[Federal Register Volume 60, Number 18 (Friday, January 27, 1995)]
[Proposed Rules]
[Pages 5339-5343]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2057]



 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 60, No. 18 / Friday, January 27, 1995 / 
Proposed Rules  
=======================================================================
-----------------------------------------------------------------------
[[Page 5339]]

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation
7 CFR Part 457
RIN 0563-AA96

Common Crop Insurance Regulations; Nursery Crop Insurance 
Provisions
AGENCY: Federal Crop Insurance Corporation.

ACTION: Proposed rule.

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

SUMMARY: The Federal Crop Insurance Corporation (FCIC) hereby proposes 
specific crop provisions for the insurance of nursery to be contained 
in an endorsement to the Common Crop Insurance Policy which contains 
standard terms and conditions common to most crops. The intended effect 
of this action is to add a nursery frost, freeze, and cold damage 
exclusion option to better meet the needs of the insured.

DATES: Written comments, data, and opinions on this proposed rule must 
be submitted no later than February 27, 1995 to be sure of 
consideration.

ADDRESSES: Written comments, data, and opinion on this proposed rule 
should be sent to Diana Moslak, Regulatory and Procedural Development 
Staff, Federal Crop Insurance Corporation, USDA, Washington, D.C. 
20250. Hand or messenger delivery should be made to 2101 L Street, 
N.W., suite 500, Washington, D.C. Written comments will be available 
for public inspection and copying in the Office of the Manager, 2101 L 
Street, N.W., 5th Floor, Washington, D.C., during regular business 
hours, Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Diana Moslak, Federal Crop Insurance 
Corporation, U.S. Department of Agriculture, Washington, D.C. 20250. 
Telephone (202) 254-8314.

SUPPLEMENTARY INFORMATION: This action has been reviewed under United 
States Department of Agriculture (``USDA'') procedures established by 
Executive Order 12866 and Departmental Regulation 1512-1. This action 
constitutes a review as to the need, currency, clarity, and 
effectiveness of these regulations under those procedures. The sunset 
review date established for these regulations is January 1, 2000.
    This rule has been determined to be ``not significant'' for the 
purposes of Executive Order 12866, and therefore, has not been reviewed 
by the Office of Management and Budget (``OMB'').
    The information collection or record-keeping requirements contained 
in these regulations (7 CFR part 457) have been submitted to the OMB in 
accordance with the provisions of 44 U.S.C. Sec. 35 and will be 
assigned an OMB control number.
    It has been determined under section 6(a) of Executive Order 12612, 
Federalism, that this proposed rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment. The 
policies and procedures contained in this rule will not have a 
substantial direct effect on states or their political subdivisions, or 
on the distribution of power and responsibilities among the various 
levels of government.
    Under the Regulatory Flexibility Act (5 U.S.C. Sec. 605), this 
regulation will not have a significant impact on a substantial number 
of small entities. This action reduces the paperwork burden on the 
insured farmer and the reinsured company. Therefore, this action is 
determined to be exempt from the provisions of the Regulatory 
Flexibility Act and no Regulatory Flexibility Analysis was prepared.
    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.
    This program is not subject to the provisions of Executive Order 
12372 which require intergovernmental consultation with state and local 
officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.
    The Office of the General Counsel has determined that these 
regulations meet the applicable standards provided in subsections 
(2)(a) and 2(b)(2) of Executive Order 12778. The provisions of this 
rule will preempt state and local laws to the extent such state and 
local laws are inconsistent herewith. The administrative appeal 
provisions located at 7 CFR part 400, subpart J or promulgated by the 
National Appeals Division must be exhausted before judicial action may 
be brought.
    This action is not expected to have any significant impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

Background

    FCIC proposes to add to the Common Crop Insurance Regulations (7 
CFR Part 457), two new sections to be known as 7 CFR 457.114, the 
Nursery Crop Insurance Provisions and 7 CFR 457.115, the Nursery Frost, 
Freeze, and Cold Damage Exclusion Option. The provisions and option 
will be effective for the 1996 and succeeding crop years.
    The proposed Nursery Crop Insurance Provisions will replace the 
provisions found at 7 CFR part 406. By separate rule, FCIC will amend 
these regulations to restrict the crop years of application to those 
prior to the crop year for which this rule will be effective and later 
remove the nursery crop insurance regulations contained in 7 CFR part 
406.
    This rule makes minor editorial and format changes to improve its 
compatibility with the Common Crop Insurance Policy. In addition, FCIC 
is proposing other changes in the provisions for insuring nursery 
crops:
    1. Subsection 1.(a)--Revises the definition of ``amount of 
insurance'' to allow a maximum amount of insurance based on the highest 
reported monthly market value of inventory plus any additional 
inventory added during the year, or which is restocked, if approved by 
the insurer. Presently, the maximum amount of insurance is based on 90 
percent of the average monthly market value of inventory reported at 
the beginning of the crop year. The 10 percent reduced valuation in the 
current regulations is eliminated to recognize the abnormal expenses 
incurred in disposing of damaged inventory.
    2. Subsection 1.(b)--Revises the definition of ``annual loss 
deductible'' by replacing the term ``field market value'' with the term 
``highest reported monthly market value.''
    3. Subsection 1.(e)--Revises the definition, ``field market value 
A'' to no longer contain the 10 percent reduced valuation contained in 
the current regulations due to the change stated in item 1. above. 
Language specifies that the insurer reserves the right to review the 
insured's wholesale price list taking into consideration maximum 
discounts [[Page 5340]] granted to any buyer as contained in the 
definition of ``wholesale market value.''
    4. Subsection 1.(f)--Revises the definition, ``field market value 
B'' to no longer contain the 10 percent reduced valuation contained in 
the current regulations due to the change stated in item 1. above. 
Maximum pricing discounts will also be considered in this determination 
as specified in the definition of ``wholesale market value.''
    5. Subsection 1.(h)--Add a definition for ``monthly loss 
deductible.''
    6. Subsection 1.(i)--Add a definition for ``monthly market value.''
    7. Subsection 1.(n)--Add a definition for ``standard nursery 
containers.''
    8. Section 2--Clarify that locations outside a five mile radius of 
the named locations, but within the same county, may be designated as a 
separate basic unit or be included in the closest unit listed on the 
insured's nursery plant inventory summary.
    9. Subsection 6.(c )--Clarify that whenever inventory is expected 
to change within a specific month, the highest value for the month will 
be recorded on the nursery plant inventory summary.
    10. Subsection 6.(d)--Require the insured to give notice in writing 
at least 14 days before making a change in inventory value, if a 
request for a revised nursery plant inventory summary is planned. This 
provision allows the insurer to inspect the inventory if necessary.
    11. Paragraphs 6.(d)(1) and 6.(d)(2)--Specify that insurance will 
not attach on any increase in inventory until the insurer completes an 
inspection and accepts such increase.
    12. Subsection 6.(e)--Specify that any plants added to the 
inventory that are not reported for insurance will not be insured, but 
the value of these plants, after a loss, will be considered production 
to count for purposes of loss determination and claim settlement.
    13. Subsection 7.(b)--Allow the insured to pay the annual premium 
in three installments. The first payment (40 percent of the annual 
premium) is due and payable on the later of September 30 preceding the 
crop year or the date the insurer accepts the inventory for insurance; 
the second payment (30 percent of the annual premium) is due and 
payable on January 1 of the crop year; and the third payment (30 
percent of the annual premium) is due and payable on April 1 of the 
crop year. Current provisions state that the annual premium is earned 
and payable on or before September 30 preceding each crop year, but 
allow a six month delay in the payment of premiums, until March 31 of 
the crop year.
    14. Subsection 7.(c)--Specify that additional premium resulting 
from an increase in a nursery plant inventory summary is due and 
payable when the revised summary is approved.
    15. Subsection 7.(d)--Clarify that premium will not be reduced due 
to a decrease in plant inventory, unless such decrease results from 
deleting uninsurable inventory which was incorrectly reported.
    16. Paragraph 8.(a)(1)--Require that the nursery plants be grown 
under an irrigated practice.
    17. Paragraph 8.(a)(3)--Clarify that the insured nursery plant 
inventory will not include plants that produce edible berries, fruits, 
or nuts.
    18. Paragraph 8.(a)(4)--Clarify that nursery plants grown in 
standard nursery containers less than three inches across at the 
smallest dimension are not insured unless the insurer enters into a 
written agreement to insure such plants.
    19. Paragraph 8.(a)(6)--Allow plants not listed in the Nursery 
Eligible Plant Listing to be insurable if the insured submits a written 
request and the insurer agrees in writing to insure such plants.
    20. Paragraph 8.(a)(7)--Clarify that stock plants will not be 
insured.
    21. Section 9--Specify that insurance attaches on the later of 
October 1 or the date the insurer accepts the inventory for insurance, 
and in either case upon payment of 40 percent of the annual premium. 
This change allows the insurer to complete any necessary inspection 
before insurance attaches. This paragraph also states that when the 
nursery plant inventory summary is revised to add additional plant 
inventory, coverage for the additional inventory will not attach until 
the additional premium for that inventory is paid in full.
    22. Subsection 9.(a)--Clarify that insurance coverage ends when 
inventory is sold or removed unless that inventory is replaced and 
additional premium is paid. Previous provisions did not permit 
insurance to attach to restocked inventory.
    23. Paragraph 10.(a)(9)--Add as an insurable cause of loss, failure 
or breakdown of frost/freeze protection equipment or facilities 
provided: 1) such failure or breakdown is caused by a named insurable 
cause of loss, 2) the insured nursery plants are damaged by freezing 
temperatures within 72 hours of such failure or breakdown, and 3) the 
equipment or facilities could not be repaired or replaced between the 
time of failure or breakdown and the time the freezing temperatures 
occur.
    24. Paragraph 10.(b)(1)--Clarify that brownout is not an insured 
cause of loss.
    25. Paragraph 10.(b)(2)--Clarify that failure of the power supply 
is not an insured cause of loss, unless such failure is a direct result 
of an insured cause of loss.
    26. Paragraph 10.(b)(5)--Clarify that collapse or failure of 
buildings or structures are not insured causes of loss unless due to an 
insured cause of loss.
    27. Subsection 12(a)--Allow use of the highest reported monthly 
market value for the unit and the monthly loss deductible (not to 
exceed the remaining annual loss deductible) to calculate an indemnity. 
References to the 10 percent reduced valuation have been deleted. These 
changes were necessary due to the change in the definition of ``amount 
of insurance'' as stated in item 1. above.
    28. Add a nursery frost, freeze, and cold damage exclusion option. 
This option excludes losses due to frost, freeze, and cold weather for 
plants that have specific over-wintering requirements when those over-
wintering requirements will not be met.

List of Subjects in 7 CFR Part 457

    Crop insurance, nursery crop.

Proposed Rule

    Pursuant to the authority contained in the Federal Crop Insurance 
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance 
Corporation hereby proposes to amend the Common Crop Insurance 
Regulations (7 CFR part 457), effective for the 1996 and succeeding 
crop years, to read as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE 
1996 AND SUBSEQUENT CONTRACT YEARS

    1. The authority citation for 7 CFR part 457 is revised to read as 
follows:

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

    2. The heading for part 457 is revised as set forth above.
    3. 7 CFR part 457 is amended by adding Secs. 457.114 and 457.115 to 
read as follows:


Sec. 457.114  Nursery Crop Insurance Provisions.

    The Nursery Crop Insurance Provisions for the 1996 and succeeding 
crop years are as follows: [[Page 5341]] 

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Nursery Crop Provisions

    If a conflict exists among the Basic Provisions (Sec. 457.8), 
these crop provisions, and the Special Provisions, the Special 
Provisions will control these crop provisions and the Basic 
Provisions; and these crop provisions will control the Basic 
Provisions.

1. Definitions

    (a) Amount of insurance--The result of multiplying the highest 
monthly market value reported on the nursery plant inventory summary 
(which will include inventory reported by you and accepted by us on 
a revised nursery plant inventory summary or restocked), multiplied 
by the percentage for the coverage level you elect.
    (b) Annual loss deductible--The value calculated by subtracting 
the amount of insurance from the highest monthly market value 
reported on the nursery plant inventory summary. The annual loss 
deductible will be revised if an inventory addition is approved.
    (c) Brownout--A cutback or reduction in electric power, as a 
result of a shortage.
    (d) Crop year--The 12 month period which begins October 1 and 
extends through September 30 of the next calendar year, designated 
by the year in which it ends. (The 1996 crop year begins October 1, 
1995, and ends September 30, 1996).
    (e) Field market value A--The wholesale market value for the 
unit immediately prior to the occurrence of the loss.
    (f) Field market value B--The wholesale market value remaining 
for the unit immediately following the occurrence of the loss.
    (g) 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 maintain the amount of 
insurance on the nursery plant inventory.
    (h) Monthly loss deductible--The result of multiplying the 
smaller of field market value A or the highest monthly market value 
reported on the nursery plant inventory summary by 100 percent 
(100%) less the percentage for the coverage level you elect, not to 
exceed the annual loss deductible. When inventory is added or 
restocked by a revised nursery plant inventory summary, the monthly 
loss deductible will be calculated based on the revised monthly 
market value, not to exceed the annual loss deductible.
    (i) Monthly market value--The sum of the wholesale market value 
of all insurable plants in the unit for a month based on your 
wholesale price list less the maximum discount granted to any buyer.
    (j) Nursery--A business enterprise that produces ornamental 
plant types in standard nursery containers for the wholesale market.
    (k) Nursery eligible plant listing--A listing contained in the 
Actuarial Table which specifies the plants eligible for insurance 
and any mandatory or recommended storage required for such plants in 
each hardiness zone defined by the United States Department of 
Agriculture.
    (l) Nursery plant inventory summary--A report that specifies 
numbers and prices of plants included in the nursery inventory.
    (m) Smallest dimension--For a round container, the diameter; for 
any other container, the distance measured from one side directly 
across to the opposite side at the narrowest point.
    (n) Standard nursery containers--Rigid containers not less than 
three (3) inches across the smallest dimension which are 
commercially sold to nurseries. Grow bags, trays, cellpacks, and 
burlap are not considered standard nursery containers.
    (o) Stock plants--Plants being used for reproduction, for 
growing cuttings, for air layers or for propagating.
    (p) Wholesale market value--The dollar valuation of the numbers 
of insurable plants actually contained within the unit at any time. 
The values used will be based on your wholesale price list less the 
maximum discount granted to any buyer.
    (q) Written agreement--Designated terms of this policy may be 
altered by written agreement. Each agreement must be applied for by 
the insured in writing no later than the sales closing date and is 
valid for one year only. If not specifically renewed the following 
year, continuous insurance will be in accordance with the printed 
policy. All variable terms including, but not limited to, plant type 
and premium rate must be contained in the written agreement. 
Notwithstanding the sales closing date restriction contained herein, 
in specific instances, a written agreement may be applied for after 
the sales closing date and approved if, after a physical inspection 
of the nursery plant inventory, there is a determination that the 
inventory has the expectancy of meeting the amount of insurance. All 
applications for written agreements as submitted by the insured must 
contain all variable terms of the contract between the company and 
the insured that will be in effect if the written agreement is 
disapproved.

2. Unit Division

    In lieu of the definition of unit contained in subsection 1.(tt) 
of the Basic Provisions (Sec. 457.8), a unit consists of all growing 
locations in the county within a five mile radius of the named 
insured locations designated on your nursery plant inventory 
summary. Any growing location more than five miles from any other 
growing location, but within the county, may be designated as a 
separate basic unit or be included in the closest unit listed on 
your nursery plant inventory summary.

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

    Subsection 3.(c) of the Basic Provisions (Sec. 457.8) is not 
applicable to the Nursery Crop Provisions.

4. Contract Changes

    The contract change date is June 30 preceding the crop year (see 
the provisions of section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8)).

5. Cancellation and Termination Dates

    In accordance with subsection 2.(f) of the Basic Provisions 
(Sec. 457.8), the cancellation and termination dates are September 
30 preceding the crop year.

6. Nursery Plant Inventory Summary

    (a) For the purposes of the provisions of section 6 (Report of 
Acreage) of the Basic Provisions (Sec. 457.8), the term ``acreage'' 
means ``nursery plant inventory.''
    (b) Your annual nursery plant inventory summary will be used to 
determine your premium and the amount of insurance for each unit. If 
you do not submit the summary by the reporting date, we may elect to 
determine the nursery plant inventory for each unit or we may deny 
liability on any unit. Errors in reporting units may be corrected by 
us at the time of loss adjustment.
    (c) You must submit a nursery plant inventory summary to us on 
or before September 30 preceding the crop year. This summary must 
include, by unit and by month for each type of plant in the 
inventory, the:
    (1) Container sizes;
    (2) Number of plants;
    (3) Wholesale price for each month of the crop year; and
    (4) Your share.
    If your inventory will change within a specific month, report 
the largest inventory that you will have for that month.
    (d) With our consent, you may revise your nursery plant 
inventory summary to correct or change the value of the insurable 
inventory caused by a quantity change if the amount of the revision 
is at least 10 percent of the highest monthly market value reported 
on the nursery plant inventory summary or $25,000, whichever is 
smaller. You may not revise your nursery plant inventory summary 
after the sales closing date to add plants not listed on the Nursery 
Eligible Plant Listing. If you wish to revise the nursery plant 
inventory summary, you must notify us in writing at least 14 days 
before a change in inventory value. We must inspect and accept the 
nursery before insurance attaches on any proposed increase in 
inventory if:
    (1) The storage facilities have changed in any way since our 
previous inspection; or
    (2) The revision includes plants that have specific over-
wintering storage requirements and that were not previously reported 
on your nursery plant inventory summary.
    (e) Insurable plants that are not reported on your nursery plant 
inventory summary will not be insured, but the value of such plants 
after a loss will be included as production to count. Such 
unreported inventory may reduce the amount of any indemnity payable 
to you.
    (f) You must designate separately any plant inventory that is 
not insurable.
    (g) Subsection 6.(f) of the Basic Provisions (Sec. 457.8) is not 
applicable to the Nursery Crop Provisions.

7. Annual Premium

    We will determine your premium as follows:
    (a) The annual premium for each unit will be calculated by:
    (1) Multiplying the number of each type of plant and size 
container designated on your nursery plant inventory summary for 
each month by prices for that type and container [[Page 5342]] size 
shown on your wholesale price list, less the maximum discount 
granted to any buyer;
    (2) Adding the results of step 1, for each month;
    (3) Multiplying the highest monthly market value for the crop 
year by the percentage for the coverage level you have elected;
    (4) Multiplying the product obtained in (3) above by the 
appropriate premium rate for each appropriate plant classification 
listed on the actuarial table; and
    (5) Multiplying the product obtained in (4) above by your share.
    (b) The annual premium will be earned in full when insurance 
attaches. It is due and payable as follows:
    (1) Forty percent (40%) on the later of September 30 preceding 
each crop year or the date we accept the inventory for insurance;
    (2) Thirty percent (30%) on January 1 of the crop year; and
    (3) Thirty percent (30%) on April 1 of the crop year.
    (c) Additional premium earned from an increase in the nursery 
plant inventory summary is due and payable when the revised nursery 
plant inventory summary is approved by us.
    (d) Premium will not be reduced due to a decrease in the nursery 
plant inventory summary, unless such decrease results from the 
deletion of uninsurable inventory from the summary that was 
erroneously reported as insurable.

8. Insured Plants

    (a) In lieu of the provisions of section 8 (Insured Crop) of the 
Basic Provisions (Sec. 457.8), the insured nursery plant inventory 
will be all nursery plants in the county reported by you or 
determined by us for which an application is accepted, for which a 
premium rate is provided by the actuarial table, and that:
    (1) Are grown under an irrigated practice for which you have 
adequate facilities and water at the time coverage begins in order 
to carry out a good irrigation practice;
    (2) Are classified as woody, herbaceous, or foliage landscape 
plants;
    (3) Do not include plants that produce edible berries, fruits or 
nuts;
    (4) Are grown in standard nursery containers (not planted in the 
ground), at least three (3) inches across the smallest dimension 
unless a written agreement is extended allowing a smaller container;
    (5) Are initially inspected by us and determined to be 
acceptable;
    (6) Are listed on the Nursery Eligible Plant Listing unless a 
written agreement provides otherwise;
    (7) Are not stock plants;
    (8) Are grown in accordance with the production practices for 
which premium rates have been established; and
    (9) Meet the ``mandatory'' or ``recommended'' storage 
requirements unless you have signed the Frost, Freeze, and Cold 
Damage Exclusion Option for those nursery plants.
    (b) The provisions of section 9 of the Basic Provisions 
(Sec. 457.8) are not applicable to the Nursery Crop Provisions.

9. 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 October 1 or the date we accept the 
inventory for insurance, provided at least 40 percent (40%) of the 
annual premium is paid by the date specified in paragraph 7.(b)(1). 
Coverage will not attach for plant inventory added due to a revised 
nursery plant inventory summary until any additional premium is paid 
in full. Insurance ends for each unit at the earliest of:
    (a) The date all plant inventory within the unit is sold or 
otherwise removed unless that inventory is replaced and additional 
earned premium is paid. (If a portion of the plants are sold or 
otherwise removed from inventory and are not replaced, insurance 
ends only on that part of the unit.);
    (b) The date of final adjustment of the loss on the unit; or
    (c) September 30 of the crop year.

10. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of 
Loss) of the Basic Provisions (Sec. 457.8), insurance is provided 
for unavoidable damage caused only by the following causes of loss 
which 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;
    (8) Failure of the irrigation water supply, due to an 
unavoidable cause of loss occurring within the insurance period; or
    (9) Failure or breakdown of frost/freeze protection equipment or 
facilities due to direct damage to such equipment or facilities from 
an insurable cause of loss, provided the insured nursery plants are 
damaged by freezing temperatures within 72 hours after the failure 
of such equipment or facilities and repair or replacement was not 
possible between the time of failure or breakdown and the time the 
freezing temperatures occurred.
    (b) In addition to the causes of loss not insured against under 
section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we 
do not insure against any loss caused by:
    (1) Brownout;
    (2) Failure of the power supply unless such failure is due to an 
insurable cause of loss;
    (3) The inability to market the nursery plants as a direct 
result of quarantine, boycott, or refusal of a buyer to accept 
production;
    (4) Fire, where weeds and other forms of undergrowth in the 
vicinity of the building and on your property have not been 
controlled; or
    (5) Collapse or failure of buildings or structures unless due to 
an insured cause of loss.

11. Duties in the Event of Damage or Loss

    (a) In addition to your duties contained under section 14 
(Duties in the Event of Damage or Loss) of the Basic Provisions 
(Sec. 457.8), you must:
    (1) 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 plant inventory.
    (2) Upon our request, provide complete copies of your nursery 
plant inventory wholesale price list for the 12 month period 
immediately preceding the loss and your marketing records including 
plant shipping invoices for the same period.
    (b) In addition to subsection 14.(c) of the Basic Provisions 
(Sec. 457.8), you must submit a claim for indemnity to us on our 
form, not later than 60 days after the earliest of:
    (1) Your loss; or
    (2) The end of the insurance period.

12. Settlement of Claim

    (a) The indemnity will be the amount calculated by us for each 
unit as follows:
    (1) Subtracting field market value B from the lesser of field 
market value A or the highest monthly market value for the unit 
reported on the nursery plant inventory summary to determine the 
total amount of loss;
    (2) Subtracting therefrom the monthly loss deductible (not to 
exceed the remaining annual loss deductible); and
    (3) Multiplying the result of (2) above by your share.
    (b) Individual insured losses occurring on the same unit during 
the crop year may be accumulated if each loss is reported and valued 
by us to satisfy the annual loss deductible. Paragraph 12.(a)(2) 
will not apply to any subsequent individual loss determinations when 
the total amount of accumulated monthly loss deductibles is equal to 
or greater than the annual loss deductible. Total indemnities for a 
unit will not exceed the amount of insurance for the unit.
    (c) The value of any insured plant inventory may be determined 
on the basis of our appraisals conducted after the end of the 
insurance period.


Sec. 457.115  Nursery Frost, Freeze, and Cold Damage Exclusion Option.

    This is not a continuous option. Application for this option must 
be made on or before the sales closing date for each crop year this 
Option is to be in effect (see exception in item 2 below).

Insured's Name---------------------------------------------------------

Address----------------------------------------------------------------

Contract Number--------------------------------------------------------

Identification Number--------------------------------------------------

SSN/EIN ________ Tax I.D. ________

Crop Year ________ Unit Number ________ Hardiness Zone ________

    For the crop year designated above, the Nursery Crop Provisions 
(Sec. 457.114) are amended in accordance with the following terms and 
conditions:
    1. You must have the Common Crop Insurance Policy Basic Provisions 
and Nursery Crop Provisions in force.
    2. This option must be submitted to us on or before the final date 
for [[Page 5343]] accepting applications for the crop year in which you 
wish to insure your nursery plant inventory under this option. If the 
provisions of paragraph 6.(d)(2) of the Nursery Crop Provisions apply, 
we may accept this option after the sales closing date, or we may allow 
additional plants to be added to this option after such date.
    3. Executing this option does not reduce the premium rate for 
nursery crop insurance.
    4. All provisions of the Basic Provisions (Sec. 457.8) and Nursery 
Crop Provisions (Sec. 457.114) not in conflict with this option are 
applicable.
    5. Upon execution of this option, the following plant varieties 
will not have frost, freeze, or cold damage coverage on this unit 
because the mandatory (Risk Group A) or recommended (Risk Group B) 
over-wintering requirements will not be met.

------------------------------------------------------------------------
                                                      Over-wintering    
    Scientific name            Common name          requirements to be  
                                                         excluded       
------------------------------------------------------------------------
                                                                        
                                                                        
------------------------------------------------------------------------
                                                                        
                                                                        
------------------------------------------------------------------------
                                                                        
                                                                        
------------------------------------------------------------------------
                                                                        
                                                                        
------------------------------------------------------------------------
                                                                        
                                                                        
------------------------------------------------------------------------

    Insured's Signature
Date-------------------------------------------------------------------

----------------------------------------------------------------------
Insurance Company Representative's Signature and Code Number

Date-------------------------------------------------------------------

----------------------------------------------------------------------

    Done in Washington, DC, on January 23, 1995.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 95-2057 Filed 1-26-95; 8:45 am]
BILLING CODE 3410-08-P