[Federal Register Volume 65, Number 202 (Wednesday, October 18, 2000)]
[Proposed Rules]
[Pages 62311-62313]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-25987]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 65, No. 202 / Wednesday, October 18, 2000 / 
Proposed Rules  

[[Page 62311]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457


Common Crop Insurance Regulations; Sugarcane Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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

SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to 
amend the Sugarcane Crop Insurance Provisions. The intended effect of 
this proposed action is to provide policy changes to better meet the 
needs of the insureds and to restrict the effect of the current 
Sugarcane Crop Insurance Regulations to the 2001 and prior crop years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business December 18, 2000 and will be 
considered when the rule is to be made final.

ADDRESSES: Interested persons are invited to submit written comments to 
the Director, Product Development Division, Federal Crop Insurance 
Corporation, United States Department of Agriculture, 6501 Beacon 
Drive, Kansas City, MO 64133. Comments may also be sent via the 
Internet to [email protected]. A copy of each response will 
be available for public inspection and copying from 7:00 a.m. to 4:30 
p.m., CDT, Monday through Friday except holidays, at the above address.

FOR FURTHER INFORMATION CONTACT: Arden Routh, 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 purpose of 
Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget (OMB).

Paperwork Reduction Act of 1995

    Under the provisions of the Paperwork Reduction Act of 1995 (44 
chapter 35), the collections of information for this rule have been 
previously approved by OMB under control number 0563-0053 through April 
30, 2001.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
establishes requirements for Federal agencies to access 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 13132

    The provisions contained in this rule do not have any substantial 
direct effect on states, the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government.
    Therefore, no consultation with states is required.

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 acreage report. If the crop is damaged or 
destroyed, the producer is required to give notice of loss and provide 
the necessary information to complete a claim for indemnity. This 
regulation does not alter these requirements. The amount of work 
required of the insurance companies delivering and servicing these 
policies will not increase 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 amending 7 CFR 457.116 Sugarcane Crop Insurance Provisions 
effective for the 2002 and succeeding crop years. The proposed changes 
to provisions for insuring sugarcane are as follows:
    1. Change the word ``paragraph'' to ``section'' throughout these 
provisions to be consistent with other crop provisions and make other 
minor editorial changes.
    2. Section 1--Remove the definition of ``local market price'' 
because there is no local market price for raw sugar, and revise the 
definition of ``sugarcane'' for clarification.
    3. Section 5--Add provision that makes uninsurable any sugarcane 
damaged the previous crop year to the extent the sugarcane is unable to

[[Page 62312]]

produce the production guarantee. Add a provision that the sugarcane is 
not insurable if it exceeds the age limitations (by variety if 
applicable) at which sugarcane may be insured as specified in the 
Special Provisions. This change eliminates the need for inadequate 
stand appraisals unless the insured is seeking insurance by written 
agreement.
    4. Section 7(a)--Removed provisions for plant cane that allow 
coverage at a later date by an agreement in writing, as this is an 
uncommon practice. Removed language that allows coverage to attach on 
the later of April 15 or 30 days following the harvest of stubble cane, 
since in practice coverage will attach only on the specified date. 
Clarify when insurance attaches for Louisiana and all other states. For 
stubble cane damaged the previous crop year, the calendar date when 
insurance attaches has been changed from April 15 to April 30 in 
Louisiana. Currently, acreage that does not have an adequate stand on 
April 15 is not insurable; however, this same acreage may have an 
adequate stand by April 30.
    5. Section 9(a)--Add provisions that if the insured believes that 
the sugarcane will produce less than the approved yield, the insured 
must request that an appraisal be performed to determine the sugar 
potential. If an appraisal is not made, the production to count for 
such acreage will be the approved yield. Also, this section clarifies 
the requirement that if notice is not given prior to cutting for seed, 
the acreage will be considered as put to another use without consent 
and the approved yield will be assessed for such acreage.
    6. Add an example of a claim for indemnity for clarity.
    7. Section 10(c)(1)(iv)--Remove provisions that explained the 
process for making an inadequate stand appraisal. It has been 
determined that inadequate stand appraisals are not accurate. Current 
sections 10(c)(1)(v) and (vi) have been redesignated to 10(c)(1)(iv) 
and (v).
    8. Section 10(d)--Delete the section because there is no local 
market price for raw sugar. The extent of any freeze damage to 
sugarcane is reflected in the pounds of raw sugar extracted from the 
damaged sugarcane. A producer with freeze damaged sugarcane is paid the 
same price per pound for raw sugar as a producer whose sugarcane is not 
damaged.

List of Subjects in 7 CFR Part 457

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

PART 457--COMMON CROP INSURANCE REGULATIONS

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

    Authority: 7 U.S.C. 1506(1), 1506(p).

    2. Amend Sec. 457.116 as follows:
    a. Revise the introductory text.
    b. In section 1 of the crop provisions, delete the definition for 
``local market price'' and revise the definition for ``sugarcane.''
    c. Revise sections 3, 5, 6, 7, the introductory language to 9(a), 
9(a)(2), and 10(b)(4) of the crop provisions.
    d. Remove the parenthetical phrase ``(Sec. 457.8)'' wherever it 
occurs in sections 2, 8, and 9(b) of the crop provisions. In addition, 
remove the parenthetical phrases ``(Insurance Guarantees, Coverage 
Levels, and Price for Determining Indemnities)'' in section 2(a); 
``(Causes of Loss)'' in section 8 introductory text; and ``(Duties in 
the Event of Damage or Loss)'' in section 9(b).
    e. Remove section 10(c)(1)(iv) of the crop provisions.
    f. Redesignate section 10(c)(1)(v) and (c)(1)(vi) as section 
10(c)(1)(iv) and (c)(1)(v), respectively, of the crop provisions and in 
newly redesignated 10(c)(1)(iv), remove the word ``paragraph'' and add 
``section'', in its place.
    The revised text reads as follows:


Sec. 457.116  Sugarcane crop insurance provisions.

    The Sugarcane Crop Insurance Provisions for the 2002 and succeeding 
crop years are as follows:
* * * * *
    1. Definitions.
* * * * *
    Sugarcane--means plant cane and stubble cane.
* * * * *
    3. Contract Changes.
    In accordance with section 4 of the Basic Provisions, the contract 
change date is June 30 preceding the cancellation date.
* * * * *
    5. Insured Crop.
    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the sugarcane in the county for which a premium 
rate is provided by the actuarial documents:
    (1) In which you have a share;
    (2) That is grown for processing for sugar or for seed; and
    (3) That is not interplanted with another crop, unless allowed by a 
written agreement.
    (b) In addition to the crop listed as not insured in section 8(b) 
of the Basic Provisions, we will not insure any sugarcane:
    (1) That was damaged the previous crop year to the extent the 
sugarcane is unable to produce the production guarantee; or
    (2) That exceeds the age limitations (by variety, if applicable) 
contained in the Special Provisions, unless we agree in writing to 
insure such acreage.
    6. Insurable Acreage.
    Section 9(a)(3) of the Basic Provisions is not applicable to the 
Sugarcane Crop Provisions.
    7. Insurance Period.
    (a) In addition to the provisions of section 11 of the Basic 
Provisions, insurance attaches:
    (1) At the time of planting for plant cane;
    (2) On the first day following harvest of the previous crop for 
stubble cane except as contained in sections 7(a)(3) and (4);
    (3) On April 15 following harvest of the previous crop for stubble 
cane damaged during the previous crop year in all states (except 
Louisiana); and
    (4) On April 30 following harvest of the previous crop for stubble 
cane damaged during the previous crop year in Louisiana.
    (b) In accordance with the provisions of section 11 of the Basic 
Provisions, the calendar date for the end of the insurance period is:
    (1) January 31 in Louisiana; and
    (2) April 30 in all other states.
* * * * *
    9. Duties in the Event of Damage or Loss or Cutting the Sugarcane 
for Seed.
    (a) In addition to your duties under section 14 of the Basic 
Provisions, in the event of damage or loss:
* * * * *
    (2) You must give us notice at least 15 days before you begin 
cutting any sugarcane for seed. Your notice must include the unit 
number and the number of acres you intend to harvest as seed. Failure 
to give us timely notice will cause the acreage cut for seed to be 
considered as put to another use without consent. The production to 
count for such acreage will be your approved yield.
    (3) If you believe that your sugarcane will produce less than your 
approved yield, you must request an appraisal of the sugarcane to 
determine the sugar potential. If you do not request an appraisal, the 
production to count for such acreage will be your approved yield.
* * * * *
    10. Settlement of Claim.
* * * * *

[[Page 62313]]

    (b) * * *
    (4) Multiplying this result by your share.
    Example 1:
    Assume you have a 100 percent share in a unit of 100 acres of 
sugarcane, with a guarantee of 4,000 pounds of raw sugar per acre and a 
price election of $0.12 per pound. You are only able to harvest 200,000 
pounds because the unit was damaged by an insurable cause of loss. Your 
indemnity would be calculated as follows:
    (1) 100 acres  x  4,000 pounds = 400,000 pound guarantee;
    (2) 400,000 pound guarantee-200,000 pounds harvested production = 
200,000 pound production loss;
    (3) 200,000 pound production loss  x  $0.12 price election = 
$24,000 value of production loss; and
    (4) $24,000 value of production loss  x  100 percent share = 
$24,000 indemnity payment.
    Example 2:
    Assume you have a 100 percent share in a unit of 100 acres of 
sugarcane. Your approved yield is 6,000 pounds of raw sugar per acre. 
You have selected the 65 percent coverage level, which multiplied by 
your approved yield equals a guarantee of 3,900 pounds of raw sugar per 
acre, and a price election of $0.12 per pound. You cut 20 acres of this 
unit for seed without giving notice that you were cutting this acreage 
for seed. You are only able to harvest 200,000 pounds from the 
remaining 80 acres. Your indemnity would be calculated as follows:
    (1) 100 acres  x  3,900 pounds = 390,000 pound guarantee;
    (2) 390,000 pound guarantee-200,000 pounds harvested 
production-120,000 pound production guarantee for putting acreage to 
another use without consent (20 acres  x  6,000 approved yield per 
acre) = 70,000 production loss;
    (3) 70,000 pound production loss  x  $0.12 price election = $8,400 
value of production loss; and
    (4) $8,400 value of production loss  x  100 percent share = $8,400 
indemnity payment.
* * * * *

    Signed in Washington, DC, on October 3, 2000.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 00-25987 Filed 10-17-00; 8:45 am]
BILLING CODE 3410-08-P