This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

6099

Vol. 62, No. 28

Tuesday, February 11, 1997

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 433 and 457

RIN 0563–AB02

Common Crop Insurance Regulations,

Dry Bean Crop Insurance Provisions;

and Dry Bean Crop Insurance

Regulations

AGENCY: Federal Crop Insurance

Corporation, USDA.

ACTION: Final rule.

SUMMARY: The Federal Crop Insurance

Corporation (FCIC) finalizes specific

crop provisions for the insurance of dry

beans. 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 dry bean crop insurance

regulation with the Common Crop

Insurance Policy for ease of use and

consistency of terms, and to restrict the

effect of the current dry bean crop

insurance regulation to the 1996 and

prior crop years.

EFFECTIVE DATE: February 11, 1997.

FOR FURTHER INFORMATION CONTACT:

Arden Routh, Program Analyst,

Research and Development, Product

Development Division, Federal Crop

Insurance Corporation, United States

Department of Agriculture, 9435 Holmes

Road, Kansas City, MO 64131,

telephone (816) 926–7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

The Office of Management and Budget

(OMB) has determined this rule to be

exempt for the purposes of Executive

Order No. 12866 and, therefore, has not

been reviewed by OMB.

Paperwork Reduction Act of 1995

Following publication of the proposed

rule, the public was afforded 60 days to

submit written comments, data, and

opinions on information collection

requirements previously approved by

OMB under OMB control number 0563–

0003 through September 30, 1998. No

public comments were received.

Unfunded Mandates Reform Act of

1995

Title II of the Unfunded Mandates

Reform Act of 1995 (UMRA), Public

Law 104–4, establishes requirements for

Federal agencies to assess the effects of

their regulatory actions on State, local,

and tribal governments and the private

sector. This rule contains no Federal

mandates (under the regulatory

provisions of title II of the UMRA) for

State, local, and tribal governments or

the private sector. Thus, this rule is not

subject to the requirements of sections

202 and 205 of the UMRA.

Executive Order No. 12612

It has been determined under section

6(a) of Executive Order No. 12612,

Federalism, that this rule does not have

sufficient federalism implications to

warrant the preparation of a Federalism

Assessment. The provisions contained

in this rule will not have a substantial

direct effect on States or their political

subdivisions, or on the distribution of

power and responsibilities among the

various levels of government.

Regulatory Flexibility Act

This regulation will not have a

significant 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.

The insured must also annually

certify to the previous years production

if adequate records are available to

support the certification. The producer

must maintain the production records to

support the certified information for at

least three years. 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

3015, subpart V, published at 48 FR

29115, June 24, 1983.

Executive Order No. 12778

The Office of the General Counsel has

determined that these regulations meet

the applicable standards provided in

sections 2(a) and 2(b)(2) of Executive

Order No. 12778. The provisions of this

rule will not have a retroactive effect

prior to the effective date. The

provisions of this rule will preempt

State and local laws to the extent such

State and local laws are inconsistent

herewith. The administrative appeal

provisions published at 7 CFR part 11

must be exhausted before any action for

judicial review may be brought.

Environmental Evaluation

This action is not expected to have a

significant impact on the quality of the

human environment, health, and safety.

Therefore, neither an Environmental

Assessment nor an Environmental

Impact Statement is needed.

National Performance Review

This regulatory action is being taken

as part of the National Performance

Review Initiative to eliminate

unnecessary or duplicative regulations

and improve those that remain in force.

Background

On Tuesday, November 26, 1996,

FCIC published a proposed rule in the

Federal Register at 61 FR 60049–60057

to add to the Common Crop Insurance

Regulations (7 CFR part 457) a new

section, 7 CFR 457.150, Dry Bean Crop

Provisions. The new provisions will be
6100 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

effective for the 1997 and succeeding

crop years. These provisions will

replace and supersede the current

provisions for insuring dry beans found

at 7 CFR part 433 (Dry Bean Crop

Insurance Regulations). FCIC also

amends 7 CFR part 433 to limit its effect

to the 1996 and prior crop years. FCIC

will later publish a regulation to remove

and reserve part 433.

Following publication of the proposed

rule, the public was afforded 30 days to

submit written comments, data, and

opinions. A total of 80 comments were

received from the crop insurance

industry and FCIC. The comments

received, and FCIC’s responses, are as

follows:

Comment: The crop insurance

industry questioned if consideration

had ever been given to having two bean

polices, one for contract seed beans and

one for dry beans. It would be easier for

policyholders to have crop provisions

that address only the kind of beans they

are insuring.

Response: FCIC will consider this

option for a future rule. However, there

is not sufficient time to divide this

policy for the 1997 crop year. Therefore,

no change has been made.

Comment: The crop insurance

industry recommended defining

‘‘properly handled.’’

Response: The requirements for

handling seed beans are contained in

the seed bean processor contract.

Therefore, it would be difficult for FCIC

to define ‘‘properly handled’’ due to the

differing requirements of seed bean

companies. However, FCIC will amend

the definition of ‘‘actual value’’ to

clarify that production must be handled

in accordance with requirements

contained in the seed bean processor

contract.

Comment: The crop insurance

industry recommended that the

definition of ‘‘Base price’’ be amended

to exclude any bonus offered when the

germination percentage is above the

minimum required by the seed contract.

Response: FCIC agrees with the

comment and has amended the

definition accordingly.

Comment: The crop insurance

industry expressed confusion with the

definitions of ‘‘beans,’’ ‘‘dry beans,’’ and

‘‘contract seed beans.’’ The definition of

‘‘contract seed beans,’’ is also covered

by the ‘‘dry beans’’ definition which

makes the definition of ‘‘beans’’ seem

redundant. The commenter questions if

the definition for ‘‘dry beans’’ needs to

include the intended use of the

production.

Response: Throughout these

provisions the term ‘‘beans’’ applies to

both dry beans and contract seed beans.

The term ‘‘dry beans’’ includes all

classes of beans included in The United

States Standards for Beans. The term

‘‘contract seed beans’’ distinguishes dry

beans grown under a contract for the

specific purpose of producing seed for

a subsequent crop year. The definition

of ‘‘dry beans’’ was changed to exclude

contract seed beans.

Comment: The crop insurance

industry agreed that the definition for

‘‘county’’ should be deleted in these

provisions so that the definition in the

Basic Provisions will be effective. The

commenter emphasized that if these

provisions are approved for the 1997

crop year, these changes and subsequent

procedures need to be issued soon

enough for companies to provide

training to their agents, rearrange APH

data bases for units that previously

included land in another county, and to

allow policyholders to decide whether

to insure any land in another county in

which they have an interest.

Response: FCIC will provide

instructions for changing the data bases

for units that previously included land

in another county. These instructions

will be made available at the time the

policy is released. FCIC does not

anticipate that a large number of

producers farm in more than one county

and, therefore, does not expect a large

number of data base revisions to be

necessary.

Comment: The crop insurance

industry was concerned with the

definition of ‘‘Good farming practices,’’

which makes reference to ‘‘generally

recognized by the Cooperative

Extension Service.’’ The commenters

indicated that there are areas or

situations where good, accepted farming

practices may not necessarily be

recognized by the Extension Service.

Response: FCIC has removed the word

‘‘generally’’ from this part of the

definition. However, the Cooperative

State Research, Education, and

Extension Service recognizes most

farming practices that are considered

acceptable for producing beans. The use

of practices not recognized as acceptable

by the Cooperative State Research,

Education, and Extension Service

provides no standards by which to

measure performance.

Comment: The crop insurance

industry recommended adding the

words ‘‘and quality’’ after the word

‘‘quantity’’ in the definition of ‘‘irrigated

practice.’

Response: Water quality is an

important issue. However, since no

standards or procedures have been

developed to measure water quality for

insurance purposes, quality cannot be

included in the definition. Therefore, no

change has been made.

Comment: A representative of FCIC

recommended changing the second

sentence in the definition of ‘‘local

market price’’ to ‘‘Moisture and factors

* * *’’ and delete ‘‘such as moisture

content.’’

Response: FCIC agrees with the

comment and has amended the

definition accordingly.

Comment: The crop insurance

industry recommended changing the

definition of ‘‘net price’’ to read, ‘‘The

dollar value of dry bean production

received or that could have been

received * * *’’

Response: FCIC agrees with comment

and has amended the definition

accordingly.

Comment: One comment received

from the insurance industry

recommended changing the definition

of ‘‘pick’’ to consider defects based on

the original grade of the beans.

Response: Dockage does not include

defects to the beans and, therefore,

should not be included in any

calculation of the pick, which applies

only to defects of the beans. Therefore,

no change has been made.

Comment: The crop insurance

industry recommended adding a final

sentence to the definition of ‘‘prevented

planting,’’ which would require the

insured to have past history of the bean

type which the insured is declaring as

being prevented from being planted.

Response: FCIC cannot penalize new

producers of a bean type, who can prove

that they had the inputs available to

plant that particular bean type, by

denying them prevented planting

coverage. Therefore, no change has been

made.

Comment: A representative of FCIC

recommended replacing the reference to

‘‘Special Provisions’’ in the definition of

‘‘Production guarantee (per acre)’’ with

‘‘Actuarial Table,’’ since the adjustment

factors are in the Actuarial Table and

not the Special Provisions.

Response: FCIC agrees with the

comment and has amended the

definition accordingly.

Comment: The crop insurance

industry questioned if the term

‘‘production guarantee’’ applies only to

dry beans and if the term ‘‘amount of

insurance’’ is used only for contract

seed beans. If so, it would be helpful to

identify dry beans in the definition of

‘‘production guarantee’’ and include a

definition for ‘‘amount of insurance’’ for

contract seed beans.

Response: The term ‘‘production

guarantee’’ applies to both dry beans

and contract seed beans. The amount of

insurance for contract seed beans is
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6101

obtained by using the production

guarantee per acre for each contract seed

bean variety in the unit, as provided in

section 3(b) of these provisions.

Therefore, no change has been made.

Comment: The crop insurance

industry recommended changing the

definition of ‘‘Replanting.’’ The

commenter indicated that the wording

‘‘* * * replace the bean seed and then

replacing the bean seed * * *’’ is

confusing and awkward.

Response: FCIC agrees with the

comment and will clarify the definition

accordingly. Comment: The crop

insurance industry and a representative

of FCIC indicated that the definition of

‘‘Seed company’’ should not limit the

seed company to only being a

corporation.

Response: FCIC agrees with the

comments and has amended the

definition.

Comment: The crop insurance

industry questioned if the term ‘‘type’’

applies only to dry edible beans. If so,

the definition should be clarified.

Response: For the purpose of

establishing insurability of the crop,

FCIC’s Special Provisions identify

classes of all beans as types. Contract

seed beans are a specific type under a

seed bean processor contract.

Comment: The crop insurance

industry recommended clarifying the

language of section 2(a) of the proposed

rule by substituting language similar to

that contained in section 2(a) of the

Sugar Beet Crop Provisions. The

wording of this section would be

‘‘Unless limited by the Special

Provisions, a unit (basic unit) as defined

in section 1 (Definitions) of the Basic

Provisions (§ 457.8), may be divided

* * *’’

Response: FCIC agrees with the

comment and has amended section 2(a)

of the proposed rule to indicate that a

unit as defined in the Basic Provisions

is a basic unit.

Comment: A comment from the crop

insurance industry asked the following:

(1) Are optional units available by type

or variety for contract seed beans; (2) if

an insured has a processor contract for

one seed variety and another processor

contract for another seed variety, would

each variety be eligible for a separate

unit; and (3) if the contract specifies an

amount of production rather than the

number of acres, are optional units

available?

Response: Optional units are only

available for contract seed beans if the

contract specifies a number of acres

under contract and all acreage under the

seed bean processor contract will be

included in the optional unit. There are

no separate optional units by type for

contract seed beans. Optional units are

not available for contract seed beans if

the seed bean processor contract

specifies an amount of production.

Section 2 has been amended to clarify

the available optional units for contract

seed beans.

Comment: The crop insurance

industry recommended that section 2(c)

of the proposed rule be clarified to

indicate that it affects only optional

units by section and irrigated or nonirrigated practices and does not

authorize separate optional units for

different types of seed beans.

Response: Types of contract seed

beans do not qualify for optional units.

Optional units by type, section, or

irrigation practice are available for

contract seed beans if the seed bean

processor contract specifies the number

of acres under contract. The provisions

in section 2 have been amended

accordingly.

Comment: Representatives of FCIC

questioned the need for the provisions

contained in section 2(c) of the

proposed rule, since the definitions of

‘‘base price,’’ ‘‘contract seed beans,’’ and

‘‘seed bean processor contract,’’ specify

that acreage is not eligible to be insured

as seed beans if the total production is

not contracted. The commenter

recommended deleting section 2(c) of

the proposed rule.

Response: Section 2(c) of the

proposed rule is necessary to protect the

integrity of the program. The insured

production is determined based on the

number of acres under contract. If FCIC

allows optional units when the contract

only specifies an amount of production,

this amount of production is prorated

over the optional units to determine the

per unit amount of insurance. If the

value of the production from any unit is

less than the amount of insurance for

that unit, an indemnity is paid, even

though the insured may have fulfilled

all obligations under the contract from

production in other units. This will

result in FCIC insuring amounts in

excess of that under contract, which

would adversely affect the actuarial

soundness of the program.

Comment: The crop insurance

industry and a representative of FCIC

recommended clarifying the last

sentence of section 2(d) of the proposed

rule. The commenter believes that the

current wording may lead the insured to

believe that premium may be refunded

any time optional units are combined.

Premium is refunded when there are no

optional units within a basic unit. One

of the comments recommended

changing the provisions to read as

follows: ‘‘If failure to comply with the

provisions is determined to be

inadvertent and if all of the optional

units within a basic unit are combined,

that portion of the premium paid for the

purpose of electing optional units will

be refunded to you.’’

Response: FCIC agrees with the

comment and has amended the

provision in redesignated section 2(e).

Comment: A representative of FCIC

recommended clarifying the language in

section 2(e) of the proposed rule to

indicate that optional units not planted

in the current crop year need not be

identified on the acreage report.

Response: FCIC has clarified this

provision in redesignated section 2(f) to

indicate that only those optional units

established for the specific crop year

need be identified on the acreage report.

Comment: The insurance industry

indicated that provisions in section

2(f)(4)(i) of the proposed rule authorize

optional units by type for dry beans.

The commenter questioned if optional

units by bean type are available for

contract seed beans, since the definition

of ‘‘bean’’ suggests it applies to all types

of dry beans. This language needs to be

more clearly distinguished. The

commenter recommended that contract

seed beans and other dry beans should

be handled as separate basic units since

procedures will be more complicated

under these provisions. Production of

one type would count against the

guarantee of another type if insured as

one basic unit, which creates

difficulties. The commenter also

questioned if the premium rates are

being adjusted to reflect the change from

basic to optional units by type (will the

premium rates be 10–11 percent higher

than last year’s premium rates)?

Policyholders must be provided the

necessary information and advance time

to decide how to accommodate the extra

costs and requirements involved.

Response: Optional units by type are

only applicable to dry beans and the

provision has been amended for

clarification. Contract seed beans

qualify as a basic unit. If the

policyholder elects to obtain optional

units, the premium rates will be

adjusted to reflect any additional risk of

loss. Any changes in the insurance

coverage, including premium rates, will

be available on or before the contract

change date. This should provide the

policyholder with ample time to make

their business decisions. The provisions

in section 2 have been amended

accordingly.

Comment: The crop insurance

industry and a representative of FCIC

questioned if the language in section

2(f)(4)(ii) of the proposed rule should be

amended to read ‘‘In addition to, or

instead of * * *’’ or if that phrase
6102 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

should be omitted since the possibility

of ‘‘besides or instead’’ is covered by the

statement in section 2(f)(4) of the

proposed rule that ‘‘one or more’’ of

these criteria must be met for each

optional unit.

Response: FCIC agrees that the phrase

‘‘In addition to, or instead of’’ should be

incorporated into the first sentence of

redesignated section 2(g)(4)(ii), and has

modified this provision accordingly.

Comment: The crop insurance

industry had the following comments

regarding the provisions in section 3(a).

The provisions allow different price

election percentages by dry bean type,

which is not consistent with other crop

provisions unless each type is treated as

a separate crop. Based on the provisions

of section 3(a), one comment questioned

the change that no longer allows dry

bean basic units by type. The comment

indicated that if different price election

percentages are allowed, each type

should continue to be a separate basic

unit. One of the comments questioned if

other crops will be changed to permit

different price percentages within the

same basic unit and how the computer

edits will handle these situations.

Response: Producers can elect

optional units for different types of dry

beans. However, in those cases where

multiple types are in a single unit, FCIC

has provided producers the flexibility to

select a different percentage of the

maximum price election for each type.

The costs to produce different types of

dry beans can vary considerably as can

the economic significance of each to the

producer. It may be necessary for some

insurance providers to reprogram

computer systems to allow this variation

in price election percentages.

Comment: The crop insurance

industry questioned the new

requirement that the producer submit a

copy of the seed bean processor contract

at acreage reporting time. What would

happen if an acreage report is received

without a copy of the processor

contract? This requirement could lead to

policyholders waiting until acreage

reporting time to decide if they want to

insure the crop as contract seed beans.

Response: FCIC has always required

the seed bean processor contract to be

executed on or before the acreage

reporting date. Now, FCIC requires the

insured to submit a copy of the contract

no later than that date in order to ensure

that such contract exists, prior to any

likely loss. Thus, there is no greater

effect upon the producer’s decision as to

how to insure the beans. If a copy of the

contract is not provided at the time

acreage is reported, the beans may be

insurable as dry beans, but not as

contract seed beans.

Comment: The crop insurance

industry questioned the language of

section 7(a)(2)(i), which references dry

beans. The commenter explained that

the definition of ‘‘dry beans’’ seems to

include both dry edible beans and

contract seed beans instead of

distinguishing between the two.

Response: Contract seed beans are

defined separately from dry beans so

that they may be identified and treated

differently in several sections of the

policy, including price election

determination, unit division, insured

crop, and loss calculations. FCIC agrees

that some contract seed beans would

qualify under the definition of dry

beans. Therefore, FCIC has amended the

definition of dry beans to exclude

contract seed beans.

Comment: A representative of FCIC

stated that section 7(a)(3) of the

proposed rule is not necessary because

section 8(b)(4) of the Basic Provisions

states that we do not insure volunteer

crops.

Response: FCIC agrees and has

deleted this provision and renumbered

the remaining provisions.

Comment: The crop insurance

industry questioned the reference to

other ‘‘types of beans’’ in section 7(c)

and whether it applies only to dry

edible beans or if it also applies to

contract seed beans.

Response: The reference to other

‘‘types of beans’’ in section 7(c) applies

to classes of dry beans not listed as a

type of dry beans in the Special

Provisions. Section 7(c) has been

amended to specify ‘‘dry beans.’’

Comment: The crop insurance

industry recommended putting a period

at the end of section 8(a) and deleting

the word ‘‘or.’’ As written, this

provisions could be misunderstood to

mean that as long as the rotation

requirements are met, the insured

would not have to replant even if

practical, or vice versa. Presumably,

each of the statements in section 8 (a)

and (b) stand alone.

Response: The use of ‘‘or’’ has the

effect of making these stand alone

requirements as written, if the insured

fails to comply with either requirement,

the acreage would be uninsurable.

Therefore, no change will be made.

Comment: The crop insurance

industry asked the following questions:

(1) Whether dry bean acreage that is

replanted to another bean type would be

insured as a separate optional unit, and

if so, would there be an additional

premium charged; (2) how the actual

production history (APH) yield for the

following year would be affected; and

(3) whether the guarantee will be based

on the type of dry bean originally

planted or the type of dry bean that was

replanted. They also had the following

recommendations: (1) keep the original

guarantee for acreage that is replanted to

another bean type; (2) that no additional

premium be charged for the new

optional unit; (3) that the APH form be

updated based on the replanted type;

and (4) by adding a sentence stating ‘‘If

the crop is replanted, the price of the

replanted type will determine your

price election.’’

Response: The guarantee and

premium must be based on the actual

production capability and risks

associated with the type planted and

produced to maintain the actuarial

soundness of the program. Optional unit

division will be available for the

replanted type in accordance with the

provisions of section 2. Production from

the replanted acreage will be used to

update APH records for the type

replanted. The original planted type

will not be included in the APH data

base for that particular year. Section

11(d) has been added to specify that the

guarantee and premium amount for the

replanted acreage will be based on the

replanted type when acreage is

replanted to a different insurable type.

No premium will be due for the original

type when acreage is replanted to a

different type.

Comment: The crop insurance

industry questioned if replanting

payments are available for contract seed

bean varieties.

Response: Provisions in section 11

allow a replanting payment for ‘‘the

bean crop’’ which includes both dry

beans and contract seed beans.

Comment: The crop insurance

industry indicated that language in

section 13(b) is not as clear as in other

crop provisions. The comment

recommended that the provisions start

as 13(b)(1) ‘‘For each dry bean type:’’

followed by sub-items for the

calculations in (1)–(3); then section

13(b)(2) would be ‘‘For each contract

seed bean variety:’’ etc.

Response: The provisions were

written in this format to demonstrate

how to settle a claim when both dry

beans and contract seed beans are

insured in one unit. If a unit contains

only contract seed beans or only dry

beans the provisions that pertain to the

kinds of beans that are not in the unit

are disregarded. Therefore, no change

has been made.

Comment: The crop insurance

industry recommended revising section

13(c)(1)(i) to read ‘‘Multiply the actual

value received, actual value at time of

adjustment, or base price per pound,

whichever is greater, by the price

election percentage you selected; and’’
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6103

Response: Adding the suggested

language would be redundant with the

language contained in the definition of

‘‘actual value.’’ In addition, not all

insurance providers require that the

insured select a percentage. Therefore,

no change has been made.

Comment: The crop insurance

industry recommended adding the word

‘‘harvestable’’ to section 13(d)(1) so that

it would read, ‘‘All appraised

harvestable production as follows:’’

Response: When making an appraisal,

the loss adjuster considers whether the

crop can be harvested. Therefore, no

change has been made.

Comment: The crop insurance

industry recommended clarifying

section 13(d)(1)(i)(D). It is not necessary

to use the word ‘‘acceptable’’ twice in

this section.

Response: FCIC agrees with the

comments and has amended the

provision accordingly.

Comment: The crop insurance

industry questioned whether the

reference in section 13(d)(1)(iii), to ‘‘dry

beans’’ excludes contract seed beans.

Response: The provisions allow

adjustment for quality deficiencies and

excess moisture for mature unharvested

dry beans only.

Comment: The crop insurance

industry recommended that section

13(d)(1)(iv) be revised as follows: (1)

Add the phrase ‘‘harvestable beans’’ to

section 13(d)(1)(iv)(A) which would

make the section read: ‘‘* * * (The

amount of production to count for such

acreage will be based on the harvested

production or appraisals of harvestable

beans from the samples at the time

harvest should have occurred * * *’’ (2)

Add the phrase ‘‘of harvestable beans’’

to section 13(d)(1)(iv)(B), which would

make this section read: ‘‘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 of

harvestable beans if additional damage

occurs and the crop is not harvested;

and’’ The comment also questioned the

advisability of ‘‘leaving representative

samples’’ when agreement on the

appraised amount of production can not

be reached. The commenter

recommended the use of Arbitration

(section 17 of the Basic Provisions) as

the preferable process when agreement

on the appraised amount of production

can not be reached.

Response: The ability to harvest the

crop is considered when making

appraisals of the crop. Representative

samples are the most accurate method

available to determine an accurate

representation of production when the

parties disagree on the amount of

appraised production and it allows the

insured to put most of the acreage to

another use. If it is not practical to leave

representative samples the insurance

provider does not have to require such

samples be left. Therefore, no change

has been made.

Comment: The crop insurance

industry recommended changing the

order of the last two sentences of section

13(e) so the exclusion of these

adjustments for contract seed beans

does not interrupt the information that

applies to dry edible beans.

Response: FCIC agrees with the

comment and has amended the

provision accordingly.

Comment: A representative of FCIC

recommended deleting any reduction in

the amount of production to count due

to ‘‘pick’’ since it is not a term used in

‘‘The United States Standards for

Beans’’ upon which quality adjustment

is based. The reason for an excessive

amount of ‘‘pick’’ in the beans (other

than damage) is generally due to

farming or cultural practices. ‘‘Pick’’ is

normally controllable by the producer.

‘‘Pick’’ charts are never the same two

years in a row and different charts are

used each year by different bean dealers.

‘‘Pick’’ is driven by the market and

supply and demand, depending on the

size of the crop in a given area. The

commenter further stated that numerous

studies have been made on whether

‘‘pick’’ should be used as a reduction of

production to count, and each time it

has been determined that it is not

feasible.

Response: ‘‘Pick’’ currently is used for

quality adjustment procedures in certain

areas and has been found to be an

acceptable method to establish quality.

It is defined in the rule. Therefore, no

change has been made.

Comment: The crop insurance

industry recommended adding the

phrase: ‘‘and the beans are to be sold at

time of adjustment or sold based on the

original grade;’’ at the end of both

sections 13(e)(2) (i) and (ii).

Response: Neither FCIC nor the

insurance provider can require the

insured to sell the production at the

time of adjustment as a condition of

obtaining quality adjustment. Quality

adjustments are applied at the time of

loss adjustment. Any further damage,

whether the crop is sold or not, is not

covered. Therefore, no change has been

made.

Comment; The crop insurance

industry questioned if it was necessary

to say both ‘‘damaged’’ and ‘‘badly

damaged’’ in section 13(e)(2)(ii). The

commenter recommended just the term

‘‘damage’’ should suffice.

Response: The provisions are

consistent with different degrees of

damage defined in ‘‘The United States

Standards for Beans.’’ Therefore, no

change has been made.

Comment: The crop insurance

industry stated that dry beans are rarely

stored in most states. The adjuster

would be required to obtain a sample of

the beans prior to or during harvest.

Most samples of beans are provided by

the facility storing or purchasing the

beans. It is therefore unlikely that they

are a ‘‘disinterested third party,’’ as

stated in section 13(e)(3)(iii). The

commenter recommended that the

language be revised to include the

‘‘place of storage or sale if the company

feels the sample is consistent with the

quality of beans in the surrounding

area.’’

Response: All samples must be

obtained by disinterested third parties

to assure that such samples are

genuinely representative of the total

production. If the insurance provider

believes the samples were not obtained

in this manner, or that they are not

representative, they should not accept

the results. Therefore, no change has

been made.

Comment: The crop insurance

industry recommended adding the

phrase ‘‘based on the applicable grade

or pick which the production is to be

sold or sold at time of adjustment;’’ at

the end of section 13(e)(4)(i).

Response: As stated above, the

insurance provider cannot require the

sale of the production at the time of loss

adjustment or at any other time. The

amount of loss, including any quality

adjustments, are made at the time of loss

adjustment and any subsequent damage

is not covered, so the time of sale

should not affect this determination.

Therefore, no change has been made.

Comment: The crop insurance

industry stated that conversion factors

adopted for several crops have provided

the industry with consistent quality

adjustment, generally unaffected by the

marketplace, and questions whether

FCIC intends to establish conversion

charts for all states in which dry beans

are insurable.

Response: FCIC agrees that studies

should be made to determine if similar

conversion charts for dry beans can be

developed. Until this can be further

analyzed, no change will be made.

Comment: The crop insurance

industry: (1) Recommended adding

‘‘based on the applicable grade or pick

for the production which you will

receive * * *’’ at the end of the first

sentence and after the word

‘‘production’’ in the second sentence of

section 13(e)(4)(ii)(A); and (2)
6104 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

questioned whether the current year’s

maximum price election for the type

should be used when a processor

refuses to quote a No. 2 price.

Response: The price should be

determined based on the quality and

quantity of the production as it was

originally delivered and the provisions

clearly indicate that the value of the

damaged production is used in this

calculation. Therefore, the

recommended change has not been

made. Further, the current year’s

maximum price election is used only

when a local market price is not

available. A local market price may be

established using price quotes from

usual marketing outlets in the area.

Refusal of one processor to quote a price

does not automatically mean a local

market price is not available.

Comment: One comment received

from the crop insurance industry

recommended adding ‘‘(to include

trading tare for grade to obtain a higher

grade and price),’’ after the word

‘‘processing’’ in section

13(e)(4)(ii)(A)(3).

Response: FCIC agrees with the

comment and has amended the

provisions accordingly.

Comment: The crop insurance

industry recommended that late and

prevented planting coverage should not

be provided on crops grown under

contract with a processor. The processor

determines what the producer does if

the insured crop is not planted during

the normal planting period.

Response: The inclusion of late and

prevented planting is appropriate for

contract seed beans. As the comment

indicates, the processor may or may not

allow planting within the late planting

period. Congress has determined that

marketing windows should be a factor

in determining whether a crop has been

prevented from planting. The contracted

planting period, and intended harvest

period, is considered as a marketing

window. However, if planting is

allowed under the contract, and the

crop can reach maturity, coverage

should be provided. Therefore, no

change has been made.

Comment: The crop insurance

industry recommended adding the

phrase ‘‘to a type for which you have

history’’ after the word ‘‘planted’’ in

section 14(c)(1).

Response: Changing the provision to

require past history of the bean type

would prevent a new producer from

obtaining late planting coverage or

diversifying their production. To protect

the integrity of the program, the

insurance provider should require the

producer to prove that the producer had

the inputs available to plant the new

bean type. Therefore, no change has

been made.

Comment: The crop insurance

industry recommended adding the

phrase ‘‘type for which you have

history’’ after the words ‘‘insured crop’’

in the second and last sentences of

section 14(d)(1)(ii) and at the end of the

first sentence of section 14(d)(1)(iii)(B).

Response: Changing the provision as

suggested would prevent a new

producer from having late or prevented

planting coverage or diversifying their

production. Therefore, no changes has

been made.

Comment: The crop insurance

industry and a representative of FCIC

recommended eliminating late and

prevented planting provisions that

reference participating in a USDA

program that limits acreage planted,

compliance with conservation plans,

and base acreage. These do not apply.

Response: FCIC agrees that acreage

limiting programs and base acreage do

not apply to dry beans and has amended

the appropriate provisions. However,

conservation plans may allow the

insurance provider to verify an intent to

produce or not produce the crop.

Therefore, provisions regarding the use

of conservation plans have not been

changed.

Comment: The crop insurance

industry and a representative of FCIC

asked whether the prevented planting

coverage available when a substitute

crop is planted will be dropped, or at

least revised, for all affected crops for

the 1997 crop year, and whether it is

possible to remove (or revise)

redesignated sections 14(d)(1)(iii)(B)

and 14(d)(2)(iii)(B).

Response: The provisions that allow a

prevented planting guarantee when a

substitute crop is planted are under

review for all affected crops for the 1998

crop year. Any changes will be made in

a separate rule for all affected crop

provisions. No change will be made in

these provisions to maintain

consistency with prevented planting

provisions for other crops.

Comment: The crop insurance

industry questioned if the provisions in

section 14(d)(4)(ii) apply to dry beans

only since ‘‘dry beans’’ are referenced,

or if this carryover prevented planting

coverage would be different for contract

seed beans due to the requirement that

they are to be grown under a contract

with a processor.

Response: The Federal Crop Insurance

Act requires the insurance period for

prevented planting to begin on the sales

closing date for the previous crop year

if coverage has been continuous.

Therefore, this ‘‘tail coverage’’ would

apply if any beans, including contract

seed beans, were insured previously.

This provision has been clarified by

replacing the term ‘‘dry beans’’ with the

term ‘‘beans.’’

Comment: The crop insurance

industry recommended limiting the

number of contract seed bean acres

eligible for prevented planting to the

number of acres that are under the

processor contract for the crop year.

Response: FCIC agrees with the

comment and has amended the

provisions in section 14(d)(5)(iv)(A) to

limit the number of acres eligible for

prevented planting to those specified in

the seed bean processor contract or the

number needed to produce the

contracted production based on the

APH yield for the acreage.

Comment: The crop insurance

industry asked whether the language

contained in section 14(d)(5)(iv)(E)

regarding double-cropping would be

liberalized or if proof that the acreage

has a history of double-cropping in each

of the last four years would still be

required. The comment recommended

changing the words ‘‘* * * the acreage

has a history * * *’’ to ‘‘* * * the farm

has a history * * *’’

Response: The recommended change

would allow double benefits on an

entire farm even though a very small

number of acres may have been doublecropped in the past. Therefore, no

change has been made.

Comment: The crop insurance

industry recommended revising section

14(d)(5)(v) if the current language

allows use of total acreage from both dry

edible beans and contract seed beans for

determining eligible prevented planting

acreage. The proposed provision could

result in a prevented planting payment

for more than the acreage under contract

for contract seed beans.

Response: FCIC has revised section

14(d)(5)(iv)(A) to limit the number acres

of contract seed beans that are eligible

for prevented planting to the number of

acres under contract in the current year.

Comment: The crop insurance

industry suggested combining the

provisions contained in section 15(e)

with the provisions in section 15(a).

Response: Approval of written

agreements requested after the sales

closing date is the exception, not the

rule. Therefore, these provisions should

be kept separate.

Comment: The crop insurance

industry recommended that the

requirement for a written agreement to

be renewed each year be removed.

Terms of the agreement should be stated

in the agreement to fit the particular

situation for the policy, or if no

substantive changes occur from one year
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6105

to the next, allow the written agreement

to be continuous.

Response: Written agreements are

intended to change policy terms or

permit insurance in unusual situations

where such changes will not increase

risk. If such practices continue year to

year, they should be incorporated into

the policy or Special Provisions. It is

important to minimize exceptions to

assure that the insured is well aware of

the specific terms of the policy.

Therefore, no change will be made.

In addition to the changes described

above, FCIC has made the following

changes to the Dry Bean Provisions:

1. Section 1—Amended the definition

of ‘‘practical to replant’’ to specify that

it will not be considered practical to

replant contract seed beans unless

production from the replanted acreage

can be delivered under the terms of the

seed bean processor contract.

2. Section 14(d)(3)-Clarified that the

insured must have possessed the inputs

to plant and produce the insured crop.

3. Revised part 433 to restrict its effect

to the 1996 and prior crop years.

Good cause is shown to make this rule

effective upon publication in the

Federal Register. This rule improves the

dry bean 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 1997

crop year is February 15, 1997. It is

therefore imperative that these

provisions be made final before that

date so that the 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 1997 crop year.

List of Subjects in 7 CFR Parts 433 and

457

Crop insurance, Dry bean crop

insurance regulations, Dry bean.

Final Rule

Accordingly, for the reasons set forth

in the preamble, the Federal Crop

Insurance Corporation hereby amends 7

CFR parts 433 and 457 as follows:

PART 433—DRY BEAN CROP

INSURANCE REGULATIONS

1. The authority citation for 7 CFR

part 433 continues to read as follows:

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

2. The subpart heading preceding

§ 433.1 is revised to read as follows:

Subpart—Regulations for the 1986

Through 1996 Crop Years

3. Section 433.7 is amended by

revising the introductory text of

paragraph (d) to read as follows:

§ 433.7 The application and policy.

* * * * *

(d) The application for the 1986 and

succeeding crop years is found at

subpart D or part 400—General

Administrative Regulations (7 CFR

400.37, 400.38). The provisions of the

Dry Bean Insurance Policy for the 1986

through 1996 crop years are as follows:

* * * * *

PART 457—COMMON CROP

INSURANCE REGULATIONS;

REGULATIONS FOR THE 1994 AND

SUBSEQUENT CONTRACT YEARS

4. The authority citation for 7 CFR

part 457 continues to read as follows:

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

5. Section 457.150 is added to read as

follows:

§ 457.150 Dry bean crop insurance

provisions.

The Dry Bean Crop Insurance

Provisions for the 1997 and succeeding

crop years are as follows:

FCIC policies:

Department of Agriculture

Federal Crop Insurance Corporation

Reinsured policies:

(Appropriate title for insurance provider)

Both FCIC and reinsured policies:

Dry Bean Crop Provisions

If a conflict exists among the Basic

Provisions (§ 457.8), these Crop Provisions,

and the Special Provisions; the Special

Provisions will control these Crop Provisions

and the Basic Provisions; and these Crop

Provisions will control the Basic Provisions.

1. Definitions

Actual value—The dollar value received,

or that could be received, for contract seed

beans under a seed bean processor contract

if the contract seed bean production is

properly handled in accordance with the

requirements of such contract.

Base price—The price per pound

(excluding any discounts or incentives that

may apply) that is stated in the seed bean

processor contract and that will be paid to

the producer for at least 50 percent of the

total production under contract with the seed

company.

Beans—Dry beans and contract seed beans.

Combining—A harvesting process that uses

a machine to separate the beans from the

pods and other vegetative matter and place

the beans into a temporary storage receptacle.

Contract seed beans—Dry beans grown

under the terms of a seed bean processor

contract for the purpose of producing seed to

be used for producing dry beans or vegetable

beans in a future crop year.

Days—Calendar days.

Dry beans—The crop defined by The

United States Standards for Beans excluding

contract seed beans.

FSA—The Farm Service Agency, an agency

of the United States Department of

Agriculture, or a successor agency.

Final planting date—The date contained in

the Special Provisions for the insured crop by

which the crop must initially be planted in

order to be insured for the full production

guarantee.

Good farming practices—The cultural

practices generally in use in the county for

the crop to make normal progress toward

maturity and produce at least the yield used

to determine the production guarantee and

are those recognized by the Cooperative State

Research, Education, and Extension Service

as compatible with agronomic and weather

conditions in the county.

Harvest—Combining the beans. Beans

which are swathed or knifed prior to

combining are not considered harvested.

Interplanted—Acreage on which two or

more crops are planted in a manner that does

not permit separate agronomic maintenance

or harvest of the insured crop.

Irrigated practice—A method of producing

a crop by which water is artificially applied

during the growing season by appropriate

systems and at the proper times, with the

intention of providing the quantity of water

needed to produce at least the yield used to

establish the irrigated production guarantee

on the irrigated acreage planted to the

insured crop.

Late planted—Acreage planted to the

insured crop during the late planting period.

Late planting period—The period that

begins the day after the final planting date for

the insured crop and ends 25 days after the

final planting date.

Local market price—The cash price per

hundredweight for the U.S. No. 2 grade of

dry beans of the insured type offered by

buyers in the area in which you normally

market the dry beans. Moisture content and

factors not associated with grading under the

United States Standards for Beans will not be

considered in establishing this price.

Net price—The dollar value of dry bean

production received, or that could have been

received, after reductions in value due to

insurable causes of loss.

Pick—The percentage, on a weight basis, of

defects including splits, damaged (including

discolored) beans, contrasting types, and

foreign material that remains in the dry beans

after dockage has been removed by the

proper use of screens or sieves.

Planted acreage—Land in which seed has

been placed by a machine appropriate for the

insured crop and planting method, at the

correct depth, into a seedbed that has been

properly prepared for the planting method

and production practice. Beans must initially

be planted in rows far enough apart to permit

cultivation to be considered planted. Acreage

planted in any other manner will not be

insurable unless otherwise provided by the

Special Provisions or by written agreement.

Practical to replant—In lieu of the

definition of ‘‘Practical to replant’’ contained
6106 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

in section 1 of the Basic Provisions (§ 457.8),

practical to replant is defined as our

determination, after loss or damage to the

insured crop, based on factors, including but

not limited to moisture availability,

condition of the field, time to crop maturity,

and marketing window, that replanting the

insured crop will allow the crop to attain

maturity prior to the calendar date for the

end of the insurance period. It will not be

considered practical to replant after the end

of the late planting period unless replanting

is generally occurring in the area. For

contract seed beans, it will not be considered

practical to replant unless production from

the replanted acreage can be delivered under

the terms of the seed bean processor contract

or the seed company agrees to accept such

production.

Prevented planting—Inability to plant the

insured crop with proper equipment by the

final planting date designated in the Special

Provisions for the insured crop in the county

or the end of the late planting period. You

must have been unable to plant the insured

crop due to an insured cause of loss that has

prevented the majority of producers in the

surrounding area from planting the same

crop.

Production guarantee (per acre)—The

number of pounds determined by

multiplying the approved yield per acre by

the coverage level percentage you elect, and

multiplying the result by any applicable

adjustment factor specified in the Actuarial

Table.

Replanting—Performing the cultural

practices necessary to prepare the land to

replace the bean seed and then replacing the

bean seed in the insured acreage with the

expectation of growing a successful crop.

Seed bean processor contract—A written

agreement between the contract seed bean

producer and the seed company, containing

at a minimum:

(a) The contract seed bean producer’s

promise to plant and grow one or more

specific varieties of contract seed beans, and

deliver the production from those varieties to

the seed company;

(b) The seed company’s promise to

purchase all the production stated in the

contract; and

(c) A base price, or a method to determine

such price based on published independent

information, that will be paid to the contract

seed bean producer for the production stated

in the contract.

Seed company—Any business enterprise

regularly engaged in the processing of seed

beans, that possesses all licenses and permits

for marketing seed beans required by the

State in which it operates, and that possesses

or has contracted for facilities, with enough

drying, screening and bagging or packaging

equipment to accept and process the seed

beans within a reasonable amount of time

after harvest.

Swathing or knifing—Severance of the

bean plant from the ground, including the

pods and beans, and placing them into

windrows.

Timely planted—Planted on or before the

final planting date designated in the Special

Provisions for the insured crop in the county.

Type—A category of beans identified as a

type in the Special Provisions.

Written agreement—A written document

that alters designated terms of this policy in

accordance with section 15.

2. Unit Division

(a) In addition to section 1 (Definitions) of

the Basic Provisions (§ 457.8), (basic unit) all

acreage of contract seed beans qualifies as a

separate basic unit. For production based

seed bean processor contracts, the unit will

consist of all the acreage needed to produce

the amount of production under contract,

based on the actual production history of the

acreage. For acreage based seed bean

processor contracts, the unit will consist of

all acreage specified in the contract.

(b) Unless limited by the Special

Provisions, a unit as defined in section 1

(Definitions) of the Basic Provisions (§ 457.8),

(basic unit) and section 2(a) of these crop

provisions, may be divided into optional

units if, for each optional unit, you meet all

the conditions of this section or if a written

agreement to such division exists.

(c) Basic units may not be divided into

optional units on any basis including, but not

limited to, production practice, variety, and

planting period, other than as described in

this section.

(d) Contract seed beans may only qualify

for optional units as specified in section 2(g)

of these Crop Provisions if the seed bean

processor contract specifies the number of

acres under contract. Contract seed beans

produced under a seed bean processor

contract that specifies only an amount of

production are not eligible for optional units.

(e) If you do not comply fully with these

provisions, we will combine all optional

units that are not in compliance with these

provisions into the basic unit from which

they were formed. We will combine the

optional units at any time we discover that

you have failed to comply with these

provisions. If failure to comply with these

provisions is determined to be inadvertent,

and the optional units are combined into a

basic unit, that portion of the additional

premium paid for the optional units that

have been combined will be refunded to you.

(f) All optional units you selected for the

crop year must be identified on the acreage

report for that crop year.

(g) The following requirements must be

met for each optional unit:

(1) You must have records, which can be

independently verified, of planted acreage

and production for each optional unit for at

least the last crop year used to determine

your production guarantee;

(2) You must plant the crop in a manner

that results in a clear and discernable break

in the planting pattern at the boundaries of

each optional unit;

(3) You must have records of marketed

production or measurement of stored

production from each optional unit

maintained in such a manner that permits us

to verify the production from each optional

unit, or the production from each unit must

be kept separate until loss adjustment is

completed by us; and

(4) Subject to section 2(d) each optional

unit must meet one or more of the following

criteria, as applicable:

(i) Optional Units by bean type: A separate

optional unit may be established for each

bean type shown in the Special Provisions.

(ii) Optional Units by Section, Section

Equivalent, or FSA Farm Serial Number: In

addition to, or instead of, establishing

optional units by type, optional units may be

established if each optional unit is located in

a separate legally identified section. In the

absence of sections, we may consider parcels

of land legally identified by other methods of

measure including, but not limited to

Spanish grants, railroad surveys, leagues,

labors, or Virginia Military Lands, as the

equivalent of sections for unit purposes. In

areas that have not been surveyed using the

systems identified above, or another system

approved by us, or in areas where such

systems exist but boundaries are not readily

discernable, each optional unit must be

located in a separate farm identified by a

single FSA Farm Serial Number.

(iii) Optional Units on Acreage Including

Both Irrigated and Non-irrigated Practices: In

addition to, or instead of, establishing

optional units by type, section, section

equivalent, or FSA Farm Serial Number,

optional units may be based on irrigated

acreage or non-irrigated acreage if both are

located in the same section, section

equivalent, or FSA Farm Serial Number. To

qualify as separate irrigated and non-irrigated

optional units, the non-irrigated acreage may

not continue into the irrigated acreage in the

same rows or planting pattern. The irrigated

acreage may not extend beyond the point at

which your irrigation system can deliver the

quantity of water needed to produce the yield

on which the guarantee is based, except the

corners of a field in which a center-pivot

irrigation system is used will be considered

as irrigated acreage if separate acceptable

records of production from the corners are

not provided. If the corners of a field in

which a center-pivot irrigation system is used

do not qualify as a separate non-irrigated

optional unit, they will be a part of the unit

containing the irrigated acreage. However,

non-irrigated acreage that is not a part of a

field in which a center-pivot irrigation

system is used may qualify as a separate

optional unit provided that all requirements

of this section are met.

3. Insurance Guarantees, Coverage Levels,

and Prices for Determining Indemnities

(a) In addition to the requirements of

section 3(b) (Insurance Guarantees, Coverage

Levels, and Prices for Determining

Indemnities) of the Basic Provisions (§ 457.8),

you may select only one price election for all

the dry beans in the county insured under

this policy unless the Special Provisions

provide different price elections by type, in

which case you may select one price election

for each dry bean type designated in the

Special Provisions. The price elections you

choose for each type are not required to have

the same percentage relationship to the

maximum price offered by us for each type.

For example, if you choose 100 percent of the

maximum price election for one type, you

may also choose 75 percent of the maximum

price election for another type.

(b) For contract seed beans only, the dollar

amount of insurance is obtained by

multiplying the production guarantee per
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6107

acre for each variety in the unit by the

insured acreage of that variety, times the

applicable base price, and times the price

election percentage you selected. The total of

these results will be the amount of insurance

for contract seed beans in the unit.

4. Contract Changes

In accordance with section 4 (Contract

Changes) of the Basic Provisions (§ 457.8),

the contract change date is November 30

preceding the cancellation date.

5. Cancellation and Termination Dates

In accordance with section 2 (Life of

Policy, Cancellation, and Termination) of the

Basic Provisions (§ 457.8), the cancellation

and termination dates are:

State and county Cancellation and termination

dates

California .................................................................................................................. February 28.

All other States ........................................................................................................ March 15.

6. Report of Acreage

For contract seed beans only, in addition

to the requirements of section 6 (Report of

Acreage) of the Basic Provisions (§ 457.8),

you must submit a copy of the seed bean

processor contract on or before the acreage

reporting date.

7. Insured Crop

(a) In accordance with section 8 (Insured

Crop) of the Basic Provisions(§ 457.8), the

crop insured will be all the beans in the

county for which a premium rate is provided

by the actuarial table:

(1) In which you have a share;

(2) That are planted for harvest as:

(i) Dry beans; or

(ii) If applicable, contract seed beans, if the

seed bean processor contract is executed on

or before the acreage reporting date; and

(3) That are not (unless allowed by the

Special Provisions or by written agreement):

(i) Interplanted with another crop; or

(ii) Planted into an established grass or

legume.

(b) For contract seed beans only:

(1) 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 seed bean

processor contract may be treated as a

contract under which you have an insurable

interest in the crop; and

(2) We will not insure any acreage of

contract seed beans produced by a seed

company.

(c) In addition to the types of dry beans

designated in the Special Provisions, we will

insure other types if:

(1) The type you intend to plant has been

demonstrated to be adapted to the area.

Evidence of adaptability must include:

(i) Results of test plots for 2 years and

recommendations by a university or seed

company; or

(ii) Two years of production reports that

indicate your experience producing the type

in your production area;

(2) You submit on or before the sales

closing date your production reports and

prices received, or the test plot results, and

evidence of market potential, including the

price buyers are willing to pay for the type;

and

(3) Both parties (you and us) enter into a

written agreement allowing insurance on the

type in accordance with section 15.

(d) Any acreage of beans that is destroyed

and replanted to a different insurable type of

beans will be considered insured acreage in

accordance with section 11.

8. Insurable Acreage

In addition to the provisions of section 9

(Insurable Acreage) of the Basic Provisions

(§ 457.8):

(a) We will not insure any acreage that

does not meet the rotation requirements

contained in the Special Provisions; or

(b) Any acreage of the insured crop

damaged before the final planting date, to the

extent that the majority of growers in the area

would normally not further care for the crop,

must be replanted unless we agree that

replanting is not practical. We will not

require you to replant if it is not practical to

replant to the same type of beans as

originally planted.

9. Insurance Period

In accordance with the provisions of

section 11 (Insurance Period) of the Basic

Provisions (§ 457.8), the calendar date for the

end of the insurance period is the date

immediately following planting as follows:

(a) October 15 in Oklahoma, New Mexico,

and Texas;

(b) November 15 in California; and

(c) October 31 in all other States.

10. Causes of Loss

In accordance with the provisions of

section 12 (Causes of Loss) of the Basic

Provisions (§ 457.8), insurance is provided

only against the following causes of loss that

occur during the insurance period:

(a) Adverse weather conditions;

(b) Fire;

(c) Insects, but not damage due to

insufficient or improper application of pest

control measures;

(d) Plant disease, but not damage due to

insufficient or improper application of

disease control measures;

(e) Wildlife;

(f) Earthquake;

(g) Volcanic eruption; or

(h) Failure of the irrigation water supply,

if caused by an insured peril that occurs

during the insurance period.

11. Replanting Payments

(a) In accordance with section 13

(Replanting Payment) of the Basic Provisions

(§ 457.8), a replanting payment is allowed if

the bean crop is damaged by an insurable

cause of loss to the extent that the remaining

stand will not produce at least 90 percent of

the production guarantee for the acreage and

it is practical to replant.

(b) The maximum amount of the replanting

payment per acre will be the lesser of 10

percent of the production guarantee for the

type to be replanted or 120 pounds

multiplied by your price election for the type

to be replanted and by your insured share.

(c) When beans are replanted using a

practice that is uninsurable as an original

planting, the liability for the unit will be

reduced by the amount of the replanting

payment. The premium amount will not be

reduced.

(d) The guarantee and premium for acreage

replanted to a different insurable type will be

based on the replanted type and will be

calculated in accordance with sections 3

(Insurance Guarantees, Coverage Levels, and

Prices for Determining Indemnities) and 7

(Annual Premium) of the Basic Provisions

(§ 457.8) and section 3 of these Crop

Provisions.

12. Duties in the Event of Damage or Loss

In accordance with the requirements of

section 14 (Duties in the Event of Damage or

Loss) of the Basic Provisions (§ 457.8),

representative samples of the unharvested

crop must be at least 10 feet wide and extend

the entire length of each field in the unit. The

samples must not be harvested or destroyed

until the earlier of our inspection or 15 days

after harvest of the balance of the unit is

completed.

13. 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 unit.

(b) In the event of loss or damage to your

bean crop covered by this policy, we will

settle your claim by:

(1) Multiplying the insured acreage of each

dry bean type by its respective production

guarantee;

(2) Multiplying each result in section

13(b)(1) by the respective price election for

each insured type;

(3) Totaling the results in section 13(b)(2);

(4) Multiplying the insured acreage of each

contract seed bean type by its respective

production guarantee;

(5 ) Multiplying each result in section

13(b)(4) by the applicable base price;

(6) Multiplying each result in section

13(b)(5) by your selected price election

percentage;

(7) Totaling the results in section 13(b)(6);

(8) Totaling the results in section 13(b)(3)

and section 13(b)(6);
6108 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

(9) Multiplying the total production to be

counted of each dry bean type if applicable,

(see section 13(d)) by the respective price

election;

(10) Totaling the value of all contract seed

bean production (see section 13(c));

(11) Totaling the results in section 13(b)(9)

and section 13(b)(10);

(12) Subtracting the total in section

13(b)(11) from the total in section 13(b)(8);

and

(13) Multiplying the result by your share.

(c) The value of contract seed bean

production to count for each type in the unit

will be determined as follows:

(1) For production meeting the minimum

quality requirements contained in the seed

bean processor contract and for production

that does not meet such requirements due to

uninsured causes:

(i) Multiplying the actual value or base

price per pound, whichever is greater, by the

price election percentage you selected; and

(ii) Multiplying the result by the number of

pounds of such production.

(2) For production not meeting the

minimum quality requirements contained in

the seed bean processor contract due to

insurable causes:

(i) Multiplying the actual value by the

price election percentage you selected; and

(ii) Multiplying the result by the number of

pounds of such production.

(d) The total bean production to count (in

pounds) from all insurable acreage on the

unit will include:

(1) All appraised production as follows:

(i) Not less than the production guarantee

per acre 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) Unharvested production (mature

unharvested production of dry beans may be

adjusted for quality deficiencies and excess

moisture in accordance with section 13(e));

and

(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; and

(2) All harvested production from the

insurable acreage.

(e) Mature dry bean production to count

may be adjusted for excess moisture and

quality deficiencies. If moisture adjustment is

applicable, it will be made prior to any

adjustment for quality. Adjustment for excess

moisture and quality deficiencies will not be

applicable to contract seed beans.

(1) Production will be reduced by 0.12

percent for each 0.1 percentage point of

moisture in excess of 18 percent. We may

obtain samples of the production to

determine the moisture content.

(2) Production will be eligible for quality

adjustment if:

(i) A pick is designated in the Special

Provisions and the pick of the damaged

production exceeds this designation; or

(ii) A pick is not designated in the Special

Provisions and deficiencies in quality, in

accordance with the United States Standards

for Beans, result in dry beans not meeting the

grade requirements for U.S. No. 2 (grades

U.S. No. 3 or worse) because the beans are

damaged or badly damaged; or

(iii) Substances or conditions are present

that are identified by the Food and Drug

Administration or other public health

organizations of the United States as being

injurious to human or animal health.

(3) Quality will be a factor in determining

your loss only if:

(i) The deficiencies, substances, or

conditions resulted from a cause of loss

against which insurance is provided under

these crop provisions and which occurs

within the insurance period;

(ii) The deficiencies, substances, or

conditions result in a net price for the

damaged production that is less than the

local market price;

(iii) All determinations of these

deficiencies, substances, or conditions are

made using samples of the production

obtained by us or by a disinterested third

party approved by us; and

(iv) The samples are analyzed by a grader

licensed to grade dry beans under the

authority of the United States Agricultural

Marketing Act or the United States

Warehouse Act with regard to deficiencies in

quality, or by a laboratory approved by us

with regard to substances or conditions

injurious to human or animal health. (Test

weight for quality adjustment purposes may

be determined by our loss adjuster.)

(4) Dry bean production that is eligible for

quality adjustment, as specified in sections

13(e) (2) and (3), will be reduced:

(i) If a conversion factor is designated by

the Special Provisions, by multiplying the

number of pounds of eligible production by

the conversion factor designated in the

Special Provisions for the applicable grade or

pick; or

(ii) If a conversion factor is not designated

by the Special Provisions as follows:

(A) The market price of the qualifying

damaged production and the local market

price will be determined on the earlier of the

date such quality adjusted production is sold

or the date of final inspection for the unit.

If a local market price is not available for the

insured crop year, the current years’

maximum price election available for the

applicable type will be used. The price for

the qualifying damaged production will be

the market price for the local area to the

extent feasible. We may obtain prices from

any buyer of our choice. If we obtain prices

from one or more buyers located outside your

local market area, we will reduce such prices

by the additional costs required to deliver the

dry beans to those buyers. Discounts used to

establish the net price of the damaged

production will be limited to those that are

usual, customary, and reasonable. The price

of the damaged production will not be

reduced for:

(1) Moisture content;

(2) Damage due to uninsured causes; or

(3) Drying, handling, processing, including

trading tare for grade to obtain a higher grade

and price, or any other costs associated with

normal harvesting, handling, and marketing

of the dry beans; except, if the price of the

damaged production can be increased by

conditioning, we may reduce the price of the

production after it has been conditioned by

the cost of conditioning but not lower than

the value of the production before

conditioning;

(B) The value per pound of the damaged

or conditioned production will be divided by

the local market price to determine the

quality adjustment factor; and

(C) The number of pounds remaining after

any reduction due to excessive moisture (the

moisture-adjusted gross pounds (if

appropriate)) of the damaged or conditioned

production will then be multiplied by the

quality adjustment factor to determine the

net production to count.

(f) Any production harvested from plants

growing in the insured crop may be counted

as production of the insured crop on a weight

basis.

14. Late Planting and Prevented Planting

(a) In lieu of provisions contained in the

Basic Provisions (§ 457.8), regarding acreage

initially planted after the final planting date

and the applicability of a Late Planting

Agreement Option, insurance will be

provided for acreage planted to the insured

crop during the late planting period (see

section 14(c)), and acreage you were

prevented from planting (see section 14(d)).

These coverages provide reduced production

guarantees. The premium amount for late

planted acreage and eligible prevented

planting acreage will be the same as that for

timely planted. If the amount of premium

you are required to pay (gross premium less

our subsidy) for late planted acreage or

prevented planting acreage exceeds the

liability on such acreage, coverage for those

acres will not be provided, no premium will

be due, and no indemnity will be paid for

such acreage.

(b) You must provide written notice to us

not later than the acreage reporting date if

you were prevented from planting.

(c) Late Planting

(1) For bean acreage planted during the late

planting period, the production guarantee or
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6109

amount of insurance for each acre will be

reduced for each day planted after the final

planting date by:

(i) One percent per day for the 1st through

the 10th day; and

(ii) Two percent per day for the 11th

through the 25th day.

(2) In addition to the requirements of

section 6 (Report of Acreage) of the Basic

Provisions (§ 457.8), you must report the

dates the acreage is planted within the late

planting period.

(3) If planting of beans continues after the

final planting date, or you are prevented from

planting during the late planting period, the

acreage reporting date will be the later of:

(i) The acreage reporting date contained in

the Special Provisions for the insured crop;

or

(ii) Five days after the end of the late

planting period.

(d) Prevented Planting (Including Planting

After the Late Planting Period)

(1) If you were prevented from timely

planting beans, you may elect:

(i) To plant beans during the late planting

period. The production guarantee or amount

of insurance for such acreage will be

determined in accordance with section

14(c)(1);

(ii) Not to plant this acreage to any crop

except a cover crop not for harvest. You may

also elect to plant the insured crop after the

late planting period. In either case, the

production guarantee or amount of insurance

for such acreage will be 50 percent of the

production guarantee for timely planted

acres. For example, if your production

guarantee for timely planted acreage is 1,500

pounds per acre, your prevented planting

production guarantee would be 750 pounds

per acre (1,500 pounds multiplied by 0.50).

If you elect to plant the insured crop after the

late planting period, production to count for

such acreage will be determined in

accordance with section 13; or

(iii) Not to plant the intended crop but

plant a substitute crop for harvest, in which

case:

(A) No prevented planting production

guarantee will be provided for such acreage

if the substitute crop is planted on or before

the 10th day following the final planting date

for the insured crop; or

(B) A production guarantee equal to 25

percent of the production guarantee for

timely planted acres will be provided for

such acreage, if the substitute crop is planted

after the 10th day following the final planting

date for the insured crop. If you elected the

Catastrophic Risk Protection Endorsement or

excluded this coverage, and plant a substitute

crop, no prevented planting coverage will be

provided. For example, if your production

guarantee for timely planted acreage is 30

bushels per acre, your prevented planting

production guarantee would be 7.5 bushels

per acre (30 bushels multiplied by 0.25). You

may elect to exclude prevented planting

coverage when a substitute crop is planted

for harvest and receive a reduction in the

applicable premium rate. If you wish to

exclude this coverage, you must so indicate,

on or before the sales closing date, on your

application or on a form approved by us.

Your election to exclude this coverage will

remain in effect from year to year unless you

notify us in writing on our form by the

applicable sales closing date for the crop year

for which you wish to include this coverage.

All acreage of the crop insured under this

policy will be subject to this exclusion.

(2) Production guarantees for timely, late,

and prevented planting acreage within a unit

will be combined to determine the

production guarantee for the unit. For

example, assume you insure one unit in

which you have a 100 percent share. The unit

consists of 150 acres, of which 50 acres were

planted timely, 50 acres were planted 7 days

after the final planting date (late planted),

and 50 acres were not planted but are eligible

for a prevented planting production

guarantee or amount of insurance. The

production guarantee for the unit will be

computed as follows:

(i) For the timely planted acreage, multiply

the per acre production guarantee or amount

of insurance for timely planted acreage by the

50 acres planted timely;

(ii) For the late planted acreage, multiply

the per acre production guarantee or amount

of insurance for timely planted acreage by 93

percent and multiply the result by the 50

acres planted late; and

(iii) For prevented planting acreage,

multiply the per acre production guarantee or

amount of insurance for timely planted

acreage by:

(A) Fifty percent and multiply the result by

the 50 acres you were prevented from

planting, if the acreage is eligible for

prevented planting coverage, and if the

acreage is left idle for the crop year, or if a

cover crop is planted not for harvest.

Prevented planting compensation hereunder

will not be denied because the cover crop is

hayed or grazed; or

(B) Twenty five percent and multiply the

result by the 50 acres you were prevented

from planting, if the acreage is eligible for

prevented planting coverage, and if you elect

to plant a substitute crop for harvest after the

10th day following the final planting date for

the insured crop. (This paragraph (B) is not

applicable, and prevented planting coverage

is not available under these crop provisions,

if you elected the Catastrophic Risk

Protection Endorsement or you elected to

exclude prevented planting coverage when a

substitute crop is planted (see section

14(d)(1)(iii)). Your premium will be based on

the result of multiplying the per acre

production guarantee or amount of insurance

for timely planted acreage by the 150 acres

in the unit.

(3) You must have the inputs available to

plant and produce the intended crop with the

expectation of at least producing the

production guarantee or amount of

insurance. Proof that these inputs were

available may be required.

(4) In addition to the provisions of section

11 (Insurance Period) of the Basic Provisions

(§ 457.8), the insurance period for prevented

planting coverage begins:

(i) On the sales closing date contained in

the Special Provisions for the insured crop in

the county for the crop year the application

for insurance is accepted; or

(ii) For any subsequent crop year, on the

sales closing date for the insured crop in the

county for the previous crop year, provided

continuous coverage has been in effect since

that date. For example: If you make

application and purchase insurance for beans

for the 1997 crop year, prevented planting

coverage will begin on the 1997 sales closing

date for beans in the county. If the bean

coverage remains in effect for the 1998 crop

year (is not terminated or canceled during or

after the 1997 crop year), prevented planting

coverage for the 1998 crop year began on the

1997 sales closing date. Cancellation for the

purpose of transferring the policy to a

different insurance provider when there is no

lapse in coverage will not be considered

terminated or canceled coverage for the

purpose of the preceding sentence.

(5) The acreage to which prevented

planting coverage applies will not exceed the

total eligible acreage on all FSA Farm Serial

Numbers in which you have a share, adjusted

for any reconstitution that may have occurred

on or before the sales closing date. Eligible

acreage for each FSA Farm Serial Number is

determined as follows:

(i) The number of acres planted to beans

on the FSA Farm Serial Number during the

previous crop year; or

(ii) One hundred percent of the simple

average of the number of acres planted to

beans during the crop years that you certified

to determine your yield.

(iii) Acreage intended to be planted under

an irrigated practice will be limited to the

number of acres for which you had adequate

irrigation facilities prior to the insured cause

of loss which prevented you from planting.

(iv) A prevented planting production

guarantee or amount of insurance will not be

provided for any acreage:

(A) Of contracted seed beans in excess of

the number of acres required to be grown in

the current crop year under a seed bean

processor contract executed on or before the

acreage reporting date, or the number of acres

needed to produce the amount of contracted

production, based on the APH yield for the

acreage.

(B) That does not constitute at least 20

acres or 20 percent of the acreage in the unit,

whichever is less (Acreage that is less than

20 acres or 20 percent of the acreage in the

unit will be presumed to have been intended

to be planted to the insured crop planted in

the unit, unless you can show that you had

the inputs available before the final planting

date to plant and produce another insured

crop on the acreage);

(C) For which the actuarial table does not

designate a premium rate unless a written

agreement designates such premium rate;

(D) Used for conservation purposes or

intended to be left unplanted under any

program administered by the United States

Department of Agriculture;

(E) On which another crop is prevented

from being planted, if you have already

received a prevented planting indemnity,

guarantee or amount of insurance for the

same acreage in the same crop year, unless

you provide adequate records of acreage and

production showing that the acreage was

double-cropped in each of the last 4 years in

which the insured crop was grown on the

acreage;

(F) On which the insured crop is prevented

from being planted, if any other crop is
6110 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

planted and fails, or is planted and

harvested, hayed or grazed on the same

acreage in the same crop year, (other than a

cover crop as specified in section 14

(d)(2)(iii)(A), or a substitute crop allowed in

section 14 (d)(2)(iii)(B)), unless you provide

adequate records of acreage and production

showing that the acreage was double-cropped

in each of the last 4 years in which the

insured crop was grown on the acreage;

(G) When coverage is provided under the

Catastrophic Risk Protection Endorsement if

you plant another crop for harvest on any

acreage you were prevented from planting in

the same crop year, even if you have a history

of double-cropping. If you have a

Catastrophic Risk Protection Endorsement

and receive a prevented planting indemnity,

guarantee, or amount of insurance for a crop

and are prevented from planting another crop

on the same acreage, you may only receive

the prevented planting indemnity, guarantee,

or amount of insurance for the crop on which

the prevented planting indemnity, guarantee,

or amount of insurance is received; or

(H) For which planting history or

conservation plans indicate that the acreage

would have remained fallow for crop rotation

purposes.

(v) For the purpose of determining eligible

acreage for prevented planting coverage,

acreage for all units will be combined and be

reduced by the number of bean acres timely

planted and late planted. For example,

assume you have 100 acres eligible for

prevented planting coverage in which you

have a 100 percent share. The acreage is

located in a single FSA Farm Serial Number

which you insure as two separate optional

units consisting of 50 acres each. If you

planted 60 acres of beans on one optional

unit and 40 acres of beans on the second

optional unit, your prevented planting

eligible acreage would be reduced to zero

(i.e., 100 acres eligible for prevented planting

coverage minus 100 acres planted equals

zero).

(6) In accordance with the provisions of

section 6 (Report of Acreage) of the Basic

Provisions (§ 457.8), you must report by unit

any insurable acreage that you were

prevented from planting. This report must be

submitted on or before the acreage reporting

date. For the purpose of determining acreage

eligible for a prevented planting production

guarantee, the total amount of prevented

planting and planted acres cannot exceed the

maximum number of acres eligible for

prevented planting coverage. Any acreage

you report in excess of the number of acres

eligible for prevented planting coverage, or

that exceeds the number of eligible acres

physically located in a unit, will be deleted

from your acreage report.

15. Written Agreements.

Designated terms of this policy may be

altered by written agreement in accordance

with the following:

(a) You must apply in writing for each

written agreement no later than the sales

closing date, except as provided in section

15(e);

(b) The application for a written agreement

must contain all variable terms of the

contract between you and us that will be in

effect if the written agreement is not

approved;

(c) If approved, the written agreement will

include all variable terms of the contract,

including, but not limited to, crop type or

variety, the guarantee, premium rate, and

price election;

(d) Each written agreement will only be

valid for one year (If the written agreement

is not specifically renewed the following

year, insurance coverage for subsequent crop

years will be in accordance with the printed

policy); and

(e) An application for a written agreement

submitted after the sales closing date may be

approved if, after a physical inspection of the

acreage, it is determined that no loss has

occurred and the crop is insurable in

accordance with the policy and written

agreement provisions.

Signed in Washington, D.C., on February 6,

1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance

Corporation.

[FR Doc. 97–3327 Filed 2–10–97; 8:45 am]

BILLING CODE 3410–FA–P

Agricultural Marketing Service

7 CFR Part 984

[Docket No. FV96–984–1 FIR]

Walnuts Grown in California;

Assessment Rate

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Final rule.

SUMMARY: The Department of

Agriculture (Department) is adopting as

a final rule, without change, the

provisions of an interim final rule

establishing an assessment rate for the

Walnut Marketing Board (Board) under

Marketing Order No. 984 for the 1996–

97 and subsequent marketing years. The

Board is responsible for local

administration of the marketing order

which regulates the handling of walnuts

grown in California. Authorization to

assess walnut handlers enables the

Board to incur expenses that are

reasonable and necessary to administer

the program.

EFFECTIVE DATE: August 1, 1996.

FOR FURTHER INFORMATION CONTACT:

Mary Kate Nelson, Marketing Assistant,

California Marketing Field Office, Fruit

and Vegetable Division, AMS, USDA,

2202 Monterey Street, suite 102B,

Fresno, CA 93721, telephone 209–487–

5901, FAX 209–487–5906, or Martha

Sue Clark, Program Assistant, Marketing

Order Administration Branch, Fruit and

Vegetable Division, AMS, USDA, PO.

Box 96456, room 2525–S, telephone

202–720–9918, FAX 202–720–5698.

Small businesses may request

information on compliance with this

regulation by contacting: Jay Guerber,

Marketing Order Administration

Branch, Fruit and Vegetable Division,

AMS, USDA, PO. Box 96456, room

2525–S, Washington, DC 20090–6456;

telephone 202–720–2491; FAX 202–

720–5698.

SUPPLEMENTARY INFORMATION: This rule

is issued under Marketing Agreement

and Order No. 984, both as amended (7

CFR part 984), regulating the handling

of walnuts grown in California,

hereinafter referred to as the ‘‘order.’’

The marketing agreement and order are

effective under the Agricultural

Marketing Agreement Act of 1937, as

amended (7 U.S.C. 601–674), hereinafter

referred to as the ‘‘Act.’’

The Department is issuing this rule in

conformance with Executive Order

12866.

This rule has been reviewed under

Executive Order 12988, Civil Justice

Reform. Under the marketing order now

in effect, California walnut handlers are

subject to assessments. Funds to

administer the order are derived from

such assessments. It is intended that the

assessment rate as issued herein will be

applicable to all assessable walnuts

beginning August 1, 1996, and

continuing until amended, suspended,

or terminated. This rule will not

preempt any State or local laws,

regulations, or policies unless they

present an irreconcilable conflict with

this rule.

The Act provides that administrative

proceedings must be exhausted before

parties may file suit in court. Under

section 608c(15)(A) of the Act, any

handler subject to an order may file

with the Secretary a petition stating that

the order, any provision of the order, or

any obligation imposed in connection

with the order is not in accordance with

law and request a modification of the

order or to be exempted therefrom. Such

handler is afforded the opportunity for

a hearing on the petition. After the

hearing the Secretary would rule on the

petition. The Act provides that the

district court of the United States in any

district in which the handler is an

inhabitant, or has his or her principal

place of business, has jurisdiction to

review the Secretary’s ruling on the

petition, provided an action is filed not

later than 20 days after the date of the

entry of the ruling.

Pursuant to requirements set forth in

the Regulatory Flexibility Act (RFA), the

Agricultural Marketing Service (AMS)

has considered the economic impact of

this rule on small entities.

The purpose of the RFA is to fit

regulatory actions to the scale of

business subject to such actions in order