[Federal Register Volume 81, Number 113 (Monday, June 13, 2016)]
[Rules and Regulations]
[Pages 38061-38067]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-13770]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 81, No. 113 / Monday, June 13, 2016 / Rules
and Regulations
[[Page 38061]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
[Docket No. FCIC-15-0002]
RIN 0563-AC48
Common Crop Insurance Regulations; Texas Citrus Fruit Crop
Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the
Common Crop Insurance Regulations, Texas Citrus Fruit Crop Insurance
Provisions, to provide policy changes to better meet the needs of
policyholders, to clarify existing policy provisions, and to reduce
vulnerability to program fraud, waste, and abuse. Specifically, this
final rule modifies or clarifies certain definitions, clarifies unit
establishment, clarifies substantive provisions for consistency with
terminology changes, modifies the insured causes of loss, clarifies
required timing for loss notices, modifies portions of loss calculation
formulas, and addresses potential misinterpretations or ambiguity
related to these issues. The changes will be effective for the 2018 and
succeeding crop years.
DATES: This rule is effective July 13, 2016.
FOR FURTHER INFORMATION CONTACT: Tim Hoffmann, Director, Product
Administration and Standards Division, Risk Management Agency, United
States Department of Agriculture, Beacon Facility, Stop 0812, Room 421,
P.O. Box 419205, Kansas City, MO 64141-6205, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Background
This rule finalizes changes to the Common Crop Insurance
Regulations (7 CFR part 457), Texas Citrus Fruit Crop Insurance
Provisions that were published by FCIC on January 12, 2016, as a notice
of proposed rulemaking in the Federal Register at 81 FR 1337-1345. The
public was afforded 60 days to submit comments after the regulation was
published in the Federal Register.
A total of 26 comments were received from 4 commenters. The
commenters were insurance providers, an insurance service organization,
and a grower organization.
The public comments received regarding the proposed rule and FCIC's
responses to the comments are as follows:
General
Comment: A commenter stated they agree with the proposed changes in
the following sections: Definitions, Unit Division, Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities,
Duties in the Event of Damage or Loss, and Settlement of Claim.
Response: FCIC appreciates the support for these changes.
Comment: Several commenters recommended changing the term ``insured
crop'' to ``citrus fruit group'' throughout the Crop Provisions. For
example, the commenters stated that section 2(a) indicates basic units
will be established for each insured crop. However, since the
definition of crop has been removed from these provisions, this can
easily lead to confusion as to whether basic units can be by citrus
fruit commodity, commodity type, or citrus fruit group. The background
information from the proposed rule indicates the intent is that
separate basic units will be established for each citrus fruit group
because FCIC proposes to treat each citrus fruit group as a separate
insured crop. Therefore, the commenter recommended that the word
``crop'' be replaced by ``citrus fruit group'' which is the defined
term in these Crop Provisions and the intent of these provisions based
on the background information. This would then clearly indicate to
anyone reading this provision as to the intent for how basic units are
to be established and remove any ambiguities that currently exist by
using the generic term ``crop'' which is not a defined term.
Response: FCIC agrees that in some instances it may be clearer to
refer to the ``citrus fruit group'' in addition to the ``insured
crop.'' FCIC has made this change in section 2 (unit division) and as
appropriate throughout the Crop Provisions in the final rule. In
addition to this change in section 2, FCIC has revised section 2(c)(2)
by changing the phrase ``non-contiguous land'' to ``if each optional
unit is located on non-contiguous land.'' This change is intended to
provide clarification and is consistent with language contained in
other crop insurance policies for perennial crops such as apples and
peaches.
Comment: Several commenters stated that the proposed definitions of
``citrus fruit commodity,'' ``citrus fruit group,'' ``commodity type''
and other related revisions are part of the Acreage Crop Reporting
Streamlining Initiative (ACRSI) and are similar to what was done in the
2014 Florida Citrus Fruit Crop [Insurance] Provisions proposed rule and
the 2015 Arizona-California Citrus Crop Insurance Provisions proposed
rule. Some of the concerns that were expressed in comments to the
Florida Citrus Fruit Proposed Rule were addressed in the final rule
responses, so these proposed changes are better understood this time
around, though this is still a ``work in progress.'' The chart on page
1339 of the proposed rule is helpful in showing the expected groupings
of citrus fruit commodities, commodity types, intended uses, and citrus
fruit groups.
Response: In the proposed rule background, FCIC continued to
address issues previously raised in the proposed rules for the Florida
Citrus Fruit Crop Provisions and the Arizona-California Citrus Crop
Provisions, which contained some similar changes. FCIC appreciates
hearing the ACRSI changes are better understood and that the background
information from the proposed and final rules for the citrus crops has
contributed to that increased understanding. FCIC has made no change to
the final rule.
Section 3--Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities
Comment: The last sentence in section 3(e)(3) states ``We will
reduce the yield used to establish your production guarantee for the
subsequent
[[Page 38062]]
crop year to reflect any reduction in the productive capacity of the
trees or in the yield potential of the insured acreage.'' Several
commenters asked what if the event that occurred was something that
only affects the crop for the year in question and has no carryover
effect on the yield into the next crop year? The word ``will'' should
be changed to ``may'' so that approved insurance providers have the
flexibility to either reduce or not reduce the yield for the subsequent
crop year depending on whether the effect of the damage will carry over
to the subsequent year. The word ``will'' implies that the yield must
be reduced even if the event that occurred will have no impact on the
crop yield for the following year. This language needs to be revised to
allow the approved insurance providers to have some flexibility in
determining whether the approved APH yield should be reduced for the
subsequent year. A commenter noted that FCIC responded to similar
comments to the Peach Proposed Rule by saying that approved insurance
providers already have that flexibility according to the opening
statement [3(c) of the Peach Crop Provisions refers to reducing the
yield ``. . . as necessary, based on our estimate of the effect . .
.'']. However, the commenter still has a concern with this language as
proposed as the word ``may'' allows more flexibility to administer this
provision. The commenter would like FCIC to confirm that if the event
that occurred in the current crop year has been determined to have no
yield impact for the subsequent year that approved insurance providers
have the ability to not reduce the yield the subsequent crop year even
though this provision indicates that it must be reduced by using the
word ``will.'' A commenter noted that the draft version of these
provisions prior to being published as a proposed rule did use the word
``may'' which is how this provision should be worded. The background
information also indicates that this provision is similar to the
provisions that FCIC recently added to other perennial crop policies
such as the Arizona-California Citrus Crop Insurance Provisions. It
should be noted that the Arizona-California Citrus Crop Insurance
Provisions were published as a final rule and for this exact same
policy provision used the word ``may'' rather than ``will''. The
commenter emphasized that FCIC should use the same language of ``may''
that was used in the final version of the Arizona-California Citrus
Crop Insurance Provisions as this is the correct word to use and it
will make the language in these provisions consistent with the language
used in the Arizona-California Citrus Crop Insurance Provisions.
Response: As the language indicates, the provision only requires a
yield reduction if a circumstance occurs that reduces productive
capacity of the trees for the subsequent year. Use of the term ``will''
in the provision does not require a reduction in the yield if a
reduction in productive capacity does not exist or is not expected for
the subsequent year. FCIC has made no change to the final rule.
Comment: The provision in section 3(e) is proposed to be moved to
section 3(f) with no other changes to the language in this provision. A
commenter stated the language in this provision suggests that in the
event of damage or changes to the grove, the yield is established by
another method (appraisal of the potential of the insured acreage for
the crop year). The commenter is concerned that as written, the
provision is too vague and allows for different interpretations. The
commenter requested FCIC provide further clarification/procedures of
how and when this should be done. The commenter stated that it seems
more clarification will be provided in the new 3(e), but not for the
new 3(f).
Response: FCIC agrees that, relative to current changes, as
currently worded this existing provision could be misinterpreted,
especially the phrase ``another method.'' Although the provision only
refers generically to the method described in the new paragraph 3(e),
FCIC intends to minimize the risk of misinterpretation. This language
is no longer needed with the addition of the new paragraph 3(e).
Therefore, to prevent potential confusion FCIC is revising the
provision in the final rule by removing the duplicative information.
Section 7--Insured Crop
Comment: A commenter stated the provision in section 7(a) is
beneficial to indicate that the insured crop will be each citrus fruit
group but this still does not change the need to replace the term
``crop'' with ``citrus fruit group'' as recommended in various other
sections of these Crop Provisions since this is the defined term.
Response: As stated in response to a previous comment, FCIC has
revised the final rule by including the term ``citrus fruit group'' in
addition to the term ``insured crop'' where appropriate.
Comment: Several commenters asked for clarification on what is
meant by the term ``previous year'' in the newly designated section
7(a)(4) [previously section 7(d)] because there is a lag year for fruit
production in the APH [Actual Production History]. For example, the
commenter asked if ``previous year'' means the most recent year
harvested or does it mean the last year of the database.
Response: The crop year for the Texas Citrus Fruit Crop Provisions
spans more than one calendar year. The Crop Provisions require
production reporting from two crop years ago for APH purposes because
the prior crop year harvest is generally not completed before beginning
of the next crop year. For this same reason, the minimum production
requirement contained in the newly designated section 7(a)(4) is not
typically assessed from the previous crop year. Therefore, FCIC is
revising this provision in the final rule to clarify that the provision
refers to the crop year reported in accordance with section 3(g), which
is the crop year two years prior to the current crop year.
Section 8--Insurable Acreage
Comment: Several commenters asked for clarification on the
provisions in section 8 regarding whether a producer may have different
fruit groups interplanted with each other, as any other citrus fruit
group would qualify as ``another perennial agricultural commodity.''
Response: The provision in section 8 states that a citrus fruit
group planted with another perennial agricultural commodity is
insurable unless we inspect the acreage and determine it does not meet
the requirements contained in your policy. A citrus fruit group would
typically qualify as a perennial agricultural commodity, under the
``agricultural commodity'' definition in the Basic Provisions.
Therefore, a citrus fruit group interplanted with another citrus fruit
group may be insurable unless an inspection reveals the citrus fruit
group for which coverage is sought does not meet the policy terms. FCIC
has made no change to the final rule.
Section 9--Insurance Period
Comment: A commenter recommended removing ``. . . during the 10-day
period . . .'' when the application is received between November 11 and
November 21 from section 9(a)(1). The requirement that the approved
insurance provider inspection must take place within a 10-day period is
unnecessary and burdensome.
Response: The purpose of this language is allowing the approved
insurance provider adequate time to determine insurability, such as
performing an inspection, prior to
[[Page 38063]]
insurance attaching if the application is received after November 11.
While the provision references inspection authority, it does not
necessarily require an inspection to be completed during the 10-day
period. Therefore, FCIC disagrees this provision is burdensome. In
addition, the proposed rule indicated no intended changes to this
provision. However, FCIC wishes to further clarify whether the
provision is referring to the 10-day period between November 11 and
November 21 or the 10-day period between the time the application is
received and when insurance attaches, when those time periods are not
the same. Therefore, FCIC has revised the provision in the final rule
to clarify the 10-day period raised in the comment refers to the period
that begins when the application is received, if it is received after
November 11.
Section 10--Causes of Loss
Comment: Several commenters asked for clarification on whether
citrus canker (a disease affecting citrus species caused by the
bacterium Xanthomonas axonopodis) is an insurable or uninsurable peril
for Texas Citrus Fruit.
Response: Citrus canker is insurable under the revised Texas Citrus
Fruit Crop Provisions unless excluded through the Special Provisions.
FCIC currently does not intend to exclude citrus canker through the
Special Provisions. FCIC has made no change to the final rule.
Comment: A commenter stated that producers may be concerned if
there is a premium rate increase if citrus greening is added as an
insurable cause of loss. Producers may want an option to opt out of
this coverage.
Response: As stated in the background section of the proposed rule,
FCIC intends to exclude citrus greening from insurability through the
Special Provisions. FCIC does not foresee making coverage available for
citrus greening. FCIC has made no change to the final rule.
Comment: A commenter stated the provisions in section 10 are of
most concern to growers in Texas. The commenter asked if the new
language is saying that citrus greening is covered. More importantly,
the commenter asked what is covered. The commenter states it is very
unclear. The commenter states that growers in Texas have many questions
as to how changes to the cause of loss section will affect the premium
rates. The commenter states it is impossible to plan without this
information.
Response: As stated in the proposed rule, FCIC intends to exclude
citrus greening from insurability through the Special Provisions.
Therefore, citrus greening is not an insurable cause of loss because
the Special Provisions are a part of the policy. Any insect or other
plant disease not excluded through the Special Provisions will be
insurable as long as the loss of production is not due to damage
resulting from insufficient or improper application of control measures
as recommended by agricultural experts. Presently, FCIC does not
foresee excluding any other disease besides citrus greening. Although
loss experience may impact premium rates, FCIC does not expect these
current cause of loss changes to have an immediate impact on premium
rates. Insects and plant disease were already insurable causes of loss
under the Crop Provisions, provided they were linked to an insurable
cause of loss under specific terms of the prior policy language. FCIC
has made no change to the final rule.
Comment: Several commenters stated that producers do not harvest
trees afflicted with citrus greening separately from trees that are not
affected. Assessing the amount of production lost to citrus greening,
an uninsurable cause, may be difficult if production is commingled. The
commenters stated FCIC must develop procedures governing how to
separate insurable damage from uninsurable damage.
Response: The current methods for assessing uninsured damage would
apply equally to citrus greening. It is not uncommon for groves or
trees within a grove to contain insurable damaged fruit, uninsurable
damaged fruit, and undamaged fruit. However, FCIC will assess the
impacts of the changes to these Crop Provisions and revise the loss
adjustment procedures if necessary. FCIC intends to give approved
insurance providers an opportunity to review and provide feedback on
the proposed changes to the loss adjustment procedures prior to
publication. FCIC has made no change to the final rule.
Comment: Several commenters stated they agree with the comments in
the background section made by FCIC regarding citrus greening and agree
that citrus greening should be excluded as a cause of loss in the
Special Provisions. The proposed provision in section 10(a)(9) also
provides FCIC with the flexibility in the future to exclude additional
causes of loss for insects or disease that should not be covered.
Response: FCIC appreciates the feedback and support for this
proposed change. In addition to providing flexibility for excluding
causes of loss, the Special Provisions also provide flexibility for
providing additional information needed to determine other causes of
loss such as excess wind. The proposed definition of ``excess wind''
was intended to allow additional weather reporting stations to be
identified through the Special Provisions to be used to verify excess
wind. However, FCIC has determined the proposed wording in the
definition of ``excess wind'' could be misinterpreted to mean that the
phrase ``operating nearest to the insured acreage at the time of
damage,'' only applies to non-US National Weather Service stations
identified in the Special Provisions. Therefore, FCIC has revised the
definition of ``excess wind'' to clarify that the phrase ``operating
nearest to the insured acreage at the time of damage,'' applies to both
U.S. National Weather Service reporting station and any other weather
reporting station identified in the Special Provisions.
Section 11--Duties in the Event of Damage or Loss
Comment: Several commenters stated that section 11(a) indicates
``we will determine which trees must remain unharvested so that we may
inspect them in accordance with FCIC procedures.'' This language could
be difficult to administer without clear and concise guidance from FCIC
in procedures. The background information for this section indicates
that the FCIC intends to issue crop specific guidance for the approved
insurance providers to use to instruct the insured on which trees must
remain unharvested. The commenters requested FCIC make sure the
procedures are clearly laid out to ensure this new section of the Crop
Provisions is not unduly difficult to administer. A commenter requested
FCIC to confirm that in addition to the procedures being clear that
they will also ensure they will not be unreasonably difficult for
approved insurance providers to administer.
Response: As stated in response to a previous comment, FCIC will
assess the impacts of the changes to the Crop Provisions and revise the
loss adjustment procedures if necessary. FCIC will make every effort to
ensure procedures are clear and unduly difficult for approved insurance
providers to administer. FCIC intends to give approved insurance
providers an opportunity to review and provide feedback on the proposed
changes to the loss adjustment procedures prior to publication. FCIC
has made no change to the final rule.
[[Page 38064]]
Executive Orders 12866 and 13563
Executive Order 12866, ``Regulatory Planning and Review,'' and
Executive Order 13563, ``Improving Regulation and Regulatory Review,''
direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). Executive Order 13563 emphasized the importance
of quantifying both costs and benefits, of reducing costs, of
harmonizing rules, and of promoting flexibility.
The Office of Management and Budget (OMB) designated this rule as
not significant under Executive Order 12866, ``Regulatory Planning and
Review,'' and therefore, OMB has not reviewed this rule.
Paperwork Reduction Act of 1995
Pursuant to the provisions of the Paperwork Reduction Act of 1995
(44 U.S.C. chapter 35, subchapter I), the collections of information in
this rule have been approved by OMB under control number 0563-0053.
E-Government Act Compliance
FCIC is committed to complying with the E-Government Act of 2002,
to promote the use of the Internet and other information technologies
to provide increased opportunities for citizen access to Government
information and services, and for other purposes.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L.
104-4) requires Federal agencies to assess the effects of their
regulatory actions on State, local, and Tribal governments, or the
private sector. Agencies generally need to prepare a written statement,
including a cost-benefit analysis, for proposed and final rules with
Federal mandates that may result in expenditures of $100 million or
more in any year for State, local, or Tribal governments, in the
aggregate, or to the private sector. UMRA generally requires agencies
to consider alternatives and adopt the more cost effective or least
burdensome alternative that achieves the objectives of the rule. This
rule contains no Federal mandates, as defined in Title II of 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
UMRA.
Executive Order 13132
It has been determined under section 1(a) of Executive Order 13132,
Federalism, that this rule does not have sufficient implications to
warrant consultation with the States. The provisions contained in this
rule will not have a substantial direct effect on States, or on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government, except as required by law.
Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments.'' Executive Order 13175 requires Federal agencies
to consult and coordinate with tribes on a government-to-government
basis on policies that have tribal implications, including regulations,
legislative comments or proposed legislation, and other policy
statements or actions that have substantial direct effects on one or
more Indian tribes, on the relationship between the Federal Government
and Indian tribes or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
FCIC has assessed the impact of this rule on Indian tribes and
determined that this rule does not, to our knowledge, have tribal
implications that require tribal consultation under Executive Order
13175. If a Tribe requests consultation, FCIC will work with the USDA
Office of Tribal Relations to ensure meaningful consultation is
provided where changes, additions, and modifications identified in this
rule are not expressly mandated by law.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by
the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA,
Pub. L. 104-121), generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to the notice and comment
rulemaking requirements under the Administrative Procedure Act or any
other law, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
FCIC certifies that this regulation will not have a significant
economic impact on a substantial number of small entities. Program
requirements for the Federal crop insurance program are the same for
all producers regardless of the size of their farming operation. For
instance, all producers are required to submit an application and
acreage report to establish their insurance guarantees and compute
premium amounts, and all producers are required to submit a notice of
loss and production information to determine the amount of an indemnity
payment in the event of an insured cause of crop loss. Whether a
producer has 10 acres or 1000 acres, there is no difference in the kind
of information collected. To ensure crop insurance is available to
small entities, the Federal Crop Insurance Act authorizes FCIC to waive
collection of administrative fees from limited resource farmers. FCIC
believes this waiver helps to ensure that small entities are given the
same opportunities as large entities to manage their risks through the
use of crop insurance. A Regulatory Flexibility Analysis has not been
prepared since this regulation does not have an impact on small
entities, and, therefore, this regulation is exempt from the provisions
of the Regulatory Flexibility Act.
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 requires intergovernmental consultation with State and
local officials. See 2 CFR part 415, subpart C.
Executive Order 12988
This 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. With respect to any direct action taken by FCIC
or action by FCIC directing the insurance provider to take specific
action under the terms of the crop insurance policy, 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, or safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
[[Page 38065]]
List of Subjects in 7 CFR Part 457
Crop insurance, Texas citrus fruit, Reporting and recordkeeping
requirements.
Final Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation amends 7 CFR part 457 effective for the 2018 and
succeeding crop years as follows:
PART 457--COMMON CROP INSURANCE REGULATIONS
0
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(o).
0
2. Amend Sec. 457.119 as follows:
0
a. In the introductory text by removing ``2000'' and adding ``2018'' in
its place;
0
b. By removing the undesignated paragraph immediately preceding section
1;
0
c. In section 1:
0
i. By adding in alphabetical order the definitions of ``citrus fruit
commodity,'' ``citrus fruit group,'' ``commodity type,'' and ``intended
use'';
0
ii. By removing the definitions of ``crop,'' ``local market price,''
and ``varieties'';
0
iii. In the definition of ``crop year'' by removing the term ``citrus''
and adding the term ``insured'' in its place;
0
iv. In the definition of ``direct marketing'' by adding the term
``insured'' directly preceding the term ``crop'' in the second
sentence;
0
v. In the definition of ``excess rain'' by adding the term ``insured''
directly preceding the term ``crop'';
0
vi. By revising the definitions of ``excess wind,'' ``interplanted,''
and ``production guarantee (per acre)''; and
0
d. In section 2 by revising paragraphs (a) and (c);
0
e. In section 3:
0
i. In the introductory paragraph by removing the phrase ``(Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities)''
immediately following the words ``section 3'';
0
ii. By revising paragraphs (a) and (b);
0
iii. In paragraph (d) introductory text by removing the term ``type''
and adding the phrase ``commodity type and intended use'' in its place;
0
iv. In paragraph (d)(4) by removing the phrase ``perennial crop, and
anytime'' and replacing it with the phrase ``agricultural commodity and
any time'';
0
v. In paragraph (d)(4)(i) by removing the phrase ``crop, and type'' and
adding the phrase ``agricultural commodity and commodity type,'' in its
place;
0
vi. By redesignating paragraphs (e) and (f) as (f) and (g)
respectively;
0
vii. By designating the undesignated paragraph following paragraph
(d)(4)(iii) as paragraph (e); and
0
viii. By revising the newly designated paragraphs (e), (f) and (g);
0
f. In section 4 by removing the phrase ``(Contract Changes)''
immediately following the words ``section 4'';
0
g. In section 5 by removing the phrase ``(Life of Policy, Cancellation,
and Termination)'' immediately following the words ``section 2'';
0
h. In section 6 by removing the phrase ``(Annual Premium)'' immediately
following the words ``section 7'';
0
i. In section 7 by:
0
i. Designating the undesignated introductory paragraph as paragraph (a)
and redesignating paragraphs (a) through (f) as (a)(1) through (6)
respectively;
0
ii. Revising the newly designated paragraph (a);
0
iii. In the newly designated paragraph (a)(2) by removing the term
``are'' and adding the phrase ``is grown on trees'' in its place;
0
iv. In the newly designated paragraph (a)(3) by removing the term
``are'' and adding the term ``is'' in its place;
0
v. In the newly designated paragraph (a)(4) by removing the phrase
``previous year'' and adding the phrase ``the crop year from two years
prior reported in accordance with section 3(g)'' in its place; and
0
vi. Adding a new paragraph (b);
0
j. Revise section 8;
0
k. In section 9:
0
i. In paragraph (a) by removing the phrase ``(Insurance Period)''
immediately following the words ``section 11'';
0
ii. By revising paragraph (a)(1); and
0
iii. In paragraph (b) by removing the phrase ``(Insurance Period)''
immediately following the words ``section 11'';
0
l. In section 10:
0
i. In paragraph (a) by removing the phrase ``(Causes of Loss)''
immediately following the words ``section 12'';
0
ii. In paragraph (a)(7) by removing the word ``or'';
0
iii. In paragraph (a)(8) by removing the period and adding ``; or'' in
its place;
0
iv. By adding a new paragraph (a)(9); and
0
v. By revising paragraph (b);
0
m. In section 11:
0
i. By redesignating paragraph (a) as (b)(1); and
0
ii. By redesignating paragraph (b) as (b)(2) and revising the newly
designated paragraph (b)(2);
0
iii. By designating the undesignated introductory paragraph as
paragraph (b) introductory text;
0
iv. By adding a new paragraph (a); and
0
v. In the newly designated paragraph (b) by removing the phrase
``(Duties in the Event of Damage or Loss)'' immediately following the
words ``section 14'';
0
n. In section 12:
0
i. By revising paragraph (b)(1);
0
ii. In paragraph (b)(2) by removing the phrase ``crop, or variety, if
applicable'' and adding the phrase ``combination of commodity type and
intended use'' in its place;
0
iii. In paragraph (b)(4) by removing the phrase ``variety, if
applicable,'' and adding the phrase ``combination of commodity type and
intended use'' in its place;
0
iv. In paragraph (c)(1)(iv) by removing the term ``crop'' in all three
places it appears and adding the term ``insured crop'' in its place;
0
v. In paragraph (d) by adding the phrase ``insured with an intended use
of juice'' after the phrase ``Any citrus fruit''; and
0
vi. By revising paragraph (e).
The revisions and additions read as follows:
Sec. 457.119 Texas citrus fruit crop insurance provisions.
* * * * *
1. Definitions
Citrus fruit commodity. Includes the following:
(a) Oranges;
(b) Grapefruit; and
(c) Any other citrus fruit designated as a ``citrus fruit
commodity'' in the actuarial documents.
Citrus fruit group. A designation in the Special Provisions used to
identify combinations of citrus fruit commodity types and intended uses
within a citrus fruit commodity that may be grouped together for the
purposes of electing coverage levels and identifying the insured crop.
Commodity type. A specific subcategory of a citrus fruit commodity
having a characteristic or set of characteristics distinguishable from
other subcategories of the same citrus fruit commodity.
* * * * *
Excess wind. A natural movement of air that has sustained speeds
exceeding 58 miles per hour (50 knots) recorded at the weather
reporting station (U.S. National Weather Service reporting station or
any other weather reporting station identified in the Special
Provisions) operating nearest to the insured acreage at the time of
damage.
* * * * *
Intended use. The insured's expected end use or disposition of the
commodity
[[Page 38066]]
at the time the commodity is reported. Insurable intended uses will be
specified in the Special Provisions.
Interplanted. In lieu of the definition contained in section 1 of
the Basic Provisions, acreage on which two or more agricultural
commodities are planted in any form of alternating or mixed pattern and
at least one of these agricultural commodities constitutes an insured
crop under these Crop Provisions.
Production guarantee (per acre). In lieu of the definition
contained in section 1 of the Basic Provisions, the production
guarantee will be determined by stage as follows:
* * *
(b) Second stage production guarantee. The quantity of citrus (in
tons) determined by multiplying the yield determined in accordance with
section 3(e) of these Crop Provisions by the coverage level percentage
you elect.
* * * * *
2. Unit Division
(a) Basic units will be established for each insured crop (citrus
fruit group) in accordance with section 1 of the Basic Provisions.
* * * * *
(c) Optional units may be established by either of the following,
but not both:
(1) In accordance with section 34(c) of the Basic Provisions,
except as provided in section 2(b) of these Crop Provisions; or
(2) If each optional unit is located on non-contiguous land.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 of the Basic
Provisions:
(a) You may select only one price election and coverage level for
each insured crop (citrus fruit group designated in the Special
Provisions) that you elect to insure.
(1) The price election you choose for each insured crop (citrus
fruit group) need not bear the same percentage relationship to the
maximum price offered by us for each insured crop (citrus fruit group).
For example, if you choose one hundred percent (100%) of the maximum
price election for one insured crop (citrus fruit group) (e.g., the
citrus fruit group for early and midseason oranges), you may choose
seventy-five percent (75%) of the maximum price election for another
insured crop (citrus fruit group) (e.g., the citrus fruit group for
late oranges).
(2) If separate price elections are available by commodity type or
intended use within an insured crop (citrus fruit group), the price
elections you choose within the insured crop (citrus fruit group) must
have the same percentage relationship to the maximum price offered by
us for each other commodity type or intended use within the insured
crop (citrus fruit group). For example, if separate price elections are
available for commodity type ruby red grapefruit with an intended use
of fresh, and commodity type ruby red grapefruit with an intended use
of juice, and you choose one hundred percent (100%) of the price
election for commodity type ruby red grapefruit with an intended use of
fresh, you must also choose one hundred percent (100%) of the price
election for commodity type ruby red grapefruit with an intended use of
juice.
(b) The production guarantee per acre is progressive by stage and
increases from the first stage production guarantee to the second stage
production guarantee. The stages are as follows:
(1) The first stage extends from the date insurance attaches
through April 30 of the calendar year of normal bloom.
(2) The second stage extends from May 1 of the calendar year of
normal bloom until the end of the insurance period.
* * * * *
(e) We will reduce the yield used to establish your production
guarantee, as necessary, based on our estimate of the effect of any
circumstance that may reduce your yields from previous levels. Examples
of these circumstances that may reduce yield may include, but are not
limited to: Interplanted agricultural commodities; removal, topping,
hedging, or pruning of trees; damage; and change in practices. If the
circumstance occurred:
(1) Before the beginning of the insurance period and you notify us
by the production reporting date, the yield used to establish your
production guarantee will be reduced for the current crop year
regardless of whether the circumstance was due to an insured or
uninsured cause of loss;
(2) After the beginning of the insurance period and you notify us
by the production reporting date, the yield used to establish your
production guarantee will be reduced for the current crop year only if
the potential reduction in the yield used to establish your production
guarantee is due to an uninsured cause of loss; or
(3) Before or after the beginning of the insurance period and you
fail to notify us by the production reporting date, an amount equal to
the reduction in the yield will be added to the production to count
calculated in section 12(c) of these Crop Provisions due to uninsured
causes. We will reduce the yield used to establish your production
guarantee for the subsequent crop year to reflect any reduction in the
productive capacity of the trees or in the yield potential of the
insured acreage.
(f) The yield used to compute your production guarantee will be
determined in accordance with Actual Production History (APH)
regulations, 7 CFR part 400, subpart G, and applicable policy
provisions.
(g) In lieu of the provisions in section 3 of the Basic Provisions
that require reporting your production for the previous crop year, for
each crop year you must report your production from two crop years ago
(e.g., on the 2018 crop year production report, you will provide your
2016 crop year production).
* * * * *
7. Insured Crop
(a) In accordance with section 8 of the Basic Provisions, the
insured crop will be each citrus fruit group you elect to insure and
for which a premium rate is provided by the actuarial documents:
* * * * *
(b) For each insured crop (citrus fruit group), administrative fees
will be assessed in accordance with section 6 of the Catastrophic Risk
Protection Endorsement and section 7 of the Basic Provisions.
8. Insurable Acreage
In lieu of the provisions in section 9 of the Basic Provisions that
prohibit insurance attaching to an insured crop interplanted with
another agricultural commodity, interplanted acreage is uninsurable,
except a citrus fruit group interplanted with another perennial
agricultural commodity is insurable unless we inspect the acreage and
determine it does not meet the requirements contained in your policy.
* * * * *
9. Insurance Period
(a) * * *
(1) Coverage begins on November 21 of each crop year, 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 that
begins when the application is received by us and determine that it
does not meet insurability requirements. You must provide any
information that we require for the insured crop (citrus fruit
[[Page 38067]]
group) or to determine the condition of the grove.
* * * * *
10. Causes of Loss
* * * * *
(a) * * *
* * * * *
(9) Insects and plant disease, unless excluded or otherwise
restricted through the Special Provisions, provided the loss of
production is not due to damage resulting from insufficient or improper
application of control measures as recommended by agricultural experts.
(b) In addition to the causes of loss excluded in section 12 of the
Basic Provisions, we will not insure against damage or loss of
production due to the inability to market the citrus for any reason
other than actual physical damage from an insurable cause of loss
specified in this section. For example, we will not pay you an
indemnity if you are unable to market due to quarantine, boycott, or
refusal of any person to accept production.
11. Duties in the Event of Damage or Loss
(a) In accordance with the requirements of section 14 of the Basic
Provisions, you must leave representative samples. In lieu of the
requirements of section 14(c)(3) of the Basic Provisions, we will
determine which trees must remain unharvested so that we may inspect
them in accordance with FCIC procedures.
(b) * * *
* * * * *
(2) If you intend to claim an indemnity on any unit, you must
notify us at least 15 days prior to the beginning of harvest, or within
24 hours if damage is discovered during harvest, so we may have an
opportunity to inspect the unit. You must not sell or dispose of the
damaged crop until after we have given you written consent to do so. If
you fail to meet the requirements of this section, all such production
will be considered undamaged and included as production to count.
12. Settlement of Claim
* * * * *
(b) * * *
(1) Multiplying the insured acreage for each combination of
commodity type and intended use by its respective production guarantee;
* * * * *
(e) Any citrus fruit insured with an intended use of fresh that is
not marketable as fresh fruit due to insurable causes will be adjusted
by multiplying the number of tons of such citrus fruit by the
applicable Fresh Fruit Factor contained in the Special Provisions.
* * * * *
Signed in Washington, DC, on June 6, 2016.
Michael Alston,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. 2016-13770 Filed 6-10-16; 8:45 am]
BILLING CODE 3410-08-P