[Federal Register Volume 65, Number 16 (Tuesday, January 25, 2000)]
[Rules and Regulations]
[Pages 3782-3785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-1703]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457


Common Crop Insurance Regulations; Forage Production Crop 
Provisions; and Forage Seeding Crop Provisions

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 forage production and 
forage seeding. The intended effect of this action is to provide policy 
changes to better meet the needs of the insured. The changes will be 
effective for the 2001 and subsequent crop years.

EFFECTIVE DATE:  This rule is effective February 24, 2000.

FOR FURTHER INFORMATION CONTACT:  Richard Brayton, Insurance Management 
Specialist, 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 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

    Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 
35), the collections of information in this rule have been approved by 
the Office of Management and Budget (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 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 13132

    The policies contained in this rule do not have any substantial 
direct effect on states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
rule impose substantial direct compliance costs on state and local 
governments. Therefore, consultation with the states is not required.

Regulatory Flexibility Act

    This regulation will not have a significant economic impact on a 
substantial number of small entities. Additionally, the regulation does 
not require any action on the part of small entities than is required 
on the part of large entities. The amount of work required of the 
insurance companies will not increase because the information used to 
determine eligibility must already be collected under the present 
policy. No additional work is required as a result of this action on 
the part of either the insured or the insurance companies. 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

[[Page 3783]]

officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.

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. The administrative appeal provisions published 
at 7 CFR part 11 must be exhausted before any action for judicial 
review of any determination made by FCIC 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.

National Performance Review

    This regulatory action is being taken as part of the National 
Performance Review Initiative to eliminate unnecessary or duplicate 
regulations and improve those that remain in force.

Background

    On Thursday, August 26, 1999, FCIC published a notice of proposed 
rulemaking in the Federal Register at 64 FR 46599-46603 to revise 7 CFR 
457.117, Forage Production Crop Insurance Provisions, 457.151 Forage 
Seeding Crop Insurance Provisions, and to delete 457.127 Forage 
Production Winter Coverage Endorsement, effective for the 2001 and 
succeeding crop years.
    Following publication of the proposed rule on August 26, 1999, the 
public was afforded 30 days to submit written comments and opinions. A 
total of 8 comments were received from 2 reinsured companies, a 
Pennsylvania consulting firm, and the Pennsylvania State Secretary of 
Agriculture. The forage production comments received and FCIC's 
responses are as follows:
    Comment: A reinsured company stated the provisions still contains a 
reference to the Winter Coverage Endorsement in section 7(c).
    Response: FCIC has deleted the references.
    Comment: A reinsured company recommended that optional units should 
not be available for forage producers because production records will 
need to be kept separate and, with multiple cuttings throughout the 
season, the insured would have to store or keep production records by 
optional units if a loss occurs.
    Response: Producers are not required to obtain optional units. 
Offering optional units to forage producers will likely increase 
participation in the crop insurance program because there are some 
producers that feel it is worth the effort to maintain separate 
records, to get the additional benefit of optional units. Therefore, no 
change has been made.
    Comment: A reinsured company asked whether the underwriting report 
is still required?
    Response: The farmer certification and underwriting report is still 
required.
    Comment: Reinsured companies, a Pennsylvania consulting firm, and 
the Pennsylvania Secretary of Agriculture expressed concern that forage 
production coverage should be raised to the level of other crop 
programs by providing quality adjustment provisions as in other crop 
insurance programs.
    Response: It is important to provide quality protection to forage 
producers. However, at this time, FCIC has not been able to obtain the 
necessary data to offer coverage nor have the rates been established to 
cover the additional risks that may affect the quality of the forage. 
This would be a significant change that will likely result in higher 
premiums. FCIC will continue its effort to provide quality adjustment. 
Therefore, no change has been made.
    Forage seeding comments and FCIC's responses are as follows:
    Comment: A reinsured company stated that Wisconsin was omitted from 
the cancellation and termination dates list in section 5 of the 
proposed rule.
    Response: FCIC has added Wisconsin.
    Comment: A reinsured company recommended extending the forge 
seeding deadline in Wisconsin. They stated that a number of producers 
are seeding forage later than May and obtaining a successful stand. The 
Special Provisions lists May as deadline for seeding forage.
    Response: FCIC welcomes producer data that helps to establish the 
appropriate seeding deadline for the various areas. However, it is too 
late to consider this information for the 2001 crop year. FCIC will 
consider this information for future changes in the deadlines. 
Therefore, no change has been made.
    In addition to the changes described above, FCIC has made the 
following changes to the Forage Production Crop Provisions:
    1. Section 1--Removed the definition of ``crop year'' from the 
final rule. The current regulation contains a more accurate definition 
of ``crop year.''
    2. Section 7(a)(4) and (5)--Removed these provisions from the final 
rule because section 7(a)(5) was duplicative with section 7(a)(1) and 
section 7(a)(4) was inconsistent with section 7(a)(2) which stated that 
the insurance attaches for Lassen, Modoc, Mono, Shasta and Siskiyou 
Counties on April 15.

List of Subjects in 7 CFR Part 457

    Crop insurance, Forage production, Forage seeding, Reporting and 
recordkeeping requirements.

Final Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation amends the Common Crop Insurance Regulations (7 
CFR part 457) by amending 7 CFR 457.117, for the 2001 and succeeding 
crop years, to read 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 457.117 as follows:

    Revise the heading and introductory text;

    b. In section 1 of the crop insurance provisions delete the 
definitions of ``fall planted'' and ``spring planted,'' add definitions 
of ``direct marketing'' and ``windrow'' and revise the definition of 
``cutting;''

    c. In the crop insurance provisions delete section 2 and 
redesignate sections 3 through 12 as 2 through 11;

    d. In the crop insurance provisions revise newly designated 
sections 4, 5, 6(a), 7(a), 7(b) introductory text and 7(b)(6), 8(b), 9, 
and 10(a); and

    e. In the crop insurance provisions add examples (1) and (2) in 
section 10(b); all to read as follows:


Sec. 457.117  Forage production crop insurance provisions.

    The Forage Production Crop Insurance Provisions for the 2001 and 
succeeding crop years are as follows:
* * * * *
    1. Definitions.
* * * * *
    Cutting. The severance of the forage plant from its roots.
    Direct marketing. Sale of the forage crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
shipper, buyer, or broker. An example of direct marketing is selling 
directly to other producers.
* * * * *

[[Page 3784]]

    Windrow. Forage that is cut and placed in a row.
* * * * *
    4. Cancellation and Termination Dates.
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
                  State                    Cancellation/termination date
------------------------------------------------------------------------
California, Nevada and Utah..............  October 31;
All other states.........................  September 30.
------------------------------------------------------------------------

    5. Report of Acreage.
    In lieu of the provisions of section 6(a) of the Basic Provisions, 
a report of all insured acreage of forage production must be submitted 
on or before each forage production acreage reporting date specified in 
the Special Provisions.
    6. Insured Crop.
    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all the forage in the county for which a premium rate 
is provided by the actuarial documents:
    (1) In which you have a share; and
    (2) That is grown during one or more years after the year of 
establishment.
* * * * *
    7. Insurance Period.
    In lieu of the provisions of section 11 of the Basic Provisions:
    (a) Insurance attaches on acreage with an adequate stand for the 
calendar year following the year of establishment for:
    (1) All California counties accept Lassen, Modoc, Mono, Shasta and 
Siskiyou--December 1;
    (2) Lassen, Modoc, Mono, Shasta and Siskiyou Counties California, 
Colorado, Idaho, Nebraska, Nevada, Oregon, Utah and Washington--April 
15;
    (3) Iowa, Minnesota, Montana, New Hampshire, New York, North 
Dakota, Pennsylvania, Wisconsin, Wyoming, and all other states--May 22;
    (b) Insurance ends at the earliest of:
* * * * *
    (6) The following dates of the crop year:
    (i) California counties of Lassen, Modoc, Mono, Shasta and 
Siskiyou, and all other states--October 15;
    (ii) The last day of the 12th month after the insured crop 
initially planted in all California counties except Lassen, Modoc, 
Mono, Shasta and Siskiyou.
* * * * *
    8. Causes of Loss.
* * * * *
    (b) In addition to the causes of loss specifically excluded in 
section 12 of the Basic Provisions, we will not insure against damage 
of loss of production that occurs after removal from the windrow.
    9. Duties in the event of Damage or Loss.
    In addition to the requirements of section 14 of the Basic 
Provisions, the following will apply:
    (a) You must notify us within 3 days of the date harvest should 
have started if the insured crop will not be harvested;
    (b) You must notify us at least 15 days before any production from 
any unit will be sold by direct marketing unless you have records 
verifying that the forage was direct marketed. Failure to give timely 
notice that production will be sold by direct marketing will result in 
an appraised amount of production to count of not less than the 
production guarantee per acre if such failure results in our inability 
to make the required appraisal;
    (c) If you intend to claim an indemnity on any unit, you must 
notify us at least 15 days prior to the beginning of harvest if you 
previously gave notice in accordance with section 14 of the Basic 
Provisions so that we may inspect the damaged production. You must not 
destroy the damaged crop until after we have given you written consent 
to do so. If you fail to meet the requirements of this section, and 
such failure results in our inability to inspect the damaged 
production, all such production will be considered undamaged and will 
be included as production to count; and
    (d) You must notify us at least 5 days before grazing of insured 
forage begins so we can conduct an appraisal to determine production to 
count. Failure to give timely notice that the acreage will be grazed 
will result in an appraised amount of production to count of not less 
than the production guarantee per acre.
    10. Settlement of Claim.
    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) * * *
    (7) * * *

Example 1

    Assume you have a 100 percent share in 100 acres of type A forage 
in the unit, with a guarantee of 3.0 tons per acre and a price election 
of $65.00 per ton. Due to adverse weather you were only able to harvest 
50.0 tons. Your indemnity would be calculated as follows:
    1. 100 acres type A  x  3 tons = 300 ton guarantee;
    2 & 3. 300 tons  x  $65 price election = $19,500 total value 
guarantee;
    4 & 5. 50 tons production to count  x  $65 price election = $3,250 
total value of production to count;
    6. $19,500 value guarantee--$3,250 = $16,250 loss; and
    7. $16,250  x  100 percent share = $16,250 indemnity payment.

Example 2

    Assume you also have a 100 percent share in 100 acres of type B 
forage in the same unit, with a guarantee of 1.0 ton per acre and a 
price election of $50.00 per ton. Due to adverse weather you were only 
able to harvest 5.0 tons. Your total indemnity for forage production 
for both types A and B in the same unit would be calculated as follows:
    1. 100 acres  x  3 tons = 300 ton guarantee for type A; and 100 
acres  x  1 ton = 100 ton guarantee for type B;
    2. 300 ton guarantee  x  $65 price election = $19,500 total value 
of the guarantee for type A; and 100 ton guarantee  x  $50 price 
election = $5,000 total value of the guarantee for type B;
    3. $19,500 + $5,000 = $24,500 total value of the guarantee;
    4. 50 tons  x  $65 price election = $3,250 total value of 
production to count for type A; and 5 tons  x  $50 price election = 
$250 total value of production to count for type B;
    5. $3,250 + $250 = $ 3,500 total value of production to count for 
types A and B;
    6. $24,500--$3,500 = $21,000 loss; and
    7. $21,000 loss  x  100 percent share = $21,000 indemnity payment.
* * * * *
    3. Section 457.127 is removed and reserved.
    4. Amend 457.151 as follows:
    a. Revise the introductory text;
    b. In the crop insurance provisions revise the definition in 
section 1 of ``harvest';
    c. In the crop insurance provisions redesignate sections 6 through 
13 as 7 through 14;
    d. In the crop insurance provisions revise section 5 and 
redesignated sections 7(b), 8, 11 introductory text, 11(a), 11(b), 
13(a)(3);
    e. In the crop insurance provisions add a new section 6 and an 
example to redesignated section 13(a)(3); all to read as follows:

[[Page 3785]]

Sec. 457.151  Forage seeding crop insurance provisions.

    The Forage Seeding Crop Insurance Provisions for the 2001 and 
succeeding crop years are as follows:
* * * * *
    1. Definitions.
* * * * *
    Harvest. Severance of the forage plant from its roots. Acreage that 
is only grazed will not be considered harvested.
* * * * *
    5. Cancellation and Termination Dates.
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are:

------------------------------------------------------------------------
            State and county              Cancellation/termination dates
------------------------------------------------------------------------
California, Nevada, New Hampshire, New   July 31.
 York, Pennsylvania and Vermont.
Montana, Minnesota, North Dakota, South  March 15.
 Dakota, Wisconsin and Wyoming.
------------------------------------------------------------------------

    6. Report of Acreage.
    In lieu of the provisions of section 6(a) of the Basic Provisions, 
a report of all insured acreage of forage seeding must be submitted on 
or before each forage seeding acreage report date specified in the 
Special Provisions.
    7. Insured Crop.
* * * * *
    (b) That is planted during the current crop year, or replanted 
during the calendar year following planting, to establish a normal 
stand of forage;
* * * * *
    8. Insurable Acreage.
    In addition to the provisions of section 9 of the Basic Provisions:
    (a) In California counties Lassen, Modoc, Mono, Shasta, Siskiyou 
and all other states, any acreage of the insured crop damaged before 
the final planting date, to the extent that such acreage has less than 
75 percent of a normal stand, must be replanted unless we agree that it 
is not practical to replant; and
    (b) In California, unless otherwise specified in the Special 
Provisions, any acreage of the insured crop damaged anytime during the 
crop year to the extent that such acreage has less than 75 percent of a 
normal stand must be replanted unless it cannot be replanted and reach 
a normal stand within the insurance period.
* * * * *
    11. Replanting Payment.
    In lieu of the provisions contained in section 13 of the Basic 
Provisions:
    (a) A replanting payment is allowed if:
    (1) In California, unless specified otherwise in the Special 
Provisions, acreage planted to the insured crop is damaged by an 
insurable cause of loss occurring within the insurance period to the 
extent that less than 75 percent of a normal stand remains and the crop 
can reach maturity before the end of the insurance period;
    (2) In Lassen, Modoc, Mono, Shasta, Siskiyou Counties, California, 
and all other states:
    (i) A replanting payment is allowed only whenever the Special 
Provisions designate both fall and spring final planting dates;
    (ii) The insured fall planted acreage is damaged by an insurable 
cause of loss to the extent that less than 75 percent of a normal stand 
remains;
    (iii) It is practical to replant;
    (iv) We give written consent to replant; and
    (v) Such acreage is replanted the following spring by the spring 
planting date.
    (b) The amount of the replanting payment will be equal to 50 
percent of the amount of indemnity determined in accordance with 
section 13 unless otherwise specified in the Special Provisions.
* * * * *
    13. Settlement of Claim.
    (a) * * *
    (3) Multiplying the total acres with an established stand for the 
insured acreage of each type and practice in the unit by the amount of 
insurance for the applicable type and practice;

Example

    Assume you have 100 percent share in 30 acres of type A forage in 
the unit, with an amount of insurance of $100.00 per acre. At the time 
of loss, the following findings are established: 10 acres had a 
remaining stand of 75 percent or greater. You also have 20 acres of 
type B forage in the unit, with an amount of insurance of $90.00 per 
acre. 10 acres had with a remaining stand of 75 percent or greater. 
Your indemnity would be calculated as follows:
    1.  30 acres  x  $100.00 = $3,000 amount of insurance for type A;
    20 acres  x  $90.00 = $1,800 amount of insurance for type B;
    2.  $3,000 + $1,800 = $4,800 total amount of insurance;
    3.  10 acres with 75% stand or greater  x  $100 = $1,000 production 
to count for type A;
    10 acres with 75% stand or greater  x  $90 = $900 production to 
count for type B;
    4.  $1,000+$900 = $1,900 total production to count;
    5.  $4,800-$1,900 = $2,900 loss;
    6.  $2,900 x 100 percent share = $2,900 indemnity payment.
* * * * *

    Signed in Washington, DC, on January 18, 2000.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 00-1703 Filed 1-24-00; 8:45 am]
BILLING CODE 3410-08-P