[Federal Register Volume 61, Number 109 (Wednesday, June 5, 1996)]
[Proposed Rules]
[Pages 28512-28517]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13590]



 ========================================================================
 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. 61, No. 109 / Wednesday, June 5, 1996 / 
Proposed Rules  

[[Page 28512]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AB56


Common Crop Insurance Regulations; Texas Citrus Fruit Crop 
Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, Agriculture.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes 
specific crop provisions for the insurance of Texas 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 and combine the 
current Texas Citrus Endorsement with the Common Crop Insurance Policy 
for ease of use and consistency of terms.

DATES: Written comments, data, and opinions on this proposed rule will 
be accepted until close of business July 5, 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 August 5, 
1996.

ADDRESSES: Interested persons are invited to submit written comments to 
the Chief, Product Development Branch, Federal Crop Insurance 
Corporation, United States Department of Agriculture, 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., 8:15 a.m.-5:45 p.m., 
Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Louise Narber, Program Analyst, 
Research and Development Division, Product Development Branch, FCIC, 
Kansas City, MO, address listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866 and Departmental Regulation 1512-1

    This action has been reviewed under United States Department of 
Agriculture (USDA) procedures established by Executive Order No. 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 April 30, 2001.
    This rule has been determined to be not significant for the 
purposes of Executive Order No. 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 these 
regulations were previously submitted to OMB pursuant to the Paperwork 
Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB control number 
0563-0003 through September 30, 1998.
    The amendments set forth in this proposed rule do not contain 
additional information collections that require clearance by OMB under 
the provisions of 44 U.S.C. chapter 35.
    The title of this information collection is ``Catastrophic Risk 
Protection Plan and Related Requirements including, Common Crop 
Insurance Regulations; Texas Citrus Fruit Crop Insurance Provisions.'' 
The information to be collected includes: a crop insurance acreage 
report, an insurance application, and continuous contract. Information 
collected from the acreage report and application is electronically 
submitted to FCIC by the reinsured companies. Potential respondents to 
this information collection are producers of Texas citrus fruit that 
are eligible for Federal crop insurance.
    The information requested is necessary for the reinsured companies 
and FCIC to provide insurance and reinsurance, determine eligibility, 
determine the correct parties to the agreement or contract, determine 
and collect premiums or other monetary amounts, and pay benefits.
    All information is reported annually. The reporting burden for this 
collection of information is estimated to average 16.9 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 2,676,932 hours.
    The comment period for information collections under the Paperwork 
Reduction Act of 1995 continues 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 
gathering technology.
    Comments regarding paperwork reduction should be submitted to the 
Desk Officer for Agriculture, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, D.C. 20503 and to 
Bonnie Hart, Advisory and Corporate Operations Staff, Regulatory Review 
Group, USDA, Farm Service Agency, P.O. Box 2145, Ag Box 0570, 
Washington, D.C. 20013-2415. Telephone (202) 690-2857. Copies of the 
information collection may be obtained from Bonnie Hart at the above 
stated address.

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

[[Page 28513]]

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) of 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 No. 12612

    It has been determined under section 6(a) of Executive Order No. 
12612, Federalism, that this rule does not have sufficient Federalism 
implications to warrant the preparation of a Federalism Assessment. The 
provisions 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. Under the current regulations, an insured is 
required to complete an application and acreage report. If the crop is 
damaged or destroyed, the insured is required to give notice of loss 
and provide the necessary information to complete a claim for 
indemnity. An insured must use actual records of production or receive 
a transitional yield. This regulation does not alter those 
requirements. Therefore, the amount of work required of the insurance 
companies and Farm Service Agency (FSA) offices delivering and 
servicing these policies will not increase significantly from the 
amount of work currently required. This rule does not have any greater 
or lesser impact on the insured. 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 No. 12372

    This program is not subject to the provisions of Executive Order 
No. 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.

Executive Order No. 12778

    The Office of the General Counsel has determined that these 
regulations meet the applicable standards provided in sections 2(a) and 
2(b)(2) of Executive Order No. 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 parts 11 and 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, 7 CFR Sec. 457.119, Texas Citrus Fruit 
Crop Insurance Provisions. The provisions will be effective for the 
1998 and succeeding crop years. The proposed provisions will replace 
those found at 7 CFR Sec. 401.115 (Texas Citrus Endorsement). Upon 
publication of 7 CFR Sec. 457.119 as a final rule, the provisions for 
insuring Texas citrus fruit contained herein will supersede the current 
provisions contained in 7 CFR Sec. 401.115. By separate rule, FCIC will 
revise 7 CFR Sec. 401.115 to restrict its effect through the 1997 crop 
year and later remove that section.
    This rule makes minor editorial and format changes to improve the 
Texas Citrus Crop Insurance Endorsement's compatibility with the Common 
Crop Insurance Policy. In addition, FCIC is proposing substantive 
changes in the provisions for insuring Texas citrus fruit as follows:
    1. Section 1--Add definitions for ``days,'' ``direct marketing,'' 
``FSA,'' ``good farming practices,'' ``interplanted,'' ``irrigated 
practice,'' ``local market price,'' ``production guarantee (per 
acre),'' ``type,'' ``ton,'' and ``written agreement'' for clarification 
purposes.
    2. Section 1--Change the definitions for ``freeze,'' ``harvest,'' 
``hedged,'' ``non-contiguous land,'' and ``topped,'' for clarification.
    3. Section 1--Delete the definition for ``frost'' because frost as 
a cause of loss has been eliminated as unnecessary. The definition of 
``freeze'' includes damage from frost. Also, replace the definition of 
``excess moisture'' with ``excess rain'' for clarification.
    4. Section 2--Add provisions to allow optional unit division by 
section, section equivalent, or FSA Farm Serial Number, or by non-
contiguous land so that the unit structure will be the same in both the 
Texas Citrus Fruit Provisions and the Texas Citrus Tree Provisions. The 
previous provisions only allowed basic units to be divided into more 
than one unit by section if each unit was non-contiguous.
    5. Section 3(a)--Clarify that an insured may select one price 
election for each citrus type, and that the price election selected for 
each type need not bear the same percentage relationship to the maximum 
price offered for each type. Since each type of Texas citrus fruit is 
considered a separate crop, it should not be treated any differently 
than any other crop with a separate price election. The insured may 
select any available price election. However, if separate price 
elections are available by variety within each type, the price 
elections the insured chooses within the type must have the same 
percentage relationship to the maximum price offered by the insurance 
provider for each variety within the type.
    6. Section 3(b)--Add a provision for a 1-year lag period for the 
insured to report citrus production for Actual Production History (APH) 
because all of the fruit will not be harvested until after the 
production reporting date.
    7. Section 3(c)--Add provisions for reporting the age and type, if 
applicable, of any interplanted perennial crop, its planting pattern, 
and any other information that the insurance provider requests in order 
to establish the yield upon which the insurance guarantee is based. If 
the producer fails to notify the insurance provider of any 
circumstances that may cause the expected yield to fall below the yield 
upon which the insurance guarantee is based, the insurance provider 
will reduce the production guarantee at any time the insurance provider 
becomes aware of the circumstances. This allows the insurance provider 
to limit liability before insurance attaches based on the condition of 
the citrus trees.
    8. Section 3(d)--The yield upon which the guarantee is based will 
be determined from APH yields unless previous damage requires 
establishment of the yield based on the appraised yield

[[Page 28514]]

for the insured acreage. Currently the guarantee is based on crop 
appraisals because a hard freeze severely damaged the citrus trees a 
few years ago. Enough time has passed to determine the producers' 
guarantee based on the producers' individual yield.
    9. Section 5--Change the cancellation and termination dates from 
November 30 to November 20 to be consistent with other perennial crops.
    10. Section 6--Clarify that all premium computations will be based 
on the final stage production guarantee.
    11. Section 7--Include the insurable citrus type designations in 
the Special Provisions rather than in the Texas Citrus Fruit 
Provisions. This will prevent the need for an amendment to the Texas 
Citrus Fruit Crop Provisions if it is later determined that additional 
types need to be added. Also, eliminate the provision that requires 
acceptable production records for the previous crop year for insurance 
to attach. There is a 1 year lag period for reporting production.
    12. Section 8--Add a provision making interplanted citrus insurable 
if planted with another perennial crop unless after an inspection, the 
insurance provider determines it does not meet insurability 
requirements. This clause will make insurance available to more 
producers and will reduce the number of acres for which coverage would 
only be available under the noninsured crop disaster assistance program 
(NAP).
    13. Section 9--Change the beginning of the insurance period from 
December 1 to November 21 to be consistent with other perennial crops. 
However, for the 1st crop year for which insurance is sought, if the 
application is accepted by the insurance provider after November 20, 
insurance will attach on the 10th day after the application is received 
in the insurance provider's local office. The current requirement that 
insurance will not attach for 30 days after the application is received 
if not received until after November 30, creates an unnecessary lag 
time during which the crop is not covered. Add provisions to clarify 
the procedure for insuring acreage when an insurable share is acquired 
or relinquished on or before the acreage reporting date. Under the 
current Texas Citrus Endorsement for acreage acquired (for which an 
application is in place) on or before the acreage reporting date, 
coverage would attach at the time the insurer considers the crop 
inspection as being acceptable provided it was on or after November 30 
(and not a late filed application and the first year of insurance). In 
the same situation under these new provisions, coverage will have 
started on November 21 (except for a late filed application and the 1st 
year of insurance) even if the insurer considers the inspection as 
being acceptable on January 14. Under the current Texas Citrus 
Endorsement for acreage relinquished on or before the acreage reporting 
date but after coverage had attached, the premium would still be due 
from the insured even if the insured no longer had an insurable 
interest. In the same situation under these new provisions, insurance 
will not be considered to have attached so the premium will not be due 
unless a transfer of right to an indemnity was completed.
    14. Section 10--Add a clause clarifying that any failure of the 
irrigation water supply must be caused by an insured peril occurring 
during the insurance period. Delete ``frost'' as a cause of loss 
because the definition of freeze also includes damage from frost. Also, 
delete damage by Mediterranean Fruit Fly as an insurable cause and 
specify that we will not insure against damage or loss of production 
due to disease or insect infestation, unless an insured cause of loss 
prevents the proper application of control measures, causes properly 
applied control measures to be ineffective, or causes disease or insect 
infestation for which no effective control mechanism is available.
    15. Section 11--Require the producer to give notice at least 15 
days before any production from any unit will be marketed directly to 
consumers because insureds usually have inadequate records of such 
marketing and an appraisal is necessary to accurately determine the 
direct marketed production.
    16. Section 12--Add a provision clarifying the procedure for when 
the insured intends to abandon or not care for the acreage. If the 
insured and the insurer agree on potential production on acreage the 
insured wishes to abandon or no longer care for, the insurance period 
for that acreage will end. If agreement is not reached, the claim may 
be deferred if the insured agrees to continue to care for the crop. The 
insurance provider will make another appraisal when the insured 
notifies them of further damage or that harvest is general in the area 
unless the crop is harvested, in which case the harvested production 
will be used to determine the production to count. If the insured does 
not continue to care for the crop the appraisal made prior to deferring 
the claim will be used to determine the production to count. Also add a 
provision to clarify that if individual records of juice content are 
not available, the average juice content will be obtained from the 
nearest juice plant, if available, or from an appraisal to determine 
the average juice content. Delete the provision which allows the 
contract price to be an applicable price for undamaged citrus fruit if 
the contract was executed between the producer and buyer before damage 
occurred because it allowed a potential for abuse and was seldom used.
    17. Section 13--Add provisions for providing insurance coverage by 
written agreement. FCIC has a long standing policy of permitting 
certain modifications of the insurance contract by written agreement 
for some policies. This amendment will extend this practice to Texas 
citrus fruit and will make it possible to tailor the policy to a 
specific insured in certain instances.

List of Subjects in 7 CFR Part 457

    Crop insurance, Texas 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 part 457), effective for the 1998 and succeeding 
crop years, as follows:

PART 457--[AMENDED]

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

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

    2. A new Sec. 457.119 is added to read as follows:


Sec. 457.119   Texas Citrus Fruit Crop Insurance Provisions

    The Texas Citrus Fruit Crop Insurance Provisions for the 1998 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 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

    Crop year--The period beginning with the date insurance attaches 
to the citrus crop and extends through normal harvest time, and will 
be designated by the calendar year following the year in which the 
bloom is normally set.
    Days--Calendar days.
    Direct marketing--Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor,

[[Page 28515]]

shipper, or buyer. 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.
    Excess rain--An amount of precipitation that damages the crop.
    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 tree or its 
fruit caused by low air temperatures.
    FSA--The Farm Service Agency, an agency of the United States 
Department of Agriculture or any successor agency.
    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 generally recognized by the Cooperative Extension 
Service as compatible with agronomic and weather conditions in the 
county.
    Harvest--The severance of mature citrus fruit from the tree by 
pulling, picking, or any other means, or by collecting marketable 
fruit from the ground.
    Hedged--A process of trimming the branches 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.
    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 applicable citrus price per ton offered 
by buyers in the area in which you normally market the insured crop.
    Non-contiguous land--Any two or more tracts of 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 by a public or private right-of way, waterway or 
irrigation canal will be considered to be touching.
    Production guarantee (per acre):
    (a) First stage production guarantee--The second stage 
production guarantee multiplied by 40 percent.
    (b) Second stage production guarantee--The quantity of citrus 
(in tons) determined by multiplying the approved yield per acre by 
the coverage level percentage you elect.
    Ton--Two thousand (2,000) pounds avoirdupois.
    Topped--A process of trimming the upper most portion of the 
citrus trees for better and more fruitful growth of the citrus 
fruit.
    Type--Classes of fruit with similar characteristics that are 
grouped for insurance purposes as specified in the Special 
Provisions.
    Written agreement--A written document that alters designated 
terms of a policy in accordance with section 13.

2. Unit Division

    (a) A unit as defined in section 1 (Definitions) of the Basic 
Provisions (Sec. 457.8), will be divided into basic units by each 
citrus type designated in the Special Provisions.
    (b) Unless limited by the Special Provisions, these basic units 
may be 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.
    (c) 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.
    (d) 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 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 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.
    (e) All optional units must be identified on the acreage report 
for each crop year.
    (f) The following requirements must be met for each optional 
unit:
    (1) You must have records, which can be independently verified, 
of acreage and production for each optional unit for at least the 
last crop year used to determine your production guarantee;
    (2) You must have records of marketed production or measurement 
of 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 unit must be kept separate until 
loss adjustment is completed by us; and
    (3) Each optional unit must meet one of the following criteria 
as applicable:
    (i) Optional Units by Section, Section Equivalent, or FSA Farm 
Serial Number: Optional units may be established if each optional 
unit is located in a separate legally identified 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 discernible, each 
optional unit must be located in a separate farm identified by a 
single FSA Farm Serial Number; or
    (ii) Optional Units on Acreage Located on Non-Contiguous Land: 
In lieu 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 price election and coverage level for 
each citrus fruit type designated in the Special Provisions that you 
elect to insure. The price election you choose for each type need 
not bear the same percentage relationship to the maximum price 
offered by us for each type. 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 type, the price elections you choose within 
the type must have the same percentage relationship to the maximum 
price offered by us for each variety within the type.
    (b) Instead of reporting your citrus production for the previous 
crop year, as required by section 3 of the Basic Provisions 
(Sec. 457.8), there is a one-year lag period. Each crop year you 
must report your production from two crop years ago, e.g., on the 
1998 crop year production report, you will provide your 1996 crop 
year production.
    (c) 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 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; and change in practices 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.
    (d) 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 previous damage or changes to the grove or trees 
require establishment of the yield by another method. In the event 
of such damage, your production guarantee will be established based 
on our appraisal of the yield potential for the insured acreage.
    (e) The production guarantee per acre is progressive by stage 
and increases at specific

[[Page 28516]]

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 40 percent of the yield calculated in 
paragraph (d) of this section 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 paragraph (d) 
of this section multiplied by your coverage level.
    (f) Any acreage of citrus damaged to the extent that the 
majority of producers in the area would not further maintain it will 
be deemed to have been destroyed even though you may continue to 
maintain it. The production guarantee for such acreage will be the 
guarantee for the stage in which such damage occurs.

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 type designated in the Special Provisions 
that you elect to insure and for which a premium rate is provided by 
the actuarial table:
    (a) In which you have a share;
    (b) That are types 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, unless the trees are inspected by us and 
we agree in writing to insure such acreage with less potential; and
    (e) That is grown in a grove that, if inspected, is considered 
acceptable by us.

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 for insurability 
contained in these crop provisions.

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 first crop year, if the application is accepted by us 
after November 20, insurance will attach on the 10th day after the 
application is received in your insurance provider's local office.
    (2) The calendar date for the end of the insurance period for 
each crop year is May 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 any 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 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; 
and
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date. If you relinquish 
your share, no premium will be due and no indemnity paid unless a 
transfer of coverage is properly executed.

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 that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in Section 12 
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not 
insure against damage or loss of production due to:
    (1) Disease or insect infestation, unless a cause of loss 
specified in section 10(a):
    (i) Prevents the proper application of control measures or 
causes properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available; and
    (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), you 
must notify us at least 15 days before any production from any unit 
will be marketed directly to consumers. We will conduct an appraisal 
that will be used to determine your production to count for direct 
marketed 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 marketed directly to consumers 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 
an accurate appraisal.

12. 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 on a unit basis by:
    (1) Multiplying the insured acreage for each type crop by its 
respective production guarantee (see sections 1 and 3);
    (2) Multiplying each result in section 12(b)(1) by the 
respective price election for each type, or variety within a type;
    (3) Totaling the results in section 12(b)(2);
    (4) Multiplying the total production to be counted of each type 
or variety, if applicable, (see section 12(c)) by the respective 
price election;
    (5) Totaling the results of section 12(b)(4);
    (6) Subtracting the total of section 12(b)(5) from the total in 
paragraph (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) Marketed directly to consumers if you fail to meet the 
requirements contained in section 11;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on insured acreage you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for 
that acreage will end. If you do not agree with our appraisal,

[[Page 28517]]

we may defer the claim only if you agree to continue to care for the 
crop. We will then make another appraisal when you notify us of 
further damage or that harvest is general in the area unless you 
harvested the crop, in which case we will use the harvested 
production. If you do not continue to care for the crop, our 
appraisal made prior to deferring the claim will be used to 
determine the production to count; and
    (2) All harvested production from the insurable acreage.
    (d) Any citrus fruit that is not marketed as fresh fruit and, 
due to insurable causes, does not contain 120 or more gallons of 
juice per ton, will be adjusted by:
    (1) Dividing the gallons of juice per ton obtained from the 
damaged citrus by 120; and
    (2) multiplying the result by the number of tons of such citrus.
    If individual records of juice content are not available, an 
average juice content from the nearest juice plant will be used, if 
available. If not available, a field appraisal will be made to 
determine the average juice content.
    (e) Where the actuarial table provides for, 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. Written Agreements

    Designated terms of this policy may be altered by written 
agreement. The following conditions will apply:
    (a) You must apply in writing for each written agreement no 
later than the sales closing date, except as provided in paragraph 
(e) of this section.
    (b) The application for written agreement must contain all terms 
of the contract between you and us that will be in effect if the 
written agreement is not approved.
    (c) If approved, the written agreement will include all variable 
terms of the contract, including, but not limited to, crop type or 
variety, the guarantee, premium rate, and price election.
    (d) Each written agreement will only be valid for 1 year. 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.
    (e) An application for written agreement submitted after the 
sales closing date may be approved if, after a physical inspection 
of the acreage, it is determined that no loss has occurred and the 
crop is insurable in accordance with the policy and written 
agreement provisions.

    Signed in Washington, D.C., on May 23, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-13590 Filed 6-4-96; 8:45 am]
BILLING CODE 3410-FA-P