[Federal Register Volume 61, Number 52 (Friday, March 15, 1996)]
[Proposed Rules]
[Pages 10699-10703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6262]



 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 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.
 
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 

  Federal Register / Vol. 61, No. 52 / Friday, March 15, 1996 / 
Proposed Rules  

[[Page 10699]]


DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AB51


Common Crop Insurance Regulations; Florida Citrus Fruit Crop 
Insurance Provisions

AGENCY: Federal Crop Insurance Corporation., USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) hereby proposes 
specific crop provisions for the insurance of Florida citrus fruit. The 
provisions will be used in conjunction with the Common Crop Insurance 
Policy Basic Provisions, which contain standard terms and conditions 
common to most crops. The intended effect of this action is to provide 
policy changes to better meet the needs of the insured, move the 
current Florida Citrus Endorsement from 7 CFR 401.143 to the Common 
Crop Insurance Policy (7 CFR 457) for ease of use by the public and 
conformance among policy terms, and conform to the amendments to the 
Federal Crop Insurance Act made by the Federal Crop Insurance Reform 
Act of 1994.

DATES: Written comments, data, and opinions on this proposed rule will 
be accepted until close of business April 15, 1996 and will be 
considered when the rule is to be made final. The comment period for 
information collections under the Paperwork Act of 1995 continues 
through May 13, 1996.

ADDRESSES: Interested persons are invited to submit written comments to 
the Chief, Product Development Branch, Federal Crop Insurance 
Corporation (FCIC), Farm Service Agency (FSA), United States Department 
of Agriculture (USDA), 9435 Holmes Road, Kansas City, MO 64131. Written 
comments will be available for public inspection and copying in room 
0324, South Building, USDA, 14th and Independence Avenue, S.W., 
Washington, D.C., during regular business hours, Monday through Friday.

FOR FURTHER INFORMATION CONTACT: William Klein, Program Analyst, 
Research and Development Division, Product Development Branch, FCIC, 
FSA, at the address listed above, telephone (816) 926-2704.

SUPPLEMENTARY INFORMATION:

Executive Order 12866 and Departmental Regulation 1512-1

    This action has been reviewed under 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 May 1, 2000.
    This rule has been determined to be exempt for the purposes of 
Executive Order 12866, and therefore has not been reviewed by the 
Office of Management and Budget (OMB).

Paperwork Reduction Act of 1995

    The information collection requirements contained in the Florida 
Citrus Fruit Crop Provisions have been submitted to OMB for approval 
under section 3507(j) of the Paperwork Reduction Act of 1995. This 
proposed rule will amend the information collection requirements under 
OMB control number 0563-0003 through September 30, 1998. The Federal 
Crop Insurance Corporation will be amending the information collection 
to adjust the estimated reporting hours and revising the usage of FCI-
12-P, Pre-Acceptance Perennial Crop Inspection Report as it applies to 
the Florida Citrus Fruit Crop Insurance Provisions.
    Section 7 of the 1997 Florida Citrus Fruit Crop provisions adds 
interplanting as an insurable farming practice as long as it is 
interplanted with another citrus fruit crop. This practice was not 
insurable under the previous Florida Citrus Endorsement 90-02 and the 
General Crop Policy 88-G (REV 3-91) to which it attached. Consequently, 
interplanting information will need to be collected, using the FCI-12-P 
Pre-Acceptance Perennial Crop Inspection Report form for approximately 
20 percent of the Florida Citrus insureds who interplant their citrus 
crop. Standard interplanting language has been added to most perennial 
crops. Interplanting is an insurable practice as long as it does not 
adversely affect the insured crop. This is a benefit to agriculture 
because insurance is now available for more citrus and fruit producers 
and as a result less acreage will need to be placed into the Noninsured 
Crop Disaster Assistance Program (NAP).
    Revised reporting estimates and requirements for usage of OMB 
control number 0563-0003 will be submitted to OMB for approval under 
the provisions of 44 U.S.C 35. Public comments are due by May 13, 1996.
    The title of this information collection is ``Catastrophic Risk 
Protection Plan and Related Requirements Including Common Crop 
Insurance Regulations; Florida Citrus Fruit Crop Insurance 
Provisions.'' The information to be collected includes: a crop 
insurance acreage report, an insurance application and a continuous 
contract. Potential respondents to this information collection are 
growers of Florida citrus fruit that are eligible for Federal crop 
insurance.
    The estimated increase in the number of respondents and total 
burden hours associated with the OMB information collection is the 
result of two new parts in chapter IV of title 7 of the Code of Federal 
Regulations; Part 402, Catastrophic Risk Protection Plan, and Part 404, 
Noninsured Crop Disaster Assistance Program. The Federal Crop Insurance 
Reform Act of 1994 required the Federal Crop Insurance Corporation to 
implement a catastrophic risk protection plan of insurance that 
provides a basic level of coverage to protect producers in the event 
that a covered disaster results in crop losses or prevented planting. 
As a result of the implementation of the Catastrophic Risk Protection 
Endorsement, increased producer participation has increased the 
information collections covered under OMB control number 0563-0003. The 
information requested is necessary for the reinsured companies and the 
Federal Crop Insurance Corporation to provide insurance and 
reinsurance, determine eligibility, determine the correct parties to 
the agreement or contract, determine and collect premiums or other 
monetary amounts (or fees), and pay benefits.
    All information is reported annually. The reporting burden for this 
collection

[[Page 10700]]
of information is estimated to average 25 minutes per response for each 
of the 3.6 responses from approximately 1,755,015 respondents. The 
total annual burden on the public for this information collection is 
2,669,970 hours.
    The comment period for information collections under the Paperwork 
Reduction Act of 1995 continues through May 13, 1996, for the 
following: (a) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information shall have practical utility; (b) the 
accuracy of the agency's estimate of the burden of the proposed 
collection of information; (c) ways to enhance the quality, utility, 
and clarity of the information to be collected; and (d) ways to 
minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques or other 
forms of information technology.
    Comments should be submitted to the Desk Officer for Agriculture, 
Office of Information and Regulatory Affairs, Office of Management and 
Budget (OMB), Washington, D.C. 20503 and to Bonnie Hart, Advisory and 
Corporate Operations Staff, Regulatory Review Group, Farm Service 
Agency, P.O. Box 2415, Ag Box 0572, U.S. Department of Agriculture, 
Washington, D.C. 20013-2415. Copies of the information collection may 
be obtained from Bonnie Hart at the above address. Telephone (202) 690-
2857.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, FCIC 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures of State, local, or tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
1 year. When such a statement is needed for a rule, section 205 of the 
UMRA generally requires FCIC to identify and consider a reasonable 
number of regulatory alternatives and adopt the least costly, more 
cost-effective or least burdensome alternative that achieves the 
objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of title II of the UMRA) for State, local, and tribal 
governments or the private sector. Thus, this rule is not subject to 
the requirements of sections 202 and 205 of the UMRA.

Executive Order 12612

    It has been determined under section 6(a) of Executive Order 12612, 
Federalism, that this 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.

Regulatory Flexibility Act

    This regulation will not have a significant impact on a substantial 
number of small entities. The amount of work required of the insurance 
companies and FSA offices delivering these policies and procedures 
therein will not increase significantly from the amount of work 
currently required to deliver previous policies to which this 
regulation applies. This rule does not have any greater or lesser 
impact on the insured farmer. Therefore, this action is determined to 
be exempt from the provisions of the Regulatory Flexibility Act (5 
U.S.C. 605) and no Regulatory Flexibility Analysis was prepared.

Federal Assistance Program

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.

Executive Order 12372

    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 3015, subpart V, published 
at 48 FR 29115, June 24, 1983.

Executive Order 12778

    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 not have a retroactive effect prior to the effective date. 
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 in 7 CFR part 11 and 7 CFR part 780 
must be exhausted before action for judicial review may be brought.

Environmental Evaluation

    This action is not expected to have a significant impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

National Performance Review

    This regulatory action is being taken as part of the National 
Performance Review initiative to eliminate unnecessary or duplicative 
regulations and improve those that remain in force.

Background

    FCIC proposes to add to the Common Crop Insurance Regulations (7 
CFR part 457), a new section to be known as 7 CFR 457.107, Florida 
Citrus Fruit Crop Insurance Provisions. The provisions will be 
effective for the 1997 and succeeding crop years. The proposed Florida 
Citrus Fruit Crop Insurance provisions will replace the provisions 
found at 7 CFR 401.143 (Florida Citrus Endorsement). Upon publication 
of 7 CFR 457.107 as a final rule, the provisions for insuring Florida 
citrus fruit contained herein will supersede the current provisions 
contained in 7 CFR 401.143. By separate rule, FCIC will revise 
Sec. 401.143 to restrict its effect through the 1996 crop year and 
later remove that section.
    This rule makes minor editorial and format changes to improve the 
Florida Citrus Endorsement's compatibility with the Common Crop 
Insurance Policy. In addition, FCIC is proposing substantive changes in 
the provisions for insuring Florida citrus fruit as follows:

Florida Citrus Endorsement

    1. Section 1--Add definitions for the terms ``days'', ``freeze'', 
``good farming practices'', ``hurricane'', ``interplanted'', and 
``written agreement'' for clarification purposes.
    2. Subsection 1(b)--Add limes to the Florida Citrus Fruit Crop 
Provisions as an insurable citrus crop. Limes are added in response to 
public interest in coverage and findings of FCIC's field staff and 
research and development staff supporting the insurability of this 
additional citrus crop. Limes are grouped with Lemons under Type VI. 
Limes and lemons are often grown together and are similar in their 
growth patterns, maturity, and cultivation.
    3. Section 2--Describe the guidelines under which basic units may 
be divided into optional units. The definition of ``unit'' under 
section 1(tt) of the Basic Provisions (Sec. 457.6) provides for the 
division of units in accordance with applicable crop provisions. The 
current Florida Citrus Endorsement does not

[[Page 10701]]

provide guidelines for determining optional units. Section 2 of these 
crop provisions provides guidelines for optional unit division of 
Florida citrus fruit basic units that are consistent with many other 
perennial crop provisions. Optional units may be divided on the basis 
of section, section equivalent, or FSA Farm Serial Number, or on 
acreage located on non-contiguous land, or both. Consistent with the 
definition of ``unit'' in the Basic Provisions (Sec. 457.6), section 10 
of the Florida Citrus Fruit Crop Provisions will provide that, in 
settling a claim, loss will be determined on a unit basis and all 
optional units for which acceptable production records were not 
provided will be combined.
    4. Subsection 3(a)--Specify that the insured may select only 1 
percent of the maximum dollar amount of insurance for all fruit 
included in each type shown in section 1 of these crop provisions or as 
designated in the Special Provisions. Beginning with the 1996 crop 
year, certain citrus fruit within types (IV tangerines and V murcotts) 
were priced differently, as shown in the actuarial table. While it was 
not encouraged, producers could choose different percentages of the 
maximum amount of insurance depending on anticipated market conditions. 
This created administrative problems in settling claims. Section 3 of 
the Basic Provisions provides that the insured may select only one 
coverage level for each insured crop. Since FCIC considers each type to 
be a ``crop'', the language in these crop provisions clearly limits 
producers to 1 percent of the maximum dollar amount for each fruit 
within a type, regardless of variations in the maximum amount of 
insurance for the fruit.
    5. Subsection 3(c)--Specify that the insured must report the age of 
any interplanted crop, the planting pattern, and any other information 
needed to establish the amount of insurance for the interplanted 
acreage. The acreage or amount of insurance, or both, may be adjusted 
by us when we become aware of the situation if the insured has not 
previously reported it. Interplanting is not provided under the current 
Florida Citrus Endorsement. Section 7 of these crop provisions allows 
interplanting a citrus fruit crop with another citrus fruit crop. The 
change in policy language is based on existing practices and FCIC's 
desire to insure the maximum amount of acreage. Interplanting, as 
provided in these crop provisions, is limited to existing interplanting 
practices, i.e., with another citrus fruit crop, and excludes other 
interplanting practices which may adversely impact the insured crop. 
This policy change necessitates a change in reporting requirements. 
Insureds with interplanted citrus acreage must report information 
needed by the insurer to establish the amount of insurance or number of 
acres of the interplanted insured crop.
    6. Section 4--Change the contract change date from April 15 to 
March 15. This change will allow insureds more time to make insurance 
decisions before the April 30 cancellation date.
    7. Subsection 6(b)(2)--Change the insurable tree age requirement 
from 10 years after set out to 5 years after set out based on industry 
recommendations. The amounts of insurance are listed in the actuarial 
documents based on tree age, and are reduced proportionately for 
younger trees.
    8. Section 7--Add ``interplanting'' as an insurable farming 
practice if the citrus fruit crop is interplanted with another citrus 
fruit crop.
    9. Subsection 8(a)(1)--Clarify that if an application is accepted 
by us after April 20, insurance will attach on the 10th day after the 
application is received in the insurance provider's local office. Full 
premium, however, will be due for the partial year.
    10. Section 8(b)--Provide policy guidelines for attachment of 
insurance when insurable acreage is acquired or relinquished. 
Previously this language was contained in the Crop Insurance Handbook 
and Catastrophic Risk Protection Handbook.
    11. Section 10--Change the deductible for determining when an 
indemnity is due. For limited and additional coverage the indemnity had 
been computed based on the determination of the percent of damage less 
10 percent. For the 1997 crop year, it will be the percent of damage 
less the deductible (25%, 30%, 35%, 40%, 45%, 50%) divided by the 
coverage level percent. This change makes the Florida Citrus Fruit Crop 
Provisions consistent with other crop provisions and with the way in 
which other catastrophic losses were computed for the 1995 crop year.
    12. Section 11--Add provisions for providing insurance coverage by 
written agreement. FCIC has a long-standing policy of permitting 
modification of certain provisions of insurance contracts by written 
agreement. This provision is not documented in the current Florida 
Citrus Endorsement. This section will provide for the application for, 
and duration of, written agreements.

List of Subjects in 7 CFR Part 457

    Crop insurance, Florida citrus fruit.

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 457), effective for the 1997 and succeeding crop 
years, as follows:

PART 457--[AMENDED]

    1. The authority citation for 7 CFR 457 continues to read as 
follows:

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

    2. 7 CFR 457 is amended by adding a new Sec. 457.107 to read as 
follows:


Sec. 457.107  Florida Citrus Fruit Crop Insurance Provisions.

    The Florida Citrus Fruit Crop Insurance Provisions for the 1997 and 
succeeding crop years are as follows:

United States Department of Agriculture; Federal Crop Insurance 
Corporation; Florida Citrus Fruit 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) Box--A standard field box as prescribed in the State of 
Florida Citrus Fruit Laws.
    (b) Citrus fruit type--Any of the following:
    (1) Type I--Early and mid-season oranges;
    (2) Type II--Late Oranges;
    (3) Type III--Grapefruit for which freeze damage will be 
adjusted on a juice basis;
    (4) Type IV--Navel Oranges, tangelos and tangerines
    (5) Type V--Murcott Honey Oranges (also known as Honey 
Tangerines) and Temple Oranges;
    (6) Type VI--Lemons and Limes; or
    (7) Type VII--Grapefruit for which freeze damage will be 
adjusted on a fresh fruit basis.
    (c) Days--Calendar days.
    (d) Freeze--The formation of ice in the cells of the fruit 
caused by low air temperatures.
    (e) Good farming practices--The cultural practices generally in 
use in the area for the crop to make normal progress toward maturity 
and produce the expected yield for the type and age of citrus fruit 
and are those generally recognized by the Cooperative Extension 
Service as compatible with agronomic and weather conditions in the 
area.
    (f) Harvest--The severance of mature citrus fruit from the tree 
by pulling, picking, or any other means, or collecting the 
marketable fruit from the ground.
    (g) Hurricane--A windstorm classified by the U.S. Weather 
Service as a hurricane.
    (h) Interplanted--Acreage on which two or more crops are planted 
in any form of alternating or mixed pattern.
    (i) Non-contiguous land--Any land owned by you or rented by you 
for any consideration other than a share in the insured crop, whose 
boundaries do not touch at any point. Land that is separated only by 
a public or private right-of-way, waterway or irrigation canal will 
be considered to be contiguous.

[[Page 10702]]

    (j) Potential production--Includes production that would have 
been produced had damage not occurred and includes citrus fruit 
that:
    (i) Was harvested before damage occurred;
    (ii) Remained on the tree after damage occurred; and
    (iii) Was lost from either an insured or uninsured cause.
    Potential production does not include citrus fruit that:
    (i) Was lost before insurance attached for any crop year;
    (ii) Was lost by normal dropping; or
    (iii) Any tangerines that normally would not, by the end of the 
insurance period for tangerines, meet the 210 pack size (2 and 4/16 
inch minimum diameter) under United States Standards.
    (k) Written agreement--A written document that alters designated 
terms of a policy.
    2. Unit Division--A unit as defined in section 1 (Definitions) 
of the Basic Provisions (Sec. 457.8), will be divided into basic 
units by each citrus fruit type shown in section 1 of these crop 
provisions or designated in the Special Provisions. Unless limited 
by the Special Provisions, a basic unit may be further divided into 
optional units if, for each optional unit you meet all the 
conditions of this section or if a written agreement to such 
division exists. Basic units may not be divided into optional units 
on any basis including, but not limited to, production practice, 
type, and variety other than as described in this section. If you do 
not comply fully with these provisions, we will combine all optional 
units that are not in compliance with these provisions into the 
basic unit from which they were formed. We may 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 to be inadvertent, and the optional units are combined, 
that portion of the premium paid for the purpose of electing 
optional units will be refunded to you pro rata for the units 
combined. All optional units must be reflected on the acreage report 
for each crop year.
    (a) Each optional unit must meet one or more of the following 
criteria as applicable:
    (1) Optional Units by Section, Section Equivalent, or Farm 
Service Agency (FSA) Farm Serial Number: Optional units may be 
established if each optional unit is located in a separate legally 
identified section. The trees must be planted in such a manner that 
the planting does not continue into the adjacent section. In the 
absence of sections, we may consider parcels of land legally 
identified by other methods of measure including, but not limited to 
Spanish grants, railroad surveys, leagues, labors, or Virginia 
Military Lands, as the equivalent of sections for unit purposes. In 
areas that have not been surveyed using the systems identified 
above, or another system approved by us, or in areas where such 
systems exist but boundaries are not readily discernable, each 
optional unit must be located in a separate farm identified by a 
single FSA Farm Serial Number; or
    (2) Optional Units on Acreage Located on Non-Contiguous Land: In 
addition to or instead of establishing optional units by section, 
section equivalent or FSA Farm Serial Number, optional units may be 
established if each optional unit is located on non-contiguous land.
    3. Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities--In addition to the requirements of section 
3 (Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8):
    (a) You may select only 1 percent of the maximum dollar amount 
of insurance for all citrus fruit included in each type, shown in 
section 1 of these crop provisions or designated in the Special 
Provisions, that you elect to insure.
    (b) In lieu of the production reporting date contained in 
section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8), 
potential production for each unit will be determined during loss 
adjustment.
    (c) For the first year of insurance for acreage interplanted 
with another citrus fruit crop, and anytime the planting pattern of 
such acreage is changed, you must report, by the sales closing date 
contained in the Special Provisions, the following:
    (1) The age of the interplanted trees and type if applicable;
    (2) The planting pattern; and
    (3) Any other information we may need to establish your amount 
of insurance. We will reduce acreage or the amount of insurance, or 
both, as necessary, based on the effect of the interplanted citrus 
fruit trees on the insured citrus fruit crop. If you fail to notify 
us, we will reduce the acreage or amount of insurance, or both, any 
time we become aware of the interplanted crop.
    4. Contract Changes--The contract change date is March 15 
preceding the cancellation date. (See the provisions of section 4 
(Contract Changes) of the Basic Provisions (Sec. 457.8).)
    5. Cancellation and Termination Dates--In accordance with 
section 2 (Life of Policy, Cancellation, and Termination) of the 
Basic Provisions (Sec. 457.8), the cancellation date is April 30 
preceding the crop year. The termination date is April 30 of the 
crop year.
    6. Insured Crop--
    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all of each citrus 
fruit type that you elect to insure, in which you have a share, that 
are grown in the county shown on the application, and for which a 
premium rate is quoted in the actuarial table. If you insure 
grapefruit, you must insure all of your grapefruit under a single 
type designation (type III or type VII).
    (b) In addition to the citrus fruit not insurable in section 8 
(Insured Crop) of the Basic Provisions (Sec. 457.8), we do not 
insure any citrus fruit:
    (1) That cannot be expected to mature each crop year within the 
normal maturity period for the type;
    (2) Produced by trees that have not reached the fifth growing 
season after being set out, unless otherwise provided in the Special 
Provisions or by a written agreement approved by us to insure such 
citrus fruit;
    (3) Of ``Meyer Lemons'' and oranges commonly known as ``Sour 
Oranges'' or ``Clementines''; or
    (4) Of the Robinson tangerine variety, for any crop year in 
which you have elected to exclude such tangerines from insurance. 
(You must elect this exclusion prior to the crop year for which the 
exclusion is to be effective, except that for the first crop year 
you must elect this exclusion by the later of April 30 or the time 
you submit the application for insurance.)
    (c) Upon our approval, you may elect to insure or exclude from 
insurance for any crop year any insurable acreage in any unit that 
has a potential production of less than 100 boxes per acre. If you:
    (1) Elect to insure such acreage, we will consider the potential 
production to be 100 boxes per acre when determining the amount of 
loss;
    (2) Elect to exclude such acreage, we will disregard the acreage 
for all purposes related to this contract; or
    (3) Do not elect to insure or exclude such acreage:
    (i) We will disregard the acreage if the potential production is 
less than 100 boxes per acre; or
    (ii) If 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.
    (d) We may exclude from insurance, or limit the amount of 
insurance, on any acreage that was not insured the previous crop 
year.
    7. Insurable Acreage--In lieu of the provisions in Section 9 
(Insurable Acreage) of the Basic Provisions (Sec. 457.8) that 
prohibit insurance attaching to a crop planted with another crop, 
citrus fruit interplanted with another citrus fruit crop is 
insurable unless we inspect the acreage and determine it does not 
meet insurability requirements.
    8. Insurance Period--(a) In accordance with the provisions of 
section 11 (Insurance Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on May 1 of each crop year, except that for 
the first crop year, if the application is accepted by us after 
April 20, insurance will attach on the 10th day after the completed 
application and acreage and production reports are received in your 
insurance provider's local office. Full premium is due for any 
partial year.
    (2) The calendar date for the end of the insurance period for 
each crop year is:
    (i) January 31 for tangerines and navel oranges;
    (ii) April 30 for lemons, limes, tangelos, early and mid-season 
oranges; and
    (iii) June 30 for late oranges, grapefruit, Temple and Murcott 
Honey Oranges.
    (b) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage 
on or before the acreage reporting date of any crop year and if we 
inspect and 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 
insurable citrus fruit on or

[[Page 10703]]
before the acreage reporting date of any crop year, insurance will 
not be considered to have attached to such acreage for that crop 
year unless:
    (i) A transfer of right to an indemnity or a similar form 
approved by us is completed by all affected parties; and
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date.
    9. Causes of Loss--
    (a) In accordance with the provisions of section 12 (Causes of 
Loss) of the Basic Provisions (Sec. 457.8), insurance is provided 
only against the following causes of loss that occur within the 
insurance period:
    (1) Fire, unless weeds and other forms of undergrowth have not 
been controlled or pruning debris has not been removed from the 
grove;
    (2) Freeze;
    (3) Hail;
    (4) Hurricane; or
    (5) Tornado.
    (b) In addition to the causes of loss excluded in section 12 
(Cause of Loss) of the Basic Provisions (Sec. 457.8), we will not 
insure against damage or loss of production due to:
    (1) Any damage to the blossoms or trees; or
    (2) Inability to market the citrus fruit for any reason other 
than actual physical damage from an insurable cause specified in 
this section. For example, we will not pay you an indemnity if you 
are unable to market due to quarantine, boycott, or refusal of any 
person to accept production.
    10. Settlement of Claim--
    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide 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 for each unit by:
    (1) Multiplying the number of acres by the respective dollar 
amount of insurance per acre for the citrus fruit by the share;
    (2) Computing the average percent of damage to the respective 
citrus fruit, rounded to the nearest tenth of a percent (0.1%), 
without regard to any percent of damage determined in prior 
inspections. The percent of damage will be the ratio of the number 
of boxes of citrus fruit considered damaged from an insured cause, 
divided by the undamaged potential production. Citrus fruit will be 
considered undamaged potential production if it is:
    (i) Or could be marketed as fresh fruit;
    (ii) Harvested prior to inspection by us; or
    (iii) Harvested within 7 days after a freeze;
    (3) Subtracting the insurance (level) deductible from the 
respective percent of damage and, if this result is positive, 
dividing this result by the coverage level percentage;
    (4) Multiplying this result by the amount of insurance for the 
respective citrus fruit.
    (For example, if the average percent of damage is 70 percent and 
the coverage level is 75 percent (the deductible is 25 percent), the 
amount payable is 60 percent times the amount of insurance (70% 
damage -25% level deductible)=45% (45%75%)=60% adjusted 
damage X the amount of insurance); and
    (5) Summing all such products to determine the amount payable 
for the unit.
    (c) Pink and red grapefruit of Type III, and citrus fruit of 
Types IV, V, and VII, that are seriously damaged by freeze, as 
determined by a fresh-fruit cut of a representative sample of fruit 
in the unit in accordance with the applicable provisions of the 
State of Florida Citrus Fruit laws, and are not or could not be 
marketed as fresh fruit will be considered damaged to the following 
extent:
    (1) If less than 16 percent (16%) of the fruit in a sample shows 
serious freeze damage, the fruit will be considered undamaged; or
    (2) If 16 percent (16%) or more of the fruit in a sample shows 
serious freeze damage, the fruit will be considered 50 percent (50%) 
damaged, except that:
    (i) For tangerines of Type IV, damage in excess of 50 percent 
(50%) will be the actual percent of damaged fruit; and
    (ii) For pink and red grapefruit of citrus Type III, and citrus 
of Types IV(except tangerines), V, and VII, if it is determined that 
the juice loss in the fruit exceeds 50 percent (50%), such percent 
will be considered the percent of damage.
    (d) Notwithstanding the provisions of subsection 11(c) as to any 
pink and red grapefruit of Type III and citrus fruit of Types IV, V, 
and VII, in any unit that is mechanically separated using the 
specific gravity ``floatation'' method into undamaged and freeze-
damaged fruit, the amount of damage will be the actual percent of 
freeze-damaged fruit not to exceed 50 percent (50%) and will not be 
affected by subsequent fresh-fruit marketing. Notwithstanding the 
preceding sentence, the 50 percent (50%) limitation on freeze-
damaged fruit, mechanically separated, will not apply to tangerines 
of citrus fruit Type IV.
    (e) Any citrus fruit of Types I, II, and VI and white grapefruit 
of Type III that is damaged by freeze, but may be processed into 
products for human consumption, will be considered as marketable for 
juice. The percent of damage will be determined by relating the 
juice content of the damaged fruit as determined by analysis to:
    (1) The average juice content of the fruit produced on the unit for 
the three previous crop years based on your records, if they are 
acceptable to us; or
    (2) The following juice content, if acceptable records are not 
furnished:
    (i) Type I--44 pounds of juice per box
    (ii) Type II--47 pounds of juice per box
    (iii) Type III--38 pounds of juice per box
    (iv) Type VI--43 pounds of juice per box
    (f) Any citrus fruit on the ground that is not collected and 
marketed will be considered totally lost if the damage was due to an 
insured cause.
    (g) Any citrus fruit that is unmarketable either as fresh fruit 
or as juice because it is immature, unwholesome, decomposed, 
adulterated, or otherwise unfit for human consumption due to an 
insured cause will be considered totally lost.
    (h) Pink and red grapefruit of citrus fruit Type III and citrus 
fruit of Types IV, V, and VII that are unmarketable as fresh fruit 
due to serious damage from hail as defined in United States 
Standards for grades of Florida fruit will be considered totally 
lost.
    11. Written Agreements--Designated terms of this policy may be 
altered by written agreement. You must apply in writing for each 
written agreement no later than the sales closing date. Each 
agreement is valid for one year only. If the written agreement is 
not specifically renewed the following year, insurance coverage for 
subsequent crop years will be in accordance with the printed policy. 
All variable terms, including, but not limited to, crop type and 
variety, guarantee, premium rate, and price election must be 
contained in the written agreement. Notwithstanding the sales 
closing date restriction contained herein, application for a written 
agreement may be made after the sales closing date, and approved if, 
after physical inspection of the acreage it is determined that the 
crop is insurable in accordance with policy and written agreement 
provisions. Applications for written agreements submitted by the 
insured must also contain all variable terms of the contract between 
the company and the insured that will be in effect if the written 
agreement is not approved.

    Signed in Washington, D.C., on March 21, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-6262 Filed 3-12-96; 1:54 pm]
BILLING CODE 3410-FA-P