[Federal Register Volume 64, Number 32 (Thursday, February 18, 1999)]
[Proposed Rules]
[Pages 8015-8018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3890]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457


Common Crop Insurance Regulations; Onion Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to 
amend the Onion Crop Insurance Provisions to: Modify stage guarantee 
percentages, to have a separate guarantee for transplanted and direct 
seeded onions, and to provide for modification of stage guarantee 
percentages in the Special Provisions; allow optional units by section 
or section equivalent or FSA farm serial number, unless otherwise 
provided in the Special Provisions; clarify the replant payment 
provisions; clarify the amount of production to count when damaged 
production is sold after a previous determination that the crop was 100 
percent damaged; limit prevented planting coverage to 45 percent of the 
production guarantee for timely planted acreage; and change the 
termination date for one county in Oregon and one county in Washington. 
The intended effect of this action is to modify the existing policy so 
that it is actuarially sound and better meets the needs of insureds.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business April 5, 1999, and will be considered 
when the rule is to be made final. Comments on the information 
collection requirements must be received on or before April 19, 1999.

ADDRESSES: Interested persons are invited to submit written comments to 
the Director, Product Development Division, Federal Crop Insurance 
Corporation, United States Department of Agriculture, 9435 Holmes Road, 
Kansas City, MO 64131. A copy of each response will be available for 
public inspection and copying from 8 a.m. to 4:30 p.m., CDT, Monday 
through Friday, except holidays, at the above address.

FOR FURTHER INFORMATION CONTACT: William Klein, Insurance Management 
Specialist, Research and Development, Product Development Division, 
Federal Crop Insurance Corporation, at the Kansas City, MO, address 
listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be exempt for the purposes of 
Executive Order 12866, and, therefore, has not been reviewed by the 
Office of Management and Budget (OMB).

Paperwork Reduction Act of 1995

    In accordance with section 3507(j) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501), the information collection or recordkeeping 
requirements included in the proposed rule have been submitted for 
approval to the Office of Management and Budget (OMB). Please send your 
written comments to Clearance Officer, OCIO, USDA, room 404-W, 14th 
Street and Independence Avenue SW., Washington, DC 20250. A comment to 
OMB is best assured of having its full effect if OMB receives it within 
30 days of publication of this proposed rule.
    We are soliciting comments from the public comment concerning our 
proposed information collection and recordkeeping requirements. We need 
this outside input to help us:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information has practical utility;
    (2) Evaluate the accuracy of our estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond (such as through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of

[[Page 8016]]

information technology, e.g. permitting electronic submission 
responses).
    The collections of information for this rule revises the Multiple 
Peril Crop Insurance Collections of Information 0563-0053 which expires 
April 30, 2001.
    Title: Multiple Peril Crop Insurance.
    Abstract: This rule improves the existing onion policy by; 
modifying stage guarantee percentages, providing a separate guarantee 
for transplanted and direct seeded onions, allowing modification of 
stage guarantee percentages in the Special Provisions, allowing 
optional units by section or section equivalent unless otherwise 
provided in the Special Provisions, clarifying the provisions on 
replant payments and the amount of production to count for damaged 
onion production that is sold after a previous determination that the 
crop was 100 percent damaged, limiting prevented planting coverage to 
45 percent of the production guarantee for timely planted acreage, and 
changing the termination date for one county in Oregon and one county 
in Washington. The revisions are effective for the 2000 and succeeding 
crop years. It is anticipated that there will be more claims filed by 
insureds because of the revised unit division option.
    Purpose: The purpose of this proposed rule is to modify the 
existing crop provisions for clarification, improve the method of 
calculating losses, provide additional coverage benefits for insureds, 
and make the policy more flexible through Special Provision statements, 
so that it better meets the needs of all regions of the country, and to 
provide an improved risk management tool for onion producers.
    Burden Statement: The information that FCIC collects on the 
specified forms will be used in offering crop insurance coverage, 
determining program eligibility, establishing a production guarantee or 
amount of insurance, calculating losses qualifying for a payment, etc. 
FCIC assumes that by allowing optional units to be determined by 
section as well as irrigated and non-irrigated and type, the number of 
claims submitted by producers may increase the burden hours.
    Estimate of Burden: We estimate that it will take insured 
producers, a loss adjuster, and an insurance agent an average of .79 of 
an hour to provide the information required by the Onion Crop Insurance 
Provisions.
    Respondents: Insureds, insurance agents, and loss adjusters.
    Estimated annual number of respondents: 569.
    Estimated annual number of responses per respondent: 2.4.
    Estimated annual number of responses: 1,369.
    Estimated total annual burden on respondents: The total public 
burden for this proposed rule is estimated at 448 hours.
    Recordkeeping requirements: FCIC requires records to be kept for 
three years, but all records required by FCIC are retained as part of 
the normal business practice. Therefore, FCIC is not estimating 
additional burden related to recordkeeping.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform of 1995 (UMRA) 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. Therefore, this rule is not 
subject to the requirements of sections 202 and 205 of the UMRA.

Executive Order 12612

    It has been determined under section 6(a) of Executive Order No. 
12612, Federalism, that this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment. The 
provisions contained in this rule will not have a substantial direct 
effect on States or their political subdivisions or on the distribution 
of power and responsibilities among the various levels of government.

Regulatory Flexibility Act

    This regulation will not have a significant economic 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, every producer is required to 
complete an application and an acreage report. If the crop is damaged 
or destroyed, every insured is required to give notice of loss and 
provide the necessary information to complete a claim for indemnity. 
This regulation does not alter those requirements. 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. 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 12372

    This program is not subject to the provisions of Executive Order 
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 12988

    This proposed rule has been reviewed in accordance with Executive 
Order 12988 on civil justice reform. The provisions of this rule will 
not have a retroactive effect. 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 against FCIC for 
judicial review may be brought.

Environmental Evaluation

    This action is not expected to have a significant economic impact 
on the quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

Background

    FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR 
part 457) by revising 7 CFR 457.135 Onion Crop Insurance Provisions 
effective for the 2000 and succeeding crop years. The principal changes 
to the provisions for insuring onions are as follows:
    1. Section 1--Revise the definition of ``production guarantee (per 
acre)'' to include a first stage guarantee for transplanted onions. The 
second stage for direct seeded storage onions is increased from 60 
percent to 70 percent. These revised stage percentages reflect a more 
appropriate relationship of pre-harvest input costs to harvesting costs 
for both direct seeded and transplanted onions.
    2. Section 2--Allow optional units by section, section equivalent, 
or FSA farm serial number, unless otherwise provided in the Special 
Provisions. This provides additional units for producers who generally 
raise only one type of onion (typically only yellows), irrigate all 
their acreage, and have onion acreage spread throughout large areas. 
Such

[[Page 8017]]

producers do not qualify for optional units under the existing policy, 
which only allows optional units by type and by irrigated or non-
irrigated. Currently, type is defined in the Special Provisions by 
color, i.e.--red, yellow, or white.
    3. Section 3--Add a separate first stage for transplanted onion 
plants or sets to run from transplanting through the 30th day after 
transplanting. Revise the first stage for direct seeded onions to 
continue until emergence of the fourth leaf instead of the third leaf. 
These time frames will allow sufficient time for the onions to become 
established before a higher guarantee applies. The language for the 
second stage for transplanted onions is revised to have a single 
standard for all onions. Based on this standard, the second stage for 
transplanted onions extends from the 31st day after transplanting until 
the acreage has been subjected to topping and lifting or digging. These 
changes were necessary because of the different risks at different 
times for direct seeded and transplanted onions.
    4. Section 5--Change the termination date for one county in Oregon 
and one county in Washington to allow for a 60 day period between the 
billing and termination date. Currently these counties have only a 30 
day period between billing and termination dates. This is too short a 
period of time.
    5. Section 11--Add provisions to clarify that the amount of the 
replanting payment per acre will be the producer's actual cost of 
replanting not to exceed the lesser of 7 percent of the final stage 
production guarantee or 18 hundredweight multiplied by the producer's 
price election for the type originally planted and by the insured 
share. This consolidates all three criteria from the Basic Provisions 
and Crop Provisions needed to make a determination on the amount of a 
replanting payment in one section in the crop provisions. This will 
reduce confusion about the maximum amount of replanting payment.
    6. Section 13--Add provisions to clarify that when damage to onion 
production exceeds the percentage shown in the Special Provisions but 
the production from that unit is sold, the quantity sold will be 
included as production to count on a pound-for-pound basis regardless 
of the quality.
    7. Section 14--Removed the provision that allowed for additional 
prevented planting coverage levels. The provision had allowed producers 
who selected limited or additional levels of coverage, in accordance 
with the Special Provisions, and paid an additional premium, to obtain 
prevented planting coverage of 50 or 55 percent.
    Prevented planting coverage is designed to reimburse producers for 
the costs incurred during the pre-plant period if the intended crop 
cannot be planted. This amount is intended to cover the total fixed 
cash expenses plus the variable cash costs normally associated with 
completing all field operations prior to planting onions. The prevented 
planting coverage level for onions is lower than other major crops 
because, although pre-planting costs per acre are comparable to other 
crops, such as corn, the average insurance guarantee per acre is much 
higher. Therefore, FCIC considers a prevented planting coverage level 
of 45 percent to be appropriate for onions and proposes that additional 
prevented planting coverage levels not be made available.
    Premium rates for onions will continue to reflect Multiple Peril 
Crop Insurance experience for onions, and FCIC will consider any 
additional risk that may result from incorporation of changes to policy 
provisions contained in this proposed rule.

List of Subjects in 7 CFR Part 457

    Crop insurance, Onion.

Proposed Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation proposes to amend the onion crop insurance 
provisions contained in 7 CFR part 457 as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE 
1998 AND SUBSEQUENT CONTRACT YEARS

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

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

    2. Section 457.135 is amended by revising the language in the onion 
crop insurance provisions as follows:


Sec. 457.135  Onion Crop Insurance Provisions [Amended]

    a. Section 1 is amended to add definitions for ``direct seeded'' 
and ``transplanted'' and to revise the definition of ``production 
guarantee (per acre)'' as follows:

    1. Definitions.
* * * * *
    Direct seeded--Placing onion seed by machine or by hand at the 
correct depth, into a seedbed that has been properly prepared for 
the planting method and production practice.
* * * * *
    Production Guarantee (per acre):
    (a) First stage production guarantee--Thirty-five percent (35%) 
of the final stage production guarantee for direct seeded storage 
and non-storage onions and 45 percent of the final stage production 
guarantee for transplanted storage and non-storage onions, unless 
otherwise specified in the Special Provisions.
    (b) Second stage production guarantee--Seventy percent (70%) of 
the final stage production guarantee for direct seeded storage 
onions and 60 percent of the final stage production guarantee for 
transplanted storage onions and all non-storage onions, unless 
otherwise specified in the Special Provisions.
* * * * *
    Transplanted--Placing of the onion plant or bulb by machine or 
by hand at the correct depth, into a seedbed that has been properly 
prepared for the planting method and production practice.
* * * * *
    b. Section 2 is revised to read as follows:

    2. Unit Division.
    In addition to, or instead of, establishing optional units as 
provided in section 34 of the Basic Provisions, optional units may 
be established by type, if the type is designated in the Special 
Provisions.
* * * * *
    c. Sections 3(b) (1) and (2) are revised to read as follows:

    3. Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities.
* * * * *
    (b) * * *
    (1) First stage extends:
    (i) For direct seeded storage and non-storage onions, from 
planting until the emergence of the fourth leaf; and
    (ii) For transplanted storage and non-storage onions, from 
transplanting of onion plants or sets through the 30th day after 
transplanting.
    (2) The second stage extends, for all onions, from the end of 
the first stage until the acreage has been subjected to topping and 
lifting or digging.
* * * * *
    d. Section 5 is revised to read as follows:

    5. Cancellation and Termination Dates.
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
      State and county          Cancellation date     Termination date
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All Georgia Counties;         August 31...........  August 31.
 Kinney, Uvalde, Medina,
 Bexar, Wilson, Karnes, Bee,
 and San Patrico Counties,
 Texas, and all Texas
 Counties lying south
 thereof.

[[Page 8018]]

 
Umatilla County, Oregon; and  August 31...........  September 30.
 Walla Walla County,
 Washington.
All other states and          February 1..........  February 1.
 counties.
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* * * * *
    e. Section 11(b) is revised to read as follows:

    11. Replanting Payment.
* * * * *
    (b) The maximum amount of the replanting payment per acre will 
be your actual cost for replanting, but will not exceed the lesser 
of:
    (1) 7 percent of the final stage production guarantee multiplied 
by your price election for the type originally planted and by your 
insured share; or
    (2) 18 hundredweight multiplied by your price election for the 
type originally planted and by your insured share.
* * * * *
    f. Section 13(d) is revised to read as follows:

    13. Settlement of Claim.
* * * * *
    (d) If the damage to harvested or unharvested onion production 
exceeds the percentage shown in the Special Provisions for the type, 
no production will be counted for that unit or portion of a unit 
unless such damaged onion production from that acreage is sold. If 
sold, the damaged production will be counted on a pound-for-pound 
basis regardless of the quality.
* * * * *
    g. Section 14 is revised to read as follows:

    14. Prevented planting.
    Your prevented planting coverage will be 45 percent of your 
production guarantee for timely planted acreage. Additional 
prevented planting coverage levels are not available for onions.

    Signed in Washington, D.C., on February 10, 1999.
Robert Prchal,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. 99-3890 Filed 2-17-99; 8:45 am]
BILLING CODE 3410-08-P