[Federal Register Volume 62, Number 1 (Thursday, January 2, 1997)]
[Proposed Rules]
[Pages 48-54]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33067]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 62, No. 1 / Thursday, January 2, 1997 / 
Proposed Rules  

[[Page 48]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 443 and 457

RIN 0563-AA78


Hybrid Seed Crop Insurance Regulations; and Common Crop Insurance 
Regulations, Hybrid Corn Seed 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 hybrid corn seed. 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, include the 
current Hybrid Seed Crop Insurance Regulations with the Common Crop 
Insurance Policy for ease of use and consistency of terms, and to 
restrict the effect of the current hybrid corn seed crop insurance 
regulation to the 1997 and prior crop years.

DATES: Written comments, data, and opinions on this proposed rule will 
be accepted until close of business March 3, 1997 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 March 3, 1997.

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, United States 
Department of Agriculture, 14th and Independence Avenue, S.W., 
Washington, D.C., 8:15 a.m. to 4:45 p.m., est, Monday through Friday, 
except holidays.

FOR FURTHER INFORMATION CONTACT: Ron Nesheim, Program Analyst, Research 
and Development Division, Product Development Branch, Federal Crop 
Insurance Corporation, at the Kansas City, MO, address listed above, 
telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

    The Office of Management and Budget (OMB) has determined this rule 
to be exempt for the purposes of Executive Order No. 12866, and, 
therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    The title of this information collection is ``Catastrophic Risk 
Protection Plan and Related Requirements including, Common Crop 
Insurance Regulations; Hybrid Corn Seed Crop Insurance Provisions.'' 
The information to be collected includes a crop insurance application 
and an 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 hybrid corn seed 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 pubic for this information 
collection is 2,676,932 hours.
    FCIC is requesting comments 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 or other forms of information 
gathering technology.
    Comments regarding paperwork reduction should be submitted to the 
Desk Officer of Agriculture, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, D.C. 20503.
    The Office of Management and Budget (OMB) is required to make a 
decision concerning the collections 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 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 Mandates 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. 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 
implication 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. New provisions included in this rule will not 
impact small entities to a greater extent than large entities. Under 
the current regulations, a producer is required to complete an 
application and acreage

[[Page 49]]

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 producer must also annually certify to the 
previous years production if adequate records are available to support 
the certification. The producer must maintain the production records to 
support the certified information for at least three years. This 
regulation does not alter those requirements. The amount of work 
required of the insurance companies 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 published at 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 457.152, Hybrid Corn Seed Crop 
Insurance Provisions. The new provisions will be effective for the 1998 
and succeeding crop years. These provisions will replace and supersede 
the current provisions for insuring hybrid corn seed found at 7 CFR 
part 443 (Hybrid Seed Crop Insurance Regulations). FCIC also proposes 
to amend 7 CFR part 443 to limit its effect to the 1997 and prior crop 
years. FCIC will later publish a regulation to remove part 443 and 
reserve that part.
    This rule makes minor editorial and format changes to improve the 
Hybrid Corn Seed Crop Insurance Regulation's compatibility with the 
Common Crop Insurance Policy. In addition, FCIC is proposing 
substantive changes in the provisions for insuring hybrid corn seed as 
follows:
    1. Section 1--Add definitions for the terms adjusted yield, bushel, 
certified seed test, county yield, FSA, field run, good farming 
practices, hybrid corn seed processor contract, insurable interest, 
interplanted, local market price, minimum guaranteed payment, planted 
acreage, planting pattern, practical to replant, seed amount, and 
written agreement for clarification.
    2. Section 2--Unit division provisions are amended to include a 
producer's reporting responsibilities to qualify for optional units. In 
addition, section 2(e)(4)(ii) clarifies that non-irrigated acreage that 
is not part of a field in which a center pivot irrigation system is 
used may qualify as a separate optional unit. This makes unit division 
consistent with other row crops. Also, clarifies that optional units 
are available if the hybrid corn seed processor contract specifies that 
it is a specific number of acres that are under contract and not a 
specified amount of production.
    3. Section 4--Change the contract change date to November 30 in 
order to maintain an adequate time period between the contract change 
date and the revised cancellation date.
    4. Section 5--Change the cancellation and termination dates to 
March 15. This change is necessary to standardize the cancellation and 
termination dates with the sales closing dates which were changed to 30 
days earlier for spring planted crops to comply with the requirements 
of the Federal Crop Insurance Reform Act of 1994.
    5. Section 6--Require the producer to certify that a hybrid corn 
seed processor contract has been executed and certify the amount of any 
minimum guaranteed payment from the seed company. Certification of a 
hybrid corn seed processor contract on or before the acreage reporting 
date is needed to establish insurability of the crop before a loss is 
likely and ensures a market for the crop. The producer must also 
certify to any minimum guaranteed payment under the contract because a 
minimum guaranteed payment will affect insurance premium and the amount 
of indemnity.
    6. Section 7(c)--Specify conditions under which a seed producer who 
is also a seed company can establish an insurable interest in the 
insured crop. There is an inherent conflict of interest when the 
producer is also the processor who will provide the records of the 
producer. These conditions are needed to ensure the eligibility of the 
processor for crop insurance.
    7. Section 8(c)--Clarify that any acreage damaged prior to the 
final planting date must be replanted unless it is not practical to 
replant.
    8. Section 9(b)--Specify that the calendar date for the end of the 
insurance period is October 31. The current policy language refers to 
the date contained in the Actuarial Table.
    9. Section 11(a)--Clarify the size of representative crop samples 
required when damage is discovered.
    10. Section 12(e)--Clarify the types of production that will be 
considered seed production to count.
    11. Section 12(g)--Change the adjustment level for high-moisture 
shelled hybrid corn seed from 15.5 percent to 15.0 percent. This change 
is consistent with changes in provisions for insuring field corn. 
Moisture adjustment calculations for ear corn are also changed. The 
current policy states ``the weight of ear corn to equal one bushel of 
shelled corn will be increased 2 pounds for each percentage point of 
moisture in excess of 14.0 percent.'' This conversion factor is changed 
to 1.5 pounds for each percentage point of moisture in excess of 14.0 
percent because research has shown the existing formula overcompensates 
insureds for high moisture seed corn. The proposed provisions also 
allow use of the seed company's moisture conversion charts if the 
charts were used to determine the ``approved yield.''
    12. Section 14. Add provisions for providing insurance coverage by 
written agreement. FCIC has a longstanding policy of permitting certain 
modification of the insurance contract by written agreement for some 
policies.

[[Page 50]]

This amendment allows FCIC to tailor the policy to a specific insured 
in certain instances. The new section will cover application for, and 
duration of, written agreements.

List of Subjects in 7 CFR Parts 443 and 457

    Crop insurance, Hybrid seed crop insurance regulations, Hybrid corn 
seed.

Proposed Rule

    Accordingly, for the reasons set forth in the preamble, the Federal 
Crop Insurance Corporation hereby proposes to amend 7 CFR parts 443 and 
457 as follows:

PART 443--HYBRID SEED CROP INSURANCE REGULATIONS

    1. The authority citation for 7 CFR part 443 continues to read as 
follows:

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

    2. The subpart heading preceding Sec. 443.1 is revised to read as 
follows:

Subpart--Regulations for the 1986 through 1997 Crop Years.

    3. Section 443.7 is amended by revising the introductory text of 
paragraph (d) to read as follows:


Sec. 443.7  The application and policy

* * * * *
    (d) The application for the 1986 through 1997 crop years is found 
at subpart D of part 400, General Administrative Regulations (7 CFR 
400.37 and 400.38). The provisions of the Hybrid Seed Crop Insurance 
Regulations for the 1986 through 1997 crop years are as follows:
* * * * *

PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE 
1994 AND SUBSEQUENT CONTRACT YEARS

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

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

    4. 7 CFR part 457 is amended by adding a new Sec. 457.152 to read 
as follows:


Sec. 457.152  Hybrid Corn Seed Crop Insurance Provisions

    The Hybrid Corn Seed Crop Insurance Provisions for the 1998 and 
succeeding crop years are as follows:

    FCIC policies:

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

    Reinsured policies:

(Appropriate title for insurance provider)

    Both FCIC and reinsured policies:

Hybrid Corn Seed 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

    Adjusted yield--The yield per acre that results from multiplying 
the approved yield by the coverage level percentage.
    Amount of insurance per acre--The number of dollars determined 
by multiplying the county yield for the coverage level you select by 
the price election you select, and subtracting any minimum 
guaranteed payment. If the minimum guaranteed payment is stated in a 
unit of measure other than dollars, it will be converted to a dollar 
amount by multiplying the number of bushels guaranteed by the price 
election you selected.
    Approved yield--The yield per acre that a specific type or 
variety is expected to produce determined from yield records 
provided by the seed company or other acceptable information.
    Bushel--Fifty-six pounds avoirdupois of shelled corn, 70 pound 
avoirdupois of ear corn, or the number of pounds determined under 
the seed company's normal conversion chart when the company's 
conversion chart is used to determine the approved yield and the 
claim for indemnity.
    Certified seed test--A warm germination test performed according 
to specifications of the ``Rules for Testing Seeds'' of the 
Association of Official Seed Analysts.
    Commercial hybrid corn seed--The offspring produced by crossing 
a male and female parent plant, each having a different genetic 
character. This offspring is the product intended for use by an 
agricultural producer to produce a commercial field corn crop for 
grain.
    County yield--A yield contained in the Actuarial Table that is 
used to calculate your amount of insurance.
    Days--Calendar days.
    Dollar value per bushel--The value determined by dividing your 
amount of insurance for timely planted acreage by the adjusted 
yield.
    FSA--The Farm Service Agency, an agency of the United States 
Department of Agriculture, or a successor agency.
    Female parent plants--Corn plants that are grown for the purpose 
of producing commercial hybrid corn seed and have had their stamens 
removed.
    Field run--Commercial hybrid corn seed production before it has 
been processed or screened.
    Final planting date--The date contained in the Special 
Provisions for the insured crop by which the crop must initially be 
planted in order to be insured for the full amount of insurance per 
acre.
    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 amount of 
insurance, or are required by the hybrid corn seed processor 
contract and recognized by the Cooperative State Research, 
Education, and Extension Service as compatible with agronomic and 
weather conditions in the county.
    Harvest--Combining, threshing or picking of the female parent 
plants to obtain commercial hybrid corn seed.
    Hybrid corn seed processor contract--A written agreement between 
the hybrid corn seed crop producer and a seed company containing, at 
a minimum:
    (a) The producer's promise to plant and grow male and female 
parent plants, and to deliver all commercial hybrid corn seed 
produced from such plants to the seed company;
    (b) The seed company's promise to purchase all the commercial 
hybrid corn seed produced by the producer; and
    (c) Either a fixed price per unit of measure (bushels, 
hundredweight, etc.) of the commercial hybrid corn seed or a formula 
to determine the value of such seed. Any formula for establishing 
the value must be based on data provided by a public third party 
that establishes or provides pricing information to the general 
public, based on prices paid in the open market (e.g., commodity 
futures exchanges) to be acceptable for the purpose of this policy.
    Inadequate germination--Germination of less than 80 percent of 
the commercial hybrid corn seed as determined by using a certified 
seed test on clean seed.
    Insurable interest--Your share of the financial loss that occurs 
in the event seed production is reduced by a cause of loss defined 
under this crop insurance contract.
    Interplanted--Acreage on which two or more crops are planted in 
a manner that does not permit separate agronomic maintenance or 
harvest of the insured crop.
    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 amount of insurance on the irrigated acreage 
planted to the insured crop.
    Late planted--Acreage planted to the insured crop during the 
late planting period.
    Late planting period--The period that begins the day after the 
final planting date for the insured crop and ends 25 days after the 
final planting date.
    Local market price--The cash price offered by buyers in the area 
for any production from the female parent plants that is not 
considered commercial hybrid corn seed under the terms of this 
policy.
    Male parent plants--Corn plants grown for the purpose of 
pollinating female parent plants.
    Minimum guaranteed payment--A minimum amount (usually stated in 
dollars or bushels) specified in your hybrid corn seed processor 
contract that will be paid or credited to you by the seed company 
regardless of the quantity of seed produced.
    Non-seed amount--The dollar amount obtained by multiplying the 
number of bushels of non-seed production to count by

[[Page 51]]

the local market price determined on the earlier of the date the 
non-seed production is sold or the date of final inspection for the 
unit.
    Planted acreage--Land in which seed has been placed by a machine 
appropriate for the insured crop and planting method, at the correct 
depth, into a seedbed that has been properly prepared for the 
planting method and production practice. The insured crop must be 
planted in rows wide enough to permit mechanical cultivation. 
Acreage planted in any other manner will not be insurable unless 
otherwise provided by the Special Provisions or by written 
agreement.
    Planting pattern--The arrangement of the rows of the male and 
female parent plants in a field. An example of a planting pattern is 
four consecutive rows of female parent plants, two consecutive rows 
of male parent plants.
    Practical to replant--In lieu of the definition of ``Practical 
to replant'' contained in section 1 of the Basic Provisions 
(Sec. 457.8), practical to replant is defined as our determination, 
after loss or damage to the insured crop, based on factors, 
including but not limited to moisture availability, condition of the 
field, time to crop maturity, and marketing window, that replanting 
to the insured crop will allow the crop to adequately pollinate and 
attain maturity prior to the calendar date for the end of the 
insurance period. It will not be considered practical to replant 
after the end of the late planting period unless replanting is 
generally occurring in the area. Determinations of practical to 
replant will take into consideration the planting dates specified in 
the hybrid corn seed processor contract in accordance with section 
8(c).
    Prevented planting--Inability to plant:
    (a) The female parent plant seed with proper equipment by:
    (1) The final planting date designated in the Special Provisions 
for the insured crop in the county; or
    (2) The end of the late planting period; or
    (b) The male parent plant seed with proper equipment at a time 
sufficient to assure adequate pollination of the female parent 
plants in accordance with the production management practices of the 
seed company.
    You must have been unable to plant the female or male parent 
plant seed due to an insured cause of loss that has prevented the 
majority of producers in the surrounding area from planting the same 
crop.
    Sample--For the purpose of the certified seed test, at least 3 
pounds of field run shelled corn for each variety of commercial 
hybrid corn seed grown on the unit.
    Seed amount--The dollar amount obtained by multiplying the 
number of bushels of seed production to count for each type or 
variety of commercial hybrid corn seed grown on the unit by the 
applicable dollar value per bushel for that type or variety, and 
totaling the products of each type or variety.
    Seed company--A corporation that possesses all licenses for 
marketing commercial hybrid corn seed required by the state in which 
it is domiciled or operates, and which possesses or has contracted 
facilities with enough storage and drying capacity to accept and 
process the insured crop within a reasonable amount of time after 
harvest.
    Seed production--All seed produced by female parent plants with 
a germination rate of at least 80 percent, as determined by a 
certified seed test.
    Shelled corn--Kernels that have been removed from the cob.
    Timely planted--Planted on or before the final planting date 
designated in the Special Provisions for the insured crop in the 
county.
    Variety--The name, number or code assigned to a specific genetic 
cross by the seed company or the Special Provisions for the insured 
crop in the county.
    Written agreement--A written document that alters designated 
terms of this policy in accordance with section 14.

2. Unit Division

    (a) Unless limited by the Special Provisions, a unit as defined 
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), 
(basic unit) may be divided into optional units only if, for each 
optional unit, you meet all the conditions of this section or if a 
written agreement to such division exists.
    (b) Optional units are available if the hybrid corn seed 
processor contract specifies that it is a specific number of acres 
that are under contract and not a specified amount of production.
    (c) 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 additional 
premium paid for the optional units that have been combined will be 
refunded to you.
    (d) All optional units you selected for the crop year must be 
identified on the acreage report for that crop year.
    (e) The following requirements must be met for each optional 
unit:
    (1) You must have records, which can be independently verified, 
of planted acreage and production for each optional unit for at 
least the last crop year used to determine your amount of insurance.
    (2) You must plant the crop in a manner that results in a clear 
and discernable break in the planting pattern at the boundaries of 
each optional unit;
    (3) 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
    (4) Each optional unit must meet one or more 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 discernable, each 
optional unit must be located in a separate farm identified by a 
unique FSA Farm Serial Number.
    (ii) Optional Units on Acreage Including Both Irrigated and Non-
irrigated Practices: In addition to, or instead of, establishing 
optional units by section, section equivalent, or FSA Farm Serial 
Number, optional units may be based on irrigated acreage or non-
irrigated acreage if both are located in the same section, section 
equivalent, or FSA Farm Serial Number. To qualify as separate 
irrigated and non-irrigated optional units, the non-irrigated 
acreage may not continue into the irrigated acreage in the same rows 
or planting pattern. The irrigated acreage may not extend beyond the 
point at which the irrigation system can deliver the quantity of 
water needed to produce the yield on which the guarantee is based, 
except the corners of a field in which a center pivot irrigation 
system is used will be considered as irrigated acreage if separate 
acceptable records of production from the corners are not provided. 
If the corners of a field in which a center-pivot irrigation system 
is used do not qualify as a separate non-irrigated optional unit, 
they will be a part of the unit containing the irrigated acreage. 
However, non-irrigated acreage that is not a part of a field in 
which a center-pivot irrigation system is used may qualify as a 
separate optional unit provided that all requirements of this 
section are met.

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 for all the hybrid corn seed in the county insured under 
this policy unless the Special Provisions provide different price 
elections by type or variety, in which case you may select one price 
election for each hybrid corn seed type or variety designated in the 
Special Provisions. The price election you choose for each type or 
variety must have the same percentage relationship to the maximum 
price offered by us for each type or variety. For example, if you 
choose 100 percent of the maximum price election for one specific 
type or variety, you must also choose 100 percent of the maximum 
price election for all other types or varieties.
    (b) The 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 
to this contract.

4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is November 30 
preceding the cancellation date.

5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the

[[Page 52]]

Basic Provisions (Sec. 457.8), the cancellation and termination 
dates are March 15.

6. Report of Acreage

    In addition to the requirements of section 6 (Report of Acreage) 
of the Basic Provisions (Sec. 457.8), you must:
    (a) Report, by type and variety, the location and insurable 
acreage of the insured crop;
    (b) Report any acreage that is uninsured, including that portion 
of the total acreage occupied by male parent plants; and
    (c) Certify that you have a hybrid corn seed processor contract 
and, if applicable, report the amount of any minimum guaranteed 
payment.

7. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the female 
parent plants in the county for which a premium rate is provided by 
the actuarial table:
    (1) In which you have a share;
    (2) That are grown under a hybrid corn seed processor contract 
executed before the acreage reporting date;
    (3) That are planted for harvest as commercial hybrid corn seed 
in accordance with the requirements of the hybrid corn seed 
processor contract; and
    (4) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (i) Planted with a mixture of female and male parent seed in the 
same row;
    (ii) Planted for any purpose other than for commercial hybrid 
corn seed;
    (iii) Interplanted with another crop; or
    (iv) Planted into an established grass or legume.
    (b) An instrument in the form of a ``lease'' under which you 
retain control of the acreage on which the insured crop is grown and 
that provides for delivery of the crop under substantially the same 
terms as a hybrid corn seed processor contract will be treated as a 
contract under which you have an insurable interest in the crop.
    (c) A commercial hybrid corn seed producer who is also a 
commercial hybrid corn seed company may be able to establish an 
insurable interest if the following requirements are met:
    (1) The seed company must be a corporation and have an insurable 
interest in the hybrid corn seed crop;
    (2) The Board of Directors of the seed company must have 
instituted a corporate resolution that sets forth essentially the 
same terms as a hybrid corn seed processor contract. Such corporate 
resolution will be considered a contract under the terms of the 
hybrid corn seed crop insurance policy;
    (3) Sales records for at least the previous years' seed 
production must be provided to confirm that the seed company has 
produced and sold seed. If such records are not available, the crop 
may only be insured under the Coarse Grains Crop Provisions; and
    (4) Our inspection of the storage and drying facilities 
determines that they satisfy the requirements for a seed company.

8. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8), we will not insure any 
acreage:
    (a) Planted and occupied exclusively by male parent plants;
    (b) Not in compliance with the rotation requirements contained 
in the Special Provisions or, if applicable, required by the hybrid 
corn seed processor contract; or
    (c) Of the insured crop damaged before the final planting date, 
to the extent that the remaining stand will not produce at least 90 
percent of the adjusted yield, unless such acreage is replanted or 
we agree that it is not practical to replant. If we determine that 
it is practical to replant and the seed company will not extend the 
planting date stipulated in the hybrid corn seed processor contract, 
we will delete the affected acreage from your report of acreage, and 
that acreage will not be insured under these crop provisions.

9. Insurance Period

    (a) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), insurance attaches 
after:
    (1) The female parent plant seed is completely planted in 
accordance with the hybrid corn seed processor contract and the 
production practices of the seed company, on or before the final 
planting date designated in the Hybrid Corn Seed Special Provisions, 
except as allowed in section 13(c); and
    (2) The male parent plant seed is completely planted in 
accordance with production practices for the variety being produced.
    (b) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the calendar date for 
the end of the insurance period is the October 31 immediately 
following planting.

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) Adverse weather conditions;
    (2) Fire;
    (3) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (4) Plant disease, but not damage due to insufficient or 
improper application of disease control measures;
    (5) Wildlife;
    (6) Earthquake;
    (7) Volcanic eruption; or
    (8) 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 not insured against under 
section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we 
will not insure against any loss of production due to:
    (1) The use of unadapted, incompatible, or genetically deficient 
male or female parent plant seed;
    (2) Frost or freeze after the date set by the Special 
Provisions;
    (3) Failure to follow the requirements stated in the hybrid corn 
seed processor contract or production management practices of the 
seed company;
    (4) Inadequate germination, even if it's the result of an 
insured cause of loss, unless you have provided adequate notice 
under section 11(b)(1) and the crop is inspected and the loss is 
appraised by us before harvest is completed; or
    (5) Failure to plant the male parent plant seed at a time or in 
a manner sufficient to assure adequate pollination of the female 
parent plants, unless you are prevented from planting the male 
parent plant seed.

11. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 (Duties in 
the Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), 
the representative samples of the unharvested crop must be at least 
one complete planting pattern of the male and female parent plant 
rows, and extend the entire length of each field in the unit. The 
samples must not be harvested or destroyed until the earlier of our 
inspection or 15 days after harvest of the balance of the unit is 
completed.
    (b) In addition to your duties under section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8):
    (1) You must give us notice of probable loss at least 15 days 
before the beginning of harvest if you anticipate inadequate 
germination on any unit; and
    (2) You must provide a completed copy of your hybrid corn seed 
processor contract.

12. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units 
for which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled 
production to such units in proportion to our liability on the 
harvested acreage for the units.
    (b) You will not receive an indemnity payment on a unit if the 
seed company refuses to provide us with records we require to 
determine the dollar value per bushel of production for each 
variety.
    (c) In the event of loss or damage covered by this policy, we 
will settle your claim on any unit by:
    (1) Multiplying the insured acreage by its respective amount of 
insurance per acre;
    (2) Subtracting the total of production to count for the seed 
amount and the non-seed amount from the result of section 12(c)(1); 
and
    (3) Multiplying the result of section 12(c)(2) by your share.
    (d) The total production (bushels) to count from all insurable 
acreage on the unit will include all seed and non-seed production as 
specified in section 12 (e) through (g) below.
    (e) Production to be counted as seed production will include:
    (1) All appraised production as follows:
    (i) Not less than the adjusted yield for acreage:
    (A) That is abandoned;
    (B) Put to another use without our consent;
    (C) That is damaged solely by uninsured causes; or
    (D) For which you fail to provide acceptable production records;
    (ii) Production lost due to uninsured causes;
    (iii) Mature unharvested production with a germination rate of 
at least 80 percent of the

[[Page 53]]

commercial hybrid corn seed as determined by a certified seed test. 
Any such production may be adjusted in accordance with section 
12(g);
    (iv) Immature appraised production;
    (v) Potential production on insured acreage that you intend to 
put to another use or abandon, if you and we agree on the appraised 
amount of production. Upon such agreement, the insurance period for 
that acreage will end if you put the acreage to another use or 
abandon the crop. If agreement on the appraised amount of production 
is not reached:
    (A) If you do not elect to continue to care for the crop, we may 
give you consent to put the acreage to another use if you agree to 
leave intact, and provide sufficient care for, representative 
samples of the crop in locations acceptable to us (The amount of 
production to count for such acreage will be based on the harvested 
production or appraisals from the samples at the time harvest should 
have occurred. If you do not leave the required samples intact, or 
fail to provide sufficient care for the samples, our appraisal made 
prior to giving you consent to put the acreage to another use will 
be used to determine the amount of production to count); or
    (B) If you elect to continue to care for the crop, the amount of 
production to count for the acreage will be the harvested 
production, or our reappraisal if additional damage occurs and the 
crop is not harvested; and
    (2) Harvested production that you deliver as commercial hybrid 
corn seed to the seed company stated in your hybrid corn seed 
processor contract, regardless of quality, unless the production has 
inadequate germination.
    (f) Production to be counted as non-seed production will include 
all harvested or mature appraised production that does not qualify 
as seed production to count as specified in section 12(e). Any such 
production may be adjusted in accordance with section 12(g).
    (g) For the purpose of determining the quantity of mature 
production:
    (1) Shelled commercial hybrid corn seed will be:
    (i) Increased 0.12 percent for each 0.1 percentage point of 
moisture below 15 percent; or
    (ii) Decreased 0.12 percent for each 0.1 percentage point of 
moisture in excess of 15 percent.
    (2) The weight of ear corn required to equal one bushel of 
shelled corn seed will be increased 1.5 pounds for each full 
percentage point of moisture in excess of 14 percent, and any 
portion of a percentage point will be disregarded. The moisture 
content of ear corn will be determined from a shelled sample of the 
ear corn.
    (3) When records of commercial hybrid corn seed production 
provided by the seed company have been adjusted to a shelled corn 
basis of 15.0 percent moisture and 56 pound avoirdupois bushels, 
sections 12(g) (1) and (2) above will not apply to harvested 
production. In such cases, records of the seed company used for 
determining the next year's approved yield will be used to determine 
the amount of production to count; provided, such production records 
are calculated on the same basis as that used to determine the 
approved yield.

13. Late Planting and Prevented Planting

    (a) In lieu of provisions contained in the Basic Provisions 
(Sec. 457.8) regarding acreage initially planted after the final 
planting date and the applicability of a Late Planting Agreement 
Option, insurance will be provided for acreage planted to the 
insured crop during the late planting period (see section 13(c)), 
and acreage you were prevented from planting (see section 13(d)). 
These coverages provide reduced amounts of insurance. The premium 
amount for late planted acreage and eligible prevented planting 
acreage will be the same as that for timely planted acreage. If the 
amount of premium you are required to pay (gross premium less our 
subsidy) for late planted acreage or prevented planting acreage 
exceeds the liability on such acreage, coverage for those acres will 
not be provided, no premium will be due, and no indemnity will be 
paid for such acreage.
    (b) You must provide written notice to us not later than the 
acreage reporting date if you were prevented from planting.
    (c) Late Planting
    (1) For hybrid corn seed acreage planted during the late 
planting period, the amount of insurance for each acre will be 
reduced for each day planted after the final planting date by:
    (i) One percent per day for the 1st through the 10th day; and
    (ii) Two percent per day for the 11th through the 25th day.
    (2) In addition to the requirements of section 6 (Report of 
Acreage) of the Basic Provisions (Sec. 457.8), you must report the 
dates the acreage is planted within the late planting period.
    (3) If planting of hybrid corn seed continues after the final 
planting date, or you are prevented from planting during the late 
planting period, the acreage reporting date will be the later of:
    (i) The acreage reporting date contained in the Special 
Provisions for the insured crop; or
    (ii) Five days after the end of the late planting period.
    (d) Prevented Planting (Including Planting After the Late 
Planting Period)
    (1) If you were prevented from timely planting hybrid corn seed, 
you may elect:
    (i) To plant hybrid corn seed during the late planting period. 
The amount of insurance for such acreage will be determined in 
accordance with section 13(c)(1);
    (ii) Not to plant this acreage to any crop except a cover crop 
not for harvest. You may also elect to plant the insured crop after 
the late planting period. In either case, the amount of insurance 
for such acreage will be 40 percent of the amount of insurance for 
timely planted acres. For example, if your amount of insurance for 
timely planted acreage is $300 per acre, your prevented planting 
amount of insurance would be $120 per acre ($300 multiplied by 
0.40). If you elect to plant the insured crop after the late 
planting period, production to count for such acreage will be 
determined in accordance with section 12; or
    (iii) Not to plant the intended crop but plant a substitute crop 
for harvest, in which case:
    (A) No prevented planting amount of insurance will be provided 
for such acreage if the substitute crop is planted on or before the 
10th day following the final planting date for the insured crop; or
    (B) An amount of insurance equal to 20 percent of the amount of 
insurance for timely planted acres will be provided for such 
acreage, if the substitute crop is planted after the 10th day 
following the final planting date for the insured crop. If you 
elected the Catastrophic Risk Protection Endorsement or excluded 
this coverage, and plant a substitute crop, no prevented planting 
coverage will be provided. For example, if your amount of insurance 
for timely planted acreage is $300 per acre, your prevented planting 
amount of insurance would be $60 per acre ($300 multiplied by 0.20). 
You may elect to exclude prevented planting coverage when a 
substitute crop is planted for harvest and receive a reduction in 
the applicable premium rate. If you wish to exclude this coverage, 
you must so indicate, on or before the sales closing date, on your 
application or on a form approved by us. Your election to exclude 
this coverage will remain in effect from year to year unless you 
notify us in writing on our form by the applicable sales closing 
date for the crop year for which you wish to include this coverage. 
All acreage of the crop insured under this policy will be subject to 
this exclusion.
    (2) Amounts of insurance for timely, late, and prevented 
planting acreage within a unit will be combined to determine the 
amount of insurance for the unit. For example, assume you insure one 
unit in which you have a 100 percent share. The unit consists of 185 
acres of the same type and variety of which 150 acres are occupied 
by the female parent plants. (The acreage occupied by the male 
parent plants (35 acres) is not insurable, and is not eligible for 
coverage under this section.) The unit consists of 150 acres, of 
which 50 acres were planted timely, 50 acres were planted 7 days 
after the final planting date (late planted), and 50 acres were not 
planted but are eligible for a prevented planting amount of 
insurance. The amount of insurance for the unit will be computed as 
follows:
    (i) For the timely planted acreage, multiply the per acre amount 
of insurance for timely planted acreage by the 50 acres planted 
timely;
    (ii) For the late planted acreage, multiply the per acre amount 
of insurance for timely planted acreage by 93 percent, and multiply 
the result by the 50 acres planted late; and
    (iii) For prevented planting acreage, multiply the per acre 
amount of insurance for timely planted acreage by:
    (A) Forty percent and multiply the result by the 50 acres you 
were prevented from planting, if the acreage is eligible for 
prevented planting coverage, and if the acreage is left idle for the 
crop year, or if a cover crop is planted not for harvest. Prevented 
planting compensation hereunder will not be denied because the cover 
crop is hayed or grazed; or

[[Page 54]]

    (B) Twenty percent and multiply the result by the 50 acres you 
were prevented from planting, if the acreage is eligible for 
prevented planting coverage, and if you elect to plant a substitute 
crop for harvest after the 10th day following the final planting 
date for the insured crop. (This paragraph (B) is not applicable, 
and prevented planting coverage is not available under these crop 
provisions, if you elected the Catastrophic Risk Protection 
Endorsement or you elected to exclude prevented planting coverage 
when a substitute crop is planted (see section 13(d)(1)(iii)).
    Your premium will be based on the result of multiplying the per 
acre amount of insurance for timely planted acreage by the 150 acres 
in the unit.
    (3) You must have the inputs available to plant and produce the 
intended crop with the expectation of at least producing the 
approved yield. Proof that these inputs were available may be 
required.
    (4) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the insurance period 
for prevented planting coverage begins:
    (i) On the sales closing date contained in the Special 
Provisions for the insured crop in the county for the crop year the 
application for insurance is accepted; or
    (ii) For any subsequent crop year, on the sales closing date for 
the insured crop in the county for the previous crop year, provided 
continuous coverage has been in effect since that date. For example: 
If you make application and purchase insurance for hybrid corn seed 
for the 1998 crop year, prevented planting coverage will begin on 
the 1998 sales closing date for hybrid corn seed in the county. If 
the coverage remains in effect for the 1999 crop year (is not 
terminated or canceled during or after the 1998 crop year), 
prevented planting coverage for the 1999 crop year began on the 1998 
sales closing date. Cancellation for the purpose of transferring the 
policy to a different insurance provider when there is no lapse in 
coverage will not be considered terminated or canceled coverage for 
the purpose of the preceding sentence.
    (5) The acreage to which prevented planting coverage applies 
will not exceed the total eligible acreage on all FSA Farm Serial 
Numbers in which you have a share, adjusted for any reconstitution 
that may have occurred on or before the sales closing date. Eligible 
acreage for each FSA Farm Serial Number is determined as follows:
    (i) If you participate in any program administered by the United 
States Department of Agriculture that limits the number of acres 
that may be planted for the crop year, the acreage eligible for 
prevented planting coverage will not exceed the total acreage 
permitted to be planted to the insured crop.
    (ii) If you do not participate in any program administered by 
the United States Department of Agriculture that limits the number 
of acres that may be planted, and unless we agree in writing on or 
before the sales closing date, eligible acreage will not exceed the 
greater of:
    (A) The number of acres planted to hybrid corn seed on the FSA 
Farm Serial Number during the previous crop year; or
    (B) One-hundred percent of the simple average of the number of 
acres planted to hybrid corn seed during the crop years that you 
certified to determine your yield.
    (iii) Acreage intended to be planted under an irrigated practice 
will be limited to the number of acres for which you had adequate 
irrigation facilities prior to the insured cause of loss which 
prevented you from planting.
    (iv) A prevented planting amount of insurance will not be 
provided for any acreage:
    (A) That does not constitute at least 20 acres or 20 percent of 
the acreage in the unit, whichever is less (Acreage that is less 
than 20 acres or 20 percent of the acreage in the unit will be 
presumed to have been intended to be planted to the insured crop 
planted in the unit, unless you can show that you had the inputs 
available before the final planting date to plant and produce 
another insured crop on the acreage);
    (B) For which the actuarial table does not designate a premium 
rate unless a written agreement designates such premium rate;
    (C) Used for conservation purposes or intended to be left 
unplanted under any program administered by the United States 
Department of Agriculture;
    (D) On which another crop is prevented from being planted, if 
you have already received a prevented planting indemnity, guarantee 
or amount of insurance for the same acreage in the same crop year, 
unless you provide adequate records of acreage and production 
showing that the acreage was double-cropped in each of the last 4 
years in which the insured crop was grown on the acreage;
    (E) On which the insured crop is prevented from being planted, 
if any other crop is planted and fails, or is planted and harvested, 
hayed or grazed on the same acreage in the same crop year, (other 
than a cover crop as specified in paragraph (d)(2)(iii)(A) of this 
section, or a substitute crop allowed in paragraph (d)(2)(iii)(B) of 
this section), unless you provide adequate records of acreage and 
production showing that the acreage was double-cropped in each of 
the last 4 years in which the insured crop was grown on the acreage;
    (F) When coverage is provided under the Catastrophic Risk 
Protection Endorsement if you plant another crop for harvest on any 
acreage you were prevented from planting in the same crop year, even 
if you have a history of double-cropping. If you have a Catastrophic 
Risk Protection Endorsement and receive a prevented planting 
indemnity, guarantee, or amount of insurance for a crop and are 
prevented from planting another crop on the same acreage, you may 
only receive the prevented planting indemnity, guarantee, or amount 
of insurance for the crop on which the prevented planting indemnity, 
guarantee, or amount of insurance is received; or
    (G) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes.
    (v) For the purpose of determining eligible acreage for 
prevented planting coverage, acreage for all units will be combined 
and be reduced by the number of hybrid corn seed acres timely 
planted and late planted. For example, assume you have 100 acres 
eligible for prevented planting coverage in which you have a 100 
percent share. The acreage is located in a single FSA Farm Serial 
Number which you insure as two separate optional units consisting of 
50 acres each. If you planted 60 acres of hybrid corn seed on one 
optional unit and 40 acres of hybrid corn seed on the second 
optional unit, your prevented planting eligible acreage would be 
reduced to zero (i.e., 100 acres eligible for prevented planting 
coverage minus 100 acres planted equals zero).
    (6) In accordance with the provisions of section 6 (Report of 
Acreage) of the Basic Provisions (Sec. 457.8), you must report by 
unit any insurable acreage that you were prevented from planting. 
This report must be submitted on or before the acreage reporting 
date. For the purpose of determining acreage eligible for a 
prevented planting amount of insurance, the total amount of 
prevented planting and planted acres cannot exceed the maximum 
number of acres eligible for prevented planting coverage. Any 
acreage you report in excess of the number of acres eligible for 
prevented planting coverage, or that exceeds the number of eligible 
acres physically located in a unit, will be deleted from your 
acreage report.

14. 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 
14(e);
    (b) The application for a written agreement must contain all 
variable 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 a 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 December 20, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-33067 Filed 12-31-96; 8:45 am]
BILLING CODE 3410-FA-P