Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65313

(5) Cleveland-Akron, OH—consisting

of the Cleveland-Akron, OH CMSA;

(6) Columbus, OH—consisting of the

Columbus, OH MSA;

(7) Dallas-Fort Worth, TX—consisting

of the Dallas-Fort Worth, TX CMSA;

(8) Dayton-Springfield, OH—

consisting of the Dayton-Springfield,

OH MSA;

(9) Denver-Boulder-Greeley, CO—

consisting of the Denver-BoulderGreeley, CO CMSA;

(10) Detroit-Ann Arbor-Flint, MI—

consisting of the Detroit-Ann ArborFlint, MI CMSA;

(11) Hartford, CT—consisting of the

Hartford, CT MSA, plus that portion of

New London County, CT, not located

within the Hartford, CT MSA;

(12) Houston-Galveston-Brazoria,

TX—consisting of the HoustonGalveston-Brazoria, TX CMSA;

(13) Huntsville, AL—consisting of the

Huntsville, AL MSA;

(14) Indianapolis, IN—consisting of

the Indianapolis, IN MSA;

(15) Kansas City, MO–KS—consisting

of the Kansas City, MO–KS MSA;

(16) Los Angeles-Riverside-Orange

County, CA—consisting of the Los

Angeles-Riverside-Orange County, CA

CMSA, plus Santa Barbara County, CA,

and that portion of Edwards Air Force

Base, CA, not located within the Los

Angeles-Riverside-Orange County, CA

CMSA;

(17) Miami-Fort Lauderdale, FL—

consisting of the Miami-Fort

Lauderdale, FL CMSA;

(18) Milwaukee-Racine, WI—

consisting of the Milwaukee-Racine, WI

CMSA;

(19) Minneapolis-St. Paul, MN–WI—

consisting of the Minneapolis-St. Paul,

MN–WI MSA;

(20) New York-Northern New JerseyLong Island, NY–NJ–CT–PA—

consisting of the New York-Northern

New Jersey-Long Island, NY–NJ–CT–PA

CMSA;

(21) Orlando, FL—consisting of the

Orlando, FL MSA;

(22) Philadelphia-WilmingtonAtlantic City, PA–NJ–DE–MD—

consisting of the PhiladelphiaWilmington-Atlantic City, PA–NJ–DE–

MD CMSA;

(23) Pittsburgh, PA—consisting of the

Pittsburgh, PA MSA;

(24) Portland-Salem, OR–WA—

consisting of the Portland-Salem, OR–

WA CMSA;

(25) Richmond-Petersburg, VA—

consisting of the Richmond-Petersburg,

VA MSA;

(26) Sacramento-Yolo, CA—consisting

of the Sacramento-Yolo, CA CMSA;

(27) St. Louis, MO–IL—consisting of

the St. Louis, MO–IL MSA;

(28) San Diego, CA—consisting of the

San Diego, CA MSA;

(29) San Francisco-Oakland-San Jose,

CA—consisting of the San FranciscoOakland-San Jose, CA CMSA;

(30) Seattle-Tacoma-Bremerton, WA—

consisting of the Seattle-TacomaBremerton, WA CMSA;

(31) Washington-Baltimore, DC–MD–

VA–WV—consisting of the WashingtonBaltimore, DC–MD–VA–WV CMSA,

plus St. Mary’s County, MD; and

(32) Rest of U.S.—consisting of those

portions of the 48 contiguous States not

located in another locality pay area.

[FR Doc. 97–32580 Filed 12–11–97; 8:45 am]

BILLING CODE 6325–01–U

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 401 and 457

RIN 0563–AB03

General Crop Insurance Regulations;

Hybrid Sorghum Seed Endorsement

and Common Crop Insurance

Regulations; Hybrid Sorghum Seed

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 sorghum seed. 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 sorghum seed

endorsement under the Common Crop

Insurance Policy for ease of use and

consistency of terms, and to restrict the

effect of the current hybrid sorghum

seed endorsement 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 an 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.
65314 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

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

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 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 Monday, December 30, 1996, FCIC

published a proposed rule in the

Federal Register at 61 FR 68674 to add

to the Common Crop Insurance

Regulations (7 CFR part 457), a new

section, 7 CFR 457.112 (Hybrid

Sorghum Seed Crop Insurance

Provisions). These provisions will

replace and supersede the current

provisions for insuring hybrid sorghum

seed found at 7 CFR section 401.109 and

will be effective for the 1998 and

succeeding crop years. This rule also

amends section 401.109 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 36

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

believed that the calculation sequence

in the definition of ‘‘amount of

insurance per acre’’ formula should be

revised to match the order shown in the

Special Provisions. The commenter

stated that in the Special Provisions,

multiplication by the price election is

not in the proper sequence. Amount of

insurance per acre is the county yield,

multiplied by the factor for the coverage

level selected, 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: An insurance service

organization suggested that the

definition of ‘‘female parent plant’’ may

have to be changed because some

companies have started experimenting

with female sterile plants from which

the stamen may not have to be removed.

Response: FCIC has revised the

definition to accommodate those

instances where the parent plants are

rendered male sterile by means other

than stamen removal.

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.

Response: The Special Provisions

uses the term ‘‘interplanting’’ and the

Crop Provisions uses the term

‘‘interplanted,’’ and the terms have

different meanings. To avoid any

confusion between these terms, FCIC

will change the reference from

‘‘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: 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. 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

definition 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: A reinsured company and

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 changed to read ‘‘. . . 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 most

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
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65315

section 3(b) which correctly indicates

that production reporting requirements

do not apply to this crop. In most

instances the sorghum seed 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 Regional

Service Office (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 sorghum seed is not used to

establish the amount of insurance as

stated in section 2(e)(1). The amount of

insurance is based on the county yield,

coverage level and price elected and any

minimum guaranteed payment.

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 provide the

records for each optional unit, they will

be combined in basic units. The insured

can obtain the necessary records from

the seed company. These provisions

have been moved to the Basic

Provisions and deleted from these Crop

Provisions.

Comment: An insurance service

organization suggested that the opening

phrase of section 2(e)(4) ‘‘Each optional

unit must meet one or more of the

following criteria, as applicable:’’ Is not

necessary, and may actually cause

confusion, since this crop has only one

method for optional unit division (by

section or other legal description).

Perhaps section (e)(4) should start with

‘‘Each optional unit is located in a

separate legally identified

section. . . .’’

Response: All relevant changes have

been made to the Basic Provisions and

those provisions deleted in these Crop

Provisions.

Comment: A reinsured company was

concerned about the requirement that

the producer must meet all the

requirements in section 6. They stated

that these requirements should not be

mandatory for every acreage report.

Response: The information required

in 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 sorghum seed 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

sorghum seed. The commenter

suggested that this should only 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 the 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 sorghum seed processor contract

and the amount of any minimum

guaranteed payment. The commenter

questioned 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 that the

insured has 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 the processor 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: 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 questioned

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 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: Reinsured companies and

an insurance service organization

questioned why section 7(c) requires the

seed company to be a corporation. The

commenters also questioned whether

there could be other acceptable legal

entities that could conduct business as

a seed company, and if the requirement

in section 7(c)(1) is necessary, since

‘‘seed company’’ is a defined term.

Response: In most cases, a seed

company need not be a corporation and

FCIC has changed the requirement for a
65316 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

seed company from a ‘‘corporation’’ to

a ‘‘business enterprise’’ in the

definition. However, to protect the

integrity of the program, the seed

company must be a corporation if the

seed company is also the producer.

FCIC has added a provision in the

definition to require seed companies

that are also the insured to be a

corporation.

Comment: A reinsured company and

an insurance service organization noted

that section 7(c)(3) states that if sales

records are not available from a seed

company who is also the insured, the

crop could be insured under the coarse

grains policy, not the hybrid sorghum

seed policy. Yield potential for sorghum

seed is lower than that for commercial

sorghum, so this would be a

questionable move.

Response: FCIC agrees that hybrid

sorghum seed is best suited for

insurance under the hybrid sorghum

seed policy, but records must be

provided to assure that the person

seeking insurance is a bona-fide

producer of hybrid sorghum seed. If the

crop is insured under the Coarse Grains

Crop Provisions, the approved yield

would be derived from grain sorghum

production records of the processor for

the particular type or variety. The last

sentence of section 7(c)(3) has been

revised to allow such insurance by

written agreement.

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

sections 8(a) or 8(b).

Response: FCIC has clarified the

provision. 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 1988–CHIAA

797) so the term would be more easily

located.

Response: The requirement for

representative samples is 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

suggested the requirement in section

11(b)(2) that the insured provide a

completed copy of the seed processor

contract in the event of a loss should be

optional, not mandatory. If an insurance

company insures all of a seed

company’s producers, the company

knows each producer has a seed

contract, and should not have to obtain

a copy from each one. The insurance

company will have a copy of the base

contract for each seed company and

nothing is gained by having to obtain

the exact contract in effect for each

producer. If some producers insured

with an insurance company grow hybrid

sorghum seed for various seed

companies (not all of their producers are

insured with them) there may be some

benefit in obtaining a copy of their

contract.

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 the

provisions in section 12(e)(1)(v)

(redesignated section 12(d)(1)(v)) 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 will

be made.

Comment: An insurance service

organization stated that section 12(e)(2)

(redesignated 12(d)(2)), counts

harvested production delivered to the

seed company, whereas section

6(c)(1)(a) of the 1998–CHIAA 797 counts

harvested production delivered to and

accepted by the seed company. The

commenter questioned whether this is a

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 sorghum seed to the

seed company stated in the hybrid

sorghum seed processor contract,

regardless of quality, unless the

production has inadequate germination.

Comment: A reinsured company and

an insurance service organization stated

that section 12(g)(2) (redesignated

section 12(f)(2)) requires a company to

work the claim in the same manner as

the records of the seed company

provided for establishing the approved

yield. Since the approved yield is

calculated by the RSO, the insurance

provider must be notified when a seed

company has its own method for

converting the production.

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

suggested that the substitute crop

provisions under Prevented Planting
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65317

coverage should be eliminated, as

indicated in other comments being

submitted and as being discussed

separately.

Response: The prevented planting

provisions have been moved to the

Basic Provisions and FCIC has revised

these provisions to remove the

substitute crop provisions.

Comment: A reinsured company

understands that FCIC plans to revise

prevented planting for 1998 and

assumes that these new provisions will

be incorporated into this policy.

Response: The prevented planting

provisions have been moved to the

Basic Provisions and will be applicable

to this policy.

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 have been moved to the Basic

Provisions.

Comment: An insurance service

organization suggested that instead of

specifying years in section 13(d)(4)(ii), it

could be written with references to ‘‘this

year’’ and ‘‘the following year’’ so it

wouldn’t look outdated in subsequent

years. Also, consider changing ‘‘for the

purpose of the preceding sentence’’ to

‘‘for this purpose’’.

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

suggested that section 13(d)(5)(ii)

should be changed since hybrid

sorghum seed is a crop grown under

contract with a seed company, which

dictates the number of acres to be

planted. The maximum eligible acreage

for prevented planting coverage should

be contracted acres, regardless of how

many acres may have been planted in

previous years.

Response: FCIC has clarified the

provisions in the Basic Provisions.

Comment: An insurance service

organization suggested that in section

13(d)(5)(iv)(E), the sentence should

begin with ‘‘On which * * *’’ (Or at

least the first word should be

capitalized to match the other items).

Response: FCIC has revised the

provision appropriately in the Basic

Provisions.

Comment: An insurance service

organization questioned whether is it

necessary to keep repeating ‘‘guarantee,

or amount of insurance’’ as alternatives

to a ‘‘prevented planting indemnity’’ in

section 13(d)(5)(iv)(F).

Response: The prevented planting

guarantee; amount of insurance; and

indemnity refer to different amounts,

and all terms are necessary. No change

has been made in the Basic Provisions.

Comment: Reinsured companies 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.

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 the

provisions contained in 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 was

concerned about many of the mandatory

requirements added to these provisions.

In its view, most of these requirements

are unnecessary. 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 sorghum seed 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 the

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 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. Also, deleted

the definition of ‘‘seed amount.’’

3. The definitions of ‘‘adjusted yield,’’

‘‘approved yield,’’ ‘‘county yield,’’

‘‘dollar value of insurance,’’ ‘‘hybrid

sorghum seed processor contract,’’ and

‘‘insurable interest’’ have been revised

for clarification.

4. A definition of ‘‘coverage level

factor’’ has been added for clarification.

5. The definitions 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 sorghum

seed 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 sorghum

seed when the hybrid sorghum seed

processor contract specifies an amount

of production to be delivered. Also, for

processor contracts that stipulate a

number of acres to be planted, the

provisions in the Basic Provisions that

allow optional units by irrigated and

non-irrigated practices are not

applicable.

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
65318 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

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)(2), as redesignated,

the last sentence has been revised 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 sorghum seed 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 401 and

457

Hybrid sorghum seed endorsement,

Crop insurance, Hybrid sorghum seed.

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

THROUGH 1997 CROP 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 § 401.109

is revised to read as follows:

§ 401.109 Hybrid sorghum seed

endorsement.

The provisions of the Hybrid

Sorghum Seed Endorsement for the

1988 through the 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. Section 457.112 is added to read as

follows:

§ 457.112 Hybrid sorghum seed crop

insurance provisions

The Hybrid Sorghum Seed 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 Sorghum Seed 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

sorghum seed processor contract. If your

hybrid sorghum seed 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 the

insured crop.

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 sorghum seed. 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

sorghum crop for grain or forage.

County yield. An amount contained in the

actuarial documents that is established by

FCIC to represent the yield that a producer

of hybrid sorghum seed would be expected

to produce if the acreage had been planted

to commercial field sorghum.

Coverage level factor. A factor contained in

the Special Provisions to adjust the county

yield for commercial field sorghum to reflect

the higher value of hybrid sorghum seed.

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. Sorghum plants that

are grown for the purpose of producing

commercial hybrid sorghum seed and are

male sterile.

Field run. Commercial hybrid sorghum

seed production before it has been processed

or screened.

Good farming practices. In addition to the

definition contained in the Basic Provisions,

good farming practices include those

practices required by the hybrid sorghum

seed processor contract.

Harvest. Combining, threshing or picking

of the female parent plants to obtain

commercial hybrid sorghum seed.

Hybrid sorghum seed processor contract.

An agreement executed in writing between

the hybrid sorghum seed 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 sorghum seed

produced from such plants to the seed

company;

(b) The seed company’s promise to

purchase the commercial hybrid sorghum

seed produced by the producer; and

(c) Either a fixed price per unit of measure

(bushels, hundredweight, etc.) of the

commercial hybrid sorghum seed 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 sorghum seed 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 sorghum seed under the

terms of this policy.

Male parent plants. Sorghum 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 sorghum
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65319

seed 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 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

sorghum seed 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 sorghum seed

processor contract to be considered planted.

Sample. For the purpose of the certified

seed test, at least 3 pounds of randomly

selected field run sorghum seed for each type

or variety of commercial hybrid sorghum

seed grown on the unit.

Seed company. A business enterprise that

possesses all licenses for marketing

commercial hybrid sorghum seed 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.

Type. Grain sorghum, forage sorghum, or

sorghum sudan parent plants.

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.

(a) For any processor contract that

stipulates the amount of production to be

delivered:

(1) 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 sorghum seed processor

contract;

(2) There will be no more than one basic

unit for all production contracted with each

processor contract;

(3) 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

(4) Optional units will not be established.

(b) For any processor contract that

stipulates a number of acres to be planted,

the provisions in the Basic Provisions that

allow optional units by irrigated and nonirrigated practices are not applicable.

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 sorghum seed in the county insured

under this policy unless the Special

Provisions provide different price elections

by type or variety, in which case you may

elect one price election for each hybrid

sorghum seed type or variety designated in

the Special Provisions. The price election

you choose for each type or variety must

have the same percentage relationship to the

maximum price offered by us for each type

or variety. For example, if you choose 100

percent of the maximum price election for

one specific type or variety, you must also

choose 100 percent of the maximum price

election for all other types or 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 sorghum

seed 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 sorghum

seed processor contract executed before the

acreage reporting date;

(3) That are planted for harvest as

commercial hybrid sorghum seed in

accordance with the requirements of the

hybrid sorghum seed 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 sorghum seed;

(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

sorghum seed processor contract will be

treated as a contract under which you have

an insurable interest in the crop.

(c) A commercial hybrid sorghum seed

producer who is also a commercial hybrid

sorghum seed company may be able to insure

the hybrid sorghum seed crop if the

following requirements are met:

(1) The seed company has an insurable

interest in the hybrid sorghum seed crop;

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

of Directors of the seed company has

executed and adopted a corporate resolution

containing the same terms as an acceptable

hybrid sorghum seed processor contract. This

corporate resolution will be considered a

contract under the terms of 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 sorghum seed processor contract; or

(c) If either the female or male parent

plants are damaged before the final planting

date and we determine that 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 November 30 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 during the insurance

period:
65320 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations

(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 set by the

Special Provisions;

(3) Failure to follow the requirements

stated in the hybrid sorghum seed 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 male and

female parent plant rows that 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 sorghum seed 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 producers 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.

(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 sorghum seed

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 12(c)(5) from the result of section

12(c)(2) if there are more than one type or

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 type ‘‘A’’

hybrid sorghum seed in the unit, with an

amount of insurance per acre guarantee of

$361 (county yield of 170 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 $3.47. 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×$361=$18,050 amount of

insurance guarantee;

(3) 1,400 bushels×$3.47=$4,858 value of

seed production;

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

non-seed production;

(5) $4,858+$200=$5,058;

(6) $18,050¥$5,058=$12,992; and

(7) $12,992×100 percent share=$12,992

indemnity payment.

You also have a 100 percent share in 50

acres insured for the development of type

‘‘B’’ hybrid sorghum seed 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). You harvested

1,200 bushels and the dollar value per bushel

for the harvested amount was $4.63. 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×$361=$18,050 amount of

insurance guarantee for type ‘‘A’’ and 50

acres×$340=$17,000 amount of insurance

guarantee for type ‘‘B’’;

(2) $18,050+$17,000=$35,050 amount of

insurance guarantee;

(3) 1,400 bushels×$3.47=$4,858 value of

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

bushels×$4.63=$5,556 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) $4,858+$200+$5,556+$400=$11,014

value of production to count;

(6) $35,050¥$11,014=$24,036; and

(7) $24,036×100 percent share=$24,036

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 sorghum seed 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 sorghum seed to the

seed company stated in your hybrid sorghum

seed 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).
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Rules and Regulations 65321

(f) For the purpose of determining the

quantity of mature production:

(1) Commercial hybrid sorghum seed

production will be:

(i) Increased 0.12 percent for each 0.1

percentage point of moisture below 13.0

percent; or

(ii) Decreased 0.12 percent for each 0.1

percentage point of moisture in excess of 13.0

percent.

(2) When records of commercial hybrid

sorghum seed production provided by the

seed company have been adjusted to a basis

of 13.0 percent moisture and 56 pound

avoirdupois bushels, section 12(f)(1) 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

60 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. 97–32497 Filed 12–11–97; 8:45 am]

BILLING CODE 3410–08–P

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 422 and 457

Potato Crop Insurance Regulations;

and Common Crop Insurance

Regulations, Northern Potato Crop

Insurance Provisions, Central and

Southern Potato Crop Insurance

Provisions, Northern Potato Quality

Endorsement Crop Insurance

Provisions, Northern Processing

Potato Quality Endorsement Crop

Insurance Provisions, Certified Seed

Potato Endorsement Crop Insurance

Provisions, and Northern Potato

Storage Endorsement Crop Insurance

Provisions

AGENCY: Federal Crop Insurance

Corporation, USDA.

ACTION: Final rule.

SUMMARY: The Federal Crop Insurance

Corporation (FCIC) finalizes crop

provisions for the insurance of potatoes.

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 potato crop insurance

regulations with the Common Crop

Insurance Policy for ease of use and

consistency of terms, and to restrict the

effect of the current potato crop

insurance regulations to the 1997 and

prior crop years in counties in which

the Northern Potato Crop Provisions

will be used and to the 1998 and prior

crop years in all other states.

EFFECTIVE DATE: December 12, 1997.

FOR FURTHER INFORMATION CONTACT:

Rob Coultis, Insurance Management

Specialist, Product Development

Division, Federal Crop Insurance

Corporation, United States Department

of Agriculture, 9435 Holmes Road,

Kansas City, MO 64131, telephone (816)

926–7730.

SUPPLEMENTARY INFORMATION:

Executive Order 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 amount of work required of

insurance companies will not increase

because the information used to

determine eligibility is already

maintained at their office and the other

information required is already being

gathered as a result of the present

policy. No additional actions are

required as a result of this action on the

part of either the producer or the

reinsured company. Additionally, the

regulation does not require any action

on the part of the small entities than is

required on the part of the large entities.

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 12988

on civil justice reform. The provisions

of this rule will not have 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.