[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31464-31468]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15770]



 ========================================================================
 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. 120 / Thursday, June 20, 1996 / 
Proposed Rules  

[[Page 31464]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457


Common Crop Insurance Regulations; Arizona-California Citrus Crop 
Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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

SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes 
specific crop provisions for the insurance of Arizona-California 
citrus. 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 Arizona-California Citrus Crop Insurance 
Regulations 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 22, 1996, and will be 
considered when the rule is to be made final. The comment period for 
information collections under the Paperwork Reduction Act of 1995 
continues through August 19, 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 (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., 8:15 a.m.-4:45 
p.m., Monday through Friday, except holidays.

FOR FURTHER INFORMATION CONTACT: John Meyer, Program Analyst, Research 
and Development Division, Product Development Branch, FCIC, at the 
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 June 30, 2006.
    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 the Arizona-
California Crop Insurance 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 Arizona-California Citrus Crop 
Insurance Provisions.
    Section 7 of the 1998 Arizona-California Citrus Crop Provisions 
adds interplanting as an insurable farming practice as long as it is 
interplanted with another perennial crop. This practice was not 
insurable under the previous Arizona-California Citrus Crop Insurance 
Policy. Consequently, interplanting information will need to be 
collected using the FCI-12-P Pre-Acceptance Perennial Crop Inspection 
Report form for approximately 0.5 percent of the 2,468 insureds who 
interplant their Arizona-California 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 perennial crop producers and as a result less 
acreage will need to be covered by 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., chapter 35. Public comments are due by 
August 19, 1996.
    The title of this information collection is ``Catastrophic Risk 
Protection Plan and Related Requirements including, Common Crop 
Insurance Regulations; Arizona-California Citrus Crop Insurance 
Provisions.'' The information to be collected includes a crop insurance 
acreage report, 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 growers of Arizona-
California citrus 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 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.
    The comment period for information collections under the Paperwork 
Reduction Act of 1995 continues on 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

[[Page 31465]]

or other forms of information 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 (OMB), Washington, DC 20503 
and to Bonnie Hart, Advisory and Corporate Operations Staff, Regulatory 
Review Group, Farm Service Agency, PO Box 2415, Ag Box 0572, United 
States Department of Agriculture, Washington, DC 20013-2415. Copies of 
the information collection may be obtained from Bonnie Hart at the 
above address, telephone (202) 690-2857.
    The Office of Management and Budget (OMB) is required to make a 
decision concerning the collection(s) of information contained in these 
proposed regulations between 30 and 60 days after submission to OMB. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment on the proposed regulation.

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 
one 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 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, a producer 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. The insured must certify to the number of acres and 
production on an annual basis or receive a transitional yield. The 
producer must maintain the records to support the certified information 
for at least 3 years. 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 producer. 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 
any 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 457.121, Arizona-California Citrus 
Crop Insurance Provisions. The new provisions will be effective for the 
1998 and succeeding crop years. These provisions will supersede and 
replace the current provisions for insuring Arizona-California citrus 
found at 7 CFR part 409 (Arizona-California Citrus Crop Insurance 
Regulations). By separate rule, the current provisions for insuring 
Arizona-California citrus will be revised to restrict its effect 
through the 1997 crop year and later remove that part.
    This rule makes minor editorial and format changes to improve the 
Arizona-California Citrus Crop Insurance Regulations' compatibility 
with the Common Crop Insurance Policy. In addition, FCIC is proposing 
substantive changes in the provisions for insuring Arizona-California 
citrus as follows:
    1. Section 1--Add definitions for the terms ``days,'' 
``dehorning,'' ``direct marketing,'' ``FSA,'' ``good farming 
practices,'' ``hedged,'' ``interplanted,'' ``irrigated practice,'' 
``non-contiguous,'' ``production guarantee (per acre),'' ``scaffold 
limb,'' ``set out,'' ``type,'' and ``written agreement'' for 
clarification.
    2. Section 1--Change the definition of ``harvest,'' for 
clarification.
    3. Section 3(a)--Clarify that an insured may select one price 
election for each citrus type, but that the price election selected for 
each type does not need bear the same percentage relationship to the 
maximum price offered for each type. 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. This helps protect against 
adverse selection and simplifies the administration of the program.
    4. Section 3(b)--Add a provision to specify that instead of 
reporting citrus

[[Page 31466]]

production for the previous crop year as required by the Basic 
Provisions, there is a lag period of one year because the citrus is not 
harvested until after the production reporting date.
    5. Section 3(c)--Add a provision to specify that the insured must 
report damage, dehorning, removal of trees, and change in practices 
that may reduce yields. Further, add provisions that for the first year 
of insurance for acreage interplanted with another perennial crop the 
insured must report the age and type, if applicable, the planting 
pattern, and any other information that the insurance provider requests 
to establish the yield upon which the production guarantee is based. If 
the insured fails to notify the insurance provider of circumstances 
that may reduce the yield below the yield upon which the insurance 
guarantee is based, the insurance provider will reduce the production 
guarantee at any time the circumstances become known. This allows the 
insurance provider to limit liability, if necessary, before insurance 
attaches.
    6. Section 5--The cancellation and termination dates are changed to 
November 20. Currently, the policy states November 30. This change is 
consistent with other perennial crop policies and allows for ease of 
administration.
    7. Section 6--Remove citrus type designations from the Arizona-
California Citrus Crop Provisions and add them to the Special 
Provisions. This will eliminate the need to amend the Arizona-
California Citrus Crop Provisions if FCIC decides to add additional 
types.
    8. Section 7--Add a provision to make interplanted citrus insurable 
if planted with another perennial crop unless the insurance provider 
inspects the acreage and determines it does not meet the other 
requirements for insurability. This clause will make insurance 
available to more producers and will reduce the number of acres for 
which coverage would be available only under the noninsured crop 
disaster assistance program (NAP).
    9. Section 8(a)--Change the beginning of the insurance period from 
December 1 to November 21 to be consistent with other perennial crops. 
However, if an application is accepted by the insurance company after 
November 20, insurance will attach on the 10th day after the 
application is received in the local agent's office, if approved.
    10. Section 8(b)--Add provisions to clarify the procedure for 
insuring acreage when an insurable share is acquired or relinquished on 
or before the acreage reporting date.
    11. Section 9(a)--Add the clause, ``if caused by an insured peril 
that occurs during the insurance period,'' to the end of the phrase 
``failure of the irrigation water supply.'' This will limit coverage to 
a cause of loss covered by the policy.
    12. Section 9(b)--Clarify that disease and insect infestation are 
excluded causes of loss unless adverse weather prevents the proper 
application of control measures, causes control measures to be 
ineffective when properly applied, or causes disease or insect 
infestation for which no effective control mechanism is available.
    13. Section 10--The previous 15 day ``notice of probable loss'' 
requirement is replaced by the requirement that the insured provide 
notice of damage within 72 hours of discovery to be consistent with 
other citrus policies.
    14. Section 10(a)--Add a provision requiring the insured to give 
notice within 3 days of the date harvest should have started if the 
crop will not be harvested in order to permit a timely appraisal of the 
marketable production.
    15. Section 10(b)--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 provisions for providing insurance coverage by 
written agreement. FCIC has a long standing policy of permitting 
certain modifications of the insurance contracts by written agreement 
for some policies. This amendment will extend this practice to Arizona-
California citrus fruit and make it possible to tailor the policy to a 
specific insured in certain specific instances.

List of Subjects in 7 CFR Part 457

    Crop insurance, Arizona-California citrus.

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, to read 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. 7 CFR part 457 is amended by adding a new Sec. 457.121 to read 
as follows:


Sec. 457.121  Arizona-California Citrus Crop Insurance Provisions.

    The Arizona-California Citrus Crop Insurance Provisions for the 
1998 and succeeding crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Arizona-California Citrus Crop Provisions

    If a conflict exists among the 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

    Carton--The standard container for marketing fresh packed fruit 
by citrus type as shown below. In the absence of marketing records 
on a carton basis, production will be converted to cartons on the 
basis of the following average net pounds of packed fruit in a 
standard packed carton.

------------------------------------------------------------------------
            Container size                  Types of fruit        Pounds
------------------------------------------------------------------------
Container #58 Navel oranges..........  ........................       38
                                       Valencia oranges & Sweet  .......
                                        oranges                         
Container #58 Lemons.................  ........................       40
Container #59 Grapefruit.............  ........................       32
Container #63 Tangerines.............  ........................       25
                                       (including Tangelos) &    .......
                                        Mandarin oranges                
------------------------------------------------------------------------

    Crop year--In lieu of the definition in section 1 (Definitions) 
of the Basic Provisions (Sec. 457.8), crop year is the period 
beginning with the date insurance attaches to the citrus crop and 
extending 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.
    Dehorning--Cutting of any scaffold limb to a length that is not 
greater than one-fourth (\1/4\) the height of the tree before 
cutting.
    Direct marketing--Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, 
farmer's market, and permitting the general public to enter the 
field for the purpose of picking all or a portion of the crop.
    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

[[Page 31467]]

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 from the tree by 
pulling, picking, or any other means, or by collecting marketable 
fruit from the ground.
    Interplanted--Acreage on which two or more crops are planted in 
any form of alternating or mixed pattern.
    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.
    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 only by a public or private right-of-way, waterway 
or irrigation canal will be considered to be contiguous.
    Production guarantee (per acre)--The number of citrus (cartons) 
determined by multiplying the approved yield per acre by the 
coverage level percentage you elect.
    Scaffold limb--A major limb attached directly to the trunk.
    Set out--Transplanting a tree into the grove.
    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 12.

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 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; and
    (3) Each optional unit must be located on non-contiguous land.

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

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) 
of the Basic Provisions (Sec. 457.8), you may select only one price 
election and coverage level for each citrus fruit type designated in 
the Special Provisions that you elect to insure. The price elections 
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 sweet oranges, you may choose seventy-five 
percent (75%) of the maximum price election for grapefruit. However, 
if separate price elections are available for varieties within each 
type, the price elections you choose for each variety must have the 
same percentage relationship to the maximum price offered by us for 
each variety within the type.
    (b) In lieu of reporting your citrus production of marketable 
fresh fruit for the previous crop year, as required by the Basic 
Provisions (Sec. 457.8), there is a lag period of one year. Each 
crop year, you must report your production from two crop years ago, 
e.g., on the 1998 crop year production report, you will provide your 
1996 crop year production.
    (c) In addition, you must report, by the production reporting 
date designated in section 3 (Insurance Guarantees, Coverage Levels, 
and Prices for Determining Indemnities) of the Basic Provisions 
(Sec. 457.8), by type, if applicable:
    (1) The number of trees damaged, dehorned or removed, and any 
change in practices or any other circumstance that may reduce the 
expected yield below the yield upon which the insurance guarantee is 
based; and the number of affected acres;
    (2) The number of bearing trees on insurable and uninsurable 
acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted 
with another perennial crop, and anytime the planting pattern of 
such acreage is changed:
    (i) The age of the interplanted crop, and type, if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to 
establish your approved yield.
    We will reduce the yield used to establish your production 
guarantee as necessary, based on our estimate of the effect of the 
following: interplanted perennial crop; damage; dehorning; removal 
of trees; or change in practices on the yield potential of the 
insured crop. If you fail to notify us of any circumstance that may 
reduce yields from previous levels, we will reduce your production 
guarantee, as necessary, at any time we become aware of the 
circumstance.

4. Contract Changes

    The contract change date is August 31 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 
and termination dates are November 20.

6. Insured Crop

    (a) 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:
    (1) In which you have a share;
    (2) That is a type adapted to the area; and
    (3) That is grown in a grove that, if inspected, is considered 
acceptable by us.
    (b) In addition to citrus not insurable in section 8 (Insured 
Crop) of the Basic Provisions (Sec. 457.8), we do not insure any 
citrus fruit:
    (1) That is not irrigated; and
    (2) That has not reached the sixth growing season after being 
set out, unless we inspect and allow insurance on such acreage.

7. Insurable Acreage

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

8. Insurance Period

    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins on November 21 of each crop year, except 
that for the first crop year, if the application is accepted by us 
after November 20, insurance will attach on the 10th day after the 
application, if approved, is received in our local agent's office.
    (2) The calendar date for the end of the insurance period for 
each crop year is:
    (i) August 31 for Navel oranges and Southern California lemons;
    (ii) November 20 for Valencia oranges; and
    (iii) July 31 for all other types of citrus.
    (b) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage 
after coverage begins, but on or before the acreage reporting date 
for the crop year, and after an inspection we consider the acreage 
acceptable, insurance will be considered to have attached to such 
acreage on the calendar date for the beginning of the insurance 
period.

[[Page 31468]]

    (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 or indemnity will be 
due unless a transfer of coverage is properly executed.

9. Causes of Loss

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

10. Duties in the Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 
following will apply:
    (a) You must notify us within three 3 days of the date harvest 
should have started if the crop will not be harvested.
    (b) You must notify us at least 15 days before any production 
from any unit will be 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 the required appraisal.
    (c) If you intend to claim an indemnity on any unit, you must 
notify us prior to the beginning of harvest so that we may inspect 
the damaged production. You must not sell or dispose of the damaged 
crop until after we have given you written consent to do so. If you 
fail to meet the requirements of this section, all such production 
will be considered undamaged and included as production to count.

11. Settlement Of Claim

    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide production records:
    (1) For any optional unit, we will combine all optional units 
for which acceptable production records were not provided; or
    (2) For any basic unit, we will allocate any commingled 
production to such units in proportion to our liability on the 
harvested acreage for each unit.
    (b) In the event of loss or damage covered by this policy, we 
will settle your claim by:
    (1) Multiplying the insured acreage for each type by its 
respective production guarantee;
    (2) Multiplying each result in paragraph (1) by the respective 
price election for each type, or variety within a type;
    (3) Totaling the results in paragraph (2);
    (4) Multiplying the total production to be counted of each type 
or variety, if applicable (see section 11(c)), by the respective 
price election;
    (5) Totaling the results of paragraph (4);
    (6) Subtracting the total of paragraph (5) from the total in 
paragraph (3); and
    (7) Multiplying the result of paragraph (6) by your share;
    (c) The total production to count (in cartons) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) Marketed directly to consumers if you fail to meet the 
requirements contained in section 10;
    (C) Damaged solely by uninsured causes; or
    (D) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production determined to be marketable as 
fresh packed fruit; and
    (iv) Potential production on insured acreage that you intend to 
abandon or no longer care for, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for 
that acreage will end. If you do not agree with our appraisal, we 
may defer the claim only if you agree to continue to care for the 
crop. We will then make another appraisal when you notify us of 
further damage or that harvest is general in the area unless you 
harvested the crop, in which case we will use the harvested 
production. If you do not continue to care for the crop, our 
appraisal made prior to deferring the claim will be used to 
determine the production to count; and
    (2) All harvested production marketed as fresh packed fruit from 
the insurable acreage.
    (3) All disposed or sold damaged citrus that was disposed or 
sold without an inspection or written consent.
    (d) Any production will be considered marketed or marketable as 
fresh packed fruit unless, due to insurable causes, such production 
was not marketed or marketable as fresh packed fruit.
    (e) Citrus that cannot be marketed due to insurable causes will 
not be considered production to count.
    (f) If we determine that frost protection equipment was not 
properly utilized or not properly reported, the indemnity for the 
unit will be reduced by the percentage of premium reduction allowed 
for frost protection equipment. You must, at our request, provide us 
records showing the start-stop times by date for each period the 
frost protection equipment was used.

12. Written Agreement

    Designated terms of this policy may be altered by written 
agreement in accordance with the following:
    (a) You must apply in writing for each written agreement no 
later than the sales closing date, except as provided in section 
12(e);
    (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 one 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); and
    (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, DC., on June 13, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-15770 Filed 6-19-96; 8:45 am]
BILLING CODE 3410-FA-P