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###### Department of Agriculture

###### Federal Crop Insurance Corporation 

          - 7 CFR Part 457 

# AGENCY:

Federal Crop Insurance Corporation, USDA. 

# ACTION:

Proposed rule. 

# SUMMARY:

The Federal Crop Insurance Corporation (FCIC) proposes to amend the Sugarcane Crop Insurance Provisions. The intended effect of this proposed action is to provide policy changes to better meet the needs of the insureds and to restrict the effect of the current Sugarcane Crop Insurance Regulations to the 2001 and prior crop years. 

# DATES:

Written comments and opinions on this proposed rule will be accepted until close of business December 18, 2000 and will be considered when the rule is to be made final. 

# ADDRESSES:

Interested persons are invited to submit written comments to the Director, Product Development Division, Federal Crop Insurance Corporation, United States Department of Agriculture, 6501 Beacon Drive, Kansas City, MO 64133. Comments may also be sent via the Internet to DIRECTORPDD@RM.FCIC.USDA.GOV. A copy of each response will be available for public inspection and copying from 7:00 a.m. to 4:30 p.m., CDT, Monday through Friday except holidays, at the above address. 

# FOR FURTHER INFORMATION CONTACT:

Arden Routh, Insurance Management Specialist, Research and Development, Product Development Division, Federal Crop Insurance Corporation, at the Kansas City, MO, address listed above, telephone (816) 926-7730. 

# SUPPLEMENTARY INFORMATION:

## Executive Order 12866

This rule has been determined to be exempt for the purpose of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget (OMB). 

## Paperwork Reduction Act of 1995 

Under the provisions of the Paperwork Reduction Act of 1995 (44 chapter 35), the collections of information for this rule have been previously approved by OMB under control number 0563-0053 through April 30, 2001. 

## Unfunded Mandates Reform Act of 1995 

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) establishes requirements for Federal agencies to access 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 13132

The provisions contained in this rule do not have any substantial direct effect on states, the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. 

Therefore, no consultation with states is required. 

## Regulatory Flexibility Act 

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

## Federal Assistance Program

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

## Executive Order 12372

This program is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. See the Notice related to 7 CFR part 3015, subpart V, published at 48 FR 29115, June 24, 1983. 

## Executive Order 12988

This proposed rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule will preempt State and local laws to the extent such State and local laws are inconsistent herewith. The administrative appeal provisions published at 7 CFR part 11 must be exhausted before any action against FCIC for judicial review may be brought. 

## Environmental Evaluation 

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

## Background 

FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR part 457) by amending 7 CFR 457.116 Sugarcane Crop Insurance Provisions effective for the 2002 and succeeding crop years. The proposed changes to provisions for insuring sugarcane are as follows: 

1. Change the word “paragraph” to “section” throughout these provisions to be consistent with other crop provisions and make other minor editorial changes. 

2. Section 1—Remove the definition of “local market price” because there is no local market price for raw sugar, and revise the definition of “sugarcane” for clarification. 

                    3. Section 5—Add provision that makes uninsurable any sugarcane damaged the previous crop year to the extent the sugarcane is unable to                           ( print page 62312)                        produce the production guarantee. Add a provision that the sugarcane is not insurable if it exceeds the age limitations (by variety if applicable) at which sugarcane may be insured as specified in the Special Provisions. This change eliminates the need for inadequate stand appraisals unless the insured is seeking insurance by written agreement.                 

4. Section 7(a)—Removed provisions for plant cane that allow coverage at a later date by an agreement in writing, as this is an uncommon practice. Removed language that allows coverage to attach on the later of April 15 or 30 days following the harvest of stubble cane, since in practice coverage will attach only on the specified date. Clarify when insurance attaches for Louisiana and all other states. For stubble cane damaged the previous crop year, the calendar date when insurance attaches has been changed from April 15 to April 30 in Louisiana. Currently, acreage that does not have an adequate stand on April 15 is not insurable; however, this same acreage may have an adequate stand by April 30. 

5. Section 9(a)—Add provisions that if the insured believes that the sugarcane will produce less than the approved yield, the insured must request that an appraisal be performed to determine the sugar potential. If an appraisal is not made, the production to count for such acreage will be the approved yield. Also, this section clarifies the requirement that if notice is not given prior to cutting for seed, the acreage will be considered as put to another use without consent and the approved yield will be assessed for such acreage. 

6. Add an example of a claim for indemnity for clarity. 

7. Section 10(c)(1)(iv)—Remove provisions that explained the process for making an inadequate stand appraisal. It has been determined that inadequate stand appraisals are not accurate. Current sections 10(c)(1)(v) and (vi) have been redesignated to 10(c)(1)(iv) and (v). 

8. Section 10(d)—Delete the section because there is no local market price for raw sugar. The extent of any freeze damage to sugarcane is reflected in the pounds of raw sugar extracted from the damaged sugarcane. A producer with freeze damaged sugarcane is paid the same price per pound for raw sugar as a producer whose sugarcane is not damaged. 

# List of Subjects in 7 CFR Part 457

      - Crop insurance

Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation proposes to amend 7 CFR part 457 as follows: 

# PART 457—COMMON CROP INSURANCE REGULATIONS 

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

Authority:7 U.S.C. 1506(1), 1506(p). 

2. Amend § 457.116 as follows: 

a. Revise the introductory text. 

b. In section 1 of the crop provisions, delete the definition for “local market price” and revise the definition for “sugarcane.” 

c. Revise sections 3, 5, 6, 7, the introductory language to 9(a), 9(a)(2), and 10(b)(4) of the crop provisions. 

d. Remove the parenthetical phrase “(§ 457.8)” wherever it occurs in sections 2, 8, and 9(b) of the crop provisions. In addition, remove the parenthetical phrases “(Insurance Guarantees, Coverage Levels, and Price for Determining Indemnities)” in section 2(a); “(Causes of Loss)” in section 8 introductory text; and “(Duties in the Event of Damage or Loss)” in section 9(b). 

e. Remove section 10(c)(1)(iv) of the crop provisions. 

f. Redesignate section 10(c)(1)(v) and (c)(1)(vi) as section 10(c)(1)(iv) and (c)(1)(v), respectively, of the crop provisions and in newly redesignated 10(c)(1)(iv), remove the word “paragraph” and add “section”, in its place. 

The revised text reads as follows: 

§ 457.116 

The Sugarcane Crop Insurance Provisions for the 2002 and succeeding crop years are as follows: 

* * * * *

1. Definitions. 

* * * * *

*Sugarcane*                            —means plant cane and stubble cane.                         

* * * * *

3. Contract Changes. 

In accordance with section 4 of the Basic Provisions, the contract change date is June 30 preceding the cancellation date. 

* * * * *

5. Insured Crop. 

(a) In accordance with section 8 of the Basic Provisions, the crop insured will be all the sugarcane in the county for which a premium rate is provided by the actuarial documents: 

(1) In which you have a share; 

(2) That is grown for processing for sugar or for seed; and 

(3) That is not interplanted with another crop, unless allowed by a written agreement. 

(b) In addition to the crop listed as not insured in section 8(b) of the Basic Provisions, we will not insure any sugarcane: 

(1) That was damaged the previous crop year to the extent the sugarcane is unable to produce the production guarantee; or 

(2) That exceeds the age limitations (by variety, if applicable) contained in the Special Provisions, unless we agree in writing to insure such acreage. 

6. Insurable Acreage. 

Section 9(a)(3) of the Basic Provisions is not applicable to the Sugarcane Crop Provisions. 

7. Insurance Period. 

(a) In addition to the provisions of section 11 of the Basic Provisions, insurance attaches: 

(1) At the time of planting for plant cane; 

(2) On the first day following harvest of the previous crop for stubble cane except as contained in sections 7(a)(3) and (4); 

(3) On April 15 following harvest of the previous crop for stubble cane damaged during the previous crop year in all states (except Louisiana); and

(4) On April 30 following harvest of the previous crop for stubble cane damaged during the previous crop year in Louisiana. 

(b) In accordance with the provisions of section 11 of the Basic Provisions, the calendar date for the end of the insurance period is: 

(1) January 31 in Louisiana; and 

(2) April 30 in all other states. 

* * * * *

9. Duties in the Event of Damage or Loss or Cutting the Sugarcane for Seed. 

(a) In addition to your duties under section 14 of the Basic Provisions, in the event of damage or loss: 

* * * * *

(2) You must give us notice at least 15 days before you begin cutting any sugarcane for seed. Your notice must include the unit number and the number of acres you intend to harvest as seed. Failure to give us timely notice will cause the acreage cut for seed to be considered as put to another use without consent. The production to count for such acreage will be your approved yield. 

(3) If you believe that your sugarcane will produce less than your approved yield, you must request an appraisal of the sugarcane to determine the sugar potential. If you do not request an appraisal, the production to count for such acreage will be your approved yield. 

* * * * *

10. Settlement of Claim. 

* * * * *
      ( print page 62313)    
(b) * * * 

(4) Multiplying this result by your share. 

Example 1: 

Assume you have a 100 percent share in a unit of 100 acres of sugarcane, with a guarantee of 4,000 pounds of raw sugar per acre and a price election of $0.12 per pound. You are only able to harvest 200,000 pounds because the unit was damaged by an insurable cause of loss. Your indemnity would be calculated as follows: 

(1) 100 acres × 4,000 pounds = 400,000 pound guarantee; 

(2) 400,000 pound guarantee−200,000 pounds harvested production = 200,000 pound production loss; 

(3) 200,000 pound production loss × $0.12 price election = $24,000 value of production loss; and 

(4) $24,000 value of production loss × 100 percent share = $24,000 indemnity payment. 

Example 2: 

Assume you have a 100 percent share in a unit of 100 acres of sugarcane. Your approved yield is 6,000 pounds of raw sugar per acre. You have selected the 65 percent coverage level, which multiplied by your approved yield equals a guarantee of 3,900 pounds of raw sugar per acre, and a price election of $0.12 per pound. You cut 20 acres of this unit for seed without giving notice that you were cutting this acreage for seed. You are only able to harvest 200,000 pounds from the remaining 80 acres. Your indemnity would be calculated as follows: 

(1) 100 acres × 3,900 pounds = 390,000 pound guarantee; 

(2) 390,000 pound guarantee−200,000 pounds harvested production−120,000 pound production guarantee for putting acreage to another use without consent (20 acres × 6,000 approved yield per acre) = 70,000 production loss; 

(3) 70,000 pound production loss × $0.12 price election = $8,400 value of production loss; and 

(4) $8,400 value of production loss × 100 percent share = $8,400 indemnity payment. 

* * * * *

Signed in Washington, DC, on October 3, 2000. 

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 00-25987 Filed 10-17-00; 8:45 am] 

BILLING CODE 3410-08-P