65344 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

(c) At least 15 days prior to the beginning

of harvest if you intend to claim an

indemnity on any unit, or immediately if

damage is discovered during the 15 day

period or during harvest, so that we may

inspect any damaged production. If you fail

to notify us and such failure results in our

inability to inspect the damaged production,

we will consider all such production to be

undamaged and include it as production to

count. You are not required to delay harvest.

12. 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) In the event of loss or damage covered

by this policy, we will settle your claim by:

(1) Multiplying the insured acreage by its

respective production guarantee, by type if

applicable;

(2) Multiplying each result of section

12(b)(1) by the respective price election, by

type if applicable;

(3) Totaling the results of section 12(b)(2)

if there are more than one type;

(4) Multiplying the total production to

count (see section 12(c)), for each type if

applicable, by its respective price election;

(5) Totaling the results of section 12(b)(4)

if there are more than one type;

(6) Subtracting the results of section

12(b)(4) from the results of section 12(b)(2) if

there is only one type or subtracting the

results of section 12(b)(5) from the result of

section 12(b)(3) if there are more than one

type; and

(7) Multiplying the result of section

12(b)(6) by your share.

For example:

You have a 100 percent share in 100 acres

of type A processing sweet corn in the unit,

with a guarantee of 3.0 tons per acre and a

price election of $50.00 per ton. You are only

able to harvest 200 tons. Your indemnity

would be calculated as follows:

(1) 100 acres×3.0 tons=300 tons guarantee;

(2) 300 tons×$50.00 price

election=$15,000.00 value of guarantee;

(4) 200 tons×$50.00 price

election=$10,000.00 value of production

to count;

(6) $15,000.00¥$10,000.00=$5,000.00 loss;

(7) $5,000.00×100 percent=$5,000.00

indemnity payment.

You also have a 100 percent share in 100

acres of type B processing sweet corn in the

same unit, with a guarantee of 4.0 tons per

acre and a price election of $45.00 per ton.

You are only able to harvest 350 tons. Your

total indemnity for both types A and B would

be calculated as follows:

(1) 100 acres×3.0 tons=300 tons guarantee for

type A, and

100 acres×4.0 tons=400 tons guarantee for

type B;

(2) 300 tons×$50.00 price

election=$15,000.00 value of guarantee

for type A, and

400 tons×$45.00 price election=$18,000.00

value of guarantee for type B;

(3) $15,000.00 + $18,000.00=$33,000.00 total

value of guarantee;

(4) 200 tons×$50.00 price

election=$10,000.00 value of production

to count for type A, and

350 tons×$45.00 price election=$15,750.00

value of production to count for type B;

(5) $10,000.00+$15,750.00=$25,750.00 total

value of production to count;

(6) $33,000.00¥$25,750.00=$7,250.00 loss;

(7) $7,250.00 loss×100 percent=$7,250.00

indemnity payment.

(c) The total production to count, specified

in tons of unhusked ear weight, from all

insurable acreage on the unit will include:

(1) All appraised production as follows:

(i) Not less than the production guarantee

for acreage:

(A) That is abandoned;

(B) That is put to another use without our

consent;

(C) That is damaged solely by uninsured

causes; or

(D) For which you fail to provide

production records that are acceptable to us.

(ii) Production lost due to uninsured

causes.

(iii) Production on acreage that is bypassed

unless the acreage was bypassed due to an

insured cause of loss which resulted in

production which would not be acceptable

under the terms of the processor contract.

(iv) Potential production on insured

acreage that you intend to put to another use

or abandon, if you and we agree on the

appraised amount of production. Upon such

agreement, the insurance period for that

acreage will end when you put the acreage

to another use or abandon the crop. If

agreement on the appraised amount of

production is not reached:

(A) If you do not elect to continue to care

for the crop, we may give you consent to put

the acreage to another use if you agree to

leave intact, and provide sufficient care for,

representative samples of the crop in

locations acceptable to us (The amount of

production to count for such acreage will be

based on the harvested production or

appraisals from the samples at the time

harvest should have occurred. If you do not

leave the required samples intact, or fail to

provide sufficient care for the samples, our

appraisal made prior to giving you consent to

put the acreage to another use will be used

to determine the amount of production to

count); or

(B) If you elect to continue to care for the

crop, the amount of production to count for

the acreage will be the harvested production,

or our reappraisal if additional damage

occurs and the crop is not harvested.

(2) All harvested processing sweet corn

production from the insurable acreage. The

amount of such production will be:

(i) The usable tons of processing sweet

corn shown on the processor settlement

sheet, if available; or

(ii) Determined by dividing the dollar

amount paid, payable, or which should have

been paid under the terms of the processor

contract for the quantity of the sweet corn

delivered to the processor by the base

contract price per ton; and

(3) All harvested processing sweet corn

production from any other insurable units

that have been used to fulfill your processor

contract for this unit.

The total production to count will be

expressed as an unhusked ear weight. Any

other measure of production will be

converted to an unhusked ear weight

equivalent.

13. Late Planting.

A late planting period is not applicable to

processing sweet corn unless allowed by the

Special Provisions and you provide written

approval from the processor by the acreage

reporting date that it will accept the

production from the late planted acres when

it is expected to be ready for harvest.

14. Prevented Planting.

Your prevented planting coverage will be

40 percent of your production guarantee for

timely planted acreage. If you have limited or

additional levels of coverage, as specified in

7 CFR part 400, subpart T, and pay an

additional premium, you may increase your

prevented planting coverage to the levels

specified in the actuarial documents.

Signed in Washington, D.C., on December

5, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance

Corporation.

[FR Doc. 97–32493 Filed 12–11–97; 8:45 am]

BILLING CODE 3410–08–P

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 443 and 457

RIN 0563–AA78

Hybrid Seed Crop Insurance

Regulations; and Common Crop

Insurance Regulations, Hybrid Seed

Corn Crop Insurance Provisions

AGENCY: Federal Crop Insurance

Corporation, USDA.

ACTION: Final rule.

SUMMARY: The Federal Crop Insurance

Corporation (FCIC) finalizes specific

crop provisions for the insurance of

hybrid seed corn. 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 hybrid seed crop insurance

regulations under the Common Crop
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65345

Insurance Policy for ease of use and

consistency of terms, and to restrict the

effect of the current hybrid seed crop

insurance regulations to the 1997 and

prior crop years.

DATES: Effective December 12, 1997.

FOR FURTHER INFORMATION CONTACT: Ron

Nesheim, Insurance Management

Specialist, 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

The Office of Management and Budget

(OMB) has determined this rule to be

exempt for the purposes of Executive

Order No. 12866 and, therefore, this rule

has not been reviewed by OMB.

Paperwork Reduction Act of 1995

Pursuant to the Paperwork Reduction

Act of 1995 (44 U.S.C. 3507), those

collections of information have been

approved by the Office of Management

and Budget (OMB) under control

number 0563–0053.

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) 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 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 the

various levels of government.

Regulatory Flexibility Act

This regulation will not have a

significant economic impact on a

substantial number of small entities.

The effect of this regulation on small

entities will be no greater than on larger

entities. Under the current regulations,

a producer is required to complete an

application and acreage report. If the

crop is damaged or destroyed, the

insured is required to give notice of loss

and provide the necessary information

to complete a claim for indemnity. This

regulation does not alter those

requirements.

The amount of work required of the

insurance companies delivering and

servicing these policies will not increase

significantly from the amount of work

currently required. 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. 12988

This final rule has been reviewed in

accordance with Executive Order No.

12988 on civil justice reform. The

provisions of this rule will not have a

retroactive effect. The provisions of this

rule will preempt State and local laws

to the extent such State and local laws

are inconsistent herewith. The

administrative appeal provisions

published at 7 CFR part 11 must be

exhausted before any action against

FCIC for judicial review may be brought.

Environmental Evaluation

This action is not expected to have a

significant 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, January 2, 1997, FCIC

published a proposed rule in the

Federal Register at 62 FR 48 to add to

the Common Crop Insurance

Regulations (7 CFR part 457), a new

section, 7 CFR 457.152 (Hybrid Seed

Corn Crop Insurance Provisions). These

provisions will replace and supersede

the current provisions for insuring

hybrid seed corn found at 7 CFR part

443 and will be effective for the 1998

and succeeding crop years. This rule

also amends 7 CFR part 443 to restrict

its effect to the 1997 and prior crop

years.

Following publication of the proposed

rule, the public was afforded 60 days to

submit written comments. A total of 37

comments were received from reinsured

companies and an insurance service

organization. The comments received,

and FCIC’s responses, follow:

Comment: A reinsured company and

an insurance service organization stated

that the current hybrid seed policy

limits the amount of other insurance

which can be carried on hybrid seed

corn to one and a half times the

maximum amount of insurance

available. Since no such restriction

appears in this 1998 proposal, the

commenter assumes that this is no

longer applicable and supports not

having this restriction in the policy.

Response: The policy provision that

limited the amount of other insurance to

one and a half times the highest price

election has been deleted. This deletion

will be identified in the Summary of

Changes when the new policy is issued.

Comment: A reinsured company and

an insurance service organization

suggested that the name of the Crop

Provisions be changed to ‘‘hybrid seed

corn’’ rather than ‘‘hybrid corn seed’’.

Everyone in the seed corn industry

refers to it as hybrid seed corn.

Response: FCIC has made the change

accordingly.

Comment: A reinsured company and

an insurance service organization

suggested that the definition of

‘‘Amount of insurance per acre’’ be

revised to match how this coverage is

shown and defined in the Special

Provisions, although the commenter

stated that the Special Provisions

definition should be multiplied by the

price election before subtracting the

minimum guaranteed payment. The

county yield is multiplied by the factor

for the coverage level selected, which is

multiplied by the price election selected

by the producer less any minimum

guaranteed payment.

Response: FCIC has revised and

clarified the definition to show the

proper calculation. Since the calculation

is in the Crop Provisions, it will be

removed from the Special Provisions.

Comment: A reinsured company and

an insurance service organization were

concerned about the definition of

‘‘bushel’’ and the provisions in section

12(g)(3) (redesignated section 12(f)(3))
65346 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

that requires the insurance provider to

work the claim in the same manner as

the records provided by the seed

company to establish the approved

yield. Since the yields from the seed

company are submitted to the FCIC

Regional Service Office (RSO) for

determination of the approved yield, the

FCIC RSO needs to inform the insurance

providers when a seed company is using

its own conversion charts and what this

chart is so that, at claim time, the

production to count can be converted in

the same manner as the approved yield

was determined.

Response: In order to ensure the

accuracy of any claim, the same

moisture and weight per bushel must be

used to calculate the amount of

insurance and the production to count.

The FCIC procedure will specify that

the seed company will provide its

conversion chart with the production

records. FCIC will provide the

conversion chart to the insurance

provider when the moisture or weight

used to determine a bushel differs from

the definition stated in the policy.

Comment: A reinsured company and

an insurance service organization were

concerned with the definition of

‘‘female parent plants,’’ where there is

reference to the stamens (tassles) being

removed. The commenters indicated

that some seed companies are

experimenting with male sterile plants

from which the stamens may not have

to be removed.

Response: FCIC has revised the

definition to accommodate those

instances wherein parent plants are

rendered male sterile by means other

than detassling.

Comment: A reinsured company and

an insurance service organization

suggested that the definition of

‘‘interplanting’’ be revised to match its

use in the Special Provisions.

Interplanting is listed as a separate type

with a different county yield than

standard planting. The male parent

plants are planted between every female

parent plant row rather than in a

planting pattern as defined in the Crop

Provisions.

Response: The Special Provisions

uses the term ‘‘interplanting’’ and the

Crop Provisions uses the term

‘‘interplanted’’, and both terms have

different meanings. To avoid any

confusion between these terms, FCIC

will change the reference to

‘‘interplanting’’ to ‘‘non-standard

planting’’ in the Special Provisions.

Comment: A reinsured company

suggested that in the definition of

‘‘irrigated practice,’’ the words ‘‘and

quality’’ be added after the words

‘‘* * * providing the quantity.’’

Response: FCIC agrees that water

quality is important. However, there are

no clear criteria regarding the quality of

water necessary to produce a crop. The

highly variable factors involved would

make such criteria difficult to develop

and administer. The provisions

regarding good farming practices can be

applied in situations in which the

insured failed to exercise due care and

diligence in the application of irrigation

water. Therefore, no change has been

made.

Comment: An insurance service

organization suggested adding, in the

definition of ‘‘non-seed amount,’’ the

phrase ‘‘(rejected for seed purposes)’’ or

something similar after the first

reference to ‘‘non-seed production’’ for

clarification.

Response: FCIC has revised the

definitions and section 12 to clarify that

non-seed production is production that

does not qualify as seed production

because of inadequate germination.

Comment: A reinsured company and

an insurance service organization

suggested that the definition of ‘‘planted

acreage’’ be amended to require that the

male and female parent plants be

planted in accordance with the

production management practices of the

seed company.

Response: The definition of ‘‘planted

acreage’’ is broad enough to permit

planting in accordance with practices of

the seed company. The requirement that

parent plants be planted in accordance

with the production management

practices of the seed company is more

appropriate in sections 7 and 10

regarding insured crop and causes of

loss and those provisions have been

revised accordingly.

Comment: An insurance service

organization suggested that a conflict

exists between the definition of

‘‘sample’’ and ‘‘inadequate germination’’

because the germination rate is

determined by using a certified seed test

on clean seed, not field run seed.

Response: There is no conflict

between the terms. The sample must be

at least 3 pounds of field run seed. The

germination rate is based on the amount

of clean seed obtained from that sample.

No change has been made.

Comment: An insurance service

organization asked why a ‘‘seed

company’’ must now be a corporation

(previously defined as a ‘‘business

enterprise’’), and if there are any

legitimate seed companies that are not

corporations.

Response: A seed company need only

be a corporation if the seed company is

also the producer. To cover all other

situations, FCIC has changed ‘‘a

corporation’’ to ‘‘a business enterprise’’

in the definition of ‘‘seed company.’’

Comment: An insurance service

organization suggested that section 2(a)

be rearranged as follows: ‘‘* * * a basic

unit, as defined in section 1 of the Basic

Provisions, may be divided * * *’’

(instead of ‘‘(basic unit))’’ at the end of

the earlier phrase.

Response: All definitions and those

provisions common to most crops with

respect to units have been deleted and

moved to the Basic Provisions.

Comment: A reinsured company and

an insurance service organization stated

that the provisions contained in section

2(e)(1), which require the insured to

keep records by optional unit for

optional units to apply, conflict with

section 3(b) which correctly indicates

that production reporting requirements

do not apply to this crop. In most

instances the seed corn is harvested and

hauled directly to the seed companies’

processing facilities. The seed company

maintains records of planted acreage

and harvested production and provides

all of the yield records used by the FCIC

RSO to establish the approved yields.

All references to the insured

maintaining records by optional unit

should not be a requirement since this

is maintained at the seed company

level. The historical yield of the

producer’s seed corn is not used to

establish the amount of insurance as

stated in this item as this is based on the

county yield, coverage level and price

elected and any minimum guaranteed

payment. Seed corn producers will

often plant different varieties from year

to year with different expected yields.

Therefore, the actual yield produced

from the previous year has little or no

value for the producer in subsequent

years.

Response: The insured must have

verifiable records of planted acreage and

production for each optional unit for at

least the ‘‘* * * last crop year used to

determine the amount of insurance’’.

This requirement should not be

removed simply because the seed

company maintains those records. In

order to protect the integrity of the

program, FCIC must be able to verify the

accuracy of the guarantee for each unit.

If the producer cannot produce the

records from each optional unit, they

will be combined into basic units. The

insured can obtain the necessary records

from the seed company. These

provisions have been deleted and

moved to the Basic Provisions.

Comment: A reinsured company was

concerned about the requirement that

the producer must meet all the

requirements in section 6. They stated
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65347

that these requirements should not be

mandatory for every acreage report.

Response: The information required

by the acreage report is necessary to

establish liability, premium, and

insurability of the acreage. No change

has been made.

Comment: A reinsured company and

an insurance service organization

mentioned that in section 6(a), each

individual producer is the named

insured under this program and may not

know the type or variety of hybrid. The

seed companies provide the seed and

the producer grows it. Seed companies

do not want this information going any

further than necessary while still

meeting the requirements of the MPCI

program. This information is needed

only in the event of a claim and can be

obtained from the seed company as

needed at that time. The commenter

believes collection of this information

should be an option since the insurance

provider may want to capture it in

certain instances but not for all

insureds. Therefore, this should be an

option, not mandatory as it would be

with the word ‘‘must’’ in the proposed

language.

Response: The reporting requirement

by type or variety must be maintained

for rating purposes and to determine

liability and premium for the unit. Such

information cannot be obtained only at

the time of loss. It is the responsibility

of the producer to provide the

information which should be contained

in the hybrid seed corn processor

contract. No change has been made.

Comment: A reinsured company and

an insurance service organization

mentioned that section 6(b) requires that

acreage occupied by the male parent

plants be reported. They realize it is

common for other crops to obtain all

insurable and uninsurable acreage of the

crop. However, this stipulation to

capture the total acreage occupied by

the male parent plants is an unnecessary

and burdensome requirement for hybrid

seed corn. The commenter suggested

that this should be determined in the

event of a claim. A number of seed

companies require that the male acres

be destroyed after pollination.

Response: The requirement to report

any acreage occupied by male parent

plants is necessary to determine the

correct amount of insurance for a unit

since acres with male plants are not

insurable. The amount of insurance is

determined on the Summary of

Coverage so the insurance provider

cannot wait until a loss to determine

insurable acreage. The burden of

determining the amount of acreage

occupied by the male plant can be

minimized by mathematical calculation

based on the planting pattern of the

crop. No change has been made.

Comment: A reinsured company and

an insurance service organization

questioned section 6(c), which requires

the insured to certify that there is a

hybrid seed corn processor contract and

the amount of any minimum guaranteed

payment. The commenter questions

what constitutes certification. It is their

feeling that if the insured goes through

the FCIC RSO to obtain an approved

yield, and upon receiving copies of this

information, this would be adequate

certification as to the insured having a

contract. The presumption is that the

FCIC RSO would not go through this

process between the producer and the

seed company if there was not some

type of contractual agreement in place.

If they obtain some of this information

directly from the seed company it

would also constitute certification as the

seed company would not provide this

information if a contract was not in

place. If this does not constitute

certification for the purposes of having

a contract then they have some concerns

as to what additional requirements must

be met.

Response: The certification

requirement is satisfied by a written

statement on the acreage report, signed

by the producer, that such a contract

exists. In many cases, the RSO provides

an approved yield for a variety, not

specifically for individual producers.

Since a contract is a condition of

insurance, the insurance provider must

have some assurance that a contract

exists. Receipt of an approved yield

from the RSO is not evidence of a

contract between the processor and the

producer. No change has been made.

Comment: A reinsured company and

an insurance service organization were

concerned with section 6(c) references

to the minimum guaranteed payment

which, according to the Crop Insurance

Handbook, must be obtained from each

insured. If an insurance company

happens to insure all producers of a

seed company, there is generally only

one base contract which is used for all

the individual seed corn producers. If

the base contract does not provide a

minimum guarantee, each insured is

still required to certify to this effect

even though this information can be

determined from the base contract.

Response: Section 6(c) only requires

the producer to report a minimum

guaranteed payment if the hybrid seed

corn processor contract contains such a

payment. No change has been made.

Comment: An insurance service

organization asked if all the exceptions

in section 7(a)(4)(I)–(iv) should be

required by written agreement. For

example, the commenter questions why

acreage with female and male parent

plants in the same row would ever be

insurable. Perhaps the phrase ‘‘unless

allowed’’ should be removed from item

(4) and inserted at the specific items

where it is actually possible.

Response: Current planting practices

do not allow male and female plants to

be planted in the same row. However,

acceptable planting practices may

change and the provision must allow a

certain amount of flexibility to cover

such changes. No change has been

made.

Comment: A reinsured company

questioned section 7(c) pertaining to a

producer who is also the seed company.

If a seed corn producer is insured as an

individual, and also owns the seed corn

company under a corporate name and

the company contracts with other

producers, the commenter questions

whether this situation would fall into

the procedure outlined.

Response: If the other conditions in

section 7(c) are met, the seed company

could be eligible for insurance. Section

7(c) has been amended for clarification.

Comment: An insurance service

organization asked that since ‘‘seed

company,’’ by definition, is required to

be a corporation, whether it is necessary

to repeat the requirement again in

section 7(c)(1).

Response: A seed company is no

longer required to be a corporation

except when the seed company is also

the producer. FCIC has revised the

definition of ‘‘seed company’’ to specify

business enterprise and added a

provision requiring a seed company that

is also an insured to be a corporation.

Comment: A reinsured company and

an insurance service organization were

concerned with section 7(c)(3) which

states that if acceptable sales records are

not available, the crop may only be

insured under the Coarse Grains Crop

Provisions. Since the yield potential for

seed corn is considerably less than for

commercial field corn, a normal seed

corn crop could be harvested and still

potentially have a payable loss under

the Coarse Grains Crop Provisions.

Language similar to ‘‘* * * may only be

insured by written agreement * * *’’ is

recommended.

Response: FCIC agrees that hybrid

seed corn is best suited for insurance

under the Hybrid Seed Corn Crop

Provision, but records must be provided

to assure that the person seeking

insurance is a bona-fide producer of

hybrid seed corn. If the crop is insured

under the Coarse Grains Crop

Provisions, the approved yield would be

derived from hybrid seed corn

production records of the processor for
65348 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

the particular variety. The last sentence

of section 7(c)(3) has been revised to

read ‘‘If such records are not available,

the crop may be insured under the

Coarse Grains Crop Provisions with a

written agreement; and * * *.’’

Comment: An insurance service

organization asked if it is necessary that

the phrase ‘‘Of the insured crop’’ be

specified in section 8(c) but not for

items (a) or (b).

Response: FCIC has clarified the

provisions. Further, since damage to the

male plant could also necessitate

replanting, FCIC has modified section

8(c) to include both male and female

parent plants.

Comment: An insurance service

organization stated that the phrase

‘‘insurance attaches after’’ in section

9(a) creates an ambiguity with respect to

when insurance attaches. The

commenter suggested that the term

‘‘after’’ could be changed to ‘‘once’’ (or

‘‘upon completion of planting:’’) and

then delete ‘‘is completely planted’’

from items (1) and (2).

Response: Section 9(a) has been

clarified.

Comment: A reinsured company and

an insurance service organization stated

that the provisions in section 11(a)

stipulate that any representative

samples must consist of one complete

planting pattern the entire length of the

field if the acreage will not be harvested.

The commenters prefer that each

representative sample be one complete

pattern which is long enough to provide

a 1⁄100 acre sample, and that these be at

various representative areas of the field

rather than the entire length of the field.

This would be consistent with the

appraisal methods specified in the loss

adjustment procedures.

Response: More than one

representative sample may be required

by the insurance provider, and such

samples may be in different parts of the

field. However, by having a strip the

entire length of the field, the loss

adjuster can choose the areas to be

sampled and is not restricted to the crop

the insured chose to leave for this

purpose. This permits a more accurate

appraisal. Further, it would be difficult

for the person harvesting the crop to

know what constitutes 1⁄100 of an acre.

No change has been made.

Comment: An insurance service

organization suggested that since the

Basic Provisions state that the term

‘‘representative sample’’ will be further

defined in the Crop Provisions, it

should be included in section 1 with the

other definitions (as in the 1986–CHIAA

738) so the term would be more easily

located.

Response: The requirements for

representative samples are substantive

and, therefore, should not be in the

definition section. The Basic Provisions

are revised to amend the definition to

state ‘‘as specified in the Crop

Provisions’’.

Comment: A reinsured company and

an insurance service organization

disagreed that section 11(b)(2) should be

a mandatory requirement for all

producers having a loss. If all seed corn

producers for a seed company are

insured with the same insurance

company, the company knows that all of

their producers have a seed corn

contract. The company will already

have a copy of the base contract for the

seed company and are not gaining

anything by having to obtain the exact

contract in effect for each producer. If

some producers insured with an

insurance company grow seed corn for

various seed companies (not all of their

producers are insured with them) there

may be some benefit in obtaining a copy

of the contract. The commenter does not

believe this should be a mandatory

requirement for all losses.

Response: Since not all producers

may receive the same contract terms, the

insurance company must verify contract

terms, unless it has been determined

that the contract provided by the seed

company is used for all its producers

without any waivers or amendments.

Section 11(b)(2) has been revised

accordingly.

Comment: An insurance service

organization suggested that section

12(e)(1)(v) (redesignated section

12(d)(1)(v)) of the policy should not

allow the insured to defer settlement

and wait for a later, generally lower

appraisal, especially on crops that have

a short ‘‘shelf life.’’

Response: A later appraisal will only

be necessary if the insurance provider

and the insured do not agree on the

appraisal or the insurance provider

believes the crop needs to be carried

further. The producer must continue to

care for the crop. If the producer does

not care for the crop, the original

appraisal will be used. No change has

been made.

Comment: An insurance service

organization stated that section 12(e)(2)

(redesignated section 12(d)(2)) counts

harvested production delivered to the

seed company, whereas section 4d(1)(I)

of the 1986–CHIAA 738 counts

harvested production delivered to and

accepted by the seed company. The

commenter questioned whether this is

change, or should this provision be

interpreted to mean that production is

not considered delivered until it is

accepted.

Response: This is a change. Section

12(d)(2) provides that seed production

to be counted includes mature harvested

production that is delivered as

commercial hybrid seed corn to the seed

company stated in the hybrid seed corn

processor contract, regardless of quality,

unless the production has inadequate

germination.

Comment: A reinsured company and

an insurance service organization asked

that since there has been a change in

amounts for moisture content (to 15

percent moisture content instead of 15.5

percent, and increased for ear corn by

1.5 pounds, instead of 2.0 pounds, for

each percentage point of moisture in

excess of 14.0 percent) in sections 12(f)

(1) and (2), whether FCIC plans any

adjustments to previous yields that were

adjusted using the previous amounts.

Response: Previous yield information

will not be affected. These changes will

be effective for 1998 and subsequent

crop years. Approved yields after these

provisions are effective will be

determined on the revised basis.

Comment: An insurance service

organization suggested that section

13(d)(2) may be confusing because a

sentence that states ‘‘The unit consists

of 185 acres * * *’’ is followed

immediately by a sentence that states

‘‘The unit consists of 150 acres * * *.’’

The example would be clearer if it

stated ‘‘The unit consists of 150 acres of

female parent plants of the same type

and variety (an additional 35 acres are

occupied by the male parent plants,

which are not insurable). Of the 150

acres, 50 acres were planted * * *’’ or

some similar statement. At the least, the

latter should read ‘‘The unit consists of

150 insurable acres * * *.’’

Response: The late and prevented

planting provisions, common to most

crops, are deleted and moved to the

Basic Provisions.

Comment: A reinsured company and

an insurance service organization

favored the elimination of the substitute

crop provisions under prevented

planting coverage.

Response: The late and prevented

planting provisions, common to most

crops, are deleted and moved to the

Basic Provisions. FCIC has revised those

provisions to remove the substitute crop

provisions.

Comment: A reinsured company and

an insurance service organization stated

that section 13(d)(5), which defines the

maximum eligible acreage for prevented

planting, conflicts with the current

provisions, which correctly states that

the maximum eligible acres for seed

corn is the number of acres the producer

contracted for the crop year.
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65349

Response: FCIC has clarified the

provision in the Basic Provisions.

Comment: A reinsured company

stated that it understands that FCIC is

revising prevented planting for 1998

and assumes these new provisions

would be incorporated into the crop

provisions for hybrid seed corn.

Response: The late and prevented

planting provisions have been moved to

the Basic Provisions and will be

applicable to this policy.

Comment: A reinsured company and

an insurance service organization

recommended deleting section 14(d).

Written agreements should not be

limited to one year. Rather, such

agreements should be valid for the

period stated in the agreement. In most

cases, written agreements should be

continuous, as is the case with the

policy. Limiting written agreements to

one year only increases administrative

cost, complexity and opportunity for

misunderstanding and error.

Response: Written agreements are, by

design, temporary and intended to

address unusual circumstances. If the

conditions that require a written

agreement exists for multiple crop years,

the policy or Special Provisions should

be amended to accommodate the

conditions. The written agreement

provisions have been deleted and

moved to the Basic Provisions.

Comment: An insurance service

organization suggested that section 14(e)

be combined with the provisions in

section 14(a).

Response: Section 14(e) is intended to

be a limited exception, not the rule,

affecting only those cases in which

conditions discovered after the sales

closing date make a written agreement

necessary. Therefore, these provisions

should be kept separate. No change has

been made in the Basic Provisions.

Comment: A reinsured company

expressed a general concern about many

of the mandatory requirements added to

these provisions. In its view, most of

these requirements are unnecessary.

Failure to collect this information in

prior years has not caused problems.

The issues of reduced expense

reimbursement and simplification

should be considered prior to finalizing

these provisions. This policy proposes

to increase the expense of writing

hybrid seed corn along with the added

complexity involved from the additional

collection requirements.

Response: FCIC understands the

concerns of this commenter. These Crop

Provisions were revised to reduce

program vulnerabilities and make the

insuring language more precise. FCIC

has attempted to minimize any

additional requirements imposed upon

the policyholder, the reinsured

company, and the seed company. All

mandatory information is required to

fairly and properly administer the

policy.

In addition to the changes described

above, FCIC has made minor editorial

changes and has amended the following

provisions:

1. The paragraph preceding section 1

has been revised to refer to the

Catastrophic Risk Protection

Endorsement for the purpose of

clarification.

2. The definition of ‘‘adjusted yield,’’

‘‘amount of insurance per acre,’’

‘‘approved yield,’’ ‘‘county yield,’’

‘‘dollar value per bushel,’’ ‘‘field run,’’

‘‘hybrid seed corn processor contract,’’

and ‘‘insurable interest’’ have been

revised for clarification.

3. A definition of ‘‘coverage level

factor’’ has been added for clarification.

4. The definitions of ‘‘days,’’ ‘‘FSA,’’

‘‘final planting date,’’ ‘‘interplanted,’’

‘‘irrigated practice,’’ ‘‘late planted,’’

‘‘late planting period,’’ and ‘‘timely

planted’’ have been deleted and moved

to the Basic Provisions.

5. The definition of ‘‘good farming

practices,’’ ‘‘planted acreage,’’ and

‘‘prevented planting’’ have been revised

to delete the provisions moved to the

Basic Provisions.

6. The definition of ‘‘practical to

replant’’ has been revised to clarify that

it will not be considered practical to

replant unless production from the

replanted acreage can be delivered

under the terms of the hybrid seed corn

processor contract, or the seed company

agrees to accept such production.

7. Section 2 has been revised to delete

those provisions that have been moved

to the Basic Provisions, and to clarify

the unit structure for hybrid seed corn

when the hybrid seed corn processor

contract specifies an amount of

production to be delivered.

8. Section 7(d) has been added to

allow the insured crop that is under

contract with different seed companies

to be insured under separate policies

with different insurance providers

provided all acreage of the insured crop

in the county is insured.

9. Section 8(c) has been revised for

clarification.

10. In section 10(b)(4), the

requirement that the crop be inspected

and the loss appraised before harvest is

completed has been deleted to be

consistent with section 11(b)(1).

11. Section 12(c) has been revised for

clarification. Also, an example of an

indemnity calculation has been added

for illustration. Section 12(d) is deleted

since it was redundant with section

12(e) and the following section

redesignated accordingly.

12. In section 12(e)(1)(I), as

redesignated, adjusted yield has been

changed to amount of insurance per

acre.

13. In section 12(f)(3), as redesignated,

the last sentence has been corrected to

clarify that records of the seed company

will only be used to determine the

amount of production to count if the

production is calculated on the same

basis as that used to determine the

approved yield.

14. Add provision specifying the

prevented planting coverage available.

Good cause is shown to make this rule

effective upon publication in the

Federal Register. This rule improves the

hybrid seed corn insurance coverage

and brings it under the Common Crop

Insurance Policy, Basic Provisions for

consistency among policies. The earliest

contract change date that can be met for

the 1998 crop year is December 31,

1997. It is, therefore, imperative that

these provisions be made final before

that date so that reinsured companies

and insureds may have sufficient time

to implement these changes. Therefore,

public interest requires the agency to act

immediately to make these provisions

available for the 1998 crop year.

List of Subjects in 7 CFR Parts 443 and

457

Crop insurance, Hybrid seed crop

insurance regulations, Hybrid seed corn.

Final Rule

Accordingly, for the reasons set forth

in the preamble, the Federal Crop

Insurance Corporation hereby amends 7

CFR parts 443 and 457 as follows:

PART 443—HYBRID SEED CROP

INSURANCE REGULATIONS FOR THE

1986 THROUGH 1997 CROP YEARS

1. The authority citation for 7 CFR

part 443 continues to read as follows:

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

2. The part heading is revised to read

as set forth above.

3. Subpart Heading ‘‘Subpart—

Regulations for the 1986 and

Succeeding Crop Years’’ is removed.

4. Section 443.7 is amended by

revising the introductory text of

paragraph (d) to read as follows:

§ 443.7 The application and policy.

* * * * *

(d) The application for the 1986

through 1997 crop years is found at

subpart D of part 400, General

Administrative Regulations (7 CFR

400.37 and 400.38). The provisions of

the Hybrid Seed Crop Insurance
65350 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

Regulations for the 1986 through 1997

crop years are as follows:

* * * * *

PART 457—COMMON CROP

INSURANCE REGULATIONS;

REGULATIONS FOR THE 1994 AND

SUBSEQUENT CONTRACT YEARS

5. The authority citation for 7 CFR

part 457 continues to read as follows:

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

6. Section 457.152 is added to read as

follows:

§ 457.152 Hybrid seed corn crop insurance

provisions.

The Hybrid Seed Corn 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:

Hybrid Seed Corn Crop Provisions

If a conflict exists among the policy

provisions, the order of priority is as follows:

(1) The Catastrophic Risk Protection

Endorsement, if applicable; (2) the Special

Provisions; (3) these Crop Provisions; and (4)

the Basic Provisions, (§ 457.8) with (1)

controlling (2), etc.

1. Definitions.

Adjusted yield. An amount determined by

multiplying the county yield by the coverage

level factor.

Amount of insurance per acre. A dollar

amount determined by multiplying the

adjusted yield by the price election you

select and subtracting any minimum

guaranteed payment, not to exceed the total

compensation specified in the hybrid seed

corn processor contract. If your hybrid seed

corn processor contract contains a minimum

guaranteed payment that is stated in bushels,

we will convert that value to dollars by

multiplying it by the price election you

selected.

Approved yield. In lieu of the definition

contained in the Basic Provisions, an amount

FCIC determines to be representative of the

yield that the female parent plants are

expected to produce when grown under a

specific production practice. FCIC will

establish the approved yield based upon

records provided by the seed company and

other information it deems appropriate.

Bushel. Fifty-six pounds avoirdupois of

shelled corn, 70 pound avoirdupois of ear

corn, or the number of pounds determined

under the seed company’s normal conversion

chart when that chart is used to determine

the approved yield and the claim for

indemnity.

Certified seed test. A warm germination

test performed on clean seed according to

specifications of the ‘‘Rules for Testing

Seeds’’ of the Association of Official Seed

Analysts.

Commercial hybrid seed corn. The

offspring produced by crossing a male and

female parent plant, each having a different

genetic character. This offspring is the

product intended for use by an agricultural

producer to produce a commercial field corn

crop for grain.

County yield. An amount contained in the

actuarial documents that is established by

FCIC to represent the yield that a producer

of hybrid seed corn would be expected to

produce if the acreage had been planted to

commercial field corn.

Coverage level factor. A factor contained in

the Special Provisions to adjust the county

yield for commercial field corn to reflect the

higher value of hybrid seed corn.

Dollar value per bushel. An amount that

determines the value of any seed production

to count. It is determined by dividing the

amount of insurance per acre by the result of

multiplying the approved yield by the

coverage level percentage, expressed as a

decimal.

Female parent plants. Corn plants that are

grown for the purpose of producing

commercial hybrid seed corn and have had

the stamens removed or are otherwise male

sterile.

Field run. Commercial hybrid seed corn

production before it has been dried,

screened, or processed.

Good farming practices. In addition to the

definition contained in the Basic Provisions,

good farming practices include those

practices required by the hybrid seed corn

processor contract.

Harvest. Combining, threshing or picking

ears from the female parent plants to obtain

commercial hybrid seed corn.

Hybrid seed corn processor contract. An

agreement executed between the hybrid seed

corn crop producer and a seed company

containing, at a minimum:

(a) The producer’s promise to plant and

grow male and female parent plants, and to

deliver all commercial hybrid seed corn

produced from such plants to the seed

company;

(b) The seed company’s promise to

purchase the commercial hybrid seed corn

produced by the producer; and

(c) Either a fixed price per unit of measure

(bushels, hundredweight, etc.) of the

commercial hybrid seed corn or a formula to

determine the value of such seed. Any

formula for establishing the value must be

based on data provided by a public third

party that establishes or provides pricing

information to the general public, based on

prices paid in the open market (e.g.,

commodity futures exchanges), to be

acceptable for the purpose of this policy.

Inadequate germination. Germination of

less than 80 percent of the commercial

hybrid seed corn as determined by using a

certified seed test.

Insurable interest. Your share of the

financial loss that occurs in the event seed

production is damaged by a cause of loss

specified in section 10.

Local market price. The cash price offered

by buyers for any production from the female

parent plants that is not considered

commercial hybrid seed corn under the terms

of this policy.

Male parent plants. Corn plants grown for

the purpose of pollinating female parent

plants.

Minimum guaranteed payment. A

minimum amount (usually stated in dollars

or bushels) specified in your hybrid seed

corn processor contract that will be paid or

credited to you by the seed company

regardless of the quantity of seed produced.

Non-seed production. Production that does

not qualify as seed production because of

inadequate germination.

Planted acreage. In addition to the

definition contained in the Basic Provisions,

the insured crop must be planted in rows

wide enough to permit mechanical

cultivation, unless otherwise provided by the

Special Provisions or by written agreement.

Planting pattern. The arrangement of the

rows of the male and female parent plants in

a field. An example of a planting pattern is

four consecutive rows of female parent plants

followed by two consecutive rows of male

parent plants.

Practical to replant. In addition to the

definition contained in the Basic Provisions,

practical to replant applies to either the

female or male parent plant. It will not be

considered practical to replant unless

production from the replanted acreage can be

delivered under the terms of the hybrid seed

corn processor contract, or the seed company

agrees that it will accept the production from

the replanted acreage.

Prevented planting. In addition to the

definition contained in the Basic Provisions,

prevented planting applies to the female and

male parent plants. The male parent plants

must be planted in accordance with the

requirements of the hybrid seed corn

processor contract to be considered planted.

Sample. For the purpose of the certified

seed test, at least 3 pounds of randomly

selected field run shelled corn for each

variety of commercial hybrid seed corn

grown on the unit.

Seed company. A business enterprise that

possesses all licenses for marketing

commercial hybrid seed corn required by the

state in which it is domiciled or operates,

and which possesses facilities with enough

storage and drying capacity to accept and

process the insured crop within a reasonable

amount of time after harvest. If the seed

company is the insured, it must also be a

corporation.

Seed production. All seed produced by

female parent plants with a germination rate

of at least 80 percent as determined by a

certified seed test.

Shelled corn. Kernels that have been

removed from the cob.

Variety. The name, number or code

assigned to a specific genetic cross by the

seed company or the Special Provisions for

the insured crop in the county.

2. Unit Division.

For any processor contract that stipulates

the amount of production to be delivered:

(a) In lieu of the definition of ‘‘basic unit’’

contained in the Basic Provisions, a basic

unit will consist of all acreage planted to the

insured crop in the county that will be used

to fulfill a hybrid seed corn processor

contract;
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65351

(b) There will be no more than one basic

unit for all production contracted with each

processor contract;

(c) In accordance with section 12, all

production from any basic unit in excess of

the amount under contract will be included

as production to count if such production is

applied to any other basic unit for which the

contracted amount has not been fulfilled; and

(d) Optional units will not be established.

3. Insurance Guarantees, Coverage Levels,

and Prices for Determining Indemnities.

(a) In addition to the requirements of

section 3 of the Basic Provisions, you may

select only one price election for all the

hybrid seed corn in the county insured under

this policy unless the Special Provisions

provide different price elections by variety,

in which case you may select one price

election for each hybrid seed corn variety

designated in the Special Provisions. The

price election you choose for each variety

must have the same percentage relationship

to the maximum price offered by us for each

variety. For example, if you choose 100

percent of the maximum price election for

one specific variety, you must also choose

100 percent of the maximum price election

for all other varieties.

(b) The production reporting requirements

contained in section 3 of the Basic Provisions

are not applicable to this contract.

4. Contract Changes.

In accordance with section 4 of the Basic

Provisions, the contract change date is

November 30 preceding the cancellation

date.

5. Cancellation and Termination Dates.

In accordance with section 2 of the Basic

Provisions, the cancellation and termination

dates are March 15.

6. Report of Acreage.

In addition to the requirements of section

6 of the Basic Provisions, you must:

(a) Report by type and variety, the location

and insurable acreage of the insured crop;

(b) Report any acreage that is uninsured,

including that portion of the total acreage

occupied by male parent plants; and

(c) Certify that you have a hybrid seed corn

processor contract and report the amount, if

any, of any minimum guaranteed payment.

7. Insured Crop.

(a) In accordance with section 8 of the

Basic Provisions, the crop insured will be all

the female parent plants in the county for

which a premium rate is provided by the

actuarial documents:

(1) In which you have a share;

(2) That are grown under a hybrid seed

corn processor contract executed before the

acreage reporting date;

(3) That are planted for harvest as

commercial hybrid seed corn in accordance

with the requirements of the hybrid seed

corn processor contract and the production

management practices of the seed company;

and

(4) That are not (unless allowed by the

Special Provisions or by written agreement):

(i) Planted with a mixture of female and

male parent seed in the same row;

(ii) Planted for any purpose other than for

commercial hybrid seed corn;

(iii) Interplanted with another crop; or

(iv) Planted into an established grass or

legume.

(b) An instrument in the form of a ‘‘lease’’

under which you retain control of the acreage

on which the insured crop is grown and that

provides for delivery of the crop under

substantially the same terms as a hybrid seed

corn processor contract will be treated as a

contract under which you have an insurable

interest in the crop.

(c) A commercial hybrid seed corn

producer who is also a seed company may be

able to insure the hybrid seed corn crop if the

following requirements are met:

(1) The seed company has an insurable

interest in the hybrid seed corn crop;

(2) Prior to the sales closing date, the Board

of Directors of the seed company has

executed and adopted a corporate resolution

that contains the same terms as a hybrid seed

corn processor contract. This corporate

resolution will be considered a contract

under this policy;

(3) Sales records for at least the previous

years’ seed production must be provided to

confirm that the seed company has produced

and sold seed. If such records are not

available, the crop may be insured under the

Coarse Grains Crop Provisions with a written

agreement; and

(4) Our inspection reveals that the storage

and drying facilities satisfy the definition of

a seed company.

(d) Any of the insured crop that is under

contract with different seed companies may

be insured under separate policies with

different insurance providers provided all

acreage of the insured crop in the county is

insured. If you elect to insure the insured

crop with different insurance providers, you

agree to pay separate administrative fees for

each insurance policy.

8. Insurable Acreage.

In addition to the provisions of section 9

of the Basic Provisions, we will not insure

any acreage of the insured crop:

(a) Planted and occupied exclusively by

male parent plants;

(b) Not in compliance with the rotation

requirements contained in the Special

Provisions or, if applicable, required by the

hybrid seed corn processor contract; or

(c) If either the female or male parent

plants are damaged before the final planting

date and we determine that the insured crop

is practical to replant but it is not replanted.

9. Insurance Period.

(a) In addition to the provisions of section

11 of the Basic Provisions, insurance attaches

upon completion of planting of:

(1) The female parent plant seed on or

before the final planting date designated in

the Special Provisions, except as allowed in

section 16 of the Basic Provisions; and

(2) The male parent plant seed.

(b) In accordance with the provisions of

section 11 of the Basic Provisions, the

calendar date for the end of the insurance

period is the October 31 immediately

following planting.

10. Causes of Loss.

(a) In accordance with the provisions of

section 12 of the Basic Provisions, insurance

is provided only against the following causes

of loss that occur within the insurance

period:

(1) Adverse weather conditions;

(2) Fire;

(3) Insects, but not damage due to

insufficient or improper application of pest

control measures;

(4) Plant disease, but not damage due to

insufficient or improper application of

disease control measures;

(5) Wildlife;

(6) Earthquake;

(7) Volcanic eruption; or

(8) Failure of the irrigation water supply,

if due to a cause of loss contained in section

10(a) (1) through (7) that occurs during the

insurance period.

(b) In addition to the causes of loss

excluded by section 12 of the Basic

Provisions, we will not insure against any

loss of production due to:

(1) The use of unadapted, incompatible, or

genetically deficient male or female parent

plant seed;

(2) Frost or freeze after the date established

by the Special Provisions;

(3) Failure to follow the requirements

stated in the hybrid seed corn processor

contract and production management

practices of the seed company;

(4) Inadequate germination, even if

resulting from an insured cause of loss,

unless you have provided adequate notice as

required by section 11(b)(1); or

(5) Failure to plant the male parent plant

seed at a time or in a manner sufficient to

assure adequate pollination of the female

parent plants, unless you are prevented from

planting the male parent plant seed by an

insured cause of loss.

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 of at least one

complete planting pattern of the female and

male parent plant rows and extend the entire

length of each field in the unit. If you are

going to destroy any acreage of the insured

crop that will not be harvested, the samples

must not be destroyed until after our

inspection.

(b) In addition to the requirements of

section 14 of the Basic Provisions:

(1) You must give us notice of probable

loss at least 15 days before the beginning of

harvest if you anticipate inadequate

germination on any unit; and

(2) You must provide a completed copy of

your hybrid seed corn processor contract

unless we have determined it has already

been provided by the seed company, and the

seed company certifies that such contract is

used for all its growers without any waivers

or amendments.

12. 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) You will not receive an indemnity

payment on a unit if the seed company

refuses to provide us with records we require

to determine the dollar value per bushel of

production for each variety.
65352 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

(c) In the event of loss or damage covered

by this policy, we will settle your claim on

any unit by:

(1) Multiplying the insured acreage by its

respective amount of insurance per acre, by

type and variety if applicable;

(2) Totaling the results of section 12(c)(1)

if there are more than one type or variety;

(3) Multiplying the total seed production to

count (see section 12(d)) for each type and

variety of commercial hybrid seed corn by

the applicable dollar value per bushel for that

type or variety;

(4) Multiplying the total non-seed

production to count (see section 12(e)) for

each type and variety by the applicable local

market price determined on the earlier of the

date the non-seed production is sold or the

date of final inspection;

(5) Totaling the results of sections 12(c)(3)

and 12(c)(4) by type and variety;

(6) Subtracting the result of section 12(c)(5)

from the result of section 12(c)(1) if there is

only one type or variety, or subtracting the

result of 1or variety; and

(7) Multiplying the result of section

12(c)(6) by your share. For example:

You have a 100 percent share in 50 acres

insured for the development of variety ‘‘A’’

hybrid seed corn in the unit, with an amount

of insurance per acre guarantee of $340

(county yield of 160 bushels times a coverage

level factor of .867 for the 65 percent

coverage level, times a price election of $2.45

per bushel, minus the minimum guaranteed

payment of zero). Your seed production was

1,400 bushels and the dollar value per bushel

was $9.80. Your non-seed production was

100 bushels with a local market value of

$2.00 per bushel. Your indemnity would be

calculated as follows:

(1) 50 acres×$340=$17,000 amount of

insurance guarantee;

(3) 1,400 bushels×$9.80=$13,720 value of

seed production;

(4) 100 bushel of non-seed×$2.00=$200 of

non-seed production;

(5) $13,720+$200=$13,920;

(6) $17,000¥$13,920=$3,080; and

(7) $3,080×100 percent share=$3,080

indemnity payment.

You also have a 100 percent share in 50

acres insured for the development of variety

‘‘B’’ hybrid seed corn in the unit, with an

amount of insurance per acre guarantee of

$297 (county yield of 140 bushels times a

coverage level factor of .867 for the 65

percent coverage level, times a price election

of $2.45 per bushel, minus the minimum

guaranteed payment of zero). You harvested

1,200 bushels and the dollar value per bushel

for the harvested amount was $8.56. You also

harvested 200 bushels of non-seed with a

market value of $2.00 per bushel. Your

indemnity would be calculated as follows:

(1) 50 acres×$340=$17,000 amount of

insurance guarantee for type ‘‘A’’ and 50

acres×$297=$14,850 amount of insurance

guarantee for type ‘‘B’’;

(2) $17,000+$14,850=$31,850 amount of

insurance guarantee;

(3) 1,400 bushels×$9.80=$13,720 value of

seed production for type ‘‘A’’ and 1,200

bushels×$8.56=$10,272 value of seed

production for type ‘‘B’’;

(4) 100 bushels of non-seed×$2.00=$200 of

non-seed production for type ‘‘A’’ and 200

bushels of non-seed×$2.00=$400 of non-seed

production for type ‘‘B’’;

(5) $13,720+$200+$10,272+$400=$24,592

value of production to count;

(6) $31,850¥$24,592=$7,258; and

(7) $7,258×100 percent share=$7,258

indemnity payment.

(d) Production to be counted as seed

production will include:

(1) All appraised production as follows:

(i) Not less than the amount of insurance

per acre for acreage:

(A) That is abandoned;

(B) Put to another use without our consent;

(C) That is damaged solely by uninsured

causes; or

(D) For which you fail to provide

acceptable production records;

(ii) Production lost due to uninsured

causes;

(iii) Mature unharvested production with a

germination rate of at least 80 percent of the

commercial hybrid seed corn as determined

by a certified seed test. Any such production

may be adjusted in accordance with section

12(f);

(iv) Immature appraised production;

(v) Potential production on insured acreage

that you intend to put to another use or

abandon, if you and we agree on the

appraised amount of production. Upon such

agreement, the insurance period for that

acreage will end when you put the acreage

to another use or abandon the crop. If

agreement on the appraised amount of

production is not reached:

(A) If you do not elect to continue to care

for the crop, we may give you consent to put

the acreage to another use if you agree to

leave intact, and provide sufficient care for,

representative samples of the crop in

locations acceptable to us (The amount of

production to count for such acreage will be

based on the harvested production or

appraisals from the samples at the time

harvest should have occurred. If you do not

leave the required samples intact, or fail to

provide sufficient care for the samples, our

appraisal made prior to giving you consent to

put the acreage to another use will be used

to determine the amount of production to

count); or

(B) If you elect to continue to care for the

crop, the amount of production to count for

the acreage will be the harvested production,

or our reappraisal if additional damage

occurs and the crop is not harvested; and

(2) Harvested production that you deliver

as commercial hybrid seed corn to the seed

company stated in your hybrid seed corn

processor contract, regardless of quality,

unless the production has inadequate

germination.

(e) Production to be counted as non-seed

production will include all harvested or

mature appraised production that does not

qualify as seed production to count as

specified in section 12(d). Any such

production may be adjusted in accordance

with section 12(f).

(f) For the purpose of determining the

quantity of mature production:

(1) Shelled commercial hybrid seed corn

will be:

(i) Increased 0.12 percent for each 0.1

percentage point of moisture below 15

percent; or

(ii) Decreased 0.12 percent for each 0.1

percentage point of moisture in excess of 15

percent.

(2) The weight of ear corn required to equal

one bushel of shelled seed corn will be

increased 1.5 pounds for each full percentage

point of moisture in excess of 14 percent, and

any portion of a percentage point will be

disregarded. The moisture content of ear corn

will be determined from a shelled sample of

the ear corn.

(3) When records of commercial hybrid

seed corn production provided by the seed

company have been adjusted to a shelled

corn basis of 15.0 percent moisture and 56

pound avoirdupois bushels, sections 12(f)(1)

and (2) above will not apply to harvested

production. In such cases, records of the seed

company will be used to determine the

amount of production to count, provided that

the moisture and weight of such production

are calculated on the same basis as that used

to determine the approved yield.

13. Prevented Planting.

Your prevented planting coverage will be

50 percent of your amount of insurance for

timely planted acreage. If you have limited or

additional levels of coverage as specified in

7 CFR part 400, subpart T, and pay an

additional premium, you may increase your

prevented planting coverage to a level

specified in the actuarial documents.

Signed in Washington, D.C., on December

5, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance

Corporation.

[FR Doc. 97–32498 Filed 12–11–97; 8:45 am]

BILLING CODE 3410–08–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 97–NM–295–AD; Amendment

39–10250; AD 97–26–07]

RIN 2120–AA64

Airworthiness Directives; Boeing

Model 747 Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule; request for

comments.

SUMMARY: This amendment supersedes

an existing airworthiness directive (AD),

applicable to certain Boeing Model 747

series airplanes, that currently requires

a one-time inspection to detect damage

of the sleeving and wire bundles of the

boost pumps of the numbers 1 and 4

main fuel tanks, and of the auxiliary

tank jettison pumps (if installed);

replacement of any damaged sleeving

with new sleeving; and repair or

replacement of any damaged wires with

new wires. For airplanes on which any