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[Federal Register Volume 62, Number 19 (Wednesday, January 29, 1997)]
[Rules and Regulations]
[Pages 4115-4119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2040]

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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
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Federal Register / Vol. 62, No. 19 / Wednesday, January 29, 1997 / 
Rules and Regulations

[[Page 4115]]

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457

RIN 0563-AB50

Common Crop Insurance Regulations, Texas Citrus Tree Crop 
Insurance Provisions; and Texas Citrus Tree Endorsement

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes 
specific crop provisions for the insurance of Texas citrus trees. The 
provisions will be used in conjunction with the Common Crop Insurance 
Policy Basic Provisions, which contain standard terms and conditions 
common to most crops. The intended effect of this action is to provide 
policy changes to better meet the needs of the insured, include the 
current Texas citrus tree endorsement with the Common Crop Insurance 
Policy for ease of use and consistency of terms, and to restrict the 
effect of the current Texas citrus tree endorsement to the 1997 and 
prior crop years.

EFFECTIVE DATE: January 29, 1997.

FOR FURTHER INFORMATION CONTACT: Louise Narber, Program Analyst, 
Research and Development, Product Development Division, Federal Crop 
Insurance Corporation, United States Department of Agriculture, 9435 
Holmes Road, Kansas City, MO 64131, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

    This action has been reviewed under United States Department of 
Agriculture (USDA) procedures established by Executive Order No. 12866. 
This action constitutes a review as to the need, currency, clarity, and 
effectiveness of these regulations under those procedures. The sunset 
review date established for these regulations is August 3, 2002.
    This rule has been determined to be exempt for the purposes of 
Executive Order No. 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget (OMB).

Paperwork Reduction Act of 1995

    Following publication of the proposed rule, the public was afforded 
60 days to submit comments, data, and opinions on information 
collection requirements previously approved by OMB under OMB control 
number 056-0003 through September 30, 1998. No public comments were 
received.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. This rule contains no Federal 
mandates (under the regulatory provisions of title II of the UMRA) of 
State, local, and tribal governments or the private sector. Thus, this 
rule is not subject to the requirements of sections 202 and 205 of the 
UMRA.

Executive Order No. 12612

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

Regulatory Flexibility Act

    This regulation will not have a significant impact on a substantial 
number of small entities. New provisions included in this rule will not 
impact small entities to a greater extent than large entities. Under 
the current regulations, all producers are required to complete an 
application and acreage report. If the trees are damaged or destroyed, 
insureds are required to give notice of loss and provide the necessary 
information to complete a claim for indemnity. This regulation does not 
alter those requirements. The amount of work required of the insurance 
companies delivering and servicing these policies will not increase 
significantly from the amount of work currently required. This rule 
does not have any greater or lesser impact on the producer. Therefore, 
this action is determined to be exempt from the provisions of the 
Regulatory Flexibility Act (5 U.S.C. 605), and no Regulatory 
Flexibility Analysis was prepared.

Federal Assistance Program

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.

Executive Order No. 12372

    This program is not subject to the provisions of Executive Order 
No. 12372, which require intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.

Executive Order No. 12778

    The Office of the General Counsel has determined that these 
regulations meet the applicable standards provided in sections 2(a) and 
2(b)(2) of Executive Order No. 12778. The provisions of this rule will 
not have a retroactive effect prior to the effective date. The 
provisions of this rule will preempt State and local laws to the extent 
such State and local laws are inconsistent herewith. The administrative 
appeal provisions published at 7 CFR part 11 must be exhausted before 
any action for judicial review may be brought.

Environmental Evaluation

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

National Performance Review

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

Background

    On Thursday, August 29, 1996, FCIC published a proposed rule in the

[[Page 4116]]

Federal Register at 61 FR 45369-45373 to add to the Common Crop 
Insurance Regulations (7 CFR part 457), a new section, 7 CFR 
Sec. 457.106 Texas Citrus Tree Crop Insurance Provisions. The new 
provisions will be effective for the 1998 and succeeding crop years. 
These provisions will replace and supercede the current provisions for 
insuring Texas citrus trees found at 7 CFR Sec. 401.134 (Texas Citrus 
Tree Endorsement). FCIC also amends 7 CFR 401.134 to limit its effect 
to the 1997 and prior crop years. FCIC will later publish a regulation 
to remove and reserve Sec. 401.134.
    Following publication of the proposed rule, the public was afforded 
60 days to submit written comments, data, and opinions. A total of 20 
comments were received from the crop insurance industry and FCIC. The 
comments received and FCIC's responses are as follows:
    Comment: A representative of FCIC suggested that the word ``type'' 
be changed to ``crop'' throughout the provisions where appropriate 
since the citrus type designations used in the past will be replaced 
with individual crop codes beginning with the 1998 crop year.
    Response: FCIC agrees and has made this change and has also deleted 
the definition of type.
    Comment: The crop insurance industry suggested that the definition 
of ``deductible'' be defined in the Basic Provisions rather than the 
crop provisions.
    Response: ``Deductible'' must be defined in the crop provisions 
until the Basic Provisions are revised. No change has been made to the 
provisions.
    Comment: The crop insurance industry questioned the definition of 
``dehorning.'' They stated that the definition previously was ``The 
cutting back of each scaffold limb * * *''; the proposed rule stated 
``* * * one or more scaffold limbs * * *.'' This affects the amount of 
insurance per acre. The commenters questioned if the intent was to 
limit the amount of insurance per acre to 33 percent for any tree with 
only one scaffold limb dehorned.
    Response: FCIC agrees that the definition of ``dehorning'' as 
published in the proposed rule is confusing. The definition has been 
revised to read ``Cutting all scaffold limbs to a length not longer 
than \1/4\ the height of the tree before such cutting.''
    Comment: The crop insurance industry recommended that the 
definition of ``irrigated practice'' should also address the quality of 
the water being applied.
    Response: FCIC disagrees. There are no established criteria 
regarding the quality of water necessary to produce a crop. Such 
criteria would be difficult to develop and administer due to the 
complexity of the factors involved. No change has been made in the 
definition.
    Comment: The crop insurance industry suggested defining ``root 
stock.''
    Response: FCIC agrees and has added a definition of ``root stock.''
    Comment: The crop insurance industry stated that section 2(f) needs 
to be revised to say ``Each optional unit must meet one of the 
following criteria, as applicable * * *'' instead of ``* * * one or 
more of the following * * *'' so that the policyholder may choose to 
have optional units either by non-contiguous land or by legal 
description but not by both.
    Response: FCIC agrees and has made the recommended change. Also, 
the phrase ``In lieu of establishing optional units by section, section 
equivalent or FSA Farm Serial Number,'' has been deleted from section 
2(f)(2) for clarification.
    Comment: The crop insurance industry questioned if there should be 
some reference to type in section 3(b) in regard to amount of insurance 
for each population density.
    Response: FCIC agrees that the per acre amount of insurance for 
each variety or population density within a crop must bear the same 
relationship to the maximum amount of insurance available for each 
variety and population density of the crop as specified in the 
Actuarial Table. This change has been made.
    Comment: The crop insurance industry suggested clarifying section 
3(b)(4) by adding the phrase ``the premium and'' before the phrase 
``any indemnity will be based is $1,700 ($2,000 multiplied by 0.85).''
    Response: FCIC agrees and has made the recommended change.
    Comment: The crop insurance industry suggested changing ``and'' to 
``or'' in section 7(b)(1) because items 1 and 2 are two separate 
conditions.
    Response: FCIC agrees and has made the change.
    Comment: The crop insurance industry questioned whether there were 
any guidelines to exclude or limit coverage on any acreage that was not 
insured the previous year.
    Response: The M8-Texas Citrus Tree Handbook contains provisions for 
excluding or limiting the amount of insurance on Texas citrus trees.
    Comment: The crop insurance industry stated that since the term 
``excess moisture'' is not defined in the provisions whereas the term 
``excess precipitation'' was defined in the existing regulation, they 
assumed that excess moisture would be determined on a case by case 
basis.
    Response: ``Excess moisture'' was an insurable cause of loss in the 
Texas Citrus Tree Endorsement published in 7 CFR Sec. 401.134 for the 
1989 and subsequent crop years and in the proposed rule for these crop 
provisions. However, the term was not defined. The term is changed to 
``excess precipitation'' and is defined as ``An amount of precipitation 
sufficient to directly damage the tree.''
    Comment: The crop insurance industry stated that the covered peril 
of ``failure of the irrigation water supply'' basically has been 
eliminated and they questioned if this was the intent and, if so, if 
the premium would be adjusted accordingly.
    Response: It was not the intent to eliminate the covered peril of 
``failure of the irrigation water supply'' due to drought. This 
provision has been revised consistent with the Texas Citrus Fruit Crop 
Insurance Provisions. It now reads ``Failure of the irrigation water 
supply if caused by an insured peril or drought that occurs during the 
insurance period.''
    Comment: The crop insurance industry suggested deleting the word 
``actual'' in section 12(a)(1) because sections 12(b)(2) and 12(c) may 
adjust the actual percentages.
    Response: FCIC believes that the provisions are clearly stated. No 
changes have been made.
    Comment: The crop insurance industry stated that the existing 
provisions established the condition that any grove sustaining more 
than 80 percent actual damage would be considered 100 percent damaged, 
but the proposed rule establishes this condition on an individual tree 
basis. If this is an intended change it must be identified as such.
    Response: When appraising damage, a sample of trees is selected. 
Damage to individual scaffold limbs on each tree is assessed to 
establish the percent of damage for the unit. FCIC has not changed the 
procedure. These crop provisions have been revised to more accurately 
identify the process with the addition of the following sentence: ``If 
this percent of damage is more that 80 percent, the unit will be 
considered 100 percent damaged.''
    Comment: The crop insurance industry questioned whether a tree that 
has 85 percent actual damage is considered to be 100 percent damaged. 
They wondered which figure is used

[[Page 4117]]

when calculating the average percentage of damage for the unit.
    Response: Any tree that sustains more than 80 percent damage 
following the year of set out will be considered 100 percent damaged. 
The percent of damage on the unit will be determined by computing the 
average of the determinations made for the individual trees within each 
sample, thus any tree with over 80 percent of damage will be regarded 
as having 100 percent of damage. If the total samples have an average 
of more than 80 percent damage, the damage will be determined to be 100 
percent for the unit.
    Comment: The crop insurance industry stated that they believe the 
written agreement should be continuous if no substantive changes occur 
from one year to the next.
    Response: Written agreements are, by design, temporary and intended 
to address unusual circumstances. If the conditions for which a written 
agreement is needed exists each crop year, the policy or Special 
Provisions should be amended to reflect this condition. Therefore, no 
change will be made to the provisions.
    Comment: The crop insurance industry suggested combining the 
provisions contained in section 13(e) with the provisions in section 
13(a).
    Response: FCIC believes that the current provisions are clearly 
stated and has not opted to combine them.
    Comment: The crop insurance industry suggested addressing the 
extended insurance period for the 1998 crop year in the 1998 Special 
Provisions or an amendatory endorsement, instead of 3 references in 
these crop provisions.
    Response: The policy itself is the best place to notify the insured 
of the insurance period to avoid any confusion. FCIC believes that 
these provisions are clearly stated and the provisions have not been 
changed.
    In addition to the changes described above, FCIC has made the 
following minor editorial changes to the Texas Citrus Tree Provisions:
    1. Section 1--Added a definition for ``crop'' and amended the 
definitions of ``crop year,'' ``deductible,'' ``destroyed,'' ``excess 
wind,'' ``FSA,'' ``good farming practices,'' ``interplanted,'' and 
``written agreement'' for clarification.
    2. Section 9--Revised the provisions to allow all insureds to 
obtain coverage for the extended 1998 crop year. Previously new 
insureds would not have had an opportunity to insure their crop from 
June 1 through November 20, which may have resulted in some losses paid 
under the crop insurance policy and others under the noninsured crop 
disaster assistance program.
    3. Section 12--Clarified how an indemnity is computed by adding a 
statement to specify that the result of subtracting the insured's 
deductible from the percent of damage for the unit must be greater than 
zero to receive an indemnity. Deleted the provision specifying that any 
percent of damage paid previously in the same crop year be subtracted. 
These provisions do not allow an initial payment prior to the final 
indemnity.
    Good cause is shown to make this rule effective upon publication in 
the Federal Register and without the 30-day period required by the 
Administrative Procedure Act. This rule improves the Texas citrus tree 
insurance coverage and brings it under the Common Crop Insurance Policy 
Basic Provisions for consistency among policies. This rule will allow 
optional unit division by section, section equivalent, or FSA Farm 
Serial Number; or by non-contiguous land, but not by both. The unit 
structure will now be the same for both the Texas Citrus Tree 
Provisions and the Texas Citrus Fruit Provisions.

List of Subjects in 7 CFR Parts 401 and 457

    Crop insurance, Texas citrus tree, Texas citrus tree endorsement.

Final Rule

    Accordingly, for the reasons set forth in the preamble, the Federal 
Crop Insurance Corporation hereby amends 7 CFR parts 401 and 457 as 
follows:

PART 401--GENERAL CROP INSURANCE REGULATIONS--REGULATIONS FOR THE 
1988 AND SUBSEQUENT CONTRACT YEARS

    1. The authority citation for 7 CFR part 401 continues to read as 
follows:

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

    2. The introductory text of Sec. 401.134 is revised to read as 
follows:

Sec. 401.134  Texas Citrus Tree Endorsement.

    The provisions of the Texas Citrus Tree Endorsement for the 1989 
through 1997 crop years are as follows:
* * * * *

PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE 
1994 AND SUBSEQUENT CONTRACT YEARS

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

    Authority: 7 U.S.C. 1506(l), 1506(p).
    4. 7 CFR part 457 is amended by adding a new Sec. 457.106 to read 
as follows:

Sec. 457.106  Texas Citrus Tree Crop Insurance Provisions.

    The Texas Citrus Tree Crop Insurance Provisions for the 1998 and 
succeeding crop years are as follows:

    FCIC policies:

United States Department of Agriculture

Federal Crop Insurance Corporation

    Reinsured policies:

(Appropriate title for insurance provider)

    Both FCIC and reinsured policies:

Texas Citrus Tree Crop Provisions

    If a conflict exists among the Basic Provisions (Sec. 457.8), 
these crop provisions, and the Special Provisions; the Special 
Provisions will control these crop provisions and the Basic 
Provisions; and these crop provisions will control the Basic 
Provisions.

1. Definitions

    Bud union--The location on the tree trunk where a bud from one 
tree variety is grafted onto root stock of another variety.
    Crop--Specific groups of citrus fruit trees as listed in the 
Special Provisions.
    Crop year--For the 1998 crop year only, a period of time that 
begins on June 1, 1997, and ends on November 20, 1998. For all other 
crop years, a period of time that begins on November 21 of the 
calendar year prior to the year the trees normally bloom, and ends 
on November 20 of the following calendar year. The crop year is 
designated by the year in which the insurance period ends.
    Days--Calendar days.
    Deductible--The amount determined by subtracting the coverage 
level percentage you choose from 100 percent. For example, if you 
elected a 65 percent coverage level, your deductible would be 35 
percent (100%-65% = 35%).
    Dehorning--Cutting all scaffold limbs to a length not longer 
than \1/4\ the height of the tree before such cutting.
    Destroyed--Trees damaged to the extent that removal is 
necessary.
    Excess precipitation--An amount of precipitation sufficient to 
directly damage the tree.
    Excess wind--A natural movement of air that has sustained speeds 
in excess of 58 miles per hour recorded at the U.S. Weather Service 
reporting station nearest to the crop at the time of crop damage.
    Freeze--The formation of ice in the cells of the trees caused by 
low air temperatures.
    FSA--The Farm Service Agency, an agency of the United States 
Department of Agriculture or a successor agency.
    Good farming practices--The cultural practices generally in use 
in the county for the trees to have normal growth and vigor and 
recognized by the Cooperative State Research, Education, and 
Extension Service as compatible with agronomic and weather 
conditions in the county.
    Interplanted--Acreage on which two or more crops are planted in 
any form of alternating or mixed pattern.
    Irrigated practice--A method by which the normal growth and 
vigor of the insured trees is maintained by artificially applying 
adequate quantities of water during the

[[Page 4118]]

growing season using the appropriate irrigation systems at the 
proper times.
    Non-contiguous land--Any two or more tracts of land whose 
boundaries do not touch at any point, except that land separated 
only by a public or private right-of-way, waterway, or an irrigation 
canal will be considered as contiguous.
    Root stock--A root or a piece of a root of one tree variety onto 
which a bud from another tree variety is grafted.
    Scaffold limbs--Major limbs attached directly to the trunk.
    Set out--Transplanting the tree into the grove.
    Written agreement--A written document that alters designated 
terms of this policy in accordance with section 13.

2. Unit Division

    (a) A unit as defined in section 1 (Definitions) of the Basic 
Provisions (Sec. 457.8), will be divided into additional basic units 
by each citrus crop designated in the Special Provisions.
    (b) Unless limited by the Special Provisions, these basic units 
may be divided into optional units if, for each optional unit, you 
meet all the conditions of this section or if a written agreement to 
such division exists.
    (c) Basic units may not be divided into optional units on any 
basis including, but not limited to, production practice, type, and 
variety, other than as described in this section.
    (d) If you do not comply fully with these provisions, we will 
combine all optional units that are not in compliance with these 
provisions into the basic unit from which they were formed. We will 
combine the optional units at any time we discover that you have 
failed to comply with these provisions. If failure to comply with 
these provisions is determined to be inadvertent, and the optional 
units are combined into a basic unit, that portion of the additional 
premium paid for optional units that have been combined will be 
refunded to you for the units combined.
    (e) All optional units you selected for the crop year must be 
identified on the acreage report for that crop year.
    (f) Each optional unit must meet one of the following criteria, 
as applicable:
    (1) Optional Units by Section, Section Equivalent, or FSA Farm 
Serial Number: Optional units may be established if each optional 
unit is located in a separate legally identified section. In the 
absence of sections, we may consider parcels of land legally 
identified by other methods of measure including, but not limited to 
Spanish grants, railroad surveys, leagues, labors, or Virginia 
Military Lands, as the equivalent of sections for unit purposes. In 
areas that have not been surveyed using the systems identified 
above, or another system approved by us, or in areas where such 
systems exist but boundaries are not readily discernible, each 
optional unit must be located in a separate farm identified by a 
single FSA Farm Serial Number; or
    (2) Optional Units on Acreage Located on Non-Contiguous Land: 
Optional units may be established if each optional unit is located 
on non-contiguous land.

3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities

    (a) In lieu of the requirement of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) 
of the Basic Provisions (Sec. 457.8), that prohibits you from 
selecting more than one coverage level for each insured crop, you 
may select a different coverage level for each crop designated in 
the Special Provisions that you elect to insure.
    (b) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) 
of the Basic Provisions (Sec. 457.8):
    (1) If you insure trees within a crop which are either of a 
different variety or are planted at a different population density, 
the per acre amount of insurance for each variety or population 
density for the crop must bear the same relationship to the maximum 
amount of insurance available for each variety and population 
density of the crop as specified in the Actuarial Table. For 
example, if you elect 100 percent of the maximum amount of insurance 
for a variety within a population density for the crop, you must 
select 100 percent of the maximum amount of insurance for that 
variety for all population densities for the crop. The amount of 
insurance for each variety and population density must be multiplied 
by any applicable factor contained in section 3(b)(2).
    (2) The amount of insurance per acre will be the product 
obtained by multiplying the reference maximum dollar amount of 
insurance that is shown in the Actuarial Table for the applicable 
population density by the percentage for the level of coverage you 
select and by:
    (i) Thirty-three percent (0.33) for the year of set out, the 
year following dehorning, or the year following grafting of a set 
out tree. (Insurance will be limited to this amount until trees that 
are set out are one year of age or older on the first day of the 
crop year);
    (ii) Sixty percent (0.60) for the first growing season after 
being set out, the second year following dehorning, or the second 
year following grafting of a set out tree;
    (iii) Eighty percent (0.80) for the second growing season after 
being set out, the third year following dehorning, or the third year 
following grafting of a set out tree; or
    (iv) Ninety percent (0.90) for the third growing season after 
being set out, the fourth year following dehorning, or the fourth 
year following grafting of a set out tree.
    (3) The amount of insurance per acre for each population 
density, or factor as appropriate, will be multiplied by the 
applicable number of insured acres. These results will then be added 
together to determine the amount of insurance for the unit.
    (4) The amount of insurance will be reduced proportionately for 
any unit on which the stand is less than 90 percent, based on the 
original planting pattern. For example, if the amount of insurance 
you selected is $2,000 and the remaining stand is 85 percent of the 
original stand, the amount of insurance on which the premium and any 
indemnity will be based is $1,700 ($2,000 multiplied by 0.85).
    (5) If any insurable acreage of trees is set out after the first 
day of the crop year, and you elect to insure such acreage during 
that crop year, you must report the acreage, practice, crop, number 
of trees, date set out is completed, and your share to us within 72 
hours after set out is completed for the unit.
    (6) Production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8), are not 
applicable.
    (7) You must report, by the sales closing date contained in the 
Special Provisions, by type if applicable:
    (i) Any damage, removal of trees, change in practices, or any 
other circumstance that may reduce the amount of insurance, and the 
number of affected acres;
    (ii) The number of trees on insurable and uninsurable acreage;
    (iii) The date of original set out and the planting pattern;
    (iv) The date of replacement or dehorning, if more than 10 
percent of the trees on any unit have been replaced or dehorned in 
the previous 5 years; and
    (v) For the first year of insurance for acreage interplanted 
with another perennial crop, and anytime the planting pattern of 
such acreage is changed:
    (A) The age of the interplanted crop, and type if applicable;
    (B) The planting pattern; and
    (C) Any other information that we request in order to establish 
your amount of insurance.
    We will reduce the amount of insurance as necessary, based on 
our estimate of the effect of interplanting a perennial crop; 
removal of trees; damage; change in practices and any other 
circumstance on the potential of the insured crop. If you fail to 
notify us of any circumstance that may reduce the potential for the 
insured crop, we will reduce your amount of insurance as necessary 
at any time we become aware of the circumstance.

4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8), the contract change date is August 31 
preceding the cancellation date.

5. Cancellation and Termination Dates

    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation 
and termination dates are November 20.

6. Annual Premium

    In addition to the provisions of section 5 (Annual Premium) of 
the Basic Provisions (Sec. 457.8), for the 1998 crop year, the 
premium amount otherwise payable for the 1998 crop year will be 
increased by 46 percent as a result of the additional six months of 
coverage for that crop year.

7. Insured Crop

    (a) In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all of each citrus 
tree crop designated in the Special Provisions in the county for 
which a premium rate is provided by the actuarial table that you 
elect to insure:
    (1) In which you have an ownership share;
    (2) That is adapted to the area;

[[Page 4119]]

    (3) That is set out for the purpose of growing fruit to be 
harvested for the commercial production of fresh fruit or for juice;
    (4) That is irrigated; and
    (5) That have the potential to produce at least 70 percent of 
the county average yield for the crop and age, unless a written 
agreement is approved to insure the trees with lesser potential.
    (b) In addition to section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), we do not insure any citrus trees:
    (1) During the crop year the application for insurance is filed, 
unless we inspect the acreage and consider it acceptable; or
    (2) That have been grafted onto existing root stock or nursery 
stock within the one-year period prior to the date insurance 
attaches.
    (c) We may exclude from insurance or limit the amount of 
insurance on any acreage that was not insured the previous year.

8. Insurable Acreage

    In lieu of the provisions in section 9 (Insurable Acreage) of 
the Basic Provisions (Sec. 457.8), that prohibit insurance attaching 
to a crop planted with another crop, citrus trees interplanted with 
another perennial crop are insurable, unless we inspect the acreage 
and determine that it does not meet the requirements contained in 
your policy.

9. Insurance Period

    In lieu of the provisions of section 11 (Insurance Period) of 
the Basic Provisions (Sec. 457.8):
    (a) The insurance period is as follows:
    (1) For the 1998 crop year only, coverage will begin on June 1, 
1997, and will end on November 20, 1998.
    (2) For all subsequent crop years, coverage begins on November 
21 of the calendar year prior to the year the insured crop normally 
blooms, except that for the year of application, if your application 
is received after November 11 but prior to November 21, insurance 
will attach on the 10th day after your properly completed 
application is received in our local office, unless we inspect the 
acreage during the 10 day period and determine that it does not meet 
the requirements for insurability contained in your policy. You must 
provide any information that we require for the crop or to determine 
the condition of the grove.
    (3) The calendar date for the end of the insurance period for 
each crop year is November 20.
    (b) If you acquire an insurable share in any insurable acreage 
after coverage begins but on or before the acreage reporting date 
for the crop year, and after an inspection we consider the acreage 
acceptable, insurance will be considered to have attached to such 
acreage on the calendar date for the beginning of the insurance 
period.
    (c) If you relinquish your insurable share on any insurable 
acreage of citrus trees on or before the acreage reporting date for 
the crop year, insurance will not be considered to have attached to 
and no premium or indemnity will be due for such acreage for that 
crop year unless:
    (1) A transfer of coverage and right to an indemnity, or a 
similar form approved by us, is completed by all affected parties;
    (2) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (3) The transferee is eligible for crop insurance.

10. Causes of Loss

    In accordance with the provisions of section 12 (Causes of Loss) 
of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur within the insurance 
period:
    (a) Excess precipitation;
    (b) Excess wind;
    (c) Fire, unless weeds and other forms of undergrowth have not 
been controlled or pruning debris has not been removed from the 
grove;
    (d) Freeze;
    (e) Hail;
    (f) Tornado; or
    (g) Failure of the irrigation water supply if caused by an 
insured peril or drought that occurs during the insurance period.

11. Duties In The Event of Damage or Loss

    In addition to the requirements of section 14 (Duties in the 
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), in 
case of damage or probable loss, if you intend to claim an indemnity 
on any unit, you must allow us to inspect all insured acreage before 
pruning, dehorning, or removal of any damaged trees.

12. Settlement of Claim

    (a) In the event of damage covered by this policy, we will 
settle your claim on a unit basis by:
    (1) Determining the actual percent of damage for the unit in 
accordance with sections 12 (b), (c), and (d);
    (2) Subtracting your deductible from the percent of damage for 
the unit (this result must be greater than zero to receive an 
indemnity);
    (3) Dividing the result of section 12(a)(2) by your coverage 
level percentage;
    (4) Multiplying the result of section 12(a)(3) by the amount of 
insurance per acre determined in accordance with section 3(b)(2);
    (5) Multiplying the result of section 12(a)(4) by the number of 
insured acres; and
    (6) Multiplying the result of section 12(a)(5) by your share.
    (b) The percent of damage for any tree will be determined as 
follows:
    (1) For damage occurring during the year of set out (trees that 
have not been set out for at least one year at the time insurance 
attaches):
    (i) One-hundred percent (100%) whenever there is no live wood 
above the bud union;
    (ii) Ninety percent (90%) whenever there is less than 12 inches 
of live wood above the bud union; or
    (iii) The tree will be considered undamaged whenever there is 
more than 12 inches of live wood above the bud union; or
    (2) For damage occurring in any year following the year of set 
out:
    (i) The percentage of damage will be determined by dividing the 
number of scaffold limbs damaged in an area from the trunk to a 
length equal to one-fourth (\1/4\) the height of the tree, by the 
total number of scaffold limbs before damage occurred. Whenever this 
percentage exceeds 80 percent, the tree will be considered as 100 
percent damaged.
    (ii) The percent of damage for the unit will be determined by 
computing the average of the determinations made for the individual 
trees. If this percent of damage exceeds 80 percent, the unit will 
be considered 100 percent damaged.
    (c) The percent of damage on the unit will be reduced by the 
percentage of damage due to uninsured causes.

13. Written Agreement

    Designated terms of this policy may be altered by written 
agreement in accordance with the following:
    (a) You must apply in writing for each written agreement no 
later than the sales closing date, except as provided in section 
13(e);
    (b) The application for a written agreement must contain all 
variable terms of the contract between you and us that will be in 
effect if the written agreement is not approved;
    (c) If approved, the written agreement will include all variable 
terms of the contract, including, but not limited to, crop type or 
variety, the guarantee, premium rate, and price election;
    (d) Each written agreement will only be valid for one year (If 
the written agreement is not specifically renewed the following 
year, insurance coverage for subsequent crop years will be in 
accordance with the printed policy); and
    (e) An application for a written agreement submitted after the 
sales closing date may be approved if, after a physical inspection 
of the acreage, it is determined that no loss has occurred and the 
crop is insurable in accordance with the policy and written 
agreement provisions.

    Signed in Washington, D.C., on January 22, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-2040 Filed 1-28-97; 8:45 am]
BILLING CODE 3410-FA-P
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