[Federal Register Volume 62, Number 19 (Wednesday, January 29, 1997)]
[Rules and Regulations]
[Pages 4115-4119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2040]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
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Federal Register / Vol. 62, No. 19 / Wednesday, January 29, 1997 /
Rules and Regulations
[[Page 4115]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Parts 401 and 457
RIN 0563-AB50
Common Crop Insurance Regulations, Texas Citrus Tree Crop
Insurance Provisions; and Texas Citrus Tree Endorsement
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes
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, include the
current Texas citrus tree endorsement with the Common Crop Insurance
Policy for ease of use and consistency of terms, and to restrict the
effect of the current Texas citrus tree endorsement to the 1997 and
prior crop years.
EFFECTIVE DATE: January 29, 1997.
FOR FURTHER INFORMATION CONTACT: Louise Narber, Program Analyst,
Research and Development, Product Development Division, Federal Crop
Insurance Corporation, United States Department of Agriculture, 9435
Holmes Road, Kansas City, MO 64131, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No. 12866
This action has been reviewed under United States Department of
Agriculture (USDA) procedures established by Executive Order No. 12866.
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 August 3, 2002.
This rule has been determined to be exempt 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
Following publication of the proposed rule, the public was afforded
60 days to submit comments, data, and opinions on information
collection requirements previously approved by OMB under OMB control
number 056-0003 through September 30, 1998. No public comments were
received.
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) of
State, local, and tribal governments or the private sector. Thus, this
rule is not subject to the requirements of sections 202 and 205 of the
UMRA.
Executive Order No. 12612
It has been determined under section 6(a) of Executive Order No.
12612, Federalism, that this rule does not have sufficient federalism
implications to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on States or their political subdivisions, or on the
distribution of power and responsibilities among 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, all producers are required to complete an
application and acreage report. If the trees are damaged or destroyed,
insureds are required to give notice of loss and provide the necessary
information to complete a claim for indemnity. 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 part 11 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
On Thursday, August 29, 1996, FCIC published a proposed rule in the
[[Page 4116]]
Federal Register at 61 FR 45369-45373 to add to the Common Crop
Insurance Regulations (7 CFR part 457), a new section, 7 CFR
Sec. 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 and supercede the current provisions for
insuring Texas citrus trees found at 7 CFR Sec. 401.134 (Texas Citrus
Tree Endorsement). FCIC also amends 7 CFR 401.134 to limit its effect
to the 1997 and prior crop years. FCIC will later publish a regulation
to remove and reserve Sec. 401.134.
Following publication of the proposed rule, the public was afforded
60 days to submit written comments, data, and opinions. A total of 20
comments were received from the crop insurance industry and FCIC. The
comments received and FCIC's responses are as follows:
Comment: A representative of FCIC suggested that the word ``type''
be changed to ``crop'' throughout the provisions where appropriate
since the citrus type designations used in the past will be replaced
with individual crop codes beginning with the 1998 crop year.
Response: FCIC agrees and has made this change and has also deleted
the definition of type.
Comment: The crop insurance industry suggested that the definition
of ``deductible'' be defined in the Basic Provisions rather than the
crop provisions.
Response: ``Deductible'' must be defined in the crop provisions
until the Basic Provisions are revised. No change has been made to the
provisions.
Comment: The crop insurance industry questioned the definition of
``dehorning.'' They stated that the definition previously was ``The
cutting back of each scaffold limb * * *''; the proposed rule stated
``* * * one or more scaffold limbs * * *.'' This affects the amount of
insurance per acre. The commenters questioned if the intent was to
limit the amount of insurance per acre to 33 percent for any tree with
only one scaffold limb dehorned.
Response: FCIC agrees that the definition of ``dehorning'' as
published in the proposed rule is confusing. The definition has been
revised to read ``Cutting all scaffold limbs to a length not longer
than \1/4\ the height of the tree before such cutting.''
Comment: The crop insurance industry recommended that the
definition of ``irrigated practice'' should also address the quality of
the water being applied.
Response: FCIC disagrees. There are no established criteria
regarding the quality of water necessary to produce a crop. Such
criteria would be difficult to develop and administer due to the
complexity of the factors involved. No change has been made in the
definition.
Comment: The crop insurance industry suggested defining ``root
stock.''
Response: FCIC agrees and has added a definition of ``root stock.''
Comment: The crop insurance industry stated that section 2(f) needs
to be revised to say ``Each optional unit must meet one of the
following criteria, as applicable * * *'' instead of ``* * * one or
more of the following * * *'' so that the policyholder may choose to
have optional units either by non-contiguous land or by legal
description but not by both.
Response: FCIC agrees and has made the recommended change. Also,
the phrase ``In lieu of establishing optional units by section, section
equivalent or FSA Farm Serial Number,'' has been deleted from section
2(f)(2) for clarification.
Comment: The crop insurance industry questioned if there should be
some reference to type in section 3(b) in regard to amount of insurance
for each population density.
Response: FCIC agrees that the per acre amount of insurance for
each variety or population density within a crop must bear the same
relationship to the maximum amount of insurance available for each
variety and population density of the crop as specified in the
Actuarial Table. This change has been made.
Comment: The crop insurance industry suggested clarifying section
3(b)(4) by adding the phrase ``the premium and'' before the phrase
``any indemnity will be based is $1,700 ($2,000 multiplied by 0.85).''
Response: FCIC agrees and has made the recommended change.
Comment: The crop insurance industry suggested changing ``and'' to
``or'' in section 7(b)(1) because items 1 and 2 are two separate
conditions.
Response: FCIC agrees and has made the change.
Comment: The crop insurance industry questioned whether there were
any guidelines to exclude or limit coverage on any acreage that was not
insured the previous year.
Response: The M8-Texas Citrus Tree Handbook contains provisions for
excluding or limiting the amount of insurance on Texas citrus trees.
Comment: The crop insurance industry stated that since the term
``excess moisture'' is not defined in the provisions whereas the term
``excess precipitation'' was defined in the existing regulation, they
assumed that excess moisture would be determined on a case by case
basis.
Response: ``Excess moisture'' was an insurable cause of loss in the
Texas Citrus Tree Endorsement published in 7 CFR Sec. 401.134 for the
1989 and subsequent crop years and in the proposed rule for these crop
provisions. However, the term was not defined. The term is changed to
``excess precipitation'' and is defined as ``An amount of precipitation
sufficient to directly damage the tree.''
Comment: The crop insurance industry stated that the covered peril
of ``failure of the irrigation water supply'' basically has been
eliminated and they questioned if this was the intent and, if so, if
the premium would be adjusted accordingly.
Response: It was not the intent to eliminate the covered peril of
``failure of the irrigation water supply'' due to drought. This
provision has been revised consistent with the Texas Citrus Fruit Crop
Insurance Provisions. It now reads ``Failure of the irrigation water
supply if caused by an insured peril or drought that occurs during the
insurance period.''
Comment: The crop insurance industry suggested deleting the word
``actual'' in section 12(a)(1) because sections 12(b)(2) and 12(c) may
adjust the actual percentages.
Response: FCIC believes that the provisions are clearly stated. No
changes have been made.
Comment: The crop insurance industry stated that the existing
provisions established the condition that any grove sustaining more
than 80 percent actual damage would be considered 100 percent damaged,
but the proposed rule establishes this condition on an individual tree
basis. If this is an intended change it must be identified as such.
Response: When appraising damage, a sample of trees is selected.
Damage to individual scaffold limbs on each tree is assessed to
establish the percent of damage for the unit. FCIC has not changed the
procedure. These crop provisions have been revised to more accurately
identify the process with the addition of the following sentence: ``If
this percent of damage is more that 80 percent, the unit will be
considered 100 percent damaged.''
Comment: The crop insurance industry questioned whether a tree that
has 85 percent actual damage is considered to be 100 percent damaged.
They wondered which figure is used
[[Page 4117]]
when calculating the average percentage of damage for the unit.
Response: Any tree that sustains more than 80 percent damage
following the year of set out will be considered 100 percent damaged.
The percent of damage on the unit will be determined by computing the
average of the determinations made for the individual trees within each
sample, thus any tree with over 80 percent of damage will be regarded
as having 100 percent of damage. If the total samples have an average
of more than 80 percent damage, the damage will be determined to be 100
percent for the unit.
Comment: The crop insurance industry stated that they believe the
written agreement should be continuous if no substantive changes occur
from one year to the next.
Response: Written agreements are, by design, temporary and intended
to address unusual circumstances. If the conditions for which a written
agreement is needed exists each crop year, the policy or Special
Provisions should be amended to reflect this condition. Therefore, no
change will be made to the provisions.
Comment: The crop insurance industry suggested combining the
provisions contained in section 13(e) with the provisions in section
13(a).
Response: FCIC believes that the current provisions are clearly
stated and has not opted to combine them.
Comment: The crop insurance industry suggested addressing the
extended insurance period for the 1998 crop year in the 1998 Special
Provisions or an amendatory endorsement, instead of 3 references in
these crop provisions.
Response: The policy itself is the best place to notify the insured
of the insurance period to avoid any confusion. FCIC believes that
these provisions are clearly stated and the provisions have not been
changed.
In addition to the changes described above, FCIC has made the
following minor editorial changes to the Texas Citrus Tree Provisions:
1. Section 1--Added a definition for ``crop'' and amended the
definitions of ``crop year,'' ``deductible,'' ``destroyed,'' ``excess
wind,'' ``FSA,'' ``good farming practices,'' ``interplanted,'' and
``written agreement'' for clarification.
2. Section 9--Revised the provisions to allow all insureds to
obtain coverage for the extended 1998 crop year. Previously new
insureds would not have had an opportunity to insure their crop from
June 1 through November 20, which may have resulted in some losses paid
under the crop insurance policy and others under the noninsured crop
disaster assistance program.
3. Section 12--Clarified how an indemnity is computed by adding a
statement to specify that the result of subtracting the insured's
deductible from the percent of damage for the unit must be greater than
zero to receive an indemnity. Deleted the provision specifying that any
percent of damage paid previously in the same crop year be subtracted.
These provisions do not allow an initial payment prior to the final
indemnity.
Good cause is shown to make this rule effective upon publication in
the Federal Register and without the 30-day period required by the
Administrative Procedure Act. This rule improves the Texas citrus tree
insurance coverage and brings it under the Common Crop Insurance Policy
Basic Provisions for consistency among policies. This rule will allow
optional unit division by section, section equivalent, or FSA Farm
Serial Number; or by non-contiguous land, but not by both. The unit
structure will now be the same for both the Texas Citrus Tree
Provisions and the Texas Citrus Fruit Provisions.
List of Subjects in 7 CFR Parts 401 and 457
Crop insurance, Texas citrus tree, Texas citrus tree endorsement.
Final Rule
Accordingly, for the reasons set forth in the preamble, the Federal
Crop Insurance Corporation hereby amends 7 CFR parts 401 and 457 as
follows:
PART 401--GENERAL CROP INSURANCE REGULATIONS--REGULATIONS FOR THE
1988 AND SUBSEQUENT CONTRACT YEARS
1. The authority citation for 7 CFR part 401 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. The introductory text of Sec. 401.134 is revised to read as
follows:
Sec. 401.134 Texas Citrus Tree Endorsement.
The provisions of the Texas Citrus Tree Endorsement for the 1989
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), 1506(p).
4. 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:
FCIC policies:
United States Department of Agriculture
Federal Crop Insurance Corporation
Reinsured policies:
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
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--Specific groups of citrus fruit trees as listed in the
Special Provisions.
Crop year--For the 1998 crop year only, a period of time that
begins on June 1, 1997, and ends on November 20, 1998. For all other
crop years, a period of time that begins on November 21 of the
calendar year prior to the year the trees normally bloom, 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 the coverage
level percentage you choose from 100 percent. For example, if you
elected a 65 percent coverage level, your deductible would be 35
percent (100%-65% = 35%).
Dehorning--Cutting all scaffold limbs to a length not longer
than \1/4\ the height of the tree before such cutting.
Destroyed--Trees damaged to the extent that removal is
necessary.
Excess precipitation--An amount of precipitation sufficient to
directly damage the tree.
Excess wind--A natural movement of air that has sustained speeds
in excess of 58 miles per hour recorded at the U.S. Weather Service
reporting station nearest to the crop at the time of crop damage.
Freeze--The formation of ice in the cells of the trees caused by
low air temperatures.
FSA--The Farm Service Agency, an agency of the United States
Department of Agriculture or a successor agency.
Good farming practices--The cultural practices generally in use
in the county for the trees to have normal growth and vigor and
recognized by the Cooperative State Research, Education, and
Extension Service as compatible with agronomic and weather
conditions in the county.
Interplanted--Acreage on which two or more crops are planted in
any form of alternating or mixed pattern.
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
[[Page 4118]]
growing season using the appropriate irrigation 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.
Root stock--A root or a piece of a root of one tree variety onto
which a bud from another tree variety is grafted.
Scaffold limbs--Major limbs attached directly to the trunk.
Set out--Transplanting the tree into the grove.
Written agreement--A written document that alters designated
terms of this 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 additional basic units
by each citrus crop 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 additional
premium paid for optional units that have been combined will be
refunded to you for the units combined.
(e) All optional units you selected for the crop year must be
identified on the acreage report for that crop year.
(f) Each optional unit must meet one 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:
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 crop 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 within a crop which are either of a
different variety or are planted at a different population density,
the per acre amount of insurance for each variety or population
density for the crop must bear the same relationship to the maximum
amount of insurance available for each variety and population
density of the crop as specified in the Actuarial Table. For
example, if you elect 100 percent of the maximum amount of insurance
for a variety within a population density for the crop, you must
select 100 percent of the maximum amount of insurance for that
variety for all population densities for the crop. The amount of
insurance for each variety and 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 reference maximum dollar amount of
insurance that is shown in the Actuarial Table for the applicable
population density by the percentage for the level of coverage you
select and by:
(i) Thirty-three percent (0.33) for the year of set out, the
year following dehorning, or the year following grafting of a set
out tree. (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, the second year following dehorning, or the second
year following grafting of a set out tree;
(iii) Eighty percent (0.80) for the second growing season after
being set out, the third year following dehorning, or the third year
following grafting of a set out tree; or
(iv) Ninety percent (0.90) for the third growing season after
being set out, the fourth year following dehorning, or the fourth
year following grafting of a set out tree.
(3) 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 $2,000 and the remaining stand is 85 percent of the
original stand, the amount of insurance on which the premium and any
indemnity will be based is $1,700 ($2,000 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 the acreage, practice, crop, number
of trees, date set out is completed, and your share to us within 72
hours after set out is completed for the unit.
(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 if applicable:
(i) Any damage, removal of trees, change in practices, or any
other circumstance that may reduce the amount of insurance, and the
number of affected acres;
(ii) The number 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 10
percent 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 interplanting a perennial crop;
removal of trees; damage; change in practices and any other
circumstance on the potential of the insured crop. If you fail to
notify us of any circumstance that may reduce the potential for the
insured crop, 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), for the 1998 crop year, the
premium amount otherwise payable for the 1998 crop year will be
increased by 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 crop 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 is adapted to the area;
[[Page 4119]]
(3) That is set out for the purpose of growing fruit to be
harvested for the commercial production of fresh fruit or for juice;
(4) That is irrigated; and
(5) That have the potential to produce at least 70 percent of
the county average yield for the crop and age, unless a written
agreement is approved to insure the trees with lesser 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; or
(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 that was not insured 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, coverage will begin on June 1,
1997, and will end on November 20, 1998.
(2) For all subsequent crop years, coverage begins on November
21 of the calendar year prior to the year the insured crop normally
blooms, except that for the year of application, if your application
is received after November 11 but prior to November 21, insurance
will attach on the 10th day after your properly completed
application is received in our local office, unless we inspect the
acreage during the 10 day period and determine that it does not meet
the requirements for insurability contained in your policy. You must
provide any information that we require for the crop or to determine
the condition of the grove.
(3) The calendar date for the end of the insurance period for
each crop year is November 20.
(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
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 or indemnity will be due 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 precipitation;
(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 an
insured peril or drought that occurs during the insurance period.
11. Duties In The Event of Damage or Loss
In addition to the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), 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 the unit in
accordance with sections 12 (b), (c), and (d);
(2) Subtracting your deductible from the percent of damage for
the unit (this result must be greater than zero to receive an
indemnity);
(3) Dividing the result of section 12(a)(2) by your coverage
level percentage;
(4) Multiplying the result of section 12(a)(3) by the amount of
insurance per acre determined in accordance with section 3(b)(2);
(5) Multiplying the result of section 12(a)(4) by the number of
insured acres; and
(6) Multiplying the result of section 12(a)(5) 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 12 inches
of live wood above the bud union; or
(iii) The tree will be considered undamaged whenever there is
more than 12 inches of live wood above the bud union; or
(2) For damage occurring in any year following the year of set
out:
(i) 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 exceeds 80 percent, the tree will be considered as 100
percent damaged.
(ii) The percent of damage for the unit will be determined by
computing the average of the determinations made for the individual
trees. If this percent of damage exceeds 80 percent, the unit will
be considered 100 percent damaged.
(c) 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 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 January 22, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-2040 Filed 1-28-97; 8:45 am]
BILLING CODE 3410-FA-P