species, or applicable subsequent 
regulations.
    State-listed species means a species listed as threatened or 
endangered under State endangered species laws, a candidate for such 
listing, or a species listed in a State Wildlife Action Plan as a 
Species of Greatest Conservation Need.
    Sign-up notice means the public notification document that NRCS 
provides to describe the particular requirements for a specific HFRP 
sign-up.
    State Conservationist means the NRCS employee authorized to 
implement HFRP and direct and supervise NRCS activities in a State, 
Caribbean Area, or Pacific Islands Area.
    Technical service provider means an individual, private-sector 
entity, or public agency certified by NRCS to provide technical services 
to program participants in lieu of or on behalf of NRCS.

Sec. 625.3  Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the Chief.
    (b) The Chief may modify or waive a provision of this part if the 
Chief determines that the application of such provision to a particular 
limited situation is inappropriate and inconsistent with the goals of 
the program. This authority cannot be further delegated. The Chief may 
not modify or waive any provision of this part which is required by 
applicable law.
    (c) No delegation in this part to lower organizational levels will 
preclude the Chief from determining any issue arising under this part or 
from reversing or modifying any determination arising from this part.
    (d) The State Conservationist will develop a list of eligible 
restoration practices, payment rates and cost-share percentages, a 
priority ranking process, and any related technical matters.
    (e) NRCS will coordinate with FWS and NMFS in the implementation of 
the program and in establishing program policies. In carrying out this 
program, NRCS may confer with private forest landowners, including 
Indian tribes, the Forest Service and other Federal agencies, State fish 
and wildlife agencies, State forestry agencies, State environmental 
quality agencies, other State conservation agencies, and nonprofit 
conservation organizations. No determination by the FWS, NMFS, Forest 
Service, any Federal, State, or tribal agency, conservation district, or 
other organization will compel NRCS to take any action which NRCS 
determines will not serve the purposes of the program established by 
this part.

Sec. 625.4  Program requirements.

    (a) General. Under the HFRP, NRCS will purchase conservation 
easements from, or enter into 30-year contracts or 10-year cost-share 
agreements with, eligible landowners who voluntarily cooperate in the 
restoration and protection of forestlands and associated lands. To 
participate in HFRP, a landowner will agree to the implementation of a 
HFRP restoration plan, the effect of which is to restore, protect, 
enhance, maintain, and manage the habitat conditions necessary to 
increase the likelihood of recovery of listed species under the ESA, or 
measurably improve the well-being of species that are not listed as 
endangered

[[Page 506]]

or threatened under the ESA but are candidates for such listing, State-
listed species, or species identified by the Chief for special 
consideration for funding. NRCS may provide cost-share assistance for 
the activities that promote the restoration, protection, enhancement, 
maintenance, and management of forest ecosystem functions and values. 
Specific restoration, protection, enhancement, maintenance, and 
management activities may be undertaken by the landowner or other NRCS 
designee.
    (1) Of the total amount of funds expended under the program for a 
fiscal year to acquire easements and enter into 10-year cost-share 
agreements, not more than 40 percent will be used for cost-share 
agreements, and not more than 60 percent will be used for easements.
    (2) The Chief may use any funds that are not obligated by April 1 of 
the fiscal year for which the funds are made available to carry out a 
different method of enrollment during that fiscal year.
    (b) Landowner eligibility. To be eligible to enroll an easement in 
the HFRP, an individual or entity must:
    (1) Be the landowner of eligible land for which enrollment is 
sought;
    (2) Agree to provide such information to NRCS, as the agency deems 
necessary or desirable, to assist in its determination of eligibility 
for program benefits and for other program implementation purposes; and
    (3) Comply with applicable registration and reporting requirements 
of the Federal Funding Accountability and Transparency Act of 2006 (Pub. 
L. 109-282, as amended), and 2 CFR parts 25 and 170.
    (c) Eligible land. (1) NRCS, in coordination with FWS or NMFS, will 
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 restoration, enhancement, and protection of 
forest ecosystem functions and values when considering the cost of 
acquiring the easement, 30-year contract, or 10-year cost share 
agreement, and the restoration, protection, enhancement, maintenance, 
and management costs.
    (2) Land will be considered eligible for enrollment in the HFRP only 
if NRCS determines that:
    (i) Such private land will contribute to the restoration or 
enhancement of the habitat or otherwise measurably increase the 
likelihood of recovery for a selected species listed under section 4 of 
the ESA; and
    (ii) Such private land will contribute to the restoration or 
enhancement of the habitat or otherwise measurably improve the well-
being of a selected species not listed under section 4 of the ESA but is 
a candidate for such listing, or the selected species is a State-listed 
species, or is a species identified by the Chief for special 
consideration for funding.
    (3) NRCS may also enroll land adjacent to eligible land if the 
enrollment of such adjacent land would contribute significantly to the 
practical administration of the easement area, but not more than it 
determines is necessary for such contribution.
    (4) To be enrolled in the program, eligible land must be configured 
in a size and with boundaries that allow for the efficient management of 
the area for easement purposes and otherwise promote and enhance program 
objectives.
    (5) In the case of acreage owned by an Indian tribe, NRCS may enroll 
acreage into the HFRP which is privately owned by either the tribe or an 
individual.
    (d) Ineligible land. The following land is not eligible for 
enrollment in the HFRP:
    (1) Land owned by the United States, States, or units of local 
government;
    (2) Land subject to an easement or deed restriction that already 
provides for the protection of fish and wildlife habitat or that would 
interfere with HFRP purposes, as determined by NRCS; and
    (3) Land that would not be eligible for HFRP under paragraphs (c)(1) 
through (c)(5).

[75 FR 6546, Feb. 10, 2010, as amended at 76 FR 19684, Apr. 8, 2011]

Sec. 625.5  Application procedures.

    (a) Sign-up process. As funds are available, the Chief will solicit 
project proposals from the State Conservationist. The State 
Conservationist may consult

[[Page 507]]

with other agencies at the State, Federal, and local levels to develop 
proposals. The State Conservationist will submit the proposal(s) to the 
Chief for funding selection. Upon selection for funding, the State 
Conservationist will issue a public sign-up notice which will announce 
and explain the rationale for decisions based on the following 
information:
    (1) The geographic scope of the sign-up;
    (2) Any additional program eligibility criteria that are not 
specifically listed in this part;
    (3) Any additional requirements that participants must include in 
their HFRP applications that are not specifically identified in this 
part;
    (4) Information on the priority order of enrollment for funding;
    (5) An estimate of the total funds NRCS expects to obligate during a 
given sign-up; and
    (6) The schedule for the sign-up process, including the deadline(s) 
for applying.
    (b) Application for participation. To apply for enrollment through 
an easement, 30-year contract, or 10-year cost-share agreement, a 
landowner must submit an application for participation in the HFRP 
during an announced period for such sign-up.
    (c) Preliminary agency actions. By filing an application for 
participation, the applicant consents to an NRCS representative entering 
upon the land for purposes of determining land eligibility, and for 
other activities that are necessary or desirable for NRCS to make offers 
of enrollment. The applicant is entitled to accompany an NRCS 
representative on any site visits.
    (d) Voluntary reduction in compensation. In order to enhance the 
probability of enrollment in HFRP, an applicant may voluntarily offer to 
accept a lesser payment than is being offered by NRCS. Such offer and 
subsequent payments may not be less than those rates set forth in 
Sec. 625.8 and Sec. 625.10 of this part.

Sec. 625.6  Establishing priority for enrollment in HFRP.

    (a) Ranking considerations. Based on the specific criteria set forth 
in a sign-up announcement and the applications for participation, NRCS, 
in coordination FWS and NMFS, may consider the following factors to rank 
properties:
    (1) Estimated conservation benefit to habitat required by threatened 
or endangered species listed under section 4 of the ESA;
    (2) Estimated conservation benefit to habitat required by species 
not listed as endangered or threatened under section 4 of the ESA but 
that are candidates for such listing, State-listed species, or species 
identified by the Chief for special consideration for funding;
    (3) Estimated improvement of biological diversity, if enrolled;
    (4) Potential for increased capability of carbon sequestration, if 
enrolled;
    (5) Availability of contribution of non-Federal funds;
    (6) Significance of forest ecosystem functions and values;
    (7) Estimated cost-effectiveness of the particular restoration cost-
share agreement, contract, or easement, and associated HFRP restoration 
plan; and
    (8) Other factors identified in a HFRP sign-up notice.
    (b) NRCS may place higher priority on certain forest ecosystems 
based regions of the State or multi-State area where restoration of 
forestland may better achieve NRCS programmatic and sign-up goals and 
objectives.
    (c) Notwithstanding any limitation of this part, NRCS may enroll 
eligible lands at any time in order to encompass project areas subject 
to multiple land ownership or otherwise to achieve program objectives. 
Similarly, NRCS may, at any time, exclude otherwise eligible lands if 
the participation of the adjacent landowners is essential to the 
successful restoration of the forest ecosystem and those adjacent 
landowners are unwilling to participate.
    (d) If available funds are insufficient to accept the highest ranked 
application, and the applicant is not interested in reducing the acres 
offered to match available funding, NRCS may select a lower ranked 
application that can be fully funded. In cases where HFRP funds are not 
sufficient to cover the costs of an application selected for funding, 
the applicant may lower the cost of the application by changing the 
duration of the easement or agreement

[[Page 508]]

or reducing the acreage offered, unless these changes result in a 
reduction of the application ranking score below that of the score of 
the next available application on the ranking list.

Sec. 625.7  Enrollment of easements, contracts, and agreements.

    (a) Offers of enrollment. Based on the priority ranking, NRCS will 
notify an affected landowner of tentative acceptance into the program. 
This notice of tentative acceptance into the program does not bind NRCS 
or the United States to enroll the proposed project in HFRP, nor does it 
bind the landowner to convey an easement, or to contract or agree to 
HFRP activities. The letter notifies the landowner that NRCS intends to 
continue the enrollment process on their land unless otherwise notified 
by the landowner.
    (b) Acceptance of offer of enrollment. An agreement to purchase or a 
restoration cost-share agreement or contract will be presented by NRCS 
to the landowner which will describe the easement, agreement, or 
contract area; the easement, agreement, or contract terms and 
conditions; and other terms and conditions for participation that may be 
required by NRCS.
    (c) Effect of the acceptance of the offer. After the agreement to 
purchase or restoration cost-share agreement or contract is executed by 
NRCS and the landowner, the land will be considered enrolled in the 
HFRP. For easements, NRCS will proceed with various easement acquisition 
activities, which may include conducting a survey of the easement area, 
securing necessary subordination agreements, procuring title insurance, 
and conducting other activities necessary to record the easement or 
implement the HFRP, as appropriate for the enrollment option being 
considered. For restoration cost-share agreements and contracts, the 
landowner will proceed to implement the restoration plan with technical 
assistance and cost-share from NRCS.
    (d) Withdrawal of offers. Prior to execution of an agreement to 
purchase, a restoration cost-share agreement, or contract between the 
United States and the landowner, NRCS may withdraw the land from 
enrollment at any time due to lack of availability of funds, inability 
to clear title, or other reasons. An agreement to purchase will be void, 
and the offer withdrawn, if not executed by the landowner within the 
time specified.

Sec. 625.8  Compensation for easements and 30-year contracts.

    (a) Determination of easement payment rates.
    (1) NRCS will offer to pay not less than 75 percent, nor more than 
100 percent of the fair market value of the enrolled land during the 
period the land is subject to the easement, less the fair market value 
of the land encumbered by the easement for permanent easements or 
easements for the maximum duration allowed under State law.
    (2) NRCS will offer to pay not more than 75 percent of the fair 
market value of the enrolled land, less the fair market value of the 
land encumbered by the easement for 30-year easements or 30-year 
contracts.
    (b) Acceptance and use of contributions. NRCS may accept and use 
contributions of non-Federal funds to make payments under this section.
    (c) Acceptance of offered easement or 30-year contract compensation.
    (1) NRCS will not acquire any easement or 30-year contract unless 
the landowner accepts the amount of the payment that is offered by NRCS. 
The payment may or may not equal the fair market value of the interests 
and rights to be conveyed by the landowner under the easement or 30-year 
contract. By voluntarily participating in the program, a landowner 
waives any claim to additional compensation based on fair market value.
    (2) Payments may be made in a single payment or no more than 10 
annual payments of equal or unequal size, as agreed to between NRCS and 
the landowner.
    (d) If a landowner believes they may be eligible for a bargain sale 
tax deduction that is the difference between the fair market value of 
the easement conveyed to the United States and the easement payment made 
to the landowner, it is the landowner's responsibility to discuss those 
matters with the Internal Revenue Service. NRCS disclaims any 
representations concerning

[[Page 509]]

the tax implications of any easement or cost-share transaction.
    (e) Per acre payments. If easement payments are calculated on a per 
acre basis, adjustment to stated easement payment will be made based on 
final determination of acreage.
    (f) Ecosystem Services Credits for Conservation Improvements. USDA 
recognizes that environmental benefits will be achieved by implementing 
conservation practices and activities funded through HFRP, and that 
environmental credits may be gained as a result of implementing 
activities compatible with the purposes of a HFRP easement, 30-year 
contract, or restoration cost-share agreement. NRCS asserts no direct or 
indirect interest in these credits. However, NRCS retains the authority 
to ensure the requirements of a HFRP easement, contract, cost-share 
agreement, or restoration plan are met consistent with Sec. Sec. 625.9 
through 625.13 of this part. Where activities required under an 
environmental credit agreement may affect land covered under a HFRP 
easement, restoration cost-share agreement, or 30-year contract, 
participants are highly encouraged to request a compatibility assessment 
from NRCS prior to entering into such agreements.

Sec. 625.9  10-year restoration cost-share agreements.

    (a) The restoration plan developed under Sec. 625.13 forms the basis 
for the 10-year cost-share agreement and its terms are incorporated 
therein.
    (b) A 10-year cost-share agreement will:
    (1) Incorporate all portions of a restoration plan;
    (2) Be for a period of 10 years;
    (3) Include all provisions as required by law or statute;
    (4) Specify the requirements for operation and maintenance of 
applied conservation practices;
    (5) Include any participant reporting and recordkeeping requirements 
to determine compliance with the agreement and HFRP;
    (6) Be signed by the participant;
    (7) Identify the amount and extent of cost-share assistance that 
NRCS will provide for the adoption or implementation of the approved 
conservation treatment identified in the restoration plan; and
    (8) Include any other provision determined necessary or appropriate 
by the NRCS representative.
    (c) Once the participant and NRCS have signed a 10-year cost-share 
agreement, the land will be considered enrolled in HFRP.
    (d) The State Conservationist may, by mutual agreement with the 
parties to the 10-year cost-share agreement, consent to the termination 
of the restoration agreement where:
    (1) The parties to the 10-year cost-share agreement are unable to 
comply with the terms of the restoration agreement as the result of 
conditions beyond their control;
    (2) Compliance with the terms of the 10-year cost-share agreement 
would work a severe hardship on the parties to the agreement; or
    (3) Termination of the 10-year cost-share agreement would, as 
determined by the State Conservationist, be in the public interest.
    (e) If a 10-year 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 
10-year cost-share agreement where forces beyond the participant's 
control prevented compliance with the agreement.

Sec. 625.10  Cost-share payments.

    (a) NRCS may share the cost with landowners of restoring land 
enrolled in HFRP as provided in the HFRP restoration plan. The HFRP 
restoration plan may include periodic manipulation to maximize fish and 
wildlife habitat and preserve forest ecosystem functions and values, and 
measures that are needed to provide the Landowner Protections under 
section 7(b)(4) or section 10(a)(1) of the ESA, including the cost of 
any permit.
    (b) Landowner Protections may be made available to landowners 
enrolled in the HFRP who agree, for a specified period, to restore, 
protect, enhance, maintain, and manage the habitat conditions on their 
land in a manner that is reasonably expected to result in a net 
conservation benefit that contributes to the recovery of listed species

[[Page 510]]

under the ESA, candidate, or other species covered by this regulation. 
These protections operate with lands enrolled in the HFRP and are valid 
for as long as the landowner is in compliance with the terms and 
conditions of such assurances, any associated permit, the easement, 
contract, or the restoration agreement.
    (c) If the Landowner Protections, or any associated permit, require 
the adoption of a conservation practice or measure in addition to the 
conservation practices and measures identified in the applicable HFRP 
restoration plan, NRCS and the landowner will incorporate the 
conservation practice or measure into the HFRP restoration plan as an 
item eligible for cost-share assistance.
    (d) Failure to perform planned management activities can result in 
violation of the easement, 10-year cost-share agreement, or the 
agreement under which Landowner Protections have been provided. NRCS 
will work with landowners to plan appropriate management activities.
    (e) The amount and terms and conditions of the cost-share assistance 
will be subject to the following restrictions on the costs of 
establishing or installing NRCS approved conservation practices or 
implementing measures specified in the HFRP restoration plan:
    (1) On enrolled land subject to a permanent easement or an easement 
for the maximum duration allowed under State law, NRCS will offer to pay 
not less than 75 percent nor more than 100 percent of the average cost, 
and;
    (2) On enrolled land subject to a 30-year easement or 30-year 
contract, NRCS will offer to pay not more than 75 percent of the average 
cost.
    (f) On enrolled land subject to a 10-year cost-share agreement 
without an associated easement, NRCS will offer to pay not more than 50 
percent of the average costs.
    (g) Cost-share payments may be made only upon a determination by 
NRCS that an eligible conservation practice or measure has been 
established in compliance with appropriate standards and specifications. 
Identified conservation practices and measures may be implemented by the 
landowner or other designee.
    (h) Cost-share payments may be made for the establishment and 
installation of additional eligible conservation practices and measures, 
or the maintenance or replacement of an eligible conservation practice 
or measure, but only if NRCS determines the practice or measure is 
needed to meet the objectives of HFRP, and the failure of the original 
conservation practices or measures was due to reasons beyond the control 
of the landowner.

Sec. 625.11  Easement participation requirements.

    (a) To enroll land in HFRP through a permanent easement, an easement 
for the maximum duration allowed under State law, or 30-year enrollment 
option, a landowner will grant an easement to the United States. The 
easement deed will require that the easement area be maintained in 
accordance with HFRP goals and objectives for the duration of the term 
of the easement, including the restoration, protection, enhancement, 
maintenance, and management of habitat and forest ecosystem functions 
and values.
    (b) For the duration of its term, the easement will require, at a 
minimum, that the landowner and the landowner's heirs, successors, and 
assignees, will cooperate in the restoration, protection, enhancement, 
maintenance, and management of the land in accordance with the easement 
and with the terms of the HFRP restoration plan. In addition, the 
easement will grant to the United States, through NRCS:
    (1) A right of access to the easement area by NRCS or its 
representative;
    (2) The right to determine and permit compatible uses on the 
easement area and specify the amount, method, timing, intensity, and 
duration of the compatible use, if such use is consistent with the long-
term protection and enhancement of the purposes for which the easement 
was established;
    (3) The rights, title, and interest to the easement area as 
specified in the conservation easement deed; and
    (4) The right to perform restoration, protection, enhancement, 
maintenance, and management activities on the easement area.

[[Page 511]]

    (c) The landowner will convey title to the easement which is 
acceptable to NRCS. The landowner will warrant that the easement granted 
to the United States is superior to the rights of all others, except for 
exceptions to the title which are deemed acceptable by NRCS.
    (d) The landowner will:
    (1) Comply with the terms of the easement;
    (2) Comply with all terms and conditions of any associated agreement 
or contract;
    (3) Agree to the long-term restoration, protection, enhancement, 
maintenance, and management of the easement in accordance with the terms 
of the easement and related agreements;
    (4) Have the option to enter into an agreement with governmental or 
private organizations to assist in carrying out any landowner 
responsibilities on the easement area; and
    (5) Agree that each person who is subject to the easement will be 
jointly and severally responsible for compliance with the easement and 
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 
easement or the provisions of this part.

Sec. 625.12  30-year contracts.

    (a) To enroll land in HFRP through the 30-year contract option, a 
landowner will sign a 30-year contract with NRCS. The contract will 
require that the contract area be maintained in accordance with HFRP 
goals and objectives for the duration of the term of the contract, 
including the restoration, protection, enhancement, maintenance, and 
management of habitat and forest ecosystem functions and values.
    (b) For the duration of its term, the 30-year contract will require, 
at a minimum, that the landowner and the landowner's assignees, will 
cooperate in the restoration, protection, enhancement, maintenance, and 
management of the land in accordance with the contract and with the 
terms of the HFRP restoration plan. In addition, the contract will grant 
to the United States through NRCS:
    (1) A right of access to the contract area by NRCS or its 
representative;
    (2) The right to allow such activities by the landowner as hunting 
and fishing, managed timber harvest, or periodic haying or grazing, if 
such use is consistent with the long-term protection and enhancement of 
the purposes for which the contract was established;
    (3) The right to specify the amount, method, timing, intensity, and 
duration of the activities listed in paragraph (b)(2) of this section, 
as incorporated into the terms of the contract; and
    (4) The right to perform restoration, protection, enhancement, 
maintenance, and management activities on the contract area.
    (c) The landowner will:
    (1) Comply with the terms of the contract;
    (2) Comply with all terms and conditions of any associated agreement 
or contract; and
    (3) Agree to the long-term restoration, protection, enhancement, 
maintenance, and management of the contract area in accordance with the 
terms of the contract and related agreements.
    (d) A 30-year contract will:
    (1) Be signed by the participant;
    (2) Identify the amount and extent of cost-share assistance that 
NRCS will provide for the adoption or implementation of the approved 
conservation treatment identified in the restoration plan; and
    (3) Include any other provision determined necessary or appropriate 
by the NRCS representative.
    (e) Once the landowner and NRCS have signed a 30-year contract, the 
land will be considered enrolled in HFRP.

Sec. 625.13  The HFRP restoration plan development and Landowner 
          Protections.

    (a) The development of the HFRP restoration plan will be made 
through an NRCS representative, who will confer with the program 
participant and with the FWS and NMFS, as appropriate.
    (b) The HFRP restoration plan will specify the manner in which the 
enrolled land under easement, 30-year

[[Page 512]]

contract, or 10-year cost-share agreement will be restored, protected, 
enhanced, maintained, and managed to accomplish the goals of the 
program.
    (c) Eligible restoration practices and measures may include land 
management, vegetative, and structural practices and measures that will 
restore and enhance habitat conditions for listed species, candidate, 
State-listed, and other species identified by the Chief for special 
funding consideration. To the extent practicable, eligible practices and 
measures will improve biodiversity and optimize the sequestration of 
carbon through management that maintains diverse and high quality native 
forests to accomplish the goals of the restoration plan. NRCS, in 
coordination with FWS and NMFS, will determine the conservation 
practices and measures. The State Conservationist will develop and make 
available to the public a list of eligible practices, and will determine 
payment rates and cost-share percentages within statutory limits.
    (d) Landowner Protections. An HFRP participant who enrolls land in 
HFRP and whose conservation treatment results in a net conservation 
benefit for listed, candidate, or other species, may request such 
Landowner Protections as follows:
    (1) Incidental Take Authorization.
    (i) NRCS will extend to participants the incidental take 
authorization received by NRCS from FWS or NMFS through biological 
opinions issued as part of the interagency cooperation process under 
section 7(a)(2) of the ESA;
    (ii) NRCS will provide assurances, as a provision of the restoration 
plan, that when a participant is provided authorization for incidental 
take of a listed species, NRCS will not require management activities 
related to that species to be undertaken in addition to or different 
from those specified in the restoration plan without the participant's 
consent;
    (iii) The program participant will be covered by the authorization 
to NRCS for incidental take associated with restoration actions or 
management activities. The incidental take may include a return to 
baseline conditions at the end of the applicable period, if the 
landowner so desires.
    (iv) Provided the landowner has acted in good faith and without 
intent to violate the terms of the HFRP restoration plan, NRCS will 
pursue all appropriate options with the participant to avoid termination 
in the event of the need to terminate an HFRP restoration plan that is 
being properly implemented; and
    (v) If the 30-year contract or 10-year restoration cost-share 
agreement is terminated, any requested assurances, including an 
incidental take authorization under this section, provided by NRCS will 
be voided. As such, the landowner will be responsible to FWS or NMFS for 
any violations of the ESA.
    (2) SHA or CCAA.
    (i) NRCS will provide technical assistance to help participants 
design and use their HFRP restoration plan for the dual purposes of 
qualifying for HFRP financial assistance and as a basis for entering 
into a SHA or CCAA with FWS or NMFS and receiving an associated permit 
under section 10(a)(1)(a) of the ESA.
    (ii) In exchange for a commitment to undertake conservation 
measures, the landowner may receive a permit under section 10 of the ESA 
from FWS or NMFS authorizing incidental take of species covered by the 
SHA or CCAA that may occur as a result of restoration actions, 
management activities, and for a listed species covered by a SHA, a 
return to baseline conditions at the end of the applicable period.
    (iii) All SHAs and associated permits issued by FWS or NMFS are 
subject to the Safe Harbor Policy jointly adopted by FWS and NMFS 
according to the regulations at 64 FR 32717 or applicable subsequently 
adopted policy, and SHAs with FWS also are subject to regulations at 50 
CFR 17.22(c) for endangered species or 50 CFR 17.32(c) for threatened 
species, or applicable subsequent regulations.
    (iv) All CCAAs and associated permits issued by FWS or NMFS are 
subject to the CCAAs policy jointly adopted by FWS and NMFS according to 
the regulations at 64 FR 32706 or applicable subsequently adopted 
policy, and CCAAs with FWS also are subject to

[[Page 513]]

regulations at 50 CFR 17.22(d) for endangered species or 50 CFR 17.32(d) 
for threatened species, or applicable subsequent regulations.
    (v) If the 30-year contract or 10-year restoration cost-share 
agreement is terminated, the landowner will be responsible to notify and 
coordinate with FWS and NMFS or any other relevant party to the specific 
SHA or CCAA, as appropriate, for any modifications related to the SHA or 
CCAA.

Sec. 625.14  Modification of the HFRP restoration plan.

    The State Conservationist may approve modifications to the HFRP 
restoration plan that do not modify or void provisions of the easement, 
contract, restoration agreement, or Landowner Protections, and are 
consistent with applicable law. NRCS may obtain and receive input from 
the landowner and coordinate with FWS and NMFS to determine whether a 
modification to the restoration plan is justified. Any HFRP restoration 
plan modification must meet HFRP program objectives, and must result in 
equal or greater wildlife benefits and ecological and economic values to 
the United States. Modifications to the HFRP restoration plan which are 
substantial and affect provisions of the contract, restoration cost-
share agreement, or Landowner Protections will require agreement from 
the landowner, any relevant party to a specific SHA or CCAA, FWS, or 
NMFS, as appropriate, and may require execution of an amended contract 
or 10-year restoration cost-share agreement and modification to the 
Landowner Protection provisions.

Sec. 625.15  Transfer of land.

    (a) Offers voided prior to enrollment. Any transfer of the property 
prior to the applicant's acceptance into the program will void the offer 
of enrollment. At the option of the State Conservationist, an offer can 
be extended to the new landowner if the new landowner agrees to the same 
or more restrictive easement, agreement, and contract terms and 
conditions.
    (b) Actions following transfer of land.
    (1) For easements or 30-year contracts with multiple annual 
payments, any remaining payments will be made to the original landowner 
unless NRCS receives an assignment of proceeds.
    (2) Eligible cost-share payments will be made to the new landowner 
upon presentation of an assignment of rights or other evidence that 
title has passed.
    (3) Landowner protections will be available to the new landowner, 
and the new landowner will be held responsible for assuring completion 
of all measures and conservation practices required by the contract, 
deed, and incidental take permit.
    (4) If a SHA or CCAA is involved, the previous and new landowner may 
coordinate with FWS or NMFS, as appropriate, to transfer the agreement 
and associated permits and assurances.
    (5) The landowner and NRCS may agree to transfer a 30-year contract. 
The transferee must be determined by NRCS to be eligible to participate 
in HFRP and must assume full responsibility under the contract, 
including operation and maintenance of all conservation practices and 
measures required by the contract.
    (c) Claims to payments. With respect to any and all payments owed to 
a person, the United States will bear no responsibility for any full 
payments or partial distributions of funds between the original 
landowner and the landowner'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 an agreement or 
adjudication on the rights to the funds.

Sec. 625.16  Violations and remedies.

    (a) Easement Violations.
    (1) In the event of a violation of the easement or any associated 
agreement involving a landowner, the landowner will 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 determines is necessary to correct the violation.
    (2) Notwithstanding paragraph (a)(1) of this section, 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

[[Page 514]]

when such actions are deemed necessary to protect important listed 
species, candidate species, and forest ecosystem 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 contractual 
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 owed to landowners at any 
time there is a material breach of the easement covenants, associated 
restoration agreement, or any associated contract. 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) The United States 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.
    (b) 30-year Contract and 10-year Cost-Share Agreement Violations.
    (1) If NRCS determines that a participant is in violation of the 
terms of a 30-year contract, or 10-year cost-share agreement, or 
documents incorporated by reference into the 30-year contract or 10-year 
cost-share agreement, the landowner will 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 determines is necessary to correct the violation. If the 
violation continues, the State Conservationist may terminate the 30-year 
contract or 10-year cost-share agreement.
    (2) Notwithstanding the provisions of paragraph (b)(1) of this 
section, a 10-year cost-share agreement or 30-year contract termination 
is effective immediately upon a determination by the State 
Conservationist that the participant has: submitted false information; 
filed a false claim; engaged in any act for which a finding of 
ineligibility for payments is permitted under this part; or taken 
actions NRCS deems to be sufficiently purposeful or negligent to warrant 
a termination without delay.
    (3) If NRCS terminates a 10-year cost-share agreement or 30-year 
contract, the participant will forfeit all rights for future payments 
under the 10-year cost-share agreement or 30-year contract, and must 
refund all or part of the payments received, plus interest, and 
liquidated damages.
    (4) When making any 30-year contract or 10-year cost-share agreement 
termination decisions, the State Conservationist may provide equitable 
relief in accordance with 7 CFR part 635.

Sec. 625.17  Payments not subject to claims.

    Any cost-share, contract, or easement payment or portion thereof due 
any person under this part will be allowed without regard to any claim 
or lien in favor of any creditor, except agencies of the United States 
Government.

Sec. 625.18  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. 625.19  Appeals.

    (a) A person participating in the HFRP may obtain a review of any 
administrative determination concerning eligibility for participation 
utilizing the administrative appeal regulations provided in 7 CFR parts 
11 and 614.
    (b) Before a person may seek judicial review of any administrative 
action concerning eligibility for program participation 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 will be a final agency action except a decision of the Chief 
under these procedures.
    (c) Any appraisals, market analysis, or supporting documentation 
that may be used by NRCS in determining property value are considered 
confidential information, and will only be disclosed as determined at 
the sole discretion of NRCS in accordance with applicable law.
    (d) Enforcement actions undertaken by NRCS in furtherance of its 
federally

[[Page 515]]

held property rights are under the jurisdiction of the Federal District 
Court, and are not subject to review under administrative appeal 
regulations.

Sec. 625.20  Scheme and device.

    (a) If it is determined by 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 to such person during the applicable 
period may be withheld or be required to be refunded with interest 
thereon, as determined appropriate by NRCS.
    (b) A scheme or device includes, but is not limited to, coercion, 
fraud, misrepresentation, depriving any other person of payments for 10-
year cost-share agreements, contracts, or easements for the purpose of 
obtaining a payment to which a person would otherwise not be entitled.
    (c) A person who succeeds to the responsibilities under this part 
will report in writing to 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.

[[Page 516]]

                   SUBCHAPTER D_LONG TERM CONTRACTING

                     PART 630_LONG TERM CONTRACTING

    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

                      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 517]]

    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 518]]

    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

[[Page 519]]

achieve the applicant's objectives and 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 520]]

                         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

                            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 521]]


    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 522]]

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 523]]

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, as amended at 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 524]]

    (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, as amended at 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 525]]

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 526]]

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 527]]

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 528]]

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 529]]

                    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 530]]

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 531]]

    (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, as amended at 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, as amended at 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 532]]

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

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 533]]

    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 534]]

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 535]]

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 536]]

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 537]]

    (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 538]]

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

                            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 projects.
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 539]]

    (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,

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    (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,

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    (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

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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

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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.

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    (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 545]]

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:

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    (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 547]]

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 548]]

    (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 549]]

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 project 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 550]]

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 551]]

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 district(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 552]]

    (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 553]]

    (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 554]]

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 555]]

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 556]]

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 557]]

                     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 558]]

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

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 559]]

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 560]]

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. Sec. 635.3 and 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

[[Page 561]]

with the requirements of the covered conservation program.
    (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 INCENTIVE PROGRAM

Sec.
636.1  Applicability.
636.2  Administration.
636.3  Definitions.
636.4  Program requirements.
636.5  National priorities.
636.6  Establishing priority for enrollment in WHIP.
636.7  Cost-share payments.
636.8  WHIP plan of operation.
636.9  Cost-share agreements.
636.10  Modifications.
636.11  Transfer of interest in a cost-share agreement.
636.12  Termination of cost-share agreements.
636.13  Violations and remedies.
636.14  Misrepresentation and scheme or device.
636.15  Offsets and assignments.
636.16  Appeals.
636.17  Compliance with regulatory measures.
636.18  Technical services provided by qualified personnel not 
          affiliated with USDA.
636.19  Access to operating unit.
636.20  Equitable relief.
636.21  Environmental services credits for conservation improvements.

    Authority: 16 U.S.C. 3839bb-1.

    Source: 75 FR 71338, Nov. 23, 2010, unless otherwise noted.

Sec. 636.1  Applicability.

    (a) The purpose of the Wildlife Habitat Incentive Program (WHIP) is 
to help participants develop fish and wildlife habitat on private 
agricultural land, nonindustrial private forest land (NIPF), and Indian 
land.
    (b) The regulations in this part set forth the requirements for 
WHIP.
    (c) The Chief, Natural Resources Conservation Service (NRCS), may 
implement WHIP in any of the 50 States, District of Columbia, 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. The funds, facilities, 
and authorities of the Commodity Credit Corporation (CCC) are available 
to NRCS to carry out WHIP. Accordingly, where NRCS is mentioned in this 
part, it also refers to CCC's funds, facilities, and authorities, where 
applicable.
    (b) The State Conservationist may accept recommendations from the 
State Technical Committee and Tribal Conservation Advisory Council (for 
tribal land) in the implementation of the program and in establishing 
program direction for WHIP in the applicable State or tribal land. The 
State Conservationist has the authority to accept or reject the State 
Technical Committee and the Tribal Conservation Advisory Council's (for 
tribal land) recommendation; however, the State Conservationist will 
give strong consideration to the State Technical Committee and the 
Tribal Conservation Advisory Council's recommendation.
    (c) NRCS may enter into agreements with Federal and State agencies, 
Indian tribes, conservation districts, local units of government, public 
and private organizations, and individuals to assist with program 
implementation, including the provision of technical assistance. NRCS 
may make payments pursuant to said agreements for program implementation 
and for other goals consistent with the program provided for in this 
part.
    (d) NRCS will provide the public with notice of opportunities to 
apply for participation in the program.

[[Page 562]]

    (e) No delegation in this part to lower organizational levels will 
preclude the Chief, or designee, from determining any issues arising 
under this part or from reversing or modifying any determination made 
under this part.

Sec. 636.3  Definitions.

    The following definitions will apply to this part, and all documents 
issued in accordance with this part, unless specified otherwise:
    Agricultural lands means cropland, grassland, rangeland, 
pastureland, and other land determined by NRCS to be suitable for fish 
and wildlife habitat development on which agricultural and forest-
related products or livestock are or have the potential to be produced. 
Agricultural lands may include cropped woodland, wetlands, waterways, 
streams, incidental areas included in the agricultural operation, and 
other types of land used for or have the potential to be used for 
production.
    Applicant means a person, legal entity, joint operation, or Indian 
tribe that has an interest in agricultural land, NIPF, Indian land, or 
other lands identified in 636.4(c)4, who has requested in writing to 
participate in WHIP.
    At-risk species means any plant or animal species listed as 
threatened or endangered; proposed or candidate for listing under the 
Endangered Species Act (ESA); a species listed as threatened or 
endangered under State law or tribal law on tribal land; State or tribal 
land species of conservation concern; or other plant or animal species 
or community, as determined by the State Conservationist, with advice 
from the State Technical Committee and Tribal Conservation Advisory 
Council (for tribal land), that has undergone, or likely to undergo, 
population decline and may become imperiled without direct intervention.
    Beginning farmer or rancher means an individual or entity who:
    (1) Has not operated a farm or ranch, or who has operated a farm or 
ranch for not more than 10 consecutive years. This requirement applies 
to all members of an entity, who will materially and substantially 
participate in the operation of the farm or ranch.
    (2) In the case of a cost-share agreement with an individual, 
individually, or with the immediate family, material and substantial 
participation requires that the individual provide substantial day-to-
day labor and management of the farm or ranch consistent with the 
practices in the county or State where the farm is located.
    (3) In the case of a cost-share agreement with an entity or joint 
operation, all members must materially and substantially participate in 
the operation of the farm or ranch. Material and substantial 
participation requires that each of the members provide some amount of 
the management, or labor and management necessary for day-to-day 
activities, such that if each of the members did not provide these 
inputs, operation of the farm or ranch would be seriously impaired.
    Chief means the Chief of NRCS or designee.
    Conservation activities means conservation systems, practices, or 
management measures needed to address a resource concern or improve 
environmental quality through the treatment of natural resources, and 
includes structural, vegetative, and management activities, as 
determined by NRCS.
    Conservation district means any district or unit of State, tribal, 
or local government formed under State, tribal, 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, resource conservation district, natural 
resource district, land conservation committee, or similar name.
    Conservation practice means one or more conservation improvements 
and activities, including structural practices, land management 
practices, vegetative practices, forest management, and other 
improvements that benefit the eligible land and achieve program 
purposes. Approved conservation practices are listed in the NRCS Field 
Office Technical Guide (FOTG).
    Cost-share agreement means a financial assistance document that 
specifies

[[Page 563]]

the rights and obligations of any participant accepted into the program. 
A WHIP cost-share agreement is a binding agreement for the transfer of 
assistance from the Department of Agriculture (USDA) to the participant 
to share in the costs of applying conservation activities.
    Cost-share payment means the payments under the WHIP cost-share 
agreement to develop fish and wildlife habitat or accomplish other goals 
consistent with the program provided for in this part.
    Designated conservationist means an NRCS employee whom the State 
Conservationist has designated as responsible for WHIP administration in 
a specific area.
    Field Office Technical Guide means the official local NRCS source of 
resource information and interpretations of guidelines, criteria, and 
requirements for planning and applying conservation practices and 
conservation management systems. It contains detailed information on the 
conservation of soil, water, air, plant, and animal resources applicable 
to the local area for which it is prepared.
    Habitat development means the conservation activities implemented to 
establish, improve, protect, enhance, or restore the conditions of the 
land for the specific purpose of improving conditions for fish and 
wildlife.
    Historically underserved producer means an eligible person, joint 
operation, legal entity, or Indian tribe who is a beginning farmer or 
rancher, socially disadvantaged farmer or rancher, limited resource 
farmer or rancher, or NIPF landowner who meets the beginning, socially 
disadvantaged, or limited resource qualifications set forth in 
Sec. 636.3.
    Indian land means:
    (1) Land held in trust by the United States for individual Indians 
or Indian tribes, or
    (2) Land, the title to which is held by individual Indians or Indian 
tribes subject to Federal restrictions against alienation or 
encumbrance, or
    (3) Land which is subject to rights of use, occupancy, and benefit 
of certain Indian tribes, or
    (4) Land held in fee title by an Indian, Indian family, or Indian 
tribe.
    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant to 
the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.) that is 
eligible for the special programs and services provided by the United 
States to Indians because of their status as Indians.
    Joint operation means, as defined in 7 CFR part 1400, a general 
partnership, joint venture, or other similar business organization in 
which the members are jointly and severally liable for the obligations 
of the organization.
    Legal entity means, as defined in 7 CFR part 1400, an entity created 
under Federal or State law that:
    (1) Owns land or an agricultural commodity, product, or livestock; 
or
    (2) Produces an agricultural commodity, product, or livestock.
    Lifespan means the period of time during which a conservation 
practice is to be operated and maintained for the intended purpose.
    Limited resource farmer or rancher means:
    (1) A person with direct or indirect gross farm sales of not more 
than $142,000 in each of the previous 2 years (this is the amount for 
2010, and adjusted for inflation using Prices Paid by Farmer Index as 
compiled by National Agricultural Statistical Service); and
    (2) Has 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 2 years (to be determined 
annually using the Department of Commerce Data).
    Liquidated damages means a sum of money stipulated in the WHIP cost-
share agreement that the participant agrees to pay NRCS if the 
participant fails to adequately complete the terms of the cost-share 
agreement. The sum represents an estimate of the technical assistance 
expenses incurred to service the agreement, and reflects the 
difficulties of proof of loss and the inconvenience or non-feasibility 
of otherwise obtaining an adequate remedy.

[[Page 564]]

    Livestock means all animals produced on farms and ranches, as 
determined by the Chief.
    Natural Resources Conservation Service is an agency of USDA, which 
has the responsibility for administering WHIP using the funds, 
facilities, and authorities of the CCC.
    Nonindustrial private forest land means rural land, as determined by 
the Secretary, that has existing tree cover or is suitable for growing 
trees and is owned by any nonindustrial private individual, group, 
association, corporation, Indian tribe, or other private legal entity 
that has definitive decisionmaking authority over the land.
    Operation and maintenance means work performed by the participant to 
keep the applied conservation activities functioning for the intended 
purpose during the conservation practice lifespan. Operation includes 
the administration, management, and performance of non-maintenance 
actions needed to keep the completed activity functioning as intended. 
Maintenance includes work to prevent deterioration of the practice, 
repairing damage, or replacement of the practice to its original 
condition if one or more components fail.
    Operation and maintenance agreement means the document that, in 
conjunction with the WHIP plan of operations, specifies the operation 
and maintenance (O&M) responsibilities of the participants for 
conservation activities implemented with WHIP assistance.
    Participant means a person, legal entity, joint operation, or Indian 
tribe that is receiving payment or is responsible for implementing the 
terms and conditions of a WHIP cost-share agreement.
    Person means, as defined in 7 CFR part 1400, an individual, natural 
person and does not include a legal entity.
    Producer means, as defined in 7 CFR part 1400, a person, legal 
entity, joint operation, or Indian tribe who has an interest in the 
agricultural operation or who is engaged in agricultural production or 
forestry management.
    Resource concern means a specific natural resource problem that 
represents a significant concern in a State or region, and is likely to 
be addressed successfully through the implementation of the conservation 
activities by participants.
    Secretary means the Secretary of USDA.
    Socially disadvantaged farmer or rancher means a farmer or rancher 
who has been subjected to racial or ethnic prejudices because of their 
identity as a member of a group without regard to their individual 
qualities. Those groups include African Americans, American Indians or 
Alaskan Natives, Hispanics, and Asians or Pacific Islanders.
    State Conservationist means the NRCS employee authorized to 
implement WHIP and direct and supervise NRCS activities in a State, 
Caribbean Area, or the Pacific Islands Area.
    State Technical Committee means a committee established by the 
Secretary in a State pursuant to 16 U.S.C. 3861.
    Technical assistance means technical expertise, information, and 
tools necessary for the conservation of natural resources on land active 
in agricultural, forestry, or related uses. The term includes the 
following:
    (1) Technical services provided directly to farmers, ranchers, and 
other eligible entities, such as conservation planning, technical 
consultation, and assistance with design and implementation of 
conservation practices; and
    (2) Technical infrastructure, including activities, processes, 
tools, and agency functions needed to support delivery of technical 
services, such as technical standards, resource inventories, training, 
data, technology, monitoring, and effects analyses.
    Technical service provider means an individual, entity, Indian 
tribe, 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.
    Tribal Conservation Advisory Council means a committee established 
by a State Conservationist to implement consultation as defined in 
General Manual 410 Part 405.

[[Page 565]]

    WHIP plan of operations means the document that identifies the 
location and timing of conservation activities that the participant 
agrees to implement on eligible land in order to develop fish and 
wildlife habitat and provide environmental benefits. The WHIP plan of 
operations is a part of the WHIP cost-share agreement.
    Wildlife means non-domesticated birds, fishes, reptiles, amphibians, 
invertebrates, and mammals.
    Wildlife habitat means the aquatic and terrestrial environments 
required for fish and wildlife to complete their life cycles, providing 
air, food, cover, water, and spatial requirements.

Sec. 636.4  Program requirements.

    (a) To participate in WHIP, an applicant must:
    (1) Be in compliance with the highly erodible and wetland 
conservation provisions found in 7 CFR part 12;
    (2) Be in compliance with the terms of all other USDA-administered 
conservation program contracts to which the participant is a party;
    (3) Develop and agree to comply with a WHIP plan of operations and 
O&M agreement, as described in Sec. 636.8;
    (4) Enter into a cost-share agreement for the development of fish 
and wildlife habitat as described in Sec. 636.9;
    (5) Provide NRCS with written evidence of ownership or legal control 
of land for the term of the proposed cost-share agreement, including the 
O&M agreement. An exception may be made by the Chief in the case of land 
allotted by the Bureau of Indian Affairs (BIA) or Indian land where 
there is sufficient assurance of control;
    (6) Agree to provide all information to NRCS determined to be 
necessary to assess the merits of a proposed project and to monitor 
cost-share agreement compliance;
    (7) Agree to grant to NRCS or its representatives access to the land 
for purposes related to application, assessment, monitoring, 
enforcement, verification of certifications, or other actions required 
to implement this part;
    (8) Provide a list of all members of the legal entity and embedded 
entities along with members' tax identification numbers and percentage 
interest in the entity. Where applicable, American Indians, Alaska 
Natives, and Pacific Islanders may use another unique identification 
number for each individual eligible for payment;
    (9) With regard to cost-share agreements with individual Indians or 
Indians represented by the BIA, payments exceeding the payment 
limitation may be made to the tribal participant if a BIA or tribal 
official certifies in writing that no one individual, directly or 
indirectly, will receive more than the payment limitation. The BIA or 
tribal entity must also provide annually, a listing of individuals and 
payments made, by tax identification number or other unique 
identification number, during the previous year for calculation of 
overall payment limitations. The tribal entity must also produce, at the 
request of NRCS, proof of payments made to the person or legal entity 
that incurred costs related to conservation activity implementation;
    (10) Supply information, as required by NRCS, to determine 
eligibility for the program including, but not limited to, information 
to verify the applicant's status as a limited resource farmer or rancher 
or beginning farmer or rancher and payment eligibility as established by 
7 CFR part 1400, Adjusted Gross Income (AGI);
    (11) With regard to any participant that utilizes a unique 
identification number as an alternative to a tax identification number, 
the participant will utilize only that identifier for any and all other 
WHIP cost-share agreements to which the participant is a party. 
Violators will be considered to have provided fraudulent representation 
and are subject to Sec. 636.13; and
    (12) Comply with applicable registration and reporting requirements 
of the Federal Funding Accountability and Transparency Act of 2006 (Pub. 
L. 109-282, as amended) and 2 CFR parts 25 and 170.
    (b) Eligible land includes:
    (1) Private agricultural land;
    (2) NIPF;
    (3) Indian land; and
    (4) Trust land owned in fee title by a State, including an agency or 
subdivision of a State, when such trust land is held under a long-term 
lease by a person or nongovernmental entity and

[[Page 566]]

when the Chief determines that (i) by the nature of the lease, such land 
is tantamount to private agricultural land; (ii) the duration of the 
lease is at least the length of any WHIP agreement; and (iii) no funds 
under the WHIP program are paid to a governmental entity.
    (c) Ineligible land. NRCS will not provide cost-share assistance 
with respect to land:
    (1) Enrolled in a program where fish and wildlife habitat objectives 
have been sufficiently achieved, as determined by NRCS;
    (2) With onsite or offsite conditions which NRCS determines would 
undermine the benefits of the habitat development or otherwise reduce 
its value;
    (3) On which habitat for threatened or endangered species, as 
defined in section 3 of the ESA, 16 U.S.C. 1532, would be adversely 
affected; or
    (4) That is owned in fee title by an agency of the United States, 
other than:
    (i) Land held in trust for Indian tribes, and
    (ii) Lands owned in fee title by a State, including an agency or 
subdivision of a State or a unit of government except as provided in 
Sec. 636.4(b)(4).

Sec. 636.5  National priorities.

    (a) The following national priorities will be used in WHIP 
implementation:
    (1) Promote the restoration of declining or important native fish 
and wildlife habitats;
    (2) Protect, restore, develop, or enhance fish and wildlife habitat 
to benefit at-risk species;
    (3) Reduce the impacts of invasive species on fish and wildlife 
habitats;
    (4) Protect, restore, develop, or enhance declining or important 
aquatic wildlife species' habitats; and
    (5) Protect, restore, develop, or enhance important migration and 
other movement corridors for wildlife.
    (b) NRCS, with advice of other Federal agencies, will undertake 
periodic reviews of the national priorities and the effects of program 
delivery at the State, tribal, and local levels to adapt the program to 
address emerging resource issues. NRCS will:
    (1) Use the national priorities to guide the allocation of WHIP 
funds to the State offices;
    (2) Use the national priorities in conjunction with State, tribal, 
and local priorities to assist with prioritization and selection of WHIP 
applications; and
    (3) Periodically review and update the national priorities utilizing 
input from the public, Indian tribes, and affected stakeholders to 
ensure that the program continues to address priority resource concerns.

Sec. 636.6  Establishing priority for enrollment in WHIP.

    (a) NRCS, in consultation with Federal and State agencies, tribal, 
and conservation partners, may identify priorities for enrollment in 
WHIP that will complement the goals and objectives of relevant fish and 
wildlife conservation initiatives at the State, regional, tribal land, 
or national levels. In response to national, tribal, regional, or State 
fish and wildlife habitat concerns, the Chief may focus program 
implementation in any given year to specific geographic areas or to 
address specific habitat development needs.
    (b) The State Conservationist, with recommendations from the State 
Technical Committee and Tribal Conservation Advisory Council (for tribal 
land), may give priority to WHIP projects that will address unique 
habitats or special geographic areas identified in 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 fish and wildlife habitat need using some or all 
of the following criteria:
    (1) Contribution to resolving an identified habitat concern of 
national, tribal, regional, or State importance including at-risk 
species;
    (2) Relationship to any established wildlife or conservation 
priority areas;

[[Page 567]]

    (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 fish and wildlife habitat development 
activities;
    (7) Other factors determined appropriate by NRCS to meet the 
objectives of the program; and
    (8) Willingness of the applicant to complete all conservation 
improvements during the first 2 years of the WHIP cost-share agreement.

Sec. 636.7  Cost-share payments.

    (a) NRCS may share the cost with a participant for implementing the 
conservation activities as provided in the WHIP plan of operations that 
is a component of the WHIP cost-share agreement:
    (1) Except as provided in paragraph (a)(2) of this section and in 
Sec. 636.9(c), NRCS will offer to pay no more than 75 percent of the 
costs to develop fish and wildlife habitat. The cost-share payment to a 
participant will 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.
    (2) Historically underserved producers, as defined in Sec. 636.3, 
and Indian tribes may receive the applicable payment rate and an 
additional rate that is not less than 25 percent above the applicable 
rate, provided that this increase does not exceed 90 percent of the 
estimated costs associated with WHIP plan of operations implementation.
    (b) Cost-share payments may be made only upon a determination by 
NRCS that a conservation activity or an identifiable component of a 
conservation activity has been established in compliance with 
appropriate standards and specifications.
    (c) Payments will not be made for a conservation activity that was:
    (1) Applied prior to application for the program; or
    (2) Initiated or implemented prior to cost-share agreement approval, 
unless a waiver was granted by the State Conservationist or designated 
conservationist prior to implementation.
    (d) NRCS, in consultation with the State Technical Committee, will 
identify and provide public notice of the conservation activities 
eligible for payment under the program.
    (e) Cost-share payments may be made for the establishment and 
installation of additional eligible conservation activities, or the 
maintenance or replacement of an eligible conservation activity, but 
only if NRCS determines the conservation activity is needed to meet the 
objectives of the program, or that the failure of the original project 
was due to reasons beyond the control of the participant.
    (f) Payments made or attributed to a participant, directly or 
indirectly, may not exceed, in the aggregate, $50,000 per year.
    (g) Eligibility for payment in accordance with 7 CFR part 1400, 
subpart G, average AGI limitation, will be determined prior to cost-
share agreement approval.
    (h) Subject to fund availability, the payment rates identified in a 
WHIP contract may be adjusted by NRCS to reflect increased costs.
    (i) A participant will not be eligible for payments for conservation 
activities on eligible land if the participant receives payments or 
other benefits for the same activity on the same land under any other 
conservation program administered by USDA.
    (j) Before NRCS will approve and issue final payment, the 
participant must certify that the conservation activity has been 
completed in accordance with the cost-share agreement, and NRCS or an 
approved Technical Service Provider (TSP) must certify that the activity 
has been carried out in accordance with the applicable FOTG.
    (k) NRCS, for a fiscal year, may use up to 25 percent of WHIP funds 
to carry out cost-share agreements described in Sec. 636.9(c).

[[Page 568]]

Sec. 636.8  WHIP plan of operations.

    (a) As a condition of participation, the participant develops a WHIP 
plan of operations with the assistance of NRCS or other public or 
private natural resource professionals who are approved by NRCS. A WHIP 
plan of operations encompasses the parcel of land where habitat will be 
established, improved, protected, enhanced, or restored. The WHIP plan 
of operations will be approved by NRCS and address at least one of the 
following as determined by NRCS:
    (1) Fish and wildlife habitat conditions that are of concern to the 
participant;
    (2) Fish and wildlife habitat concerns identified in State, 
regional, tribal land, or national conservation initiatives, as 
referenced in Sec. 636.6(a); or
    (3) Fish and wildlife habitat concerns identified in an approved 
area-wide plan that addresses the wildlife resource habitat concern.
    (b) The WHIP plan of operations forms the basis for the WHIP cost-
share agreement and will be attached and included as part of the cost-
share agreement, along with the O&M agreement. The WHIP plan of 
operations includes a schedule for implementation and maintenance of the 
conservation activities, as determined by NRCS.
    (c) The WHIP plan of operations may be modified in accordance with 
Sec. 636.10.
    (d) All conservation activities in the WHIP plan of operations must 
be approved by NRCS and developed and carried out in accordance with the 
applicable FOTG.
    (e) The participant is responsible for the implementation of the 
WHIP plan of operations.

Sec. 636.9  Cost-share agreements.

    (a) To apply for WHIP cost-share assistance, a person, tribe, or 
legal entity must submit an application for participation at a USDA 
Service Center to an NRCS representative.
    (b) A WHIP cost-share agreement will:
    (1) Incorporate the WHIP plan of operations;
    (2) Be for a time period agreed to by the participant and NRCS, with 
a minimum duration of one year after the completion of conservation 
activities identified in the WHIP plan of operations and a maximum of 10 
years, except for agreements entered into under paragraph (c) of this 
section;
    (3) Include all provisions as required by law or statute;
    (4) Include any participant reporting and recordkeeping requirements 
to determine compliance with the cost-share agreement and program;
    (5) Be signed by the participant;
    (6) Specify payment limits described in Sec. 636.7(f) including any 
additional payment limitation associated with determinations made under 
Sec. 636.7(g);
    (7) Include an O&M agreement that describes the O&M for each 
conservation activity and the agency expectation that WHIP-funded 
conservation activities will be operated and maintained for their 
expected lifespan; and
    (8) Include any other provision determined necessary or appropriate 
by the NRCS representative.
    (c) Notwithstanding any limitation of this part, NRCS may enter into 
a long-term cost-share agreement that:
    (1) Is for a term of at least 15 years;
    (2) Protects and restores essential plant or animal habitat, as 
determined by NRCS; and
    (3) Provides cost-share payments of no more than 90 percent of the 
cost of implementing the WHIP plan of operations to develop fish and 
wildlife habitat.

Sec. 636.10  Modifications.

    (a) The participant and NRCS may modify a cost-share agreement if 
both parties agree to the modification. The WHIP plan of operations is 
revised in accordance with NRCS requirements, and the agreement is 
approved by the designated conservationist.
    (b) Any modifications made under this section must meet WHIP program 
objectives and must be in compliance with this part.
    (c) In the event implementation of a conservation activity fails 
through no fault of the participant, the State Conservationist may 
modify the cost-share agreement in order to issue payments to re-
implement the activity, at the rates established in accordance with 
Sec. 636.7, provided such payments do not exceed the payment limitation 
requirements as set forth in Sec. 636.7.

[[Page 569]]

    (d) Where circumstances beyond the participant's control or when it 
is in the public interest, such as matters of health or safety, the 
State Conservationist may independently or by mutual agreement with the 
parties modify or terminate the cost-share agreement as provided for in 
Sec. 636.12.

Sec. 636.11  Transfer of interest in a cost-share agreement.

    (a) A participant is responsible for notifying NRCS when he or she 
anticipates the voluntary or involuntary loss of control of the land 
covered by a WHIP cost-share agreement during the term of the agreement.
    (b) The participant and NRCS may agree to transfer a cost-share 
agreement to another potential participant. The transferee must be 
determined by NRCS to be eligible to participate in WHIP and must assume 
full responsibility under the cost-share agreement.
    (c) 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 will 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.
    (d) If new participants are not willing or not eligible to assume 
the responsibilities of an existing WHIP cost-share agreement, including 
the O&M agreement, and the participant fails to implement the cost-share 
agreement, then NRCS will terminate the agreement and may require that 
all cost-share payments be forfeited, refunded, or both, with applicable 
interest in accordance with Sec. 636.12. Participants may be subject to 
liquidated damages in accordance with Sec. 636.12.

Sec. 636.12  Termination of cost-share agreements.

    (a) The State Conservationist may, independently or by mutual 
agreement with the parties to the cost-share agreement, terminate the 
cost-share agreement 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;
    (2) Termination of the cost-share agreement would, as determined by 
the State Conservationist, be in the public interest; or
    (3) A participant fails to correct a violation of a cost-share 
agreement within the period provided by NRCS in accordance with 
Sec. 636.13.
    (b) If NRCS terminates a cost-share agreement, in accordance with 
the provisions of paragraphs (a)(1) and (a)(2) of this section the State 
Conservationist may allow the participant to retain a portion of any 
payments received appropriate to the effort the participant has made to 
comply with the contract.
    (1) NRCS may require a participant to provide only a partial refund 
of the payments received if a previously implemented conservation 
activity can function independently, and is not adversely affected by 
the violation or the absence of other conservation activities that would 
have been implemented under the cost-share agreement; and
    (2) The State Conservationist will have the option to waive all or 
part of the liquidated damages assessed, depending upon the 
circumstances of the case.
    (c) When making termination decisions, NRCS may reduce the amount of 
money owed by the participant by a proportion that reflects:
    (1) The good faith effort of the participant to comply with the 
cost-share agreement; or
    (2) The existence of hardships beyond the participant's control that 
have prevented compliance. If a participant claims hardship, that claim 
must be documented and cannot have existed when the applicant applied 
for participation in the program.

Sec. 636.13  Violations and remedies.

    (a) If NRCS determines that a participant is in violation of a cost-
share agreement, NRCS will give the parties to the cost-share agreement 
notice of the violation and a minimum of 60 days to correct the 
violation and comply with the terms of the cost-share agreement and 
attachments thereto.
    (b) If the participant fails to correct the violation of a cost-
share agreement

[[Page 570]]

within the period provided by NRCS under paragraph (a) of this section, 
NRCS may terminate the agreement and require the participant to refund 
all or part of any of the funds issued under that cost-share agreement, 
plus interest, and may assess liquidated damages as indicated in the 
cost-share agreement appendix, as well as require the participant to 
forfeit all rights to any future payment under the agreement.
    (c) If NRCS terminates a cost-share agreement due to breach of 
contract, the participant will forfeit all rights to future payments 
under the agreement, may be required to pay liquidated damages in an 
amount determined by the State Conservationist in accordance with the 
terms of the agreement, and will refund all or part of the payments 
received, plus interest. Participants violating WHIP cost-share 
agreements may be determined ineligible for future NRCS-administered 
conservation program funding.

Sec. 636.14  Misrepresentation and scheme or device.

    (a) A participant who is determined to have erroneously represented 
any fact affecting a program determination made in accordance with this 
part, will not be entitled to cost-share agreement payments and must 
refund to NRCS all payments and pay liquidated damages, plus interest, 
as determined by NRCS.
    (b) A participant will refund to NRCS all payments, plus interest, 
as determined by NRCS, with respect to all NRCS cost-share agreements to 
which they are a party if they are 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.
    (c) Other NRCS cost-share agreements where this person is a 
participant may be terminated.

Sec. 636.15  Offsets and assignments.

    (a) Except as provided in paragraph (b) of this section, any payment 
or portion thereof to any person or legal entity will 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 United States 
Government. The regulations governing offsets and withholdings found at 
7 CFR part 1403 of this title will be applicable to cost-share agreement 
payments.
    (b) WHIP participants may assign any payments in accordance with 7 
CFR part 1404.

Sec. 636.16  Appeals.

    (a) Any participant may obtain reconsideration and review of 
determinations affecting participation in this program in accordance 
with 7 CFR parts 11 and 614, except as provided in paragraph (b) of this 
section.
    (b) In accordance with the provisions of the Department of 
Agriculture Reorganization Act of 1994, Public Law 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 fish and wildlife priority areas, 
habitats, or activities;
    (3) NRCS program funding decisions;
    (4) Eligible conservation activities; and
    (5) Other matters of general applicability.
    (c) Before a participant may seek judicial review of any action 
taken under this part, the participant must exhaust all administrative 
appeal procedures set forth in paragraph (a) of this section.

Sec. 636.17  Compliance with regulatory measures.

    (a) Participants who implement the WHIP plan of operations will be 
responsible for obtaining the authorities, rights, easements, permits, 
or other approvals necessary for the implementation, operation, and 
maintenance of the conservation activities in keeping with applicable 
laws and regulations. The requirement for the participant to obtain 
necessary permits is included in the terms and conditions of the 
contract appendix.
    (b) Participants will be responsible for compliance with all laws 
and for all

[[Page 571]]

effects or actions resulting from the participants' performance under 
the cost-share agreement.

Sec. 636.18  Technical services provided by qualified personnel not 
          affiliated with USDA.

    (a) NRCS may use the services of qualified TSPs in performing its 
responsibilities for technical assistance.
    (b) Participants may use technical services from qualified personnel 
of other Federal, State, and local agencies, Indian tribes, or 
individuals who are certified as TSPs by NRCS.
    (c) Technical services provided by qualified personnel not 
affiliated with USDA may include, but are not limited to, conservation 
planning; conservation practice survey, layout, design, installation, 
and certification; and related technical services as defined in 7 CFR 
part 652.
    (d) NRCS retains approval authority over certification of work done 
by non-NRCS personnel for the purpose of approving WHIP payments.

Sec. 636.19  Access to operating unit.

    As a condition of program participation, any authorized NRCS 
representative will have the right to enter an agricultural operation or 
tract for the purposes of determining eligibility and for ascertaining 
the accuracy of any representations related to cost-share agreements and 
performance. Access will include the right to provide technical 
assistance; determine eligibility; inspect any work undertaken under the 
cost-share agreements, including the WHIP plan of operations and O&M 
agreement; and collect information necessary to evaluate the habitat 
development performance specified in the cost-share agreements. The NRCS 
representative will make a reasonable effort to contact the participant 
prior to the exercising of this provision.

Sec. 636.20  Equitable relief.

    (a) If a participant relied upon the advice or action of any 
authorized NRCS representative and did not know, or have reason to know, 
that the advice or action was improper or erroneous, NRCS may grant 
relief in accordance with 7 CFR part 635. Where a participant believes 
that detrimental reliance on the advice or action of a NRCS 
representative resulted in an ineligibility or program violation, the 
participant may request equitable relief under 7 CFR 635.3. The 
financial or technical liability for any action by a participant that 
was taken based on the advice of a NRCS certified non-USDA TSP is the 
responsibility of the certified TSP and will not be assumed by NRCS when 
NRCS authorizes payment.
    (b) If during the term of a WHIP cost-share agreement a participant 
has been found in violation of a provision of the cost-share agreement, 
the O&M agreement, or any document incorporated by reference through 
failure to fully comply with that provision, the participant may be 
eligible for equitable relief under 7 CFR 635.4.

Sec. 636.21  Environmental services credits for conservation 
          improvements.

    USDA recognizes that environmental benefits will be achieved by 
implementing conservation activities funded through WHIP, and that 
environmental credits may be gained as a result of implementing 
activities compatible with the purposes of a WHIP cost-share agreement. 
NRCS asserts no direct or indirect interest on any such credits. 
However, NRCS retains the authority to ensure that program purposes are 
met and the requirements for WHIP funded improvements are met and 
maintained consistent with Sec. Sec. 636.8 and 636.9. Where activities 
required under an environmental credit agreement may affect land covered 
under a WHIP cost-share agreement, participants are highly encouraged to 
request a compatibility assessment from NRCS prior to entering into such 
agreements. The WHIP cost-share agreement may be modified, in accordance 
with policies outlined in Sec. 636.10, provided the modification meets 
WHIP purposes and is in compliance with this part.

[[Page 572]]

                         SUBCHAPTER E [RESERVED]

[[Page 573]]

                     SUBCHAPTER F_SUPPORT ACTIVITIES

                      PART 650_COMPLIANCE WITH NEPA

             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.); 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.

Sec. 650.3  Policy.

    (a) NRCS mission. The NRCS mission is to provide assistance that 
will allow

[[Page 574]]

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 their habitats, and designated 
ecosystems.
    (13) Advocate the conservation of natural and manmade scenic 
resources to insure that NRCS-assisted programs

[[Page 575]]

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, as amended at 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.
    (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

[[Page 576]]

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 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

[[Page 577]]

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, as amended at 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 578]]

[GRAPHIC] [TIFF OMITTED] TR25JN08.003


[44 FR 50579, Aug. 29, 1979, as amended at 73 FR 35884, June 25, 2008]

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;

[[Page 579]]

    (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) When any new action is planned under the programs identified in 
paragraph (a) of this section, the EE performed by the RFO 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.
    (c)(1) The NRCS restoration and conservation actions and activities 
identified in paragraph (d) of this section are eligible for categorical 
exclusion and require the RFO to document a determination that a 
categorical exclusion applies. Agency personnel will use the EE review 
process detailed in Sec. 650.5 to evaluate proposed activities for 
extraordinary circumstances and document the determination that the 
categorical exclusion applies. The extraordinary circumstances address 
the significance criteria provided in 40 CFR 1508.27.
    (2) The extraordinary circumstances identified in paragraph (c)(1) 
of this section include:
    (i) The proposed action cannot cause significant effects on public 
health or safety.
    (ii) The proposed action cannot significantly affect unique 
characteristics of the geographic area such as proximity to historic 
properties or cultural resources, park lands, prime farmlands, 
floodplains, wetlands, wild and scenic rivers, or ecologically critical 
areas.
    (iii) The effects of the proposed action on the quality of the human 
environment cannot be highly controversial.
    (iv) The proposed action cannot have highly uncertain effects, 
including potential unique or unknown risks on the human environment.
    (v) The proposed action cannot include activities or conservation 
practices that establish a potential precedent for future actions with 
significant impacts.
    (vi) The proposed action is known to have or reasonably cannot be 
expected to have potentially significant environment impacts to the 
quality of the human environment either individually or cumulatively 
over time.
    (vii) The proposed action cannot cause or promote the introduction 
of invasive species or have a significant adverse effect on any of the 
following special environmental concerns not previously identified in 
paragraph (c)(2)(B) of this section, such as: endangered and threatened 
species, environmental justice communities as defined in Executive Order 
12898, wetlands, other waters of the United States, wild and scenic 
rivers, air quality, migratory birds, and bald and golden eagles.
    (viii) The proposed action will not violate Federal or other 
applicable law and requirements for the protection of the environment.
    (3) In the absence of any extraordinary circumstances as determined 
through NRCS' EE review process, the activities will be able to proceed 
without preparation of an EA or EIS. Where extraordinary circumstances 
are determined to exist, the categorical exclusion will not apply, and 
the appropriate documentation for compliance with NEPA will be prepared. 
Prior to determining that a proposed action is categorically excluded 
under paragraph (d) of this section, the proposed action must:
    (i) Be designed to mitigate soil erosion, sedimentation, and 
downstream flooding;
    (ii) Require disturbed areas to be vegetated with adapted species 
that are neither invasive nor noxious;
    (iii) Be based on current Federal principals of natural stream 
dynamics and processes, such as those presented in the Federal 
Interagency Stream Corridor Restoration Working Group document, ``Stream 
Corridor Restoration, Principles, Processes, and Practices;''
    (iv) Incorporate the applicable NRCS conservation practice standards 
as found in the Field Office Technical Guide;
    (v) Not require substantial dredging, excavation, or placement of 
fill; and
    (vi) Not involve a significant risk of exposure to toxic or 
hazardous substances.
    (d) The use of the following categorical exclusions for a proposed 
action

[[Page 580]]

does not waive NRCS compliance with any applicable legal requirement 
including, but not limited to, the National Historical Preservation Act 
or the Endangered Species Act. The following categorical exclusions are 
available for application to proposed actions provided the conditions 
described in paragraph (c) of this section are met:
    (1) Planting appropriate herbaceous and woody vegetation, which does 
not include noxious weeds or invasive plants, on disturbed sites to 
restore and maintain the sites ecological functions and services;
    (2) Removing dikes and associated appurtenances (such as culverts, 
pipes, valves, gates, and fencing) to allow waters to access floodplains 
to the extent that existed prior to the installation of such dikes and 
associated appurtenances;
    (3) Plugging and filling excavated drainage ditches to allow 
hydrologic conditions to return to pre-drainage conditions to the extent 
practicable;
    (4) Replacing and repairing existing culverts, grade stabilization, 
and water control structures and other small structures that were 
damaged by natural disasters where there is no new depth required and 
only minimal dredging, excavation, or placement of fill is required;
    (5) Restoring the natural topographic features of agricultural 
fields that were altered by farming and ranching activities for the 
purpose of restoring ecological processes;
    (6) Removing or relocating residential, commercial, and other public 
and private buildings and associated structures constructed in the 100-
year floodplain or within the breach inundation area of an existing dam 
or other flood control structure in order to restore natural hydrologic 
conditions of inundation or saturation, vegetation, or reduce hazards 
posed to public safety;
    (7) Removing storm debris and sediment following a natural disaster 
where there is a continuing and eminent threat to public health or 
safety, property, and natural and cultural resources and removal is 
necessary to restore lands to pre-disaster conditions to the extent 
practicable. Excavation will not exceed the pre-disaster condition;
    (8) Stabilizing stream banks and associated structures to reduce 
erosion through bioengineering techniques following a natural disaster 
to restore pre-disaster conditions to the extent practicable, e.g., 
utilization of living and nonliving plant materials in combination with 
natural and synthetic support materials, such as rocks, rip-rap, geo-
textiles, for slope stabilization, erosion reduction, and vegetative 
establishment and establishment of appropriate plant communities (bank 
shaping and planting, brush mattresses, log, root wad, and boulder 
stabilization methods);
    (9) Repairing or maintenance of existing small structures or 
improvements (including structures and improvements utilized to restore 
disturbed or altered wetland, riparian, in stream, or native habitat 
conditions). Examples of such activities include the repair or 
stabilization of existing stream crossings for livestock or human 
passage, levees, culverts, berms, dikes, and associated appurtenances;
    (10) Constructing small structures or improvements for the 
restoration of wetland, riparian, in stream, or native habitats. 
Examples of activities include installation of fences and construction 
of small berms, dikes, and associated water control structures;
    (11) Restoring an ecosystem, fish and wildlife habitat, biotic 
community, or population of living resources to a determinable pre-
impact condition;
    (12) Repairing or maintenance of existing constructed fish 
passageways, such as fish ladders or spawning areas impacted by natural 
disasters or human alteration;
    (13) Repairing, maintaining, or installing fish screens to existing 
structures;
    (14) Repairing or maintaining principal spillways and appurtenances 
associated with existing serviceable dams, originally constructed to 
NRCS standards, in order to meet current safety standards. Work will be 
confined to the existing footprint of the dam, and no major change in 
reservoir or downstream operations will result;
    (15) Repairing or improving (deepening/widening/armoring) existing 
auxiliary/emergency spillways associated with dams, originally 
constructed to

[[Page 581]]

NRCS standards, in order to meet current safety standards. Work will be 
confined to the dam or abutment areas, and no major change in reservoir 
or downstream operation will result;
    (16) Repairing embankment slope failures on structures, originally 
built to NRCS standards, where the work is confined to the embankment or 
abutment areas;
    (17) Increasing the freeboard (which is the height from the 
auxiliary (emergency) spillway crest to the top of embankment) of an 
existing dam or dike, originally built to NRCS standards, by raising the 
top elevation in order to meet current safety and performance standards. 
The purpose of the safety standard and associated work is to ensure that 
during extreme rainfall events, flows are confined to the auxiliary/
emergency spillway so that the existing structure is not overtopped 
which may result in a catastrophic failure. Elevating the top of the dam 
will not result in an increase to lake or stream levels. Work will be 
confined to the existing dam and abutment areas, and no major change in 
reservoir operations will result. Examples of work may include the 
addition of fill material such as earth or gravel or placement of 
parapet walls;
    (18) Modifying existing residential, commercial, and other public 
and private buildings to prevent flood damages, such as elevating 
structures or sealing basements to comply with current State safety 
standards and Federal performance standards;
    (19) Undertaking minor agricultural practices to maintain and 
restore ecological conditions in floodplains after a natural disaster or 
on lands impacted by human alteration. Examples of these practices 
include: mowing, haying, grazing, fencing, off-stream watering 
facilities, and invasive species control which are undertaken when fish 
and wildlife are not breeding, nesting, rearing young, or during other 
sensitive timeframes;
    (20) Implementing soil control measures on existing agricultural 
lands, such as grade stabilization structures (pipe drops), sediment 
basins, terraces, grassed waterways, filter strips, riparian forest 
buffer, and critical area planting; and
    (21) Implementing water conservation activities on existing 
agricultural lands, such as minor irrigation land leveling, irrigation 
water conveyance (pipelines), irrigation water control structures, and 
various management practices.

[44 FR 50579, Aug. 29, 1979, as amended at 74 FR 33322, July 13, 2009; 
75 FR 6556, Feb. 10, 2010]

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

[[Page 582]]

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 that the EE reveals may be a major Federal action 
significantly affecting the quality of the human environment.
    (c) Criteria for determining the need for a program EA:
    (1) A program EA is to be prepared when NRCS has determined, based 
on the environmental evaluation, that a program EIS is not required and 
the program and actions to implement the program are not categorically 
excluded; and
    (2) A program EA may also be prepared to aid in NRCS decision-making 
and to aid in compliance with NEPA.
    (d) The RFO, through the process of tiering, is to determine if a 
site-specific EA or EIS is required for an action that is included in a 
program EA or EIS.

[44 FR 50579, Aug. 29, 1979, as amended at 73 FR 35886, June 25, 2008]

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

[[Page 583]]

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 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

[[Page 584]]

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 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

[[Page 585]]

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 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.

[[Page 586]]

    (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) Environmental Impact Statement (EIS) and Record of decision The 
RFO is to prepare a concise record of decision (ROD) for actions 
requiring an 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.
    (d) Environmental Assessments and Finding of No Significant Impact 
(FNSI)--(1) EA's. 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).
    (2) Availability of the FNSI (40 CFR 1501.4(e)(2)). In accordance 
with CEQ regulations at 40 CFR 1501.4(e)(2), NRCS shall make the EA/FNSI 
available for public review for thirty days in the following instances: 
The proposed action is, or closely similar to, one which normally 
requires the preparation of an EIS as defined by NRCS NEPA implementing 
regulations at Sec. 650.7, or the nature of the action is one without 
precedent. When availability for public review for thirty days

[[Page 587]]

is not required, NRCS will involve the public in the preparation of the 
EA/FONSI and make the EA/FONSI available for public review in accordance 
with CEQ regulations at 40 CFR 1501.4(b) and 1506.6.
    (e) 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 to determine whether a supplemental 
NEPA analysis is necessary before making a change.

[44 FR 50579, Aug. 29, 1979, as amended at 73 FR 35886, June 25, 2008]

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:
    (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.

[[Page 588]]

    (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 management 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 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

[[Page 589]]

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 screened 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 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

[[Page 590]]

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 
multistate 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 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

[[Page 591]]

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 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.

[[Page 592]]

    (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.
    (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.

[[Page 593]]

    (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 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

[[Page 594]]

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 member(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 
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

[[Page 595]]

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 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.

[[Page 596]]

    (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.
    (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

[[Page 597]]

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 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]

[[Page 598]]

                           PART 651 [RESERVED]

             PART 652_TECHNICAL SERVICE PROVIDER ASSISTANCE

                      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

    Source: 75 FR 6845, Feb. 12, 2010, unless otherwise noted.

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 (TSPs). The Food Security Act of 1985, 
requires the Secretary to deliver technical assistance to eligible 
participants for implementation of its Title XII Programs and the 
conservation activities in the Agricultural Management Assistance 
Program, 7 U.S.C. 1524, directly, through an agreement with a third 
party provider, 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 TSP, 
sets forth a certification and decertification process, and establishes 
a method to make payments for technical services.
    (b) TSPs may provide technical services to eligible participants in 
conservation planning, education and outreach, and assistance with 
design and implementation of conservation practices applied on private 
land, Indian land, or where allowed by conservation program rules on 
public land.
    (c) The Chief may implement this part in any of the 50 States, 
District of Columbia, Commonwealth of Puerto Rico, Guam, 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 the Natural Resources 
Conservation Service (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.
    (2) An entity or public agency 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.

[[Page 599]]

    Conservation activity plan means the conservation practices 
associated with plan development as authorized under the Food, 
Conservation, and Energy Act of 2008 (2008 Act).
    Conservation plan means a record of the client's decisions and 
supporting information for treatment of a land unit or water as a result 
of the planning process that meets the Field Office Technical Guide 
quality criteria for each natural resource (soil, water, air, plants, 
and animals), and takes into account economic and social considerations. 
The plan describes the schedule of operations and activities needed to 
solve identified natural resource problems and takes advantage of 
opportunities at a conservation management system level. The needs of 
the client, the resources, and Federal, State, and local requirements 
will be met.
    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 defined in the Federal 
Grants and Cooperative Agreement Act, 31 U.S.C. 6301 et seq.
    Department means the NRCS, the Farm Service Agency, or any other 
agency or instrumentality of the Department of Agriculture (USDA) that 
is assigned responsibility for all or a part of a conservation program 
subject to this part.
    Eligible participant means a producer, landowner, or entity that is 
participating in, or seeking to participate in, a conservation program 
covered by this rule in which the producer, landowner, or entity is 
otherwise eligible to participate.
    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.
    Indian land means all lands held in trust by the United States for 
individual Indians or tribes, or all lands, titles to which are held by 
individual Indians or tribes, subject to Federal restrictions against 
alienation or encumbrance, or all lands which are subject to the rights 
of use, occupancy, and benefit of certain tribes. The term Indian land 
also includes land for which the title is held in fee status by Indian 
tribes and the United States Government-owned land under the Bureau of 
Indian Affairs jurisdiction.
    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 program authorized under Title XII of the Food 
Security Act of 1985, or the Agricultural Management Assistance Program, 
authorized under 7 U.S.C. 1524.
    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 TSPs for specific technical services.
    Secretary means the Secretary of the Department of Agriculture.
    State Conservationist means the NRCS employee authorized to direct 
and supervise NRCS activities in a State, Caribbean Area, or Pacific 
Basin Area.
    Technical service means the technical assistance provided by TSPs, 
including conservation planning; education and outreach; and the design, 
installation, and check-out of approved conservation practices.
    Technical service contract means a document that specifies the 
rights and obligations of an eligible participant to obtain technical 
services from a TSP where the eligible participant will not receive 
financial assistance for the implementation of the practice paid for in 
the technical service contract through

[[Page 600]]

participation in a Title XII conservation program or the Agricultural 
Management Assistance Program, 7 U.S.C. 1524.
    Technical service provider means an individual, entity, Indian 
Tribe, 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.

[75 FR 6845, Feb. 12, 2010, as amended at 75 FR 48273, Aug. 10, 2010]

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 TSP in accordance with the requirements of this 
part.
    (b) The Chief of 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 TSP process;
    (2) Consult with the Farm Service Agency and other appropriate 
agencies and entities concerning the availability and utilization of 
TSPs 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 TSPs;
    (4) Provide training to ensure that persons meet the certification 
criteria for certain technical expertise when there is a lack of 
training resources or market outside the agency for such technical 
expertise. However, any training provided by the Department will be 
limited to training about Department regulations, policies, procedures, 
processes, and business and technical tools unique to NRCS; and
    (5) 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 TSP unless the TSP 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 TSP in this manner, the TSP is 
authorized to provide technical services and receive payment even if 
such TSP is not certified in accordance with subpart B, nor identified 
on the approved list.
    (f) When a participant acquires technical services from a TSP, the 
Department is not a party to the agreement between the participant and 
the TSP. To ensure that quality implementation of the goals and 
objectives of the conservation programs are met, the TSP must be 
certified by NRCS in accordance with subpart B of this part and 
identified on the approved list. Upon request of NRCS, TSPs are required 
to submit copies of all transcripts, licensing, and certification 
documentation.

Sec. 652.4  Technical service standards.

    (a) All technical services provided by TSPs 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

[[Page 601]]

NRCS standards, specifications, and requirements. The Department must 
approve all new technologies and innovative practices, including interim 
standards and specifications, prior to a TSP initiating technical 
services for those technologies and practices.
    (c) A TSP must assume responsibility in writing for the particular 
technical services provided. Technical services provided by the TSP 
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 address the resource issues. Conservation alternatives 
will meet the objectives for the program and participant to whom 
assistance is provided.
    (d) TSPs 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 TSP 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 TSP.
    (g) The TSP will 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, TSPs may 
utilize the services of subcontractors to provide specific technical 
services or expertise needed by the TSP, 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 TSP.
    (b) To acquire technical assistance directly from the Department, 
participants should contact their local USDA Service Center.
    (c) To acquire technical services from a TSP, 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 TSP from the approved list of TSPs.
    (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 or activity plans suitable for 
subsequent incorporation into a program contract.
    (f) The Department may make payment to eligible participants who 
have a technical service contract and utilize it for technical 
assistance from a TSP.
    (g) The Department will identify in the particular program contract 
or written agreement the payment provisions for TSPs hired directly by 
the participant.
    (h) To obtain payment for technical services, participants must 
submit to the Department valid invoices, supporting documentation, and 
requests for payment. The Department will

[[Page 602]]

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 TSP hired by the participant, or upon 
receipt of an assignment of payment from the participant, make payment 
directly to the TSP.
    (i) 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 TSPs.
    (j) Payments for technical services will be made only one time for 
the 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.
    (k) The Department will not make payment for activities or services 
that are customarily provided at no cost by a TSP to a participant as 
determined by the State Conservationist.
    (l) Payment rates for technical services acquired by participants.
    (1) NRCS will calculate TSP payment rates for technical services 
using national, regional, and locally determined price data.
    (2) Establishing TSP payment rates.
    (i) NRCS will establish guidelines to analyze the local pricing 
information using a standardized method.
    (ii) The State Conservationist will establish TSP payment rates in 
each State for the various categories of technical services. The State 
Conservationist will determine the rates according to local NRCS cost 
data, procurement data, and market data.
    (iii) National Headquarters will review and approve State payment 
rates to ensure consistency where similar resource conditions and 
agricultural operations exist. Payment rates may vary to some degree 
between or within States due to differences in State laws, the cost of 
doing business, competition, and other variables.
    (iv) National Headquarters and State levels 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 TSP 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 may enter into a procurement contract, 
contribution agreement, cooperative agreement, or other appropriate 
instrument with TSPs to provide related technical assistance services 
that accelerate conservation program delivery. Related technical 
assistance services may include activities or services that facilitate 
the development, processing, or implementation of a program contract, 
such as recording conservation planning decisions and specifications.
    (c) NRCS may enter into agreements with other agencies or with a 
non-Federal entity to provide technical services to eligible 
participants.
    (d) 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 TSP through a procurement contract, 
contribution agreement, cooperative agreement, or other similar 
instrument, the TSP is authorized to provide technical services and 
receive payment even if such TSP is not certified in accordance with 
subpart B of this part nor identified on the approved list.

[[Page 603]]

    (e) 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. Any contract, contribution agreement, 
cooperative agreement, or other appropriate instrument entered into 
under this section will be for a minimum of one year, will not exceed 3 
years in duration, and may be renewed upon mutual agreement of the 
parties.
    (f) A TSP 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.
    (g) 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 TSPs. 
As a requirement of certification, TSPs must develop and maintain 
documentation in accordance with Departmental manuals, handbooks, and 
technical guidance for the technical services provided, and provide this 
documentation to NRCS and the participant when the particular technical 
service is completed. NRCS may utilize information obtained through its 
quality assurance process, documentation submitted by the TSP, and other 
relevant information in determining how to improve the quality of 
technical service, as well as determining whether to decertify a TSP 
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 TSP detailing 
the deficiency and requesting remedial action by the TSP. Failure by the 
TSP 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. TSPs 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

[[Page 604]]

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 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

[[Page 605]]

    (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 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

[[Page 606]]

    (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 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.

[[Page 607]]

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 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

[[Page 608]]

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.

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

Sec.
653.1  General.
653.2  Technical standards and criteria.
653.3  Adaptation of technical standards.
653.4  Availability of technical standards.


[[Page 609]]


    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.

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

                            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.

[[Page 610]]

                            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.

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.

[[Page 611]]

             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.

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

[[Page 612]]

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.

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

[[Page 613]]

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 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

Sec.
656.1  Purpose.
656.2  Archeological and historical laws and Executive orders applicable 
          to NRCS-assisted programs.
656.3  Policy.

[[Page 614]]

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 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

                 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.

[[Page 615]]

                 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:
    (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

[[Page 616]]

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 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

[[Page 617]]

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-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

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

[[Page 618]]

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. 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

[[Page 619]]

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.
    (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

[[Page 620]]

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 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

[[Page 621]]

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 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

[[Page 622]]

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
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

[[Page 623]]

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)
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

[[Page 624]]

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 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 625]]

                       SUBCHAPTER G_MISCELLANEOUS

                           PART 660 [RESERVED]

            PART 661_PUBLIC INFORMATION AND RIGHT TO PRIVACY

             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 records 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 records 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 626]]

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.

                        PART 662_REGIONAL EQUITY

Sec.
662.1  General.
662.2  Definitions.
662.3  Applicability.
662.4  Regional Equity implementation procedure.


[[Page 627]]


    Authority: 16 U.S.C. 3841(d).

    Source: 74 FR 63540, Dec. 4, 2009, unless otherwise noted.

Sec. 662.1  General.

    This part sets forth the procedures that NRCS will use to implement 
the Regional Equity provision of the Food Security Act of 1985, 16 
U.S.C. 3841(d).

Sec. 662.2  Definitions.

    The following definitions are applicable to this part:
    Chief means the Chief of NRCS or the person delegated authority to 
act on behalf of the Chief.
    Contribution programs means Regional Equity programs that contribute 
funding to Regional Equity States, as determined by the Chief each 
fiscal year, consistent with the limitations established in 16 U.S.C. 
3841(d).
    Drawing account means the aggregated amount of contribution program 
funds required to bring all States to the Regional Equity threshold.
    Funding opportunity means the amount of funding needed to bring a 
State to the $15,000,000 Regional Equity threshold for the aggregate of 
Regional Equity programs.
    Initial allocation means the amount of conservation program 
allocation funding provided to all States through a merit-based, natural 
resource focused process.
    Obligated means a specific binding agreement, in writing, for the 
purpose authorized by law and executed while the funding is available.
    Regional Equity programs mean conservation programs under Subtitle D 
(excluding the Conservation Reserve Program, Wetlands Reserve Program, 
and the Conservation Security Program) of the Food Security Act of 1985. 
These programs include: Conservation Stewardship Program, Farm and Ranch 
Lands Protection Program, Grassland Reserve Program, Environmental 
Quality Incentives Program, Conservation Innovation Grants, Agricultural 
Water Enhancement Program, Conservation of Private Grazing Land, 
Wildlife Habitat Incentive Program, Grassroots Source Water Protection 
Program, Great Lakes Basin Program, Chesapeake Bay Watershed Initiative, 
and the Voluntary Public Access and Habitat Incentive Program. Regional 
Equity programs will be aggregated to determine whether a State meets 
the $15,000,000 Regional Equity threshold. However, not all Regional 
Equity programs will be considered contribution programs.
    Regional Equity provision means the statutory requirement to give 
priority funding before April 1 for approved applications for specific 
programs within States that have not received a $15,000,000 aggregate 
level of funding.
    Regional Equity States means any State not meeting the Regional 
Equity threshold of $15,000,000 through the initial allocation for 
Regional Equity programs.
    Regional Equity threshold means the $15,000,000 minimum aggregate 
amount of Regional Equity program funds.
    Respective demand means the mix of contribution program funds that 
each State Conservationist in a Regional Equity State requests to fill 
that State's funding opportunity.
    State means all 50 States, the District of Columbia, Commonwealth of 
Puerto Rico, Guam, Virgin Islands, American Samoa, Commonwealth of the 
Northern Mariana Islands, and the Freely Associated States.
    State Conservationist means the NRCS employee authorized to 
implement Regional Equity programs and direct and supervise NRCS 
activities in a State, the Caribbean Area, or the Pacific Islands Area.

Sec. 662.3  Applicability.

    The regulation in this part sets forth the policies and procedures 
for the Regional Equity provision as administered by the NRCS. This 
regulation applies to the Regional Equity programs defined in this part. 
The Chief will implement the Regional Equity provision by identifying 
programs that contribute to the establishment of program-specific 
drawing accounts for priority funding in Regional Equity States.

Sec. 662.4  Regional Equity implementation procedure.

    The following procedures will implement the Regional Equity 
provision:
    (a) Determine initial allocations. NRCS will determine initial 
conservation

[[Page 628]]

program funding levels for each State through a merit-based, natural 
resource focused allocation process as determined by the Chief.
    (b) Determine the funding opportunity. The combined initial 
allocation funding level for Regional Equity programs, by State, will be 
compared to the Regional Equity threshold to determine each Regional 
Equity State's funding opportunity.
    (c) Establish contribution program fund levels. Subject to 
availability of funds, contribution program fund levels are determined 
by:
    (1) Identifying which programs contribute funds, as determined by 
the Chief, consistent with the limitations established in 16 U.S.C. 
3841(d); and
    (2) Each State's respective demand.
    (i) State Conservationists in Regional Equity States, in 
consultation with State Technical Committees, will evaluate and 
determine their respective program demands based on the following 
criteria:
    (A) Program applications and how they address national program 
priorities;
    (B) Historic trends in program interest; and
    (C) State priority natural resource concerns.
    (ii) The State Conservationist's identified respective demand will 
assist the Chief in determining the composition of contribution program 
funds within the established drawing account.
    (d) Establish the drawing account. NRCS will establish a drawing 
account for each contribution program, as determined in paragraphs 
(c)(1) and (c)(2) of this section, and will give priority before April 1 
of each fiscal year for such funds to be used to fund applications in 
Regional Equity States sufficient to bring each of the Regional Equity 
States to the Regional Equity threshold of $15,000,000.
    (e) Access the drawing account. State Conservationists in Regional 
Equity States may request access to that State's assigned portion of the 
drawing account once that State has obligated at least 90 percent of its 
initial allocation for that same program. The Chief may waive the 90 
percent threshold requirement for a specific program in response to 
specific program needs.
    (f) Re-allocation of funds. The program-specific drawing accounts 
for Regional Equity States will be available until April 1 of each 
fiscal year, after which date the remaining funds may be re-allocated at 
the discretion of the Chief.

                        PARTS 663-699 [RESERVED]



[[Page 629]]



                              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 631]]



                    Table of CFR Titles and Chapters




                      (Revised as January 1, 2014)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
       III  Administrative Conference of the United States (Parts 
                300--399)
        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 2--199)
        II  Office of Management and Budget Guidance (200--299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300--
                399)
        IV  Department of Agriculture (Parts 400--499)
        VI  Department of State (Parts 600--699)
       VII  Agency for International Development (Parts 700--799)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
        XI  Department of Defense (Parts 1100--1199)
       XII  Department of Transportation (Parts 1200--1299)
      XIII  Department of Commerce (Parts 1300--1399)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1800--1899)
        XX  United States Nuclear Regulatory Commission (Parts 
                2000--2099)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Housing and Urban Development (Parts 2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)
     XXVII  Small Business Administration (Parts 2700--2799)
    XXVIII  Department of Justice (Parts 2800--2899)

[[Page 632]]

       XXX  Department of Homeland Security (Parts 3000--3099)
      XXXI  Institute of Museum and Library Services (Parts 3100--
                3199)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
     XXXIV  Department of Education (Parts 3400--3499)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
    XXXVII  Peace Corps (Parts 3700--3799)
     LVIII  Election Assistance Commission (Parts 5800--5899)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--199)
        II  Recovery Accountability and Transparency Board (Parts 
                200--299)

                   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 (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        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 (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600--3699)
    XXVIII  Department of Justice (Parts 3800--3899)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)

[[Page 633]]

    XXXIII  Overseas Private Investment Corporation (Parts 4300--
                4399)
     XXXIV  Securities and Exchange Commission (Parts 4400--4499)
      XXXV  Office of Personnel Management (Parts 4500--4599)
    XXXVII  Federal Election Commission (Parts 4700--4799)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
      XLIX  Federal Labor Relations Authority (Parts 5900--5999)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
    LXVIII  Commission on Civil Rights (Parts 7800--7899)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
       LXX  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 8000--8099)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)
     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)
     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
      LXXX  Federal Housing Finance Agency (Parts 9000--9099)
   LXXXIII  Special Inspector General for Afghanistan 
                Reconstruction (Parts 9300--9399)

[[Page 634]]

    LXXXIV  Bureau of Consumer Financial Protection (Parts 9400--
                9499)
    LXXXVI  National Credit Union Administration (9600--9699)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)
     XCVII  Council of the Inspectors General on Integrity and 
                Efficiency (Parts 9800--9899)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 1--99)
         X  Privacy and Civil Liberties Oversight Board (Parts 
                1000--1099)

                         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)

[[Page 635]]

      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     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)
       XXV  Office of Advocacy and Outreach, Department of 
                Agriculture (Parts 2500--2599)
      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  National Institute of Food and 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)

[[Page 636]]

        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)

                           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 1300--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)
        II  Election Assistance Commission (Parts 9400--9499)

                      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)
         X  Bureau of Consumer Financial Protection (Parts 1000--
                1099)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XII  Federal Housing Finance Agency (Parts 1200--1299)
      XIII  Financial Stability Oversight Council (Parts 1300--
                1399)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
       XVI  Office of Financial Research (Parts 1600--1699)
      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)

[[Page 637]]

               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 (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    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--1199)
         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)

[[Page 638]]

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             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  U.S. 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  U.S. 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  Office of Workers' Compensation Programs, 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 Service, Department of 
                Labor (Parts 1000--1099)

[[Page 639]]

                       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)

                      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 (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)
      XIII  Millennium Challenge Corporation (Parts 1300--1399)
       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)

[[Page 640]]

        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)
        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)
        XV  Emergency Mortgage Insurance and Loan Programs, 
                Department of Housing and Urban Development (Parts 
                2700--2799)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
      XXIV  Board of Directors of the HOPE for Homeowners Program 
                (Parts 4000--4099)
       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)

[[Page 641]]

        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 (Parts 1200--1299)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--End)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        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)

[[Page 642]]

      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)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Bureau of Safety and Environmental Enforcement, 
                Department of the Interior (Parts 200--299)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
         V  Bureau of Ocean Energy Management, Department of the 
                Interior (Parts 500--599)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)
       XII  Office of Natural Resources Revenue, Department of the 
                Interior (Parts 1200--1299)

                 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)
         X  Financial Crimes Enforcement Network, Department of 
                the Treasury (Parts 1000--1099)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)

[[Page 643]]

         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)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     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)
    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)
       VII  Office of Educational Research and Improvement, 
                Department of Education (700--799)[Reserved]
            Subtitle C--Regulations Relating to Education
        XI  National Institute for Literacy (Parts 1100--1199)
       XII  National Council on Disability (Parts 1200--1299)

[[Page 644]]

                          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)
        VI  [Reserved]
       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 (Parts 1500--
                1599)
       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  U.S. Copyright Office, Library of Congress (Parts 
                200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                300--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--199)
        II  Armed Forces Retirement Home (Parts 200--299)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory 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)

[[Page 645]]

       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 A--Federal Procurement Regulations System 
                [Note]
            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)
   62--100  [Reserved]
            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)
  103--104  [Reserved]
       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)
  129--200  [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System [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--599)

[[Page 646]]

         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 400--999)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10099)

             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)

                       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)

[[Page 647]]

       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)
        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)
        IV  National Telecommunications and Information 
                Administration, Department of Commerce, and 
                National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 400--499)

           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  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  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)

[[Page 648]]

        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)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)[Reserved]
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  Civilian Board of Contract Appeals, General Services 
                Administration (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)

[[Page 649]]

         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)[Reserved]
       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)
        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)

[[Page 651]]





           Alphabetical List of Agencies Appearing in the CFR




                     (Revised as of January 1, 2014)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Administrative Conference of the United States    1, III
Advisory Council on Historic Preservation         36, VIII
Advocacy and Outreach, Office of                  7, XXV
Afghanistan Reconstruction, Special Inspector     22, LXXXIII
     General for
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              2, VII; 22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            2, IV; 5, LXXIII
  Advocacy and Outreach, Office of                7, XXV
  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
  Economic Research Service                       7, XXXVII
  Energy Policy and New Uses, Office of           2, IX; 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
  National Institute of Food and Agriculture      7, XXXIV
  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, L
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV, L
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII, L
  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

[[Page 652]]

Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
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
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
Bureau of Ocean Energy Management, Regulation,    30, II
     and Enforcement
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chemical Safety and Hazardous Investigation       40, VI
     Board
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                       5, LXVIII; 45, VII
Civil Rights, Office for                          34, I
Council of the Inspectors General on Integrity    5, XCVIII
     and Efficiency
Court Services and Offender Supervision Agency    5, LXX
     for the District of Columbia
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               2, XIII; 44, IV; 50, VI
  Census Bureau                                   15, I
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  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
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III, IV
       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 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 Financial Protection Bureau              5, LXXXIV; 12, X
Consumer Product Safety Commission                5, LXXI; 16, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    5, LXX; 28, VIII
     for the District of Columbia
Customs and Border Protection                     19, I

[[Page 653]]

Defense Contract Audit Agency                     32, I
Defense Department                                2, XI; 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
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 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          5, LXX; 28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          2, XXXIV; 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
Election Assistance Commission                    2, LVIII; 11, II
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                             2, IX; 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                   2, XV; 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                2, Subtitle A; 5, III, 
                                                  LXXVII; 14, VI; 48, 99

[[Page 654]]

  National Drug Control Policy, Office of         21, III
  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           2, XXXV; 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                       5, XXXVII; 11, I
Federal Emergency Management Agency               44, I
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 Agency                    5, LXXX; 12, XII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority                 5, XIV, XLIX; 22, XIV
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
Financial Crimes Enforcement Network              31, X
Financial Research Office                         12, XVI
Financial Stability Oversight Council             12, XIII
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
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

[[Page 655]]

Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  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          2, III; 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
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  2, XXX; 6, I; 8, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection                   19, I
  Federal Emergency Management Agency             44, I
  Human Resources Management and Labor Relations  5, XCVII
       Systems
  Immigration and Customs Enforcement Bureau      19, IV
  Transportation Security Administration          49, XII
HOPE for Homeowners Program, Board of Directors   24, XXIV
     of
Housing and Urban Development, Department of      2, XXIV; 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 Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V

[[Page 656]]

Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
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, XV
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department                               2, XIV
  American Indians, Office of the Special         25, VII
       Trustee
  Bureau of Ocean Energy Management, Regulation,  30, II
       and Enforcement
  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
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Natural Resource Revenue, Office of             30, XII
  Ocean Energy Management, Bureau of              30, V
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  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 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
Investment Security, Office of                    31, VIII
Iraq Reconstruction, Special Inspector General    5, LXXXVII
     for
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                                2, XXVIII; 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
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V

[[Page 657]]

  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
  Occupational Safety and Health Administration   29, XVII
  Office of Workers' Compensation Programs        20, VII
  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 Royalty Board                         37, III
  U.S. Copyright Office                           37, II
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, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Millennium Challenge Corporation                  22, XIII
Mine Safety and Health Administration             30, I
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
Museum and Library Services, Institute of         2, XXXI
National Aeronautics and Space Administration     2, XVIII; 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   2, XXII; 45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
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              5, LXXXVI; 12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Food and Agriculture        7, XXXIV
National Institute of Standards and Technology    15, II
National Intelligence, Office of Director of      32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
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

[[Page 658]]

National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       2, XXV; 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, IV
     Administration
National Transportation Safety Board              49, VIII
Natural Resources Conservation Service            7, VI
Natural Resource Revenue, Office of               30, XII
Navajo and Hopi Indian Relocation, Office of      25, IV
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                     2, XX; 5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Ocean Energy Management, Bureau of                30, V
Offices of Independent Counsel                    28, VI
Office of Workers' Compensation Programs          20, VII
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                                       2, XXXVII; 22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
  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 Regulatory 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
Privacy and Civil Liberties Oversight Board       6, X
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
Recovery Accountability and Transparency Board    4, II
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII, L
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV, L
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII, L

[[Page 659]]

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                5, XXXIV; 17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 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                                  2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
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                     2, XII; 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; 47, IV; 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                   19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Financial Crimes Enforcement Network            31, X
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  Investment Security, 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
[[Page 660]]

U.S. Copyright Office                             37, II
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       2, VIII; 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 661]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations (CFR) that 
were made by documents published in the Federal Register since January 
1, 2009 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, parts and 
subparts as well as sections for revisions.
For changes to this volume of the CFR prior to this listing, consult the 
annual edition of the monthly List of CFR Sections Affected (LSA). The 
LSA is available at www.fdsys.gov. For changes to this volume of the CFR 
prior to 2001, see the ``List of CFR Sections Affected, 1949-1963, 1964-
1972, 1973-1985, and 1986-2000'' published in 11 separate volumes. The 
``List of CFR Sections Affected 1986-2000'' is available at 
www.fdsys.gov.

                                  2009

7 CFR
                                                                   74 FR
                                                                    Page
Subtitle B
Chapter IV
400  Authority citation revised.....................................8704
400.90  Amended.....................................................8704
400.91  (c) introductory text and (d) amended; (e) added............8704
400.93  (a) amended.................................................8704
400.94  (a) amended.................................................8704
400.700--400.768 (Subpart V)  Heading revised.......................8705
400.700  Revised....................................................8705
400.701  Amended....................................................8705
400.714  Removed....................................................8705
400.715  Removed....................................................8705
400.716  Removed....................................................8705
400.717  Removed....................................................8705
400.718  Removed....................................................8705
400.719  Removed....................................................8705
400.720  Removed....................................................8705
400.721  Removed....................................................8705
400.722  Removed....................................................8705
400.767  (a)(1)(ii) and (iii) correctly revised; (a)(1)(iv) 
        correctly added............................................66029
402  Regulation at 73 FR 70864 confirmed...........................45543
402.4  Regulation at 73 FR 70864 confirmed.........................45543
407  Authority citation revised....................................11643
    Regulation at 73 FR 70864 confirmed............................45543
407.9  Correctly amended...........................................11643
    Regulation at 73 FR 70864 confirmed; amended...................45543
457  Authority citation revised....................................11643
    Regulation at 73 FR 70865 confirmed............................45543
457.8  Correctly amended...........................................11643
    (b) amended; interim...........................................28156
    Regulation at 74 FR 28156 confirmed; (b) amended...............61018
457.136  Revised...................................................13059
457.138  Amended...................................................32055
457.149  Amended...................................................32057
    Corrected......................................................35113
457.156  Removed...................................................13061
457.171  Added......................................................8709
    Correctly amended..............................................26281
458.8  Regulation at 73 FR 70865 confirmed; amended................45543
Chapter VI
610.21--610.25 (Subpart C)  Revised................................66912
636  Revised; interim...............................................2794
636.3  Amended.....................................................34211
636.4  (a)(11) correctly revised...................................10674
636.7  (f) correctly revised.......................................10674
650  Authority citation revised....................................33322
650.6  (b) revised; (c) added; interim.............................33322
652.1  (a) amended; (b) revised; interim............................2805
652.2  Amended; interim.............................................2805

[[Page 662]]

652.3  (c)(3) amended; (c)(4) redesignated as (c)(5); new (c)(4) 
        added; interim..............................................2805
652.5  (e) revised; (f) through (j) redesignated as (g) through 
        (k); new (f), (l) and (m) added; interim....................2805
652.6  (b) through (e) redesignated as (d) through (g); new (b) 
        and (c) added; new (e) amended; interim.....................2806
662  Added; interim.................................................1589
    Revised........................................................63540

                                  2010

7 CFR
                                                                   75 FR
                                                                    Page
Chapter IV
457  Authority citation revised....................................52231
457.8  Nomenclature changes; (b) revised; (c) through (f) added....15856
         Amended.......15857, 15859, 15861, 15863--15867, 15870, 15872, 
                                                            15873, 15875
457.101  Introductory text revised; amended........................15875
    Amended..........................................15876, 15877, 15878
457.104  Introductory text revised; amended........................15878
    Correctly amended..............................................59057
457.106  Introductory text revised; amended........................15879
457.108  Introductory text revised; amended........................15879
    Amended........................................................15880
457.111  Introductory text revised; amended........................15880
457.113  Introductory text revised; amended..........15881, 15882, 15883
457.116  Introductory text revised; amended........................15883
457.118  Revised...................................................15883
457.130  Introductory text revised; amended........................15887
457.131  Introductory text revised; amended........................15887
    Introductory text correctly revised............................59057
457.135  Introductory text revised; amended........................15887
457.140  Introductory text revised; amended........................15887
457.141  Introductory text revised; amended........................15888
457.157  Introductory text revised; amended........................15889
    Removed........................................................44717
    Correctly amended..............................................59058
457.158  Introductory text revised; amended........................52231
457.159  Amended...................................................44717
457.161  Introductory text revised; amended..........15889, 15890, 15891
457.171  Introductory text revised; amended........................15891
457.173  Added.....................................................15607
Chapter VI
625  Revised........................................................6546
636  Revised.......................................................71338
650  Regulation at 74 FR 33322 confirmed; authority citation 
        revised.....................................................6556
650.6  Regulation at 74 FR 33322 confirmed; (c) revised; (d) added
                                                                    6556
652.1--652.7 (Subpart A)  Revised...................................6845
652.2  Correctly amended...........................................48273
    Corrected; CFR correction......................................81832

                                  2011

7 CFR
                                                                   76 FR
                                                                    Page
Chapter IV
407.9  Amended......................................................4804
457  Technical correction...........................................4201
457.105  Amended...................................................32068
457.106  Amended....................................................4804
457.130  Amended....................................................4804
457.137  Amended....................................................4804
457.149  Amended....................................................4804
457.151  Amended....................................................4804
457.154  Amended....................................................4804
457.155  Amended....................................................4805
Chapter V
550.28  (b)(1) amended..............................................4805
Chapter VI
622.30  (d) added..................................................19684
624.6  (a)(2) revised..............................................19684
625.4  (b) revised.................................................19684

                                  2012

7 CFR
                                                                   77 FR
                                                                    Page
Chapter IV
457.107  Amended; eff. 1-22-13.....................................75519
457.133  Amended...................................................59048
457.135  Introductory text revised; amended........................13965

[[Page 663]]

457.139  Introductory text revised; amended........................22469
457.153  Amended...................................................52592
Chapter V
505  Revised........................................................3069
520.4  (a) revised.................................................40250
Chapter VI
614  Revised.......................................................34190

                                  2013

7 CFR
                                                                   78 FR
                                                                    Page
Chapter IV
402.4  Amended.....................................................52835
407  Revised.......................................................38507
457.105  Amended...................................................70487
457.107  Amended.............................................4305, 22411
457.121  Amended...................................................46253
457.154  Amended...................................................55173
457.167  Amended...................................................13459
    Amended........................................................33691


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