[Federal Register Volume 61, Number 169 (Thursday, August 29, 1996)]
[Proposed Rules]
[Pages 45369-45373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22032]


 ========================================================================
 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. 169 / Thursday, August 29, 1996 / 
Proposed Rules  

[[Page 45369]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AB50


Common Crop Insurance Regulations; Texas Citrus Tree Crop 
Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes 
specific crop provisions for the insurance of Texas citrus trees. 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 to combine 
the current Texas Citrus Tree 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 October 28, 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 October 28, 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.-4:45 p.m., EDT 
Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Louise Narber, 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 November 1, 2000.
    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 approved by 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 Tree Crop Insurance Provisions.'' 
The information to be collected includes: a crop insurance application 
and acreage report. Information collected from the application and 
acreage report is electronically submitted to FCIC by the reinsured 
companies. Potential respondents to this information collection are 
producers of Texas citrus trees 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, Farm Service Agency, P.O. Box 2145, Ag Box 0572, U.S. Department 
of Agriculture, Washington, D.C. 20013-2415, telephone (202) 690-2857. 
Copies of the information collection may be obtained from Bonnie Hart 
at the above address.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Pub. L. 
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 45370]]

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 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 trees 
are damaged or destroyed, the insured is required to give notice of 
loss and provide the necessary information to complete a claim for 
indemnity. 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 457.106, Texas Citrus Tree Crop 
Insurance Provisions. The new provisions will be effective for the 1998 
and succeeding crop years. These provisions will replace the current 
provisions for insuring Texas citrus trees found at 7 CFR 401.134 
(Texas Citrus Tree Endorsement). Upon publication of the Texas Citrus 
Tree Crop Provisions as a final rule, the current provisions for 
insuring Texas citrus trees will be removed from Sec. 401.134 and that 
section will be reserved.
    This rule makes minor editorial and format changes to improve the 
Texas Citrus Tree Crop Endorsement's compatibility with the Common Crop 
Insurance Policy. In addition, FCIC is proposing substantive changes in 
the provisions for insuring Texas citrus trees as follows:
    1. Section 1--Added definitions for ``bud union,'' ``days,'' 
``deductible,'' ``FSA,'' ``good farming practices,'' ``interplanted,'' 
``irrigated practice,'' ``scaffold limbs,'' ``type,'' and ``written 
agreement'' for clarification purposes. Amend the definitions for 
``crop year,'' ``dehorning,'' ``freeze,'' ``non-contiguous land,'' and 
``set out'' for clarification.
    2. Section 2--Added 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 is the same for both the 
Texas Citrus Tree Provisions and the Texas Citrus Fruit Provisions. The 
previous provisions only allowed basic units to be divided into more 
than one unit if the insured trees were located on non-contiguous land. 
The guidelines for optional unit division are consistent with many 
perennial crop provisions.
    3. Section 3--Clarify that an insured may select a different 
coverage level for each type designated in the Special Provisions that 
the producer elects to insure. Also, clarify that if the insured 
insures trees planted at different population densities, the per acre 
amount of insurance for each population density must bear the same 
relationship (be the same percentage) to the maximum amount of 
insurance available for each population. In addition, add provisions 
for reporting the type and age, 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 production guarantee is based. If the insured fails to notify 
the insurance provider of any circumstance that may reduce the yield 
potential, the insurance provider will reduce the amount of insurance 
at any time the insurance provider becomes aware of the circumstance. 
This allows the insurance provider to limit liability based on the 
condition of the citrus trees at the time insurance attaches.
    4. Section 4--Change the contract change date from February 28 to 
August 31 to correspond to the change made to the date that insurance 
attaches.
    5. Section 5--Change the cancellation and termination dates from 
May 31 to November 20. This change eliminates the concerns that 
producers could wait until a loss is likely before purchasing insurance 
in the event of a pending hurricane prior to the sales closing date. 
Previously, insurance attached on June 1 unless the application was 
accepted after June 1. Insurance will now attach on November 21, except 
for producers who were insured in 1997 and do not cancel their 
insurance for the 1998 crop year.
    6. Section 6--Added provisions to increase the amount of premium 
for the 1998 crop year for producers who were insured for the 1997 crop 
year and who do not cancel their insurance for the 1998 crop year. Due 
to the change in dates that insurance attaches and ends and to avoid a 
gap in coverage, these producers will have an 18 month policy in effect 
for the 1998 crop year, therefore, a higher premium is required. For 
producers who were not insured for

[[Page 45371]]

the 1997 crop year but obtain insurance coverage prior to the sales 
closing date for the 1998 crop year, the premium will be determined in 
accordance with section 5 of the Basic Provisions (Sec. 457.8).
    7. Section 7--Include the insurable citrus tree type designations 
in the Special Provisions rather than in the Texas Citrus Tree Crop 
Provisions. This will avoid the need to amend the Texas Citrus Tree 
Crop Provisions if it is later determined that additional types need to 
be added.
    8. Section 8--Add a provision making interplanted citrus trees 
insurable if planted with another perennial crop, unless after an 
inspection, the insurance provider determines the citrus trees do not 
meet the requirements for insurability contained in the crop policy and 
FCIC approved procedures. This change will make insurance available to 
more producers.
    9. Section 9--Change the beginning of the insurance period from 
June 1 to November 21 and the end of the insurance period from May 31 
to November 20. For producers who were insured for the 1997 crop year 
and do not cancel their coverage for the 1998 crop year, however, the 
insurance period for the 1998 crop year only will begin on June 1, 
1997, and will end on November 20, 1998. This provision was changed 
because the June date corresponds with the beginning of the hurricane 
season and allowed producers to wait until a loss was likely before 
obtaining insurance. Provisions were also added to clarify the 
procedure for insuring acreage when an insurable share is acquired or 
relinquished after November 21, but on or before the acreage reporting 
date. Under the current Texas Citrus Tree 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. The transferee must be eligible for crop 
insurance.
    10. Section 10--Added a clause clarifying that failure of the 
irrigation water supply must be caused by an insured peril occurring 
during the insurance period.
    11. Section 12--Removed those provisions that limit coverage to 50, 
65, and 75 percent to allow for the computation of losses at additional 
coverage level computations if a decision is made to provide additional 
coverage levels.
    12. Section 13--Added 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 allows written agreements in relation 
to this policy consistent with FCIC's usual policy.

List of Subjects in 7 CFR Part 457

    Crop insurance, Texas citrus tree.

    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(1) and 1506(p).

    2. 7 CFR part 457 is amended by adding a new Sec. 457.106 to read 
as follows:


Sec. 457.106  Texas Citrus Tree Crop Insurance Provisions

    The Texas Citrus Tree Crop Insurance Provisions for the 1998 and 
succeeding crop years are as follows:

United States Department of Agriculture

Federal Crop Insurance Corporation

Texas Citrus Tree 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

    Bud union--The location on the tree trunk where a bud from one 
tree variety is grafted onto root stock of another variety.
    Crop year--For the 1998 crop year only, a period of time that 
begins on June 1, 1997, and ends on November 20, 1998, provided the 
acreage was insured for the 1997 crop year and you do not cancel 
your coverage for the 1998 crop year. In all other instances, a 
period of time that begins on November 21 of the calendar year prior 
to the year the insured crop normally blooms, and ends on November 
20 of the following calendar year. The crop year is designated by 
the year in which the insurance period ends.
    Days--Calendar days.
    Deductible--The amount determined by subtracting your coverage 
level percentage from 100 percent. For example, if you elected a 65 
percent coverage level, your deductible would be 35 percent 
(100%-65% = 35%).
    Dehorning--Cutting one or more scaffold limbs to a length that 
is not greater than \1/4\ the height of the tree before such 
cutting.
    Destroyed--Trees that are damaged to the extent that removal is 
necessary.
    Excess wind--A natural movement of air which has sustained 
speeds in excess of 58 miles per hour recorded at the U.S. Weather 
Service reporting station nearest to the crop at the time of crop 
damage.
    Freeze--The formation of ice in the cells of the trees caused by 
low air temperatures.
    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 trees to have normal growth and vigor and 
generally recognized by the Cooperative Extension Service as 
compatible with agronomic and weather conditions in the county.
    Interplanted--Acreage on which two or more crops are planted in 
a manner that does not permit separate agronomic maintenance of the 
insured crop.
    Irrigated practice--A method by which the normal growth and 
vigor of the insured trees is maintained by artificially applying 
adequate quantities of water during the growing season using 
appropriate systems at the proper times.
    Non-contiguous land--Any two or more tracts of land whose 
boundaries do not touch at any point, except that land separated 
only by a public or private right-of-way, waterway or an irrigation 
canal will be considered as contiguous.
    Scaffold limbs--Major limbs attached directly to the trunk.
    Set out--Transplanting the tree into the grove.
    Type--Classes of trees 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 
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 into a basic unit, that portion of the premium 
paid

[[Page 45372]]

for the purpose of electing optional units will be refunded to you 
for the units combined.
    (e) All optional units established for a crop year must be 
identified on the acreage report for that crop year.
    (f) Each optional unit must meet one or more of the following 
criteria as applicable:
    (1) 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
    (2) Optional Units on Acreage Located on Non-Contiguous Land: 
Instead of establishing optional units by section, section 
equivalent or FSA Farm Serial Number, optional units may be 
established if each optional unit is located on non-contiguous land.

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

    (a) In lieu of the requirement of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) 
of the Basic Provisions (Sec. 457.8), that prohibits you from 
selecting more than one coverage level for each insured crop, you 
may select a different coverage level for each type designated in 
the Special Provisions that you elect to insure.
    (b) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) 
of the Basic Provisions (Sec. 457.8):
    (1) If you insure trees planted at different population 
densities, the per acre amount of insurance for each population 
density must bear the same relationship (be the same percentage) to 
the maximum amount of insurance available for each population 
density as specified in the Actuarial Table. The amount of insurance 
for each population density must be multiplied by any applicable 
factor contained in section 3(b)(2).
    (2) The amount of insurance per acre will be the product 
obtained by multiplying the amount of insurance that is shown in the 
Actuarial Table for the level of coverage you select and applicable 
population density by:
    (i) Thirty-three percent (0.33) for the year of set out or the 
year following dehorning. (Insurance will be limited to this amount 
until trees that are set out are one year of age or older on the 
first day of the crop year);
    (ii) Sixty percent (0.60) for the first growing season after 
being set out or the second year following dehorning;
    (iii) Eighty percent (0.80) for the second growing season after 
being set out or the third year following dehorning; or
    (iv) Ninety percent (0.90) for the third growing season after 
being set out or the fourth year following dehorning.
    (3) If there is more than one population density in the unit, or 
if more than one factor contained in section 3(b)(2) is applicable, 
the amount of insurance per acre for each population density or 
factor, as appropriate, will be multiplied by the applicable number 
of insured acres. These results will then be added together to 
determine the amount of insurance for the unit.
    (4) The amount of insurance will be reduced proportionately for 
any unit on which the stand is less than 90 percent, based on the 
original planting pattern. For example, if the amount of insurance 
you selected is $2000 and the remaining stand is 85 percent of the 
original stand, the amount of insurance on which any indemnity will 
be based is $1700 ($2000 multiplied by 0.85).
    (5) If any insurable acreage of trees is set out after the first 
day of the crop year, and you elect to insure such acreage during 
that crop year, you must report to us within 72 hours after set out 
is completed for the unit the following: the acreage; practice; 
type; number of trees; date set out is completed; and your share.
    (6) Production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), are not 
applicable.
    (7) You must report, by the sales closing date contained in the 
Special Provisions, by type:
    (i) Any damage, removal of trees, change in practices, or any 
other circumstance that may reduce the expected yield below the 
yield upon which the amount of insurance is based, and the number of 
affected acres;
    (ii) The number and type of trees on insurable and uninsurable 
acreage;
    (iii) The date of original set out and the planting pattern;
    (iv) The date of replacement or dehorning, if more than ten 
percent (10%) of the trees on any unit have been replaced or 
dehorned in the previous 5 years; and
    (v) For the first year of insurance for acreage interplanted 
with another perennial crop, and anytime the planting pattern of 
such acreage is changed:
    (A) The age of the interplanted crop, and type if applicable;
    (B) The planting pattern; and
    (C) Any other information that we request in order to establish 
your amount of insurance.
    We will reduce the amount of insurance as necessary, based on 
our estimate of the effect of the following: interplanted perennial 
crop; removal of trees; damage; and change in practices and any 
other circumstance on the yield potential of the insured crop. If 
you fail to notify us of any circumstance that may reduce your yield 
potential, we will reduce your amount of insurance as necessary at 
any time we become aware of the circumstance.

4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date.

5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation 
and termination dates are November 20.

6. Annual Premium

    In addition to the provisions of section 5 (Annual Premium) of 
the Basic Provisions (Sec. 457.8), if you were insured for the 1997 
crop year and do not cancel your insurance coverage for the 1998 
crop year, the premium amount otherwise payable for the 1998 crop 
year will be increased by forty-six (46%) percent as a result of the 
additional six months of coverage for that crop year.

7. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all of each citrus 
tree type designated in the Special Provisions in the county for 
which a premium rate is provided by the actuarial table that you 
elect to insure:
    (1) In which you have an ownership share;
    (2) That are types adapted to the area;
    (3) That are set out for the purpose of harvesting as fresh 
fruit or for juice;
    (4) That are irrigated; and
    (5) That have the potential to produce at least 70 percent of 
the county average yield for the type and age, unless a written 
agreement is approved by us to insure the trees with less potential.
    (b) In addition to section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), we do not insure any citrus trees:
    (1) During the crop year the application for insurance is filed, 
unless we inspect the acreage and consider it acceptable; and
    (2) That have been grafted onto existing root stock or nursery 
stock within the one year period prior to the date insurance 
attaches.
    (c) We may exclude from insurance or limit the amount of 
insurance on any acreage which was not insured by us the previous 
year.

8. Insurable Acreage

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

9. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of 
the Basic Provisions (Sec. 457.8):
    (a) The insurance period is as follows:
    (1) For the 1998 crop year only, if you were insured for the 
1997 crop year and you do not cancel your coverage for the 1998 crop 
year, the insurance period will begin on June 1, 1997 and end on 
November 20, 1998; or
    (2) In all instances not covered by paragraph (a)(1) of this 
section, the insurance period will begin the later of the date we 
accept your application or November 21 of the calendar year prior to 
the year the insured crop normally blooms, and will end on November 
20 of the crop year.
    (b) If you acquire an insurable share in any insurable acreage 
after coverage begins, but on or before the acreage reporting date 
for the crop year, and after an inspection we consider the acreage 
acceptable, insurance will be considered to have attached to such

[[Page 45373]]

acreage on the calendar date for the beginning of the insurance 
period.
    (c) If you relinquish your insurable share on any insurable 
acreage of citrus trees on or before the acreage reporting date for 
the crop year, insurance will not be considered to have attached to, 
and no premium will be due, and no indemnity paid for such acreage 
for that crop year unless:
    (1) A transfer of coverage and right to an indemnity, or a 
similar form approved by us, is completed by all affected parties;
    (2) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (3) The transferee is eligible for crop insurance.

10. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur within the insurance 
period:
    (a) Excess moisture;
    (b) Excess wind;
    (c) Fire, unless weeds and other forms of undergrowth have not 
been controlled or pruning debris has not been removed from the 
grove;
    (d) Freeze;
    (e) Hail;
    (f) Tornado; or
    (g) Failure of the irrigation water supply, if caused by one of 
the causes of loss contained in (a) through (f) of this section that 
occurs during the insurance period.

11. Duties In The Event of Damage or Loss

    In addition to the provisions of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), in case of 
damage or probable loss, if you intend to claim an indemnity on any 
unit, you must allow us to inspect all insured acreage before 
pruning, dehorning, or removal of any damaged trees.

12. Settlement of Claim

    (a) In the event of damage covered by this policy, we will 
settle your claim on a unit basis by:
    (1) Determining the actual percent of damage for any tree and 
for the unit in accordance with subsections 12 (b), (c), and (d) of 
these provisions;
    (2) Subtracting your deductible from the percentage of damage 
for the unit;
    (3) Subtracting any percentage of damage paid previously in the 
same crop year from the result of (2);
    (4) Dividing the result of (3) by your coverage level 
percentage;
    (5) Multiplying the result of (4) by the amount of insurance per 
acre;
    (6) Multiplying the result of (5) by the number of insured 
acres; and
    (7) Multiplying the result of (6) by your share.
    (b) The percent of damage for any tree will be determined as 
follows:
    (1) For damage occurring during the year of set out (trees that 
have not been set out for at least one year at the time insurance 
attaches):
    (i) One-hundred percent (100%) whenever there is no live wood 
above the bud union.
    (ii) Ninety percent (90%) whenever there is less than twelve 
(12) inches of live wood above the bud union; or
    (iii) Zero percent (0%) (the tree will be considered undamaged) 
if more than twelve (12) inches of wood above the bud union is 
alive; or
    (2) For damage occurring in any year following the year of set 
out, the percentage of damage will be determined by dividing the 
number of scaffold limbs damaged in an area from the trunk to a 
length equal to one-fourth (\1/4\) the height of the tree, by the 
total number of scaffold limbs before damage occurred. Whenever this 
percentage is over eighty percent (80%), the tree will be considered 
as one-hundred percent (100%) damaged.
    (c) The percent of damage for the unit will be determined by 
computing the average of the determinations made for the individual 
trees.
    (d) The percent of damage on the unit will be reduced by the 
percentage of damage due to uninsured causes.

13. 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 
13(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, D.C., on August 22, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-22032 Filed 8-28-96; 8:45 am]
BILLING CODE 3410-FA-P